The Problems of Our Provinces

The Second of a Series of Ten Striking Articles

JOHN NELSON June 1 1923

The Problems of Our Provinces

The Second of a Series of Ten Striking Articles

JOHN NELSON June 1 1923

The Problems of Our Provinces

The Second of a Series of Ten Striking Articles

JOHN NELSON

IL Prairie Provinces and Their Problems Concluded in Three Articles

THE problems which have been mentioned in the previous article on the prairie provinces, are important. But perhaps the supreme one still remains. It is that of transport and markets. These wheat fields lie from four to five thousand miles from the market. Until recently they depended practically on one avenue of transport—the St. Lawrence route. In . summer the possibilities of the route were expanded by lake navigation: but in winter they were forced to depend on the rail haul all the way to St. John.

Where so much mileage was involved, every cent added to or taken from the freight rate became of importance, and the battle for lower carrier charges has been long and persistent. The first investigation into rate levels took place in 1895. It was continued by boards of investigation at regular intervals and was finally placed in the hands of a board of railway commissioners, in 1903. These commissioners, whose duties cover all Canada, have found that most of their time has been absorbed in adjusting complaints on the plains.

Before the creation of this latter board, some relief was obtained through an arrangement between the G. P. R. and the government. In lieu of certain cash subventions amounting to about $4,000,000 and connected with the constitution of the Crow’s Nest Pass railway, the railway company undertook to grant, indefinitely, certain commodity rates, chiefly on grain passing eastward through Fort William and on live stock passing westward through the same point.

Rebates were also provided on certain commodities, more or less arbitrarily selected, moving westward from the eastern provinces.

The grain rate reduction amounted primarily to three cents per hundred pounds. The reduction on commodities for prairie points from the East ranged ten per cent, to thirtythree per cent, and included such articles as fruit, coal oil, building material, cordage, binder twine, and agricultural implements.

This arrangement, highly advantageous to the western farmers, was discontinued in 1918 following a great increase in the wages of railway men, rendered necessary by the McAdoo award on U. S. lines. It remained in suspension until 1922,

when it was restored, much to the delight of the shippers. It is estimated that the saving which the Crow’s Nest agreement effected to the average shipper was $40 a car. But most of the advantage disappeared in the face of what was charged to be a shipping combine on the Great Lakes and which was made the subject of a parliamentary investigation.

Alternative Grain Routes

THIS occasioned great resentment among westerners and has made them more receptive than they might otherwise have been to the virtues of other routes. But the St. Lawrence route must remain foi all time, a principal, if not the greatest, outlet for the products of the plains. For this reason the settlers are looking with deep interest on the deepening of the canals and the advent of vessels of greater draught at the head of the lakes. It will bring the Atlantic more than 1,000 miles further inland, and ocean carriers to a point that much nearer the place where the freight originates.

Premier Greenfield points out that there still remain several inevitable elevations—at the point of loading, at Fort William, at Port Colborne, or Port McNiehoil, and at Montreal, and that as each of these represents from half a cent to a cent per bushel there must always be a heavy handicap on the lake route.

This latter route has recently been engaging the attention particularly of the Alberta government, though it is very sympathetically regarded by the governments of the other two provinces as well. Alberta has joined her case with that of B. C., which is pressing strongly for an adjustment of the mountain haul rate to equalize it with similar distances on the prairie. During the ■ past summer wheat loaded at Vancouver, even from points in.

Saskatchewan, could‘be handled on a competitive basis with that loaded at, Fort, William, for Liverpool,1 and the present freight rate campaign of Premier Oliver of B. C., would greatly extend the zone from which wheat may be drawn westward.

The B. C. government is asking •

for the same rates between prairie points and the coast that obtain from prairie points to Fort William. The mountain rate was approximately thirty per cent, higher. In June, 1922, this differential was cut in two. The Pacific province is now pressing for its entire elimination. It is claimed that under the fair conditions which such a

change would bring about, 95,000,000 bushels would seek an outlet by the Pacific route.

