Mr. Harrison.:

As some hon. members have indicated, we are not asking for new lines- and I want that to be clearly understood. Contracts were let; and then between 1930 and 1935 the government of the late Viscount Bennett saw fit to give the contractor a sum of money to release the government from the obligation of continuing with this construction.

Meantime many people had gone into and settled in those parts of Canada, with the understanding that the line was under construction and that if they stayed there they would be able to get their produce to market. I was pleased to note that the minister said one of the points which would be considered was as to whether the line was economical to operate, and that under that classification possibly the Heinsburg gap would not be considered.

I suggest that in the line farther north between Barnes Crossing and St. Walburg we have a line which is economical for the simple reason that it also was to connect up with the C.P.R., which runs to Prince Albert, and from Meadow Lake through to Bonny-ville, and the C.P.R. were to have running rights on the C.N.R. when the C.N.R. was built. This would give the C.P.R. direct connection from Edmonton to Prince Albert.

An official of the C.P.R. who surveyed the economic possibilities of the line at that time, and was stationed in the town of Meadow Lake, gave voice to the idea that it was an economic proposition.

Just to give some idea of how far the economy has come since that time, I have here a letter from the president of the board of trade at Meadow Lake which I received this week. I believe in my maiden speech I made mention of the grain shipped out of Meadow Lake. Since then some hon. members have doubted whether that would be possible. The president fortifies my first remarks, to the effect that there have already been a million bushels of grain shipped out of the town of Meadow Lake up to the 15th of October this year, and that there will be over two million more shipped from that point. Part of this grain comes from the territory not served by the railway; and, as I mentioned before, a million dollars' worth of grass seed was also grown along that line last year.

At the time the economic survey was made the town of Meadow Lake, for instance, produced little grain at all, possibly 100,000 or 200,000 bushels at the outside. At the present time the president writes me that a whole trainload is going out of the town of Meadow Lake every day. The hon. member for Vegreville mentioned the Redwater oil fields as being along this line. The town of Meadow Lake alone uses some 3,000,000 gallons of gasoline in a year, and it is just one point on the line. There are many other towns. As a matter of fact, within my constituency there are some 20,000 people in the region adjacent to it who would ship their products thereon.

Therefore there is no doubt about the economic factor. The other consideration is the fact that the government at one time committed itself to construct the line. They built most of the grade and left a small gap. There is no steel on that part of the grade.

As a result of the action of the government at that time, people settled there, and in spite of the transportation difficulties are now out-producing any other part of Saskatchewan. It is necessarily very good land, and there is no doubt about the economic value. That is one point I want to bring to the attention of the minister. I am not going to ask him, as the hon. member for Vegreville did, when it will come about. I know that he will make proper representations to the Canadian National Railways. As I have said, the action of the C.P.R. hinges entirely on when the C.N.R. line is constructed because the C.P.R. have running rights over the C.N.R. line when it is built. As soon as the

C.N.R. line is constructed the C.P.R. will no doubt extend their lines from Meadow Lake to Bonnyville and then run over that line.

The official of the C.P.R. to whom I have referred made a survey of the economic possibilities of the land some years ago and said at that time that when the line was completed his company intended to run a daily train between Edmonton and Prince Albert each way. If it was economically possible at that time it is ten times more so now. I think I have taken up as much of the time of the house as is necessary to place the case of the people of that district before the minister.

Mr. Green:

Mr. Chairman, we have had a most interesting discussion this afternoon on the question, of a coastguard. I have nothing to add to it because the ground has been well covered, but I think the minister can be quite sure that there is great interest, in the coastal areas of Canada and also in the great lakes area, in the establishment of a coastguard service for Canada. I should like to suggest to him that he ask the standing committee on marine and fisheries to go into the question. That committee has to meet at this session in order to deal with the bill being brought in by the Minister of Fisheries, or at least we were told last night that was probably what w'ould be happening.

Mr. Mayhew:

That is right.

Mr. Green:

I think the committee could perform useful work if it also gave consideration to the question of a coastguard. Practically every hon. member who has spoken today on the subject is a member of that particular committee. I do not believe it would be wise to let the matter drag along. I believe if the standing committee on marine and fisheries were to consider it there would be far more chance of getting something done at an early date than if we merely have a discussion now and drop the matter. That is particularly so because it is a job of co-ordination, a matter of getting different departments together. The interdepartmental committee which the minister mentioned has been considering the question for quite a long time.

