1960-11-22

Right Hon. J. G. Diefenbaker (Prime Minister):: Mr. Speaker, in accordance with the usual practice of notifying the house when there is any change in ministerial powers, duties and functions, I wish to advise that the duties and functions under the Canada Grain Act have been transferred from the Minister of Trade and Commerce (Mr. Hees) to the Minister of Agriculture (Mr. Hamilton). The result will be that the administration of the board of grain commissioners will hereafter be under the jurisdiction of the Minister of Agriculture. Similar activities with respect to other farm products have always been under the jurisdiction of the Minister of Agriculture.


Mr. Hazen Argue (Assiniboia):: My position as to the transfer of the Canadian wheat board to the Department of Agriculture is well known. Once the transfer has been made, even though I do not agree with it, I think it is a logical step that the board of grain commissioners should be under the same department as the Canadian wheat board.
In my opinion, the better place for both would be the Department of Trade and Commerce. Since the Prime Minister took the Canadian wheat board and put it in the Department of Agriculture, I think it was merely an oversight on his part at the time that he did not do both at once.


John George Diefenbaker: Mr. Speaker, I know everyone in the house will appreciate the support of the hon. gentleman in the course that has been followed.

On the orders of the day:
Hon. L. B. Pearson (Leader of Ihe
Opposition): Mr. Speaker, may I ask the Prime Minister whether there have been any changes of ministerial functions recently additional to those which he mentioned just a few minutes ago?
Right Hon. J. G. Diefenbaker (Prime
Minister): Mr. Speaker, the only one that I can think of at the moment is the transfer of 90205-6-5
the wheat board and its responsibilities from the Minister of Trade and Commerce to the Minister of Agriculture.


Mr. Pearson:: A supplementary question. Is it the case, then, that the atomic energy board and the national research council remain the responsibility of the Minister of Trade and Commerce?


John George Diefenbaker: That change was announced at the time it was made.



LABOUR CONDITIONS


Hon. Michael Siarr (Minisier of Labour):: Mr. Speaker, because of the various representations which have been made to me by some hon. members of this house, and by various persons, agencies and organizations in western Canada, with the permission of the house I desire to make a statement concerning the strike of some 350 west coast grain elevator employees which has halted the movement of grain to export markets and from the farm to country elevators. If I may have permission I should like to make this statement.


Mr. Speaker:: Does the hon. member have leave to make this statement?


Some hon. Members:: Agreed.


Michael Starr: The collective agreement between the grain workers' union and the five operators of the elevators expired on December 1, 1959, and negotiations were entered into by the parties for a new agreement. The parties were unable themselves to settle the terms of a new collective agreement, and I appointed a west coast conciliation officer to assist them. When my officer was unsuccessful I appointed a conciliation board in March, and the board made its recommenda-tions'for the settlement of the dispute in June. The chairman of the board and the employers' nominee made a majority report containing recommendations, and the trade union nominee made a minority report.
The companies agreed to accept the majority recommendations, 'but the union delayed in stating its position and it was not until October 31 that the representative of the union advised that its members had rejected

Statement on Grain Handlers Strike unanimously the recommendations of the conciliation board and that it was making application to its international headquarters for permission to take a strike vote.
My department was advised on November 7 that the union had served a strike notice on the grain companies effective midnight Tuesday, November 8, and the strike took place at the time scheduled. On November 9 I communicated by telephone with both parties concerned, urging them to meet again with my conciliation officer in an endeavour to settle their' differences. They agreed to do so, and meetings were then continued.
Late on Friday, November 11, because of the unsuccessful attempt by my own conciliation officer to bring about an agreement, I appointed Mr. F. Craig Munroe, Q.C., of New Westminster, British Columbia, an industrial inquiry commissioner to mediate the dispute, and the commissioner commenced his meetings with the parties on Monday, November 14. He has met the parties constantly since that time and is still discussing the settlement of the dispute with them.
Mr. Speaker, it will be seen from what I have said that everything possible has been done under the Industrial Relations and Disputes Investigation Act to assist the ' parties in reaching a settlement. They have had the assistance of a conciliation officer, conciliation board, post-conciliation board mediation, and now they are receiving the advice and assistance of an industrial inquiry commissioner. I want to emphasize, Mr. Speaker, that all possible aid has been given to the parties, and the officers of my department have been in touch with them at all stages of'the dispute.
The employees and employers have complied with all the procedures contained in our legislation, and the strike is not in violation of the Industrial Relations and Disputes Investigation Act. There are no provisions under the act nor in any other legislation which give the government of Canada authority to have prevented the strike from taking place or to compel resumption of work. We have no authority to go beyond what we have done to prevent a stoppage of work. Settlement of this dispute clearly depends upon the parties themselves. We have provided them with all levels of mediation, but they themselves must recognize the damage that is being done to our western economy in the loss of sales involved in the export of grain, and they must be prepared to make the mutual concessions necessary for a fair and reasonable settlement. I am very hopeful that having regard to the public interest they will be prepared to accept such

proposals as may be worked out by the commissioner for the settlement of the dispute and the resumption of operations.
In my telegram appointing the commissioner I said to the parties:
It is of vital importance to the entire Canadian economy that the movement of grain for export and from farms to local elevators be resumed at the earliest possible moment and to this end I have appointed Mr. F. Craig Munroe, Q.C., New Westminster, British Columbia an industrial inquiry commissioner to make inquiry into the dispute affecting the Vancouver terminal grain elevators and to assist the parties to the dispute in reaching agreement on all issues that stand in the way of resumption of work. In the discussions that have been carried on in the period since the date of the strike notice both parties have been fixed and rigid in their attitudes toward the issues in dispute and now must direct their whole attention to the making of mutual concessions to effect a settlement in the public interest. I request the earnest co-operation of the parties with the commissioner in reaching a fair and reasonable settlement. The commissioner will be assisted by Mr. G. R. Currie, departmental chief industrial relations officer, Vancouver.
Many persons and farm organizations have made representations to me concerning this dispute, and I have advised them of our constant efforts to assist the parties in reaching a settlement and have urged them to bring their pressure directly to bear on the trade union and employers involved in the dispute.


Lester Bowles Pearson: This unhappy strike, affecting as it does the business of grain marketing, is a matter of great national importance as well as being of immediate significance to every western grain producer. It is, therefore, of the first importance to bring it to an end at the earliest possible date, and all members of this house must hope that the efforts which are being made to this end will be successful.
The legal position may be that which has been described by the minister, and we all recognize the hon. gentleman's difficulties; but we must hope that he will maintain his concern and make every effort which he and the government can legally make to intervene in order to bring this strike to an end. We all wish him well in that endeavour.


Hazen Robert Argue: I am pleased that the minister took this opportunity to inform the house of some of the actions which have been taken by himself and his department. This is a situation which affects not only the grain handling companies and the employees; it has very widespread repercussions among many Canadians, particularly among tens of thousands of grain producers on the prairies. It interferes with the normal transport of grain and, if it has not already done so, it could lead, if prolonged, to a loss of sales in addition to the present

delay in the marketing of grain. I have said on a previous occasion, and I urge again now, that the Minister of Labour, the Minister of Agriculture and, I would suggest also, the Minister of Veterans Affairs should proceed immediately to Vancouver to interview the various parties to the dispute in the hope that a settlement might be reached at an early date.
The government has taken this very kind of action in an endeavour to avoid a railway strike. Although the date is now late, I suggest that similar action should be taken by the government at this time. I urge the Prime Minister and the cabinet to have these three cabinet ministers proceed to Vancouver to discuss with both parties the issues involved, in the hope that a settlement may be arrived at immediately.

On the orders of the day:


Mr. J. E. Pascoe (Moose Jaw-Lake Cenire):: I should like to direct a question to the Minister of Labour following his statement with regard to the grain handlers' strike at Pacific terminals. Can the minister give the house the names of the elevator firms affected by the grain movement tie-up?


Mr. Speaker:: Order. I think to be consistent that is information which, if required, is more appropriately sought through the order paper.



TRANSPORT ACT


[Stage Direction]
Mr. J, F. Browne (Vancouver-Kingsway) moved for leave to introduce Bill No. C-33, to amend the Transport Act.
Some hon. Members:: Explain.


Mr. Browne (Vancouver-Kingsway):: Mr. Speaker, the purpose of this amendment is to provide that representatives of the trucking industry shall have the right to make application to the Minister of Transport when they feel that an agreed charge unjustly discriminates against a motor vehicle operator.
Motion agreed to and bill read the first time.



CRIMINAL CODE


Mr. Frank Howard (Skeena) moved: for leave to introduce Bill No. C-34, to amend the Criminal Code (trading stamps).
Motion agreed to and bill read the first time.
90205-6-5J
Proposed Legislation



AMENDMENTS RESPECTING DEATH PENALTY AND METHOD OF EXECUTION

Mr. John Drysdale (Burnaby-Richmond) moved: for leave to introduce Bill No. C-38, to amend the Criminal Code (capital punishment).
Motion agreed to and bill read the first
time.



EXCHEQUER COURT


Mr. Arnold Peiers (Timiskaming) moved: for leave to introduce Bill No. C-35, respecting the jurisdiction of the Exchequer Court of Canada.
Motion agreed to and bill read the first time.



SWEEPSTAKES


John Ferguson Browne: for leave to introduce Bill No. C-36, to provide for the establishment of a hospital sweepstakes board.


Some hon. Members:: Explain.


John Ferguson Browne: The
purpose of this bill, Mr. Speaker, is twofold. First, by providing a legal outlet under strictly supervised conditions for those Canadian residents who wish to gamble on sweepstakes, lotteries and like games of chance, the bill supplements those provisions of the Criminal Code which endeavour to prevent Canadian residents from participating in such activities whether the gambling is promoted within or outside Canada. Second, it assures that moneys spent by Canadian residents on such activities will be redirected with a minimum of expense to the promotion of the welfare of Canadian residents rather than dissipated in large part for the benefit of promoters and, in many instances, outside Canada.
Motion agreed to and bill read the first time.



AERONAUTICS ACT


John Andrew W. Drysdale: for leave to introduce Bill No. C-37, to amend the Aeronautics Act.


Some hon. Members:: Explain.


John Andrew W. Drysdale: The purpose of this bill is to provide a central Canadian aircraft registry in order to record title to and all encumbrances against Canadian civil aircraft. Provision is made for registration according to

Inquiries of the Ministry nationality in order to comply with the provisions of the convention on the international recognition of rights in aircraft. By providing a central aircraft registry according to nationality, Canada can then become a signatory to that convention.
Motion agreed to and bill read the first time.



RAILWAY ACT


John Ferguson Browne: for leave to introduce Bill No. C-39, to amend the Railway Act.
Motion agreed to and bill read the first time.



CANADIAN NATIONAL RAILWAYS


[Stage Direction]
On the orders of the day:
Mr. D. M. Fisher (Port Arthur):: Mr. Speaker, I should like to direct a question to the Minister of Transport. The house will forgive me; it has a small preamble. Because at the last session Mr. Gordon, president of the Canadian National Railways, undertook to ensure that any future fundamental shifts in railway employment would be well discussed in advance with workers and communities, I should like to ask the minister this question. Can he explain the shifts at Nakina, Hornepayne and Capreol, due to take effect on Thursday of this week, for which only nine days' notice has been given to both communities and railroad workers?


Hon. Leon Balcer (Minister of Transport):: Mr. Speaker, the management of the Canadian National Railways advise that a new fast merchandise train operating between eastern and western Canada will commence service from Toronto on November 24. The new runs have been bulletined for crew assignments, and crews will operate between Hornepayne and Armstrong without changing at Nakina. An arrangement has been made whereby the work available to crews working out of Nakina will not be reduced as a result of the new operation, and they are not required to transfer to Hornepayne.
As far as the preamble to my hon. friend's question is concerned, the fact that the expected notice of shifts has not been given in time will be brought to the attention of the management of the C.N.R.


Douglas Mason Fisher: A supplementary question to the Minister of Labour. In view of the fact

that the opposition on the part of the workers to this particular move may lead to what is called a wildcat strike, will the Minister of Labour take steps at once to investigate this situation? Because I am sure that is what is going to develop.



THE CENSUS


[Stage Direction]
On the orders of the day:
Hon. Lionel Chevrier (Laurier):: Mr. Speaker, may I direct a question to the Minister of Trade and Commerce. Is it a fact that on the questionnaire prepared for the 1961 census the word "Canadian" appears first in the question relating to racial origin?


Hon. George H. Hees (Minister of Trade and Commerce):: Mr. Speaker, I can think of no better position for the word "Canadian" in any listing of racial origins. I would be interested in hearing whether the hon. member for Laurier or the Leader of the Opposition have objection to the word "Canadian" being in such a position. As I explained the other day, this word "Canadian" was put there in relation to racial origin to make it unnecessary for the enumerators to write, as they did about 152,000 times during the last census, the word "Canadian" or "United States" when such racial origin was insisted upon by those who were being interrogated.
I might also advise the hon. member of something he might have forgotten, because it happened at a time when he was a member of the ministry-


Mr. Speaker:: Order. The minister was asked a simple question of fact which I believe requires a simple answer.


Lionel Chevrier: The minister asked me a question, and I think I should answer it before I ask a supplementary question.


Some hon. Members:: No, no.


Lionel Chevrier: There is quite a distinction to be made between "Canadian" and any racial origin because "Canadian" is a nationality and not a racial origin. Furthermore, in answer to the question I asked the other day, the minister misled the house.


Mr. Speaker:: If the hon. member has a supplementary question he may ask it, but I do not want the tendency to debate the issue to be prolonged.


George Harris Hees: Could I first answer the supplementary to the supplementary?


Lionel Chevrier: Before I ask my supplementary, I had just stated that the minister, in answer to my question the other day, had

misled the house. My supplementary question is this. Was this change that the minister now tells the house has taken place made on the initiative of the dominion bureau of statistics or was it made at the request of the government?


George Harris Hees: Mr. Speaker, in the first place, the original suggestion came from Right Hon. Louis St. Laurent when he called a meeting, prior to the last census and when the hon. member was a member of the ministry, at the Rideau club at which he told the bureau of statistics representatives that the racial origin "Canadian" must be accepted by the census takers if it were given by citizens of this country when being interrogated. As I say, 152,000 times people insisted on being known as "Canadian".


Mr. Speaker:: I was waiting to hear whether the minister would answer the question.


Lionel Chevrier: May I ask a supplementary question, sir? Why did the minister, in answer to the question the other day, indicate that there was no change in reference to the question of racial origin in the 1961 census as compared with the 1951 census, whereas there is a substantial change?


George Harris Hees: If the hon. member will look back he will find that I answered that the racial origin "Canadian" is being inserted to save the enumerators the trouble of writing in the racial origin "Canadian" which, I feel sure, will be something in excess of 152,000 times during the coming census. This is only to make it more convenient for the enumerators than was possible under the previous administration.



TRANS-CANADA HIGHWAY   PARTICIPATION BY QUEBEC-INQUIRY AS TO INCREASE IN FUND

[Stage Direction]
On the orders of the day:
Mr. Maurice Bourgel (Levis):: I should like to direct a question to the Minister of Public Works. In view of the fact that the province of Quebec has now decided to come into the trans-Canada highway scheme, will it be necessary during this session to introduce any amendment to the Trans-Canada Highway Act in order to increase the fund?


Hon. D. J. Walker (Minister of Public Works):: No, that will not be necessary because the act as it stands at the present time made it possible to have Quebec included.
Inquiries of the Ministry VETERANS AFFAIRS



REQUEST FOR REDUCTION IN SMALL HOLDING REQUIREMENT

[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: wish to ask the Minister of Veterans Affairs a question in strict conformity with the rules, and as one old soldier to another. In view of the large number of veterans denied an opportunity to acquire small holdings under the Veterans Land Act in certain parts of Canada because of a shortage of land or because of cost, and in view of the resolution passed at the annual convention of the Canadian Legion at Windsor urging the reduction of the acreage requirement to a half acre, would the minister inform the house whether consideration has been given to this serious and urgent problem of veterans, and whether a decision has been reached?


Hon. Gordon Churchill (Minister of Veterans Affairs):: The question is important but not of such urgency as to require an oral answer. I await your decision in that regard, Mr. Speaker.


Herbert Wilfred Herridge: It is a matter of great urgency to a number of veterans in my constituency who do not know what to do 'with regard to the purchase of land until they hear the government's decision.


Mr. Speaker:: It seems to me to involve discussion of a question of policy which could be discussed at the appropriate time during the session, and one which should be raised here only if the minister sees fit to deal with it at this time.


Gordon Minto Churchill: If the question is placed on the order paper an answer will be forthcoming immediately. It is a fairly lengthy answer, and similar to one which was given to the hon. member during the last session.



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. R. C. Coates (Cumberland):: I should like to direct a question to the Minister of Public Works. Is the minister in a position to comment on his negotiations with the province of New Brunswick on the proposed site of the Chignecto canal?


Mr. Speaker:: Order. Is this not the same question that we had yesterday? Perhaps, since it is a repetition, it might be put on the order paper for final disposition.

Inquiries of the Ministry TRADE



REQUEST FOR STATEMENT OF PRESENT


[Stage Direction]
On the orders of the day:
Mr. G. J. Mcllraiih (Ottawa West):: I
should like to direct a question to the Minister of Trade and Commerce based on a newspaper report in which Cuban armed forces minister Raul Castro referred to the United States embargo against exports to Cuba, except foodstuffs and medicine. He said the embargo had failed, and it is on this quotation that I should like to base my question:
"So soundly has it failed1," he said, "that we are about to begin trade in a big way very close to them-we are referring to Canada."
Would the minister advise the house just what the situation is arising out of this question of the United States embargo?


George Harris Hees: As the Prime Minister
stated a few weeks ago, Canada's trade and trading relations with Cuba are completely normal. I am not aware of any large or noticeable increase in trade. At the moment trade between our two countries appears to be quite normal.


George James McIlraith: Mr. Speaker, I would like to direct a question to the Minister of Trade and Commerce and ask him whether there are any Canadian restrictions on Canadian exports to Cuba.


George Harris Hees: No, Mr. Speaker, except the regular restrictions that are placed on strategic materials going to any country.



IMMIGRATION


[Stage Direction]
On the orders of the day:
Mr. Hubert Badanai (Fort William):: I should like to direct a question to the Minister of Citizenship and Immigration. In view of the minister's statement made in Winnipeg last month, as reported in the press, to the effect that fear of rising unemployment would not persuade the government to cut back its immigration program this winter, will the minister explain what is the government's immigration policy for this winter?


Mr. Speaker:: Order. The hon. member is taking in a rather large territory when he asks the minister to explain the government's immigration policy on orders of the day. If he had some specific question relating to immigration I would be more receptive, but I feel his question is too broad.



INQUIRY AS TO ADVERTISING CAMPAIGN IN UNITED KINGDOM

[Stage Direction]
On the orders of the day:
Frank Howard: I wish to direct a question to the Minister of Labour, and ask him whether he is aware that certain travel agencies are participating in placing in United Kingdom papers advertisements for skilled workers to come to Canada. If so, what action is being taken to ensure that we are not flooded with more unemployed workers?


Some hon. Members:: Order paper.


Michael Starr: Mr. Speaker, I wonder whether the hon. member would repeat the question?


Frank Howard: Certainly. I just happen to have it written down. It is helpful to have it in that form.


Michael Starr: It should be on the order paper.


Frank Howard: The minister first says he wants me to repeat the question and then he says it should be on the order paper. The question is this. Is the minister aware that certain travel agencies are participating in placing in United Kingdom papers advertisements for skilled workers to come to Canada? If so, what action is being taken to ensure that we are not flooded with more unemployed workers?


Michael Starr: No, I am not aware of that.


Frank Howard: I have a supplementary question. Will the minister undertake to inquire into it and see what can be done?



POSTAL SERVICE


[Stage Direction]
On the orders of the day:
Mr. Azellus Denis (St. Denis):: I wish to direct a question to the Postmaster General in view of the "Quotable Quotes" appearing in yesterday's Gazette, which read as follows:
Post Office Department efficiency report: A letter addressed to "Hon. Jean Lesage, 34 rue de la Fabrique, Quebec, Quebec," was returned to the sender the other day with the rubber-stamped notation "Left no address".
Is it the intention of his department to lecture his employees in order that they may be more efficient in locating letter recipients, and also to give them a lecture on political history of Canada in general and of the province of Quebec in particular?


