March 3, 1950

L L

William Moore Benidickson

Liberal Labour

Mr. W. M. Benidickson (Kenora-Rainy River) moved

the second reading of Bill No. 9, to incorporate Prairie Transmission Lines Limited.

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Subtopic:   PRAIRIE TRANSMISSION LINES LIMITED
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LIB
L L

William Moore Benidickson

Liberal Labour

Mr. Benidickson:

This bill is practically the same as another bill, under the same name, which passed the Senate last session, but was not voted upon by this house, nor advanced to a committee of the house for further study prior to the closing of the last session. During the last session, information was requested by members of the house regarding the applicants for this private bill. Criticism was directed at the fact that some of the applicants for incorporation were members of legal

firms acting for the company desiring incorporation. It was suggested that more information should be supplied regarding the real applicants. The new list of applicants in this bill constitutes the only change from the bill presented last session.

The seven applicants, who will be the incorporating directors of the company, are all citizens of the province of Alberta. I believe they are known to many members of this house. They are associated with other prominent individuals in Alberta, British Columbia, Manitoba and Ontario, and they propose to maintain the ownership of this important pipe-line project in Canada. I am informed that they do not represent any United States corporation. These applicants are Canadian citizens who believe, as most of us believe, that Canadians are entitled to the fruits of the development of Canadian natural resources. Associated with them are prominent and successful engineers, as well as professional advisers. They have secured the support of investment bankers of substance, who have expressed their willingness to form a group to sell the securities required to provide the funds necessary for a project of this kind. The plans, and other aspects of the project, I believe could best be discussed in the committee on railways, canals and telegraphs, when representatives of the company would be available for questioning.

At the last session much time was taken by a few members of the house in general argument, so an opportunity was not afforded for examining in committee the merits of the bill or the plans of the company. Believing that the opponents of the bill had a full opportunity for expressing themselves in this way last session, I trust they will now permit a vote of the house, which will enable the committee to examine all matters in which the hon. members are properly interested.

The applicants for the incorporation of this company must have incorporation in order to apply to the various regulatory bodies for permission to build a pipe line to transmit gas from Alberta to the Pacific coast area in Canada and the northwest United States. I think it is desirable that I remind this house that this is, simply a bill to obtain incorporation, in the same manner as charters were granted to the five other companies in the spring session of parliament last year. In that session, parliament also enacted a general Pipe Lines Act. Under this act, parliament gave the board of transport commissioners full power to regulate any interprovincial or international pipe lines. It is a requirement of that statute that any company proposing to build such a line must be incorporated by parliament. I submit that, parliament having

Prairie Transmission Lines so decided, it is the duty of parliament to deal with an application for incorporation when the applicants come here for parliament's decision. I say that parliament should now render a decision, yes or no. It is not good enough to intolerably delay a decision by unnecessary debate, which has been widely described in the press as filibustering.

After a pipe line company obtains incorporation here, it has to appear before several regulatory bodies. As I pointed out, the board of transport commissioners have been given jurisdiction so far as the dominion parliament is concerned. Under legislation passed in Alberta in July of last year, any company proposing to export gas from the province of Alberta must first obtain a permit from the Alberta petroleum and natural gas conservation board. In the third place, as we heard last session, there is an additional public control, in that any applicant proposing to export gas must obtain a permit from the Minister of Trade and Commerce, under the provisions of the Electricity and Fluid Exportation Act.

In this connection, I think it would be useful to briefly review the position with regard to this project, which I know has created a great deal of interest in the province of Alberta and in the House of Commons. The large discoveries of oil in Alberta in recent years have produced great reserves of natural gas. Providing a market for this gas will benefit the citizens of Alberta, and will bring about additional development of both oil and gas. The proposal to build a pipe line to serve not only British Columbia, but the Pacific northwest United States, is an important development for the future of western Canada. It should be noted that perhaps over 80 per cent of the output from any such pipe line will have to be sold in the Pacific northwest United States, in order to justify the tremendous financial cost of the pipe line itself. This will mean an extremely valuable source of United States exchange.

It is of primary importance, however, to see that the interests of Canada are protected in connection with this project. The announced policy of the government of the province of Alberta is to see to it that no export permit is granted until the interests, first, of the citizens of Alberta and, second, the citizens of other provinces of Canada are given priority. Moreover, the Minister of Trade and Commerce (Mr. Howe), in dealing with this very question during the last session, said this, as reported in Hansard at page 1560:

. . . the attitude of the government would be that the export of gas would be treated in exactly

Prairie Transmission Lines the same way that we treat the export of electricity, namely, that the needs of Canada would be served first, and would be protected in perpetuity for all export purposes.

Later in the debate, at page 1806 of Hansard, the minister said this:

Vancouver must be served before any considerable service is taken off for supply to the United States.

Now, Mr. Speaker, what are the interests of Canada in this matter? I suggest that the primary requirement is to see that potential Canadian consumers are provided for before any gas is exported.

Not only the supply of gas but its ultimate cost to the Canadian consumer must be considered. This is an important factor in determining the route of the pipe line. I am informed this pipe line project will cost about $100 million. To finance it, an assured market must be available, as all members will appreciate. Bonds to pay for the construction cannot be sold, unless a market for the output of the line is assured. Where is this market?

In the Pacific area it is said that 85 per cent is across the line in the United States, according to the information that is given to me from engineering sources, in the cities of Portland, Seattle, Tacoma, Spokane and the industrial areas of the state of Washington. There, natural gas must compete in price with other fuels such as coal, oil and electricity. The problem then is therefore to construct a line which is economically feasible and which thus will establish reasonable prices for the Canadian consumers in British Columbia, which is some distance from the source of supply. Obviously, the shorter the line, the cheaper the capital cost will be and the lower the overhead charges; also, if the line passes through centres of population, the tapping of the line at intermediate points cuts down the per unit cost of transportation.

For these reasons, I am informed, the best engineering advice as given to the applicants for this charter at an early stage was that a route which proceeded from southern Alberta, through Kingsgate into the United States, across the flat plains of the state of Washington, with a branch line to Trail, and terminating in the Vancouver area, would cost approximately $20 million less than the cheapest all-Canadian route. Thus more gas would be sold by Alberta producers, and the cost to the ultimate consumer in British Columbia would be less than through a more expensive pipe line route. I do not propose to vouch for these engineering details. I think that assurance in this respect can best be obtained by hon. members as a result of seeing the engineers themselves, through examination in a committee of this house. I

[Mr. Benidlckson.l

think that wise counsel was given to us in this respect last session by the hon. member for Coast-Capilano (Mr. Sinclair) when he said, as reported at page 2103 of Hansard of last year:

The only place where that can be decided is before the standing committee on railways, canals and telegraph lines where expert witnesses, engineers both for and against the pipe lines, can be called and give members of parliament actual and not ipse dixit information. For that reason I, as a British Columbian member who yields to none in devotion to my province, say that I will vote for the bills on second reading if only to get them where they can be properly studied in committee. Unless very sound reasons are given in the committee why construction through British Columbia is uneconomic, I will vote against the bills on their return to the house.

Then at page 2104 he goes on to say:

But I say they should get second reading and go to the standing committee on railways, canals and telegraph lines if only to give the members of this house and the people of Canada knowledge of the facts rather than the opinions of members of parliament, , many of whom obviously have very little knowledge of the engineering problems involved.

A great deal of discussion at the last session of parliament concerned itself with this question of route. The applicants for this bill desire to build the pipe line along the most economic route to protect Canadian consumers both as to supply and as to cost. If the government of the province of Alberta, or the board of transport commissioners, or the Minister of Trade and Commerce (Mr. Howe), under the Electricity and Fluid Exportation Act, decides that the route of the pipe line should proceed from southern Alberta through Canadian territory to the city of Vancouver before entering the United States, I am informed that the proposed company would be prepared to build the line along this so-called "all-Canadian route".

