Mr. Fournier (Hull):

On recommendation of the civil service commission, approved by treasury board.

Mr. Gillis:

Oh, no.

Mr. Fournier (Hull):

Oh, yes.

Mr. Gillis:

Mr. Fulton:

I was paired with the hon. member for Yorkton (Mr. Stewart). Had I voted, I would have voted against the motion.

Mr. Ross (Souris):

I was paired with the hon. member for Melville (Mr. Gardiner). Had I voted, I would have voted against the motion.

Mr. Cardiff:

I was paired. Had I voted, I would have voted against the motion.

Mr. White (Middlesex East):

I was paired with the hon. member for Middlesex West (Mr. McCubbin). Had I voted, I would have voted against the motion.

The house went into committee, Mr. Beaudoin in the chair.

Mr. Fournier (Hull):

Mr. Chairman, I move that the committee rise, report progress, and ask leave to sit again.

Progress reported.

Hon. Lionel Chevrier (Minister of Transport) moved

was deeper navigation. It was large channels that were required for the additional trade. It was the canal and channel development which made cheap water transportation a reality. But I should like to say more about that at a later stage.

The boundary line which separates Canada and the United States follows by treaty the 45th parallel of latitude until it strikes the St. Lawrence river at a spot a short distance east of Cornwall, and from thence for a distance of 115 miles westerly it follows the middle of the stream until it strikes the foot of lake Ontario. Because the Long Sault rapids in the international rapids section of the river St. Lawrence-about which much will be said in this debate-are in what is known as international waters, in order to develop those rapids it has therefore been necessary to seek the concurrence of both countries. Since 1895 Canada and the United States have co-operated in a series of investigations. They have covered both the engineering and economic aspects of the project. No other project of comparable size has had the benefit of such careful scrutiny and such complete engineering data. Every report has favoured the development of deep draft navigation in the St. Lawrence river, and from an early date all have recommended a power development in the international rapids section as an integral part of the project.

What then, sir, is the proposed great lakes-St. Lawrence seaway development? It is a

2,000 mile channel, 27 feet in depth, extending from the Atlantic seaboard to the heart of the North American continent. Coupled with this is a large power development at two sites at least, if not three. The first is in the international rapids section of the St. Lawrence river, where it is proposed to develop jointly with the United States 2,200,000 horsepower of electrical energy, one-half of which will belong to Canada and the other half to the United States. The second is in the Sou-langes section, where power development is already far advanced and where the Beauhar-nois installations will reach 1 million horsepower before the end of this year, with an ultimate expansion to 2 million horsepower when the installations are fully completed. The third site is the Lachine section where a projected 1,200,000 horsepower development might well be installed.

The great lakes-St. Lawrence seaway must first of all be distinguished from the St. Lawrence ship channel, which is a channel 35 feet in depth extending from the port of Montreal to a point 30 miles east of the city of Quebec. This channel has been deepened

at substantial cost by the federal government in order to bring deep-sea navigation into the port of Montreal. [DOT]

The St. Lawrence seaway should also be distinguished from the great lakes-St. Lawrence basin. This is a vast drainage system covering an area of 678,000 square miles, of which almost 500,000 are in Canada and

185.000 in the United States. It includes lake Superior, lake Michigan, lake Huron, lake St. Clair, lake Erie, lake Ontario and the St. Lawrence river, together with all the tributary rivers and streams which flow into the basin, the chief of which are the Ottawa, the Saguenay and the St. Maurice rivers.

What does the great lakes-St. Lawrence basin consist of? It consists of five steps which are its chief assets and its chief liabilities; chief assets because within the steps lie tremendous amounts of waterpower awaiting development; chief liabilities because in order to circumnavigate these steps side canals must be built at some cost to the government.

The five steps are: 1. St. Mary's falls lying between lake Superior and lake Huron, where there is a drop of 21 feet; 2. The St. Clair-Detroit passage joining lake Huron and lake Erie, where there is a drop of 8 feet;

3. Niagara river, emptying from lake Erie into lake Ontario, with a drop of 326 feet;

4. The upper St. Lawrence river from lake Ontario to Montreal, with a drop of 225 feet;

5. Montreal to the sea, a drop of 20 feet, entirely in Canada. These five steps will, it is estimated, develop approximately 9 million horsepower, divided as follows: At Niagara, 3,600,000 horsepower; in the international rapids section, 2,200,000 horsepower; in the Beauharnois or Soulanges section, 2,000,000 horsepower; in the Lachine section, 1,200,000 horsepower. All of this power is Canadian with the exception of 1,800,000 horsepower at Niagara and 1,100,000 horsepower in the international rapids section.

There is no need to labour the economic significance of this white power in an area of Canada where no coal or black power is found.

To what extent have these facilities been developed? From a power point of view

100.000 horsepower have been developed at the Sault, 1,800,000 at Niagara, 93,000 at Mas-sena, New York, and over 1,000,000 in the Soulanges section. Therefore out of a total potential of 9,000,000 horsepower, barely 3,000,000 have been developed, or about one-third.

For navigation, I have already mentioned the facilities that provide 25-foot channels past the first three steps, from the head of the great lakes to Prescott. The fleet of lake

St. Lawrence Waterway vessels using these facilities is said to provide the cheapest transportation in the world, the largest of them carrying over 20,000 tons.

From Montreal to the open gulf, the fifth step, the federal government has provided the St. Lawrence ship channel. It has been sufficient to make Montreal one of the busiest ocean ports of the world.

But at the fourth step, between Montreal and Prescott, there remains the 14-foot bottleneck. In other words, from Prescott to the head of the upper lakes are navigational facilities for 25-foot craft, and from Montreal to the sea are navigation facilities for 35-foot craft, but between the two is the neck of the bottle which should be made to disappear. The largest vessels that can pass the small locks of the present canals can carry less than 3,000 tons. These canals have served Canada well in their time, but their time is now past. They are obsolete, if judged by present day standards of traffic, method of construction and operation.

What new works are proposed with reference to this project? The new works proposed are those outlined at the time of the 1941 agreement. They are a matter of public record, so I need only refer to them here in general terms. However, attention centres chiefly on requirements in the upper St. Lawrence river, and that for obvious reasons. This part of the river, from Kingston to Montreal, divides naturally into five sections; the thousand islands section; the international rapids section; lake St. Francis section; the Soulanges section; the Lachine section. The second of these sections, namely in the international rapids section, is the area where the most of the works referred to in the agreement will have to be performed. Here the basic power development would include an upper control dam near Iroquois and a main dam and powerhouse near Cornwall. The project is what is known as the 238-242 single stage control project. This means that when the project is completed the elevation will be from 238 to 242 feet above the level of the sea. When one considers that the present elevation along the highway extending from Morrisburg to the city of Cornwall is 225 to 230 feet one will immediately realize that when the project is completed all those communities extending along that highway will be submerged to the extent of from 10 to 15 feet. It will be necessary, too, to construct short canals around both the control dam at Iroquois as well as the main dam in the Long Sault rapids. In the 1941 agreement it was proposed that the canals be on the United States side, but there is no problem

St. Lawrence Waterway about putting them on the Canadian side. As a matter of fact general plans have been prepared for such Canadian canals.

The other section that I had reference to a moment ago is Soulanges. Here the basic power development already exists at Beau-harnois, and a wide power canal is available for navigation. Little more is necessary than to add the locks and short access channels.

Third, in the Lachine section the minimum development will be a 10-mile canal and considerable channel enlargement. But a large-scale power development is possible in this section too. Discussions have been opened with Quebec, out of which may come an agreement for a combined power and navigation development in the Lachine section.

As for the work required in the great lakes, it will be necessary to enlarge the various connecting channels and deepen them to 27 feet. Except for the Welland ship canal, the work would be done by United States. This is no more than a continuation of a development that has been going on for over a century, it will be observed. And it is worth noting that this development could proceed independent of the 1941 agreement.

Why is the project necessary from a power standpoint? I need hardly dwell on the need for power, for the case has been clearly put by those who are interested in that part of the project. However, let me say in general terms that as a result of the rapid post-war expansion of industry, together with a constantly rising domestic consumption, the province of Ontario has been, for the past few years, faced with an acute shortage of power to meet demands. The house will recall that Canada negotiated a treaty last year with United States, ratified early this year, permitting a larger diversion of water for power at Niagara. The Ontario Hydro Electric Power Commission lost no time in beginning a redevelopment there that is expected to harness another 600,000 horsepower or so before the end of 1954. But demand cannot wait in Ontario till 1954. In a province that prides itself on cheap hydro power, two large steam plants have already been started at Toronto and Windsor, and in each case the planned installation has been increased before the plant could be completed. I believe that the ultimate capacity now planned for these plants is nearly 900,000 horsepower. It appears that still more steam capacity will be required in the near future if the international hydro site is not developed. It comprises the one large block of undeveloped hydro power that now remains available in

the southern part of the province. The Financial Post in its issue of November 10 quotes Mr. R. H. Saunders, chairman of the Ontario Hydro Electric Power Commission, to the effect that present estimates show demands for power can be met up to the end of 1956, and that after that the commission stands at the crossroads if the St. Lawrence power is not available.