Hon. W. M. Hamilton (Postmaster General):: Mr. Speaker, I suspect that the addressee of that letter was perhaps better known to the hon. member than he was to the post office

staff in that particular part of Quebec. I also suggest that perhaps the man who readdressed the letter had in mind that Hon. Jean Lesage was only residing temporarily at his present address.


Azellus Denis: I have a supplementary question. Does the minister think it might be a post office employee of the Union Nationale?


Mr. Speaker:: Order. The hon. member began outside of this jurisdiction and is continuing in an opposite direction.



MONTREAL


[Stage Direction]
On the orders of the day:
Lionel Chevrier: May I
direct a question to the Minister of Transport arising out of the statement which was made earlier by the Minister of Labour, and ask what steps are being taken by the minister to remove the bottleneck in the port of Montreal whereby a large number of vessels are unable to unload their cargo of some five million bushels of wheat and have been idle for some weeks.


Léon Balcer: Mr. Speaker, all steps possible are being taken by the national harbours board for that purpose. I am glad to report to the house that the situation has improved tremendously in these last few days. For a while the situation was really alarming, but in these last few days quite a number of ocean vessels have been able to load in Montreal and by so doing relieve the pressure.



STATEMENT ON QUOTA POSITION

[Stage Direction]
On the orders of the day:
Hon. Alvin Hamilton (Minister of Agriculture):: Mr. Speaker, in reply to a question yesterday relating to grain delivery quotas in western Canada, as of November 19 the figures are as follows:
Unit quota 		1959	296 stations
	1960	719 "
1-bushel quota .. .	1959	1,060 "
	1960	1,007 "
2-bushel quota ...	1959	659 "
	1960	274 "
Delivery quotas are not advanced as far this year as at this time last year, as every western farmer knows. However, the house should know that this year from August 1 to November 9 producers' marketings in the west amounted to 135.7 million bushels, as compared with 98.6 million bushels a year ago.
Inquiries of the Ministry This substantial increase is due to the opportunities given the farmers for marketing Durum wheat and oats.
Since August 1 producers have marketed 17.8 million bushels of Durum wheat, and 21.5 million bushels have been shipped from country elevators to the lakehead. These stocks have been moved eastward as rapidly as possible, and 14.2 million bushels have already been exported from Canada.
The quick action by the Canadian wheat board in securing these sales abroad will result in higher levels of income for western farmers in this current crop year. Meanwhile it has meant a slowing down of the deliveries of grades 1, 2 and 3 wheat to the country elevators in the west. These grades of wheat are now beginning to move, and the results will show in due course in the delivery quotas at the various shipping centres.


Hazen Robert Argue: I have a supplementary question, Mr. Speaker. Since Durum wheat at the moment seems to be congesting elevators in eastern Canada, I wonder whether the minister anticipates that there will be an immediate movement to export Durum wheat?


Francis Alvin George Hamilton: Mr. Speaker, the reason for throwing the quotas wide open on Durum wheat was that the wheat board had sold Durum short and was able, by this technique, to secure enough Durum wheat to meet those sales commitments.


Hazen Robert Argue: Perhaps the minister misunderstood my question. My question is, is there likely to be an export of Durum wheat soon, in order to remove the congestion that Durum wheat is causing in the eastern terminal elevators?


Francis Alvin George Hamilton: Mr. Speaker, in my answer I related the fact that 14.2 million bushels have already been exported from Canada, and we will require all the Durum wheat that we are able to get from the farmers to meet the commitments.



FORESTRY


[Stage Direction]
On the orders of the day:
Hon. J. W. Pickersgill (Bonavisla-Twillin-gaie):: May I ask the Minister of Finance how it happens, in view of the establishment of the Department of Forestry, that the supplementary estimates which the hon. gentleman tabled yesterday contain estimates for the forestry branch of the department of northern affairs?

Inquiries of the Ministry


Hon. Donald M. Fleming (Minisler of Finance):: Because they are required for that purpose.


John Whitney Pickersgill: May I ask the Prime Minister whether any steps have been taken to set up the Department of Forestry except by way of proclamation?


John George Diefenbaker: Naturally steps have been taken and are proceeding.


John Whitney Pickersgill: Can the Prime Minister indicate to the house, since this is pursuant to legislation passed at the last session of parliament, what those steps have been and where the headquarters of the department now is?


Some hon. Members:: Order paper.



AIRPORTS


[Stage Direction]
On the orders of the day:
Léon Balcer: Yesterday the hon. member for Algoma West asked a question concerning tenders for a terminal building at Sault Ste. Marie.
When I said tenders had been called I was speaking of the temporary terminal building being provided. Tenders for this building have been received and construction will be commenced immediately the approval of treasury board is received. It is expected it will be completed in six to eight weeks.
As far as the permanent terminal building is concerned, my officials advise me that the consulting architects have planned to call for tenders in February, and that completion is expected by the summer of 1962.



AIR TRANSPORT


[Stage Direction]
On the orders of the day:
Léon Balcer: Perhaps I might have the permission of the house to refer to a reply I made yesterday to the supplementary question by the hon. member for Laurier regarding financial assistance to Pacific Western Airlines.
In looking at Hansard I notice I did not make it clear that the figure of $25,000 I mentioned is per month. It is up to a maximum of $25,000 per month through the air transport board to cover direct operating losses, and is subject to further review prior to the close of the fiscal year if an over-all solution for the continuance of this type of service has not been reached earlier.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Hon. Paul Hellyer (Triniiy):: I wish to direct a question to the Minister of National Defence. Is the minister in a position to report on his visit to the Pentagon?
Hon. D. S. Harkness (Minister of National
Defence): As I announced in the house before I went down to Washington, the purpose of my visit was to meet Secretary Gates and other defence officials. I had a very good meeting with them. We discussed defence matters in a general way, but as I indicated at that time, there was no agenda. This was a private meeting, and I have nothing really of substance to report on it.


Paul Theodore Hellyer: I have a supplementary question. Will the minister tell the house whether he discussed the much publicized swap of Canadian CL-44 freighters for United States F-101 jet fighters, and whether any decision has been taken or is likely to be taken soon?


Mr. Harkness:: If I answered a succession of questions along that line I would soon be giving full disclosure of the private discussions which I had with the United States officials, and I am not prepared to do that.


Paul Theodore Hellyer: I have a further supplementary question. Can the minister say whether there are any further elections pending which may further delay a decision being taken?


Mr. Speaker:: Order.


Mr. Fulton:: Is the hon. member thinking of resigning?


Paul Theodore Hellyer: No, I was thinking it was a farewell talk between the minister and Mr. Gates.



CAPE BRETON-STATEMENT ON REPORTED INTENTION TO CLOSE MINES

[Stage Direction]
On the orders of the day:
Hon. Paul Comtois (Minister of Mines and Technical Surveys):: On Friday last the hon. member for Gloucester asked me the following question:
Is it the intention of the government to take any action to prevent the loss of more than 2,000 jobs in Cape Breton which will result from anticipated mine closures?
In reply I should like to say that we have been advised of the proposal to close No. 4 mine in Glace Bay on January 14, 1961, with possible loss of employment to some 780 men. Representations from interested parties

have been received and the matter is presently under closest investigation. We have no official information of any other closures at the present time.



STATEMENT ON REPORT OP ROYAL COMMISSION

[Stage Direction]
On the orders of the day:
Paul Comtois: If I may be permitted to do so, I should like to give a short statement on the Rand report.


Mr. Speaker:: Has the minister leave to make a statement on the Rand report?


Lester Bowles Pearson: Mr. Speaker, I take it we are reverting to motions, and therefore on this I will have the right of a short reply.


Mr. Speaker:: If the minister wishes to make a statement I think he should have leave of the house to revert to motions, so the usual procedure can be followed.


Paul Comtois: I will wait until tomorrow, Mr. Speaker.


Lester Bowles Pearson: No, do it now.


George Harris Hees: We like to stick to the rules.



SUPPLIES OP SESSIONAL DOCUMENTS FOR MEMBERS

[Stage Direction]
On the orders of the day:
Mr. Speaker:: Before the orders of the day, may I ask hon. members to indicate whether they would like two sets of Hansard and other papers in their desks. That is, as a team at each desk, would they decide whether they wish to have two sets or one, as was indicated as the preference in some cases last year. If so, would hon. members leave a note for the page boys on their desks. The supplies will then be given out in accordance with the instruction. There seems to be some confusion at the moment on this matter.



BUSINESS OF THE HOUSE


[Stage Direction]
On the orders of the day:
Mr. Speaker:: There is another matter before we continue with orders of the day. There is the possibility that because the public bills are not printed and available for the period commencing at five o'clock this afternoon, it may be necessary to continue with the business then before the house. Hon. members might bear that in mind.
71
Guarantee of Loans to Small Businesses FINANCE



PROVISION FOR GUARANTEE OF LOANS TO SMALL BUSINESS ENTERPRISES

[Stage Direction]
The house resumed, from Monday, November 21, consideration in committee of the following resolution-Mr. Fleming (Eglinton) -Mr. Flynn in the chair:
That it is expedient to introduce a measure to provide, by way of a guarantee of loans made by banks to proprietors of small business enterprises, for the improvement and modernization of premises and equipment, and to provide further that any amount paid to a bank under the said measure shall be paid out of the consolidated revenue fund.
Mr. Broome:: Mr. Chairman, we have heard from the opposition speakers how they support this resolution. We have also heard from them as to the defects that they think may be inherent in the resolution.
According to the last census there are some
400,000	small businesses in Canada. Those figures were based on a turnover of $300,000 a year. With the growth of the country I think we can say that we still have 400,000 small businesses falling within the limits of the legislation; that is, of $250,000 a year annual turnover. Some 90 per cent of these small businesses are in the retail and service field, and of that 90 per cent, again 90 per cent of that number will fall into the range of annual turnover to be covered by this bill.
With regard to manufacturing, there are some 35,000 to 40,000 manufacturing companies in Canada. It is estimated that three quarters of these will fall within the terms of the new bill. The bill, as we have been told by the minister, will allow a maximum loan of up to $25,000 on a medium term basis with repayment over ten years, and will provide credit facilities which small business has not had available up to this time.
Formerly, small business could have working capital from a bank, which was on a demand basis and was not for the purpose of acquiring additional equipment or extending premises, and was not on a medium or long term basis. Opposition speakers have tried to point out that the government has had no concern for small business, whereas the record shows that this has been the first government to actually bring in legislation expressly designed to aid and benefit small business. It started, naturally enough, with the setting up of a staff of civil servants in the small business division of the Department of Trade and Commerce to study the needs and requirements of small business and advise the government and be a vehicle to convey small business needs and requirements to the government.
The hon. member for Burnaby-Coquitlam made quite a point of the fact that there was

Guarantee of Loans to Small Businesses no attempt, as far as he could find out from the blue book last year, to carry on the functions of this division, whereas if he would look at the telephone book he would find that the small business division is intact and has been working continuously since it was set up.
The point was made by the hon. member for Burin-Burgeo that this government was copying from his party's platform, and he seemed to regret that the facilities of the industrial development bank had not been used in this legislation. The industrial development bank has some 12 branches spread across Canada, whereas the chartered banks have some 3,000 branches. Small business is not necessarily found entirely in big cities. Small business, as the name implies, is spread throughout the country; in villages and towns as well as in major cities. It is only through the medium of the chartered banks, with their widespread coverage of the entire country, that small business can be adequately serviced, because small business will always have branches near them where they can go to secure these loans.
The hon. member for Burnaby-Coquitlam stated that his group was in agreement with the principle behind this resolution, but at one point in his speech he said he regretted the insufficiency of the resolution and at another he referred to the inadequacy of the resolution. In fact the resolution is neither insufficient nor inadequate. The minister has pointed out that it covers almost the entire scope of Canadian business activity, a field which has not been covered before by government legislation or government help. At the present time, through its agencies, the government provides assistance to housing, fishing and farming. Now, through the present measure, the government will be aiding in the fields of manufacturing, wholesale operations, retail business, service industries, tourist establishments, co-operatives and the like. It would be interesting to hear of an area of Canadian small business or Canadian business in general which is not covered here.
The view that the industrial development bank should handle these loans is certainly not valid. In fact it would almost appear now as though the industrial development bank, because of the wide range of this resolution, should vacate the field of small loans up to $25,000, because I feel that the resolution before us will take care of practically all loans of this magnitude.
Further criticism of the resolution-and I say this with the most kindly feelings toward the hon. member concerned-has been that perhaps it is not good because we are being unkind rather than kind when we offer to
IMr. Broome.]
lend money. This was the view of the hon. member for Burnaby-Coquitlam. Certainly the government cannot guarantee that a man who secures a loan under the terms of this resolution will be able to repay it. The government cannot foresee what his problems may be. The government can, however, make funds available to some 400,000 small businesses in Canada through the medium of the established banking system, and it will be up to the bank managers to assess whether a loan is a good one to make. By reason of the government guarantee a bank manager will be able to guide himself by the record of the person concerned and be in a position to make the loan without the necessity of security which under regular banking procedure would have to be provided.
Here we are dealing with some 400,000 employers of labour, whether they employ carpenters or electricians for the renovation of their premises, or workers in manufacturing plants making tow trucks for gasoline stations, or a refrigerated showcase for a grocery store. The effect of this measure will be felt in every corner of Canada. It would hardly be possible to overestimate the importance of this resolution, not only as it will provide work and much needed improvements to premises but also as it will bring help to a substantial section of our business community, a section which has been ignored year after year by previous governments.
This measure will have 100 per cent support in this house. It will have the support of the C.C.F. party and the Liberal party. I have been trying to point out, at least in part of this speech, how diligently spokesmen for those parties have tried to find some weakness in the resolution which they might criticize. They have not as yet been able to find anything, though we have been told that when the bill is available they may be more successful.
I rather doubt that, because the resolution is simple. It is a plan which can be easily carried out, since we have the means to carry it out, as I said earlier, through our present banking system. The cut-off point is the $250,000 annual turnover. There must be a cut-off point; there must be a separation of small business from big business, and wherever that point is placed there will be some enterprises which fall just below the line and some which fall just above it. That is the way it is with all government measures. Such measures must define the areas which they are to cover, and I think the government has, if anything, stretched a point by deciding on a figure of $250,000. The amount of money which can be made available is $25,000, and the term for repayment is 10 years. All this makes good common sense.

I think, as I said before, that this will be one of the most important measures and most effective measures to be presented to the house this session.


Hazen Robert Argue: First of all I want to say how pleased I am that the government has decided to come forward with a measure which will provide at least intermediate term credit to small businesses. For a number of years I have taken a personal interest in this subject, as the record of the banking and commerce committee will show. As long ago as 1956 I advocated action to provide loan facilities for small business. I think that making this provision through the banks is necessary and desirable, though I shall have some further remarks to make on this general subject in a few minutes.
I feel that the government might have broadened this particular aspect. Although this seems to be part of the government's package to deal with unemployment-perhaps "package" is a bad word, after the Prime Minister spent so much time talking about its definition recently-I have no doubt at all that this measure will be of some help in giving more Canadians an opportunity to work. Even though this may be one advantage which flows from this particular legislation at this time, I think the legislation is desirable on its own merits and can stand on its own feet. If we were so fortunate as to have a full employment economy today it should be proceeded with even in those circumstances.
I would hope that the definition of the purposes for which this money may be used would be made quite clear, and that the definition will not include merely an extension or renovation of the premises of the given businessman who applies for a loan. The businessman who wants a loan to build a new building surely has as much claim to intermediate term credit as he would have if he wished to add a section to an existing building. I would hope it would be made clear that this money could be made available for the building of brand new premises and in fact could be used in connection with existing premises title to which is held by someone else. If that were done admittedly it would not bring about any additional employment opportunities, but surely it is a sufficiently good purpose that a businessman should have access to intermediate term credit for the purchase of an existing building if he feels that this is in his own business interest.
My first suggestion to the minister, therefore, is that the bill should make it clear that money will be made available to businessmen for the construction of new business premises 90205-6-6i
Guarantee of Loans to Small Businesses as well as for the purchase of existing premises when that appears to the businessman and banker involved to be a sound move. I think this would be in conformity with legislation which has as its chief purpose the providing of intermediate term credit to small businesses when such credit, as we all know, is not now readily available.
The second suggestion I have to make to the minister is that the interest rate should be 5 per cent. Under the Farm Improvement Loans Act a fixed interest rate of 5 per cent is written in. Farmers and fishermen have obtained great advantage from this act over the years. An interest rate of 5 per cent is reasonable and fair, and money has been made available by the Canadian banking system at that rate. There is no doubt in my mind that a small businessman obtaining a loan is on a par with a farmer who obtains a loan; therefore the former should not be required to pay a higher rate of interest. A 5 per cent interest rate should be fixed in the bill that follows this resolution. A rate of 6 per cent should not be allowed. A 6 per cent rate is the maximum provided in the Bank Act.
The third suggestion I wish to make is that this guarantee should apply to credit unions and to the loans made to small businesses by credit unions as well as by banks. I ask the minister whether this was considered and whether any discussion has taken place with credit unions across Canada and their central organizations as to whether this course should be followed.
I am a strong supporter of the credit union movement. I think it is worth while for Canadians to be encouraged to save in a nonprofit, democratically operated organization such as a credit union. I can tell the minister that there are hundreds upon hundreds of communities across Canada where credit unions are providing an essential and valuable service that is not provided by banks. I believe that inquiry will show that small businesses in this country have had access to credit from credit unions in recent years. It has been almost impossible for small businessmen to obtain intermediate term credit through local banks because this is against banking practice.


Ernest James Broome: Mr. Chairman, would the hon. member permit a question? Does the hon. member know that credit unions charge 12 per cent interest as a minimum?


Hazen Robert Argue: No, I do not know it because it is not a fact.
74	HOUSE OF
Guarantee of Loans to Small Businesses


Mr.   Brooms@: I happen to be a member of a credit union. I have borrowed from a credit union, and they charged 1 per cent per month or 12 per cent a year.


Hazen Robert Argue: Mr. Chairman, this is the kind of logic which usually leads to erroneous conclusions. The hon. member, who is a good friend of mine, says that he belongs to a credit union and that this one union charges a minimum of 12 per cent. He then proceeds to ask me the general question if I know that credit unions across Canada charge the rate of 12 per cent, and the answer is no.


Ernest James Broome: They do.


Hazen Robert Argue: Oh, no, they do not.


Ernest James Broome: Ask the hon. member for Burnaby-Coquitlam. He is a member of a credit union.


Hazen Robert Argue: I have borrowed from credit unions, and I never paid a rate that high.


Paul Theodore Hellyer: You got a special rate.


Hazen Robert Argue: I had no special rate. The hon. member for Regina City is in his seat. I congratulate him for being in his seat.


An hon. Member:: You would be better off if you were in yours.


Hazen Robert Argue: The hon. member may be here quite frequently. I am not attempting to criticize him. I am pleased to see him in his seat; let me put it that way. The hon. member might be able to tell the committee what interest rates are charged by the large and successful credit union in his city, the Sherwood credit union. The latest information I have is that the current rate is approximately 8 per cent; I think it varies with different types of loans. This is a huge credit union that has been very successful. The hon. member for Regina City will correct me if I am wrong, but my impression is that the general rate charged by credit unions in the city of Regina today is in the neighbourhood of 8 per cent. I see that the hon. gentleman nods his head in the affirmative.


Ernest James Broome: The maximum under this resolution will be 6 per cent.


Hazen Robert Argue: The maximum under this resolution is nothing. It is the maximum in the Bank Act, which is of course 6 per cent. What the bill that will follow this resolution will represent is not an interest rate at all but a guarantee. I suggest that the same guarantee that is being given to the chartered banks of Canada should be given to the credit unions. I am sick and tired of having placed before this house by this government and by its predecessors good legislation


Some hon. Members:: Oh, oh.


