Mr. CANTLEY:

At the time I refer to,

when we bought out the Hudson's Bay Company, there was very little settlement in the western provinces.

Mr. CANTLEY:

The Address-Mr. Cantley

horse-power for about six to ten dollars per year. Under the circumstances we could not compete with them, because in the cutting of nails pow'er was the largest item in the cost of manufacture. That gives you a concrete example of the advantages derived by manufacturers in the provinces of Quebec and Ontario in connection with the power privileges from the system of canals.

This great lake commerce made possible by and dependent upon the Canadian canal system is reflected in the enormous tonnage passing through the Soo canal, the main artery of the west. The contribution the Maritime provinces have made and are continuously making towards the construction, extension, repair and operation of this great free transport system, useful only for the more favoured provinces of Quebec, Ontario, and the central west, is seemingly quite overlooked or, if realized by those who profit most, is seldom if indeed ever acknowledged.

Per contra, the Maritime provinces were contributors to the purchase of the prairie land, the policing, settling, early government, and opening out of the country for settlement, aiding immigration, quelling rebellions, building the Canadian Pacific railway, guaranteeing the Canadian National and Grand Trunk Pacific bonds, and constructing the Transcontinental railway and the Quebec bridge- all projects foreign to our necessities, but to which the Atlantic provinces have contributed their full per capita proportion of cost, interest and upkeep. And yet the Maritime provinces, when they ask that their larger, richer predominating partners abide by the promise they have given, are told that the Intercolonial railway is regarded as the milch cow of the Maritime provinces. To this taunt, and it has been made if I mistake not in this House in years past, it might then have been retorted that the Canadian canal system is the champagne locker of the central provinces, shared in some degree with our American coal and steel competitors. The milch cow of the Maritime provinces forsooth! We got the cow in exchange for our independence. We have fed her, and the older and central provinces have both the milk and the manure, and the Minister of Agriculture, when sometimes he feels his bowels of compassion moved, throws some of the latter product back to us. That is all we get.

At six o'clock the House adjourned, without question being put, pursuant to rule.

Thursday, February 11, 1926

Mr. CANTLEY:

Coke ought to be laid down and delivered to wholesale buyers in Montreal for about two-thirds the present price of hard coal. And remember this: you are getting a fuel that is worth at least five to eight per cent more than any hard coal that is coming into this country to-day, whether it is American, Welsh or any other coal. The domestic coke to-day made from Cape Breton coal has a fixed carbon content of about 93 per cent. There is no anthracite coal coming into Canada, whether it be American or British, that will go over 85

The Address-Mr. Cantley

Mr. CANTLEY:

The hon. member knows the management of both these concerns fairly well and he would1 not expect them to put up with conditions such as I have referred to without making some protest.

It is hardly necessary to state that these are serious times in the coal industry in

Canada. Competition is keen with the foreign product. Everyone recognizes that for the independence of Canada in the matter of its fuel requirements for domestic, industrial and railway purposes, this industry should receive every possible consideration. The greatest difficulty is experienced, not only in making any material expansion, but even in maintaining production. Innumerable efforts have been made to'obtain freight rates to enable this product to be placed on the market to meet foreign competition. Rates in effect throughout middle and eastern Canada go to show that the railways are giving preference to the foreign product and discriminating against Canadian production. Rates on this product, also on coke made from Canadian coal, should receive the careful consideration of parliament. We find that rates in effect from Buffalo, Black Rock and Suspension Bridge to Canadian destination are far lower than we can obtain for similar distances for our products. From Buffalo to Cochrane, a distance of 1,049 miles, the Canadian railways give a rate to American coal of 3.9 mills per ton mile; from Black Rock to the same destination, 3.9i mills per ton mile; and from Suspension Bridge to the same destination, 4.0 mills per ton mile. From Montreal to Cochrane the best we can get is 6.4 mills per ton mile, and from Quebec 6.6 mills per ton mile. To get to Montreal we have to carry the coal by water for about 900 miles, and to Quebec for about 750 miles. Besides the expense of transferring from steamers to cars, there is considerable loss owing to degradation in the coal compared with coal moved direct by rail from United States mines. The degradation, even in transporting bituminous coal by rail, has been given consideration by the United States Interstate Commerce Commission in considering rail freights. So much more should the degradation in transferring from steamer to ears, in addition to the movement by rail, be considered in establishing competitive rates on this Canadian product, and we think the railway should give this phase careful consideration. We submit that the long water haul should be considered a factor in establishing rail rates that are just to the industry.

