The Weak Spot in Our Canadian Constitution

Mr. Chairman and Gentlemen,--Perhaps the best method of getting to the heart of the matter is to relate an incident that occurred during my sojourn for some months in this very charming city on the strenuous and not unprofitable job of determining what was the proper price to be paid for the Street Railway. During that arbitration we were addressed by a well-known American lawyer whose qualifications may be judged from the fact that he now occupies a seat on the bench of the Supreme Court of the United States, having been promoted, as it were, right from the City Hall of Toronto to that exalted station. This gentleman quoted to us the provision of the American Constitution by which it was made clear that the property of no private individual could be taken from him for public purposes without due compensation; and by citing various judgments from the Supreme Court of his own country he showed that that doctrine

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Hume Cronyn is a former member of the Dominion Parliament, Chairman Board of Arbitration Toronto Railway Company; Chairman Special Parliamentary Committee on Soldiers' Pensions and on Scientific Research; now President The Mutual Life Insurance Company, VicePresident and General Manager of The Huron & Erie Mortgage Corporation, and has recently been appointed one of the Royal Commissioners investigating the Nova Scotia Coal Situation.

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had been extended to cover such cases as the undue lowering of railway rates, which would be an indirect method of taking the property of the stockholders of that railway, or even excessive taxation, which seemed to me an extreme extension of the doctrine. At the time I wondered whether the learned Counsel had ever read the judgment of one of the most skilled of our Canadian jurists which pointed out how greatly the American Constitution differed from that of Canada. As some one has said, the American Constitution "divides the powers of government neatly between the executive, the judiciary and the legislature." With us, in theory at least, our parliaments are supposed to have complete control over the execuive. There is a complaint at times that governments work alone, without the backing of their Houses, but theoretically the rule is as stated, and as well in the last analysis our legislatures are the final courts of appeal.

The judgment in question, after quoting the classic commentaries of Blackstone, wherein it is set forth that "Parliament has sovereign and uncontrollable authority in the making, confirming, enlarging, restraining, abrogating, repealing, reviving and expounding of laws concerning matters of all possible denominations"-(the old authorities were nothing if not comprehensive) -goes on to say that the Ontario Legislature in dealing with matters within its jurisdiction "can do everything that is not naturally impossible, and is restrained by no lawhuman or divine. The prohibition 'Thou shalt not steal' has no force upon this sovereign body." (Laughter)

That brings me to the crux of what I think is the weak point in our Constitution, a Constitution which personally, despite that weakness, I infinitely prefer to that of our cousins to the south. (Hear, hear) In many ways they work under handicaps which do not exist with us. Of course you have to remember that in calling it a weak spot my thesis is inspired by the belief in the right to the ownership of property fairly acquired; the right of the savage to the canoe he fashioned; of the pioneer to the fields he has so laboriously cleared; of the workman to the house he has erected or purchased from his hardwon savings. The idea is neither original with me, nor is it indeed modern. So antiquated is it that in certain circles it is brushed to one side as being quite out of date; for we find in Magna Charta--that Charter of English liberty, as it is appropriately named--three primary principles: first, the right to personal security--no man could be imprisoned save by the judgment of his peers; second, the right of personal liberty--every man was free to move when and where he chose, nor could any be kept in a state of vassalage or slavery; and third, the right of private property, including therein the right freely to pledge, alienate or dispose of the same. Do not forget that the greater includes the less, because the right to the ownership of property would mean little if it did not include the right to pledge or dispose of it.

In aid of those three primary or fundamental principles were added various enabling remedies, the chief of which was that one which threw open the courts of the land to all who considered themselves wronged. That last right is thus described by an ancient writer: "Since the law is the supreme arbiter of every man's life, liberty and authority, Courts of Justice must at all times be open to the subject. The emphatical words of Magna Charta, spoken in the person of the King--who in the eye of the law is ever present repeating them in all his courts-are these: 'Nulli vendemus, nulli negabimus aut differemus rectum vel justitiam'--To none will we sell, to none will we deny or delay right or justice." (Applause) These privileges, as you very well know, were won only after centuries of conflict, and were fought for and affirmed time and again through succeeding years. In confirmation of this great Charter of the common people--not, mark you, of the King, nor of his barons, nor of the landed gentry, but of the people, as we call it today, with a capital P-in confirmation of that Charter Henry III of England was forced to attend at Westminster Abbey, where, surrounded by his nobility, and the Bishops of the Church holding lighted candles, he stood with hands folded on his breast while each clause of Magna Charta was read to him; whereupon, in the words of the chronicler of that day, "he swore solemnly to observe faithfully and inviolably all things therein contained as he was a man, a Christian, a soldier and a king." Then the bishops extinguished their candles, and all cried aloud, "Thus let him be extinguished and stink in Hell who violates this Charter." (Laughter)

