1960-03-15

[Stage Direction]
Second report of standing committee on banking and commerce-Mr. Cathers.


Mr. John Palleti (Peel) moved:: That the 24 members of the House of Commons to act on behalf of the house as members of the joint committee on Indian affairs be as follows: Messrs. Dorion, Badanai, Baldwin, Barrington, Cadieu, Charlton, Fraser, Gundlock, Hardie, Henderson, Howard, Jorgenson, Korchinski, Leduc, Martel. McQuillan, Michaud, Montgomery, Muir (Cape Breton North and Victoria), Pickersgill, Robinson, Small, Stefanson and Thomas, and that a message be sent to the Senate to inform Their Honours that the foregoing members have been appointed to act on behalf of the commons on the said joint committee of both houses.


[Stage Direction]
Motion agreed to.


[Stage Direction]
On the orders of the day:
Hon. L. B. Pearson (Leader of the Opposition):: I should like to ask the Minister of Trade and Commerce whether he can report anything to the house on his discussions yesterday in Toronto about the Blind River-Elliot Lake situation?


Hon. Gordon Churchill (Minister of Trade and Commerce):: We had a very good meeting in Toronto yesterday discussing the problems affecting the Elliot Lake area. There is the same desire on the part of the Ontario provincial authorities as there is on our part to do what is reasonably possible to maintain the community of Elliot Lake. I am not able at this moment to report on any specific action that will be taken, but a thorough investigation is being made and consideration is being given to things that are within the competence of the two governments to do for that area.


Mr. Arnold Pelers (Timiskaming):: I would like to direct a question to the Prime Minister. Has the Prime Minister received the report 79951-0-130i
from the committee that investigated the serious unemployment situation at Elliot Lake, under the leadership of the parliamentary secretary to the Minister of Labour? If so, has he any comment to make to the house?


Righi Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, I have received the report and I am now having it considered in detail. When in a position to do so I will give a statement to the house on behalf of the government.



MONTREAL


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: May I
direct a question to the Minister of Labour. In view of the serious unemployment situation in Montreal, the figure given in La Presse of yesterday being 86,900, which is the highest in many years, has the minister been advised of the request made by la confederation des travailleurs catholiques du Canada at a meeting held last week for the immediate establishment of an economic council composed of labour, management and the government to study ways and means of remedying the present situation? Has the minister any comment to make on that request?


Hon. Michael Starr (Minister of Labour):: No, Mr. Speaker; I have not received any such communication, or at least it has not come to my attention as yet.


Lionel Chevrier: Mr. Speaker, I should like to ask the Minister of Finance a question arising out of the question I asked the Minister of Labour earlier. It has to do with the meeting of the C.T.C.C. in Montreal at which the president of the Montreal labour council, M. Louis Laberge, had this to say: (Translation):
Mr. Louis Laberge, president of the Montreal labour council has stated that the policy of credit restrictions should be done away with, because it boosts interest rates and slows down the building industry. According to Mr. Laberge, the federal government is responsible for that policy.
(Text):
My question is, having regard to that statement, which is to the effect that in order to hasten the construction of houses in Montreal there is only one way to do it, and

Inquiries of the Ministry that is to put an end to the credit restrictions, has the minister any comment to make on Mr. Laberge's statement?
Hon. Donald M. Fleming (Minister of
Finance): Mr. Speaker, I have not seen the statement, but obviously it is not a correct view of the situation.



TEXTILES


[Stage Direction]
On the orders of the day:
William Arnold Peters: I should like to direct a question to the Minister of Finance. Would the minister comment on a report in the Financial Post of March 12 that quotas on Japanese textiles imported into Canada are to be increased by from 5 per cent to 10 per cent in 1960? Could the minister say whether such an increase will adversely affect the textile industry, and if so what steps are being taken to provide alternative employment?


Hon. Donald M. Fleming (Minister of Finance):: I have seen the article to which the hon. member has made reference. It is an entirely speculative article, and at this stage of the pending negotiations I do not believe I should make any detailed comment upon it.


Lionel Chevrier: May I
ask a supplementary question of the Minister of Trade and Commerce arising out of this prior question. Can the minister say whether the Canadian government has completed negotiations with the Japanese for the 1960 import quotas?


Gordon Minto Churchill: Mr. Speaker, these negotiations have been carried on by the Minister of Finance.


Lionel Chevrier: May I then ask the Minister of Finance if he can tell the house whether the Canadian government's negotiations with Japan concerning the 1960 import quotas have been completed?


Donald Methuen Fleming: No, Mr. Speaker they are advanced but not completed as yet.


Lionel Chevrier: Would the minister then say whether the statement which he says he has seen in the Financial Post, that there will be very serious importations of Japanese textile goods into Canada, is accurate?


Donald Methuen Fleming: I made the comment that the article in question is entirely speculative, and I do not believe I should make any detailed comment upon it.
[Mr. Chevrier.)



U.S. URANIUM PURCHASES-ALLEGED INCOMPLETE RETURN

[Stage Direction]
On the orders of the day:
Mr. G. J. Mcllraith (Ottawa West):: Mr. Speaker, I should like to direct a question to the house leader arising out of an order for return which was tabled yesterday. The order for return was in reply to an order passed by this house on February 24, which order provided:
That a humble address be presented to His Excellency the Governor General, praying he will cause to be laid before this house a copy of all correspondence, telegrams and other documents exchanged between the Canadian government, on the one hand, and the United States government on the other in the period of the past two years on the subject of the purchase of uranium by the United States of America from Canada.
The order for return as tabled contains one letter from the Canadian charge d'affaires ad interim to the secretary of state of the United States dated August 7, 1959, and the reply to that letter from the acting secretary of state of the United States to the ambassador of Canada dated August 28, 1959; just the two letters. My question is this. Am I correct in concluding that there was no correspondence or telegrams in connection with the stretch-out part of the program for deliveries of uranium?


Gordon Minto Churchill: The problem was decided by consultation between representatives of the two governments.


George James McIlraith: My point is a little different, if I might rephrase it. What I am seeking to find out is whether there was other correspondence on this subject of uranium contracts with the United States that was not tabled, presumably because it was thought it was not included in the orders of the house and because it merely dealt with the stretchout part of the program as opposed to additional purchases.


Gordon Minto Churchill: The two documents to which the hon. member refers complete the correspondence between the two governments.



REQUEST FOR MORE AGGRESSIVE SALES


[Stage Direction]
On the orders of the day:
Mr. Hubert Badanai (Fort William):: I have a question for the Minister of Agriculture. A news item appeared in the Financial Post recently to the effect that the agriculture committee of the United States Senate has made recommendations for the appointment of a super salesman to outsell Canadian wheat in Europe. My question is this. Is

the Canadian wheat board or any other government agency contemplating a more aggressive sales program in Europe?


Hon. D. S. Harkness (Minister of Agriculture):: This is a question that really should be directed to the Minister of Trade and Commerce, under whose jurisdiction the Canadian wheat board comes.


Hubert Badanai: Then I shall direct the same question to the Minister of Trade and Commerce.


Gordon Minto Churchill: This question is based on an article in the Financial Post. It seems to have arisen from dissatisfaction in the United States with regard to their own selling program because, as I read the article, one European wheat importer said this:
When we buy a cargo of hard winter Canadian wheat, we can be confident that the wheat we will receive will be the grade we have ordered or better, and that the protein content will be up to specifications.
When we buy a cargo of United States wheat, we can never be sure what we will get, but we can assume that it will be at the very bottom of the permissible grade and possibly even lower.
I think it was on the basis of that statement that the Americans are becoming perhaps a little bit more active in their wheat program.


Hubert Badanai: Is the government not contemplating offsetting any such program or campaign by the United States in selling wheat in Europe?


Gordon Minto Churchill: It is not a question of offsetting any program. We have been competing successfully with the Americans over the years. We have men stationed in the United Kingdom and in Europe representing the wheat board who regularly visit the countries which import our wheat. The members of the Canadian wheat board themselves annually go to the United Kingdom and to the continent of Europe in order to keep in contact with the purchasers of Canadian wheat. For three years in succession I have accompanied them on those trips. A very active program is being carried on by the Canadian wheat board and the representatives of that board.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: I should like to direct a question to the Minister of Transport, although the Minister of National Defence may have the answer. Could we have a brief explanation of the reasons for
Inquiries of the Ministry the new regulations issued by the Department of Transport to shipping and to aviation personnel relating to the early warning system, respectively called "Clarint" and "Merint".


Hon. George H. Hees (Minister of Transport):: I will take that question as notice.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. J. E. Pascoe (Moose Jaw-Lake Centre):: I wish to direct a question to the Minister of Trade and Commerce. In view of the report in today's paper that the first ocean ship of the year is expected to arrive at Montreal on Sunday, ten days earlier than the previous record, can the minister inform this house whether this indicates earlier than usual lake shipments of grain?


Gordon Minto Churchill: It is the natural assumption from this event that spring will be a little earlier this year than last year. That being the case there will be earlier shipments from the lakehead. I am informed that the ice conditions at the lakehead are not as serious as they were a year ago and the harbour may be opened more quickly than last year, though stormy weather and bad winds can sometimes delay the movement of ships. However, I would think an early spring is indicated, and that consequently there will be earlier shipment of wheat.



HARBOURS


[Stage Direction]
On the orders of the day:
Mr. C. W. Carter (Burin-Burgeo):: I should like to direct a question to the Minister of Public Works. If the minister is not in a position to reply perhaps he will take my question as notice. Has the minister received any report on the recent storm damage to the new pier at Grand Bank? If so, what steps are being taken to keep the harbour open for shipping?
Hon. D. J. Walker (Minister of Public
Works): No, Mr. Speaker; I have not received any report. However, I shall be very happy to go into the matter and give a report to the hon. member in due course.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. Augustin Brassard (Lapointe):: I would like to address a question to the Prime

Inquiries of the Ministry Minister, of which I regret I have not given notice. Would the Prime Minister consider the possibility of taking some concrete steps with a view to implementing the promise he made at Campbellton on May 4, 1957 to the effect that his party, if elected, would give very special assistance to Canadian firms to the end that they would process our raw materials here in Canada?


Mr. Speaker:: I think the urgency of that question may be subject to some doubt, as it relates to something occurring on May 4, 1957, and which furthermore is a very general problem.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. H. J. Robichaud (Gloucester):: I wish to direct a question to the right hon. Prime Minister. Has the Prime Minister seen the statement on the proposed Chignecto canal attributed to the parliamentary secretary to the Postmaster General as it appeared in the Halifax Chronicle-Herald for Saturday, March 12? If so, does the Prime Minister think it is appropriate for an hon. member holding the office of parliamentary secretary to make such a statement on matters actually before the government for consideration?


John George Diefenbaker: Mr. Speaker, not having seen the statement, naturally I cannot answer the question.



INQUIRIES FOR RETURNS


[Stage Direction]
On the orders of the day:
Hon. J. W. Pickersgill (Bonavisia-Twillin-gate):: Mr. Speaker, I wonder if I could ask the Minister of Finance whether he would endeavour to comply with the order of the house made at his request in response to a starred question of mine last Wednesday before we take up the resolution in his name on the order paper having to do with the federal-provincial tax-sharing arrangements. The question had to do with the increase in federal payments to provincial governments, and there were three parts to it.


Donald Methuen Fleming: Mr. Speaker, I think the replies from the provinces are now nearly complete, but I will check that. I realize that the hon.


gentleman will no doubt wish to have that information before the debate on the measure is commenced. As a matter of fact it had been earlier announced that it would be taken up today, but at the request of the opposition on another count it was deferred, I believe until after Thursday.


John Whitney Pickersgill: Mr. Speaker, I wonder if I could also ask whether the minister hopes soon to be in a position to comply with the order of the house made in response to another question of mine asked on July 1, 1959, which the minister said he was having made an order in order to facilitate the furnishing of complete information.


Donald Methuen Fleming: Would the hon. gentleman indicate the purport of the question?


John Whitney Pickersgill: Yes. The question was as follows:
1.	Have any special fiscal considerations been offered by the government to encourage private enterprises to locate in the Atlantic provinces to encourage the processing of natural resources?
2.	If so, what are those considerations?
The minister will probably remember that that was one of the famous Atlantic resolutions.


Donald Methuen Fleming: I will be glad to look into that, Mr. Speaker.



PARLIAMENT HILL


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: should like to address a question to the Minister of Public Works. I apologize for not sending him notice, but it has just come to mind. In view of the fact that tanks and rubbish have been left over from the construction of the new main steps for over a month, could the minister have these unsightly things removed now that spring is arriving?
Hon. D. J. Walker (Minister of Public
Works): I will give the hon. gentleman a chance, if he wishes, to construct a proper question, but in the meantime I would be very happy to look into this matter.



CANADA COUNCIL


John George Diefenbaker: That the report of the Canada Council for the fiscal year ended March 31, 1959, laid before the house on July 10, 1959, be referred to the standing

committee on public accounts in order to provide for a review thereof pursuant to section 23 of the Canada Council Act.
He said: I do not intend to make any statement at this time, except to point out that under the statute, chapter III of 1956-57, sections 22 and 23, provision is made that a report shall be tabled in parliament. I think that is the proper course to follow, that the accounts and the affairs generally of the Canada Council be examined fully by the committee on public accounts. That is the purpose of this motion.
There is, perhaps, one point I should make, and that has to do with the currency of the council's report. The council's fiscal year does not end until March 31. Therefore the report for 1959-60 will not be available for some time. Should some hon. members of the committee feel that they may not, in consequence, be provided with up to date information, I would point out that last year, before the report for the year ending March 31, 1959 was in fact available, officials of the council were able to provide the committee with current information, and I feel sure that the same course followed this year will place the members of the committee in a position to study the situation, the transactions and the course followed by the Canada Council right up to date.


Douglas Mason Fisher: The only reason I rise now is to comment on the fact that last year the committee did not get down to very much detail in its consideration of the accounts. I think this was because the committee was run under forced draught, and it was apparent that the chairman of the council, Mr. Claxton, was for some reason not anxious to have the full time members of the Canada Council staff give evidence before the committee.
I just wanted to express the hope that this year we can get more closely to grips with such questions as the endowment fund, the basis upon which scholarships are awarded and the amount of money and support that the council is giving to UNESCO. I would not like these remarks to be taken as implying serious criticism of the council, but I certainly feel that the parliamentary committee should look much more carefully into these questions than it did last year.


[Stage Direction]
Motion agreed to.


Donald Methuen Fleming: That the public accounts volumes I and II and the report of the Auditor General for the fiscal
National Housing Act
year ended March 31, 1959, and the financial statements of the Canada Council and the report of the Auditor General thereon for the fiscal year ended March 31, 1959, be referred to the standing committee on public accounts.


[Stage Direction]
Motion agreed to.


Hon. D. J. Walker (Minister of Public Works) moved: the second reading of Bill No. C-53, to amend the National Housing Act, 1954.


Mr. Garland:: I wonder whether the minister is going to make a statement.


David James Walker: Mr. Speaker, I made such a long statement at the resolution stage, and I have also answered in such great detail most of the questions asked, that I would at this time waive the opportunity of making any further remarks. The speech on the resolution is to be found at page 1161 of Hansard of February 17, and the other protracted remarks at page 1993 of Hansard of March 11.


John Richard Garland: Mr. Speaker, may I say on behalf of the official opposition that, as I indicated at the resolution stage on February 17, we stand ready to support and speed up the passage of this legislation. May I also say that realizing the mess into which this government has manoeuvred itself in respect of the scarcity of mortgage funds, we have been ready to discuss this matter since the beginning of the session. I should like to say that many of our members, from a genuine desire to speed up the passage of this legislation, have decided not to speak in this debate, and some who have spoken have curtailed their remarks substantially for the same reason. I can think of at least three occasions, and there may have been others, when the hon. member for Laurier (Mr. Chevrier), in inquiring from the government house leader the business of the house to be taken up next day, suggested that the housing legislation be given priority. It is a matter of record that on each of those three occasions to which I am referring, the house leader, acting on behalf of the government, turned down our suggestion.
Now, naturally the government house leader, acting as he does on behalf of the government, is perfectly within his rights in any organization as to priority of the day to day business of the house. I mention this fact merely to keep the record straight.

National Housing Act


Mr. Speaker:: Order. If the hon. member will excuse me, there is still quite a bit of noise and it is difficult to hear the hon. member who has the floor.


John Richard Garland: I have been quite disturbed by statements in this house which seem to be trying to leave the impression that the opposition are holding up this housing legislation.


John Cameron Pallett: It is a statement of fact.


John Richard Garland: The truth of the matter is that while this house has been sitting steadily since January 14, the government has seen fit to give this important subject very little priority, juggling it around behind less important or, I should say, less urgent matters. I can use no better example of the attitude of the government and its apparent lack of interest in getting this legislation through than to refer to Hansard at page 1830. At that time the hon. member for Laurier inquired about the business to be taken up the following day, and asked the house leader whether he would give priority to this housing legislation. This was on March 7, and I do not think there can be any better example. At that time the government house leader said this:
The proposed order of business for Wednesday will be, first, the motion in the name of the Minister of Citizenship and Immigration to set up a joint committee on Indian affairs. Second, and related to that, we will take the second reading of Bill No. C-2, an act to amend the Indian Act. Third, we will take second reading of Bill No. C-3, an act to amend the Canada Elections Act.
The fourth order of business will be the resolution in the name of the Prime Minister dealing with the tenure of office of judges; fifth, the resolution in the name of the Minister of Public Works dealing with the National Housing Act.
Again, at the end of the discussion on March 1 the hon. member for Laurier inquired along these same lines:
May I ask if any further consideration has been given to taking the housing resolution before the matter of the Judges Act in the name of the Prime Minister.
Again the government house leader advanced his reasons for turning down this suggestion, and we find that a similar situation developed at the end of the day on February 26. At that time the hon. member for Laurier said this:
May I suggest that on Tuesday, should we complete the supplementary estimates, we might take up housing as the first item instead of the Prime Minister's resolution.
I take these few moments simply to establish the fact that we on this side of the house have tried sincerely at every opportunity that has been afforded to us to speed up this legislation. I could go on with statistics to prove the hours of debate that have been

taken up to further establish that point, but I do not think it is necessary. I do not think there can be any better examples than the ones I have cited of the lack of urgency with which the government views this very serious situation.
Frankly, lending under the National Housing Act has practically collapsed. When we think of the decreases in January and February, according to the figures given us on Friday last by the minister in terms of percentages, they are absolutely fantastic. The collapse of National Housing Act lending would not be so bad if other lending for residential construction was taking its place, but here too we find a substantial drop. We have the story in last Monday's Gazette of a 48 per cent decrease in residential construction across this country, and the reasons are obvious. There is another story in the Toronto Telegram of March 10 which carried the headline:
Mortgages Soar to H Per Cent Highest Since 1929
The article goes on to say:
Lending institutions have advised Toronto lawyers that interest rates on homes will range from 71 to 8 per cent-the highest since 1929.
Then it goes on to spell out how this is going to be handled. It says:
Lending institutions had sent out circulars advising that interest rates on houses over 25 years old, without garages, would be 8 per cent.
And so on; I am not going to take the time of the house to read it all. This is indeed a very serious situation. Like many hon. members, I have always tried to discuss housing in as non-partisan a vein as possible. However, this government is playing politics with housing, and is using it at this time as a whipping boy.
As I said at the resolution stage, the government in asking for this $500 million at this time is asking for a blank cheque to be used as it sees fit between now and the next election. If we needed further proof we got it on Friday in the minister's remarks, when he stated at page 1194 of Hansard that the total amount to be expended by Central Mortgage and Housing Corporation would be between $150 million and $175 million, approximately half the lending done last year, which would include direct loans to builders, if the government feels these direct loans to builders are necessary this fall. Really what the minister was saying was, direct loans to builders if necessary but not necessarily direct loans to builders. This could only mean that the government intends to squeeze out sufficient funds for builders' loans this fall from the $150 million to $175 million only if it feels that the economy needs this shot in the

arm. If that is the case, then we must conclude that a relatively small amount will be placed by C.M.H.C. through direct loans in 1960 as compared with last year.
In cutting back on housing to reduce its financial requirements the government is hoping that non-residential construction will fill the gap. If not, the government will pour in a few more millions this fall, according to the minister. This turning on and turning off of the flow of mortgage funds by the government since taking office has resulted in periods of feast and famine with respect to mortgage funds.
I should like to correct another illusion which the government has tried to create. All government spokesmen right down the line refer to the fact that this government rescued housebuilding in Canada, that nothing was being done by the former administration. This sort of propaganda is being spread from one end of the country to the other, and at this time I should like to refer to a document to which I do not think hon. members opposite will object. It is known as "Here are the Facts", and I believe additional copies are readily available to all those who are interested. I would refer hon. members to page 15, where it says:
The last years-
I emphasize the word "years".
-of the Liberal regime were characterized in the field of housing by a drastic decline in the number of new homes being built.
There could be no statement more false or misleading. The former minister of public works, now Secretary of State for External Affairs, used to indulge in this sort of nonsense but I had thought that the new minister, who was not in the opposition for 20 years, would not have followed this erroneous and misleading line. But here again the other day we had the Minister of Public Works restating this propaganda. This government, after nearly three years in office, are still trying to create the myth that nothing was being done with respect to housing before they took office.
Let us look at the facts, and I mean the real facts. In 1956, the last full year of Liberal administration and during a period of real boom when there was a real demand for funds, 135,700 homes were completed. Today the government, this self-styled saviour of the housing industry, is suggesting 125,000 starts as its objective. If the bang-up start they have made up to now is any indication, the results could well be substantially less than 100,000. So I hope this is the last time we will hear this nonsense that nothing was being done in the housing field until this government took office.
79951-0-131
National Housing Act


Mr. McGee:: Will the hon. member permit a question?