We find that from some of the United States coal fields the Interstate Commerce Commission has recently established rates on bituminous coal of 5.4 to 5.7 mills per ton mile for distances of 380 to 400 miles- and this in a country whose coal industry has been brought up to the highest development and has practically no competition

The Address-Mr. Cantley

from outside sources. The rate by rail from Sydney to Montreal, a distance of 956 miles, is $4.50 per net ton, notwithstanding that this is a water competitive point, while the rate from Buffalo and Black Rock to Cochrane, a distance of 1,049 miles, is only $4.10 per ton; almost 100 miles longer, with a freight rate of 40 cents per ton less.

Have we any grievances in the Maritime provinces, and should parliament do something to improve those conditions? I ask this question of hon. gentlemen to my right, who time and again have expressed some consideration for our situation, and of hon. gentlemen opposite, many of whom claim to be of Nova Scotian birth. Are those hon. gentlemen prepared to support us in our demand for fair and equitable rates for the basic products of our province? I have referred only to the rates, from two points, on American and Canadian coal.

I may mention again the rate from Black Rock to Cochrane a distance of 603 miles, which is $3.80 per ton, as against Quebec, to Iroquois Falls-a coming coal consuming centre-of $5.55 per ton for a distance of 608 miles. If the railways can afford to carry American coal at such a low rate to meet water competition, they should surely do so to assist the mainstay product of the country, to meet foreign competition. You will find here a difference of $1.75 per ton in favour of the American product. Take again the rate from Buffalo to Sherbrooke, a distance of 536 miles: the American product gets a rate of $3.60 per ton, or 6.7 mills per ton mile, while the rate from Springhill, Nova Scotia, to Sherbrooke, a distance of 638 miles, is $4.30 per ton; exactly the same rate per ton mile. If distance reduces the rate per ton mile, it was not considered here, thereby again discriminating in favour of the American product. I claim we should have established from Quebec, Three Rivers, Montreal and Levis, and shipping centres in the Maritime provinces, rates at least equally as low as those referred to above on American coal from the American border; otherwise discrimination against the Canadian product will exist.

With regard to coke rates, an effort is being made at the present time to find a substitute for hard coal for domestic use in Canada, and by-product coke seems to be the only alternative so far possible. The introduction of coke from Canadian coal is greatly handicapped by the attitude of the railways in the matter of freight rates. The Canadian National Railways, the only rail carrier by which the coke produced in eastern Canada

from coal mines in Canada can be transported, does not take kindly to establishing rates which the needs of the country and the industry call for at the present time. Their latest proposal is for a rate twenty per cent in excess of coal rates. The president of the road, I absolve from any knowledge-at least, any considerable knowledge-of what his traffic officers are doing in the matter of preparing and enforcing the rates to which I have referred.

In the preceding portion of this statement I endeavoured to point out the discrimination against the Maritime provinces in coal rates. Adding twenty per cent to these rates, even should they be brought to a proper basis, to arrive at coke rates, we consider most unreasonable. We claim, in the interests of Canada as a whole, that as coke for domestic use is to replace anthracite coal, the rates on coke should not bear any heavier burden -than, at the outside, the percentage of rate on hard coal over bituminous, and in view of the fact that it is a new product for domestic use, and to get it established in place of hard coal, that it should be carried at the same rate as bituminous coal. We find in Quebec and Ontario anthracite carried at the same rate exactly as bituminous coal. For instance, from Montreal to Belleville, Ontario, the rate on bituminous and anthracite is the same, namely, $2.30 per ton. In no single instance can we find a rate on anthracite in excess of 20 cents per ton over bituminous. For instance, the rate from Buffalo to Cochrane, a distance of 1,049 miles, on bituminous coal, is $4.10 per ton, while the rate on anthracite is $4.30. Although we have the same rate on coal and coke to Montreal at the present time, it is our understanding that it is the intention of the railway to propose a change on this and charge us for coke 20 per cent over the coal rate.