Well, gentlemen, you laugh; and as a matter of fact such ancient rites do but excite ridicule in these days, where liberty is oft confounded with license, and you may be inclined to retort with that character of Molieres, "Nous avons change tout cela." Indeed, with those of you, if there be any such, who prefer the tenants of Sovietism so called, or who as do certain of the fifty-seven different varieties of Socialism denounce private ownership of property as theft, I cannot argue, as my argument is based on that right. "Ah, ha," I hear you say, "here we have a defender of vested interests, of the bloated capitalist, or at best a die-hard reactionary who will fight to the last ditch against any betterment of the oppressed." Now, it amuses me to hear the Capitalist abused in this Canada of ours; but I know, of course, there are a few individuals-relatively very few, indeed-whose ill-gotten wealth is alike an instrument of oppression and an object of envy; but the great aggregations of Capital in Canada are owned by a vast army of men and women who by their hard work and prudent economy have been able to lay by something for a rainy day, and those savings are entrusted to our financial institutions, such as banks, insurance, mortgage and trust companies, or are invested in real estate or other securities.

May I take an actual example of the insurance company with which I am connected? It is purely a mutual concern; that is, it has no capital stock, and every dollar of its assets belongs wholly and solely to the policy-holders. When I tell you there are considerably over 100,000 of such owning among them some $66,000,000 of assets, I think you will agree with me that laws which weaken or destroy the investment in which those assets are placed--all of them either government, municipal or other bonds or mortgages in Canada--are to be deplored. The figures just quoted shrink to insignificance when compared to the amounts entrusted to life insurance companies under Dominion jurisdiction, whose total assets amount to $733,000,000.

As to being a reactionary, I plead guilty if my warning and protest against laws, which I believe undermine our social structure, convict me of such a charge. As a matter of fact, my sympathies are always with the underdog. I have ever quarreled with the second line of Browning's oft-quoted couplet-the second line mark you--"God's in His Heaven; all's right with the world." All is far from being right in this world of ours and doubtless the reason is, as we have been told many a time by our pastors, that we keep the Creator enthroned in His Heaven instead of enshrining Him in our hearts. (Applause)

Many of the ideals of Socialism make a deep appeal, but we have by slow and laborious trial to ascertain the best means of realizing them in practice. There is no short cut to the elysium of universal brotherhood, and I think you will appreciate the statement of the Rt. Hon. Arthur Henderson, the well-known labour leader even no won this continent, when, after a visit to Russia, he declared that although as bitterly opposed as ever to the economic theories which dominated his own land, he preferred to bear the ills consequent on these rather than fly to those infinitely worse bred under the Soviet regime. (Hear, hear)

What I am criticizing is that law which infringes on or repudiates the third of those cardinal principles laid down over 700 years ago--the right to hold, to pledge, to deal with private property. Perhaps the best method of emphasizing my objection is to cite actual instances of legislation which in my opinion have offended in this respect.

We all know that complaints have been made from time to time or, this ground regarding Western legislation, but as an Easterner, speaking in the East, I prefer to select for one example a case which occurred in the Dominion Parliament, and for the other one in the Legislature of our own Province of Ontario. I know that, by so doing I am, in a sense, weakening my case, because the Western examples would be more apt, are more recent, and you might think them more conclusive, but I do not want to bolster up my argument by unfair tactics, and in addition as both the cases cited are not of recent date, no question of politics can be involved.