John Richard Garland: Certainly.


Frank Charles McGee: Does he have the figure for the first six months of 1957?


John Richard Garland: If the hon. member will contain himself I will come to that. If I had more time I should like to refer to the situation in early 1957.


David James Walker: My friend always purports to be fair. Would he be good enough to answer that question?


Lester Bowles Pearson: He said he would come to it.


John Richard Garland: I should like to refer to the situation in early 1957, and to a meeting on March 14 between the chartered banks and the Bank of Canada. The result of that meeting was that the chartered banks agreed to release $150 million for 1957 housing. Compare that, Mr. Speaker, with the situation today.


Mr. Benidickson:: I wish they could be persuaded to lend some money now.


John Richard Garland: Thanks to this government the banks are doing absolutely nothing, and we had proof of that in the minister's statements on Friday. In fact when one examines the results of 1957, having in mind the administrative time lag, a great portion of the starts in 1957 were the result of Liberal policy. In 1956, the last full year of Liberal administration, 135,700 homes were completed as compared with 83,600 family formations. So I hope this is the last time we will hear attempts by government spokesmen to leave the impression that nothing was being done prior to their taking office.
Speaking in support of the legislation before us, one must consider the reasons that make these substantial increases necessary. While we do not object to these staggering increases, they do point up the degree to which the government have got themselves involved in the housing industry. They have used the taxpayers' money to bolster the economy. They have gone a step further and attempted to use these funds to regulate seasonally the flow of house construction.
Let us look at the record for a moment. In no field of government activity have government spokesmen heaped more praise upon themselves than in the field of housing. Let us see just what the government did do. When the Canadian economy began to sag late in 1957, some time after the government took office, the government poured hundreds of millions of dollars into housing in a frantic attempt to dissociate themselves from the old stigma, "Tory times are hard times" or "the

National Housing Act
party of depression", and so on. In these frantic attempts to pour money into the economy they overstimulated house building and built many of the 1959 houses in 1958.
This overstimulation had two obvious effects. First, it created a tremendous growth in housebuilding capacity which, in the face of the government's current policies, may well go unused, causing unnecessary hardship especially among the thousands of construction workers across the country. Second, the government artificially stimulated the price of land in many areas with government funds.
However, apart from the large number of housing starts resulting from the government pouring in hundreds of millions of dollars to bolster the sagging economy, the government has done relatively little in the general field of housing. The legislation before us shows no improvement in existing regulations under the National Housing Act, which would indicate to me that there is any recognition by the government of the many problems in this field at the present time and which, indeed, have existed for several years. Apparently the government are content simply to ask parliament to provide more funds, to give them a blank cheque so they may continue the policies they have been following up to this time.
Let us examine for a moment the results of these policies which the government seem to think are so satisfactory. What did these policies do for housing in 1959? Outlays on housing in Canada, which had been rising throughout 1957 and 1958, declined throughout 1959. We attempted to bring this problem to the attention of the government in the house on several occasions during the last session. The government, instead of recognizing the problem and doing something about it, contented itself with reprimanding opposition spokesmen for making such remarks. These warnings, in one case my own, were referred to in this way by the then minister of public works, as found on page 4012 of Hansard of May 26, 1959:
With regard to his earlier suggestion, I would point out to him that it does not help house building, the morale of the Canadian people or the creation of employment, to have all this calamity howling that we are getting here on this question.
That was the sort of response we got from the government last year when we attempted to point out a steadily increasing scarcity of mortgage funds. That these warnings were well founded can be proven by the dominion bureau of statistics. In their third quarter report they use these words to describe the situation in 1959:
Housing has been much affected by the availability of mortgage funds, direct lending of Central Mortgage and Housing Corporation was sharply reduced

early in the year, and the approved lenders finding N.H.A. loans less attractive, curtailed their lending.
Why did approved lenders, including the commercial banks, decide to curtail their lending? Simply because they could get more for their funds by buying government bonds and treasury bills. The decline in residential construction in 1959 was due to such factors as reduced direct lending by C.M.H.C., tight money conditions, and high interest rates on government bonds. Speaking of tight money conditions and high interest rates on government bonds, it seems to me there is absolutely no justification for this situation. The government, surrounded by experts, must have known when they embarked on a policy of high interest rates in 1958 that other borrowers would have to follow suit. The bond conversion of 1958, to cover the expenditures made in an attempt to partially fulfil this government's election promises, was the real beginning of our trouble with higher mortgage interest rates.
What about housing in 1960? I do not believe people are interested in what was done in 1956 or what was done in 1958, when records were set in this field. They are interested in what government policy is going to do for them in 1960. There is every indication that the demand for money will continue and that the high interest rates encouraged by the government in its own borrowings will remain unusually high, naturally adding to the cost of doing business. Its restrictive effect on house construction has been clearly shown in 1959, and the situation will be worse in 1960 unless the government fills the gap in mortgage funds.
Starts for the last five years have averaged 138,500, and this year's estimate seems to suggest 125,000. I suggest that without government support starts will fall below 100,000. Today, with some 800,000 registered at unemployment insurance offices across the country, what possible justification can there be for the government curtailing home building and not acting at once in an effort to restore confidence that the government will support a substantial program of house building in 1960, thereby enabling builders to get on with their plans? It is only by planning that the industry can keep costs at a reasonable level and at the same time organize work in a way to ensure that employees will enjoy some degree of employment security.
Surely the government will not hide its head again this year to the scarcity of mortgage funds or pursue, in a period of high unemployment, a policy of restricting house construction. Surely the government has

provided sufficient deterrent already by establishing the highest interest rates on N.H.A. housing since the act has been in effect. Now, for the first time in the history of the act, a buyer financing through N.H.A. over a 20-year period will pay more money in interest than the original purchase price of the house. Yet government spokesmen rave about what they are doing for the lower income groups in respect of housing. They continue to heap upon themselves crushing burdens of their own praise.
Well, repetition may fool some of the people, but it is not fooling the average young couple of modest means who want to own their own home. Instead, the government, by pursuing the policies of tight money and high interest rates to which I have briefly referred, are making it more difficult than ever for these people to purchase homes of their own in 1960.
Now, we have made, I think, several suggestions from this side, and it is not my intention to prolong the proceedings by reviewing them now. We have made reference to the field of urban redevelopment, and an increase from 50 per cent to 75 per cent in the federal share and of participating in the cost of sewer, water and street services to assist municipalities; to encouragement of the establishment of a secondary market for mortgages in order to facilitate the flow of more private money into mortgages, especially from the small investor; to creation of a municipal loan fund for financing major improvements; to reduction or elimination of tne insurance premiums on Central Mortgage and Housing Corporation mortgages. We do not believe there is any justification for a continuation of the present rate of the premiums.
There have been suggestions of sponsoring a national design competition so as to produce the types of houses people want. There has been a suggestion for smaller down payments. While this would lengthen the period of the mortgage, it would help to eliminate the great need for second mortgage financing which is so costly. There has been a suggestion for a dominion-provincial conference, and so on. As I mentioned, I am not going to repeat our arguments.
We have tried to indicate that the government should put its own financial house in order. We have tried to point out, and I think this is important, that with the banks now practically out of the mortgage field altogether, with the government's announced intention of cutting in half the lending they did last year, and with the lending institutions reluctant to tie up large amounts of money 79951-0-131J
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in long term mortgages, we believe the housing program as envisaged by this government is entirely inadequate for 1960.
However, as I said at the beginning, it is not our intention to delay the passage of the legislation. We believe the government, through its mismanagement of fiscal and monetary matters, has created an unfortunate situation which makes this legislation necessary at this time. We regret the circumstances that make it necessary for this government to ask for a blank cheque for $500 million to be used at the whim or fancy of the government between now and the next election. However, the housing requirements of many of our people remain acute. Unemployment is with us to an alarming degree. Therefore it seems to us the government should give this problem of the shortage of mortgage funds its full attention before house construction goes into a tailspin that could bring unnecessary hardship and further lack of employment to our people. We believe the urgency of this matter should transcend any political considerations, and we urge the government to get on with the job.


Mr. J. F. Browne (Vancouver-Kingsway):: It is not my intention this afternoon to go into great detail in connection with the housing program. The very comprehensive statement already made by the minister indicates quite clearly that the policies and actions of the present government are so far superior to those of the previous government that there is really nothing I could add. We have only to recall that under the previous government some $100 million had been expended under this national housing program, while in the short time the present government has been in office the expenditure has risen to $1 billion.
My purpose in rising this afternoon, Mr. Speaker, is to take issue with the hon. member for Nipissing (Mr. Garland), who now realizes there is some necessity for getting on with this program. He went to great pains to try to show that the opposition had been spurring this measure along. I simply want to say that is not the case, and his remarks that the government has not tried to get this measure through are entirely inaccurate.
I would call your attention, Mr. Speaker, to the fact that on February 17, the first time this measure came before the house, it was part of the regular proceedings of that day; but on that day the opposition rose and suggested that we adjourn the regular business of the house to debate unemployment. This housing measure could very easily have been proceeded with and passed that very day if the opposition had been in any great

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anxiety to get on with it. I suggest to you they were not very anxious to get on with it.
Then subsequently we debated unemployment, during consideration of the supplementary estimates, for some eight or nine days. You will recall that the government was delayed in making some of its payments because there was such a great delay in passing the supplementary estimates. The opposition were not showing any great anxiety to get on with the housing program at that time.
Today they finally realize that we should get on with it, because it is a popular measure. Even so, the hon. member for Nipissing gets up and says: "We support this measure", while at the same time trying to make all sorts of criticisms about it and trying to hide their record in this field by suggesting that the government has delayed in trying to get this measure through. I am sure you will agree, sir, that that is entirely inaccurate.


Douglas Mason Fisher: Mr. Speaker, the lakehead forms an interesting microcosm in the Canadian economy. One of the reasons for this is its isolation from any large centre to the west or the east. You can take a good look at it without having extraneous factors enter into your calculations. This is what I propose to do in so far as second reading of this bill is concerned, when considering its failure to affect the lakehead situation.
I should, perhaps, begin just by noting that as of March 11 the unplaced applicants at the lakehead, or in Port Arthur, totalled over 6,000, and in Fort William they totalled approximately 4,000. The relevance of this to the housing situation becomes more apparent when you take a look at the list of occupations and discover that there are almost 380 carpenters in the twin cities who have no work at the present time. Over 1200 construction workers in those two relatively small cities are out of work. This fact indicates that there is a fundamental need at the lakehead for jobs in the construction field.


Mr. Broome:: It indicates that it is winter.


Douglas Mason Fisher: I hear an interjection from a man who lives in the land of eternal sunshine but who seems to appreciate the fact that we have a winter problem. I might point out to the hon. member who has interjected that in the first two months of last year we had 41 housing starts in Port Arthur and Fort William as a result of the policy of the government. This year we have had exactly one housing start. If the hon. member would like to check these statistics as to the carpenters and construction workers out of work, he will

find that the incidence is higher this year than it was last year. I am obliged to put it down to the failure of the housing program of the government to generate any interest at the lakehead.
The other day the hon. member for Fort William made this point quite well when he read to the house portions of a brief from the lakehead house builders' association. This group are quite concerned over the fact that they cannot get money either to start houses on their own, let us say for speculative purposes-that is for later sale-or even find the ordinary person who can get money through the National Housing Act and wishes them to build a home. They therefore sent a letter to the hon. member for Fort William and me asking us if we would bring the problem to the attention of the minister.
I did bring this brief to the attention of the minister, and in a letter dated March 9 he gave a rather full reply. I want to put on the record-and I am sure the minister will not object-several of the paragraphs in the letter to me of March 9. In this letter the minister says:
The brief also suggests that the Bank Act be amended to permit the banks to charge an interest rate of 62 per cent per annum. Such a matter is not within my immediate jurisdiction although I am interested in it inasmuch as it affects N.H.A. loans. However a change in the bank interest rate is a matter that must be considered on the basis of its total effect on the over-all economy of the country and not purely in the light of its effect on the supply of mortgage funds.
I think I can almost paraphrase that in these words; "the supply of local mortgage funds". The letter goes on to state:
The provision of public money for mortgage lending on a large scale cannot be continued indefinitely and it is imperative that the government decrease its participation in mortgage lending as well as other expenditures in 1960. However you know that a resolution to the effect of providing more government mortgage funds has been introduced in the house. When parliament authorizes such funds, the corporation will resume its role of a residual lender.
I am sure you will appreciate that there are other centres throughout the country in a position similar to that of the lakehead in so far as availability of mortgage funds is concerned. Where loans through approved lenders are not available, the corporation will consider applications for direct loans from individual home owner applicants after parliament authorizes additional funds. The conditions under which direct loans will be made will be announced later.
It seems to me that there is in the bill a glimmer of hope beyond the rather restrictive nature of the minister's suggestion that the government hopes to limit the funds to $150 million or $175 million this year. In looking at the experience at the lakehead, which the minister says is not an isolated experience, we would trust that he will get moving on this matter as quickly as possible,

and that it there are indications that more money than $150 million or $175 million is required, he will be only too pleased to extend it.
But that does not really get at the problem of a region such as ours. When you get into the field of farming, Mr. Speaker, this government through a number of bills provides facilities, supports and subsidies to farmers in various parts of the country. We happen to be in an isolated area. We have not the kind of farm organization that can apply direct pressure, and the rebuttal I always get when the matter is brought to the attention of the Minister of Agriculture is this. "There is really nothing we can do about it; you are not on a big enough scale."
We have exactly the same situation in this housing field. Aside from the two cities of Port Arthur and Fort William there is a cluster of communities spread across northwestern Ontario in which, if the minister checks on the matter, I doubt whether in the last five years more than a dozen homes have been built with N.H.A. funds.
When the previous minister of public works took over he became very enthusiastic about a low cost house design which he passed around to all hon. members here. This house was to sell for between $5,000 and $8,000. It was going to be one of the answers of the government to looking after the people in the low income brackets. I just have not been able to find that a single one of these houses has been constructed in my particular region, a fact which indicates that somehow it has fallen short.
If you live in a town such as Geraldton with a population of 3,000, or in Hornepayne with a population of 2,000, you find there are no mortgage lending sources of any kind except the banks, and the banks will not touch loans for housing in those communities. Despite the fact that Geraldton is a fairly prosperous town, I think it has had only two houses in its history that have come from N.H.A. funds. But from statistics that are put out by Central Mortgage and Housing Corporation, and knowing that their whole program has been oriented to places of 5,000 or larger and also to places that are clustered around a metropolitan centre, if we could get the figures on just how much of the building through N.H.A. auspices has taken place in Canada I would be willing to bet that over 85 per cent of it is concentrated within 100 miles of our larger cities.
This is a failure, in so far as Central Mortgage and Housing Corporation are concerned, that I have pointed out previously, namely their inability to get out into the
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smaller places and especially into the hinterland part of the country where, as everyone knows, costs are extremely high. But it is difficult to point it out at times like this when you have a tight money situation or, as this government may prefer to call it, a tighter money situation. It seems to me that the broad, over-all policy of this government, as introduced this year under the auspices of the Minister of Finance, is becoming a noose that is strangling an area of the country such as ours.
The minister-and I am obliged to praise him for being candid-does not disguise the fact that the point that is dictating this bill and government policy at this time has nothing to do with an ideal housing policy or with a coherent government move. It is related to the consideration that the government must raise less money from other than tax sources, and must spend less money this year. At the very least this is a political position that we can recognize. I cannot admire it nor can I be for it, but at least it is clear cut. We know where this government stands. It seems to me that as far as the lakehead is concerned, it is saying to the house builders there and to the carpenters and construction workers, "You may be having it tough, but there is a greater cause for which you are suffering at the present time, namely to get this government and this country's finances into a better balance".
If you go along with this policy, that is fine. We do not happen to go along with it. We condemn it. We think it is wrong. It is more than just my personal reaction, having regard to a figure of 25 per cent of our working force unemployed. It seems to me there are very much larger issues than merely that of housing, when 25 per cent of your labour force is unemployed this early in the winter; early, that is, in the winter in statistical terms. For this reason I think we must accept this measure but we must point out, as I think the hon. member who spoke previously was trying to do, that it reflects an over-all policy that is not answering the larger needs. It is just answering the needs of the house builders or the carpenters or the construction workers.
There is one point I wanted to introduce in this debate, although I would be a silly ass to claim to know much about it. My reason for bringing it up is that I have been interested by an article written by Professor J. V. Poapst of the institute of business administration of the University of Toronto, which the hon. member for Trinity was kind enough to provide me. This article ends up by plumping for a much higher or more fluctuating rate of interest. The title of the

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article is "Instability in house building and its costs". On the first page of the article the writer makes this point:
The power of the government to control the rate of house building derives largely from its control over the N.H.A. mortgage market. It controls the supply of mortgage funds by making the N.H.A. interest rate attractive or unattractive to private lenders and by varying the volume of its own lending. Changes in interest rates affect the public's demand for N.H.A. mortgage loans. But changes in demand are also influenced by changes in the other terms of the loans, i.e. the maximum loan, loan to value ratio, period to maturity ratio of debt service to the loan applicant's income. Down payment requirements can also be changed by appraisal policy. Changes in the conditions and volume of N.H.A. mortgage lending (including the admission of the banks in this field in 1954) have been the preponderant cause of instability in the rate of house building in recent years.
This charge that the preponderant cause of instability in the rate of house building has been because of changes in the conditions and volume of N.H.A. mortgage lending seems to me rather serious. The minister has indicated that the money we will be getting through this bill is going to be used largely for the people in the lower income brackets, in effect for low cost housing, which is an objective we can all admire. But the question I would like to pose to the minister is this. If one of the ways to achieve this was the raise in the interest rate which was made last December to 6J per cent, why did not the minister go the whole hog and raise the interest rate much higher, and then introduce some form of subsidy to get a greater concentration on limited dividend housing or cheaper building, and so clear the way for a more stable market for people in the higher income group outside of N.H.A. altogether?
It seems to me that the government's housing policy, as a sort of offshoot of the Minister of Finance's general financial policy, is trying to ride two horses. If, as news dispatches indicate, N.H.A. mortgages are finding no takers at this particular rate and the minister is concerned, as was the previous minister, with the people with low incomes who need housing most, why did he not bifurcate his policy and free the interest rate for people who are going to buy the higher value houses, and then do something directly for the people in need whom he really wants to help?
I would judge that anything which would bring outside money into the housing picture would satisfy the house builders. It would create employment where employment is needed and is not developing at the present time, and would generally do more than the policy does at present. I have been waiting to hear a speech from the hon. member for

Trinity on this subject because he is active in this particular field. House building is his business. I hope he can go into this question of the interest rate and the effect it is having upon the stability of the house building industry in Canada at the present time.
One aspect of this bill which disappoints me is its failure to do anything about the insurance rate on mortgages under the National Housing Act. Some time ago I put a question on the order paper to try to get some perspective of the amount of money which is in the fund at the present time, and as I remember it the figure ran somewhere around $63 million. I think it was two years ago that Mr. Stewart Bates, who was appearing before a Senate committee, expressed concern over the fact that there was an increase in foreclosures, and he thought this might indicate that there were perils ahead for this fund. However, I gathef from the reassuring messages we have had from the government, even in connection with Elliot Lake, that this is not so and that the insurance fund continues to increase at a steady rate.
Following the filing of the question I received a letter from Mr. Eugene Chalifour, who I gather is a contractor living at Sillery in Quebec. He made a speech at a conference of the national house builders' association in 1959 on this very point of insuring mortgages. 1 would like to put on the record for the benefit of the minister the conclusions of this gentleman, which do spell a way out. As reported on page 6 of his address he said.
I frankly believe that every criticism of a system or any opposition of a system should be followed by a proposition.
My first is this one: why not apply the same guarantee that exists in the case of loans for housing improvements, that is 15 per cent applicable on the total of the loans? ...
Second, the creation of a mutual. Each owner who has paid insurance should be a member and would have the right to a comeback after a few years of the loan because the risk decreases as the monthly payments are made. I would recall also the equity of the debtor which is always a guarantee.
Finally, I suggest to use the reserve funds as a bank for mortgage loans.
That is the point here. At the present time we have over $63 million which could be a potential bank guarantee for mortgage loans. Mr. Chalifour goes on:
We have often talked in our conferences of a bank of mortgage loans created by Central Housing. The present fund that is already up to $63 million could no doubt be used to guarantee the billion investment by the Canadian government to help housing. This billion should remain at the disposition of the Central Housing and would be very well guaranteed by the reserve.
Recommendation should be made to the federal department so that a competent personnel in matters of insurance be hired by the Central Housing. The rate of mortgage loans should be based on the