The whole question of the route of the pipe line cannot be settled, however, until all the factors mentioned are considered by the regulatory bodies which have to make the decisions. Considerations arise from time to time-and they have arisen-which may change the ultimate decision as to the proper route to be followed. Another pipe line project is proposed to take natural gas out of the province of Alberta eastward into Saskatchewan and Manitoba. The available fields of gas in Alberta will have to be allocated as between these projects, and this consideration may affect the starting point of the pipe line. Large additional reserves of proven gas may be discovered before any permit is granted to any company, and this also might alter the starting point of a pipe line route. Economic developments in southern British Columbia or in some of the large United States cities might similarly affect the desirable final choice of route. The competition of gas from other fields in the

United States, such as those in Wyoming, or of other fuels, may dictate the choice of the pipe line route.

When the government agencies concerned have weighed all these factors they will approve the route to be followed. Other things being equal, I am informed that the applicants for this bill will favour an all-Canadian route to Vancouver. As I said before, they are Canadians who have only the interest of Canada at heart, and have no United States interest to serve.

Before closing, Mr. Speaker, I just want to remind the house that there is in existence another charter giving rights with respect to the transportation of gas through a pipe line; and in this connection it should be observed that the Westcoast Transmission Company obtained a charter at the spring session of parliament last year, through a bill sponsored by the hon. member for Fraser Valley (Mr. Cruickshank). This bill was frequently referred to in the debates last fall and the company has been called the company proposing an all-Canadian route. As reported at page 2807, I think, of Hansard of last session, the hon. member for Fraser Valley said that he sponsored this company simply because it proposed to build an all-Canadian route. At page 2807 of Hansard the hon. member for Kamloops (Mr. Fulton) is reported as saying:

When the bill went through last year we knew at the time the company was incorporated that the route would be all-Canadian.

I want to point out to hon. members, Mr. Speaker, as I did last session, that this company, Westcoast Transmission Company, has before the board of transport commissioners, and has never removed it, an application for a route comparable to the route that the engineering staff of this company, the Prairie Transmission company, and the Alberta Natural Gas Company, have indicated is probably at this stage the most economic route. I say therefore that it is obvious that parliament placed no restriction on the choice of routes by that company and that company has certainly not observed any such restrictions in its various applications.

The applicants for the incorporation of Prairie Transmission Lines Limited only seek to be placed in the same competitive position as Westcoast Transmission Company to propose whichever route is finally seen to be both most economical and most beneficial to the interests of Canada. No company should have a monopoly in this connection, and this is the view of the government of Alberta as shown by the telegram from Premier Manning

Prairie Transmission Lines to Senator Turgeon on October 17, 1949, which appears at page 1345 of Hansard of last year, and in which the premier says in part:

The Alberta government is not opposed to the incorporation of the Alberta Natural Gas Company or any other bona fide company under the provisions of the dominion Pipe Lines Act, but on the contrary, feels very strongly, that no bona fide company should be refused incorporation if that refusal would deprive the province of its right to deal with any or all legitimate companies interested in exporting gas and would restrict such dealings to those particular companies favoured by parliament for incorporation.

Hon. members will have noticed that the leader of the Social Credit group from Alberta in this house stated, as reported at page 2113 of Hansard of last year:

The Social Credit members in the house feel that these bills should be brought to a vote.

I think that most hon. members will agree.

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Subtopic:   PRAIRIE TRANSMISSION LINES LIMITED
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LIB

George Alexander Cruickshank

Liberal

Mr. Cruickshank:

Will the hon. member

permit' a question?

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L L
LIB

George Alexander Cruickshank

Liberal

Mr. Cruickshank:

I should just like to ask the hon. member for Kenora-Rainy River if the company he is sponsoring is prepared to abide by its application, and do as the other companies have done-agree to an allCanadian route. Will they abide by that?

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L L

William Moore Benidickson

Liberal Labour

Mr. Benidickson:

I have given the assurance, Mr. Speaker, that this company is quite prepared to build a pipe line wherever any of these regulatory bodies insist that it be built.

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LIB

George Alexander Cruickshank

Liberal

Mr. Cruickshank:

I have one other question if the hon. member is willing to answer it. Am I correct in my understanding tonight, that the directors of the company he is sponsoring have been changed since the last submission.

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PC

Arthur Leroy Smith

Progressive Conservative

Mr. Smith (Calgary West):

Yes, they have some friends of mine on it, now.

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L L

William Moore Benidickson

Liberal Labour

Mr. Benidickson:

I indicated that the applicants had been changed from solicitors of the company to those who will be acting directors at the early stages of the company.

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CCF

Herbert Wilfred Herridge

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

Mr. H. W. Herridge (Kootenay West):

Obviously some hon. members are somewhat impatient with the continuance of this debate on the pipe line bill. I do ask them to realize that the members from British Columbia who have spoken or will speak in this debate are giving voice to the opinions of the great majority of the people of that province regardless of party because, Mr. Speaker, this is a very important matter so far as the development of the interior of British Columbia is concerned.

Before proceeding I want to give some evidence to prove that the position taken

Prairie Transmission Lines by many of the British Columbia members in this house is supported by public opinion in British Columbia. In my hand I hold a clipping from the Victoria Times, dated February 28, 1950, which is further proof of the attitude of the government of British Columbia. The article is entitled:

All-Canadian route for Alberta Pipe Line Urged

Lands and Forests Minister E. T. Kenney said in the legislature Monday, "we must do our utmost to see that the all-Canadian route is selected for the proposed natural gas pipe line from Alberta to the northwestern United States. Preliminary engineering had been completed for an oil pipe line from Edmonton to Vancouver following the same route as the proposed gas line-through Yellowhead pass, south through Kamloops to Princeton, along the Hope-Princeton highway, to Vancouver.

"This line is 725 miles to tidewater, and shorter by 350 miles than a line from Edmonton south to Montana and westward to Vancouver," Mr. Kenney said.

Based on present-day costs, he continued, the proposed oil line was shown to be entirely feasible from a construction, operating, maintaining and economic standpoint.

The minister listed six benefits from the proposed transmission of natural gas along the proposed oil line route through British Columbia: it would provide cheaper fuel; Canadians would have first draw on the supply; United States dollars would be spent for construction; Canadians would be employed in construction, maintenance and servicing; new industries would be attracted; as a national defence measure the line would provide vital fuel requirements to strategic centres on the coast.

In addition to that, Mr. Speaker, we know the opinion of the attorney general of British Columbia as given to this house by the hon. member for Fraser Valley (Mr. Cruick-shank) on Tuesday evening last. Before proceeding, Mr. Speaker, I want to say this to the house: a good number of my constituents, regardless of party, have asked me to thank the hon. member for Fraser Valley for his efforts in these pipe-line debates.

I now wish to quote from the Nelson Daily News. The Nelson Daily News is the largest daily circulated in east and west Kootenay. As a matter of fact it is a Conservative paper. I read it, of course, although it is not favourable to the party I have the honour to represent. In this editorial the Nelson Daily News represents the opinion of people in those districts. The editorial is entitled:

For the All-Canada Route

British Columbia has a particular interest in the movement in Alberta to have the proposed pipe line for the export of natural gas to the Pacific coast laid through the Yellowhead pass in the Jasper area and thence southward through the Kamloops, Princeton and Hope districts to Vancouver. The alternative route-southward through Alberta into Idaho and then westward through Washington and southward to Portland-would be of little benefit in this province as far as natural gas is concerned, and would present numerous other disadvantages from which the Yellowhead pass plan of the Westcoast Transmission Company Limited is free.

The maintenance road that would parallel a pipe line from Edmonton through the Yellowhead pass to Vancouver would provide additions to the existing highway system that would be of great importance in future development, points out the Victoria Daily Times. The feeder lines that could be run off the main line would supply natural gas at minimum cost to communities in the southern interior of British Columbia which at present are not so served. A loop from Kamloops, talcing in Vernon, Kelowna, Penticton and Trail, for instance, would open up facilities of great promise. The export market to Portland would still be served, but it would be a market to be supplied after the needs of British Columbia had been filled. The route through the United States would put Vancouver in the position of being able to expect only the surplus unused by the American market.

The advantage of spending the major portion of the $70,000,000 construction costs in Canada rather than in the United States, is, of course, immediately obvious, and the prospects of development for Alberta and British Columbia areas now isolated from transportation and fuel facilities are readily apparent. These are among the considerations of importance to the dominion, and particularly to its western provinces, to which it is hoped the Alberta petroleum and natural gas conservation board will give full weight in assessing the merits of the pipe line companies' applications now before it.

