April 13, 1948


James Sinclair



My hon. friend has had very interesting meetings in the west himself, to judge by what I hear from Moose Jaw. In this connection, for example, as a British Columbian, badly off though our province may be, I believe there is one province in Canada in a worse position than British Columbia. That is Alberta, which is at the very apex of the freight rates. At least we in British Columbia get a little advantage from the water competition that exists between Montreal and Vancouver. Alberta gets none of that; but I do not feel I should stand in my place in this house and explain the Alberta plight, when Alberta is represented by the able members from that province. I say also one other body has a very great responsibility for the present plight of British Columbia and for doing something about it. That is the provincial government, whose responsibility it is to take every possible step to safeguard our provincial economy. Yet-and this was the thing that struck me as most astounding and which actually, I can tell the hon. member for Kamloops (Mr. Fulton), did dampen my fires a bit-I learned from the minister that not since 1927 has our province taken any specific, official action. Oh, certainly they have talked. The members of the legislative assembly have talked; the members of parliament like ourselves have talked, but there has never been the one thing which would have brought about some correction of that mountain differential. There has not been an official demand by the government of British Columbia upon the board of transport commissioners for a review of the mountain differential since 1927.

The reason for that is probably that we have become accustomed to our burdens. When you are burdened down with afflictions, after a while you get used to them and bear them. You do not like it, but it is only when extra afflictions are heaped upon you that you suddenly object to the original ones; and that is the situation today. It was only when the 21 per cent was laid on top of our already heavy burden of the mountain differential that we suddenly rose as a province to protest against it. But I say the

real responsibility rests with the government of British Columbia, which should have made concurrent application about the mountain differential when the railways filed their application, so that today the board of transport commissioners and the federal government could not point the finger and say the only matter considered was the application of the railways for increased revenue and that the province of British Columbia made no application for a review of the mountain differential.

That is why, instead of condemning the federal government, I stand here today praising them, for at least they have taken the one specific action which will remove the mountain differential. The announcement of the minister that not British Columbia, the province most directly affected, but the federal government had asked the board of transport commissioners to start an investigation into the inequalities, not only in British Columbia but across Canada, was a positive step which my province and the other western provinces should have taken long ago. I would say this, to the credit of one provincial premier- Premier Manning-that at least a year ago he started preparing his case on the mountain differential. It has now been a year in preparation and should be very well presented before the board of transport commissioners.

There are some in the house who will say: What is the value of the applications now made by the federal government? The actual record shows that in the case of British Columbia the applications to the board of transport commissioners for the removal of the mountain differential have borne continuing fruit. At one time we had a double rate. An application was made against it by the province and the rate was reduced to one and three-quarters. Then came the famous freight rates case of 1924 when our province, at great expense, hired distinguished legal talent, who later adorned this chamber, and who succeeded in having that rate reduced to one and a quarter.

It is also true that a later application, a third one, failed. The vote by the board of transport commissioners was four to two, a very close vote indeed. Since that time great changes have occurred in the economy of our province which have changed our case. Certainly the imposition of this 21 per cent increase will have aggravated the case for the province; but I feel confident that the application made by the federal government on behalf of British Columbia, which British Columbia should have made for itself at the time the railways were making their applica-

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tion, will bring the mountain differential down to parity with the rest of Canada.

For these reasons I will vote against both the Conservative amendment and the C.C.F. amendment, and will support the government in the action they have taken.



Maxime Raymond

Bloc populaire canadien

Mr. MAXIME RAYMOND (Beauharnois-Laprairie):

Mr. Speaker, may I briefly define my stand on the amendment moved by the hon. member for Rosetown-Biggar (Mr. Coldwell) and the amendment to the amendment moved by the hon. leader of the opposition (Mr. Bracken). I cannot support either for the simple reason that both embody a principle which I wholeheartedly condemn. What, after all, is the point at issue? It is not a matter of deciding whether the board of transport commissioners' decision suits us or not, nor of deciding whether it is fair, reasonable and acceptable to all sections of this country. On the contrary the amendment moved by the hon. member for Rosetown-Biggar (Mr. Coldwell) would have us blame the government on the plea that it failed to intervene as a court of appeal in order to repeal a legal decision taken by the board of transport commissioners. Such a proposition implies a dangerous principle. If political tribunals were to replace our judicial ones, what would become of justice? In my opinion, that is the sole question involved in this case. Again, it is not a matter of deciding whether the board of transport commissioners' decision suits us or not but if the government should take the place of a judicial body or, in other words, if it must set itself up as a court of appeal to review a legal finding. That is the meaning of the amendment proposed by the hon. member for Rosetown-Biggar and the meaning of the amendment to the amendment moved by the hon. leader of the opposition (Mr. Bracken).

I do not mean that I approve the increase granted by the board of transport commissioners. I must say that I am not much in favour of an increase which adds to the burden of taxation in our country and will enable certain companies to pay big dividends to foreigners. But that, may I say once again, is not the issue. The only reason why I cannot vote for the amendment and the amendment to the amendment is that they embody a principle which is contrary to the public interest, a principle whereby a political tribunal and not a judicial tribunal would deal with certain matters of general interest.



Anthony Hlynka

Social Credit

Mr. ANTHONY HLYNKA (Vegreville):

Mr. Speaker, members of this group are not opposing any increase in freight rates if, as I said on April 5, an increase is necessary. But we certainly disagree with the principle that western Canada and the maritimes should pay the bulk of this increase.

For our immediate purposes the discussion on the subject of freight rates may be narrowed down to two major points. First there is the existence of discrimination in the scale of freight rates as between the two central provinces on the one hand and the four western provinces and the maritimes on the other. In other words, Ontario and Quebec have been favoured in the present freight rates, and the rest of Canada has been discriminated against.

To substantiate my argument, I need only refer to the figures given in exhibit 131 filed by the Canadian Pacific Railway Company at the hearing before the board of transport commissioners. The exhibit states that east of Fort William in the ten-year period from 1936 to 1945 $90-4 million of working expenses brought to the Canadian Pacific a net earning of $12-1 million, or 34-2 per cent of the total net earnings in the whole of Canada, while west of Fort William in the same ten-year period $90-0 million of working expenses brought net earnings to the Canadian Pacific of $23-3 million, or 65-8 per cent of the total net earnings. I think no further argument is necessary on that point.

The second major point is this: Will this discrimination be allowed to continue; will the federal government allow an additional burden to be imposed on western Canada by permitting a flat increase in freight rates of 21 per cent; and what does the federal government intend to do about the matter, if anything?

According to the statement of the Minister of Transport (Mr. Chevrier), the government has no intention of doing anything about this matter. It is evading its responsibility by putting forth the argument that the board of transport commissioners was set up by parliament for this very purpose. The minister stated that the board was charged with the responsibility of studying this question and rendering its decision. It has given its decision, and the government has accepted it.

The question is now: Where do we go from here? After listening to the speech of the Minister of Transport this afternoon, I was convinced more than ever that the protest of the west against any additional increase in freight rates upon the western provinces before the existing discrimination is removed is justified, without a doubt.

