1954-01-22

Right Hon. L. S. St. Laurent (Prime Minister) moved:: That on Monday, January 25, 1954, and every Monday thereafter to the end of the session, government notices of motions and government orders shall have precedence over all business except the introduction of bills, questions by members and notices of motions for the production of papers.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, may I say a brief word on this motion. When a motion such as this reaches the order paper, we realize there is no practical point in objecting to it. I should like to ask the government, however, to recall that when we gave up one of the private members' Wednesdays in December, I think it is fair to say there was general agreement that that would be remembered when the time came to take away private members' days. I hope the government will recall that understanding before it moves too quickly to take away private members' Wednesdays.


Mr. Daniel Mclvor (Fort William):: I should like to ask a question. When private members' days come along, why is it there are so few members in the house? Why is it that the press takes so little notice of it?


Mr. E. G. Hansell (Macleod):: I do not believe we can have any particular objection at this time to the motion, although we do want to go on record as supporting the hon. member for Winnipeg North Centre (Mr. Knowles) in his suggestion that Wednesdays be left open a little longer. While I am on my feet, I suggest to you, Mr. Speaker, that we are interested in this matter of private members' days being cut off. We like to be as accommodating as possible, but I believe in the ordinary course of parliamentary procedure we are beginning to get away from the important fact that members of parliament, no matter where they sit in this house, have equal status. Each of us represents a body of people who perhaps hold a certain body of opinion.
This is one place in the country where all members are equal. Ever since my first session here I have often deplored the differentiation in our phraseology between government and private members. We recognize, of course, that a government is that officiating body which runs the affairs of this country, but in reality a cabinet minister or even the Prime Minister (Mr. St. Laurent), who takes his seat in this house, has no more right to that seat than a backbencher. He was elected just the same as any other member. I believe that when members introduce motions, resolutions or bills they should have equal prominence with any other bill. I would suggest, therefore, although I do not suppose my suggestion will meet with any degree of approval for a long time, that private members' days should be lengthened and strengthened. They should be strengthened in the sense that any motion, resolution or bill placed on the order paper by a private member should eventually reach a place where it is voted upon. If the house votes in agreement with it, it should be the responsibility of the government to carry it through.
While we are not going to seriously object to the motion at this time, those are my sentiments at least.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Mr. Donald M. Fleming (Eglinton):: May I
ask the Secretary of State when the government proposes to bring into effect the Trade Marks Act, which was adopted at the last session of parliament.


Hon. J. W. Pickersgill (Secretary of State):: No decision has been made as yet. The officials of my department are still engaged in drafting the rather complicated regulations. I am informed that when they have been drafted and approved by council they will propose that a proclamation be issued bringing the act into force at some later date. In this way there would be plenty of time for members of the bar, and other interested parties, to familiarize themselves with the new regulations before they come into operation.
135G	HOUSE OF
Inquiries of the Ministry LABOUR CONDITIONS



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Stanley Howard Knowles: I should like to ask a question of the parliamentary assistant to the Minister of Transport. When he draws to the attention of his minister the question that was put to him yesterday by the hon. member for Vancouver-Quadra (Mr. Green) respecting anticipated lay-offs by the Canadian National Railways, will he ask him to give special consideration to the extent to which those lay-offs will affect the workers at Winnipeg, where I understand the largest single group, in the total number of lay-offs, will lose their jobs.


Mr. L. Langlois (Parliamentary Assistant to the Minister of Transport):: I shall be pleased to bring to the attention of the minister the representations just made by the hon. member for Winnipeg North Centre.
While I am on my feet I wish to answer the question asked yesterday by the hon. member for Vancouver-Quadra (Mr. Green) and which was at that time taken as a notice. His question had reference to these lay-offs by the Canadian National Railways. I have looked into this matter and I am told by the management of the railway company that railway traffic has been declining, and that consequently staff adjustments will have to be made according to actual requirements. It is hoped however that traffic levels will soon be restored to the point where the railway company will again require the services of those who may be laid off to meet the current situation.


Mr. Green:: May I ask the parliamentary assistant what number are to be laid off.


J. G. Léopold Langlois: I have no official confirmation from the management with respect to that; but I have learned from other sources that the number is, as I understand it, about 800 for the country as a whole.


Stanley Howard Knowles: And 262 of them will be at Winnipeg.


Howard Charles Green: Has not the department any method of avoiding such heavy lay-offs?


J. G. Léopold Langlois: Unfortunately, no.



DELIVERIES UNDER QUOTAS


[Stage Direction]
On the orders of the day:
Mr. J. G. Diefenbaker (Prince Albert):: should like to ask a question of the Minister


of Trade and Commerce. I have not given notice, because a request for this information just reached me by letter a few minutes ago. The question is this: Is the minister in a position to advise the extent to which present quotas at wheat delivery points have been exhausted? What is the probability, particularly in those areas where the acreage is small, of having a further increase of the wheat quota to eight or ten bushels to the acre?


Right Hon. C. D. Howe (Minister of Trade and Commerce):: Mr. Speaker, the delivery quota on oats was increased yesterday by a further six bushels per acre seeded to oats. I have no information as to the progress in the deliveries of the general two-bushel quota. However, I shall be glad to make inquiries. I should think however that it would be some time before that particular quota could be increased.
If my memory serves me correctly, the minimum quota for the small producers was increased when the two-bushel quota was announced. I do not remember the exact figure, but I think the minimum is at least 1,000 bushels at the moment. Anyone can deliver 1,000 bushels of any grain. I believe that is the situation, but I shall be glad to make a check and give a statement later.



HARBOURS


[Stage Direction]
On the orders of the day:
Mr. Thomas M. Bell (Saint John-Albert):: I should like to ask a question of the Minister of Transport (Mr. Chevrier) or his assistant. In view of the recent serious waterfront fire in Saint John last Wednesday, January 20, has the government, through the national harbours board, or any other of its agencies, considered providing or assisting in the provision of a fire boat for Saint John harbour?


J. G. Léopold Langlois: I thank the hon. member for having given me notice of his question. Apparently the hon. member has reference to the fire which broke out on board the S.S. Mont Gaspe shortly before midnight on January 19, while the ship was docked at pier No. 7 on the west side of Saint John harbour.
This fire, which apparently was caused by a short circuit in the radio equipment, was confined to the chart room and the bridge of the ship, and did not spread to the property of the national harbours board. Since fire protection is a municipal responsibility, no fire-

fighting boat is at present being considered for either the harbour at Saint John or any other harbour in Canada.


Thomas Miller Bell: May I ask a supplementary question. Does not the national harbours board, or the government, provide a subsidy for a fire boat at Vancouver, and also allow the navy to provide a fire boat at the port of Halifax?


J. G. Léopold Langlois: It is true that the national harbours board is paying a subvention of $25,000, I believe, to the municipal authorities in Vancouver to assist them in operating the fire-fighting tug which was built there by the city. So far as Halifax is concerned, during the war the navy had two fire tugs at that point. Some years ago one of them was sent to St. John's, Newfoundland, and the other is still being operated in Halifax, but strictly by and for the use of the navy. There is no other government-owned fire boat in operation in any other harbour in Canada.



QUESTION AS TO FINAL PAYMENT FOR

[Stage Direction]
1952-53 crop
On the orders of the day:
Mr. H. R. Argue (Assiniboia):: I should like to ask a question of the Minister of Trade and Commerce. Is he able to add anything to his reply to my question on January 12, as to when final payments for wheat might be made, and to say whether the wheat board accounts for 1952-53 have yet been closed, as a first step toward making final payments?


Clarence Decatur Howe: No, the accounts have not been closed. There has been some discussion between the wheat board and my officers. The position, of course, is that the last crop of wheat is not sold in total. It is hoped that the wheat accounts can be closed early in February, and final payment made. I expect to be in Winnipeg early in the month, and at that time we will try to arrive at a decision.


Hazen Robert Argue: Would that mean that final payments might be out at the end of February, or in March?


Clarence Decatur Howe: Yes, certainly not later than that.



NORTHWEST TERRITORIES


Hon. Jean Lesage (Minister of Norlhern Affairs and National Resources) moved: the
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third reading of Bill No. 77, to amend the acts respecting the Northwest Territories.


[Stage Direction]
Motion agreed to, bill read the third time and passed.


[Stage Direction]
The house resumed, from Thursday, January 21, consideration of the motion of Mr. Winters for the second reading of Bill No. 102, to promote the construction of new houses, the repair and modernization of existing houses, and the improvement of housing and living conditions.
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I have just a few remarks to add to what I said last night. They are as follows. In view of the tremendously high cost of building at the present time, and if this legislation is to succeed in providing low-cost housing for people of low and medium incomes, I should like to suggest that the minister might consider setting up a research department in Central Mortgage and Housing Corporation to look into the possibility of finding new types of architecture and revising the present regulations of the corporation in order that new and more advanced methods may be employed in the building of houses with which the corporation is concerned, thus possibly allowing houses to be built at a lower cost.


Stanley Howard Knowles: Mr. Speaker, some of us feel that the real test of the new housing legislation now before parliament is as to whether or not it will help people to get homes who would not otherwise get them. It is our contention that the housing legislation we have had thus far has failed to meet that test. Houses have been built under the National Housing Act. There is no denying that fact. But they have been built mainly for people who would have been able to build or obtain homes anyway. They have been helped to get new homes a little earlier than would otherwise be the case, but the old National Housing Act has not helped people who were not able to help themselves.
It is our belief that the new legislation now before parliament offers little or no improvement on that score. Again, there is no question but that houses will be built under the new housing act and the minister will be able to bring figures before the house from time to time indicating that large numbers of homes have been built under this legislation. But it is our contention from

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a study of the act that there is no change in respect to the basic weakness to which I have already drawn attention. It is still the case that the assistance provided under this legislation will be mainly for those who would get homes or have them built anyway. It so happened that while I was at home in Winnipeg during the Christmas recess I discussed the government's housing legislation with some gentlemen whom I think it would be fair to describe as hardheaded real estate men. They are men whose support of the C.C.F. is doubtful. I imagine they support other parties than ours. Nevertheless they said to me in very clear terms, two real estate men in particular, that in their view the national housing legislation helped only those who would be able to get homes anyway. They pointed out to me that they are collecting rents from a great many people occupying rented houses in cases where the rents are greatly in excess of the monthly payments being made by some people who are buying their own homes. They pointed out to me that the new legislation will not enable those people to become home owners any more than the previous legislation did.
That, Mr. Speaker, is our chief complaint against this legislation. We have already pointed out with respect to the previous housing act that it seemed to be legislation largely designed to guarantee the position of money lenders. We contend that that criticism must be levelled against this new legislation as well. Indeed, as my colleague, the hon. member for York South (Mr. Noseworthy), pointed out yesterday, it goes one step further in taking the alleged risk out of private enterprise which is supposed to be the justification for private enterprise making a profit out of such a matter as housing. As I say, those are our two main criticisms of this legislation. Those are the two main points on which it falls down. In our view it is legislation that takes the risk out of private enterprise, that underwrites and guarantees the position of the money lender, and, on the other hand, though it helps to get houses built, it helps to get them built for people who would get homes anyway.
Having made that main charge against this legislation, namely, that it will not help the people who really need help, may I indicate, even at the risk of repeating some of the points made by colleagues of mine who spoke yesterday, that in my view there are three main stumbling blocks in the government housing legislation which are the cause for it not being of any help to the little people, the people who need help.

The first stumbling block is the high interest rate. We do not know for sure just what that interest rate is going to be after this bill has been passed, but it would appear from what the minister said yesterday as though the figure would probably be 5J per cent. He said yesterday that 5 per cent would be a very nice rate from the borrower's point of view but that he doubted whether money would be available at that rate. On the other hand, he characterized 6 per cent as too high. He pointed out that life insurance companies have been putting their portion of money into joint loans at the rate of 5f per cent, so I deduce from all this that what is up the government's sleeve is a proposal of a 5f per cent interest rate. That is one of the main contributing factors to the high cost of home ownership. Whether you talk about homes of moderate total cost, whether you talk about homes in the bracket the minister was speaking about yesterday when he gave examples involving monthly payments in the $50 range, or whether you talk about homes of a little better quality, right down the line one of the main factors in a high monthly payment, one of the main factors in it taking 25 to 30 years to pay off a mortgage, is the high interest rate.
We of the C.C.F. contend that the government has not faced up to the seriousness of the housing problem, has not recognized it as the social responsibility it is, until it takes steps to bring down the interest rate, and we suggest that it should be reduced to 2 per cent. The hon. member for York South yesterday suggested a couple of ways in which that might be done. One way would be to use money from the Bank of Canada. Another way would be for Central Mortgage and Housing Corporation to lend money directly for home building and for the government, if necessary, to subsidize the interest rate so as to bring it down to 2 per cent.
There may be other ways, but the point we are making is that the challenge is facing the government, if it claims to be interested in housing, if it claims to be really concerned about housing as a social responsibility, to find some way to bring the interest rate down so that the cost of a home for the average Canadian can be brought within the means and capacity of the average Canadian. It is no use prating about the large number of homes that have been built by people who can afford them. It is no use the Liberals getting up enthusiastically and patting the government on the back for bringing in a new housing act unless they are prepared to take this basic step of finding a way to bring down the interest rate so it will be possible for people of average means, of average financial capacity, to own their own homes.

The second barrier to ordinary people being able to take any advantage of housing legislation is the question of the down payment. Of course we welcome the fact that the amount of the down payment is being reduced by the terms of this legislation, but, as the hon. member for York South pointed out yesterday, we feel that the 90 per cent loan provision should apply higher than the government proposes, that it should apply on a value of $12,000 which would bring the loan on such a house up to $10,800.
Not until something has been done to make it possible for people of ordinary average income to get started on the purchase of a home can it be said that the government or the country is really fostering on a widespread scale the idea of home ownership. I shall come later to something that I want to say about rental housing and the need for a government program that will actually provide low-rental housing, but at the moment I am talking about the home ownership aspect of a national housing policy.
With respect to the question of the down payment, I suggest to the government that it need not do any boasting about having reduced the down payment under a certain point to 10 per cent as though that was the last word in down payment legislation. I would call the attention of the government to the fact that President Eisenhower's committee of advisers on housing made a report to the President of the United States on December 15 last. That report contained quite a striking suggestion with regard to the ways and means of helping to provide housing for low income families. I have in my hand a copy of the supplement to House and Home for January, 1954, which contains comments on the report prepared by the President's committee and also the text of the recommendations. One of those recommendations contains this suggestion:
For an experimental period of two years, the federal housing administration should be authorized to insure 40-year, 100 per cent loans up to $7,600 per dwelling unit or up to $8,600 per dwelling unit in high-cost areas as determined by the federal housing commissioner. This special mortgage insurance program, proposed as a new section 221 of the National Housing Act, is designed to meet the housing requirements of low-income families as determined by the federal housing commissioner. Purchasers under this program should be required to make a minimum cash payment of $200 including amounts to cover settlement costs and initial payments for taxes, hazard insurance and similar prepaid expenses.
In other words, there is in that recommendation the proposal for some cash down but only for the purposes indicated. So far as the basic purchase of a home is concerned,
National Housing Act
the recommendation by President Eisenhower's advisers is that under certain conditions there be a 40-year mortgage and no down payment. So I submit that we have not seen the last word in this kind of legislation, that the government is not fostering seriously and earnestly the idea of widespread ownership of homes by the Canadian people.
A few moments ago I said that in my view there were three stumbling blocks to this legislation being of any use to ordinary people, to people with average incomes.
In my view the third stumbling block is the amount or percentage of income required under this legislation before one can qualify for a National Housing Act loan. I said earlier in my remarks that I had discussed this question with hard-headed real estate men in my city during the Christmas recess. I repeat what I said a few moments ago, that two of them told me that their firms were collecting high rents of from $70 to $80 per month, and more, from people who they knew could not afford to pay those rents. But in the light of the government's legislation those same people were told that they could not afford to buy a home under the National Housing Act and pay $55 or $60 per month on the purchase of such homes. Surely that is ridiculous. These hard-headed real estate men in Winnipeg say that neither the former legislation nor the new legislation will help those people.
I have been under the impression for a long time that what my real estate friends told me was correct, but I decided-as a matter of fact I did this only an hour or so ago-to check with the dominion bureau of statistics to see if they had any figures on this question. I found that they had. I found that there will be a booklet or monograph on housing put out in a month or so which will contain many interesting figures on housing in general and on the rental of homes in particular. The officials of the dominion bureau of statistics were able to give me figures over the telephone which substantiated the point I have been making, namely, that there are a great many people in this country paying rents which are higher than what might be considered an appropriate monthly figure for the purchase of a home.
For example, I find that according to the returns of the 1951 census there were 257,225 heads of households in Canada paying rents of $50 per month or more, and there were 162,885 paying rents of $60 a month or more. The first figure represents 23 [DOT] 1 per cent of all renters, the second figure, 14-6 per cent. I sought the figure for my own city of Winnipeg and found that in 1951, 9,360 heads

