Some Canadian Problems

Mr. President and Gentlemen of the Empire Club,--I wish to say a word by way of introduction in connection with the attitude of the railways and particularly that with which I am associated, towards the City of Toronto. You will recall that various matters have been sources of conflict between the City and the Companies and that one in particular, namely, the station facilities and waterfront situation, has given rise to a controversy extending over a great many years. Looking back on the situation in its first development many years ago with that wisdom which is incident to hindsight, it would be a hardy man that would suggest that the policies of the Railway Companies had either been fair or in their own interest. It is a singular thing but very common that when two parties come to grips over a matter not of great magnitude the intensity of the contest brings about an inelasticity in attitude which makes a comparatively simple problem difficult of solution. This

------------------------------------------------------------

Edward W. Beatty, K.C., born in Ontario, was educated at University of Toronto; called to the Bar, 1909; VicePresident of C.P.R. 1915; President of C.P.R. since 1918; Chancellor of McGill University since 1921; and of Queen's University, Kingston, 1919-1923.

------------------------------------------------------------

is what took place many years ago and was the inception of the difficulties of 1913 and 1923 so far as the City and the Railway Companies are concerned.

You know, too, of the existence of the agreement which constitutes a legal obligation upon the Grand Trunk Railway and its successors, the Canadian National, and the Canadian Pacific. You know as well of the changes in conditions which have taken place since that agreement was made. A project which was considered ambitious even at that time has reached proportions which, in figures are to me almost staggering. What the best Engineers available estimated including the station would cost between thirteen and fourteen millions is now estimated to cost almost three times that amount, while the benefit accruing to the Companies, the City and the Harbour are identical now to what they were when the plans were approved. I will admit frankly that none of us seem to be particularly concerned with large figures. The forced enormous expenditures of the last ten years have killed our sense of proportion and made us accept obligations with comparative equanimity which a few years ago would have left us paralyzed with apprehension.

A year or two ago when I was considering the Toronto situation and the necessity that something should be done as soon as conditions permitted it, I wondered whether the Companies were mistaken in their insistent demand that the proper solution was by means of bridges instead of a viaduct. I wondered if we had tied ourselves narrowly to one system because our technical advisers consistently held that to be the proper solution. In fact, gentlemen, I wondered whether our experts were right or whether they were quite honestly, no doubt, but mistakenly leading the Companies to adhere to a principle of grade separation which time might prove to be not the best in the interest of all the parties. So I decided that not being an Engineer, I would withhold my own opinion until I could receive the report of an independent expert whose views had not been obtained previously and who was not committed to any plan. We therefore retained Professor Swain, of Harvard University, one of the most note-worthy Engineering experts on the American Continent, whose reputation and work was well known to our Government and to all the large corporations in Canada and the United States. My instructions to him were to go to Toronto with his assistants, study the situation on the ground, consider every plan which had been prepared by any interest, the plans which were before the Railway Commission and the suggestions which, during this long controversy, had been made by any source whatever. I asked him to approach the situation as if there never had been any alternative scheme suggested by the Railway Companies or the City or the Harbour Board. I asked him to tell us exactly what he thought, whether or not the views were contrary to these expressed by the railway engineers or by any other expert. He made a protracted and thorough investigation. He had access to all the data prepared by any interest and he made a voluminous report which, I think, constitutes the most accurate history of the Toronto water front which has ever been made by any one man or group of men. Professor Swain's conclusions were that the Railway Companies' position was right in the interests of the City and the Harbour and the Companies and that any other solution would be inappropriate and would constitute a woeful waste of money at a time when these huge expenditures should be curtailed as much as was reasonably proper. Professor Swain's report did not change the terms of the existing agreement but it did constitute a valuable contribution to the expert consideration of your water front and was a distinct relief to me in that it exonerated the Railway Companies from the charge of being guilty of ill-considered opposition to the plans which had been previously submitted.

With these facts and this history before us, the President of the National Railways and myself reviewed the whole situation with our respective Chief Engineers. The result of that consideration and in a sincere desire to suggest some solution which would enable the work to be prosecuted and not take away from the other parties to the agreement any of the rights which they had obtained, we have submitted alternative plans for the consideration of the other interests. It would not be proper, probably, for me before an Association such as this to go into the merits of the plans which we have suggested. They are still awaiting the criticism of the technical advisors of the other parties to the agreement. My sole purpose in mentioning it to you now is to say that I hope that when the time comes if it becomes necessary that these plans shall be considered generally with your members, constituting as you do, a substantial representation of the business interests of the City, you will give them that consideration which I think they deserve. It is perfectly true that we must await the action of Parliament authorizing the necessary expenditure. I hope that may be speedily obtained because it is nothing short of a calamity that your magnificent station costing almost seven million dollars should remain idle when the facilities which it provides are so much needed by the citizens of this City.

