Mr. THATCHER:

I think the minister should have known when he made his announcement that the maritimes, the prairies and British Columbia could not take an increase like this one lying down.

Where were the cabinet ministers? Where was the Prime Minister (Mr. Mackenzie King)? I may be wrong, but it did not seem to me that the announcement made by the Minister of Transport had the Mackenzie King touch, the usual finesse. It seems to me that possibly the Prime Minister was in seclusion somewhere trying to get caught up with his work, during which time the cabinet made its decision without him. I do not know, but it seems to me that that is what happened.

British Columbia is one of the provinces most vitally affected by this decision. Where was the cabinet minister from British Columbia? British Columbia has not had a cabinet minister for about four months. I will wager that, had Senator Mackenzie been still in the cabinet, a lot more would have been said against the proposed increase. I think this decision has demonstrated more than any other single thing that the Liberal government should appoint a cabinet minister to represent British Columbia without further delay. If they are waiting for the Vancouver by-election they may have a long time to wait, because I do not think they will get one in that riding.

Where was the cabinet minister from Prince Edward Island, another province vitally affected. It is some years since that province has had a minister. Prince Edward Island had nothing to say about this decision which affects them to such an extent. I understand that the cabinet minister for Manitoba was unfortunately too ill to be present and Manitoba did not have cabinet representation when the decision was made.

What about the province of Saskatchewan? Where was the Minister of Agriculture (Mr. Gardiner)? If he was out in Saskatchewan I suppose we cannot blame him too much because, after all, there is an election coming up. However I think that when such a vital issue was being debated it would have been better for the people of Saskatchewan if the minister had been present. Where was our other representative from Saskatchewan, the parliamentary assistant to the Minister of Veterans Affairs (Mr. Tucker)? Well, he was out electioneering too, trying to ride a dead horse.

What dead horse?

Mr. THATCHER:

May I finish? What did the parliamentary assistant have to say? He

Freight Rates

made a statement in Saskatoon, as reported in an article which is headed, "Tucker thinks west will get fair deal on freight rates". The article goes on to report him as saying:

I think the west will get a fair deal out of the freight rate situation under proper representations.

Apparently we did not have proper representation in the cabinet. I doubt very much if the parliamentary assistant is happy about the way in which the freight rate situation has developed. I picked up the Ottawa Journal just before I rose to speak and I notice this headline:

Liberals united on freight rate crisis.

Are we to take from, this statement that the Minister of Agriculture and the parliamentary assistant believe that this decision is the best that Saskatchewan can get on freight rates?

In other words, four out of seven of the provinces affected by this discriminatory action were not represented in the cabinet when this matter came up.

We hear a great deal today about the need for national unity and that is all to the good, but I think we must realize in this house that national unity must be brought about on a basis of equality. The action of the government in permitting the freight rate increase cannot but cause discontent in the dominion, because it will impose on the citizens in the remote areas of Canada a charge which is greater than the charge imposed on people in Ontario and Quebec. Once again I do not argue basically with the railways when they say they need increased revenue, but I disagree strongly with the way in which they are proposing to obtain it; that is, by a flat increase instead of by equalization. As equal partners in this confederation we are asking for the same rates as Ontario and Quebec. Let all sections of Canada pay freight rates which are on a fair and equitable basis, and if the government must be defeated to make it see the wisdom of such a policy, then let it be defeated.

Mr. ROBERT H. WINTERS (Queens-Lunenburg): Mr. Speaker, as a member from Nova Scotia I wish to present certain aspects of this problem of freight rates. But first I should like to say how much the house was enlightened by the statement made so capably this afternoon by the Minister of Transport (Mr. Chevrier).

This is undoubtedly an issue of the gravest importance, and at the outset may I briefly summarize the history of the case. On October 9. 1946, the railways applied for an increase of 30 per cent in their freight rates. They emphasized that there had been no general

increases since 1920 and no general investigation since 1925 and pleaded that costs of labour, materials, and other factors had risen enough to justify increased rates.

The board of transport commissioners undertook a comprehensive study of the situation and gave all concerned an opportunity of presenting their cases both for and against. Seven of the nine provinces opposed the increase; Quebec and Ontario refrained from presenting their views.

It is important to note that it was the railways-not the government-that requested the increase.

After hearings and study lasting almost eighteen months, the board announced on March 20 that it had authorized an increase of 21 per cent-instead of the 30 per cent requested-with the effective date to be April 8.