National Housing Act
of households were paying rents of $50 a month or more, being 30-8 per cent of all renters in Winnipeg, and that 5,285 of them, or 17-4 per cent of the total, were paying rents of $60 per month or more.
Those are the figures for 1951 when the last census was taken, but the dominion bureau of statistics made another survey under date of September, 1953, from which we discover that the situation is getting worse. Unfortunately for my purposes the bureau does not have the 1953 figures for the city of Winnipeg, but it does have figures comparable to those which I just gave for 1951 for the whole of Canada and they also have them for Manitoba as a whole, both for 1951 and 1953. When those figures are studied the picture becomes quite clear.
For example, in September, 1953, for Canada as a whole the number of heads of households paying rents of $50 a month or more had gone up from 257,225 to 391,000, and the percentage had risen from 23-1 per cent to 32-9 per cent. The number of those paying rents of $60 a month or more had gone up from 162,885 to 272,000, with a percentage increase from 14-6 per cent to 22-9 per cent.
In the case of Manitoba, those paying rents of $50 per month or more stood at 12,235 in 1951 or 23-3 per cent of the total, and that figure had gone up to 17,000 or 27-7 per cent *of the total by September, 1953.
In the case of Manitoba those paying $60 a month or more stood at 6,970 in 1951 or a percentage of 13-3 per cent. That figure went up to 11,000 in September, 1953, or a percentage of 18 per cent. As I said before, there are no figures as yet for Winnipeg for September, 1953, but by looking at the increases that have taken place over Canada as a whole and the increases that took place for Manitoba as a whole it is safe to assume that in the case of Winnipeg as at September, 1953, 34 or 35 per cent of the heads of households paying rent were paying $50 a month or more and 20 to 21 per cent were paying rents of $60 per month or more.
I would be the first to admit that some of these people paying these high rents are doing so by choice and for one reason or another do not wish to own their own homes. But there is no doubt in my mind, and my real estate friends back home agree with me, that great numbers of these people paying these high rents would rather be purchasing homes at monthly figures similar to the examples given to the minister yesterday.
Yesterday the minister gave examples to underline the virtues of this legislation, as he sees it, and most of the examples he gave

were in the $50 bracket. But I suggest it is ridiculous that we should have legislation which provides for the purchase of a home at monthly payments in the $50 bracket while its provisions are not available to many persons who are having to pay $60, $70, $80, $90 and $100 a month rent. It is surely adding insult to injury to tell these people who are having to pay rents as high as $80 and $90 a month or more that their income is not sufficient to make it possible for them to undertake the ownership of a home at monthly payments of between $50 and $60 a month.
These three stumbling blocks in this legislation which I have presented are in my view stumbling blocks which stand in the way of this legislation being of any help to the average person, let alone to little people, in the matter of home purchasing. I would strongly urge that consideration be given by the committee that will deal with this legislation to these three stumbling blocks. Three things that must be done are: First, bring down the rate of interest; second, bring down the amount of the down payment and even consider in the case of moderate priced homes for low income families the suggestion made by President Eisenhower's committee of a program involving no down payment; and finally, reduce the amount of income one is required to have in order to become a home owner, so that we do not have the ridiculous situation whereby people paying $80 a month rent are being told they cannot afford to pay for a home at $50 or $55 per month.
I have one or two other suggestions to make as to the shortcomings in this legislation. It seems to me the time has come in this country to consider the principle of open-end mortgages whereby people who have bought homes can get additional money on a mortgage later on after it has been reduced at the same terms that originally applied for the purpose of home improvements or other necessary purchases.
Similarly, I think consideration should be given to the problem of major appliances. In a modern home the heating plant is considered to be a part of that home in this country, but the day has come when an electric stove and a refrigerator are also part of the equipment of a modern home. Many a family that is otherwise able to take on the obligations of purchasing a home under the National Housing Act finds itself strapped because it has not the money to get started with a stove, refrigerator and the other major items that are necessary at the beginning. It is possible for builders to purchase some of

these articles of equipment wholesale or in large lots and get them at less than the retail price, and it seems to me that provision should be made for including some of these articles in the purchase price of a home, and that lending arrangements made in connection with that purchase price should include these essential articles.
Not until consideration is given to matters such as these, which affect ordinary people who desire home ownership, is there room for all the boasting and prating we have had in the house, particularly from the other side.
There are still other shortcomings in the government's proposals. The minister was proud of the fact that he is lengthening the amortization period, and we are glad he is doing so. I took occasion to point out during the election campaign last summer the manner in which the government seemed to be stealing parts of our housing platform. We had, in the main, adopted three points: first, the lowering of the down payment; second, the lengthening of the amortization period; and third, lowering of the interest rates. Reports were leaking out during the election campaign to the effect that the government was going to do something about lowering down payments and about lengthening the amortization period. The only complaint I had about that type of thieving, that stealing of our planks, was that the government did not steal all three of our points and decrease the interest rate as well. As someone is saying behind me, they failed to steal the most important plank in our platform.
But what I intended to say on this point was that any pride the minister has in the fact he has lengthened the amortization period is, I believe, washed out by the type of figure he was yesterday put in the position of having to give to the house. He pointed out that under the present rate of interest on joint loans of 5\ per cent the lengthening of the amortization period to 25 years is going to save the borrower or home purchaser 73 cents per month per $1,000. That is before the rate of interest goes up from 5J per cent to 5| per cent or whatever the increase might be. It appears to me that the increased rate of interest and the increased cost of homes is going to wash out for most people any advantage that accrues from the lengthening of the amortization period so far as monthly payments are concerned.
I suggest, Mr. Speaker, that if that is the case, and if the anticipated advantages of the government's own legislation are going to be washed out by the increased rate of
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interest and the increase in the cost of homes, it is high time the whole proposal was further reviewed.
I need not take much time on one or two other points which have been adequately covered by my colleagues who have already spoken, but I would like to say in passing that we in this group deplore the way in which the government is moving in respect to the provision of money for homes. For some time now we have had part I of the National Housing Act, and we have had joint loans with government money being put in along with the money of the life insurance companies or the lending institutions. That is now being taken away. In other words we are having a retreat from the idea of joint loans into a situation where private enterprise, private lending institutions, are to take over, for all practical purposes, the whole field, at least so far as individual homes are concerned. I noted with some interest that even the hon. member for Eglinton (Mr. Fleming), despite the fact that the Tory party declared at the start of this session that they were going to be more ardent advocates of private enterprise than in the past, also deplored the retreat of the government from the principle of joint loans.
Whatever thinking may be going on in the mind of the hon. member for Eglinton, at any rate we greatly dislike the idea of moving in that direction.
Comments have already been made by members of our group as to the idea of making use of the banks. If the government wishes to have the banks used in that way, we see no serious objection; but we point out that in effect that is giving over to private enterprise the whole field of lending for houses without any suggestion of the kind of interest rates that would make housing possible for average and middle income people. This is simply a denial on the part of the Canadian government of social responsibility in the field of housing.
We feel the same way about this business of insuring mortgages. Again the borrower is being asked to pay the shot. The borrower is having a sum added to what he must pay. Is it for his own protection? No; it is to protect the money lender against default, either by the borrower in case there is something in his own experience over which he has no control or in case there is a depression and the value of homes goes down to the point that it is less than the amount that would still be owing on a mortgage. In other words, out of this legislation the banks are getting not only a new field for investment, underwritten, guaranteed and

National Housing Act
protected at public expense, but as well they are getting insurance against a depression, to be paid for by the people who purchase these homes. Mr. Speaker, with respect to the National Housing Act as we had it before, we have said time and time again that it was not an act to get homes built for people who needed them but was primarily an act to help out the lending institutions. The leopard has not changed its spots. This legislation is just like the legislation we had before. The banks have been substituted for the insurance companies in actual practice, but it is still legislation which helps people get homes if they could have got them anyway, and it makes things bright and rosy for the banks, which are the major lending institutions under this new legislation.
The other major fault with this legislation, in our view, is that it makes no improvement in the section having to do with low-rental housing. As I have already said, we feel strongly that every encouragement should be given in this country to the idea of home ownership. I hope I have made my points in connection with that matter as strongly as possible, having regard to the importance we attach to them. But it is still true that there are many people whose occupations require them to move around. It is still true that there is needed a great deal of rental housing in this country. Most of the people who require rental housing are in average or below average income brackets. My friend the hon. member for "Winnipeg South (Mr. Trainor) is interjecting to say that I have already suggested that there is too much of rental housing. That is perfectly true. I thought I had made it clear just now that our first choice is that there should be home ownership and that we want to encourage the possibility of home ownership for middle, average and even lower than average income people. But there are those whose jobs are such that they cannot be sure they will stay in one place for any extended period of time and for whom rental housing seems to be the only solution. It so happens that most of those people are also the people whose incomes are in the middle or lower than middle brackets, and the only possible solution for them is a low-rental housing program with an element of subsidy in it, to make possible decent housing for them.
I know that some of the private enterprisers in this house-and the place is full of them-who listen to what I am saying will be thinking, in their own minds, that these people over here in the C.C.F. group want public money to go into housing in the form of a subsidy; and that is something which
[Mr. Knowles.l
is anathema, as I say, to many of the private enterprisers in this house. But we take the position that you mark a society's progress by the extent to which it accepts social responsibility for those things which are vital to the life and the well-being of its people. In our view housing is just as important as are education, roads and many other services which we have agreed are a public and social responsibility rather than an individual matter. With all that is in us we deplore the idea that some children are born into this world, in this country of ours, to live in poor, inadequate slum homes whereas other children, who are equally Canadians, are born to enjoy better housing. Just as we have accepted the principle that every child in this country is entitled to the best education the country can provide, we say that the time has come when every child born in this country is entitled to be born into and to live in a good home. We know of no way in which public money could be better spent than by channelling it into ways that will provide for better homes for our children. In our view, Mr. Speaker, the legislation now before us is woefully inadequate. It does not meet the tests which housing legislation in 1954 should meet for the Canadian people.


Mr.  C. E. Johnsion@Bow River: Mr. Speaker, I should like to take advantage of this opportunity to say a few words with regard to housing. It is not often that I have had the opportunity of congratulating the minister. I looked through this bill carefully to see if there was not, somewhere in it, something on which I would be able to congratulate the minister, and I found one. I should not say that I found it in the bill, Mr. Speaker; I found it in the minister's quotations when he was speaking. The thing on which I think I should congratulate the minister on this occasion is that at last he has recognized the need for further development in our housing so that those people with small incomes will be able to become possessors of homes. I also think he is right in taking the view that something should be done in the field of credit expansion so that our national resource of homes may be developed without undue interference with the industrial development of this country because, in my judgment, there is room for both developments. The view is prevalent that there is a need for credit expansion in this country. If that expansion is necessary for developing more homes, then it should be provided for. I do not think that we have reached the period in our development when industrial development

either has expanded to the extent that it should reach. I think the two can run along hand in hand.
After having congratulated the minister in that respect, Mr. Speaker, may I speak for a moment about the need for homes; and in this view I think the minister and I are in accord. There is a great need in Canada for homes for those people in the low income groups. Like my friend the hon. member for Winnipeg North Centre (Mr. Knowles), I am more concerned with those people in the low-income groups than I am with those people who have a sufficiently large income to build houses of their own or to take advantage of the housing legislation as it existed in the past. In the early part of this session and in the last session I have said that people with sufficient income have no difficulty in procuring houses under the National Housing Act. Those people whose incomes are not sufficiently high to meet the requirements of Central Mortgage and Housing Corporation for loans are the ones who are in need of assistance.
The dominion bureau of statistics has stated that 75 per cent of the people of Canada earn less than $3,000 per year. This is an extremely low income to apply to 75 per cent of our population. If that is true, then I think I am safe in saying that about 50 per cent of our people earn less than $1,500 per year. How are people in that financial category going to be able to take advantage of the legislation as it existed last year or as it will exist under Bill No. 102? It just cannot be done.
In his speech the other day the minister stated that on a $10,000 house with a lending value of $8,000, the down payment would be $1,400. I say that if the statement of the dominion bureau of statistics is true, then only 50 per cent of the people in Canada can take advantage of that.


Mr. Mcllrailh:: Would the hon. member permit a question?


Mr. Johnston (Bow River):: Yes.


George James McIlraith: The hon. member is using the particular statistic put out by the dominion bureau of statistics as an indication that 75 per cent of the persons available for work in Canada get less than $3,000 per year. The statistic does not say that at all.


Charles Edward Johnston: I was not referring to the unemployed at all. The hon. member is referring to people who are not available for work.


George James McIlraith: No; the statistic you are using includes in it all persons who earned
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money at any time during the year. For instance, students are included in it if they worked any part of the year.


Charles Edward Johnston: I think that is a minor consideration because if you take the students out of it entirely the position is practically the same.


George James McIlraith: No, it is not.


Charles Edward Johnston: Let us take the general, over-all picture. I am not going to argue with the hon. member for Ottawa West (Mr. Mcllraith) whether their income is down or up $100. The over-all picture is the same, and that is as the dominion bureau of statistics states it.


George James McIlraith: That is my point: it is as the dominion bureau of statistics states it and not as the hon. member states it.


Charles Edward Johnston: I shall let you argue that with the Minister of Public Works (Mr. Winters). When the minister was speaking not long ago to the appraisal institute of Canada, he made this statement. The hon. member can argue this with him. The statement appears in a press dispatch of Thursday, April 2, 1953:
Mr. Winters said that not more than one-third of Canada's families could afford new houses- either to rent or to own.
Do you agree with that statement? The hon. member for Ottawa West makes no reply.


An hon. Member:: He makes no reply because he knows the bureau of statistics statement, but not the other one.


Charles Edward Johnston: I do not want to get the hon. member into an argument with the Minister of Public Works because I think the minister would wipe the floor with him. I agree with the minister. Then, he goes on to say:
But if enough new houses were not found, he stated, it would affect the people at the bottom of the scale-people who were living in dilapidated and obsolescent houses.
That bears out almost word for word what the dominion bureau of statistics has said, so I take it that what the minister has said is quite correct.


George James McIlraith: It is.


Charles Edward Johnston: Then, you have changed your mind in the last few seconds.


George James McIlraith: No, I have not. I was just trying to point out to the hon. member, as I am sure he wishes me to do, that he was not using the dominion bureau of statistics statement exactly as it was put out. If he will

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just read the item as it was put out, and put it on the record that way, we will be in complete agreement.


Charles Edward Johnston: The hon. member can put any interpretation on it he likes, but the dominion bureau of statistics statement still stands as it is.


Mr. Noseworthy:: Get some houses for Ottawa instead of patting the government on the back.


Charles Edward Johnston: A while ago I congratulated the minister when I said I thought he recognized the problem in this country by stating that two-thirds of our families are just not in a financial position to own or rent homes. Then, let us do something about it. Perhaps the minister is in hope, I am sure he is, that this new bill will take care of that problem. I am afraid he is going to be disappointed.
When the minister was speaking the other day he indicated the number of new houses that had been built year by year. When he was speaking on December 16, I think the figures were different slightly from those in his last speech, but not materially. He said that starts in 1950 were 95,000; 1951, 74,000; 1952, 84,000. At that time, he did not have the estimates for 1953, but I think it is about 100,000. He hopes in 1954-I think I am correct in this and I am sure he will correct me if I am wrong-there will be about 105,000 new starts.


Mr. Winters:: I made no prediction, Mr. Speaker. I said there were about 105,000 starts in 1953.


Charles Edward Johnston: Then, the minister is not sure what this new legislation is going to do.


Mr. Goode:: You are not, either.


Charles Edward Johnston: No, I am not. The only thing I am sure about is that it is not going to be any better. It probably is not going to meet the expectations of the Minister of Public Works, but it may meet your expectations. I do not know what they are. I have not heard you express them. You should get up and speak on this subject.


Tom Goode: I will.


Charles Edward Johnston: Then, the people of Vancouver will know you are here.


Tom Goode: Do not mention Vancouver, say Burnaby.


Charles Edward Johnston: Where is that? In the past I have been somewhat critical of Central Mortgage and Housing Corporation, but not of the individuals concerned. As I

have said, it is too big a job, it is too scattered for any centralized organization in Ottawa. I have suggested a plan, and I shall repeat it later, how that can be overcome.
One of the great faults I have found with the government-built homes has been the inspection. I believe that is where the whole plan falls down. I am not blaming particular individuals in the Central Mortgage and Housing Corporation. Probably they try to do the best they can. How is it possible for a central organization in Ottawa to scatter its work all over the Dominion of Canada and expect to have proper home inspection? It just cannot be done, and it never has been done. A few good homes have been built; I am not contradicting that for a moment. It depends entirely on the local contractor. If he is an honest fellow you will get a good house. In the last few years I have seen some good houses built under Central Mortgage and Housing Corporation, but I have seen a lot of poor ones. In almost every case it comes down to poor inspection.
I am not going to go over the question of poor inspection again. I have gone over it so thoroughly on many other occasions, I am sure the minister knows exactly what I mean. I believe the federal government should get away from this attempt at trying to build houses. I shall give my alternative proposal later.
Under Bill 102 in which the minister is putting so much hope there are two main provisions. The first is that it is going to widen the group of lending institutions to include the chartered banks and the Quebec savings banks. The second is that it will abandon joint loans and substitute insured loans. Probably the minister hopes that it will result in the chartered banks extending credit-and, to a degree, it will. The minister said certain things about the principle of mortgage insurance, as reported at page 998 of Hansard-and I shall read his words now because I do not wish to misrepresent his views. This is what he said:
Under the proposed amendments Central Mortgage will have the power to buy insured mortgages from approved lenders.
And later:
-it is proposed to make insured mortgages eligible security for Bank of Canada advances to chartered banks, as is the present position in respect to government bonds.
In his speech he gave the impression-at least I thought he did-that the people's savings which are deposited in the chartered banks are now going to be used for home building. This cannot be true, because the banks do not lend people's savings directly.

What is going to happen? I said a while ago that this would result in the expansion of credit; and so it will. What is going to happen is that when Central Mortgage and Housing Corporation accepts these insured loans they will be accepted by the chartered banks, and then the chartered banks will use this as eligible security to deposit in the Bank of Canada, where they will be given further credit advances.
When the bank then makes a loan it is an issue of new credit; it is not using the people's savings at all. So the hon. member for Bur-naby-Coquitlam (Mr. Regier) when speaking the other day was, I think, quite wrong when he suggested they were going to use the people's savings for this purpose. That will not be done; it is purely a matter of credit expansion.
One of the particular faults I find with this measure is this. If we are going to use the chartered banks for the purpose of credit expansion, why do we not avoid them and use the Bank of Canada for the same purpose? I shall show later on how I think that can be done.
There is in the bill a provision whereby the down payment will be lessened to a degree, and this may be of some assistance. But, as I said a moment ago, 50 per cent of our people receive less than $1,500 a year. According to the minister's own figures, two-thirds of the people of Canada cannot afford either to own or to rent homes.
If we are both correct-and I think we are -that means that the down payment must be brought down to a point much lower than it was under the old legislation. But that is not going to be done. The down payment of 20 per cent is going to be reduced to 10 per cent. It is to be 90 per cent of the first $8,000 and 70 per cent of the balance of the lending value. In other words, on a $10,000 house, on which the lending value is $8,000, the down payment is to be $1,400 where it used to be $2,000.
Of course, that is a fallacy; you cannot build a home for $10,000. Indeed, the minister himself recognizes that and is prepared to raise the $10,000 to $12,500 or possibly $13,000. I think that is a good thing, because you cannot build much of a home for $10,000.
On his own statement the $8,000 loan would require a down payment of $1,400, representing a reduction of $600. How many people in the bracket to which the minister referred, and to which I, too, have been referring, have the $1,400 required for a down payment? If we are going to attempt
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to improve housing conditions for those people to whom both of us have referred, this legislation cannot possibly do it, without some further adjustment. It just cannot be done.
The income requirements as indicated under the old act are not being changed in this one. There is no change in the 23 per cent relationship between gross income and the monthly payment. That is not being changed; it is being left as it was. And because of that these people are just not going to be able to afford that high monthly payment. In my view that payment is altogether too high.
The bill incorporates the new principle of the single insurance premium on three types of homes, namely home ownership, rentals and conversions. By issuing this insurance premium it is expected by the government that lenders will be more ready to extend loans than they were before. I do not think this will prove to be so. It may result in the chartered banks, which are being brought into the picture, making loans in addition to what was done before. Because of that factor more money will be spent on home building. It will be spent, not by the group in the low income brackets, but by those groups who are in a financial position where they can afford the down payment.
This insurance plan will entail the 2 per cent being capitalized in the mortgage loan. When the hon. member for Eglinton (Mr. Fleming) spoke the other day and referred to the down payment of $1,400 on the $8,000 loan he included 2 per cent of $8,000, which is $160, in the down payment, and the minister nodded his head in agreement. Later on he made a correction and stated that this would not be included in the down payment.