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risk of investment in centres more or less populated. Those who provide risky cases pay for these risks.
The mortgage insurance now in force has allowed $2,100,000,000 of loans, that is, 210,000 borrowers at $10,000 each. Why should we make these people responsible for a few 2,000 loans here and there isolated throughout the country.
These are the real risks. In other words, this gentleman has two suggestions. One is that this rate of 2 per cent is too high for insuring mortgages; second, that the fund which has already been built up could be used as a safety reserve for a continuing or revolving fund in the figure he gives of a billion dollars which would be permanently in the government's kitty as a government guarantee.
Mr. Speaker, as I said when I began my remarks, my knowledge of finance and investment is small, but I do not think this suggestion made by this gentleman is of a funny money kind or anything like that. It seems to me to have a bit of sense to it, and for that reason I would like to bring it to the minister's attention on second reading of this bill and hope that perhaps at the next session the government will consider changes in the act which will implement the two suggestions made.
I cannot end my remarks without underlining, as I have done so often in the past, the paradox or the agony of free enterprise in the house building field. The other day we had a debate on air transport, and we discovered that these free enterprisers in aviation are down asking the government to restrict things to protect their present interests, or to subsidize in one direction or another. The main purport of this brief which I have received from the lakehead house builders, and the purport of most of the recommendations in such magazines as The Canadian Builder, is to commit the government to increasing support of private industry.
There is nothing wrong with this. As a matter of fact most of my argument today has been, to a degree, in support of this; but I wish to point out and reiterate that we hear a great deal of nonsense sputtered in this country, in connection with housing, about the wonderful role of free enterprise. Again, it seems to me that in many cases free enterprise is right down there-I will not say getting their noses in the trough-trying to persuade and manipulate the government into subsidizing or supporting operations which will redound to their credit.
As a matter of fact this feeling is so strong within the house building group that it should lead us to take an even sterner or tougher look than before at just what we are doing when we vote funds to be spent in this
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particular field. If free enterprise is so good and so vigorous, and as wonderful as some of its proponents say it is, I cannot see why we must constantly be bailing it out with millions of dollars. I have great sympathy for the minister's aim of providing housing for those people who are among the needy of our society. I have not quite as much sympathy with regard to providing backing to these people who are shouting "free enterprise" at one moment and running around trying to pull something out of the government's treasure chest at the next.
Before concluding, I might say that I went over the speeches which were made by other hon. members at the resolution stage. I thought the hon. member for Coast-Capilano (Mr. Payne) presented a very worth-while argument for the type of study and suggested action by the government in the housing field that I believe almost everyone in the house would support.
I hope the minister has taken very seriously the suggestions put forward by the hon. member for Coast-Capilano, and that he will realize that they command fairly wide support in this chamber. The hon. member wants us to come to grips with the whole question of the kind of suburbs and housing developments we are getting in Canada at the present time and their effect upon the older parts of our cities, together with the services that are provided. It seems to me that such a study as the hon. member suggested would go some way toward providing answers to the questions that are bothering most of the municipalities at the present time.
In conclusion, though this may appear somewhat obvious, I wish to say that we in this group intend to vote for this measure. However, we do wish it were a better one and a more detailed one, and that it offered some indication that, sitting on the treasury benches, was one cabinet minister who did not wholly swallow the policy of the Minister of Finance but was prepared to buck it and take a broader view.
Mr. Laurier Regnier (St. Boniface):: Mr. Speaker, in beginning what I have to say on this subject I should like first of all to join with all those hon. members who spoke earlier, at the resolution stage, in offering to the minister my most sincere congratulations and best wishes in the discharge of his new responsibility.
National housing is of very great importance because it provides homes for Canadian people whose incomes are small, and besides it provides employment. In addition I believe it should also give protection to the puchasers against radioactive fall-out in the event of a nuclear attack or nuclear war.


Hon. Paul Hellyer (Trinity):: Mr. Speaker, this bill is intended to supplement and regulate the flow of mortgage funds under the National Housing Act. At the outset, may I assure the hon. member for Port Arthur (Mr. Fisher), who is not in his seat at the moment, that if it was not for the variety of government regulations which frustrate the natural market forces, the building industry itself would not be forced to come to the government with hat in hand for what appears to be assistance but for what in reality is relief from governmental strangulation.
In order better to understand the situation in which the house building industry finds itself today it is helpful to review some of its past history. During the depression years, unfortunately, practically no new housing was built in Canada. In the war years which followed, the volume of housing construction was also very small. It is true that a few wartime housing units, were constructed but this was done quickly and some of it was on a prefabricated basis. During this same period of the depression and the war years which followed very few new apprentices were taken

into the building trades, and most of those artisans who had practised their skills in the years before were growing considerably older.
After the war there was a desperate shortage of housing. When the men and women returned home from serving in the armed forces the formation of family units was very rapid and a desperate shortage of housing accommodation developed in the immediate postwar years, reaching its peak about the late 1940's. At the same time the industry was stretched to meet this situation and had to operate in excess of its capacity. There was at the same time a desperate shortage of materials, both quantitatively and qualitatively; in addition, there was a serious shortage of skilled labour and an equally serious shortage of trained management. The situation was not without the inevitable results. There was some very poor building done in the immediate postwar years and most of the designs were those which had been used in the period preceding world war II. This is not to say that there was not some good building done. There was, but some of it, unfortunately, and I think inevitably, was below a standard which would have been expected under different circumstances.
In the ten years following world war II, some of the backlog was caught up. Year after year new supplies of building materials came into being and new building products were created and marketed; the labour force became more skilled, as those people who were engaged in the building industry throughout those years naturally acquired more competence in their various trades. In addition, management became more experienced because it had gone through some of the growing pains in this explosive expansion, and many of the mistakes which were made from time to time and from year to year were avoided in future building.
By the mid-1950's there was no longer an acute physical shortage; there were ample materials and labour to meet the effective demand in the housing industry in Canada. At the same time the situation became much more competitive. Building companies were forced by competition to improve their techniques. Many began for the first time to hire architects to prepare their plans. Others put architects on their staffs. They hired engineers to introduce into the housing industry some of those techniques which helped to cut the costs and improve the quality in other industries. At the same time, some were forced to go into the land development business in order to provide better layouts, better subdivision techniques and to reduce the cost of
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the ultimate housing project. The end result was a much improved product and much better value, and this process has been continuing throughout the number of years since the most critical shortage began to subside; but those improvements have been depending upon volume. Only with volume building is it possible to afford to amortize the costs of architectural services, of engineering services, to employ new labour saving devices, to engineer new building techniques, and to take advantage of the benefits of twentieth century technology. Of course, volume is dependent on financing and the building industry, I think more than any other industry in the country, is plagued by inadequate financing. It is always a feast or famine, either too much money or too little and, unfortunately, there never seems to be a long period in which there is an adequate and even flow of funds available.
The industry has struggled desperately to overcome those handicaps and to reduce the cost of its product to its customers because everybody agrees that this is how the private enterprise system works. If an industry can reduce its costs and market its products more cheaply it will increase the effective demand and thereby make a larger profit. There are three main areas of attacking the cost of the finished housing unit. They are the cost of land, the cost of money and the cost of the housing unit itself which is, at least partially tied to the availability of mortgage financing, affecting as it does the continuity of building operations. Unfortunately, government at its several levels has an overwhelming influence in each area. It is not possible to deal with each of those this afternoon, and therefore I shall content myself with dealing briefly with the third factor, namely the cost of the housing unit itself, and particularly the relationship of housing costs to a continuous supply of mortgage financing.
In the early years after the war the leading insurance companies had large blocks of funds available for investment in mortgage financing. Indeed, they invested tens of millions of dollars in national housing mortgages. They were at the time increasing their portfolios very rapidly. In later years they have been unable to meet the demands for funds and part of that, of course, is due to the fact that portfolios are now more in balance. They have increased their proportionate holdings of National Housing Act and other mortgages which they did not have during the war years and they now follow a policy designed to maintain approximately the same ratio of different types of investments.
In 1954 the National Housing Act was amended to permit the Canadian chartered

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banks to make insured loans under the act. This was an important addition to the supply of funds for building. More recently all sources have proved inadequate.
The government of Canada has embarked upon a policy of making direct loans through its agency, Central Mortgage and Housing Corporation. This began under the previous administration and has continued under the present one. Under the previous administration the policy was that of a residual lender. In other words, loans were made in areas where private lending institutions did not for one reason or another wish to make mortgage loans. It also has provided loans at times when because of policy or because of the limitation of funds in any one particular fiscal period financing was not available through the normal lending sources.
The new government when it came into office changed the policy, as stated today by the hon. member for Nipissing (Mr. Garland), and became the big mortgage lender. Apparently it is now to return to the policy of the former government of residual lending. Like other policies of the former government this probably looks sound when considered impartially and in the light of experience.
I have no quarrel with this belated recognition of the situation if the government takes steps to encourage a continuous flow from private sources. The money comes fundamentally from the same sources, from the same pot of resources, and just because loans are made through Central Mortgage and Housing Corporation does not mean for sure that it is additional mortgage lending. Actually the government has to go into the money market and borrow funds which otherwise might, under different circumstances, have been similarly channelled into mortgage lending by the private lenders themselves.
The alarming part of the present situation is that the sum to be provided under the government's policy for 1960 is not adequate and will not do the job. The government has cut its proposed lending to half and the chartered banks are kept out of the market by government policy.


John Cameron Pallett: What do you mean by that last statement?


Paul Theodore Hellyer: I mean simply that the Canadian chartered banks will not make mortgage loans at less than the current interest rate, which they are not permitted to do at the present time under the law.


John Cameron Pallett: Is the hon. member advocating an increase in the bank interest rate?


Paul Theodore Hellyer: If the hon. member will contain himself until the end of my address he will know precisely what I am suggesting.


Mr. Ricard:: That would be something new.


Paul Theodore Hellyer: As I said, the government has cut its lending to half and the banks are not in the market at present because of government policy as outlined by the minister on Friday last. There is a substantial drop in the volume of funds available from these sources without at the same time any policy to supplement the supply by other means. The present policy of the government is not adequate and will fail.
I have told the Minister of Public Works (Mr. Walker) that he is exonerated as to everything the government has done up to the present time with respect to housing matters. He starts as of now with a clean slate. On the other hand, he will, of course, have to be held responsible for policy in the future and for the success or lack of success of whatever course the government proceeds to follow.


Mr. Nugent:: Or take the credit.


Paul Theodore Hellyer: It is only fair in these circumstances that I should make some suggestions for his consideration. They are mine and may not necessarily reflect the view of my party. The first one is a consideration of a proposal mentioned by the hon. member for Port Arthur when he spoke a few minutes ago and which was put forward by Professor J. V. Poapst, associate professor, institute of business administration, University of Toronto, when he spoke to the Ontario regional housing conference at Ottawa on May 26, 1959. I am sure that it will be agreed that Professor Poapst has no particular axe to grind except the best interests of the Canadian people.
His proposal was that the N.H.A. interest rate be freed to seek its own level in the market. The object, of course, would be to make sure that there was some supply of N.H.A. mortgage financing available at all times. The supply would vary with the interest rate. The demand for new housing also varies as a direct function of the interest rate. But at least it would be possible to plan and the industry and private individuals who seek to provide themselves with housing accommodation would know that at all times some money would be available. This, of course, has not always been the case in the past. I should like to put on the record, if I may, just a few of the considerations raised

by Professor Poapst in his paper because I think they are well worth repeating and should form part of the record. He states:
Changes in the supply of mortgage funds in recent years have varied the fortunes of builders from feast to famine. But the effects are not limited to builders. Instability in house building must raise the cost of housing above the level which would otherwise prevail. It makes house building a tenuous field of employment. Higher wage rates are required to attract labour to the feast when there is the prospect of subsequent famine. Producers of residential building materials may be similarly affected. Also, instability discourages the development and introduction of cost reducing methods of production in the building and building materials industries where such innovations would substitute fixed for variable costs.
Further on he states:
The relative inflexibility in the N.H.A. rate has the disruptive effect of encouraging speculation over changes in the rate. This tends to create a disorderly market. If an increase in the rate is expected, private lenders tend to reduce their volume of lending, and if a decrease is expected they tend to increase it.
If approved lenders are to be induced to offer a more stable supply of N.H.A. mortgage funds, the N.H.A. rate must be more flexible. It must be free to move as other interest rates move. As I have noted already, the inadequate flexibility of the N.H.A. rate applies more to increases than to decreases. One development that would materially ease this problem would be greater acceptance by the voting public of the fact that when a lender is offered two prices for the use of his funds it is perfectly reasonable for him to prefer the higher one.
In conclusion Professor Poapst summarizes the advantages of his suggestion as follows:
1.	Higher N.H.A. rates do not mean higher financing costs for everyone. It can mean lower financing costs for borrowers who as a result of the lack of N.H.A. funds would have to turn to the conventional market and to expensive second mortgage financing.
2.	Greater flexibility in N.H.A. rates tends to reduce fluctuations in the supply of mortgage funds and thereby to reduce uncertainty over the rate of house building. This, I believe, would tend to reduce the cost of housing in the long run.
3.	More freedom for the N.H.A. rate to rise would make monetary restraint, when it is necessary, more acceptable, since the burden of restraint would be more equitably distributed. This would help to limit the seemingly non-reversible increases in prices of goods and services in general, which occur in inflationary periods.
4.	The N.H.A. mortgage market is a major component of the capital market. The net amount of N.H.A. loans approved in 1958 exceeded the gross amount of corporate bonds issued in Canadian currency during the year. The more sensitive and flexible our capital market becomes, the better it channels savings into the most desirable uses, and the stronger our national economy becomes.
I cannot possibly put the case as well as Professor Poapst has. I should like to say, however, that personally I took some considerable period of time to come to the conclusion that Professor Poapst was correct in his suggestion. As a matter of fact, I considered the matter for one full year before
National Housing Act
I came to the clear conclusion that the long term advantages to the Canadian house buying public exceeded any possible disadvantage. There is, of course, the matter of timing as to when such a policy might be put into effect. If the government was not prepared to take the risk politically of such action at a time when interest rates are going up or are very high, they could effect a change the next time the rate commenced to decline and the current N.H.A. rate is considered attractive. I think that this suggestion deserves most careful consideration by the government and its advisers.
The second consideration is to encourage the establishment of a mortgage institution along the lines suggested by Elliot N. Yarmon, president of Tankoos Yarmon Ltd., to the national house builders association convention at the Royal York hotel, Jan. 13, 1960. This is another suggestion based on experience elsewhere which has some merit and which, I think, should receive consideration by the government. I realize the minister will reply this is something in which the initiative has to be taken by private enterprise. However, I believe he and his officials could at least encourage private enterprise from the standpoint of showing interest to come forward with some concrete proposals in this connection.
Very briefly, the suggestion is to establish a private company which would issue government guaranteed certificates or debentures, the proceeds from which would be invested in N.H.A. or other mortgage investments. In order that a private company would not profit unduly at the taxpayers' expense, because of the nature of the guarantee, the return on the capital which would be required would be limited to 5 per cent; that is the same principle which is embodied in the present limited dividend section of the National Housing Act. This new non-government mortgage lending institution would make loans from coast to coast. It would be a corporate body under the same rules and regulations as now govern the construction and mortgage financing of N.H.A. housing. Its lending funds would come only from the sale to the general public of bonds fully guaranteed by the Canadian government.
The mortgage lending operations of this new body would be similar to those of conventional mortgage organizations, but its interest rate would fluctuate with local market conditions, and not be frozen at any arbitrary level as the N.H.A. level. Of course, if the N.HA.. rate were freed, this qualification of Mr. Yarmon's would not apply. The equity capital of the institution would be

National Housing Act
raised from stock subscriptions by each applicant for mortgage financing, in a fixed ratio of common stock to mortgage loans. However, because the institution would be first and foremost a body created to serve the public interest, its profits would be strictly limited to a maximum of 6 per cent. I regret the error, sir, in having previously stated it to be 5 per cent.
I would commend to the government, and to other hon. members who are interested in the subject of housing, this presentation by Mr. Yarmon. I am sure copies of it are available in full if any hon. member is interested in taking a look at it.
The third suggestion is that the government introduce amendments to the Canadian and British Insurance Companies Act to permit conventional mortgage loans to a maximum of 80 per cent of the appraised value rather than 60 per cent as at present. I have taken the trouble to inquire into the experience in other countries where they have larger ratios of loan to appraised value, and the result of this survey is quite conclusive. The experience in the United Kingdom, where their building societies collect money from the public and lend it against the security of housing, is very interesting. I understand that after the war they made mortgage loans as high as 95 per cent of the appraised value, and many at 90 per cent. Even now they are making loans at 80 and 85 per cent of the appraised value. The losses resulting from this policy have been practically negligible. In the United States the experience is similar under the federal housing administration and the veterans housing administration.


David James Walker: May I ask the hon. member a question there? Are these conventional loans you are speaking about, through insurance companies and trust companies?


Paul Theodore Hellyer: No, they are loans made, at least in Britain, under the auspices of the building societies. In the United States they are under the F.H.A. and the V.H.A. However, what I am saying is that the experience of all mortgage loans over a long period of time has been very good and leads one to the conclusion that a higher proportion of loan under the conventional system would have an equally excellent record so far as losses are concerned. The risk is practically eliminated.
The federal housing administration has made loans as high as 97 per cent of the value, and with 62.9 per cent of the total loans outstanding varying between 86 per cent and 95 per cent of the value of the house their experience has been excellent. The losses have been in a category which one

might consider to be negligible. The veterans administration advises that their experience has been similar. From the beginning of the loan guarantee program in 1945 through June, 1959 the veterans administration had guaranteed 2,672,750 loans amounting to more than $28 billion to veterans of world war II and the Korean conflict for the purchase of newly constructed homes. The average purchase price was $11,640 and the average loan was $10,505. I believe that is something over a 90 per cent loan, on the average. The conclusion that they gave me was that on these guaranteed loans their losses had amounted to less than eight cents for every $100 of the original face amount. This is such a small loss, it could be considered nominal or routine. In Canada, too, under the National Housing Act the experience has been equally favourable. Losses through default have been virtually negligible. The conclusion is that loans up to 80 per cent, could safely be made without undue risk.


David James Walker: My friend is aware, is he not, that we make loans up to 90 per cent on the first $12,000 and 70 per cent of the balance up to $12,800?


Paul Theodore Hellyer: Quite, but as as the minister knows what I am talking about at the present time is the proposal that the British and Canadian Insurance Companies Act be amended to permit conventional loans being made under this act up to 80 per cent of the appraised value. I have concluded that if the government were to take that action it would not involve undue risk so far as the funds of the shareholders and policy holders of these companies are concerned. The insurance companies themselves, as the minister knows, have asked that the ratio of the loan be increased to 66 per cent from its present limit of 60 per cent. I feel that this is much too conservative, if I may use that word, and merely a small step in the right direction.
Some people raise the question, what would happen in the case of a serious depression comparable to that of the 30's. My answer to that is simply that there will not be one. I feel there are a number of reasons why there will not be one, and the first is that the system today is much different from that of the 30's. Our central banking system was just established in the 30's and today it has an area of control and support for the Canadian economy which was not present in the 30's.
In addition, the variety of social welfare payments and transfer payments, including children's allowance, old age pensions, unemployment insurance et cetera are all built-in safeguards which reduce if not eliminate the possibility of any major depression. If by

any outside chance there should be a depression comparable to that in the 1930's-and I repeat that there will not be but if it did happen-


An hon. Member:: Not with a Conservative government.


Paul Theodore Hellyer: My hon. friend says "not with a Conservative government". That would be the one exception I would make if he had not made it for me. But if it did happen, we would have revolution in Canada and mortgage paper would not be worth anything; and that would occur regardless of which party happened to be in power at the time.
I believe that 80 per cent loans would be perfectly safe. It is true that not all insurance companies would lend to that extent, even if they had permission to do so under the statute. But they could exercise their discretion within their own policy; and of course, in relation to the competition from other lenders, it would provide some real competition for N.H.A. loans because conventional loans would become less unacceptable alternatives to N.H.A. loans.
This provision would save Canadian home owners vast sums of money by eliminating the necessity for exhorbitant charges on second and third mortgages. There has been a recent debate in the Ontario house on the vicious nature of second and third mortgage practices in the province of Ontario. There have been references to it in this house also from time to time. My hon. friend and successor in the riding of Davenport has mentioned in this house some of his experiences with respect to second and third mortgages. Any step which this government could take which would reduce or eliminate the necessity for private individuals seeking funds from the present sources of second and third mortgages would be most welcome to all of the Canadian people. If something like this is not done, new investment organizations will, of necessity, be formed to fill the need and provide the Canadian people with this essential service.
The fourth suggestion, and the final one, is that the government should amend the National Housing Act in order to allow the Canadian chartered banks to make housing loans at the current rate. My friend, the hon. member for Peel (Mr. Pallett), will now realize that it is best for him to exercise some patience from time to time.


John Cameron Pallett: What does the hon. member refer to as the current rate?


