[Stage Direction]
Mr. W. G. RAYMOND (Brantford) presented the report of the special committee appointed to consider the subject of Old Age Pensions.


Mr. ANDREW KNOX (Prince Albert):: Mr. Speaker, I desire to present a petition signed by 125,000' of the people of the province of Saskatchewan praying the parliament of Canada to take-such steps as may provide for the completion of the Hudson Bay railway to Port Nelson during the present year; also to provide for the expenditures for the completion of the harbour facilities at Port Nelson. I may say that the forwarder of this petition says in an accompanying letter that approximately 100,000 of the signatures to this petition were obtained at the polls during the Saskatchewan provincial election, and that each signature on the petition is of a duly qualified voter in the province of Saskatchewan. He also says-


Mr. SPEAKER:: Order.



BUSINESS OF THE HOUSE MORNING SITTINGS

Right Hon. W. L. MACKENZIE KING (Prime Minister):: Mr. Speaker, I wish to
make a motion with respect to morning sittings. I am suggesting Thursday, the 18th instant, in view of the discussion that took place yesterday, as a date likely to be acceptable to all sides of the House. I move:
That on and after Thursday, the 18th of June next, until the end of the present session, the House shall meet at eleven o'clock in the morning of each sitting day, and that in addition to the usual intermission at six o'clock p.m., there shall be also an intermission every day from one to three o'clock p.m.


Right Hon. ARTHUR MEIGHEN (Leader of the Opposition):: Mr. Speaker, although
we have had much else this session in the way of avalanches of money and other votes,
Private Bills

we have not had the supplementary estimates. I do not know how close we are to the end of the session, but we are certainly pretty well advanced and near it. Surely we should have had the supplementary estimates before this.


Mr. ROBB:: I hope to table the supplementary estimates not later than to-morrow.


Mr. GARLAND (Bow River):: Before this motion is put, I desire to point out to the government that there is at the present time before the Agriculture committee that most important act, the Grain Act. I am informed it will be impossible for that act to get out of the committee stage before tonight at the earliest, possibly not until tomorrow. It cannot then be reprinted and disposed of by the House this week. By the time it goes to the Upper House we probably may expect the middle of next week to be reached, and I sincerely trust that in putting this motion the government does not intend that parliament shall prorogue before the Grain Act is disposed of by both Houses.


Mr. JACOBS:: May I inquire if this
motion will include Saturday sittings?


William Lyon Mackenzie King: There is no
mention of Saturday sittings at the moment, but I am asking the whips to ascertain whether it would be agreeable to members of the House to sit this coming Saturday, and if there appears to be agreement in favour of it, I will move that the House sit on Saturday.


[Stage Direction]
Motion agreed to.


Mr. ANDREW McMASTER (Brome) moved:: That Bill No. 11, an act to incorporate the Dominion Chartered Customs House Brokers Association, be sent back to the Private Bills committee.
He said: This bill was rejected by the committee when there were only eleven members out of sixty-fiv,e present, and on a fairly close division. The bill is now shorn of any objectionable feature, and I think the interests of justice demand that it should be sent back to the committee. I may say that I have not prepared any formal motion in writing, Mr. Speaker, but I trust that the informality may be overlooked.


Hewitt Bostock: Hon. members have heard the motion. Is it the pleasure of the House that it be adopted?


Arthur Meighen: Is the motion in order?
I do not think it is. A motion of this kind cannot be made without giving due notice.


Hewitt Bostock: By unanimous consent.


Andrew Ross McMaster: There is really no reason why the House should not give unanimous consent. Every objectionable feature in the bill is cut out entirely, and it is now most innocuous.


Hewitt Bostock: The rule governing a
question of this kind reads as follows:
Two days' notice shall be given of a motion for leave to present a bill, resolution or address, for the appointment of any committee, or for the .putting of a question but this rule shall not apply to bills after their introduction, or to private bills, or to the times of meeting or adjournment of the House. Such notice shall be laid on the table before five o'clock p.m., and be printed in the Votes and Proceedings of that day.
I understand this is a private bill.


Andrew Ross McMaster: It is a private bill,
Mr. Speaker.


[Stage Direction]
Motion agreed to.

[Stage Direction]
Bill No. 197, from the Senate, for the relief of Euphemia Tudor Slade.-Mr. Duff.
Bill No. 19S, from the Senate, for the relief of Marion Roberts Edmiston.- Mr. Mac-Laren.
Bill No. 199, from the Senate, for the relief of William Morgan Floyd.-Mr. Hanna.
Bill No. 200, from the Senate, for the relief of Harry Iven Jones.-Mr. Maclean (York).
Bill No. 201, from the Senate, for the relief of Edith Smith.-Mr. Duff.
Bill No. 202, from the Senate, for the relief of Mary Helen Wallace.-Mr. German.
Bill No. 203, from the Senate, for the relief of Elizabeth Ethel McSherry.-Mr. White.
Bill No. 204, from the Senate, for the relief of Wilbert Newell Hurdman.-Mr. White.

Mr. W. C. GOOD (Brant):: I beg leave
to move the motion of which I gave notice last Wednesday. It is as follows:
Whereas under an order of reference made on the 23rd of March, 1925, the standing committee on Public Accounts has had under investigation the methods of assessment and collection of business profits and income
taxes;
Therefore be it resolved,
That the said committee on Public Accounts be instructed that they have power to consider and recommend to this House such amendments to the Income War Tax Act as may seem to them advisable.


James Alexander Robb: When this resolution was presented by my hon. friend from Brant (Mr. Good)

Tax Collections
a few days ago, I directed his attention to the fact that what seemed to me the proper method of procedure was that such a motion should come from the Public Accounts committee, either through its chairman or by a majority report of the committee. For these reasons I shall have to oppose the resolution.
Mr. HANCE J. LOGAN (Cumberland): I may say that after the reference made a few days ago bv the Acting Minister of Finance I brought	this	matter up	in	the PublicAccounts committee, of which I am chairman, and asked	them	for their	instructions. Amotion was made to request this House to give the committee power to make the inquiry as desired	by the hon.	member forBrant (Mr. Good). The motion was duly put to a vote and defeated, largely on the ground that it -was considered too late in the session to	enter	upon such	a	very serious
consideration, and secondly that there was a question as to whether the Public Accounts committee should not be confined to examining the public accounts and not determining what is public policy.


William Charles Good: I took it that this would be the attitude of the government. Under the circumstances, therefore, I feel under an obligation to put myself on record briefly in regard to the need for this motion. I should like, in the first place, to refer to some of the significant and salient facts brought out during the investigation. In the first place the commissioner was formerly the tariff officer of the Canadian Manufacturers' Association, and was subsequently called upon as Commissioner of Taxation to assess the business profits and income taxes against concerns for whom he had previously been a special agent. In the second place the commissioner assumed full and personal responsibility for all appointments made under the Business Profits War Tax Act, and also for all adjustments or modifications of assessment made under that act. In the third place, among approximately
30.000	taxpayers assessed under the Business Profits War Tax Act not a single appeal was pressed and no board of referees was ever appointed. There was not one among the
30.000	who -was not satisfied to such an extent that he did not press his appeal; not one was irreconcilable. In the fourth place no member of parliament, and no committee of parliament, has had the privilege of examining any original assessment or any subsequent modification thereof. All the files are strictly confidential, and all the officials are under a solemn obligation to preserve secrecy. Not only is this obligation imposed upon all officials under the Business Profits War Tax
Act and the Income War Tax Act, but in addition, within the last year, all the officials in the Taxation branch at Ottawa have been required! to make a sweeping and solemn declaration before the commissioner.


Mr. W. F. CARROLL (Cape Breton South and Richmond):: Mr. Speaker, I rise to a
point of order, although I am one of those who supported the hon. gentleman in his contention the other day. The point of order is that there has been no written notice of this motion given to the House previous to its introduction as required, I think, by rule 40.


Hewitt Bostock: I remember the hon. gentleman (Mr. Good) bringing this same motion forward on the 9th of June. At that time I ruled the motion out of order for the reason that no notice had been given. Now rule 40 says:
Two days' notice shall be given of a motion for leave to present a bill, resolution or address, for the appointment of any committee, or for the putting of a question; but this rule shall not apply to bills after their introduction, or to private bills, or to the times of meeting or adjournment of the House. Such notice shall be laid on the table before five o'clock, p.m., and be printed in the Votes and Proceedings of that day.
Has the hon. gentleman given notice to the Clerk of the House?


William Charles Good: May I speak to the point of order? I gave notice on Wednesday at the opening of the proceedings, and was subsequently in communication with the Clerk over the matter. I understood that I had officially given notice on that day. At all events the resolution appears in the Votes and Proceedings of that day. Under the rule quoted by you, Mr. Speaker, I understand that the motion is in order and that I have complied with all the formalities. '


Hewitt Bostock: Does any other hon.
member desire to speak to the point of order?
It is true that on the Votes and Proceedings of the House of June 10, the motion which I have just read appears; the same resolution that was moved on June 9. However, it is simply recorded as one of the questions which came before the House and was debated that day. But to be strictly in order the hon. gentleman should have handed his motion to the Clerk of the House before five o'clock and it would then have been printed under " Notices of Motions and Questions." If the hon. member will refer to the Votes and Proceedings at page 425 he will see certain notices of motion and questions, and his motion does not appear there. Therefore, much as I regret it, I must rule that there was no notice given.
Rural Credits


William Charles Good: Did you not, Mr. Speaker, accept my notice as a notice of motion on Wednesday?


Hewitt Bostock: I ruled against the hon.
gentlemen moving his resolution as he proposed to do on June 9, and I said to the hon. member that he should give two days' notice of this motion. The hon. gentleman did not avail himself of my advice. The notice does not appear in the votes and proceedings of June 10.


William Charles Good: I understood I had given
notice.


Hewitt Bostock: The hon. member should
have handed his notice of motion to the Clerk, who would have entered it in the journals of the House.


William Charles Good: It was an inadvertance on my part, and I shall have to give notice now in the proper way.


Hewitt Bostock: Yes, by handing the notice of motion to the Clerk.



OCEAN RATES ON CATTLE

[Stage Direction]
On the Orders of the Day:
Mr. HARRY LEADER (Portage la Prairie):: I desire to read the following paragraph, under the caption "Ocean rates on cattle," and to ask a question of the government relative thereto:
Right upon the heels of the report of the Parlia-nif-ntary Committee which inquired into ocean rates comes announcement that the steamship companies have heightened the cattle rate to $25 a head to Glasgow and Liverpool.
Is the government aware of this increase, and are they taking steps in protest?
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals):	Such a report appeared in the newspapers. Now the newspapers are usually accurate, but sometimes the papers are imposed upon. A telegram was received yesterday by the Minister of Agriculture (Mr. Motherwell) saying that only one line had increased their rate on cattle, and that that increase bad immediately been withdrawn. On reading the item a day or two ago I wired the President of the Canadian National Railways, under whose jurisdiction the Canadian Government Merchant Marine operates, that the rate on cattle must not exceed the rate in force in May.



RURAL CREDITS

[Stage Direction]
On the Orders of the Day:
Mr. H. E. SPENCER (Battle River):: Will the Acting Minister of Finance inform me

when the House may expect legislation to be brought down with regard to rural credits?


James Alexander Robb: I think if my hon. friend refers to the votes and proceedings he will find the answer to his question.


Arthur Meighen: Did I understand the
Acting Minister of Finance to refer to this motion that is on the order paper in his name as the government's rural credits' policy? If so, I would point out that this is not rural credits at all, as I understand it.


James Alexander Robb: What motion is my right hon. friend referring to?


Arthur Meighen: The 810,000,000 for the
land loan.


James Alexander Robb: When we reach it, I shall be
in a position to explain to my right hon. friend what it means.


Arthur Meighen: But is it the rural credits' scheme?


Andrew Ross McMaster: I do object-and I trust I speak not only for myself but for all members in this part of the chamber-to the conversational tone of voice in whidh the proceedings are being carried on. Either our services should be dispensed with from the chamber, or matters should 'be discussed in such audible tones that members who are carefully listening will be able. to hear what is going on.


Arthur Meighen: I am prepared for either alternative. I was merely asking if the government represents this motion as its rural credits' policy.



ALBERTA COAL

[Stage Direction]
On the Orders of the Day:
Edward Joseph Garland: I
desire to direct the attention of the Minister of the Interior (Mr. Stewart, Argenteuil) to a despatch on the front page of the Calgary Herald of June 12, which has just reached Ottawa. It refers to coal shipments from Alberta to Ontario, and is headed: "Ontario asks for Drumheller coal in vain." The despatch indicates that the operators have been unable to secure any co-operation with the Canadian National Railways in the shipment of coal, and that the Canadian . National officials are without authority to accept coal shipments to Ontario at reduced rates. It is a perplexing situation. On a wire to the minister the information was given that the Dominion government was paying one dollar

C.N.R.-Branch Lines
per ton subsidy on the freight rate on coal from Drumheller. That is, Drumheller to Ontario. What steps have been taken to remedy this situation and to make the rates reduced available? Is the statement in this despatch true, that the payment is in the form of a subsidy to the railway of a dollar a ton?


Hon. CHARLES STEWART (Minister of the Interior):: Some difficulty appears to
have arisen with the coal shipments, but I am not clear as to what the difficulty is. Negotiations have been carried on between the Alber.a government and the coal company. We agreed to provide one dollar per ton for this trial shipment of 25,000 tons to be brought from a centrad point in Alberta to a central point in Ontario, provided, of course, that the rate to be fixed was $7 a ton. I was given to understand that was the rate. That was the rate agreed upon as the initial rate, the railways claiming it cost $9 a ton. Checkers were to be appointed by the railway and by the Alber.a government. I think Mr. Hinton was paid by the Alberta government as their representative, but a careful check of the movement was to be kept from an Alberta point to a central point in Ontario. If it developed that the cost was more than $7 this government was to contribute to the extent of $1 per ton, and if it developed that it cost more than SS per ton the Alberta government was to contribute to the extent of one dollar. That was the arrangement as I understand, and that is the arrangement we are prepared to carry out.


Edward Joseph Garland: The minister had not answered the first part of my query. Is the government aware that difficulties have arisen between the Canadian National and the operators in tihe transportation of this coal, the Canadian National apparently holding the opinion that it has no authority to haul the coal at the reduced rate?


Charles A. Stewart: I cannot be
held responsible for what is in the newspapers. I am not aware of any difficulty of that kind. I have never heard before that the Canadian National did not have authority to haul coal at the reduced rate.



FRUIT ACT AMENDMENT BILL


[Stage Direction]
The House resumed from June 12, the adjourned debate on the motion of the Minister of Agriculture (Mr. Motherwell) for the consideration of an amendment made by the Senate to Bill No. 117, to amend the Fruit Act.
William Lyon Mackenzie King: This is the bill on which
we had a brief discussion the other evening and as regards which we decided to ask for a conference with the Senate. I, therefore, beg to move:
That a message be sent to the Senate to acquaint Their Honours that this House disagrees to their amendment to Bill No 117, to amend the Fruit Act, foi the following reason;
Because, (a) It refers to an association by a wrong title
(b)	The holding of consultations with an association whose membership is recruited from all points in Canada may often be very difficult and even impossible ;
(c)	The mere fact of consulting such a body would not bring actual results and seems an unnecessary condition.


Arthur Meighen: I support the motion
wholeheartedly. May I ask why the Minister of Agriculture is absent?


Mr. GRAHAM:: He is attending the committee on Agriculture.	*


[Stage Direction]
Motion agreed to.


[Stage Direction]
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals) moved the second reading of Bill No. 210, respecting the construction of a Canadian National railway line between Sunnybrae and Guysborough, in the province of Nova Scotia.
Motion agreed to, bill read the second time and referred to the select standing committee on Railways, Canals and Telegraph lines.


[Stage Direction]
Hon. GEORGE P. GRAHAM (Minister of Railways and Canals) moved the second reading of Bill No. 181, to amend the Railway Act, 1919.
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Gordon in the chair.
On section 1-Powers of board continued.
George Perry Graham: This is the freight rates
case, and I do not want to take any advantage of hon. gentlemen to pass any of it through without their having an opportunity to discuss it.
C.N.R.-Branch Lines


Mr. FORKE:: I think we ought to have
this debate on the second reading. It slipped through rather accidentally.


George Perry Graham: 

STATEMENT SHOWING ALL-RAIL RATES ON CROW'S NEST COMMODITIES IN CARLOADS FROM EASTERN TO WESTERN CANADA' COMPARED WITH RATES ON SOME COMMODITIES FROM TERRITORY NOT AFFECTED BY' THE CROW'S NEST AGREEMENT

[Stage Direction]
Commodity
Agricultural implements....
Furniture	
Binder twine	
Apples, green	
Glass, window, common	
Household goods	
Iron bars	
Cattle	
Oil, lubricating	
Paints	
Paper, building and roofing..
Wire, common fence	
Woodenware	
Crow's Nest Hates
From
Hamilton, Ont____
Woodstock, Ont..
Hamilton, Ont____
Toronto, Ont	
London, Ont	
BrockviUe, Ont... Hamilton, Ont...
Ingersoll, Ont...
Montreal, Que....
Windsor, Ont....
Toronto, Ont	
London, Ont	
Woodstock, Ont..
To
Saskatoon, Sask	
Regina, Sask	
Winnipeg, Man	
Moose Jaw, Sask	
Portage la Prairie, Man.
Brandon, Man	
Calgary, Alta	
Weyburn, Sask	
Edmonton, Alta	
Regina, Sask	
Bienfait, Sask	
Saskatoon, Sask	
Winnipeg, Man	
Regular Rates
Miles	Rate in cents per 100 pounds	From	To	Miles	Rate in cents per 100 pounds1,716	1154	Brantford, Ont	Saskatoon, Sask	1,737	13911,645	125	Stratford, Ont....	Regina, Sask	1.629	18511,246	711	Welland, Ont	1,286	1141,606	85	Grimsby, Ont....	Moose Jaw, Sask	1,654	130 [DOT]1,359	81	Kitchener, Ont...	Portage la Prairie, Man...	1,301	1221,858	851	Cornwall, Ont....	Brandon, Man	1,880	1102,112	137	Welland, Ont	2,152	1921,639	73	Kitchener, Ont..	Weyburn, Sask	1,587	1132,148	172	Sarnia, Ont	2,147	188*1,771	107	Stratford, Ont	Regina, Sask	1,629	1551,502	107	Brantford, Ont. . .	Bienfait, Sask	1,561	1471,775	1321	Sarnia, Ont	1,824	1681,289	861	Stratford, Ont	Winnipeg, Man	1,272	114
Office of the Vice-President,
Canadian National Railways,
.	Montreal, Que., May 6, 1925.
[Stage Direction]


-i
s
o
<s>.
[Stage Direction]

C.N.R.-Branch Lines
It can be readily seen that this state of affairs could not continue. Now, there are two things that parliament can do; it can insist on having the Crowsnest agreement remain in force in its entirety or it can remove it altogether from the statute books. But a third and middle course might be taken, and we are asking parliament to remove from the agreement that part relating to westbound traffic, leaving to the prairies and the west for the future all the benefit they have ever received, and more too, I think, on grain and flour.
Now, suppose we said that the best thing to do was to leave the Crowsnest pass agreement in its entirety. I do not think there is a man in this House who in private would, after considering the situation, say that that ought to be done. What does it mean? Speaking as Minister of Railways and adviser of the government on railway matters, I feel a serious responsibility for the condition of our railways at the present time. Not only are we responsible for the great Canadian Pacific Railway, but we are responsible for and proprietors of 22,600 miiles of our own railway; and while I am not pleading the cause of the railways, let us all keep in mind that this is the situation to which we cannot close our eyes and which we cannot ignore in discussing the question. As I said, I have a responsibility, but I want to be bold, I want to pass that responsibility, or the share that belongs to him or her, over to every member of this House, because I say without any hesitation that this parliament could break the railways of Canada if it so desired, and any action we take ought to be taken with at least full consideration. Now, what would happen if the Crowsnest pass agreement were maintained in its entirety? On a large list of commodities-
Sir HENRY DRAYTON:: I think, fifteen.


George Perry Graham: Yes, fifteen. On that list of commodities rates were established by the Crowsnest pass agreement which mean a loss to the railways of Canada. There is no getting around that. Now, if that rate basis applied only to those particular commodities between certain points it would not be so bad, but these particular commodities come under certain classifications, and no unjust discrimination being allowed under the Railway Act, there would be nothing for the 4 p.m. Board of Railway Commissioners to do but to apply the Crowsnest pass rates as the basis for rates all over the Dominion. The railways of Canada-I say it advisedly-cannot stand that application.
Then take the other viewpoint: Should we abolish the Crowsnest pass agreement altogether? I may admit at once that there are a great many men in this House who believe that it is the proper thing to do.


Mr. CALDWELL:: Before the minister
proceeds may I put a question to him on the former point? He said that if the Crowsnest pass agreement were put into effect it would mean that the railway commission must make other rates corresponding with the rates under that agreement, for there could not be unjust discrimination. But did not the Supreme court rule that any rates set under such a private act did not constitute unjust discrimination, that therefore there could be very much lower rates under a special act, but that they would not be taken as the basis for fixing rates generally, and would not be considered unjust discrimination?


George Perry Graham: No. In making comparisons with the special act in force it would not be called unjust discrimination; but in building a rate structure, no matter what the judgment of the court might be, you would find that the Board of Railway Commissioners would have to take that special rate as their yardstick. It would have to apply to every town in the Dominion where there was any railway.


Thomas Wakem Caldwell: It never has.


George Perry Graham: To my mind the Crows-nest pass agreement could not possibly be made the permanent basis of our rate structure without bringing our railways into a situation that would be serious for them and more serious for the Dominion.


Mr. MACLEAN (York):: Why did the
Canadian Pacific Railway sign the Crowsnest pass agreement then?


George Perry Graham: My hon. friend has lived
a good many years since 1897; so have I.


William Findlay Maclean: Why did they
sign it?


Mr. HOEY:: As a matter of fact, would
not that mean increased freight rates for eastern Canada?


George Perry Graham: It is not my intention to
discuss freight rates; but I repeat, if the Crowsnest pass basis of rates is to be made the yardstick for freight rates in the Dominion, you may as well give away your National railways to-morrow, because you will find no government and no Minister of Railways that would foe responsible for carrying on the railway system under those conditions.
C.N.R.-Branch Lines


William Findlay Maclean: Have not the
Canadian Pacific Railway that in view?


George Perry Graham: My hon. friend must
excuse me from saying what the Canadian Pacific Railway had in view forty years ago.


Mr. HODGINS:: Would not that be the
only yardstick for those commodities that are mentioned in the Crowsnest pass agreement?


George Perry Graham: Not at all. Commodities are classified under various classifications, and no matter how we may endeavour to get around it we cannot have unjust discrimination, and all the rates would have to be brought to the same level as a matter of practice, for the people would demand it, and rightly so.
Are we to do away with the Crowsnest pass agreement altogether? As I pointed out, a great many people think we should. But the Crowsnest pass agreement having been in forcd, the government decided that, along the lines they are proceeding, they would give a fair chance to the people in every part of the Dominion and thus avoid injustice to those in certain sections. I think I am correct in this, that there is no part of Canada from which anything is taken that is not getting compensation. There are different kinds of rates, they are all interwoven into our rate system, and it is possible to gain something on one rate and lose twice as much on some other rate. We have commodity rates, through rates, export rates, local rates, distributing rates, competitive rates. Now, parts of Canada are gaining more in their commodity rates than they could lose in this grain rate if it were increased by twenty-five per cent. A commodity rate is based on nothing but the desire to give a certain community an opportunity to ship its goods at a rate sufficiently low to enable those goods to reach the market on a competitive basis. The fixing of commodity rates is in the hands of the Board of Railway Commissioners. Competitive rates. are rates to competitive points and rates competing with water carriage.


Mr. WOODSWORTH:: Under these circumstances, what does the equalization of rates really mean?


George Perry Graham: The Board of Railway
Commissioners will have to decide what equality means.


James Shaver Woodsworth: As I understand it, this bill provides for the equalization of rates. Under all these categories of rates, what does equalization really involve?


George Perry Graham: My hon. friend will have
to excuse me from going into a couple of hours' discussion of a technical point. I am pointing out to him and to the House the different kinds of rates which exist, and this bill 'has nothing to do with those rates except that it leaves their control entirely with the Board of Railway Commissioners, where it has always been.


James Shaver Woodsworth: Mr. Chairman, it
seems to me important that, since the bill proposes to grant the railway commission the opportunity of equalizing rates, we should know exactly what that involves.