Neither of the alternative routes to that by way of the Great Lakes is open to an objection that applies to the latter. During the past thirteen years, of the Canadian grain which reached the head of the lakes forty-two per cent was carried from that point in U. S. vessels to U. S. elevators; at U. S. lake ports, thence by U. S. railways to U. S. ocean ports. In the last crop year alone 114,000,000 bushels went that way and American transportation interests received approximately $28,000,000 for the service rendered. (Vide Edmonton Board of Trade report.) '

But the alternative route upon which there appears to

be unanimity on the prairies, is that via Hudson’s Bay. There has always been a sentimental attachment in the West for “the Bay” for it. was via Hudson’s Bay, in a sense, that these provinces came into the Dominion. t Its champions, indeed, claim that the opening up of this route was tentatively agreed upon in the discussions preceding the entry of Manitoba into Confederation, and that it was then urged as being as vital to Manitoba as the Intercolonial was to the Maritime Provinces, or the C. P. R. to British Columbia. It has been promised by Tupper, Laurier, and Borden. It is approved by Meighen and King. About - $15,000,000 has been spent on the road, and $6,000,000 on its terminals. Construction has proceeded t sporadically until the road is within one • hundred miles of tide water. There has been little open opposition, yet the men in the West feel there has been but halfhearted support. And now, with the problems of market, ing more insistent than ever, there is a concerted movement being fostered throughout the prairie provinces for its completion.

In support of their contention they put forward many strong arguments. One is the fact that such a huge sum has already been expended that to äbandon it now would be a shocking waste of public money. An equally strong argument is that the road has actually been financed by the West, being paid for out of a special fund for which provision was made tyears ago. Large areas in Saskatchewan, Alberta and Manitoba were set aside and the proceeds from their sale ear-marked for this special enterprise. A statement by the Department of the Interior, submitted in 1922, shows that $28,000,000 has been realized from the sale of these lands, and that half of it has already been paid in cash.

The popular distrust of Hudson’s Bay as a route for regular sailings has no doubt had some influence in delaying matters up to the present. A special Senate inquiry several years ago dissipated some of these misconceptions. It developed that in a century and three quarters, 750 vessels had entered the bay, ranging from a seventy-gun ship to a pinnace

of ten tons and that only two had been lost. This was in the face of the fact that all the vessels in question were sailers and hence somewhat helpless in ice. It further developed that the period of navigation is determined not by the presence of ice in the bay itself (from which it is comparatively free) or even in the straits, but in the harbors, ports and roadsteads, in which the services of ice breakers can materially lengthen the season. This would seem to last for about four months, beginning in July. The Senate committee declared that the route was feasible and probably would be profitable, especially if proper aids to navigation were installed.

Given that the route is feasible on the ground of safety of navigation, the prairies have a very strong case based on the tables of distances as compared with existing routes. The distance from Port Nelson, the terminal of the Hudson’s Bay Railway, to Liverpool is almost exactly that from Montreal, namely 3,000 miles. This would save the 1,000 miles from Port Arthur to Montreal, for most' of the prairie shipping stations are as near to Port Nelson as they are to Port Arthur. In conjunction with the Pacific route the use of this outlet would overcome the present congestion and excess freight rates on the Great Lakes, which during last season caused such resentment. It would bring Calgary, Edmonton, and Saskatoon more than one thousand miles nearer to Liverpool than is possible by any existing line.

Ontario, when her boundaries were being extended a few years ago, was sufficiently convinced of the value of the Bay to her northern territory that she secured the right to a five mile strip to Port Nelson and is already preparing to complete her T. and N. O. line to this northern terminus.

The advocates of the scheme find an additional argument in the history of this very railway—the T. and N. O. Conceived as a colonization line, its construction has opened up great belts of mineral territory which is enriching the province of Ontario. In northern Manitoba there are enormous deposits of copper and other ores which it is held will prove a source of similar wealth, once they are tapped by a proper system of transportation.

To-day Canada transports her wheat across natural' barriers at much additional expense, to outlets remote from the point of production. The Bay gives the territory under consideration, for a period of the year at least, a great natural route comparable to those which serve si m i 1 a r wheat fields in Egypt, Argentina, Russia, and China.