When the board announced its decision, the seven provinces indicated their intention to appeal to the cabinet and asked that the provisions of the order be not effective until at least .thirty days after the date initially announced, April 8, pending the results of the appeal. This the government did not see fit to do, but the minister stated on Wednesday, April 7, as reported at page 2717 of Hansard, that such action would not be prejudicial to any appeal.

It is my understanding, Mr. Speaker, that when the seven provinces presented their briefs in opposition to the increase requested by the railways they made it clear that they were not at that time dealing with so-called equalization or differentials. Any action they had in mind in this regard they clearly indicated to be for future consideration. Nevertheless the government, according to the minister's statement of April 7, directed the board to conduct an investigation into this matter of inequality and the general problem of a fair rate structure for all parts of Canada. The minister's statement was as follows:

In the circumstances, the government has decided it would be in the public interest to have the board of transport commissioners make a thorough investigation of the rate structure of railways and railway companies which are under the jurisdiction of parliament, with a view to the establishment of a fair and reasonable rate structure which vcill, under substantially similar circumstances and conditions, be equal in its application to all persons and localities so as to permit the freest possible exchange of commodities between the various provinces and territories of Canada and the extension of Canadian trade, both foreign and domestic.

According to the minister's statement and press reports, the board has already met for this purpose.

Freight Rates

There is no question that the increase in freight rates will be a severe and adverse blow to the maritime provinces as well as to the west. Even at the old rates it was almost impossible for our industries to put their products on central Canadian markets at competitive prices. To be in a competing position, it was necessary not only to aim at wages more moderate than those prevailing elsewhere but to keep our other manufacturing costs down. What small measure of success we have had indicates that we have achieved both these aims to some extent. Now, however, the higher freight rates place another obstacle in our path. They will tend to make us live within ourselves in an industrial sense more than ever before.

The establishment of a railway with its attendant facilities and services was one of the conditions upon which the maritimes accepted the terms of confederation, as is clear from the British North America Act, section 145, which reads in part:

Inasmuch as the provinces of Canada, Nova Scotia, and New Brunswick have joined in a declaration that the construction of the Intercolonial Railway is essential to the consolidation of the union of British North America, and to the assent thereto of Nova Scotia and New Brunswick, and have consequently agreed that provision should be made for its immediate construction by the government of Canada.

That was one of the important terms upon which the maritime provinces entered confederation. Such a railway was regarded in the eyes of the dominion as being necessary to give maritime merchants a market in Canada, particularly since the maritime provinces stood to sacrifice reciprocal and profitable trade agreements with the United States. It was clearly understood at the time that construction and operation costs would not be related directly to the traffic that might pass over the line, but would be borne in great measure by the dominion in the interests of national, imperial and strategic considerations.

It is clear that the intention of those concerned with confederation was to give the maritimes freer access to central Canadian markets, whereas this increase in freight rates as such may well have a further effect in the opposite direction.

The Maritime Freight Rates Act recognizes that certain statutory advantages in rates should be given to the maritimes as a matter of right. It states clearly that no rates will be approved which may destroy or prejudicially affect such advantages. Section 8 of the Maritime Freight Rates Act reads as follows:

The purpose of this act is to give certain statutory advantages in rates to persons and industries in the three provinces of New Brunswick,

Nova Scotia and Prince Edward Island, and in addition upon the lines in the province of Quebec mentioned in section two, together hereinafter called "select territory," accordingly the board shall not approve nor allow any tariffs which may destroy or prejudicially affect such advantages in favour of persons or industries located elsewhere than in such select territory.

We in the maritimes attach great weight to this statutory advantage.

On the other hand, there is no denying that costs have gone up and there is clear indication that the railways needed some relief if they were to continue in operation. This applied more particularly to those privately owned railways which were incurring operating deficits and were not able to offset them by government funds made available through subsidies or some other means of financing.

In its last annual report the Canadian National Railways showed that since 1939 the average compensation paid to each employee had increased by $816.26. Over the same period many materials which are used by the railways in their operation had increased in large proportion. For example, softwood ties increased from 59 cents each to $1.35 each, or a percentage increase of 128-8. Coal increased from $4.09 to $7.50 a ton, or an increase of 83-4 per cent. There are many other such increases shown. Assuming therefore, Mr. Speaker, that some help was needed if revenues were to balance expenditures, it would appear that three courses were open. The first course was to reduce wages, or at best to hold them from going higher, not only to the railway employees but to all employees engaged in allied undertakings; second, to pay increased subsidies on a very broad scale; and third, to increase revenue by charging higher rates for goods carried.