Hazen Robert Argue: -which is good because it provides an avenue of credit for certain borrowers but which is inadequate because it discriminates against credit unions. Credit unions in many localities have been providing credit to small businessmen. When the bankers have said no, the credit unions have said yes. The government now comes forward with a guarantee and makes the guarantee applicable only to the banks. I say that is rank discrimination, and that this should be corrected. Credit unions are providing exceedingly good service in Canada. They are supported by Canadians all across our great land. They should have the support of the government in their worth-while endeavours by being placed on the same basis as the banks by way of guarantee under this legislation.
I have in my hand a publication entitled "Credit Unions in Canada", a report of the economic division of the Canadian Department of Agriculture for 1959. In that year it is reported that there were 4,566 credit unions in Canada with a huge membership of 2,347,317. There are many communities in our country where banks do not exist and banking facilities are not available, but which have credit unions. I suggest there is no solid reason why this legislation should not apply to credit unions.
I made the statement a little while ago that my understanding was that the Sherwood credit union, this very large credit union-I do not know whether it is the biggest but it is one of the biggest in Canada- charges a current rate of some 8 per cent. But there are certain advantages which obtain with respect to a loan from a credit union which usually do not obtain with respect to a loan from a bank. There is an insurance provision. If the person who has the loan should die, then the insurance wipes out the obligation so that the obligation is not one which the estate has to pay. I think it is ordinarily assumed that this particular insurance costs in the neighbourhood of 1 per cent.
The credit unions usually follow the policy of paying a much higher rate of interest on deposits than is paid by our chartered banks, so while their practices are somewhat different from those of the chartered banks, yet in my judgment they provide an excellent service and they should have the same guarantees that are given to banks.
The government has said that this measure is to help small business. In my opinion there is no better type of small business in our country than credit unions, and this legislation should be designed to assist in the development and expansion of credit unions and their facilities. I think the thousands

upon thousands of small business people across this country who have been doing business with credit unions and who have been getting credit facilities from their credit unions would welcome the inclusion of credit unions in this legislation by way of guarantee. If there were some administrative difficulties, I am sure the minister and his officials would be able to work out with credit unions across the country a method of bringing their loans under this kind of legislation.
It will be seen that without this kind of credit a very definite discrimination will be worked against credit unions. It means giving preference to the banks. The businessman can go to the bank, the bank can provide money, knowing that it has a government guarantee against 10 per cent of the aggregate. For the credit union there is no such guarantee.
Let us not fool ourselves into thinking that the banks will be undergoing any risk whatever with a guarantee of 10 per cent of the aggregate amount of the loan against loss. It means that it is absolutely impossible for the banks to incur the loss of a single dollar under this kind of legislation. The last time I looked at the figures I found that losses under the Farm Improvement Loans Act were running at, I believe three tenths of one per cent of the aggregate loans. The guarantee here is 10 per cent; therefore it is perfectly obvious that the banks are not undertaking any risk of any kind in doing this kind of business.
I make a plea to the minister that between now and the introduction of the bill, or certainly between now and the time the bill is discussed on second reading, he take all the steps that may be necessary to include credit unions in this legislation.


Mr. Aiken:: It is not very often that a person in public life has reason to feel satisfied, but when I heard His Excellency refer to loans to small business in the speech from the throne I felt very elated. I might also say that I am very proud to belong to the party whose government brings in this legislation.
For many years small business has been fighting an uphill battle. It has been very evident from all the briefs that have been presented to the government, from all the suggestions that have been made from all parts of this house for many years back, that this legislation has been required. Without being unkind, may I say that yesterday I heard the hon. member for Burin-Burgeo say that the idea was expressed by the Leader of the Opposition on February 1, 1958. At that time I felt that I should have liked to ask
Guarantee of Loans to Small Businesses him what the position of the Leader of the Opposition was on February 1, 1957 and February 1, 1956, and in the previous years, because I had heard statements that loans to small business had been requested for many years in the past. The hon. member for Burnaby-Coquitlam took us back as far as 1930, when loans to small businessmen had been requested in this house. Therefore, with this background, with all the urging that has been placed on this government since it came into office, and on previous governments, it is a great satisfaction to finally see this assistance to small business.
The present government came into office on a policy of aid to small business. This has not only been brought out by us many times; it was mentioned by members of the C.C.F. group yesterday. This is a fact. We did come in on this policy, and perhaps it might be said that it took three years to get around to putting it into effect. I think it took three years to clear up the underbrush of the past administration.


Paul Theodore Hellyer: It will take three decades to clear up the mess of the present administration.


Gordon Harvey Aiken: The hon. member for Trinity may make his interjection, but I should like to ask him how many years the Liberal government was in power during which this proposal was made and nothing was done about it.


Paul Theodore Hellyer: Business was good then.


Gordon Harvey Aiken: Twenty two years.


Paul Theodore Hellyer: There were not so many bankruptcies, either.


Gordon Harvey Aiken: Yet just yesterday hon. members of the opposition were saying that this legislation had been asked for since 1930, and at every session since then. I do not know how on earth one can justify both these statements.
In 1958 this government established the small business section of the Department of Trade and Commerce. They made a small start, but it was a beginning. During the last session amendments were made to the Combines Investigation Act which, in our opinion at least, were for the assistance of small business, to help their position in the economic field in Canada. Those amendments were fought right through to the bitter end by the opposition parties, right through to the final vote in this house. Nevertheless they were passed, and they did benefit small business.
The industrial development bank has been mentioned. The hon. member for York North
76	HOUSE OF
Guarantee of Loans to Small Businesses did not express any great admiration for the services of the industrial development bank, and I am inclined to agree with him. But there have been signs recently that they are going to assume the responsibilities for which they were set up, and make loans to help the manufacturing and industrial segments of this country to carry on and compete in international affairs.
Finally, we have the loans to small business which are now proposed and which I believe is the final piece of legislation to round out the type of assistance to small business that has been promised by this government.
My own interest in this matter has been more than passing, although as hon. members know it has been mainly confined to assistance to tourist operators because my riding of Parry Sound-Muskoka is best suited to the operators of tourist establishments. Nevertheless, X have recognized that other small businesses require some assistance. Tourist operators in particular have had credit difficulties, not only in recent years but always, because of the fact that their business is classed as seasonal and risky, and the banks do not consider it a first class security. Mortgage loans are difficult to secure for tourist premises because in many cases the business is only as good as the man who is operating it, and the mortgage companies do not want to have a tourist operation on their hands. In order to keep up with the competition that is coming not only from other areas of North America but from	overseas as	well,
the tourist operator has to make general repairs and improvements. He has found himself unable to do all this work that is necessary because of the lack of credit facilities.
In passing, I should like to mention the fact that on July 28, 1958 I was fortunate enough to have a resolution in connection with loans to tourist operators debated for one day on the floor of the house. I believe this did draw to the attention of the government and the country generally the plight of these operators. I have already mentioned that in 1959, in various speeches on the budget and during supply motions, I referred to this subject. Earlier this year, in February, I participated in the discussion of a resolution respecting small loans. I should like to point out also, Mr. Chairman, that I have a resolution on the order paper, No. 33, which undoubtedly will not be reached at this session but which now becomes completely unnecessary because in this resolution I have requested the government to give urgent


consideration to loans for the construction, improvement and repair of business premises and tourist operations.
I should like to make one reference to the tourist industry, because there was a brief presented to the government on May 1, 1958 by the Canadian Tourist Association, which is a body speaking principally for tourist operators in this country. The requests in this brief were in very much the same terms as the measure now being enacted. At page 5 of the brief the association says, referring to plant improvement:
The tourist industry is composed mainly of small businesses. While the few larger establishments, such as the hotels and lodges of the transportation companies, are well known, the greater percentage of restaurants and accommodation establishments are small. Many are family enterprises.
Most of Canada's hotels, resorts and camps are 30, 40 and 50 years old. They were built when our national standard of living was not as high as it is today, when many hotels were not equipped with private baths or even running water in the rooms. At that time the rooms were much smaller and were not furnished as comfortably as the travelling public expect and demand today.
I will not read any more at that point, but on page 7 the association points out that one of the major deterrents to plant improvement is the lack of credit facilities. I do not intend to labour the subject of tourist operations, Mr. Chairman, because it has been discussed many times in this house. In summing up, however, I should like to point out a few'things that have not already been mentioned in the debate.
The first thing I should like to point out is that construction and improvement of business premises is going to have an effect on the Canadian economy similar to that which the housing program had. In other words building materials, lumber and all those items which go into this type of construction and improvement of small business premises are the very items that are produced in Canada. The production of these items will make work for the lumber camps and ultimately this will stimulate the Canadian economy. I feel it is a good thing that loans should be made for this type of work, something that can help our small businessmen compete by making their property attractive and making those repairs which have been necessary over the years.
I believe it is clear, Mr. Chairman, that this measure will do a great deal to stimulate the type of winter employment that has been the aim of this government and that, in addition to the matters already mentioned by other speakers, Canada will get a lift out of the type of construction that will be made possible by this measure. Until we actually see the bill we cannot comment on the details. I think perhaps some of the comments

that have been made and questions asked may be answered when the bill is introduced.
For all these reasons, Mr. Chairman, I am delighted to support the government in its presentation of this resolution.
(Translation):


Mr. Sevigny:: Mr. Chairman, I should like to say a few words on the resolution now before the house. We note with some satisfaction that it has the unanimous support of the house.
In my opinion, the measure is a constructive one and should work to the best advantage of the nation as a whole. Of course, it will be beneficial to the people throughout Canada, but I think the province which stands to benefit most from this imaginative measure is the great province of Quebec. Indeed, it is in our province perhaps that you find the largest number of small industries, small businesses and family businesses, the latter being more widespread in Quebec than in any other province. Perhaps this is because we have inherited from old France its traditional individualism. Our province also harbours that kind of individualism, that thrifty attitude which has been a factor of greatness for our motherland and which has also enabled our fine province to grow and to achieve its great destiny.
I should like to pay a special tribute to the Minister of Finance (Mr. Fleming) for initiating such an original and progressive measure. I think the Minister of Finance has done more for his country than any minister of finance in a previous government. I think it is a generally accepted fact that no government has done more in the field of housing than the present government.
Furthermore, this government has looked after the needs of the farmer by providing him, both in the past and in the present, with the credit needed to improve his equipment and his farm. Now the government is turning to the medium income businessman, and the medium size business, who are in need of long term credit if they are to improve their position.
I think this measure answers those who, for too long, have been complaining about certain credit restrictions.
It must be realized that in some cases, banks have been forced, quite against their will, to turn down applications from people who were seeking funds to expand their businesses. It must be realized that in many cases, expansion of small businesses was restricted and, indeed, completely halted due to the fact that the credit needed by businessmen was just not available. Now today,
Guarantee of Loans to Small Businesses thanks to this legislation, our businessmen whose means are limited can at last improve their premises, extend their plants and modernize their equipment. Moreover, I think that, from every point of view, the proposed legislation will bring about the following results: First of all, it will create employment for a great number of our fellow citizens, and second, a considerable amount of money will be put in circulation, which will mean improved purchasing power for our people. Last but not least, as a result of the improvements our businessmen and industrialists will make in their plants and premises, the aesthetic aspect of our municipalities will be improved considerably.
I think that everybody will join me in recognizing that this legislation is a step forward for the greatness of this country and the progress of our fellow citizens. I am sure that I speak on behalf of hon. members from Quebec, as well as of all the people in my province, when expressing to the Minister of Finance my appreciation for having introduced such an excellent and progressive legislation in this house.
(Text):


Lionel Chevrier: I rise at this stage not to take part in the discussion of the resolution, but rather to bring to the attention of the committee a statement made by the Prime Minister yesterday during the course of another debate. In that statement he asked us on this side of the house to co-operate with the government in an effort to get on with the business of the house in so far as legislation was concerned to bring about an increase in jobs in this country. I listened carefully last evening and again this afternoon, and observed that there have been no less than five speeches made from the other side of the house; and as the Associate Minister of National Defence rose in his place two other members on the other side of the house also rose.
The Minister of Finance has made it quite clear that this is an important measure. We on this side of the house have acquiesced in that view by putting up one speaker, namely the hon. member for Burin-Burgeo, who has given the point of view of the opposition. The Minister of Finance has also made it quite clear that, according to information he has in his possession from small businesses, this measure might well mean the expenditure of some $75 million involving, although he did not mention the number, a substantial number of jobs, I take it. If that is the case, we on this side of the house
78	HOUSE OF
Guarantee of Loans to Small Businesses think we should get on with this measure and not continue a discussion of it, thereby just taking up time of the house which otherwise would have been taken up by a discussion of the speech from the throne.
I think that was clearly the object of the opposition and, I hope, of all of us in this house, in voting the address in reply to the speech from the throne yesterday. It was done so we could see the various measures the government has in mind to bring before the house. We have one of them now before us. It would seem to me that those of us who want to take part in this debate can do so, as I intend to do, when we get to second reading of the bill. I would therefore invite hon. members of the committee to get on with this resolution so that in due course we can see the bill and then examine the other measures which the government has in mind to deal with the emergency now before us.


Donald Methuen Fleming: Mr. Chairman, cooperation in any part of the house, of course, is appreciated at all times. I think I should say this, however, lest there be some misunderstanding on the point. The speeches on this measure have all been brief. No hon. member has taken undue time in expressing his views.
So far as those participating are concerned, may I say this. Last evening two hon. members spoke from this side of the house, including myself; two from the C.C.F., and one from the official opposition. This afternoon there has been one speech from the C.C.F., several from this side of the house and one hon. member in the official opposition was on his feet, I think just about five minutes ago, seeking to obtain the chairman's eye. I am quite sure that even if some other hon. members wish to make their remarks at the resolution stage rather than wait until the second reading of the bill, those remarks will be brief. I am hopeful that we can have the bill introduced at this afternoon's sitting; I am quite sure we can do so, Mr. Chairman.


Mr. Morton:: I quite appreciate the opinion expressed by the hon. member for Laurier that we want to get on with this bill. The purpose I have in rising this afternoon is to bring to the attention of the minister and the committee a problem that perhaps pertains more to ridings like my own in metropolitan Toronto and other large cities. As we know, in the older areas we have a competition going on between the so-called ribbon strip type of merchandising and the shopping centres; and also, of course, between the corner stores and the chain stores.


One of the main difficulties arising in connection with the merchants in the older sections, in addition to that of being able to raise money to improve their premises so they can display their goods to better advantage, is the matter of parking. That perhaps has been one of the reasons for the development of the shopping centres. I refer to this method of being able to collect stores together and provide adequate parking facilities. I welcome the intention of the government to continue its assistance to small business and to translate promises into action. However, I am wondering whether the interpretation of the act would be broad enough to provide that a number of merchants could borrow money in an effort to get together in providing parking lots adjacent to their premises, something which is a form of improvement to their premises. In certain sections of older cities, as I know is the case in Toronto, merchants would not be anxious to put too much money into the improvement of premises until they could be assured that would-be shoppers had the opportunity of parking near their premises.
Another question, Mr. Chairman, would be related to the fact that some merchants in these older sections would like to move out into newer sections. Would this act permit them to obtain loans to make this move? It may be that under their present circumstances business has not been so good; sales in certain areas have been going down, shall we say, and they feel that they would like to move out of a particular area but cannot afford to do so. Would loans cover the moving from one premises to another, and improving the new premises? Those are the two main points that I wish to bring to the attention of the house.
I know that in respect to parking the government has assisted, through the winter works program, by paying one half of the labour costs to cities that have applied for assistance in that respect. But I suggest that this is not sufficient, because the major cost in obtaining parking lots is the expropriation of property which is necessary to secure these lots. I hope the government will review that situation and give assistance in the older sections in the form of loans to parking authorities to make parking facilities available in those areas. I know this is a municipal matter, but when we are taking this over-all view in assisting merchants, it seems to me unreasonable to provide an opportunity for them to improve their premises without providing facilities for customers to park and then come and look at their premises.
Mr. Chairman, I wish to add my thanks to the Minister of Finance and the government

for recognizing these problems of the small businessman and merchant, and I add my support to the measure.
(Translation):


Mr. Lafour:: Mr. Chairman, I was pleased to notice that the speech from the throne had a paragraph concerning assistance to small businesses, and may I at once congratulate the Minister of Finance for that excellent idea.
The matter seems to be a prime concern of the present government. Scarcely has the address in reply to the speech from the throne been passed than the Minister of Finance has already submitted his resolution to the house and this will be followed by a bill shortly.
The purpose of this resolution is clearly set out. Its object is to help small businesses to improve and modernize their premises and to purchase necessary equipment.
It seems to me, Mr. Chairman, that we are late with this. Our small industries, especially those that have developed in rural areas, are family undertakings, created or established by a grandparent and developed by the father and his children. Those are the people who, today, are most exposed to the competition of shopping centres and especially chain stores. And yet, those are the people who, today, have to face all the social problems in Canadian rural centres. They are the ones who have to serve the population by granting credit or assisting in a number of different ways.
Those businessmen, Mr. Chairman, will soon be able to receive government assistance. They are not asking for charity nor for subsidies. They are not looking for guarantees. They simply want to obtain from our banks-and may I add from our caisses populates-the loans which they require. So 1 am very pleased to see that the government is now attending to their needs in the first place.
In this measure are to be found incentives to further development which will benefit all our people in towns as well as in villages. The projects to be undertaken will help relieve unemployment. Businessmen will be able to employ more people, thus making for increased buying power. Our people are bound to be pleased over it. Therefore, not wishing to delay this resolution further, I again offer my most sincere congratulations to the government and to the Minister of Finance for this splendid initiative.
Guarantee of Loans to Small Businesses


Mr. Crouse:: Mr. Chairman, it is with
pleasure that I rise to speak on this resolution, primarily because it is the first measure of its kind in Canada's history that recognizes the small retailer and, second, because it will be of immeasurable benefit to many small business establishments in my riding. The very wording of this resolution is indicative of the consideration given by this administration to the average citizen engaged in independent free enterprise.
There are some who will question this measure and ask why it was necessary. Generally speaking, a small business is one with a limited investment that is independently owned or employing a limited number of people with relatively small sales.
What is the problem of the small business? In recent years competition has become increasingly keen owing to the activities of the large corporate chains and the supermarkets, which rely on their ability to draw customers from a larger area than their own communities. Moreover, supermarket locations are not usually available to small business, due to their financial standing, as their lease of premises is of little help as security for initial bond issues. However, independent stores are a necessity to round out retail sales in shopping centres. To survive, small business concerns therefore need capital for modernization to keep pace with the times.
When you have the limited financial resources which I have just outlined, you cannot borrow long term money from the public or other sources. The matter is an immediate problem, however, which cannot wait until enough money is secured, or set aside, from the profits. The present movement is too rapid to permit this.
What small business needs, therefore, is a plan under which an approved risk can borrow money, repayable on extended terms. At best, banking accommodation, though substantial, has been of a more temporary nature, and the fact is that suppliers, generally speaking, can do no more than render assistance in carrying inventories and receivables. Long term loans have rarely been made available to the average retailer.
The need for extended credit is not something new in our economy: it has been recognized before by governments in various forms. For instance, under some form of guarantee there are the Farm Improvement Loans Act, the Fisheries Improvement Loans Act, home improvement loans and others which I could mention.
I realize that in the provinces of Alberta, New Brunswick, Nova Scotia, Prince Edward Island, Quebec, Saskatchewan and Newfoundland some form of financial assistance is

Guarantee of Loans to Small Businesses available but it does, in the main, pertain to primary industries such as agriculture, fishing and mining. These loans or guarantees are generally first mortgage loans and in the aggregate they have not been large. I believe the experience of loans under these forms of guarantee has been in the main satisfactory. This established procedure therefore sets a pattern for assistance to small business and enables this program to be established on sound business lines with a minimum of delay.
The importance of the small businessman in the national economy is, I think, clearly recognized in all government circles. As has been previously mentioned by other speakers, the industrial development bank was established in 1944 for the purpose of assisting certain small businesses. Unfortunately, however, the administration setting up the industrial development bank did not at that time show any concern for the welfare of the small retailer, for no provision was made for assistance to him.
It is a generally conceded fact that unless the independent retailer can be kept in a reasonably competitive position with the corporate chains it naturally follows that he will go out of business. Throughout the years some wholesale firms, in an effort to keep retailers competitive, have established a service to retailers department. Through this department they give expert advice to retailers in connection with store planning, arrangement of merchandise in the store, and in general what could be summed up as merchandising policy. However, increasing modernization programs demand larger sums of money as chain store competitors have grown in size and range of merchandise, and the independent retailer must follow suit if he hopes to maintain his position. Unfortunately, to date, many aggressive and capable merchants are not in a position financially to remodel or extend their premises, or build new buildings nor are they in a position to finance the necessary new equipment required by a remodelling program.
For this reason I welcome this resolution by the Minister of Finance who, in my opinion, is one of the most capable finance ministers in Canada's history. According to his statement this measure when approved will assist four classes of business-manufacturing, wholesale trade, retail trade and service. As this includes the tourist industry I believe any enterprising Canadian businessman will experience little difficulty in financing his business expansion. Needless to say, the tourist industry is of vital importance to my riding and to Nova Scotia which we call Canada's ocean playground,

and I know there are many in the tourist industry who will take advantage of this type of assistance to improve their present facilities.
It has often been said this is Canada's century. Under the great national development program planned by this government new areas will be opened up for settlement by new Canadians. It is a well known fact that in areas with a population of 1,000 or less there is little to attract the chain store operator. It is in these areas that the independent retailer fills a worth-while need. However, he must still compete with the mail order houses and this measure will enable him to finance the most modern equipment and operate his business at the lowest possible expense.
Finally, when we consider the 1 events that have occurred in Cuba and South Africa, where businesses large and small have been confiscated by the government, or taken over by revolution and revolt, only then do we realize the tremendous opportunity open to businessmen in Canada. In promoting small business we are on safe ground. Under stable government and sound leadership there is a security to business investment in this nation that is not paralleled anywhere else in the world. For these reasons I commend the Minister of Finance on this resolution and hope that it finds ready acceptance among all members of the house.