George Perry Graham: Mr. Chairman, I would
advise my hon. friend to discuss this in committee, and allow me to proceed with my statement. Perhaps he is confusing the order in council with the bill. I made the statement that I did not think that anything was being taken from any part of Canada for which compensation was not being given. In the east, and I want to make it clear that the Crowsnest pass agreement gave the east some privileges, privileges to ship their produce to the west at a reduced rate, and that privilege was shared and only shared by the western people who got the benefit, or should have got the benefit of the lower freight-rates on those commodities-that was not all for the western people; that was for the eastern producer as well as the western consumer. Now we are taking away from the eastern producer any benefit he may have had under that Crowsnest pass agreement on westbound traffic, but he is getting something which under the present conditions is necessary to clear the way and must make him feel that he is getting a substitute which helps in a measure at least. He is getting rid of an act under which the railways cannot give him good service. Every community knows that under this act it will not be discriminated against in favour of any other community. That is what the east gets in eliminating this portion of the Crowsnest pass agreement.
Now what does the west get?


Robert Forke: There's the joker.


George Perry Graham: 
Mr. KELLNER:: Would that be mileage
east of the mountains?


George Perry Graham: That is the mileage from the boundary of British Columbia to the head of the lakes. Take the Canadian Pacific, granted, if you like, that the Crowsnest pass agreement anticipated that all this mileage to be constructed would come under it; take for granted, as parliament always seems to have done, that this decision of the Supreme court is not applicable, then what do we find? The; Canadian Pacific lines all told coming under the Crowsnest pass agreement to-day are 8,084 miles. But in addition to that, and surely no one will dispute this, with the Canadian National railway coming under the bill we are now proposing, this new statute definitely gives to the prairie provinces an additional mileage of 9,007. I say that the extra benefit by legislation, not by competition, but by legislation, that comes to the prairie provinces under the act now before this House more than compensates them for anything they lose on the westbound traffic.


Mr. SHAW:: Is it not true that we have always had that?


George Perry Graham: If my hon. friend were in court he would have followed my words more closely. I said you ' will have by statute
9,000	miles more than you ever dreamed you would have.


Joseph Tweed Shaw: We had it by a decision of the railway commission once before.


George Perry Graham: Not by statute, because
the statute applies only to the Canadian Pacific, and the only way you could get that would be under the clause which provides against unjust discrimination.


Mr. STEVENS:: If the minister justifies
the bringing of this 9,000 miles of National railway under the same conditions as provided in the Crowsnest agreement, why does he by an amendment to clause 6 prevent the application of it to the transport of wheat and flour westward to the Pacific coast?


George Perry Graham: Because the Crowsnest
pass agreement always dealt with eastbound traffic, and under this act we are bringing nothing in; we are simply making an enlargement of the Crowsnest pass agreement to include all mileage in the territory eastward that was covered by the Crowsnest pass agreement.


Henry Herbert Stevens: The minister is including territory to the northward of the area included in the Crowsnest agreement. What is the difference between including it if it is to the northward or if it is to the westward? Why should not westward be included as well as northward? The geographical area northward is included, but the geographical area westward is arbitrarily excluded.


George Perry Graham: The geographical situation as described by my hon. friend may be approximately accurate, but this act continues to deal with eastbound traffic, and that is in the Crowsnest pass agreement and always has been.


Arthur Meighen: Westbound.


George Perry Graham: I mean.on grain and flour, and no division is made in that respect. I am pointing out that no matter what might happen in the years to come under railway commissions, whose decisions sometimes vary, the prairie provinces under this legislation are confirmed by statute-


Robert Alexander Hoey: Which can be changed.


George Perry Graham: Only by'parliament. The prairie provinces are confirmed by statute now in a position they never had by statute before, but only under a decision of the Board of Railway Commissioners and on account of the unjust discrimination clause in the act. So to that extent there is, to my mind, a substantial benefit to the prairie provinces.


Robert Alexander Hoey: The minister is talking about the benefit to the prairies. Will he not admit that even under the Crowsnest rates we still pay more, by seven to forty per cent, than we paid on grain and flour in 1917, and for many years previous?


George Perry Graham: If my hon. friend wants
to go back to the rates we had so many years ago, he will have to get a cheaper method of transportation.


Robert Alexander Hoey: I would not return to them,
but if normal conditions come back, this so-called statutory protection may be meaningless.
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George Perry Graham: It is all the protection my hon. friend ever had under the Crowsnest pass agreement. It is maintaining that in its entirety and in every detail.
Now let me go a little further. I want to refer for a moment to the bill itself. My hon. friend has spoken of British Columbia, and the same question might be raised in regard to the Maritime provinces; the same question might be raised in regard to any part of the province of Ontario, and in regard to the province of Quebec. But that would bring us to the point, Mr. Chairman, where this parliament would be undertaking to make a schedule of rates for the whole Dominion by statute, and I submit that that is not in the interests either of the consumers or of the producers of Canada. It would simply bring chaos, and we would have to go back on half our work. Parliament can lay down general principles, but under conditions as we have them to-day parliament is not the proper body to start in making a schedule of rates for the whole Dominion.


Mr. CLARK:: In view of the fact that the
Supreme Court has given a decision which makes it impossible to operate under the Crowsnest pass agreement, what obligation is there upon the people of Canada to make statutory rates for any part of Canada?


George Perry Graham: This bill does not propose to make statutory rates for any part of Canada.


Some hon. MEMBERS:: Oh, oh.


George Perry Graham: This bill rids us of the
statutory rates that have already been made. That is all it does.


Mr HANSON:: And confirms others.
Mr. LeSUEUR: By statute.


George Perry Graham: There is no question about the attitude and the position. I want to make it clear again: This bill does not create any statute for the making of rates. It eliminates a portion of the rates created under the statute of 1897, and leaves the balance as a fair compromise between the different parts of Canada.


John Arthur Clark: May I ask the minister
another question?


George Perry Graham: Surely.


John Arthur Clark: Does this act not extend
the rates created under the Crowsnest pass agreement to the Canadian National Railways and all other railways?
	.


George Perry Graham: Surely.


John Arthur Clark: And they are statutory rates.


George Perry Graham: Because, as my hon.
friend says, they were in reality in force though I understood that-


Arthur Meighen: Hear, hear, the minister
sees where he is cornered.


George Perry Graham: Not cornered at all. I
see where the right hon. gentleman has got all his gentlemen friends around him trying to corner me, but he will have to get forty more before he can do it.


Arthur Meighen: Does the minister not
admit that this statute provides for the Canadian National Railways' fixed rates on grain and flour eastward, and that prior to this statute there was no statute that did it.


George Perry Graham: Surely.


Arthur Meighen: Then does not this
statute increase the statutory rates?


George Perry Graham: Not at all.


Some hon. MEMBERS:: Oh, oh.


George Perry Graham: It confirms the rates
that are now in force.


Arthur Meighen: Not by statute.


George Perry Graham: They are in force.


Arthur Meighen: Not by statute.


John Arthur Clark: Is it not a fact that in the decision given by the Supreme Court of Canada it was -expressly laid down that the Crowsnest rate does not apply to the Canadian National Railways eastward?


George Perry Graham: I am not going to argue
that matter, it is so evident.


John Arthur Clark: It is not a matter of evidence, it is a matter of judgment.


George Perry Graham: I used the word "evident." My hon. friends are just drawing a red herring across the trail. Here .we are, trying to remedy a condition, that is all; and I am pointing out to the prairies that by statute they are getting something which by practice they had before. Now let me take up the bill


John Arthur Clark: Would the minister say
what the effect of the Supreme court judgment is?


George Perry Graham: What I say about the
Supreme court decision is that in one respect

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we are overriding it in this bill. Now let me take up the bill as it is:
Chapter 41 of the Statutes of 1922 is hereby repealed.
That was the act. Power was given to the Governor in Council to extend it for another year. That is now out of existence, so it is repealed. Now the next section:
Subsection five of section three hundred and twenty-five of the Railway Act, 1919, is hereby repealed.
That is the section of the act passed in 1919 suspending the Crowsnest rates for three years. Now I come to section three which reads as follows:
Section three hundred and twenty-five of the Railway Act, 1919, is amended by adding at the end thereof the following subsections:
"(5) Notwithstanding the provisions of section three the powers given to the Board under this Act to fix, determine and enforce just and reasonable rates, and to change and alter rates as changing conditions or cost of transportation may from time to time require, shall not be limited or in any manner affected by the provisions of any act of the parliament of Canada, or by any agreement made or entered into pursuant thereto, whether general in application or special and relating only to any specific railway or railways, and the Board shall not excuse any charge of unjust discrimination, whether practised against shippers, consignees, or localities, or of undue or unreasonable preference, on t'he ground that such discrimination or preference is justified or required by any agreement made or entered into by the company.
That is practically a section of the act of 1919.	The object is to remove the westbound traffic and place it under the jurisdiction of the Board of Railway Commissioners. I continue reading the section:
Provided that, notwithstanding anything in this subsection contained, rates on grain and flour shall, on and from the date of the passing of this Act, be governed by the provisions of the agreement made pursuant to chapter five of the statutes of Canada, 1897.
The provisions in the act of 1897 have reference to the retention of the rates east-bound on grain and flour.


Robert Alexander Hoey: There is no reference to the
westbound nates on grain and flour?


George Perry Graham: There never was. In this bill we are sticking to the terms of the Crowsnest pass agreement. I want to explain again that if we started in to make a wholesale tariff for all the different parts of Canada, which is the business of the Board of Railway Commissioners, I am afraid parliament might not make a very good job of it. Consequently we are sticking to the terms of the Crowsnest pass agreement. We are not making new legislation except in the manner I described a few minutes ago, eliminating that portion of the Crowsnest pass agreement relating to westbound traffic but retaining every item of benefit the prairie provinces have had heretofore on grain
and flour. Now let me read the proposed amendment. We have got to the point where all the traffic but the westbound traffic is still under the Crowsnest pass agreement, and the balance is put under the Board of Railway Commissioners.


Robert Forke: Before you leave that point. The reduction was three cents to Fort William and points east?


George Perry Graham: Yes.


Robert Forke: Does that only apply to
Fort William?


George Perry Graham: I am going to explain
that.


Arthur Meighen: That is another change.


George Perry Graham: It is not a material change though, it does not make any difference. If the rate reduction were a percentage on so much a mile it would mean a great difference, but it was 3 cents per hundred pounds, and under the present act that was to apply to grain and flour shipped from points west of Fort William to Fort William or points east. It did not make any difference whether the grain stopped at Fort William or went east of Fort William, the reduction was three cents per hundred pounds. And that is not changed.


Arthur Meighen: Under the law as it
will stand if this legislation passes, could not the rate be raised from Fort William eastward nullifying the effect of the reduction westward, whereas under the previous law that could not have been done?


George Perry Graham: I want to say distinctly
that the Crowsnest pass agreement never applied east of Fort William.


Arthur Meighen: Yes.


George Perry Graham: Oh, no.


Arthur Meighen: Yes.


George Perry Graham: Never. I will explain it to my right hon. friend because there has been a lot of misconception about this. It is a very important point and I want to make it clear. The only condition to get that three cents per hundred pounds was that the goods must be shipped from a point west of Fort William. Whether it stopped at Fort William or whether it went through to Jericho three cents per hundred pounds was all that was taken off the freight rates. If it originated fifty miles west of Fort William and got to Fort William the reduction was three cents

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per hundred pounds. The same was true if the freight went one hundred miles east of Fort William. I have looked up the Crows-nest pass agreement rates since 1897 so far as I could get them and those rates never were applied to points east of Fort William.


Arthur Meighen: I think the minister has a wrong comprehension of the situation. What he has said up to this last sentence is true. I do not dispute for a moment that all that was necessary-under the act as it stood, and as it was in effect-was that there was to be a reduction of three cents as between western points and Fort William and western points and St. John city or any other city. What will be possible if the present legislation passes is this. The company is only obliged to reduce three cents to Fort William:. Now, with the approval of the railway commission- and there is nothing to prevent them giving it, nothing at all-the rate from Fort William farther east could be raised, thereby nullifying the reduction to Fort William from the points of origin.


George Perry Graham: That was always the case.


Arthur Meighen: No.


George Perry Graham: Yes.


Arthur Meighen: Because the aggregate
rate from the place of origin eastward could never be more than three cents less than it was before. Now it can.


George Perry Graham: I want to make it clear to my right hon. friend that he is absolutely wrong. Let me state that again, and I know he cannot help but see it; that all the shipper could get anyway was a reduction of three cents per hundred pounds. It did not make any difference where he got it, if he got it.


Arthur Meighen: That is right.


George Perry Graham: But the grain had to go as far east anyway as Fort William to get it. If that had not been in the act at that time, the way the act was drawn, if a man shipped grain from a hundred miles west of Fort William to two miles west of that place he would not have got the reduction of three cents; but they had to make it apply, not only, to grain or flour that stopped at Fort-William, but grain that went on. All the reduction he could get under any circumstances was three cents a hundred pounds. The through rate from Medicine Hat to St. John was made in this way; by taking the Crowsnest pass agreement rate to Fort William and then the special rate decided upon by the Board of Railway Commissioners from Fort William east; and these two were added 
together. That condition is not changed one iota under this bill. I have the opinion of some of the best men in this country on that point. The condition is not changed one iota. I am going on with this point. The grain shipped from west of Fort William gets the three cents a hundred pounds off under this bill, just the same as under the -old act; and the Crowsnest pass agreement never was applied by the Board of Railway Commissioners to points east of Fort William in any judgment they ever gave or any rate ever filed since the passing of the act in 1897; and the reason is quite clear, that it was intended to apply and be earned before the shipment got to Fort William, because at Fort William the competition with the water rates changes or controls the situation, and the earning of the. reduction of three cents per hundred pounds under the old act was accomplished before it got to Fort William, and that is the case under this act; therefore there is no change. The reason of the amendment was to make it quite clear that the territory that was covered by the old act was covered by the new one, and no other territory. That is what every man in this House wanted to do-to retain the features of the Crowsnest pass agreement on all the traffic eastward, and that amendment to my mind was not needed. However, that is the advice I have received. It does not affect the situation but makes it clearer that the territory is not extended at this point, but that the reduction of three cents per hundred pounds that always applied under the Crowsnest pass agreement to any traffic originating west of Fort William applies under this act to the other traffic I have mentioned. There have been desperate efforts to get us to open up that point, to make it clear or to provide that, if grain were shipped from other points east of Fort William, even if there is water competition, the Crowsnest pass agreement should apply, but the government has no intention of doing that, nor has parliament any such intention. The Crowsnest pass agreement was made to give relief to those portions of Canada where there was no water competition. This amendment only makes it clear and does not add one iota to the difficulties of the farmers or millers in getting a reduction of three cents per hundred pounds.


Mr. CAMPBELL:: Is there any intention of making the Crowsnest pass agreement rate apply to Quebec over the Transcontinental?


George Perry Graham: This is going to be left
to the Board of Railway Commissioners. My hon. friend from Mackenzie (Mr. Campbell)

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asks this question, and my hon. friend from Vancouver Centre (Mr. Stevens) asks another question. I have been asked a hundred questions. That would mean that we were going to make rates in parliament, and we are trying to get away from that as far as we can.


Arthur Meighen: You have started it.


George Perry Graham: I hope my bon. friend
will feel better as I proceed.


Henry Herbert Stevens: The next clause is more
serious still.


George Perry Graham: What is that clause?


Henry Herbert Stevens: Number six.


George Perry Graham: It is all right.


Henry Herbert Stevens: If you leave it alone it
is all right.


George Perry Graham: It is to make it clear
and to conform with the amendment made in the other section.


Robert Forke: We have not got clauses
five and six.


George Perry Graham: I have got to move these amendments in committee when the time comes.


Robert Forke: Has the hon. member the
clauses before him?


George Perry Graham: I have them in typewriting. I will read the clause I have just been discussing. At the end of subsection 5 the following is added:
But shall apply to all territory west of Fort William covered by tariffs filed with the board under the terms of said agreement at the date of the passing of this act and to all lines of railway now or hereafter constructed by any company subject to the jurisdiction of parliament within such territory.
Now tve have clause 6. The only amendment in clause 6 is by inserting after the word "thereto" in the sixth line the words "within the territory." That is to conform to the amendment I have just read, to confine this to the territory.
Now let me take clause 6. This clause is meant and does convey this assurance; that within the territory affected by the Crowsnest pass agreement there must mot be any discrimination as between localities under the agreement. Now it was contended that with regard to territory that came under that agreement the clause concerning unjust discrimination might not be applicable; that is, to the different points getting the benefit of the Crowsnest pass agreement; consequently clause 6 is put in to provide that within the territory 276
included in the Crowsnest pass agreement there must be no discrimination as between points that are under this agreement; and I am told by a very high legal authority that that is just what it does convey, and it is not intended to convey anything else; and I think if hon. gentlemen will read it closely when it is printed, they will find that it does convey that meaning.


Henry Herbert Stevens: The addition of the words in the now proposed amendment "within the territory" as applied to clause 6 limits the application of clause 6 to the territory formerly covered by the Crowsnest pass agreement and eliminates the territory west of the mountains as well as the territory east of them.


George Perry Graham: Because the territory
west of the mountains was never under the Crowsnest pass agreement.


Henry Herbert Stevens: Quite so, but the present
amendment does not accomplish that. The present amendment inserting the words "within the territory" eliminates the territory west of the mountains, as well as the territory east of Fort William.


George Perry Graham: It does not eliminate it
at all, because it was never in the Crowsnest pass agreement.


Henry Herbert Stevens: The minister has not
caught the force of my statement.


George Perry Graham: I caught the force of
What the hon. member was trying to say.


Andrew Ross McMaster: Are we not out of
order discussing amendments not before the committee?


Henry Herbert Stevens: My hon. friend has
selected an odd moment to suggest that we are out of order. The minister has been out of order for the last hour. We are out of order by consent of the committee, and it is an unfortunate moment to raise this objection. I ask if clause 6 of the bill as it is presented to parliament does not extend to the territory west of the mountains as well as the territory east of Fort William the same privileges as are accorded the prairie provinces or the central section, but that the interjection of the words "within the territory " limits the meaning of this clause to territory between the mountains and Fort William.


George Perry Graham: No, my hon. friend will
get no admission on that. Let me read the clause. Perhaps my hon. friend has not read it. I ask hon. members to concentrate their

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thoughts on this for a minute. This clause reads:
The board shall not excuse any charge of unjust discrimination, whether practised against shippers, consignees, or localities or of undue or unreasonable preference, respecting rates on grain and flour, governed by the provisions of chapter five of the statutes of Canada, 1897.
What is that statute? The Crowsnest pass agreement, and this section without this amendment applies only to the Crowsnest pass agreement and to territory under the Crowsnest pass agreement.


Henry Herbert Stevens: Why does the minister
insert the amendment?


George Perry Graham: I am not sure that it is
absolutely necessary, but some lawyers tell "me it is. What I am trying to do, if my hon. friend will allow me, is to close up the gaps which lend themselves to a great deal of litigation. because litigation has been going on for years. If that will be accomplished by adding a word or two to make the matter clearer, then I want to add that word or two.


Mr. CLARKE:: The minister says that
the addition of this clause does not change the practice that was in operation say prior to 1917 when the War Measures Act was in vogue.


George Perry Graham: I do not want to be rude, but I do not know anything about that. I do not know what the practice of 1917 was. I know this amendment that, I have suggested.. should be inserted here does not change the meaning of sub-clause (6), but makes it clearer.


John Arthur Clark: I will put it. in another way and leave out 1917 altogether. I merely want to get the meaning of sub-clause (6), whether or not it has any significance or effect as regards British Columbia. If so, what is the effect? The impression I am under is that the clause does not change the practice as previously adopted, but it may, as the minister says, be put in to clear up some points of law that were not perfectly clear before.


George Perry Graham: This subclause (6), to begin with, is to make it clear that there cannot be any discrimination within the territory covered by the Crowsnest pass agreement.


John Arthur Clark: Has it any significance as
regards British Columbia?


George Perry Graham: The Crowsnest pass agreement never affected British Columbia and this does not affect British Columbia in any way.

Let me come to clause 4. I am more surprised than I could imagine about the objections to clause 4. Some people have construed clause 4 to mean that certain people might be shut out from going to the courts at any time under the Crowsnest pass agreement or its application. What clause 4 means and what it says is simply this, that it precludes a great deal of little, petty lawsuits that might be brought against the railways on account of the decision given.by the Board of Railway Commissioners as to rates under which certain tolls were collected, which the Supreme court says were wrong. The committee can readily understand that if some people paid fifty cents too much, there may be speculators in different parts of the Dominion who will buy up all these little claims and start sui's against the railways. All that clause 4 says and means is that the railways shall not be liable for action for filing and collecting tolls for a few months under the decision of the Board of Railway Commissioners, and it cannot be construed into meaning anything else. Perhaps I have violated all the rules; but as I gave notice of these amendments a few days ago and put them on Hansard, I would not be discussing the principle of the bill in its entirety unless I included the discussion of the bill as it will be when amended. I put these proposed amendments on Hansard some days ago in order that hon. members might have them before them.
The order in council which has been printed and published covers quite a large territory, and it was the final answer to the application made against the ruling of the Board of Railway Commissioners, which finding in its entirety was postponed until after the judgment cf the Supreme court. What we need in Canada at the present time on this rate question is a compromise attitude by which we shall get rid of some of the complications and be able to get a more equitable adjustment of freight rates throughout the Dominion. I do not mean by that putting burdens on here and taking burdens' off there, but in the west and in the east a certain chaos exists that must be cleared up. Who shall clear it up? We believe the Board of Railway Commissioners has the power and is the best authority to clear that up. The hon. member for Vancouver Centre (Mr. Stevens) will note that in the order in council reference was made to the westbound traffic, and while this government feels and while I believe parliament will agree that the simplest and most effective way of clearing up the situation that now exists is to adhere, as is done in the bill to the Crowsnest pass agree-

C.N.R.-Branch Lines
ment as regards grain and flour, the Board
of Railway Commissioners, when it comes to carry out the instructions as contained in the order in council, will have to face this situation, that on the Pacific coast a new condition affecting the prairies has arisen. Last year approximately 50,000,000 bushels of grain went through Vancouver harbour, and a large proportion of the grain that, when the Crowsnest pass agreement went into force, was all intended to come east, is going west. When the board comes to decide the rates to be applied on grain in the prairie provinces, it will have to take into account the new conditions that exist now that did not exist some years ago. It will have to take into account the fact that we have really three transcontinental railways, one running into Prince Rupert and two running into Vancouver. It will have to take into account further the fact that a not inconsiderable portion of the prairies find it more convenient, easier, to ship their grain to the Pacific coast, and any Board of Railway Commissioners will certainly give full consider-a'ion to this new condition and see that the Pacific coast trade is treated properly in any decision handed down by that board.


Arthur Meighen: Why does the minister
think the same Board of Railway Commissioners would not be just to the prairie provinces?


George Perry Graham: My right hon. friend
speaks as if there was a condition existing in which there was no Crowsnest pass agreement.


Arthur Meighen: There is none now.


George Perry Graham: There is a portion of it
as my right hon. friend knows. I say to him now frankly that if there were no Crowsnest pass agreement, I would never move to have that or any other agreement. But we find ourselves faced with a condition and not a theory, and we are dealing with a condition that is in existence under an agreement made in 1897 between the government of Canada and the Canadian Pacific.


Henry Herbert Stevens: Does the government consider itself bound by that agreement?


George Perry Graham: Parliament can do anything it likes with any agreement.


Henry Herbert Stevens: Does the government consider itself morally and legally or morally or legally bound by that agreement?


George Perry Graham: As I pointed out to my
hon. friend-perhaps he was not in-I took his view of it, that they did not want any Crowsnest pass agreement. They would prefer to 276i
have none. Many people feel in that way. Other people feel that they would like to have the agreement. We believe this was a middle course that would be fair to all the people of Canada.


Henry Herbert Stevens: Does the government feel it is bound by the Crowsnest pass agreement of 1897? I am not asking the minister if he is going to take a middle or a right or a left course.


George Perry Graham: It is bound by the Crowsnest pass agreement just as my hon. friend is, until it is changed, and we are proposing to change it now.


Mr. COOTE:: Why would the minister expect the Board of Railway Commissioners to take into consideration the new condition existing as regards farmers shipping their grain to Vancouver any more after this legislation passes than they did when the last application was made to them?


George Perry Graham: There may be something
in the suggestion that the Governor in Council has asked the Board of Railway Commissioners to make a thorough investigation into the rate structure and to endeavour to make an equality of rates so as to give all the people of Canada a fair chance.


Arthur Meighen: Will the minister not
admit that the railway commission was instructed to do exactly the same thing in 1920?


George Perry Graham: I do not know; I do not remember.


