The Trans-Canada Pipeline

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The Trans-Canada Pipeline was not only an engineering feat that would change the economies of Alberta and Saskatchewan, but it would also fundamentally alter Canadian politics in the 1950s and into the 1960s.

By the 1950s, the economies of Alberta and Saskatchewan were booming due to the oil and gas industry gaining new life. Out east, energy shortages were becoming problematic as the population began to boom in the post-war era. It was in this situation that the Trans-Canada Pipeline would come to fruition.

Two companies put their name forward to moving gas from west to east, the Canadian Delhi Oil Company, which proposed moving the gas to the eastern Canadian cities through an all-Canadian route, and Western Pipelines, which planned to stop the line at Winnipeg and then branch it south to sell in the United States.

In 1954, C.D. Howe, a Liberal Member of Parliament, forced the two companies to merge and the all-Canadian route was chosen over the cheaper, American route. For Howe, he felt that the Trans-Canada Pipeline rivalled the Canadian Pacific Railway project of the 1880s in importance to the country.

The management committee was set up, with Clint Murchison serving as the president of the company. Murchison was a Texas oil man who had been in the oil industry since he served in the First World War. He had formed the Delhi Oil Corporation in 1945 and had quite the life. For one, he was one individual said to be involved in the Kennedy assassination after he had a meeting with Lyndon Johnson, J. Edgar Hoover and Richard Nixon at a party at his home the night before Kennedy visited Dallas. After the party, he was rumoured to have said quote:

“After tomorrow, those goddamn Kennedys will never embarrass me again. That is no threat, that is a promise.”

Of course, this was later debunked but its still an interesting story.

This solution would fix problems that were seen in inter-provincial lines that had been built, and it would quiet the Progressive Conservative Opposition in Parliament who wanted Canadian centres to have preference over American customers, and that a main pipeline carrying Canadian oil should be laid in Canadian soil.

TransCanada Pipelines Ltd. was incorporated to begin the process of constructing a natural gas pipeline, with financing being split 50/50 between American and Canadian interests.

By constructing the line through Canada, national sentiments were accommodated, which proved to be a problem for the Liberal government.

The regulatory process for the Trans-Canada Pipeline would prove to be a difficult one. Proposals were rejected twice before Alberta granted permission to export gas from the province. The province had wanted to ensure that gas reserves would be sufficient for its 30-year needs, with the intent of only allowing exports in excess of those needs. For Ontario, the pipeline was needed not only because of a shortage of gas coming into the province, but because it was believed that there would be a reduction in the price of gas in places like Toronto by as much as 50 per cent.

Howe would predict that the pipeline would reach Winnipeg by 1955 but many questioned whether or not the pipeline would be made and there were rumours flying in 1954 that Trans-Canada Pipelines had approached the government for assistance in financing the program. Howe would say quote:

“I’m not saying they may not ask for something before we’re through. If they do, we will look at it.”

British Columbia would express anger towards the pipeline, which completely ignored the province. The Quesnel Cariboo Observer on Sept. 29, 1955 wrote quote:

“All attention in the national capital seems to be focused on the Trans-Canada pipeline which will move gas east to the Ontario and Quebec markets. Though B.C. is as much a part of the Dominion as the other provinces, Ottawa seems quite content to let the western province shift for itself while in talks of subsidizing the eastern line.”

Things would slow down throughout 1955 as the government assessed the pipeline project. At some points, it felt that it was not going to happen, something that worried Alberta. The Alberta government was concerned about the potential revenue loss and was doing whatever it could to keep the project moving, including meeting with the Trans Canada Pipeline Company, natural gas producers and others.

The Progressive Conservatives also continued to criticize the Liberals over how they were moving with the pipeline. Carl Nickle, an MP out of Calgary, was angry towards the government over the stalled progress on the pipeline. What was supposed to have been delivering gas by 1955 was not even started. He would state the matter was quote:

“neither fish nor fowl, but a stalemate. It does Eastern Canada no good and Western Canada a great deal of harm.”