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The minister pointed out that the act provides that any person or persons or any province may make application to the board of transport commissioners for equalization of freight rates, and that it is up to the province to file such appeals, if it so desires. In other words, the government is endeavouring to wash its hands clean of the whole problem. In view of the government's stand on this issue, the western provinces should first of all satisfy themselves that they know exactly how this matter stands; secondly, that the federal government has decided not to do anything about it; thirdly, that the provinces should study and arrive at some decision as to the ways of solving this problem.

Touching on a few other points, first I should like to say that in spite of the explanation given to this house by hon. members from western Canada, in spite of the briefs which were prepared and circulated by the western provinces on this question, there still are those who persist in arguing that the railways need additional revenue and that, therefore, an increase in the freight rates in western Canada is justified. Let me make it plain once again that if it is shown to the west that the railways need additional revenue I am sure that no reasonable person would object to an increase in freight rates, but spread the load fairly over all parts of Canada. Why take a disproportionate share of the revenue from western Canada?

I am telling the minister that the government must take full responsibility for the 21 per cent increase and for the existing injustice of discriminatory freight rates. I say further that the people of western Canada are not going to take this lying down. If the government does not understand the pleas of the people of western Canada which have been expressed through their provincial governments and through their members of parliament the people of the west will have to adopt language which all political parties understand.

In his speech this afternoon the Minister of Transport paid a compliment to the hon. member for Calgary West (Mr. Smith) for putting freight rates above politics. Freight rates in western Canada are so high that no member from the west has a reach high enough to put anything above the present freight rates. However I agree with the minister that the question of freight rates should not be used as a political football.

Let me explain what I mean. I have in my hand a copy of the platform which was circulated in the constituency of Vegreville

and presumably throughout Alberta during the election of 1940 by the candidates of the party in power at the present time. The Liberals placed before the people of that province a program which reads in part:

Agriculture-Pool the freight on wheat.

Reconsider whole freight rate structure.

Lower the cost of agricultural machinery.

If the candidates of the Liberal party had not used freight rates as a political football it would never have been in politics. Under the circumstances we are asked by our constituents to do something about- these questions, because they say that the Liberal candidates told them that if they voted for them the government would do something about the matter. I agree with -the minister that questions of this sort should be solved in a non-partisan way. Many questions should be solved in a non-partisan way, but I hardly believe there -is another group in Canada that has been using these questions in politics to the extent to which government members and candidates have.

I wish to come back to this mistaken view that seems to have taken hold of some people who keep on repeating it. I want to make it clear beyond a shadow of a doubt just where this group stands on the question of freight rates. I believe that the majority of those who have opposed or who have criticized the minister take the same stand. The following editorial appeared in the Ottawa Journal of April 9, 1948:

Entirely sensible is the government's decision not to interfere with the increase in freight rates granted to the railways. The board of transport commissioners, after exhaustive inquiry, decided that increases were needed.

Then it goes on:

Opponents of freight rate increases say there are regional rate injustices which should be righted. Would it help to right such regional injustices, assuming that they exist, if we bankrupt our railways in the meantime?

Surely those people who look at these questions fairly will agree that no one from western Canada wants to starve our railways or see them bankrupt. But, as I said before, why take it out on western Canada and the mari-times? Why discriminate against those provinces which are politically weaker? It appears that the famous saying could be paraphrased in this case and we could say that where there is political might, there is right. That appears to be the way things are running in this ease.

I clipped out an article which appeared in the Ottawa Citizen of March 30 of this year

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just before the release was made in connection with freight rates. One significant paragraph reads:

The decision equalizing east-west freight rate levels will take into account a present higher scale in the west estimated at about seven per cent above the eastern level. The dividing point is the head of the lakes.

It was understood the board's method of equalization would consist in withholding increases from certain rates in the west.

Even the newspapermen who were writing about this question before the decision was handed down felt that something should be done to equalize freight rates as between the east and the west. But what happened? When the decision was handed down we found there was to be a flat increase in freight rates for the entire country. Some hon. members have already pointed out that the west will have to carry an additional burden of something like eighteen per cent higher than the rest of the country. Surely that question must be faced by this government. The minister now promises that the board will go ahead and study the whole question again. As time goes by, it will render its decision on the equalization phase of this question. But why did not the government long before this ask the board to study this question? The government in their election platform in 1940 said they were going to do something about equalizing freight rates; but they have waited until this time, and surely now, after the board has studied the rate question for more than a year and a half it must have learned all the facts and need not take years to bring down its decision.

I do not think I have much more to add to what I have said tonight and what I said on April 5, except that I insist that the government shall not shirk its responsibility in connection with this problem. What the people of western Canada want is action, and action now, not later. When the next election rolls around, if this question is not settled before, the government will again use it as a political football and then, when the election is over, the whole thing will be forgotten. We want this question settled now. We do not want it to be involved in politics. Let us solve it now and then it will not be involved in politics.

It must be remembered that the majority of the people in western Canada are primary producers. This means that they have to pay freight both ways; they pay freight on everything they buy and on everything they sell. It is only the primary producer who is in that position. The manufacturer does not pay freight both ways. He has not to pay freight on everything he buys and on everything he sells. But the primary producer does, so in

reality multiply this increase by two and then you will be nearer the mark as to what the farmer of western Canada has to pay in increased freight rates.


Thomas Langton Church

Progressive Conservative

Mr. T. L. CHURCH (Broadview):

Mr. Speaker, the old Grand Trunk railway which was a pioneer good road, made very good money in Ontario, and then what did they do? They went and built a third transcontinental from Moncton to Winnipeg, and the result was that the system got into such difficulties that in 1916-17 a royal commission to investigate the railway situation in Canada had to be appointed, consisting of Mr. A. H. Smith, president of the New York Central railway, Sir Henry Drayton, head of the railway commission as chairman, and Mr. Acworth, who was a leading executive of the Great Midland railway in England and had made a great success of that road. The city of Toronto and the Ontario government in 1918-19 opposed the railway rate increase, and we took an appeal on questions of facts to whom? To the governor in council, and they dismissed our appeal.

The province of Ontario, with the other great industrial province of Quebec, contributes more in taxes than any other province in this dominion. The province of Ontario gets little or nothing from governments and little or nothing from some railway corporations. But I do say that there should have been set up in this house long ago a committee to consolidate and revise the Railway Act. Thirty years ago, back in 1917 and 1918 there was a committee of the House of Commons appointed to revise and consolidate the Railway Act, which met for two years. I appeared before that committee as head of the Canadian Union of Municipalities, accompanied by the late Sir Adam Beck, and we proposed to the railway committee that the Railway Act, like the Bank Act, should be revised every ten years. There has been no revision of the Railway Act since 1917 or 1918. But the railway committee of that day sat for nearly two years and the city of Toronto had to have some of its chief officials appear before that committee for nearly two and a half years, because the Mackenzie interests had gone to nearly every legislature in the country and got charters for the building of a third transcontinental line. We had to watch them because the Sir William Mackenzie interests owned the old Toronto street railway with a thirty-year terminable franchise expiring in 1921. We had a clause put in the Railway Act at that time, after a long battle here, to protect the municipalities. It provided that a

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federal corporation could not run its line in, on, along, over or under a highway without the consent of the municipality. That was a blessing to the municipalities, which otherwise would have been ruined, with no control over their own streets. As I say, a committee should have been appointed long ago, directly after the war, to revise the Railway Act and bring it up to date, but that has not been done since 1919 up to the present time.

