Hydro and the St. Lawrence

THE PRESIDENT: Gentlemen: We are indeed delighted at the excellent audience here to greet Dr. Hogg today, and it is a unique honour to welcome as our guest today, Dr. Hogg, whom I have known intimately almost from his graduation from the University of Toronto with the degree of B.A.Sc. in 1907.

Later, from the same university in 1912 he received the degree of C.E., and the Honorary Degree of Doctor of Engineering in 1927 for meritorious work. Shortly after

his graduation he entered the employ of the Ontario Power Company under one of the most outstanding water power engineers in North America and obtained that groundwork that was to determine his latest career in engineering.

About the year 1912, the Hydro-Electric Power Commission of Ontario obtained authority to proceed with the construction of its own water powers to meet the further demand of its power consumers in certain systems. Prior to this date all power had been purchased for the operation of the Hydro Systems at Niagara, the Severn, Ottawa and Fort William. This new departure necessitated the organization of a water power engineering branch under the direction of Dr. H. G. Acres and of which shortly afterwards, in 1913, Dr. Hogg became a member, later becoming Chief Assistant to the Hydraulic Engineer.

During this period the most important water power works of the Commission were constructed; first, the Wasdell and Eugenia, then the larger plants at Nipigon120,000 horsepower in two plants--and the QueenstonChippewa, 500,000 h.p., in all of which Dr. Hogg had an important part in engineering design.

Upon the resignation of Dr. Acres in 1924, Dr. Hogg became Chief Hydraulic Engineer. During this period, and with the authority of the Commision he held import ant retainers as Consulting Engineer for the Beauharnois, Manitoba Power Commission and on Government Boards, such as the Lake of the Woods Board, Lac Seul and others, including a joint Board of Engineers on the St. Lawrence.

In 1934, Dr. Hogg became Acting Chief Engineer and later Chief Engineer of the Hydro-Electric Power Commission, and in 1937, Chairman of that Government appointed Commission, administering the largest and most successful municipally-owned Hydro-Electric undertaking in the world, which has been of such tremendous value and benefit to the people of Ontario, supplying power to over 700 municipalities under contract.

Indeed I have great pleasure in introducing to you at this time Dr. T. H. Hogg, whose address is entitled, "Hydro and the St. Lawrence". (Applause)

DR. THOMAS H. HOGG, C.E.: Dr. Gaby, Gentlemen: To the average citizen of Ontario and Canada, the St. Lawrence navigation and power project is a mammoth undertaking that has periodically appeared and disappeared from his field of notice, always without finality one way or the other. He is now surprised at its reappearance at a very critical period in Canadian history, when all our best energies are needed for a life or death war. His first question is: why would it not be best to defer any decision until after the war, when the re-establishment of returned soldiers will present a pressing social problem of great magnitude? He has noted with disquietude and alarm a great deal of anti-St. Lawrence propaganda warning him that it would saddle Canada with an enormous expense, running into many hundreds of millions of dollars. He is being told that the navigation project would be of little or no value and that Ontario has no need, either now or in the near future, for St. Lawrence power. Yet he knows that his Government has seriously considered entering into a St. Lawrence treaty with the United States. In the face of all this, is it any wonder that he stands bewildered and more than a little suspicious?

All my life I have been interested in power, the development of power and the power needs of communities. My primary interest in the St. Lawrence project is due to power. You will know how to take this into account as you listen to what I say. But do not forget that you, too, have a deep interest in this project. It concerns you vitally, both as it directly affects your local interests and as it affects the interests of Canada. Moreover, as Canadians, you need offer no apology for urging that Ontario's interests be very carefully considered, and for insisting upon the importance of a proper understanding of all aspects of this St. Lawrence project.

In some respects it is unfortunate that the official arguments in favour of the St. Lawrence project have not been put forward and cannot yet be put forward. For reasons which you can readily appreciate, the Dominion Government has necessarily kept silent and you have been dependent upon various analyses published by the newspapers and periodicals, very largely based upon the proposals made in 1932.