After returning home at the conclusion of the last session of parliament I had the opportunity to address a number of meetings of various types of organizations and groups. I had the opportunity to meet a good number of my constituents, and I was then more firmly convinced than ever that the people in the southeastern portion of British Columbia are very anxious that members representing British Columbia stand up for Canadian rights in this matter.

The public opposition to these bills from British Columbia, which we are simply expressing in this house as members of parliament, is based entirely on the belief that Canadian communities and Canadian requirements should receive first consideration. Once we are assured that these requirements will receive first consideration our objection to these bills will be- dropped.

In passing I might say that, belonging to the party to which I do, I would prefer that these pipe lines and gas lines be publicly owned utilities. We know at this time that we cannot give effect to our policies on this matter in this house at this time. Therefore we are doing our best to protect Canadian citizens, and British Columbians particularly, by advocating that Canadian requirements and Canadian needs receive first consideration.

I represent a constituency in the interior of British Columbia, namely, Kootenay West, which has vast natural resources, untapped natural resources, and which still requires great power developments to utilize these resources. I have grown up in that district from boyhood. I have seen the district

developed from the pioneer stage to what is, shall I say, a semi-pioneer stage. We have in that district great developments in mining, lumbering and in smelting; but if we are going to have a balanced economy we require secondary industries.

In order to understand the point of view of the people I have the honour to represent I am going to place on record a few illustrations of the situation as it exists in my constituency. I know other members representing other constituencies in British Columbia will apply their local conditions to these pipe line bills.

As I said before, we have large mining, smelting and lumbering developments; but for years boards of trade, farmers organizations and other public bodies have realized the necessity for the development of secondary industries and have urged the necessity for the establishment of a pulp industry in the interior of British Columbia. They have urged the necessity for the establishment of a steel industry. So important is that to the interior of British Columbia, so important is the establishment of those industries and secondary industries that the British Columbia government has had a representative of the provincial department of trade and industry resident in Nelson for three or four years, whose sole duty has been to make a complete survey of natural resources and of industrial opportunities, power opportunities and possibilities for power development, and then to interest outside capital, industrialists and others in the possibilities for the development of secondary industries in that area.

Power is the great question which enters into industrial development in this age. We have our largest power development on the Kootenay river. The greater portion of that power is used and required by the Consolidated Mining and Smelting Company. Some of it is used for domestic requirements in the city of Trail and for other industrial needs in the southern Okanagan. Then, we have the city of Nelson served by the Kootenay river.

In addition to that we have some smaller electrical developments throughout the district serving the smaller villages, towns and cities. At the present time we have under development a large power project on the Arrow lakes at Watshan. Most of that power will be required to serve the northern Okanagan.

There is a great shortage of power for industry. We have one more great possibility for power development in the immediate future, and that is on the Pend d'Oreille river. That power will also be required by the Consolidated Mining and Smelting Company. So. in the future we foresee a 55946-29

Prairie Transmission Lines continued shortage of power. That is one reason why the people in my constituency are so interested in these pipe line bills, and are so concerned about the service they should receive from an all-Canadian route.

During the latter years of the war, and shortly thereafter, an extensive survey was made of the industrial possibilities of the Kootenay area. As I said before, we have an opportunity for the establishment of a pulp industry. I believe we have one of the largest stands of pulpwood in North America, in the Columbia river basin, close to transportation. But we cannot establish a pulp industry in that area, even if capital were available, because there is not sufficient power to operate a pulp industry at the present time.

There is also a desire for the establishment of an iron and steel industry, because we have coal and ore. According to a report by the government of British Columbia there are 25,500,000 tons of tailings at Kimberley which have a 47 per cent iron content and a 27 per cent sulphur content. We have the other minerals and materials required to develop a steel industry; but that steel industry cannot be developed until we have the necessary power.

In addition, it has been suggested that we require a corrugated sheeting plant as a secondary industry in the interior. We supply a large amount of white pine, manufactured in blocks from the west Kootenay area, for the manufacture of matches by the Eddy Match Company Limited. We produce the sulphur for matches at Trail, in my constituency. In total we produce some 5 million feet per year of white pine in the form of match blocks which come to Ontario and other match factories for manufacture into matches. We believe we should have a match industry in Kootenay West, in the southeastern section of British Columbia, so that we would not be paying freight on pine and sulphur to and from Ontario, when we have all the materials required to manufacture first-quality matches there. I can see an hon. member from Ontario, who is in the lumber business, does not appear to agree with my suggestion.

We have clays of various types which make it possible to develop a brick and earthenware industry. As a result of research these facts have been established but, here again, we have not the available power. We have large quantities of birch, cottonwood and other types of timber on which could be based a very satisfactory veneer industry-again, use for power.

We have opportunities particularly for the establishment of shingle mills and additional small saw mills. But the big bugbear which

Prairie Transmission Lines confronts the man who opens a saw mill or a shingle mill, or any other small industry of that type, is power.

That is one of the reasons so many people in my constituency are interested in this development. We want a dehydration plant to take care of some of the surplus fruits, particularly apples, in the district. We need jam and canning factories. There is a great opportunity in that area for the development of a modest jam and canning industry. We have also an opportunity for the development of a plastics industry, and for the development of a very substantial furniture industry, because we have large quantities of those woods required to produce high-class furniture.

But these secondary industries will not be developed and cannot be developed in one district until we have the necessary power. Years of effort have been put forth by the people in Kootenay West in studying plans for the development of secondary industries. These efforts have been supported by the major industries, including the officials of the Consolidated Mining and Smelting Company, the owners of the larger lumber companies, the owners of mines and others, all of whom agree that if the whole community is to have a stable foundation, secondary industries must be developed. That is why this considerable and continual research has been carried on, and why there has been investigation into all aspects of the possibilities for developing secondary industries.

In view of the present shortage of power, and the likelihood of its continuing for years to come, is it not easy to understand the attitude of the people I represent when they see the possibilities of Canadian natural resources by-passing their district, and going into the United States to serve areas in that country first?

The oil and natural gas industry is a tremendous one. One has only to read newspaper reports, magazine articles and books published on the subject to realize that this is a big and profitable business. While it is immensely profitable in the operations end according to the balance sheets and reports that are issued in the United States, there have also been immense fortunes made simply by obtaining charters from legislatures and then selling them to other companies and benefiting by the advantage created by the charter.

There are those who say: Would you have a monopoly? I think we all know that if it is going to cost approximately $100 million to build this pipe line from Alberta to the Pacific seaboard there are not going to be two or three companies building pipe lines. If you

examine the network of pipe lines in the United States you will find that there is a monopoly in each area served. No one will invest such large amounts of capital in a section where someone else is already operating. A pipe line is in the 'nature of a public utility and from the very nature of things must develop a monopoly, like other service industries.

It is argued that those who speak against these bills are supporting a monopoly because if all these companies get charters there will be three pipe lines built. We know that that is absolutely not true. Before concluding I should like to quote from an article in Fortune of December, 1949, entitled "Natural gas- Whoosh". If anyone is interested in the subject I shall be only too glad to let him have my copy because it is a most interesting article on the development and financing of natural gas pipe lines in the United States. This article reads:

Just for the sake of argument, consider the type of business that should excite the interest of investors these days, First of all, the product of the business would be a household necessity, selling at a price practically everyone could afford. Second, the product would serve a major general purpose in commerce and industry, and would have other specialized industrial uses that were growing in number and importance all the time. Third, for its principal uses it would be better and cheaper than competitive products. Fourth, it would embody a minimum of labour cost, and hence a minimum danger of supply interruptions due to labour trouble.

This ideal business would have a market outlet guaranteed for, say, twenty years; sources of supply guaranteed for a similar period, at prices agreed on in advance; and a huge, unsatisfied demand that would open vistas of indefinite expansion. The business would be largely depression-proof and would operate under conditions that virtually assured an ample return on invested capital. Finally, the securities of the business would offer strong speculative attractions.