It is not necessary to dwell on the disadvantages of reducing wages at this time or the reaction that would have resulted' across the country if any such course had been followed. The reason for not dealing with the problem by this method will be well understood.

As to the second alternative; that is, subsidies, we in Nova Scotia do not look unfavourably on subsidies that tend to minimize the disadvantage under which we operate as a result of our geographical situation. The maritimes have subsidized Ontario and Quebec industry for many years-out of all proportion to the returns we derive from these two wealthy provinces-by buying their manufactured goods. The industrialization of Ontario and Quebec has been accomplished, and is being protected, by tariffs which continually operate to the disadvantage of the maritimes. We regard, and Canada regards, reasonable subsidies to the maritimes as being a matter of

Freight Rates

right, but we do not want subsidies on a scale that would make us fully dependent upon or pensioners of central Canada. We want every opportunity to stand on our own feet.

Solving the problem completely by subsidies means that all taxpayers would be required to share the burden, whereas we feel that the brunt of it should be borne by those who use the freight hauling facilities of the railways.

Sir Stafford Cripps, in bringing down his British budget last week, said that high prices and inflationary pressure cannot be removed entirely by government action unless England is to envisage a degree of economic control too rigid to be operated in a democracy. Coming from a socialist government, this is clearly indicative. We in the .maritimes also are satisfied that subsidies cannot be regarded as the full answer to the entire problem'.

This leaves as the third alternative the necessity for increasing rates. We see the necessity of this move; but, situated as we are in the maritimes, and with due regard to our attitude toward subsidies, we feel that if the problem must be solved by applying increased rates, the solution should carry with it a measure of subsidies. In other words, the impact of the freight rate increase must be cushioned by subsidies wherever they are indicated.

Let us look for a moment at the government's performance in the field of freight assistance to the maritimes. There is not much doubt that the administration fully realizes this problem and our position as a result of it. The Maritime Freight Rates Act, to which I have already referred, provides that -westbound freight from the maritimes shall be at a rate 20 per cent lower than that prevailing for eastbound freight to the maritimes. This alone will cost the dominion over five and a quarter million dollars for the present fiscal year, but will assist the maritimes in putting their goods on Canadian markets. Freight subsidies which enable our farmers to purchase feed grains at prices comparable with those prevailing at the head of the great lakes are another form of financial assistance which helps to offset the disadvantageous position in which our farmers would otherwise find themselves. It was good news for the maritimes farmers to learn from the Minister of Agriculture (Mr. Gardiner) that the period for this subsidy assistance will be extended to July 31, 1949. Then, too, there are the well known subventions on coal which are intended to enable our miners to place their coal on Canadian markets in competition with United States coal.

According to statute, the advantage extended to us by the Maritime Freight Rates Act must be protected, and there is no indication that the government will not live up to its obligations. Where it develops that the increased freight rates react to our disadvantage when compared with other sections of the dominion, we will seek offsetting assistance, as we believe we have the right to do.

On this basis, and in the light of the government's assistance in the past, as well as the undertakings extended to Nova Scotia when entering confederation and our present statutory protection, I can see no good reason for supporting this amendment opposing the government's action. Moreover, both the amendment and the subamendment resolve themselves into motions of lack of confidence in the government.

Mr. MacINNIS:

That is the determining factor, is it not?

Mr. SINCLAIR:

Looking across at the hon. member, I say it is.

Mr. WINTERS:

Without denying the

gravity of the possible effect of this increase in freight rates, I believe it would be an outstanding lack of wisdom to use this one predicament as a lever in an attempt to unseat an administration which has done such a commendable job on a broad front. Therefore, Mr. Speaker, since the amendment and the subamendment have resolved themselves into motions of lack of confidence, there is no alternative but to oppose them.

(Translation):

Mr. GEORGES H. HEON (Argenteuil):

Mr. Speaker, I wish to begin this brief speech in French, in order to assert once more my absolute right to speak French in this house. However, as the majority of the members have not the advantage of speaking that beautiful tongue, I shall now proceed in English, that I may be readily understood.