On the other hand, those who take a narrow and a selfish view and those who fear that their interests may be adversely affected have been loud and persistent in their clamour against the St. Lawrence project. Large sums of money have been spent for ingenious anti-St. Lawrence publicity. Although plausible, much of this deceptive propaganda collapses like a pricked balloon when subjected to careful study.

It is most regrettable that such propaganda appears to have been accepted in good faith and at face value by many newspapers and publications unaware of its fallacious character. In the absence of correct information it is perhaps natural that this should be so, but the distorted and erroneous conceptions which inevitably have arisen in the minds of the public in consequence of the untrue propaganda is none the less harmful.

With this in mind, I have decided to talk to you about the St. Lawrence project. I have no intention of discussing navigation in any detail, although I shall make some references to the combined navigation and power project as a whole. My primary and official concern is with power, and I shall begin with a brief review of the power demand of the Hydro-Electric Power Commission, its growth and the resources available to meet future growth.

During the interval between the last war and this, the increase in industrial use of electricity in Ontario has been enormous. Thousands of factories have been established, technical processes have been developed, personnel has been trained, power equipment installed and a strong broad industrial base has been laid. On this broad base Ontario industry is capable of rapid expansion. But for the existence of this industrial foundation; the production of munitions and supplies vital for the war, in quantities that would have any significant effect upon the outcome, would be impossible.

Looking back to the last war, you will recall that notwithstanding the Commission's utmost efforts, a power shortage on the Niagara system occurred during 1917 and 1918. That shortage threatened to handicap vital industry at a time when the need for power was tragically urgent. It will be well to keep this in mind during this review of the resources of the Niagara system today.

The outlook has changed materially since the Quebec contracts issue was settled some two years ago. Who would have thought then, when so many declared we would never need the additional Quebec power, that we would today seriously question the adequacy of our Niagara System resources to meet the demands upon them beyond the early fall of 1942? This may seem almost unbelievable to those who regard the low rate of load growth during the early middle thirties as a reliable indication of the probable increase in future power demands and who were seriously impressed by the repeated assertions during that period that the quantity of power available under the Quebec power contracts exceeded the Commission's most optimistic requirements for many years to come. I may say I never took this view, and the facts do not support it.

First as to resources now available for growth. In December, 1939, our Niagara System power resources exceeded the demand for primary power including normal reserves by about 100,000 horsepower. In addition to this, the total quantities of power scheduled for future delivery under our Quebec contracts, including the last block of 20,000 horsepower due in November, 1944, aggregate 140,000 horsepower. The two combined amount to 240,000 horsepower and represent the total quantity of power resources available for growth in the Niagara System while preserving a working reserve.

As evidence of load growth, consider this: from December, 1929 to 1931, during the depths of the depression, there were substantial decreases in the Niagara System primary demand; from December, 1931 to 1935, small increases of less than 3 per cent per annum; from December, 1935 to 1938, larger increases, in the order of 5 or 6 per cent per annum. But, in December, 1939, our Niagara System primary load exceeded the peak of the previous year by 150,000 horsepower, a growth of 13 per cent. Last March (1940) the load growth over the previous March (1939) was 178,000 horsepower, over 17 per cent. A load increase of only 10 per cent per annum for two years over the primary load of December last, would mean that every resource of our Niagara System including the last block of Quebec power not due until 1944 would be needed to meet the demand for primary power as of December, 1941, while -providing only a very moderate reserve for safety. Allowing for the growth of the Eastern Ontario and Georgian Bay systems which for a year or two will probably be supplied by transfer from the Niagara System, the working reserve will be wiped out entirely in December, 1941. Some of you may remember that for a period of eighteen years prior to the thirties, load increases of 10 per cent per annum were the order of the day. That such increases cannot go on forever no one doubts, but while war activity and industrial expansion continue, load increases of 10 per cent per annum would seem to be quite moderate.