Robert Henry Winters: On a matter of privilege; I made no sign of agreement at all when the hon. member for Eglinton made that statement.


Charles Edward Johnston: I thought you did, but I am glad you are clearing that up now. As I understand the act, that amount would be incorporated in the amortization of the loan. So the borrower would not have to pay off that $160 immediately; it would be spread over a number of years. But he still has to pay it.
What advantage is derived from this by the borrower? It is an added cost of $160. What advantage does he get? He does not get any advantage at all.


Robert Henry Winters: He gets mortgage money.


Stanley Howard Knowles: At a higher price.

National Housing Act Mr. Johnston (Bow River): If he had a good bank account of perhaps $5,000 he could get lots of mortgage money. This does not seem to be a square deal. I will give the minister credit for sincerity in what he is doing, but I would point out to him that in this instance we are trying to make houses available to those people in the low income brackets; and yet he adds $160 to that loan, right off the bat. They must pay that much more than they paid before. The only insurance is to the lenders and the banks; there is no insurance for the individual at all except that, as the minister pointed out, he will now get the loan if he can meet other requirements. Of course, the poor fellow cannot do that anyway.
This is a very bad situation. The bill speaks particularly about default. If the borrower is ever in default he loses his equity in the house. Let me read the explanation appearing at page 11 of the bill, opposite section 9.


Mr. Deputy Speaker:: Order. The hon. member should not refer to a particular clause in the bill.


Charles Edward Johnston: No, I am not
referring to a clause in the bill. It reads:
This section sets out what will be paid to an approved lender in respect of a loan that has gone into default. Under the section, in order to qualify for payment, the approved lender must secure title to the mortgaged property and convey such title to Central Mortgage.


Mr. Deputy Speaker:: Order. Will the hon. member not agree with me that he is doing indirectly what he should not do directly?


Charles Edward Johnston: You may be
right there, Mr. Speaker, because I was reading the explanation on the opposite page.


Stanley Howard Knowles: You will find the same explanation in the minister's speech.


Charles Edward Johnston: Yes, it was given in the minister's speech, too. But let me summarize it this way. Once a borrower becomes in default, then the lender has no alternative but to foreclose on the loan after it is in arrears for six months. The lender must do that if he is to retain the benefits of the insured loan. He has no alternative. I think that is bad. The minister may recall that on one occasion a couple of years ago I had with me in the house when making a speech a copy of the form of contract signed between Central Mortgage and Housing Corporation and the home owner. I think they are using the same general contract, but the minister will correct me if I am wrong. In it there is a clause stating that if the borrower falls into default for a period of only one month he loses all his equity in his home.

If he has paid every insurance premium and has made every payment with the exception of the last one and then defaults on the last one he loses everything he had.
I tried to get that clause taken out of the contract but the present Minister of Trade and Commerce (Mr. Howe) got up and said: Oh well, sure it is there, but our mortgage companies would not do a thing like that. He has more faith in them than I have. If they did not intend to use it why was it put in the contract? But here we are incorporating the same thing into the act. Once a home owner is in default the lending company has no alternative, if it wants to keep its business in a sound position, but to foreclose. The man who owned the house has paid a 2 per cent insurance premium, but for what protection?
Another phase of the bill is that the interest rate is going to be raised. That is almost a certainty. Is that lessening the burden on the home owner? Is that making it possible for this two-thirds of the people of Canada to become the possessors of homes? Of course not. We are making it more difficult. The only good feature is that there will be a longer amortization period and the payments may be smaller. I think any businessman will tell you that the ordinary fellow just cannot afford to pay 5 per cent on borrowed money. I know that if you can borrow money from the bank at 5 per cent and make 10 per cent on it that is good business, but the people concerned here are not in that position. They are in the position now where they must pay more interest than they did under the old legislation. Their debt is greater.
I think that possibly some device could have been used to bring about a lower interest rate. The rate is not set by statute. It depends on the governor in council. It is possible that people may be paying more than 51 per cent. Before long they may be paying 6 per cent. But it does seem to me that there should be a definite figure in the bill so that members of the house and the people of Canada may know what rate of interest people are going to be required to pay. I know that when the individual will enter into a contract he will know what the rate of interest is because it will have been set by that time for that particular period.
There is one good thing about the bill, the fact that the period of amortization has been lengthened from 20 to 25 years. But I am afraid that the over-all results of the legislation are not going to meet the expectations of the minister. I know it is going to result in the building of some homes. The old

legislation had that result, but not for the two-thirds of the families of Canada to whom the minister referred who just cannot afford to own their own homes. They are not going to benefit very much from this legislation.
I said that I would present a plan. I have advanced it before. It is not new but I think this is the time to present it again because the hon. member for Winnipeg North Centre (Mr. Knowles) accused the government- here I am coming to the government's support again-of stealing some of their proposals. Let me say to the C.C.F. that they are pretty good thieves in that respect. After I had presented our Social Credit proposal last session they came down to the same rate of interest, and this session they have adopted the principle of a revolving fund. I am not criticizing them for doing so. I am glad they have been converted to a sound idea, and I trust that the government will give some consideration to it because the proposal which I intend to make is not something that is new. It is something that has been tried out and has been found to be very satisfactory.
The Social Credit proposal was and is that the federal government should set up a revolving fund. This money should be issued through the Bank of Canada. It is correct to say right off the bat that this would be an expansion of credit, but the minister cannot criticize that because that is exactly what he is doing in amending the Bank of Canada Act to permit chartered banks to expand their credit. Under my proposal the federal government would set up a revolving fund of $300 million, let us say. I do not know how much it would take. That is merely a guess. It might be $500 million, but such an amount would only equal the interest rate on our national debt for one year, so it is not a big sum.
This money would be issued by the Bank of Canada and it should be lent to the municipalities through the provinces. A while ago one of the socialist members suggested [DOT]that the money should be given directly to borrowers by Central Mortgage and Housing Corporation. I do not think that is the proper way. I think we would get into more difficulty than we are in now. I think we must have the type of set-up where the responsibility of constructing proper homes is going to be narrowed down to a smaller field than the whole of Canada. It should be narrowed down to the municipalities.
I said that this project had been tried and found very satisfactory. The Alberta government set up what they called a self-liquidating fund for the improvement of property through sewage, lighting and water works
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for municipalities. It lent the money to the municipalities at a rate of 2 per cent, and as the monthly payments were made the money was available to re-lend to other municipalities. The same principle could be used in the case of money lent from a revolving fund for the purpose of building homes. There is no better security, and the money would come back in monthly payments and could be lent again for other projects. When the municipalities received this money they would be in position to set up construction committees which would have the responsibility of seeing that houses were built according to plans and specifications. That is not being done under Central Mortgage and Housing Corporation. I was told by one of the officials that all the inspectors have to do is to see that a house is built sufficiently strong in order to insure their equity in it. They do not have to see that it is built according to the standards laid down by Central Mortgage and Housing Corporation. I think that that is wrong.
I have looked over the standards set up by Central Mortgage and Housing Corporation and I think they are exceptionally good. But we should see that we have the machinery to make sure that these specifications are lived up to. As I say, when you have an organization like this spread over the whole of Canada it just becomes too big a job for any central outfit in Ottawa. The municipalities are on the spot and would be able to see that these houses were built according to specification. If the federal government is going to set up a revolving fund I see no reason why they should not have inspectors to see that the municipalities are living up to the building standards laid down by the federal government. That would not be too big a job.
These down payments of which we have been talking and about which I have been criticizing the government could be made more reasonable. I am sure that a down payment of $500 would be a good starting point and maybe it could be made smaller than that. In any event you would immediately have $500 of an equity and then as the monthly payments were made the equity would become greater. If a house is well built it is good for 25 or 30 years and there would be no possible chance of loss. That has been the experience in Alberta because they have found that under their revolving fund they have not lost any money and the money has been coming back in very satisfactorily. The amortization period could be increased from 25 to 30 years.
I see no reason why the government should not start out with a plan such as this. No doubt it would need some changes but I think the principle is basically sound. I think it will

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be found that when you lend money at 2 per cent for home building, the money being issued by the Bank of Canada, it will result in a greater number of homes being built for that class of people to whom the minister referred, and to whom I referred, but who are not now in a financial position either to own or to rent homes. That is what we all hope will happen under the present legislation. I am afraid it will not, but we are hopeful. I am sure that if the proposal which I have suggested is adopted the results I have mentioned will accrue.
I hope my socialist friends will read it over more carefully than they have read other proposals in the past. I hope they will go further and adopt the whole thing. After all, I do not care who adopts it. My main concern is to see that those people who are not now getting homes are put in a position whereby they can have comfortable homes in which to rear their families.


Mr. P. T. Hellyer (Davenport):: Mr. Speaker, I should like to say at the outset that having read this bill I believe it is an excellent bill and I think congratulations are due to all the people who are responsible for it. There are some things in it which are complicated and it may take some time to find out exactly how they will work. However, I know that the minister and the government want it to work. They want to increase the level of house building in this country and they will do everything necessary to see that it does work. It should make possible a continuation of the large house building program of last year.
Before going any further I should like to say that I think some words of commendation should be given to the particular insurance companies who did such an excellent job under the old act during the last few years. It is true that some companies did not do as much as others, but I think some of them in particular were influenced by their recognition of their public duty. I think they went perhaps farther than they otherwise might have gone under the National Housing Act as a result of their recognition of what they felt was their social obligation, and that action should be recognized.
Five companies in particular carried the ball as far as mortgage financing under part I of the act was concerned. I do not know whether I should mention them, but I think their names are widely known. The companies are Canada Life, London Life, Mutual Life, Prudential of America, and Sun Life. They have been the really strong supporters of the National Housing Act as we presently know it.

However, their resources proved to be insufficient to provide housing for all those Canadians who needed housing accommodation and alternative sources of additional funds had to be found. I am positive the new legislation will overcome this liability and will make available sufficient mortgage funds to continue the high level of house building. The rather unique economic possibilities of the provisions of this bill will be very interesting to watch and I think that in future the beneficial effects may far exceed our fondest expectations. This is something which those of us who have the privilege of being members of the banking and commerce committee should investigate most thoroughly because I think it is one of the most important developments in this country in several decades.
There are two aspects of the housing problem which I should like to discuss in particular this afternoon, the first being land assembly. In commenting on the provisions for land assembly contained in the new bill the hon. member for Eglinton (Mr. Fleming) said yesterday that there was nothing new and added that "this principal bottleneck still continues". The hon. member is quite correct in saying there is no change; there does not need to be. Provision was made in the present act in December, 1949, by which provincial governments, in co-operation with the federal government, could do a great variety of things to assist in the house building program in Canada. Included in this section was provision for the assembly of land to be made available to builders or for direct construction.
Unfortunately the Ontario government has done practically nothing under this section, particularly in the Toronto area in which I have a special interest. Since December, 1949, this stubborn inaction on the part of the Ontario provincial government has cost home purchasers in the Toronto area alone at least $36 million. Recently the premier of the province of Ontario decided that in order to co-ordinate the development of that great area, the city of Toronto and suburban municipalities, he would set up a metropolitan council, an innovation in municipal government in this country. One purpose of the metropolitan council was, it was stated, to provide logical development and to end illogical development.
One of the first acts of the metropolitan council in co-operation with the Ontario provincial government, after four years of complete inaction, has been to announce that they are going to purchase 2,000 acres of land at Malvern, Ontario, subdivide it, and make it available for house building.

For those hon. members who are not familiar with the environs of Toronto let me say that Malvern is miles away from the city. The price it is proposed to pay for land in this isolated area is the same price for which they could have bought land adjacent to the city had they bought it after the section was brought into effect in 1949. It seems fantastic that the first action of a council, which was brought into being to end illogical development, should be to undertake one of the most illogical developments that has happened there in many years.
There was a statement made in the Toronto papers with regard to this proposed project, and since it is entirely erroneous I would like to say a word about it. This statement was reported in the Toronto Evening Telegram dated December 24, 1953, and reads as follows:
Metropolitan chairman F. G. Gardiner estimates a reduction of $2,000 in the price of the lot for a house, compared with the ordinary subdivision set-up.
He is referring here to the proposed subdivision of Malvern. This estimate, Mr. Speaker, is completely misleading. The only real saving is in the price of the raw land. The services which will have to be supplied in this isolated location will cost at least as much as they would on land adjacent to the city, and perhaps more. Giving them the benefit of the doubt, the real saving might come as high as $500 a lot. If this is so, the extra cost of transportation, telephone and other facilities over the 25-year term of the mortgages on these houses would exceed any possible saving.
The hon. member for Eglinton is absolutely correct. The problem is there but the Ontario provincial government has waited four years to do anything about it and still shows very little interest, and what they have done is certainly not what could be done to assist.
The other very important feature I would like to mention is the cost of construction. An editorial in the Toronto Globe and Mail, dated January 15, 1954, entitled "Who's to stop it?" on the subject of building costs states in part:
Why, then, is the cost of new housing "increasing every day?" Why did the cost of the average National Housing Act dwelling rise from $10,194 in the first half of 1952 to $10,788 in the first half of 1953, and why will it be well over $11,000 in the first half of 1954?
In answer to that question, Mr. Speaker, I would like first of all to say that the houses are larger. It is quite elementary that larger houses cost more money and therefore if the average size of the houses increases, if they 83276-87
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contain greater floor area, it is certain the average cost is going to be higher, even on the same unit cost basis.
Second, the houses contain much better and more expensive equipment. This, of course, is not reflected in the statistics, which give only the average prices and which do not mention equipment such as heating, plumbing, and other items which tend to make the houses better and more liveable.
Thirdly, included in these average prices for houses is the cost of land; and the price of land, particularly in the Toronto area, has been inflated considerably in the last year or two. If you take the same size of house with the same equipment in that area, exclusive of land, it can be built for less money today than it could eighteen months ago. That saving is due entirely to an increase in productivity.
I would like to quote another paragraph from that same editorial in the Toronto Globe and Mail. It reads as follows:
The process continues. Workers in the construction industry, and the various industries which supply it, are demanding and getting wage increases without productivity increases to justify them. So, every day, the cost of new housing increases. So, every day-regardless of what parliament does to the N.H.A.-it becomes a little more difficult, a little more dangerous, for the average Canadian to own his own home. Who's to stop it?
It is dangerous to quote statistics without adequate explanation. I think the Globe and Mail can answer its own questions. If the cost of land in Toronto today was the same as it was eighteen months ago, houses of the same size would be selling for less money. That is how it can be stopped. The Globe and Mail has considerable influence with the provincial government and I am sure if they really want to stop it they know how to go about it.
This bill, Mr. Speaker, if it makes more mortgage money available will permit the building industry to streamline its operations even further. It will allow increases in productivity due to better planning. One of the great drawbacks in the industry is that with so few mortgage commitments builders could not plan their operations more than a few weeks in advance. That makes it very difficult to achieve the economies enjoyed by other industries. With a steady stream of mortgage money which, we hope, will now be available, plans can be made months and even years in advance. Engineering and architectural costs can be amortized over a greater number of units. The product can be improved as it has been improved over the last two or three years and at the same time

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the increase in productivity and efficiency should make it possible to maintain prices at approximately their present level.
With reference to prices, there is just one thing I would like to add. Some hon. members in their speeches in the house yesterday indicated they would like to extend the 10 per cent down payment to higher-priced houses. I am not sure this would be a blessing at the present time, because if it did in fact bring more purchasers into the market than there were houses immediately available it would only add to the inflationary spiral and raise the price of houses and housing materials and price the industry further out of the market. I think that it might be quite an unfortunate development. Later, as the supply of housing grows and when the effective demand under the presently proposed regulations is more adequately met, would be the time to consider more lenient provisions as far as equities are concerned.
Another thing that was mentioned yesterday, in particular in the Toronto and Ontario sphere, was the shortage of schools. I think that our Ontario provincial government could make a real contribution in that regard, in making it easier for municipalities to provide the necessary facilities. From reading the newspapers during the last two or three days one would think that if they were able to streamline their department of highways, they might be able to make savings which they could then make available to assist the municipalities with the construction of new schools.
Finally, Mr. Speaker, just in a general way I should like to say that great improvement has been made in the house building industry in the last three or four years. Hon. members must keep in mind the fact that the capacity was extremely limited immediately after the war. Very few houses were built during the depression; very few had been built during the war. The availability of skilled tradesmen was hampered in view of the fact that few men had gone into the building trades during the depression and the war years. In the course of expansion the building industry was obliged to employ anyone they could get; and sometimes they were what you might call hammer and saw carpenters. However, they did a job; and they did it as best they knew how.
Some of the housing of the early post-war years was not very good. There is still some that is not very good. But as a general rule, the quality of the houses being built in Canada-and in particular those being built under the National Housing Act-is improving every year, and even from month to month. The quality of design is improving. More

builders are using the services of architects. The quality of materials is improving. The planning of the location of houses and the general planning of subdivisions is improving considerably and the tendency is all in the direction of further improvement. I think it is reasonable to assume that we can expect these trends to continue.
Many provisions of the new bill are designed to accelerate the improvement that has been going on for the last several years. I think it is fair to say that the new bill will do a tremendous amount for the people in Canada who need houses. Undoubtedly its effect on rents will be reflected in the months and years that lie ahead. Rents that now in some cases are exorbitant will settle automatically as the law of supply and demand comes into effect.
In closing, Mr. Speaker, I should again like to congratulate the minister and his assistants and to wish them well. I think that we shall watch the bill closely in operation. I am sure that there will be some things that will have to be changed in a year or two. But I am certainly one who will go along with the bill as it now stands and will help to support any changes that might be necessary in the light of experience, in order to make it operate more satisfactorily.