Arthur Meighen: I have the order in
council here.


George Perry Graham: It is a good thing.


Robert Forke: The Crowsnest pass agreement will be the basis for the rate structure.


Arthur Meighen: But the minister says not.


Henry Herbert Stevens: The minister has killed
that in this bill.


George Perry Graham: If the cross-examiners are
through with the prisoner in the box, he will go on.


Mr. McQUARRIE:: Will not the preference given under the Crowsnest agreement be retained? Will not the railway commission be obliged to recognize the fact that there is this preference of three cents?


George Perry Graham: It is not a preference of
three cents per hundred pounds on the present rate but on the rate that existed at the time
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of the passing of the act, so that this preference will always exist so long as the Crows-nest pass agreement- stands.
Now I shall come to the Maritime provinces. The Maritime provinces have a unique situation, one that anybody who has been connected with the Intercolonial railway will know something about.


Arthur Meighen: Hear, hear.


George Perry Graham: We found it in bad shape under my right bon. friend's management and it has taken some time to get it straightened out. Everyone will agree to that. The Maritime -provinces, I say, consider themselves in a unique position, and they are. They contend that under the terms of confederation they were to be given, in compensation for sacrificing the market to the south, access to the central markets of Canada, and a railway was to be built for that purpose and not with any idea of profit in view. And they have always contended, with some force, that this railway, so far as they themselves are concerned, should -be run for the benefit of the people of the Maritime provinces, largely to cany out the object conceived and enunciated at confederation, that they should be enabled to place their products in the markets of old Canada-, as this part of the Dominion was then called, seeing that they had given up their markets across the line. If that is the case, they are entitled to the fullest consideration. But it will be argued that the road is being run at a loss. I am not going to discuss that question, but I do say that the contention of the Maritime provinces, now that we are endeavouring to clear up the rate situation with a vifew to placing all parts of the country on a basis of equality, ought to be, as it will be, fully considered. And the order in council refers to that situation.
In 1919 certain rates were Taised very materially, and to this increase the Maritime provinces seriously objected. The Governor in Council, very wisely as I think, understanding something of the situation, calls the attention of the Board of Railway Commissioners to the feeling in that part of the country and asks that it be given consideration when the board comes to -make its rate structure. I will not dilate further on this matter, but what the government has in view, and all that it has in view, is to bring about in Canada a better feeling among the different sections of the country in relation to this question of transportation. Now, freight rates in Canada are high, but they are lower in this country than they are to the south of us;

and we can never expect as low rates here as we had years ago, because the cost of transportation will never come down sufficiently to allow them to be reduced to the point where they were fifteen years ago. But there is a basis of equality that may be found, and we hope that under this legislation, in which the Board of Railway Commissioners, with the restrictions to which I have referred, is given a free hand throughout the Dominion, a better condition will result from the reconstruction of the rate fabric, so that there will be in the future a greater degree of contentment on the part of all the provinces of Canada, who will feel that they have been given a fair show in the fixing -of rates for the carrying of their products.


Mr. HUDSON:: Has the Canadian Pacific
Railway made any specific requests to be relieved of its obligations under the Crowsnest pass agreement in whole or in part?


George Perry Graham: No.


Albert Blellock Hudson: It never has?


George Perry Graham: The idea of getting rid
of the Crowsnest pass agreement I have already discussed. The Canadian Pacific Railway has never in specific terms asked for relief from the burden, but as I have pointed out, it has indicated quite clearly in our discussions that the conditions have so changed that, in the interests of the entire railway system of Canada as well as of the country generally, a change should be made.


Albert Blellock Hudson: Does the minister not understand that as a request for relief?


George Perry Graham: I thought my hon. friend
was going to ask me to produce correspondence as to any such request. There has been no correspondence of that nature.


Albert Blellock Hudson: Does not the minister take their contention as a request?
iMr. GRAHAM:	I take it as a strong suggestion.


Albert Blellock Hudson: This amendment proposes
to eliminate all agreements outstanding including the Crowsnest agreement. Has the minister taken into consideration the fact that what is known as the Manitoba agreement is now in litigation before the Privy Council?


George Perry Graham: I have considered that
fact, and there may be a score of similar agreements. But if we are to have a rate structure that is at all equitable parliament must take a strong stand on these agreements;

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and it has been held, if not by the courts at least by the Board of Railway Commissioners, that the Manitoba agreement does not hold under the present condition. The Supreme Court of Canada has held that Manitoba is in exactly the same position as other places that are under the Crowsnest pass agreement so far as restricted territory is concerned, although, I believe, that province has appealed to the Judicial Committee of the Privy Council. Undoubtedly, if some legislation is not passed, the other provinces will take the same action on the decision of the Supreme court. They are therefore all practically in the same position.


Arthur Meighen: Is not the minister
asking the House to legislate away Manitoba's right?


George Perry Graham: I do not think that
Manitoba has any rights particularly in this regard, any more than other provinces.


Arthur Meighen: The minister is assuming the position of the Privy Council.


George Perry Graham: No.


Arthur Meighen: I think he is.


Henry Herbert Stevens: The proposal to put the various sections of Canada in the position to feel that they are receiving reasonable and fair treatment in regard to the very important and complicated question of freight rates has been before parliament for some time. The matter has been before the country for a number of years, and at the opening of this session a few months ago the government informed parliament that they had addressed themselves to the whole situation and purposed introducing a measure which they expected and1 hoped would solve this all perplexing problem. Let us view the legislation which the minister (Mr. Graham) has now submitted to us. That this legislation solves the freight rates problem, or even that it offers a medium of compromise, I think no one will assert with any very great confidence. The measure before us now may answer, to the satisfaction of the government, a pledge to bring in legislation, but that it will relieve in the slightest degree the consciousness of unfair treatment now permeating certain sections of the country, I think cannot be claimed under any circumstances. Indeed, I believe it will accentuate that feeling.
It is not my intention to delay the committee with a long detailed analysis of this proposed legislation, but I want to make very clear my position in regard to it and to the
question of transportation in a broad way. I have argued in this House and before my own constituents and the people of my province for certain .principles which I think should underlie and govern the making of a freight rate structure. I have argued that the fixation of rates is. such a complicated problem that it should not be pitchforked into parliament, but rather that it should be dealt with by a competent board, that board in my estimation being the Board of Railway Commissioners. All through the years that this matter has been under discussion, indeed in recent years when it has been the most acute problem in my own province, I have adhered very closely to that stand. I believe that if the government had in its proposed legislation stuck strictly to that main principle there would not have been so much to complain of to-day; but they deviate from it in that they extract from a certain agreement, based upon a statute of 1897, one part and seek to perpetuate it in this bill.
Further, I took -the stand a year ago when this matter was before the Privy Council on appeal from the railway board, the stand that I have taken on the public platform, that the Crowsnest pass agreement had outlived its usefulness, that it was obsolete and should be abrogated. Among the reasons which I advanced then and repeat now why I think that course should be taken are the following. First, I contend that while the Crowsnest pass agreement was a contract between the Canadian Pacific Railway on the one hand and the people of Canada as represented by parliament and the government on the other band, if in the lifetime of the contract conditions so change that one or both of the parties consider that its terms should be varied to meet those conditions, such variation can be made with the consent of both contracting parties. Now as a matter of fact, the people of Canada at large and the government are convinced that that contract should be abrogated; and the Canadian Pacific Railway, the other party to the contract, has appealed to the railway board and the committee of the Privy Council for its abrogation. So I contend there is no obstacle to the setting aside of that contract.
Another reason why in my estimation the statute should be repealed is this. The contract was made in 1897 when the control of freight rates was far different from that which obtains to-day. At that time the railways filed their tariffs with the Department of Railways, and the Railway Committee of the Privy Council either approved or disapproved
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them, as the ease might be. But in 1903 parliament, under the leadership of the late Sir Wilfrid Laurier, erected what is
5 p.m. known as the Board of Railway Commissioners. I pause here to repeat what I have said on other occasions, that of all the public acts of Sir Wilfrid Laurier, that was the greatest of his career and one for which he and those who were associated with him deserve the fullest credit. That Board of Railway Commissioners won and held the confidence of the people of Canada for the way in which it administered this highly technical act, and only in the last couple of years has there been any question of the fairness of the board-with that I shall deal in a moment. With this change in conditions the usefulness of the Crowsnest pass agreement passed away; and I remind those who to-day seek to retain the agreement that down to 1916 the ordinary rates allowed by the Board of Railway Commissioners were not above those of the Crowsnest pass agreement, so there was no question of invoking the agreement to protect the public interest.


Robert Forke: The hon. member is aware
how that came about, I suppose? It was owing to the Manitoba agreement having lower rates than the Crowsnest pass agreement-it was to avoid discrimination.


Henry Herbert Stevens: The rates generally were
lower. I am not advancing that in any spirit of criticism, I am merely stating the fact. Now, this is the point I wish to impress upon the House. The war brought about a revolution in the economic structure of this and every other country. In other words, a dollar which previously would purchase a given quantity of goods, or in this case a certain quantity of freight service, shrunk so that it would not buy more than forty per cent and in some cases thirty per cent of what it did in prewar days-the purchasing power of the dollar was very much reduced. Therefore to-day under these new economic conditions it is not fair that there shall be a constant scale of freight rates. Transportation service must fluctuate in value the same as other services, or on the other hand ruin must come to those who are bound to carry on the transportation of the country.


Milton Neil Campbell: Is it not a fact that
the commodity rates under the Crowsnest pass agreement from eastern to western Canada are still higher than the prevailing rates for the same commodities for similar distances in eastern Canada to-day?


Henry Herbert Stevens: It may be. I do not desire to enter into a discussion of the whole question of transportation. I am prepared to do so under other circumstances, but to-day it would take up too much time. There are other factors that enter into the question. The factor that we are dealing with now is the retention of a portion of the Crowsnest pass agreement in this bill. But I would say to my hon. friend, so he will see I am not unaware of the point he is suggesting, that there is a very vital factor involved, one that is purely economic-the competition of water carriage.
Now, I state emphatically that I stand for the railway board having supreme control of freight rates throughout the Dominion. Secondly, I am wholly in favour of the complete abrogation of the Crowsnest pass agreement; or any similar agreement, for the reasons which I have stated.


Mr. McTAGGART:: In 1897, at the time
the Crowsnest pas act was passed, was it not then contemplated that a Board of Railway Commissioners should be appointed, and were there not contained in the agreement at least two provisions which were not to come under the control of the Board of Railway Commissioners when appointed?


Henry Herbert Stevens: 
Mr. MACDONALD (Pictou):: Where does my hon. friend find that?


Henry Herbert Stevens: The minister has spent
an hour telling us that that was his intention. Where do I find it? I find it in the amendment the minister has introduced since the bill came before us.


Edward Mortimer Macdonald: No.


Henry Herbert Stevens: Oh yes; my hon. friend
was not in his seat perhaps. But the iniquity of this whole thing is this: The minister introduces this bill, and particularly clause 6, which I interpret, as do many others who are better qualified than I am, as eliminating the contention that the Crowsnest is a contract rate and therefore cannot be pleaded as an excuse for discrimination. That clause does that, and permits the shipment of grain from the prairies westward the same as eastward. The minister has introduced since the bill has been before the committee an amendment whereby he limits the application of clause 6 to the territory previously covered by the Crowsnest pass agreement.


Edward Mortimer Macdonald: I do not
know where my hon. friend gets the authority for any such interpretation as he puts on the original bill. I venture to say that no legal gentleman would construe the statute in the sense that he is doing it.
Mr. STEVENS':	The minister himself did.
My hon'. friend knows that I do not pose as an authority on law; I never have, although sometimes I have been accused of being a lawyer.


Andrew Ross McMaster: Complimented.


Henry Herbert Stevens: No, accused of it, I said.
But I have the opinion of those who are much better qualified to judge of the legal merits than I am, and I myself read that into the statute. I say that clause as it originally stood would have permitted the Board of Railway Commissioners to fix a rate westward similar to the rate eastward, other things being equal. Of course, it is possible to plead other reasons for a higher rate westward, or a lower rate for that matter, but so far as
the Crowsnest agreement is concerned, it could not have been pleaded as an extenuating circumstance that it was a contract rate and therefore not applicable.
But the point I was making was this: The Board of Railway Commissioners have not a free hand at all. In one respect, and in a. very important respect, they go into this investigation of freight rates with their hands tied. Furthermore, I want to point this out, and this is a question I put to the minister when he was elucidating the bill, but he escaped or evaded answering me. Do the government feel themselves bound by the Crowsnest agreement? Do they retain this section of it because they are morally or legally bound to do so? I asked the minister that question, and he would not answer me.
I do not think the Prime Minister would care to answer it.


William Lyon Mackenzie King: ' The Minister of Railways had better reply.


Henry Herbert Stevens: I compliment the Prime
Minister on the skill of his answer. He does not desire to answer. Let me answer it for him. The government know perfectly well they are not bound by the Crowsnest pass agreement. Then why do they retain a portion of it?


Edward Mortimer Macdonald: Does my
hon. friend mean to say that the decision of the Supreme Court of Canada as to the effect of that agreement is not in effect in the terms laid down by . the court?


Henry Herbert Stevens: I am not desirous of reflecting on the decision of the Supreme court by describing it as a red herring, but the minister is endeavouring to draw a red herring across the trail at this point. What I am discussing is this:	If the government argue
that they were bound by the Crowsnest pass agreement, then they are bound by the whole agreement. If they are justified in scrapping a portion of that agreement, they are justified in scrapping it all. I want-shall I say?- to take away from the government the excuse that they are legally or morally bound to bring in the statute in the form in which it is. Their hands were absolutely free to bring in any statute that would abrogate the Crow agreement in its entirety, but they have chosen to preserve a section of it, and why? We have not heard from the minister why. I presume the reason is this:	They want to
curry a little favour with my hon. friends from the prairies. There is no other reason. My hon. friends will not take that in an offensive way; I do not offer it as such, but
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I am pleading my own cause. If the government are justified in making a fixed and statutory rate for grain and flour for the advantage of certain sections of Canada, then I say they owe it to us in British Columbia to give us equal treatment in that regard, to .give us the same rates to the Pacific coast. But I am not asking them to do it. I am asking them to abrogate the whole thing and to let it rest, as the minister intimated he was prepared to do, and give the Board of Railway Commissioners a free hand. I do not ask special privileges, but I do ask for the province of British Columbia the opportunity to plead its cause on a firm and even basis. I ask for the opportunity for my province to come before the board and say:	Here are
the economic conditions; here are the reasons why we ask you for a freight rate structure of a given standard. But instead of that, the government is saying to the province of British Columbia:	If you go before the Board of
Railway Commissioners, you go there with one hand tied behind your back. There is no escape from that.


Edward Mortimer Macdonald: How do you make that out?


Henry Herbert Stevens: My hon. friend knows it perfectly well. I do not wish to labour the point. As I have already stated twice, t'he minister by his amendment limits the application of clauses 6 and 5 to the territory previously covered by the Crowsnest pass agreement, and that did not apply to British Columbia.
I have before me a copy of the Vancouver Morning Sun of June 6, 1925, and on the front page I see the photographs of three lions of the Liberal party, Premier Oliver, the Hon. Dr. J. H. King, and Mr. G. G. McGeer. These are the three men to whom credit is due for what they secured for British Columbia at last, the opportunity of pleading its cause, as the Minister of Railways describes it, with a free hand. I wonder ryhat the Minister of Public Works has to say as to the amendment the Minister of Railways has introduced.
I wonder what the Minister of Public Works (Mr. King, Kootenay) has to say as to the amendment that the Minister of Railways has injected into this bill thus depriving him, depriving his province, and depriving his associates of the possibility of going before the railway board with free hands, literally tying their hands behind their backs. Let me read a passage or two from this eulogy of the minister :
It is only the first trench in the west's campaign for justice. To relax efforts now would be suicidal,
[Mr. Stevens.1
They look upon this order in council and this bill of the Minister of Railways as a great victory. The Sun has this further to say:
The Hon. J. H. King, British Columbia's representative in the Mackenzie King government, was radiant with optimism as he commented on the government's order that equalization of freight rates should be taken in hand forthwith.
What a travesty! What a mockery! Here the government come out with an order in council in which they say to the railway board in a sense: " Now go to work and equalize freight rates. Give to British Columbia, give to the Hon. Dr. King "-I am referring here to the Minister of Public Works- "give to the Hon. John Oliver, give to Mr. Jerry McGeer"-the $150,000 advocate of the provincial government-" the right to equalize freight rates," a thing they have been fighting for for years; and then having sent that broadcast over the country, having secured a considerable amount of acclamation from its people of that province, the Minister of Railways brings in this bill which deliberately hangs them after they have been eulogized in this fashion. The Sun goes on to say:
The railway board is to be unfettered in its investigation except in regard to the eastbound rates on grain and flour. On these the maximum established under the .Crownest pass Act is not to be exceeded.
On the interpretation of the order in council, on the interpretation of the bill as the Minister of Railways introduced it, the east-bound minimum rate was to apply to the westbound traffic as well; and the Minister of Public Works knows that. He knows that was expected. He knows that his friends in British Columbia congratulated him on obtaining that. Now the Minister of Railways interjects three little words-" in the territory "-and the whole dream, the whole aspiration, the entire hope is destroyed and proven to be only a delusion and a snare. It is not my intention to labour the point;
I simply want to make my own position clear. It is this: that insofar as the transportation problem is concerned I believe it should be left unfettered, and in the true sense unfettered, to the Board of Railway Commissioners.
I did intend to say a word regarding the Board of Railway Commissioners. I have heard some hon. members of this House say that they have not confidence in that board. The Hon. John Oliver, Premier of British Columbia, intimated in an interview which he gave the other day that he had not confidence in the Board of Railway Commissioners. I want to say that this circulating of the spirit of distrust in the Board of Railway Com-

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missioners is one of the most lamentable things that I know of. I think it is unfortunate and wholly inexcusable. The Board of Railway Commissioners ought to have the confidence of the people of Canada, and if they are shackled by the government in going into this problem then they will have great difficulty in escaping the charge of being actuated by influences other than those of equity and justice. And so I say this government should be the last to interfere with the board in the free exercise of their powers and of their wisdom. I plead with this House that we should scrupulously avoid giving out to the public any idea that this court-one of the finest ever established in Canada-is anything but a sound, and a fair, and a just court. Having encouraged the confidence of the public in the Board of Railway Commissioners I believe our duty is to leave the problem with them free and unhampered from any restriction whatsoever.
I repeat again my other point and it is this: The Crowsnest pass agreement as sued is obsolete, it has outlived its usefulness. I agree with the minister that it is impossible, but I go further than the minister and say that a thing that is impossible, a thing that is obsolete, should be abrogated in toto, and not one section of it retained to pester and worry the people, and interefere with the harmonious and equitable adjustment of these matters.


Robert Forke: I think we all realize the difficulty of the situation in regard to the railway problem in this Dominion of ours. Canada is a country of vast distances, with a sparse population and railway deficits to be met year after year. We want to keep these facts in mind at all times when discussing railway problems and railway rates. However, we recognize the fact that the railways must operate. The Minister of Railways and Canals (Mr. Graham) in his speech this afternoon pictured a condition in which the railways would be unable to operate. Of course, we know that will never happen for the simple reason that the people of this country are interested in the railways and realize that their interests are indissolubly bound up with them. But there is another side to the situation. Agriculture and industry must also function, and we must endeavour to preserve, as far as we possibly can, a proper balance between the operation of our railways and the successful prosecution of agriculture and its allied industries, to say nothing of the industries of the country as a whole. These are things that we must keep in mind1.
I hope to convince the House that in speaking as I am I am not expressing any sectional point of view; that while I am speaking in behalf of certain interests and keeping them in mind, I am just as anxious as anyone else to see that the country as a whole shall prosper, that all parts of the Dominion shall get equal opportunities to prosper and progress as we hope they shall in the future. While dealing more particularly with the western prairie provinces anything that I may say will not be said in any sectional spirit, but due regard will be paid to the national interests os a whole.
The order-in-council which preceded the bill we are now discussing admits the principle of maximum rates. To prove the truth of that I shall read an extract from the order-in-council itself to the following effect:
The committee are further of the opinion that as the production and export of grain and flour forms one of the chief assets of the Dominion, and in order to encourage the further development of the great graingrowing provinces of the west, on which development the future of Canada in large measure depends, it is desirable that the maximum cost of the transportation of these products should be determined and known, and therefore are of opinion that the maximum established for rates on grain and flour, as at present in force under tfye Crowsnest pass agreement, should not be exceeded.
This is a frank admission that this question is not a local one but is a question of national importance which affects the prosperity of the whole Dominion. In dealing with the question of transportation and the different rates on grain from the west to the east comparisons are sometimes made between the rates on the Canadian side and the rates on the American side. In that connection I should like to read the following extract:
2.	The spring wheat areas of the northwestern states, Montana and the Dakotas, have the advantage of geographical location in being situated so much nearer lake Superior, and the great bulk of the grain is a comparatively short average haul as against the longer average haul from the prairie provinces to Fort William and Port Arthur.
3.	It had also, no doubt, in mind that the producers of the western provinces have to compete with the remainder of the world in marketing their wheat and the foremost competitor is the Argentina republic. The average haul from Argentina to the shipping ports is 140 miles. The average haul from the western provinces to lake Superior is between 800 and 900 miles and before the ocean haul begins there is the water haul, Fort William to Montreal, during the season of lake navigation, the average rate for which last year was about 11 cents per bushel.
4.	These rates on grain and flour from the prairie provinces to lake Superior were, with other rates on various commodities, provided for in the Crowsnest agreement between the government of Canada and the Canadian Pacific Railway in 1897. Several millions of dollars were paid the railway as a subsidy, as part of the bargain; the rates were thus bought and paid for.
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I know that conditions have changed to some extent since that time. At the same time we must bear in mind that many hundreds of thousands of people who went into the prairie provinces knew that the agreement was in force, and were led to believe it was a permanent agreement, and that it had fixed the maximum rates on a permanent basis. However, I am willing to admit that I do not know very much about freight rates. The Minister of Railways also made that admission this afternoon.


George Perry Graham: None of us know very
much about the question.


Robert Forke: To adapt the words of the
Good Book, it "passeth all understanding." 1 do not think anyone in the House will pretend that he understands the conditions. We hear a great deal about eastern and western rates. I know that many hon. members in the House will tell me that the rates in the west are very much lower than the rates in the east, and again we hear from people in the west that rates are lower in the east; each section seem to think they are paying higher rates than the other. I have a few extracts here which I do not think will be disputed.


Mr. LADNER:: Does the hon. gentleman
think it is fair, from the point of view of the prairies, 'that having established a policy of maximum rates on grain going eastward to the grain market, the government should have refused to grant the same rates, on grain going westward to Vancouver, where so much money is invested in the harbour and elevators?


Robert Forke: I should like to see the
Crowsnest rates established on westbound traffic just the same as on eastbound traffic. I think that the case will not be so bad after all, because I believe the railway commission will have to take as a basis in fixing rates in the mountains the Crowsnest rates, perhaps plus the extra cost of transportation across the mountains. I trust they will do that. We have no statutory agreement as to that.


Leon Johnson Ladner: Does the hon. member
advocate the mountain differentials in that
statement?


Robert Forke: I do not know what the
mountain differential amounts to, but if it costs more to haul grain over the mountains, than it does to haul it over the prairies, I think the extra cost should be looked after in the rates.


William Garland McQuarrie: As a matter of fact, it does not.


Robert Forke: If it does not, then the
freight should be hauled for the same rates. It id a matter for investigation. If it does not require any more cost to haul the same mileage through the mountains than through the prairies, the rates should be the same.


William Garland McQuarrie: Does the hon. member know that the grade on the Canadian National from Vancouver to Edmonton is less than the grade from Calgary or from Edmonton to Fort W'illiam.


Robert Forke: I think I had better leave
that matter alone, because I am not posted on it. The hon. member for New Westminster (Mr. McQuarrie) might- be content with my statement that I a.m willing to give exactly the same treatment on grain being hauled west 'as on grain being hauled east as long as conditions are the same. I am going to quote a few extracts from a table I have here that I think will be correct. In comparing western rates with eastern I find that the rate from Fort William to Oak Lake, Manitoba, 585 miles, is 99 cents, and the rate from St. Catharines to Quebec, 584 miles, is 68 cents, showing that the western rates are 45 per cent higher. The rate from Fort William to Virden, Manitoba, 600 miles, is $1.02, and the rate from St. Catharines to Sherbrooke, 603 miles, is 65 cents, showing that the western rates are higher by 57 per cent. So that we find that rates are much higher in the west over the same mileage. The rate on binder twine from Fort William to Bagot, Manitoba, 491 miles, is 68 cents, and the rate from Montreal to St. John, New Brunswick, 488 miles, is 52J cents, showing that the western rates are 30 per cent higher. From Fort William to Pilot Butte, Saskatchewan, 767 miles, the rate is 98 cents, and from Montreal to St. John, New Brunswick, 488 miles, 64 cents, so that western rates are higher by 53 per -cent. The rate on agricultural implements from Fort William to Chater, Manitoba, 547 miles, is 62 cents, and from Hamilton to Quebec, 546 miles, is 49 cents; western rates being higher by 26 per cent. I could quote a good many more rates on exactly the same mileage in western Canada, compared with the rates charged in eastern Canada, and I may say it will be found in- almost all cases that the rates are higher in the west t-han in the east, and all of them under the Crowsnest pass rates.