Settlement and Freights

THESE natural barriers make high carrying charges inevitable, but they do hot reconcile the farmer to them.

“Transportation costs have got to be brought down toa better basis,” declares Premier Cree nfield.

“Transportation interests must be content under actual conditions with a reasonable profit. They can not exist without the farmers, who provide most of the material they

transport. The farmer cannot exist without transportation at reasonable cost. Agriculture and transportation are inter-dependent in so far as Western Canada is concerned. Transportation interests, rail and water, should be satisfied, until times become normal, with moderate dividends. Lower marketing costs, the elimination of every possible cent of present ccsts between the producer and the ultimate market is the prime essential for the present re-establishment and ultimate development of western agriculture. Too much attention has been paid in the past to increased production to the neglect of marketing. Until times improve I do not think we can expect much more settlement a ong the Canadian National or any other railway line.”

The disabi itv complained of applies not alone to the actual, but to the potential, products of the prairie. “We

have coal enough for the needs of all Canada,” says Attorney General Brownlee, of Alberta, “yet we cannot ship it beyond Winnipeg. Why, last year when there was sucha shortage in Eastern Canada we applied without success for a train load rate to Toronto.”

This problem regarding coal is general throughout the West, particularly in Alberta. Robert Forke, the present leader of the Progressive party, says that $155,000,000 is spent annually by Canada for coal in the United States that might well be

obtained in this country. Seventeen per cent, of the coal areas of Canada are in Alberta and in 1920 7,000,000 tons were mined. Mr. Meighen claims that much of this coal can be mined for $2 per ton. These are the lignites with which much of the West is underlaid. There are no anthracites within 80 miles of a railway, and it is the opinion of the Minister of the Interior, Mr. Stewart, that it will cost $16 a ton to transport this to Ontario.

The present rate from Alberta to Toronto on lignite coal is more than $12.00 per ton. If this rate were cut in two, it is estimated this coal could compete successfully in the Toronto market with the U. S. article. * Technical engineers are busy endeavoring to so treat these coals that they can be transported profitably. Saskatchewan has spent more than three quarters of a million dollars in seeking some method of carbonizing these fuels. A high authority states that there are thirty barrels of water and oil in a carload of lignite. Enormous

tonnage is lost in slack, for which there is little or no demand. But in the research laboratories German and other processes are being tested with rather encouraging results. Even should Henry Ford’s dream not come true, and the hidden forces of coal be released through mechanical means at the pit mouth and transported over power lines, it is by no means unlikely that these low grade lignites will, ere long, yield to the skill of chemist and engineer, and

form an addition to the natural wealth of Canada, difficult of computation.

Of all the - problems of the West none will create a quicker or more heated discussion in that region than the subject of a Wheat Board. It has occupied much time in the Commons; it has been one of the most

vexed questions before the various legislatures.' It has formed the subject of tentative legislation at all the prairie capitals. The great body of the farmers, with a lively recollection of its effectiveness during the war, turn to the “old ’un,” certain that in that quarter lies relief. The legislators, on the other hand, more convert sant with its difficulties, accept its responsibilities with many misgivings.

Wheat Board Problems

f I 'HERE is general agreement among the prairie premiers for a temporary board; there seems unanimity among them regarding the dangers of a permanent one, Hon. Mr. Bracken favors a compulsory board for this year, as indeed do both his brother premiers. He thinks that the farmers cannot, for the present, use a voluntary pool, because creditors might force them to sell at inconvenient times. But he regards such a step this year as helping the morale of the people. Premier Greenfield is of the same view, because he says the people feel the government should come to their aid this year. But he wants the wheat pool to be co-operative, non-profitmaking, farmer-owned, and farmer-controlled. And such a pool should embrace,from sixty-five to seventy-, five per cent, at least of the grain growers, to be effective. The initiative of this year’s legislation is coming from Saskatchewan, probably because Premier Dunning has a practical marketing experience that his brother premiers lack. The chief executive of Manitoba seems to have made his adherence to the idea of a compulsory board for this year dependent upon common action by the three governments to develop a co-operative, non-profiting, non-compulsory organization to handle subsequent crops. Premier Dunning made a recital of this proposal a preamble to a resolution of his legislature asking the government of Canada to extend the operation of the Wheat Board Act for one year from August, 1923, and offering to co-operate with the other provinces in giving effect, to it.