Paul Theodore Hellyer: The current rate is 6f per cent. I thought my hon. friend would know that.
The chartered banks made substantial loans under the National Housing Act from 1954 to
National Housing Act
date. In 1954 they made 16,906 loans; in 1955, 34,457; in 1956, 15,896; in 1957, 15,687; and in 1958, 26,135. I do not have the 1959 figure and I do not know if it is available yet. However, the five-year total from 1954 to 1958 is over 109,000 units with a total investment of over $300 million.


John Cameron Pallett: I wonder whether the hon. member would just clarify his remarks there. Is he saying that he is in favour of an amendment to the Bank Act so that the banks may charge 6| per cent interest?


Paul Theodore Hellyer: I made the proposal on behalf of myself that the National Housing Act be amended to permit the banks to make National Housing Act loans at the current rate. I thought my hon. friend would have understood that the first time.


John Cameron Pallett: Is the hon. member not familiar with the terms of the Bank Act which restricts them to 6 per cent?


Paul Theodore Hellyer: I am quite familiar with it; but I am sure that parliament has the authority to make an amendment to the National Housing Act which would permit the banks, notwithstanding anything contained in the Bank Act, to make loans at the current rate.


John Cameron Pallett: That is in effect amending the Bank Act so they can charge 6J per cent.


Paul Theodore Hellyer: The hon. member can make his own speech after I have finished. I hope he will do so.
It has been argued that the chartered banks are not in a position to make any substantial number of loans at the present time. That may well be the situation, but they will make some loans and each additional one would be of some assistance. Of equal importance, perhaps, the banks would have that freedom of choice which would allow them to make loans or not make loans in accordance with their individual circumstances.


Mr. Regier:: Will the hon. member permit a question?


Paul Theodore Hellyer: Certainly.


Erhart Regier: Is the hon. member in favour of allowing the chartered banks to collect more than the statutory maximum of 6 per cent?


Paul Theodore Hellyer: For the third time I must repeat that in my opinion the public interest would be best served at this time by an amendment to the National Housing Act which would permit the chartered banks to make National Housing Act loans, if they are so inclined, at the current rate as set by the governor in council.


Erhart Regier: In excess of 6 per cent?

National Housing Act


Paul Theodore Hellyer: For the fourth time may I say at the current rate as set by the governor in council in accordance with the National Housing Act.


Terence James (Terry) Nugent: No matter how high?


An hon. Member:: Amend the Bank Act.


Paul Theodore Hellyer: If the government would prefer to amend the Bank Act to do the same thing, that would be their prerogative. They could present it to parliament.


An hon. Member:: The banker's friend.


Paul Theodore Hellyer: There are, of course, other steps which could be taken. Time does not permit me to elaborate. The implementation of any one of the four suggestions I have put forward today would help the situation materially. The implementation of all four would help immeasurably. I urge the government to give careful consideration to these suggestions designed to stabilize the housing industry and to reduce the cost of new housing to Canadian home purchasers.


Mr. H. M. Horner (Jasper-Edson):: I should like to say a few words on the second reading of this bill with regard to the particular problem which we find prevalent in the rural constituencies. I speak of constituencies such as my own in which the largest town has a population of perhaps 5,000 and no more. I have several towns, of course, with a population in the range of between 3,000 and
5,000.	I would suggest, first of all, that I am completely against the suggestion put forward by the hon. member who has just spoken with regard to altering the interest rates in order to allow the bank to enter more actively into the field of housing and mortgage loans. One reason is that the banks, when they were active in this field, did not do very much in the smaller communities across this country with regard to loans for housing. I think the same comment applies to some of his other suggestions. Quite frankly, I may say I was a little bit disappointed that he did not have some better suggestion with regard to the housing situation.
I should first of all like to commend the minister on this further step in our housing policy, for with this policy has come a great deal of prosperity to my constituency. For the first time under this act we are now having some loans given to the smaller communities in western Canada. From figures in this regard it can be shown that prior to 1957 the National Housing Act was operated in the interests of large metropolitan areas and in the interests of the vested interests, the larger contractors and had little regard for the small home owners in our smaller
[Mr. Eegier.l
communities. For instance, in 1955, 14 direct loans were given out. In 1956, somewhere in the neighbourhood of 375 direct loans wert given out. In 1957 there were 2,814 direct loans as such, not including the great number of agency loans which did go out into the rural areas as well. In 1958 the figure is again over 2,000 in direct loans.
This question of direct loans through Central Housing and Mortgage Corporation is important to the people who live in the smaller communities, because this is the only type of N.H.A. loan which in many instances they have been able to get, and I would like to commend the government for their policy and especially the minister for his statement of Friday last with regard to what he intends to do this year in parliament.
We have a particular problem in our area in that the approved lenders, particularly the insurance companies, absolutely refuse to go out to the smaller towns. The reason is not that they feel these towns do not have a stable future because they have; the reason very simply is that there are not enough loans there for them to bother with. It would not even pay their overheads when there are, say, just five or six loans in each of these towns across Canada. That is the difficulty of people in our smaller towns.
As the hon. member for Port Arthur (Mr. Fisher) suggested, the number of N.H.A. loans was practically negligible up to 1957, and then for the first time we had builders' loans under the agency system being offered to our smaller contractors in our smaller communities. This is an important development and one which I would like to see carried on. This government has done more for housing than any other government has ever done. I do not mean in just the metropolitan areas by large contractors; I am referring to what has been done for all the ordinary people across this country, which is to me the important thing. It is all very well to develop a policy whereby the big contractors get loans to build perhaps a 1,500 house subdivision, but this does not do the ordinary people any good who just want to build a new home but cannot get any mortgage funds.
This government has made it possible with its farm credit policy and' the changes in the Veterans' Land Act for the farmers and veterans to build better homes, and I would like to make a suggestion to the minister in this regard. I would suggest that he give special consideration and study to the problem of home building in our smaller communities which are now developing in western Canada. They are stable and will continue to grow, but they need help with regard to



[Stage Direction]
mortgages. My suggestion would simply be that the corporation look into making a policy with regard' to issuing builders' loans, perhaps up to six at the most, to any one builder in these smaller communities. As I was saying, the ordinary approved lenders hesitate to go into these areas. My contention is that it does the nation as a whole no good to become concentrated in great masses of metropolitan activity. We will lose our individualism and our precious qualities of resourcefulness if we give way to routine living.
This step might also be considered in conjunction with the problem of rural redevelopment. In the United States they have a program of rural redevelopment, and they have worked into their program the whole question of federal mortgage funds for homes in rural areas. In Canada this would keep our employment force at home. It would not swell the job seekers in the larger areas, and would provide a labour force for our farming areas which usually surround our towns. Needless to say it would be a boon to the small businessman in these towns and would be a factor in keeping the economy of Canada more level all across the country.
Mr. Speaker, one other matter before I sit down, and it is with regard to the question of housing for our senior citizens. We in Alberta have been primarily concerned with this because of the failure of the provincial government to provide adequate housing for our senior citizens. They have now embarked upon a scheme of building institutions across the province, but they are not meeting the needs of our senior citizens in that area. They have steadfastly refused to co-operate with the federal government and Central Mortgage and Housing Corporation on any limited dividend scheme to provide housing for our senior citizens. I do hope that they will reconsider this and will enter into this co-operative scheme even to the point of supplying grants to communities who would like to set up limited dividend corporations and build houses for the senior citizens of our province. They have got the idea that they can take our senior citizens, institutionalize them and stick them on a shelf all across the province.
I have had some experience in dealing with our older citizens, and it is my opinion that a requisite of any type of housing for our senior citizens is something to maintain the dignity and independence of these people, not to put them into an institution or a home which is later to be run by the government. They require independence and individualism, and we cannot get this by a system of institutionalized housing.
National Housing Act
These are just a few points with regard to the question of this industry as it applies not only to my riding but I daresay to all rural ridings across the country. I hope that the minister will give us special consideration. We do not want treatment different from anybody else, but we would like to be able to provide homes for our people in our smaller towns, because as I have said the approved lenders refuse to go into these towns. We would like a source of funds by way of direct builders loans, and I suggest something like four or six loans per builder could be made in these smaller areas.
William Arnold Peters: Mr. Speaker, I would like to say a few words on this subject as it affects my area in particular. I was very surprised last year when I made an application for a branch office of Central Mortgage and Housing Corporation to be located in my home town where considerable building is going on and was informed by the department that there have only been 13 houses built there in the last two years with loans provided by Central Mortgage and Housing Corporation, the rest being provided by private and other sources. On making inquiries I found that these people who are borrowing money from private sources on second mortgages are in many cases paying as much as 13 per cent; and on the $2,000 or $3,000 which they borrow they pay upwards of $1,000 by way of bonus in order to get the money in the first place.
While it is true that there is no justification for moving Central Mortgage and Housing Corporation's regional office into that area because of the number of houses which were being built there, there was probably good reason to move in because so many houses were not being built under this particular act.
These houses being built are for low income people. In the main they are earning less than $5,000. Taxation statistics in 1957 indicated that 62 per cent of the wage earners in that year earned under $3,000. Under 71 per cent earned less than $3,500, and it has been pointed out that to get a $10,000 mortgage you must have an income of at least $3,500. For a mortgage of $12,000 you need a minimum income of $4,360. So it is quite obvious why the people in my area are not able to build Central Mortgage and Housing Corporation homes.
It was mentioned this afternoon that some people, and I was one, were very pleased when the government announced that they were going to build a minimum standards home for people in the low income groups. Central Mortgage and Housing Corporation put out a booklet in which they outline what

National Housing Act
they expect will be in this minimum standards house, and I would like to read one sentence from the cover of this little bulletin which is as follows:
Most houses built under the N.H.A. exceed the minimum standards in a number of ways. To reduce building costs some of these features-such as bathroom, basement and electrical wiring-can be omitted without impairing the soundness of the house.
I have often wondered why in some provinces, including the province of Saskatchewan, they have a rural sanitation program where they instal bathrooms and kitchen sinks in houses. I presume the type of houses in which they are installed are the minimum standards type which Central Mortgage and Housing Corporation is going to build. These are not non-essentials. I would think they were essentials in a new house. If I am going to pay $10,000 to buy a house I would at least want a bathroom, and I think I would like some kind of basement as well. If not, I think I would go back and live in a wigwam.
It is quite true, as the previous speaker has pointed out, that the government and its supporters are worried about housing. The average Conservative member does not want to become too involved in the field of housing; he does not want the government to be in a position where it is controlling any of the aspects of private enterprise. We see in housing a field where private enterprise has deserted the task, left it so completely that the government was forced to put money into it, and now hon. members are complaining that the government is having to put money into it at the rate of 6 per cent.
Obviously something is being done in the high interest class, but nothing in the low interest class. If an attempt is made to get houses built under the old scheme of things the interest charged will be comparable with the interest now earned on second mortgages, which is 13 or 14 per cent plus a bonus. I hope the government will never encourage those who lend money at rates of interest such as those.
I further suggest that the government should make no attempt to encourage the construction of the house itself by leaving out such items as a bathroom and a basement. We should be able to build a fairly good house for the low income wage earners of this country, one that will serve the purpose of a fully equipped house, for between $10,000 and $12,000.
I should be happy if the government would send some of its officials into the town of New Liskeard with a view to establishing a plant there for the building of prefabricated houses. At the present time we have there a multi-million dollar woodworking plant. It

is a plant which people familiar with this business claim can build between 300 and 400 prefabricated houses per week. Once it employed a staff of 500 people, but now there is only a token staff of 20 or 30 people there. We can build prefabricated houses in New Liskeard. We have built them for Newfoundland, and demonstrated the capacities of this plant by so doing. We build a good house-a complete house-and at much less than the going cost of Central Mortgage houses.
No consideration has been given to the problem of financing as it affects people who earn low wages, particularly young married couples. Young people who have recently been married have to face a particularly expensive period of their lives, a time of their heaviest responsibilities. In most cases the husband has lately started in a job which he hopes to build up as the years go by. The needs of a growing family make it necessary to have a house with three or four bedrooms, and these people cannot just afford to buy one.
It cannot be too difficult for us to plan ahead for a few years and build houses which could be financed over a period of 50 or 60 years. The young couple could pay on this large house until their family had grown up, after which they could move out of that house, taking the equity that they have established with them, and pay for a fully paid-up small house which would suit them in their declining years. It always seems to me that we do not make plans to supply the needs of the Canadian people. We should not be too interested about maintaining the interest rates obtained by the lending institutions. They will look after themselves. But we should be very concerned about the provision of low cost housing. It seems to me that this is a field in which only the government can provide the answer and that we shall have to build once again in the class of $6,000 or $7,000 or less at a low rate of interest and with a minimum down payment.
If we do build such houses, let us economize where it is proper to do so, not by leaving out plumbing and electric wiring. It seems to me that we can solve this problem if we really try to do so and if we plan accordingly. I think we must face it today that the government will have to undertake complete responsibility for the financing in the low cost housing field. The money is not being supplied through the banks or through the lending institutions. Parliament does not seem to want to force the insurance companies to put a certain amount of their funds into low cost housing. If we do not want to do it this way, then I think that we ourselves must put more money into these things.

It is almost five o'clock, but I should like to point out that in Elliot Lake we have done all that the government hopes to do. We have built these houses, costing $15,000 or $20,000, and now we find that according to the newspapers people are locking the doors and handing in their keys. We have suggested many times that there should be disaster insurance schemes so that people living in these areas of unemployment are not forced to lose whatever money they have put into their homes; that there should be some method by which they could recuperate their losses either through insurance of this disaster type or through guarantees. I think this was one case where Central Mortgage knew something that the rest of the government did not realize, namely that there was going to be this problem in Elliot Lake. They took the opportunity of protecting themselves. I think they should have taken the opportunity, also, of protecting the people who were buying their houses. There are too many people in that area living in houses under mortgages with the Central Mortgage and Housing Corporation who are going to be faced with the complete loss of their equities.


Mr. Speaker:: I regret to interrupt the hon. member, but it being five o'clock the house will proceed to the consideration of private and public bills, the former having precedence, pursuant to section 3 of standing order No. 15.



PRIVATE BILLS

Mr. Small:: I should like to obtain the unanimous consent of the house to deal with Bill No. S-17, item No. 146 on the order paper, an act respecting the National Sanitarium Association. I assure hon. members that there is nothing contentious about it.


Mr. Speaker:: The hon. member for Dan-forth proposes that the house should deal first with item 146, and that it should have priority over the other items on the order paper.
Is the house agreeable to this proposal?


Some hon. Members:: Agreed.



NATIONAL SANITARIUM ASSOCIATION

Robert Hardy Small: the second reading of Bill No. S-17 respecting the national sanitarium association.
He said: The national sanitarium association is asking for an amendment to their charter. The charter was originally granted to give them the right to treat tubercular pulmonary cases. They did such a good job in arresting this plague, which was called consumption, with their treatment and the
Private Bills-Divorce
putting of health station units throughout the provinces to make early diagnoses of cases. With the use of the new antibiotic medicines available they have arrived at the position where they now have vacant beds and are treating other tubercular cases such as tubercular kidneys, tubercular joints, tubercular livers and other physical ailments. They seek an amendment to the act to enable them to continue what they are now doing.
They recognize the fact that there could be a resurgence of the disease which they have almost eradicated. This has happened with the use of the insecticide D.D.T. Insects have developed a resistance to the insecticide and are making a comeback. The association will always be equipped and ready to combat tuberculosis.
The reason I am sponsoring the bill is that I had a long association with Mr. E. L. Ruddy, whose chief interest in life, other than his business, was the national sanitarium association and its fight against tuberculosis. He devoted the greater part of his life to this work. He died last year. Because of his interest I took the liberty of sponsoring the bill in the house.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the standing committee on miscellaneous private bills.
Mr. McCleave:: Mr. Speaker, I wonder whether the next order to be called should be order No. 73, "house in committee on Bill No. S-9, respecting the Canadian Public Health Association." The hon. member for High Park (Mr. Kucherepa) asked me if I would attempt to have this dealt with this afternoon.


Mr. Speaker:: Before proceeding with the agenda placed on the order paper, the hon. member for Halifax requests that the house take item No. 73, which is "house in committee on Bill No. S-9, an act respecting the Canadian Public Health Association". Is the house agreeable to giving priority to this item?


Some hon. Members:: Agreed.



CONSIDERED IN COMMITTEE


[Stage Direction]
Bill No. S-9, respecting the Canadian Public Health Association,-Mr. Kucherepa.

[Stage Direction]
The house in committee on Bill No. SD-25, for the relief of Georgette Rosenberg Korman -Mr. McCleave-Mr. Flynn in the chair.
On clause 1-Marriage dissolved.
Mr. Howard:: Mr. Chairman, this is one of those instances where there are no children

Private Bills-Divorce
of the petitioner and the respondent. Consequently, it is a case with which one would have less concern than those cases where there were children involved. I say this for the reasons I have set out on other occasions. This is also an instance where private investigators were involved. As a result of their investigations they produced certain evidence which was presented. The investigators were Gerard Daigneault and Clovis Paquette.
There is a bit of difference in this particular case, which should concern this committee, as compared with others which the committee has concerned itself with previously. I only make reference to this in order to make a comparison. In other cases some of the evidence given was very scanty. Scanty questions were asked by other counsel for the petitioner, or by hon. members of the subcommittee of the other house who dealt with the question. In their very light questions they did not attempt to get too much out of the extensive information which might be available. But in this case I find that counsel for the petitioner, Mr. A. H. Lieff, Q.C., of the city of Ottawa incidentally, and hon. members of the other place also, seemed to attack this case by questioning in a more insidious manner than they had in the past. I submit this is probably the type of examination which might have gone on in one of the courts of our land if this particular case had come up in one of the provinces where it is possible to obtain a divorce through the courts, where, incidentally, these cases should be dealt with.
In this case there was extensive questioning. I make reference to it in order to draw a comparison and to express wonder as to why in this instance, compared with others, there was this desire to elicit particular information. I make reference to page 11 where Mr. Lieff, Q.C., counsel for the petitioner, asked questions of the petitioner herself. Incidentally, this was after questioning on other matters had gone on previously. But to some extent this went to the question of whether or not there was collusion, whether or not there was any arrangement, whether or not any discussions were held between the respondent and the petitioner and so on. Dispensing with the questions relating to the success of attempts at reconciliation and so on and dealing only with those questions relating to the matter of arrangements or collusion between the parties we find these questions asked by Mr. Lieff:
Q. Is there any understanding between you about it?
A. No.
Q. Did you connive at the adultery? Did you scheme about it or plan it or arrange it in any way?
A. No.
Q. Or did you have anybody arrange it for you?

