Mr. COCKERAM:

Have the surpluses

which have been built up over the period of the war years been used for retiring funded indebtedness or the indebtedness standing on the books of the company? .

Mr. MAYHEW:

That has been used to pay off loans which they received from the government.

Mr. CHURCH:

I should like to ask the minister a question under this section. I am not in favour of the present system of financing this particular road and its subsidiaries and other affiliations, aided by many bills passed during this war, and even during this session. In view of the vast earnings which this system is making on land, on the sea and in the air, would it not be possible to pay out of income some of these expenditures which are charged up to capital? In the ordinary public ownership ventures, such as the cheap power furnished in Ontario, many of the improvements are charged to income, and come directly from it. If this railway is to operate at cost, and if it is to run on a commercial basis, well and good. But I can tell the house that these two principles are not being carried out at the present time. Why are many of these expenditures for improvements not paid for out of income? Why is it all charged up to capital with heavy refunding charges? I find it difficult to read the auditor's report, and I cannot get this information from the various pamphlets and booklets that are given an ordinary member of parliament. I cannot find any connection between the owership of this railway, which is a public venture, and the principles I have mentioned. If it is going to be a public ownership venture, then let it be a real public

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ownership venture, with the operational costs of the road placed on a commercial basis and the road run from the commercial aspect.

When we look at the cheap light and power in Ontario, a venture which has been a great success, we see the way they meet many betterments and some capital expenditures out of income. What is done in connection with this railway makes but a sorry comparison, loaded up as it is with all sorts of ventures which should never have been entered into. I refer to subsidiaries in the United States, and other capital outlays that never should have been made. Then there is the steamship line running to Port Dalhousie, and many other subsidiary ventures. They are all mixed up together. This system of expenditures and finance bears heavily upon the taxpayers, but they will have to pay for it. We are all wrong in such financing, and it seems to me the system of financing should be overhauled from top to bottom, and in the years to come we should have some way of meeting many of these expenditures out of income instead of charging them up to capital and having them refunded from' year to year. I would ask for an explanation from the parliamentary assistant.

Mr. MAYHEW:

I think I have already made an explanation. Probably the non. member did not hear it, or I may not have understood his question. At any rate the amount provided by parliament to meet capital expenditures shall not be diverted to cover deficits in operation, unless with express authority from parliament. We are coming to parliament now for that authority.

Mr. CHURCH:

You did not give any

answer whatever.

Mr. McLURE:

I see the Minister of Transport in his seat, and I should like to direct some observations to him. When this matter was first introduced the hon. members for Cape Breton South and Cumberland spoke in connection with it. On that occasion I forgot to mention this matter, and now that so much money is being voted I should like to find out whether part of it will be used to pay for the new steamer to be used in the ferry service between Borden and Tormentine. At the present time the service between those points could scarcely be called a service at all so far as the farmers are concerned. If the money is voted will it facilitate this matter, or have the effect of the steamer being made available any sooner?

Mr. CHEVRIER:

None of this money has anything to do with the new steamer now being constructed for the Prince Edward

Island car ferry. That will be voted under another estimate for the Department of Transport which I hope will be reached some time to-day or perhaps to-morrow. I shall be glad to discuss it then.

Mr. McLURE:

I would ask the minister to prepare a statement to be presented when we reach that matter and to indicate definitely when we may expect to have, the steamer.

Mr. BLACK (Cumberland):

Could we have a detailed statement from the parliamentary assistant of the items which make up this appropriation of $15,008,000 for additions and betterments? There has been considerable complaint from the maritime provinces, especially in respect of local railway service, about the antiquated rolling stock operated on those lines and also to some extent on the main line of the Canadian National Railways. There is a very general feeling that the maritime provinces are getting the dregs of obsolete rolling stock from other parts of Canada.

Will the Minister of Transport indicate to the committee in what form the appropriation will be made for the building of the causeway or bridge over the strait of Canso? The people in eastern Canada take it for granted that this public work will be undertaken in the coming season. It was approved by the former premier of Nova Scotia, the Honourable A. S. MacMillan. He quoted the Minister of Munitions and Supply (Mr. Howe) as having approved it. The present premier of Nova Scotia has given his approval, and has given the people of that province to understand he will proceed with the work. Similar approval was given by all the candidates in the eastern part of Nova Scotia who took part in the two recent elections. I .should like to learn from the parliamentary assistant whether a special vote will be offered in his estimates, and if not, whether one will be placed in the estimates of the Minister of Transport, the Minister of Reconstruction, or the Minister of Public Works. I repeat that we take it for granted that such appropriation will be made so as to meet the requirements of the people in that part of Canada, and also to fulfil the undertaking given to the people of Nova Scotia.

Mr. CHEVRIER:

This question was discussed the other evening by the hon. member, when we were at the resolution stage. I said at that time, and I repeat now, that when the estimates for the Department of Transport are up for discussion either the Minister of Reconstruction or myself will be in a position to make a statement concerning the project I

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at Canso. It is my understanding that the funds for the construction of that project, if approved, will be voted by the Department of Reconstruction and that the work will be done by the Department of Transport. I do not wish to say anything further about the project at this time, because it is not a matter which would properly come under any discussions flowing from .this bill. When my estimates are before the committee a statement will be made.

Mr. HAZEN:

The parliamentary assistant said a few minutes ago that the cash surplus for last year was $23,600,000. I call the matter to his attention, because I think he has made a mistake. The figure is $23,027,000, and should be corrected.

Mr. CHEVRIER:

Does the hon. member say it .should be $27,000,000?

Mr. HAZEN:

No, $23,027,000.

Mr. CHEVRIER:

That is what was read out.

Mr. HAZEN:

I understood the parliamentary assistant to say $23,600,000.

Mr. MAYHEW:

The figure is $23,026,924.35.

Mr. HAZEN:

That is not what Mr. Vaughan's annual report says. It gives the figure as $23,027,000. Is that correct.

Mr. MAYHEW:

Well, the difference is only a few dollars. *

Mr. BLACK (Cumberland):

Would the

parliamentary assistant give the details of the appropriation of $15,800,000 asked for additions and betterments?

Mr. MAYHEW:

It would take a rather voluminous report to answer that question in detail, but if the hon. member will turn to page 175 of the report of the committee on railways and shipping he will get a fairly good idea. I can give him the amounts by regions, which are: .

Atlantic region $ 1,331,350

Central region 6,009,624

Western region 2,963,779

Grand Trunk Pacific 1,529,246

Montreal terminal construction 100,000

Prince Edward car ferry

terminal 10,000

Subsidiary companies 281,097

Additions, betterments and. equipment 2,600,854