Mr. EULER:: Are all these rates fixed
on the same basis in both cases? Are they commodity rates?

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Robert Forke: Rates on the same article.


William Daum Euler: But are they on a different
basis?
Mr. FORIvE: I do not know exactly where that comes in.


William Daum Euler: It might make quite a
difference.


Robert Forke: I am speaking of binder
twine which is a commodity) and from Fort William to Bagot, 491 miles, the rate is 68 cents, while the rate from Montreal' to St. John, New Brunswick, 488 miles, is 524 cents.
I do not understand why a carload of implements should be any harder to haul from Fort William to Chater than from Hamilton to Quebec.


William Daum Euler: I am not questioning that,
but I wanted to find out whether my hon. friend's basis of comparison was absolutely the same in both cases.


Robert Forke: I do not think they would
be exactly the same, but I think I have stated it sufficiently to show that whatever the conditions are the west is not getting very much lower rates in any case than those they have been getting-not as low. The Minister of Railways went into the question very extensively this afternoon in connection with the establishment of the Growsnest pass agreement in 1897. Those rates were lower in fact in many cases, owing to the Manitoba agreement with the Canadian Northern Railway. Those rates prevailed until 1917 or 1918. It was also pointed out this afternoon that the amendment now before the House, if it carries, will supersede the Manitoba agreement with the Canadian Northern Railway. The minister assumes, of course, that this agreement is going to be declared null and void. However, he is not taking any chances, and should it happen that the Privy Council should decide in favour of Manitoba, Manitoba will have nothing left but to pay the bill and to go oni without getting anything in the way of reduction of rates. They will have to pay the bills in any case for appealing the case to the Privy Council.


Arthur Meighen: And Manitoba paid the price for that agreement out of her own treasury.


Andrew Ross McMaster: As the poet says:
Two souls with but a single thought,
Two hearts that beat as one.


Robert Forke: The hon. member from
Brome is waxing poetic. In 1918, under the War Measures Act, the railway commission
was given authority to disregard the Crowsnest pass agreement. In 1919, statutory authority was given to the railway commission to abrogate the agreement until July, 1922. In 1922, as most of us are aware, a special committee was appointed by this House to inquire into the whole matter of transportation costs. I happened to be a member of that committee, and I remember a good deal about the proceedings that took place at that time. I recall that President Beatty, President Hanna and other railway freight experts for the two different railways appeared before the committee and, I think, giving evidence upon oath, stated that if the Crowsnest pass rates came into effect on grain and flour, tremendous deficits would occur on their railways. If I remember correctly, President Beatty said that the loss on grain alone on the Canadian Pacific would be S14.000.000. and President Hanna said that the Canadian National Railways would lose $7,000,000. As a matter of fact, in the following year after the Crowsnest pass agreement had come into operation on those commodities the railways I think made more money than they had ever made before. Therefore, the lugubrious prophecies that these gentlemen made at that particular time were entirely wrong. They were many million dollars out. The final report on Crowsnest pass rates on grain and grain products was submitted to f his House. I am sorry to say that hon, members to my right opposed that report very strenuously and took exactly same stand as they take to-day. They do not move. They seem just to stay put all the time. Therefore, I am afraid we are not- going to get from them very much support along the lines that I would advocate this afternoon.


Arthur Meighen: If we were inconsistent,
we might be taken for Progressives.


Robert Forke: I would point out to the
leader of the opposition that the greatest men we read about in history have been men who have advanced with the times. I would refer to the Right Hon. William Gladstone who commenced his career as an extreme Tory and who died almost a Radical. No one to-day will find any fault with his career. There is hope for the leader of the opposition even yet. The hon. member for West York (Sir Henry Drayton) moved an amendment at that time. I will read it just to prove how exactly and solidly they stand in just the same position as they did at that time. It reads:
1. That while the Board of Railway Commissioners remains as it is now a tribunal constituted by parliament to fix railway rates without discrimination and m
4326	COMMONS
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accordance with changing conditions and to meet the needs of the countrj' as a whole, it should be left free to perform such duty without dictation from this House and subject only to review by the Governor m Council as in the Railway Act provided.
I do not think I will read all the amendment that was moved by the hon. member at that time.


Mr. SPEAKMAN:: Read the last paragraph. It is interesting.


Arthur Meighen: Read it all. It is the
best part of the speech.


Mr. FORKE (Reading):: 2.	That large and general reductions of freight rates particularly on basic commodities are not only obviously demanded in the national interest but are admitted by all concerned to be possible and to have been possible for several months and action to that ena by the railway commission has only awaited the decision of the government and of parliament as regards the Crowsnest pass agreement.
S.	That to enable the railway commission to carry v*ut its duty as defined above such board should be empowered to suspend the said agreement, such suspension to be followed immediately by submission to the Governor in Council of a new schedule of rates as reduced by the commission, the suspension to be revocable if such schedule is not approved by the Governor in Council but otherwise to continue for one year within which time the will of parliament may be again expressed.
The final report submitted by that committee to tlie House was that the Crowsnest pass rate on grain and grain products should come into effect; that the rates on other articles mentioned in the Crowsnest pass agreement should be abrogated for one year, and that by order in council the government might suspend it for another year.


George Perry Graham: I want to correct an error that I entertained myself until a few days ago. The Crowsnest pass agreement does not speak of grain and grain products; it refers to grain and flour.


Robert Forke: I think I knew that, but I
thought I would repeat that phrase as often as I possibly could. It is a better phrase.


George Perry Graham: It was not in the act,
though.


Robert Forke: That condition of affairs remained until July 6 of last year when the Crowsnest pass agreement came again into full force. It is needless for me to take up any of the time of the committee in discussing what has happened since then. We know that immediately after it came into operation we had railway rate discrimination.
I am not very much concerned so far as that goes as to what happens to the bill that is before the House at the present time. I feel prefectly satisfied that in any case neither
[Mr. Forke.J
the government nor the railways could allow this matter of discrimination to continue. I have an idea that it was rather clever strategy on the part of the railways just to bring about the condition of affairs that now exists by putting that into effect, and I do not think that discrimination can or will continue, no matter what happens to the legislation that is now before the House. We>
had the decision of the railway commission that, instead of remedying the discrimination, wiped the agreement off the slate altogether. My hon. friends to the right say that we should have complete faith in the railway commission. That sort of thing did not tend to give us very _ great faith in at least some of their decisions. Then we had the decision of the Supreme court, and again we have the Crowsnest pass rates put into effect with the discrimination that has been spoken about this afternoon. Finally we now have the amendment which is before the House.
Why is the west anxious for statutory maximum rates? The hon. member for Vancouver Centre (Mr. Stevens), in his very eloquent speech this afternoon, wonders why the west want any particular legislation in regard to railway rates. The western prairie provinces occupy a postion that cannot be parallelled anywhere else in the civilized world at the present time in regard to agricultural conditions. We have in those three western pro-vinees a great agricultural empire and yet we are in the centre of a continent far removed from the seaports where the products of those prairies must find an outlet. Consequently, they demand more serious attention than any other particular section of the country in regard to transportation costs. Transportation is vital to the prairie provinces. With rates that are unprofitable, rates that are too high to permit the carriage of agricultural products, it means bankruptcy for those provinces. Why are we anxious to have some maximum rates fixed? In the first place, it has been pointed out that the east has competition by lake and river to the sea, whereas in the west no such condition exists. British Columbia, which I am sure ' has many strong advocates in this House, enjoys ocean communication; it is a maritime province with seaports right at hand. British Columbia therefore is in many respects in a different position from the prairie provinces. The west wants maximum rates fixed, and fixed by an agreement, simply for the purpose of protecting itself from any exorbitant railway rates that it may be called upon to pay at any time. It is all very well to say, why not trust the railway commission? Well, certain things

C.N.R.-Branch Lines
have been promised us by solemn compact and we wish those things fulfilled; certain conditions exist which we want to see continue for our protection. For twenty-seven years we have had a certain agreement and now we are asked to give it up and trust to something else which we are told may prove as satisfactory. We are asked to trust to the railway commission, which would already have entirely wiped out this agreement if it had had the power to do so.
The commission is supposed to fix rates adequate to ensure reasonable dividends. Perhaps that is the first consideration with the railway commission-the fixing of rates to provide adequate dividends to the railways. But there is another point of view which one may take with regard to railway rates, that is, reasonable rates as between the railways and the communities served. That, I take it, should be the proper function of the railway commission. We feel a little uncertainty in giving up something sure which we already have for something else the nature of which we cannot conceive; and consequently I am inclined to stand solidly behind our agreement until we know exactly what we shall get. Maximum rates may occasion some trouble for the railways; but there is a great deal of trouble in this world anyway, and nobody gets a smooth path to travel all the way. . The present amendment to the Crowsnest rates is to apply to grain and flour, while the rest of commodities are to go by the board. And what do we get in return? I think the Minister of Railways (Mr. Graham) said some time ago that the railways had made no request for the abro-. gation of the Crowsnest pass agreement. But I think they did in one way, because, if I remember rightly, when they appeared before the transportation committee they made certain propositions in lieu of the Crowsnest agreement. I have them here, taken from Hansard, and I think they are correct. The railways were prepared at that time to make certain reductions in lieu of the Crowsnest pass agreement. There was to be a twenty per cent reduction on grain rates, two-thirds of the way to the Crow rates, when ten per cent would have brought it to the level of those rates. There was to be a reduction of 16.66 on forest products and ten to twenty per cent per ton on coal, so that the average on building material and other basic commodities would have been about 18.3 per cent. And a complete suspension of the agreement was urged, in order that all other matters might be left to the railway board. I am inclined- to think that the railway companies in 1922 were making as good an offer
as we are getting to-day; they were proposing almost as low rates on grain, and a large reduction on a good many other commodities. If therefore we had accepted their proposition in 1922 we should be in about as good a position to-day as we are in if we accept the bill now before the House.


Arthur Meighen: Better.


Robert Forke: Well, there would not be much difference.


George Perry Graham: Were they to be statutory?


Robert Forke: No. Now, there is a great deal of difference between a promise made before a committee and an agreement which is embodied in a statute; and speaking for myself, as I am sure I am speaking for the other members representing the prairie provinces, I may tell the committee that we shall not be content with any mere promise. What we want and what we intend to fight for is some statutory fixing of maximum rates; in fact, we want the Crowsnest pass rates on basic commodities.


Leon Johnson Ladner: The hon. member has intimated his approval of the idea that the same Crowsnest rates provided for in this legislation should also exist for grain going westward. Would he support an amendment to the bill to the effect that there shall be the same maximum rates westward as eastward?


Robert Forke: I do not see much objection to the proposal, but I am rather afraid to agree to very much change in the Crowsnest agreement for the simple reason that this might give the government some opportunity to say that as we were changing the thing anyway we might as well go a little further. However, the hon. member makes the suggestion and without thinking it over seriously at the moment I think I would be prepared to support an amendment to that effect if he would support what I ask for.


Henry Lumley Drayton: Would the hon. member support an amendment extending the provisions of the act to the farm produce of Ontario?


Robert Forke: I want to see some of these amendments before committing myself. I think the government has chosen a very opportune time to introduce this piece of legislation. The elections have just concluded in Saskatchewan and they are looming up in Nova Scotia; and I notice that the Minister of Railways has been making some very nice suggestions to the Maritime provinces.


George Perry Graham: It is a great part of the
country.
432S
C.N.R.-Branch Lines


Robert Forke: I have a warm place in my heart for the Maritime provinces and I know something of their difficulties; I trust they will get the just treatment they deserve. It occurred to me, however, that this was rather an opportune moment for the government to bring this matter up. I have here an extract taken from the Manitoba Free Press. It is a report of a meeting that took place at Regina and I think it adequately expresses some of the ideas I have regarding the bill now before the House. It states:
1.	That maximum statutory freight rates should be fixed on grain and flour not exceeding the rates on these commodities set under the Crowsnest pass agreement and that such rates should be applicable to the whole of Manitoba, Saskatchewan and Alberta.
I put emphasis on the next paragraph:
2.	That proper equalization of freight rates throughout Canada is impossible without statutory provisions for maximum rates in those parts of Canada in which freight rates are. not controlled by competitive water transportation rates-the principle which is recognized and admitted in connection with grain and flour in the pioposed legislation.
I would point out that fact, Mr. Chairman, that the government recognizes the principle of maximum rates in regard to grain and flour. Then why lose sight of it altogether upon other commodities that are very important to the prairie provinces?
3.	That the Board of Railway Commissioners for Canada should be instructed to equalize rates on grain and flour outward bound from points in Manitoba, Saskatchewan and Alberta, in any direction, with those obtaining under the provisions of the Crowsnest pass agreement.
I hope my friend from British Columbia is paying attention-I am afraid he has left the House.


John Arthur Clark: What is my hon. friend
reading from?


Robert Forke: An extract from the Manitoba Free Press of provisions that were promulgated by a committee in the city of Regina, composed of representatives of the governments of the three prairie provinces.
4.	That the Board of Railway Commissioners for Canada should be constituted as a truly national body with more equal representation from all parts of Canada m order that there may be proper understanding by the commission of the rate problems of the whole country.
That is "the western bill of rights on freight rates," Mr. Chairman.
At six o'clock the Speaker resumed the chair and the House took recess.
After Recess
The House resumed at eight o'clock.



PRIVATE BILLS


[Stage Direction]
Bill	No.	164,	for	the	relief	of	Walter
Thomas Pratchett.-Mr. Church.
Bill	No.	173,	for	the	relief	of	Samuel
James Connor.-Mr. Church.
Bill	No.	175,	for	the	relief	of	Andrew
Toulouse.-Mir. Church.
Bill No. 176, for the relief of Albert Plue Jessop.-Mr. Duff.
Bill No. 177, for the relief of Cecil Hunter. -Mr. Maclean (York).
Bill No. 174, to change the name of "The Dominion Woman's	Christian	Temperance
Union" to "Canadian Woman's Christian Temperance Union."-Mr. Raymond.

[Stage Direction]
Bill No. 186, for the relief of Frederick Etheibert Shibley.-Mr. German.
Bill No. 188, for the relief of Alfred Per-cival Selby.-Mr. Clifford.
Bill No. 189, for the relief of Charles Thomas Bolton.-Mr. Duff.
Bill No. 190, for the relief of Ada Durward. -Mr. Clifford.
Bill No. 191, for the relief of Edward James Hogan.-Mr. Hanna.
Bill No. 192, for the relief of Roger Alexander McGill.-Mr. Bowen.
Bill No. 193, for the relief of John Perron. -Mr. McKay.
Bill No. 194, for the relief of William Albert Everingham.-Mr. Bowen..
Bill No. 195, for the relief of Mary Ella Mackey.-Mr. Ryckman.
Bill No. 196, for the relief of Melvin Grant Cowie.

Mr. Garfand (Carleton).


[Stage Direction]
The House resumed consideration in committee of Bill 181 to amend the Railway Act, 1919, Mr. Gordon in the chair.
Robert Forke: Continuing the remarks I
made before six o'clock, I would like to say that in seeking the advantages we do under the Crowsnest pass agreement the west does not desire any favours at the expense of any other part of Canada. Nor are we animated in any way by a feeling of hostility to the railway companies. I think every one of us recognizes the fact that the railways and the people are inseparably bound together as far

Railway Freight Rates
as the prosperity of our country is-concerned. So that when we seek to have maximum rates fixed by statute it is not with any idea of being hostile to the railway companies. The west, if it should prosper and develop as it ought to do, will in a few years produce a vast amount of freight both outgoing and incoming. Rightly or wrongly we believe that the solution of our railway problems lies very largely in the development of western Canada. There is no hostility towards, and no desire on our part bo belittle, any other section or province in the Dominion, but we believe that in the west there is boundless room for expansion, room for a very large increase in population, with the result that the volume of freight both outgoing and incoming will be enormously increased. Consequently the prosperity of the west is indeed vital to this Dominion. Furthermore, it seems to me that this question of transportation rates is so vital that unless a proper solution is arrived at it will mean that the people out there will enjoy but a bare existence, or a degree of prosperity much less than they would under more favourable conditions. If the railways could show by any process of bookkeeping that the west was enjojdng a cheaper rate than is enjoyed in eastern Canada, I think we would be quite amenable to reason and would be willing that our rates should be raised. On the other hand, we conscientiously believe that the west is paying its full share of rates at the present time, and that no other part of Canada is being sacrificed at the expense of the prairie provinces through the Crowsnest pass rates being put into operation.


John Arthur Clark: Does the hon. member
suggest that British Columbia has not been sacrificed by the Crowsnest pass agreement?


Robert Forke: I would not agree to that
proposition. At the same time I do not think we are showing any hostility to British Columbia or any other portion of Canada.


John Arthur Clark: Do not misunderstand me.
I was asking whether the hon. member thought that some injustice had not been done to British Columbia as a result of the Crowsnest pass agreement and the schedule of rates proposed in this bill.


Robert Forke: I hardly think so. I am
not very sure, but when the Crowsnest rates agreement came into operation in the western provinces, did the freight rates not come down in British Columbia at the same time?


Henry Herbert Stevens: No.


Robert Forke: I thought they did.


John Arthur Clark: They came down some time after.


Robert Forke: I cannot enter into an argument on that point. But as I stated, we were quite willing that all freight from the western provinces should have the benefit of the Crowsnest pass agreement.
Another thing we must keep in mind, no matter what difficulties British Columbia may labour under, is that she is a maritime province, has ports on the seashore and derives benefits therefrom which we do not enjoy in the prairie provinces at the present time. We hope that the time is not far distant when we shall have a port to the north of us in the prairie provinces, which will help to reduce freights. I might also mention another fact in connection with the prairie provinces. They are not in the least selLcontained. They ship out and ship in. Westbound freight is very important to the prairie provinces for the simple reason that they are not manufacturing to any extent. Most of the goods they require are transported over a thousand miles, so that it is easily seen that westbound freight is very important to the prairie provinces. Perhaps the day is not as far distant as some of us might suppose when the prairie provinces will be to some extent more self-contained than they are at the present time, but it is vital to them that they should get the best rates possible both east and west, and it is perfectly natural, and only just and right, that when we have the agreement, something that has been bought and paid for, we should get the benefit of it, and we are loth to see a law placed upon the statutes of the Dominion that will abrogate any privileges we have enjoyed during the past twenty-seven years.
A good many people in our Dominion, I am afraid, wrongly conclude that they have to pay for the concessions which have been granted under the Crowsnest pass agreement. I do not admit for one moment that the west has not all the time been paying for the privileges which it enjoyed by having railway communication. That there have been deficits on the railway we all know, and we are all anxious that these deficits should be wiped out just as soon as possible, but I can see no future for our railways unless we have a very large expansion in our western provinces. That does not mean that we cannot have expansion in every province of the Dominion, but the conditions and the situation are different in the west, and it is most likely that the expansion will occur in the west in the not distant future.
Railway Freight Rates

The Prime Minister made a trip through the western provinces last year and gave some very glowing accounts as to what the government had done in regard to the Crows-nest pass agreement. I am going to read one or two quotations from speeches he made at that time. Speaking at Winnipeg he said:
Having stated that measures for the advantage of western Canada would also be of advantage to eastern Canada-
I want to call attention to that statement.
Premier King said the administration had restored the Crowsnest pass agreement after a careful inquiry by a committee of the House of Commons, and it was now in force as in the old days of the Liberal administration. "The question of discrimination is now before the railway commission," he said. "It would be improper while the matter is sub judice for me to discuss that question or express an opinion one way or another; but I believe that the system which has been adopted of having railway matters referred to a railway commission independent altogether of parliament, acting as fair-minded, honest and straightforward judges, will be found the most effective and most satisfactory manner of dealing with all questions of importance that arise."
Speaking at Saskatoon on October 7, the Prime Minister said:
When I spoke in Northumberland a few weeks ago, I defined policies and I defined them in the manner I will in western Canada. I intend to say the same thing in western Canada that I told them in eastern Canada. I haven't one message for the west and one for the east. I have one message for all Canada. I told the east that we were carrying out our promises made before election. The Crowsnest agreement was made by Sir Wilfrid Laurier and we were carrying out his policies. That was the statement I made in eastern Canada. It is the statement of our position in western Canada.
Again at Edmonton on October 11, the Prime Minister said:
On taking office he had sought to carry out the policies of Sir Wilfrid Laurier and hoped that we would obtain representation in the west that would enable him to follow out those policies to their conclusion. He reminded the gathering that it was under Liberal auspices that the Canadian Northern railway which served Vegreviille had been built, and also that it was an early Liberal administration which had established the Crowsnest pass agreement; and the present administration which had restored it after it had been suspended by the Tories.
Now, Mr. Chairman, I believe the Prime Minister was quite sincere, and I almost think that in his heart to-day he would like to see those promises fulfilled.


Edward Mortimer Macdonald: Does the
hon. member realize that the decision of the Supreme Court of Canada rendered some few months ago changes the whole situation with regard to the Crowsnest pass agreement?


Robert Forke: I understand the situation
thoroughly, and I understand the decision that has been given by the Supreme court since the Prime Minister made those state-

ments. But I am perfectly sure that parliament has the same power to-day as it always has had to remove any discrimination, and that in fact it could have removed that discrimination when it took place at the very time the Crowsnest pass agreement came into effect. The idea at that time was to wait until the decision of the railway commission in regard to discrimination was given. We had some dispute with the railway commission. Instead of removing the discrimination, the commission abrogated the Crowsnest pass agreement altogether. I am not blaming the government, but at the same time I know they could have removed the discrimination if they had so desired. I am sure the Prime Minister would like to see those promises fulfilled, and to let us have the Crowsnest pass agreement, or a quid pro quo in western Canada. Conditions have perhaps changed to some extent since 1867, but I want to repeat that the west will not be satisfied unless they have a maximum rate fixed for westbound traffic, just as it has been fixed for eastbound traffic. This is our Magna Charta. We are situated in the centre of the continent, and while hon. gentlemen claim they have tremendous faith in the railway commission, that commission is only human and we do not know what it might do. With respect to other parts of Canada, it would be a serious matter if they had to pay the maximum rates, but in the case of the prairie provinces it would not only be serious, but it would mean bankruptcy to the people of the west. Transportation through the western provinces is of more consequence than it is in any other part of the Dominion of Canada. That is the reason why we feel so strongly on this subject and are so anxious to see that the prairie provinces get a square deal in this matter.
In conclusion, I repeat that I have no thought of hostility towards any part of Canada. I know something about the troubles and difficulties of the Maritime provinces. I am sure we have the warmest feelings towards the people down there and we wish to see them prosperous and happy. The same is true with regard to British Columbia and the far west. We have the warmest feelings towards the people in that part of the country. We want to work hand in hand with every section of this Dominion in order to make it a happy and prosperous country.