Post-war demand has been growing rapidly in Quebec too, including more particularly the metropolitan area of Montreal. Several power developments or expansions are under way right now, but it appears that construction of additional facilities must start in the near future as well. Quebec is fortunate in that Lachine is not an only choice. Power needs could be met for some time by first a final expansion at Beauharnois, and next by the expansion of other sites such as that at Carillon, for instance. It is my hope nevertheless that an agreement can be reached with the province of Quebec for a joint development for power and navigation at Lachine.

Why is the project necessary from a navigation standpoint? With respect to navigation, the main objective is to remove the present bottleneck in the St. Lawrence river. Removing the bottleneck would save many millions of dollars a year in the cost of moving shipments that today pass its small canals or follow alternative routes to market. This alone would be sufficient reason to construct the seaway. Now it also promises to be the key that will unlock the future for the iron ore fields of Quebec and Labrador. It will open large new markets for these ores in the great lakes area, otherwise largely out of economic reach. And on the other side of the coin it will give those interior steel mills the best new source of ore at the lowest cost, a matter of serious concern at the moment.

Iron ore: The mills within reach of the great lakes account for about 75 or 80 per cent of the steel produced in United States. They draw ore preponderantly from the iron ranges of the lake Superior district. The immediate problem is not the exhaustion of these ores, although that too may be expected at some more or less indefinite time. The point is that production of the ores now in use has just about reached its maximum annual rate, and that maintenance of even that rate promises to involve a continued increase in costs. Meanwhile ore requirements continue to rise, not only because of additions to steel capacity but because with a shortage of scrap it is taking more pig iron to make a ton of steel. The problem thus is one of a growing gap between supplies and requirements.

This gap can be filled partly with imported ore from Quebec-Labrador, Venezuela, Liberia and other countries, partly by resort to such low-grade sources of iron as the so-called taconite found in vast quantities in the lake Superior district. It is likely that each of these sources will get some call in any event. But without the seaway, the great inland steel mills can expect to find their ore more costly and their supply position less satisfactory all around.

Obviously enough, the steel mills are going to use the ore that is cheapest to them. At present that is lake Superior ore, broadly speaking. But the delivered prices of these ores have been moving upward for many decades. I have just indicated that an even sharper upward movement is in prospect. This price increase may be limited to the amount that would cover the cost of delivering imported ores to the same markets.

Processes are being developed for concentrating one type of taconite, a low-grade iron formation that exists in large quantities in the lake Superior ranges. But the best hope is that the product would be competitive with natural ore if production could be maintained at full plant capacity. The high overhead of the concentration plants would make them vulnerable to any slackening of demand. Accordingly it appears in like manner that it would take a substantial increase in ore prices to bring a development of this source on the scale required.

The new ore traffic: Completion of the seaway would change this picture completely. Quebec-Labrador ores, after paying any likely toll, would be enabled to compete in most of the lake districts at current prices for ore. The ore deposits occur near the surface over a wide area, readily mined from open pits, and hence low-cost shipments could be made in any volume likely to be required. Accordingly the seaway will give the best possible answer to the ore problem, both in terms of cost and of ready availability.

This invites a sober comparison with the role that has been played by the navigation facilities in the upper lakes. These facilities made available a plentiful supply of iron ore at a low cost, on which were based the great steel centres of today. Now that production of those ores has reached its limit and costs threaten to increase sharply, the new facilities will make available new and expansible supplies at comparatively low cost.

The Quebec-Labrador development already is going ahead. The production goal is 10 million tons a year. Given the seaway, however, the mining interests have already indicated that they would expect to sell 20

St. Lawrence Waterway million tons a year as soon as production could be raised to that volume. They could expect a further growth of demand in following years.

Canada has a twofold interest in this matter. We are concerned with making the best and greatest use of a rich natural resource. But we are interested in the other side of the coin too, the ore supply problem facing the steel mills. A plentiful supply of iron and steel at comparatively low prices has been taken for granted in our economy. It can be taken for granted no longer. A little thought will show the serious implications of the threatened higher costs in these fields. The seaway promises to avert the worst of this threat. We cannot afford to do without it.

Other benefits: I have referred to transportation economies in other fields as well as iron ore. They may attract less attention but they will be important too. It so happens that they promise to be all the greater because of the new ore movement. It appears that the lake carriers delivering ore from Seven Islands to lake Erie will find it of advantage to proceed to the head of the lakes to pick up cargo for Montreal or beyond, and that for such offerings they could underquote any other vessels that did not have a like advantage in two-way cargoes. This of course means a more economical use of shipping. Moreover, it is expected that the up traffic will outweigh the down, what with the preponderance of iron ore. The difference may not be great, but it should be enough to shift the rate advantage to the downbound cargoes as a result of normal competitive forces.

In this connection it may be of interest to note that ocean-going vessels are not expected to play a major role on the seaway. They may very well enter in some numbers, to be sure. But in the circumstances I have outlined it would appear that an ocean vessel would not enter unless it had an inbound cargo as well as an outbound offering. No doubt there will be those that would have this advantage, but otherwise most of them will find it more attractive to pick up their cargoes at Montreal or some other transfer point.

Is the project necessary from the point of view of defence? From the point of view of national defence, I believe that the development of the St. Lawrence deep waterway is of the greatest urgency. The main contribution perhaps would be in the field just discussed, iron ore supplies. The demand for ore has risen in the present period of preparedness, and would rise sharply again on the outbreak of a major war. The possible

St. Lawrence Waterway sources are sea-borne imports, taconite concentrates, and seaway shipments from Quebec and Labrador. But sea-borne imports would be highly vulnerable in war. Far from increasing, they would decline or disappear, putting a still greater strain on other sources. This did happen during the late war, when millions of tons had to be shipped from the lake Superior ranges to the east coast. Yet taconite production could not be expanded rapidly unless expensive plants were held idle in reserve. New plants would be so costly in time and materials that it might prove too late to start them after the emergency arose, and hence the war effort would be seriously handicapped. On the other hand, once the initial mining development is complete in Labrador and the seaway is open, it would be little more than a matter of putting additional shovels to work to get all the ore that the steel furnaces could use. Even those mills on the east coast of the United States could draw Labrador ore from lake Erie.

The seaway would make at least four other contributions to defence. Important as they are, I will do no more than mention them now. The project would create a reserve of power in the industrial heart of Canada, to be drawn on in the emergency. The combination of power and navigation will stimulate industrial growth, permitting more of the specialized production required in modern war. The seaway will add flexibility and dispersal to a shipbuilding and ship repair program in a sheltered area in the upper and lower reaches of the great lakes. And it will provide an additional transportation route between the factories and the battlefront.

Will the seaway be vulnerable to attack? In the first place ore carriers and other vessels from the gulf of St. Lawrence to the seaway would be infinitely less vulnerable to submarine attack than on the open sea, where this is the main menace. On the other hand it is true that a determined enemy attack could damage or destroy some of the seaway installations. The same can be said for any one of the existing hydro developments, steam power plants, the locks at Sault Ste. Marie, taconite concentration plants, the ore docks on lake Erie, the steel plants themselves, or the railway lines. But an enemy would find it extremely difficult to knock out all the various alternatives at the same time. Surely, then, the best over-all defence is to increase and disperse the most promising alternatives. Just as surely, the deep waterway and the associated power development qualify for a high priority.

What about the materials and manpower for construction? The same considerations

give the answer to this pertinent question, whether the project warrants the use of scarce materials and manpower in today's circumstances. The present period of defence preparation may be short or may be long, but it is precisely in such a period that works should be undertaken to add to our economic strength and efficiency. That is this government's attitude toward resource development and defence-supporting projects generally. Postponing the project would not relieve the pressure on men and materials. It might rather increase it. For without the seaway, other hydro or steam capacity would be required, other transportation facilities, more ore concentration facilities and other works. Moreover, as I have suggested above, a large part of these alternative facilities would be less suitable to the needs of war if it came.

What are the regional benefits of the project? Perhaps I have given enough reason already for saying that this project is of national concern, that it will benefit Canada from coast to coast. That is my own firm conviction. I have been gratified therefore to hear many hon. members from widely separated points give it their support. But 1 would like to mention some of the direct benefits that I see for each of the ten provinces.

Let me say at once that the main benefits do not promise to fall to the areas of industrial concentration in Ontario and Quebec. The outstanding industrial stimulation promises to be in the ore fields of Newfoundland's Labrador and Quebec's Ungava district. It has been arranged that the men to be employed in Labrador shall be recruited as far as possible in Newfoundland, and indeed the two most obvious benefits in both provinces are the new employment opportunities and the provincial royalty revenues.

Both the power and the navigation facilities provided by the project will be important for a number of industries in Ontario and Quebec, of course, and in some cases there will be obvious benefits on both counts.

Further development of power from the St. Lawrence certainly will serve the expansion of industry. That is its purpose and its justification, for the demand for power is growing rapidly. But that demand is going to grow in any event. It is simply a matter of meeting it in the most economical manner. Whether industrialization comes from this scheme or from another, namely from coal by the development of steam plants, 1 do not think it would be possible to stop that development. This is particularly true in Ontario, where still more steam plants are the only alternative to an international hydro development in the St. Lawrence. Quebec on

the other hand can develop its St. Lawrence power independently of the seaway project, and has other hydro sites as well that will serve its industrial expansion.