Mr. Winkler:: I assure you, Mr. Chairman, as well as the hon. member for Laurier, that I shall be brief in my remarks. However, I wish to comment on this particular measure. Certainly the Minister of Finance and the government deserve the commendation of all hon. members and, indeed, of every citizen of Canada for introducing this particular proposal.
It is quite evident from the views which have been put forward already that there is a broad understanding of the necessity for this measure. It is also interesting to note that the proposal has been put forward not only by the Minister of Finance but, long before this time, by other people who have promoted it, apparently, for years and years. However that may be, I certainly compliment the Minister of Finance and the government upon bringing it to fruition. It does not matter to me if members of other parties are anxious to get on the band wagon. I do not believe this will be a very contentious piece of legislation and we will all be very happy to see it made effective.
The restrictions which were placed on the money supply as early as 1955 caused a great deal of concern to small businessmen in this country and certainly from then until the present time it has also, probably, caused

Guarantee of Loans to Small Businesses
embarrassment to some of these people. I feel very strongly on this point, because I feel at times that the chartered banks have been responsible in no small measure for the way in which credit facilities have been handled in the past in that they were not sufficiently generous in supporting this particular phase of our economy. It is gratifying, nevertheless, to hear of the co-operation of these institutions and to hear that they hail it as an excellent measure.
As a result of this resolution the pressure of corporate organizations on small business will be removed to some degree and the independence of those individuals who have made such a worthy contribution to community life in Canada will be restored. I refer of course, as did the hon. member for Davenport, to the retail sector of our economy in particular to which this measure will apply. I have no doubt as to the benefit that will accrue to smaller branches of industry as well as to other phases of the economy, but my remarks will in particular refer to retail business.
The competition in this particular field which is presented by corporate chains has become, I think we can reasonably say, ruthless. The small businessman is feeling this pressure from day to day. When we make the comparison with the unwritten law of ethics that existed among small businessmen this is a very disturbing factor in that part of the distribution system. We must remember that all of these businessmen are true Canadians. They are in our distribution system the best of Canadians. They are that particular segment of the economy that will foster secondary industry, that will put Canadian goods before the public, that will make a concerted effort to sell Canadian goods to the citizens of this country.
Certainly it would be a very simple matter for me to prove to the committee that the small chains as well as the larger chain stores are not too particular in this case because the imports that are causing concern to Canadian secondary industry are being presented, displayed and sold in large quantities by those stores. The small businessman is the man who promotes the welfare of our secondary industry.
In this regard I have had numerous conversations in the last couple of weeks with people interested in this question as well as with those who are participating in this type of distribution of imports. It has been said that I am nationalistic in my views in this case. I did not want to mention the fact that I am in the retail business, but I can assure hon. members that if this is Canadian nationalism I intend to support and promote
it because the presentation of the manufactured goods of Canadian secondary industry is the only way we can get it across to our people. After all, it is the people themselves who will create a market whether for our products or for imported products.
I fear that the day has passed when a businessman's integrity in the community and his own character are used as the basis upon which he can approach a bank for credit facilities. I compliment the minister in recognizing this principle which I think is basic in the outline of the resolution that has been proposed.
I feel as many others do that possibly business in Canada is becoming too dependent on the state for its support but as the hon. member for Kootenay West said last evening we must be aware of certain monolithic powers that are becoming apparent in our Canada. If the end result of the resolution is to create legislation that takes cognizance of these matters then certainly it is a worth-while proposal.
When you, Mr. Chairman, or some other hon. member of the committee participated in the debate the thought was expressed that some value would flow from improving the aesthetic appearance of the business section of small communities. I believe that is true. In many instances visitors will assess the progress and prosperity of a town on the basis of its appearance and the impressions they receive while travelling through its business section. Unquestionably this measure will be of assistance to people in improving the appearance of their establishments and in attracting customers for the sale of the goods to which I referred.
This segment of our business community has been clearly defined by the minister and although the definition does not include some of the factors mentioned by some who have spoken in this debate this remains a worthwhile and notable measure. In my opinion it represents the most imaginative step on behalf of this sector of the business community ever taken by any government in this country. I am pleased to be able to heartily support this measure in every way.


Frank Howard: Mr. Chairman, while I sat listening to the other participants in this debate I thought for a moment that we were at the tail end of the last session because as I recall it we spent the last few weeks of that session discussing the position of small business and its relationship to the Combines Investigation Act. I am sure this proposal will not be as damaging to small business as was the measure introduced last session by the Minister of Justice.

Guarantee of Loans to Small Businesses
In spite of the support expressed for this measure, I think it indicates that we have a slow motion government in office. In introducing this resolution last evening as reported at page 55 of Hansard, the Minister of Finance said:
I may say that when the bill is introduced I think all hon. members will be struck by the similarity of its form to that of the Farm Improvement Loans Act, a similarity which marks not only the scheme of lending under the provisions of the bill but many of the provisions of the legislation itself.
The Farm Improvement Loans Act has been on the statute books for a number of years.


John Whitney Pickersgill: Since 1944.


Mr.. Howard:: I thank my friend the hon. member for Bonavista-Twillingate for enlightening me in that regard. My personal recollection of events in this chamber does not go back to 1944 and I welcome the hon. member's interjection.
We have had the Farm Improvement Loans Act on our statute books for approximately 16 years. This government that promised to help small business has taken this long to discover that such an act existed and that the principle established could be applied to small business loans. I do not know if it is the normal slow motion thinking of the government in office that accounts for the delay or if the pressure of economic conditions has forced the government into doing at least a little.
Apparently this will be a key part of the government's program to alleviate economic conditions, to promote employment and put some people to work. It must be a key part of the program because we were asked to waive the full throne speech debate in order that we can proceed to deal with measures affecting our economic circumstances. This we did.
Last evening I believe the minister said that according to representations made to him this measure will account for $75 million worth of work being done in relation to small business.


Donald Methuen Fleming: That is in the retail business alone.


Mr,. Howard:: Yes, not taking into account wholesalers, manufacturers and so on. I do not know if the minister connected this in his comments with work that could be undertaken this winter. I do not know if he meant $75 million in the retail field this winter or a total of $75 million as a backlog that might even take us into the spring, summer, autumn and next winter.
tMr. Howard.!


Donald Methuen Fleming: According to the information given to us, Mr. Chairman, that is the existing volume of work that could be carried out by retailers in renovating their premises if credit were available to them on intermediate terms.


Frank Howard: It is not necessarily connected with the possibility of work this winter.


Donald Methuen Fleming: I trust that a substantial volume of that work would be done this winter.


Frank Howard: In the minister's comments the two were connected together and one may assume that this was planned. This will be beneficial to a limited extent. I will not repeat the arguments advanced by the hon. member for Assiniboia concerning why this should be extended to include other types of work.
Apart from that, I do not wish to go over that ground again. Too much emphasis has been placed upon the expectation that this will go a long way toward promoting employment. Undoubtedly what has occurred since this government has been in office and since we have had a decline in the economic activity in the country and an increase in the number of unemployed-and the numbers are still increasing-is that we have found many businesses, particularly the small ones, which traditionally are at the mercy of the economic elements, large business, government and everything else-the people who can least afford it-in an economic squeeze. They have had to curtail their spending and eke out their savings in order to keep their small businesses going.
It may be true that there is a backlog of $75 million in the retail field to take care of renovations and things of that kind that have to be done. Because of the economic squeeze of the last two or three years these small merchants will find themselves in a less advantageous position than they would have been in if the government had not been so slow in its actions and had brought this thing into effect two or three years ago. I am not saying that these individual businessmen have no faith in our nation, or no faith in our economy and are not going to borrow money to expand and so on. It is just that they have had two or three years of economic difficulties during which time they have been squeezed by the government and by the large monopoly interests. They have been squeezed on all sides and they find themselves in more and more financial trouble.
I think their desire to expand, their desire to renovate, their desire to do over their stores and so on, in an attempt to build up their businesses may be there; but I am afraid that they will not go to the extent in
NOVEMBER 22, I960	83
Guarantee oj Loans to Small Businesses
doing so that the minister thinks they will unless they can see some definite and sure signs that this government is going to deal with the basic economic problems of this country, and especially create an economic climate and economic structure within which small businesses can function freely and to the fullest possible extent. They want to see signs of growth in the economy, even with a so-called free enterprise government in office. They would like to see some indication of action on the part of this government to deal with the situation. They would like to see that the government itself has faith in our economy and they would like to be sure that the government is able to cope with the difficulties that confront us.
I am afraid that unless the government is able to do that the hopes that it has as to the volume of business which will be done, the number of loans which will be made under this legislation when it is passed by this house, will not be realized and the small business people in the community will be far more cautious in their desire to get into debt if they are not going to be in a position to pay off their debt later on than they will be if the economic climate is good and they feel that they will have sufficient income to get themselves out of debt once they get into it.


Mr. Horner (Jasper-Edson):: Mr. Chairman, we have had another dissertation on gloom and doom from the hon. member for Skeena. I do not intend to say very much on this measure, but there are one or two points that I should like to bring to the attention of the committee and the minister.
First of all, I should like to say to the hon. member for Skeena that he is not aware of what the small businessman is thinking about if, one, he thinks that he is not in favour of the changes we made in the Combines Investigation Act at the last session; and, two, if he thinks they are worried about what this government is doing. They are more worried about the inroads of the creeping socialism that is taking place in Canada than anything else.
I want to bring to the attention of the committee the fact that if this legislation is to be as effective as we would like it to be the challenge will be to the banks of this country. It is because of my knowledge of the workings of the Farm Improvement Loans Act that I bring this to the attention of the minister. There have been occasions, particularly in western Canada, when we have felt that the banks have fallen down on this challenge even though their loans were guaranteed. Sometimes it has seemed to us that
the very time when the banks had fallen down on this challenge were the times when we had crop failures or other climatic disasters, the very time when the farmers could have used the money. At those times the banks failed miserably in providing loans through the Farm Improvement Loans Act. This happened not long ago in our particular part of the country.
On occasion in western Canada we also feel that the head offices of some of our banks are a little bit too far away from us, and it becomes too easy for the local manager to say, "Well, I am sorry; head office says no". It is this sort of thing that is of particular importance to our small businessmen. They will appreciate this particular legislation. However, I repeat to the banks, the challenge is theirs. This is their opportunity to prove that they can and will co-operate in providing a free enterprise economy with the credit which is needed because if they fail on this occasion they may not get another chance to provide guaranteed loans to our people and the government will be in the lending business directly.
I also wish to point out to my socialist friends that there is not very much difference between some of the large monopolies and government monopolies. In both instances the consumer is the loser. We have seen this here. Many of us who have lived in some of the residential areas of Ottawa in which the grocery or the food market is controlled by one of the large chain stores know that because of unfair zoning regulations, which we now have in most of our cities, the small businessman, the small grocer, is crowded out of those shopping centres and, as a result, the consumer has to pay more for his food. This is something that this legislation can help to correct, but we will need the cooperation of the banks and of our municipal governments in their zoning regulations to make it as effective as it can be made.
I do not think there is any doubt at all that this legislation will provide an innumerable number of jobs for working people right across Canada. I commend the minister and the government on the legislation.


The Chairman:: Order. It being five o'clock, it is my duty, pursuant to standing order 15 (2), to leave the chair in order to permit the house to proceed to the consideration of private and public bills.
Progress reported.



PRIVATE BILLS

Mr. Speaker:: Order. It being five o'clock, the house will proceed to the consideration of private and public bills, pursuant to standing orders. As hon. members will know, there are no private bills on the order paper, and
84	HOUSE OF
Guarantee of Loans to Small Businesses I have been informed that none of the public bills has yet been printed. They must be received from the printer in both languages. In the circumstances it would seem appropriate to revert to the business which has just been interrupted.



FINANCE


[Stage Direction]
The house resumed consideration in committee of the following resolution:
That it is expedient to introduce a measure to provide, by way of a guarantee of loans made by banks to proprietors of small business enterprises, for the improvement and modernization of premises and equipment, and to provide further that any amount paid to a bank under the said measure shall be paid out of the consolidated revenue fund.
Mr. McIntosh:: Mr. Chairman, as a small business operator, I wish to associate myself with the other hon. members who have complimented the Minister of Finance upon the measure he has brought before the house. I should like to have seen it go a little further than the resolution appears to go. However, there are several points in the resolution on Which I would appreciate more clarification.
In his introductory remarks the minister said that the bill to be founded upon the present resolution deals with the provision of intermediate term credit to small business. In my opinion, the use to which the credit can be put is very limited in scope, and I suppose that was one of the purposes of this measure. The resolution states that the use of the credit is limited to the improvement and modernization of premises and equipment. No provision is made for the inclusion of operating or working capital or capital to consolidate liabilities. As I said before, I presume that was purposely omitted from this measure.
If a proprietor rents his premises rather than owns them his use of the intermediate term credit is more or less restricted to the purchase of equipment. It would seem to me that the term "equipment" in this case is more applicable to small manufacturing businesses than it is to the other three categories, that is wholesale, retail or services. I should like to ask the minister, is the definition of the term "equipment" going to be so broad as to include increases in inventory in the case of wholesalers or retail outlets? In so far as service businesses are concerned, would an enterprise conducted by a professional person such as a doctor, dentist and so on, be included?
Then I have another thought in relation to the figure of $250,000 which sets the limit on a small business. Under this resolution, the maximum amount of money that may be


borrowed is $25,000. Is this maximum amount based upon 10 per cent of the gross revenue of any one firm?


Donald Methuen Fleming: No.


John (Jack) McIntosh: It is just a coincidence, then, is it, that the definition of a small business mentions the gross revenue of $250,000 and the maximum amount of the loan is 10 per cent of that?


Donald Methuen Fleming: I gave the reasons for the selection of $250,000 as the basis for the definition of a small business as applied to the gross revenue of the business. The maximum loan permissible under this measure is $25,000. There is no direct relationship between the $25,000 and the $250,000.


John (Jack) McIntosh: The comparison there is 10 per cent, is it not?
Another point I wish to mention concerns the regulations that will eventually be issued under this measure. How broad will those regulations be? I have in mind some of the other measures with which we have dealt during past sessions. One of these would be the Civil Service Act. Under the Civil Service Act, I understand that one and a quarter days is allowed to each employee for each month worked. This seems very simple. It means that for each month worked he is entitled to one and a quarter days holidays up to a maximum of 15 days in any one year. However, a treasury board minute has been passed which states that no employee is entitled to holidays during the first six months of his employment. The regulations, therefore, are much stronger than the act. I trust that the minister will guard against such regulations being enacted under this measure.
Then again, last year, we were mentioning the Farm Credit Act. The purpose to which loans obtained under this act may be put is set out in the act. It is presumed that anyone who can qualify and who wants to use money under the terms laid down in this act can do so. However, in practice that seems not to be the case. Perhaps the hon. member for Skeena, who was so critical of members talking on this bill, could explain why, in the regulations issued under the Farm Credit Act, regulation 12 (2) says this: Where, in the Judgment of the corporation, an applicant for a loan has the resources required to complete an economic farm unit the corporation may decline to make a loan to him or limit the amount of the loan to be made to him.
In other words, under this act there has to be a certain amount of security available before the applicant is entitled to a loan, but in some other cases the board or the bureaucrats, if you wish to call them that, who control this act may determine who

Guarantee of Loans to Small Businesses
can obtain a loan. I have had some cases in which the assets were considered to be too high and the applicants have been refused on that ground. I hope the same situation will not apply in the case of these loans to small businesses.


Frank Howard: I just wanted to say, Mr. Chairman, that I think my friend must be complaining about somebody else. I did not complain about hon. members talking on this issue.


Mr. Nasserden:: Mr. Chairman, this debate has been a most interesting one for many reasons, chief of which may be the fact that this measure has inspired opposition groups to fall all over each other in attempting to claim authorship of this important and timely piece of legislation. The hon. member for Burin-Burgeo must surely recognize how pitiful it was to try to tie this act to the leader of his party. A Pearson plan there may have been, but the Liberal party certainly never had a plan to help small business. That record is one I should like to touch upon later.
The hon. member for Burnaby-Coquitlam and the other C.C.F. speakers have not much faith in the small businessmen of this country or they would not question their integrity by referring to these men taking out loans they would be unable to repay. The outstanding record of Canadian farmers with regard to loans from the banks, farm improvement loans, and so on, leads me to believe that the hon. members should have more confidence in the small businessmen of this country. I believe they will prove to be as equally alert and industrious in undertaking and fulfilling their financial obligations as have the farm people.
If you study the history of small business you cannot escape the conclusion that it is the history of Canada as well. It is perhaps the greatest denominator in our economy. It is one of the pivots upon which development in Canada has depended. There is no more romantic chapter in the history of this country. It is a story of achievement, continued development and community building which, generally, is not fully appreciated. Indeed it would almost appear as though the only time governments in the past have remembered small business was when they imposed taxation or required someone to collect taxes. It is refreshing to note that this government has recognized the vitality of this segment of our economy by introducing this measure which should multiply the effective benefits of small business in every part of the nation.
The role played by small busines is apparent everywhere you go in Canada. I see it everywhere in my own riding, which is an agricultural community, and I can think of scores of towns in the Rosthern constituency in which small businessmen by their foresight and planning, have made those towns stand out from their neighbouring communities. Every time I meet these businessmen I see mirrored in their eyes the future of their communities and the future of Canada as well. They are the real builders of this nation, providing our people with services and leaving to future generations those valuable principles of service and courtesy that singled them out as leaders in their respective communities.
I saw this many times as I visited along the St. Lawrence river and the cities of Montreal, Toronto and Quebec; and it was brought to my attention much more forcibly where the textile industry had been brought to a halt during the past decade. I saw it in the eyes of a taxi driver in the city of Halifax. I saw it in the shops and buildings wherever I went in the maritimes. Doors were barred, windows were boarded up; this was undeniable evidence of the failure of Liberalism in its administration and responsibility in so far as the spirit of confederation was concerned in the great Atlantic region. When I looked at those buildings I knew that they represented, perhaps more than anything else, the utter decay of Liberalism in this country as an active political force. Mr. Chairman, they seemed to be much more than that; they seemed to be like lighthouses alert against the perils and corrosive forces and influences that had over a long period of years robbed the people of this area of their true heritage, namely the promise and vision of confederation.
If I might be permitted to say so, I think the fisherman is a small businessman too. When I looked at the rotting hulks of vessels that had once been proud to claim Canada's fisheries as a thriving and a living industry, I could not help but think of the hon. member for Bonavista-Twillingate, the hon. member for Essex East and the rest of that played-out school of herring, caught and entangled in the web of their own administrative neglect during their period of office.
As I moved across the prairies during the past several years I saw the unfulfilled hopes of implement agents and others written in the story of the padlocks and boards that proclaimed "closed" in a measure that cannot help but touch the heart of anyone who understands the sacrifice that small businessmen make to play a part in their communities.