As to the present rate increase, the toll charges and rates should provide that there be no more political rate structure in Canada, setting one part of the country against the other, causing divisions and all that kind of thing. Ontario does not want that, nor does any other province that I know of. This particular application by the railways was considered by the board for nearly a year and a half. The board is a judicial body appointed under the Railway Act, which removed control of the railways from the old railway committee of the privy council, which used to consider all railway legislation down to the appointment of the board in 1903, when the late Hon. Mr. Blair, a former minister of railways, became first chairman of the railway board.

The board is a law court. I raised some question about the matter when the late Hon. Rodolphe Lemieux was Speaker of the house, and he ruled that the board was a law court. The then solicitor general, Mr. Cannon, had objected to some things that had been said in the debate and it was then that the Speaker ruled that the board was a court of law. The act gave the board very wide powers over any class of goods or persons or property of every description conveyed by the railways or by steamships connected with the railways.

Section 33 of the Railway Act gives the board powers equal to the powers of the supreme court. It has jurisdiction of its own volition. It does not need an application before it at all. It can go to work of its own volition and investigate express rates, freight rates and all that kind of thing. It is its function and duty to do so. This board did not do it. The province of Ontario wants nothing the other provinces do not get also from the country; it wants no hand-outs from the country and has never got any. Were it not for the resources of the province we would not be in the position in which we are today. Ontario is the greatest taxpaying province in the dominion. If it were not for this province in the past, the dominion would not be able to go into all this kind of thing and duplication.

They had big eyes in those days. Cox could not wait. We remember the old Grand 5849-187

Trunk Pacific which started to build a road from Moncton to Winnipeg and the railway board had no jurisdiction over it. They all had big eyes. Branch lines would have been built to the sun, to the moon and the stars if they had been allowed to carry on. After all this was done, the good old Grand Trunk in Ontario took the rap and became bankrupt. It had to be taken over by the country, which meant a serious loss to the country. The Canadian National Railways made all their money in Ontario out of the old Grand Trunk. There was an investigation into this situation, appointed by the gentleman I have named. The chairman of the board at that time was Sir Henry Drayton who was associated with Mr. A. H. Smith. What did the report find? The report found the following, that Canada had too much railway mileage for its population. It said:

The mileage of Canadian railways is very great in proportion to the population of the country. It has increased out of proportion to the increase of population.

Canada's natural waterways make railways less absolutely necessary than in other countries.

The net return is so low as to prove that more railways have been built than can be justified on commercial grounds under present conditions.

The public investment in railways is very large. The total amount of public capital involved in direct construction of government lines, and cash aid, land grants and guarantees to private companies is $958,451,900, not counting the value of lands still unsold.

They were not satisfied with that. They went to the provinces of Manitoba, Alberta, Saskatchewan and British Columbia and they got further hand-outs of millions of acres of land and right-of-way protection; so much so, that chaotic conditions were created. The report went on to say:

The development of Canada justified two transcontinental lines. It did not justify three. The Grand Trunk and Canadian Northern should have been amalgamated.

Then they recommended certain things to be done in regard to taking over of this railway. They did not consider that operations by a minister directly responsible to parliament would be in the public interest. They said:

It would not secure better service or lower rates.

They rejected the idea of direct government ownership and operation and they recommended that parliament not fix the rates. They recommended that the commission be appointed as a judicial body, and they could not be criticized here. They have the same jurisdiction and powers as a judge of the superior court or of any of the courts of this country. One of the cardinal principles of the

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British constitution is that the courts of our country are subservient to the legislature. That is a very good principle. They also report that the railway board be non-political, permanent and self-perpetuating. They said:

We give reasons for concluding that railways are not a proper subject for direct parliamentary control.

That is right. We have the same thing in connection with the Toronto transportation commission. The original bill consisted of sixty pages, and I boiled it down to a page and a half. That act has now been used as a model by the city of Ottawa. They recommended:

That the act of parliament provide that the operation of the company shall be on a commercial basis, and that the trustees make no general reduction in rates until the property earns a reasonable net return.

They also recommended that there be given to the trustees the widest powers in the management of their property, and that they take into account depreciation, overhead and all the rest of it, and to run the road from the commercial aspect. The Drayton report recommended that the authority of the railway commission be extended to include all government railways.

Mr. A. H. Smith, president of the New York Central, in an amending report said:

Amend the regulating policy so that the railway commission may have jurisdiction over all railroads in the matter of maximum and minimum rates, the issuance of securities, the building of new railways, or the extension of lines, and other matters properly within the scope of governmental supervision.

Create a board of trustees, consisting of two government officials and three private citizens to act for the government in the matters hereinafter proposed.

The commission in 1909 was appointed under the chairmanship of Mr. Justice Mabee who had tried to regulate railways and their rates, and he did make some substantial progress and was a strong chairman. I might refer to the application I had before them in connection with the coal subsidy. I believe that the national policy should be extended in railways to include bonuses, subventions and subsidies, because we had that regarding the coal situation, which has been carried on by an act of parliament outside the railway commission's authority. We had one or two other instances of that as well. The house will find that all set out in the coal debate on my national fuel policy in Hansard of Monday, March 19, 1923. It took six years to make it statutory as applying to the maritimes, and Alberta coal and coal from Wales, and it was a blessing to the people of this country.

I may say that before there was a railway commission, away back on the 11th of June,

1897, the Laurier government, which came into office in 1896, introduced a bill regarding British Columbia railways and the building of the Canadian Pacific to the Crowsnest pass. The bill was introduced in this house by the minister of railways of the Laurier government regarding a subsidy for the railway to the Crowsnest pass. There was a debate in this house. Mr. Ross Robertson, the then member for Toronto East, discussed the bill. I am reading from "The Economic Aspects of the Crowsnest Pass Rates Agreement, No. 13, of the McGill University economic studies, one of the national problems of Canada series," by Mr. Theodore Herbert Harris, M.A. Mr. Harris said that at the time the bill was passed discussion fell into three principal divisions: first, the advantages to be derived from the construction of the line; second, the terms under which the line was to be constructed, more particularly with reference to the subsidy which the Canadian Pacific Railway Company was to receive and, third, the feasibility of constructing the line as a government enterprise. Regarding the first, there was practically unanimous approval, the sole dissenting voice being that of a member for an Ontario constituency, Mr. Ross Robertson, who failed to see why so large a sum was being devoted to the development of British Columbia, while the province of Ontario was, in his opinion, being neglected. And it was neglected, with the result that we had not had the Temiskaming and Ontario system electrified in 1910-11-12. If wre had had that it would have been of great advantage to Ontario.