Mr. George H. Hees (Broadview):: Mr. Speaker, in my view this new bill is nothing but a gigantic bluff which is designed to kid the people of Canada that something is going to be done. I think it is more like a bomb that just is not going to go off. People are going to find that they are not going to get any more houses built, to any great extent, than are being built at the present time. They are also going to find that it does very little to help them buy a new house.
In the first place, Mr. Speaker, the minister is only aiming at building about 100,000 houses a year. It has been demonstrated by statements by one of the leading advisers to the government in this field, and the president of the Canadian Construction Association, that the building industry, if given a chance, can build up to 125,000 or 130,000 houses a year. But the government is aiming at building 100,000 houses a year, with a demonstrated backlog of at least half a million houses which are badly needed by the people of Canada today.
I think this bill is completely inadequate to do the job it is supposed to do, which is to help us catch up with our backlog of half a million houses. I think it is inadequate for two main reasons. First of all, it is not going to help those who need most to buy a new house, to obtain the house they need. In the

second place, there is no indication that there is going to be any more mortgage money available than is available at the present time.
I should like to deal with each of those questions in turn, and I want to begin with the income which the government says a man must have before he can apply for a National Housing Act mortgage. I think we will all agree, Mr. Speaker, that the cheapest house you can buy today under the National Housing Act is one costing $10,000. Under the new act a man must be receiving an income of $3,860 a year before he can apply for an N.H.A. mortgage. The average income of all people in Canada who received salaries or wages during the past twelve months was $2,970. If a housing act is to do the job it is supposed to do, I believe it must at least make it possible for a man earning an average income to buy his own home. I therefore think that the income requirement of $3,860 must be reduced to an income requirement of $3,000, which is merely the average income received by all Canadians receiving salaries and wages during the past twelve months.


Robert Henry Winters: In order to make this point clear to hon. members, perhaps my hon. friend would say to what he is relating the figure of $3,860?


George Harris Hees: I should be glad to do that, Mr. Speaker, because the figures have been worked out for me by officials of the minister's own department. It works out in this way. The lending value of the house is $10,000. The down payment is $1,400. The mortgage loan is $8,600. To that would be added a premium of $172. The mortgage is actually written for $8,772 at 5J per cent, once again using the rate under the old legislation. If this is to be a 25-year mortgage, principal and interest amount to $52.42 a month-


Robert Henry Winters: $52.45 a month, is it not?


George Harris Hees: Yes, $52.45 a month is what I should have said; taxes $20 a month; fire insurance, $1.50 a month; and the note says this $1.50 is a more considered opinion than was given in the two previous examples. The total charges on this mortgage would be $73.95 per month. The income required to carry such a mortgage at the 23 per cent ratio is $3,860 per annum. Those are the government's own figures. As I say, the income requirement of $3,860 has been worked out on the basis of a man being allowed to spend 23 per cent of his income on the carrying charges of his house.
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I say, Mr. Speaker, that if a man wants to spend more than 23 per cent of his income on the carrying charges of his house, that is his business. He should be allowed to do so. Who are we to tell a man how he is to spend his income? If a man wants to do without a car, or if he wants to do without a television set or the various other things that might be necessary to make it possible for him to pay considerably more than 23 per cent of his income toward the carrying charges of his home, I would say that is his decision to make. In addition to that there may easily be, and today generally are, other members of the family who are wage earners who would be glad to contribute toward the carrying charges of the house. Therefore I feel it is only reasonable and sensible to reduce the income requirement applying on Central Mortgage and Housing Corporation mortgages to $3,000 per year or $60 per week.
I feel that this change will make it possible for a great many people, who today cannot buy their own homes, to purchase homes. It will still leave more than half the people of Canada unable to buy homes. In order to overcome this problem I believe Central Mortgage and Housing Corporation must alter its -building specifications to allow less costly types of construction. I do not mean that we should allow contractors to build match boxes or inferior types of houses. I have been shown plans by builders which embodied attractive two-bedroom houses with living room, dining room, kitchen and -bathroom, as well as a full cellar. These contractors will be glad to sell these houses for $8,000 provided the Central Mortgage and Housing Corporation will alter the building specifications. These houses are no myth. They can be a reality. They are attractive. They simply do not contain some of the frills that Central Mortgage and Housing Corporation now requires in houses under the National Housing Act.
These houses would not contain as much brick as Central Mortgage and Housing Corporation houses do now. They would be of good, sturdy, attractive construction. They would last for many, many years. I believe it is important for us to make houses available to the working people of this country at less than today's cost. As I say, these houses would provide for families with one, two or three children, and would allow a man to carry the charges if he were earning about $2,500 per year. This would -bring into the field of potential purchasers a tremendous number of people who today want to buy their own homes and are prohibited from, doing so.

National Housing Act I believe the second requirement for us to catch up on our housing backlog is to make it possible for people to afford the down payment on a house. This bill provides for a down payment of 10 per cent on the first $8,000 loan and 30 per cent on the remainder. As I said earlier, the cheapest Central Mortgage and Housing Corporation house you can buy today costs $10,000, so the lowest down payment today would be $1,400. This is still beyond the reach of the man earning a moderate income.
Building costs are increasing steadily, and if the new act is to be effective for any length of time that down payment should be 10 per cent on all houses up to a value of $12,000. If building costs continue to increase, as they give every indication of continuing to increase, it will not be long before the cheapest house you can buy under the National Housing Act will cost $12,000.
In addition to the down payment, the amortization is a very important factor in making it possible for people with moderate incomes to buy new houses. Under this bill the amortization period has been lengthened to 25 years. I believe the amortization period should be lengthened to 30 years, because that would allow a great many more people to carry the charges on new houses than would otherwise be possible. It can be done without appreciably increasing the risk to the lender, because builders tell me that today Central Mortgage and Housing Corporation houses will last for anywhere from 50 to 70 years. If the amortization period is increased to 30 years, this will still leave the lender a generous margin of safety.
In order to show how the thinking has developed in the United States with regard to providing houses for low income groups, I should like to quote a dispatch which appeared in the Montreal Gazette of January 9, 1954, under the heading "Radical Plan for Home Owner Urged in United States". The dateline is Washington; it is an Associated Press dispatch, and reads as follows:
Senator Homer Capehart (Republican-Indiana) today suggested a $1,000,000,000 government program to help people buy homes on 50 to 60 year mortgages with little or no down payment.
Capehart, chairman of the Senate banking committee which will consider President Eisenhower's housing proposal advanced what he called a "radical idea" of making home owners of citizens otherwise unable to afford their own dwellings.
He told a CIO housing conference he had long been worried about the plight of citizens who cannot afford either a down payment on a home or "the high rents they are forced to pay today."
Capehart disapproved past programs under which public housing has been built with federal subsidies for rent to low income families. He said it would be better to help such families finance their own homes.

I think that dispatch is particularly interesting, owing to the fact it is not the statement of any airy dreamer but is made by the chairman of the United States banking committee, the man who will be given responsibility for putting through President Eisenhower's housing program. It shows how far thinking along these lines has developed in the United States. I do not agree with the suggestions he has made, but I think it makes the suggestions I am making, and the other suggestions I am about to make, seem very moderate indeed.
I believe, Mr. Speaker, in addition to making it possible for people to buy houses, it is very important that the necessary mortgage money to finance the construction of those new houses be made available. Under the provisions of the bill, banks will be permitted to deal in housing mortgages under an insurance scheme whereby the government will guarantee the mortgage. At first sight this would seem to make sufficient additional mortgage money available, but it seems to me one important factor has been overlooked.
I have talked very recently with senior officials of two of our largest banks, and they have both told me that that part of their investment portfolios which they are permitted to invest in non-government securities is almost completely taken up with investments in commerce and industry.
If we are going to close the gap between mortgage money now available and mortgage money that is needed it seems to me, as it seemed to them, that some of the money which is at present being invested in commerce and industry will have to be diverted from those fields so it can be used for housing mortgages. This, of course, is going to slow down commercial and industrial development, upon which our whole economy depends. And if that kind of slow-down, which certainly we can ill afford, is to be avoided, the government must tell the people of Canada, and particularly the banks involved-because they do not know it yet-where these additional funds are to come from. We will be listening attentively to learn this from the minister, when he decides to tell us.
Another aspect of the matter, with which I heartily disagree, is the fact that the banks are not going to carry out their own appraisals and inspections. These tasks are going to be carried out for them by officials of Central Mortgage and Housing Corporation. This will give the government control over a very large proportion of the mortgage and lending operations connected with the building industry, and will place the government in an entrenched position, so far as that industry is concerned.

After all, the government is guaranteeing these bank loans. Therefore I can see no reason at all why the banks should not be ready, willing and anxious to bear the cost of their own appraisals and inspections, just as the other lending institutions that have been participating with the government in the building of houses over the past few years have been willing to bear the cost of carrying out their own appraisals and inspections.
I believe the banks should be instructed by the government right now to begin training the staffs they will require so that, in a minimum of time, they will be ready to function. I believe the eagerness-and there can be no doubt that there has been great eagerness on the part of the government in this respect-to take over appraisals and inspections from the banks is simply another demonstration of the government's intention to go on assuming more and more control over as many as possible of the proper functions of industry.
It seems to me that this is simply another example of this government's drift toward socialism, a government which is so fond of professing its adherence to the principles of free enterprise. I sincerely hope the banks will stand up to the government and insist upon doing their own appraisals and inspections, because that is the only way we can stop this drift of the government toward getting into business. My view is that so far as possible the government must be kept out of business, and I sincerely hope the banks will not permit the government to bulldoze them any further. I hope they will stand up to the government and say, "We want to do our own inspections and appraisals."
I believe that if the government insists upon doing appraisals and inspections it will reduce almost to the vanishing point the effectiveness of the 4,000 branch banks about which the minister spoke so glibly when he dealt with the matter in the house last December. It is obvious that if appraisals and inspections have to be carried out by Central Mortgage and Housing Corporation, a branch bank can be only as effective as the service it can get from the nearest Central Mortgage and Housing Corporation official.
I would say that if the government insists upon doing this work, then it might just as well go whole hog. It is guaranteeing the loans anyway, so it might as well go whole hog and make the mortgages available to the people who want them for the purpose of building houses. If it did this it could make mortgage money available at 4J per cent. The government pays to the people of Canada a rate of 3| per cent. Add half of one per
National Housing Act
cent, the cost of servicing a mortgage, and you have the 4J per cent. It must be one thing or the other; either bring the banks in and let them do the job completely, or else stop this farce and keep the banks out, and let the government do the job. Let us have it one way or the other.
I believe, really, that the only reason the banks are being brought into the picture is that the government wants the banks to do the dirty work when people have to be evicted from their homes. It seems very clear to me that when the nice things are going to be done, such as approving a loan, the government wants to be on hand with the smiles and chuckles, saying, "Oh, yes, here is your nice home, Mr. Smith. We are very glad to give you a mortgage, and it is only going to cost you so much. Just sign on the dotted line, and don't forget to vote Liberal next time you go to the polls, because, remember, we are doing it for you."
Then when that poor, unfortunate man- and there will be some-has to default in his payments, is the government going to go to him and say, "We are sorry, Mr. Smith, but you cannot stay in your house." Oh, no, the poor old bank has to do that; it then becomes the villain in the piece. The banker is the one who is hated by the person evicted. The whole thing becomes a farce: the government does all the nice things, and the bank does all the nasty things. The government carries out all inspections, and proceeds to kid itself and the people of Canada that the branch banks will be effective. Well, the branch banks will be only as effective as their nearness to an office of Central Mortgage and Housing Corporation. That is why I think this whole thing is a gigantic bluff, trying to kid the people into believing that they are going to be able to get houses cheaper and easier than they did before.
So much for that. I hope the government is going to pay some attention to some of these suggestions, because I believe the very best investment we can make in good citizenship is to make it as easy as possible for a man to own his own home. The home owner has a stake in the community, and I believe we will all agree he becomes the best possible kind of citizen. That is the greatest possible bulwark we can have against the inroads of communism.
In addition to the shortage of houses a person may buy, there is also an acute shortage of rental housing. Very little is available at reasonable rentals. A few weeks ago in Toronto I went to see a house put up by the Toronto metropolitan home builders' association. This house was erected to show

National Housing Act
what the industry can do on a non-subsidized basis to provide the kind of rental housing people need at rentals they can pay.
This house is designed to meet the needs of people with one, two or three children, and earning between $2,500 and $3,500 a year. It is 18 feet wide and 23 feet deep. It has a front lawn, a back garden, two storeys and a basement. On the top floor there are two bedrooms and a three-piece bathroom. On the ground floor there is a living room, dining room and kitchen. The basement is full size with a coal furnace, hot water heater and laundry tubs.
The whole design of this house is most attractive. It gives you the impression it has been well thought out. It is well finished and very attractive to the eye. The floors throughout the house are hardwood with the exception of the bathroom and kitchen floors, which are of linoleum tile. The Toronto metropolitan home builders' association plans to rent this house at $58 a month; and on the basis of a man being allowed to spend 23 per cent of his income on shelter, this kind of accommodation can be carried by a man earning $55 a week.
During the first few days this rental unit was open for inspection more than 5,000 couples signed cards saying they were very anxious to have the opportunity of renting this kind of accommodation at $58 a month. The majority of the people who thought this type of accommodation was attractive were earning between $2,500 and $3,500 a year, and had two children. When I was there I listened to the comments made by the people going through, and they were frankly comments of amazement that such accommodation could be made available at a rental of $58 a month.
This kind of accommodation is in very sharp contrast to the single rooms in which families with four or five children are living today in Toronto, and I am sure in other centres throughout Canada, and for which they are paying as high as $60 a month rent. They are living in such accommodation simply because they cannot find anywhere else to go, and they live in constant fear that they are going to be evicted because of the children. I believe this type of project is a very good example of how the needs of people can be met by industry if industry gets down to the job, and remember that is on a non-subsidized basis. This kind of project is completely non-subsidized.
To make the project a reality the government must make available to those who will carry out the construction, money for land and construction at an interest rate of 3f
TMr. Hees.]
per cent. I know the minister is going to say that money is available at that interest rate if the company is a limited dividend corporation. However, I see no reason why this interest rate should be confined to limited dividend corporations which are restricted to a return of 5 per cent on their investment, because we all know that if you have money to invest you can get better than 5 per cent today with very great security by putting your money into any good industrial common stock.
Therefore I say that if a co-operative effort like this can make available to people, in large quantities, the kind of rental housing they are anxious to obtain at a rental they are able to pay, then the government, on inspection and after satisfying themselves that the rent is fair for the accommodation which will be afforded, should make money available for construction at 3? per cent. It makes money available at the same rate of interest to housing projects that need a subsidy to enable them to pay their way, and it is the rate of interest which the government pays the people of Canada for the use of their money. I cannot think of any better way that money can be spent to good account.
Finally, I believe this legislation can be made effective if the following requirements are complied with. First of all, I think the income requirement to obtain an N.H.A. mortgage must be reduced to $3,000 a year. Second, Central Mortgage and Housing Corporation building specifications should be eased to permit a less costly type of construction which will make low-priced houses available to people in the low income brackets. Third, the down payment should be reduced to a flat 10 per cent on all N.H.A. houses up to a value of $12,000. Fourth, the period over which the loan can be paid off should be lengthened to 30 years. Fifth, the government must make it clear, in the very near future, where the money necessary to finance additional mortgages is going to come from without depriving commerce and industry of the funds being invested in those fields at the present time. Sixth, I believe the government must make funds available at 3f per cent to low-rental housing projects which do not require a subsidy, and which provide the type of rental housing that people want, at rents which they can pay.
If these six conditions are complied with, this legislation can materially help us to catch up on our ever-increasing backlog of half a million houses.


The Acting Speaker (Mr. Applewhaite):: It
being five o'clock, the house will proceed to the consideration of private and public bills.

There being no business under private and public bills, the house will continue the business under consideration.


Mr. Claude Ellis (Regina City):: 
the first case the amount is $3,460 and in the second case the amount is $3,550. Put it another way. The difference between a mortgage at 5 per cent and one at 6 per cent is only slightly less than 5 years of mortgage payments. Thus we see the vital role played by interest in the financing of home purchases.
Hence any benefits under the new bill in so far as a lower down payment and increased amortization period are concerned will not bring the most desirable results if the government fails to lower the interest rate. I will grant you that under the new bill some people will be able to purchase homes who might not ordinarily have been able to do so, but it must be remembered that in many cases they are going to have to pay more as a result of the longer period of repayment on the loan.
We of the C.C.F. have always advocated a lower interest rate because we believe that it is only through a lower interest rate that we can make it possible for a great number of Canadians to undertake the purchase of their own homes. A low rate of interest is a vital part of any housing program, and the lack of that low rate is perhaps the most glaring inadequacy in the present legislation.
As regards the insurance aspects of this bill, section 40 of the old act contained an insurance feature which, although very limited in scope, was not designed to operate at the expense of the borrower. Under the new act the prospective home owner will have to pay not only what we consider to be an exorbitant rate of interest but in addition an insurance premium which in some instances, since the insurance may be capitalized into the mortgage loan and amortized accordingly, may mean an increase of two-tenths of one per cent which, of course, will be added to the already high rate of interest.
I was very interested in the comments made in regard to free enterprise by the hon. member for Broadview (Mr. Hees). It has always interested me to hear comments by various members of the house about the virtues of free enterprise. But I have always understood that the reason the lenders were able to charge the high rate of interest was because they were lending their money at a risk. In other words, it was risk capital. If a man had money and he made it available to others then he risked that money, and was therefore entitled to a high interest rate or profit.
The situation we now face is that the government is taking away the risk and at the same time permitting lending institutions to exact the profits. Under this legislation

the government is stepping in and assuming the risk at the borrower's expense, while at the same time permitting the private lending institutions to take the profit. There can be no excuse whatsoever for a provision of this nature in this legislation.
It is rather amusing at times to hear the comments made regarding paternalism and the way in which people attempt to disparage the idea of the welfare state. They take exception to members of this group asking for increases in old age pensions or family allowances. They are prone to criticize us for being paternalistic and for going out of our way to help various sections of our population. But the amazing thing is this. They are glad to help out those who in the main require no help whatsoever. I have noticed that the larger a company is in this country the more likely it is to run to the government for help any time it gets into difficulties. Many of the bigger industries in this country have for many years enjoyed some form of government protection, yet these same people see nothing wrong with that. It is all very well for private enterprise to come running to the government for assistance, but it is a different story altogether when people who want to purchase homes ask for some assistance from this government.
The hon. member for Broadview suggested that this legislation was placing more power in the hands of the government. We feel the contrary is true, and what is actually happening is that the government is getting out of the lending field and turning over to private enterprise the last interest it had in housing. The government is doing that after having guaranteed the profits of private enterprise through the insurance scheme.
I find it difficult to understand the point of view of those who claim the government is taking too much upon itself at the expense of private enterprise. On this point there is one question I would like to direct to the minister, and I hope he will be able to give the house the information when he rises to close the debate. I wonder how important this insurance feature is, and I would ask the minister to inform the house how many mortgages under the old N.H.A. went into default over the past five years. If he can demonstrate that over the past five years a large percentage of the mortgages arranged under the old N.H.A. went into default, then he may at least have some pretext for advancing this insurance feature at this time. But I am doubtful that that has been the case. Perhaps the government is worried about a recession, or perhaps it is afraid of 83276-88
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a slump. That would seem to me to be the only logical reason for inserting this feature into the act.
We have often been accused of being a group of crepe hangers and spreaders of gloom because we dared to suggest we ought to be planning for the future and taking care we do not once again find ourselves in the position we found ourselves in before the last war. I think the government ought to take the people into its confidence. Are they afraid of a drop in real estate values? Are they afraid of a slump? Is that the reason for the insertion of this insurance feature in this bill? That seems to me to be the only logical reason for adopting that feature at this time.
It will be interesting to learn how many mortgages went into default over the past five years, because the insurance companies have invested just under 20 per cent of their assets in mortgages. Under the new provisions of this bill it is unlikely the banks will be investing more than 5 per cent of their assets in real estate mortgages. These mortgages, of course, will be accepted as security by the Bank of Canada just in the same manner as government bonds. I find it difficult to understand why the government saw fit to place this burden on those who wish to buy homes, by requiring them to pay an insurance policy to protect not their own investment but the investment of the lending institution. If these people believe in free enterprise let them take the risk. That is the test.