A. No.
Q. Did you put any woman in his way to attempt or trap him?
A. No.
Then he goes on to deal with their relationship and it has nothing to do with the question of making any collusive arrangement. The questions are very clear. The petitioner was not merely asked, as occurs in some cases, "Did you make any arrangements", but was asked quite definitely whether she had schemed about it or planned it or arranged it or connived at it. A variety of words were used to inquire of the petitioner whether there was any possibility of collusion. Then the chairman of the committee, Senator Roebuck, asked a somewhat similar question but different to some degree:
Q. Is there any arrangement between him and you with regard to the bringing of these proceedings?
A. No, there is no arrangement.
In view of the detailed examination with respect to collusion, connivance, arrangements or making plans or agreements about bringing the case before the committee of the other place and with respect to the events leading up to the petition for divorce, one wonders, especially when the same counsel is involved in other cases, why other cases are not conducted with this desire to bring out in definite form the evidence with respect to the question of collusion or connivance. I am not saying that there was anything particularly wrong in this case. It is a rather unfortunate case and it appears that for some time marital relationships between the couple had been rather strained. From the evidence given apparently one of the parties was not desirous of pulling his full weight, as a partner in a marriage should, to try to make the marriage function properly. There was a lack of effort on the part of the respondent to provide adequately for the support of his wife.
While these things in themselves would warrant questioning whether this was the proper marital relationship that should exist and while the investigators went quite extensively into what they discovered when they visited a particular place, I submit that there is no evidence of adultery. There is evidence of conditions that one might normally expect to exist if adultery were about to take place or had taken place in the past or at that particular time but there is no evidence with respect to adultery itself. This is shown on page 13 in the questioning by Mr. Lieff of one of the investigators, Mr. Gerard Daigneault, who appeared as a witness on behalf of the petitioner. After being sworn and testifying as to his name and so on he was shown a photograph and asked to identify the person. Mr. Daigneault identified him as the

respondent and then made reference to the things he discovered. He referred to verifying certain information relating to the individual in the photograph and went on to say, as found on page 12 of the evidence:
-on September 14, 1959, accompanied by Mr. Paquette, we proceeded to 132 Fairmount avenue west, Montreal, apartment 2, at approximately 11 p.m., where, after knocking on the door a few times, the door was answered by Mr. Korman.
He makes reference to the respondent being attired in pyjamas and slippers. Then he continues:
After identifying ourselves to him we walked into the entrance, and there he wanted to talk to us in the living room which is on the righthand side. I told him that I was there on behalf of his real wife and that I wanted to see and talk to the woman who was in the bedroom.
Incidentally I might add that prior to this time there is no evidence given whether or not there was a woman in the bedroom or as to how the investigator knew there was a woman in the bedroom or anywhere else on the premises. He merely starts off by saying that on a particular day they went somewhere, knocked on the door and asked to see somebody whom they said was there.
I opened the door of the bedroom myself, and I put on the ceiling light in the bedroom myself, and in a double bed on the righthand side was the woman we had seen him with previously. At that time I went to her and asked her her name and she answered me: "Rosina di Kago''. I asked her where she was living and she said: "806 Stuart avenue, Montreal".
Q. How was she dressed?
He starts to reply and then hesitates.
A. She was kind of-I saw the top part of the pyjamas on her-
And so on. Then he says there was only one bed and it appeared to have been occupied. From the evidence given by Mr. Daigneault I would say that this is another instance where the conditions were such in the particular apartment that adultery may have taken place and could have taken place either then or before or after. But in fact there is no evidence given that adultery did take place. This is a rather keen issue in some of these cases and makes one wonder whether we are in fact asked to grant divorces on the basis of adultery or on the basis of conditions which we can easily interpret according to our own way of thinking and say that adultery may have taken place when in fact we know no such thing. We only know that certain conditions existed which under some circumstances and with a certain relationship between a man and a woman might have led to or resulted in adultery but in this particular case we know no such thing. There is not one reference to it in the evidence, except for an individual reference to the arrangements in the bedroom, and so
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on. There was a later reference to a studio couch having been there, which was elicited after questioning by counsel for the petitioner.
Then there is the factor of the cost of obtaining a divorce in this particular medium. I have been told, and it has been mentioned in this house, that there is a minimum- of course it can vary-cost of somewhere in the neighbourhood of $2,000 or $2,500. This amount is variously divided between legal fees, a certain amount toward expenses in connection with the activities of the investigators, a certain amount for incidental expenses and the cost of filing the petition itself in the other place which has been established, as I understand it, at $210.
There is a reference in here to the amount of income the petitioner has at the moment. There is a reference to when this couple separated. There is a reference to when they were married, which was October 23, 1955. According to an answer given on page 10 they separated at the end of July, 1959. Questions were asked of the petitioner with respect to support and income. I quote from page 10 a few questions by Mr. Lieff, counsel for the petitioner:
Q. Then, what happened? Did he leave you or did you leave him?
A. I left him.
Q. Yes. While you were living with him, did he support you?
A. No.
Q. Who did support you?
A. I supported myself.
Q. And who supported your husband?
A. I did, in the beginning.
Q. You did, in the beginning?
A. Yes.
Q. Has he supported you since the separation?
A. No.
Q. What is your occupation?
A. Clerk.
Q. How much do you earn?
A. $75 a week.
Q. Did you take your husband to court to get any support from him?
A. No.
Q. Does he give you any money?
A. No.
There is a question later by the chairman, Senator Roebuck, as to the occupation of the husband and the answer is that she does not know because he has not been working since 1958. Then, Senator Bradley asks:
Q. He lived off you, in other words; is that it?
A. Yes.
Here is a couple who have been married since 1955 and the husband has not been working since 1958. The petitioner by her own evidence indicates that she supported her husband in the beginning. I would imagine that would relate to the beginning of their marriage, and this would indicate that her income had been pretty well exhausted. She was earning $75 a week. I think one is

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entitled to ask, where would this young lady-unless she has other means-dig up $2,000 or $2,500?


Mr. Lambert:: You don't know.


Mr, Howard:: Of course, I do not know; if I knew I would not be asking.


Norman Platt Lambert: Why say $2,500?


Charles Benjamin Howard: Do you know of a better figure?


Norman Platt Lambert: What is the proper figure?


Charles Benjamin Howard: If you know it, tell me. My hon. friend knows no more about this question than he does about a lot of other questions-


Norman Platt Lambert: Wasting time.


Charles Benjamin Howard: I would suggest if my friend wants to participate in discussing these things he should do so in the proper manner.


Norman Platt Lambert: An insult to parliament.


Charles Benjamin Howard: An insult to the House of Commons?


Norman Platt Lambert: That is what you are doing now.


Charles Benjamin Howard: I submit that the bringing to the House of Commons and to the other place these divorce petitions from two provinces in Canada is an insult to the House of Commons and an insult to the Senate. Insult, indeed. It is merely as a result of an invitation from the Minister of Public Works that we, in this house, are engaged in wondering, questioning and looking into them. One is entitled to wonder as to where, in circumstances like these, the money would be acquired, especially when one considers this young lady is earning $75 a week and has contributed to the support of her husband as well as supporting herself. He was not working, whether by design or circumstances, I do not know. It makes one wonder. I am not casting any reflection upon the evidence given by the petitioner herself. The evidence is there, and it is clear. She made no arrangements. She did not connive; she did not plan or scheme or arrange in any way for this divorce.
I wonder whether, without her knowledge- because the respondent is not here-through some other means, he has made arrangements. I wonder whether he has a source of income which he kept hidden from his wife during the period they were living together, or whether some arrangement was made between him and the investigators to provide the proof, not of adultery, but of circumstances under which it might reasonably be assumed adultery had taken place. I do not wish to cast any reflection upon the committee of

the other place. We know that it, too, with some 500 or 600 similar cases to deal with, has not the time to inquire as fully as they might like into all the circumstances surrounding any particular case that comes before them. I would certainly suggest that counsel for the petitioner in other cases, and hon. members of the other place on the subcommittee that deals with these matters, might use the evidence given in this particular instance as a guide for their conduct in the future, and attempt to establish these facts as they have established them in this case. There should not be any doubt left as to whether or not there is a possibility of collusion or something else with respect to the various cases.


Norman Platt Lambert: I think one must call a halt here. All day yesterday and today we have listened to people being smeared by innuendo during these discussions, doubts cast upon people who are not here. I submit these innuendos would not be made outside of this house for fear of libel. I would suggest to you, sir, that this procedure we have been witnessing this afternoon and yesterday is an insult to the members of this house. With all due respect to you, sir, these proceedings have been highly irrelevant to the question of whether or not a divorce should be granted on the grounds upon which it is usually granted.
It is not the practice of this house to determine the question of custody of the children. We have no jurisdiction over that matter nor over the matter of maintenance. Those have never been questions for consideration in the House of Commons. I would suggest to you, Mr. Chairman, that we would be far better off if we continued. If hon. members wish to discuss these things, I suggest that the members who are now criticizing attend the committee meetings and prepare themselves for them instead of raising a great number of asinine points in this chamber.


The Chairman:: Does clause 1 carry?


Charles Benjamin Howard: May I make some comment? I hope that you, Mr. Chairman, will allow me at least the same latitude that you allowed the hon. member for Edmonton West who was more irrelevant on this particular question than any other hon. member has been on any of these items that have yet been discussed. He makes reference to sneers and innuendos and to how this is an insult to the house. However, I am sure my hon. friend appreciates the fact that these are separate bills. This House of Commons is charged with the responsibility of dealing with them.


Norman Platt Lambert: Oh-


Charles Benjamin Howard: I should have thought my hon. friend would have exhausted his comments while he was standing up. He will notice that I did not interrupt him. Perhaps he will extend to me the same courtesy. If he would like to make some other comments later on, I am quite sure he will have no difficulty in having the Chair recognize him.
The hon. member made reference to the procedure and suggested that this is not the proper procedure. But in no instance did he express any thought as to what should be done. I am sure he will agree with me in this. I know many of his colleagues with whom I have spoken in private will do so. I do not want to divulge their names. They themselves can so indicate if they desire to do so. I am sure he will agree that this is no place to be dealing with divorce.


Mr. McDonald (Hamilton South):: Then why deal with it here? Why do you not deal with the bill?


Charles Benjamin Howard: My friend the hon. member for Hamilton South will have an opportunity to make some gentle comments rather than this brash outburst we have just heard. This is the procedure that we have to deal with. This is the arrangement. This is what exists at the moment. I for one would welcome nothing better than to get this particular case that is before us, for instance-the situation leading up to it, the evidence and everything else -out of the hands of parliament entirely and into the place where it should properly belong, namely in the hands of the provincial jurisdiction. That is what I want to do. In this particular case we must deal with it because it is here.


Jacques Flynn: Order. I think I have given the hon. member the same latitude that was given to the hon. member for Edmonton West. From that point on I hope the comments will be relevant to the bill.


Charles Benjamin Howard: Yes, Mr. Chairman. My friend the hon. member for Edmonton West made reference to the custody of the children. May I point out to him that there are no children involved in this case.


Jacques Flynn: Order. I indicated to the hon. member that I thought he had had the chance of replying. As he says, if he did mention children in his remarks, it is not relevant and I do not think he needs to answer in every detail all that was said by the hon. member for Edmonton West. Again I say to the hon. member that his comments are not relevant and that I hope from this point on he will be relevant. Otherwise I will have to ask hon. members to resume their seats.
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Charles Benjamin Howard: I wonder whether I might raise a question of privilege, Mr. Chairman? I am not casting any reflection upon myself. I know you wanted to allow the hon. member for Edmonton West an opportunity to express his opinion on and his attitude toward this case and you allowed him some latitude. I think it was a correct thing to do. But in the future, Mr. Chairman, if such irrelevant comments are made, I hope you will take the opportunity of first drawing the fact to the attention of the other hon. gentleman who is speaking. I merely raise this as a question for the future guidance of the entire committee so that all of us may understand that we must be relevant to the bill. I am quite sure that in my initial discussion of this particular case I was in all instances relevant to it and only made reference to other cases for purposes of comparison, and then in only a slight way. I hope that all hon. members of this committee will restrain themselves from wandering as far afield as did my friends the hon. member for Edmonton West and the hon. member for Hamilton South.


[Stage Direction]
Clause agreed to.
Preamble agreed to.
Title agreed to.
Bill reported, read the third time and passed.

[Stage Direction]
The house in committee on Bill No. SD-27, for the relief of Helen Kurtzman Bernard- Mr. McCleave-Mr. Flynn in the chair.
William Arnold Peters: Before you call Bill No. SD-27, Mr. Chairman, may I ask what happened to Bill No. SD-26? Why are the bills not in sequence?


Robert Jardine McCleave: If the hon. member had attended the committee meetings he would have found out the reason. Some of the bills are being held up for consideration.
On clause 1-Marriage dissolved.


William Arnold Peters: In Bill No. SD-27, the 36th
report of the Senate committee, we have another case that involves investigators. I would point out to you, Mr. Chairman, that there is a great deal of similarity in the operations of these particular private investigators referred to in this case. First, I should like to ask a question of the sponsor of this bill. In looking at the preamble which states what is involved in this bill, I find at page 5 of the submission to the hon. members of the Senate of Canada in parliament assembled, the following:
The petition ... humbly showeth: . ..
5. That your petitioner ever since she discovered that the said Herman Bernard had committed the

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said adultery, has lived separate and apart from him, and the said Herman Bernard has not since cohabited with your petitioner.
I should like to ask the sponsor of this bill whether this is not a correct statement. If there has been some close relationship between the petitioner and Herman Bernard does that mean that this bill is not acceptable to the house?


Robert Jardine McCleave: I think the established point of law is that if, after she found out that he had been unfaithful to her, she had then had sexual relationship with him she would in effect be condoning the offence, that is to say, forgiving him or letting bygones be bygones.


William Arnold Peters: From the lawyer's point of view, would that mean that we would not be allowed to grant a divorce?


Robert Jardine McCleave: If that fact were established, a divorce should not be granted.


William Arnold Peters: Mr. Chairman, in this business it would be advantageous if one were a lawyer. I should like to point out that the grounds for the adultery as charged in this particular case could just as easily have been presented as having taken place between the petitioner and her husband. Let us examine what happened according to the witnesses in this case. Let us even go a little bit further back and find out how she found out that the husband was supposed to be engaged in extracurricular activities. Mr. Wright, her lawyer, as reported at page 10 of the Senate evidence, asked the following questions:
Q. Would you please tell the committee how your marriage went?
A. Well, in September when we were married, for the first month, it was quite all right. During the second month of our marriage he came home one day and told me he had to take some buyers out.
Q. Buyers?
A. Yes, for the firm, and I understand this was going on for a month or two. While he was taking out the buyers he would be coming home at 3 or 4 in the morning, and this went on for three or four times a week. I told him I did not like staying alone in the apartment by myself until 3 or 4 o'clock in the morning, and I asked: "Why does it have to be that late?" Well, he answered me very briefly. He told me it was none of my business. He has to take out the buyers and that is all there is to that. I found out that the buyers were mostly women.
Q. This is as a result-you cannot tell us what anybody else told you, but I assume this is as a result of what you were told by someone else?
A. Yes.
Then it goes on. Apparently she went to a lawyer, a Mr. Adessky, and hired him. He asked her if she would like to get some evidence and have her husband's conduct investigated, and she said she would. She gave him a photograph of her husband and told him where her husband worked. This

information was subsequently turned over to the investigators, with the information of the license plate of her husband's car and also the type of car it was.
This is what happened according to the evidence of the detectives. Mr. Peter Rosen appeared as a witness on behalf of the petitioner and having been duly sworn he testified as follows:
By the clerk of the committee:
Q. What is your name?
A. Peter Rosen.
Q. What is your age?

Q. Where do you live?
A. Montreal.
Q. What is your occupation?
A. Investigator.
By Mr. Wright:	.
Q. Mr. Rosen, I show you a photograph, being exhibit 2 in these proceedings. Have you seen that photograph before?
A. Yes, that is Mr. Herman Bernard.
Q. From whom did you receive that or who showed you this photograph?
A. I received it from Mr. Adessky, a lawyer in Montreal.
Q. Did you conduct an investigation concerning this man?
A. I did.
Q. Will you please tell the committee what investigation you made?
A. I investigated the conduct of Mr. Herman Bernard from March 13 until April 25, 1959. During that time I saw Mr. Bernard on several occasions and I found that he was seeing a certain woman that lived at 1230 Fort street.
By the Chairman (Senator Roebuck):
Q. That is of your own knowledge?
A. Yes. I followed him there, and I saw him go into the apartment on several occasions prior to April 25, 1959. I also saw Mr. Bernard with the same woman attending a movie one night during the time of investigation.
By Mr. Wright:
Q. Did you see Mr. Bernard on April 25, 1959?
A. Yes sir, I did.
Q. Will you tell the committee about this?
A. I was parked near his home at 5753 North Mount street, Montreal. He came out of his home at approximately 8 o'clock.
Q. In the evening?
A. In the evening. And he got into his car, a 1958 Chevrolet sedan, and drove down town and then went into the apartment building at 1230 Fort street. I parked my car and followed him into the apartment. He went again into apartment C -this is the third time I saw him going into that apartment. I waited around until 10 o'clock and neither Mr. Bernard nor the woman came out of the building. I taped the door of the apartment and went down to the comer and called my man. As a result of that call my man met me in front of the building.
Mr. Chairman, here is a case once more where we find, in my opinion, an invasion of the privacy of	the individual. It
turned out that this Mr. Spevack is a salesman who this investigator was able to call upon any time he wished, and it raises the question of what type of salesman he is when he is available at any time of the day or night. The evidence goes on:
Q. What was the name of your man?

A. Mr. Spevack. He met me at around 11 o'clock or shortly before 11 and we both went into the building. I rang the bell of apartment C.
Q. Had the tape been removed? You rang the bell downstairs?
A. No. We checked the tapes and found they were intact. I rang the bell, and it took a few minutes before a woman came to the door and she opened the door for us slightly.
Q. How was this woman dressed?
A. She had a bathrobe on. Before opening the door she asked who was it. I told her I had a telegram for Miss Grevatt, which was her name. It took another few seconds before the door was opened and she put her hand out to take the telegram. As that happened my man and myself pushed the door, and we were in the apartment. The woman started to yell for us to get out. I told her I wanted to see Mr. Bernard. As we were in the apartment, we pushed passed her and into a bedroom-it is a very small apartment, a living room, bedroom and kitchenette.
We have another case here of the investigators lying to get into the building, and once in there, of using rough arm tactics to push the door open after it is unlocked, to push the woman to one side, and to enter the bedroom without any justification whatsoever. Let us go on with the evidence. It continues:
Q. The same man whose picture I showed vou Exhibit 2?
A. I showed him the picture I had with me, this picture, and I asked him if this was his picture and he was Herman Bernard. He admitted it was his picture and that he was Herman Bernard.
Mr. Chairman, the Senate does not appear to be very interested in whether this method of entry was legal or illegal, or whether they used false pretences in gaining entry.


Jacques Flynn: Order. The hon. member should know that he must not refer to conduct of the other place, and I would ask him to avoid all reference to the proceedings in the other house. I would also ask the hon. member if he would end my torture and indicate what conclusions he is arriving at with the quotation of all this evidence.


Mr. Thomas:: Mr. Chairman, I would like to raise a point of order at this time. This item, No. 72 on the order paper, which is now before the committee states as follows:
House again in Committee of the Whole on the following sixty seven Bills:-
It is well known procedure in past sessions that after these divorce bills have come to us from the other place and have been considered-


William Arnold Peters: Mr. Chairman, on a point of order-


Some hon. Members:: Sit down.


William Howell Arthur Thomas: Mr. Chairman, when these bills have been considered by our committee, they have been dealt with en bloc, in groups. Special bills have been selected for individual
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treatment, but apparently this item No. 72 implies that the house is again in committee of the whole, and then it says not "on the following bills" but "on the following sixty seven bills". I would ask you, Mr. Chairman, to rule that we deal with these 67 bills in one group instead of individually.


Charles Benjamin Howard: Mr. Chairman, may I make a comment on the point of order raised by the hon. member. I think the rules of the house are such-clearly such-that these bills are individual bills commonly referred to as private bills. They relate to divorce, and our rules allow that we deal with them, and must deal with them unless by unanimous consent we waive the rules of the house, one by one. In the past we have by unanimous consent dealt with them as a block, although in some cases that has not been done. As far as I can gather from the books I have referred to, this practice dates back to 1925 and 1926, where they were dealt with seriatim, one by one.
I am sure, Mr. Chairman, you will find that the rules of the house are such that they must be dealt with as separate bills.
Second, just because on other occasions committees in this house or in the other place have dealt with divorce bills by using the process of automation is no reason why we in this committee should follow the same practice. I am sure you will rule in that light, Mr. Chairman.


Jacques Flynn: I think it is well known that to study all the divorce bills together requires unanimous consent, and that is the reason we are studying them one by one- because some hon. members have objected to giving unanimous consent. Therefore, I cannot entertain the point of order.


William Arnold Peters: Mr. Chairman, you inquired before this point of order was raised as to what point I was making. I was examining the grounds given for this adultery charge; how the evidence was obtained, the calibre of the witnesses in this case, and how it compared with what I would imagine to be more honest evidence given in other instances. The report goes on to describe the situation.
Q. Did the bed appear to have been used by one person or more?
A. It had two pillows on it and it was pretty well disarranged.
No conclusion, obviously, could be drawn from such a statement as that. The record continues:
Q. Did you see any other clothing in the room?
A. Yes, there was men's and women's underclothing in the room.
Q. Is it possible that the woman you saw was the lady sitting next to me?
A. No, it wasn't the same woman.

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Here we have a case where evidence is given by two people, one of them a detective, or an investigator, whatever that really means, and the other a salesman, whatever that means in this context. They break into a house under false pretences, boldly push their way in, and by doing so they establish that they are not law abiding citizens in the common sense of the word. Then they suggest that because the man is not fully dressed and the woman is wearing a housecoat, adultery has taken place. I think it is stretching the imagination to believe that it is possible. Let me read this further passage.
By Mr. Wright:
Q. When you learned about him what did you do?
A. I started divorce proceedings, I told Mr. Adessky-
Q. When you learned about this were you living with your husband at that time?
A. Yes, and I moved out.
Q. How soon after you received this information from Mr. Adessky did you move out?
A. A few days after.
We have established that these people have been living as man and wife, yet when the woman found out she did not move out right away. She moved out a few days later. Then the lawyer, Mr. Wright, whom I have met on several occasions and who is a very sharp lawyer, asked this question:
Q. A few days after that. Between the time that you learned of it-I am sorry to have to ask you these questions-between the time you learned about this from Mr. Adessky and the time you moved out did you have any sexual relations with your husband?
A. No.
You can bet your bottom dollar that Mr. Wright is sorry he has to ask that question, but he asks it all the same. He asked it because if he had not done so the chairman of the committee of the other place would have asked it.
He did not ask these other two people if they had had a sexual relationship. All he established was that they were in a place where it could have taken place. But here we have a man and his wife and we are assuming that they did not have sexual relationship. Are we not stretching our imaginations considerably? We do not know if they had two beds in this other house where this couple were living, and I rather expect they did not. They had only been married a short time, and unless they were very well off they probably had not bought a second bed.
It would appear from page five of the submission that if this had indeed taken place there would be no divorce. I am suggesting that there were much greater grounds to prove that sexual relations had been engaged in between this man and his wife because of the fact that they live in the

same house, sleep in the same bed and have been used to having sexual relationships probably for six or seven months preceding this, than it would in the other case. It would be much more logical to expect this type of relationship to take place between these two people than it would be to say that the man had gone into a stranger's house and engaged in sexual relations. They have either done this to further the passage of this divorce or else I think we are going to find no grounds for this case. The committee can continue to hear the evidence in this case and I think it will reach the conclusion that there was an opportunity for them to engage in this relationship which would have prevented the passing of this divorce. Are we not being rather ridiculous when we say it would happen in the one case and not in the other? We only have the evidence of men who are not in the least opposed to breaking the law when it serves their own purpose-the evidence of the type of investigator who breaks into people's houses in the wee hours of the morning, give false information as to who they are, and who would steal the name plates off the door. We are taking their evidence that these conditions exist. One of them says in answer to a question:
Q. Did the bed appear to be used by one person or more?
A. The bed had two pillows on it and it was pretty well disarranged.
If this is grounds for adultery, I suggest that in this case we have certainly much more ground for considering that adultery, if you would call it adultery-


Jacques Flynn: It being six o'clock it is my duty to rise and report progress.
Progress reported.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.