Prime Minister Louis St. Laurent was hopeful by mid-1955 that the pipeline was still possible. Negotiations between Trans-Canada Pipelines and government agencies continued, but throughout the year very little progress was made. One reason for the delay was that the Ontario government did not want to tax its citizens $35 million to build the pipeline through the sparse terrain of northern Ontario.

The fate of the pipeline would be put in jeopardy in early 1956 when demands were made before the Federal Power Commission for the immediate dismissal of the Trans-Canada Pipeline proposal with the Tennessee Natural Gas Company to import natural gas from Canada out of Manitoba. The financing of the pipeline was heavily connected to the approval by the Federal Power Commission for the Tennessee proposal. Charles V. Shannon stated he would oppose the bill, stating quote:

“We are prepared to spend two or three years on testimony on the proposals if we are not granted immediate dismissal.”

At the same time, the Canadian government set May 1 as the deadline to prove that Trans-Canada could finance the line. Howe, who had originally said that the pipeline would be done by 1955, now revised that to 1958. He would say quote:

“The obstacles that may be encountered are formidable but have been carefully assessed. I am satisfied that they can be overcome. I believe that the Trans-Canada Pipeline project is moving from controversy into reality.”

At this time, pipe was ordered for the western section of the line. Two private companies also bought private capital in Trans Canada Pipelines. The Hudson’s Bay Oil and Gas Company and the Canadian Gulf Oil Company both bought shares, while Canadian Delhi Oil and Western Pipelines cut their share of the stocks from 30 per cent to 24.5 per cent.

Eventually, the agreement was reached but it was not something the Official Opposition was happy about. For one thing, the Canadian taxpayers would be paying $130 million to build through northern Ontario. The Tennessee Gas Transmission Company agreed to also supply 152 million cubic feet a day of Canadian gas to three American iron and steel companies at a price below what Canadian industries would be required to pay. The government also gave a loan of $72 million to help with construction between Alberta and Winnipeg, which would be paid at a later date.

The prevalence of American companies in the project was seen as a threat to Canadian sovereignty by some. Toronto MP George Hees stated that the financing of the pipeline was simply a back door substitute to have the federal government guarantee the pipeline company’s bonds. He would add quote:

“The plan is a strange mixture of government and private enterprise, in which the investment of public funds will enable a corporation dominated by American interests to obtain the predominant financial equity in the line and control its operation.”

John Diefenbaker, who at this time was an MP out of Prince Albert but would soon become the leader of the Progressive Conservatives, was highly critical of the plan. He would state quote:

“We will take a stand against the increasing domination of our industry and resources by another power. This is not contributing to the building of Canada.”

It would turn out that the Ontario government had negotiated privately in November 1955 to take on the construction of the pipeline, but this was turned down and that would lead to the Progressive Conservatives in Parliament to accuse C.D. Howe, the Trade Minister, of blocking private enterprise from a chance to build the pipeline.

There was the worry of American companies in Canada because the number of American controlled companies in Canada had grown from 1,985 in 1945 to 3,400 in 1956. As well, resources such as iron and gold were being shipped out in increasing numbers, from 4 million tons in 1955 to 10 million tons in 1956.

Diefenbaker would say quote:

“You cannot buy shares in a Canadian General Motors but must buy shares in the United States General Motors. We are not opposed to United States capital and will take it where it is needed, but we want it invested in Canada to ensure jobs for Canadians.”

Beginning on May 8, 1956, the debate over the finances of the Trans-Canada Pipeline began and had to be concluded by June 6 of that year. The Opposition knew that in order to get the financing set for the pipeline construction that would begin on July 1, 1956, the debate had to be concluded and parliamentary approval given by that time. The debate would focus on allowing a consortium owned by American interests, with government loans to cover the extra costs of building through Canada. The issue of allowing American businessmen in the construction process, and whether that surrendered it to American control, would also be debated.

H.H. Stevens, the MP for Penticton, stated of Howe that he was following in the path of William Lyon Mackenzie King, whom he stated kicked Great Britain in the face. He would say that Howe was doing the same by giving interests to the United States, stating quote:

“Now, Mr. Howe is doing the same thing.”