On the navigation side, the benefits will be most important for commodities having high transportation costs relative to their value. The volume of such commodities used or produced in central Canada and likely to be served by the seaway is only a small part of the prospective traffic. Without meaning to belittle the advantages to this area, it must nevertheless be observed that the main benefits will be felt elsewhere.

As a matter of fact it is difficult to go very far in ranking the benefits to the various provinces in order of importance. Rather than argue about which will gain the most, let us look at what concrete opportunities will be opened up for each.

The prairies would find a substantial saving in the cost of moving grain, flour and other products to markets in eastern Canada and overseas. Moreover the seaway would permit large ocean vessels to move into the great lakes to relieve such shortages of shipping as occurred this year. Shortages occur from time to time to hinder the grain movement, for at present the only vessels that can enter the lakes are too small and too few to make much impression.

I have mentioned already Newfoundland's interest in the Labrador development. Beyond this, the four maritime provinces would get a new and low cost transportation route to the heart of the continent. They complain now with some justice that there is no effective water competition to keep down the rail rates. Well, this is it. There can be no doubt but that it would bring new opportunities to explore in pulpwood, wood pulp, paper, lumber, specialty agricultural products, minerals and other products.

Mr. Gillis:

Say that a little louder.

Mr. Chevrier:

My hon. friend interjects,

but I well remember the essence of the debates on the freight rate legislation both in the house and in the committee. It was said that the maritime provinces required a greater opportunity to move their commodities into the markets of central Canada. This will provide a cheaper route than the one which already exists, and I am sure, knowing the maritimers as I do, that with the initiative they possess they will make use of these many advantages.

The seaway would bring British Columbia much closer to the centre of this continent. For example, British Columbia lumber now moves all rail to these markets, but at Montreal it has been delivered cheaper by the

St. Lawrence Waterway all water route through the Panama canal. The possibility of a continued water movement without transshipment holds great promise, for the market to be reached is substantial.

What will be the effect on the railways of Canada? I do not think that the fortunes of the railways nor the economy of the railways would be materially affected by this project. For one thing, almost half the seaway traffic foreseen is in iron ore. That is traffic which does not exist at the moment in so far as the lower St. Lawrence is concerned, and in so far as the railways are concerned it is new traffic. Another large part already uses the water route for a good deal of its movement, and either leaves the lakes to move by United States routes or transships to small canallers. Still another substantial part now moves all the way by water in those canallers. Such traffic as is lost by railways will be largely in items now paying rates among the lowest in the schedule, rates that are low in the areas affected because strong competition from vessel service already exists.

On the other hand a continued industrial development, further stimulated by the project, may be expected to bring new and high class traffic to the railways, including new traffic in the very areas where diversions may occur. Canada has not stopped growing yet, and the coming decade looks as promising as any in the past. We are going to need not only the seaway but a continued expansion of railway facilities as well.

Do we want the United States to participate in the project? This brief review-[DOT] yes, I still maintain that it is brief because it is a large subject and almost impossible to consider fully in the time at the disposal of any hon. member-has outlined the reasons as I see them why Canada should press forward with the seaway. To me the case from the United States point of view is just as strong or even stronger than that which I have attempted to make for Canada. That is why we would welcome full participation of the United States along the terms of the 1941 agreement. But that agreement, as I stated earlier, after slightly more than ten years still awaits congressional approval. In the face of this uncertainty we are forced to consider how else our objective can be achieved.

The whole project hinges on the development of the international rapids section. Above it Canada could deepen the Welland ship canal, and the improvement of the other canals could be left to the United States to undertake in the normal process

1580 HOUSE OF

St. Lawrence Waterway of expansion of water transportation, as has been the case down through the years. Below it the river is wholly within Canada and the necessary works will be Canada's responsibility in any event.

I believe I have shown to the house the benefits to be derived by Canada through the joint development of power and navigation in the seaway. The project is not one of navigation alone nor of power alone. It is jointly one of power and navigation, and to achieve this maximum objective it is obvious that some form of international co-operation is necessary for the successful development of the international rapids section of the river. Without a doubt the final solution is to be found either in the approval of the 1941 agreement with some modifications or in the 1909 treaty between the United States and Canada.

But let me say again that Canada would prefer approval of the great lakes-St. Lawrence basin agreement of 1941 with modifications as already discussed in the United States congress, such as provision for the charging of tolls. That agreement was signed in recognition of the fact that the international section of the St. Lawrence river is a boundary water. It was signed in recognition of the fact that both countries would participate in the benefits and. each would have a continuing interest in the success of the project. These considerations are as valid today as they were in 1941. We want these considerations expressed today in terms of that agreement if possible because we want to respect the agreement of 1941. But over and above that we are anxious to get on with the job. [DOT]

In the event that approval of congress is withheld or action further delayed, this government is prepared to undertake an alternative, namely an all-Canadian seaway, and to endeavour to bring about the development of power in the international rapids section by the province of Ontario and an appropriate United States authority, through the machinery established under the 1909 boundary waters treaty or by whatever other means may be found suitable. Canada could and would add the navigation facilities and complete the other essential parts of the seaway. If the costs not borne by power are covered by tolls on shipping, it is of much less consequence who makes the initial expenditures, and Canada can do any necessary financing.

It is in this context that the resolution before us today and that covering the bill implementing the agreement between Canada and Ontario should be considered. The proposed St. Lawrence seaway authority would

have power to act for Canada under whatever arrangements the project does proceed. If the Canada-United States agreement of 1941 is approved, it would be the agency to construct the works assigned to Canada as provided therein. If the project proceeds on any other basis, the authority would undertake the works required to provide the navigation facilities from Montreal to lake Erie, and such other work as might be the responsibility of this government.

On completion of the project the authority would be responsible for the operation, maintenance, and administration of the Canadian navigation works from Montreal to lake Erie, including not only the new works but such existing works as may be entrusted to it. It would be responsible for levying such tolls as would cover its current expenditures and recover its capital expenditures over a period not exceeding fifty years.

What will be the cost to the federal treasury? Ontario and New York already have indicated their willingness to undertake the basic power development in the international rapids section, which it is estimated would cost something over $400 million, and this would be a normal business investment. If Quebec joins with the federal government to develop power in the Lachine section, it will be because that, too, is a good and timely investment. The remaining cost to be borne by Canada on behalf of navigation would not much exceed $250 million, which would provide a 27-foot waterway from Montreal to lake Erie.

This might appear to be a large sum of money, but let us take a look at it from this angle. Already Canada has invested about $300 million in the ship channel below Montreal, the 14-foot canals into lake Ontario, the Welland canal, and the lock at Sault Ste. Marie. Most of those expenditures date back to years when a dollar meant a great deal more than it does today, and when Canada was much poorer in material resources. The Welland ship canal cost $132 million. If the work and material that went into it were priced at today's levels, this figure alone would exceed the estimated cost of the remaining navigation works now contemplated. And whereas the earlier investments have been carried without benefit of tolls, as part of the cost of national development, it is now proposed to liquidate the investment in the seaway by a levy on the traffic served.

In conclusion, let me summarize the government's view in a very few words. We believe that Canada needs the St. Lawrence seaway and power development at the earliest possible date. We believe that it is important

for economic development and urgent for national defence. We believe not merely that it can pay its own way, but that the benefits to both Canada and the United States will far outweigh its original cost.

We would prefer to have full United States participation in the project under the terms of the 1941 agreement, perhaps with some modification, along lines already discussed in congress, providing the agreement is approved at an early date. We are now recommending to parliament that, failing such approval, the all-Canadian seaway be undertaken on the most suitable basis that can be established.

Mr. Speaker, when it is realized that more traffic now passes through the locks at Sault Ste. Marie in a season than, passes in twelve months through the Panama, Suez, Manchester, and Kiel canals put together, one can get some idea what the opening of this river would mean to the economy of Canada as a whole. The traffic foreseen for the new canals -and for the Welland canal-will also far outrank that on any of these other famous canals. One glance at the map of the world will indicate why it was decided to build the Panama canal, for instance, through the isthmus of Panama, or the Suez canal linking the Mediterranean with the Red sea. One glance at the map will indicate that those were logical things to do; they were inevitable things to do, and they were the right things to do no matter what the cost. On the proposal to construct a deep waterway in the St. Lawrence river to link the great lakes with the Atlantic ocean, the verdict must be the same.

Mr. George A. Drew (Leader of the Opposiiion):

Mr. Speaker, the motions now before the house deal with a subject that has been in the minds of Canadians for a great many years. The review that has been given to the house by the Minister of Transport (Mr. Chevrier) has been a combination of an historical survey of the canal system and the waterways with which they are associated, and also the presentation of what he regards to be the compelling reasons why this project should be proceeded with at this time.

At the outset I can say that the decision to proceed with the waterway not only should be supported in itself, as it has been put forward by the minister, but in combination with the power development with which it is associated it calls for development now-a development that is long overdue. At a time when cheap power available in large quantities is so closely associated not only with national expansion and development but also with defence itself, it seems unreasonable

St. Lawrence Waterway that there should have been as great delay as there has been in the development of these resources.

