The St. Lawrence Question

“To deepen the St. Lawrence as an entirely Canadian enterprise is folly, pure and simple"

HON. E. C. DRURY February 15 1929

The St. Lawrence Question

“To deepen the St. Lawrence as an entirely Canadian enterprise is folly, pure and simple"

HON. E. C. DRURY February 15 1929

The St. Lawrence Question

TWO : THE DANGERS OF NON-CO-OPERATION

“To deepen the St. Lawrence as an entirely Canadian enterprise is folly, pure and simple"

HON. E. C. DRURY

IN THE first article of this series I pointed out the extent and urgency of the demand from the people of the United States for the completion of the St. Lawrence Deep Waterway. I showed the entire reasonableness of this demand, based as it is, not only on the needs of the agricultural Middle West but also on the natural trade requirements of the great and populous industrial and commercial centres contiguous to the Great Lakes. I showed how this need and demand had been intensified by the opening of the Panama Canal and the increases in railway rates which had taken place in late years, so that it had forced the adoption of the Lakes-to-the-Sea Deep Waterway as an integral part of the policy of the American Government. This demand must be served either by the improvement of the St. Lawrence in co-operation with Canada or by the alternative Oswego-Albany-New York route.

I further showed that there were just four courses that Canada might take in dealing with the question: first, to refuse absolutely and finally to co-operate with the United States in improving the remaining link from Prescott to Montreal; second, to put off making a decision in the matter; third, to go on with the development, but insisting that it be an All-Canadian enterprise, built and controlled wholly by Canada; fourth, to accept the present proposal, endorsed as it is by the International Joint Commission and the Canadian Advisory Board, and to proceed with the development as a joint undertaking between Canada and the United States. I indicated certain effects that would likely result from following each of these courses, but left the full consideration of the economic results to Canada to be dealt with later. In the present article I shall consider the first three courses as they affect this country.

If we Refuse ... ?

TET us consider what will happen to Canada if the first course is the one followed. Refusal to go on with the improvement will not, as I have shown, silence the insistent and reasonable demand coming from the North Central Section of the United States for an improved deep waterway connecting the Great Lakes with the ocean. It may even intensify it. It would, without doubt, be seconded and reinforced by powerful interests in New

York State—including New York City—which is inclined to be antagonistic to the present proposal to deepen the St. Lawrence as a co-operative international undertaking. There is scarcely any doubt that a pointblank refusal on the part of Canada to go on with the present proposal will lead, in the not too distant future, to the development by the United States of the alternative route.

The Oswego-Albany-New York route, while decidedly a second choice, is not by any means infeasible. It will provide an outlet to the sea, and while, from the standpoint of the vessels using it, it will be inferior to the St. Lawrence in that there is a greater length of slow canal navigation, this will be partially compensated for by the longer season during which it is free from ice.

Its chief disadvantages lie in its greater cost and that it does not develop hydro-electric power as a by-product.

The comparison in cost of transportation by the present unimproved St. Lawrence, the improved St. Lawrence, and the alternative Oswego-Albany-Canal, can best be shown by quoting from an American document already referred to—a pamphlet entitled “Great Lakes to Ocean Waterways,” issued in 1927 by the American Department of Commerce. This pamphlet is an authoritative analysis, from the American standpoint, of the economic factors affecting the various waterways from the Lakes to the Ocean. I may say that where I have compared them, the conclusions reached correspond very closely to those reached by Canadian authorities.

On page three of this pamphlet this statement is made: “It is estimated that wheat, one of the commodities likely to move in the greatest volume, and for which it is possible to make a reliable estimate, can be carried from Duluth or Chicago through the proposed St. Lawrence route to Liverpool for 8 to 11.2 cents a bushel, as compared with the cheapest present combination of rates of 17.6 cents and from the same ports to the same destination through either the Lake Ontario-Hudson route or the All-American route for 9 to 12.8 cents per bushel.”

The difference in favor of any of the improved routes when package freight is concerned is, of course, very much greater than is represented by this statement, since costly transhipments are eliminated.

That the Lake Ontario-Hudson route, which I have referred to as the OswegoAlbany route, must be taken into serious consideration in any study of the whole problem, is indicated in the evidence of D. W. O. McLachlan, of our own Department of Railways and Canals, given before the Senate Committee last spring. Speaking of this, he said: “As you know, the Americans have been considering quite a great deal a deep waterway from Lake Ontario via Albany to New York, and a report was made two or three years ago by the War Department on that project. This is the only serious rival the (St. Lawrence) deep waterway project has—I made an investigation of this route four or five years ago, and it showed me that that route would pay interest on its cost. It would Continued on page 1^0

on Continued on page 40

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be a very much better paying proposition than our Georgian Bay canal, and is the closest competitor of the St. Lawrence. ... It will have a navigation season that will be a month longer than the navigation season below Montreal.”