Whether any such ideal business exists no one can say with certainty; but a great many people thought they saw it in the natural gas pipe-line business-enough, indeed, to make natural gas the 1949 darling of Wall street.

Before continuing with this quotation may I say this: While those whose names appear in this bill may be residents of Alberta, I would wager one hundred to one that the financing will be done in Wall street, New York. The article continues:

Their estimate as set forth in the foregoing paragraphs, explains many things. For example, it explains the high stakes at issue when the Senate, under pressure generated by the natural gas industry, recently rejected President Truman's renomination of Leland Olds to the federal power commission, the body that regulates interstate pipe lines. It explains why strong men are weeping and gnashing teeth in a battle of pipe lines to reach and serve the virgin New England market, and why important New England interests have cast aside their putative dignity in the scramble to participate. It explains why great insurance companies are investing hundreds of millions of dollars in

natural gas pipe line companies (Metropolitan alone has invested $345 million to date), and why an investment trust was recently formed to specialize in natural gas securities. It explains why fortunes have been made on the promotion stock of new pipe line companies, and why common stock prices of the business have moved upward in the past four years, far ahead of the Dow-Jones industrial averages. It explains why the net profits of the business average nearly 20 per cent on sales, and why nearly every natural gas pipe line company is expanding furiously.

And again:

The fact is everybody and his grandmother want natural gas in a crescendo of demand that is insatiable, incalculable, and, in all likelihood, unsuppliable. United States enterprise capital, which regards a crying need much as nature regards a vacuum, has rushed in to fill the demand. Yearly capital expenditures of the natural gas industry increased twelve-fold between 1939 and 1948 (compared to a four-fold increase for all private domestic investment), and are now approaching a billion dollars a year.

And finally:

The Pacific north-west, which is now entirely on manufactured gas, also provides a large potential market for natural gas, but is left out of this calculation because it will probably pipe in its gas from the newly discovered bonanza field in Alberta, Canada.

An examination of a map of the United States showing the development of pipe lines indicates that the eastern and southern states are well covered, as well as California and the gulf area. But we find that the northwestern corner of the United States is not served with natural gas or oil and, as this article mentions, that section is looking to Canada for its natural gas and oil. In view of the enormous demands in the United States for oil and gas, in view of the fact that the northwestern portion of the United States must obtain its gas from Canada, is it natural to expect that, if permission is granted to export gas through Kingsgate into United States territory, Vancouver or other portions of British Columbia are going to get satisfactory service?

We are very concerned about this because the people we represent are concerned about it. Therefore we oppose the passage of these bills because we believe that Canadian natural resources should first serve Canadian communities and Canadian needs. We believe that Canadian labour should profit from the development of this pipe line industry. We believe that Canadian industry should profit from the sale of the material's required to build these enormously expensive pipe lines. We believe that the treasuries of the governments of British Columbia and Canada should benefit from the continuous taxation which will flow from the building of these pipe lines on Canadian soil.

55946-29!

Prairie Transmission Lines

Therefore, as a member speaking for his constituents regardless of party, C.C.F., Conservative, Liberal or otherwise, I intend to vote against these pipe line bills until we are assured that Canada will be served first.

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LIB

Daniel (Dan) McIvor

Liberal

Mr. Daniel Mclvor (Fort William):

Mr. Speaker, I congratulate the hon. member for Kenora-Rainy River (Mr. Benidickson) on the able manner in which he has explained this bill. In fact, I think he has explained it so well that he has almost converted the hon. member for Fraser Valley (Mr. Cruickshank). I support this bill. We have considerable unemployment in this country. There are people who think we are heading towards a depression. Nevertheless here is a company ready to spend $100 million for the development of the natural resources of Canada. Why muzzle them?

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LIB

Arthur Laing

Liberal

Mr. Arthur Laing (Vancouver South):

Mr. Speaker, I have no desire to delay a vote on this measure tonight, but I should like to say a word or two. I believe it is somewhat unfortunate that it is necessary for these corporations to come to this house in the manner in which they do because the only justification for our viewing their applications would be the greatest measure of broad objectivity that we could give them. I may have very little insight into the proceedings of this house, but I have seen little of the spirit of objectivity in the debate on these measures last fall and during the present session. I think that is essential if we are going to view them in their proper light. I am of the opinion that if we persist in our attitude of insisting before the incorporation of a company that a pipe line must take a certain route we will wind up without any pipe line at all. I think the stage will arrive when we will have an opportunity to call experts on this matter, and that will be when the bill is referred to a committee of the house. These are technical matters, and we will have an opportunity then to call experts in order to ascertain whether an all-Canadian pipe line is economically feasible or practically possible.

I think we can place great reliance upon the government of Alberta and their conservation board to look after the people of their own province and the other provinces of Canada. I think there is a statute on the books at the present time having to do with the export of such commodities. I am quite certain when the measure is referred to a committee we will have a better opportunity of impressing upon the Minister of Trade and Commerce (Mr. Howe) the advisability of protecting the interests of Canadians first before export is made to the United States. I think we are in no position at this time to

Prairie Transmission Lines say that these companies must not be incorporated until they can guarantee a certain route. If we proceed to the committee stage we will be placed in a position where we can call experts, and we will be able to criticize these bills and the provisions and plans of the various companies with knowledge in our possession which we do not now have.

I think that hon. members who have taken part in the debates on these measures last fall and at the present session have done the public a service in bringing to their attention the tremendous assets of the province of Alberta. We in the province of British Columbia are determined to co-operate and participate in the terrific development that is going on in their marvellous province, which I contend has the greatest assets today of any province in Canada. I was glad to hear the sponsor of the bill say that his company proposes to build an all-Canadian route if it is shown to be practical from an engineering point of view. I think the people of British Columbia would much prefer that that be done. In that respect I agree with other members who have spoken. We have a centralized area in the province of British Columbia. Within greater Vancouver we have sixty-two per cent of the population of the province, and the city is only sixteen miles north of the United States boundary. The great concentration of people in that one area leads to some of the problems and troubles we have at times in regard to unemployment. We want diversification of our industries in the province. Of course we do, but I am afraid, so far as these bills are concerned, unless we use that broad objectivity to which I first referred, we will find ourselves winding up without any pipe line at all.

Topic:   PRIVATE BILLS
Subtopic:   PRAIRIE TRANSMISSION LINES LIMITED
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PC

Douglas Scott Harkness

Progressive Conservative

Mr. D. S. Harkness (Calgary East):

Mr. Speaker, like the hon. member for Fort William (Mr. Mclvor) I should like to congratulate the sponsor of the bill, but my congratulations are in a little different vein than his. I should like to congratulate him on making a very good speech about a very poor case. As indicated by the sponsor, the bill is the same one as was brought before the house last year with the exception of a few minor changes having to do with the men who appear as incorporators. When the bill was introduced last year those of us who opposed it really only asked one thing. We asked that the people who were asking for incorporation should include in the measure the route which the pipe line which they were proposing to build would follow, and that it should be an all-Canadian route. I indicated personally at that time that so far as I was concerned, if

that were done I would withdraw all opposition to the incorporation of this company or the other company concerning which a bill was before the house last session and again in the present session.

Surely that is not a great deal to ask. If these companies had done that before coming back to ask for incorporation this year I think they could have been assured of the bills passing almost immediately. It was on that ground alone that we took exception to them, and naturally continue to do so. The bills have not been changed, and for the same reasons those of us who were opposed to them last session are still opposed to them. It was pointed out at the last session, and I should like to reiterate it now, that a mistake was made when the governing pipe line bill was passed, in that provision was not made therein that a company applying for a charter for a pipe line must specify the route it wishes to follow, in the same way that a railway company applying for a charter must specify its route. Our contention was

and I think it is absolutely sound-that in this regard pipe line companies should be put in the same position as railway companies, and that the route must be specified before a charter will be granted. No railway would receive any consideration which applied to parliament and merely asked to build a railway. They would not be incorporated. They would have to say where they were going to build the railway, and certainly the same procedure should apply to pipe line companies.

On motion of Mr. Harkness the debate was adjourned.

Topic:   PRIVATE BILLS
Subtopic:   PRAIRIE TRANSMISSION LINES LIMITED
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LIB

Elie Beauregard (Speaker of the Senate)

Liberal

Mr. Speaker:

The hour reserved for private bills having expired, the house will resume the business that was interrupted at six o'clock.

