Mr. Reid:

I have no objection to its being transferred, if necessary.

Motion transferred to notices of motion.

This is the way that standing order 51 was interpreted in those days, and that is the reason why earlier in the session I made certain appeals to hon. members. I did so because I think that we have got away from the practice intended in those days, which practice was followed almost consistently until about 1935, I believe.

Mr. Reid:

I am authorized to do so, and it is my

definite understanding.

That was in May of 1947. In June of 1949 the company launched its application for' an increase in rates. When the representative of the city of Vancouver pleaded before the board of transport commissioners that it should take into consideration conditions only since 1947, and attempted to read this undertaking, he was met by a vigorous protest from counsel appearing for the British Columbia Telephone Company-a distinguished senator; mind you, he was acting for the company, and representing them most efficiently. I have here a quotation from what he said to the board of transport commissioners: "I didn't know my learned friend was appearing on behalf of parliament." The company took the position that what was said in parliament had nothing to do with the situation, and that it was not any of the board's business. The deputy chief commissioner of the board, who was presiding, took the same position, and simply brushed aside the representations made by the city, and the undertaking which had been given in the House of Commons. Therefore I repeat that I for one think there should be some fairly definite curb on this company in that they should be required to come back here at frequent intervals so that the people of British Columbia will at least receive that amount of protection.

The Vancouver city council also asked protection against unreasonable charges by affiliates, all of which charges have to be paid

by the telephone users. In order to explain that I must give hon. members the picture of the family tree of this company. It was founded by west coast pioneers and they deserve great credit for establishing this company. Some of the descendants of those pioneers are still with the company. In fact the president, Mr. Gordon Farrell, is a son of one of the key men of the early days of the company. I believe that it is well run, efficiently managed and has a very efficient staff.

For many years it was controlled in British Columbia with local men having all of the direction of the company and no decisions being made outside of the province. However, in the 1920's control was acquired by a Delaware corporation known as the Associated Telephone and Telegraph Company with headquarters in Kansas City. It holds control of the British Columbia Telephone Company through Anglo-Canadian Telephone Company of Montreal which owns

60,000 of the 80,000 common shares. For a long time, in fact until last year, Anglo-Canadian Telephone Company owned all of the issued common shares. Last year, however, 20,000 common shares were sold to the public and although the par value of the shares is $100 they brought $139. Dividends of eight per cent have been paid on the common stock for many years. Only the common shareholders vote. Preferred shareholders have no vote in the affairs of'the company. Therefore Anglo-Canadian Telephone Company and through it Associated Telephone and Telegraph Company have been able to control the company although they only hold a small portion of the issued shares, there being a large amount out by way of preference shares.

Anglo-Canadian Telephone Company also controls other telephone companies in British Columbia. It controls Chilliwack Telephones Limited, Mission Telephone Company Limited, both of which are in the riding of the hon. member for Fraser Valley (Mr. Cruickshank), Kootenay Telephone Company Limited and Northwest Telephone Company. These are smaller telephone companies operating in different parts of the province. In addition to controlling these local companies Anglo-Canadian also controls a company known as Canadian (B.C.) Telephones and Supplies Limited, and another one known as Dominion Directory Company Limited. These are companies operating in the province, and in effect operating in conjunction with British Columbia Telephone Company. They are affiliated companies, and I propose to deal with them at some length.

In the hearing before the board of transport commissioners last year it was disclosed that Dominion Directory Company Limited, 80709-102

3, 1951 1597

British Columbia Telephone Company which is owned by Anglo-Canadian Telephone Company, has a contract with the British Columbia Telephone Company whereby on all advertising contracts for the directory the directory company receives 35 per cent commission. It does not do the printing of the telephone directory. I understand that subsidiary companies of the Bell Telephone Company print their directory, but in British Columbia there is this contract with the directory company. The profits of the directory company go directly to Anglo-Canadian Telephone Company. In other words, British Columbia Telephone Company is being milked in that way, and the telephone users of our province are expected to pay the shot. The board of transport commissioners were not interested in that arrangement. They said it was purely a question of management.

Then the supply company to which I referred a few moments ago, namely, Canadian (B.C.) Telephones and Supplies Limited, purchases all supplies for the British Columbia Telephone Company, instals exchange equipment, and executes repairs. For that it is paid at a set rate. For example, on purchases it gets a commission of five per cent. Incidentally purchases by the telephone company in some cases at least are from other affiliated companies. I believe, for example, that Phillips Electrical Works Limited of Brockville is an affiliate, and much of the equipment is purchased from that company. The profits of the supply company also go back to Anglo-Canadian Telephone Company . in Montreal.

Then there is a licensing contract directly between Anglo-Canadian Telephone Company and the British Columbia Telephone Company under which one per cent of all operating revenue of the company in British Columbia goes to Anglo-Canadian in Montreal. I must take a little time, Mr. Speaker, to explain that contract, so I move the adjournment of the debate.

On motion of Mr. Green the debate was adjourned.

Mr. Reid:

That is my definite understanding.

Mr. Reid:

I am authorized to do so, and it is my definite understanding.

That was in May of 1947; hon. members will notice that there was to be no application for increased rates unless extraordinary conditions arose. I believe the telephone company officials went right back to Vancouver and started preparing an application for an increase in rates. At any rate they were not very long in applying for an increase. When counsel for the city of Vancouver tried to bring in that assurance as evidence before the board of transport commissioners the chairman ruled him out of order and would have nothing to do with it. He ruled that what had been said in the House of Commons was not evidence, that it was of no importance whatever, and went right ahead to hear the presentation by the company. In other words right there the board ruled for the company; it agreed with the submission of counsel for the company that this assurance could not be brought in as evidence, and I do not believe the board gave the people of British Columbia a fair run for their money. If we are to have a board of that type, in such a great hurry to hear the representations of these big companies and not giving the little fellow a break, I think it is time something was done about the board itself.

I suggest to the minister that he had better not be so sure as he was when he last spoke on this amendment that the board of transport commissioners is perfect. I admit that it has plenty of problems, but I am afraid it is far from perfect. Certainly some of its actions recently have shaken the confidence of the people in its wisdom. I would hope that the minister will take steps quickly to see that the board is strengthened.

Mr. Reid:

"According to a treaty entered into in

1846 between the United States of America and Her Majesty on behalf of Canada for the settlement of the Oregon boundary, in clause 2 thereof, it was expressly agreed that the Columbia river and its branches were to be kept open for the free use and navigation of all British subjects from the 49th parallel of north latitude to the Pacific ocean,-

1. Is the government aware that the provisions of this clause have been violated?

2. If so, what steps have been taken to protect the interests of the Canadian people so as to keep inviolate the provisions of the treaty and particularly clause 2 of the agreement?

3. If not. will steps be taken to see that the terms of the treaty are lived up to in every particular?"