Mr. Chevrier:

No, it has not. It is just a recent appointment.

Mr. Green:

I have a press dispatch from Vancouver dated April 16, 1949. It reports that the minister's deputy, Mr. Lessard, and the chairman of the Canadian maritime commission, Mr. Clyne, met representatives of thirteen coastal organizations in Vancouver to discuss the possibility of a coastguard service for British Columbia. Apparently

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Mr. Clyne is chairman of the interdepartmental committee. He said at that time that they were there to listen to arguments for a coastal search and rescue service, that they had an open mind, and that a committee had been set up to study requests for such a service made by persons and organizations on both coasts. Will the minister tell us whether there has been any report to him yet by the interdepartmental committee? Will he also say whether he has any objections to having the problem considered by the standing committee on marine and fisheries?

Mr. Chevrier:

As to the first question, there has been no interim report. As I indicated a moment ago, the matter is under discussion by the committee. It is a tremendous problem and one which it is not easy to determine without consideration of many factors. The hon. member seems to think we are going to have a discussion and then drop the matter. Perhaps he could have said that last year but certainly not now when, following the debate of last year and for other reasons, it was decided to set up a committee. Therefore the matter is not being dropped; on the contrary it is being studied by that committee.

With reference to the second suggestion, I do not think that it would be proper, when one committee is already dealing with the matter, to submit it to another committee for consideration.

Mr. Green:

One would be a house committee and the other is an interdepartmental committee.

Mr. Chevrier:

I know, but without having gone into it fully I would rather be inclined to await the report of the interdepartmental committee before submitting the question to a house committee.

(Translation):

Mr. LaCroix:

Mr. Chairman, I wish to take this opportunity to request the government to oppose, through a representative with the board of transport commissioners, the proposed rate increases suggested by the Bell Telephone Company, which, to my mind, do not seem reasonable. I believe it is the government's duty to so act, for not only shall we have to pay more for our own telephones, but the increase in rates will perforce be a charge upon federal, provincial and municipal governments, a charge which will have to be borne by each and every one of us through taxation. Consequently, I believe that we should do everything it is humanly possible to do in order to force the

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Bell Telephone Company to show proof of the absolute necessity of this increase in rates before the request is granted.

In the spring of 1948, the Bell Telephone Company submitted a petition to parliament for an increase in its capitalization.

This application was granted only after a promise was made by Mr. Munnoch, K.C., the representative of the company before the standing committee on railways, canals and telegraphs, as you will see at page 15 of the committee report under date of May 11, 1948. This was a reply given to Mr. Campbell, a member of the committee, and it reads as follows:

Mr. Campbell:

A while ago, I asked a question

that went unanswered. What I wanted to know is this: The company is going to spend $1,000,000 on

rights of way, $42,000,000 on land and buildings, $97,000,000 on the building of centrals, $95,000 on the building of stations, $86,000,000 on city lines, $26,000,000 on trunk lines and $15,000,000 on general equipment, which adds up to $362,000,000. Can you meet those expenses and still maintain your present rates?

Here is Mr. Munnoch's reply:

Mr. Chairman, if I may reply, I would say that the total amount of the capital we are requesting will not all be issued at one time. It will be issued from time to time, as required for new facilities of the kind mentioned by the hon. gentleman.

As new facilities develop, they will become productive, that is to say they will yield revenues. It is impossible to say what will happen to telephone rates, but I can say that at the present time the company has filed no application with the railway board for an increase in rates and has made no preparation for filing such an application. We have carried on through the war period, and by reason of economies and technological improvements in telephony, we have been able to maintain our present rate structure since it was established in 1926. Now, as to the future, as long as by economies and technological development we can maintain our rates, we intend to do so but if the economic conditions under which the company has to operate compel us to seek higher rates, then the company will seek them. Such, in so far as I can describe, is the situation at the present time.

As far as I am concerned, I never believed that promise made by the Bell Telephone Company and I voted against the second reading of the bill asking for that increased capitalization, as will be seen on page 3506 of Hansard, volume IV, 1948 session.

The foregoing statement by Munnoch calls for a very close scrutiny. If the Bell Telephone Company was able to maintain its rates without change from 1926 to 1948, what has happened between 1948 and 1949 for the company to decide suddenly to ask for increased rates? Has the company lost some of its efficiency? Has it stopped advancing in the way of technical progress? Have its operation costs increased more in one year, from 1948 to

1949, than in the previous twenty-two years, that is from 1926 to 1948? Has it ceased making profits?