Mr. Harkness:: At 6 per cent.


Alfred Claude Ellis: Yes, they are lending money at slightly under 6 per cent. They cannot lose because under this new act if a mortgage goes into default they are paid 98 per cent of the outstanding principal, and they are paid interest. They cannot lose. When we go down to the bank and deposit money in a savings account we earn interest at 2 per cent, the idea being that we are not risking the money. But the lending institutions will be lending money to prospective home owners at 6 per cent, guaranteed by the government at the expense of the borrower. Surely there can be no justification for this policy.
In the final analysis the effectiveness of this act will be determined by the number of people whom it affects. Some reference was made to this matter by the last speaker. I wonder how many people in Canada will derive direct benefit under this new housing legislation. Obviously this bill is designed to meet the needs of those who have incomes of between $3,500 and $4,000 a year or more. The last speaker gave a figure of, I believe,

National Housing Act $3,860. This legislation is not designed to meet the needs of those who receive less than that amount.
What is the situation? I went to the last available Canada Year Book and looked up the statistics with regard to income tax returns. This is what I find in 1950, the last year for which I have figures. I may say that it is not the amount of the figures but rather the relative number in each of the categories that is pertinent to this point. In the year 1950 I find that, of those paying income tax in Canada, there were 5,450 Canadians making income tax returns with incomes of less than $1,000. What is in the new act for them? I find that there were 740,070 taxpayers reporting incomes of $1,000 and up to but not including $2,000. What is in the legislation for them? I find that there were 848,960 Canadian citizens making income tax returns and reporting incomes from $2,000 up to but not including $3,000. I find that of those earning incomes between $3,000 and $3,500 there were an additional 243,000 Canadians, making a grand total of
1.837.480	earning $3,500 or less.
That number represents a little more than 80 per cent of the population of this country. Eighty per cent of the people of this country are earning incomes of $3,500 or less. Let us go down a little bit to those earning incomes of $3,000 or less. I find that a total of
1.594.480	taxpayers reported incomes of less than $3,000 a year. In other words, 71 per cent of the people of Canada making income tax returns are earning less than $3,000 a year.
What, may I ask, is in the act for them? What is this new National Housing Act doing for 80 per cent of our people? Assuming that some of the people at the very top with regard to income will have no need to ask the government for any form of assistance, I think it will be seen that it is reasonable to propose that not more than one-fifth of the people of this country will ever be in a position to avail themselves of any opportunities or benefits under this act.
Surely the test of a good piece of legislation is that it should take care of the needs of the majority of our people, and certainly of the needs of those people who are least able to take care of themselves. But what does this act do? As other hon. members have suggested, it shows more concern for those who perhaps can do something for themselves, and shows very little concern indeed for those who can do nothing for themselves. I suggest that the minister and the government explain why they have seen fit to ignore completely the needs of the vast majority of the Canadian people in this regard.
IMr. Ellis.]

In connection with the situation throughout Canada there are many other statistics available. I was reading a copy of a brief submitted by a welfare council in the city of Montreal just a year and a half ago, which reported that about 70 per cent of the people 'of Montreal were earning less than $2,000 a year. I must take that figure as being fairly accurate. I think the social welfare people, such as the Red Feather agencies, are in a position to know the situation fairly well in their respective communities. When we realize the tremendous need for housing in this country, how can we be content when we find the government getting up and patting themselves on the back because they are advancing a piece of legislation that completely ignores four-fifths of the people of this country? We have suggested that this legislation should be changed in order to take care of the needs of those people who most need help. I suggest that we are not the only ones to suggest that it is time the government took some step in this regard and was prepared to do a little bit toward subsidizing home construction, if necessary.
I was interested in going back and reading an editorial that appeared in the Ottawa Citizen of April 9 of last year. It commented on the 600 applications which had been received for the 58 units of the Lowren Housing Company in the city of Ottawa. The editorial went on to say that under this scheme rentals were to be $55 a month and that no one earning more than $3,500 a year and having less than two children under 16 years of age would be eligible for such a house. But the editorial went on to point out that families earning less than $3,000 a year could not be expected to occupy such homes because they could not afford them. The Citizen went on to state:
Such families need to be subsidized if they are to obtain adequate accommodation.
I do not think the Citizen is a spokesman for our group but I believe it is expressing what is felt by a great many Canadian people who maintain that it is time the government faced up to the housing problem in this country. I was also interested in noting an editorial that appeared in a financial journal which reached my desk the other day, namely the Financial Times of January 22 of this year. In this editorial the writer quotes from an address given by Mr. B. S. Vanstone, president of the Bank of Toronto. I am going to quote an excerpt from this bank president's address. The editorial states as follows:
Dealing with this subject in the course of his address to the annual meeting of the Bank of

Toronto, B. S. Vanstone, president of that institution, stated that it is right and proper that the maximum number of Canadians should live in their own homes. But, he emphasized, this they can do only if construction and financing costs remain within their capacity to pay. If, he said, the need for extra houses in Canada is considered so pressing that private capital cannot be marshalled quickly enough to meet it, "then presumably public funds will have to be made available;" . . .
I do not think we are hearing from a socialist there, when he suggests that if private capital will not do the job, the government should step in and do something to correct this deplorable situation in the country.
As to this legislation, I feel that the government is looking at the entire problem of housing through the glasses of the private lending institutions and not from the viewpoint of the vast number of Canadian citizens who desire either to own their own homes or to obtain suitable rental accommodation. When the private lending institutions think of housing, what do they think of? They think of ways of increasing the flow of capital into housing, and they think in terms of increased interest rates. As a matter of fact, yesterday I was reading a little item in the Financial Post which suggested that the assumed solution to the problem of mortgage money is to increase the interest rate and to increase government guarantees.
That is precisely what this government have done in this legislation. They have given the private lending institutions a guaranteed return on their capital. They have removed all risk. Then, to add insult to injury, they have added the cost of protecting the private lending institutions to the other costs payable by the home purchaser.
We in this group have maintained throughout that we must look upon housing as a social problem and that we must get away from this feeling that the only way we can get houses built in this country is by going down on our hands and knees and begging the private lending institutions to come in with their money.
We go to the extent of guaranteeing their investments. Surely, if we consider the social implications of housing, we realize that poor housing has had a great effect on juvenile delinquency; it has had a great effect on domestic difficulties throughout the country, and it has had a great influence on our crime rate. We are told that is so by people who have made a study of these important problems. Surely the time has come for the government to consider housing from that viewpoint and be prepared, if necessary, to provide subsidized housing.
83276-88$
National Housing Act
We are not the only ones in the country to suggest subsidized housing. The government chooses to ignore the representations made to it in many instances by people who would normally support the government. When the minister makes his reply at the end of the debate I wish he would tell the house why he considers that, when the government ignores the vast majority of the Canadian people, he can claim that this housing bill is any great boon to this country.
If this bill will enable one more house to be built, it is all right in so far as it goes. I suppose we should be thankful for small mercies. If it will enable one more house to go up, it is better than the old bill; it is better than nothing. But if the members of this government feel they can stick out their chests and brag about what they are doing for housing, and if this bill is what they feel will serve the needs of the Canadian people, then I suggest they are going to be in for a rude awakening.
It is all very well for some hon. members to say that people should make a down payment. I know many of my constituents, Mr. Speaker, who are living in rented dwellings. Some of them are paying $100 per month while they are earning $50 per week. How can they be expected to save money in that situation? It is all very well for some people to say they should be saving money, and perhaps 20 years from now these people might have the down payment on a home. In the meantime many of them are paying twice as much rent as they should be paying if they were buying their own homes.
So long as these people are forced to continue paying exorbitant rents, I ask in all sincerity how you can expect them to save the down payment on a home. I was talking to one gentleman some time ago and he said that it was quite true the new homes were expensive and beyond the reach of the average wage earner, but one had to remember that when people move into better homes they leave other homes for the people with lower incomes. What this man overlooked was that even if better housing is available, the time will come when a person who has the opportunity to move into better accommodation cannot afford it.
I wonder how many people who are living in tenements today, perhaps at very low rentals, are in a position to move into a suite at $85 per month if they had the chance. There are vast numbers of people in this country, as the Ottawa Citizen pointed out, on low incomes who, even if

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these rental dwellings at $55 a month were made available, would not be able to afford them.
I have made these comments on this bill because I believe it will be a cruel and bitter disappointment to the people of this country. It is a mirage. This measure was announced with great fanfare. When I went home for Christmas some of my constituents were saying they would now be able to build a house. When the time comes to enter into negotiations and have the lending value of the building established, these people will find out this legislation is not all it is cracked up to be. It is going to prove to be a bitter disappointment to many of our people. We are opposed to that.
I do not want to take up any more of the time of the house, but I do want to sum up by pointing out that we are disappointed with this legislation because it completely ignores the housing needs of the vast majority of the people of Canada.


Ernest George Hansell: I rise at this time, Mr. Speaker, to take part in this debate. I wish to emphasize at the outset that I support the suggestion made by the hon. member for Bow River (Mr. Johnston) this afternoon concerning the revolving fund. I believe the suggestion is sound. The fund could be administered with a very small interest payment which, in reality, would amount to nothing more nor less than administration costs. I agree with him, and I believe that is not only one of the easiest ways of solving this problem, but it would be less expensive and less burdensome upon those who are desirous of obtaining their own homes. I support that suggestion, and I believe we shall have to keep harping on that proposal until the government sees fit to introduce some such measure.
In spite of what I may say this afternoon, I want it understood that we are desirous of doing everything possible to enable people to own their own homes. If this legislation is going to make that possible, then we are all for it. But I rather agree with many of the speakers who have preceded me that eventually the measure will result in disappointment. Once again, however, I wish to say that we are all for legislation that will enable our people to own their own homes. Personally-and I am speaking personally now-I am not so sure that that is the main objective of this bill. I have given this matter a good deal of thought, and I rather suspect there is another purpose behind this bill. I am going to explain exactly what I mean by that.
Throughout the war years and since the war there has been an inflationary trend. There

has been an expansion in the money supply of this country. Of course there is bound to be a limit to which the banking institutions can go in increasing that money supply or what is usually known as the expansion of credit. Sometimes these terms are not completely understood. I would prefer, instead of using the term "expansion of credit", that the term "expansion of the money supply of Canada" should be used. There must be a certain limit to that; otherwise the expansion is going to exceed by far the total price of the production and inflation will get out of hand. There must also be a time when that inflationary trend must stop; and when that happens the reverse action is likely to take place. Instead of the inflationary period simply stopping it takes the opposite trend, and we would be in for a period of deflation which, of course, would mean a recession.
I believe the government sees that in the offing, and is coming to this conclusion. "We must be careful in this matter. Otherwise there will not be an adequate supply of money, and therefore we must do something about it". The banking institutions will say, "We have to be careful here, too. We cannot expand beyond a limit which would be dangerous for us." And so the government says simply, "Here is a way in which you can continue to expand the money supply of the country and, at the same time, be insured against losses."
I agree fully with the hon. member for Regina City (Mr. Ellis), who preceded me in the debate, when he said that it is the home buyer who is going to pay for the insurance against any risk that might be involved. I believe that is one of the chief purposes behind the bill.
No one wants to see another depression; and I think by the proper application of financial policy there is no need to fear a depression. If the government persists in pursuing the policy it has been following, then of course it must do something to bolster the situation, and must attempt to stave off any possibility of depression.
Much has been said by the minister and by others who have spoken in the debate about the vast amount of savings on deposit in the banks. They have suggested that therefore the banks should be given added power to lend these savings. I rise now to refute a misconception in the minds of some in respect of that kind of argument. The hon. member for Bow River (Mr. Johnston) has already said that the method behind the bill is an inflationary one, and he has pointed out that the banks do not lend their depositors' money. It is not proper to say that it is time the vast

amount of savings on deposit in the banks was placed on loan, because I repeat the banks do not lend their depositors' money.
I know the opposite view is held by many people. Indeed, this is sometimes taught in our schools. Before my boys passed out of high school they used to come home and tell me that their teachers and principals had taught them that the banks lend depositors' money. It is also being taught in some universities. I have met men with bachelor of commerce degrees who have told me that the banks lend their depositors' money.
Not so long ago in this House of Commons the hon. member for Iles-de-la-Made-leine (Mr. Cannon), speaking in the debate on the address in reply to the speech from the throne, referred to the government's intention to introduce this bill. The rules do not permit my quoting from Hansard from a previous debate but, in substance, he said that a great pool of savings was available. I remember his use of that phrase; in fact I wrote out the quotation which, under the rules, I am not allowed to quote. I do remember, however, that he made reference to the great pool of savings in the banks, and suggested that they should be permitted to lend them.
The hon. member is not a dunce by any means. I have not looked up his-


Stanley Howard Knowles: Pedigree.


Ernest George Hansell: -his pedigree in the Parliamentary Guide. I do know, however, that he comes from a distinguished family and is a barrister of no mean repute. Yet here is a man, educated in the law, with a keen mind, who actually expounds in parliament the misconception that the banks lend their depositors' money.
Not only that, but I happened to pick up a little paper known as the Sentinel which comes to our desks. I do not know how far that paper goes, how many subscribers it may have or the extent of its mailing list.


Stanley Howard Knowles: It comes to us free.


Paul Theodore Hellyer: I do not think anyone would pay for it, that's for sure.


Ernest George Hansell: When the editor of a newspaper breaks into print it is likely that he will be quoted as an authority.


Stanley Howard Knowles: That is what he wants.


Ernest George Hansell: Yes, that is what he wants.
I will say he is not an authority on this matter.


Mr. Pearson:: Don't quote him, then.


Ernest George Hansell: He says:
The banks have not the money available which the government seems to think they have. The
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only way they could enter the home mortgage business on a worth-while level would be by calling in existing loans.
Evidently he thinks that the banks lend their depositors' money.
I should like also to refer to the speech of the hon. member for Eglinton (Mr. Fleming). He is not a dunce, either. I have a very high regard for him. I am not going to say that he does not know the truth of what I am saying but, if one may judge from his observations, I think he will have to be informed a little further in the matter. I notice that yesterday he made this statement, as found at page 1329 of Hansard. I am breaking into the middle of a paragraph, but I can assure hon. members that I have regard for the context. He said:
On a recent occasion when the minister was speaking in the city of Toronto, he did hold out the hope that, without trespassing upon their existing volume of loans and investments for other purposes, the banks would have available a volume of funds arising from new deposits as the population increased.
Here he is quoting the minister himself, but I think he is quoting him with some degree of approval. A little further on in his speech he said:
I know we can assume that the banks will co-operate; but I hope we are not going to contemplate any pressures being exerted upon the Canadian banks to put depositors' money into longterm investments on mortgages under this act . . .
I would take it from that that the hon. member believes that banks lend their depositors' money. A little further on in his speech he said:
But let us recall, sir, that even though security is provided in that way, that in itself does not provide liquidity, because after all you can have a bank mortgage guaranteed against default, but if the mortgage goes on without default on the part of the mortgagor, the banks' funds are tied up. And they are tied up for periods up to 30 years, under the provisions of the new scheme.
I quote that because I should like to suggest to hon. members that it is not so much that depositors' money is tied up for that number of years as it is the collateral which the banks hold.
I want to refer to the minister's speech, and in doing so I am going to suggest that it is a little bit ambiguous on this point. I am saying it is ambiguous because that is the best way I can possibly give the minister some credit for, shall I be mean enough to say, knowing what he is talking about. But I am going to quote the minister, and if he means by his statement that the banks lend their depositors' money then he is wrong. If he means something else I would be happy to learn from him just what he does mean in

