Mr. GRAY:
I did not raise the question
with regard to that section.
Mr. MANION:
Yes, my hon. friend did
raise it a moment ago. We should deal with subsection 6 of section 9 when we come to it, not under section 2.
Mr. MACKENZIE (Vancouver):
The
point applies equally to the minister, who has just dealt with subsection 2 of section 9. May I reread part of it:
The trustees shall and may thereafter, subject to the provisions of this act, have and exercise all the powers, rights, privileges and immunities. . . .
These are new powers which the directors never had under the Canadian National Railways Act. You are giving them powers apart from the governor in council, apart from parliament, and without any limit whatever. Subsection 2 is subject only to the provisions of this act. There is no comparison whatever between the powers of the trustees under this act and the powers of the directors under the old Canadian National Railways Act.
Mr. MANION:
I think my hon. friend
should read all of it, not merely part of it.
Mr. BENNETT:
May I say a word, Mr. Chairman? I do not desire to trespass upon the time of the committee, but I am amazed at some observations that have been made. That, of course, may be because I have been unable to grasp the situation as it has been presented. Section 9 provides that-
When the governor in council shall proclaim in the Canada Gazette that he has vacated all nominations to the board of directors of the national company and has appointed trustees as by section 4 of this act provided the said board shall^ cease to exist-
That eliminates the board.
-'and, by force of this act and without more, the direction and control of the national company and its undertaking shall be vested, subject to the provisions of this act, in the trustees.
That is the substitution of the trustees for the directors. Then follow the subsections to which attention has been directed, by which it is perfectly clear that the trustees are clothed with wide powers additional to those they may exercise by virtue of succeeding the former board of directors. But will the committee be good enough to look at subsection 4 of the Caandian National Railways Act? It says:
(4) The National Act and all statutes, charters, letters patent and orders in council of Canada which relate to any of such companies in Canada shall, in so far as they may be inconsistent with the provisions of this section, be read in the light hereof and be construed so as to conform herewith.
Mr. MACKENZIE (Vancouver):
That is right.
Mr. BENNETT:
That makes it perfectly clear that the Canadian National Railways Act, so far as it is possible to read that act with this, muS be read to conform with the provisions of this measure, letter A of the Senate, Bill No. 37. If the hon. gentleman will examine with a little more care the provision at the top of page 7 of the bill, subsection 6, of section 9, having given evidence of his astuteness as a lawyer he will realize that that subsection does not deal with orders in council, has nothing to do with orders in council. The shareholder of all the national railways is His Majesty, in the right of the dominion, and he is registered as such. It will be observed that inasmuch as you have to appeal to ithe shareholders under the pro-
C.N.R.-CP.R. Bill
visions of some statutes, and inasmuch as His Majesty is a shareholder, when it says-
No order, regulation, by-law, act, decision or proceeding of the trustees shall require the approval of His Majesty or that of any other shareholder of any company to which this section applies.