I should like to speak, however, for a short time about the waterway as distinguished from the power development. In much of the discussion of this subject that has taken place, it seems to me there has been a noticeable tendency to regard the waterway as a new development. Actually the St. Lawrence waterway is part of an integrated waterway system which has been in operation for a great number of years. The facilities through the St. Lawrence and across the Niagara peninsula to lake Erie have been available for more than one hundred years, and the facilities at Sault Ste. Marie have been available only for a slightly shorter time. For many years ships could use those facilities right through to the head of the great lakes and the capacity of the canals to handle shipping was relatively the same throughout that distance. In more recent years the lock facilities at Sault Ste. Marie, particularly on the United States side of the river, have been deepened and widened so the immense ships carrying iron ore and grain can move through that canal system. So also have the locks and other facilities across the Niagara peninsula known as the Welland canal.

The bottleneck now exists at the St. Lawrence river simply because the facilities there have not kept pace with the facilities across the Niagara peninsula, through the St. Clair river and at Sault Ste. Marie. So far as the waterway aspect of the matter is concerned, it seems to me that we are simply called upon to ask ourselves whether we believe that a waterway which was started as one integrated system some one hundred years ago is to continue as an integrated system with similar facilities for the whole 2,000 miles of that waterway.

I agree with what has been said about the desirability of proceeding with that project. So far as the waterway is concerned, I think it is simply a case of following ordinary business methods and of bringing up to the standard-which justified the huge expenditures on the Welland canal, to some considerable extent-the lower canal system which would carry ships still further and make it possible to use ships of a uniform depth and uniform size for a great part of tonnage that would pass through that waterway.

As has been pointed out, however, we are also dealing with power, and we are doing so at a time when it is generally recognized that power should be made available as rapidly as possible from the great sources

St. Lawrence Waterway that we possess, not only tor the immediate purposes of defence but for the immense industrial expansion which is going to take place in this country in the years ahead. To me this is something that challenges the imagination, and that has challenged the imagination of our people for a great many years. It would hardly be expected that I personally could do anything but support these motions in view of the fact that for many years I had occasion to be seeking the fulfilment of that hope while I was in another legislative body. Certainly we wish to proceed with this development; but there are other considerations which must be borne in mind.

The Minister of Transport (Mr. Chevrier) has reviewed the reasons why this development is, in his opinion, so important. He has indicated that it would provide additional opportunities for shipping in the St. Lawrence section of that combined waterway system. He has also pointed out that there are certain immediate reasons why it should be carried out. He has pointed out that a shortage of hydroelectric power is anticipated in Ontario and that this calls for early action. He has also pointed out that there is now available iron ore which was not previously available. With that thought in mind, he has indicated why he thinks this canal system should be developed.

I should like to deal with that particular aspect of this problem because, while the dominion government now states that it is prepared to proceed with this development on its own if the government of the United States is not ready to join in the enterprise, nevertheless I have not been able to find any report which would indicate-nor have I any information which would suggest-that the Canadian government has taken nearly as vigorous steps as it should to seek the approval of the United States for their joint action at the earliest possible date. Certainly, by all means, let us proceed alone if we cannot obtain that consent. But I think there are reasons for their participation that can be put before the government of the United States which should be emphasized with the utmost vigour. I do not think this is something that should be simply presented as a project that Canada wishes to undertake, and in which she hopes the United States will join. I think it is time for us to say to the government of the United States that while we reap great benefits from our association with them, they should recognize, to an extent which they do not seem to be recognizing, the fact that they depend on us to a great extent for many of their raw materials and other requirements in these extremely difficult days. We know that the vital metal fMr. Drew.l

nickel is found almost exclusively in Canada. We know that from her forests Canada supplies more than 80 per cent of the newsprint of the United States. We know that the United States fills the bulk of her demand for asbestos from Canada. We know of developments under way which will make Canada a great producer of aluminum for the world, a substantial part of our production going to the United States. Now we are reaching the stage of being a great producer of oil; and arguments are being put forward that oil from western Canada, as well as natural gas, should be used in the United States as well as in Canada. We are also the one assured source of that vital metal uranium in the whole western hemisphere. Now we are told- and we know-that we have in Canada immense, almost limitless, reserves of high-grade iron ore.

The Minister of Transport has indicated quite clearly that he is associating the development of this waterway with the employment of the iron ore from Quebec and Labrador. I am not suggesting for one moment, and I hope that through the contraction of any remarks I may make-and I recognize the necessary contraction-it will not be suggested that I am putting forward any proposition that we should not pool our resources with that great neighbour with which we are so closely associated for the purpose of defence as well as for industrial development. Nevertheless, I think the discovery of iron ore on a scale never previously contemplated opens up new possibilities for this country which we have scarcely yet started to visualize.

There are many precious metals; there are many metals which throughout the long history of the world have been regarded as more precious than others. At a time when freedom, and the defence of freedom, are the most precious things there are for mankind, the most precious metal of all is that which forms the base of our great defence efforts, namely steel. Therefore the discovery of iron, which we should think of in terms of steel, is something that gives a new perspective to our future hopes and our future expectations. During the last hundred years it has been steel which has measured the strength of nations, and to a very substantial degree the prosperity and economic power of nations as well.

At the time of the Napoleonic wars, when Great Britain assumed the leading role in bringing order out of chaos, the population of the British isles was no greater than Canada's population today. The immense increase in population, in industrial strength, in economic power, and their position of financial

leadership which was unchallenged until they exhausted their resources so greatly in two world wars, saw its great development when an Englishman, Henry Bessemer, invented a process for smelting iron ore and producing steel in large quantities at economic prices. It was not iron but steel that built the power of the British isles, and it was steel that gave to the world what was known for so many generations as the Pax Britan-nioa. It was steel that gave to Britain not only population, prosperity and world importance on a scale not hitherto known, but also the naval and military power which played so great a part in the preservation of peace throughout the world. Now with the shifting balances of national strength it is steel that has given the United States its great position of leadership. And that leadership can be measured in the immense tonnage of steel which pours out from the steel mills of the United States. That has depended upon their possession of great ore reserves, the largest being in the Mesabi range. Their reserves are not exhausted. Nevertheless they have made such great demands upon those resources, not only for their own domestic purposes but in the common cause of freedom throughout these years that have passed, that the ore from their remaining reserves is becoming more expensive, and they are looking to other sources for that iron ore.

It has been pointed out by the Minister of Transport this afternoon that the construction of this seaway is, in his mind and I assume in the mind of the government, at this point, closely associated with the demand, and the increasing demand, of the steel mills of the United States for greater quantities of iron ore, for iron ore they can bring to their mills without having to carry it along extended sea routes if we should again at any time face the unhappy possibility of war.

I think it is proper that the minister should have pointed out this aspect of the problem, because all the discussion that has been taking place in public on this subject has emphasized the fact that one of the reasons for the construction of the waterway is that as a defence measure it will make possible the movement of iron ore from these new and vast resources in Quebec and Labrador to the established mills in the inland areas of the United States.

I recognize-as I am sure every hon. member in this house recognizes, and as I think all informed Canadians recognize-that it is important to us to be sure there will be ample steel production in the United States to maintain their great efforts and to provide

St. Lawrence Waterway not only their requirements for new structural steel but also their immense requirements for the weapons and the engines of war for themselves and for other countries less fortunately situated from that point of view. However, while we recognize that need, since Providence has placed at our disposal so much of this vitally precious metal, as we make our plans for supplying iron ore to the mills of the United States we should be laying plans now for the construction of mills in Canada to produce steel on a scale we have never contemplated at any time in the past.

The limits of the development of this country, and the increase in prosperity and employment from the Atlantic to the Pacific, in the years ahead will be measured largely by the extent to which, right now, we plan our course, so that from the maritimes on the east to British Columbia on the west this iron ore will be used not merely as iron ore but for the production of steel in mills planted strategically right across this country.

We have spoken about the need for the decentralization of industry in Canada. This is the time for us to plan the decentralization of great industries in every part of Canada. We have mills on the Atlantic seaboard today. As we plan for the use of our iron ore, let us make sure that those mills now existing in eastern Canada are supplied with iron ore on a scale which will require much greater milling capacity than they have today. And let us recognize that while there are immense advantages in carrying iron ore to the established mills in the central part of Canada, there are equally great advantages in assuring steel supplies at seaports both on the Atlantic and the Pacific, so that we may be shipping steel in the form of steel to our friends and allies in other parts of the world.

We have reason to be proud of Canada's growth and expansion during the first fifty years of this century, but steel will make growth possible on a scale we have hardly imagined, if as we plan the use of these new facilities we recognize that it will be to the extent that we fabricate steel from that iron ore in Canada that we will really measure our growth in the years ahead.

At 6.15 p.m. the house took recess.

Mr. Drew:

Mr. Speaker, before the adjournment for dinner I was referring to the importance of steel in the development of this and every other country. I do not propose on

St. Lawrence Waterway this occasion to go into statistical details of our present consumption of steel and our requirements from the United States because we know that we are short of steel. That is emphasized every day. And while we recognize that we are very short of steel at this time we know also that we have not yet felt the real pressure which is bound to come when substantial efforts are made to produce weapons and equipment of various kinds which are required for our general defence effort.

