Volume #22 - 747.|
RELATIONS WITH INDIVIDUAL COUNTRIES
CANADIAN NATIONAL (WEST INDIES) STEAMSHIP SERVICE
Memorandum from Minister of Transport|
CABINET DOCUMENT NO. 58-56|
March 6th, 1956|
CANADIAN NATIONAL (WEST INDIES) STEAMSHIPS, LIMITED.|
On March 30th, 1954, the Minister of Transport informed the Sessional Committee on Railways and Shipping that if the operation of Canadian National (West Indies) Steamships, Limited continued to result in serious deficits consideration would have to be given to abandonment of the service.
Subsequently, on January 4th, 1955, the Chairman and President of Canadian National Railways wrote to the Minister of Transport to the effect that the steamship company could be liquidated without the introduction of new capital provided that the depreciated value of the ships could be realized. Mr. Gordon contended that if the government wished the service to be continued, the vessels should be transferred to the Crown and operated by the steamship company on an agency basis.
At the request of the Minister of Transport, the continued operation of the steamship service was considered by the Interdepartmental Committee on External Trade Policy which recommended that a sub-committee consisting of officials of the Department of Trade and Commerce, External Affairs, Finance and Transport and the Canadian Maritime Commission be formed to devote further study to, and report their conclusions on, the future of Canadian National (West Indies) Steamships, Limited.
The sub-committee's report, in which the Departments concerned concur, notes that:
(1) In the thirty-five years prior to the inauguration of the Canadian National service in 1929, the Canadian Government spent nearly $6 million dollars in subsidizing shipping services to the British West Indies.
(2) During the 26 year period ending 1955, the cumulative deficit from the operation of the service by Canadian National was approximately $3.3 million.
(3) Dependable scheduled shipping is vital to Canadian trade with the British West Indies.
(4) A gradual increase in trade with the British West Indies coincident with population growth and industrial development may be foreseen.
(5) The Canadian National can retain and perhaps increase its share in the carriage of the trade.
(6) The Canadian National is succeeding in efforts to reduce operating costs and to develop new sources of revenue.
(7) Annual losses should be no higher than $200,000 over the next five years.
The report recommends that Canadian National (West Indies) Steamships be permitted to carry on its operations on the present scale and with the present fleet for a period of at least five years, and, in view of the relatively small operating losses anticipated for this period, recommends against the proposed transfer of the fleet to the Crown for operation by the steamship company on an agency basis.
The Minister of Transport, therefore, recommends that Canadian National (West Indies) Steamships, Limited continue in operation with its present fleet for a period of at least five years from 31st December 1955, such deficits as may occur from the operation to become a direct obligation of the Government, provided that the question of the operation of the service after December 31st, 1960 shall be subject to review; and, further, that the Government reject the proposal for the transfer of the vessels to the Crown for operation by Canadian National (West Indies) Steamships, Limited under an agency agreement.