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order to clarify the situation. Let me read what the minister said, as found at page 1314 of Hansard for yesterday:
It is quite clear that if there is to be an increase in private lending additional funds must come from somewhere other than the present sources of institutional mortgage funds. The only other source of significant size stems from that part of the personal savings of individuals which year by year flows into savings deposits with the chartered banks. It is realized that at the present time these deposits are rather fully employed in other directions but we must remember that in conditions of normal growth in Canada there should be a substantial annual increase in savings deposits. Under our present laws these funds cannot move into the housing sector because the Bank Act prohibits bank lending on the security of real estate mortgages.
That is the part that is slightly ambiguous to my mind. Does the minister mean that these savings held by the people on deposit in banks are what the banks will lend if the Bank Act is changed to permit them to do so? If that is what he means, then I think he is wrong. Let me go on with what he said and then amplify it a little bit.
It is important to remember that the chartered banks perform in Canada a function with respect to savings that in other countries is performed not only by the banks, but also by building societies, mutual savings banks and savings and loan institutions.
This quotation indicates to me that the minister is of the opinion that the banks lend their depositors' money. I continue:
Because of the dominant position of the chartered banks in the savings field in Canada, and because mortgage lending is prohibited by the Bank Act, the housing sector is denied access to a large part of the funds which in other countries are available to finance home building.
Once again, I say it would appear to me that the minister is suggesting that the banks actually lend their depositors' money, which is not true. But if the minister intends instead to convey the idea that the banks must increase their cash reserves with the Bank of Canada so they will be enabled to expand the money supply of Canada by way of loans, then I would agree with him. But I do not quite read that in his speech. However, he can correct me on that point if he wishes.
It is one minute to six, Mr. Speaker, and we must go; but I am going to suggest that when I return I will read from the banking and commerce committee report of 1939 some evidence on this very point given by perhaps one of the greatest authorities in Canada, none other than the governor of the Bank of Canada.
At six o'clock the house took recess.
fMr. Hansell.l


[Stage Direction]
AFTER RECESS

The house resumed at eight o'clock.
Ernest George Hansell: Mr. Speaker, before the dinner recess at six o'clock I was attempting to expound what I felt to be the object behind this measure for national housing. I had indicated that I thought the object was to retain to some extent the present inflationary trend; that the government were perhaps much concerned lest we should go into a state of recession by reason of the calling in of bank loans, and they felt one way to avoid that was to bring in a measure such as this in order to permit the banking institutions to lend money on mortgages.
In making those points I referred to several speeches that had been made in the house and to a press clipping which indicated that many were of the opinion that the chartered banks loaned their depositors' money. I referred to a little article which appeared some weeks ago in the Ottawa Sentinel, and I suggested that the editor of the Sentinel also indicated that he believed that the banks loaned their depositors' money. I quoted from that article, and after six o'clock one of my colleagues reminded me that while it was quite possible that one could get that impression from the article, at the same time the editor of the Sentinel may have realized something that was more or less hidden behind the lines of that article. May I repeat what the editor said:
The only way they could enter the home mortgage business on a worth-while level would be by calling in existing loans.
The thought he may have intended to express was that the banks had almost reached the limit of their expansion, that is ten to one, and in order to go any further, which they were not permitted to do by the law unless they increased their cash reserve, they would have to call in some loans in order to continue their method of financial expansion. I make that possible correction because I want to be fair in my appraisals of quotations.
When we adjourned for the dinner recess it will be recalled that I had indicated I would bring to the house some authentic information which would refute any idea whatsoever that the banks loaned the savings of their depositors. I should like to refer now to evidence taken by the banking and commerce committee of this house in 1939. In the first instance I shall quote questions put to Mr. Towers, the governor of the Bank of Canada, who I think we must accept as an authority on these matters, by Mr. Jaques, who was then a member of this house. I

quote from page 455 as follows, where they were talking about the banks lending the savings of the depositors:
Q. I understood you to say they could not loan what did not belong to them.-A. The banks, cannot, of course, loan the money of their depositors. What the banks have done is to make loans and investments which result in a certain sum total of deposits.
For the sake of brevity I do not think I need read any further. Then follows an expansion of that idea. The point I wanted to bring forth was that the governor of the Bank of Canada said that the banks cannot of course loan the money of their depositors. At page 398 Mr. McGeer put the following question:
Q. So that if they have got up to the point where they have got bank deposits to lend-
It would appear as though at this point the governor of the Bank of Canada sort of butted in without waiting until Mr. McGeer completed his question, because he went on to say:
A. Well, they do not lend their deposits, of course.
That is pretty specific. Then I should like to quote from page 238 where the questions are being asked by Mr. Landeryou. I might point out that with the exception of Mr. McGeer it was Social Crediters who were asking these questions. I quote:
Q. Now, if the government went to the bank with $1,000,000 in bonds there would be an increase of $1,000,000 in the amount of money in the hands of the people in the form of deposits?-A. Assuming that no other change had taken place in the bank's position at that time, yes.
Q. In other words, when the $1,000,000 worth of bonds is presented to the bank a million dollars of money or the equivalent is created?-A. Again assuming that there is no decrease in its other investments or loans.
Q. I mean at the time, at the moment.-A. Yes.
Q. It is a fact that a million dollars of new money is created?-A. That is right. Of course, governments should not always go to banks in that connection; they should sell their bonds to investors.
That is true. That is what the government was doing throughout the time of war, but the result has not been very different because when they went to the people to ask them to buy bonds, the people in turn went to the banks to borrow money and the banks took the bonds as collateral and then issued new money by way of the loans, and the credit of the country was thus expanded.


Mr. Blackmore:: They created it.


Ernest George Hansell: They created it out of nothing. The questions continue:
Q. Yes. Now, the same thing holds true when the municipality or the province goes to a bank?- A. Or an individual borrower.
Q. Or when a private person goes to a bank.-A. Yes.
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That should settle the argument, but I doubt whether it will. I am quite certain that if the same discussion comes up at the next session somebody is bound to bob up and say that the banks lend their depositors' money. They do not; they issue freshly-created money. That is the method of expansion by the banks.
I would like to refer once again to the remarks made yesterday by the hon. member for Eglinton (Mr. Fleming) because he made a point I thought was rather well taken in this connection, although I believe the hon. member is still under the impression that the banks lend their depositors' money. But here are the remarks of the hon. member as they appear on page 1329 of Hansard for January 21, 1954:
It is one thing, sir, to expand credit on commercial loans for a period, we will say, of nine months, but it is another thing to expand credit on mortgages having a lifetime of 25 or 30 years. In other words, it is an entirely new field so far as the banks are concerned.
The point the hon. member has made is to my mind the reason why the insurance scheme was written into the legislation. A period of 25 or 30 years is a long time to continue this expanded credit, because there is another side to this picture, namely that while the banks create new money every time they make a loan, that new money becomes the deposits of the people. These deposits, or savings if you will, in turn become a liability as far as the banks are concerned, because they have to pay that money out on demand. While it is true the banks, in making loans, release a fresh supply of money created out of nothing, these loans become deposits and automatically become liabilities to the banks. If the banks have to meet these liabilities over a period of 25 or 30 years then I personally do not blame them for saying, "If you want us to do that you had better guarantee us against loss". After all, their depositors and they themselves must be protected though, as previous speakers have emphasized, the government in providing that protection has made the prospective home owner pay the shot.
I have been dwelling on this matter of savings, and it may perhaps be presumed there are large savings deposits in the banks, but if there are I am inclined to think these savings must be in a minority of accounts. I say that because credit buying in Canada has now reached an all-time high. If saving deposits in the banks were as large as some might assume, then credit buying would become less and less all the time. Instead of

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that it is constantly growing, and the bill itself in a sense is an accentuation of that very situation, although I am not criticizing the bill on that account because in the final analysis it is a choice of whether one wants to pay rent or put some money into what will in time become an asset.
Now, Mr. Speaker, I do not want to reach an anticlimax in the last few minutes at my disposal, and I will therefore conclude this part of my speech by saying once again that this bill to my mind is purely a financial rather than a housing measure. It is a purely financial measure designed to perpetuate the government's present inflationary policy.
The other points I want to make are in respect of administration. I believe it is time notice was taken of certain matters of administration under this bill. I believe any contractor or anyone who undertakes to build a house for a client should be bonded in some way or other so the borrower or the person building a home will not lose his money. I am not blaming the government for this, nor is it the fault of the Central Mortgage and Housing Corporation, but something has gone wrong in the initial administration in regard to some of these loans.
I wish to bring one case in particular to the attention of hon. members. I want to make it public not because I am blaming the minister but because other people should know what is liable to happen. I have a case here where a gentleman wanted to build a home. He got in touch with a contractor, evidently through a real estate firm, and he applied for a loan. He made a deposit of $1,330 with either the real estate firm or the contractor, I am not too clear which; but in any event either the contractor or the real estate firm in the meantime went broke and the result was that this prospective home owner lost his $1,330. I took the case up with the minister and he was good enough to look into it and inform me of the exact situation. I am sure the minister will not mind if I read his explanation into the record. This concerns the case of Mr. W. L. Blackburn and his National Housing Act loan application. This gentleman resides at Pincher Creek, Alberta. The minister's explanation was as follows:
Mr. Blackburn's loan application (without any deposit) was filed with the Lethbridge branch of the corporation by a local real estate firm. It was not necessary to deposit any money with the application. On June 5 that office wrote to Mr. Blackburn and informed him that his application had been declined. The deposit was never under the control of Central Mortgage, nor was the real estate firm authorized to act on behalf of the corporation.
[Mr. Hansell.l
I am very sorry that Mr. Blackburn has not been successful in having his deposit refunded and can only suggest that he consult a solicitor forthwith.
It seems to me, Mr. Speaker, that some steps should be taken to protect a person in that situation. There must be hundreds of people who do not know exactly what the initial procedure is in regard to these things. I believe every contractor and real estate firm that has anything whatsoever to do with the National Housing Act should be bonded so that when a person undertakes a loan he will not lose any money under the bill.
Now, Mr. Speaker, I have another couple of things I wanted to suggest but I see your keen eye on me and on the clock, so I had better stop. When this bill goes to committee I will perhaps ask the minister some questions along the lines 1 have indicated, and which I still wish to pursue. Let me conclude by emphasizing that I believe this bill is designed to perpetuate the present financial policy of the government.


Tom Goode: Mr. Speaker, I had no intention of entering this debate until last night when my friend the hon. member for Burnaby-Coquitlam (Mr. (Regier) mentioned part of my own riding and said that it was covered with tarpaper shacks. I am trying to get a federal post office from the Minister of Public Works (Mr. Winters) and it has been quite a hard selling job. I do not want him to think that Burnaby is a municipality of tarpaper shacks.
My hon. friend is new in the house and I want to be kind to him, but for the minister's information may I say that in 1953 the building permits in Burnaby totalled $20,697,000. There were 1,400 house permits granted to the value of over $10 million. Permits were granted for 14 apartments to the value of one-half million dollars, and permits for the extension of homes for the aged to the value of $134,000. Through you, Mr. Speaker, may I assure the minister that Burnaby is not a conglomeration of tarpaper shacks. We are extremely proud of our municipality. We believe that we have the finest residential section in British Columbia. I am quite sure the hon. member for Burnaby-Coquitlam will take the first opportunity of retracting the remarks he made last night.
What I am concerned about in this debate are the statements made today by the hon. member for Broadview (Mr. Hees) and' the hon. member for Bow River (Mr. Johnston).


Charles Edward Johnston: Good.


Tom Goode: Both of them were intelligent speeches, if I may say so-the hon. member for Bow River and I usually agree-but both

of them suggested that the minister should consider deleting the $1,400 down payment and changing it to one of something like $500.


Charles Edward Johnston: Does the hon.
member not think that would be good?


Tom Goode: No.


Charles Edward Johnston: Would the hon. member raise it?


Tom Goode: Yes, I would.


Charles Edward Johnston: Good.


An hon. Member:: Attaboy, Kingfish.


Tom Goode: If the hon. member for Van-couver-Burrard (Mr. MacDougall) will allow me to proceed, I would' feel much better without his help.


Charles Edward Johnston: He is just encouraging the hon. member. The hon. member needs some supporters over there.


Tom Goode: I have plenty. To my mind, Mr. Speaker, the purchasing of a home is a very serious matter. I do not think the down payment is the most important thing in connection with the purchase of a home in these days.


Hazen Robert Argue: Except if you have not got it.


Tom Goode: Could be. I remember as a young fellow-


Charles Edward Johnston: That was a long time ago.


Tom Goode: It was; but not quite so long ago as in the case of the hon. member.


Mr. Speaker:: Order. If that private conversation over there is intended for me, may I say that I cannot hear it.


Hazen Robert Argue: No interruptions from behind the curtain.


Tom Goode: Mr. Speaker, I was proceeding with the idea-and I hope I shall be allowed to do so without too much further interruption-that a $1,400 down payment on a $10,000 home is not too much. What is the down payment on a home? What does it mean to the young people who are thinking about purchasing a new home today? In my case-and I expect the same is true in the case of every member in this house-my wife and I saved over many months and many years, perhaps depriving ourselves of some things that we needed, putting away a few dollars each month, hoping the time would arrive when we would have enough money to go into a home of our own.
Today conditions are a little different from those prevailing when the hon. member for Bow River and I were young. Most of the young married people, or at least a good percentage of them, are both working. We see
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that situation prevailing in the House of Commons with respect to the staff; and the situation is no different back home in British Columbia. Many of them are working. If my investigations are correct, over 90 per cent of the people purchasing homes in that locality today are under 33 years of age. They are young people.
It seems to me a good thing that the minister should hold the down payment to $1,400. If the hon. member for Bow River and the hon. member for Broadview will consider their figures again, and will take into consideration a $500 down payment and the equity that young people would have in a house at the end of a year with the monthly payments suggested in the bill, they will find that those payments including the down payment would not equal the depreciation on that home. I do not think young people should expect to purchase homes on terms of that kind. The buying of a home is something you and I do only once in our lives. It is something we live for, save for and deprive ourselves for-over a number of years. I would rather see a young couple deprive themselves of many things in order to save $1,400 than see the government make it easy for them to purchase a house with a down payment of $500. I believe the minister and the government are taking the proper attitude in maintaining that down payment at the figure they have suggested in this bill. I wanted to make these remarks-


Charles Edward Johnston: The hon. member thinks that is the purpose of the down payment?


Tom Goode: The hon. member made his speech today and he said about everything he wanted to say. Mr. Speaker, I do not appreciate too greatly the continued interruptions by the hon. member for Bow River.


Charles Edward Johnston: I would not
expect that the hon. member would.


Tom Goode: I have said what I wanted to say. I hope the minister maintains the down payment at the present figure of $1,400. I shall support the bill, and I think the minister is to be congratulated on bringing in this legislation.


Douglas Scott Harkness: Mr. Speaker, in the early stages of these debates, particularly, I have frequently heard members say they had looked over the new bill and received it more in sorrow than in anger. I am sorry I cannot make that statement today. As a matter of fact, as I look at the bill it provokes in me feelings both of sorrow and of anger. Surely the test of any housing bill must be this. Is it going to provide more housing for the people of the

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country than is provided by the legislation which it replaces? On that test I do not think there is any question but that this bill will be an utter failure and that it will not supply materially more housing than has been supplied by the legislation we have on the statute books at the present time.
The scheme which the bill contains has had a good deal of publicity which has led a large number of people to think it will be easier for them to obtain housing. In other words it has given rise to a great many hopes. I am very much afraid that the hopes of most of these people are not going to be realized. I cannot see where this particular legislation is going to make it possible for many more people to secure housing than were able to secure it under the old act.
On the face of it, of course, the lowering of the down payment to 10 per cent, or the so-called lowering of it, and the increase in the amortization period to 25 years, would make it appear that a great many more people would be able to take advantage of the provisions of the National Housing Act than have been able to do so up to date. This was certainly the idea which I myself secured when the legislation was announced. Whilst I was home over the holidays a considerable number of people expressed this opinion to me, and also expressed the hope that under this new legislation they would at last be able to secure a home.
An examination of this legislation, however, as it is likely to work out in practice, has convinced me at least that a very small number of people who were not in position to take advantage of the old act will be benefited. In other words, I am sorry to say, I have to come to the conclusion that the bill is, in the words of a parliamentarian of the last century, "a delusion, a mockery and a snare."


Mr. Harris:: Are you opposed to it?


Douglas Scott Harkness: What the government is doing in this bill, Mr. Speaker, is playing what they no doubt think is smart politics. They tell the people they have given them a 10 per cent down payment house, which sounds very attractive. It is something about which a large number of people have been talking for a long time. However, the catch is that this house has to be built for $8,000, and it has to be built to the standards set by Central Mortgage and Housing Corporation. The government knows just as well as anyone in this chamber that a house of Central Mortgage and Housing Corporation standards cannot be built for $8,000, in most

parts of this country at least. Thus, in effect, there is no such thing as a 10 per cent down payment.
As has been pointed out by several speakers already, on what most of us would consider to be the minimum priced house which could be built, that is $10,000, the down payment is going to be $1,400 or 14 per cent. A house costing probably closer to the average, we will say $12,000, will require a down payment of $2,000 or 16-6 per cent. In other words, there is no such thing as a 10 per cent down payment. It is a misnomer, a snare and a delusion. Whether or not it has been done by design, this bill has certainly roused false hopes in the minds of a large number of people.
I know the government defenders of this bill will say that the down payment has been considerably reduced, that on a $10,000 house it has been reduced from $2,000 to $1,400. Many more people, it is said, will then be able to buy a house because of this reduced down payment. Undoubtedly some people will benefit. A certain number of people who could not raise $2,000 will be able to raise $1,400. However, not nearly as many people will be benefited as one would imagine.
Over the Christmas recess I talked to a number of builders in Calgary, who told me that as many as 70 per cent of the people who had built houses during the past year with a $2,000 down payment had borrowed between $500 and $1,000 in order to meet that down payment. These people had gone to their relatives, friends or other sources and borrowed this money in order to get the down payment. It would seem, therefore, that a considerable number of people having less than $2,000, but having $1,400, have already been taken care of. The number who will be able to benefit by this reduction in the down payment is much less than one might otherwise expect.
The chief reason, however, that not so many people will be able to benefit from the bill is that the number who will be able to meet the monthly payment required is not greatly increased. The change in the monthly payment is more or less infinitesimal. As an example, on a $10,000 house there will be a mortgage of $8,600. If we assume that is going to be at 5 [DOT] 5 per cent interest, which has been rather a common assumption here although the minister said it would be between 5 and 6 per cent, the monthly payment required to amortize this over 25 years comes to $52.50. I believe this afternoon the minister said,

when some such figure was quoted, that it was $52.45. The five cents is not very material.
Under the existing scheme, on a $10,000 house where a $2,000 down payment has been made, with an $8,000 mortgage amortized over 20 years at 5-25 per cent, the monthly payment is $53.66. In other words there is a difference of only $1.16 per month or $13.92 per year. That is all the man buying a minimum priced house at $10,000 will save. This means that only a small number of people who were not able to buy a house before because their monthly salary was not sufficient will now be able to do so. As a matter of fact, I would think that with the other factors to be considered there would be no difference whatever.
During this debate it has been assumed, and the minister has never said anything to the contrary, that one of the rules which will continue in effect will be that 23 per cent of income is the maximum which may be paid for housing. So far as a $10,000 house is concerned, we must add to the payment of $52.50 for amortization the amounts for taxes and fire insurance. The hon. member for Broadview (Mr. Hees) put certain figures for taxes and fire insurance on the record this afternoon. In his calculations he arrived at a yearly income of $3,860, and the minister has not disputed that. I allowed a much smaller amount for taxes and fire insurance, $16 per month.