Your guess as to how long the war will last is as good as mine. If it should continue for a number of years the need for substantial additional quantities of power in the very near future cannot be questioned. Considering the amazing growth in the mechanization of our military forces, and the great increase in numbers and complexity of modern weapons and the consequent complete dependence of military effort upon maximum factory production, the importance of adequate power resources, especially during the war, is generally recognized as established beyond question.

It was in 1932 that the advocates of the St. Lawrence development first appeared to have success almost within their grasp. After exhaustive study by national and inter national engineering bodies and lengthy negotiations between representatives of the governments of the two countries, a treaty designed to provide a basis for the undertaking was signed.

The treaty provided for the orderly improvement of the river sections of the waterway from the head of the Great Lakes to Montreal Harbour. It also provided for the immediate development of the water power in the international rapids section of the St. Lawrence River as an integral part of the comprehensive project; this international rapids development was to have been a joint undertaking for navigation and power.

At about the same time Canada and Ontario entered into an agreement under which the power on the Canadian side was to have been developed by the Province.

When submitted to the United States Senate, the 1932 treaty failed to receive ratification. In consequence it was never formally presented to the Parliament of Canada nor was the Canada-Ontario agreement submitted to the Provincial Legislature.

During 1937 the diversion of northern waters into the Great Lakes from Long Lac and the Ogoki River, and the exclusive use by Canada of waters so diverted all along the international boundary, from Lake Superior to the sea, received considerable attention and as a result the advantages of an international arrangement under which these international waters could be more effectively used to meet the needs in each country again came to the fore.

In May, 1938, Mr. Cordell Hull, Secretary of State for the United States, put forward a comprehensive proposal for the settlement of problems on the entire Great Lakes-St. Lawrence basin. Mr. Hull also submitted a draft treaty which provided, as before, for the construction of a deep waterway from Lake Superior to Montreal Harbour and, as before, for the development of power in the international rapids section of the St. Lawrence River.

Toward the latter part of 1939 discussion of the Hull proposals was opened between representatives of Canada and Ontario and early in January, 1940, negotiations

between Canada and the United States commenced. Although there has been a lull in these negotiations, there is no doubt that Canada and the United States are in substantial agreement today and that the way to signing a new treaty is open.

In his letter to the Government of Canada (dated May 28, 1938) Mr. Cordell Hull summarized the provisions of the tentative draft treaty. "In brief", he said, "the proposed treaty would

(a) enable the United States to go forward immediately with the International Rapids Section link in the proposed St. Lawrence deep waterway and the incidental power development;

(b) defer Canada's responsibility for completing its share of the waterway for a sufficient time to assure the readiness of the Ontario power market to absorb its share of the power;

(c) provide for an international commission to develop plans and advise the two governments in a programme to promote the most advantageous use of the entire Great Lakes-St. Lawrence resources;

(d) assure the immediate undertaking under the supervision of this commission of the proposed remedial works to preserve the scenic beauty of Niagara Falls;

(e) permit the Province of Ontario to go forward with its plans for diversions from the Albany River basin into the Great Lakes and utilize such additional water for power at Niagara;

(f) make available considerable additional Niagara power to each country for development at will; and

(g) enable the proposed commission to proceed immediately with the preparation of comprehensive plans for more efficient use of the resources of the Niagara River."

From an engineering standpoint, the development plans are perfectly sound. They also have the material advantage of being nearly $30,000,000 lower in cost than the plans upon which the 1932 treaty was based, while at the same time affording full protection for all the interests in the various sections of the St. Lawrence River. This saving, when equitably distributed among the four interested parties, materially benefits both Ontario and Canada.

In the unavoidable absence of official information upon any treaty which might be signed as a result of negotiations during recent months, we have no choice but to assume that the basis for the division of cost of the St. Lawrence project would not differ materially from the basis set out in the treaty of 1932. I have already pointed out the probability that there will be a saving of some $30,000,000 as compared with the 1932 plans, but in what follows that saving is entirely neglected.