The house in committee of supply, Mr. Dion in the chair.

DEPARTMENT OF EXTERNAL AFFAIRS 64. Departmental administration, $2,378,880.

Topic:   PRIVATE BILLS
Subtopic:   PRAIRIE TRANSMISSION LINES LIMITED
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LIB

Joseph-Arthur Bradette

Liberal

Mr. Bradette:

Mr. Chairman, I must confess sincerely that I speak with all humility and with some trepidation concerning the estimates of the Department of the Secretary of State for External Affairs. When we enter the national forum, the House of Commons, and realize all the difficulties that we in Canada have to face in solving the problems of dominion-provincial relations, for example, which are of most active concern to us at the present time in our national life, then it is easy for us to realize the difficulty we face in discussing external affairs, international problems and foreign relations. We

cannot be dogmatic in these matters because, to some extent, we are dealing in the abstract. We cannot be definite, either, because the international situation is so fluid that it changes almost from hour to hour, or at least from day to day. It is, therefore, impossible for the Department of External Affairs, any member of parliament or any person in public or any walk of life to express an opinion and be positive that that opinion will hold good tomorrow as it does today.

This afternoon the member for Peel described, vividly and eloquently, the advances of science in the past few years. As a result of these advances, this world has shrunk and distances have practically disappeared. This situation should have brought a message of hope to the whole world, but what happened? Instead of having that one world, we now have two worlds. Most of the citizens behind the iron curtain might as well be on another planet as live in this world because they have no access, politically, culturally, personally or in any other way, to the other two-thirds of the population of the world. It is a monstrous thing, a thing that all the democratic peoples, and I believe the people behind the iron curtain as well, absolutely deplore. It is a sad thing to realize that in this year 1950, with all the advances we have made in civilization, in culture and science, there are countries like Russia, Czechoslovakia and Poland, just to name a few of them, that have discontinued all communication with the rest of the world. Almost everyone realizes the seriousness of the situation.

It is not the fault of the democracies. No matter what we may say or how long we may argue, I know the Canadian government, the British government or the government of the United States would not stop an individual Russian or groups or any citizen living behind the iron curtain if he wanted to visit one of these countries. In fact, if the Russian government were to say to the Canadian government tomorrow that a party of 200 young students wanted to visit our universities I know the gates would be wide open to every one of those students. At the same time, if we wanted to send some of our businessmen or men in public affairs to Russia, it would be impossible for them to make the visit. It is easy to visualize the wall which really exists between these countries.

This afternoon we have been theorizing about ways and means of destroying that wall. How could it be done? So far as our side is concerned, there is no wall. There is nothing put in the way of those people who are behind the iron curtain if they want to communicate with us. All we desire is that those people should be able to intermix with

Supply-External Affairs the other peoples in the world. One of the members has said that the democracies must see to it that the people have access to all the comforts of life. This is quite true. No one can quarrel with that statement. After all, we have reached a stage in our civilization when we should be ready to conceive that there should be no preferred class. The so-called good things of life should be available to every segment of society. We are not responsible for the present situation because freedom from want cannot exist in a world which has no freedom from war or the fear of war. This section of the world is not responsible for the fear of war. Our country has never waged a war of aggrandizement. We have participated extensively in the two great wars, but we have never asked for any territorial or maritime aggrandizement. We do not want the pound of flesh from anyone. All we want is to save and preserve the principles of democracy, freedom and Christianity. The same is true of the United States, South America, and all the democracies in the world.

We must be careful not to go too far, and to talk only of the benefits of our way of life, because if a democracy can give comfort and access to the good things of life, then some responsibility and obligation devolve upon the people living under such a system. There is a responsibility towards their brother man. People must sacrifice some of their own prerogatives' and comforts for the sake of the whole. When we hear that the adherents of communism are men who have suffered deprivation, that is only partly true. How any English or French-speaking Canadian or a naturalized Canadian can be a communist is beyond my comprehension. How can a man, worthy of being called a Canadian, follow directives from the old czarist imperialism under a new disguise, whose spearhead is in Moscow? Study what happened in the espionage cases, and then ask yourself whether those people were downtrodden or needy. No; they were people in high places to whom this country had been good. All hon. members recall reading in the press about the case of Mr. Fuchs. That man had the confidence of Great Britain, the United States and Canada. He has held some of the highest and most responsible offices those countries could give. Surely that man was not suffering from want. He could have no quarrel with our way of life. That man certainly never missed a meal unless he wanted to. Again I say that we must be careful if we believe that communism is spread only in areas in which there is poverty. This is only partly true. Look at those who head the communist movement in all countries. Again I ask, how can any Canadian be a

Supply-External Affairs communist and be a traitor to his country? How is it that some young, intelligent Canadians will leave Canada, the country in which their forefathers lived, and go to that university in Moscow where they get their minds and souls polluted with poison against their own country? It is beyond my understanding.

I cannot see how any of the citizens of my own mother country, dear old France, can be communists. For centuries that nation has led the continent of Europe in the arts and sciences, and has contributed to the cultural attainments of the whole civilized world. In France today you are faced with a group of people who would stop the gifts received through the Marshall plan. How can they look at themselves and say they are worthy of the soil of France? There are men in France, however, who have been taking directives from Moscow for the last 25 years of their political life and are ready to be traitors to their own motherland.

As the results of the British election have been received here, most of us have been glad to note that the communists only received something like 65,000 votes. This is typical of Great Britain. I cannot see how a man of Scottish, Irish, English or Welsh descent, any one of those fine groups of people in those tight little islands, who have created one of the finest empires that the world has ever known, could be a communist. Great Britain has given freedom to many people and many nations and lately we have had the example of India and Pakistan. It puzzles me how a man in Great Britain, who thought anything of his ancestors, could go to that infamous university in Moscow which spreads poison in the minds of our youth and not be ashamed of his actions. I congratulate the electors of Great Britain upon what they did during the last general election, about communism.

I believe the same principle applies with equal force to the republic to the south of us. How is it possible for an American, who is worthy of the name, to belong to the communist party in the United States? This great nation has contributed towards development in science, industry, yes, and in prosperity which has been an example to the whole world-a nation that has the highest living standard in the whole world.

There are some men who call themselves Americans who follow the directives from Moscow and the communist party. Can anyone comprehend such a degenerated state of mind? Again I must confess to you, Mr. Chairman, that I cannot understand citizens of that type. It is absolutely beyond my comprehension, because an American, a Canadian or a Frenchman worthy of the

[Mr. Bradette.l

name will never follow the brand of imperialism propounded for centuries by the czarist regime and which at the present time they are using in Moscow under the name and disguise of communism to spread into the other sections of the world. The same thing applies to Italy, a fine nation descendant of the Roman empire, a great blending of the Roman and the Greek civilizations which even in their days of centuries ago produced some great seed of democracy and freedom. No Italian worthy of the name will follow the dicta and dictates of Moscow. They have nothing in common, whether it is in civilization or in culture. These men-and I repeat it from this forum-are not worthy to be called Italians. I say that definitely.

When we speak of communism today, we realize that it is more than a political ideology. It is the old virus that has infested European politics for the last six hundred years, in the czarist regime, even prior to Peter the Great, and which has been trying to spread its tentacles into every section of Europe and Asia; and why the people outside Russia will play into the hand of that great imperialistic ideology is something that is absolutely beyond my comprehension.

Then as to Greece, that fine old civilization with which everyone is familiar. How grievously Greece has suffered. In the studies of our youth at the universities and houses of education at least one-fifth of our education is based on the old philosophy and reasoning of the Greeks. For nearly six years we have seen the sad spectacle of Greece fighting to save her own soul and her own sons. Some of the sons of that great civilization receive their direction from Russia, to foul and destroy their own country.