What adds to the discrimination against the Nova Scotia coke is the fact that the minimum carload weight imposed by the railways in the Maritime provinces is 50,000 pounds, while on coke made in Ontario from American coal, and also on some American coke, they allow a minimum carload of 40,000 pounds. Where this hits the Canadian product severely is with a domestic customer who wants only the smallest carload he can get at a time with the minimum amount of freight. For instance, a buyer in Amherst can purchase a carload of coke from Hamilton of 40,000 pounds, which is freighted a distance of 1,032 miles at a rate of 6.6 mills per ton mile, or, $276. From Sydney to Chicoutimi, practically the same distance, 1,041 miles, he will have to pay 8.7 mills, or $455.

The Address-Mr. Cantley

Have we any grievances in the Maritime provinces! What are you going to do in the way of rectifying them?

Another factor bearing on freight rates, not only on coal and coke but also on steel products, is that these products are carried from the Maritime provinces in what otherwise would be return empties. This applies not only to the Maritime provinces but also shipments westward and northward from Quebec and Montreal, while the same products from the United States are carried in cars which in the majority of cases have to return empty. The industrial centres of the Maritime provinces, such as Springhill, Stellarton, New Glasgow, Trenton, Sydney Mines, Sydney and the colliery districts surrounding Glace Bay, buy practically everything they depend on for a living, namely, flour, butter,, meat, canned goods of all kinds, furniture, boots and shoes, hay, oats and other feed-in fact almost everything required outside of fuel they buy from Ontario and Quebec. All these commodities are good revenue producers for the railways. For this reason alone coal and steel products from the Maritime provinces going back in the returned cars which bring these products east and which would otherwise- and do otherwise-return empty, should receive more favourable rates than coal from the United States or coke made from United States coal that is transported in cars that invariably return empty.

May I point out the tonnage of some of the items I have referred to? Last year there [DOT] were transported over the Canadian National Railways to Nova Scotia:

25,000 tons of meat.

600.000 barrels of flour.

350.000 bags of oatmeal.

1.000 barrels of oatmeal.

5.000 barrels of rolled oats.

We consumed one-third as much oatmeal in Nova Scotia as we did flour. Perhaps that explains why some of us are here! May I tell the hon. Minister of Agriculture (Mr. Motherwell) that we also consumed 2,741,000 pounds of butter and 707,000 pounds of cheese?

Mr. CANTLEY:

There may have been.

I am not referring to them, but to the rates in effect to-day.

On the same basis the same arbitraries should apply over Montreal to all points in the Maritime provinces. If distance is eliminated from Ontario to Port Arthur and the west, as it is under Schedule "A," why should not the Maritime provinces be treated similarly in the interchange of business between the Maritime provinces and industrial Ontario and western Quebec? The fact of the matter is that these commodities are carried over a whole zone of one thousand miles at one level rate, but when it comes to the question of rates between Montreal and Sydney, the territory is divided into several zones carrying several different rates.

It would appear that some fairer basis should be arrived at for the establishment of commodity rates than now exists. As an instance of discrimination in this respect, consider the rates on steel products, blooms and wire rods, from manufacturing centres in Ontario as compared with the rates on the same products from Nova Scotia. I will mention a few: The fifth class rate, which is the class to which these products belong, from Hamilton to Montreal is $9.63 per gross ton. The commodity rate is $3 per gross ton, which is 31 per cent of the fifth class rate. The rate from Sydney to Montreal is $5.10 per gross ton, or 41 per cent of the fifth class rate. Again, the rate from Hamilton to Owen Sound is $2.70 per gross ton on wire rods,, or 38 per cent of the fifth class rate. The rate from Sydney to Owen Sound is $7.90 per gross ton, or 47 per cent of the fifth class rate. The rate from Hamilton to Welland is $1.70 per gross ton, or 42 per cent of the fifth class rate,

while the rate from Montreal is $7.50 per gross ton, or 50 per cent of the fifth class rate. Again, the rate from Sault Ste. Marie to Toronto is $4.30 per gross ton, or 39 per cent of the fifth class rate, while the rate from Sydney to Toronto is $6.60 per gross ton, or 46 per cent of the fifth class rate. The rate from Sault Ste. Marie to Welland, Ontario, is $5.40 per gross ton, or 37 per cent of the fifth class rate, while the rate from Sydney is $7.50 per gross ton, or 50 per cent of the fifth class rate.