They’re Not Unanimous

TT MUST be recognized that some of those most active in Wheat Board operations in the past are far from enthusiastic about it now. These include James Stewart, of Winnipeg, chairman of former Wheat Board of Canada, who is regarded as one of the shrewdest grain men in the world, and Hon. T. A Crerar, ex-Leader of the Progressive party, wTho probably appreciates more than those who clamor for its restoration the changed conditions under which such a body would now be obliged to operate. He points out these distinctions very clearly.

“It must be remembered,” he says, “that early in the war there was created in England a Royal Commission on wheat supplies which controlled the freights on the Atlantic. Canada was under a board of supervisors which sold on a fixed price of $2.23 Fort William.

“In August, 1919, the Wheat Board was formed. It was thought better to continue the regulation until re-establishment had been effective. The board here operated under favorable conditions because, in fear of a general strike of transport workers, dock men, and allied unions, Britain was buying most lavishly She was paying as high, sometimes, as $4 a bushel, in order to create a reserve of foods. Chairman Stewart, I think,

Continued on page 64

’Sir Henry Thornton has announced that during May, June and July of each year a rate of $9 per ton on the C. N. R. maybe obtained.

Continued from page 19

had at one time $90,000,000 worth of wheat on hand.

“The situation is now very different. The Federal government has power only to set up the board, but it cannot give power over transport nor over wheat products. It cannot pass legislation affecting contracts—which is a provincial power.

“The provinces (two or more) have power to select the personnel, exercise the compulsory features, and also to assume the risks.

“Moreover, a province like Manitoba which has some marketing advantages, its crop coming in a little earlier, can supply better, and being closer to the head of the lakes, would have to accept certain handicaps, and' may not be so inclined.”

Premier Dunning, while temporarily accepting the idea of a compulsory board, has an alternative scheme which represents his deliberate views. He proposes a permanent solution of the whole wheat marketing question by making use of “the largest, finest, and most complete grain handling and trading facilities in the world.” These, which are controlled by the farmers’ organized movement, are the big grain marketing companies, the Saskatchewan Co-operative Elevator Company and the United Grain Growers, Ltd. This latter embraces Manitoba and Saskatchewan.

He points out that these two companies control 700 country elevators; the best-organized grain trade offices in Winnipeg; terminal elevator facilities and hospital elevators of greater capacity and more up-to-date than are controlled by any other interest, and in addition an organization for exporting grain second to none in this business. It will this year export overseas at least 100,000,000 bushels of grain and possibly double that amount.

Premier Dunning’s Idea

HON. MR. DUNNING suggests the formation of a “Canadian Farmers’ Export Company,” by amalgamating the two export companies controlled by the Saskatchewan organization and the U. G. G., as a means whereby “the splendid facilities controlled by the organized farmers” could be used to build up an improved grain marketing system which would insure to the farmer patronizing it the world’s average annual market value for his product and could be applied to other grains as well as wheat. Mr. Dunning hinted that his government would be prepared to assist financially such an organization as they assisted one of the parent companies, the Saskatchewan Elevator Company.

The Saskatchewan premier took strong issue with some of the more ardent advocates of the board. They asked, he said, three things. One was that federally the board should be placed above the law by making it impossible for anyone to enter suit against them; that they should be given control over the selling of flour in the same manner as wheat from end to end of Canada; and that they should be given power in connection with transportation both lake and rail in order that the desires of the board with respect to the transport of wheat should supersede those with respect to other commodities. His comment was very pointed: “I certainly would be very

much surprised if a free parliament of a free people would ever consent to create an autocracy with these unchecked powers.”

Although there is a strong sentiment in favor of a compulsory board, the indications are not favorable to its creation, excepting as a temporary measure. There has been a long controversy

between the prairie provinces and the Dominion with respect to the control of the natural resources of the country and particularly its lands.