[Stage Direction]
The house resumed consideration of the motion of Mr. Walker for the second reading of Bill No. C-53, to amend the National Housing Act, 1954.
(Translation):
Mr. J. J. Martel (Chapleau):: Mr. Speaker, before proceeding with the second reading of this very important bill, since its purport is to assist housing, I should like to make a

few remarks without however repeating what has already been said in this house during this debate.
I fully agree with hon. members who said that loans should be granted mostly in small rural communities and in certain outlying districts, for instance in the northern areas such as are found in the riding of Chapleau which I have the honour to represent in this house.
I am pleased to point out to the house that the C.M.H.C. has already granted loans in the main cities of my riding, especially in Amos, La Sarre, Senneterre, as well as in the mining centres of Chapais and Chibougamau.
Besides, C.M.H.C. considered loan applications from other communities like Barraute, Normetal and Macamic.
There are also other smaller rural communities which, I believe, could take advantage of this action of the Central Mortgage and Housing Corporation.
In the case of most of the small loans, the requirements concerning the rental value or resale value of these properties should not be too high.
Indeed, Mr. Speaker, after listening to the many speeches made in this house on this matter, there is no doubt whatsoever that this bill is the most important that our government has introduced to relieve unemployment and to help private enterprise, more particularly in the field of construction.
I want at this time to point out a feature of particular interest to the people in my district, because it concerns direct assistance to the lumber industry.
I remember, for instance, that in 1957 when I toured my riding, I noticed almost everywhere that lumber yards were filled to capacity and that demand in this respect was uncertain and even seemed to be dropping off. However, thanks to legislation passed by this government as soon as it took over in 1957, and since then, and thanks to this bill, conditions have gradually improved to the extent where, in 1957-59, the lumber was, as we might say, disposed of almost as soon as the lumbermen could cut it.
I should like to quote just a few figures in that connection, because this afternoon I heard members take issue with the policy of the government. However, our opponents who were in the former government should be the last to take us to task for our lateness, since as you know, they were the ones who 79951-0-132
National Housing Act
stretched the discussion of estimates for the Department of Labour over a period of seven days and a half. When they were running the country, they voted only $250 million-


Hédard-J. Robichaud: Would the hon. member allow me a question?


Jean-Jacques Martel: Certainly.


Hédard-J. Robichaud: Does the hon. member know that in the debate on those estimates, speakers on the government side covered 81 pages of Hansard, while those on the opposition side covered 130 pages?


Jean-Jacques Martel: I did not go to the trouble of checking every page of that debate, but in any event, it shows that more opposition members spoke on the subject, when they might easily have restrained themselves.
To come back to figures about housing assistance, I said earlier that the former government voted $250 million. During 195758, the present government increased the amount by $150 million, bringing it to $400 million.
During the 1958 session, that amount was increased by $350 million.
During last session, that of 1959, the total amount was raised by $250 million, bringing it to one billion dollars. We are now on second reading of the bill providing for an increase of an additional $500 million, thus raising the aggregate amount to one and a half billion dollars and authorizing the guarantee of a number of loans totalling $6 billion instead of the amount allotted by the previous administration.
I feel that such measures are an indication of the government's interest in this matter.
Not only is the government showing interest in the matter, but through the additional amount voted to assist housing, it has greatly helped the building industry and, in the case which is of particular concern to me, the lumber industry in my riding.
Mr. Speaker, I agree that I am not an expert in the matter, but I have here a few bulletins from which I should like to read certain excerpts. In this regard, they carry weight and show quite clearly that we are going through a new era of development in the field of construction.
I have here, for instance, the bulletin of the Canadian Bank of Commerce for last

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October, from which I should like to quote only a few short excerpts so as not to delay any longer the passing of this measure. With your permission, Mr. Speaker, I shall quote from the English text.
(Text) :
The heading of this bulletin of the Canadian Bank of Commerce of October was:
A New Era in Housing
I shall quote only a few remarks from this bulletin in order to save as much time as possible in the debate of this measure. Part of it reads as follows:
Outdoor barbecues, gaily coloured sports attire and all the other attributes of informal community living are part and parcel of "suburbia", a phenomenon arising out of the postwar housing boom. In many cases the houses themselves are attractively designed and well-built, set in well-planned communities that constitute small satellite towns on the border of the big city. In its neighbourliness and informality it is a reversion to the small town life of former years except that the affluence of our economy has provided us not only with more leisure, but with more ways of filling our spare time.
Sociologists are examining with interest the changes in Canadian living habits associated with the suburban housing developments and their adjuncts, the modern shopping centres, all geared to the automobile economy. In this same connection, the admirable statistics on housing issued by the Central Mortgage and Housing Corporation, which is empowered, among other things, to "encourage the development of better housing and sound community planning" are unusually revealing of social and economic change.
Further on in the bulletin I read the following:
In the years 1946-58 nearly 1,267,000 new structures and over 56,000 conversions of older structures into duplexes and apartments were completed, for a total of over 1,323,000 units. Housing starts this year are expected to be below the 165,000 made in 1958, but with a record 88,000 under construction at the first of the year, completions may be of the order of 150,000, moderately higher than last year's 147,000. This year will therefore see the completion of close to a million and a half new dwellings since the end of the war.
(Translation):
Mr. Speaker, I also have here a more complete review indicating the number of units which have been built since 1954. I have taken this from an article entitled "The economic picture-federal aid to housing", from which I would like to quote a few excerpts which clearly confirm that our opponents are mistaken as far as the building industry is concerned, when they say that house building will not be as prosperous this year. We find, among other things, a mention that 113,527 housing units were built in 1954; 138,276 units in 1955; 127,311 in 1956; 112,340 in 1957; 164,632 in 1958 and 141,345 in 1959.

Those figures indicate that most years have been about the same, except 1958, which was a record year, as everybody knows, and as some previous speakers have pointed out.
Since 1954, direct loans have, as you know, been granted by the Central Mortgage and Housing Corporation, and the above table shows that the number of those loans has considerably increased in the last three years. Indeed, the corporation, which, in 1954, had granted only 3,586 loans, in 1955 only 2,355 and 2,565 in 1956, awarded 25,304, 38,616 and 34,240 respectively during the last three years. Those figures are an indication of the improvement in this field since the Conservative party came into power.
Another important point concerns the change in the interest rate that can be charged by corporations that wish to lend money for housing purposes. This is what the article says in this respect:
We see that the 1954 revision gave results. Now. during the whole period, the interest rate on loans has not exceeded 6 per cent. Lately, Ottawa decided to increase the rate to 6] per cent. Is that measure likely to impede housing construction?
Here is the answer to that question, found in the article:
Most likely not. On the contrary, it should promote it. First of all, it is important to know the circumstances surrounding the introduction of that measure. We have seen that direct loans made by the corporation have substantially gone up in the course of the last three years. The burden falling upon the government had become too heavy. We even saw, late in 1959, a complete stoppage of direct loans, because available funds for the current fiscal year were exhausted. Moreover, loan companies have become more reluctant with regard to loans made under N.H.A. The reason is quite simple. It is because those institutions could invest their funds at a much better rate than the 6 per cent granted by the act. It is therefore in the hope of making the act more appealing to private institutions that the government decided to increase the interest rates to 6| per cent. Banks are still limited to the 6 per cent rate, however, and for that reason must not be unduly counted on in 1960.
And the article goes on as follows, thus confirming the opinion expressed by the Minister of Public Works (Mr. Walker), when he introduced that measure to allow loan institutions to raise their interest rates to 6J per cent:
That higher interest rate will mean higher monthly payments for the borrower. However, if we consider that the repayment period, which is now 25 years, might be extended to 30 years-as it quite possibly will be-the increase in the amount of payment will not be very noticeable. The National Housing Act has often been criticized as being inadequate, in regard to lower bracket salary

workers. So far, the government of the province of Quebec had refused to extend its act for improving housing conditions to people whose loans were guaranteed by the central government.


Some hon. Members:: Hear, hear.


Jean-Jacques Martel: Mr. Speaker, I see my hon.
friends in the opposition are applauding. Surely, however, they are aware that, just recently, a bill was introduced in the Quebec provincial legislature to extend the act to loans granted directly by the Central Mortgage and Housing Corporation.
The article goes on to say:
Under the act, the provincial government assumes responsibility for a portion of the interest on approved loans.


Mr. Deschateleis:: May I ask the hon. member what article he is quoting from?


Jean-Jacques Martel: I mentioned the source a moment ago; perhaps the hon. member was not here. This is an article published on February 27, 1960 in Le Devoir, under the heading: "The Economic Picture

Federal Aid to Housing", written by Fernand Bonin.
Mr. Speaker, this is not the end of my remarks. I should like to quote the conclusions of the article, which are of even greater interest for opposition members:
One may wonder how housing will fare in 1960. There are those who believe that the shortage of mortgage funds will cause a considerable drop in home construction in the forthcoming year. They expect only 100,000 housing starts in 1960. In our view, such forecasts are somewhat pessimistic. In the first place, with interest rates raised to 63 per cent, it appears unlikely that the shortage of mortgage funds will be as serious as some people believe. A slackening in demand is unlikely in view of the increased rate, because the Central Mortgage and Housing Corporation is still receiving more loan applications than it can grant. Finally, if the government is consistent in its policy, it will not allow the number of housing starts to drop below 125,000, having always felt that this number was required to meet the demand.
Because the Conservative government is consistent in its program, it is now introducing this measure to increase the available amount for housing construction loans from one billion to one and a half billion dollars.
In closing, Mr. Speaker, I would like to make a suggestion to the Minister of Public Works which, I believe, could help small wage earners, in particular, take advantage, in the future, of the provisions of the National Housing Act and therefore become home owners.
I think we should consider the possibility of establishing a special fund to help small 79951-0-132J
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wage earners who want to own their own house. For instance under this provision, part of the interest could be refunded. This would help the average income people to take advantage of the provisions of the National Housing Act, as it is done by the farm loan board in the province of Quebec, through its family housing service.
I hope the minister will discuss this point with his colleague, the Minister of Finance (Mr. Fleming) who could draft a new act for this purpose, or even use the farm loans act, to offer this advantage to those who earn less than $3,000 net a year. After study of this question, they certainly could introduce a bill for this purpose, and this would be, I believe, a great social measure that would be well received by the population in general and by small wage earners in particular.
I sincerely believe that if such a measure were adopted, people with relatively low income could become home owners. This would be an excellent incentive for expanded residential construction which is the best safeguard we have against communism in general, and against socialism in particular, because, in our democratic system, we respect the property rights of even the humblest individual.
(Text):


Erhart Regier: Mr. Speaker, I listened with much interest to the remarks made by the minister on February 17 and again on March 11. However, in the matter of whether or not we are doing enough toward providing housing for the people of Canada I think we should be guided by one of the old laws of economics. It would be to the effect that the government may relax, that we may begin to rest easy, if and when the price of housing begins to decline, and if and when the level of rentals begins to decline. I think the minister is going to agree immediately that we have not arrived at that position yet. The cost of housing is climbing and the level of rentals is continuing its upward spiral. We have not yet nearly reached the number of housing units that we need in the nation. It is for this reason that I hope the minister, when he concludes the debate or when he speaks in the committee stage, will answer a number of matters.
I should like to ask him why his government is asking for an allotment of $500 million if at the same time the minister announces he only intends to use $150 million as a

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minimum and $175 million as a maximum in the current year. I should like also to pose a question to him as to whether his proposed level of expenditure includes the revenue that is available to Central Mortgage and Housing Corporation as a result of repayments that have been made on loans in other years. I imagine that by now this publicly owned institution is in receipt of a considerable amount of money each and every month by way of payments on loans by those who have been helped in the years gone by.
I feel it is rather odd of the government to be asking this house for authorization to spend an additional $500 million when at the same time the minister announces that it is the obvious intention of the government to limit itself to spending less than one third of the amount the house is being requested to vote. I hardly see the rationality of asking us to vote $500 million if the minister announces at the same time he does not intend to use even one third of this amount It is an odd way for the government to go about receiving legislative consent to an appropriation of public revenues.
I should like to refer for a few minutes to what the minister had to say on March 11, as reported at page 1994 of Hansard. I notice the minister refers to his intention to spend very little of this money. He says:
During the last three winters we have made loans to builders in order to give winter employment a boost. We do not know whether or not that will be done again this tall or whether it will be necessary.
Might I ask the minister and the government, do they not regard the present level of unemployment as being sufficiently urgent to make these loans available now rather than wait, as the minister has indicated he will, until spring has passed, summer has passed, and if and when we again have heavy unemployment in the winter ahead, the government may reconsider its earlier announced intention of using only a very limited amount of the money parliament is now being asked to supply. I should like to submit, very humbly, that the current level of unemployment ought to warrant the minister issuing an announcement that the loans available to builders over the past number of winters will immediately again be made available upon the passage of this legislation, in order that the exceptionally high level of unemployment might receive a measure of relief.
The minister made reference, again on March 11, to the problem of the responsibility of the municipalities vis-a-vis the responsibility of other levels of government, especially this government, in the matter of slum

clearance. The minister expressed concern lest he rob the municipalities of their sense of initiative by absolving the municipalities from paying as much as 25 per cent of the cost of slum clearance. May I once again, in all humility, assure the minister that in my opinion the municipalities in Canada-and many more than he has indicated are now participating in any slum clearance-would very much like to show a lot more initiative in this field. However, because of the not inconsequential actions of the Minister of Finance (Mr. Fleming) our municipalities are in a position where they are unable to resort to the money markets; they are unable to borrow the huge amounts of capital necessarily involved in slum clearance. I feel the government might well reconsider its position and agree to encourage the municipalities to assume the initiative in slum clearance, and to give them encouragement in a little more tangible way by reducing the municipalities' portion of the costs to somewhere in the neighbourhood of 10 per cent rather than 25 per cent.
The minister went to some length on March 11 to explain how the government of which he is a member has aided Canadians in the lower income brackets. He boasts, with some measure of justification, of the fact that the number of loans made available to those with incomes below $5,000 a year have more than doubled since the Conservatives assumed office. I should like to compliment the government in this regard. However, I should like to repeat something I expressed a number of years ago in this house. I hope this has not been done at the expense of the quality of housing that has been built. I know very well indeed that the government, when the Department of Public Works was under the auspices of the present Secretary of State for External Affairs (Mr. Green), amended the regulations in order that the low income groups might take greater advantage of the National Housing Act. At the time this was done I voiced apprehensions and I fear that my fears have been realized in that all the government of the day did was to lower the quality of homes.
Now the government realizes that there are on the market thousands of unsold homes that are not adequate to meet the needs of the poor and yet are so high in price that if you want to buy them you might as well add another few years of mortgages on to your life and buy yourself a home that is adequate to meet the needs of your family.
The minister referred to limited dividend houses. In this regard he had this to say as reported at page 1994 of Hansard:
Of course, in this coming year or in the present year we shall have a limited amount for this purpose.

All during the minister's address in this house on March 11 I noticed his emphasis on the fact that only a very limited amount is going to be available in any of the fields of housing that we have under the National Housing Act. I would suggest to the minister that he is being a little bit unrealistic if he hopes at this time for a great increase in the projects included in the limited dividend housing field. The minister had this to say:
We trust that the good work along this line may be continued.
As long as the government is prepared to allow private enterprise to make net earnings much in excess of the allowable earnings under the limited dividend housing plan I cannot see private individuals taking much interest in making their money available to this particular housing development. They are not agreeable to limiting themselves to a 5 per cent or 6 per cent net return on their investment, even though it may be partially guaranteed, if their money is able to earn them a much higher rate in other fields of endeavour. Even the Minister of Finance announced yesterday the availability of federal government securities or bonds on the market with a yield of as high as 5.99 per cent. It is rather unrealistic to expect people, out of the goodness of their hearts, to organize limited dividend housing associations in which their equity will yield them a return of 5 per cent or 5J per cent or whatever limit the minister may prescribe if, on the other hand, they are able to ring up their broker and order bonds of the same government offering them as high as 5.99 per cent.
The minister indicated that the banks were leaving the housing field and that the investment we might expect on the part of the banks may be very little indeed. As reported at page 1997 of Hansard, in reply to a question asked by the hon. member for Kenora-Rainy River (Mr. Benidickson), the minister indicated that the banks in December made 17 loans; in January, 11 loans; in February, 6 loans; and that a year ago there were 900 in December, 670 in January and 883 in February. I think all of us know why the banks are leaving the housing enterprise. They are not able to get 6| per cent that other lending institutions are able to get; and in many instances the banks can buy debentures issued by this government and obtain a yield in excess of 6 per cent. Hence why would they bother with supplying housing loans?
The minister, in reply to the hon. member for Levis (Mr. Bourget), paid some compliment to co-operative institutions. I feel that here is one possible avenue that our government has not yet explored to anywhere near
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its maximum extent. There is a great deal of money that might be made available for housing in Canada if there were more active assistance to and co-operation with the whole co-operative movement of the nation. I should like to pay my respects to the people of Nova Scotia and to the people of Quebec especially for their endeavours in this regard.
Also, I feel that an appeal might be made to other provinces to look at what has been done by the provincial government of Quebec in the matter of subsidizing interest rates where necessary. I feel that this is a worthwhile endeavour for all those provincial governments that are able to afford to do this subsidizing. There are tens of thousands of families in the province of Quebec who now pay an interest rate of not more than 3 per cent simply because their own government makes to them a refund of whatever rate must be paid in excess of that rate.
I hope the minister and the government are going to give more serious consideration to the setting up of what is in effect a mortgage market. I know that there is a mortgage market. There is a mortgage market in each of our urban areas. However, it is now being operated by racketeers and the public-the investors-are being invited to invest their money and receive rates of return running all the way from 10 per cent up to 30 per cent. I feel, however, that much more money would be available if the government had a carefully supervised mortgage market to which the ordinary small investor of Canada could resort without having fear that they may end up in the hands of exploiters. I know of many mortgages that are being placed at rates of 10 per cent and more, and second mortgages at rates of 18 per cent or more. I feel that these rates would be greatly reduced if there were some law and order in the operations of the existing mortgage markets as we now know them.
The minister made a great play on the efforts of the government, as I indicated previously, to make houses available to the lower income groups. However, in my opinion there is really only one way of making adequate amounts of housing available to the lower income groups and that is by lowering the cost of homes. In this regard our Central Mortgage and Housing Corporation, as I think we must admit, has been a complete failure.
We have made no progress whatsoever over the last 20 years in reducing the cost of building the ordinary home. Whereas modern technology has made tremendous advances in almost every other enterprise in the dominion you can name, in the field of housing today we are still building a house exactly as our fathers and our grandfathers built their houses. I feel that much greater effort

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by way of research ought to be undertaken so that the modern blessing of automation and of technology may be utilized in order to reduce the ever rising cost of homes in the dominion.
The only other way I can think of to reduce the cost of a home is exactly the reverse of the method the government is applying, and that is a lowering of the interest rate rather than this continuous raising of interest rates. Because the higher you raise the cost of a home and the higher you raise the interest rate, the more difficult it becomes to make housing available to those Canadians who need the help of the government in order to obtain housing.
. I hope that the minister will note the resolution which I have on the order paper in regard to the need of a national investment board. I hope that he will also note the growing number of advocates in Canada of the federal government appealing to the patriotism of the Canadian people to make their savings available for housing purposes at a modest rate of interest. I am not worried about whether the minister accepts my specific recommendation in this regard or whether he does not. However, I know that-


Mr. Speaker:: Order. I think the hon. member is straying a little from the bill and has been for some time. When he gets into the realm of raising public funds it seems to me he is definitely out of order notwithstanding that this has been a wide ranging debate.


Erhart Regier: Mr. Speaker, I will attempt to abide by your interpretation of the ruling which was made on the misunderstanding which arose the other evening.


Mr. Speaker:: I know of no ruling at all, but I understand that there was some discussion of that subject and I have allowed a good deal of what has been irrelevant to this bill to be discussed. But I think the hon. member will agree with me that when he talks about public financing he is getting outside of the scope of this bill and matters of housing.


Erhart Regier: Mr. Speaker, I was attempting to relate my remarks to the financing of houses, and I had understood that the other evening we had agreed that the resolution stage would be ended upon the assurance of the minister that we could say whatever we liked at this stage. However, in view of your remarks I will attempt to limit myself in this respect.
The minister has indicated that he does not intend to use even as much as a third of the money he is now asking for, and in all sincerity I should like to ask the minister whether he thinks this completely ethical.