-that means His Majesty qua shareholder- not the governor in council, not the cabinet, not anything else except His Majesty as a shareholder. The crown is the shareholder of the Canadian National at the present moment, and it shall not apply to His Majesty or to any other shareholder, that is the half dozen people who have been selected for the purpose of constituting quorums and matters of that kind. That is the reason that provision wias put there. I think the hon. member for West Lamb ton will remember the rule of law, ejusdem generis. Here you have the words, "H>is Majesty or any other shareholder," the words "His Majesty" mean His Majesty as a shareholder or any other shareholder. Under the general rule affecting railways as provided by the Railway Act and other statutes you have to call a meeting of shareholders to deal with certain matters that the directors have set in motion, their power being to set the machinery in motion. This subsection merely provides that no appeal is necessary to the .shareholders. Neither the consent of the crown in the right of His Majesty is required, nor that of the other shareholders of the company. That is all it means. As I read section 23, to which the hon. gentleman has referred, there is nothing in the bill inconsistent with this section. As far as I am concerned at the present moment, without looking at it in more detail, section 23 is unaffected by this legislation. It has not yet been pointed out in what sense it is affected. Just let us look at it:
With the approval of the governor in council, and upon the recommendation of the Board of Railway Commissioners, the company may abandon the operation of any lines or parts of lines of railway and incidental works, the operation or continued maintenance whereof has, in the opinion of the Board of Railway Commissioners, become unnecessary or inexpedient through duplication, or other economical eonsiderati ons;-
As I see it at the moment there is no inconsistency between the two; this section in its force and vigour is retained. Nothing that has been said this evening, no reference that has been made to the statute affords a reason for changing that view. The supreme purpose of the statute is not to take from the security holders any powers they possess or any rights they enjoy, but rather to say, as this act has said, that unless they consent
to action being taken the action cannot be taken. After all, as I said the other day, although an endeavour was made by many people to have it misunderstood, the equity of redemption in these roads is all that we have, and inasmuch as they were built without a single dollar of capital being put up other than that represented by the securities, the non-payment of interest on the securities put them in the defaulting class had it not been for the guarantee given by the Dominion of Canada. That guarantee is what saves them from receivership, and the trustees in this case are merely trying to preserve the rights of the security holders who really built the roads in question on the bonds guaranteed by the dominion. There never was, although it was hoped there would be, any value in the equity of redemption; there is none now. As far as this section of the statute is concerned I see nothing at the moment that would induce me to believe, unless I hear arguments more powerful than I have yet heard,-and I do not reflect on the power of the arguments made-that there is any inconsistency between that provision and section 23.
Mr. MACKENZIE (Vancouver):
If . that were the effect of this provision there would be no trouble at all so far as the amendment is concerned, and if the right hon. gentleman will accept the spirit of the amendment of the hon. member for West Lambton I think all on this side will be satisfied. The Prime Minister cited subsection 4, which exactly proves the contention of the hon. member for West Lambton. The Canadian National Railways Act, and all statutes, and so forth, which relate to any such companies, shall, in so far as they may be inconsistent with the provisions of this section, be read in the light hereof and be construed so as to conform herewith. What does that mean? It means where there is any inconsistency between the Canadian National Railways Act and Bill No. 37, the Canadian National Railways Act must be subsidiary to the provisions of this bill.
Mr. BENNETT:
The hon. gentleman has just made one mistake. If he will look at subsection 4, he will observe that the inconsistency must be "with the provisions of this section," and that is the section which substitutes the trustees for the directors. I am sorry the hon. gentleman should think that the inconsistency must be with the act; it deals only with the trustees, and the substitution of them for the directors. Any inconsistency between the Canadian National Railways Act and this-and there are many-must be read in the light of this section.
C.N.R.-CF.R. Bill
Mr. MACKENZIE (Vancouver):
Section
9 gives the trustees certain powers. In the first place, it abolishes the directors and, in the second place it constitutes the trustees. The powers of the trustees are practically set out in this section 9.
Mr. BENNETT:
Will the hon. member
look at section 3?
Mr. MACKENZIE (Vancouver):
I have
read that. I am now referring to the subsection which the Prime Minister read, subsection 4. There may be inconsistencies with the provisions of the section which confers the powers upon the board of trustees which is to take the place of the board of directors created by the Canadian National act. Let us now consider subsection 6, also referred to by the Prime Minister. This reads:
No order, regulation, by-law, act, decision or proceeding of the trustees shall require the approval of His Majesty or that of any other shareholder of any company to which this section applies.
It is not material whether this refers to His Majesty in the capacity of a shareholder or in any other capacity, the effect of the subsection is that His Majesty has no control over any order, any regulation, any by-law, any act, any decision or any proceeding of the trustees which is being set up under section 9. That is the fundamental and vital difference between this bill and the Canadian National act. A board of trustees is being substituted for the old board of directors and the trustees are given powers which the directors never had. The directors were always subject to the governor in council and there is not a single clause in this bill which subjects the board of trustees to the dictates of the governor in council. Their acts cannot be discussed even by parliament. There is no comparison between the powers granted to the trustees under section 9 and the powers granted to the board of directors under the Canadian National act. Subsection 4 of section 9 specifically states that where the provisions of the Canadian National act are inconsistent with the provisions of this section, then the provisions of the act shall be of no avail. It is intended that this bill shall override the provisions of the Canadian National act. That has been our fight all along. As I stated on the second reading of the bill, it means the abandonment of government control and government ownership of the Canadian National railways.