Guarantee of Loans to Small Businesses
In my own riding the machinery agent and the automobile agent is indispensable. He is the one who introduces new machines that cut costs and increase efficiency. He must provide the plant to service the machinery he sells. He must have the room lor stock and inventory that he must carry in order to service those machines. He must maintain offices and equipment lor the staff to keep accurate records for himself, for his customers and for the company with which he deals as well as for governmental agencies. These things require more capital than the average small businessman has at the time when he needs it most. Other businesses are in like position, whether concerned with groceries, drugs, hardware or any of the other numerous services required in the community.
This measure brought forward by this government should be of great assistance to many of those engaged in small business. During the past several years, a period ol time when we had a Liberal administration that neglected to provide the small businessman with encouragement, people in many parts of this nation found it necessary to get together on a self-help basis and form co-operative organizations in order to provide for themselves those things which businessmen were unable to provide for them under the conditions that existed. Those co-operatives have served a useful purpose and there is no doubt that they will continue to do so in those places where local businessmen are unable to give the service that the people of that local area require. They are also an excellent training ground for people who go into service in those respective areas.
The department of co-operatives in the province of Saskatchewan is doing a fair job. However, the socialist and C.C.F. government of the province of Saskatchewan have never been known as being friendly to small businessmen. Indeed, the only time when they recognized the small businessman was when they raised the 2 per cent education tax to 3 per cent and asked him to collect it. That was a tax that they had pledged themselves to remove prior to their election in 1944. The mortality rate for small business in Saskatchewan has been terrific under C.C.F. administration. It is, of course, interesting to note that for the greater part of this decade we had a Liberal government at Ottawa.
For these many reasons I am therefore pleased to congratulate the Minister of Finance for bringing forward this measure. This measure should help to build the sturdier, more productive business and industrial plant that is the challenge of our day and generation. I

should like to congratulate the Prime Minister and the ministry as a whole upon the implementation of this pledge which was given to the people of Canada as part of our program to be brought forward during the life of the present parliament.
(Translation) :


Mr. Martel:: Mr. Chairman, I do not wish to express my views at too great length on this matter, because I would not want to delay the work which started so well and has been facilitated by the co-operation we have had from the hon. members of the opposition since the beginning of this session. However, I would like to make a few remarks on the financial assistance which the government proposes to extend to small businesses, that is to the owners of small establishments, as indicated in the resolution now being discussed.
When the speech from the throne opening the first session of the twenty fourth parliament in 1958 was read out, the Conservative government announced the formation of an advisory committee to help small businesses or supply smaller establishments with the technical advice they might need with regard to organization. Thus the concept had been launched, which will take form today, thanks to the bill which is to be submitted shortly in order to ensure, by means of a guarantee, loans made by banks to small businessmen for the improvement and modernization of their equipment and premises, as indeed, announced in the resolution now before us.
This bill will greatly help business and our secondary industries in the more remote parts of this country, like the district I have the honour to represent here in this house.
I do not propose to repeat all the points raised on this matter by the previous speakers who, indeed, were on the whole, unanimous in tendering their congratulations to the Minister of Finance (Mr. Fleming), as well as to the Conservative government introducing this legislation.
Apart from the help it will bring to small industries of which quite a few belong to my fellow citizens in the fine province of Quebec, the Minister of Finance (Mr. Fleming) stated yesterday that such help would also be available to the tourist industry. Now that is a very important point for the northwestern part of Quebec, where the tourist industry is just starting to be of any value, more particularly since several of our highways leading into Montreal have been paved. Besides, the Abitibi highway system will be completely paved within a few years. On previous occasions, the senior and junior chambers of commerce in my district more particularly discussed the question of the tourist

Guarantee of Loans to Small Businesses
industry and brought forward a number of suggestions and resolutions in this respect. I would more particularly like to mention the junior chamber of commerce in my district, which prepared an excellent tourist guidebook a few years ago, so that the northwestern part of Quebec would be better known. Anyway, two years ago I took great pleasure in distributing those guidebooks to all members of this house and those of the other place. The publication was bilingual and, besides giving the historical background of our towns and a summary of the history of the Abitibi, it contained a most interesting tourist map.
With the assistance that will be provided to the tourist industry through the act about to be submitted, I hope that improved facilities as well as new commodities will be available and that members and senators who visit my part of the country, as I sincerely hope they will, shall find their stay all the more pleasant.
When presenting this resolution yesterday, the Minister of Finance indicated that the loans will also be available to co-operatives. May I congratulate him on that point. Loans of that kind are already available under the agricultural legislation for the benefit of cooperatives.
Another important point raised by the leader of the C.C.F. group, the hon. member for Assiniboia (Mr. Argue), is that of credit unions.
Under the legislation that the Conservative government is planning to bring down in order to assist the smaller branches of industry, it was pointed out that in some districts of this country interest rates charged by credit unions run as high as 12 per cent. May I say that, as far as Abitibi and northwestern Quebec is concerned, credit unions lend money at 6 per cent. This I know from personal experience, as I am a member of the supervisory committee of the western Quebec credit union (caisse centrale Desjardins). I had an opportunity of seeing the organization at work for several years. To my mind credit unions, as pointed out by several other members, render important services, operating as they do in the smaller communities where banks have no branches.
Banks, of course, operate under federal legislation, and the federal government provides for regular inspections of their operations, whereas credit unions are under provincial jurisdiction-I am now referring to what
is called caisses populaires in French localities. I wonder if the Minister of Finance should not get in touch with provincial anthorities in order to reach an agreement in this regard and make it possible for credit unions to lend money as the banks will be authorized to do under this act. This might require an amendment to the Bank Act or an agreement with the provincial governments concerned. But this is only a suggestion. There is no doubt that the caisses populaires, which have already rendered services to their members, will be called upon to render other services in the future. It would be a good thing, I think, if they were allowed to benefit by the bill which will be introduced following the present resolution.
(Text):


James Ernest Pascoe: Mr. Chairman, the proposed measure to provide government guaranteed medium term bank loans to proprietors of small businesses has been very well explained by the Minister of Finance. I think, also, that there have been a sufficient number of statements from both sides of the house to indicate general approval of the government's latest move to fulfil one more of its pledges. I was particularly struck by the speech of the hon. member for Kootenay West from the C.C.F. group, in which he impressed on the committee the need to help small business private enterprise, which the proposed measure is intended to do.
I intend to make only a brief comment at this time. I just want to thank the Minister of Finance, and through him the government, for acting on suggestions put forward by many members on the government side. We private members form the closest liaison between the small business man and the government.
I am sure I speak for my fellow members when I say that we have each had close contact with small business operators on this particular question of government guaranteed bank loans for store renovation and business expansion.
I have here many letters from small store owners in my constituency, and I will name just a few places: Govan, Aylesbury, Holdfast, Watrous, Regina Beach, Duval, Nokomis and Cymric. I just mention those places to indicate how much interest there is in this proposed legislation. I have answered each letter, stating that we have presented the writer's views and hoped for early action by the government. The resolution indicates that this early action is now forthcoming, and along the lines suggested. Each of these letters from store owners made one particular request-government guaranteed bank loans.
88	HOUSE OF
Guarantee of Loans to Small Businesses For example, one letter which I have here contains this statement: "Small business loans can be self-liquidating

all that they need is government guarantee".
The loans in the proposed measure will apply to four categories; manufacturing, wholesale trade, retail trade and service business, including the tourist business. It is estimated that there are 150,000 independent retailers in only one of these four categories in Canada. This will give some indication of the number of small businesses that will come under the scope of the proposed legislation.
Government members have had a sort of informal committee to discuss among themselves the problems of small business. We have had direct contact with representatives of small business. I am sure they will be pleased by the measure that will be brought before us. I have already had expressions of approval from Ottawa store operators and I expect many more such expressions of approval by letter from those I represent in Moose Jaw-Lake Centre, Saskatchewan.
I am pleased to support fully the recommendation of the Minister of Finance, and I am proud to be a member of the government bringing in this much needed legislation.


Frank Howard: Mr. Chairman, the hon. member for Chapleau raised an interesting point with respect to provincial and federal jurisdiction; perhaps there will be conflict if credit unions are considered lending agencies. If this were so, they would be classified as such under the legislation.
I wonder if the minister would give us the benefit of his thoughts on this particular matter and tell us whether there has been any discussion with provincial authorities with respect to credit unions, whether this is a problem and there is conflict, and what circumstances exist at the moment.


Donald Methuen Fleming: Mr. Chairman, there have been no discussions with provincial authorities on the point; but I think all hon. members appreciate that credit unions and caisses populaires are strictly under provincial jurisdiction, and not federal. There would be a problem in that respect.


Frank Howard: Would they be classified as lending agencies under this legislation?


Donald Methuen Fleming: This legislation authorizes government guarantees for loans by chartered banks.


Frank Howard: I appreciate that. That will be the case when this legislation is put into effect. But will there be a conflict in this regard? Would the minister address himself to this thought: would there be any jurisdictional or constitutional conflict if it were
[Mr. Pascoe.l

the policy of the government to have credit unions established as lending agencies?


Donald Methuen Fleming: There is no authority on the part of the federal government now to establish any form of supervision over the lending operations of credit unions or caisses populaires. The federal government is qualified and authorized to supervise the operations of the banks. There is the essence of the problem.


Frank Howard: That is what I was asking. The minister has indicated that he has considered this matter. Before we proceed with the resolution, there is one other point that perhaps has not been mentioned. What is to be the interest rate contained in the bill?


Donald Methuen Fleming: The bill does not stipulate any interest rate. It will be a matter that will be decided from time to time. One would expect that that prime rate in an ordinary case would be subject to a reduction in respect of the value of the government guarantee.


Frank Howard: In effect it would be 6 per cent?


Donald Methuen Fleming: Oh no. The prime
rate today is 5| per cent. We shall have an opportunity of discussing with the banks what reduction from that existing prime rate should be made because of the federal guarantee.
Resolution reported and concurred in.
Mr. Fleming (Eglinlon) thereupon moved for leave to introduce Bill No. C-40, respecting loans to proprietors of small business enterprises for the improvement and modernization of equipment and premises.
Motion agreed to and bill read the first time.



NATIONAL HOUSING ACT

[Stage Direction]
AMENDMENTS TO EXTEND LOAN REPAYMENT PERIOD; TO INCREASE AGGREGATE AMOUNT;

David James Walker: that the house go into committee to consider the following resolution:
That it is expedient to introduce a measure to amend the National Housing Act, 1954, to further encourage the demand for housing by increasing the loan ratios and extending the periods of repayment for loans made to home owners and1 home builders and for rental housing; to increase from twenty five million dollars to fifty million dollars the aggregate amount that may be paid out of the consolidated revenue fund for urban redevelopment purposes; to increase from two hundred million dollars to five hundred million dollars the amount of home improvement loans that may be guaranteed under part IV of the act by Central Mortgage

and Housing Corporation; to authorize the corporation to undertake jointly with provincial governments and municipalities the acquisition, improvement and conversion of existing buildings in urban renewal areas for housing purposes; to authorize the corporation to make loans to universities to assist in the construction of residential accommodation for students; to authorize the corporation to make loans and rebates thereon to municipalities or other competent municipal authorities to assist in the construction of sewage projects for the elimination of pollution and to provide further for certain changes in connection with the administration of the act.
Motion agreed to and the house went into committee, Mr. Flynn in the chair.


David James Walker: I trust that hon. members of the house will indulge me if I read the technical part of the statement I have to make. I do not like having to do it, but this is a complicated bill.
Since early in 1957 Canada has built half a million houses. Two million persons are now living in this new housing accommodation. In other words, one ninth of the population, men, women and children are living in new accommodation built in the last four years. In this step forward the federal government, through its housing policy, has played a very significant role, indeed, a dominant one. From 1957 until now National Housing Acts loans were approved for 225,000 new dwellings. Nearly half of these came directly from the government itself through its agent the Central Mortgage and Housing Corporation.
Since September, 1957 Central Mortgage and Housing Corporation, expanding beyond its old frontiers, has been making loans in all parts of the country, not merely in small towns, as it had hitherto done.
Most of the corporation's loans have been to home owners but it has substantially increased its rental loans to limited dividend projects intended for low income families and old people. For them some 15,000 loans were made.
Home owner loans accounted for about
35,000	of the total of C.M.H.C. loans from 1957 to the present date. At the moment any home owner anywhere in Canada, with any income, can get a housing loan from C.M.H.C. if none is available to him from a bank or other approved lender. I ask hon. members to note that particularly. Loans by C.M.H.C. to builders from 1957 to date have been approved in respect of some 50,000 units.
Taking all C.M.H.C. loans into account from 1957 through 1960, that is to say, loans to limited dividend companies, other rental entrepreneurs, home owners and builders, a total amount of $1.1 billion has been committed, accounting for 108,000 new dwelling units. The scale of this lending policy more than any other single thing represents the main contribution of this government to
National Housing Act
housing over the past three and one half years and the main departure from earlier policies.
The lending program was pursued with the basic aim of increasing house building in Canada in order to improve housing conditions in the country. The policy, especially on builders' loans, also served another important purpose

the support of winter employment, and in its application the government took special pains to direct its assistance as far as possible toward the lower income range of eligible N.H.A. borrowers.
This endeavour of the government resulting in over 100,000 houses in three and one half years for people of modest incomes should be seen in the perspective of another 125,000 built under the act with insured loans by approved lenders. In other words, the government insured the approved loans. About a quarter of a million other houses were built outside the terms of the act at the same time. These latter, built with private funds, were largely for families with more substantial incomes and bring the total, as I said a moment ago, to the half million new houses.
Against this background I should like to comment on housing developments in the year just coming to a close. There will probably be about 110,000 new housing starts. I say that for the benefit of my hon. friends opposite. There will probably be about 110,000 starts in 1960 and something over 120,000 completions. This will represent a decline of 22 per cent in starts and 15 per cent in completions as compared with the 1959 program.
Some hon. members will recall-as will the hon. member over there who is smiling- that about a year ago in assessing the house building prospects for 1960 I did warn of a likely decline in the number of new starts. More hon. members will recall, however, that my declared expectation was 125,000 starts, rather than 110,000. I mention this for the benefit of those hon. members who may have allowed my prediction to slip from memory, so that everyone in the house may be equally possessed' of this incriminating piece of information. In the church, as all hon. members know, one may lay just claim to the office of minister without exemplifying the rare gifts and attainments that are proper to the role of prophet. I trust that hon. members will allow me the same latitude in this place.
For the first time since the war the demand for housing has become a limiting factor. Generally throughout the fifties the demand for N.H.A. loans was strong enough to use up available supplies of funds. Beginning in the fall of 1957, as I have mentioned earlier, private funds under the N.H.A.

National Housing Act
were supplemented by government funds on a major scale. The application of these funds enabled the house building industry to maintain a high output from the fall of 1957 to the end of 1959. It seemed likely, in view of the rates of building achieved in this period, that the excess demand for N.H.A. funds would not last indefinitely and that soon or later a time would be reached when substantial increases in house building could not be brought about merely by making funds available on the existing terms, although much could be achieved by improving the terms.
A year ago, however, there was no clear evidence that demand was weaker. The decline in house building forecast at that time was based on the definite expectation that there would be less mortgage money available under the act in 1960 than in 1959. The banks had virtually stopped mortgage lending because other investments were more attractive to them. It was known that the amount of government lending in the year ahead would be substantially curtailed. Lending by the life, loan and trust companies under the act was then close to a standstill.
I remember being tremendously worried about this. It was one of the first things I encountered when I became minister. These lenders were brought back into the fold by the increase in the insured mortgage interest rate from 6 per cent to 6f per cent which took place last December. The banks were unable to take advantage of this higher rate and the change had no effect of course on the expected participation by C.M.H.C. whose lending is governed by policy considerations rather than yield.
However, the decline in N.H.A. mortgage lending by C.M.H.C. and the banks does not wholly explain the fall-off in starts in 1960. Demand was also cut off. There was a distinct easing in the supply of mortgage money at mid-year but we did not immediately get a corresponding increase in mortgage loan approvals. Although the flow of insured loans has now gone up, the total for the year is still down. Activity under direct C.M.H.C. lending programs was also falling short of expectations. As is to be expected in this kind of situation there were still some builders and some prospective owners in some areas who were unable to get mortgage loans and it was primarily to meet these special demands that C.M.H.C. direct lending policy was eased over the past few months.
Hon. members will recall that the original intention for 1960 was to keep direct C.M.H.C. lending commitments within $175 million which meant about 18,000 dwelling units. This required a more restrictive policy in

the allocation of C.M.H.C. loans than had been applied in 1959 and in the previous two years. Aside from limited dividend projects, the initial policy established in April was for loans to home owners only, and those only with incomes below $5,600. In July it was announced that as from September 1, loans for borrowers with incomes of up to $7,600 would be available and that builders could have loans for dwellings whose purchasers, also subject to the $7,600 income limit, were on hand.
Market conditions at this time, however, cautioned against the provision of speculative loans to builders. Early in October the income limits were removed altogether and by the time the year is over C.M.H.C. will have committed loans for about 18,000 units all together, representing an amount of $175 million. While this result is close to the target set early in the present year it required a less restrictive lending policy throughout the year than we had originally expected because of demand weakness. As hon. members know we did not anticipate the weakness in demand which transpired around the beginning of June. Fortunately the means to strengthen demand are at our disposal. Amendments to the National Housing Act are now proposed which will, among other things, increase the size of insured loans that N.H.A. borrowers can obtain.
Having given the background, let me now deal with the substance of what the proposed legislation proposes. This will lower down payments, thereby admitting new borrowers to the active market.
Hon. members will recall that when this government came to office we found that the equity or down payment requirement for home ownership loans was so high that a very large proportion of Canadian families were unable to take advantage of the N.H.A. to acquire a home. At that time the maximum size of insured loans under the act was set at 90 per cent of the first $8,000 of lending value and 70 per cent of the remainder. In December of 1957 we amended the act to provide a loan of 90 per cent of the first $12,000 of lending value and 70 per cent of the remainder. This change had the effect of permitting large numbers of lower income families to enter the market. I may say that the guiding rule of this government has been to assist the little man to own his own home. This government has always considered it desirable to do its utmost to assist borrowers at the lower end of the eligible income range. We have watched the situation carefully during the past three years and it has become evident that a further reduction in down payment would enable many more Canadian families to buy a home.