I know this may be a unique expression in a political House of Commons, but I should like to ask him whether he considers it exactly right to be asking for $500 million when at the same time he is anouncing that the intentions of the government are to use less than one third of the money asked for. We would like to know why he is asking for so much more than his present plans call for.
We would also like to know why the government insists upon making loans available for the purpose of building senior citizens housing projects rather than matching the contributions of provincial governments in this regard. I do not know, but I understand there is an arrangement in the province of Saskatchewan, and I know that out in British Columbia our government pays for one third of the capital cost of any low rental senior citizens housing project. Yet the federal government makes no contribution whatsoever. All that the federal government does is to make money available by way of mortgage on the undertaking that the money has to be repaid with interest by our elderly Canadians. I feel that the least the government might be able to do in this regard is to match whatever any provincial government does by way of outright contribution.
The minister mentioned at the conclusion of his remarks on February 17 that the housing measures of the government had three main features. The first one he listed was that there had been recognition of the basic fact that the total program must be maintained over the long pull at a rate high enough to bring about improvements in the over-all housing situation. I should like at this time to ask the minister, in light of the admitted lack of response from and interest of private lenders to re-enter the housing field and in light of his announced intentions of much less participation by government in housing this year as compared with last year, how he hopes that the government can realize its ambition to maintain housing at a rate high enough to bring about any improvements in the over-all housing situation.
Then the minister also announced that the other aim of the government was that the actions of Central Mortgage and Housing Corporation shall not interfere with the adoption of a sound fiscal policy, and I hope the minister will elaborate a little more on that because I noticed that every once in a while in his speech on that particular day he expressed reservations as to the over-all government policy and almost admitted that his wishes were the opposite of the government and would not tie in with the over-all sound fiscal policy of the government.

I would also like to ask the minister more specifically what he is doing to make additional housing available to the lower income families, as he indicated in the report of his remarks on page 1165 of Hansard for February 17, last.


Robert Hardy Small: Mr. Speaker, I had not intended saying much in support of this measure to lend money to builders until I had heard some of the observations made by the hon. member for Port Arthur (Mr. Fisher) and the hon. member for Trinity (Mr. Hellyer). The hon. member for Trinity gave in the first part of his remarks pretty well an accurate story of what had transpired at the time the National Housing Act was brought into effect. However, there are one or two details which he left out.
The situation as I remember it was that after the war was over, of course, our soldiers were demobilized and returned home. Prior to that the people of Canada had been called upon to lend their money to war savings, and to refrain from buying scarce commodities.
The demand for housing at that time was so great that it was not possible to take care of the needs of the young people who came back from overseas and to satisfy the general demand for housing. The hon. member said there was a big shortage of housing at that time. That was an understatement. Competition for material, labour and land had reached a very high level. In addition, as the hon. member stated, there was a shortage of trade skills. This was taken care of by the government starting up trade schools such as Ryerson where people were instructed in crafts until they could enter the building industry. Large scale building by enterprises other than housing began to attract both men and materials. The hydro development at Queenston to satisfy industries demand, the St. Lawrence seaway and the construction of the Toronto subway are examples.
Projects such as these made demands on materials and labour which would otherwise have gone into housing, and the total result was one of tight material supply which was very difficult to handle. It is quite right to say that the resources of the building trade were strained. Both the government and big contracting firms employed inspectors to check the work done on the sites, but it is true that many of the men who were employed did not have very much knowledge of the trade. However, an effort was made to beat the deadline and get as much work completed as is possible in the circumstances.
Another factor in increasing costs was the rapid rise in the price of land during this period of expansion. Farms on the outskirts of municipalities where land would ordinarily
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be selling for $1,000 an acre, cost first, $2,000, then $3,000 and, finally $10,000 or $12,000. This in itself made for great increase of costs generally. In addition, there was, of course, the shortage of materials. The Korean war came and then building contractors and factories began to stockpile again. All this was bound up with speculation and galloping inflation, with the result that the housing situation became much more serious than it would ordinarily have been.
Then industry began to expand-and to expand much more rapidly. Instead of planning for a normal increase of 4 per cent a year, provision was made for an increase of 20 per cent or 25 per cent, and material was acquired far in excess of the immediate demand. Naturally the government had to take some account of the situation and, rightly or wrongly, they were accused of creating tight money. The real aim of the government was to cut down the rate of the industrial expansion which was taking place at that time. In this, the results were not entirely successful, because industry was able to get its capital south of the border at cheaper rates from their parent organization and ended in restricting homebuilding.


John Whitney Pickersgill: I hesitate to interrupt the hon. member for Danforth who is always most cogent, but I wonder if the discussion of the so-called tight money of three or four years ago is really very relevant to the bill before us.


Mr. Speaker:: I have had my doubts about the course which the hon. member has been following. I understood him to say when he began that he was answering some arguments which had been made during this debate, but it seems to me he is now undertaking to review the economic problems of house building since the last war-and in some detail-because he has now reached only the Korean war. It seems to me that unless the hon. member has some point to answer, introducing the material which he is now introducing is out of order in this debate.


Herbert Wilfred Herridge: I would like to point out that it was agreed when the resolution was allowed to go through that hon. members would have, as the minister said, all the latitude they wanted on second reading.


Mr. Speaker:: Would the hon. member give me a reference for that observation?


Herbert Wilfred Herridge: Page 2005 of Friday's Hansard.

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David James Walker: I did agree to that, Mr. Speaker, if I have any power to agree to anything; I do not know.


Mr. Speaker:: Unless the house made some order which binds me, I am afraid I cannot go by the statement of any hon. member, even of the minister. The ordinary rules of debate apply unless the house has concurred in making some different arrangement.


Erhart Regier: On this point of order, I think the house has. You will note that after the minister had said: "all the latitude they want", the deputy speaker said: "that is my understanding". I feel that a lot of the catcalls we heard when I spoke were entirely uncalled for, since some of the backbenchers did not understand the position.


Gordon Minto Churchill: The arrangement we had the other night was that we would get the resolution stage through the house on the understanding that when we reached second reading there would be some latitude allowed, as if we were at the resolution stage, but not for a wide open debate on all the subjects that have been raised this afternoon.


John Whitney Pickersgill: I feel I should apologize to the house. I was not in the house at the time that understanding was reached. I certainly have not the least intention to interfere with the freedom of speech of the hon. member for Danforth for whom I have the highest possible regard.


Mr. Speaker:: I dare say we are approaching the end' of this debate in any event, so we should not spend too much time trying to decide what the understanding was. I take it that the understanding was that there should be reasonable freedom in debating the subject before the house, and the subject before the house is not the whole subject of housing and the National Housing Act. That was decided by parliament some time ago when the act was passed. All that the house is asked to do today is to add some additional money under two sections of the act. The debate is thus narrow in its scope, but I have allowed a very wide discussion so far and I hope hon. members will not take advantage of this.


Robert Hardy Small: All I said when I began was that I was going to fill out some necessary details left out by the hon. member for Trinity. One of the points I was dealing with was the question of supplying enough money to the industry to enable it to keep going. What occurred to me was that the builders were getting what profit there was to be made leaving the people who bought the houses to carry the burden of exorbitant

prices. When the sources of money which had been available in the past dried up, and there was no more money to be obtained from the usual lending institutions, this legislation was brought in to tap a pool of money at a reduced rate of interest which was to be guaranteed by insurance to allure or induce them to lend at 5J per cent. The loans were insured at 2 per cent, to be payable by the person who was borrowing the money. I should like to quote what the minister said on January 21, 1954, as reported at page 1316 of Hansard:
These are important provisions in that they meet the main objections often expressed to the banks being in the mortgage business. The insurance protects the banks and other lenders against substantial losses on their mortgage account and there are provisions for liquidity and marketability.
At the particular time that I raised the matter I did not think it was a fair deal to the person who was borrowing the money, that he should have to pay the premium for somebody else's protection. If you want to protect your car, your home or anything you value to protect you against loss you gladly pay the premium for that protection; but here you have the case of an individual borrowing money from a lender and he is being asked to pay a premium not to give him protection but to protect the lender. I do not think it was fair to load this extra burden. I think there should be equity redemption insurance for the same premium as the lender paid. The man who is borrowing the money should have had some protection in so far as his property is concerned in case something happened to him. I thought he should have the same protection as the lender, and at the time I was told that I was radical and that I was talking along the socialist lines, which I deny. I could not agree to it then and I cannot agree to it now. Now they have raised the interest rates and the insurance protection should be withdrawn. In the olden days they used to call it usury and now they call it interest.


Mr. Speaker:: The hon. member is now discussing a proposition that is not involved in this bill at all, namely, insurance of the purchaser of the house.


Robert Hardy Small: I contend, Mr. Speaker, the situation with the borrower is a parallel one. We are now asked to supply more money to keep the building trade going. I think reconsideration should be given to the man who is purchasing the house and is paying through the nose and carrying the burden for 20 to 25 years. This is the main reason why I spoke on the subject, to ask the Minister of Public Works to give consideration to this matter another look-see and to do something for the

man who is purchasing a house and has to take on this added burden for the next quarter of a century.


Mr. Erik Nielsen (Yukon):: I intend to take only a few minutes, Mr. Speaker. There are one or two questions I have to raise in regard to the necessity of further Central Mortgage and Housing Corporation funds to support housing development in the Yukon. Until recently there was no housing development at all in the Yukon under the National Housing Act. The down payment which had to be raised in order to commence building with only the loan that was provided under the National Housing Act was too large an amount to raise.
Early in January of 1958, when I first arrived to take my seat here, I obtained the concurrence of Central Mortgage and Housing Corporation officials, the Minister of Northern Affairs and National Resources (Mr. Hamilton) and the then minister of public works (Mr. Green) to the implementation of a low rental housing scheme in Whitehorse, a scheme which was to be confined to Whitehorse but which, if the need was displayed, could have been implemented in other communities in the Yukon. This was the first time that such a proposal had been made and it almost achieved success.
Under such a scheme, of course, it was necessary for the three levels of government to co-operate, that is, the federal, the territorial and the municipal.
Housing accommodation throughout the Yukon is a matter of deep concern to all government bodies, much of it being substandard and detrimental to the health and welfare of Yukon residents and the occupants of such housing while at the same time providing a very meagre tax base for the raising of revenue in the municipalities concerned. Such conditions, as Commissioner Collins of the Yukon pointed out on one occasion, invariably accompanied the march of settlement across Canada, except where measures of aid have been made available by company or other assisted programs. In the Yukon several factors impose hardship on families of low and moderate incomes. I am quoting Commissioner Collins:
I believe the first to be the non-availability of reasonable accommodation for purchase or rental within their means, consideration being given to the cost of services, heating and other living expenses. The second is the seasonal character of much of the employment which fails to provide the necessary annual income. The third is the impermanency of the economy which does not encourage an attitude of fixed residence or the desire to become financially involved in the future of events. Outside the larger settlements other adverse factors come into play such as those which inhibit agricultural pursuits or other and normal forms of self-employment.
79951-0-133
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On this occasion the commissioner of the Yukon lay before the council a low rental housing scheme, a scheme which, as I have already said, was approved in principle by the officials of Central Mortgage and Housing Corporation and the then minister of public works as well as the minister of northern affairs and national resources. It was arranged that detailed plans would be completed and the necessary drafts of the agreements to be entered into between the federal government and the territorial government would be prepared and it was just about at that time the twenty third parliament come to an end.
It was on February 10, 1958, that I was advised by the Department of Northern Affairs and National Resources that the low rental housing scheme which I have described had reached the stage where tenders were to be called for the end of March, 1958, with construction to start early in May. The whole arrangement was, of course, subject to the Yukon legislative council giving the commissioner of the Yukon the necessary authority to enter into the appropriate agreements with the federal government and for the establishment of a housing authority. The council also had to authorize the territorial government to assume one quarter of the capital cost but it is important to know that that one-quarter of the capital cost of the project was to be borrowed by the territorial government from the federal government through the Department of Northern Affairs and National Resources. On the same day, namely, February 10, 1958, I was informed by the Minister of Public Works that a submission had been forwarded to the Yukon legislative council recommending the approval of an agreement regarding the low rental housing project pursuant to section 36 of the National Housing Act and section 18 of the Yukon Act, such project to be undertaken jointly by the commissioner of the Yukon and Central Mortgage and Housing Corporation.
Without going into the details of the project itself, it involved the expenditure of approximately $550,000 and would have made available 30 units which would have been rented to needy tenants at a rental of $70 per month. This included an element of subsidization of $35, the cost of which was to be borne in the same proportions as I have indicated, namely 75 per cent by the federal government and 25 per cent by the territorial government, the funds for the latter purpose to be borrowed from the federal government. It was at this time that the project began to deteriorate. It is my personal opinion, without intending to cast any aspersions upon the

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commissioner of the Yukon, because he cannot answer me here, that it began to deteriorate because of certain doubts expressed by him as to the feasibility of the project, certain doubts with respect to whether or not the units would be occupied completely and certain doubts as to the design of the project, doubts which at least contributed to the Yukon legislative council failing to approve the project.
There remains a very desperate need for low rental housing in the Yukon, particularly in Whitehorse. The plans are still available for this project and after recent consultations with officials of C.M.H.C. I have been advised that they are still prepared to give every consideration to the project. I assume that the Minister of Public Works (Mr. Walker) as well as the Minister of Northern Affairs and National Resources (Mr. Hamilton) would still be of the same view. Perhaps the Minister of Public Works would be prepared to give the municipality of Whitehorse that assurance when he closes the debate on second reading.
I should say that one of the main difficulties in building in the Yukon at all is the availability of funds to close the gap between the down payment necessary under C.M.H.C. and the down payment required under the act. One method by which this could be done, and which I suggested to the then minister of public works last session, is the institution of a second mortgage fund from which these moneys could be borrowed, a second mortgage fund which would be available not only to people outside the government service who wished to build but to federal civil servants who wished to buy or build their own homes. If such a fund had been available in past years the Liberal administration of the day would perhaps not have got into the difficulty where millions of dollars were expended on government housing which was somewhat ostentatious. I might also say that I have also spoken to many federal civil servants who have not only endorsed buying or building their own homes but have expressed themselves as very keenly in favour thereof.
I should like to conclude by remarks by once again requesting the minister to give me the assurance, either this evening or outside of the house or by correspondence, that the same approach is being taken by public works to the institution of a low rental housing scheme in Whitehorse and, indeed, in any municipality in the Yukon which displays a need for this type of housing. I should also say that a large amount of the blame, if indeed it can be called that, lies at the door of the two local governments concerned, 
namely, the municipal council and the territorial council of the day, in not pressing for the institution of a low rental housing scheme. I am not saying anything other than that I feel that if the two local governmental bodies were to make representations now to the minister or to C.M.H.C. for the necessary funds to implement this particular project or any modified version of it then the funds would be forthcoming. It is not a dead issue. It is an issue that is very much alive and I feel that the project can be brought into being simply by the municipal and territorial councils co-operating in a request to the government to implement the scheme in the city of Whitehorse and, indeed, the same thing can be done in any other municipality in the Yukon that can display a need for that type of housing.


James Ernest Pascoe: Mr. Speaker, I know that the Minister of Public Works (Mr. Walker) would like to get the bill through as soon as possible, and I wish to bring up only one point. Before I do so I want to add my congratulations and best wishes to those already extended to him for the wonderful job he is doing in his new office. In rising at this time I want to make an appeal for special consideration for the farmers of Saskatchewan who up to now have not been able to secure C.M.H.C. loans to build new fam homes because of legislation passed by the Saskatchewan provincial government.
The situation facing Saskatchewan farmers who would like to build new farm homes was explained very clearly in an article in the Country Guide under the heading, "Canada's National Housing Act Offers Financial Assistance to the Farm Family which is Giving Serious Thought to Building a New Modern Home". The article reads in part as follows:
There are a number of points the farm owner should bear in mind when he and his wife are considering application for a mortgage loan under the National Housing Act.
The article goes on to list the points and I want to draw attention to a notation at the bottom of the article reading as follows:
Provisions of the Saskatchewan farm security act preclude the making of farm house loans in that province.
I understand that the Saskatchewan legislature has before it now bill 51 which will exempt farm homes financed under the National Housing Act from the farm security act and other farm debt legislation. This action has been asked for many times. Now that the way may be opened for C.M.H.C. loans for Saskatchewan farmers I would ask again that if bill 51 does pass in the Saskatchewan legislature special consideration be

given to loan applications from Saskatchewan farmers so that they may be able to make up for what they have lost in the past number of years.


Mr. Hazen Argue (Assiniboia):: Mr. Speaker, I rise at this time because the minister has been very frank to state to the house that under the proposed amendments to the bill it is expected that much less money will be loaned in 1960 than was provided in 1959. The minister said, as found on page 1993 of Hansard, with respect to the amount of money that might be lent this year:
It is a difficult thing to prognosticate at the present time. Last year we lent between $330 million and $340 million. This time we would hope to lend about half of that amount, in other words between $150 million and with limited dividend projects added, up to $175 million.
The construction industry of Canada has very often been called the bellwether of the Canadian economy and that part of the construction industry that is engaged in the building of homes in Canada is exceedingly important. I think the minister has made somewhat of a distrubing forecast, namely that in 1960 so much less emphasis will be given to home construction in Canada. I am certain that the farmers of Saskatchewan, to whom the hon. member for Moose Jaw-Lake Centre (Mr. Pascoe) referred, will be very happy to take any advantage they can of this legislation.
Subject to the very difficult financial conditions in western Canada, I would think that the use of this act would be exceedingly limited, even if the government of the province removed the provisions of the farm security act from having effect on this legislation.
So that hon. members may know what the farm security act legislation now provides, may I say that it merely provides that in time of crop failure it is impossible to foreclose and to evict a farmer from his home and the home quarter section on which his home is situated. This, we feel in that province, is a basic minimum security. If the federal government is unable and unwilling to recognize this principle, then the province of Saskatchewan I know is quite willing to co-operate, even to the point of removing this minimum security from farm homes when the farmer obtains a loan under this legislation.
I would ask the minister to give the house information concerning the number of farmers in the province of Manitoba to date and the number of farmers in the province of Alberta who have qualified under this act. I think if the figures are brought out they will demonstrate to the hon. member for Moose 79951-0-133J
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Jaw-Lake Centre that where there was not this minimum security for farmers there still have been very few homes provided under this legislation.
We have been given the statistics on housing starts in Canada in recent years. In 1957, when this government took office, there were 122,340 housing starts; in 1958, this number had increased to 164,632. The government was fresh in office. It had new ideas. The vision was near at hand, and the government was attempting both to implement the vision and was activated by the prospects of an early appeal to the electorate. In 1959 apparently that kind of pressure was off and housing starts were reduced to 142,000. I should like to know from the minister the number of housing starts he expects will be made in Canada in 1960. It is very apparent to me that the number of housing starts will be greatly reduced. I think that this is a mistake. I think the government is making a mistake today in choking off a very great program of home building in this country such as was maintained in 1958, and to a lesser extent in 1959.
I will ask the minister, why the reduc-j tion? Why is less money available for homes? This I fail to understand. Is it because Canadians need fewer homes in 1960? Are we short of families to occupy the homes? Have we removed slum conditions in this country to the point where we can say we now have adequate housing and, therefore, we will cut back the program? Is the government cutting back because there is a shortage of material? Have we such a full employment economy that we are short of building materials? I do not think so. I do not think that is the reason for slicing in half the amount of money that is expended in one year under this act. I do not believe there is any shortage of manpower in this country to build homes. Is the government cutting back this home construction program that we once had because we have a full employment economy, because we are short of the manpower necessary to build homes?
A few days ago when speaking in this house the Minister of Labour (Mr. Starr) said that one of the early actions of the government in 1957 to provide for greater employment was to step up the home building program. As a matter of fact, there was less unemployment at that time than there is today. With the widespread unemployment in the country today, the government is cutting back its home building program. In a time of widespread unemployment the government, instead of making plans to deal with unemployment which may continue in 1960, and which will undoubtedly be with us next
21C8

National Housing Act
year unless action is taken, is now cutting back, slicing into its home building program. Why is this being done? I do not know, except that perhaps the Minister of Finance (Mr. Fleming), who has become clearly a financial dictator in this country, has said the essential job for this government is to balance the budget. The budget must be balanced, whether or not it is at the expense of homeless people or of unemployed people, of dispersed people from communities like Elliot Lake, Bancroft and Uranium City. This, apparently, is the over-all governing directive under which this government is functioning, and the Minister of Public Works (Mr. Walker) has become one of the first and one of the main casualties of this most severe dictum of the Minister of Finance.
It is not only that the government is reducing the construction program in this country at a time when there is widespread unemployment, but the government says that if anybody does get a home under this program we will charge him more than he was charged before. We will increase the interest rate. I tell my hon. friends they are making a great mistake in bringing about a high interest economy in this country. This is a real tight money policy. The former government never dreamed in its wildest moments of tight money, of raising interest rates under the National Housing Act to 6J per cent. That is a national disgrace, and in my opinion it is wholly unnecessary that the people of Canada should be saddled with the burden of a 6J- per cent interest rate, not just this year and next year but for 25 years under the contracts that will be signed.
I am not suggesting that people will not try to get homes under this high interest policy, because it is probably still the cheapest interest rate that people can obtain in these circumstances. If they have to obtain a second mortgage, they will pay interest rates of 8 per cent or 10 per cent or more, and a very substantial bonus, a further toll to the high interest policy of this government.
We heard from the hon. member for Moose Jaw-Lake Centre that the farmers of Saskatchewan have been denied the great benefits that flowed from this act, and I have asked the Minister of Public Works just how much benefit they obtained under this act. I have some figures here and the minister, of course, will correct me if they are the wrong figures. I will apologize in advance if I have obtained the wrong figures. The figures I have for loans made under the national housing-


Mr. Graffiey:: Do you take responsibility for these figures?
[Mr. Argue.)