May I also refer to discrimination in pig iron rates. The rate from Hamilton to Charlottetown, P.E.I., a distance of 1,063 miles, is $6.50 per gross ton, which is 73 per cent of the tenth olass rate, and the rate from Sydney to Charlottetown, 398 miles, is $7.17, which is 100 per cent of the tenth class rate. Mark this, Mr. Speaker, if you please: The rate from Hamilton to Charlottetown, 1,063 miles, is $6.50 a ton, and from Sydney to Charlottetown, 398 miles, $7.17 a ton. I ask the question: Have we any grievance? The rate from Hamilton to Sherbrooke, Quebec, is $4.80 per gross ton, which is 62 per cent of the tenth class rate, while the rate from Sydney to Sherbrooke is $5.40 per gross ton. or 65 per cent of the tenth class rate. The rate from Hamilton to Ottawa is $3.20 per gross ton, which is 49 per cent of the tenth class rate, while the rate from Sydney to Ottawa is $5.40 per gross ton, or 64 per cent of the tenth class rate. I have a lot more figfures of the same nature; I have a bundle of tables here, numbering a hundred or more, which show similar unfair discrimination,

I will only refer to one other item. Take rail fastenings. The rate from Sault Ste Marie to Winnipeg is 61-J per cent of the seventh class rate while the rate from Sydney is 75 per cent of the seventh class rate, and from New Glasgow 74 per cent of the seventh class ra.te. Again, we have to pay a full 100 per cent of the seventh class rate from New Glasgow to alt points in Ontario and western Quebec, while Sault Ste. Marie has rates to the same points varying from 70 :to 86 per cent of the seventh class rate; from Hamilton from 63 to 75 per cent of the seventh olass rate, and from Toronto from 66 to 85 per cent of the seventh class rate. These figures are based on the class rates now in effect from Sydney, and if these class rates were reduced by lowering the arbitraries over Montreal, as suggested in the foregoing, the discrimination would be very glaring. The fairest basis to apply in steel products would be a fairer percentage of the class rates to which they belong, reducing or increasing the percentage of reduction as the mileage increased; that is to say, 85 per cent of the class rates over a dis-

The Address-Mr. Cantley

tance of 500 miles, 80 per cent to points over 500 miles and up to say 1,000 miles, andi 70 per cent over 1,000 miles and up to ,2,000 miles. If this basis was applied to all territory in Canada it would eliminate discrimination completely. Why is it not done?

May I point out further the favourable position in which industrial points in Ontario are placed as compared with the Maritime provinces in the matter of export rates. Belleville, Brantford, Collingwood, Guelph, Hamilton, London. Milton, Owen Sound, Toronto, Welland, and Windsor, can all, under the present tariff, export their steel products to Quebec, St. John, Halifax, Portland, Boston, and New London, Connecticut, at two cents per hundred pounds over the rate to Montreal. Brantford, Hamilton, Collingwood, London, Owen Sound, Welland1, and Windsor, can include New York, Philadelphia and Baltimore at the same rate, while Guelph, Mfiton, and Toronto can ship via the latter ports at three cents per hundred pounds over the Montreal rate. Hamilton can ship via Halifax to any foreign country including St. Pierre and Newfoundland at two cents per hundred pounds over the Montreal rate. That is to say, the railways receive for the haul from Montreal to Halifax, 800 miles, two cents per hundred pounds, while the rate from Sydney to Halifax, a distance of 289 miles, is 19 cents per hundred pounds, this rate being applicable only to exports to British and foreign countries. The rate from Sydney to Halifax for export to Newfoundland and St. Pierre is 25J cents per hundred pounds, while the railways haul for the manufacturers in Ontario the 800 miles from Montreal to Halifax, at the rate of two cents per hundred pounds. The rate from Hamilton to North Sydney for export to St. Pierre and Newfoundland is 54 per cent of [DOT] the fifth class rate, which includes terminal charges, while the rate from Sydney to North Sydney is 124 per cent of the fifth class rate, including terminal charges.

