The proclamation of the Department of Transport Act, on November 2, 1936, marked an important step in the civil administration of the country; for the first time all agencies of transportation, so far as federal jurisdiction would permit, were placed under a single authority. It had been apparent to government for some time that a wider approach was required. On the marine side, quite apart from the developments in shipping which have been described, the time was now ripe for a centralized direction and control of the principal ports which, from the earliest days, had been subject to local arrangements. As regards the railway and canal system of the country, the Canadian National Railway was suffering from a long standing financial malaise and the canal network required some reorganization. Civil aviation, formerly under the Department of National Defence, had made rapid headway with the advent of reliable long-range aircraft and modern communications, and it must now be absorbed into the scheme of commercial transportation as a whole.
In preparation for the coming amalgamation of the two departments, a minister was appointed in 1935 to hold the joint portfolios of the Departments of Marine, and Railways and Canals. He was the Hon. C. D. Howe who had been elected to parliament that year, for the first time, after a brilliant career as industrialist and civil engineer. The only minister to hold this double portfolio, he became the first Minister of Transport when the Act came into force.
Changes were not long in coming. In 1936, the administration of certain harbours, until then managed by local harbour commissions subject to some measure of supervision by the Marine Department, was placed under the direction of the National Harbours Board, a new body separate from the Department but reporting to the Minister. The following year saw the passing of the Canadian National Railways Capital Revision Act and the incorporation of the national air carrier, Trans-Canada Air Lines.
With the assumption of new responsibilities, some branches of the old departments were transferred elsewhere, reorganized, or became redundant and were discontinued. The Hydrographic Survey passed to the Department of Mines and Resources and, in the interests of economy and efficiency, a government shipyard at Sorel, which had been operated by Marine and Fisheries, was sold to private interests along with a fleet of dredgers which had been maintained in the St. Lawrence. The chief engineer of the St. Lawrence Ship Channel moved from Ottawa to Montreal and the Marine Services of the Department were placed under a director, Mr. R. K. Smith, who had lately been Deputy Minister of Marine. Some of the administrative staff at Ottawa still occupied the original Marine and Fisheries offices in the West Block, but the Department as a whole had moved to the Hunter building on its completion in 1919, so prematurely it was said, that marks indented in the yet soft floors by government chair legs were still visible in 1936.
These domestic re-arrangements were not without minor upheavals but the Deputy Minister, Colonel V. I. Smart, was able to report that:
"during this somewhat trying period it has been pleasing to note the extent to which all branches have endeavoured to contribute to the general good, and I have every confidence that the traditional excellence of the former Departments will continue to be exemplified in the newer and larger organization."