Bear in mind that the St. Lawrence River development is a combined navigation and power project, and that the estimates for the International Rapids Section include the cost of works both for navigation and power. In the National Section of the river, which lies wholly within the Province of Quebec, works for power and for navigation may be undertaken either independently, or as a combined project. Though official estimates are available for each, only those estimates for the navigation project are here referred to, since the power projects would be independent self-liquidating undertakings.

Both the 1932 Treaty and the 1938 Draft Treaty specified that the United States would provide funds for all undertakings in the International Rapids Section, except those required for lands, rehabilitation, canals, locks, power house superstructures and equipment in Canada. Thus the United States would assume the cost of all works in the river, including the dam, equipped to control and regulate the flow of the river, and including all dredging. Thus the United States was ready to do in order to equalize the cost of the project. Canada has already expended many millions of dollars on the Welland Canal and elsewhere so that in order to finally arrive at an equal expenditure on the part of both nations, it was agreed that the United States would bear the greater part of the expense in the International Rapids Section and that Canada would complete the works in the purely national section in the Province of Quebec.

It might be argued, and with good reason, that on the basis of financial strength of the two governments, the total population of the two countries, and the use of the canal, the United States should pay much more than Canada but I think our people as a whole would like to feel that they are pulling their own weight and are in no way indebted to a good neighbour for any more assistance than should be provided by an equal partner.

In the International Rapids Section, which is estimated to cost a total of $274,000,000 for both Navigation and Power on both sides of the boundary, the actual gross out-of-pocket expenses incurred by Canada were

(a) For Land, rehabilitation, canals and Locks, (Federal Government) $22,320,000.00
(b) For Generating Stations (Ontario) 36,930,500.00

$59,250,500.00

A total of $59,000,000.00. Obviously this low cost to Canada for work actually done in the International Rapids Section is due to the assumption of much larger expenditures by the United States in lieu of Canada's expenditures elsewhere. In this way Canada begins to secure the benefits of large expenditures already made, for which no return can now be secured.

Now, let us distinguish between all the obligations of the Federal Government of Canada and of the Government of Ontario which devolve upon the Hydro-Electric Power Commission of Ontario.

Ontario agreed to pay a fair price for the power benefits which would be derived from a dam, sluice gates for controlling and regulating the river, power-house substructures and channel improvements. As these works were provided at the expense of the United States in lieu of heavy expenditures made by the Canadian Federal Government it was only proper that Ontario's payment should go to the Federal Government. Under the 1932 proposals, $67,000,000 was agreed upon as the sum payable by Ontario to the Federal Government. As the total estimated cost to the Federal Government for work in the International Rapids Section was $22,000,000 it would have actually come out of the International Rapids Section, $45,000,000 to the good. This sum could have been applied to the cost of works in Quebec to which the Federal Government was committed.

Under the agreement, Ontario meant, in effect, the Hydro-Electric Power Commission of Ontario. Ontario's only uncontrollable obligation was the $67,000,000 payable to the Federal Government. This was a binding commitment. An additional total expenditure of $37,000,000 would be made in due course for the construction of generating stations, but this was controllable, and would be made on whatever schedule best suited Ontario's needs. In other words, all of the $37,000,000 for a generating station could be deferred as long as St. Lawrence power was not needed by Ontario and, of course, it could be expended unit by unit to produce power as required. All this without imposing burden of any kind upon Ontario taxpayers.

On completion of this controllable and gradual outlay, eventually totalling $37,000,000, Ontario would finally secure 1,100,000 horsepower at a capital cost of $95 per horsepower.

To visualize the obligations assumed by the Federal Government, we must examine the project as a whole, including not only the International Rapids Section which borders Ontario, but also the work in Quebec. The official figures for the 1932 proposals show the cost to the Federal Government of the work in Quebec as $83,000,000 and for work in Ontario, $22,000,000; a total of $105,000,000. Deducting the $67,000,000 payable by Ontario, the estimate of the Federal Government's out-of-pocket expense for the whole St. Lawrence River became $38,000,000.