I stood at Fort Erie the other day watching the trains going down in that border town. I saw these magnificent new cars that they are using now on the subsidiary of the Canadian National Railways, the system they are using throughout Maine, New York and other places such as central Vermont and on all these other roads that are subsidiaries. I bring that to the attention of the hon. member for Simcoe North (Mr. Ferguson), because he is interested in the rates and rolling stock of the railroads up north in Ontario and all that kind of thing as well. This report goes on to say:

It was that section of the bill that dealt with the subsidies which the Canadian Pacific Railway Company was to receive that promoted the greater part of the discussion, leaving little time for the house to bear the pros and cons of the argument that the government undertake the work on its own behalf.

From the parliamentary debates on the terms of the Crowsnest act I quote the following:

Opposition to the subsidy granted the Canadian Pacific Railway Company under the terms of the bill came from many sources, but particularly from Mr. Ross Robertson. This mem-

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ber pointed out that as the total cost of constructing the 330 miles of railway was estimated at $7,000,000, and that as the government was subsidizing it to the extent of $11,000 a mile, the company was only required to find forty per cent of the funds necessary for the construction of a line which he believed would be a commercially successful enterprise from the very start. He deplored the fact that the public resources of British Columbia were being transferred to the Canadian Pacific Railway Company to the extent of 20,000 acres of land per mile, and felt also, that when the line was in operation, the people would be wholly at the mercy of the Canadian Pacific Railway.

Some further misgivings were entertained due to the fact that there had been guaranteed to the British Columbia and Southern Railway, a company incorporated under the laws of British Columbia, a land grant of 20,000 acres per mile in the event of that company constructing a railway line through the Crowsnest pass. "By the terms of ail agreement between the Canadian Pacific Railway Company and the British Columbia and Southern Railway, the former fell heir to a portion of this grant. The fact was made clear, however, that a considerable portion of the land which the Canadian Pacific was to obtain by virtue of its agreement with the British Columbia and Southern would be turned over to the dominion government.

Further debate on the subject was restricted to the usual parliamentary tactics of delay.

As a matter of fact, a considerable portion of the land which the Canadian Pacific Railway Company was to obtain in British Columbia in connection with the southern railway was returned to the dominion government. A further debate ensued and the Crowsnest Pass agreement was adopted. Then came the Manitoba agreement, which was submitted to the railway commission, and there was another one with respect to the Crowsnest Pass agreement, which was considered away back in 1924 when an application was made under the Railway Act. The matter was referred to the Supreme Court of Canada, and it was found that the Crowsnest Pass agreement applied only to the conditions that existed when it was originated and, I think, to the class of freight also.

I submit that there should be no more political rate structures in this country. The national railway is faced with a deficit of $23,000,000, notwithstanding the fact that it pays no taxes.

May I ask, Mr. Speaker, that hon. members observe some order in the chamber? I should like to get the attention particularly of some of my hon. friends from Ontario. I do not see why hon. members from Ontario should not follow this discussion with interest. I would ask them to pay some attention. I can wait until they are through talking. I am not in a hurry. I should like to get some order, at least on my own side of the house.

The people of this province generally, the farmers of Ontario are paying heavy taxes and 5849-187J

some are getting no service at all. Let me ask hon. members representing the districts around Haliburton and Frontenac and western and northern Ontario what service their people have been getting from the old Grand Trunk. We cannot get any steam suburban service in Toronto, which has contributed more revenue to the railways than has any other community in Canada. The Ontario members are afraid to stand up for their own province, as the members from some of the other provinces have done. We cannot get anything from any government. We have not had in the Toronto district a cabinet minister since 1935. Today we have this Canadian National deficit of $23,000,000 for one year and the people of Ontario will pay a considerable part of that deficit. The national system has many advantages which are not enjoyed by the other railway.

In my opinion this railway system should be operated on a commercial basis. One matter which I have raised, and which is not covered in the order for the present 21 per cent, has reference to the employees of the Canadian Pacific and the Canadian National from coast to coast. They were entitled to some kind of war bonus for what they did during the war. They worked day and1 night in the transportation of troops from Vancouver to Halifax. They worked long hpurs, some of them eighteen hours a day. Surely these men are entitled to some recognition from parliament, the same as some others who did less got.

So far as the province of Ontario is concerned, we have no support at all, and our Ontario members on all sides of the house are to blame. What have my friends representing Haliburton, Frontenac and Huron, and all these other places in western Ontario, to say with regard to the Canadian National services they have got? What have they received in return for the funds taken from the old Grand Trunk of Ontario and given to complete the "Cox can't wait" transcontinental from Moncton as far as Winnipeg?

I do not think there should be any political rate structures in Canada, and that is all we have ever had. No wonder the farmers of Ontario do not get anything. Their members are responsible. As I say, they are afraid to stand up for their province as the members from the prairie provinces, the maritimes and British Columbia have stood up for their provinces.

What has been responsible for the condition that has brought about appeals from seven of the provinces? Consider the extravagance condemned in the Drayton-Acworth report, attributable to the operation of three transcon-

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tinental railways. Some of the seven provinces now object to the rate structure of this country, and I am not here to support yet an increase in rates. Far from it. The appeal should have been allowed first. In my opinion sufficient material was submitted to the government for the government to decide. But some of the seven provinces who have been objecting were themselves largely responsible for the present state of affairs as a result of the overbuilding of railways and useless duplication in Canada. We had railway construction three times in excess of what the country could stand.

For example, there were three branch lines from Toronto to Belleville and the result was that one line of the tracks had to be ripped up. There were other sections of railroad in the other provinces which also had to be ripped up and abandoned, such was the overexpansion of railway construction in Canada. I do not say that all the provinces were to blame, but I suggest that the intention which was expressed at the time railway construction began in Canada should be carried out, and that is, that there should be no more political roads or political rate structure. The roads should be managed from the commercial point of view, after proper inquiry, and the facts should be allowed to speak for themselves.

I believe there should be a proper system of railway rates in Canada, and let me say in this connection that we in Ontario do not want anything from the other provinces of the dominion. I myself have always been in favour of the principle of confederation, that what is good for one province is good for the rest of the country. In other words, I believe in the old Cornish battlecry for confederation, "Each for all and all for each."

There is no doubt that there are inequalities in rates, nor is there any doubt of the fact that there is at present a very large Canadian National deficit, but I believe in the principle I put forward in 1923, of bonuses, subventions and subsidies granted after an inquiry along the lines of the coal investigation, in order to see that inequalities are wiDed out.

Finally, I suggest that the Railway Act should be revised every ten years, as the Bank Act is revised. The last Railway Act revision took place in 1917. Why should we wait thirty years for a revision of so important an act as the Railway Act? Two long wars and a heavy depression have intervened and we have had no revision of the Railway Act to check up on inequalities and to find out what, if anything, can be done.