The Dominion Act in question was brought about by an era of excessive drought throughout the greater part of the West whereby many farmers derived little or nothing from their crops, and were without means to purchase seed for the ensuing year. To remedy this situation and avert widespread disaster the Dominion House in 1914 authorised the Government of the day to make advances to needy farmers, for seed and feed and in all some $12,000,000 were expended in this fashion. The result of this, what might be called paternal innovation, was highly satisfactory, because a beneficial Providence awarded to the West in 1915 the largest crop on record. Why then, you may ask, do you question what was done?-Wait a moment till the whole story is told.-The Statutes under which these advances were made provided that the Government, or rather the Crown should have a first claim on all the lands of the borrowers, prior to any more gage or other encumbrance. In other words, with the aid of the Legislatures of the interested Provinces swept aside the law of the land, abrogated contracts entered into years before in good faith and made the Dominion Government secure at the expense of a helpless minority, viz.: those who, in the belief that they were protected by age-long laws, had invested their money in that part of Canada.

Now, I freely admit that Parliament acted wisely in authorizing these advances, and I agree the Crown should have been given a claim against the lands of the borrowers; but that claim should not have been granted priority over existing encumbrances; it should have ranked after earlier bona fide liens, and the losses, if any, should have been borne by the nation at large, because this was a national movement. (Applause) The result was that the country played the part of Fairy God-father at the expense, in certain cases, of private individuals.

Whether that expense was small or great it is of no significance. The important, disturbing feature is that, under the excuse of national needs, our legislators overrode the well-settled law of the land, and shook the faith of investors in our country. One of the worst evils of such a deviation from what have been termed "the immutable principles of justice" is that it is sure to be followed, enlarged and deepened by succeeding legislation. Had I not promised to confine myself to two examples it would not be difficult to trace many such trails on that easy downward path which leads, if not to Avernus, at least to a morass of stagnation and chaos.

My second example is in connection with the Ontario legislation establishing the Hydro-electric Commission. You will deem me rash indeed, in the face of all that Hydro has accomplished, to venture to call in question any of its legislation. May I assure you that the colossal nature of that enterprise compels one's admiration, and I am very certain that the work of its late Chairman, Sir Adam Beck, whose untimely death is undoubtedly a national calamity, will long after we are dead and forgotten shine forth among the greatest in the history of our Province. Moreover, not one penny of loss was occasioned to me by the legislation of which I complain nay, rather I am, like tens of thousands of others, distinctly a gainer thereby. For those very reasons I think one can, without heat or rancour, attempt to point out what was wrong.

I pray you to bear with me a moment while I endeavor to trace the history of this abuse of sovereign power given to our legislators. If those of you who are old enough will cast your minds back a quarter of a century you will recall that the science of electric lighting was in its infancy; not the half was known in this regard of the almost miraculous value pertaining to falling water, nor had the problem been solved of conveying electric currents over long distances without ruinous loss of the magic "juice." Yet, despite that, many towns and cities in Ontario were being served by local private concerns generating electricity from steam plants--I grant you in an inadequate fashion and at high rates. Those steam plants, inefficient though they were when judged by modern standards, cost large sums to build and maintain. Concurrently with or following this situation certain municipalities of Ontario, being desirous of erecting electric plants out of public funds, sought power from the Legislature to raise the moneys required for that purpose, and to levy taxes for their repayment.

In response to that request, the Legislature in 1899 amended the Municipal Act so as to allow municipalities to enter into the business of supplying either gas or electricity, or both, to their citizens, in addition to the right acquired many years previously of providing them with water. But the Legislature attached to these extended powers the same proviso as had for a generation governed the establishment of public systems of waterworks. That proviso was to the effect that where a private company was already in existence the municipality could not enter into competition with it, but must buy it out either at a price agreed on, or failing that, at one fixed by arbitration. The Act indeed went so far as to direct the arbitrators to ascertain the actual cost of the plant in question, and after deducting therefrom such allowances as should be made by reason of deterioration, old age and obsolescence, to increase the net figure thus obtained by ten per cent. In other words, the Legislature said to the Municipalities, "You must not use these extended powers, and the public funds you will raise, to put out of business without compensation those who have been enterprising enough to act as pioneers and risk their moneys in serving the public."