However, it is well for us all to remember that all estimates are based upon unit costs for material, for labour, and for equipment. If, on account of direct or indirect inflation the actual unit costs should differ very materially from the estimated unit costs, it is highly probable that a corresponding variation would occur in the total cost of the project. But the increase or decrease in cost caused by such variation should be fractional only.

I must now refer, though with some measure of regret, to a pamphlet entitled "The St. Lawrence Project", published by W. T. Jackman, Professor of Transportation, University of Toronto, February, 1940, and printed at Review Company Printers, Fort Erie, Canada. Thousands of copies of this pamphlet have been printed and circulated and excerpts have been extensively quoted throughout Canada and the United States. Many well-meaning people have been influenced by the use of the name "University of Toronto", and many interested parties have seized upon that name for its propaganda value, yet I have a letter from the President of the University, informing me that the pamphlet "is not published or approved by the University in any way".

Having regard to Mr. Jackman's university affiliations and the great numbers of his pamphlets that were printed at Fort Erie and broadcast all over the North American Continent, it would be interesting to know whether he published it at his own expense as a personal contribution or whether it was sponsored by any person or organization and, if so, the name of such person or organization. Had this information been given, the pamphlet could not have been mistakenly presumed to be an official and hence an impartial publication of the University.

While I am sorry to criticize the work of a Canadian University Professor, I feel compelled to deal with this pamphlet because of grossly misleading and erroneous statements which it contains and because of an unjustified reference to the Hydro-Electric Power Commission of Ontario.

From the viewpoint of capital cost, the more serious errors in Mr. Jackman's pamphlet relate to power from the International Rapids Section. On page 6 of his pamphlet, Mr. Jackman says, "This would mean that in order to get 1,100,000 horsepower of electric energy, the Province of Ontario, which would receive all this power, should have to bear the cost of its production, that is $670,000,000." Mr. Jackman makes it clear on page 4 that he is considering only the "International section" and not "the full development of power and navigation down to Montreal".

As I have already indicated, Canada's net out-of-pocket expense for actual work in the International Rapids Section is $59,000,000. Under the 1932 proposals, Ontario's out of-pocket expense for power is $104,000,000 which includes a payment of $67,000,000 to the Federal Government, a sum which is sufficient to pay for all of the Federal Government's work in the International Rapids Section and leave $45,000,000 to be applied to work in Quebec. But under Mr. Jackman's assumption that no work would be done in Quebec, what figure based upon official estimates have we to compare with his $670,000,000? 1 think all we can say is that such a figure would lie somewhere between $59,000,000 and $104,000,000.

Fantastic as this figure of $670,000,000 is, when compared with the official estimates, its origin is simple. It is largely the outcome of pyramiding error upon error. Let me give you a few examples.

First: Mr. Jackman assumes that half the cost of the work in the International Rapids Section is chargeable to Canada. As I have already pointed out, Canada was to pay very much less than half the total cost of the work.

Second: Mr. Jackman includes in his estimate the cost of interest during construction. Although this is not usual in Government estimates, I have no quarrel with the inclusion of interest if correctly calculated. But in his calculation of interest Mr. Jackman has used an approximate method based on a much longer construction period than that clearly set out in the schedule included in the official report and he assumes a uniform rate of expenditure throughout. His interest calculations are $35,000,000 on the high side.

Third: To the foregoing Mr. Jackman adds $100,000,000 for Canada's share of work in or above Lake Ontario, which does not appear in the Official estimates, and he assumes that the cost of this work should be charged to power.

Is it reasonable to suppose that large sums of money would be spent for navigation in and above Lake Ontario as well as in the International Rapids Section while omitting work in Quebec that would make through traffic possible? If such navigation work were deemed to be advisable, why should it be charged to power in the International Rapids Section?