I think the government of the day might have taken some steps after the seven provinces wrote them, after this order was passed. I have the order of the board here, and I have the opinion of Mr. Wardrope, who believes that the railways should have got another two per cent. That order was dated March 30, not so long ago; there was an appeal to the governor general in council, and the government should have allowed that appeal, because there is provision in the Railway Act for such an appeal on questions of fact. I was before the governor general in council myself at one time. We had a whole staff of accountants, lawyers and everything else. It was in connection with passenger rates and freight rates. We presented our brief to the railway commission and later took an appeal to the governor general in council.

I sympathize with the prairie provinces and the maritimes and have always favoured liberal -treatment to those parts of the country which have done so much for Canada. I am a great admirer of British Columbia which is not only rich in water power but generally has been a great blessing to confederation. So I think the Minister of Transport (Mr. Chevrier) might, after a request of seven provinces, have taken the initiative himself, because he has power under the act; and the governor in council should have heard the appeal. The operation of this order might have been postponed for two weeks or so in order to permit this to be done, and then the government could have given their decision. After all is said and done, the onus is upon the government to some extent, though the reports are the other way and the railway commission may be considered a court of law, as it is in fact. They are called commissioners, but that body is a successor of the old railway committee of the privy council, and the Railway Act says it is a court; I quoted the section a short time ago. The question as to whether or not the railways were entitled to a 21 per cent increase is a question of fact. The government could very well have postponed the application of the order for two or three weeks and heard any appeal from it. Then, after they gave their decision, I do not see what we could have done as members of parliament, bcause the railway board was appointed for a specific purpose: to find out what are reasonable rates.

I do not believe the increase is entirely justified. Perhaps ten per cent or more might have been more in line with what is required; but to give an increase of 21 per cent all at once after taking about eighteen months to hear the case, seems hardly fair. Surely after

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having taken that long the government could have taken a few days more before putting the judgment into effect. It was put through as a matter of policy, not as a matter of law. Instead of taking time to hear the appeal, however, the government announced the next day that they had no jurisdiction, though there is an appeal in law to the governor in council on questions of fact and to the Supreme Court of Canada on questions of law, or to the privy council in England. Nothing like that was done, and I am afraid to some extent the government was influenced by the action of the railways across the border and the interstate commerce commission.

These matters have to be considered. I believe the government might well have heard the appeal as I have suggested and then announced its decision.


Frank Eric Jaenicke

Co-operative Commonwealth Federation (C.C.F.)

Mr. F. E. JAENICKE (Kindersley):

Mr. Speaker, with his great effort this afternoon the Minister of Transport (Mr. Chevrier) undoubtedly convinced or converted many of his followers who a week ago were sort of faltering on this question; but I am sorry to say he has not been able to convert me and that today I feel just as I felt the day we heard over the radio the announcement of the board's order. When the minister spoke this afternoon he more or less elaborated upon the argument he advanced in this house on April 5, when we had a debate on this freight rate question. This afternoon he again stated that he wanted to dispel some misconceptions. I may say there is no misconception in my mind. I should like to quote from what the minister had to say on that other occasion, as reported at page 2662 of Hansard:

There has been a tendency in this debate today to confuse two issues, the one which was the increase recommended by the board of transport commissioners and the other which was the equalization of the rates; or, to use the expression mentioned at various times in the debate, a discrimination in the rates across Canada. . . . The board in this case was dealing with one specific matter, namely an application ... to the board of railway commissioners for an increase in freight rates.

With great respect I say to the minister that I think he was wrong, as I shall try to show in a moment. What he said is, of course, substantially what the board of transport commissioners said in their judgment; and in my opinion the board were also wrong. They held that discrimination was not in issue, and skilfully skated around that point. This afternoon the minister quoted from the decision of the board something which had some application to the argument I am about to make, but I am going to quote another paragraph from the judgment of the chief commissioner as it is found at page 81 of the mimeographed copy:

Wide latitude was given to the protestants in the development of their objections to the proposed increase. In a considerable number of instances the objections involved matters more appropriately to be dealt with under proceedings upon complaint and in other cases virtually amounted to an endeavour to have reheard various phases of some of our previous decisions. A case of this character is a poor vehicle for the adjustment of individual rates or for the elimination of preferences or unjust discrimination existing except where same may be outstanding. One reason is that no notice has been given to the public of the intention to try such unanticipated issues and many interested parties were therefore not before us and could not have been heard completely if they were.

I said, and I repeat, that I believe the board were wrong in their judgment when they said that in fact they had no jurisdiction; because I maintain that in any case before the board for approval of any tolls or rates, discrimination is always an issue. Let me refer to the act to make my point clear. The application was made under section 325 of the Railway Act, which reads:

The board may disallow any tariff or any portion thereof which it considers to be unjust or unreasonable or contrary to any of the provisions of this act, and may require the company within a prescribed time to substitute a draft satisfactory to the board in lieu thereof or may prescribe other tolls in lieu of the tolls so disallowed.

Then I wish to quote part of section 314, which deals with the matter of discrimination, part of which was also quoted this afternoon by the minister. The first subsection reads:

All tolls shall always under substantially similar circumstances and conditions, in respect of all traffic of the same description and carried in or upon the like kind of cars or conveyances, passing over the same line or route, be charged equally to all persons and at the same rate, whether by weight, mileage, or otherwise.

Subsection 2 reads:

No reduction or advance in any such rates shall be made either directly or indirectly, in favour of or against any particular person or company travelling upon or using the railroads.

Subsection 4 reads:

No toll shall be charged which unjustly discriminates between different localities.

In my opinion all the sections under this particular part of the act, including sections 314 to 321, are overriding sections and must be taken into consideration in any case of approval submitted under section 325. I think that in view of their decision, in the case before them, that they had no jurisdiction to deal with discrimination or equalization, the

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board were wrong in law. It might have been different if they had found as a matter of fact that there was no discrimination. But they did not do that; in fact they could not do that. As I said before, they skated around the point and they held that discrimination was not in issue.

In my opinion, therefore, they were wrong in law and perhaps an appeal by the provinces might lie to the Supreme Court of Canada. The government should at least have stayed the order until the provinces had sufficient time to decide upon an appeal or upon some further action. But it seems that some mystic power has more influence with the government than members of parliament from all parties who pleaded so forcefully and effectively on April 5 the cause of justice and non-discrimination.

Talking about discrimination, my mind goes back to the time we had the debate on the prohibition and restriction of imports, when a few months ago the Minister of Finance (Mr. Abbott) gave the house a lesson in non-discrimination when we were discussing this bill to prohibit and restrict imports. He told us that this government was all out for non-discrimination. He went so far as to say at one time to the committee that we were going to set an example to the world in nondiscrimination. It is true that this lesson referred to international relationships; but it now seems that when it concerns our own Canadian people not only is discrimination advisable, but it is quite right to enhance this discrimination if it is a matter of providing in perpetuity the necessary operating expenses and profits of the railways.