The claims of the three provinces are for a reversion of their natural resources, first in the form of unrestricted control of those within their present boundaries hitherto unalienated; and, secondly, to the ample recognition of their full beneficial interest, as Canadian provinces, in those already alienated by the government of the Dominion for general national purposes since the western provinces were created.

Manitoba came into Confederation in 1870; the other two provinces were not created out of the Northwest territories until many years later. The fact that title to these lands was secured from the Hudson’s Bay company; that Imperial and colonial governments were both concerned, and that the rights in the land, and the charter rights of the company were in question, has laid the ground for much difference of opinion as to which was involved. Certainly the Dominion authorities retained control of the land, instead of the title passing, as in the other provinces of Confederation, to .the province in question.

In the case of Manitoba it was held that there had been a purchase of Rupert’s Land from the Company, and therefore, the case was not parallel with that of other provinces. The Federal authorities also insisted that they required the control of the land to ensure the building of the C. P. railway and to encourage immigration. At last $45,000 was granted annually in lieu of the land, and this was later raised in 1885 to $100,000. With the creation of the provinces of Alberta and Saskatchewan, the whole question was further ventilated. In 1905 Sir Wilfrid Laurier laid down a principle in dealing with subsidies in lieu of lands in the two provinces on the following basis:

That as the public lands in these provinces were to remain the property of the Dominion, the latter was to pay as compensation a sum based on the estimated value of 25,000,000 acres at $1.50 per acre, and on the population as determined at each quinquennial census. The sum involved on account of land being $37,-

500.000, and the population at that time

250.000, the payments were to be one per cent, of the land value until the population reached 400,000; one and a half per cent, thereafter until the population reached 800,000; two per cent, until it reached 1,200,000; and thereafter three per cent.

Has There Been Injustice?

THE adjustments which have been reached from time to time have never removed the irritation and sense of injustice under which the whole three provinces have rested. The fact that British Columbia and Prince Edward Island, both of which entered Confederation susbequent to Manitoba, were given their public lands; that Sir Wilfrid Laurier and other statesmen had declared that the guiding principle of confederation with regard to the public domain was “that the provinces were entitled to the public lands as a source of revenue to administer the growing wants of the population in each province;” and that Ontario, in the extension of her boundaries, was given a five-mile-wide strip to Hudson’s Bay while Manitoba was given no littoral at the head of the Lakes—all these have combined to give the westerners something very close to a grievance.

On the invitation of Premier King, the three provincial premiers conferred with him last year with a view to reaching a satisfactory adjustment. This conference developed the fact that not only were

there differences between the federal and the western view, but that the governments of the three provinces were themselves unable to agree upon a uniform basis of settlement. Negotations have since then been conducted individually.

Not only do the primary circumstances differ as between provinces, but in some most of the lands in question have been alienated, while in others the bulk of them is still intact. This tends to alter the character of each claim. Manitoba would like what is left of these impoverished resources, but she does not want them in lieu of a cash subsidy to which she is entitled for all time. Premiers Dunning and Greenfield, on the other hand, have a jealous eye for their great agricultural and coal lands. If they are entitled to what is left, why not to those already alienated? If their claim is good since they became provinces, what about the period antedating that status?

Hon. Mr. King in submitting his offer to Alberta did so alternatively. First he suggested discontinuing the subsidy and turning over the remaining lands, without further compensation. Second he offered an accounting by an independent tribunal crediting the province with

monies received by the Dominion, and debiting the province with direct or indirect outlays by the Dominion in administering these resources.

The first proposal was rejected as unfair; the second as being too costly and involved. Alberta’s representatives in turn offered to waive all cash subsidies and to accept as settlement in full compensation for 6,400,000 acres given in subsidy for the construction of railways outside of Alberta before the granting of autonomy.

Hon. Mr. King’s final offer which has also proved unacceptable, was that in the case of the three provinces the Dominion should turn over such resources as are still unalienated plus the present subsidy for three years.

There has been a continual insistence by one of the prairie premiers that the matter should be settled upon a basis of principle and not of barter. There is also a feeling that in some of the provinces the return of these resources will, for the moment, be an embarrassment, while at the same time it is generally held that they can be managed and administered much .more successfully from a provincial capital than from Ottawa.