No, Mr. Chairman, by its present attitude the company is turning its back on the Canadian people, as represented by one of its parliamentary committees. I believe the only answer we should give to that monopoly is to have the federal government socialize it and in my estimation, Mr. Speaker, if we want to destroy the forces of communism, we must give satisfaction to the people who pay for public services; that is the best means at our disposal.

You know as well as I do, Mr. Chairman, that the Bell Telephone Company purchases all the material, all the technical equipment it needs from the Northern Electric Company without calling tenders from any other company.

I submit that part of the so-called "operating expenses" are distributed to the Northern Electric Company, a subsidiary of the Bell Telephone Company, made up of a few shareholders of the latter company. The profits of the company are not disclosed; they dare not distribute the profits of the Bell Telephone Company to its shareholders. And that is why, last year, the company increased its capitalization in order to spread out over a larger number of shares the profits remaining after the leakage intentionally directed towards the Northern Electric Company. The intention behind all this is to be in a better position to ask for an increase in rates, the shareholders supposedly earning practically nothing. An attempt is being made to conceal from the public the actual dividends earned and even to prevent the public from benefiting from this company's profits. It is a social injustice about which I appeal to the members of this house and, through you, Mr. Speaker, to the country as a whole. Since 1927, the Bell Telephone Company has never divulged the slightest part of its profits to the public, and has never effected any important revision in its rates.

Once more, do we wish to prevent the increasing communist forces from invading our country? Let us give the man in the street, who wants to live and breathe freely in this sunny land of ours, the means of living here; and let us give the people of Canada public utilities genuinely concerned with the people's interests.

As I said in this house in 1938, I maintain that part of what is called "operating expenses" is distributed to a Bell Telephone Company subsidiary, the Northern Electric Company, which has only a few shareholders. Profits are concealed by the directors. They do not dare distribute them either to the Bell Telephone Company nor to its shareholders. These tactics serve to cloak the real dividends. In this way, the public cannot benefit from the profits accumulated by the company. It is a social injustice, and typical trust behaviour.

In its issue of December 29, 1936, Labor, a Washington publication, supplies interesting details concerning those reprehensible practices:

The federal communications commission has investigated the Bell Company and another manufacturing concern which is one of its subsidiaries, the Western Electric Company Incorporated. The investigators found that about $500 million of the Bell Company's value equipment is watered stock, sheer vater.

Cyrus G. Hill, the board's chief engineer, explained how the American Telephone and Telegraph made such tremendous profits. He stated:

The Bell Telephone Company buys 92 per cent of its equipment from Western Electric, thus preventing all competition and making it possible for Western Electric to charge whatever they want. The money simply passes from one of the Bell Telephone Company's coffers to another.

Reference is made in the same article to the instrument commonly known as the French phone.

Because of extra charges, the company has made an additional profit of $24 million. The extra charges were made on the grounds that these telephones entailed additional expenses for the company. This claim is unfounded, said Mr. Hill. Actually, the new telephone permits colossal economies, by doing away with manufacturing costs of wires and other expenses totalling more than $85 million.

That is the method used in the United States.

The part played there by the Western Electric Company Incorporated in relation to the American Telephone and Telegraph Company is the same as that played in this country by the Northern Electric Company in relation to the Bell Telephone Company of Canada.

I have here a document which clearly shows how the Northern Electric Company is controlled by the Bell Telephone Company. I have managed to obtain the list of shareholders of the Northern Electric Company. It is quite short. It shows that there are only two big shareholders: the Bell Telephone Company of Canada and the Western Electric Company Incorporated. The first holds a block of 456,640 shares and the second a

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block of 353,130. The Western Electric Company is that very company mentioned by investigator Hill's report.