Robert Henry Winters: I think I should make it
clear, as I attempted to do this afternoon, that the figure of $3,860 is the figure one arrives at assuming a lending value of $12,000. Of course if the lending value is more or less than that a corresponding figure will be determined by that same formula.


Douglas Scott Harkness: I am assuming a $10,000
house with a mortgage of $8,600, and calculating that we still get this figure of $52.50 a month, you add another $16 for taxes and insurance. I am sure the minister will say that is the absolute minimum for taxes and insurance. There are very few places where you could get them for that. The total monthly payment required is then $68.50. This should work out as being 23 per cent of $297.80, or nearly $300.00 per month, a yearly income of $3,600. Now, that is the income required to purchase -a minimum priced house. No one with an income below approximately $3,600 is going to derive any advantage from this bill. I believe that has been pointed out.
The unfortunate fact is that the majority of the citizens of this country have incomes
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lower than $3,600. This housing bill is not for them at all. This measure has not been designed for the lower income groups in this country. I do not know that we should even speak of them as the lower income group. It has not been designed for at least two-thirds of the citizens in this country. Surely a housing scheme which is designed for the people in the upper one-third of the income brackets of this country could hardly be fairly called a national housing scheme.
Another matter which has received a considerable amount of criticism and in respect of which the bill can be criticized is the interest rate. It has been indicated to us that an interest rate of 5i or 6 per cent is what we are likely to have in connection with this housing scheme, and that this rate is to be allowed on what would amount to guaranteed loans. I realize the guarantee is not to the extent of 100 per cent, but it gets pretty close to that. For all practical purposes, these are guaranteed loans. It does not seem to me that a rate of 5J or 6 per cent is justified on loans of this kind.
There has been a good deal of talk about whether it will be possible to get sufficient money from lending institutions, including the banks, to finance the building we would all like to see. I do not wish to discuss that phase of the matter at the moment, but it seems to me that with a guaranteed loan there should be a possibility of getting the money at interest rates lower than 5i or 6 per cent. Certainly I do not know where money could be invested, with practically no risk, at anything like those rates of interest. Rates of that kind are being secured where there is a considerable amount of risk.
To sum up this phase of the matter 1 would say that this whole thing looks very much like one of those schemes where the government is promising a great deal, where it is doing a lot of talking about the benefits which will be secured by Canadians from this legislation, but where actually it is handing to the Canadian people a fully inflated paper bag containing practically nothing.
What the public should understand in connection with this bill-and, so far as I have been able to determine, what it does not understand-is that there are several things which make it much less attractive than it has thus far been represented. First of all, I have found that a great many people have not gone ahead to secure housing because they are waiting for this scheme to come into operation. They have been thinking that they would secure houses more easily and cheaply under this scheme than was possible before. One thing the general public should

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understand is that houses under this scheme will not be available for some time. I have heard from builders that it will be at least five or six months.
Then, on the average, the down payment is not much less than it was under the old scheme. On what one might call an average house costing $11,000 the down payment is only about $250 less than it was under the old scheme, and that is not a very material difference. Certainly it will not enable many more people to take advantage of housing legislation.
The third point is that the end cost of houses under this scheme is going to be considerably higher, and this is inevitable due to the 5J per cent interest rate and the longer period of amortization.
The fourth point the general public should understand before it gives or withholds approval is that the new plan is not designed for the lower income groups. It will do them no good whatsoever.
I suggest that nothing the minister and members supporting the government have said in connection with this housing bill comes to grips with the realities of the housing situation in Canada. As I have said, the great majority of our population cannot secure homes under this or any other plan, because their incomes are too low. What does the government envisage for the majority of the people in this country in the matter of housing? It is quite evident, I suggest, that the government has no plans for them. Those people are going to be left to their own devices, and without housing. So far as the government is concerned that is all there is to it.
A housing scheme in this country should produce houses that the majority of people in the lower income groups could secure. I suggest that is by no means impossible. We have heard a considerable amount of talk about subsidized housing from members in the C.C.F. I do not think it is necessary to go into subsidized housing in order to secure homes for the middle and lower income groups. There are two ways in which cheaper houses can be produced. The first is by improved efficiency in the building of the houses, and the lowering of costs. This involves a considerable number of factors, including prefabricated houses and utilizing other building techniques. It also involves more efficient work on the part of contractors and carpenters, plumbers, bricklayers and other tradesmen who are connected with the building of houses. I do not think many people will believe, for example, that it is not possible to lay more bricks per hour or to put
[Mr. Harkness.l
on more square feet of plaster per hour than has been done or is being done, on the average, in the building of houses today.
More efficient building methods and the utilization of new techniques can reduce building costs quite considerably. I suggest, too, that houses can be built at a lower cost for the lower income groups by lowering the present standards set by the Central Mortgage and Housing Corporation. No one maintains that everybody has to have a suit of clothes worth $100 or an automobile worth $3,000. Similarly, I do not see why it should be considered that everybody should have, let us say, a $10,000 or a $12,000 house.
It is quite possible to build smaller houses than are required by present standards. They can be built without many of the costly features and at much less money. I know this is so because in Alberta we have several examples. A number of attractive small houses have been built at Devon, an area that I know is familiar to the Minister of Mines and Technical Surveys (Mr. Prudham). I think he will agree that they are attractive. They have been sold for as low as $5,500 to the present occupants. They are not slums or shacks. Many of them are attractive, and they are well built. A few more houses of somewhat similar design have been built just west of Calgary, at Cochrane, as part of the power development.


Mr. Prudham:: Would the hon. member recommend these as family houses?


Douglas Scott Harkness: Yes, I certainly would. A large number of those houses, at any rate, are quite satisfactory for small families, and would be available at a cost which people could afford. Thousands upon thousands would be able to get out of basement suites and one-room flats, thus getting away from the very bad living conditions they have to suffer.
During the last summer I did a considerable amount of canvassing, and I was horrified by the living conditions I found right in the city of Calgary. Numbers of people were hived up in little shacks. There are in that city even now a considerable number of what we used to call homesteader shacks. They came as a sort of package deal from the T. Eaton Company and various lumber companies. They have slanting roofs and are built like chicken coops. I had not seen any of them on the prairies; they disappeared from the farms years ago. But they are still there right in the city of Calgary, and fair-sized families are living in them. Certainly houses such as have been built at Devon and various other places in Alberta are so much superior and

so much better that I do not think anybody would dispute that people would be much better off living in houses of that sort.
As a matter of fact I think one of the chief reasons so many in the lower income groups cannot secure housing is the standards set by Central Mortgage and Housing Corporation and by municipal authorities. It seems to me that a great deal of the lack and need of housing could be met at the present time by setting aside an area just beyond where present building is taking place-I mean outside of a city-and applying to it much lower building restrictions than exist at the present time in the cities of Canada.
I see nothing in the world wrong, for example, with a house that has 750 or 800 square feet rather than the 1,150 or 1,200 required by Central Mortgage and Housing Corporation. I see nothing whatever wrong with building houses with softwood floors, fir floors rather than hardwood floors, and there are various other things along the same lines. If that is done, and it can be done quite readily, houses can be built, as they actually have been built in Alberta, for prices ranging from $5,500 up to $7,500, houses which would be quite satisfactory to a large number of people and which they would be delighted to get.
Another matter that has arisen during the debate and about which quite a bit has been said is the shortage of serviced land.


Robert Henry Winters: I did not want to interrupt the hon. member while he was in the middle of a particular theme, but I should like to say to him now that the houses at Devon which he commended so highly were all financed under the National Housing Act.


Douglas Scott Harkness: I am very glad to hear it. I did not know how they were financed, but I spoke to one of the contractors who built some of them and he told me they had sold at prices ranging from $5,500 to $7,500. I have never since been able to see any reason why the same thing could not be done on the outskirts of Edmonton, Calgary, Toronto, or any city that you wish to mention.
I had started to say something about serviced land. I think one of the chief reasons there is so little serviced land is that everybody is trying to build in a few places in or immediately adjacent to large cities. This matter is tied up with the decentralization of industry. There have been many speeches in the house urging the government to take what steps it could to bring about the decentralization of industry, but unfortunately very little has been done. As a
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result more and more people are rushing to Toronto, Montreal and such areas, bringing about a terrific shortage of serviced land.
There are plenty of communities throughout Canada where serviced land would not be difficult to obtain. There are plenty of communities where the people already there would be delighted to see more building, in the smaller cities and towns. I think that part of the problem could be met very readily by encouraging loans in such areas, but those are the very areas where it is difficult for people to get loans. In the smaller places it is much more difficult in most cases to get C.M.H.C. financing than in places like Toronto, Montreal, Calgary, Edmonton or Vancouver.
Perhaps I have given the impression that I think very little of the bill, and that is the case. The only reason I will vote for it is that it will help a very limited number of people, and in view of the fact that it will help a limited number of people I cannot see my way clear to vote against it. But certainly the number of people it will help is so limited that I think the government should allow the bill to be amended when it is before the banking and commerce committee in such a way that it will become of some real value.


Mr. O. L. Jones (Okanagan Boundary):: Mr. Speaker, yesterday I listened with interest to the hon. member for Burnaby-Coquitlam (Mr. Regier) refer to the tarpaper shacks in his riding. Tonight we heard the member for the adjacent riding of Burnaby-Richmond (Mr. Goode) more or less denying it but apologizing for the condition. Neither of these members needs to worry at all, because you will find tarpaper shacks in every riding in this dominion. As a matter of fact I venture to say that more tarpaper shacks were built last year than all the units under Central Mortgage and Housing Corporation. They continue to be built for the simple reason that while these people are not anxious to live in these shacks, they cannot meet the requirements of this bill or any government legislation that has ever existed so far as the securing of a home is concerned.
These are the people who need homes; therefore I am going to say a few words on their behalf. I do not intend to deal with the particular bill before us, a bill that I call one for the upper ten. It does not have anything to do with the group to whom I am going to refer. Hansard will disclose that several excellent speeches have been made contributing, to my mind, very valuable information which if made use of would help solve the housing problem. That applies to members of every party who have spoken.

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The housing problem is a growing one, and during the last tew years we have not even held our own with the housing demand. I am not blaming the government entirely. I am blaming what is commonly called free or private enterprise even more, for it has failed us. For instance, insurance companies entered the housing field when they had no other outlet for their funds. They took things over lock, stock and barrel for the purpose of investment, not as a scheme to supply homes for the people of Canada. When other more lucrative fields opened up they withdrew from the scene, and the banks will do the same thing in a few years' time.
The free or private enterprise group of builders in this country have practically left the speculative field of building entirely alone, and they are not interested in coming back to it. Neither the government nor private enterprise have given a thought to the millions of Canadians whose earnings are below the $3,600 or $3,700 mark. We in this group are particularly worried about these people, and we are not alone. There are many Liberal, Conservative and Social Credit members who are just as alarmed that nothing is being done for these people.
It may well be that after the next election several of the present members will not return to the house. They may fail at the polls or they may not be chosen. What is going to be their lot? Many of them will be entitled to the maximum pension of $3,000 a year, and after living in Ottawa for so long they will need homes. Under this scheme they will come to the government for a home under this act but every one of them will be turned down. I feel that the lending provisions should be broadened to take account of character, because I fail to see why any former member with a steady income of $3,000 who applies for a loan should be turned down. I think his character should be sufficient recompense for the lack of the $700 needed to make up the necessary income.
I have taken certain figures from the 1951 census. I find that we have 5| million wage earners in Canada, 4 million of whom earn less than $3,000 a year, and one out of three less than $2,000 a year. Furthermore I find that in the large cities 32 per cent of all workers, married and single, earn less than $1,500 a year. Ottawa, for instance, has 24 per cent of its wage-earning heads of families receiving less than $2,000 a year. This bill does not mean a thing to them. Its language is not understood by them, and the intention of the bill is not to cover them.
Yet I feel that if any particular group needs assistance it is the group with incomes of less than $3,500 a year. It is this group that needs homes. Other people can find other means to raise money to build their own homes, through the loan companies or banks, and they would do so if this scheme were not in effect. These people are the victims of economic conditions, quite often beyond their control. I will admit that sometimes it is their own fault, but generally speaking they are the victims of our present system. But they too are human; they too have feelings; they too have families; they too have children they would like to have properly housed. They would like decent homes in which to live just the same as the person getting $5,000 or $10,000 a year. That aspect has not been considered at all.
Bearing that in mind, I would suggest to the minister that after this bill is put through, as I presume it will be, he set up a commission to investigate ways and means of providing homes for this type of person who is industrious, who has a sound moral character, who is a good Canadian citizen, who was probably born in this country and who has prospects of raising a fine family. All he wants is some assistance in order to build a home.
The hon. member for Cariboo (Mr. Leboe) made some reference to rural areas when he spoke. I feel the same as he does. Something should be done for the people in the rural areas who also need decent homes. All you need do is go by train or drive a car across this country, and in every province you will find evidence that what I say is absolutely true. A vast number of poorly-built houses, unpainted, sometimes covered with tarpaper, are to be found. To me they constitute a visible disgrace to a wealthy country like Canada.
Having concentrated on the urban areas, Central Mortgage and Housing Corporation have neglected entirely this worth-while field. If the people in our rural areas were properly housed it would help to attract tourists to different points throughout the country where they could look at decent homes and see our citizens living under decent conditions. But today you see houses with holes in the roof, barns that are propped up in order to keep them from falling completely over. That kind of thing is not a credit to this wealthy country.
This bill will not change that at all. I am going to suggest that in addition to making a survey in connection with the low income group the minister also make a survey of the

rural areas. As someone said, it is a good idea to have the people scattered instead of congested in possible slum areas. Under the old scheme the insurance companies and Central Mortgage and Housing Corporation were not interested very much in the rural areas because the lack of fire protection and other facilities made their investment less safe than investment in organized centres.
But I would point out that even though there may be a lack of such facilities in the rural areas, they would find a higher moral responsibility among the people. Those people would be more likely to look after the loan they had acquired in order to build a home. They would meet their obligations on a higher moral basis than the people in organized centres. I realize I am sticking out my neck, but it is my impression that people in the country have a high standard of morality. This would compensate for the lack of firefighting equipment and other things. If we are going to assist these people it is essential that money be made available at not more than 2 per cent. Other speakers have dealt with this so I shall not go into any further detail.
I am almost sure it was the last Liberal government of British Columbia that paid particular attention to housing in rural areas. They reduced taxation on farm homes to a nominal amount in order to encourage the painting and improvement and enlargement of homes, as well as installing facilities such as baths and toilets inside the houses. Over the last few years those concessions have resulted in a definite improvement in the homes being built and those already built. That is quite evident as you cross the province of British Columbia today.
I suggest to the minister that he instruct the banks to be particularly helpful to the borrowers in rural areas, to reverse the treatment that these people have received during the last year or two from Central Mortgage and Housing Corporation.


Mr. Auguste Vincent (Longueuil):: Mr. Speaker, after looking at this bill I have the impression that I have looked at Aladdin's lamp, because it seems to me it contains magic. Some people look at the bill and say, "The banks will be taking over the mortgage business." Other people look at the bill and say, "The government is going out of the mortgage business." This afternoon 1 heard hon. members describe the bankers as profiteers, while others described the bankers as the men who would be dragged up and forced to tell the poor man
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who could not pay his mortgage money that foreclosure was his lot. Whom are we to believe?
I believe sincerely that we have a middle of the road bill. If the Canadian public were in the galleries tonight I think they would know why they had elected the Liberal party to power. The Minister of Public Works (Mr. Winters) and the government have paved the way for constructive suggestions. I do not think everything that has been said by the opposition is wrong, but on the other hand I do not think everything contained in the bill is wrong. After all, we are lawmakers and we should use common sense. To me this bill is common sense.
I understand that this bill is going to give the banks greater powers, as has been stated by some hon. members. As I have said, other hon. members have stated that these powers would be centralized in the government's hands. The reality is that the government is going to guarantee the loans and in effect will use the offices of the banks and their available liquid assets in order to make those loans. Many hon. members are businessmen and they know what it costs in the way of upkeep, etc., to run an office. I am sure that before this bill was drafted the government conferred with the banks and came to some agreement under which they would use their facilities so there would be more offices and more available assets from which to serve the Canadian people in a more efficient way.
As I said a while ago, the Minister of Public Works in bringing this legislation forward has paved the way for suggestions. As the bill is going to go to the banking and commerce committee I consider it my privilege to make a few suggestions to the government. I am sure they will be welcomed, because this is not a hush-hush bill, nor is it a camouflaged bill. The minister placed the bill before the house on December 16, just before the recess, in order that hon. members would be aware that it would be discussed after the recess. In doing so I think the government deserves to be congratulated, for it provided hon. members with an opportunity to examine the legislation presently under discussion.
Under the old act, wherever lending institutions were granting loans Central Mortgage and Housing Corporation would not compete with private enterprise. This procedure had a somewhat harmful effect in certain regions. I cannot speak for all of Canada but I can speak for my own constituency of Longueuil. About 20 per cent of the population of the

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constituency of Longueuil benefited under the old act, and I believe that under the present bill more people will be able to benefit by Central Mortgage and Housing loans. Under the old act the lending institutions were providing 75 per cent of the amount of a loan while the government was supplying the remaining 25 per cent. "The man who pays the piper calls the tune"; therefore the lending institutions chose the regions in which they would operate and that is one of the reasons why approximately 80 per cent of my constituents did not benefit by C.M.H.C. joint loans under the old act. This new bill alters that situation and the Canadian people now are guaranteeing the loans.
It is true we are using the banks in making these loans, but the banks in each region are well aware of people's needs. They are in daily contact with the population, with business people and ordinary individuals. They know the people and they know their credit needs. It should also be borne in mind that the government is now guaranteeing these loans and therefore should be permitted to "call the tune".
I believe this is a well balanced bill. On the one hand we have the government guaranteeing the loans and on the other hand we have the services of the banks. The banks are not merely profiteers in this regard. After all they are giving service. They supply their offices, staff, and their liquid assets-we must remember that.
I believe that this bill, once it incorporates certain suggestions made by some hon. members, will be a good bill and the Canadian people will benefit by it. I do not think it is the desire of the Canadian people that they be given homes. If that were the case they would have elected a socialist government. The Liberal party and this government are striving to look after the welfare of the Canadian people and this bill in my estimation will, when enacted, become a welfare act.
Some hon. members have discussed the possibility of building better and more attractive homes. I agree with that. I believe we must strive to improve the architectural design of the Canadian home. A man is judged by the way he talks and a country is judged largely by its habitat. In other words, people coming into Canada will judge Canadians by the outward appearance of their homes. I would suggest that the government give further consideration to this matter and encourage architects in Canada to design better and more attractive modern homes.
[Mr. Vincent 1
I want to draw the attention of the government to one other point. On December 16, 1953, the Minister of Public Works stated, as reported at page 998 of Hansard:
In addition, it is proposed to reduce the down payment from the 20 per cent now required under the National Housing Act. The amount of the loans will be 90 per cent of the first $8,000 and 70 per cent of the balance of the lending value," . . .
There is one suggestion I would like to make on this point. Would it not be possible to have the loan made in direct proportion instead of having it made in inverse proportion, because I think families who have three, four or five children would like to benefit from the long-term loan provisions of this bill. Canadians should be given the same advantage whether they require a $12,000 or $8,000 home. If the government would consider that I think it would be much appreciated by the Canadian people.
There is one other aspect I would like to touch on, and it concerns the federal-provincial scheme. I sincerely regret that the province of Quebec has not seen fit to accept the benefits of the National Housing Act. I would say it is one of the reasons we have such chaotic housing conditions in the vicinity of Montreal. In the city of Jacques Cartier we have about 30,000 people living without sewers and without the benefit of a water system. Under this act the provincial government could have assisted those people.
I would ask the government and the Minister of Public Works whether it would not be possible to approach the authorities in the province of Quebec and discuss this matter with them. By bringing this matter to their attention in a fair and frank manner the government might be able to persuade the authorities in the province of Quebec to accept the benefits of this section of the act. An agreement along these lines would relieve one of the greatest housing problems which exist in the region of Montreal. Conditions there have to be seen to be believed. I am not blaming any officials or any governments, but I would seriously urge the government to consider bringing this matter to the attention of the Quebec authorities and attempting to arrive at some arrangement whereby this area may be relieved of its housing problem.
In closing I wish to thank hon. members for having listened to me in this speech. I sincerely hope that all those concerned with the good of Canada will do their utmost- especially those who are members of the banking and commerce committee-to look into this bill and I hope that if any changes have to be made, they will be made constructively, for the benefit of all Canadians.