Leon Johnson Ladner: This question is of paramount importance to British Columbia. For nearly twenty years the governments, both Conservative and Liberal, have been fighting for fair treatment in regard to freight rates. The commencement of this contest was dur-

Railway Freight Rates
ing the premiership of Sir Richard McBride. To-day that province faces, perhaps, a more delicate situation than it has ever done in the past. The industrial, commercial, shipping and agricultural future of British Columbia stand in the balance. If the scales of justice and fair play weigh out equitable treatment on this important question, our future is assured and our province will prosper. This legislation is rather late in being brought down. I do not know of any question more important to the people of Canada than that of freight rates. It has been under the consideration of parliament for the last three years or more. Evidence in great detail and from men best qualified to give it has been taken before a special committee; hearings have been had before the Board of Railway Commissioners; reports on previous occasions have been made to the House; legislation has been brought down, and at this juncture, on the eve of an election, the government brings forward a policy which is capable of being interpreted as being calculated to remedy the ills or grievances of every particular section of the country. The order in council is of a very general nature. The legislation, however, is specific on one point, and that point seriously and vitally affects the province from which I come. The legislation states in clear terms that maximum rates on grain and flour moving eastward are fixed according to the Crowsnest pass agreement, but the Crowsnest pass agreement, which was limited formerly to certain areas or districts, is now made applicable to both railway systems, and in order that the government may be more specific in its intention, notice has been given by the Minister of Railways and Canals (Mr. GraJham) that an amendment will be made making it very clear and precise that the advantage o-f comparatively low rates on grain and flour shall not be given to British Columbia.
In my opinion, that is politically an affront to the people of my province. They have carried on the fight for many years. The merits of the case cannot be and never have been denied. It seems to me that the whole point involved in this discussion, so far as British Columbia is concerned, is this: On what principle or basis of reasoning does the government grant a special right and privilege for grain moving eastward to a certain market and deny that same right and privilege for grain moving westward to the same market, the government having spent many millions of dollars on grain elevators and port development in the city of Vancouver? Has the government an answer to that question? I won-277
der if there is even a plausible excuse. I wonder if there is any excuse at all, beyond the plain, patent fact that it is an act of political expediency on the eve of an election in order to gain the support of the middle west provinces. I do not think I am overstating the case in putting it in that way. We, in the activities of the House, are well aware of the suggestions and manoeuvring backward and forwards which for many years have gone on in connection with the Crowsnest pass agreement, the rates of which, so far as they affect British Columbia, were simply iniquitous. No one will deny that. Now, when it is seriously the intention of the government to tackle this great question, one that goes to the root of our economic body, of every activity which we have, industrial, commercial and otherwise, instead of taking hold of it in a statesmanlike manner in the interest of the whole nation and giving to an expert body who understand the problem and the complications of the matter, authority to determine the question from one end to the other, they give the Board of Railway Commissioners authority to determine the question on everything but grain and flour moving eastward. I am not saying that the middle provinces have reason to be displeased with the measure of success which they have obtained. The point which I wish to make and which I would ask the minister to answer now if he can, is this: On what basis of reason, policy or fair play, does he determine a course of legislation which fixes definite maximum rates on grain moving eastward to a certain market 'but denies them on grain moving westward to the same market?


George Perry Graham: I have answered it at
least four times this afternoon. The fact is that the Crowsnest pass agreement is allowed to remain on the statute book as regards grain and flour. The Crowsnest pass agreement never affected British Columbia, and there is no clause in the bill or in the amendment which has any reference to British Columbia or that will in any way affect the decision of the Board of Railway Commissioners adversely to British Columbia.


Leon Johnson Ladner: I think the minister's explanation is a very weak one.


George Perry Graham: That is the hon. member's opinion, of course.


Leon Johnson Ladner: There are two features
of his explanation. One is that the Crowsnest pass agreement does not affect British Columbia. The Crowsnest pass agreement vitally affects British Columbia, because since the

Railway Freight Rates

agreement was made, we have had the Panama canal opened giving a new outlet for grain leaving this country and a new route for goods to come in from Europe and certain portions of eastern Canada. The minister has entirely forgotten that the whole situation in regard to the shipment of grain from the prairie provinces has been changed. As to the other point that the Crowsnest pass agreement is allowed to remain on the statute book, what the government are really doing is to allow the two items of grain and flour to remain there.


George Perry Graham: That is what I said.


Leon Johnson Ladner: They are cancelling eleven other articles of far-reaching effect. Having put the pruning knife on the tree, why not prune it properly and make it look decent and fair? If they are going to change the Crowsnest pass agreement, as they must do in order to cancel the eleven other articles, they might just as well, in order to be consistent and carry the policy of fairplay to the'other portions of the country affected, make a little addition and say that this rate will apply, not only to grain and flour moving eastward, but to grain and flour moving westward. The minister is quibbling on the matter. This does not go to the root of the problem. I repeat that laying down a policy on a matter of such overwhelming importance to the country, definitely fixing the rate on grain moving in one direction to a given market, and specifically and intentionally denying it to grain moving westward to the same market, is not only inconsistent; it is farcical. It is pure political expediency and nothing else in view of an expected election this fall. In making these remarks I do not wish to cast any reflection on the Progressive members to my left. They have felt themselves under an injustice in the matter of freight rates and they have fought for the interests of their section of the country; and the government has been weak enough to yield to this sectional demand without proper regard to other portions of Canada.


Milton Neil Campbell: I hope the hon. member does not imply that members in this section are not as much interested in securing lower rates on grain and flour to Vancouver as are members from British Columbia.


Leon Johnson Ladner: Not a bit. I quite understand that hon. members to my left are in accord with us in the view that the rates should extend to westbound grain, inasmuch as the commodity goes to the same markets and is produced by the same people. So far as

British Columbia is concerned, when the order in council appeared it was published in a local newspaper there which had taken a very active and aggressive part in the freight rates question. A report was published spreading right across the paper and a great deal of credit was given to the government on account of the fact, as alleged in the report, that a new era had dawned for Bri:ish Columbia. On that same day, the 6th of June, editorials appeared in both the leading Vancouver newspapers, and for the information of the committee as well as the members of the government I should like to read one or two short extracts from these articles. The Vancouver Province in its leading editorial of that date says:
"Equitable treatment" is the thing British Columbia [DOT] has been fighting for. We have never asked for more. We shall not be content with less. And there is very good reason to believe that with the practically free hand now given the railway commission, we shall achieve our end. Practically since its establishment, the railway commission has devoted itself to the ironing out of unjust discrimination, wherever found, and there are many precedents in its past decisions. The limitation of its powers under the Crowsnest Act brought it to a full stop. Now, it can get under way again.
Further on the editorial has this to say, which I would commend to the attention of the minister:
Two things British Columbia has been seeking in her freight rates fight: an equitable rate on grain, westbound, which will enable us to reach farther into the prairies for cargoes to fill our ships; and an equitable rate on other commodities moving from the Pacific coast eastward which will enable our manufacturers and wholesalers to get a fair share of the prairie business.
In the Morning Sun of June 9, three days afterwards, that newspaper reconsidered its position and editorially advised the government and the Prime Minister in these words:
In their order-in-council requesting the railway board to equalize freight rates, Premier Mackenzie King and his colleagues have shown a vague intent to do the west justice.
That vague intent is not good enough.
The order-in-council decrees that the Crowsnest maximum rate on eastbound grain shall not be exceeded. It would have been just as easy, instead of generalizing on equalization, to have said plainly and definitely that that maximum Crowsnest rate on grain should not be exceeded eastbound or westbound.
Nothing less than such a plain definite statement can actually bring British Columbia into the Canadian confederation.
Nothing less can give the people of British Columbia full Canadian citizenship.
The task of making British Golumbia a Canadian province or an alien province rests with Mackenzie King, not with the Railway Board.
There you have the views of two newspapers, one of no particular political complexion and the other frequently a supporter of the government. But I commend to the government the words of a gentleman welll informed on

Railway Freu/hl Rates
this question and on all its intricacies, an ardent supporter of the present administration, an aggressive, fighting leader of the Liberal party in British Columbia, Premier John Oliver. He has never been known to sympathize with anything that savoured particularly of Conservative policy, nor has he ever been known to support the Conservative cause in any way whatever. Let me read from a signed statement given by Mr. Oliver to the local newspapers, which statement I would urge the government to consider carefully. Mr. Oliver says:
I say, without any reservation, that under the pro. posed legislation the Board of Railway Commissioners may allow any discriminatory rate against the westbound movement of grain and flour, either for export or home consumption, and while I have no desire or intention to in any way reflect upon the honour of the Board of Railway Commissioners, or of any member thereof, yet I have in mind that the majority of the members of the board are the same men who authorized the discriminatory rates under which we have suffered so -long and so grievously.
I do not share Mr. Oliver's view if it reflects upon the Board of Railway Commissioners because I believe that the board is well qualified to handle the matter. He goes on:
Should they in the future authorize a discriminatory rate with the proposed legislation upon the statute book, it would be hopeless to appeal to the Supreme court as a matter of law, and I would have no confidence in appealing to a government which, in the face of the protests that have been made, would persist in placing legislation, as proposed, on the statute books.
This is a Liberal premier in British Columbia advising his Liberal friends in Ottawa. Mr. Oliver continues:
I ask >in all sincerity what justification can there possibly be for making such a statutory distinction between the same commodity moving over the same road, but in opposite directions.
We have had the explanation of the Minister of Railways and I intend to mark it and send it to Mr. Oliver for his further consideration. The importance of this matter is something of which the government cannot plead ignorance. Mr. Oliver in his evidence before the special committee on Railway Transportation Rates, on May 29, 1922, made the following statement:
I want to tell this committee that our industrial life in British Columbia is absolutely at stake in this issue before the committee at this moment.
By the chairman:
Q. On the Crowsnest pass agreement?-A. I take it, Mr. Chairman, that the Crowsnest agreement involves the whole rate structure and I will give you as my authority Mr. Beatty, who took that stand, and I will give you as that authority Mr. Hanna, who declared that the whole rate structure of the Crowsnest agreement if brought back is all shot to pieces.
In other words, when the government adopts this policy of taking grain and flour at a fixed 277i
maximum rate, it has practically settled the rates question and left little for the railway board to deal with. Mr. Oliver goes on to say at page 154 of the evidence:
Now, it will also have the effect of making it impossible for parliament to remedy the discrimination of which we are now complaining, and to give British Columbia the relief to which it is entitled. It will make that impossible except on one condition, and that is that the nation as a whole shall foot the bill for the deficiencies in revenue of the railways if the railways are forced, a3 Mr. Hanna intimated to the committee, to reduce the rates on other basic commodities in order to bring them on a parity with the rates under the Crowsnest pass agreement.
On June 27, 1924, a number of representatives appeared before the Governor in Council, and among the documents filed for consideration by the government there was a telegram from Mr. John Oliver addressed to the right hon. Prime Minister (Mr. Mackenzie King), dated June 25, 1924. In that telegram Mr. Oliver represents to his friends in Ottawa exactly what will happen if the government takes such a step as is now proposed in this legislation. He says:
The responsibility for the existing discriminations as well as those which will be added-
That is, this legislation.
-must lie with the government and parliament of Canada.
Then he continued:
We are not opposing the restoration of the Crowsnest pass rates, but we are asking the government and parliament of Canada to place British Columbia in an equitable position similar to that enjoyed by the people of other parts of the Dominion.
Now, Mr. Chairman, at this late stage of the session it is not my intention to discuss this question further. I do not expect that any words of mine will have the slightest effect in inducing the government to depart from the plans they have laid for the next general election, but I appeal to them-and in appealing to them I am placing the case before the very electors to whom they intend to appeal-I appeal to them to remember that this question is of too great and overwhelming importance to be allowed to be trifled with in an attempt to secure a political advantage, and I warn them that in fixing maximum rates on grain and flour they have, ipso facto, denied British Columbia the equitable treatment to which it is rightfully entitled. By taking that course this government will raise the rates on grain moving from the prairie provinces to British Columbia, thus handicapping the future of the port of Vancouver and jeopardizing an investment of millions of dollars in elevators and other equipment. According to the opinions already expressed of the Premier of British Columbia, the press, the Board of Trade of Vancouver
Railway Freight Rates

and the other public bodies interested, it is their judgment, as I interpret it after a careful investigation of the whole subject, that in such legislation as is proposed the government are taking a course that will prove disastrous to the best interests of British Columbia. It is unfair, it is unjust to the province, and the responsibility is upon the government. If the government cannot see their way clear to remedy this injustice, I hope the electors at the forthcoming general election will express their sense of disapproval in a manner which will fully vindicate what I have said this evening.


Mr. McCREA:: Mr. Chairman, the question of freight rates is one of the most important before this House and the country, especially in view of the fact that the government owns the greater part of the railway mileage of the country, and when the Canadian National Railway system does not earn sufficient to pay its bills the people are called upon to meet the deficit. I think it is well that we should know what part of the country's business is paying its way, whether that in the east, the west or the centre; and, furthermore, what part of the country is paying the greater proportion of the taxes. Consequently I shall take up some little time to explain my views.
The Crowsnest pass agreement, which we have heard so much about, was entered into in 1897 between the Canadian Pacific Railway Company on the one side and the government of Canada representing the people on the other side. Under that agreement it was provided that the rates-now known as the Crowsnest pass rates-should not exceed certain maxima. I presume it never entered into the minds of the parties to the agreement that conditions would ever change. At that time wages, materials, and other costs that enter into the operation of railways were very different to what they are to-day. That arrangement continued for many years, and the Canadian Pacific Railway and other roads kept their rates much below the maxima fixed thereunder. Ultimately during the war railway operating costs went so high that the Crowsnest pass agreement had to be suspended for a period of years. At the expiration of that period there was a clamour, especially from the west, for a reversion to the Crowsnest pass rates. Unfortunately the cost of railway operation at that time did not
9 p.m. justify the restoration of these rates. In 1922 this House appointed a committee to investigate the freight rate question, and that committee summoned before it not only all the railway magnates 
of Canada but also many from across the border. Mr. Beatty, of the Canadian Pacific Railway, usually acted as spokesman for the railways. He made several propositions, the final one being for a general reduction of 20 per cent in the rates on all basic commodities to all parts of Canada. That committee finally, by a small majority, passed a resolution recommending the acceptance of this proposition. But the western members rebelled and said they must have the Crowsnest pass rates regardless of what any other part of Canada might get. Naturally they might be expected to take this course, but I did not quite agree with the government's yielding to the demand The outcome has been that whilst, the prairie provinces have secured the restoration of the Crowsnest pass rates, which represent approximately a 35 per cent reduction in the freight rates on grain to the head of the lakes, the rest of Canada got a reduction of only 6 per cent in - the rates on basic commodities.


Milton Neil Campbell: I think the hon. gentleman desires to be fair. Therefore he might tell the House that this was only a partial equalization of the rates, that before it was put into effect the rates in western Canada were very much higher than the rates in eastern Canada.
Mr. MoCREA:	So far as I was able to
catch my hon. friend's question, I will show before I get through who is paying the taxes in Canada, and I think that will be a good barometer by which to judge who is paying too high rates and who is paying too low. Surely it was not the intention of the government, when they entered into that agreement in 1897, that one part of Canada should suffer for the benefit of another section, that one section of the country should have practically a 35 per cent reduction in freight rates on basic commodities, and the rest of Canada get only a 6 per cent reduction;-* and that applies not only to the government-owned railway but to the Canadian Pacific as well, because if the Canadian Pacific had made a similar reduction of 35 per cent all over Canada on basic commodities they would be in the bankruptcy court or pretty close to it to-day. If the Canadian Pacific are making money at all they are making it where they are getting paying rates.
There is a great deal of talk about that agreement, but there is one phase of it I have not heard mentioned in this House, and that is this:. The McAdoo award raised the rates of remuneration on the railways to a very high pitch, and not only the remuneration but also the classification of labour employed on the

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railways, and that sent the cost of operating a railway up out of all proportion to the rates on the commodities the railways carry. When the McAdoo arrangement which had been formulated and all worked out in Indianapolis, or somewhere else across the line, was proposed to Canada, the Canadian railways were simply advised that on such and such a date this schedule of wages and classification of labour would come into force. The railways of Canada at that time held a conference, at which the question was discussed from all angles, and they finally decided that, whether or not it was possible for the United States to accept this remuneration and classification of labour, so far as Canada was concerned it was absolutely impossible, and they notified the Canadian government that they would not accept the award. The government, of which my right hon. friend the leader of the opposition was a member, then passed an order in council ordering the Canadian railways to accept that schedule of wages and classification of labour. I wonder if it has ever entered the minds of the people of Canada that that action has placed the railways of Canada in practically an impossible position to give us the rates we should have? It tied them up to a remuneration and classification of labour that the present conditions of this country do not justify, and meant an increase in railway rates.
As I have said before in this House, there are three parties to this business: There is the producer. Whether he be a farmer, a lumberman, a miner, or whatever his calling may be, if he is producing goods, he is a producer. Then there are the transportation companies. No matter whether they operate by land or sea, the people who are engaged in carrying the products of this country from the sources of production to the sources of consumption are engaged in transportation. The third element is the distributor. It does not matter whether he is a wholesaler, a jobber or a peddler; he is selling goods, and therefore is a distributor. We have, then, these three classes, and if one of these classes gets more than their fair share, the other classes get less than their share. That is the situation in connection with the railways. The railway employees are getting more money than the business of the country can stand, and that has been brought about to a large extent by the railways, against their will and desire, being forced to accept a schedule of remuneration that was not possible for this country to pay. Whilst this schedule of wages might possibly be worked out in the United States, we must bear in mind that the
United States have a population of 437 for each mile of railway, whereas we have just a fraction over 200 people for each mile of railway. That means the United States railways have, or should have, double the passenger and freight traffic for each mile of railway that we have, and consequently they can stand a scale of wages and a classification of labour that we in Canada cannot stand. That is the reason, to my mind, why the government of this country should say to international labour, whether it is railway labour or any other kind:	We would be glad if
you would stay at home, run your business as you like, and we will attend to our business; we have no objection to our citizens organizing, if they wish, to carry on their work, but we absolutely refuse to allow international labour and international labour organizations across the border to come here and dictate terms to us; we are supplying the money; we are running this railway; we are running the whole country, and we propose to run our business in accordance with our ability to pay, and meet the conditions as we find them in Canada; we are not in a position to meet the conditions that exist across the line, especially in railway matters, where you have more than double the population per mile of railway that we have. I do not think, Mr. Chairman, I will talk much longer on that score. My system does not allow of talking too much.
I remember well, and I think everybody who was in the House at that time will also remember well, that when the late government was taking over the Canadian Northern and the Grand Trunk, one of the great fears we who then sat on the other side of the House had was that the operation of the government-owned railways might become a political football. We had fears that that might happen, and I hope we will bear that in mind now that we are on this side of the House. In dealing with this matter, I think it would be wisdom on the part of the government simply to pass the legislation necessary to, put the fixing of railway rates in the hands of the Board of Railway Commissioners. They are the people to deal with the fixing of rates, and if we have not got sufficient confidence in their ability to deal with this matter, in their knowledge and integrity, in their desire to deal squarely and honestly with all parts of the country and give everybody a square deal, then let us appoint somebody else to that commission that we have confidence in, and then place in their hands this question of the fixing of railway rates. The members of this House no matter how
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Mr. KENNEDY (Edmonton):: How much
of that do they pass on to the consumers in the rest of Canada?


Francis N. McCrea: I cannot hear the hon.
member. I am not disposed to be sarcastic or unreasonable, but my contention is that this country can be prosperous only when the people of the different parts of it make up their minds that they are willing to bear their full share of the responsibilities and the taxation of the Dominion and willing and ready to give the other parts fair play and justice. When we were offered by Mr. Beatty twenty per cent of a general reduction on all
basic commodities, and when that committee, which was hearing the evidence and which spent practically the whole session in gathering information, finally passed, by a small majority if you will, a motion that Mr. Beatty's proposition should be accepted, our friends from the west put up such a rebellion, threatening the government-and unfortunately they frightened them-that the outcome was that they got practically a thirty-five per cent reduction on grain and we who bear the great burden of the taxes got a reduction of six per cent. The west is entitled to all sympathy and justice, and for my part and, speaking so far as I know, for my province, we are inclined and disposed to be just, fair and reasonable, but the time has come when we shall have to have a, little more justice than the west is disposed to give us on freight rates.
In the particular case before the committee now, there is no reason why this whole matter of fixing freight rates should not be placed in the hands of competent men, selected by the government of this country to deal with railway questions and to fix just and fair rates for all parties. Until we get that, this granting a reduction of thirty-five per cent in one section of the country and a reduction of six per cent in our section when we are paying practically eighty per cent of the taxes, is unjust and unfair, and I trust the government will see to it that this injustice is remedied so that all parties will bear their fair share of the responsibilities and taxes. Let us have our share of both the good and the bad. This country of ours, properly governed, properly managed, is the garden of the earth in my judgment. But it will not do for any one element of this Dominion to think they are the chosen people and that they must have all the plums and the other people all the bills.


Joseph Tweed Shaw: There is probably no problem which comes before parliament which is more complicated in its character than (that involving a freight rate structure. When one considers the many varieties of rates alone, class rates, [commodity rates, transcontinental rates, export rates, one becomes somewhat bewildered. But when there is added to that such terms as constructive mileage, mountain differential and long and short hauls, one can readily understand that the problem is, generally speaking, beyond the judgment of an ordinary cosmopolitan parliament. But if 'the terminology of the subject were not sufficient in itself, a perusal of the bill would, I am sure, convince anyone that the subject is difficult
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of 1897 should be wiped out and the railway board left with a free hand to fix such rates as it may deem to be just and reasonable.
Now, I want to Suggest what seems to me to be fair and reasonable under all the circumstances. The only objection so far as I know to the minister's proposal is that the people of western Canada feel that they are being disarmed, that their only safeguard on westbound commodities is being taken away from them by this proposed legislation. I approve entirely of the minister's action with regard to the eastbound commodities. But with regard to westbound commodities, my suggestion is that there should be a suspension of that portion of the agreement for a period of, say, three years. I say that first of all because the railway commission in the intervening time will have an opportunity to work out this system of so-called equalization of freight rates. We have had rate equalization cases before; they have not always been . satisfactory. It is a high-sounding and pleasant term, but it really does not mean equal freight rates at all, because under the rate equalization cases, as the former chairman of the railway commission (Sir Henry Drayton) well knows, the rates in western Canada were from 15 to 20 per cent higher than those in eastern Canada. There were many other discriminations which I will not take the time to enumerate. So we do not really know what equalization of freight rates is going to result in under actual practice. The lapse of three years will give the railway commission an opportunity to evolve its system of rate equalization, and then we will know whether or not the freight rates imposed are fair and just to western Canada. If it is, if we are not called upon to bear more than our fair share, then we will gladly let the westbound section of the agreement be eliminated forever.


John Arthur Clark: What does the hon. gentleman mean by the westbound section of the agreement? In what way does the Crowsnest pass agreement affect westbound freight at all?


Joseph Tweed Shaw: There are some thirteen commodities mentioned in the agreement itself upon which a definite percentage of rate reductions on the then existing rates are effected.


John Arthur Clark: The hon. member is not referring to commodities westbound from the prairie provinces to the Pacific ocean?


Joseph Tweed Shaw: Oh no, that is an altogether different question. I think hon. gentlemen to my right are worrying unnecessarily about that problem.


John Arthur Clark: Does my hon. friend not
think there is anything in that problem; and if not, will he please give his reasons?


Joseph Tweed Shaw: I did not propose to discuss
that phase just at the moment. It is a problem different to that involved in the Crowsnest pass agreement. The British Columbia rates westbound from the prairie provinces constitute a subject upon which the railway commission, if I understand the bill correctly, will find themselves wholly untrammelled and unfettered in dealing with. The issue stands on its own feet. May I tell my hon. friend that his greatest anxiety should be to see that the Crowsnest pass agreement is maintained, because with lower rates under that agreement he is assured of lower rates westbound on grain and other commodities from the prairie provinces to the ports of British Columbia. Now, supposing the westbound section of this agreement were suspended for a. period of three years. At the expiration of that time the people in the prairie provinces would know exactly what rate equalization meant. If the rates were just and reasonable, if they were not higher than they should be called upon to bear, then I am sure, knowing the people of western Canada as I do, they would cheerfully undertake to bear their share of the burden and would gladly allow the westbound section of this agreement incorporated in the statute to be eliminated forever. On the other hand, if the rate equalization did not work out satisfactorily, then certainly the people of western Canada would not find themselves-as they otherwise would under the minister's bill-wholly disarmed and defenceless; they would have some instrument at least with which to meet the situation for an adjustment of their grievances.
There is another reason why I think we should make haste slowly in depriving western Canada permanently of this statutory safeguard, that is, in so far as it affects either eastbound or westbound commodities. What member in this House can visualize the rate situation five years hence? What member can visualize the rate situation even three years hence? I venture to say that perhaps

Railway Freight Rates
within a shorter period than five years, before the death of the next parliament, we will have a great railway amal-
10 p.m. gamation in this country-I hope under national auspices-and its significance will be reflected directly and immediately in our freight rates. So I say that in my judgment it is not wise to eliminate entirely the agreement in relation to westbound products. I would have no objection to its being suspended for a reasonable length of time. In that sense the railway commission would not be hampered at all; it would have a free and unfettered hand to fix westbound rates on Crow commodities and all other commodities. The people of eastern Canada would not be prejudiced and, equally important, the people of western Canada would not find themselves hampered in the future by releasing such rights as they now have under the westbound section of this agreement. That, Mr. Chairman, is the suggestion which I have to offer, and I trust that it may meet with some measure of approval.
With regard to the question raised so far as British Columbia is concerned, I realize that British Columbia has its problem, but I want to tell hon. gentlemen from British Columbia that when they speak about rate discriminations, if they want to find where the maximum of rate discriminations exists, where the grossest injustices so far as freight rates are concerned exist, they must necessarily betake themselves to the province of Alberta.