The Official Opposition wanted to filibuster the debate past the deadline so that a new all-Canadian consortium or Crown corporation could be put together.

CCF leader Coldwell would state that the government would have no limit on the depths it would stoop to yield to the wishes of the Trans-Canada Pipelines Company. He would state quote:

“What kind of private enterprise is this? Private enterprise subsidized by the public private enterprise with the public taking the risk and rich United States corporations taking the profits. This is not private enterprise at all. It is purely and simply a raid on the public treasury.”

At each stage of the bill, the Liberals attempted to force closure on the debate so that a final vote could be forced. Closure had been used seven times since it was created in 1913, with the last time in 1932. This was the first time that a minister attempted to give the motion of closure before a single opposition member had a chance to speak. The efforts to invoke closure gave the pipeline the name The Shotgun Sanctioned Pipeline.

Opposition leader George Drew would call the fight of the Opposition a crusade for democracy against dictatorships. He would state quote:

“The opposition is the most important part of Parliament. It is what differentiates our government from a dictatorship. The existence of the opposition is the hallmark of democracy. This now has become a crusade for democracy. The rights of the Canadian people are being challenged today by the government, which has been long in power and has grown contemptuous of the rights of the representatives who have been sent to Ottawa by the people.”

The day before the deadline, Rene Beaudoin, the Speaker of the House and a Liberal, allowed the opposition to debate a procedural matter and he ruled at the end of the day that the issue could be debated the following day, allowing opposition parties to debate past the deadline.

In the next day’s session, Beaudoin announced that his ruling was a mistake and that all events after 2:15 p.m. from that day should be ignored and that the debate could recommence on the pipeline. Opposition parties strongly objected to this and MPs ran into the centre aisle as chaos descended in the House of Commons.

Major Coldwell, the leader of the Co-operative Commonwealth ran towards the Speaker of the House shaking his fist.

Lorne MacDougall, a Liberal MP, would suffer a heart attack while leaving the House of Commons. The stress of the issue was cited as a cause of the heart attack. MacDougall had been a doctor of dental surgery who gave up his practice due to injuries he sustained during the war. He had actually helped Speaker Beaudoin only a week earlier when the speaker became weak and MacDougall ran forward in the House of Commons with heart pills to help him. His wife was in the gallery but did not see her husband collapse. MacDougall had been a member of the House of Commons since 1949.

St. Laurent would say, as his voice broke, that MacDougall was quote:

“our esteemed and beloved colleague.”

Diefenbaker, who knew MacDougall during their time together in the 196th battalion during the First World War, stated quote:

“I knew him through those years.”

Diefenbaker was unable to continue with speaking of his friend.

Angus MacInnis, a member of the CCF, would say quote:

“We were political opponents but the very best of friends since that time up to now. The strains and tensions of the past weeks have certainly taken a terrific toll. We are very, very sorry.”

The entire debate was taxing on members of the House of Commons over the previous three weeks. Howard Green, a Progressive Conservative MP, spent several days in the hospital due to nervous exhaustion. Dr. Owen Trainor, another Progressive Conservative MP, suffered a mild recurrence of a heart problem and had to go to the hospital. J.M. Macdonnell, another Progressive Conservative MP, suffered a severe stomach disorder and had to spend a few days in hospital.

The Opposition would claim that Prime Minister Louis St. Laurent and C.D. Howe had pressured the Speaker to change his mind. With the reversal of the decision by the Speaker, Howe and St. Laurent pushed the loan guarantee legislation through by the deadline. Drew would put forward a censure motion against Speaker Beaudoin for allegedly deviating from Parliamentary procedure during the pipeline debate.

Drew would say quote:

“The government has no mandate to use Canadian taxpayers money in this way.”

He would add in regards to the speaker that he was a victim and casualty of the pipeline debate due to the prime minister putting him that position. He would say quote:

“Most of us have little but sorrow in our hearts for the Speaker who has been the victim of the government’s action.”

The bill was able to pass through the Senate, with its third reading passing on a vote of 80 to 6. The bill was then given royal assent in the senate by Chief Justice Patrick Kerwin, who was the acting Governor General. Only one member of the Progressive Conservatives attended the signing, John Diefenbaker. The CCF staged a complete boycott of the signing in the Senate.