The steel mills we have already in the maritime provinces, in the central provinces and on the Pacific coast can all be greatly expanded, and new mills can be built. The question is how that can be done. Always the question arises as to whether a development which may appear to be related in some way to the emergency of defence itself is to be carried out by the government or by private enterprise in the usual way. I think we can all look back for a practical suggestion as to the way in which this can be done.

At the beginning of the present century we looked upon our forests as being mainly a source of building lumber, firewood, railroad ties, pit props and other commodities usually made from wood. A great deal of wood was being cut in this country for export to the United States in the form of pulp logs. The time came when some of the provincial governments decided that it would be wise to employ Canadian workmen in processing our raw materials instead of exporting them in the least valuable form and providing extremely profitable employment for the workmen of other countries. I do not recall ever having heard it suggested that in so doing any Canadian province or Canada as a nation was selfish or unfair or in any way acting outside of its rights. Provisions known as manufacturing clauses were introduced into the contracts permitting the cutting of pulp logs. These clauses provided that where wood was being cut in this country it should be processed into manufactured form in Canada except under such arrangements as permitted a mutually satisfactory exchange of skill and effort whereby some of the well-established companies in the United States built mills in Canada to manufacture pulp and paper and in return received a certain supply of cut pulp logs to continue production in their own mills.

Those manufacturing clauses were the beginning of large-scale employment in Canada from our forest resources. Today the largest earner of dollars is the forest products industry, which makes more money than any of the mining enterprises. That has been

almost directly related to the insistence that those resources which Providence has placed at our disposal should be used to the advantage of our own people and for the employment of our people at the highest level of skilled workmanship.

This meant new towns and new cities right across the country. I have seen them, and most hon. members have seen them. I do not think there is anything more thrilling than to watch the emergence from the virgin forest of some of these beautiful communities based upon no other enterprise than the employment of our forest resources to their highest level of production right here in Canada.

I cannot recall the United States having raised any objection at any time either by formal presentation to the Canadian government or in any other way. I cannot recall a time when it was ever suggested that there was anything improper in this course. If it was sound for us to raise ourselves from the position of wood choppers for the workers of the United States, it is equally sound for us to say that we shall not limit ourselves to the digging of the iron ore, that we shall give to workers here in Canada, and workers yet unborn, employment on a scale we have never even contemplated, through the use of these new resources now available to us.

I should think it would be very proper and wise that we should have manufacturing clauses in these contracts under which iron ore is exported from Canada. Then we would see great steel mills in the maritime provinces taking advantage of their seaports to ship steel and steel products to the ports of the world which in turn would distribute those products to the nations which need steel so much today. I can visualize great trade from Vancouver and the other great ports of the Pacific coast when in due course we once again return to a somewhat normal measure of trade with the oriental countries to the west. I can visualize immense traffic bringing its return of business of every kind to our shores. Along with that I can see the expanding production of industry of all kinds in the central provinces, and in the prairie provinces where this great waterway we have been discussing would give special advantages.

I have said that I believe steel is the most precious metal of all, but let us not for a moment forget the other things we have, copper, lead, zinc, the new metal titanium which can do such remarkable things, nickel, gold, silver and, as I mentioned before, uranium. These are only some of the metals we possess. These are

the great metals. Then we have our forests, and now we have oil in such abundance that people are beginning to wonder if this is not possibly the greatest oil deposit in the world.

The fact is that people living in Canada today have everything with which to build the firm foundation of a productive country which would sustain in great prosperity a population many times that which we now possess. There are those who are inclined to remind us that we have great mountains, vast tundras and the rock belt in the north. We have. The rock belt,, the mountains and even the tundras all have their value, and all have demonstrated that they contain great wealth. In this enormous country, the third largest in the world, exceeded in size only by Russia with 200 million people and China with 450 million, we have 14 million people. Yet there are those who use that ugly word "optimum" and say that the optimum population of Canada is somewhere in the neighbourhood of 20 million. That is statistical nonsense. Even today we can feed 100 million people with what we are able to produce from our soil, and we could exceed that number greatly if with a larger population more intense agricultural methods became profitable and were employed. With all these metals, with our timber and our oil, there is not the slightest question in the world that Canadians of future generations will be very foolish if they start talking about any optimum until the population of this country has exceeded 100 million people.

When I say that I am not suggesting that we are going to have 100 million people in Canada tomorrow, a year from now or five years from now; nor am I suggesting that we are suddenly going to move great populations to Canada to build up to that number. History shows how quickly populations increase when conditions provide the basis for a larger population. All we need to decide is that there is going to be a larger population and that we can support it with advantage to the people of every part of our country. I cannot help calling attention to an editorial which I found in Le Canada of Montreal under today's date, in which that newspaper takes exception to somewhat similar comments I made in Vancouver last Friday. The suggestion is that in making the statement that Canada's population can reach 100 million people with advantage to all of us I am suggesting that we suddenly start a flood of immigration which will build up to that extremely large number of people. I mention that only for the reason that the editorial seeks to convey an impression which was never contained in anything I said. I

St. Lawrence Waterway regret that a newspaper carrying the name Le Canada should suggest that in making a statement of that kind I was making a statement I would not be equally ready to make in any part of the province of Quebec as well as in any other part of Canada.

I would have thought that a newspaper with the name Le Canada would be proud to claim that Canada can grow, and that on the basis of that very ore which is now found in such vast quantities in the soil of Quebec that province, together with the other Canadian provinces, will expand its population and prosperity. I simply repeat what I said on the earlier occasion, that in mentioning a figure of that kind I am merely saying we need not worry about when that figure will be reached as long as we are confident we can support a population of that size, and then make our plans accordingly. The plans to which I was referring were plans to expand our own production by the best possible use of our resources, and that is what I am suggesting again tonight.

Once again I want to emphasize the vital role that iron and steel play. No oil would be found without steel. No copper, zinc or aluminum would be produced without steel. None of the great synthetics that we are producing today would be produced without steel. It is the basis of modem industrial expansion. That being so, of all the resources we possess I suggest it should be the declared policy to make sure we will use that raw material to the very best advantage of all Canadians when it is actually brought out from the soil.

I believe there are reasons why the people in some parts of Canada other than the central and prairie provinces can see some direct advantages from this waterway. Perhaps those advantages are more apparent to them than to the people of the east and west coasts, who view with some concern the possibility of a still greater concentration of industrial development and other activities which will be associated with this great enterprise. I suggest there are reasons for that concern.

The speech from the throne mentioned that we would be dealing with this subject. It referred also, for example, to the South Saskatchewan power and irrigation project, about which the government is still waiting for the advice of a committee, although for years -competent engineers have reported that the South Saskatchewan project could be proceeded with to the advantage of our people. We know, too, that highly competent engineers have been reporting for years that there are developments in the maritime provinces which could be carried forward

St. Lawrence Waterway with great advantage to those provinces as well as to the rest of Canada. For years we have heard of the possibility of using coal in Cape Breton, not only for ordinary industrial activities but also for the production of low cost electricity. We know of the Passa-maquoddy project; we know of the developments that have been proposed in the lower St. Lawrence. We know of the desire of Prince Edward Island for some industries associated with defence activities, and of the training activities being carried on in that cradle of our confederation. We know also of the immense possibilities of new developments in northern Manitoba, Saskatchewan, Alberta and throughout the great coastal and northern areas of British Columbia. I believe some of the concern that has already been expressed might well be removed if there were a broad declaration that we propose to develop all those resources for the advantage of our own people, and that we propose to follow whatever legitimate course we may to assure that it will be Canadian workmen from the Atlantic to the Pacific who will be employed in the fabrication of the things that are made from our raw materials.

We come back to the question of whether this is to be a joint effort in association with the United States. The Minister of Transport (Mr. Chevrier) correctly interpreted the sentiment that has been widely expressed that this new waterway will carry at low cost to the steel mills on the great lakes the ore which is required there. At the same time we are discussing the possibility that Canada alone will build this waterway. May I suggest, Mr. Speaker, that if the United States does not think this waterway is important for defence, I do not know why we should tell them we are going to build it for them. I believe it is important. It is important for the development of our resources' and for the expansion of business in this country. But surely if it is as important as all that the United States would recognize that importance. If we are convinced that it is so important for defence, I should think that in the discussions with the United States the whole subject of the exchange of raw materials should be considered upon that basis. We should point out that if they do not believe the waterway is sufficiently important for defence, then we are going to use that waterway for Canadian mills at Hamilton, at the Sault and other points on the upper lakes as well as in the maritime provinces, for the employment of our own people. I believe we have a right to do that. We have a duty to our own people to do it.

I would hope, however, that we shall not find ourselves in a position where it becomes necessary to say that if the United States does not regard this as important from the point of view of defence, we must of course build up our own defence production as quickly as possible with our own raw materials. I hope the United States congress will decide that this is not only an advantage from their point of view, but will realize also that it would be one of the finest gestures in a troubled world if it were shown that two nations could develop an international waterway under terms of this kind. There is no other place in the world of which I know where there is any similar development. At a time when we are all thinking of peace and hoping for peace, this would be a great demonstration of what two nations, confident in the possibilities of peace, were prepared to do for their own future. I hope it can be approached on that basis, and I hope it will actually work out on that basis. I am not suggesting that we should, in any selfish expression of any kind, threaten United States by saying, "You do this or else".