Mr. POWER:
I should like to add a word or two to the argument of my hon. friend from Vancouver. If the argument made by the Prime Minister is sound, surely he would have no objection to stating in the bill that
section 23 of the Canadian National Railways Act shall not be deemed to be inconsistent with the provisions of this bill or to be in any way affected thereby. There seems to be some dispute between those who believe they are capable of interpreting the meaning of this bill, and its provisions should be made dear. Apparently a similar dispute arose in the other house in connection with the provisions of the Maritime Freight Rates Act, and in order to make it quite clear subsections (a), (b) and (c) were inserted. As I understand it, there is no difference between hon. members on either side of the house in .connection with the principle that before any branch line or section of road shall be torn up someone other than the trustees whom we have set up shall pass upon the action, that the human element shall be taken into some consideration and that responsibility shall be placed upon the shoulders of someone other than this irresponsible board of trustees. I submit that this matter could be easily settled by the government accepting the amendment of the hon. member for West Lambton.
Mr. MANION:
In connection with section 23 of the National act, I still adhere to the position that where the trustees decide upon the abandonment of any branch line or service, they would have to appeal to the Board of Railway Commissioners just the same as the directors must appeal.
Mr. MACKENZIE (Vancouver):
Where is that?
Mr. MANION:
The Railway Act still
applies except those sections which are inconsistent. That section is not inconsistent. Another point which I should like to bring out is that if section 23 were put into the present bill as proposed by the hon. member for West Lambton, the arbitral tribunals would be rendered useless. There will be times when an arbitral tribunal will meet for the purpose of deciding whether a branch line shall be abandoned or a joint service inaugurated.
Mr. GRAY:
I am hopeful that the tribunal will be the Board of Railway Commissioners.
Mr. MANION:
That is another matter.
I take the position that section 23 of the Canadian National Railways Act, while perhaps not completely, will be to a large extent still in operation even after this bill goes into effect. I differ from my hon. friend from Vancouver Centre. If that section were included in this bill it might and I think it would interfere with the power of the tribunals in dealing with cooperative abandonment of certain branch lines or the decision to operate
C.N.R.-C.P.R. Bill
a joint service or something of that sort. I do not think the amendment of the hon. member for West Lambton should be accepted.
Mr. ELLIOTT:
It has been intimated that we are agreed on both sides of the house that no branch lines shall be scrapped without the trustees having to appeal to the Board of Railway Commissioners. If the minister accepts that view, surely we could agree upon some clause which would make it absolutely clear.
Mr. MACKENZIE (Vancouver):
Apparently the Prime Minister and the Minister' of Railways are not in agreement as to the effect of this amendment. The Prime Minister has stated that there is sufficient provision in this bill to safeguard what my hon. friend wants to obtain by his amendment. The Minister of Railways tells the committee that he is afraid of the effect of including a safeguarding clause in the bill which would retain the provisions of section 23 of the Canadian National act. The minister is afraid that such a section would disturb the functions of that august and majestic arbitral tribunal. I suggest that there is nothing in the amendment which would hinder the work of the arbitral tribunal; it would mean that the consent of the governor in council would have to be obtained to whatever was proposed by the private and national systems in connection with the abandonment of lines. We want to safeguard against the wholesale slaughter of branch lines throughout Canada without parliament having a single word to say. I repeat what I said before: This is a final abdication of the principle of democratic control and ownership of the Canadian National system. The Prime Minister says we are not losing that and the Minister of Railways says we are. The minister has stated that if this amendment is added to the bill it will interfere with the work of the tribunal. The Canadian National and the Canadian Pacific railways might agree among themselves that the abandonment of a branch line would be in the interests of economy. Cooperation by direction is covered by part II of the bill, and cooperation by compulsion is made possible by part III. I ask the minister to show me one clause or one sentence in this bill which will give us the right asked for by the hon. member for West Lambton, that section 23 shall be preserved for the people of Canada in the legislation we are now considering.