Many points were made on April 5 and again in this debate on the motion and on the amendment offered by my leader in connection with the matter of discrimination. I wish to mention only one example to show that there is very unjust discrimination. The example I have chosen is the one which has been referred to by the hon. member for Vegreville (Mr. Hlynka) this evening. I shall go a little farther than he went in pointing out the injustices of this discrimination, and that it is such an unjust discrimination as would come within the meaning of the act and the particular section I read a few moments ago. As was said by the hon. member, the evidence before the board showed in a statement from the Canadian Pacific that in the ten-year period between 1936 and 1945 the average of the gross earnings of the Canadian Pacific was $215 million a year. The working expenses to be paid out of that were approximately $180 million, so that the net earning in each year was

approximately $35,000,000. The evidence also established that the lines east of Fort William showed an average gross earning each year of $102 million and working expenses of approximately $90,000,000, leaving net earnings in the east of $12,000,000. In the west, that is to say the lines west of Fort William, the Canadian Pacific had gross earnings of approximately $113 million, and the working expenses in the west are practically equal to those in the east, namely $90,000,000, leaving net earnings out of western lines of approximately, $23,000,000. In other words the net earnings of the Canadian Pacific in the west, on equal operating expenses, were almost double its net earnings in the east.

If we translate these figures to a per capita basis we find that the gross earnings in the east contributed about $3 per capita, and in the west about $5.40 per capita. If we take the net earnings of the Canadian Pacific in these years we find that the east contributed $2.52 per capita and the west contributed $4.83 per capita.

If we take this 21 per cent increase we shall find that, on the basis of these figures, the eastern people will contribute 35 cents per capita, while we in the west will have to contribute about $1.10 per capita, so that the Canadian Pacific can have these additional profits. The figures which I gave as to the company's earnings in eastern Canada also include the lines in the maritimes, where the people are also being discriminated against so far as freight rates are concerned. If we take into consideration this discrimination against the maritimes, the tremendous disparity which I have already pointed out as between east and west will be enhanced as between the two central provinces of Ontario and Quebec and the rest of Canada.

As I pointed out a minute ago, I compute this increase in the freight rates structure to be more than three times as great in the west as it will be in the east; and if we take into consideration the injustices done to the maritimes, this disparity will be even greater.

Surely such a disparity in rates which results in people in the west paying more than three times as much per capita as people in the east in order to supply these additional earnings for the railways is unjust discrimination within the meaning of section 314 of the act. As a matter of fact the government might be deemed to have admitted as much because of their contemplated investigation of this matter.

For a moment let me come back to the board and its attitude in the matter. The board's duties and powers are not clearly defined in the act. But, generally speaking, I would say that its duties and powers are to

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see that the provisions of the Railway Act are fairly enforced. I would say that, taking the act as a whole, the board's primary responsibility is the protection of the public. It is true perhaps that the board is there to protect the interests of the railways as well; but an act which grants extraordinary powers to the railways, such as the power of expropriation, is primarily an act for the protection of the public.

And may I suggest that in any decision the public ought to have the benefit of the doubt. The board knew of the grossly unjust disparity in freight rates already existing between the central provinces and the rest of Canada. However, instead of rectifying the situation, as it had power to do, it accentuated the situation by its judgment.

In my opinion the board had full power to reject the application of the railways, and to tell them to submit a new freight rates schedule for approval which would meet with their needs and which at the same time would be non-discriminatory. Why should the board or anyone else figure out a just, equitable and non-discriminatory freight rates structure for the railways. The way I read the act it is the duty of the railways to do that; and they should have been told to submit such a schedule for approval of the board, and to put their house in order.

I am of the opinion that the board has entirely misconstrued its duties and powers under the act, and that the people of Canada -certainly the people in the west-have lost faith in the competency of the board. For these reasons I believe that a royal commission or some other tribunal should be set up for the investigation of the freight rate structure as proposed by the minister. I believe that some of the provinces have already taken the same stand.

But let me again suggest that the onus of providing a fair and1 equitable freight rate tariff for the whole of Canada is, in reality and according to the provisions of the act, upon the railways themselves. The railways should be given to understand that the course of least resistance which they seem to have adopted this time when asking for an increase all across the board will not do. They should get busy and work out for the approval of the board or some other tribunal a schedule which will meet their needs and at the same time be just and non-discriminatory as far as the public is concerned.

I also plead with the minister, although I presume it is now too late, that the government reconsider the matter, suspend the board's order as they have the power to do and request the railways to submit a scheme which has

these just and non-discriminatory features. Not only would this course be fair and just, but may I suggest that it would also be in the interests of the government.

This afternoon the minister mentioned something about the political situation that might develop in connection with this railway rates dispute. I have here an editorial which appeared in the Saskatoon Star-Phoenix, a newspaper which warmly supports the government of the minister. They certainly do not do so in connection with this freight rate order. The editorial reads in part:

Some of the reasons why the Chevrier policy contains the seeds of a fatal error for the King government may be found in the judgment of the board of transport commissioners. No one objects to the railways getting more money. Everyone should object to them getting it as a discriminatory levy upon the west. The board, of course, may say that the effect of a rate increase is none of its business. The federal cabinet cannot say the same and expect to remain in office, and it is an incredible lapse of the ordinary political sagacity of the cabinet to find that any of its ministers think it can. Yet that is w'hat makes politics, and the consequences will unfold quickly. Another reason why the Chevrier proposal is bad is that the board of transport commissioners is unacceptable as the body to conduct a general inquiry into the rate structure. But meanwhile, a new generation of politicians seems sure to learn one of the basic facts of Canadian politics, that is, that freight rates are basically a political matter.

I suggest to the government that they had a grand opportunity to take this matter of freight rates out of politics.

Mr. HOWARD C. GREEN (Vancouver South): Mr. Speaker, the hour is growing late; but in view of the fact that the subamendment moved by the leader of the opposition fMr. Bracken) was seconded by myself, I should like to say a few words this evening. It contains two paragraphs, and I shall deal first with the second, which reads:

Further regrets that the government has refused the reasonable request of seven provinces that the imposition of increased freight rates recently authorized by the board of transport commissioners be delayed for thirty days until they could be heard.

As hon. members know, the judgment of the board was delivered on March 30. Almost at once the premiers of seven provinces of Canada wired or wTrote in to Ottawa requesting that it be suspended for at least thirty days. For the life of me I cannot understand why that request was refused. These were the premiers of the seven provinces that had cooperated with the government by entering into agreements within the last year or eighteen months. There was the Premier of British Columbia, my native province, and the

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Premiers of Alberta, Saskatchewan, Manitoba, New Brunswick, Prince Edward Island and Nova Scotia.