The law stood as quoted until 1906, when the HydroElectric Commission of Ontario came into existence. By its Act of Incorporation the same powers were granted as existed under the Act of 1899, of raising moneys and levying taxes where municipalities joined with the Commission in distributing electricity. True, the municipalities were not erecting plants under the new law; they were simply acting as distributors; but they were specially exempted from compensating existing companies. The Act of 1906, leaving out unnecessary words, reads as follows: "It shall not be necessary for the Council, before passing a By-law or issuing debentures, to fix any price to be offered to any Electric Company or Gas Company in such municipality, or to take any further or other proceedings, having for their object the fixing of a price for the works or plant of any such company, or any part thereof, or for the expropriation thereof, unless the Commission shall otherwise order or direct."

The effect of that alteration in the law was to leave the existing plants to the tender mercies of the Commission. It is said, and has been said to me, that the Commission stood ready to buy out these existing companies on what it considered fair terms; but the answer made to that assertion is that the price offered was in most cases based on what we call "scrap value," and as a matter of record not a few companies went down to actual ruin.

We often hear of the desirability of getting British capital into this country. Some years ago I was introduced to a firm in Great Britain who specialize in the promotion, flotation and actual operation of electrical enterprises. The head of that firm, who was for many years and still is a member of the British House of Commons, told me that his firm had been approached to take over a large electrical enterprise in Ontario. The firm's engineers came out, and their report was entirely satisfactory, the water supply was ample, the market adequate and the price reasonable; but in the meantime the legal staff had been busy, and when their report came in the gentleman said to me, "As far as we are concerned we will never invest one penny in electrical enterprises in Ontario as long as that legislation stands on the statute books of the Province."

But the above is not the whole, or really the worst phase, of Hydro legislation. Some owners of private concerns, feeling they were being crushed by the public and believing the Legislature had exceeded its jurisdiction, endeavored to test the constitutionality of the new law by an appeal to the Courts; whereupon the Ontario House, to meet those attacks--bending to the will of the Commission, I take it--passed a further law that no action could be brought against the Commission or any member thereof without first obtaining the leave of the Attorney General of Ontario. As the Attorney General of Ontario was not only a member of the Cabinet, which, if it did not originate, was backing the whole scheme, but for a time at least was also a member of the Commission itself; you can see the new law imposed a real restriction. Two years later the doorway to the courts was even more effectually barred, because there was passed a clause which, omitting unnecessary words, reads as follows: "Every action heretofore brought . . . . calling in question the jurisdiction, power or authority of the Comission . . shall be and the same is hereby forever stayed."

In 1914 the Commission was still further protected by an Act which said: "No Court shall have authority to grant or shall grant an injunction restraining either temporarily or otherwise, the construction, maintenance or operation of any works, the location and mode of construction of which have been approved by the Commission."

Now, I concede that the work of the Hydro Commission was of the highest importance, and that it would have been. a great misfortune to have that work impeded by--to use the words of one of the Acts just quoted--"unnecessary and vexatious litigation" initiated, perhaps, by men of straw, of no financial worth, under the advice of speculative lawyers. I agree, too, that the largest electrical 'financial group outside of the Hydro were generally opposed to public ownership, and were credited by the public with charging all the traffic would bear; but even admitting those arguments and others, I challenge anyone to find in the history of the British Commonwealth a more serious abuse of the sovereign power of our Legislatures. Think of it, gentlemen, one of the most dearly-prized privileges of every citizen of our Empire-the right to appeal to the courts of the land, a right fought for and only secured after generations of conflict against the tyranny of court and throne--that right deliberately withdrawn from one class of our fellow-citizens!

Let me repeat that my remarks are not intended as an attack, direct or indirect, on Hydro. If all Government undertakings were conducted with the same thoroughness and zeal, criticism of public ownership would be to a great extent silenced. My quarrel is with the legislation just cited.

Let us suppose that the Act of 1899 had been allowed to remain in force, and that Hydro had been forced to acquire by purchase or otherwise the private companies operating in the fields it entered, what would have been the result? It would have meant that we,--and I say we, because Hydro is a combination of municipalities backed by the people of Ontario--we would have had something more than the $200,000,000 or $300,000,000 we have to date invested in this huge enterprise. In addition, those of us who secure light, heat or power from the Hydro, might have been called upon to pay a slight--probably a trifling--increased rate for the same. But even under this disability would not such a course, I ask you, be more consonant with that British justice and fairplay about which at times we hear so much? (Applause)

These, then, are the two examples I have chosen for the reasons stated to demonstrate what I call the weak spot in our Constitution. There are others, both within Dominion and Provincial spheres of more recent date which might arouse greater interest or animosity, but if unimpressed by what I have stated, you would not be aroused to the danger of the situation by what must be largely a repetition.