This, gentlemen, is as far as I may, I think, with propriety discuss any matter of local interest and I am only mentioning it together with the reason for not discussing it lest a complete avoidance of it might be misunderstood.

Ever since Fate ordained that I should occupy my present position I have been asked for expressions of opinion on everything under the sun, and a good many things besides. It is therefore quite possible that your President invited me to be your guest today under the impression that by virtue of that position I am an authority on many public questions. Lest you should have any misapprehension on that score will you permit me to explain that I am not. I can only claim to have my own views on certain subjects as a result of a more or less close association with the business communities of Canada and am therefore in a position to guage with reasonable accuracy the problems of the country which are engrossing their attention. I have always found that the considered opinion of the business men of Canada which is not influenced to any great degree by political considerations represents the sound public sentiment of the country. Therefore, when in numerous excursions throughout Canada you find men's minds turned to two or three subjects you must conclude that these represent real problems and whether they are the subject of public discussion or otherwise inevitably must become so in due course.

It is just fifty years since Prince Edward Island entered Confederation, and fifty years is but a day in the history of the human race. If we consider the complex character of our people, the variety of races which we have adopted into the Canadian family, the extent of territory over which they are scattered, the diversity of their interests, the difference of languages and resulting handicap in intercommunication, we have cause to marvel that the Canadian nation in so brief a period has become so united as it is. Yet while we marvel, it is well to remember that the work of consolidation is not yet completed, that the East and West still have misunderstandings, that newcomers with alien traditions are still coming in as prospective citizens, that many of our new Canadians have still to learn the language of their adopted country.

Among the Fathers of Confederation, one of the most picturesque figures is that of D'Arcy McGee, an Irishman by birth who for two-thirds of his life was a rebel against British rule and who came to Canada not directly but by way of the United States. Eventually he became an ardent prophet of Canada's greatness and in 1860 addressed the Quebec House of Assembly in a speech notable for the often-quoted simile:

"I see in the not remote distance one great nationality, bound like the shield of Achilles by the blue rim of ocean."

Two years later in the same Assembly he made another speech in which he said:

"All we have to do is, each for himself, to keep down dissensions which can only weaken, impoverish and keep back the country; each for himself to do all he can to increase its wealth, its strength and its reputation; each for himself, you and you, gentlemen and all of us, to welcome every talent, to hail every invention, to cherish every gem of art, to foster every gleam of authorship, to honour every acquirement and every natural gift, to lift ourselves to the level of our destinies, to rise above all low limitations and narrow circumscriptions, to cultivate that true catholicity of spirit which embraces all creeds, all classes and all races, in order to make of our boundless province, so rich in known and unknown resources, a great new Northern nation."

In this inspiring passage I would first draw your attention to a phrase which is repeated three times, namely, the phrase "each for himself." Here I think is a view of the national spirit which of recent years has inclined to be obscured but which to my mind is vital to our progress and prosperity. How often in these days whenever any problem has to be faced, any enterprise has to be promoted, we hear at once the cry-"Why does not the Government do something?"-a cry which is not stayed until some Government department has been forced to undertake work which may not be the proper function of Government at all. Instead of each of us doing it for ourselves, we "leave it to George."

If I interpret rightly the message of D'Arcy McGee, the spirit that he calls for in the making of a nation is the spirit of personal co-operation. He does not call upon his fellowcitizens to call upon the Government, he does not call on them to label their efforts with the word "national." He does not ask them for friendly co-operation with each other, he encourages them to personally undertake the development of their country's natural resources, to support the Canadian artist, the Canadian author, the Canadian inventor, the Canadian of any special talent. He exhorts them above all to be high-minded and broad-minded.

Personal co-operation is naturally easier in a small community than in a wide Dominion, for in a small community all men and more particularly all women are neighbours and understand or at least talk about each other's problems. But the distances in Canada are such a handicap and so much of the population is new that East and West have not yet had time or opportunity to get well acquainted. It is not only that many Eastern Canadians have never seen the West. Per contra many Western Canadians have never seen the East. Thousands have entered the Prairie Provinces or British Columbia direct from the United States, and thousands saw nothing of Eastern Canada as they passed from Europe through St. John or Quebec to Winnipeg or the Pacific slope except the glimpses they may have snatched from the windows of a colonist car. Since then they have been absorbed in the problems either of making a fortune or of making ends meet. You cannot blame them, therefore, for lack of interest in Toronto's Union Station or the new drydock at St. John, any more than Toronto or St. John can keep awake at nights thinking of the wheat crop in the Prairie Provinces or the future of the Pacific Great Eastern Railway.