Mr. A. J. Brooks (Royal):: Mr. Speaker,
first of all I should like to congratulate the hon. member for Longueuil (Mr. Vincent), who has just taken his seat, on the excellent speech he made. It is the first time I have heard him speak in the house, and I think perhaps it is his first speech, he being a new member. If it is, he certainly deserves great credit.
The subject we are discussing tonight is, of course, one in which we are all greatly interested, although perhaps the interest is not the same in all parts of Canada. As a matter of fact I greatly doubt whether the housing act affects us in the maritimes as much as it affects the people in Ontario or in Quebec in and around Montreal. It certainly does not affect us particularly in my own constituency, which is a rural one in which about 80 per cent of the people are interested in farming.
In our part of the country we have some vacant houses which we should be glad to have filled up by people coming in. As a matter of fact, last August when I was going through my constituency I visited a part of it in which there were a great many vacant houses, in fact over a thousand of them. It was rather sad to see so many vacant houses. At that time I thought that if only those houses were in some other part of Canada in which there is a scarcity of housing, what a great benefit it would be to some people. I am, of course, referring to the Gagetown camp training area which was taken over by the government a year ago.
It has been interesting to hear the prices mentioned for the construction of houses in this country. The thought came to me that on some of these farms there is a large house, a large barn and other buildings, but I doubt very much whether the farmer, for all his possessions-including house, land and so on-received $10,000. It seems that $10,000 is a great deal of money to pay for the building of a small house. I realize, of course, that this is a result of economic conditions, the scarcity of supplies with which to build houses, perhaps the great cost of the labour put into the house, and the high cost of serviced land on which it was built.
I am like everyone else in the house here. We are all interested in seeing that the people are properly housed. I am satisfied, Mr. Speaker, that it does not make any difference whether we are Liberal, Conservative, Social Credit or C.C.F.; we all have the same interest, namely that we want to see the people of this country properly housed. I know it makes no difference whether we
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live in the maritimes or in the west or what the economic situation is; we all have the same idea.
This Bill No. 102, which was explained by the minister the other day, as he told us is being substituted for the existing National Housing Act. Under that act many houses were built. I think the minister told us that some 80,000 houses were built last year. That is a large number of houses. We have heard the shortage of houses in Canada estimated by some at 200,000 and by others at 500,000. I do not think anyone really knows what the shortage of houses in Canada is today.
What this bill will do to overcome this great shortage we can only conjecture at the present time. I have my own ideas on the matter; other hon. members have theirs. It is difficult for us to say at this time just what the result will be. We will not know that result until the legislation has been in force and the activities under it have been tried out. Then only shall we be able to say what the result will be.
We expected great things of the National Housing Act. I remember when the debate took place in this house a few years ago. At that time we thought the National Housing Act was going to solve the housing problem here in the Dominion of Canada. Unfortunately it has not done so, and for that fact many reasons have been given. I have already mentioned some. We now understand that the great difficulty is the lack of money.
As I say, the object of this new bill is to build houses. This government bill proposes three things in order to carry out that purpose. The first is to reduce the down payment on a house to 10 per cent of the value and to extend the time for repayment to 25 or 30 years. We have had a great deal of comment upon this proposal. The second proposal is to put the chartered banks into the mortgage business and to have Central Mortgage and Housing Corporation insure the mortgages in order to protect the banks from loss. The premiums on this insurance are to be paid by the borrowers. The third proposal is to authorize the Bank of Canada to provide the chartered banks with cash on the security of the insured mortgages they hold.
As I said, under the National Housing Act there seemed to be no trouble raising money through the insurance companies. We were told by the minister a few days ago, I think, that the insurance companies sold government bonds to the extent of $800 million and also to the extent of $200 million more, making $1 billion that they invested in housing in

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this country. Of course it is the people's money which had been paid in to the insurance companies by way of premiums, but it was paid in over a long period of years. Insurance is something that you take out for 20 years or for life. It was not money that was payable on demand, and naturally the insurance companies could invest this money without feeling that those who had paid their premiums would be affected in any way.
Under this bill the money is to be obtained from the banks. Money is placed in banks, of course, under short-term arrangements, and it represents the savings of the Canadian people. The minister has told us that we shall have to change the Bank Act so it will provide for long-term investment instead of short-term lending. This is something which may not be regarded too lightly by the Canadian people. During the last few days we have heard many arguments to the effect that this proposal is not good as far as the investments of the people are concerned. The bank's first duty, of course, is to protect the savings of the depositors. The money is there to be called for at any time.
This afternoon the hon. member for Macleod (Mr. Hansell) gave us an interesting lecture on the banking system. He said he was sure that certain members were not stupid, but certain statements they made to the effect that the money in the banks or lent by the banks was the depositors' money were altogether wrong. Well, I listened to the hon. member's lecture this afternoon, and I expect he will think I am stupid because I am afraid I did not derive very much benefit from it.
I am not an authority on the banking system of this country, but I do know that if a bank had no deposits-well of course that would be too ridiculous to consider, because you would not have a bank at all. It is certainly true that the smaller the bank and the fewer the deposits, the less lending that bank can do. The more deposits a bank has, of course, the more lending the bank can do and the better position it is in. As I say the deposits must, in some way, have something to do with the lending which a bank is in a position to do.
So far as the protection of the banks is concerned, the bill provides that mortgages will be given. The mortgages will protect the bank to a certain extent, and in that way the depositors will be protected also. It is true that the bill realizes that money must be deposited before it is made available, and provision has been made that will enable the banks to take the insured mortgages they
(Mr. Brooks.]
hold to the Bank of Canada and get cash for them. This will not be the same kind of cash the depositors had earned and put into the banks for safekeeping. It will be cash fresh from the printing press. It will have cost the bank nothing, and will have no value except what it can absorb from the money which the people have earned and with which it will circulate.
The net upshot of the whole proceeding may be that the earned money which the people entrusted to the banks for safekeeping will have been removed and inflationary money which cost the bank nothing put in its place. This inflationary money will absorb value from the true money with which it will circulate, and everybody will find that his money has lost some of its value, though few will know how it happened.
The matter of mortgages has also been mentioned by a number of speakers. As was pointed out, the onus of foreclosing the mortgage will be placed upon the banks. Neither the government nor the government agencies will be in the position of having to carry this unpopular burden. The banks will have to bear it. I do not know what the number of foreclosures is likely to be. That is something which will be revealed in the future. I know that even people who have borrowed anything from one-half to two-thirds of the money to build a house have had to default, for different reasons, and the mortgage has been foreclosed. I am satisfied that with the granting of hundreds of thousands of mortgages there will be many which will have to be foreclosed.
I should like to point out, Mr. Speaker, that there are many reasons for the shortage of houses in Canada. The minister mentioned some the other day. People come to this country from other countries, and naturally in a cold country like Canada they need a place in which to live. Then there is the natural increase of population in this country. In addition there are other reasons. First, we have noticed that there is a movement of population from the rural areas to the towns and villages in every section of Canada. For instance, the older people used to live on the farms with their sons and daughters. Now they move into the villages and towns and take up small houses. Due to the great increase in mechanization of the farms, one or two men can run a farm which used to need three or four.
Another reason for the increased need for houses is the movement from one province to another. I can speak with knowledge of

that because I know that from the three maritime provinces-perhaps I might say four without offending my good friends from N ewf oundland-


Mr. Slick:: The Atlantic provinces.


Alfred Johnson Brooks: We are all Atlantic provinces but there are three maritime provinces. There has been a continued exodus of people to the central part of Canada, to the large industrial centres such as Montreal, Toronto, Hamilton and other places. This has caused great congestion in these parts of Canada. It has also left vacant houses in the sections of the country from which those people came. I know young people have left my constituency to go to Toronto, and have left fairly good houses which have had to be sold at low prices. These houses would accommodate families with three, four or five children. The people have gone to Toronto or Montreal. When they return for a visit they tell you they live in one room or two rooms. It is impossible to find accommodation in the big cities.
I recall that last fall I was going through Montreal, and I met a young man whom I knew in the park in front of the Windsor hotel. He had his wife and three children with him. I asked him how he was getting along and he said that he was getting good wages but had no place to live. They were living in two rooms in a basement, and he said the only comfort they had was when they could take the children out to sit in the park.
This situation has developed in Canada as a result of our economic situation. I was pleased indeed to hear the hon. member for Calgary North (Mr. Harkness) suggest a solution. I think it is a solution which is linked up with the housing problem in Canada, and that is the decentralization of industry. We can accommodate two or three times the population we have in the mari-times, and we would have two or three times our population if we could retain our young people there and give them employment. I have often pressed for this in the House of Commons, and I believe we will always have an acute housing situation in Canada until there is some decentralization of industry in this country.
As the hon. member said, around Toronto and Montreal one of the great reasons housing costs so much is that you cannot get serviced land, with sewers and water and other things required for good housing. In the smaller towns and cities of the maritime provinces I am satisfied that you could get
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serviced land, and better land, for a third or a quarter of the cost up here in the larger centres.
I am not going to deal with this question at greater length. Of course if hon. members wanted to criticize they would say, "But you have not the facilities in the maritime provinces, especially in New Brunswick, to entice industry.'' This is very true. We want cheap electrical power in New Brunswick. That province has great possibilities so far as industrial development is concerned, but today we are being held back because we have not cheap electrical power, and our financial position does not merit our going into it too extensively, although the province is anxious to do so.
This is one way in which the federal government could assist the different provinces needing help. It could assist in the decentralization of industry and, in that way, relieve the housing problem. The problem is not a temporary one; it has existed since the last war, and even before that. And I am satisfied that as long as the present economic condition exists we will have these housing conditions.
I would hope that the regulations in connection with the building of houses would not be too strict. As member after member has pointed out, a man who has to earn his living by daily toil will not be in a position to buy or to build $8,000 or $10,000 houses. It is almost impossible for the working man today to build a house costing that much.
I recall that under the Veterans Land Act provision was made whereby veterans could build their own houses. Those houses were built under the supervision of the Department of Veterans Affairs. Over 10,000 of them were built by veterans in Canada, with the assistance of their friends and neighbours, bringing about a saving of about $2,000 on each house. There are thousands of men across Canada who would like to build their own homes and who, if given the opportunity, would do so. I hope the regulations will not be too strict and that every encouragement will be given prospective home owners for the construction of their own homes.
I do not think I have anything further to add. This bill will not help in any way the matter of slum clearance in our larger cities. I know of cities in which houses have been standing for a good many years. Due to the ravages of time and the fact that rentals paid have not permitted improvements, many of those houses today are in such a condition that they should be condemned. One can find this in practically every city in Canada.

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Robert Henry Winters: This bill would help in that respect.


Alfred Johnson Brooks: The minister says the bill
would help. I am thinking of a city I know better than any other, and I shall not mention it by name. The wooden houses in that city were built many years ago, and there are three or four tenants in each house. One will find whole streets of houses of that kind. Many years ago there was a fire in that city and it had to be rebuilt in a hurry. As the years have gone by the houses have become dilapidated. I doubt very much whether this bill would be of any benefit. The cost would be too great, and many other difficulties would face the builders.
I am not opposed to the bill; I do not intend to vote against it. I am one who wishes it every success, because a housing bill which will provide homes for our people is badly needed in this country. I hope this bill is the answer, but I cannot help feeling that it has many weaknesses.


Mr. Gordon Churchill (Winnipeg South Centre):: Mr. Speaker, ten minutes to ten o'clock on a Friday evening is not the most desirable time to make a speech in the House of Commons. I do not know, sir, whether you would wish me to call it ten o'clock.


Robert Henry Winters: Get a start, anyway.


Gordon Minto Churchill: I want to be kind to the minister. I would not like to see the debate on such an important subject collapse at this moment, so that he would be called upon to wind up the debate when he is in an exhausted state, after having listened so patiently to the words of wisdom from this side of the house.
There can be no question about the importance of the bill before us. On its title page we find this; "An act to promote the construction of new houses, the repair and modernization of existing houses, and the improvement of housing and living conditions"-a very worthy objective indeed. Then the bill is divided into a series of parts. Part I is headed, "Insurance mortgage loans"; part II bears the heading, "Housing for rental purposes and land assembly", and part III, "Housing redevelopment", and so on.
In the last two days the attention of the house has been directed to part I, the new section. Most of the points in respect of that part have been covered most effectively by those who have preceded me in the debate. Consequently it is not my intention to indulge in any repetition with regard to these matters. I noticed that in his opening remarks yesterday the minister, with becoming modesty, said he and all of us, for that


matter, are not complacent with regard to the housing situation in Canada. And he said that with good reason. There is no ground to be complacent about housing conditions in Canada.
The government has been in the housing business now for almost 20 years. As was pointed out yesterday, the Dominion Housing Act was passed in 1935 and then was superseded in 1944 by the National Housing Act, the latter act of course being the legislation we have before us now with modifications. What has happened during the 20 years? I think no scientific basis has been established for us to estimate the housing requirements of the nation. At page 1313 of Hansard for yesterday the minister said:
The number of new housing units built In any one year must be related not only to our need for housing, but also to the effective demand by the Canadian people for housing.
I ran across the phrase "effective demand" eight years ago when I first began to investigate housing conditions in the city of Winnipeg. It is a very tricky phrase indeed. I do not know what its interpretation is, but I discovered when I was dealing with this matter that a distinction is made between need and effective demand. A married man surrounded by half a dozen children and living in two rooms may demonstrate to an investigator that he has a need for better housing conditions, but when you come to estimate his effective demand and find that he has not the money to put up for better rental premises or for the down payment on a new house, then you determine that he does not present any effective demand, and consequently does not affect the housing situation from that point of view. The minister may have a different interpretation of those words, but that was the way it was pointed out to me when I started to investigate housing.
It also seems to me, as was mentioned this afternoon, that sufficient emphasis has not been laid upon research to devise better and cheaper methods to erect houses in this country. Surely there is a great field there. In the 20 years that have elapsed, what has been done along that line? Mention has also been made of the advantage that would accrue if antiquated building restrictions were removed or modified to keep up with developments that have occurred in methods of constructing houses. That is tied in with the question of research. What is being done about that?
Scientifically, what is the backlog of housing in Canada? I think the minister used a figure of 100,000. Others say 500,000. Who knows? How do we determine it?

Why do we not know? Is there not some means of discovering not only the need but the effective demand for housing in Canada on a scientific basis?
Finally, when the minister was rewriting the act and bringing in the bill could he not have done something with parts II and III to correct their deficiencies? Have they met the need in Canada for low rental housing? Are these parts meeting the need for housing redevelopment, the so-called slum clearance?
If I have satisfied the minister with my introduction, Mr. Speaker, I should like to move the adjournment of the debate.
On motion of Mr. Churchill the debate was adjourned.



BUSINESS OF THE HOUSE

Walter Edward Harris: Mr. Speaker, on Monday we shall continue, and I hope conclude, this debate, followed by the second reading of the post office amendment act, followed then-


Stanley Howard Knowles: Oh, no, that is enough.


An hon. Member:: Stop right there.
Business of the House


Stanley Howard Knowles: That is all we need for Monday.


Walter Edward Harris: -by those bills standing in the name of the Minister of Mines and Technical Surveys and in the name of the Minister of Veterans Affairs. On Tuesday we shall begin with the resolution standing in the name of the Prime Minister with respect to salaries and indemnities, followed by anything that has been named for Monday that has not been disposed of. Wednesday is private members' day. On Thursday we shall continue with any of the legislation I have already mentioned that has not been completed by that time. On Friday I understand it will be the unanimous desire of the house that we should debate external affairs. If that is the case, and if we are able to arrange a suitable formula by unanimous consent, the debate will take place throughout the afternoon of Friday and, I suppose, the evening. At any rate, we shall not name any particular business other than that debate for that day.


[Stage Direction]
At ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Monday, January 25, 1954