Thomas Wakem Caldwell: To the Maritime provinces.


Henry Lumley Drayton: To Ontario.


Joseph Tweed Shaw: No, to the province of Alberta. British Columbia enjoys several freight rate rights and privileges which are denied to the neighbouring province of Alberta. There is, for instance,. the transcontinental rate, any advantage of which, of course, is denied to intervening points on the railway. There are, in addition, commodity rates, covering some 75 or 80 per cent of the commodities shipped eastbound from Vancouver. In addition to that, there are sections of construction mileage, not paying on the exact mileage, but on a reduced mileage. These are some of the advantages which British Columbia at present enjoys, and which are largely, if not wholly, denied to the neighbouring province of Alberta. I do think that this problem is a very serious and a very difficult one. It may mean the life or death of more than one province, and I think we should go carefully before we
take away from the prairie provinces the rights which they acquired many years ago and to which they have zealously adhered during all the intervening years.


Edward Mortimer Macdonald: I would like to congratulate my hon. friend from West Cailgary (iMr. Shaw) on the very fair way in which he 'has stated his case. He has shown a grip of a very abstruse subject, and has approached the situation with a very clear mind I do not know that I can congratulate him altogether upon the solution which he proposes, but he is to be commended for the very fair statement of the case which he has made.
Mr. Chairman, it became absolutely and imperatively necessary for this government -to come to tlhis House with legislation of this character at this session. We have already heard from some hon. gentlemen as to some phases of the situation which was created as a result of the decision of the Supreme Court of Canada some few months ago. The whole freight rate structure of the country, and -the whole business interests of the -country, were disarranged -by the construction which the Supreme -court put upon what is known as the Crowsneet pass -agreement, when It decided that its operation so far as rates were -concerned1 was -confined to those points in the east which were in existence in 1897, and to those points in the west which were in existence at the same period. Anomalies of so serious a nature arose in .consequence that I venture to say there was not a representative in this House, from- Ontario, at -least, who did not receive representations from the business men of his -constituency in regard to those anomalies. I need not go over them in. .detail, but some of them -are so striking that I should like to caltl the attention -of the House to one or two, to show the -practical nature of the problem that is involved here,, -n-ot merely from the standpoint of our western friends, but from -the standpoint as well of the business people in eastern Canada.
Take, for instance, furniture, which is on-e of thirteen items coming under the westbound rates in the Crowsmest agreement. Furniture is manufactured in- a great many cities and t-owns through -the whole of eastern Canada. Of t'he Ontario towns engaged in. its manufacture there are, from Cornwall west, twenty which do not enjoy the reduced rates, namely, Southampton, Menf-ord, iStrathroy, Kincardine, Tavistock. Kitchener, Waterloo, Neus-tadt, Ouellph, Hanover, Elmira, Hepworth, HespeleT, Lucknow, Stratford, New Hamburg, Orilll-ia, Cobourg, Cornwall. Napanee. Toronto is one of -the ipoin-ts which does enjoy these
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reduced rates, and compare for a moment the rate that Toronto enjoys on furniture with the rate received by these twenty towns I have mentioned. On furniture shipments to Regina Toronto has a rate of $1.27i per one hundred pounds, whereas the twenty towns named pay S1.851 per one hundred pounds. There were thus under the Crowsnest pass agreement as it exists to-day these enormous discriminations against the business interests of Ontario and Quebec as well, because, forsooth, these industries are in towns to which the Canadian' Pacific did not reach in 1897. Just imagine the position which the business men in these towns in Ontario and Quebec are in, when the rate that is enjoyed by Toronto on an article that is manufactured ini .the east to be sold in the west is from 50 to 60 per cent lower than the rate enjoyed by the business men in these other towns. How can business be carried on under these conditions?
Take, again the situation in the west. Under the 'interpretation which the Supreme court put upon the Crowsnest pass agreement, it is applicable only to 35 per cent of the towns in the northwest covered by the Canadian Pacific railway. Sixty-five per cent of the towns in the northwest covered by the Canadian Pacific ito-diay, if it were not for some such legislation as we are proposing here, would not have the right to send their grain down to Fort William at the low rate that is given under the Crowsnest pass agreement. When hon. gentlemen speak of there being any discrimination against the west in this legislation, I fear they forget that very important fact. It does seem anomalous to me that hon. gentlemen who have studied this question should not realize the very singular position in which the country' would be left, particularly Saskatchewan. Alberta and Manitoba, with the Crowsnest rates applicable only to a very small proportion of the territory which is covered by the railway.
The rates ion the commodities in question have heretofore been regulated and controlled by the board so as to establish a relative basis throughout the whole iprairie territory. Since July 7th, however, and this is the situation perpetuated by the decision of the Supreme court, the Crowsnest rates have applied to Fort William and points east thereof to points on the line .of the Canadian Pacific railway as in existence in 1897, while to oil other territory the higher rate level established since 1897 still governs. This means that approximately 35 per cent of the western lines of the Canadian Pacific have Crowsnest rates, and the balance, or 65 per cent of the mileage, .pays higher rates. If it were not for this

legislation we propose, do hon. gentlemen who come from those western provinces seriously suggest that 65 per cent of the country should be discriminated against by the perpetuation of the rates as they are to-day?
I could take up other items that enjioy the Crowsnest rates-paint, for instance. Paint is manufactured from Windsor, Ontario, to Montreal, and two of the most important centres of its manufacture are Sarnia and Hamilton. Hamilton enjoys a rate on paint of $1.09 per one hundred pounds to Regina, while from Sarnia the rate is $1.55 per one hundred pounds. In each and every one of these 13 classes of articles contained in the agreement we find discriminations existing today, and they would be perpetuated unless we proposed legislation oif this character.


Robert Alexander Hoey: When, the Crowsnest pass
agreement wais restored in full in July last year, was it .the opinion of the administration 'then that it would apply to all lines?


Edward Mortimer Macdonald: It does not miake much difference what the opinion of the administration was. The decision had been taken by the Supreme Court of Canada.
IMr. FQRKE: Would not a Slight amendment to the Railway Act have removed all the discrimination?
.Mr. MACDONALD (Pietou): How?


Robert Forke: By providing that no special agreement would be taken into account under that clause forbidding discrimination.


Edward Mortimer Macdonald: * My hon. friends opposite in attempting to deal with this question of freight rates remind me of an experience I once had when I was at the bar and retained to appear before the railway commission. on a question of that character. It is the most abstruse problem that could be given to any individual, whether a public man or a member of the legal profession, to deal with. I apprehend from my knowledge of the matter that in order to get rid of this difficulty which unquestionably exists, the railway commission will have to go through all these schedules and deal with the rates from every particular place according to the mileage. It never could be settled in the easy offhand way that my hon. friend suggests. Here was the situation. The Supreme Court of Canada had given this decision. The railways had intimated that it was their intention to appeal. Leave to appeal was granted by the Privy Council to Manitoba in connection with the agreement with the Canadian Northern, it being intimated, however,

Railvxiy Freight Rates
in granting that leave, that their lordships anticipated legislation might be passed before the question that hadl come before them was determined. Well, supposing nothing was done? There we would have litigation still pending in regard to these two important matters which would probably take another year to decide. In the meantime the business community of this country would be in a perfect turmoil. No one would) know how to deal with his competitors, and this discrimination of a most anomalous character, both east and west, would exist.


Donald Ferdinand Kellner: Where will you be if the Privy Council sustains the Manitoba agreement?


Edward Mortimer Macdonald: The Privy Council will not sustain the Manitoba agreement because parliament will have removed it, I believe, before that court will have heard the argument.


George Perry Graham: There will not be any
argument.


Edward Mortimer Macdonald: All the points in nothern Manitoba, northern Saskatchewan and northern Alberta where there were no Canadian Pacific railway lines existing in 1897, and which would have to pay higher than the Crowsnest pass rates, will be benefited by this legislation. And let me tell hon. gentleman that when this matter came to be considered by the government we had counsel from British Columbia, counsel from the cities of Edmonton and Saskatoon, and counsel from the Maritime provinces, all pointing out the anomalous situation that existed. Counsel from Edmonton and Saskatoon urged that these were two points which, if the present situation was to be perpetuated, would be debarred from the Crowsnest pass rates.


George Gibson Coote: Could not the discrimination have been easily removed by a slight amendment to the Railway Act stating that no discrimination should be allowed whether caused by special agreement or otherwise?


Edward Mortimer Macdonald: I like my
hon. friend's easy way of dealing with this abstruse question of freight rates. I am bound to say I do not think it could be done that way. I am only pointing out for the information of the House where the real situation exists when this parliament comes to deal with freight rates. My hon. friend from West Calgary (Mr. Shaw) put the situation very well. It is true that these matters refer peculiarly to the Canadian Pacific Railway; but here are these two railways in the western country, and practically whatever rate
is fixed by the Canadian Pacific will be fixed by the Canadian National as well. Therefore unless we have a proper rate structure in this countiy so that this railway, which belongs to the people of Canada, may have its rates dealt with on fair lines with due regard to its operating necessities, as well as the necessities of the business interests of the country, the problem will become so intricate and the danger in connection with it will become so great, that I am sure hon. gentlemen on reflection will agree that the matter is one that requires to be dealt with. My hon. friend from West Calgary-and I am perhaps only restating at a little greater length the point he made-agrees with me to that extent. The only thing he says is, "Let us have suspension." Now, suppose legislation w'as passed suspending the operation of the rates which will come into existence in consequence of the Supreme court's decision, what rates are going to apply in the meantime? Where are we going to find the rates to take their place in the meantime?


Joseph Tweed Shaw: The railway commission could provide for that as they did in October last year.


Edward Mortimer Macdonald: I am not so sure about their doing it so easily; they would have to go into the matter and investigate it very thoroughly. In any event hon. gentlemen in the House who do not admire I he railway commission would be entrusting to that body at once the power to deal with the whole problem. These other raites would be suspended and the matter would rest entirely in the hands of the railway commission without the situation being cleaned up in any way.


Robert Alexander Hoey: That would have to be done in any case.


Edward Mortimer Macdonald: I must say that I am exceedingly surprised that my hon. friends from the west should not have been behind the government in the strongest possible way in this legislation because we are dealing with conditions, not theories, as my hon. friend and colleague (Mr. Graham) said this afternoon. This is the only way, in my opinion, in which this matter can be settled in the interests of the whole of Canada as well as of the west.


William Charles Good: The minister stated that the doing away with discrimination, as has been suggested by the hon. member for Macleod (Mr. Coote), would be very difficult in his judgment. How much more difficult would it be than the method prescribed or embodied in the bill? What is the difference?
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Edward Mortimer Macdonald: The policy embodied in the bill is very frank. It entrusts to the railway commission the task of equalizing the rates having regard for the business interests of the country as a whole, and the only limitation that will interfere with their full and absolute power to deal with the whole question is the preservation of the rates on grain and flour.


William Charles Good: The minister makes out that this bill provides for the doing away with discrimination in a very easy manner, and when the other suggestion is made he says it is very difficult. I do not see the difficulty.


Edward Mortimer Macdonald: Not at all. My hon. friend has misapprehended me. I did not say anything of the kind, or if I did such was not my intention. I did not intend to say anything that would indicate that the solution of the government involved any other proposition than that the railway eom-mission>
should] deal with this matter on broad and equitable lines, and that is the only solution you can get. My hon.. friend from Madeod (Mr. Coote) would have to go to the railway commission in the one case just the same as we propose to go to the railway commission in this case, having regard to all the rights and interests affected.


William Charles Good: It is just as easy to do so in the one case as in the other.


Edward Mortimer Macdonald: I am not saying that the task is an easy one. I pointed out to my hon. friend that he would have to go to the railway commission and that body would have to deal with these rates generally.
Now. it has been suggested, there are only three ways to deal with this question. First, to leave the Crowsnest pass agreement as it has been interpreted by the Supreme court. Secondly, to wipe it out altogether, do away with the rates on grain and flour, and commit the whole .proposition, absolutely untrammelled in every way to the railway commission to be dealt with. The third course is the course we adopt, and which we submit with confidence to the House, believing for the reasons stated in the order in council, of which I do not need to repeat or to amplify, that it is in the public interests of Canada as a whole that our grain and flour products should be guaranteed a maximum rate so that those engaged in those industries should know at all times what the rate was to be.


George Gibson Coote: In the paragraph in the order in council dealing with that they say:
The committee are further of the opinion that as the production and export of grain and flour forms one of the chief assets of the Dominion and in order to encourage the further development of the grain growing provinces of the west, on which the development of the future of Canada in large measure depends, it is absolutely desirable-
And these are the words I wi^h to direct the minister's attention to.
-ihat the maximum cost of the transportation of these products should be determined and known, and therefore are of the opinion that the maximum established for rates on grain and flour as at present in force under the Crowsnest pass agreement should not be exceeded.
Will the minister tell me if it is the intention, as I think he has suggested, that these are to be the maximum rates on grain and flour for all time; that is in our present life-time? Why are these words put in, that the maximum cost of the transportation of those products should be determined and known?


Edward Mortimer Macdonald: That means exactly what it says. Does the hon. gentleman not think it is a desirable thing for those who have grain and flour to export to know what is the limit they can be charged for transporting their produce? That is all it means. We know that for a number of years down to 1918 a lower rate than the Crowsnest rate obtained, and it might come in again. But as a result of this bill if it passes into law, until it is repealed, the producer and shipper of grain and flour will know that this is the maximum rate which can be charged.


John Arthur Clark: Will the minister tell me whether grain and flour lose their peculiar characteristics as such when they travel westward to the Pacific coast?


Edward Mortimer Macdonald: No, if my hon. friend will only have faith in the railway commission and in their desire to deal fairly and equitably with all parts of the country, I do not think he will have cause to complain very much about rates. Trade has increased up to 50 millions of bushels for export in that country, and I think my hon. friend can rely on the railway commission dealing with that portion of the country equitably and fairly.


Thomas Wakem Caldwell: Why should the people of British Columbia and of the Maritime provinces be asked to have more faith in the railway commission than any other part of Canada?

Railway Freight Rates


Edward Mortimer Macdonald: Because in this particular case one portion of Canada has had the advantage of an agreement made in regard to rates which has been on the statute book since 1897, and unfortunately neither British Columbia nor the Maritime provinces have had that advantage.


Arthur Meighen: What reason is that?


Edward Mortimer Macdonald: The reason
is that when parliament comes to legislate you have to legislate in the light of the statutes in the one case, and in the other case you have not.


Thomas Wakem Caldwell: Is that not an added reason why the rest of Canada should have a chance at the special privilege for a while?


Edward Mortimer Macdonald: My hon.
friend had better discuss that question with some of his colleagues on his left. It is not necessary to go into it at the moment. I would like to say a word or two with reference to the argument of my genial and clever friend from Vancouver Centre (Mr. Stevens) and also his colleague from that city (Mr. Ladner). My hon. friend from Vancouver Centre was very clear in his views this afternoon that the Crowsnest pass agreement should be abolished, and that there should be supreme control in the railway commission. Those were the two important planks of his platform. My hon. friend seemed to be quite unnecessarily disturbed over the amendment which my hon. colleague proposed to make to subsection 6 on the last page of the bill. He seemed to urge the view that the bill as it stood when originally introduced gave some particular rights to British Columbia, and to be also of the opinion that because the minister proposed to amend that section by adding the words "within the territory" some rights of British Columbia were being taken away. It was certainly a wonderful flight of imagination, to put it kindly, for my hon. friend to entertain any such idea as that British Columbia rates were affected one way or the other, either by the section or the amendment.


Leon Johnson Ladner: Why were the words
added?


Edward Mortimer Macdonald: I do not
know whether my hon. friend has ever drawn statutes. He has drawn legal documents, and sometimes he has put in a word or two extra in order to make clear what the actual intent of the party was.


Leon Johnson Ladner: To make what clear?


Edward Mortimer Macdonald: To make
clear the intent of the parties drawing the bill.


Leon Johnson Ladner: What was the intention?


Edward Mortimer Macdonald: In the first place, my hon. friend would not venture to argue seriously before any court that there is a single word in subsection 6 as originally in the bill that affected British Columbia one way or the other-not within a hundred miles.


Arthur Meighen: Then what part off the bill does affect British Columbia?


Edward Mortimer Macdonald: iNo part.


Arthur Meighen: What does the Minister of Public Works say to that?


Mr. KING (Kootenay):: I will tell my
hon. friend later.


Edward Mortimer Macdonald: Let us see what the subsection says. It reads:
The board shall not excuse any charge of unjust discrimination, whether practised against shippers, consignees, or localities, or of undue or unreasonable preference, respecting rates on grain and flour-
Now were these eastern rates or western rates on grain and flour? I think it is very clear they were eastern rates and eastern rates only, because it goes on to say:
-governed by the provisions of chapter five of the statutes of Canada, 1897, and by the agreement made or entered into pursuant thereto, in the immediately preceding subsection referred to-
That is the Crowsnest .pass agreement made in pursuance of the statute.
-on the ground that such discrimination or preference *s justified or required by the said act or by the agreement made or entered into pursuant thereto.
Where by any stretch of the imagination could you torture that language into anything affecting westbound rates?


Arthur Meighen: Under the clause as the minister interprets it, would or would not the railway commission be bound to give equal rates on flour westward from Portage la Prairie to Medicine Hat as prevailed on flour from Medicine Hat to Portage la Prairie, giving 'those places by way of illustration?


Edward Mortimer Macdonald: iNo, you
would not be dealing with any western rates in this section, because the rates proposed to be dealt with are those governed by the provisions of chapter five of the statutes of Canada, 1897, and that does not refer to western rates, but rates coming east to Port Wiliam and the purpose of the subsection is to deal with the powers of the board and how they are to exercise them in reference to rates on grain and flour eastbound which are preserved under the terms of this bill.
4M6
Railway Freight Rates

Mr. ME'IGHEN: The miimster says that by virtue of that clause referring to discrimination the board would niot be bound to make the rates on flour from Portage la Prairie to Medicine H'at equal to the Crowisnest rates from Medicine Hat to Portage la Prairie.


Edward Mortimer Macdonald: The board would exercise discretion when, the ap,plication came before them.
Mr. MEIlGHDN: Does the minister say they would not be bound?


Edward Mortimer Macdonald: 
John Arthur Clark: Then what >possible ground could British Columbia advance to secure the same rates westward that are in force under this statute eastward?


Edward Mortimer Macdonald: I understand the province of British Columbia asserts that they have a very good 'case for a reduction in freight rates, that by virtue of .the gradients over the Canadian National the cost af haulage of products west to Vancouver has been materially reduced, and I hiave heard counsel make that argument more than once before the Privy Council.


John Arthur Clark: Is it the intention to leave it to British Columbia to find out whether they have a case, and if they -have to present it?


Edward Mortimer Macdonald: I will come in a moment or two to the policy of the government with regard to that, but I want to set at rest clearly if I possibly can the absurdity of the contention that by reason of anything contained in subsection 6 of this bill, or the amendment proposed thereto, .the rights of British Columbia were to be prejudiced in the Slightest degree whatever.


William F. Carroll: Would the Board of Railway Commissioners not take into consideration the general provisions of the act in dealing with British Columbia with reference to fair and equitable rates? Would they not then take into consideration the general rates coming east on grain and flour when considering British Columbia?


Edward Mortimer Macdonald: I am unable to say what the methods and policy of the Board of Railway Commissioners are in dealing with such matters.


William F. Carroll: But they must deal equitably under the Railway Act.


Edward Mortimer Macdonald: Quite so.
The leader of the Progressive party (Mr. Forke), in dealing with some of these matters this afternoon, read from a resolution that was passed at a conference that took place at Regina. It will be noticed that the hon. member for West Calgary (Mr. Shaw) agrees with all the situation as we have put it and only suggests as an alternative remedy the suspension of rates. Then my hon. friend adopted the suggestion made at Regina:
That proper equalisation of freight rates throughout Canada is impossible without statutory provisions for maximum rates in those parts of Canada in which freight rates are not controlled by competitive water transportation rates.
Other than that suggestion, together with one that the composition of the railway board might be changed, no suggestion has so far come forth of a constructive character by which anyone could gather that any better solution or one more worthy of consideration than that proposed by the government might be dealt with. It is agreed by everybody on reflection, no matter what arguments may be made in other places, that this parliament is not the proper body to deal with freight rates in particular.


Robert Forke: Would the minister read the next clause, No. 2?


Edward Mortimer Macdonald: I was reading No. 2. No. 1 states that maximum statutory freight rates should be fixed on grain and flour, and No. 2 is the one that proposes that there should be statutory provision for maximum rates in those districts where there is no competition by water. Is that what my hon. friend refers to?


Robert Forke: Westbound rates.


Edward Mortimer Macdonald: 
Leon Johnson Ladner: As my hon. friend has commended the policy of his government to extend the territory from thirty-five per cent to one hundred per cent under the Crowsnest pass agreement, why should the extension not continue to the west? On what principle do they differentiate? On what fair treatment can they possibly defend their action?


Edward Mortimer Macdonald: I do not
know whether my hon. friend is a student of railway freight rates or not, but many questions enter into this matter of freight rate decisions as regards British Columbia. The question is not merely one of grain going ' west. There are the commodity rates which people in British Columbia enjoy on east-bound traffic. All these problems are committed to the railway commission which he and his friends say is the proper body to deal with them. I am coming to that point in a moment. To follow up the suggestion of the hon. member for Brandon, no matter how extreme our views may be having regard to particular localities, we must realize that, in the last analysis, there must be some body composed of experts to deal with the matter of rate-fixing and all the problems connected therewith if results are to be obtained. How could a committee of this House, for instance, discuss the rate structure of this country and find out what would be equitable? Hence it is that, once this question of grain and flour was dealt with, the government proposed, and we propose now by our order in council, to submit to the railway commission the matter of dealing with rate-fixing in a most equitable way having regard to the situation throughout the country. The order in council states:
The committee therefore advise that the board be directed to make a thorough investigation of the rate structures of railways and railway companies subject to the jurisdiction of parliament with a view to the eslablishment of a fair and reasonable rate structure, which will, under substantially similar circumstances and conditions, be equal in its application to all persons and localities, so as to permit of the freest possible interchange of commodities between the various provinces and territories of the Dominion and the expansion of its trade, both foreign and domestic, having due regard to the needs of its agricultural and other basic industries, and in particular to:
(a)	The claim, asserted on behalf of the Maritime provinces that they are entitled to the restoration of the Tate basis which they enjoyed prior to 1919;
(b)	The encouragement of the movement of traffic through Canadian ports;
(c)	The increased traffic westward and eastward through Pacific coast ports owing to the expansion of trade with the Orient and to the transportation of products through the Panama canal.
What we have done, referring to our British Columbia friends, is this. We have asked the railway commission to approach the solution of this question on the broadest possible basis in order to attain the purposes which are set out in this order in council. We ask them particularly to take into consideration the traffic eastward and westward through Pacific coast ports owing to the expansion of trade in that part of Canada. Among the changed conditions that have taken place in this country has been the wonderful development of trade in British Columbia as a result of the opening of the Panama canal. It has been a marvellous change which has slipped into the business life of this country quietly, and yet it has created conditions of the greatest possible advantage and holding out the certainty of development in western Canada through that part which is contiguous to the Pacific coast by reason of this new method of water transportation that has been developed. There is also the trade with the Orient and the great consumption of grain and other products that has developed in Japan and China. All these constitute a new business situation that did not exist in 1897, that hardly existed ten years ago.; This is a development of the last four or five years. These are special matters which are submitted to the railway commission and which they must have regard to when they come to deal with the question of the equalization of rates.
There is also the situation that has existed in the Maritime provinces and to which my hon. colleague has referred this afternoon. That is a situation which is hardly appreciated by this House. From 1877 down to 1919, for a period of forty-two years, what was known as the Intercolonial railway with various extensions constituted the only publicly-owned and operated railway in Canada, with the exception of the addition which was made later on when the Transcontinental was built to Winnipeg. But the operation of the Intercolonial was carried on under terms and conditions which caused the people of the Maritime provinces to rely upon the federal government to see to it that their interests were properly protected. In the British North America Act the construction of that railway is specially provided for, and no public work is provided for in that act other than that railway. In the pre-confederation conferences which ied up to the formation of the Dominion the construction of that railway was recognized as an absolute condition upon the Maritime provinces gtoing into confederation. There

Railway Freight Rates

would have been no Canada at all had it not been for the assurance given in that respect. And after that railway was constructed it was operated for a period of forty-two years by the federal government in accordance with what the people in that part of Canada understood to be the confederation agreement. It was operated not primarily with a view to making money, although the railway paid its way all through that period; some years there was a substantial surplus while in other years there was a small deficit. As a result of that method of operation of the Intercolonial railway we were able to obtain access to central Canada with a great many of our natural products; and, mark you, the manufacturers of central Canada were able to come down into our markets by virtue of the conditions under which the railway was operated. Under these circumstances there was an enormous exchange of products between the two sections of the Dominion, and as a matter of fact the Maritime provinces are still a great factor in the business of the manufacturers of central Canada. Hon. gentlemen speak about certain rates having existed under the Crowsnest agreement from 1897 to 1919, a period of twenty-two years. Well, this charter of our existence as part of the Dominion of Canada has been m existence almost twice as long, for some forty-two years. Now the government asks the railway commission, when it comes to deal with the whole question of freight rates, to consider the claim made by our people in the Maritime provinces to the right to have maintained the rate basis which they enjoyed prior to 1919.