Canada is a country of vast resources and magnificent distances. This latter factor enters into all our political and, to a great degree, our commercial problems. I think it was Stephen Leacock who advocated the execution by slow torture of the man who invented near-beer on the ground that he was such a damn poor judge of distance. But the factor of distance, even more perhaps than the factor of racial origin, is the chief obstacle to Dominion-wide personal co-operation. In the case of the marketing of wheat, for instance, you find farmers of English, Irish, Scandinavian, American, German, Polish, and Ukrainian origin all combining in the formation of wheat pools; while in the Province of Quebec French Canadians and Anglo-Canadians unite in working for the development of the Port of Montreal. The same thing happens in your problems in Ontario. Groups and community organizations are formed to carry on certain works because geographically the individuals are neighbours. 0ccasional clashes arising from diversity of commercial interests would be very much lessened in this country if the people were in easier and closer touch with each other. Nothing could probably conduce so greatly to the elimination of the factor of distance as the inter-communication of the people of the several sections of the country and an understanding of the problems local to each. In this I am glad to say that the railways are being very materially aided by the motor car, the value of which as an aid to better acquaintance between people of different areas has been demonstrated with particular force in the Western United States of America and is bound to be increased in Canada as the opportunity is afforded more Canadians from the West to see the East and more from the East to see the West either through touring for the purpose of pleasure, of education, or through conventions or other gatherings which result in personal contact between men and women otherwise remote from each other.

What we are suffering from, and it applies equally here as in the Far West, is lack of men, lack of capital, and lack of those forward policies which will enable the country to realize within a reasonable time its own manifest destiny. For several years public men and leaders in business life have been advocating immigration and still more immigration as the greatest immediate necessity of this country. Our policies have been evolved very slowly, and the evolution of them is not yet complete. Our progress has been disappointing, especially in comparison with the progress made in the other British Dominions. At first two objections were urged; the fact that there was considerable unemployment in the country and the fact that our great farming community was not prosperous. People urged upon the Government the non-necessity, in fact, the unwisdom of bringing labourers to Canada when there was a surplus of labour. They urged with equal vehemence that new land should not be put under cultivation when many of our Western farmers were conducting their operations at a loss. The combination of the two representations stayed the hand of the Government and little or nothing was done. We unconsciously forgot in our unwise caution our faith in the ultimate future of Canada, and we ourselves became the worst advertisers of the country. We forgot too that what we were not doing other Dominions were, with the result that in the past three years many thousands of immigrants, the pick of the English, Welsh and Scotch races, were induced to migrate to Australia and New Zealand, and even South America, countries which did not offer as good opportunities as Canada, and do offer better opportunities than the Home Land. Many men remain to come forward, but those that have gone and whom we have lost, were undoubtedly of a quality and character which would have made them very welcome citizens of this country.

But the fact that we have been slow in putting an aggressive policy into operation and in creating an organization which is necessary to make any measures effective, does not mean that the opportunity is lost. Great Britain, the United States, Scandinavian countries and portions of Southern Europe offer to this country many desirable immigrants of both the farming and artisan classes, whose advent to Canada could not help but enrich it commercially, economically and in time spiritually. I would not care to be grouped with those who advocate the immigration to Canada only of those of the farming classes or who desire to become farmers. I regard it just as essential that the door should be thrown open to clean, healthy, willing men of any class, because it is inconceivable that this country can reach its objective in the way of commercial prosperity unless there is a free market of desirable labour to supply our industries and add to the market for the produce of our farms.

When I say this, however, it must not be forgotten that Canada's wealth is in a great measure confined to its natural resources. Agriculture, Mines, Fisheries and Forests are, in the main, the source of our national wealth, and no one can deny the preeminently important part that agriculture plays in many parts of the country. The land is there, it is fertile land and men are not on it. It is being worked so as to produce wealth for the country. It is estimated that there are twenty-five million acres of vacant land within fifteen miles of existing railways in Western Canada. There are many vacant farms in Nova Scotia and New Brunswick. There are many in Quebec. Can it be contended, with this great latent wealth lying dormant and contributing nothing to Canada's wealth, we are taking full advantage of the opportunities which nature has given us? Can it be contended that our minerals will be developed, that our forests will be utilized and that our enormous fishing possibilities can be properly exploited and that new industries can be created and present industries extended unless there are men and money available to do it? If we admit the presence of these latent resources and their nonuse, we must concede that our case is akin to the biblical example of the man who buried his one talent.