As will be shown in the bill we therefore propose to change the ratio from 90 per cent of the first $12,000 of lending value to 95 per cent of the first $12,000 of lending value and 70 per cent of the remainder, as before. This relates to the lending value as distinguished from the purchase price. This change will have the effect of increasing the loan and reducing the down payment for a house worth $10,000 by $500; for a house worth $11,000 by $550; and for houses worth $12,000 to $14,000 by $600. It will have no effect on houses worth more than $14,857.
As hon. members can see this is designed to help the little man. I might add that there are many Canadian families who have the income to make the payments on these houses but who are unable to get together the initial amount to make a down payment. As hon. members are aware the initial down payment is usually very substantial when one considers the other expenditures that have to be taken into account in connection with the purchase of a dwelling.
While this government has always been concerned with the problem of lower income families, it is important to recognize that at least half of the N.H.A. demand is for dwellings worth $14,000 and up. The N.H.A. maximum loan by regulation for single family dwellings has remained at $12,800 since 1954. During this period construction costs have risen substantially, and higher construction costs have caused down payments on houses worth more than $14,000 to increase. The cost of housing and property has gone up by at least 20 per cent, I would say.
Higher down payments have made more N.H.A. borrowers resort to second mortgages at high rates of interest or other forms of secondary financing to accumulate the necessary down payments. This year approximately 20 per cent of N.H.A. borrowers had to make use of second mortgages to accumulate the necessary equity. Hon. members know what disaster can sometimes overtake people when they become involved in second mortgages. It is considered necessary, therefore, to raise the maximum loan set by regulation. It is proposed to change the present maximum loan from $12,800 to $14,200 for single family dwellings with three bedrooms or less-that is our standard house-and to $14,900 for larger dwellings.
There will be corresponding changes in maximum loans for other structural types of dwellings. This change will have the effect of increasing the loan and reducing the down payments on houses worth $15,000 by $700 and for houses worth $16,000 and up by $1,400. We believe that this increase in loan will go a long way toward helping potential home owners to accumulate the necessary
National Housing Act
equity and reduce the incidence of secondary financing at onerous terms for some borrowers.
The combined effect of these two changes will reduce down payments for a broad range of N.H.A. borrowers. The higher loans will of course increase monthly payments of principal and interest on N.H.A. mortgages. In order to make it possible for lenders to reduce monthly charges, it is proposed to amend the act to extend the permissible repayment term from the present 30-year maximum to 35 years. That does not mean that a person is compelled to do that, but if he requires it he can get the 35-year maximum. For example, an increase of $600 in a $12,000 loan at 30 years will raise monthly payment charges by $3.85. To offset this an extension in the repayment period from 30 years to 35 years will reduce monthly charges on a $12,600 loan by $3.47.
On rental housing-this is very important -the act now authorizes loans of 80 per cent of the lending value. To keep rental demand in step with home ownership building, it is proposed to raise this 80 per cent ratio to 85 per cent. Similarly, there will be adjustments to the maximum loan amounts authorized by regulation for the various structural types of dwellings built for rental purposes, such as row houses, apartments, duplexes and triplexes.
These changes in the act and in the regulations are being put forward at this time to support demand along a broad front. It has been suggested by some that demand could be stimulated by a lowering of the interest rate as well. So it could, but in the present market a lower interest rate would reduce the amount of private lending under the act, and place heavier pressure on the federal government to meet the increased demand for loans. Even today, with the moderation in the pressure of demand which I have already mentioned, the federal government through C.M.H.C. is still carrying a large part of the lending load and hon. members will keep in mind that we are just residual lenders; we make no direct loans unless the borrower has been refused by a bank or by another approved lender. It is no part of our intention to increase the demand for housing funds and at the same time kill the incentive of private lenders to supply as much of the funds as possible. Again I cannot forget the way in which the funds dried up toward the end of 1959, when an interest rate of 6 per cent became totally unrealistic and when the borrowers turned in droves and in the thousands to the government to help them out of their dilemma.
This stimulus to demand, brought about bj higher loans, will of course have very definite

National Housing Act
implications for government lending policy as well. It may be that the supply of private funds from the life insurance, loan and trust companies, and from the banks also in time, will be sufficient to meet the increase in demand resulting from this legislation. This is my hope and I should like to say how happy I am that each week the participation of the life insurance companies and the mortgage companies increases over the corresponding week last year. They are really in the market in a big way in an effort to make up for the withdrawal of the banks from the market. Although this is my hope, you may rest assured that this government is not proposing changes to increase demand merely to see it bottled up in the future for want of private funds. This government will not stand idly by in such a situation any more than it has stood idly by in the past. The purpose of this legislation is to permit the continued improvement of housing conditions in Canada and to contribute to the pace of general economic activity. We will not see these purposes frustrated for lack of private mortgage funds. If the present lending institutions cannot provide adequate mortgage funds we shall seek other means to broaden the base of private lending or to enable the federal government to continue its major role as a mortgage lender; but we hope that private funds will be available.
The proposed changes in legislation also offer wider aids to urban redevelopment; public housing and home improvement. Virtually every major city has recently examined its obsolete housing by carrying out an urban renewal study. Only two major cities have not, Edmonton and Calgary, and of course they are in the position of being almost new cities and they may not need it at the present time. This government has encouraged this activity by offering grants of up to 75 per cent of the cost. These studies have enabled our cities to identify the worst areas of blight and to establish priorities for redeveloping these run-down areas. During the past three years this government has approved slum clearance projects for the redevelopment of over 300 acres of blight in Canadian cities. The total cost of acquisition and clearance is estimated to be more than $22 million, and federal contributions of over $11 million have been approved. Projects are currently under way in Halifax, Saint John, New Brunswick, Montreal, Toronto, Windsor, Sarnia and Vancouver.
Many other cities are studying their own special problems and will soon be anxious to secure financial assistance for redevelopment projects. It is the intention of this government to consider all worthy applications and we stand ready to make contributions of

one half the cost of acquisition and clearance in such projects. In order that this growing program should not be impeded we propose to increase that statutory limit for federal contributions under section 23 of the National Housing Act from $25 million to $50 million.
The many urban renewal studies-


Jacques Flynn: Order. I regret to interrupt the minister, but I must call it six o'clock.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
David James Walker: Mr. Chairman, as I outline the plans of the government I should like all hon. members to keep in mind the fact that every one of these plans represent a tremendous amount of employment. I should have referred to that fact at the beginning of my remarks, but I would ask hon. members to keep in mind the potentialities.
We were talking about urban renewal studies at the dinner hour, and these studies have revealed something which is new and something to which I would direct the attention of this house. I refer to the fact that there are very few housing areas that are so run down or so plainly needed for other purposes that massive and complete clearance is necessary. In other words, the blighted areas approved for redevelopment do not all require complete demolition and many potential urban renewal areas contain housing accommodation with many years of useful life which could be rehabilitated and used for lower income families. As I have reiterated many times, we are interested primarily in the little man. If we can provide for him adequate accommodation at lower cost than new housing, so much the better.
Section 36 of the National Housing Act enables the federal government to undertake jointly with the government of any province projects for the construction of new housing for rent, but does not make provision for the acquisition of suitable existing housing in urban renewal areas. This deficiency in the public housing provisions of the act makes area-wide rehabilitation difficult, and consequently cities tend to wait for severe blight to set in and then apply for total clearance aid. The proposed change 'may encourage municipalities to adopt and enforce by-laws governing the maintenance and occupancy of their housing stock and thus prevent rapid spread of blight.
It is now proposed, Mr. Chairman, to amend section 36 to permit the federal government to pay 75 per cent of the cost of

acquiring and rehabilitating existing housing, but this only in urban renewal areas designated by agreement among participating governments. In other words, it will be a corollary to the federal-provincial plans at the present time for subsidized housing. This amendment will enable a federal-provincial partnership to augment the stock of public housing with usable existing housing, at lower cost than is possible with new construction. We have a tremendous demand for such housing at the present time. We feel that this will aid the municipalities, and aid the federal government as well in providing more housing at lower cost. The federal government will continue to participate in worthy projects for new construction submitted by provinces on behalf of municipalities.
Hon. members will recall that the act contains provision for federal guarantees of bank loans for the improvement of existing housing. Before October of this year these guarantees were restricted to loans for the improvement of houses occupied by the owner. On October 11 I announced an extension of this N.H.A. assistance to an entirely new field of residential improvement and repair work. Home improvement loan financing under this act was extended to owners of rental properties, including apartment buildings, for structural alterations, interior and exterior decorating, plumbing, heating, electrical work and other improvements that qualify under the regulations. With our rental housing stock numbering 1,500,000 units, and with owners now eligible for National Housing Act bank loans, an extensive program of repair and improvement of the existing rental housing stock is now possible.
Think of it, gentlemen. With 1,500,000 rental units and with the possibility now of obtaining loans for their improvement, think of the possibilities for employment that are provided all across the country. I am sure that hon. members will appreciate the improvement in the quality of rental housing that may result, and the employment opportunities that this extension of the home improvement program will create. Because of this change it is proposed that the aggregate amount of loans that can be guaranteed under the act be increased from $200 million to $500 million.
In addition to all these changes in the present act I should like now to present a proposal that will add quite new purposes to the legislation and entirely new purposes to the work of Central Mortgage and Housing Corporation. I am coming now to something that has always been in the mind of the Prime Minister. He has constantly thought of
National Housing Act
this, but has not been able, until now, to do a great deal about it. The first of these features is the provision of aid to those municipal works designed to reduce or eliminate the pollution of Canada's waterways. We heard a magnificent speech in this house a year or so ago from the hon. member for Carleton on the subject of pollution, and no words of mine could add to his exposition of the tremendous problem this represents today and will represent in the future unless immediate steps are taken to correct it. As a matter of fact, since the speech from the throne was publicized I have been besieged with calls from mayors of municipalities all over Canada to obtain particulars of the government's proposal. Of course, I have not been able to give them particulars until the bill was introduced in the house.
Great numbers of Canadians are now living in surroundings that are urban in every other respect except that they lack adequate sewage facilities. Less than one sixth of our urban municipalities have adequate sewage treatment plants in operation; perhaps two-thirds of our urban population are living in regions where seriously polluted surface waters are found. Quite a number of years ago I recall being retained by the riparian owners below a city. I was retained simply for the purpose of suing the town, and the town was delighted to be sued because that enabled it to get the provincial authorities to come forward with a grant which would permit the town to instal a sewage disposal plant.


Jacques Flynn: Order. I am sorry to interrupt the minister but his time has expired unless the committee gives him leave to continue.


Some hon. Members:: Carry on.


Jacques Flynn: Do I understand that the committee agrees to give the minister leave to continue?


Some hon. Members:: Agreed.


David James Walker: I thank the committee, Mr. Chairman.
Under the housing act there has always been pressure to build houses in areas not yet provided with municipal sewerage service. This of course requires the house buyer to pay for a septic tank as part of his property. Several disadvantages then ensue because he will require a larger lot and hence more outlay for land and connections to all other services. Even with that safeguard great concentrations of these devices have made for soil pollution in many parts of the country. When trunk sewers and a treatment plant are finally installed the householder will find

National Housing Act
himself paying for duplicate sanitary devices, the earlier on his own property through his purchase price and the later on city property through his taxes. That situation presents a great problem to a great many people.
In order to avoid these difficulties we have tried to confine N.H.A. financing to houses connected to sewers. This effort has had other undesirable results. The amount of land within reach of a municipal sewage system has always been less than the amount of land required for such active house building programs as we have had in recent years, and so available sewered land has enjoyed scarcity values.
Residential areas are less well served with sewers than are other kinds of districts in our cities; newer residential areas are still more deprived, and land just about to be taken up for new housing is the worst off of all for sewers. Thus it has been decided to approach this problem directly by providing loans for municipalities to expand their sewerage systems, these loans to be made under a new part of the National Housing Act.
It is recognized that some provinces and municipalities are already launched on aggressive programs to redress defects in this part of their urban equipment. Indeed, the Canadian Federation of Mayors and Municipalities has quite specifically represented to us, not once but many times, that additional credit resources for this purpose would enable their member municipalities to move ahead much faster than they have been able to do up to the present time. As a matter of fact, the last such statement from them was made to our cabinet as recently as November 8.
Hence, Mr. Chairman and members of the committee, we are bringing down a measure that will extend aid for purposes that everyone agrees must be served if Canadian urban development is to continue in vigorous, healthy and orderly fashion; and we are bringing it into the house in a form that focuses on the areas of most acute need and corresponds with the stated desires of Canadian local governments. Every local authority sincerely wishing to correct the evil of pollution will find through this measure a helping federal hand.


Maurice Bourget: I am sorry to interrupt the minister but I should like to be clear on that point. By what he has just explained, does the minister mean that Central Mortgage and Housing Corporation or the government will be ready to make loans or give subsidies for the construction of main sewers or trunk sewers or whatever he has called them?


David James Walker: I am glad my friend the hon. member for Levis asked that question. They will be confined1 to sewage disposal plants and the trunk sewers and not the whole works. They will be confined to sewage disposal plants mainly and the trunk sewers.


Maurice Bourget: I have just one other question for the purpose of explanation. Suppose there is a development in a new area in a city or that the city needs to replace its main sewer by a bigger one. Would that be covered by the new amendment?


David James Walker: Provided that a sewage disposal plant is being installed. The details of all this matter can be worked out under the regulations. I will be giving the particulars when the bill is presented to the house. Does that satisfy the hon. member?


Maurice Bourget: Yes.


David James Walker: Because individual house connections are already financed in many cases by normal mortgage arrangements, this measure is confined to works of central plants and trunk main characteristics. It is intended that proposed work should be approved by competent provincial health authorities, and that the proposal to borrow under the National Housing Act should have provincial approval before C.M.H.C. will entertain a formal application for a loan. I should think, from past experience of cordial relations between municipalities and C.M.H.C. field offices, that informal consultation will usually precede the formal application. However, it is to be understood that the province will not be the middleman here. We shall be dealing directly with the municipalities; that is to say, the federal people will be dealing directly with the municipalities. Whatever the provinces want to do besides this is up to the provinces. We shall be glad to have them make whatever contributions they can make.
The amount of the loan is to be limited to two thirds of the cost of the proposed work as recognized by C.M.H.C. Just as in housing, C.M.H.C. will be the final arbiter. This loan will be repayable by the municipality over a long term of not more than 50 years, at a rate of interest close to the federal borrowing rate, just as the limited dividend rate is close to the government borrowing rate. Provision is made for loans to be made to a group of adjoining municipalities, a matter of some importance in our growing metropolitan areas where municipal boundaries do not always correspond with the limits of drainage basins. You will be asked to set aside $100 million for this purpose.
You will find that these loans are being made in order to step up this program and to inculcate in the municipalities the desire

for immediate action and also as an encouragement to take up some of the unemployed and put them to work. This whole program is designed to do that. To encourage the most vigorous attack on this problem the measure provides for one quarter of the C.M.H.C. loan to be forgiven where it is spent on work put in place by April 1, 1963. That provision should get the matter rolling right away. Many people have been inquiring, even today, as to when they could get started.
It is anticipated that advances will be made by C.M.H.C. to borrowing municipalities as their projects proceed and as evidence of the costs incurred is tendered to the corporation. A municipality will thus be able to take fullest advantage of the measure by programming its work so that completion is scheduled in the next two seasons.
Hon. members will appreciate that some administrative details remain to be settled by consultation between C.M.H.C. officers and officials of the provinces and municipalities. But what I have said should convince the committee of the government's determination that great strides to overcome this urgent need for major urban sewerage works will be taken all across Canada in the immediate future.
I now want to discuss another realm of legislation also to come under the Central Mortgage and Housing Corporation and a matter in which I have been interested ever since I was in university. The second new feature proposed for the housing act is a provision to make loans to universities for students' residences. This, too, reflects a growing national need. The population sector of university age has been steadily increasing; increasing, as a matter of fact, by leaps and bounds. The actual enrolment of full-time students has risen from 63,500 in 1952 to about 100,000 today and is expected to reach the staggering total of 160,000 by 1966. In recognition of the national importance of our universities, the per capita base of federal grants to universities was increased in 1957 to $1.50.
The national conference of Canadian universities has reported that in 1958, 60 per cent of university students were domiciled 15 miles or more from their university. University residences could then accommodate only about one quarter of their out of town students. That was in 1958-it is much worse at the present time. Our universities are agreed that the advantages of life in student residences are no small part of the educational process. For this reason universities want a substantial increase in the capacity of their student residences. Such residences are needed if our universities are to fulfil their national function. Everyone here appreciates that university life is more complete
National Housing Act
and can afford greater advantages to the student if he has the opportunity of living in a university residence.
A number of university officials have in the past inquired whether the limited dividend section of the act, which offers advantageous lending terms, could be used to finance residential accommodation for students. However, I have had to tell them all that the present section emphasizes family housing in self-contained dwelling units and does not lend itself to this proposal. I think that at some time or other in the past year I have interviewed the presidents of at least eight universities, as well as other officials from other universities, all asking if Central Mortgage and Housing Corporation could do something to alleviate this very pressing problem.
Grants have been made by the Canada Council-which is, by the way, doing an excellent job-for the construction of a few student residences; but of course this source of assistance is limited. Furthermore, it requires an equal outlay of capital by the universities. Consequently, following representations made to us by the Canadian Universities Foundation, we propose to amend the National Housing Act to allow the corporation to make higher ratio loans at low interest rates for the construction of student residences at universities. The proposed loans may be up to 90 per cent of the cost of a project and are to bear the same rate of interest as limited divided loans. In other words, it is something like a limited dividend proposition. They may be made for a term not exceeding the useful life of the project, but in no case for more than 50 years.
Just a week ago the Prime Minister called me in to a conference with university presidents, and they were asked, if a program like this was undertaken by the government, how soon could the universities get under way to alleviate the unemployment problem. You will be very happy to learn that several of them stated that they had plans ready; all they needed in the past was financing, and they could get under way almost immediately, as soon as this proposed act was put into effect.
The growth of Canada's economic capacity has given the government the opportunity to deal with national needs that had to be deferred in earlier years. In a non-partisan vein, may I invoke the goodwill of the hon. members of this house to let us think big at the present time. We are proposing a program of tremendous scope and tremendous prospective results. The amendments to the National Housing Act which I have outlined reflect our sincere conviction that, among these

National Housing Act
unmet needs, improvement of the living conditions of the Canadian people must rank very, very high. With the resources of skill and materials available to us we can induce a large group of new home owners and entrepreneurs to enter the market. And every time you get a man and his family in a new home you have a Canadian who has a stake in the country; and the more people that we have owning homes, the better it will be for Canada. There is no question about that; that is a truism.
We can at the same time broaden the credit facilities for upkeep, repair and improvement of houses already occupied, in other words, rehabilitating existing housing. We can widen the scope of the combined operations necessary to the renewal and revitalization of our cities. We must recognize that the rapid expansion of these cities cannot go on without prompt attention to the grave conditions of pollution developing in some of our endowment of waterways. Much has been done under the housing act to provide dwellings for old people. We believe the next particular group of Canadians in urgent need are those young people leaving home to attend our universities, and on whose leadership the future of this nation may very well depend. Of all the measures that have been brought before this house, those which I have described should, I submit, have the highest priority.
All of the measures I have described will have a substantial and beneficial effect on employment. Just consider this. I cannot make any estimate for the hon. member for Nipis-sing of the number of people who will get employment, but the scope of this measure is tremendous for increasing employment. The greater opportunity for Canadian families to achieve home ownership will increase demand for housing and thus create employment opportunities resulting from an expanded housing program. At this time every house that is built gives six months' employment to two men on the job and two men off the job, and also another man who is employed getting the sewers, and so on, ready.
The extension of home improvement loans to rental housing will increase activity in the whole field of renovation and repair. And what a big field it is-1,500,000 houses. Canadian universities are anxious to proceed with expansion programs for student residences at once. The aids to municipalities for the
25 per cent for that work completed by the end of March, 1963 will, we are satisfied, be a very real inducement.
The fundamental purpose of this legislation is thus to improve housing conditions. Fundamentally, that is what it is. Also-and this is very important at this time the fundamental purpose of this legislation is to create jobs in ever growing numbers.
May I very respectfully add to what the Prime Minister said yesterday, that with the federal government, the ten provincial governments, the 5,000 municipal governments, contributed 15 per cent of the gross national product. It does not matter how we strive here at Ottawa, under the lashings of the Leader of the Opposition; it does not matter how we strive, how you strive, how the government of Canada, the provinces and all the municipalities strive, we are limited to 15 per cent of the gross national product.
The problem of employment is essentially a problem for all Canadians. We have a free enterprise system, and if we want to continue our free enterprise system, which produces 85 per cent of the gross national product of Canada, every Canadian-not just those engaged in the government of the country-must perform his or her very real and important task.