( Text) :

On March 30 last, the board of transport commissioners rendered judgment on an application of the railway association of Canada on behalf of its member railway companies for authority to make a general increase of 30 per cent in freight tolls and rates and of a specified amount per ton on coal and coke. The judgment rendered authorizes a general advance of 21 per cent and an increase of 25 cents per ton throughout on coal and coke. The government has refused to interfere with the judgment rendered, whilst the amendment proposed by the bon. member

Freight Rates

for Rosetown^Biggar (Mr. Coldwell) is being offered , to prevent or rather to defer the increase which the judgment of the board has allowed after a prolonged and exhaustive inquiry in the presence of counsel, and the representatives of the applicants and seven highly interested provinces.

The press of Canada has given much space and attention to the government's decision to respect the board's ruling, and to the amendment which it is alleged may put some hon. members on the hot spot if they dared vote against it, because of the political dynamite therein contained. The whole problem, as I *see it, is not one which should be approached with the view of winning impending byelections, provincial general elections or a threatened general federal election; but rather it should be considered on its merits, on the evidence and on the arguments advanced before the board by the interested parties and their counsel.

To start with, it is evident that the board of transport commissioners was not asked to equalize freight rates, nor did any eminent counsel for the provinces suggest, prior to or during the hearings of the board, that the issue of equalization of rates be joined to the demand for a general increase in tolls and freight rates. The board, therefore, could not in my very humble opinion, without exposing itself to ridicule and violating all rules of law and evidence, rule on an issue which was not contained in the application.

This house, then, is called upon to decide only whether the increase of 21 per cent decreed by the board is justified, at least in principle.

It is generally agreed, I believe, that our railways, much the same as every other public or private corporation and individual, have felt the pinch of increased costs of maintenance, construction, operation and extension of services. Then again, the travelling public is constantly asking for more speed and comfort, with air-conditioned cars, de luxe parlour and sleeper cars and coaches, exclusive cuisine, expert personnel, while it continually complains of bumpy roadbeds, outmoded and dilapidated passenger cars and day coaches, lack of snow-removal and repair equipment, trains running behind schedule, delays in freight and express deliveries.

To do all these things the railways have offered before the board conclusive evidence that they need more money to operate. This money cannot be obtained without an increase in rates, and an increase in rates, cannot be established or put into force without being examined and sanctioned by the board.

Further, the Canadian National Railways, owned, operated and financed by the Canadian people, is one of the applicants and has lately announced a deficit of $23,000,000. We cannot hope to erase this deficit, even partly and thereby lessen our financial burden arising therefrom, unless relief is provided through increases in rates.

As to the Canadian Pacific Railway Company, which is privately owned and therefore taxed to help balance the deficit of its chief competitor, it also has construction and operation problems which can be solved only by increased rates. As a matter of fact, the Canadian Pacific could not successfully compete or even attempt to compete with the Canadian National Railways unless it enjoyed the same increases, because it cannot delve into the dominion treasury to recoup its operating losses.

For these reasons alone, Mr. Speaker, I would vote against the amendment of the hon. member for Rosetown-Biggar. But there are two other more important reasons which will motivate my vote, and which I wish to put on Hansard.

First, today's newspapers carry the announcement that conciliation in railway wage negotiations has collapsed. My sympathy is with the railway workers, who are entitled to a fair and reasonable increase in wages; and I do not want, by voting in favour of the amendment, to give a further excuse to the railway companies, if the increase in rates they seek were denied, for not meeting the motivated wage increases of their employees.

Second, I went on record in this house last year as stating that I was unwilling to vote for any issue which would precipitate a general election in the midst of the constitutional term of this parliament; and I am not changing my mind, particularly at this time, when the dangers of the international situation are too great to afford the risks of a general election.

I would, Mr. Speaker, vote for a measure or a resolution tending to a fair equalization of freight rates for every province, but not at the cost of an immediate general election.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

Mr. ANGUS MacINNIS (Vancouver East):

Mr. Speaker, I wish to say a few words in opposition to the principle of this bill, but before stating the reasons why I oppose it I want to make it quite clear that I am as much opposed to the aims, the policies and the methods of the communist party and the Labour Progressive party, which is merely the communist party under another name, as anyone in this house or anywhere else. Further I should like to say that my opposition to the communist party is not a matter of recent date or recent development. It has been my attitude since 1918, when for the first time the principles and tactics of the communist party began to show themselves on this continent. I have been associated with the labour and socialist movement in Canada since the first war; consequently I think I am about as familiar with the policies and tactics of the communist party as anyone in this country can be.