William Charles Good: Under what obligation is the railway commission to follow these recommendations?


Edward Mortimer Macdonald: The obligation that any reasonable court or commission would recognize having regard to the interests involved and the purpose which the government wishes to see attained, namely, a fair adjustment of the rate structure throughout the country.


Robert Alexander Hoey: Had the railway commission the control formerly of the rates on the Intercolonial?


Edward Mortimer Macdonald: No.


Robert Alexander Hoey: Who fixed those rates?


Edward Mortimer Macdonald: Previous to 1919 the Intercolonial railway was operated by the Department of Railways, and throughout that period of forty-two years the rates were fixed by the minister and his officials.

Were it not for the organization of the Canadian National Railway system and the subsequent incorporation of the Intercolonial railway into this vast railway system, with the transfer of control and authority from the Department of Railways to the president of the Canadian National organization, the people of the Maritime provinces would now be in the same position as they held before in the matter of railway transportation. And this vast body, which is costing the country so much money, having brought about the present situation, which our people claim has wrought a great injury to their interests, the government has asked the railway commission to investigate the facts in regard to the abrogation of the rate basis which obtained previous to 1919 and to take that circumstance into consideration in laying down what we hope will be a rate adjustment satisfactory to the whole country. Such an adjustment, we anticipate, will remove the incubus which now weighs down upon business in Canada as a result of the difficulty brought about in connection with the Crowsnest pass agreement as respects westbound freight; and we hope that it will go far towards restoring proper business conditions in the matter of transportation, so that business men east and west alike may look forward with some degree of confidence to reasonable prosperity in the conduct of their affairs.


Mr. SUTHERLAND:: The minister made reference to the agreement entered into with the Maritime provinces at the time of confederation in regard to the building of the Intercolonial railway. Has the revenue of the railways in the Atlantic region been equal to the cost of operation?


Edward Mortimer Macdonald: Yes, all
through those years.


Donald Sutherland: I am referring particularly to the past year, 1924.


Edward Mortimer Macdonald: I could not tell my hon. friend. lit must be remembered that the Intercolonial railway has been to a certain extent dismembered, so that what is known as the Atlantic region does not .constitute the whole of that railway as formerly operated. There is no particular advantage to be gained in discussing the operations at present of the Atlantic division, because that is only one half of the Intercolonial railway. The Intercolonial railway ran from Sydney to Montreal, and involved in the cost of its operations was the cost of the Prince Edward Island railway, which had no relation to the Intercolonial.

Railway Freight Rates


Donald Sutherland: The Minister of
Railways has submitted figures showing that the gross revenue in the Atlantic region during the past year was $20,721,000 odd, while the operating expenses amounted to $24,266,000, on' a deficit iof $3,545,000. The country therefore has not profited from the operation of the railways in the Atlantic region.


Edward Mortimer Macdonald: My hon.
friend has forgotten the statement I made, that for ten years previous to 1919-I think I am well within the mark in this regard-that railway did not cost the country a cent.


John Arthur Clark: The Minister of Railways in presenting this bill has stated that there are three courses open to parliament. In .the first place, (parliament may repeal the Crowsnest pass agreement or secondly, it may allow the agreement to stand in its present fonm. And there is a third or middle .course suggested, such as that taken here. The minister further stated that if the agreement were allowed to remain in full force and effect it would mean that similar rates would have to be given toy the railway commission to- all pants of Canada, or at 'least to the entire west, oni all the commodities mentioned in the agreement. On that .point I emphatically disagree with" the minister, and I think I can Show him that he is in error in submitting that view to the House. In. my opinion the Crowsnest agreement is in full force and effect to-day; but its force and effect is limited to those points which were on the Canadian Faoific Railway in 1897. As the minister has said, the agreement is an impossibility. It is an impossibility if the view he presents is correct, and it is equally an impossibility if my own view is accepted. We are agreed that the Crowsnest agreement is impossible in its present form; but I disagree emphatically with the minister when he states that the railway board would be bound, if the agreement were left as it is now, to give similar rates throughout the country and that Ithe effect would be to wreck the railway companies. If the minister had read the decision of the Supreme court, and if the Minister of National Defence (Mir. Macdonald, Pictou) had read it, they would not have made the statements which they made this afternoon and evening in regard to this agreement. Let me read from the judgment of the Supreme Court of Canada as it appears in the printed pamphlet distributed to us. It states quite clearly that the points affected by the agreement are only those that were on the railway at- the time the agreement came into force.
278i
Therefore I say the board would not be bound to give similar rates throughout Canada, for this decision goes on to say:
When such maxima are fixed by special acts, they must be regarded as exceptions intentionally made by parliament from the application of its general policy against discrimination. .	. . Discrimination so authorized by parliament itself cannot be regarded as unjust or prohibitive.
In the face of that decision, how can the minister state to this House and the country that the railway commission would be bound to give similar rates to those authorized by the agreement on similar commodities throughout the country? As a matter of fact, the Crowsnest pass agreement under the decision of' the Supreme Court of Canada is dead, and should be buried. Why attempt to revive a dead horse? My hon. friends from the west may think that we in British Columbia have very different views on the subject of freight rates to those entertained by them. Not at all. In fact I think that members in this end of the House are in agreement on the point that the basic commodities of this country, more particularly wheat and flour, are entitled to very special . consideration, because obviously the west is an inland empire and must be given an. . outlet at reasonable freight rates (for its principal products. But there are different ways of doing it. In view of public opinion not only in the west but throughout Canada,
I think the railway board would have great difficulty in refusing to authorize rates that are distinctly favourable on wheat and flour.
I further think that the railway board would adjust the matter so that full justice would be done not only to Manitoba and the eastern portion of Saskatchewan, but also to the western portion of Saskatchewan and the whole of Alberta and British Columbia. There would not be any discrimination between grain flowing eastward and grain flowing westward. There would not be the discrimination which this government has seen fit to introduce between the ports of Vancouver and Buffalo and New York. For that is one of the effects of this proposed legislation. Buffalo and New York will reap the harvest flowing from the western provinces by reason of these favoured rates whereas Alberta and the western portion of Saskatchewan will be asked to pay nearly double these rates to get their grain out by Vancouver. That is the sort of discrimination which this government is guilty of in sponsoring this bill.
There is a second very important feature in this measure. Again I take issue with the Minister of Railways (Mr. Graham) and the Minister of National Defence (Mr. Mac-
Railway Freight Rates

donald). I regret very much that they are both out of their seats, because I believe they have misinterpreted the legal effect of subsection six of section three of this bill. To see the significance of this, we must look at the position of British Columbia and Alberta prior to the decision of the Supreme Court of Canada. Since the railway board was created British Columbia and Alberta have always had the right to come before it and present a case based on unjust discrimination caused by rates on grain and flour under the Crowsnest pass agreement. In other words, we could come to the railway board and say, "Because parliament has given these favoured rates on grain and flour under the Crowsnest pass agreement, you must grant the same rates to us westward, otherwise there is unjust discrimination." It is true that we have not succeeded in convincing the railway board, because of other arguments that have been advanced against us. But that right to allege unjust discrimination is taken away from Alberta and British Columbia by this legislation.


John Warwick King: Does my hon.
friend really make that statement seriously?


John Arthur Clark: I will prove it by decisions.
I quote from page 78 of volume 22 of Canadian Railway Cases, being the judgment of the chief commissioner of the Board of Railway Commissioners in re increase in passenger and freight tolls:
The Crowsnest pass agreement again does not call foi lower rates for the whole territory as now operated. The reductions apply merely to the then existing tariffs and, therefore, to operations of the company as carried on at the time that act was passed.
I am of the opinion that discrimination should be avoided and that the effect of the Crowsnest pass agreement must be extended to the system of the company as to-day operated.
Under present tariffs no distinction is made between stations in the territory covered by the company's tariffs in effect when the agreement was made and those upon its subsequent construction. The board, in my view, ought not to permit any such distinction to be now made. The Crowsnest pass agreement was considered by the late Chief Commissioner Killam in British Columbia Pacific Coast Cities v. Canadian Pacific Railway Company (Vancouver Interior Tolils Case) 7 Canadian Railways Cases 125. His judgment reads:-
As a result of this act and the agreement made under it, the company made tariffs of reduced rates upon the classes of merchandise referred to, not only from Fort William and points east thereof westward, but also from Winnipeg westward, without similarly reducing rates on the same classes of merchandise from Pacific points eastward. These reductions cannot be considered as having been forced upon the company, but were the result of an agreement which it chose to enter into for the purpose of obtaining a subsidy in aid of the construction of a line of railway. The agreement and the statute did not even deal with rates from Winnipeg at all. When the statute was passed, and when the agreement was made, the law prohibited unjust discrimination between localities, and while par-
CMr. Clark.]
liament did not stipulate for similar reductions over western portions of the company's railway, it should r.ot, in my opinion, be considered as having authorized what would, if done otherwise, have produced unjust discrimination. I think that we are justified in inferring that, in respect of the classes of merchandise to which these tariffs relate, the reductions did result in such discrimination, and that the rates from Vancouver eastward upon similar traffic carried under similar circumstances should be proportionately reduced.


Mr. McMURRAY:: Whose judgment is
that?


John Arthur Clark: That principle I am referring to was enunciated by the late Chief Commissioner Killam in the early days of the railway board and was followed repeatedly by the Board of Railway Commissioners, and if I am not mistaken, was also enunciated in the most recent case under the Crowsnest pass agreement by the present Board of Railway Commissioners. I refer to the Dominion Law Reports, volume IV, page 657, in which Commissioner Boyce re-enunciates that principle in a few words:
It is to be observed that the additional subsection did not in any way alter or impair any jurisdiction the board otherwise had to disregard agreements resulting in unjust discrimination in rates. The board had decided that it had such a jurisdiction and had exercised it in a definite and pronounced manner.
Then he cites various cases in which the Board of Railway Commissioners had recognized that British Columbia could advance effectively the plea of unjust discrimination resulting from the Crowsnest pass agreement. Now that plea has been effectively taken away by this legislation. British Columbia and Alberta and Saskatchewan can no longer come before the railway board and argue that they are entitled to more favoured rates than they are now getting because of unjust discrimination caused by this legislation. The Minister of Public Works asks me if I argue that seriously. The reason for it is contained in the judgment of the Supreme Court of Canada recently delivered, in these words:
When such maxima are fixed by special acts they must be regarded as exceptions intentionally made by parliament from the application of its general policy against discrimination. Discrimination so authorized by parliament itself cannot be regarded as unjust or prohibited.
That means this: The Supreme Court of Canada has repealed the legal effect of these various decisions given by the Board of Railway Commissioners over many years past, and now under the judgment of the Supreme Court of Canada, British Columbia, Alberta and Saskatchewan can no longer go to the Board of Railway Commissioners and allege unjust discrimination as a ground for equalization of freight rates, or for giving us the same basis of rates, or anything approaching the

Railway Freight Rates
same basis of rates as are given by the Crows-nest pass agreement to the prairie provinces on grain and flour going east.
At first sight I thought that subsection 6 of this bill was designed to put us back in the same position at least that we were in before the Supreme Court of Canada rendered its decision. I thought that the government had at least recognized the justice of giving Alberta and British Columbia the right to allege unjust discrimination as a ground for securing more favoured rates. But not so. Both the Minister of Railways and the Minister of National Defence have declared to-day that there is no such intention, that there is nothing in this act that gives any right to British Columbia. Therefore, as I say, our right to allege unjust discrimination as a ground for remedial action by the Board of Railway Commissioners is taken away if this legislation passes in its present form. It legalizes the discrimination.
Now let us look for a few moments at some of the clauses contained in this order in council. At page 5, paragraph 3, I find this:
The committee observe that the agreement in question was made at a time when the Canadian Pacific Railway Company was the only company having a through line of railway extending through the prairie provinces and British Columbia, and before the creation of the board for the control of railway rates under the provisions of the Railway Act of 1903 and subsequent acts; and further, that the underlying purpose of the race control inaugurated by the Railway Act of 1903 was to do away as far as possible with all unjust discriminations and undue .preferences, and to secure a fair and reasonable rate structure, which, under substantially similar circumstances and conditions would be equal in its application to all persons and localities.
JuSt fancy the government introducing legislation of this character based on such a declaration, legislation which, in the declaration of the Minister of Railways and the Minister of National Defence, expressly authorizes this discrimination against British Columbia.


Edward Mortimer Macdonald: Does my hon. friend mean to say that I Stated that this legislation expressly authorized discrimination against British Columbia? I said nothing of the kind. I said it does not affect British Columbia one way or the other, not within a hundred miles of it.


John Arthur Clark: I regret the Minister of National Defence was not in when I was explaining my reasons for saying that the rights of British Columbia had been taken away by this legislation. The Minister of National Defence saidi that British Columbia's rights are not affected one way or the other by this legislation. I say the Minister of National Defence is wrong, and I intend, if
necessary, to take up a few .more moments of the House in reiterating my argument if the minister will give me his ear.
I have already made it quite clear, and I have given the authority proving without a shadow of doubt that before the judgment of the Supreme Court of Canada was given, British Columbia had a right to come before the Boardl of Railway Commissioners and argue unjust discrimination as a ground for an alteration in their freight schedules in regard to wheat and flour. I say that, because of this section, they no longer have the right to allege unjust discrimination as a ground for any change in the rates on grain and flour from Alberta westward, or from Saskatchewan or any other province westward. The Minister of Railways unfortunately was not here either, and I once more reiterate the expression of the Supreme Court of Canada to prove that statement:
When such maxima are fixed by special acts they must be regarded as exceptions intentionally made by parliament from the application of its general policy against discrimination. Discrimination so authorized by parliament itself cannot be regarded as unjust or prohibited.
Now before that decision was rendered, the Board of Railway Commissioners, under the authorities I have cited, always recognized the right of British Columbia to come in and allege unjust discrimination as a ground for more favoured freight rates. That decision of the Supreme Court of Canada is not altered or affected by the legislation the minister introduces to-day. I say that that decision stands in full force and effect, that these favoured rates are authorized by special act passed by this parliament, and that no longer because of that decision can British Columbia come before the Board of Railway Commissioners and argue unjust discrimination as a ground for more favoured freight rates.


Edward James McMurray: Supposing the Crows-nest agreement stood, would not the board be obliged to follow the law laid down by the Supreme court? Would they not be precisely in the same position?


John Arthur Clark: I would be quite happy to see this government allow the law to stand as it is now 'because the Crowsnest pass agreement is dead. The only thing that remains to be done is for this country to bury it. The Crowsnest pass agreement, as a result of the judgment off the Supreme court, is, on the Minister of Railway's own admission, inoperative, is an impossibility, and I fully agree with the minister in his cooclusion.
Railway Freight Rates

Mir. MoMURRAY: I understood my hon. friend was arguing that under the .old Orows-nest pass agreement he woulid be in a better position than under the proposed legislation.


John Arthur Clark: Yes, that is quite correct.
Mr. MicMURRAY: If the old Crowsnest pass agreement were left would not the Board of Railway Commissioners be bound to follow the law that was laid down- there and to make a discrimination as the Supreme count has ruled?


John Arthur Clark: Yes, but fortunately for
British Columbia the Supreme court recognized the injustice (to this country by an extension of the Crowsnest pass agreement beyond the points that were on the Canadian Pacific Railway at the (time ithe agreement came into effect. Consequently I am satisfied with the Supreme court's decision because it kills the agreement. I say the only thing that is left to be done is to bury it. This government has failed to do the one .thing it should have done 

an opportunity presented to them that was umparallelied since it came into office in dealing with this question and an opportunity lost. All it had to do was to repeal the agreement and turn the whole thing over to the Board of Railway Commissioners. Now, why did not the government leave this question to the Board of Railway Oom.miseioners for settlement? Was the government afraid that the board would find itself prohibited by the principles of common fairness from doing such a wanton injustice to the provinces of British Columbia and Alberta? The government by laying down the principles enunciated; by this legislation has made itself a party to the grossest discrimination possible; and has thereby invited the Board of Railway Commissioners to proceed in their investigation upon the same inequitable principles that they themselves have adopted in laying down this legislation for the guidance of the board. Let us look at one or two other clauses oif the order-in-ioounlcil. I quote as follows:
The committee are of the opinion that the policy of equalization of freight rates should be recognized to the fullest possible extent as being the only means of dealing equitably with all parts of Canada, and as being the method best calculated to facilitate the interchange of commodities between the various portions of the Dominion, as well as the encouragement of industry and agriculture and the development of export trade.
Does the government suggest there is anything new in .that? Why is that in this onder-in-couimcil ? Once more I refer to a decision, this time by the late Chief Commissioner Mabee, in his judgment in the Crowsnest Pass Coal Company versus the Canadian
{Mr. Clark.]
Pacific Railway Company, 8, Canadian Railway Cases, page 41. He says:
The Railway Act requires that under substantially s.milar conditions the tolls charged shall be equal to all persons, and at the same rate, whether by weight, mileage or otherwise, and any reduction or advance either directly or indirectly is expressly prohibited. No ur.due or unreasonable preference or advantage can be permitted to any person or company. The object of the legislation is to place every one upon terms of absolute equality, and if agreements were permitted to be entered into for reduction in tolls or for other preferential treatment, the door would be opened wide for the defeat of the Act, and the Board would be called upon to struggle with all sorts of conditions, opinions, and complications in the determination of such cases.
Now here we have the board placed by legislation of this pairl Lament in. that very position. The government declare in an orderdn-icouncii for equalization, and then they fix rates by statute upon .certain specific articles. They legislate for rates on certain Specific articles in spite of the fact that the opinion of the board is that if tlhalt sort of thing is done .they will be -called upon "to struggle with'aid sorts of conditions, opinions, and complications in the determination of such questions".
Let me now quote further from the order in council:
The committee are further of the opinion that as the production and export of grain and flour forms one of the chief assets of the Dominion, and in order to encourage the further development of the great graingrowing provinces of the west, on which development the future of Canada in large measure depends, it is desirable that the maximum cost of the transportation of these products should be determined and known, and therefore are of opinion that the maximum established for rates on grain and flour, as at present in force under the Crowsnest pass agreement, should not be exceeded.
If it is desirable that these rates should be determined and known, why put them in the act for one portion of the country and not for the other? Does grain or does flour lose its peculiar characteristics simply because it is travelling west? Does it become something else? The minister of course said "Oh, we are only dealing with the Crowsnest pass agreement." But the Crowsnest pass agreement being dead-indisputably dead on his own admission-and unworkable in every sense of the word, does he suggest in the face of that that there is any greater right to any particular point in the country to have special rates on grain and flour going east rather than that there should foe the same rates going east and west? Is there any special reason? If there is I fail to see it; and I advance this reason for the consideration of the minister, as well as for the consideration of the Minister of Public Works who is from British Columbia and I know is vitally interested in the subject. In 1911 the electors

Railway Freight Rates
of British Columbia endorsed a guarantee by the province of the bonds of the Canadian Northern Railway. The people of that province incurred a liability of something like $36,000,000 to build the Canadian Northern through the province of British Columbia. They accomplished a feat, a feat that has not been accomplished by any other people on the continent of North America. They built a line with the lowest gradients of any mountain railway on this continent by their own efforts, and they stood behind the enterprise with their credit. Which of these people to-day is entitled to the most favourable consideration? I am not arguing that we should get more favourable consideration than anybody else; we do not want it, we want a fair deal, that is all. But comparing ourselves with those who are interested in grain going east who is in the stronger position? What did the people of the northwest do to entitle them to the favoured rates given by the Crowsnest pass agreement? Who supplied the $3,500,000? Did British Columbia supply its share of that, or was it supplied by the three prairie provinces? The argument is unanswerable. The main portion of it was supplied by the people here in Ontario and Quebec, but we in British Columbia supplied our share. What is there in the Crowsnest pass agreement that gives any portion of Canada an inalienable right to the rates laid down to-day? Why is British Columbia not just as much entitled to favoured rates over the line that it stood behind, the line that it promoted, for which it pledged its credit to build as the prairies provinces, or one section of the people on the prairie provinces for their grain going east? I should not lay so much stress on the people of the prairie provinces, because it is in the interests equally of the ports in the east, the ports of Buffalo and New York, to have the grain going east. The interests of the prairie provinces, particularly the western portions of Saskatchewan and Alberta, are identical with those of British Columbia. They need a favoured or an equitable rate on grain and flour to the nearest seaport more than the people of British Columbia need it. It will work out to their interest to a far greater degree than to our interest, but it is our common interest and the common interest of all the people of Canada that the grain should go to the nearest seaboard, and that the people inland should be able to purchase their requirements from the nearest seaboard. Is it not just as much in the interests of Alberta and Saskatchewan that they should have favoured
rates on the lumber coming from the Pacific coast as it is that they should have favoured rates on grain and flour travelling across the continent, thousands of miles by land more than it would need to travel if it were allowed its natural outlet?
I may have been blunt and emphatic in my remarks, but I appeal to the government, if there is to be any spirit of fair play in this matter to look at this proposition from the point of view of a small minority who are not in a position to represent their views in the way that Ontario and Quebec are able to do, or in the way that the combined provinces of Alberta, Saskatchewan and Manitoba are in a position to do. I say that we, a small minority of a little over 500,000 people out of about 10 million people, are being grossly discriminated against under this legislation. Irrespective of what any member of this government can say, I challenge the government to refer subsection 6 to the Justice department or any independent tribunal, and I feel perfectly certain that they will confirm the interpretation I have given of it and which I say is supported by the decision of the Board of Railway Commissioners and the Supreme court of Canada.


Mr. HUGHES:: I think this is the proper time for me to present to the minister and committee the views I entertain on one phase of this question. The order in council which refers this m'at'ter in large measure to the railway commission contains a paragraph in regard to the Maritime provinces. It is addressed to the railway commission and says that they are:
To take into consideration and pay particular regard to the claims asserted by the Maritime provinces that they are entitled to the restoration of the rate basis which they enjoyed prior to 1919.
It seems to me a large number of the members of this House, some members of the government, the right hon. leader of the opposition (Mr. Meighen) and I think the hon. member for St. John and Albert (Mr. Baxter) entertain the idea that a reduction of the freight rates to and from the Maritime provinces to central and western Canada, and a reduction going east, would in some way be a comparative advantage or a special advantage to the Maritime provinces. According to my way of looking at the subject, there could be nothing more fallacious. The railway commission, if it gives a reduction on commodities of any description from the Maritime provinces to central Canada, must necessarily give a similar reduction on similar commodities going from central or western Canada to the Maritime provinces. Wherein then, could there be any comparative or special advantage to these
Railway Freight Rates

provinces by the sea? There might be even a disadvantage; if the local railways rates were not correspondingly reduced there would be a decided disadvantage to the Maritime provinces. I think I can make that clear by one or two illustrations. For instance, there are foundries in Sackville that specialize on stoves. Suppose a rate on that article going into central Canada were reduced, and a similar reduction made on similar articles coming from Hamilton, Toronto and other parts of Ontario where these articles are manufactured, into the Maritime provinces, would that give any advantage to the foundries in Sackville? You can see at a glance that it would not. The foundries in Sackville can hardly be expected to invade the fields supplied by the Ontario manufacturer, and pay the higher freight rates they would necessarily have to pay by travelling a greater distance. The most these factories could be expected to do would be to hold the Maritime province field or a part of it. Then if the long haul rate, from the central provinces into the Maritime provinces was reduced and a short haul, or a local rate in the Maritimes, were not correspondingly reduced, the factories in Sackville would be placed at a disadvantage, and what would apply to those manufacturing industries would apply to every other manufacturing industry in the Maritime provinces.
I will take the article of grain in which the farmers are interested, and I will refer to Prince Edward Island. The competition we have to meet in the Maritime provinces in the articles we produce comes from western and central Canada. I know a company in Prince Edward Island that had to sell two cars of oats within the last two weeks at ten cents a bushel less than they paid the farmers for them, and the price paid the farmers was not excessive. That loss was occasioned because of competition, because oats from central and western Canada could be placed in Jie Maritime provinces at a price that compels the trader in Prince Edward Island to sell at a loss, in part on account of the low rate for the long haul and the high rate for the short one.