Mr. Garland:: Mr. Chairman, I should like first of all to thank the minister for the very comprehensive statement which he has just given the house on this very important subject. I would suggest that my only criticism is that this speech, and this action which is outlined now, should have been made much earlier, in fact, years ago.
May I say at once that the official opposition is most anxious to expedite the passage of this resolution and by so doing to assist in bringing in the legislation at the earliest opportunity. With this in mind, my remarks will be very brief. Naturally, too we are anxious to see the actual legislation envisaged by the resolution before we attempt to make any detailed analysis of it. Suffice it to say at this time that while the changes proposed seem to be changes in the right direction and so they should be, because they have been suggested in one way or another by the opposition-I do not feel they are adequate in themselves nor do I think they come to grips with the real problem at this time.
We are anxious to see the proposed legislation with respect to urban redevelopment because we have long been attempting to stress the urgent need in this field. Few countries are urbanizing as rapidly as Canada, and
rovision of sewerage trunks and plants will nable them to accelerate the pace of such zorks and thereby increase employment both n the site and in the plants manufacturing laterial and equipment; and this rebate of

there is an urgent need to speed up the redevelopment of the blighted areas in our cities. In recognition of this problem the

National Housing Act
Liberal party's resolutions as far back as 1958 suggested the setting up of a municipal grants assistance act under which the federal government would assist municipalities to in-stal essential services. We also proposed that there should be an increase from 50 per cent to 75 per cent in the federal share of joint slum clearance schemes.
During the last session of parliament Liberal suggestions to extend the scope of the winter works program would, if accepted, have provided further assistance to municipalities in redeveloping their cities and would have provided much needed work at the present time.
I should like to refer briefly to the reference in the resolution authorizing the corporation to make loans to assist the construction of sewage disposal projects. We are told now that this is in respect of sewage disposal projects. I suggest that this is a fine proposal, but I think it is much too limited, certainly as compared with the suggestion we made back in 1958 for a municipal loan fund.
This resolution seems to reflect a belated recognition of the government's own failure in the earlier part of the year to assess the housing and economic situation accurately. Never has there been a better example of wrong action and wrong timing than the government's housing policy, or patchwork policy, in 1960. Early in the year the government stubbornly stuck to a policy of retarding house building by slicing in half the money to be made available for direct lending. Later in the year, with evidence mounting every month that the housing program was a flop, the government attempted in July to inject a small dose of serum which failed to bring the patient out of the deep sleep deliberately encouraged by the government.
Now, near the end of 1960, with housing starts down by 30 per cent, with the result that many of our people are needlessly unemployed, the government seems ready to try some of the things it should have done earlier. However, I am afraid that in this respect hon. gentlemen opposite are locking the stable after the horse has been stolen. They seem ready now to try almost anything in order to get the house building industry back into business. The events of the past three years seem to me to indicate clearly that this government treats housing primarily as an economic pump primer, rather than realizing that good housing is as necessary to life as food, clothing and other necessities.
Proof that this government failed miserably to accurately assess the economic situation in 1960 is apparent in many fields. However, in the housing field they really goofed. No better example can be found than in the 90205-6-7J
New Year's message of the former minister of trade and commerce in which he stated there would be 140,000 housing starts in 1960. If anyone is interested I would be glad to enlarge on what he said at that time. Next, we had the Minister of Public Works announcing a policy of retarding house building and, at the same time, announcing the government's objective of 125,000 starts, down substantially as compared with the previous year's figures and supposedly necessary, according to the minister, in order not to overtax the boom which was hoped for in other segments of the construction industry.
We on this side pointed out that it would be impossible to build 125,000 homes under the policy existing at that time. The government kept insisting it could. Even with the housing program "beefed up" by several changes in mid-summer and during the fall, housing starts at the end of October stood at approximately 61,000 in areas of over
5,000	population, and I believe the total for the first nine months is approximately 76,000 for all areas.
Statistics published each month have proved how wrong the government was in its forecasts and appraisal of the situation. It is apparent they have been out of touch with the facts or, worse still, if they had the facts, that they have mishandled this important section of the economy.
I should like to make two observations which I feel are quite obvious. First of all, many of the changes made by the government during the last half of the year should have been made earlier if it was the intention to help the unemployment situation this winter. Second, we have now passed through a period of great scarcity of mortgage funds to a period where there is, rather, a great scarcity of purchasers of homes. Proof of this contention can be found in the Canadian housing statistics for October, which the minister yesterday refused to put on the record of this house. These figures show, first, that the approved lenders are pouring money into housing at these very attractive government-set N.H.A. rates. In fact, in the month of October, 1960 they placed 3,195 loans representing an increase in lending of 883 per cent as compared to a year earlier.
Proof that we have entered a period of increased buyers' resistance can be found in these October figures, too, which show a growing number of completed unoccupied homes-4,037, to be exact, or an increase of 28 per cent. This reluctance to buy and the build-up of completed unoccupied homes is especially significant when one realizes that housing starts are down 30 per cent in the first ten months of this year.

National Housing Act
The government should act now to meet this new situation, restore confidence throughout the economy, and work toward lowering the cost of housing. In my opinion the government has overlooked the real villain in the slowing down of housing. I believe the government should act at once and lower the maximum interest rate allowed under N.H.A. This government is responsible for artificially stimulating mortgage rates in this country with its ill-conceived conversion loan and huge deficits; deficits, I might add, that have failed to put our people to work. It would seem we are to have more of the same this year.
This artificial stimulation of the money market has increased the cost of housing, and especially the cost of financing housing, to the point where many of our people are reluctant to take on these heavy financing obligations. Now, under this administration, it costs more to finance a home than the purchase price. Therefore it is little wonder that buyers are hard to find. I believe the government should lead the way toward lower interest rates in this country. They will never have a better opportunity to lower the rate of N.H.A. borrowing from its present unprecedented high level of 6f per cent. Only by lowering the interest rate, and by so doing encouraging other lenders to follow suit, will we be able to bring the cost of housing down within reach of the average Canadian family to a degree that will adequately stimulate the industry, put many of our unemployed back to work, and make it possible for our people to have better housing, especially those in the medium and lower income groups.
As I said at the beginning we are looking forward to the early introduction of this legislation. At that stage we in the opposition will deal with the proposed changes in some detail and will I hope be able to offer to the government some further suggestions for improving this legislation.


Mr. Regier:: Mr. Chairman, on behalf of this group I wish to express our welcome of the intentions the government has announced in this resolution. I am afraid I shall have to differ a little from the hon. member for Nipissing in a number of matters and especially in attitude.
In our opinion housing legislation is among the most important legislation. Our whole society depends to a great extent on the kind and number of homes in which the Canadian people live. We feel this is a field where political considerations should be disregarded and left out of the arguments. Housing is extremely important in respect

to the volume of employment. It is an important topic because we have a need for additional housing for our people today identical to the need for housing we had at the end of the war. Despite our efforts we have been able to do nothing more than keep pace with the needs of our increasing population and have not been able to abolish the backlog of housing needs that existed back in 1945. An active housing industry is important to all branches of Canadian industrial enterprise.
I am going to congratulate the government at this time because I feel that in the matter of housing the government has done more than it has in regard to any other department.
I wish to express my appreciation to the minister for the excellence of his detailed report. However, I wish to appeal to the minister and the government to recognize that even though in the past number of years great efforts have been made in the matter of supplying adequate housing there is much that yet remains to be done. I believe the minister would agree with that statement. Our problem is, in fact, growing in this respect because both rents and the prices of homes in Canada continue their upward climb. Until there is a decline in these levels it is obvious that we will have an insufficient number of adequate housing units, otherwise normal competition would be responsible for a reduction in rents and the retail prices of homes.
Other problems in connection with housing continue to grow. The number of available homes is inadequate and I cannot accept the argument of the minister that within recent times there has been a real weakness of demand. There may have been what economists would call an effective weakness of demand but I do not think the minister would want to claim that there were more houses available than there were Canadians really needing houses. The weakness of demand was the result of the inability of the people to purchase the housing offered. I think that ought to be recognized. I agree with the hon. member for Nipissing that the government made a mistake when it became unduly alarmed at an apparent weakness of demand a number of months ago and deliberately retarded expansion of the Canadian housing industry.
We have not today resolved the problem of those people who need housing most. We have not made it possible for them to obtain adequate housing at prices they are able to afford. The income class that has been helped by using the taxpayer's dollar is not the income class for whom the National Housing Act was really designed. When we use the

taxpayer's money for projects such as the supply of housing we have a moral obligation to Canadians to ensure that this money is used to supply assistance where it is most urgently needed. I realize the problems involved but all our efforts should be turned in this direction.
I endorse lowering of the interest rates. With the slowdown in industrial expansion on the Canadian economic scene there should be more investment capital available for housing than there was a year or so ago. Interest rates have declined. The over-all decline in interest rates and in the earnings of Canadian corporations ought to be reflected in the passing on of benefits to those who need housing by a lowering of the maximum interest rates that are permitted in this field.
We have noticed over a number of years that with a more massive amount of taxpayer's capital being invested by the government in housing, the less the private investors invest in housing. Perhaps the time has come when the government should take remedial action to prevent those who could invest money in housing deliberately deserting the housing field and re-entering it only when general profits and returns in industrial expansion are down. Willy-nilly they enter the field and withdraw at their own convenience and the government of the day is left holding the bag and has to take up the slack.
The government should have more jurisdiction over the flow of available investment capital within the nation so there could be a constant supply of investment money devoted to the needs of housing. We wish to see the establishment of a national investment board but changes would also be required in other legislation relating to the activities of Canadian insurance companies and other investment houses. The government ought to exercise more authority over the level of earnings that money can obtain elsewhere and over the maximum interest rates that can be charged throughout the economy. If the government exercised this authority there would be less difficulty persuading private capital to meet its responsibility in the field of housing.
I believe the resolution before us lacks any expression of intention on the part of the government to meet the need for additional low rental housing being made available to the Canadian people. There are millions of Canadians who do not desire home ownership. There are many millions of Canadians for whom home ownership is not realistic at all because of their income or because of the nature of their work, and there is an urgent need, when we use the taxpayer's money, to pay much more attention to the
National Housing Act
obtaining of many more units of low rental housing than has recently been the case.
When the government speaks of helping the municipalities I believe it might also extend the help it is giving or planning to give to the municipalities to make it possible to reduce the price of lots, and to do this by making money available to the municipalities so that they may be able to develop blocks of land to the point where they would be able to put the lots on the market and eliminate the operator who is responsible for the fantastic increase that we have witnessed in recent years in the price of lots, especially those in suburban areas.
I should like to bring another problem to the attention of the minister. I believe that perhaps one of the recommendations contained in the resolution will help in this regard. It is now relatively easy to build a house and obtain a mortgage in the high class areas of our larger metropolitan centres. It is also very easy to obtain a direct loan through Central Mortgage and Housing Corporation to build a house in a little village many miles away from a metropolitan area. However, it is becoming almost impossible to obtain adequate financing to build houses in the areas around the metropolitan area or in the suburban area. At the present time, because of the way our policies are working out, we feel there is discrimination against suburban areas. While we used to complain of the urban sprawl, what is happening now is that those housing developments are taking place beyond the suburban areas, and a bad situation is becoming worse. Instead of going 15 miles into town to work, people now go 40 miles and 50 miles, because at distances 40 miles to 50 miles away they are able to buy a lot for very little money, and it is comparatively easy to get a Central Mortgage and Housing Corporation loan at that distance away from the city.
This is a problem that has to be met. Perhaps the government's plan to help municipalities to build disposal plants so that the lots in suburbia can be serviced may be a part of the answer. I am afraid that even more action may be necessary to call a halt to this leapfrogging over the suburbs and building large communities many miles away from where people work. I hope the plans of the government to assist in the building of such disposal plants are not designed only to prevent the pollution of rivers, because if they are this will discriminate against municipalities that will not be able to take advantage of the assistance offered since the disposal of the sewage of a great many municipalities has very little connection with the pollution of rivers. I hope it is the intention

National Housing Act
of the government to make this assistance available to all municipalities regardless of whether the disposal plant is designed primarily to prevent river pollution.
We also hope that when federal government money is involved it will insist that not less than union wages and working conditions ought to prevail. This has been the old rule, long since established, when government projects are undertaken. I should like to see this principle established and extended to the building of houses, if the taxpayer's money is used to supply the necessary capital.
The minister made a welcome announcement when he indicated that the lending ratio was to be raised from 90 per cent to 95 per cent and also the number of years for repayment were to be increased from 30 to 35. I hope the minister realizes that when he raises the lending ratio he increases the monthly payment. He is attempting to offset this by adding to the number of years. I should like to pose the problem to him which this represents to a person over 30 years of age. In most plants in Canada the normal retirement age is 65. I am afraid that a large number of people who have been eligible under the old arrangement, and who are past the age of 30, will now become ineligible because, as the minister knows, very many people are just on the borderline of being eligible. Any increase in the amount of monthly payments immediately results in the disqualification of many applicants and this would apply in many cases. I know the minister's extension of the years remedies it, but it remedies it only for the younger people. It is not a remedy for the man who is past the age of 30.
I had hoped that the minister might have made some announcement indicating that Central Mortgage and Housing Corporation could in some way be a greater help in the building of a beautiful national capital. I am very disappointed at the slow progress we are making in the beautification of our nation's capital. I was lucky over the week end a while ago to be in Washington, and it made me horribly ashamed of conditions in our own capital. I feel that those conditions are becoming worse as time goes by, and especially as we observe what other countries are doing. I think this legislation might be amended in such a way that much more effective aid might be given to the people of Ottawa to beautify their city.
The minister mentioned that aid was to be given for part of the cost of the surveys to provide for urban renewal in order to eliminate blighted areas in our cities. I should like to plead with the minister and urge that the federal government ought also to

assume responsibility for paying for a part of the cost when a municipality, or a group of municipalities, want to conduct housing surveys for the purpose of preventing the development of blighted or slum areas. I believe municipalities ought to be encouraged to prevent slums, as they ought also to be encouraged in the matter of the removal of slums.
The help to the universities is most welcome indeed. I had hoped that the government would have found the necessary money to make at least a partial grant toward the construction of those residences. In this connection I should like to call the minister's attention to an old request of ours. He knows very well that when we build cottages and apartment blocks for the benefit of our retired senior citizens and others on low income our provincial government in British Columbia makes a contribution of one third of the capital cost. Ottawa helps, but only by lending us roughly two thirds, or a little less than two thirds of the capital cost, which has to be repaid with interest even though it is interest at a reduced rate. I feel that if our provincial governments are able to make a contribution of one third of the cost of housing for our senior citizens on low incomes, our national government should not do less.
I believe, in connection with residences for our universities, which admittedly are most urgent, that a contribution or cancellation of a part of the loan by the federal government might receive some consideration.
I began by saying that in our opinion much has been done by this government in the field of housing. However, we believe that this government ought to realize that, in the field of housing at least, free enterprise has completely failed. The minister spoke of the need to maintain free enterprise, but I think he must admit that in this field it has completely failed the needs of the Canadian people. There is much more that remains to be done. In the interests of the housing needs of our people, in the interests of employment, in the interests of giving a shot in the arm to our whole economy, we believe that the government should add much more to what I will admit are the many proposals it has now placed before the house.


Mr. McDonald (Hamilton South):: National Housing Act
year on their capital budget which would enable them to look after this urban redevelopment in a very orderly way.
For example, in Hamilton they broke down the acreage in this blighted area and found that the cost would be over $106,000 per acre. Unless very serious consideration is given to this problem and encouragement given to private enterprise to go into this business of slum clearance and redevelopment, I think it will be a long time before we clear up the problem in Hamilton. I am confident that with a man of the calibre of Mr. Ken Soble, a very prominent Hamilton businessman who is chairman of this committee, and the vigorous management of Paul Goyette of the Central Mortgage and Housing Corporation, we will go a long way toward solving this problem.
I do not want to delay the passage of this resolution, but I do want to congratulate the minister at this time for giving us the first complete look at mortgage and housing policy in this country through such things as land development, sewage disposal and lower down payments on houses. The program even includes the universities. I feel this is the best program for development, taking a long range view rather than plugging the holes in the dike every time they appear. I feel we will do a service to Canada on a long range basis, and I think we will all benefit very much from it.


Mr. Henderson:: First, I should like to congratulate the minister. He certainly has done a fine job in introducing this legislation. I fought for it last summer. We wanted it, and now we have it. I believe the minister has done a real job. The part of Canada from which I come is very large, almost as large as Texas or larger. One gentleman says they are playing leapfrog to get lots. I may tell you that for 300 miles or 400 miles from where I am all the lots are sold there. I do not know what they are going to build there. Maybe they are waiting for housing projects to come along. We are a people of young families. Our birth rate is high. The children of today are the citizens of tomorrow. That is why I like to see housing projects come along. People cannot sleep in tents; they must be housed. The country from which I come is a cold one. It is not like California or anything like that. I believe we should give all young couples a chance to get homes of their own and produce good citizens.
I am just going to say once more that I congratulate the minister. I am thankful for what he has done. It certainly helps my country. In Dawson Creek no carpenters are out of work. I talked to one contractor. He said, "I have enough work this winter in these houses that are being built to keep

my men all employed". I suppose that in Prince George the situation is the same. The man who is out of work is the shovel man, the manual labourer. A man told me the other day that he went over to the Bell Telephone Company in order to try to get a job in that company. He was asked whether he had a grade 12 education. He said that is the first time he had ever heard of anybody requiring to have a grade 12 education in order to use a pick. 1 just want to say that I am pleased with the legislation coming in and I will let some of the rest of the sharp-shooters tell you all about it.


Mr. Speakman:: I too of course want to congratulate the government on this forward step. But before the minister brings in his bill I want to make a special plea for a special kind of community. I refer to the centre of population which has 6,000 people,
7,000	people or fewer. I can speak particularly well of the district I represent which is at the moment bursting at the seams, and I mean that literally.
At the northern end of my constituency we have the town of Leduc which touches on the new Edmonton international airport. It is going to require a major housing development. As the minister knows, I have been in his hair somewhat all summer trying to get money for this purpose. I am hoping that special provision will be made for places like that.
In the city of Wetaskiwin we have the hope and the very good prospect of a plant being built by the Carnation Milk Company early in 1961. In this city there are 5,600 people. We will require housing money.
In another part of my constituency, in between the towns of Ponoka and Rimbey, we have nearing completion the largest gas extraction plant on the North American continent. This plant will bring a major influx of workers to my constituency. They will need housing. These are two towns of 4,000 and 2,000 respectively. In Lacombe we hope to have a new meat packing plant built.
As can be seen, these are centres in which there is far greater need than there is in the large metropolitan areas. Unlike my friend from the west coast who spoke about leapfrogging, we do not have that situation. I think everybody will agree that today the trend is not toward more living in the large centres but to an effort to raise families in the smaller centres where there is room for children to grow. The children of today are the citizens of tomorrow. I think we should give them this opportunity for a better life which this legislation will give. I think we should think of these smaller centres which up

until now have had a great deal of difficulty in getting house building money. I would hope the minister would give that matter serious consideration in this new bill.


Mr. Kindt:: I should like to add these few words of congratulation to the Minister of Public Works for having introduced this resolution. He has introduced one of those types of programs which I have advocated for a long time and I believe it will have far-reaching effects in the country. I rise to speak on it because I wish to bring out a few points which have not been mentioned by those who have spoken previously.
I want to say concerning the resolution that the housing provision should be very far-reaching, particularly in the urban areas. University housing is greatly needed and it will serve an extremely useful purpose supplementing the work which has already been started by the Canada Council.
The loans and rebates to municipalities for the construction of sewage projects for the elimination of pollution is one of the items which was discussed in the committee on mines, forests and waters last year. We recommended that action be taken on this particular project and that everything should be done to eliminate the waste and sewage which is pouring from most of our cities throughout the land into streams which flow thereby. For example, speaking of the city of Ottawa and the Ottawa river, I am told that the sewage from this city is dumped directly into the river or thereabouts and that there is the equivalent of about 50 dead horses going by a given point in that river every hour. Surely we, as a civilized people, as people who make the claim that we are ahead of others in other lands, should put forth every effort to correct this situation. This part of the resolution should go a long way toward assisting in that respect.
There is in this resolution another aspect that has not been brought out on which I should like to touch. The resolution deals primarily with urban areas. I happen to represent a rural area in southwestern Alberta. I should like to see better water brought into some of the drier communities and towns that are now in great need of a better quality of water. For instance, in some of these rural community centres the people are unable to obtain water except from wells; and often the wells contain water which is so polluted with alkali that they are unable to drink it without a tremendous amount of softening and even then it is unsuitable for putting on gardens and for other uses. What is needed, and what some of these centres are contefn-plating doing, is to tap reservoirs of good 90205-6-8
National Housing Act
water at distances of from 10 miles to 15 miles to 20 miles and pipe in the good soft water. But they are hesitating to do this because they need loans. They need assistance in order to put in these water systems.
I do not wish to minimize the necessity of having pollution taken care of in the urban centres but I urge the government to give full consideration to the rural areas and above all to give priority to bringing good water to these rural centres which are so much in need of good water. In other words balancing the need within the country when it comes to government assistance and loanable funds. It seems to me that the need for good water ranks equally with solving the problem of sewage pollution. Therefore, Mr. Chairman, I should like to say that I hope the government will take into consideration this problem of having good water piped into rural areas.
Before closing I should also like to again compliment the Minister of Public Works for what he has done and to say that I take great pleasure in supporting this resolution which he has brought before the house.