The total cost of the development of this route by the United States is estimated at $506,000,000. This, of course, is a serious objection to the scheme. It does not, however, prohibit it. The United States is a vastly wealthy nation, and can, if driven to it, afford even the tremendous expenditure involved in this more costly route. Moreover, she can afford to absorb it into the general expenditures of the nation, leaving the canal itself to be used, toll-free by her own shipping. Such a course would satisfy the demands of the Middle West. It would meet the hearty approval of New York. It would minister to national pride. It is the obvious answer by the United States if Canada refuses to cooperate in developing the St. Lawrence. What would be its effect on Canadian interests?

I AM assuming, of course, that Canada’s refusal is based in this case on reason rather than on pride or prejudice; that we have come to the conclusion either that we cannot afford the project, that it is not needed, or that, as some profess to believe, it will actually be detrimental. If these are our reasons, it is certain that, having refused to go on with the project when our neighbor offered to bear part of the cost, we will not go on with it alone. The comparison, then, will be between the St. Lawrence in its present state of improvements, and the Oswego-AlbanyNew York deep waterway.

If these two routes are placed in competition, there is no question as to which will win out. The American route will provide cheaper transportation, as we have shown. Larger ships, either fullsized lake freighters or sea-going vessels can use it, thus avoiding the delays and expense of transhipping—a greater hindrance, by the way, to the transportation of general freight than they are to that of grain. The season of navigation will be considerably longer—a not unimportant advantage. And finally, the port of New York offers considerably greater advantages in the matter of ocean freights than Montreal.

Under these circumstances it is not hard to imagine what will take place: not only will the entire American commerce of the Great Lakes region use the OswegoAlbany-New York route, but the greater part of Canadian commerce will do the same. And this applies not only to wheat. Indeed, it applies more particularly to package freight, on account of the almost prohibitive cost of tran-

shipment—about $1.60 per ton as against about 60 cents per ton for the transhipments of grain. Montreal would be sidetracked. A good deal of the business of Canadian railways east of Fort William and Port Arthur would be taken away.

But the damage inflicted on Canadian commerce would not end here. The Oswego-Albany canal lying wholly within the United States territory and having been constructed entirely with United States money, that country would be under neither legal nor moral obligation to afford the same treatment to Canadian vessels that it did to its own. The canal would most probably be toll-free to American vessels but since Canada’s refusal to co-operate in deepening the St. Lawrence would have caused the United States the added expense and disadvantage of constructing the OswegoAlbany canal, it could scarcely be reasonably expected that its facilities would be extended to Canadian vessels on the same terms. Indeed, it is most probable that heavy discriminatory tolls would be exacted against Canadian shipping, and if this were done, we could have no just cause of complaint agâinst the United States.

The effect on Canadian lake shipping would be disastrous. The old St. Lawrence route could not compete with the new Oswego-Albany canal, and Canadian vessels using this canal under possibly heavy tolls could not compete with American vessels using it toll-free. The result would be the almost complete extinction of the Canadian lake marine and the complete stagnation of the thriving shipyards which have grown up on the Canadian side of the Great Lakes. What this would mean to Canada can easily be seen.

THESE are the probable results of a complete refusal on the part of Canada to proceed with the joint improvement of the St. Lawrence. The second course, to delay making a decision in the matter, is fraught with exactly the same dangers though to a lesser degree. Again let us remember the insistent and reasonable demand in the United States for a deep waterway connecting the lakes with the sea, and the necessity of the American Government satisfying this demand. In addition, let us consider that there already exists across the border an unreasonable feeling, based on nothing sounder than pride and prejudice, against co-operating with Canada in the matter, just as a similar feeling, similarly based, exists here against co-operation with the United States. Further, that the advocates of the All-American route, as it is called, go so far as to call for the construction of a canal on the American side of the Niagara Continued on page 1^2

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River, duplicating our Welland canal, though American vessels, by treaty, have the right to use the Welland on equal terms with Canadian. Then let us consider that the longer the reasonable demand is frustrated, the stronger the unreasonable feeling is sure to grow, and that if decisive and consequent action is withheld long enough, the latter is certain ! to overbalance the former. We see now, clearly, the dangers involved in unreasonable or unnecessary delay. In her own interests Canada should deal with the question at the earliest possible moment.

rT'HE third course, to go on with the development, but as an entirely Canadian enterprise, is folly, pure and simple. It has nothing whatever to recommend it and everything against it. It would be excessively, even prohibitively costly. It would provide not a better, but a worse route to the sea. It would undoubtedly provoke the United States to the construction of the “All-American” route— the Oswego-Albany canal, plus a duplicate to the W elland on the other side of the Niagara River. It might easily destroy all the good work that has been done to promote good understanding during the past century -through a whole series of treaties culminating in the International Joint Commission. It could not fail to produce bad feeling of a very definite sort between the two countries and there has been altogether too much of that already.

