Mr. DUNNING:

All right.

Mr. HOWE:

I have no objection to its standing, but I must say that it is only a slight departure from the program of last year. Last year the resolution introduced by the Minister of Finance provided for capital expenditures and advances by the Minister of Finance to the railway up to a certain amount. The only difference this year is that we are substituting a definite vote for the provision for advances. If the right hon. member wishes the item to stand, it may.

Item stands.

Loans and Investments

To provide for advances by way of loans to the Canadian Pacific Railway Company and to the Canadian National Railway Company with interest at a rate to be fixed by the governor in council and upon such terms and conditions as the governor in council may determine of expenditures for wages to be

paid by each of the said companies (other than wages to be reimbursed to the said companies as provided for in vote No. 419) to employees engaged in special works in extension of the said companies' programs of maintenance of way and betterment works during the year 1936, and certain transportation allowances in respect of movements of the unemployment relief forces from point to point during the progress of the special works, not exceeding in the aggregate, $1,109,400.

Sir GEORGE PERLEY:

I think the minister has already given an explanation of this. He is proposing to advance to the companies this amount of money in order to provide them with funds to meet the expenditures which it will be necessary for them to make for the purposes of utilizing the labour provided by the government under item 419; is that right?

Mr. HOWE:

That is correct, about one third of their expenditure, their expenditure for labour in that connection. In addition they will have expenditures for materials and equipment which they will include in their usual budget.

Sir GEORGE PERLEY:

By way of loan.

Mr. HOWE:

This item is by way of loan.

Mr. WOODSWORTH:

The chairman of the railway committee told us that the Canadian National had given an estimate of the amount which would be required. Why was not this amount put into that estimate and included in the sum we have just considered? Why this separate item for the Canadian National Railways?

Mr. HOWE:

The budget of the Canadian National Railways had been submitted to the government and the budget of the Canadian Pacific had been submitted to that company's shareholders before we made this request to the railways to use this additional labour. I may say that the making of a railway budget is about as complicated as the preparation of the budget presented by the Minister of Finance; it is not done in a moment.

Mr. WOODSWORTH:

But it seems to me that the Canadian National Railways ought to be dealt with as a unit. We have just had under consideration an item which has been allowed to stand, which it seems to me ought to include the total amount to be spent by these railways. I cannot see why we should have another item to put in later on. If we are to make a favourite of the Canadian Pacific Railway and make loans to that company without requiring interest for a certain period, then I say that we should let the Canadian Pacific Railway stand on its own feet as an independent entity. But let us keep the Canadian National Railways

Supply-Railways-C -P.R.

by itself as a government owned road. Let the Canadian National make its own estimate and put that in as one united estimate covering the whole of the Canadian National Railways. That would be a reasonable way of dealing with the matter, instead of introducing subsequent votes involving loans without interest. I should like to know why that could not be done in this case.

Mr. HOWE:

This is an accommodation loan to enable the companies to do the work and not to charge it to their budget in the ordinary way. They are not in a position to spend for maintenance in one year all the money which would be involved, and there is an appropriation for maintenance of a million and a half in the case of each railway. We are lending them the money so that they can absorb the item gradually without disturbing the budget for this particular year. It is not at all a loan without interest; it is with interest.

Mr. WOODSWORTH:

For a time, I said.

Mr. HOWE:

Interest starts from the day the money is borrowed. The loan in the case of the Canadian Pacific Railway will undoubtedly be paid when due, and as regards the Canadian National, if they are not able to pay the loan, it will be absorbed into the deficit of the year in which the loan falls due.

Mr. LAWSON:

Despite the minister's

explanation I still cannot understand one phase of the matter. Under item 419 which we have already passed, paragraph (c) provides for certain allowances for transportation of labour, that is labour which the government really expects to supply. When we get to item 427 we find that it contains two clauses. Apparently it is to provide for two things: First, for advances by way of loans to the railways, and, second, certain transportation allowances in respect of movements of unemployment relief forces from point to point during the progress of the work. Is one not a duplicate of the other? If not, what is the distinction?

Mr. HOWE:

The first item we voted a little while ago is for the actual wages of the men at the site of the work. This item provides for the labour that will be required to supervise the men, and for the cost of transporting them from one locality to another. Naturally men engaged in maintenance of way cover considerable distances and this provides for the cost of moving them.

Mr. LAWSON:

Am I to take it then that the latter class to which the minister refers comprises employees of the railway companies?

Mr. HOWE:

Yes, experienced employees.

Mr. LAWSON:

Apparently we are agreeing by item 419 to pay the wages of unemployment relief labour, and also to pay the cost of transportation from one point to another, and under these items we will loan the railways money with which to pay the cost of transporting their own experienced employees and to supervise the work to be done by relief labour.

Mr. HOWE:

That is correct.

Mr. LAWSON:

Then the only comment I have to make is this: I by no means agree with all that has been said about these measures being a matter of subsidy for the railways, but I cannot refrain from saying that during the last election those most active in heckling me from the public platform were Liberals who howled to high heaven about the fact that the government of which I was a member had made loans to the Canadian Pacific Railway to enable them to give additional employment in their shops, every dollar of which loans I am informed has since been paid back. I want to make it clear that this government is doing the very thing for which we were so roundly condemned.

Mr. MacNICOL:

Does the minister say that the railways will be paid for transporting their own men? They travel free at all times now. Why should the government undertake to pay them? I should like to know why the fares of railway men are to be paid when railway men now travel free.