Mr. BANCROFT:: Does the hon. member know the rate per bushel from northern Saskatchewan to Prince Edward Island?


James Joseph Hughes: No, but the th.ee central places where grain could be sold in the Maritime provinces would be St. John, Halifax and the Sydneys; the distance from Prince Edward Island! to such a central point would be less than one-third of the distance from

Toronto to the same point, and the rate from Prince Edward Island is a little more than three-quarters of the rate from Toronto. Apparently a discrimination exists there, and that is one of the things that a layman does not understand and as regards which we have to take the decision of the railway commission or whatever body fixes the railway rates. That difference is apparently too great. The local rates in each province appear to be too large. I know, as a matter of fact, in the province from which I come, traders, men engaged in business, for short hauls, use motor trucks and, in some instances, horse power to move their goods because the local rates are so high. The trains are passing over the route in any case, and it appears to a layman that the rates are so 'high that they injure the business. I presume this order in council as it stands is an advice to the railway commission that when they are considering the through or long haul rates and when they are reducing the rates, as they will if they comply with the request in this order in council, they will at the same time take into consideration the local rates among the Maritime provinces themselves and the local rates in each of the provinces. I should like to have the attention of the minister to the remarks that I am making. I should like to have the attention of the leader of the opposition and that of the leader of the Conservative party from the province of New Brunswick, a man who is much interested in the welfare of the Maritime provinces, the hon. member for St. John and Albert (Mr. Baxter), because I think these hon. gentlemen entertain the idea that a reduction in freight rates between the Maritime provinces and the central provinces would in some way be, comparatively speaking, a special advantage to the Maritime provinces. That is an idea which, in my opinion, is wholly fallacious.


Mr. BAXTER:: How about a reduction on
west-bound rates?


James Joseph Hughes: From where to where?


John Babington Macaulay Baxter: From the Maritime provinces west.


James Joseph Hughes: West to where?


John Babington Macaulay Baxter: West.


James Joseph Hughes: West to Montreal or
Toronto?


John Babington Macaulay Baxter: Any distance the hon. member likes to go.

Railway Freight Rates


James Joseph Hughes: I have just been speaking on that subject, and I think the railway commission that would fix those rates in central or western Canada must necessarily give the same rates on the same .commodities from these same points to the Maritime provinces.


Henry Lumley Drayton: They are not doing that now.


James Joseph Hughes: If they do not do that now, to that extent it would be some advantage to the Maritime provinces. But even with a reduction of freight rates I would ask hon. gentlemen on this side or on that side, because I am not talking party politics at all, as I am trying to present the views that I entertain with regard to the Maritime provinces, what commodities could we send into central Canada under lower freight rates that we are not sending there now? We cannot send grain into the central provinces of Canada because they are our competitors in that. We cannot send potatoes into the central provinces.


Henry Lumley Drayton: You have done
so.


James Joseph Hughes: We have when there has been a famine, a failure in the crop but under ordinary conditions we send very few potatoes into the Montreal market. We do not send anything else.


Robert Alexander Hoey: Could you not send fish in?


James Joseph Hughes: We send fish in now at a low rate. I will come to that in a moment. We could, of course, send coal into that market if the railway rates were made so low that we could sell coal in the central provinces cheaper than American coal, but who would get the benefit? Would that not benefit the central provinces as much as it would benefit the Maritime provinces? The idea that I wish to impress upon the committee is that lower freight rates to and from the central provinces is of no special or comparative advantage to the Maritime provinces.


Henry Lumley Drayton: What about the rate on iron and steel to Montreal?


James Joseph Hughes: 
Henry Lumley Drayton: Would the hon. gentleman advocate raising the rates to central Canada?


James Joseph Hughes: No, 'but I want to impress upon the hon. member for West York and hon. gentlemen who sit near him that when he and they try to give this House or the
people of Canada the impression that a reduction of freight rates to and from the Maritime provinces is such an advantage to those provinces that it compensates them for higher customs duties or other taxation that may be imposed upon them, they are making a statement that is not correct. Those rates, if and when reduced, are of no special or comparative advantage to that part of Canada and they may be a distinct disadvantage for the reasons I have already stated if the local rates among the Maritime provinces and in each province are not correspondingly reduced.


Thomas Wakem Caldwell: Why should the local
rates not be reduced in comparison with the other?


James Joseph Hughes: That is the very thing I
wish to bring to the attention of the railway commission, the Minister of Railways and whoever may have the ear of the railway commission. In 1924, the long haul rates were reduced by 10 per cent and the local rates were not reduced at all. Therefore, I fear that if this went through without the Maritime men calling the attention of the railway commission to this phase of the question, it is just possible that what happened in 1924 might happen again. It is that phase of the question that I wish to bring particularly to the attention of the committee and of the Minister of Railways, so that what took place in 1924 will not under ordinary conditions take place again, and that the Maritime provinces will not be placed under that disadvantage while at the same time the idea goes forth that we are getting an advantage.


Thomas Wakem Caldwell: When this question was before the House in 1922, I supported the Crowsnest pass agreement because I believed that agreement meant just what it said. Eor instance, on freight moving westward the agreement stated that it applied to freight that originated at all points east of Fort William on the Canadian Pacific railway line, and up until that time it had been applied to all lines owned or operated by or for the Canadian Pacific Railway, although they were not in existence previous to 1897. The decision of the Supreme court last winter, I think we will all agree, threw the Crowsnest pass agreement into an impossible position; and I am somewhat surprised to find the government adopting the proposed method of overcoming the difficulty. For instance, in order to remove the discrimination on westbound freight they cut out all advantages that formerly accrued to the eastern provinces on westbound freight under the Crowsnest agree-
Railway Freight Rates

ment, and they removed the discrimination on grain and flour coming to the east by extending the provisions of the Crowsnest agreement to practically three times as much territory as the old act applied to. This does not seem right to me; it does not seem consistent; nor does it seem fair. To wipe out all the advantages the east enjoyed under the Crowsnest rate and to extend the advantages which the west enjoyed under the old act does not strike one as the proper way to go about adjusting matters. Either there should have been an ironing-out of discrimination east and west, or; if it was intended to wipe out any part of the act, the whole thing should have been abrogated so that everyone might have been given an even break on railway rates in Canada.
As regards the order in council referring the matter to the railway commission, I do not take much stock in the pious wish that the commission shall consider the claims of the Maritime provinces to the rates they enjoyed previous to 1919. I appreciate the thought the government had in mind in expressing that wish, but my point is that it will have little if any influence on the commission. I am afraid it will have none. There is another claim made by our western friends, that the rates under the Crowsnest agreement are higher than the eastern rates. I am not in a position either to affirm or to deny this statement, but if it is true I can hardly understand why they should wish to maintain that condition by statute; I do not see why they should not be anxious to have it set aside, if by statute the higher rate is maintained on their commodities than obtains in other parts of Canada.


Mr. LEWIS:: They might increase them
still higher.


Thomas Wakem Caldwell: An hon. gentleman says they might increase them still higher. Well, another hon. member has said that the western provinces have lost confidence in the railway commission. I do not know whether that lack of confidence is confined solely to the prairie provinces, but if this is the case, the prairie provinces evidently think that the railway commission is good enough for the rest of Canada while it should not apply to themselves. Possibly those of us in other parts of Canada may not have altogether lost confidence in the commission; but when you come to delve into railway rates, as I have endeavoured to do in the past few weeks, to ascertain just where we stand and what our position will be in the future-and that is what I am really more interested in-you will find, 
as I have found, that there has been no application of logic in the fixing of rates by the commission. I shall quote a few rates before I am through to substantiate this statement. A lumber firm in New Brunswick wrote me some time ago inquiring how it had come about that British Columbia could dump lumber into eastern markets at a cheaper rate than our lumber men could land their product, notwithstanding that the latter were nearer to these markets. My correspondent referred particularly to the Boston and New York markets. It is true that the special rate on the Panama canal enables British Columbia to get into those markets at a cheap rate, and that is a concession which no one would wish to deny British Columbia. But I was somewhat surprised when I came to look up the rail rates on lumber from British Columbia to New Brunswick and vice versa to find that British Columbia had a great advantage over the lumber men of New Brunswick. In this connection I wish to quote the rate on lumber, which is given in dollars and cents per hundred pounds.


Andrew Ross McMaster: Is not the difference
due to water competition?


Thomas Wakem Caldwell: I think I can convince the hon. member that this anomaly is not due to water competition. I asked for the rate between Vancouver and Plaster Rock, New Brunswick, and I purposely took an inland point to avoid any question of export rate. Now, I find that the rate for lumber from Vancouver to Plaster Rock, New Brunswick, a distance of 3,222 miles, is 103i cents per hundred pounds. Plaster Rock is a point in New Brunswick at which large lumber mills are operating. The rate from Plaster Rock to Vancouver, over the same rails and exactly the same distance, is 142 per hundred.


John Warwick King: Make the comparison from St. John to Vernon.


Thomas Wakem Caldwell: I have not the rate from St. John to Vernon but I can quote it from St". John to Vancouver.


John Warwick King: That is not a fair comparison. You cannot take it from Vancouver to an interior point in New Brunswick and give that as a typical rate. Compare that with the rate from St. John or some other water point in New Brunswick to an interior point in British Columbia and your comparison will be fair.

Railway Freight Rates


Thomas Wakem Caldwell: A fair comparison would be between the two ocean ports of Vancouver and St. John, and I am able to give the figures in that regard. From Vancouver to St. John the rate is 103i cents, the same as from Vancouver to Plaster Rock, while from St. John to Vancouver the rate is 142 per hundred. And they are both ocean ports. I think a worse comparison may be given. Our British Columbia friends have always contended that the mountain rate militates against that province, but I think I can show by comparison that it must be an advantage to British Columbia to ship over the mountains because they can ship from Vancouver over the mountains to Plaster Rock, New Brunswick, at 103i whereas to ship from Plaster Rock to Calgary or Edmonton -and this does not go over the mountains-we are obliged to pay 126, or 22j cents per hundred pounds more from our point in New Brunswick to Calgary or Edmonton than the lumber man pays from Vancouver to Plaster Rock. To my mind this is discrimination of the worst kind. I took this matter up with the railway commission some time ago and I shall quote some of the correspondence that passed on the subject. I may say, by the way, that the rates I have given were confirmed by the railway commission. I had obtained these rates but thinking that possibly they were not correct I went to the commission to have them verified and accompanying the statement of rates there was a memorandum setting forth some of the reasons. The memorandum stated:
.So far, therefore, as the comparison of rates proving anomalies or disparities eastbound versus westbound is concerned, in my opinion, it is meaningless, because the movements are not comparable, and, further, if there was any actual movement westbound from some of these shipping points shown, unquestionably the rates would be on a different basis as it is evident the rates shown in the statement are largely ''paper rates."
I shall quote a paragraph from my letter in reply to that statement, which I regarded as a most remarkable one. In another place the statement had been made that the only movement of lumber west was hardwood flooring. In reply to this I said:
"With regard to his statement that the westbound movement of lumber is confined largely to hardwood flooring, I think possibly this is correct, as it is possibly the only lumber we have in eastern Canada that would sell dear enough in the western market to stand the present very high freight rate.
With regard to his other statement, that if there was any actual movement westbound from some of these shipping points shown, unquestionably the rates would be on a different basis. I think in this latter instance he has stated the case backwards. If he had said, if the rates were on a different basis, unquestionably
there would have been a movement westbound from some of these shipping points, he would undoubtedly have been right as I have no doubt that there is a good market in the middle western provinces for the spruce lumber of New Brunswick for building purposes, and I hope to take up with your board at your earliest convenience the question of securing a cheaper rate on our lumber from the Maritime province ports to central and western Canada.
To that Mir. Commissioner Boyce replied:
Speaking for myself, and in accord with the replies that the board has given to similar requests for reductions or equalizations of specific rates, it would appear that until the whole rate structure is dealt with on a definite policy, probably to be decided by the government, it would, I think, be undesirable for the board to deal with specific applications until it has before it the general policy.
That is ithe policy, Mr. Chairman, which I presume we are now considering. I am not at all satisfied with the policy 'brought down by the government, because, as I said before, in endeavouring to iron out the discriminations that obtain under the Crowsnest pass agreement since the decision by the Supreme court, they propose to take away all the advantages the east ever enjoyed under that agreement, and to cut out the discrimination on grain and flour coming east iby extending the operation of this commodity rate to a very large degree indeed, i think the Minister of Railways said that the old act applied to something less than three thousand miles of railway in the west.


George Perry Graham: When it was first passed.


Thomas Wakem Caldwell: Yes; and that while it had been applied by other roads, they were nlot compelled to do so. Since the decision by the Supreme court I imagine they will no longer apply those rates in the absence of special legislation. This bill, the minister said, extends the application of those rates to fifteen thousand miles of railway that the old act did not apply to at all.


Mr. LEWES:: Would not the hon. gentleman consider it a benefit to the east to be able .to get wheat and flour from the west at a cheap rate?
Mr. CALDWELL,: I am glad the hon. member has asked that question, because I got a quotation on wheat for local consumption and for export. By the way, we have mills in New Brunswick that import western wheat and grind it to supply the farmers with feed for their stock and flour far local consumption, because we do not grow enough wheat in eastern Canada to meet our own demands. If we want to ship wheat from Winnipeg to St. John or any other approximate point in New Brunswick we have to pay 69i cents per hundred pounds; but if it is sent through for
Railway Freight Rates

export the ralte is only 49i cents per hundred pounds. So for domestic purposes we have to pay 20 cents .per hundred pounds more. This is the sort of discrimination we suffer in Neiw Brunswick.
iNow, with regard to the increases in the rates on local oommodities, I was hardly able to follow my hon. friend from Kings, P.EJ. (Mr. Hughes) to-night, although I am usually able to agree with (him, especially on tariff matters, He argued that a lowering of freight rates even between the Maritime provinces and central Canada would not be a benefit to the Maritime [provinces.
(Mir. HUGCHES: Comparatively.


Thomas Wakem Caldwell: We do have commodities that we want to ship to the western provinces. For instance, last winter because of a shortage *there we shipped potatoes to Calgary.


James Joseph Hughes: Last year potatoes were bringing a price in the Maritime provinces far below what it cost to produce them. That was an exceptional condition.


Thomas Wakem Caldwell: We did get a special concession to Winnipeg and points west, but we couM not get lany similar concession to other points nearer at hand1. We shipped potatoes as far west as Calgary and North Batbleford. I traced three of the shipments through, and I found that potatoes for which our farmers got 22 cents a bushel retailed in North Battleford at $1.85 a bushel. If that market is any good to the fanners of the Maritime provinces, they would need a magnifying igflass to detect it, because the cost of producing those potatoes was at least 40 cents a bushel.


Arthur John Lewis: What was the rate to Edmonton?


Thomas Wakem Caldwell: I do not recall at the moment. We got two reductions last winter in order to get our potatoes there at all, rather than dump them over the bank. I find that the rate from Andover to Montreal, a distance of 505 miles, was 17 cents per hundred pounds in 1913; in 1919 it was 19 cents per hundred pounds; but to-day it is 324 cents per hundred pounds, or an increase of nearly 100 per cent over 1913. This is a prohibitive rate for such a short haul. This is what is affecting us very severely in the Maritime provinces, and we want some relief if it is at all possible to get it. As I said, I am afraid the pious wish contained in the order in council will not get us very far. I do not think that the members of this House are qualified to set specific rates in any direction, but I do think this parliament

must lay down a policy under which the railway commission will fix the rates. In this proposed legislation there is no policy for Canada as a whole. There is a special provision for a certain section of the Dominion on a specific commodity, and the rest of us will have to take pot luck. I think the railway commission is the logical body to set rates. At the same time, I have not always been satisfied with the rates they have set, due largely, I think, to the fact that they have been interfered with by special legislation, but more often by special pressure brought to bear by different interests in this country. I think the railway commission should be put in just the same position as *the Canadian National Railways-it should be absolutely free from political interference in the fixing of rates. I do not think there should even be a pious wish sent to the commission from the government as to what it should do. If the commission do not make just and equitable rates, I think the government should fire the commissioners so fast that we would forget their names. That is what should happen to them if they do not deal out justice to all parts of Canada.
Another matter was drawn to my attention by the lumber company that wrote me about their special rates. This is possibly the second largest lumber company in eastern Canada, and in addition to their lumbering operations they own and operate a number of large farms where they have embarked on the breeding of pure-bred stock to a considerable extent. During the past winter they sent their stock man to Ontario to purchase some pure-bred cattle. He bought two carloads, and they were loaded at a place called Inker-man, about ninety miles west of Montreal. By the way, in writing me about the freight rates on lumber the company incidentally mentioned this shipment of cattle, and said they were not able to get the same rate on them as would have been accorded them on a western shipment. I am interested in the raising of pure-bred cattle myself, and I wrote them for further particulars. Their letter in reply is dated May 23, 1925:
Your letter of the 16th instant referring to rates on cattle.
The particulars in regard to this are, that this year, we bought two carloads of pure-bred cattle in Ontario, some ninety miles west of Montreal, and loaded them at Inkerman station, Ontario. Mr. Irvine, Canadian Pacific Railway station agent there, notified our men that there was a cheaper rate on pure-bred cattle, but it onlly applied to cattle being shipped west and net coming east of Montreal.


George Perry Graham: The cheaper rate west
would be under the Crowsnest pass agreement.

Railxoay Freight Rates


Thomas Wakem Caldwell: I am not in a position
to contradict the minister, but I think he is wrong.


George Perry Graham: I am absolutely right.


Thomas Wakem Caldwell: I have read the Crows-nest Pass Act from start to finish a good number of times, and I fail to find cattle mentioned in it at all anywhere.


George Perry Graham: Cattle come under the
agreement.


Thomas Wakem Caldwell: Then my glasses must
be poor, because I have never seen cattle mentioned there.


George Perry Graham: They give the Crowsnest
rate to cattle whether it is in the agreement or not.


Thomas Wakem Caldwell: I think they do. The
agreement might have had a sympathetic effect on the rate on cattle. I thought there must be something wrong, and I took this matter up with the Live Stock department, and I received a letter from the Live Stock Commissioner, dated June 15th, reading as follows:
Following conversation this morning and with reference to letter, herewith returned, addressed to you by the Fraser Lumber Company, I beg to advise that, in shipping a carload of pure-bred cattle as between points in eastern Canada, the shipper cannot do better than ship at the ordinary carload rate.
It is only in cases of less than carloads that the reduced pure-bred rate applies. Furthermore, even in shipping less than carloads of pure-bred live stock, when there are more than say five cattle in the car, it usually works out better even in this case to ship at the carload rate than to ship at the pure-bred rate, which is based on a considerably higher tariff.
The reduced rates in connection with the shipment of carlogds of pure-bred live stock, apply only in connection with shipments as between points east and points west. In cases of this kind, the settlers' effects rate applies, which is about 30 per cent less than the ordinary rate.
As I said, in delving into this matter I have not been able to find a case with regard to railway rates -where the Maritime provinces seem to be getting an even 'break with anybody. We seem to be getting it where the chicken got the axe in almost every case.
With regard to rates between the Maritime provinces and other parts of Canada, I do not agree, however, with the hon. member for Kings (Mr. Hughes) that we have not got any reduction in local rates, especially in New Brunswick.


James Joseph Hughes: I did not say that. I say we did not get any reduction in 1924 when the long haul rates were reduced.


Thomas Wakem Caldwell: I think it was in 1923
that I am referring to. We had an export rate on potatoes, and it is more or less a local rate, because it is a short haul to the
seaboard. Our rate from Florenceville to St. John, New Brunswick, an average point in the St. John river valley, where we grow a lot of potatoes, was 23^ cents per one hundred pounds, for export.


James Joseph Hughes: I was talking of shipments to the central markets, Montreal, for instance.


Thomas Wakem Caldwell: I was instrumental in
calling a meeting of the potato shippers in New Brunswick and getting representatives of the two railroads to meet a committee in Woodstock to discuss this question.


James Joseph Hughes: That was shipments for
export?


Thomas Wakem Caldwell: Yes that is where our
movement went that year. After putting up our case, the representatives of the railroad companies bold us it would be impossible to give us any reduction in rates, and most of those at the meeting were very disappointed. However, I realized that we had taken the matter up wrong. We had had the railway companies send us their traffic men, whose duty it is to go and meet the public, and endeavour to make them believe they are getting a little better deal than anybody else in Canada. I suggested that we should get a small committee to go to Montreal and meet the management of the railroad companies. We did this, and got a reduction of 6 cents per hundred pounds on a rate of 23$ cents, which was a little better than 25 per cent reduction on our potatoes for export, and this did assist materially in the export of our potatoes that year. But this past winter England put an embargo on potatoes, a thing that made me feel as un-British for a few days as anything that has ever happened since I have been a man, especially in view of the preference that we give to British goods coming -to Canada, and by the way, I am still in favour of the British preference. Our only outlet then was Cuba. It was not a very paying market. Potatoes were selling very high in the Canadian west, where they were very scarce, and we therefore set about to get a reduction in the rate to that point, which we accomplished. However, the distance is so great that we were simply able to get the potatoes out there, rather than throwing them out in the spring; we did not make anything on them. [DOT]
That brings me to another point. Our friends speak of the home market. There was a wonderful home market in the Canadian west for Canadian potatoes, but while the consumer there would have to pay this last
Railway Freight Rates

winter $1.85 a bushel for our potatoes, we were only able to get 20 cents per bushel for them in New Brunswick. A home market of that kind is not of much benefit to producers in Canada.


Arthur John Lewis: Surely it did not cost $1.60
for sixty pounds.


Thomas Wakem Caldwell: That is what it cost
to get the potatoes to the consumer's kitchen. I can show the figures, what the shipper got, what the wholesaler got, what the retailer got, what the freight was, and what it cost the consumer. Those potatoes sold in North Battleford for $1.85 a bushel.
If I might digress just at this point, business is being held up in this country by combines in trade, one of which we unearthed in New Brunswick this winter, with the assistance of the Combines Investigation Act. I know my right hon. friend to my right (Mr. Meighen) has sneered at that act more than once, but I hope he will read the interim report of the investigation that has been carried on in New Brunswick during the past winter. I think it will help him to realize that, after all, that act is a pretty good act, and that it is needful we should go after some of these people.


Arthur Meighen: What has happened the
combine?


Thomas Wakem Caldwell: Nothing yet. The
interim report has only just been published, but if they get their just deserts, they will not ship potatoes next winter.


Arthur Meighen: You cannot get any
action under that act.


Thomas Wakem Caldwell: Our western friends
have told us that their rates are higher than in eastern Canada, but they were very careful not to compare them with the rates in the United States for corresponding distances to the head .of the lakes. On looking over this list-I will make only one comparison-I see that from Edmonton, Alberta, to Fort William, a distance of 1.267 miles, the rate on wheat is 36 cents per one hundred pounds, while from Stonehill, Montana, to Duluth, Minnesota, a distance of 1,265 miles, the rate is 52i cents per one hundred pounds.
In our case in the east we have no advantage over our American cousins in freight rates. We are a little nearer the seaboard than our American cousins in the state of Maine, but we have to quote, when we ship to Cuba, from 15 to 20 cents a bag under our American cousins' price, in order to get into that market at all, and we have to pay our own freight rates, which are heavy enough. We have also

been subject to the "middle against both ends" in the potato trade in New Brunswick, but I hope we shall be able to eliminate that if we follow up the report of this investigation and punish the guilty as they should be punished.
I do not wish at this late hour to take up any more time, but I thought in view of the fact that I was not able to support the Crowsnest pass legislation this year, and having regard to the fact that I did support it in 1922, I felt in justice to myself I should give my reasons. I hope I have made it clear both to the House and the country why I have changed my mind on this matter. If the Crowsnes't pass agreement applied, as I believed it applied in 1922, I would support it to-day; but I cannot approve of the government's legislation which deprives the east of any benefit it ever had under the Crowsnest pass agreement and extends it more fully to freight coming east.


Arthur John Lewis: The hon. gentleman is not opposed to the Crowsnest pass agreement but to the legislation before us at the present time?


Thomas Wakem Caldwell: I thought I made my position dear, that this legislation deprives us of any benefit we had while it extends it in fuller measure to other parts of Canada.
Progress reported.
On motion of MJr. Mackenzie King the House adjourned at 12.15 a.m. (Wednesday).
Wednesday, June 17, 1925