And yet there is a very real danger, not that an “All Canadian” route will be developed, because it never would be — but that some politician may put forward the policy of an “All-Canadian” route, hoping to be carried into power on the wave of prejudice which he could create. Such a course would involve all the evil effects which we have seen. It would be almost the worst thing that could happen to Canada, to the British Empire, to the English-speaking world.

This article may seem to be alarmist. I hope it is. Others, however, share the same fears. Since writing the above I have read an article in the Toronto Star from the pen of one of its best-informed staff-correspondents, W. R. Plewman. Recent happenings at Ottawa connected with the St. Lawrence, he says, “indicate that prospects are not so bright as a year ago for the waterway project, that Canada is not counting on the work proceeding at an early date, and is not even figuring on making steady progress with the negotiations with the United States . . .

“The writer has kept in touch with waterway developments on both sides of the boundary line, and believes there is a real danger that the United States will feel herself forced by Canada’s attitude during the next two years to proceed with some other navigation scheme than the St. Lawrence waterway.”

What this would mean to Canada and Canadian interests we have seen.

'"PHE Canadian Government, it may -*• safely be assumed, is keenly aware of the whole St. Lawrence problem. On it devolves the responsibility of making decisions, of formulating policies, of taking action. But it cannot be said to be in a particularly happy position. No question more complicated, more involved, more bristling with difficulties and dangers, ever confronted a Government in this country. It is its duty to drive as shrewd a bargain as it properly may, and any failure to do so may properly be made the occasion of criticism and attack. But if it should overreach, it may imperil disastrously the whole situation. It should not, dare not, make undue delay; it must, in the larger interests of Canada, proceed with the waterway, and it must do so in partnership with the United States. There is, in fact, no other feasible way in which the work can be done. But to carry out its policy the Government must expose itself to attack in what might easily

prove a most vulnerable spot. The lesson of 1911 is not forgotten, the “no truck or trade with the Yankees” campaign, in which a great historical Canadian party abandoned its traditional policy in regard to reciprocity to take advantage of an appeal to international prejudice—and won the election.

All the elements of a similar situation are contained in the St. Lawrence question at the present moment.

Quebec, lacking the magnetic leadership of Sir Wilfrid Laurier and inclined to be prejudiced against the project in any case, might prove to be as susceptible to such tactics as Ontario was in 1911, and Ontario only slightly less so. Such a campaign in the present instance might not only destroy the Government, but might also make finally impossible a reasonable co-operation in developing the whole waterway, with most regrettable effects on our relations with our great southern neighbor.

Lastly, there is, in the power situation alone, enough high explosive to blow to smithereens any Government that may handle it unskilfully. Even with the most skillul handling it is dangerous enough. Ontario is fanatically devoted to public ownership in the development of w'ater powers. Quebec is just as strongly prejudiced in favor of their development by private enterprise. If Quebec’s policy is allowed to prevail in her section of the river, it means that the three million horsepower there becomes the propertv of one or other of the powerful financial groups centred in Montreal. These groups are not particularly popular in the rest of Canada. How effectively could Ontario and the West be raised on this issue? There is, too, the questions now before the courts as to whether the Dominion or the provinces own the water. If it should be decided that the water power belongs to the Dominion Government, what will it do with it? If it allows the Quebec power to be developed by private enterprise in accordance with the policy of the province, it is almost certain to offend the rest of the country. If it does not, it will surely alienate Quebec.

Meanwhile, the Opposition has remained strangely silent on the whole matter. Aside from a few sentences from Hon. J. D. Reid before the Senate Committee last spring, apparently in opposition to joint development with the United States, and an echo from Mr. Ferguson in Ontario, there has been little to indicate what the policy of the Conservative party may be, unless, indeed, it may be described as one of “watchful waiting.” Whether it is merely a courteous “After you, sir,” or the silence and immobility of the cat before the mousehole, remains to be seen.

TN SUCCEEDING articles I shall en-

deavor to show that by proceeding with the development in co-operation with the United States, Canada will not only avoid the dangers I have pointed out in this article, but will create for herself an enormous economic asset in improved transportation and power development; that no legitimate Canadian interests will be injured, and that the work will constitute a powerful agency for maintaining and strengthening good relations between Canada and the United States—a state of affairs vital not only to the well-being of our country, but to the whole Englishspeaking world. But to reap these benefits and avoid these dangers it is nec essary that the question be dealt with in a far-sighted, businesslike wTay, with an eye single to the best interests of Canada, economic and otherwise, and it is necessary that it be dealt with, not in the distant, but in the very near future. It must not be made a political football, the sport of prejudice and passion.

Editors Note: This is the second of a scries of articles by Mr. Drury on the Sf. Lawrence Deep Waterway. The third will appear in an co.rly issue.