These were responsible men, men who were far closer to the people living in those provinces than the Prime Minister (Mr. Mackenzie King) or any dominion cabinet minister. They were men of all political shades. The Premier of British Columbia represented a coalition government of Liberals and Conservatives. The Premier of Alberta represented a Social Credit government. The Premier of Saskatchewan represented a C.C.F. government. The Premier of Manitoba represented a coalition government of Liberals, Conservatives and Social Crediters. The premiers of the three maritime provinces represented Liberal governments. I wonder that the government failed to heed the reasonable request of those seven premiers. In my opinion that was shabby treatment; treatment which should be condemned in no uncertain way by the members of this house. Therefore I approve strongly the wording of the second paragraph of the subamendment. The first paragraph reads as follows:

Regrets the government's failure to secure the removal of inequalities and discriminations in the Canadian railway freight rates structure before the imposition of a horizontal increase of twenty-one per cent-an increase which is bound to intensify the aforesaid inequalities and discriminations.

Hon. members will notice that the essence of that paragraph is the reference to inequalities and discriminations. No one can deny that such existed before the judgment of this board was handed down, and no one can deny that they have been intensified by the judgment of the board. It seems to me that the question of these inequalities and discriminations is vitally bound up in the whole freight rate situation; yet it is being cavalierly brushed aside by the Minister of Transport and those who have spoken in support of the government's stand.

I shall not attempt this evening to deal with the position in any other province than my own province of British Columbia. There our problem, and our complaint, for decades has been the mountain differential. It was explained neatly in the judgment of the British Columbia member of the board of transport commissioners, Mr. MacPherson, at page 84 of the board's judgment, and I propose to quote from Mr. MacPherson's explanation. He says:

During the progress of the hearing it was pointed out by counsel for the provinces on many occasions that in Canada we have different grades or steps in the freight rate structure, viz. . . .

By the way, the Minister of Transport made the same explanation this afternoon. The commissioner went on to enumerate the types of


The maritime rates (in preferred territory).

As I understand it, those are rates reduced by 20 per cent by reason of the Maritime Freight Rates Act. Next:

The competitive rates of Ontario and Quebec.

Which rates apparently are higher than the maritime rates. Next:

The prairie rates for Manitoba, Saskatchewan, and Alberta.

Which in turn are higher than the rates in Ontario and Quebec. The Minister of Transport will perhaps correct me if I am wrong in anv of my statements. Next:

The mountain scale or Pacific scale of rates.

These are higher again than the prairie rates. In other words, they are the highest of all four rates. They apply only to freight moving through the province of British Columbia.


Lionel Chevrier (Minister of Transport)



May I interrupt the hon. gentleman at that point? Did not the commissioner whose judgment he now cites agree with the judgment of the chief commissioner?


Howard Charles Green

Progressive Conservative


I am at the moment citing only that portion of Mr. MacPherson's judgment which explains the four different types of rates in Canada.


Lionel Chevrier (Minister of Transport)



Did he not agree with the judgment of the chief commissioner?


Howard Charles Green

Progressive Conservative


Yes, he did agree, with the reservation which I am going to quote in a few minutes about the mountain differential. In effect this higher rate for freight in British Columbia means that we are being penalized for living in the mountains. It is very fine to live in the mountains. I would not want to live anywhere else. I was born there and it is where I like to live. But we should not be penalized right down through all the history of Canada. There is certainly no justification for a penalty of that type. What we really are being penalized for is that we live so far removed from Ottawa. We are in the province farthest away from the capital. We have always had a comparatively small number of members and we have not yet been able to get this mountain differential wiped out.

I cannot say too strongly that that mountain differential is unfair. It is opposed by everyone in the province of British Columbia and has been ever since I can remember, running back for many years. The reason used in support of it seems to have been that the Canadian Pacific Railway Company had heavy

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expenses in running their trains through the Kicking Horse pass, through that particularly mountainous portion of our province. But over thirty years ago one of the predecessors of the present Canadian National Railways was hauling its freight from Alberta to the coast through the Yellowhead pass, and, as the minister knows, the line goes through on a grade which is lower than the grade on the prairies. That in itself should have been sufficient to wipe out the mountain differential, but in spite of that fact we are still being penalized. Surely the whole basis of decision with regard to these higher rates should be that there is competition. We should have a rate that would meet the requirements of the Canadian National Railways. There is no reason why we should not get the benefit from the fact that its line of railway has gone through the mountains on such a good grade. Either the rates are being kept up to protect the Canadian Pacific Railway Company at the expense of the people of British Columbia, or the Canadian National Railways is getting rates to which it is not entitled. I suggest that the only fair basis would be to give us the _ benefit of the fact that the Canadian National Railways' has that lower grade.

I doubt also whether the Canadian Pacific Railway Company under present operating conditions is incurring more expense than it is incurring in running, for example, through the rocky country of northern Ontario. I believe that neither railway has ever been able to prove in the hearings before the board that it did cost them more to operate in British Columbia than in other portions of Canada.

The attitude of the British Columbia government in connection with the recent hearing was very reasonable. I must say I was amazed this evening to hear the hon. member for Vancouver North (Mr. Sinclair) try to place all the blame on the British Columbia government. I was amazed to hear a member of our province make an attempt of that kind. He did not do the British Columbia government justice at all. When their counsel appeared before the board, this was the stand taken; members will find it at page 57 of the judgment; the chief commissioner is citing the stand taken by British Columbia counsel, which was:

We say there should be no increase in rates wihdle the present inequality under which our people have been suffering remains.

That was the stand taken by Mr. Locke, who has since been made a justice of the Supreme Court of Canada, and was one of the most distinguished counsel in Canada. That was the stand taken by him on the opening of the inquiry eighteen months ago.


Lionel Chevrier (Minister of Transport)



Will the hon. gentleman read the following sentence?


Howard Charles Green

Progressive Conservative


I am quoting from the chief commissioner's statement. The next sentence is:

Removal of the mountain differential is something which must be brought up by a substantive application which, when our preparations are complete, I propose to launch.

The province of British Columbia was asking that there be no increase in rates until the question of discrimination had been dealt with, and that has been their position throughout, but it was misrepresented this evening by the hon. member for Vancouver North.

British Columbia is hit harder than any other province by this increase in freight rates. That is shown by Mr. MacPherson. I refer again to his judgment, where at page 84 he says:

The maritime rates which are covered by the statute, viz., the Maritime Freight Rates Act, carry a twenty per cent discount on all freight moving within the maritimes and as far west aa Levis, P.Q., and also cover freight consigned west of Levis originating' in the preferred territory.

In Ontario and Quebec, competitive rates are governed by water and truck competition, the latter being uncontrollable, resulting in some very low competitive rates.

The prairie provinces get the benefits of the Crowsnest pass grain rates and also truck competitive rates, this last to a degree. However, these truck rates are controlled by provincial highway boards and cannot be considered to be competitive to the same degree as the truck rates of Ontario and Quebec.

This is also true in British Columbia where the provincial public utilities board controls truck rates in certain areas.