There may be those sufficiently interested to enquire, what is the remedy for so serious an infringement of the rights of the industrious and economical amongst us? Well, a possible one--and I do not know that it is even possible,--is to amend the British North America Act. I take it that would mean the consent of the Provinces concerned; it would have to pass both the House of Commons and the Senate, and then the Imperial House as well, and the chances of getting that through seem to be pretty slim. The other remedy is an extension of the principles enunciated some time ago by Dr. Horace Britton, of Toronto, when he pointed out that the primary duties of the electorate were not merely to cast their votes but to acquaint themselves with the candidates offering themselves for election and with the issues before the people. It was an American, I think, who uttered the caution, "Watch your legislators." I would alter that phrase to the slogan, "Watch your Legislation." There is no doubt that by associations, by clubs such as this, backed by an intelligent public opinion unafraid to make itself heard, much can be done to prevent unwise laws appearing on the Statute Books. Governments are notoriously susceptible, even those with a large majority, to the opinions of the electorate, if these are clearly placed before them, backed by a large and firmly-spoken body of citizens. That is a homely truth--I was going to say a Home Bank truth. (Laughter) We really cannot take too many cautions. The scrutiny must be alert; the protest must be immediate. It is absurd how in the last days of a Session measures will slip through the House, whether it be a Legislature or Parliament, without even members themselves grasping the significance of what they are passing. We ought to follow the example of those English villagers who, when an inspector came around to find how they guarded their water supply, told him, "First we filters it, sir." The inspector said, "That's good." "And then we boils it, sir." The inspector said, "That's fine." "And then, sir, we drinks beer!" (Laughter) Well, if we could filter and boil our legislation-I would not recommend drinking 4.4 (laughter) but we could do without a deal of the legislation that gets upon our Statute Books, when it is clear beyond doubt that the Legislature of any Province can take A's property from him and give it to B, can take your property and give it to me, or can confiscate the properties of both of us without compensation, I think you will agree it is wise to keep a sharp lookout on what goes on within the walls of Parliament.

In the olden days the struggle was to restrict the power of the King so as to prevent the infringement by him or his nobles of those three great rights of which I have spoken. Our constitutional monarch is however no longer the offender: we have enthroned a new king, "Demos," as the Greeks called the people; and, in the words of a witty Frenchman, "The clamour of the market-place can be as grave a menace to independence as the favour of the throne."

Curiously enough, in that famous report by Lord Durham on Canadian affairs, through which we obtained to a great extent the measure of self-government we now enjoy, he touches on this very remedy in the following cogent terms: "If the colonists make bad laws and select improper persons to conduct their affairs, they will generally be the only, always the greatest, sufferers, and, like the people of other countries, they must bear the ills which they bring on themselves, until they choose to apply the remedy."

I pray your pardon for tarrying so long on a subject which calls for a far more eloquent voice than mine to give it the living, appealing human touch. I wonder if I can bring it home to you in this fashion? A believer in life insurance myself, I take it that you have protected yourselves and dependants in this fashion. In doing so you have entered into contracts with life companies running over a series of years, and many of them only calling for fulfillment after your death. Your savings paid in the shape of premiums are invested in a variety of securities, for the most part Canadian, such as bonds and mortgages. The protection thus obtained enables you to face the future with confidence, and sleep sound o' nights. What would be your feeling if you were to discover that the Dominion Parliament or the Legislature of your Province were enacting laws which imperilled your fancied security? Yet that it the effect of not a little of the legislation of late years, and unless checked by your alertness and opposition the effect will inevitably be to weaken if not to destroy the savings of a lifetime. In taking my seat let me repeat I represent neither the capitalist nor the rich corporation. My plea is on behalf of those inarticulate thousands and tens of thousands who are daily denying themselves, daily struggling to earn a little more and spend a little less in order that thereby they may avert the spectre of a penniless old age or provide for those dearer to them than life itself. Should we not, therefore, ever stand ready to protest against legislation which, however attractive, its immediate object, may in the end undermine or render valueless the securities in which these savings are invested. (Long and sustained applause)

MR. JUSTICE MOWAT expressed the thanks of the Club for the address.