I should like the House to grasp this fact. That on an export basis iron and steel products are carried from Ontario, and from Montreal after the close of navigation, to Halifax for two cents per hundred pounds whereas the rate for the same products from Sydney to Halifax is 19 cents per hundred pounds. In the former case the distance is 800 miles and in the latter case only 289 miles. These rates apply if the products are going to Great Britain. If Sydney products are going to Newfoundland they are charged 25i cents, or 12 times the rate that is charged the iron and steel manufacturers of Ontario. Again I ask is there any ground for dissatisfaction?

14011-50a

We submit this is an unfair discrimination. Ontario and western Quebec are surrounded by iron and steel commodity rates far lower on percentage of class to their own local territory than the railways allow from Maritime province manufacturing points, and Ontario manufacturing centres receive export rates on their surplus products which are not granted to Maritime province manufacturing points. We submit that if mileage is eliminated for export purposes, as already explained, to help out manufacturing centres in Ontario in order to reach world markets via Baltimore, New York, Boston, New London, Conn., St. John, N.B., and Halifax, the same consideration should be given the steel manufacturing plant in Sydney and Sydney placed on the same rate basis to those shipping ports in order to reach the world markets. The rates referred to from Ontario for export to St. Pierre and Newfoundland make it impossible for the Sydney steel plant to compete in those markets except by providing their own water transport, which is awkward and very difficult at times. We have to ship by steamers in the ore carrying trade from Sydney to Wabana, and thence by coasting steamer to destination. It is unreasonable to ask the establishing of rail rates from Sydney, and any other points they please, to all ports on the great lakes, on the same basis and in proportion to class rate as is now in effect to other water competitive points in Canada such as Montreal, Quebec, Halifax and St. John. Ports in Ontario such as Toronto, Hamilton, and Owen Sound should receive the same consideration as other ports having these competitive rates. We would ask in establishing from ports on the great lakes the same commodity rate on a similar mileage basis as is in effect from industrial points in Ontario, or in the Maritime provinces for that matter, that these rates might very well be confined to Canadian products.

Not only are Canadian products for export carried at the rates which I have mentioned, but American products are carried at the same rates although they enter into competition with the products of our own plants in Cape Breton and other parts of Canada. Discrimination seems to exist in connection with shipments from Nova Scotia to points in Ontario reached by both the Canadian Pacific and the Canadian National railway systems, in case where the purchaser has his plant connected by a siding from the Canadian Pacific railway, but not by a connection from the Canadian National. Up to a few years ago the Canadian National and the Canadian Pacific Railways had a joint

The Address-Mr. Cantley

tariff to many of these points; routing could be given as desired by the customer, and the business was so routed. These joint tariffs however have been discontinued, and additional expense is therefore incurred on either the shipper or the receiver in the way of extra charges. Let me quote for the information of the House a letter recently received from a customer of one of the steel plants in Nova Scotia, in Harrison, Ontario, which reads as follows:

We are returning your draft of July 16, at thirty days for $823.47, covering car of iron. When your representative was here we stated the car must be Shipped via Canadian Pacific railway and it came in Canadian National, and cost us $13.50 more to unload than if it came in Canadian Pacific, as we can unload from Canadian Pacific siding into our yard, while from Canadian National railway it has to be teamed. Your representative said any additional cost in unloading if it came in Canadian National railway could be deducted from .invoice and we will charge your account with $13.50. You may pass draft for $S09.97, or we will send you a cheque for that amount when due.

Now, Mr. Speaker, this is a very unnecessary burden which is placed on an industry located in the Maritime provinces; and it is discrimination against that industry in favour of the Ontario manufacturers. If both the Canadian Pacific and the Canadian National Railways issued a joint tariff, as they formerly did, and each took a share of the haul, this burden would be eliminated. An alternative would be for the Canadian National railways to absorb the extra switching or extra cartage caused by their refusal to combine in a joint tariff. We know that this is done in other sections of the country.