I do suggest, however, that as Canadians, concerned first of all with the welfare of Canada, we point out to them that it is Canadian workmen and the growth of Canada with which we are concerned. Whatever we do in co-operation with them is, nevertheless, always done with that first thought in our minds. I hope the United States, which at all times has built its strength on the acceptance of the principle that its first duty was to the people of the United States, will recognize our legitimate aspirations and join us in this great peaceful expression of mutual confidence. If that is done, then I think we may find this waterway will become the key to Canada's new era. For centuries and more alchemists have been trying to convert base metal to gold. By the alchemy of good will a great joint effort of this kind could convert our vast iron resources to produce the gold that is found in the productive work of men profitably employed. If, with that vision, our government places before the United States the proposal that will emerge from this resolution and from the legislative steps which follow, then I think this may well be the beginning of Canada's golden age based upon the use of iron.

I should like also to go back into legend and recall the fact that the thousand islands section of the St. Lawrence waterway which we are now discussing carried the Indian name of Manatoana, which means "garden of the great spirit". I hope, Mr. Speaker, it will

be the garden of the great spirit of friendly co-operation between nations which will shine as an example to the whole world.

Mr. M. J. Coldwell (Rosetown-Biggar):

Not

since 1941, Mr. Speaker, have we had before us a definite proposal for the building of this great waterway. I agree with the leader of the opposition (Mr. Drew) that the building of this waterway is perhaps, in a sense, the beginning of an era of new development in Canada the like of which we have not known as yet. I join with him in hoping that the rich resources of the northland and the great iron ore deposits in Labrador and in the province of Quebec may be used not to build great industries in the country of our great and good neighbour to the south, but may be used more and more to build great industries and give productive opportunities to the young men and women of our own country. In saying that I am not indulging, I hope, in any narrow nationalism. I think it would be a great pity if these vast resources that are now being developed were in part, we will say, shipped down the Atlantic coast of the United States to New Haven, New London, Connecticut, or some port on the United States coast line, passing the great coal fields of Nova Scotia, and were used rather to belittle our own resources of coal and so on in the maritime provinces and build up industries in another land. In the same way I think it would be regrettable if the ore passing up this great seaway were used mainly to expand the great iron and steel industry along the shores of lake Erie and at Port Huron, Cleveland, Buffalo and so on and were not used to build up industry in our own country.

I join with the leader of the opposition (Mr. Drew), the Minister of Transport (Mr. Chevrier) and others in the house in the hope that this may not occur. But I want to say to the government that I do not quite know how our objective is to be achieved if we have no regulation of that industry, or if we allow the matter to be determined purely by the profit motive and by free enterprise. Hon. members have heard me recount this incident before; but when early in the war steel plate was needed on the Pacific coast, and when the late hon. member for Vancouver-Burrard, Mr. McGeer, the present Minister of Fisheries (Mr. May-hew), the present Senator Reid and others of us on the committee dealing with war expenditures urged that, instead of building up industry in one part of Canada or in one or two spots, the great deposits of iron and coal lying in close proximity to each other on Vancouver island should be used to build up a steel industry on the Pacific coast, I

St. Lawrence Waterway remember how we were told categorically that such a procedure would not be permitted. We were told that the expansion was to be undertaken at Algoma, at Hamilton and where the steel industry was then located. In other words, we said at that time that the steel industry expansion was going to be in certain parts of Canada. If the government, as they may well have to, give any concessions in the building of this greatly expanded steel industry, whether it be under public or private enterprise, I would hope that the placing of industry in various other parts of Canada than those where that industry now exists will be undertaken; and that, if it is done by government support for established industry-free enterprise, if you like-we will say to them: We expect you to place some of your industries elsewhere than where they are to be found at the present time, or to expand in regions where there is at present both coal and iron, as in the maritime provinces.

But this is a great project. I suppose we think of it largely as a transportation problem, and that is the manner in which the leader of the opposition discussed it this evening. We think a great deal of the moving of ore from the province of Quebec, from Labrador, up the St. Lawrence river to the mills located along the great lakes. But to those of us who come from the prairie provinces there is another reason why we are interested in this project. We are convinced that when the channels now forming what the Minister of Transport calls a bottleneck have been deepened, and when ocean-going vessels can go right through to the ports on the great lakes, the products of the prairies will move more easily and at lower transportation costs. If ships bring iron ore up the St. Lawrence through the great lakes it is quite conceivable that some of those ships might at least carry grain down the great lakes, even if the cargo has to be transshipped at Montreal or one of the ocean ports. Consequently those of us who are looking at this matter from a prairie point of view hope, and indeed believe, that the expenditure which is to be made to deepen this channel in order to give our products access to the sea in ocean-going ships from the inland ports will be beneficial to the producers of the great plains.

While I indeed appreciate the remarks made by the leader of the opposition in relation to the value of this being a joint project between ourselves and the United States, may I say that I would not be at all worried if we had to undertake it by ourselves. As a joint project you have two nations exercising control over it. We might find that such joint

1588 HOUSE OF

St. Lawrence Waterway control would lead to some awkward situations in the future, and that one or other of the two nations might find it beneficial to both that one nation, and not the two nations together, should undertake this great project.

Do not misunderstand me, Mr. Speaker. I am not suggesting that, if the opportunity arises for this to be a joint undertaking, it should not be undertaken as such. It would relieve Canada of a vast expenditure of money if it were a joint undertaking. What I am saying is that there are some reasons why the undertaking of this project by Canada alone might be of benefit not only to Canada but to the two countries, since it would remove the possibility of misunderstanding and perhaps dispute in the days to come. Consequently I think that side of the picture should be considered.

But whether this is a joint undertaking or not, it is going to have a tremendous effect, not only in the field of transportation but in many other ways, upon the future of a large part of this country. When we think of what this project will mean along the shores of the great lakes-the building of additional port facilities^ the enlargement of the port facilities we now have in order to accommodate larger, ocean-going vessels and so on-it opens up vistas of expansion which may well beggar description and which we perhaps cannot adequately and properly conceive at the present time.

The proposed St. Lawrence seaway project is, of course, a dual purpose plan. I think we must keep that fact in mind. It combines both navigation and power projects.

I am not going to say much about the power project side of this because a great deal will be said on it in this house in the near future, and possibly in this debate. One of the features of this project is that it is not a navigation project alone but a great power project as well.

I have not had time to study the agreement that was tabled in the house yesterday, between the province of Ontario and the federal government, with regard to power development in this region. I am happy indeed to know that an agreement has been reached between the two governments.

As a navigation project of course it is one of the great projects in the history of the world. It means that there will be a 2,500-mile channel 27 feet or more in depth joining the Atlantic ocean with the chain of great lakes, permitting ocean-going vessels to ply backward and forward from the very heart of this continent to all the ports of Europe and the world. What a remarkable project it is in that respect. To appreciate the significance of this we have to understand the role [Mr. Coldwell.l

the St. Lawrence river has already played in the history and the development of Canada. Years ago it provided the only great route from the Atlantic ocean to the interior of the North American continent, and the impact this great route has had upon the history and the development of Canada and the United States is indeed almost incalculable. Its potentialities have undergone continual development until the present, when most of its length is navigable to deep draft vessels from the mouth of the St. Lawrence to Montreal. I remember when I was a boy at school I was taught that Montreal was the seaport, as it were, farthest away from the ocean; and it seemed almost inconceivable, until I first rode up that great river now over forty years ago, that a seaport could be situated a thousand miles from the open sea.

At the present time there is no obstacle to navigation which will prevent a ship with a draft of some 35 feet, I think the minister said this afternoon, reaching that great inland city and port of Montreal. From Prescott to lake Erie we have spent a tremendous amount of money as a nation in order to deepen and make navigable the canals in that region. It is already to a depth of 25 feet, and down-bound ships with drafts of 21 feet can navigate from lake Erie right through to the narrower and shallower channels near Prescott. Therefore the main section to be improved, as the minister said this afternoon, is the 115 miles from Montreal to Prescott, where navigation is seriously limited owing to the 14-foot depth that exists between those two points. He well called that this afternoon the bottleneck of this great inland waterway.

I believe we have already spent something over $300 million on the St. Lawrence in providing a 35-foot channel to Montreal, a 14-foot canal system from Montreal to lake Ontario, and a 25-foot channel from lake Ontario to lake Erie; and then of course the locks at the Sault. I hope all hon. members at one time or another have seen these remarkable projects; the Welland canal, the great locks that let ships in and out of lake Ontario, and the great locks along the Sault in the province of Ontario. And so it seems to me that having done this much, it is logical that an attempt should be made now to complete this project.

There are two projects, as the leader of the opposition said a short time ago, in which many of us are interested, and they both involve rivers: this great project, the seaway, and the great project of the South Saskatchewan, so there will be more produce to be exported along this waterway to the sea. It seems to me that the two things are related,

because they both deal with the possibilities of not only an expanded economy but an expanded policy, and all that an expanded policy brings in its train in a country of this kind.

As I said earlier, one of the chief enticements to the support of this project is that we believed there would be a reduction in the cost of transportation between the lower St. Lawrence and the great lakes. I do not intend to go into the whole route; the minister went into that this afternoon, but I intend to say something more than I have said about it. We have already completed a large section of it, and it seems to me we should now make up our minds that this is to be completed, whether we do it in co-operation with our great friendly neighbour to the south or whether we are compelled to go it alone.