Senator David Croll would state of the bill and the fallout of it quote:

“When the pipeline is built, it will be buried deep in the ground but that will be left above ground is a little ugly and somewhat frightening. Careers have been shattered, reputations have been tarnished, democracy has been insulted and belittled. I don’t approve of hooliganism in the Montreal Forum. I like it even less when it occurs, well, you know, where I mean.”

After the contentious debate, St. Laurent asked for a truce to the party warfare that had erupted in the House of Commons.

On June 8, the agreement was ready to be signed but that was a headache unto itself. St. Laurent’s cabinet met in his office to go over the wording of the document, then lawyers looked at the technical issues of it. At this point, cabinet gave its okay and then St. Laurent was notified that the Trans-Canada signers would only sign it in their office. As a result, everyone had to hurry over to those offices with the documents to get the documents signed.

Ironically, the deadline was not as important as originally thought as the factories that would construct the pipe went on strike, delaying construction for a year.

Construction would begin on the pipeline, with workers installing 3,500 kilometres of pipe from the Alberta-Saskatchewan border to Toronto and Montreal. Each day, workers were able to finish 10 kilometres of the pipeline through the prairies as they made quick progress.

On Sept. 17, 1957, a large celebration was held as the gas was turned on in Regina with the flick of a switch by Mayor T.H. Cowburn at 9:45 p.m in front of 1,500 people. Regina was the first customer of the Trans Canada Pipeline company. Chairman N.E. Tanner would say quote:

“We are happy to say that Trans-Canada Pipelines is now a reality, something many of you people and many others besides thought would never be.”

Within a few months, the pipeline had reached Winnipeg and was delivering gas service. By the end of the year, the line had reached Thunder Bay.

Building through the Canadian Shield was extremely difficult, with constant blasting of the hard rock of the shield becoming common. In one 1,000 foot stretch, crews had to drill 2.4 metre holes into the rock, three abreast, at 56-centimetre intervals to blow up the rock.

On Oct. 10, 1958, the final weld of the line was complete and gas arrived in North Bay, Ontario.

On Oct. 27, 1958, gas from Alberta reached Toronto. One day later, it reached Montreal.

The final price tag came in at roughly $245 million to build the pipeline. Today, with inflation, that price tag would be $2.4 billion. As soon as gas started to reach Toronto, the Borden Royal Commission on Energy released its report that showed top official of Trans-Canada Pipelines had incurred huge profits on an enterprise financed partly by public funds. Chairman Nathan Tanner had bought 55,000 common shares, while others had bought between 5,000 and 50,000 shares at eight dollars a share. Later, the stock went up to $10. The increase in share price would net Tanner $1.457 million in stock value.

For two decades, the TransCanada pipeline was the longest in the world before it was exceeded by a Soviet pipeline in the 1980s that ran from Siberia to Western Europe.

When the 1957 election came along, the Progressive Conservatives and John Diefenbaker cited the pipeline debate as evidence that the Liberals had become arrogant after over two decades in power.

In the election, the Progressive Conservatives ended 22 years of Liberal rule over Canada with a minority government. One year later, Diefenbaker won the largest majority in Canadian history.

St. Laurent would retire from politics after the election loss in 1957, while Beaudoin’s reputation was in tatters over the matter. He would not run for re-election in 1958, ended 13 years in the House of Commons. He would spend the rest of his life working from job to job, eventually working as a bartender at a tavern in Arizona. He would die in 1970, penniless and alone in the back of a Montreal taxi from a heart attack. Howe would lose his seat in the 1957 election, after serving in his riding since 1935. He would be dead only three years later.

Information from Canadian Encyclopedia, Ottawa Citizen, Macleans, Wikipedia, Calgary Herald, CBC, National Post, Regina Leader-Post, Quesnel Cariboo Observer, Montreal Gazette, Edmonton Journal, Windsor Star, Victoria Times Colonist, Montreal Star, Windsor Star, North Bay Nugget,

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