What about China? I am no prophet or son of a prophet, Mr. Chairman, but I am going to make this prediction. Before fifteen years have passed, China will penalize Russia, because China has many scores to settle. We must visualize this fact. China, an Asiatic nation, always considered Siberia as an integral part of the Asiatic continent; and she always resented infiltration into Siberia, whether it was by politics or by force of arms into Siberia. How could the Chinese government, or Mr. Mao or the Chinese people take their directives from communistic Russia? What about Manchuria? Is Manchuria not an integral part of the great nation of China? What about outer Mongolia? Again these terrible claws of communism have taken hold of outer Mongolia. What about inner Mongolia? That again is an integral part of Chinese Russia. What about Tibet? It is true that Tibet wants to remain independent, but at the same time you can see the communist bear preparing to put one of its claws on that

fine little nation. In their present turmoil the Chinese people may not see very clearly the situation as it exists with regard to their aspirations and the integrity of their own soil; but the day will come, and I believe it will be soon, when even Mr. Mao and the leading Chinese will realize that there can be no real friendship between them and Russia, and they will use all their might to shake the Moscow yoke. It is true that in the past history of China some European powers have in some instances violated the sacred soil of that great nation, but no nation went half-way or one-tenth of the way, as Russia did against the Chinese and against the Chinese nation.

In a discussion of that kind it is hard to choose and develop a special subject; but at the same time I believe this is the time and place to mention the economic war which now prevails and which we deplored after the war of 1914-18 but which has become almost as greatly accentuated after the second great war. I speak of trade restriction and of tariff walls between the nations even outside the iron curtain. Two or three years ago, speaking in these precincts, I made the statement that I hoped fervently that the day was gone when, on the frontiers of the democracies, there would be an economic war. There is today to a certain extent an economic war between Canada and the United States, because if you want to sell or to buy, in many instances you find some restrictions; you find, in many cases, a tariff which is irritating not only to our national economy but also even to the economy of the United States. It has been refreshing to every Canadian to note what it meant in the civilized world when they heard the statement made a few weeks ago by Mr. Paul Hoffman, who is director of ECA, that he wants 270 million Europeans to buy freely from one another. That is revolutionary. I am reading the heading from Life magazine. There is a message that carries great import and also some lessons with regard to the American nation. As a citizen of this country I can say that there have been many occasions when I have been baffled in my own mind when that great republic to the south of us, although we have always been their best customer, found it expedient-I am speaking of the past, not of the present; and I am speaking of the matter of tariff restrictions

to slap the Canadian nation in the face. Today, with regard to the Marshall plan, the United Nations is doing something that has never been done before in the world; because no matter what we may say, when we in Canada wish to help Europe make some gifts, to some extent we take something away from our Canadian people; and to a larger extent the same principle applies to the Americans.

Supply-External Affairs

Is the great United States going to make the same error it made after war No. I? In those days the economists of the United States expected that Great Britain, France and the nations in Europe would be able to liquidate the debt they owed to the United States without selling to the United States. The thing is absolutely impossible. When Mr. Hoffman, quite rightly, asked the European nations to destroy the walls which really are evidence of an economic war between the European nations-between Belgium and France, for example, between France and Italy, between Germany, Holland, Luxembourg and many other nations-he is speaking as a man of logic; and he knows in his own mind that even the American nation has suffered itself because of some of the restrictions which they applied so strictly and so vigilantly in the past. If we maintain an economic war, there is very little chance of its being entirely successful even on our own side, because there is always a price to pay when you stop the natural flow of commerce and finance of the countries of the world. You cannot get away from that fact. After world war I-and I know whereof I speak because I have relatives who still live in Normandy- the French government was bonusing the French farmers for producing wheat which cost the French government twice as much as it would have cost to buy from Canada. That was not good economics then; it cannot be good economics now. Even in this country we can learn something too. At the present time we hear that if we import certain lines of goods from Great Britain, some of our industries may suffer. Let us be fair about the matter. I do not believe that they will suffer grievously-if we try to understand one another-if we try to make trade a little more free than it is at the present time. I am not speaking as a free trader, but of freer trade, and I am speaking of some of the anomalies that have existed, in Europe and in the Americas for the last four years and to some extent at the present time, and present a dangerous situation indeed, which, unless it is dealt with diligently and intelligently, may be the causes of great disharmony and friction even among friendly nations.

Surely experience should have taught us to be reasonable, to try to see the points of view of the other nations. No doubt hon. members have read an article which appeared in Reader's Digest of February last, I believe it was. At the present time, as hon. members know, they are erecting in New York a huge building for the United Nations, which is being financed actually by the United States treasury, but which will be eventually paid for by all of the nations that belong to the United Nations Organization. They have not

Supply-External Affairs bought any material from outside the United States. I do not say that in a critical way, but I am just mentioning things that should be mentioned among friends. When we talk of an Atlantic pact we should also talk of an economic pact between all these nations so that it will be possible to deal more freely with each other than we do at the present time.

We have more than that. In the building of the United Nations we have the spectacle of the marble coming from Vermont in the United States. As you know, some workers said they were not going to use it in the building because it was not polished in New York. This shows you what is going on in our own sections of the world. Things like these are non-existent on the other side of the iron curtain, but we do not want the conditions that they have, though on that score we may learn something from them. There the leaders dictate to the people. The people are doing things about which they have no say. When they reduced the value of the ruble over 60 per cent a few years ago Russian soldiers, Russian farmers, all the Russian people had nothing to say about it. Overnight they lost practically all their savings. We do not want conditions like that to come to the civilized democracies of the world, but at the present time our own world must of necessity know of the dangers that exist so far as an economic war is concerned. There is always some danger in a tariff war, and it generates friction and apprehensions. No matter how we look at it, there is always an element of an uneasiness because there is not the free interchange that there should be between the nations of the world. If we do not buy more from Europe the situation will not get much better in the United States or Canada. When you come to think that only $1 billion more worth of goods bought from Europe would make all the difference in the world to those nations while the national production in the United States represents over $60 billion of trading you can readily understand what a small minority group or irritating tariffs and restrictions can do to the national and international economy, and to all intents and purposes we must try to avoid those circumstances, and causes of friction and restricted trade.

Speaking of the two worlds and the dangerous situation that exists at the present time, I cannot do better than to quote the words of the present Secretary of State for External Affairs in a speech he made three years ago in the city of Montreal:

The greatest menace to peace today is this division of the world into two basically opposed forms of society; a division which transcends all national boundaries. One form which respects the dignity

and decency and liberty of the individual and in which government is justified only by the contribution it makes to his welfare; the other, in which the individual is nothing but a mere cog in an inhuman machine, where there is no rule of law, and where the omnipotent state moulds the man into conformity with the mass, and if he will not so conform, crushes him.

I want to say a few words about the United Nations Organization. There have been some criticisms of its achievements. As far as I am concerned, studying all conditions under which it has to work starting from San Francisco, I have only words of praise for that fine world-wide organization. It is true that, like the old league of nations, human ambitions, nationalistic ambitions, and nationalistic interference are also playing their role and stultifying and fouling some of the activities of the United Nations Organization. Let us visualize for one single moment that tomorrow, for instance, if tomorrow we coul,d have co-operation from the Soviet republic as we get it from the other nations of the United Nations and her satellites. What a difference it would make immediately in the whole world, to every nation of the world, if we could get that co-operation.

I had the honour to represent Canada as a delegate to the United Nations Organization. At the general assembly we knew beforehand what the vote would be. We knew it would be Six or seven or eight at the most. It would be Soviet Russia with her satellites, no more and no less. Every time that any democracy brought anything forward for the good of mankind as a whole we were sure what would happen so far as the Russian delegation was concerned.

I believe it was the hon. member for Peel (Mr. Graydon) who said very feelingly and very sincerely that he would like to see the heads of the countries of the world get together around the conference table. I agree with him to some extent, but I believe that the initiative should come from Mr. Stalin. He has never left Russia as far as we know, certainly not since the war has been over. Surely all the heads of the democracies have shown a willingness to meet the leaders of Russia in any section of the world.

There is one man today who could give the greatest measure of hope to the whole world. If tomorrow Mr. Stalin would say, I am inviting the heads of the countries of the world to come to Moscow and discuss together for two or three weeks the matter of peace in the world, it would be the greatest step toward peace that the world has known in the last six or seven years, and that message would be received with great jubilation by all mankind.