Here is the list:

shares

Hon. Thomas Ahearn, P.C., c/o Ahearn & Soper,

56 Sparks St., Ottawa, Ont 25

W. F. Angus, c/o Dominion Bridge Co., Ltd.,

P.O. Box 4015, Montreal, Quebec 25

Bell Telephone Co. of Canada, Beaver Hall

Building, Montreal, Quebec 456,640

E. S. Bloom, c/o Western Electric Co., Inc.,

195 Broadway, New York, N.Y 10

Hon. A. J'. Brown, K.C., c/o Montgomery & McMichael, 360 St. James St., W., Montreal,

Quebec 25

R. H. Gregory, c/o Western Electric Co., Inc.,

195 Broadway, New York, N.Y 10

J. D. Hathaway, c/o Northern Electric Co., Ltd.,

1261 Shearer St., Montreal, P.Q 25

L. B. McFarlane, 400 Mount Pleasant Ave.,

Westmount, P.Q 25

R. H. McMaster, P.O. Box 1650, Montreal, P.Q. 25 C. F. Sise, c/o Bell Telephone Co. of Canada,

Beaver Hall Bldg., Montreal, P.Q 25

C. G. Stoll, c/o Western Electric Co. Inc., 195

Broadway, New York, N.Y 10

Western Electric Co., Inc., 195 Broadway, New York 353,130

Which makes a grand total of 809,975

Mr. Speaker, I wish to stress the fact that no Northern Electric Company shares are available on the market. No one can buy them. They are all held by the people I have just mentioned.

On the other hand, I am not the only one to allege that the Bell Telephone Company has the absolute monopoly of a great public service. Here is a reply given in 1938 by the present Minister of Trade and Commerce, who was then minister of transport, as reported on page 935 of Hansard, volume I, 1938 session. I quote:

We must all recognize that the Bell Telephone dompany has a monopoly of a great public service in the districts in which it operates, and it is entirely sound government to provide that a public service monopoly shall be regulated as completely as possible.

The Deputy Chairman:

Order.

Mr. LaCroix:

Therefore,-

The Deputy Chairman:

Order. I am sorry to interrupt the hon. member. I have listened to him with much attention since he began his remarks, and I notice that they do not relate in the least to item 453. He is now discussing monopolies, asking whether the government should not do something to prevent them. We are now on item 453 of the Transport estimates, and I do not think that it is in order to ask the minister (Mr. Chevrier) to state his views on the matter of monopolies.

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Mr. LaCroix:

Be that as it may, Mr. Chairman, I shall conclude by saying that I hope the government will take whatever action is necessary for the protection of the public, in seeing that it is properly represented before the board of transport commissioners.

(Text):

The Deputy Chairman:

May I remind all hon. members that there has been a lengthy discussion on item 453. I think I have given all the necessary latitude to hon. members to discuss general matters. Several members have raised points which, perhaps, could have been more properly raised on specific items. If any progress is to be made, I would venture to suggest that this general discussion should not last much longer. I understand that a few more hon. members wish to take part in the discussion, but I would ask the co-operation of all the members to facilitate the early passing of this item. Then, we could carry on with a discussion of the other items.

Mr. Gillis:

I am not going to pursue the subject mentioned by the last speaker. The subject I am going to raise is not covered by any item in the estimates, so that the only time I can raise it is on the general item. I am bringing the matter forward now because I desire to secure a statement of policy from the minister on employment on public works projects falling within the jurisdiction of the Department of Transport.

The minister knows something about the question I am raising because I wrote to him about it early in the session. It has to do with employment at the Sydney airport, and it appears as though many men would be required on that work. There are many unemployed in the area. According to the telegrams and letters I have received from both individuals and organizations, anyone applying for employment at that airport is obliged to go to the two defeated candidates in the riding, one a druggist and the other a local magistrate, and secure from them a slip entitling the person to employment.

I should like to point out to the minister that the government maintains a chain of employment offices across this country known as national employment offices. In these offices there is a veterans' counsellor who is supposed to see that the veterans get preference in employment, particularly on public works projects. These offices have a list of all the unemployed in the community, and know the trades or vocations for which these people are fitted. The officers in these employment offices know the men who have been unemployed the longest, and generally try to give preference to the men with families. *

[The Deputy Chairman.]

As a result of the sort of action I have brought to the minister's attention, men have left employment, secured a slip and taken a job on this construction project. If we are going to justify the maintenance of these national employment offices, then I think it should be the policy of the government to give employment through them. The minister, who has supervision over public works projects, should notify all concerned to that effect. I believe patronage is a throwback to the past. We are starting to build Canada as a nation. We are going to amend our own constitution, and I believe it is time that vicious system of patronage, which creates unrest and disunity in a community, was abolished. I should like the minister to tell me whether it is his policy to route employment on projects under his supervision through the employment offices.

Mr. Chevrier:

I believe my hon. friend knows full well that that is not the policy of the department.

Mr. Knowles:

I believe it is the other way round.

Mr. Chevrier:

What did I say?