Fourth: Mr. Jackson multiplies his swollen figures by 2V2, because the official estimate, although prepared by a Board of competent engineers, after exhaustive study and having before them unlimited data, was, in his opinion, not high enough. As plausible justification of this procedure, he cites the increase in cost of certain major engineering works, disregarding factors such as enlargement of the project during construction and neglecting all the many other undertakings on which the costs were consistent with the estimated figures. It is my considered opinion that if this work were to be re-estimated on the basis of present-day unit costs, the figures would be lower rather than higher. Since the preparation of the estimates, great advances have been made both in methods and equipment employed on undertakings of this nature, which should result in reduced costs in carrying out this project.

Aside from the question of the adequacy of the official estimates for navigation work, there is another absurdity due to the indiscriminate application by Mr. Jackman of his correction factor. Mr. Jackman has not only multiplied legitimate items of cost by 2/2, but he has also multiplied his errors, for he has made large items, included in error, 2%2 times larger than they were originally.

He has also multiplied by 2%2, large and readily predictable items such as the cost of generating stations proper; by this I mean the buildings and apparatus, exclusive of the dam and main hydraulic works. It is well known that generating stations are almost invariably constructed at a cost that is in reasonable agreement with the estimates.

By these and other means Mr. Jackman contrives to "blow up" the official figures for the work in the International Rapids Section to $670,000,000 and he says that all this work should be charged to power. Mr. Jackman assumes that nothing whatever would be spent within the Province of Quebec to complete the navigation link to the sea, and, as I have indicated, the official figures for the work chargeable to power on this basis would lie somewhere between $59,000,000 and $104,000,000, depending upon what sum was paid by Ontario to the Federal Government. Bear in mind that his figures include huge amounts to be spent for navigation above the International Rapids Section, specified by himself and not by the Board. To turn Mr. Jackman's own adjectives against himself, truly his figures are "grossly perverted, absurd and grotesque". (Applause)

When evaluating the weight which should be given to the official estimates as compared with some of the biased propaganda, do not lose sight of the fact that over the years a great many national and international boards have been convened and reconvened to study the St. Lawrence navigation and power development and every one of those official national and international bodies have reported in favour of the project. An enormous amount of data has been accumulated, sifted and weighed. It is probably safe to say that no project has been more exhaustively and painstakingly studied by the most qualified persons available.

Remember, too, that while the works to be carried out in the International Rapids Section are of a large order, they are not of unusual magnitude when compared with recent undertakings that have been conceived and launched while the St. Lawrence project remained under consideration. Nor are the uncertainties of the St. Lawrence project greater than other large projects which have been successfully completed during the same period of time. What interest, you may ask, has the Hydro-Electric Power Commission in the St. Lawrence project?

It is quite evident that this development cannot be classed as a war measure, for even if it were undertaken tomorrow, it would be six or seven years before it could become of use. Yet the project is persistently misrepresented as a war measure which, far from helping, would actually handicap war work. Since Canada's expenditure during the war would be small--I was going to say almost negligible--this is untrue. As to the aftermath of the war, by entering into a treaty now, there is every reason to feel that the project will be of great social value as an aid toward the rehabilitation of returned soldiers. It seems to me this is a factor of prime importance.

I want to make it quite clear that the Commission is not yet wholly dependent upon the early development of the St. Lawrence for its additional power supplies. There are substantial power resources on the Ottawa River which can probably be made available more quickly than the St. Lawrence, but they involve interprovincial agreements with the Province of Quebec and the purchase by the Commission of Quebec's share of the power available from any given site.