Again, take the case of Sydney, with its steel manufacturing plants, which has for years felt itself discriminated against in the failure of the railways to issue export tariffs via this port on the same basis as they do for other Maritime and United 5 p.m. States ports. As previously stated herein, if distance is eliminated for the benefit of the manufacturing centres of Ontario, there is no reason why it should not be eliminated for the manufacturing centre of North Sydney, as at present they are handicapped in this world trading by the great difficulty in getting steamers which trade with all ports of the world to call for the products of the port, although these steamers pass in and out from St. Lawrence practically within sight of *he harbour. Outside of coal, which is not exported in less than cargo quantities, the export of Sydney is confined to steel products for shipment to the various markets of the world. In order to get steamers to call, certain minimum quantities have to be guaranteed them. This is a serious handicap compared with the advantages

enjoyed by steel plants in Ontario which have low export rates to all parts of the United States and Canada. They can take an order for and ship a carload to any part of the world as cheaply as they can 1,000 tons, and as the steel business is generally of small volume-done in carloads, so to speak- these low rates place them in a most favourable position as compared with Sydney plants, which have to guarantee a minimum quantity of some hundreds of tons before a ship can be induced to call for it. This discrimination could be overcome by Sydney being placed by the railways on the same basis, so far as export rates are concerned, as other Canadian and United States ports. In that manner export business could be diverted to this port in summer and to Louisburg in winter, by our efforts to procure sufficient cargo to induce steamers to call there, which, together with our own, could be of sufficient volume to make business profitable. True, there are no public terminal facilities. They have offered the railways the use of our own private facilities, as far as they can go, for handling such business, but the discrimination in the matter of export freight rates through the port of Sydney still continues. It may be added that it is a serious reflection on the government, and perhaps on the people, that proper shipping terminals are not provided in one of the best harbours of the world. The lack of them makes the Transcontinental railway practically a dead end at this port. However, if proper export rates were established By the railways, that would go a long way towards drawing the attention of the government to the need of proper dock and shed for storing inbound and outbound freight for furtherance.

Referring further to discrimination in railway freight rates, permit me to refer to the advance made in the old Intercolonial standard mileage rates on May 10, 1923. These rates apply to all classes other than those covered by town tariffs and special commodity rates. Among the items heavily affected is explosives from Beloeil, Quebec, to the Sydneys. In 1916 the rate was 94 cents per 100 pounds. At the present time the rate is S2.55J, per 100 pounds, an increase of 171 per cent. Explosives are a necessity in mining coal, ore and limestone. The freight alone at present means a cost of 4.6 mills per ton on every ton of coal mined. With the cost of this material and other expenses which enter into the cost of mining, this is a very heavy charge, and it amounts to considerably more on ore and limestone. Why this exorbitant increase has been made on explosives is difficult to understand. Since the rate existing in 1916 originally

The Address-Mr. Cantley

went into effect, the formulae of all explosives has come under the jurisdiction of the Dominion government, and its manufacture and transportation have been greatly safeguarded. A steady improvement in the process of its manufacture has taken place, the improvement lessening the danger in handling it. As a matter of fact, Mr. Speaker, I cannot at the moment recall a case where a single accident has occurred in the transportation of explosives -by rail. Cases are on record where explosives have been destroyed in cars when crashed into by a locomotive, but without any explosion or injury to surrounding property. A reduction on this commodity in line with others is therefore requested.

By the same change in the old Intercolonial standard mileage rates, the rate on horses in carload lots has been unreasonably increased. The Nova Scotia coal companies use in the mines and about their various works a large number of horses. We have occasion to bring these from Montreal and surrounding territory. The rate for these in 1916 was 38 cents per IOC pounds. To-day it is 100i cents per 100 pounds, an increase of 164 per cent. This makes the minimum freight rate per horse on the minimum carload $9.25, an increase of $5.75 per horse since 1916. These horses are light in weight, ranging about 900 pounds. The rate is unreasonable and unjust to the mining industry. As far as we are aware or can ascertain, no reason was ever given for increasing the Intercolonial rates to that of the standard mileage. The other increases made during the war period had some reason to support them, but this increase, made long after the war was over, does not seem to have had any justification whatever.

Now, Mr. Speaker, I want to deal to some extent with the coke and coal rate.