Mr. Creaghan:: Mr. Chairman, like all previous speakers it gives me great pleasure to congratulate the government, and particularly our active minister, for this most welcomed piece of legislation. All people in Canada have an interest in most aspects of this resolution. I can recall a few years ago serving on a municipal council, and the plight of the municipality was great; it was nearly impossible to keep up with the growth and to maintain main trunk lines in order to have serviced lots for the extension of the new housing starts.
A great many of our hon. members have been to university, and all of us who have had the privilege of attending university recognize that one misses a great deal if one cannot participate in campus activities. It is unfortunate that the former secretary of state for external affairs, the Hon. Sidney Smith, is not with us tonight. On many occasions I discussed university problems with him. I know he would have welcomed this legislation, in so far as it will give aid to universities, as much, or more so than any of us present.
The housing aspect of it deserves our commendation. Since the C.M.H.C. legislation went on the statute books housing has had a great boost in Canada. During the years between 1950 and 1960 we have witnessed a great many new starts in this country. The legislation contemplated in this resolution will make it possible for thousands of our younger citizens to build new homes forthwith, immediately after their marriages. This

National Housing Act
will make it possible for them, as young married couples, to take a particularly active interest in community life.
Those who prefer to live in rental accommodation should receive an improvement in their living standards. The 1,500,000 rental units referred to by the minister are in some cases not too much credit to some of our municipalities.
However, it is the university aspect of the legislation in which I am most particularly interested. I hope the university presidents and those in charge of the universities-the boards of governors and trustees-will forthwith take advantage of this legislation. Ninety per cent of the amount can be borrowed, as stated by the minister, and it can be spread over a long period of years, up to fifty. This should make it possible for all universities of Canada to immediately-after plans have been prepared-take advantage of this program.
Most of the unemployment in the Atlantic provinces is in unskilled construction and the trades. Housing, of course, gives a great deal of winter work for tradesmen throughout the country. However, larger buildings such as university residences will make it possible for many of these projects to be continued throughout the winter months with little or no interruption because of snow.
The municipalities, through the union of mayors and municipalities, have been urging the government of Canada each and every year to make it possible for the municipalities to obtain money at a more reasonable rate of interest. The winter works programs have been expanded this year; it is now possible to build libraries, fire halls, et cetera. This government has made that possible. This new aspect of assistance introduced tonight should be of great benefit to all municipalities, and I believe it is to the credit of the union which fought so hard for the proposals.
Mr. Chairman, in my few remarks I want to once again thank the minister, and in conclusion, I would ask the people of Canada who intend to build new homes to do so at the first opportunity. I encourage the municipalities to take advantage of the new lending rules in order that they may be able to get their refunds. This must be done by them before 1963. I know that the universities and the alumni concerned will appreciate the aid which it is intended to give to them.
Jobs for construction workers and tradesmen appear on the upgrade; and not only those who are associated with the construction industry but the suppliers of building materials will welcome this legislation.

(Translation):


Mr. Lafreniere:: Mr. Chairman, it gives me pleasure to rise after the members who spoke before me, not to sum up the question, as I shall probably not be the last to discuss it, but to remind the Minister of Public Works (Mr. Walker) of this French axiom which I know he will readily understand, being quite proficient in the French language: Quand le batiment va, tout va.
Mr. Chairman, I have seldom seen-


Mr. Habel:: Better late than never.


Robert B. Lafrenière: -so practical and so effective a piece of legislation as the one proposed in this resolution. It is one of the best ways of getting the government close to the people, from whom the former government had gotten away.
Mr. Chairman, my constituency is located close to Quebec city, and quite naturally, it receives the overflow of the city's expanding population. The constituency of Que-bec-Montmorency now has a population of about 125,000, distributed in 36 municipalities.
It follows that the measure now before us, which provides for improvements to existing houses and for urban redevelopment, will provide employment for many workers in that section of the country. For the young people wishing to settle down outside Quebec city, it will be easier to build a home where they can raise a family.
Mr. Chairman, since my election to parliament, I have had opportunities to hear the complaints of some municipal councils around Quebec city; now most of their problems revolved around the lack of funds for building sewers. Therefore, I feel sure that this wise piece of legislation put forth by the government will help the municipalities deal with this problem, which has become extremely serious. Moreover, Mr. Chairman, as I am representing a constituency in which Laval University is located, I cannot but congratulate the government for giving additional facilities for the building of students' residences. Indeed, the lack of housing, more particularly meant for students, was an almost insurmountable difficulty, and I am satisfied that a considerable proportion of the people in the neighbourhood of the city of Quebec as well as all students from the province of Quebec and of the whole country will be able to benefit from this legislation.
The Central Mortgage and Housing Corporation pointed out that within the next 20 years, about 3,200,000 new houses would have to be built in this country, which means an

average of about 160,000 homes a year. Consequently, we find that, under the legislation now before this house, the government means to introduce some measure of regularity with regard to home building in this country and in this respect it deserves to be commended. All municipalities in this country, and more particularly those who are located close to larger cities, will benefit from the legislation and, as the representative of a constituency which I may call a suburban riding, I am happy to thank and to commend the government for having shown such wisdom and foresight in introducing this legislation.
(Text):


Mr. Macdonnell:: The reason I intervene in this debate is because of what was said by the hon. member for Westmorland about the importance of assisting universities in the construction of residences. I have had something to do with universities. For many years we were utterly wanting in residences at Queen's University. Lately we have been able to supply the need to some extent and I am glad to think we shall be able to go on, because I do believe that a great deal of benefit is acquired by students who are able, outside the classrooms and away from formal instruction, to exchange views with each other.
Another reason I intervene is to give a little illustration going back some years which will give the opinion on this subject of a man whose opinions I valued highly- a professor at Queen's University who was commanding a field company of engineers during the first world war. One summer evening, in 1916 or 1917 I strolled across and found him playing poker with his subalterns. He said: "Do you know, I could be court martialled for doing this?" Then he said, "Take a hand". I said, "I do not know how to play". "But you were at Queen's University" he replied. I had to explain I had lived at home. This was, he said, a great misfortune. "If my son goes to a university, if it is in the town where I am living I will send him out to live, even if it is in the house next door". I mention this for what it is worth, so that hon. members may know the value he attached to residences.
I wish to make one further point. We may well have reached the stage where public investment, investment in all kinds of things owned by the public and for the benefit of the public-roads, hospitals, universities and so on-may come to play a larger part in our economy than they have in the past. For 90205-6-81
National Housing Act
that reason, among others, I am very glad that the minister has brought down this measure.


Mr. Rynard:: I wish first of all to congratulate the Minister of Public Works upon introducing this measure to amend the National Housing Act of 1954. There are some things in which I am particularly interested. One of them is the arrangement for loans to universities for the building of residences for students. I think that is a commendable proposal. Rooming houses now are totally inadequate to look after our students. Our university population has doubled, in a few years and in the very near future it will double again, so I think the government is on very sound ground when it makes these loans. I am also interested in the loans and rebates to the municipalities to assist in the building of sewage projects and for the elimination of pollution.
It is on this point particularly that I wish to speak but 1 would first of all like to make a few general comments if I may.
It is interesting to note that about one tenth of all the people in Canada now live in accommodation which has been provided for in the last five years, and that about 100,000 new homes have been built in the last four years for those with lower incomes. It has been said, and said with some truth, that housing is catching up, but I would remind the house, if indeed it does need reminding, that new births now number in Canada 400,000 per year and that very soon we shall need
200,000	new dwellings per year for young married couples establishing homes. In addition we shall also need homes for immigrants who may come to our shores, homes to take the place of those which have been cleared away under slum clearance projects and homes to replace those which have served their day and generation. We must not only permit more and more people to own their own homes, but we must see to it that they do. Every home owner has a deeper feeling of his responsibility to his community and country.
Now I return to the question of the rebates to the municipalities in respect to the building of sewage plants and for the elimination of pollution. As we have been told, two thirds of the cost is to be loaned to the municipalities over a period of years and if the work is completed by 1963, 25 per cent of this cost will be returned. It is certain that there are many towns and cities throughout Canada which could benefit from this legislation. Fewer than one sixth now have proper sewage facilities. Those municipalities with foresight and vision will be encouraged to deal with this problem and prepare themselves for the future.

National Housing Act
I know cases of towns which stand still simply because they lack sufficient water supplies and sewage disposal facilities. Factories establish themselves elsewhere where they can obtain properly serviced areas with water and sewage disposal facilities. I have in mind one small village which has a factory on the lake; the lake is polluted by the effluent from this factory, and it does not need much imagination to realize that in this great tourist area pollution of this kind simply must stop as soon as possible. I am wondering if this resolution will go far enough to enable the municipality to help build a sewage disposal plant for this factory to control the effluent and raw sewage which is going into the lake.
A similar situation exists in many lakes throughout the province. Cottagers decline to live near these polluted areas. Tourists refuse to stay there. People will not build motels or accommodation on such lakes to provide accommodation for the travelling public. These problems must be cleared up. The government should be commended for this farsighted policy because these problems must be cleared up in the municipalities if our water supply is to be kept free of pollution.
If the lakes to which I referred are cleaned up many tourists will come to the area. As a result of the government's action in making available loans to small business it will be possible to construct motels and hotels on the waterway to bring to the area the tourist dollars which are so urgently needed. In addition to that, the building of sewage disposal plants in the area will provide work for many people in the building trades and will enable the factory to operate in a satisfactory manner providing work for approximately 50 to 75 employees in this case I have in mind.
I am sure that a similar situation obtains in many Canadian municipalities. I am convinced that in many areas where there are septic tanks they are not doing the job due to poor drainage. Sewage disposal plants could be installed and that is up to the municipality at the ground level.
Not long ago I passed through a town where it was possible to smell the odour of the sewage overflow from the septic tank. The sewage was not being properly carried away by the tile drainage. Action in instances like this should be instituted at the municipal level. I am sure no effort at the present time the government could undertake would make a greater contribution to the sanitary facilities and welfare of individuals in Canada than the measure under which it would be possible for municipalities to receive assistance in the construction of sewage disposal projects.

I commend the minister for bringing this far-sighted proposal before the committee.
I am sure all hon. members opposite will welcome this measure that will assist in some measure in the installation of proper sanitary facilities throughout the length and breadth of Canada.


Mr. Bigg:: Mr. Chairman, there is an aspect to this plan which greatly appeals to me at this time. It now appears that Canadian municipalities will be able to borrow money in Canada and this at a time when the present government has been accused of adopting a tight money policy. I believe for the first time in history Canadian municipalities will be able to obtain as much credit as they need for at least two major building projects by borrowing the money at home, regardless of interest rates. This will tend to balance off the Canadian economy and it is my earnest hope that the applicable interest rates will be exceedingly reasonable. It is a matter of great interest to me that Canadian municipalities will be able to borrow on the Canadian market. It has always been a mystery to me why they have not been able to borrow on the Canadian market previously. I am quite sure that the National Housing Act has not been used for this purpose. If this is to be one of the few sources of Canadian credit to our own municipalities, I am pleased to see this door opened. I hope the whole program will be greatly expanded along these lines.


Mr. McGee:: I do not want to delay the progress of this resolution but I do want to add to what was said by my colleague, the hon. member for Hamilton South, concerning the remarks made by the hon. member for Nipissing. His comments on the remarks of the hon. member for Nipissing were made in anger whereas mine will be made more in sorrow than in anger.
Apparently the hon. member for Nipissing has not been listening to his party leader who since the last election has been roaring around the country promising programs and outlining patterns of government activity running into billions and billions of dollars. If the hon. gentleman had listened to the statements made by his leader and his leader's lieutenants the word "deficit" would have been the last word he would have used in this debate.


Lionel Chevrier: Were you talking about Niagara Falls and Labelle?


Frank Charles McGee: If the cap fits, wear it. In a general vein, the longer the present minister remains as Minister of Public Works the more he seems to contribute by his efforts to

reflect his observations in and around the area he represents, and certainly the field under his jurisdiction reflects a developing pattern of progress. That is all to the good.
I endorse the basic principle that he follows of studying the general situation, participating in this report of the Royal Architectural Institute of Canada on the design of the residential environment-in other words the basic and logical approach of examining the problem in detail, holding hearings across the country and in this House of Commons- and then proceeding in logical phase to develop the pattern of measures which has been presented to the house.
It is interesting to note in passing that several of the recommendations of the R.A.I.C. have already been put into effect in part by this resolution. Again, following the basic logic in sequence, there is a general examination of the problem as it exists across all areas of the country, and then there is the introduction of positive definite measures to aid in the elimination of the blights in our major centres; the arrest of the deterioration by offering assistance along the lines the minister indicated; the stabilizing of those perimeter areas which cannot be classified as blights but given the normal progression would be so classified in a few years; and then the positive thrust forward in connection with the assistance and long term loans for sewage disposal plants which will affect the suburban areas.
I wish to assure the minister that these developments and the details that will be made known when we see the bill will be good news indeed to my constituency. I think that can also be said with respect to other constituencies in the Toronto area. One of the municipalities in my constituency, Scarborough, will be most interested in the sewage disposal proposition put forward by the government. Perhaps that municipality has already expressed its interest.
The aid to universities for student accommodation will be most welcome. A few weeks ago I had the good fortune to visit a number of maritime universities. In one instance alone which I vividly recall I was told by the faculty that over 1,000 students could not be accepted by that university for the simple reason that there was not accommodation available for those students in the campus area. In many university centres in Canada and particularly in the maritimes where the university is an important segment of the town there simply are not adequate facilities in the town for students wishing to attend university. The announcement of assistance will be most welcome not only to the university to which I referred but to universities across Canada.
National Housing Act
Returning to my own constituency, there is a real possibility that York University will ultimately come within the vast boundaries of York-Scarborough and no doubt student residence assistance will be most effective in the future.


Mr. Thomas:: Mr. Chairman, I should very much like to associate myself with other hon. members who have congratulated the minister and the government and expressed their satisfaction with the legislation proposed in this resolution. This resolution is one of those items in the government's plans which is designed to bring about a greater measure of buoyancy in our economy at the present time for the purpose of creating and expanding job opportunities in this country, and it will be welcomed by all Canadians. Since I live in west Middlesex I represent an area which is composed partly of a suburban area, the city of London, several fair sized towns and villages and a large rural area. Nearly every item in this resolution is of great importance to our people of Middlesex West.
First of all I should like to deal with the matter of loans to municipalities for the purpose of promoting and encouraging the construction of sewage projects for the elimination of pollution in our streams and lakes. Down through that area where the country is densely populated the streams which once flowed with clear sparkling water are now little more than open sewers, and sewage disposal throughout the whole area of southwestern Ontario is one of the major problems facing the people there. The streams flowing through west Middlesex, the Thames below the city of London, the Sydenham below the town of Strathroy, the Ausable below several villages and towns along its course are polluted to the extent that they no longer serve as a source of pleasure for the residents of the area, and anything which can be done to remedy that pollution problem will be more than welcome to the people of our area.
I should like to associate myself particularly with those who have commended the government and the minister on including or offering to include a provision in this legislation for long term loans to municipalities for this purpose, and particularly the provision which would write off one quarter of the cost of those projects which are completed before 1963.
The provision also to increase the ratio for loans will be welcome news to the people in our area. It seems very difficult for people to buy and pay for houses today unless both parents are in a position where they can take a paying job. Of all the people who need houses and homes it is the people with

Business of the House
growing families. Where a smaller down payment is required it will make it much easier for families with limited incomes to own their own houses. I am sure that increasing the loan ratio will be of great assistance to people in the lower income brackets. Then, again, the extension of the period of repayment will help to cut down the size of the monthly payment and make houses more available to those with limited incomes.
The suggestion has been made that people of middle age who enter into a long term contract have little hope of completing the contract. I do not think that is any serious objection to long term contracts. When payments on houses can be reduced to the equivalent of rent, as they have been in the last few years and as they tend to become under the long term contracts, it does not greatly matter whether people complete the contract or not; they have a house at a rate which they are able to pay. After all, the provision of a house at a rate they are able to pay is the important thing.
May I call it ten o'clock, Mr. Chairman?
Progress reported.



BUSINESS OF THE HOUSE

Lionel Chevrier: Mr. Speaker, may I inquire from the house leader what we shall be doing tomorrow and Thursday?


Gordon Minto Churchill: Tomorrow, Mr. Speaker, we shall continue with the discussion of the resolution in the name of the Minister of Public Works, dealing with amendments to
the National Housing Act, followed by second reading of the bill dealing with the guarantee on loans made by banks to proprietors of small business enterprises. On Thursday we shall continue with those measures, if they are not concluded on Wednesday. Under the rules, Thursday would normally be a private members' day. The rules call for the first two Thursdays after the conclusion of the speech from the throne being private members' days. The amendment to the rule made last session permits private members' Thursday to be deferred for one week. It is the intention on this occasion to do that, so government business will be conducted on Thursday.


Lionel Chevrier: Could the house leader give some indication what we might be doing on Monday?


Gordon Minto Churchill: Again, the first six Mondays following the conclusion of the speech from the throne, according to the rules, are given over to private members' business unless superseded by a supply motion. The amendment to the rules last session permits private members' Monday to be deferred for one week. It may be that that will be done on this occasion because, as it stands now, we would have Thursday of next week for private members' business, and I feel the house would not wish to take two days next week for private members matters. However, a firm announcement in that regard will be made on Thursday.


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

Questions

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


Mr. Chevrier: 1.	Were invitations to tender advertised for the bar and cocktail lounge privileges at the new air terminal building at Dorval?
2.	If so, what are the names of those who submitted tenders and the amount of their respective tenders?
3.	Was the contract awarded to the highest bidder?
Answer by: Hon. Leon Balcer (Minister of Transport):
1.	No.
2 and 3. Answered by No. 1.
Note: It is not the practice of the department to call tenders for the operation of bar and cocktail lounge privileges in air terminal buildings. The department calls tenders for the operation of the restaurant concession in terminal buildings. Whether or not the successful tenderer for the restaurant concession in the terminal building subsequently is in a position to provide beverage service is a matter for the concessionaire to determine
in accordance with applicable provincial or municipal law, i.e. it is the responsibility of the concessionaire to obtain any licences or permits necessary in this connection.



FEDERAL GROUP SURGICAL-MEDICAL PLAN

Mr. Regier: 1.	How many insurance companies presently underwrite the group surgical-medical insurance
plan?
2.	Are federal government employees entitled to use the facilities of the credit union and co-operative health services society of British Columbia? If not, for what reason?
Answer by: Hon. Donald M. Fleming (Minister of Finance):
1.	Twenty six insurance companies presently underwrite the group surgical-medical insurance plan of which one is the principal underwriter and administers the plan, while the remaining 25 participate on a reinsurance basis.
2.	The credit union and co-operative health services society of British Columbia is not one of the companies mentioned above but, since participation in the group surgical-medical insurance plan is voluntary, federal government employees who wish to make private arrangements for their insurance with the credit union and co-operative health services society of British Columbia are free to do so.



Wednesday, November 23, I960