Let us not fool ourselves about that situation. You cannot deal with an adder just as

you can with a walking stick. There is too much danger in an adder; it will poison you. You cannot be passive with it. Nation after nation, diplomat after diplomat, delegate after delegate have all spoken on this subject at the United Nations. Some outstanding men from Great Britain, from France, and from the United States and many other nations went over to Russia time and time again, and in many instances they came back with words of hope coming from the lips of Stalin himself. They did not have their backs turned, were not back in their own country, before the word of the head of one of the greatest nations of the world had been thrown into the wastepaper basket and deliberately repudiated by his actions. Can you deal with men of that calibre? Can you expect that they will change their ways?

I repeat, even if we have to go to Moscow, the message must come from the leaders of communistic Russia and from her satellite countries. We have made some errors, but they certainly have made some terrible mistakes. We have to co-operate with them, but they have never given a single sign of wanting to co-operate with us. We know that war is no good, that it practically never solved anything. We know that war No. 1 was a calamity to all participants. We know that war No. 2 has not solved any problem; in fact it has accentuated the older problems and created numerous new ones. Surely the heads of states in Soviet Russia, precisely as we do in the democracies, realize that another war with the new terrific equipment of destruction that human inventiveness has created might mean the end of civilization as we know it. Do we realize for one single moment, when we see fifty planes flying through the skies of the United States or of Russia, that they could destroy ten or fifteen million lives? We do not realize the import that there is in this message. But not satisfied with the present ravages that could be caused, human inventiveness is creating at the present time a bomb which it is said will have a thousand times the power of the atomic bomb. Therefore even the winning nation of the next war will not benefit in any way because it will have in its possession a devastated world in which the problems we are facing at the present time will look absolutely puny and insignificant in comparison with what they would be facing then.

In a few months, and perhaps two years at the most, they will be opening up new quarters for the United Nations in New York. During the last war, I believe in the year 1943, Life magazine sent some of the best United States artists to depict the scenes in the Pacific field of war where, with the help of Australia, the Americans were able to come

Supply-External Affairs back step by step and eventually crush the enemy which almost destroyed at least a part of the great nation's navy at Pearl Harbor. It was a terrific struggle, when tens of thousands of young lives were nipped in the bud, young boys who had no quarrel with the world, boys in the prime of life, thinking of love, thinking of home, thinking of their parents, thinking of their wonderful country, of their future, just at the threshold of life with all its hopes and enchantments.

They were fighting thousands of miles away from their homes, under the most horrible climatic and other conditions to which human beings could be subjected or under which they could fight. While I have not the issue before me, I did see in one issue of Life magazine a portrayal by artists of what happened in the raw, the horrifying disaster which befell thousands of young men who were pulverized on the shores of some of those islands, when they were jumping from one point to another so as to reach Japan and the Asiatic continent. [DOT] I saw where corpses lying for days on the beaches had become bloated up to three or four times their normal size. One could see the wounds, with the blood gushing from them. One could see the long rows of crosses which marked the end of the lives of those who had been lost while fighting for freedom and democracy.

And I am reminded particularly of those in Great Britain who lost their lives, and the great sacrifices that all the people had to make. As a Canadian of French descent I was sometimes sceptical of what was described as the bulldog spirit of the British people; but I implicitly believe in it now. Because when you found the people on that tight little island holding the fort against the hordes of barbarism, holding it with the rampart of their human flesh for over a year, then you had to believe in British leadership and the British bulldog spirit.

I would want those who are responsible for the construction of the new buildings which are to house the United Nations Organization to be free to ask artists and sculptors to depict in marble, stone or granite, works of art to be placed right below the rostrum in the general assembly, scenes which would remind us of that great loss of life for the sake of the world and to make it as lifelike as possible. Because those boys -Russian, German, or Canadian-boys from all the armies, had no quarrel with anyone. They were all young, in the prime of life.

I am reminded of having watched the trooping of the colours by our young boys in the R.C.A.F. during the last war. They were fine and clean-cut. And I saw them coming up to parliament hill. How fine they

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Supply-External Affairs looked! How full of life and hope they appeared to be! They were wearing the blue uniforms of the Royal Canadian Air Force. And as I watched them I said to myself, "How many of those fine boys will never see their homes again! How many mothers and fathers of those lovely youth of Canada will never see their sons again- because they will be dead!" I wondered how many of those lives would be lost away from Canadian soil. None of them had any quarrel with other nations of the world; in fact, no quarrel with anyone. But they answered the call to do their duty.

I say that, if possible, in front of the rostrum, in a special place, we should have in that United Nations building evidence of those thousands of mutilated cases, representing our boys-and our women, too-who lost arms or legs or who have been maimed for the rest of their lives. Perhaps some of them would go there and take their seats, before the commencement of deliberations in the assembly and remain there so that all nations in the world would realize the great price of war. No one could fail to see and understand evidence of this kind. Perhaps we should have there some mothers, perhaps we should have some wives who lost their young spouses, who never saw them again- young wives who to their last days will weep their eyes out because they lost their husbands in those times of tremendous stress, lost their husbands through no fault of their own.

I say these things sincerely, because if my suggestion were followed it would bring to our deliberations some realism, which one does not always find in the United Nations Organization.

I thank the committee for the close attention it has paid to what I have said. There is hope in the world yet. It is true that to some extent we have to worry; we have to hope and pray, and not despair; for worry never solved any problem. Surely God Almighty, a kind Providence, has not brought into being His jewel of creation, our world, surely He did not place men and women on this earth and infuse into them the spark of life and of divinity, only to have them destroy themselves. I am sure if they did that it would be as the result of works of their own creation and their own will, of their own passions, their own greed, but not by the will of God.

The leaders of great nations must realize that in our times they hold in the hollow of their hands perhaps the destruction of tens of millions of people. What human being worthy of the name could avoid that responsibility? What government would deliberately

start such a catastrophe? They hold in the hollow of their hands the future of civilization as we know it.

By the design of our Creator, we pass through space at a terrific rate in a great journey drawn at some points in the heavens. If destruction comes, then it should come naturally, and not be caused by human beings. When I think of the great attraction felt by our planetary and solar system through space I am convinced that we are bound for a wonderful rendezvous where all will realize the greatness of creation in the Creator's infinite.

Let me say again, and with sincerity, that when one travels outside Canada the greatest word he can say is that he is a Canadian. It is the open sesame; doors are always open to you. I believe that is true because within one generation Canada has given twice of her blood and her riches and her services for the maintenance of freedom, democracy and Christianity. She has given those things we cherish most. When we attend these deliberations we do not draw a curtain across Canada; rather we extend a hand to every nation of the world to do everything possible within our power to make the world a better place in which to live, for the benefit of all.

May I conclude my observations this evening by placing on record the words of a great scientist, a controversial personality who has been in the forefront of the news for the last three years, in the United States. I refer to Mr. David E. Lilienthal, and I would quote one paragraph which I saw yesterday in the Christian Science Monitor. Mr. Lilienthal was formerly chairman of the atomic energy commission and knows not only about the destructive but also about the constructive possibility through atomic energy and the hydrogen bomb. He does not despair, because he believes implicitly in the goodness of mankind. A report of a meeting a few days ago in New York states this:

If they allow themselves to wallow In the dark side of atomic energy, instead of realizing that mankind has "always stumbled onto solutions when it is under pressftre," Mr. Lilienthal warned the American people, they never will realize the great potentialities in nutrition, medical science, and1 industrial development that can be theirs. But he added, "Thank God for the common sense of the American people."

And I am sure, had he been speaking in Canada, he would have said the same about the Canadian people. It continues:

"We have to have faith in the Creator of all of us," he declared, "that He did not create man in His image and endow him with the ability to unlock the secrets cf the atom to destroy the beautiful earth and all that is in it."

May God grant us the vision and strength, through our most ardent prayers, to bring about a speedy and lasting peace.

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

Mr. Chairman, first of all I do wish to say I feel sure every member in the house will echo the words of the hon. member for Cochrane (Mr. Bradette) when he said so confidently that there is hope. There is great hope, so long as the people who have the responsibility for expressing opinions, as the chosen representatives of the people in free countries, remember the lessons of the past, and with a clear recollection of those lessons discuss the problems of the present in terms that leave no doubt about what we are thinking or what we intend to do, and the responsibilities we are prepared to accept for the preservation of peace, for which so many of the youth of the world have died.