From the point of view of immediate supplies that might be required during the course of a protracted war there is one rather important advantage which would be secured through a St. Lawrence agreement. It opens the way to the use at Niagara or at DeCew Falls of water that can now be diverted from the Long Lac and that could be diverted from the Ogoki within a period of about two years. The Ogoki water could also be used on the Nipigon. In addition, the St. Lawrence agreement would almost certainly make available additional water for power at Niagara, quite independently of these northern diversions. That water could be used immediately for the production of additional energy from the Commission's existing plants at Niagara by operating them more continuously than at present and, when needed, it would make possible a 200,000 horsepower peak power development at DeCew Falls or another base power development at Niagara Falls.

What we must know, and must know soon, is whether or not the St. Lawrence is to go ahead at once. Our plans for the next five or six years will be very different in the one case from the other, and we must have a decision that will enable those plans to be laid within a very few months. This is the crux of the whole situation so far as I and my colleagues are concerned.

Now, a word about the negotiations at Ottawa and Washington which have been misrepresented; my part in them might easily be misunderstood, yet it is very simple. It has been to furnish engineering information, to help explore possible engineering compromises essential to agreement, and to help reconcile divergent engineering and economic views. Any pressure from me has been for a decision as to whether or not to proceed; never for a particular decision, either affirmative or negative.

Notwithstanding all this, there may be many people who would question the wisdom of inaugurating so great an undertaking as the St. Lawrence project at this time. That viewpoint is understandable, but there are circumstances under which action must be taken at the time when it is possible to take it.

Where there are four parties to any agreement and a fifth that must be considered, it may be difficult to find a time that is ideally suited to all. This project that involves Canada and the United States, New York State and the Province of Ontario as active participants, with Quebec as a very interested one, has been fraught with all sorts of difficulty, political and otherwise. Where three of the four participants are ready, and where the fourth believes in the soundness of the project, surely the occasion may be said to be opportune. If it were not for the war we should scarcely hesitate; if we wait, other even more formidable obstacles may arise.

I believe the St. Lawrence navigation and power project to be essentially sound. I believe also that if an expenditure -I want you to get this point--of approximately $38,000,000 by Canada were needed to remove an obstruction in the way of 35 ft. navigation from Quebec to Montreal, it would be forthcoming overnight. Since 1925 at east $45,000,000 have been spent on this channel between Quebec and Montreal, in addition to $26,000,000 previously expended. I believe that Canada need have no great hesitation about making a $38,000,000 expenditure to bring 27 ft. navigation from Montreal to Lake Superior. I think that argument is unanswerable.

As a last word let me again remind you of the amounts of money involved according to the official estimates under the 1932 proposals. The Federal Government would be obligated for navigation works in the International River Section to the extent of only $22,000,000, of which little would be spent during the war. Navigation in Quebec would cost $83,000,000 more, none of which would be spent during the war. Thus the total cost of work to be done by the Federal Government would be $105,000,000. From this sum $67,000,000 contributed by Ontario in lieu of power advantages secured in the International Section must be deducted. This leaves a net out-of-pocket cost to the taxpayers of Canada of $38,000,000.

In addition to the $67,000,000 which the HydroElectric Power Commission would pay the Federal Government on behalf of Ontario, the Commission would expend approximately $37,000,000 for its own generating stations, making a total of $104,000,000, of which the $37,000,000 would be expended unit by unit as and when power needs make it advantageous to do so. None of this money would be secured by taxation.

Again let me point out that all these figures neglect any possible effect of inflation.

With these figures firmly in your mind, I do not think you will be led far astray by those who search for means of confusing and distorting the issues involved in the St. Lawrence project, rather than seeking to present the true facts and information in proper perspective so that Canadians, interested in the general advantages of Canada, may safely draw their own conclusions.

I have studied the St. Lawrence development project very closely over a period of twenty-five years. During all that time my work and my viewpoint have been closely identified with power requirements in Ontario. This may unconsciously handicap me in appraising the project in terms of the general interest of Canada. Be that as it may, though I am not an active advocate, yet I am satisfied that Canada would make no mistake in joining with the United States in the development of the St. Lawrence River for power and navigation. (Applause-prolonged)

THE PRESIDENT: Gentlemen: I am sure you will all agree with me that we are very much indebted on this occasion to Dr. Hogg for his very capable address and the

very lucid manner in which he has cleared up many of the erroneous statements that are being made with regard to this project at this time, and at a time when this question is of such importance to Ontario.