Hazen Robert Argue: Look at who is asking the question, after the kind of speeches he makes and the interruptions he makes from time to time-


An hon. Member:: Are you going to answer?


Hazen Robert Argue: -which caused Mr. Speaker to make him the subject of a very severe reprimand. My information is that these figures came from the minister's own department.


Gordon Minto Churchill: I rise on a point of order in connection with the statement the hon. member made a moment ago in connection with my hon. friend here, when he said-


Mr. Denis:: Is he Siamese twins?


Mr. Speaker:: Order.


Gordon Minto Churchill: The hon. member for As-siniboia mentioned the fact that my hon. friend had suffered a severe reprimand from the Speaker. He did not follow that up with the subsequent report the next day. I think it was unwise and unparliamentary for the hon. member to refer to the Speaker's remark.


Hazen Robert Argue: Mr. Speaker, I believe what you said was that you had probably been a little bit severe with the hon. member for Brome-Missisquoi (Mr. Grafftey).


Mr. Speaker:: Order. I think it is always out of order to refer back to rulings that have been concluded and dealt with and are not related to the debate.


Hazen Robert Argue: Thank you very much, Mr. Speaker. I think I should ask the hon. member for Brome-Missisquoi whether he takes responsibility for the figures put out by the Minister of Public Works. That would be a very interesting answer that he might give as to whether he accepts responsibility for the figures that are put out from his department. I am asking the Minister of Public Works whether or not it is correct that in 1959 under this program Central Mortgage and Housing Corporation made the large number of five rural loans in the province of Alberta. I am also asking him this further question, whether or not it is correct-and again I cannot vouch for these figures; I merely ased for information-that in Manitoba in 1953 one loan was made; in 1952 three loans were made; and in 1957 one loan was made. I would appreciate receiving from the minister responsible figures from his department showing to what extent loans have been made in rural Manitoba and rural Alberta.
I feel that the government is making a mistake in curtailing home construction in Canada at this time not only because homes are necessary in large quantities, and in larger numbers than the minister is prepared to



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[Stage Direction]
forecast will be forthcoming, but also because of the great importance of the home construction industry to our national economy. In my opinion, when the Minister of Public Works has forecast that only half of the amount of money will be lent in 1960 under this act as compared with the amount in 1959, the government is agreeing that widespread unemployment will remain, that the government is prepared to accept a recession economy and indeed that the government is prepared to do its part in assuring that widespread unemployment will remain.
An hon. Member:: Nonsense.


Hazen Robert Argue: In my opinion that is a denial of the vision. This is the opposite of the vision. In my opinion this shows that this government came to power by false pretences, by making promises that it has failed to fulfil and-


Gordon Minto Churchill: Nonsense.


Hazen Robert Argue: -by misleading the Canadian public.


Gordon Minto Churchill: Nonsense.


Hazen Robert Argue: This government is in a phony position.


Gordon Minto Churchill: Nonsense.


Hazen Robert Argue: This government promised full employment. There is widespread unemployment. Instead of taking action in 1960 as the Minister of Labour said the government took action in 1957, the government is bringing about, by this kind of legislation which reduces home construction, further unemployment.


Mr. Speakman:: It does not say so in the bill.


Hazen Robert Argue: No. We would not expect this government to put it so clearly in the bill. They would like to hide it. They would like to camouflage what they are doing. However, it is all too clear that this is real Tory legislation, that it is back-tracking.


Mr. Bell (Saini John-Albert):: Are you going to vote against it?


Hazen Robert Argue: Oh, we would rather have a crumb than nothing at all. We are prepared to vote for Tory crumbs but we do not think this half measure is good enough from a government that had this great vision of a new Canada; of people who had access to good homes; of people who were fully employed; of a great country where not a single Canadian suffered from unemployment. Yet the Minister of Public Works brings in this half-baked measure that goes only half as far as his Tory government went last year when
National Housing Act
the hon. gentleman did not have the same responsibility he now has in this departmenf at this time.
I think the Minister of Public Works has been placed in an extremely difficult position. I would think he would like to do better. It must be rather discouraging for a new minister immediately he takes over the office to have one of his colleagues-


Lester Bowles Pearson: Cut him down.


Hazen Robert Argue: -cut him down, as the Leader of the Opposition (Mr. Pearson) says or slice him in half saying, "We will allow you to do just half as much as was done under another minister who went on to greater things and greater service under the same government."


David James Walker: I rise on a point of order, Mr. Speaker. I appreciate the sympathy of the hon. member but so far I think he would be well advised, after showing abysmal ignorance of housing, to confine his remarks to wheat.


Hazen Robert Argue: That was a very intolerant interjection, Mr. Speaker, and a very uncalled for one. The minister says he does not want sympathy. The minister does not want to be exposed to what his colleagues have done to him. He is new here. He is a very good friend of mine; he is a very genial person but he has not sufficient influence in the cabinet to hold the portfolio at the same strength, as far as this act is concerned, as it was one year ago. But the minister was frank, honest and fair in pointing out that housing starts are being cut, that the amount of money is being reduced and that Canadians, by this retrograde step, are being condemned to inadequate housing and to continuing unemployment. We have said previously that this country cannot afford a Tory government.


Azellus Denis: That is right.


Hazen Robert Argue: I think this is the best example that this country cannot afford a Tory government. This country cannot afford a Tory government particularly-


An hon. Member:: That is not what the voters said.


Hazen Robert Argue: Oh, the voters will have time to express their opinion as to whether they believe in the original vision or whether they will accept the nightmare that is now prevalent in the country.


Mr. Speaker:: Order. The hon. member is raising an issue that I do not see set out in the bill. Notwithstanding the generous latitude the house gave some time ago in this

National Homing Act
debate, I suggest that he might now return to the question of the money to be voted.


Hazen Robert Argue: On the point of order you have raised, Mr. Speaker, I would suggest with great deference that an hon. member does not or should not become out of order the minute he attacks the government-


Some hon. Members:: Oh, oh.


Hazen Robert Argue: -and the minute he exposes the government for the phony that it is.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order. The hon. member is not speaking to the point of order in the way in which he should do it. If he wants to deal with the point of order, I will give him the opportunity to do so. I expressed my view. If he disagrees with it, he is entitled to say so.


Hazen Robert Argue: On the point of order, Mr. Speaker, I suggest, with great deference, that it is not unparliamentary to say with reference to this housing bill now before the house that it is an indication that this country cannot afford the luxury of a Tory government. I do not think that is an unparliamentary expression. I think it is a frank opinion as to what is happening under this government with regard to this legislation.


Gordon Minto Churchill: May I ask the hon. member a question. Is the hon. member prepared to accept the Speaker's ruling?


Hazen Robert Argue: Mr. Speaker, it is an indication that this government would like to apply closure to this debate.


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order. The hon. member who has the floor knows that he is quite free to criticize the government in any way which is relevant to the debate. I suggested that he was getting a little off the track, and he could see that for himself because of the reaction he created in the house. If we are to get on with this debate I think the hon. member should stick within the limits of the matter before the house, which is an amendment to the National Housing Act providing for the voting of additional money under two sections of the existing act.


Hazen Robert Argue: My understanding was that at the resolution stage, at the request of the Minister of Trade and Commerce (Mr. Churchill), it had been agreed that we would allow the resolution to pass even though we had four or five speakers ready to speak at that time, and that the greatest latitude would be allowed at this present stage. I want to point out, Mr. Speaker, that the words of the Minister of Public Works-although

I hasten to tell you that I do not think the Minister of Public Works has it within his power to say to what extent the house may discuss the principle of this legislation-are as follows, as reported on page 2005 of Hansard for March 11 last. He said:
All the latitude they want.
I think it was perfectly clear that we would have a far-reaching debate on this question, as we have been having so far. Further, Mr. Speaker, I suggest, with great deference that it is not the reaction in this house of hon. members opposite that should be the criterion or which can be the criterion as to whether the remarks of an hon. member are in order. The criterion as to whether the remarks of an hon. member are in order are set out very clearly-


Mr. Fulton:: In the rules of the house.


Hazen Robert Argue: Yes, in the rules of the House of Commons; and it would be a very sorry day for this government as for the last government when the rules become a plaything in the government's power.


Some hon. Members:: Oh, oh.


Mr. Speaker:: I suggest that the hon. member proceeds with his discussion of the bill.


Hazen Robert Argue: Thank you, Mr. Speaker; I think that is a very good admonition and I would hope that the hon. members to your right will contain themselves. I realize that it must hurt. I realize it must hurt when this government, which had a good record in 1958, is not maintaining its record.


Gordon Minto Churchill: You are out of order again.


Hazen Robert Argue: It is out of order to refer to the government's record in 1958!


Gordon Minto Churchill: You will not obey the Speaker's ruling.


Hazen Robert Argue: Mr. Speaker, I suggest that the words of the Minister of Trade and Commerce suggest a mentality of mind that is dangerous to our parliamentary system-


Mr. Speaker:: Order. I really must insist that the hon. member get back to the matter in hand, and not be diverted by every interruption which is made. For the last ten minutes now the debate has not been directed to the bill but to irrelevant matters.


Hazen Robert Argue: Interruptions. Mr. Speaker, I can understand that the Minister of Trade and Commerce feels he is in order, but-


Mr. Speaker:: Will the hon. member kindly proceed with the debate on the bill and leave the Minister of Trade and Commerce out of it.


Hazen Robert Argue: Mr. Speaker, if the Minister of Trade and Commerce interrupts me I claim the right to reply. On the point of order, no one who has ever sat in this house was more agile and more far-reaching in this kind of repartee than was the hon. member for Prince Albert of that day, the present Prime Minister (Mr. Dief enbaker). The former hon. member for Prince Albert-


Mr. Speaker:: Order. What I am trying to convey to the hon. member who has the floor is that it is time to leave personalities and go on with the principle of the bill.


Hazen Robert Argue: I was saying that I could quite understand that the Minister of Trade and Commerce is sensitive, but I point out that the government's housing record in 1958 was much better than it is in 1960. Surely it is not irrelevant to point out that this government is going backwards instead of forwards; that instead of following a vision it is following the dictates of the Minister of Finance who is apparently choking off the money which can be made available under this particular measure. And he is choking off the money-


Edmund Davie Fulton: Half a billion dollars is a pretty big choke.


Hazen Robert Argue: But it will not be used in
1960.


Some hon. Members:: How do you know?


Hazen Robert Argue: This is a very important interruption. You see, it is no longer the amount of money which will be used under a measure in a given year which counts. It is the size of the carrot on the stick, and this is a big carrot; but the people will be allowed to have just a portion of the carrot in 1960. The Minister of Justice (Mr. Fulton) says, "Don't criticize us for cutting down the amount of money we are going to spend in 1960".


Edmund Davie Fulton: I never said any such thing.


Hazen Robert Argue: There will be pie in the sky
some future day. That is a strange attitude for a government to take, a government which was so much in favour of housing in 1957.


Edmund Davie Fulton: What I said was, half a
billion dollars is a pretty big choke, and that was all.


Hazen Robert Argue: Even the unemployment situation which had accrued after 22 years of Liberal administration is not nearly as bad as the unemployment situation which has accrued in less than three years of Conservative administration. We are supposed to accept this half baked, ineffective housing
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program which is just about half as good, as far as the amount of money being loaned under the act is concerned, as this government was able to make available in 1958.
I ask the Minister of Public Works this simple question: Why the cutting? Does he say that Canadians today are well housed? He has not walked a mile from the parliament buildings if he thinks people are well housed in the capital city of this land. Is the minister cutting back housing because there is no material? Our resources are idle.
I would like him to answer this question.


David James Walker: May I do it now?


Hazen Robert Argue: Mr. Speaker, I said I want
the minister to answer the question when he replies and closes the debate.


David James Walker: On a point of order, I can
answer the question asked by my hon. friend.


Mr. Speaker:: Of course, if the minister has a point of order I will hear it.


David James Walker: So far the hon. member for Assiniboia has engaged in a lot of rhetoric in order to ask a series of questions. He has made no contribution to the debate, just abuse. Now he has asked me a question and I would be happy to give him the answer.


Hazen Robert Argue: If I have asked a series of
questions I would tell the Minister of Public Works that-


David James Walker: You had better stick to
wheat.


Hazen Robert Argue: I have the floor.


Mr. Speaker:: The hon. minister will have
to wait his opportunity to answer the question unless the hon. member yields the floor.


Hazen Robert Argue: Mr. Speaker, I think if I
yield the floor it would not be yielded back to me again. I ask these questions in the hope that I may get some answers when the minister takes his 40 minutes to close the debate.


Edmund Davie Fulton: If the present torrent of words ever comes to an end you may get your answer.


Hazen Robert Argue: Another cry of closure. The hon. gentleman looks at the clock and says: ten o'clock is coming, and if you do not sit down you will not get the answers. That is a strange attitude for the Minister of Justice who used to be such a great champion of parliamentary liberty. One cabinet minister after another in the last 30 or 35 minutes has been trying to impose a type of closure. Hon. members will not fall for this nonsense-

National Housing Act


Edmund Davie Fulton: They have never heard such nonsense as they have heard in the last 20 minutes.


Hazen Robert Argue: I have never seen this instinct so widespread among so many responsible, or so-called important people. Apparently it is a disease, and I know who in the cabinet is spreading the disease. I know the source, and it is none other than the man who has created all these promises and all these images which today he is failing to fulfil, and with regard to which in so many ways, as under this act, he and his government stand today as a phoney government in the eyes of thinking Canadians.


David James Walker: It is always a pleasure to hear the hon. member for Assiniboia (Mr. Argue) because, as we know, he is an authority on one subject, and that is wheat. Whenever he talks about anything else he merely creates a pattern of invective and rhetoric. He has not contributed to the debate-


John Whitney Pickersgill: I am rising on a point of order. The Minister of Public Works has been seeking to restrict somewhat the latitude of this debate, and it seems to me that the hon. gentleman should stick to the bill before the house.


David James Walker: We are in a wonderful position tonight. We have in Canada today, as a result of this government coming into power, 400,000 new homes completed. Think of what that means. Think of all it means to the Canadian economy. Due to the winter works program of the Prime Minister (Mr. Diefenbaker),
82.000	homes are being built. We have a greater volume of construction going on in the building of homes in Canada today than in almost any previous year in the history of the nation. The government has placed tens of thousands-hundreds of thousands- of people, in houses of their own, people who could never have dreamed of owning a modern home had this government not come into power.
We have in prospect this year the completion of the 82,000 homes which are in the process of being built. Now starts will include between 80,000 and 85,000 homes built with the aid of conventional loans in which the Central Mortgage and Housing Corporation does not participate. We have, in addition,
20.000	homes, 20,000 starts, through approved lenders. With or without the participation of banks there may be 20,000 of these homes and, with the $150 million allocated by Central Mortgage for direct loans, another 15,000 and, in addition, a further 3,000 or 5,000 units under limited dividend housing. That is the

answer to the hon. member for Assiniboia, the authority on wheat. That is our answer on housing.
I have been asked about the interest rate. Everybody was satisfied with the interest rate at 6 J per cent until the opposition tried to stir up blue ruin. The hon. member for Assiniboia thinks it is too high. The hon. member for Skeena (Mr. Howard) thinks it is too low. They are all mixed up. There are three leaders in that party at the present time, and after the contribution of the hon. member for Assiniboia tonight there will be two. I never heard such gross nonsense in my life. Is not the rate of 6J per cent attractive enough to bring the approved lenders into the market again? Where could they get a more attractive investment, considering that this a loan insured by the government at a time when they would only get 5-J per cent on government bonds? Is the hon. member suggesting that we should put it lower than that, and not get anything from the approved lenders? We are interested in the little man. We are getting the approved lenders back into the market as they were before, and we do not want their confidence to be broken down by snide, ignorant remarks from hon. members of the opposition of whom the hon. member for Assiniboia is the chief.
Was there any other question which the hon. member for Assiniboia asked in his rhetorical remarks to which he wants an answer before ten o'clock? If not, let me say this. So far tonight we have had no constructive suggestions from the C.C.F. group. On the other hand, we have received considerable assistance from the Liberal party, and I am surprised to be able to say that. So far the helpful suggestions from the Liberal group are that we should this year increase the frills; that we should carry out more urban redevelopment; that we should have the sewers paid for by the federal government; that we should cut out the insurance premium; that we should hold more design competitions, and so on.
What we are talking about is building homes for the ordinary man in as great a number as we can. That is what this government is engaged in, and we approach ten o'clock-I am only going to adjourn the debate until tomorrow afternoon-may I say this in closing: it is not possible to go on forever with this fantastic amount of building. We are delighted that it has gone on until now. We predict in this year 1960 an unprecedented year of prosperity. Hon. members have seen estimates showing that we expect there will be spent in Canada $8.7 billions on capital expenditure this year. How

can they expect us to keep up the same record as we have had in the last three years in housing?
Some of the suggestions we receive from the other side are incredible. Tomorrow I may perhaps be permitted to answer in detail many of the queries raised by the opposition, and I will try to be as brief as possible.
May I call it ten o'clock and adjourn the debate?



BUSINESS OF THE HOUSE

John Whitney Pickersgill: Before the adjournment, I wonder if I could ask the leader of the house if he could indicate the business for the rest of the week?


Gordon Minto Churchill: I think I did that last evening, but so that it should be on record in Hansard again, tomorrow we shall continue with the second reading of this bill, and then we shall follow with the motion in the name of the Minister of National Defence to set up a committee on defence expenditure. I announced the other two items last night. If we pass the motion to set up that committee, we would then take the resolution in the name of the Minister of Public Works dealing with the amendments to the Trans-Canada Highway Act and the other resolution in the name of the Minister of Transport concerning amendments to the Railway Act.
Business of the House


John Whitney Pickersgill: Can the minister go on and indicate what will happen on Thursday and Friday?


Gordon Minto Churchill: Something tells me that is all that will happen on Wednesday and Thursday. If we complete that, then we shall take up the motion in the name of the Minister of Finance which is No. 12 on today's order paper, dealing with the Federal-Provincial Tax-Sharing Arrangements Act.


John Whitney Pickersgill: Is it not planned to take any estimates this week?


Gordon Minto Churchill: No, Mr. Speaker.


Hazen Robert Argue: Can the minister tell us when the long awaited resumed discussion on the agricultural estimates will take place, for a further discussion of the vision.


Gordon Minto Churchill: The hon. member will get on to his favourite subject in due course.


John Whitney Pickersgill: For the convenience of hon. members, would it be possible to indicate whether next Monday will be a private member's day or will there be a supply motion?


Gordon Minto Churchill: Next Monday? I announced that earlier. If I did not, I intended to. On next Monday and Tuesday we shall have a supply motion.


[Stage Direction]
It being three minutes past ten o'clock the house adjourned, without question put, pursuant to standing order.
[Stage Direction]
Question

[Stage Direction]
The following answer, deposited with the Clerk of the house, is printed in the official report of debates pursuant to standing order 39:

Mr. Deschatelels: 1.	How many applications were rceelved by the civil service commission at Montreal in connection with competition No. 59-1192, Dorval air terminal?
2.	After examination, did the examining board recommend certain persons to the civil service commission, Montreal, as being qualified to fill the position?
3.	If so, did the commission implement such recommendation? If not, for what reason?
4.	Were the applicants who tried the examination notified in writing of the results? If not, for what reason?
5.	During the period between October 22, 1959 and February 15, 1960, did the Minister of Transport communicate by letter, telegram or telephone with the civil service commission at Montreal or Ottawa regarding this competition?
Answer by:	Hon. Leon Balcer (Acting
Secretary of Stale):
1.	Fifty applications were received by the civil service commission at Montreal in connection with competition No. 59-1192, superintendent, terminal building, Montreal airport.
2.	The examining board at Montreal recommended three candidates as qualified for the position.
3.	During consideration of the board's recommendation, the commission received reports on the top-ranking candidate from the commission's Montreal district office, the commission officer in charge of selection for the department, and the department itself. In the light of these reports, the commission was of the opinion that none of the candidates was fully qualified to fill the position in question. Accordingly the competition was cancelled and re-advertised on a new Canadawide basis under competition No. 60-489.
4.	The candidates were notified in writing that the competition had been cancelled and that their applications were being transferred to the new competition.
5.	No.

Wednesday, March 16, 1960



BANKING AND COMMERCE

[Stage Direction]
Second report of standing committee on banking and commerce-Mr. Cathers.