Museum Musings: Payout of Lacolle Falls mortgage

La Colle Falls from the south bank of the river

by Fred Payton

Fifty-five years ago today, the City of Prince Albert finally paid off the debt which had been a drain on its growth and progress for over forty years.  It was on December 31st, 1965, that the last payment was made on the La Colle Falls debt.

Between 1910 and 1913, Prince Albert was booming.  More land changed hands in the newly created city in one week in March, 1910, than in the previous two years.  Excitement abounded with news that the Hudson Bay and Pacific Railway had let contracts for placing the first fifty miles of it line through Prince Albert and, on the evening of April 29, 1911, real estate deals totalling one and a half million dollars were made.

Although the Hudson Bay and Pacific slowly faded away, other rail construction continued to give Prince Albertans high expectations, including the Grand Trunk Pacific branch, the C.P.R., and the Canadian Northern. Underlying all the railway growth were thriving farming and lumber industries.

As a result, the residents of Prince Albert were open to welcoming the idea of the establishment of a potential source of cheap energy which would not only power residential development but myriad industrial properties.  Not only would the city be able to provide its own power through the project, but it would be able to sell power to numerous other communities in northern Saskatchewan.

Harnessing the power of the North Saskatchewan River, by building a lock at a set of rapids east of the city, appeared to be the answer.  With financial assistance from the federal government, which was responsible for the control and upkeep of inland waterways, it appeared sensible that an hydroelectric dam made powerful sense.

At first, the federal government appeared to be in agreement, but like the Hudson Bay and Pacific Railway, it slowly faded out of the picture, even though a Toronto engineering firm had made a good case for the project.  Even so, a tender was advertised in 1911, funds were raised by selling municipal bonds, and the project looked ready to proceed.

Then, further cost estimates were received, and the price of the project was raised not once, but twice in the summer of that year.  Another engineering firm subsequently raised the cost estimates even higher.  Yet the city signed a contract with a Montreal firm for the construction of the dam, a lock, and intakes.  Construction started immediately, but delays crept in.  Construction continued over the winter of 1912/13, employing over 300 labourers.  The expectation of the citizens of Prince Albert were being achieved, as industry was being attracted to the city

Shortly after the excitement had peaked, disaster struck.  A financial crisis occurred, which by 1913 found that the city had run out of money.  City bonds plummeted as European financiers lost confidence in western Canada.  Prince Albert stopped paying its bills, while continuing to borrow more money.  The La Colle Falls project was suspended on August 29th, 1913 when it was estimated that it would cost $1.8 million to complete it.  Even then, engineering firms reported that the venture was not feasible, and neither the provincial nor federal governments were willing to assist the city, especially after the Imperial Bank refused to provide it with any further loans.

A total of $1.2 million had been expended by the city on a useless chunk of concrete which spanned a mere third of the river.  No electricity would ever be produced, while the city was left with its credit rating in tatters, and a lack of municipal services such as sewers and water mains without attracting any sustainable major industries.

Through the years, efforts were made by local leadership to have the dam project completed.  In 1927, Hugh Sibbald was president of the Board of Trade.  He met with a Montreal company which strongly supported the completion of the project.  In concert with the completion of the project, the company encouraged the construction of a pulp mill near Prince Albert.  But the spokesman for the company was perceived to be too pushy by members of the City Council, and on April 30th, 1928 they rejected his proposal.  A month later, however, the company came back with a further offer which the Council accepted.  Due to provincial legislation passed earlier that year, which impacted power production in the province, the deal fell through.  Again, in 1930, the Montreal firm was involved in negotiation with the city and the province to finish the La Colle Falls project, but the province refused to participate in the venture.  In the long term this was likely of greater benefit to the city and province than if they had proceeded in a project which, from an engineering stand point, was not feasible.

In 1946, under the leadership of Mayor John Cuelenaere, negotiations were entered into which resulted in revised terms for the city.  Those negotiations resulted in the cancellation of nearly $7.16 thousand, leaving a balance of over $2.775 million.  News reports from December 1965 suggested that between 1946 and the final payment on the debt interest alone cost the taxpayers of Prince Albert about $1.5 million.

It was a jubilant Mayor Allan Barsky who joined with the City Commissioner, Joe Oliver, and the trustees to sign the cheques on December 21st 1965 at the trustees’ final meeting.  The trustees at the meeting were Ned Pickering and E.T. “Teddy” Bagshaw.  All at the meeting agreed that Bagshaw, who had been the city’s auditor, as well as an alderman, through the years would be the perfect person to light the fire when the mortgage was to be burnt early in 1966, Prince Albert’s centennial year. 

For more background on the La Colle Falls fiasco, why not visit us at the Historical Museum.  We will re-open on January 4th, and will be open from 9:00 a.m. to 4:00 p.m. week days.