We are indeed honoured today by the presence of many distinguished guests who have played an important part in the development and progress of the Hydro-Electric System. We had expected to have present today Sir William Hearst, but he was unable to be present. We have with us the Honourable Howard Ferguson, and the Honourable George Henry, but we are sorry to say that the Honourable Mitchell Hepburn was unable to be here today. However, these gentlemen have all played their part in the development of Hydro. We have also with us today as our guest, a man who has been actively furthering the policies of Hydro for over thirty-five years, as Secretary of the Ontario Municipal Electric Association-Mr. T. J. Hannigan, the grand old man of Hydro. We have also other distinguished guests who, owing to the lateness of the hour, I will not mention on this occasion, but who are interested in engineering and in other organizations that are furthering the interests of Ontario in these power projects.

Referring again, and I hope you will bear with me for a minute, to the excellent address of Dr. Hogg, dealing with the development of the St. Lawrence in relation to the necessary power demands of Ontario, what has been said sounds to me like a triumphant sequel to the great work of that fine Canadian, Sir Adam Beck. No one knows more than I do of the aims and ggal of the many years of service and determined efforts in planning the future policies of the Hydro, which were uppermost in his mind to the last. He never gave up hope of the attainment of the objectives he had visualized as necessary to complete the work so that it would be unassailable and give maximum service and benefit to the people of Ontario.

During the last few months of his life, when he tried so strenuously to come back, although we felt it hopeless, I found on many visits to John Hopkins Hospital and later to his home, that his uppermost thoughts were on the matters that were to be done to obtain for Ontario the rights to its water powers on the St. Lawrence and Ottawa Rivers and in Northern Ontario, so as to extend their development to include all of Ontario North, as well as East and West.

Now Mr. Ferguson, who is present, no doubt remembers the many occasions when I carried messages to him from Sir Adam Beck emphasizing the importance of obtaining for Ontario the rights to these developments, by appeals and protests to the Federal Government in Ontario's interest.

To make way for this policy, as early as 1923, when there was only a 60,000 horsepower load on the 500,000 horsepower development at Queenston, he authorized offers to Quebec power interests for the purchase of power of sufficient quantity to justify economically the construction of a transmission line to the Ottawa River, for in this way, it was believed prior claims to the rights to water power developments on the Ottawa and St. Lawrence would be assured to the people of Ontario.

At his death in 1925, the Ottawa and the St. Lawrence water powers were all owned by private interests and the Federal Government, and it was not until after the first contract for power had been negotiated with a Quebec corporation that franchises were terminated and agreements made, recognizing the right of Ontario to share in these developments.

This occurred in 1926 by a tri-party agreement, assuring to Ontario its share of the rights at the Carillon Development on the Ottawa River, at which time agree ments were negotiated but never executed for the joint development of this power, and in 1927, by the termination of the franchise rights of the Georgian Bay Canal Company on the Ottawa River.

In 1930, by Ontario rights to the development of the Chats Falls and its joint development with a Quebec corporation, and in 1932, by the negotiating of an. agreement with the Federal Government recognizing the rights of Ontario to the development of power jointly with navigation on the St. Lawrence River, strenuous efforts were made to obtain under many difficulties the rights on these rivers.

As Dr. Hogg has so very fully explained, the present status of the agreements for the development of the St. Lawrence, are the outcome of many negotiations over a period of 25 years, in an endeavour to obtain fully for Ontario the power rights on the St. Lawrence and at the same time on other rivers within its domain and on its boundaries.

I am sure we have listened with a great deal of interest to this excellent address by Dr. Hogg and on behalf of the Empire Club, I extend to you our warmest thanks and appreciation for your splendid address. (Applause)