I am not much impressed with the argument that this is a defence project. I hope that before this is completed the situation in the world will be somewhat different, that we shall have achieved a larger amount of peace among the nations and not have to regard this as a defence project. Indeed as a defence project, if was came, it might offer an inducement as a very interesting target to an aggressor nation who could deliver either guided missiles or atom bombs by planes. One atomic bomb dropped at the Sault could tie up lake shipping over the whole route. As I say, I do not regard this as a defence project but as an economic project, which will be useful to Canada in the years and probably the centuries to come.

I repeat, I am not going into all the details; but I think I might refer to some of them. In one way or another the leader of the opposition and the Minister of Transport (Mr. Chevrier) have already referred to them. I might refer to the tremendous quantities not only of iron ore but of wheat and of other produce that I believe can be shipped over this route at lower costs, which should urge us to consider it in all its aspects. I know there will be criticism of this project, and there should be criticism because some of us are looking at it very largely from the point of view of the areas from which we come. The prairie area, which was my home for many years, always looked to the day when Fort William and Port Arthur would be ocean ports from which we might ship our wheat and our other produce without undue freight costs, without transshipment at Port McNicoll or Port Colborne or Prescott or Buffalo or other points. I am thinking of wheat now, of course, but there is other produce. We should be able to ship it from coast to coast without the necessity of moving our produce from one type of lake ship to an

St. Lawrence Waterway ocean-going vessel. Therefore I say this project should be carefully examined by every hon. member. Those of us who come from regions where we think this would be beneficial should listen to those who come from regions where the people think it may be harmful to them.

In the main, my personal belief is that if undertaken and completed, this project will open up a new era of progress and prosperity for many parts of this great country.

Mr. J. H. Blackmore (Lethbridge):

Mr. Speaker, when this project was mentioned some time ago I said the Social Credit group would support it. We still support it. I have liked generally the attitude of the government in going forward with this development. Canada is sufficiently grown up now that she does not need to have the co-operation of any neighbours in the building of a great project of this kind. She has so intimated, and so stated. She is going forward to build this project, which I believe is the right thing to do.

I always like to get along with my neighbours just as well as I possibly can. But I have always had the idea that I get along better with them if we do not go together in some project such as the building of a shed or something like that. And I think we would get along better with this project if it were all our own. In that respect I think the government can see quite readily the position we will take, so far as Canada going ahead with this project herself is concerned.

I am not sure just what the impact of this project will be immediately or ultimately upon the other provinces. But there is one thing I hope Ontario and Quebec will learn very soon, and that is that if they use a project of this kind greatly to increase their industrial strength and their strength of population, and consequently their voting strength; if they use the power they get from that added strength to seek to impose their will upon the other provinces to the detriment of those provinces, they are courting trouble. They are going to injure the other provinces, and thereby injure Canada. Therefore I hope the governments of Ontario and Quebec will do some good, earnest, serious thinking while this project is being built, and that they will take steps to see that the results of this project will be felt to the benefit of all provinces in Canada.

There are provinces that are worried about what this project will do to their economies. I would be in favour of giving those provinces the positive assurance that no injury will be done them, and that if there is any

St. Lawrence Waterway injury it will be made good in one way or another. I have in mind particularly the maritime provinces. My opinion is that Canada has treated the maritime provinces scandalously ever since they entered confederation. Many people act as though they do not care. "What difference does it make? They have not enough votes to bother us, anyway. Why bother about them?" Then, of course, when those people go down to the maritimes they talk nicely and get the people in the maritime provinces to vote Liberal or Conservative all the time, one or the other. And they are just as badly off when they vote for one as when they vote for the other. They go on suffering, from generation to generation. That has been the record. No Conservative administration can point to any more advantage given to the maritime provinces than any Liberal administration has given. And no Liberal administration can point with pride to its record of treatment of the maritimes. If anyone thinks he can point to any such administration, then I will listen to him when he rises to speak. Whatever is done we must keep in mind the maritime provinces. We must remember that those provinces should be given the opportunity of growing into the great and happy areas the Creator intended they should be, and that they should not be trailing in the wake of federal policy in this nation, greatly to their disadvantage, as has been their unhappy experience in the past.

This project is one of the most serious, from the standpoint of the maritime provinces. I sympathize deeply with them when I cast my eye over past records. If I were a maritimer I would be greatly worried about this project until I was given positive assurance that my area was not going to suffer. The minister's admirable speech this afternoon sounded all right for the maritime provinces. If it only works out that way no one will object. I think there is not much more to say in that connection, so far as we Albertans are concerned. We have not had the opportunity to study the project deeply enough to see all the possible pitfalls, but in a general way it would appear to be a good thing for Canada. It is going to be a good thing for Ontario and Quebec. Ultimately what is good for Ontario and Quebec is going to be good for the rest of Canada, if Ontario and Quebec use the common sense they ought to use. We certainly will pray that statesmen will arise in those two provinces who will realize their responsibilities in the future as their men have never realized them in the past.

The power aspect of the project is a great consideration. It is important that we have adequate power for Ontario and Quebec, and

fMr. Blackmore.l

it is very important that we should have no neighbour in a position to meddle in our affairs when we endeavour to use the power which will be derived from that project. That is another reason I would like to see us have the thing all to ourselves. I would want Canada to be generous with her neighbours in permitting the use of the development both in respect of travel and the use of power. But I want to be in the position that they realize that whatever they do is only with our consent.

I repeat that Alberta and the Social Credit movement will support this great project.

Mr. Robert Cauchon (Beauharnois):

Mr. Speaker, as political economy depends upon the observation and study of both physical and human factors, it is of great interest to see how the peoples of nations react to the programs proposed to and imposed upon them. This enables us to judge a national policy not only by the intention which motivates it but also by its results. For instance, policies resulting in such services as railways and social security measures have always drawn heavily upon public finances, but who would criticize those undertakings for that reason? Would Canadians today say that the building of our transcontinental railways was ill advised?

Again, it has been often shown that increased production and work efficacy are means of improving the conditions of the workers. That being true, the prosperity of a country will be augmented by increasing the efficiency of human labour both by mechanization and more particularly by utilization of our potential electrical power. Only thus will our standard of living be improved, especially that of the workers who constitute the most important part of our population, for they produce what Canadians consume and export to maintain our foreign trade.

Quite apart from the substantial improvements through intelligent application of more efficient work methods and consequent increased production, an essential to prosperity is the investment of new capital. Such an opportunity for sound investment is afforded by the proposed plan to develop the St. Lawrence seaway. Can there be a more profitable investment for a nation than the development of the St. Lawrence, which is both a national and international asset? In fact, no greater opportunity for the successful development of commerce and of electrical power has ever been offered to mankind. The advantages cannot be regarded as of local importance only, because they give all Canada the opportunity of expanding her world trade by meeting competition through cheaper transportation.

The government which has suggested that our nation undertake the construction of this waterway, alone if need be, is now in a position to know the advantages to be derived from it. From the findings of numerous joint commissions which have been set up from time to time to study and report on the feasibility and need of the waterway it has been able to weigh the advantages and the costs. Ever since Dollier de Casson built a one and a half foot canal at Lachine in 1700, attempts have been made to use the great east and west waterway in the interests of both Canada and the United States. Together in 1905 these countries set up a joint standing national waterways commission which in turn led to the boundary waters treaty, effective in 1910. From that time matters pertaining to our international waters were under the jurisdiction of the international joint commission. This commission obtained reports from an engineering board, and held hearings in five of our provinces and several of those states most intimately concerned. Its report to the government-a report entirely favourable- recommended further study of the subject. This was in 1921.

Acting on the commission's recommendations further study was undertaken, which showed unanimity of opinion as to the economic value of the proposed waterway. But in 1924 fuller examination by six engineers, constituting an international joint board of engineers, resulted in a conference between Canada and Ontario, because the international section lies in that province. Again a favourable report was submitted.

The treaty drawn up by Canada and the United States as a result of these findings provided, among other terms, for a combined power and navigation project in the international section. There would be, according to its provisions, 2,200,000 horsepower to be divided equally between the two countries, and a 27-foot waterway from lake Superior to Montreal. The treaty, being defeated in the United States Senate in 1934, was never ratified.

But in 1940, because our war effort drew heavily on our supply of electrical power, the Canadian government proposed to the United States that conversations be held regarding the development of power on the St. Lawrence. As a result concessions were made which permitted Ontario to develop at Niagara 70,000 horsepower. Moreover, committees were set up to investigate development of the international rapids section. The government, after having received the reports of these committees, signed the great lakes-St. Lawrence agreement. As in

St. Lawrence Waterway 1934, under the St. Lawrence waterway treaty, it provided for a 27-foot waterway to Montreal, and for the development of

2,200,000 horsepower.

In reading the recommendations and reports submitted one is impressed by the fact that all these commissions were in favour of the undertaking. But history shows that opposition has always been encountered when a new project is under consideration. Such opposition may spring from lack of foresight, as in 1840 when, at the instance of the Michigan legislature, a bill was introduced in congress for a grant of land to aid in building the first canal at the Sault. Even Henry Clay argued against it and said that this region was beyond the reach of the remotest settlement. Today that statement would be ridiculous.