Finally the paragraph I wish to emphasize:

Then lastly, there is the mountain or Pacific scale, which is commonly referred to as mountain differential, whereby one and one-quarter prairie miles equal one mile in Pacific territory for rate purposes. I am of the opinion that this situation, which amounts to an increase of 16 per cent over the prairie scale of rates, should be again reviewed at the earliest possible date.

I repeat that our province has been hit harder than any other province by this increase. You see, Mr. Speaker, railway rates are of vital importance to us because we are in the most remote province of Canada. Our goods, both those which are sold and those which are bought, have to come farther by rail in most cases than the goods of any other province. The proportion of our costs which is made up of freight rates is higher than in any other province. We are also in this position. Our province has been growing in population. We have had many thousands of splendid citizens come out from the prairie provinces, and many of the young men who


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served in British Columbia during the war have moved out there since. the termination of hostilities. This means that there must be many more jobs found in our province than in any other province at the present time. Yet our industries are handicapped by this heavy freight rate. It has been a drag on them from the time when the railway was first put through to the coast. Some of the industries are particularly hard hit. The Okanagan valley is our great fruit producing district. From there fruit is shipped to all parts of Canada, and also to the United States. Some is shipped to the coastal ports for export overseas. All the fruit that is moved out of that valley must go by rail, and we find a great protest coming from that Okanagan valley as a result of the increase. I hold in my hand a press dispatch of just a few days ago headed, "Okanagan Freight up $1 Million". This is from Kelowna and reads in part:

The 21 per cent rail freight boost may cost B.C.'s fruit industry $1,000,000 a year.

The estimate was made today by A. K. Lloyd, president and general manager of B.C. Tree-Fruits Ltd.

He foresaw a jump of 11 cents in the cost of shipping a box of apples or pears to main western markets. Charges for peaches, plums and prunes probably would go up five cents a box, he thought.

Said Mr. Lloyd:

"While at first sight the freight rate boost appears an additional burden for the consumer, it does not always work out that way.

When the laid-down value of produce exceeds a certain limit, the producer begins to feel the lag. He may have to take some of the squeeze in order to continue the free movement.

It comes down to a question of supply and demand, and too often additional freight rates reflect a reduction in the net amount to the producer."

Last summer the B.C. Fruit Growers' Association presented a brief to the board of transport commissioners, and a very reasonable brief it was, dealing with the effect of an increase in freight rates on their industry. They pointed out that, because of the loss of a market overseas, they were having to ship a far larger proportion of their fruit than ever before to Canada and to the United States, all of which involved freight rates. In the brief we find this paragraph:

Because of our geographical location and our great distance from large centres of population, the railways have secured, and continue to secure, long haul freight charges on practically every pound of fruit we produce. They also secure large revenues on practically all the supplies required by growers to produce the crop, eudh as fertilizers, insecticides, machinery, paper wraps, nails, pads, labels, strapping wire, salt, etc. We know of no other industry in Canada or United States from which the rail-

ways secure such a large share of the consumer's dollar. On a substantial portion of Ontario, Quebec and maritimes fruit the carriers receive no revenue whatever, and in the eastern and U.K. market we must compete with those provinces.

They point out that:

An increase of transportation costs is almost certain to result in decreased, instead of increased revenues to the carriers as our lower grades cannot, on a buyers' market (or heavy crop year) carry the burden of transportation costs, and they will, therefore, be left on the trees, or sent to processing plants.

I believe the situation is somewhat the same in the fishing industry. A large proportion of our fishery production has to be sent by rail east of the Rockies and the increase in rates will handicap that industry in a serious way.

This increase, with the mountain differential on which the increase is imposed, will hold up our development in the province. I hold in my hand an editorial from the Vancouver Sun, which is a supporter of the government. It is dated March 31, less than two weeks ago. The heading is: "Worse Than Ever." We find this paragraph at the end of the editorial:

The mountain differential is an artificial barrier to British Columbia's industrial expansion. By heightening the barrier, the transport board has heightened British Columbia's determination to smash it down entirely.

As the minister must know, the feeling in British Columbia about this mountain differential goes very deep. What is the remedy proposed? In his remarks this afternoon the minister said words .to the effect that now that the whole question was to be reviewed by the board of transport commissioners, they might find that the mountain differential should be dropped. He admitted that the chairman had told him that the hearings would take from six months to a year. My own opinion is that they are more likely to take from one year to two years, because there will be representations heard from all over the country. In any event, they will take a very long time.

Like some of the members on the minister's own side, such as the hon, member for New Westminster (Mr. Reid), I am doubtful of the results when the next judgment of the board is handed down. My own belief is that the question of the mountain differential will never be settled without government action. We have had this rate structure in Canada for many years. Part of it is the mountain differential, and the board of transport commissioners is very unlikely to do away with that. Judging by their actions in the past, I think it is very doubtful that they will take the step. The minister himself admitted that we have now vastly changed economic condi*

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tions. That is certainly true of British Columbia, and I suggest that there must be legislation brought in abolishing this mountain differential.

Here you have a clear-cut case for legislation by this parliament. There was legislation to set up the Crowsnest Pass agreement. That legislation met a situation which could be met only by parliament. There was also legislation to provide for the 20 per cent subsidy in the maritimes, and I am not questioning for a moment the wisdom of giving that subsidy, but I point out that the situation had to be met by legislation. The government has recognized these facts because, in the order in council of April 7, P.C. 1487, in which it directed that the board of transport commissioners review the whole freight rate structure, there appears the following:

The committee, accordingly, advise that the Board of Transport Commissioners for Canada be directed to undertake a general freight rates investigation along the lines indicated in the preceding paragraph, subject-

And this is the provision to which I draw attention particularly:

-to such special statutory provisions as affect freight rates.

The cabinet itself, in drawing up this order in council, has recognized that there are certain conditions which must be met by legislation. I submit that the mountain differential is another such situation and one which can be met only by legislation.

In British Columbia we are not asking for a rate that is lower than that given anyone else. We are asking that our rate be dropped to the level of the others. Surely there is

nothing unfair in that request. I cannot for the life of me understand why we should be singled out for the doubtful honour of paying the highest rates of any group of Canadians. It just does not make sense, nor does it make for unity in this nation.

The party of which I am a member stands for removing the mountain differential. My leader, speaking this afternoon, said that the mountain differential had to be removed. We believe that it must be removed by legislation, and we propose, Mr. Speaker, to see that it is removed.

On motion of Mr. Isnor the debate was adjourned.



Mr. G'RAYDON: May I ask the acting leader of the government what the business will be tomorrow.


Lionel Chevrier (Minister of Transport)



Tomorrow the government would like to proceed,with the motion, appearing under government notices of motions, in my name, to set up the committee on railways and shipping. That should not take very long. Next we should like to continue with this debate on the motion to go into supply and the amendment of the leader of the C.C.F. and the subamendment of the leader of the opposition. If this is disposed of, then the motion to set up the committee on human rights and fundamental freedoms, and legislation on other matters already announced but not yet disposed of.


At eleven o'clock the house adjourned, without question put, pursuant to standing order.

Wednesday, April 14, 1948

April 13, 1948