I was elected first to the House of Commons in 1930; consequently I have contested four elections from 1930 to 1945. On every occasion I have been opposed by a communist party candidate. Not only that; but on every occasion the communists who were opposing me were definite in stating that they were more opposed to me than to the candidates of the old parties, and, on my part,

Criminal Code Amendment

t am glad to say that there was complete reciprocity: I was more opposed to them than I was to the candidates of the old political parties. And I am not a bit ashamed to say that I had much more in common with the candidates of the other parties, Liberal and Conservative, than I had with the communist party; because the candidates of the old parties, and I, stood for something in common; we stood for government by consent of the people whose support we sought.

Furthermore my opposition to the communist party has not lessened over the years. I have not been taken in by any of the palaver that has taken in so many people during the past few years. Indeed my opposition to the communist party has grown, because the danger of the philosophy they advocate has become much more clear in the past few years. And as I said, I am more opposed now than ever before, because communists everywhere have consistently shown that they reject and despise those attributes of civilized human behaviour in which I believe, and which govern my relations with other people in the community.

I believe in such things as honest dealings, integrity as between man and man, group and group, tolerance of other points of view, and the bringing about of social and economic change by consent. May I add this note, that I find it impossible to have personal dealings with any individual whom I cannot implicitly trust and in whose integrity I do not believe.

I have just mentioned what I am opposed to in the communist party philosophy. I also reject what the communist party makes the guiding principle of its policies and methods; that is, the overthrow of existing governments by force, government by dictatorship, liquidation of political opponents-and that is just a polite term for murder of one's opponents.

There may be occasions when force may be necessary in effecting social change. I know of very few countries where the people are ashamed of the revolutions by which they brought about social, political and economic changes. We heard much talk in the house during yesterday's debate about Magna Carta. Let us be clear on this: Magna Carta was

not something given to the British people by the willing consent of the British King. I remember quite well, though it is a long time ago, reading in my school history that when King John signed Magna Carta in the meadow at Runnymede he signed it with a smile on his face but with rage in his heart. In other words, the barons of England of that time-

and let us be clear about it; it was not the common people of England, but the ruling class-told King John, "You sign here"; and King John signed, because there was no alternative to signing.

In the United States they had their revolution of 1776, of which all Americans are very proud indeed. Sometimes I am amused when I read statements made by the Daughters of the American Revolution, worthy ladies who have organized to perpetuate the achievements of one revolution, and who insist that no more revolutions must ever take place, no matter how great the need may be.

I mention these facts merely to show that there may be occasions in the lives of people when force is necessary to put down tyrants.

Mr. CASE:

Are you in favour of communism, or against it?

Mr. MacINNIS:

I will tell my hon. friend this, that it would be useless to tell him whether I am in favour of it or against it, because he would not know after I had told him.

Mr. CASE:

Yes, he would.

Mr. MacINNIS:

I do not believe there are any Englishmen who consider that the civil war of 1648 and 1649, when King Charles lost his head, is something to be ashamed of.

Mr. CASE:

King Charles lost his head.

Mr. IRVINE:

You never had one to lose.

Mr. MacINNIS:

I mention these things merely to show that there may be occasions in the lives of men when violent action may be necessary. But I am glad to say that I am living in a country where change by the consent of the people has become a tradition. And I should like to say here that in all the years I have been advocating political action through parliamentary institutions, the argument my communist opponents used against me was this: Yes, but when you have elected your socialist parliament the ruling classes will not allow you to put your program into effect.

If there is anything that has been completely falsified by events, it is that assertion. I do not know of any socialist government in any democratic country that has been prevented from carrying out its program by any counterrevolutionary action on the part of the former ruling classes. I want to make that clear.

Mr. CASE:

May I ask the hon. gentleman a question? Do you subscribe to the theory introduced in the book "Make This Your Canada" by David Lewis, alias Louz?

Mr. ARCHIBALD:

Take out the drunken bum.

Criminal Code Amendment

Mr. MacINNIS:

I suggest that that question is quite unworthy of an answer. David Lewis did not write "Make This Your Canada." He collaborated in writing the book. May I say that before the book was published I went over every line of it.