Opponents to the present scheme base their objections on:

(a) The shortage of the navigation season.

(b) The loss of trade that might be suffered by existing facilities.

(c) The cost of construction.

(d) The traffic's not justifying the cost.

(e) Cost of maintenance.

In answer to those who fear that the shortness of the navigation season, averaging 215 days in Montreal and 237 days at the Welland canal, would make the scheme unprofitable I would point to the commerce on the Baltic sea. The tonnage is very heavy, but so organized that it can be carried during the open season. Understandingly there is in some quarters fear that the undertaking will militate against existing facilities. The experience of Liverpool, which strongly opposed the construction of the Manchester ship canal, is an indication of what happens under such circumstances. Both ports prosper.

In carrying out the present plan of construction, alone if necessary, I am convinced that the enormous sum involved will in the near future be proved insignificant when set against the development of resources, the expansion of trade and the investment of new capital attracted by reserves of low cost, available power and cheap transportation. The attraction exercised by such facilities is well exemplified by the aluminum industry in the Saguenay area of Quebec and at Kemano, B.C. The big advantage of such development is that the deepening of a channel to aid navigation is at the same time providing power for an area almost entirely dependent on white coal.

Let us next look at the benefits resulting from the improvements at the Sault. These

1592 HOUSE OF

St. Lawrence Waterway paid for themselves five times over in the 1918 season alone. The saving that year in freight was $180 million but the cost had been only $32 million. It is impossible to reckon in advance the increase in traffic as a result of improved water transportation, as a study of the Panama and Suez canals clearly indicates. Improved transportation facilities create the demand for such facilities.

A study of the distribution of population proves that minerals, timber and other national resources if not accessible are of little value. The richest agricultural land is worth, depending entirely on transportation facilities, anywhere from a few dollars to several hundred dollars an acre. Transportation is the greatest creator and stabilizer of wealth. Moreover, in order to carry the traffic that will inevitably follow the steady growth of our country it is absolutely necessary to provide some other kind of transportation than is now available.

The need of better and cheaper transportation facilities is urgent and of interest to the entire country. With more power available, industry will expand and this expansion will demand the fullest employment of both water and rail transportation to meet the needs of those industries. Engineers assure us that conditions in the St. Lawrence are excellent for the maintenance of a navigable channel. Sediment is largely settled in the great lakes and the hard rock of the river assures a permanent bed. If the Suez canal with its high cost of maintenance has proved a profitable venture why should the St. Lawrence waterway, where physical conditions are more favourable and maintenance costs therefore much less, not prove profitable?

We must remember that the opening of the great lakes channel to the sea, thereby giving that area in effect a seacoast, is also as economically sound as a waterpower project is economically sound. The water supply is constant and adequate, a factor important both to power and navigation. The harnessing of hydroelectric power is of particular urgency to those provinces which have no coal and little or no oil or natural gas. I do not need to elaborate on the position of the province of Ontario in this respect. But I do believe that it is a duty of the federal government to make available to the provinces from the waters under its control a reserve of power upon which they can draw when and as required to enable them to make full use of their natural wealth.

Power and navigation have been and are closely associated in considering the St. Lawrence waterway, for power will be sold

and traffic on our inland waters will be multiplied and accelerated. As intimated previously, in the province of Ontario there are municipalities today seriously handicapped by lack of power. The project under consideration would alleviate this acute shortage. We are indeed failing to fulfil our obligations if we neglect to make possible a power project vital to so large a section of our population. Certainly the provinces of Ontario and Quebec understand the value of water-borne traffic and cheap power. Toronto alone saved many millions of dollars. I might also point to the growth of Arvida and Beauharnois. It is not necessary to speak at length of Cornwall's hopes for the future, as revealed in a recent issue of Saturday Night. I know its interests are in good hands.

Having watched since 1932 the growth of different municipalities in my own riding, I am in a position to know what the development of hydro power can do for a region. Several new industries have been attracted to Beauharnois, which has, as a result, nearly doubled in population. The same remarkable growth is apparent in Meloche-ville and St. Timothee. Valleyfield too has witnessed a large industrial development. Moreover, all these municipalities have a most promising future. Harnessing of the hydroelectric resources after the St. Lawrence seaway project is completed will produce a further industrial expansion.

What commodities will be affected by better and cheaper transportation to and from the great lakes area? Traffic in iron ore and petroleum is likely to be much heavier, in addition to the ever-increasing tonnages of grain and coal. Under present conditions tankers carry approximately 3,000 tons of gasoline and grain and coal carriers have a capacity of 2,500 to 3,000 tons. We are told that the St. Lawrence is to handle many millions of tons more, but because additional locks can be built its capacity is almost limitless. Savings in transportation cost on meats and lards, timber, automobiles and agricultural machinery, and the ores and coal necessary to their manufacture, would be passed on ultimately to the consumer.

Now let us consider what this project will mean to the western grain producers. Up to the time of my election to the House of Commons I knew relatively little about wheat. I now share an office with the hon. member for Yorkton (Mr. Stewart). Strange as it may seem, my heretofore neglected education in this respect is in the process of being completed. I may say he makes it a continuing process. A saving of several cents per bushel on grain moving eastward by the proposed all water route has been estimated.

Mr. Louis Sabin, general superintendent of the St. Mary's fall canal, in giving evidence before the international joint commission in 1921 drew attention to the saving in distance and time effected by the use of the St. Lawrence all-water route compared to the Erie canal and Oswego-Mohawk route, 16 days and 15 hours against 19 days and 13 hours, and 4,148 miles as against 4,641.

The cost of sending grain by the all-water route to Montreal is 12i cents per bushel, by water and rail 25-2 cents and by rail 28-2 cents. These figures were obtained from the bureau of statistics. More grain could be shipped by the cheapest method if steamers of sufficient draft could load at the lakehead for eastern Canadian ports and the Atlantic. By thus removing the necessity of reloading, with its heavy costs in time and labour, loss by unrecoverable wastage from grain erosion could also be eliminated. This wastage, as estimated conservatively by an experienced elevator superintendent, is appreciable, as much as 30 pounds in each 1,000. It follows, therefore, that the benefits derived from lower transportation costs on grain alone would justify the required expenditure. Such reduction in transportation costs to foreign markets tends to increase the farmer's return on his entire crop. It is axiomatic that in a surplus producing country the farmer's price is largely determined by his return on the surplus.

Before making the momentous decision the government has considered all the arguments in favour of and against the project. I am firmly convinced that after the debate on this subject is concluded it will be clear to all hon. members of the house that the St. Lawrence waterway should be undertaken by Canada, and undertaken now. Mr. Speaker, coming generations will remember with gratitude the government which had the vision to invest in Canada's future.

Mr. Clarence Gillis (Cape Breton South):

I am sure, Mr. Speaker, that it must be dull for you to have to sit there listening to the same story all night. In order that this may not look as if it were unanimous or prearranged, and for the sake of variety, I am going to take the other side of the argument. I agree with the Minister of Transport (Mr. Chevrier) that this is perhaps the most .mportant statement he ever made in this house. I view the action now proposed by the government in the light that it is going to have the most serious repercussions upon the economy of this country of any action that has ever been taken, that is if the government mean what they have said.

On another occasion I took the stand that I am going to take tonight, perhaps more

St. Lawrence Waterway briefly, and at that time I was told the policy I was advocating was my policy. I want to assure you that so far as I am concerned I represent people in this House of Commons, people who marked an X on a ballot and sent me here. They have a right to expect me to do the things they want done. I want to make that quite clear. Perhaps the province of Nova Scotia is the only province in Canada that has a policy on this particular question. I listened to the leader of the opposition (Mr. Drew), and he made a fine oration. My impression is that when I have said that, I have said it all. I listened to the minister, and I believe he did a good job with a bad case. To a large extent both hon. members were expressing their own opinions or the opinions of their party.

So there would be no misunderstanding about the attitude I am taking, I checked with my people during the past months. In so far as the Nova Scotia section of the C.C.F. is concerned, they have a policy on this particular matter. On November 2 and 3 I attended a convention of the party and listened to this matter discussed by about one hundred delegates. While they modified their stand, which was unalterable opposition, that section of the C.C.F. movement now takes the position that they will go along with this proposal provided the government considers it as an investment program that will mean equality of development in all sections of the country. I shall go into that in more detail later.

I was not satisfied with merely obtaining the opinion of the political party I happen to represent in this house-although they have a definite policy on the matter-and I checked with the united mine workers. Thirteen thousand coal miners, the major portion of them in the province of Nova Scotia, discussed this matter at their last convention held in Truro in August of this year. The convention instructed the executive board to go back and study the matter. There was to be no guess work about it, no ifs, ands and buts. They studied the matter from a practical standpoint through their research department, and they have a good research department. This union wrote the Prime Minister (Mr. St. Laurent), and I imagine all hon. members received a copy, setting out their considered opinion of the navigational portion of this project. They believe that the navigational part of the project is a threat to their means of livelihood. This memorandum issued by the union is dated October 16, and contains seven reasons for the union's belief that the navigational portion of this development would interfere with their

St. Lawrence Waterway means of livelihood. I am not going to put it on the record because the Minister of Transport likely has a copy.