But if the necessity of immigration is apparent, there is another corrective element to be considered in connection with our own economic conditions. The taxation of this country is heavy. Not heavy in relation to many other countries, but heavy considering the sparseness of our population and the fact that the country's wealth is largely potential. Some of them are direct imposts, the burden of which is always present in our minds because they are inescapable, and involve periodical drafts upon our individual exchequers in ways that are not concealed. Heavy income taxes being most direct are probably those taxes which are most severely felt, and a man who is heavily taxed becomes in time disgruntled and even a poor citizen.

It is essential that our taxes should, both because of what is happening in the United States and because of the financial support we must receive from our own people, if Canadian enterprise is to be developed, be reduced as soon as that may be properly done. And they can only be reduced if strict scrutiny of, and reduction in, our national and provincial and municipal expenditures is made. I know the necessity of this is keenly appreciated by our public men, and probably by no one so deeply as the distinguished Minister of Finance.

Economy is not an attractive word, nor an exhilarating slogan. People are never disposed to cheer the speaker who advocates retrenchment. Spending is always more attractive and, therefore, more popular. We will never, perhaps, escape the necessity of large expenditures, but such as are reasonable must, I think, for the next few years, be of a productive character. We should spend for the purpose of development or for the purpose of securing greater economy. We should not, however, embark on any capital expenditures of doubtful value or those which might be termed luxuries. If, in the course of two or three years of rigorous scrutiny of national, provincial and municipal budgets, our total expenditures are reduced even from 25 percent to 30 percent, we will have reduced our annual financial necessities to a point which would permit us to consider a reasonable reduction in the country's tax imposts. When that time arrives we will be able to say to ourselves that by our own efforts and sanity we have not only lightened our own burdens, but offer still further inducements to those who appreciate living in a country which expects a moderate amount from its citizens, who will, therefore, be in a position to assist in its own advancement.

The attention of the railway companies has recently been called by public bodies to the advisability in their opinion of reducing wages and salaries in order that freight rates should be reduced. No group of men could possibly be more convinced of the necessity of the reduction of railway operating costs than the Canadian Railway Managers. Our struggle has been to prevent greater inflation, because, as you know, the major portion of railway expenses is, in the main, uncontrollable, fixed for us by market conditions as far as material is concerned and determined in many cases by independent tribunals in the case of wage adjustments. While the relative position changes from time to time a comparison shows that the percentage of wage increases since 1917 still exceeds by a substantial amount the percentage of the increase in the cost of living during that period. By a peculiar anomaly wages in this country and in the United States are fixed with relation to the cost of living, but unfortunately high wages is one of the elements which contributes most largely to high cost of living. So long as wages are high, therefore, the cost of living will be high. It is difficult, however, to convince tribunals that in their pronouncements on this subject they have really got the cart before the horse, and so long as the cost of living is the basis for fixing wages, wages will be high because it cannot be substantially reduced if the wage scales are disproportionately great. In recent years there has been a lamentable lack of interest on the part of the public as to whether wages or costs were high or otherwise, and also a discouraging lack of support in the face of possible strikes or other embarrassments in consequence of the effort of employers to bring wages down. We in Canada have suffered too by the extraordinary, and some observers think, temporary, prosperity in the United States which has, in effect, meant more inflation and has tended by its reflected influence to keep up wages in Canada, where the conditions of commercial prosperity did not exist to the same extent.

I mentioned in a very general way and have really only touched upon them in passing one or two of the problems which serious-minded Canadians are considering. I believe that the spirit of true Canadianism is best evidenced by a calm dispassionate consideration of the business communities of the economic facts upon which the country's future must depend. This has been done recently in several different forms and in one instance in a way which is calculated to destroy confidence in Canada in countries who must have confidence in us if we are to obtain the support from them we are entitled to receive. I do not believe in exaggerated whisperings or in any statements which are calculated to destroy the belief of Canadians in their own country. Perhaps it is more a matter of form or of inapt phraseology than an attempt to belittle or injure the country. Whatever facts we require to know can be developed frankly and honestly, not with the idea of reproaching administrators or Governments but with the sole purpose of bringing to bear upon the policies designed to better and improve existing conditions the mature judgment of business men whose stake is in Canada and whose hearts are loyally Canadian.

HON. HOWARD FERGUSON, Premier of Ontario, expressed the thanks of the Club to President Beatty for his very interesting address.