In the light of those remarks I can only express my regret that at this critical moment the Secretary of State for External Affairs (Mr. Pearson) should have given this house today so little real information in regard to Canadian policies. The whole future of our domestic security, the hope of employment, of prosperity and of doing those things within our borders that we think should be done, depend upon the possibility of avoiding that measure of destruction which has been pictured here in different speeches today.

Both in the speech which the Secretary of State for External Affairs made earlier in this house and in his speech today, it would almost appear that he is unaware of the existence of China. Today China represents the most critical spot in the whole world and any presentation of foreign affairs by the minister responsible for that branch of government which ignores the critical problems of that great area at this moment is an address to this house which hardly does credit to the hon. members who sit here.

After all, the future peace of this country is not something that rests alone with the Secretary of State for External Affairs or with the government. It is not only the right but the duty of every hon. member of this house to have that information which is essential to a full understanding of what course Canada proposes to follow in the days, the weeks, the months and the years ahead. A statement that our policy is related to the policies of the United Nations is hardly an adequate statement of our position at a time when events are moving with a rapidity which sometimes makes the news of last week appear like the news of very long ago.

There is one particular subject in connection with the whole situation in China which

Supply-External Affairs has been passed over casually and this house has not yet received any information which would give the views of the government as to those considerations which should be in the minds of members of this house and of Canadians generally in regard to the extremely important question of the recognition of the Mao regime in that country. There was a suggestion that the Secretary of State for External Affairs had that subject in his mind today when he spoke about the possibility of a change of address of the recipient of any possible message that may be sent.

It is not necessary, however, to seek to interpret those vague words, which are almost as vague as many other words in his speech, because this is a subject which has been dealt with in fairly explicit terms within the past few days. Whatever uncertainty there might be in anyone's mind as to the authority of General A. G. L. McNaughton to speak with knowledge of the intentions of the government in regard to military affairs, there can be no doubt about his knowledge, authority and responsibility when he speaks about the activities of the United Nations, particularly about the atomic energy commission of that body. He is the representative on that body appointed on behalf of this country by the Canadian government. Therefore, a special significance attaches to the statement he made in Ottawa in a public address on February 23. Before quoting his words I should like to explain the subject to which those words referred. He was speaking of the difficulties which had arisen in connection with dealing with the whole problem of the control of atomic energy because of the fact that the delegates from Russia and the satellite countries had walked out of the meetings of that commission and of other committees of the United Nations. He then used these words:

Unfortunately the further'progress of these meetings has been held up by the soviet refusal to participate as long as the Chinese delegate represented the nationalist government. However, there is reason to expect that the meetings will again be resumed shortly when this difficulty has been overcome.

Those words are open to no doubtful interpretation. They mean one thing, and one thing alone. They mean that the difficulty raised by the presence of the delegate who now sits there representing the nationalist government is to be removed and the demands of the Russians in regard to the recognition of the Mao regime are to be carried into effect. With that before us I think it is the responsibility of those members of this house who have views on this subject to express those views now. Of course the government has the responsibility of

460

Supply-External Affairs making the decision, but the time to express those views is before that decision is made. The subject of recognition was dealt with earlier in this house when the Secretary of State for External Affairs was discussing this matter during the last session. He indicated the possibility of the recognition of the communist regime in China. He then explained the conditions which it would be necessary to see fulfilled by that government before recognition would be extended. These were the words he used, to be found at page 1838 of Hansard for November 16, 1949:

If the fact of communist control of China is demonstrated and an independent-I stress the word "independent"-Chinese government, able to discharge its international obligations, is established there, which is accepted by the Chinese people . . . we will in due course and after consultation with other friendly governments have to recognize the facts which confront us.

That statement raises three important conditions. First, the government of communist China must be independent; second, it must be able to discharge its international obligations; and third, it must be accepted by the Chinese people. This raises certain questions as to what recognition really is. There has been a good deal of discussion of this subject in the press. It is necessary to deal with it as an academic subject so that in examining the broader picture we may use the word "recognition" with full knowledge of what it has meant, what it is intended to mean, and what it means today as a diplomatic term. One of the greatest experts on international law in the world today is Professor H. Lauter-pacht, professor of international law at Cambridge university. In a recently published article on this subject, this recognized authority on international law dealt with the principles which govern recognition, and he placed them under four headings. Quoting from his statement I read:

1. Recognition is a declaration of an existing fact. Whenever the requisite conditions of governmental capacity exist recognition is due as a matter of right.

Then there is amplification of that and an explanation of the term. Point No. 2 is as follows:

International law prohibits premature recognition of the revolutionary government. So long as the lawful government has a reasonable prospect of reasserting its authority, recognition is an unfriendly act and a violation of international law. The presumption is in favour of the established government. As Sir William Harcourt, who was the first Whewell professor of international law in the university of Cambridge, put it in a letter to The Times during the American civil war,

"A friendly state is bound to exact very conclusive and indisputable evidence that sovereignty of a government with which it has existing relations over any part of its former dominions has been finally and permanently divested."

Carrying on with the quotation from Professor Lauterpacht's article, it reads:

On the other hand, "to maintain that the lawful government holding out in one isolated fortress is entitled to continued recognition de jure is to strain to breaking point an otherwise unimpeachable rule." It is a question of fact, to be ascertained in good faith, whether the authority of the lawful government has become purely nominal.

The third point is as follows:

Can recognition properly be given to a revolutionary government the support of which by the people is not evidenced by, to use a phrase of Jefferson's, "the will of the nation substantially declared?" Is effectiveness pure and simple the decisive test or is a subsequent legitimation of the revolutionary change by a freely expressed popular approval an essential requirement of recognition? That was a condition of recognition sometimes insisted upon by Great Britain until the first world war. That was also the practice of the United States, especially under President Wilson. But that practice, rational and desirable as it may be, was abandoned after the first world war and is not at present a part of the law. It may be revived when the right of man to government by consent has become part of the positive law of nations suitably guaranteed and enforced. That day is not yet.

Then there are further observations in regard to that point, and I quote now from his statement as to point 4:

There is, finally, the question of the willingness to fulfil international obligations and of assurances to be given to that effect by the government recognition of which is under consideration.

I should like to read that fourth point again.

There is finally the question of the willingness to fulfil international obligations and of assurances to be given to that effect by the government recognition of which is under consideration.

Even if the first three conditions were met, a question might well be asked as to whether the fourth condition can be met at the present time by the Mao regime in China. But while Professor Lauterpacht can well be regarded as an outstanding authority on this subject, he has overlooked one very important consideration. When he points out that a condition of recognition sometimes insisted upon by Great Britain in the past was that there was evidence of popular approval of the government, that situation no longer exists. He seems to have forgotten the decision of the United Nations in December of 1946, when, rightly or wrongly, they definitely laid it down that consent of the government is a consideration. It was on December 12, 1946, that the general assembly of the United Nations adopted a resolution dealing with the Franco government in Spain. I think it would be well to read part of that resolution. I am quoting now from the record of the assembly:

Convinced that the Franco-Fascist government of Spain, which was imposed by force upon the Spanish people with the aid of the Axis powers, and which gave material assistance to the Axis

powers in the war, does not represent the Spanish people, and by its continued control of Spain is making impossible the participation of the Spanish people with the peoples of the United Nations in international affairs;

Recommends that the Franco government of Spain be debarred from membership in the international agencies established by or brought into relationship with the United Nations and from participation in conference or other activities which may be arranged by the United Nations or by these agencies until a new and acceptable government is formed in Spain.

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LIB

Jean-François Pouliot

Liberal

Mr. Pouliot:

May I ask the hon. gentleman who sponsored that statement?

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PC

George Alexander Drew (Leader of the Official Opposition)

Progressive Conservative

Mr. Drew:

I believe the hon. gentleman is well aware of that, but I would be happy to hand over this record afterwards.

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LIB

Jean-François Pouliot

Liberal

Mr. Pouliot:

It is a polite question.

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March 3, 1950