1967-10-02

FINANCE


Hon. Mitchell Sharp (Minister of Finance):: Mr. Speaker, I should like to take a few moments of the time of the house to report on the twenty second annual meeting of the International Monetary Fund and the International Bank for Reconstruction and Development which was held last week in Rio de Janeiro. As governor of the I.M.F. and the world bank for Canada I led the Canadian delegation which this year for the first time included three other members of this house; the Minister without Portfolio, the hon. member for Saint-Maurice-Lafleche (Hon. Jean Chretien), and the hon. members for Essex West (Mr. Gray) and Labelle (Mr. Clermont). As I did in Rio, I should like to pay tribute again to the kindness and hospitality of our hosts in this beautiful city of Rio.
The most important item on the agenda concerning the I.M.F. was the resolution dealing with the establishment in the fund of a new facility based on special drawing rights to meet the need, as and when it arises, for a supplement to existing reserve assets. Through close consultation with our executive director on the board of the fund and through Canada's membership in the Group of Ten, Canada has actively participated in the development of the plan proposed in the resolution which was before us in Rio. Agreement on the plan was only possible by a series of compromises; consequently it was not completely in accord with Canadian views. None the less we strongly supported it, and I am pleased to report that the resolution was unanimously passed.
The resolution requests the fund's executive directors to complete the drafting of the new articles necessary to implement the proposal by March 31, 1968 at the latest. The governors will then be asked to vote on these amendments, and if they are passed the new agreement will go to the parliaments for approval and the authority to implement it.
[DOT] (2:40 p.m.)
I stressed in Rio the importance of establishing this new facility as quickly as possible. I will be prepared to place the necessary bill before parliament very soon after approval by the governors of the detailed agreement. I hope parliament will give it full, speedy and sympathetic consideration. The setting up of this new facility will be a major step forward in strengthening the international monetary system.
Many governors including myself gave some attention to the need for national economic policies appropriate to the international and domestic circumstances of the present. The ministers and governors of the Group of Ten also took advantage of their presence in Rio to meet to discuss a problem that I know is in the minds of us all, the high level of interest rates which currently prevails throughout the world.
As for the meeting of the international bank, while the replenishment of the resources of the International Development Association was not formally on the agenda, it was the most important issue to be discussed and dominated the proceedings. The
I.D.A. is the affiliate of the world bank which extends credits on concessional or "soft" terms to developing countries that do not earn sufficient foreign exchange to service loans made on conventional terms. Past government contributions to I.D.A. which had been set at $250 million a year for three years have virtually all been committed.
I met with Mr. George Woods, president of the world bank group and with ministers of finance of countries that contribute the major part of I.D.A. resources. I told them that I consider I.D.A. to be one of the most effective and efficient means of channelling aid to developing countries. The replenishment of
I.D.A. could well be one of the most critical points in the relations between the developed and developing world. Accordingly I was most anxious to have I.D.A. replenished at a substantially higher level than in the past and indicated that, subject to parliamentary approval, Canada would be prepared to contribute its share to such a replenishment.
As a result of my conversations I am much more hopeful than before the meeting that
October 2, 1967
2692	COMMONS
Meeting of International Monetary Fund such a replenishment will take place at an early date.
Mr. Speaker, I should like to have permission of the house to table the statement I made on behalf of Canada at the meeting in Rio as soon as it has been translated from English to French and from French to English.


Mr. Speaker:: Is that agreed?


Some hon. Members:: Agreed.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, the degree of satisfaction with which this house will have received the statement by the minister must be tempered by the fact that there is no easy road to full implementation of the first part of this international accord, and the minister has indicated some of the necessary steps that must be taken. The one point I dispute with him relates to his anticipation that he will present legislation to implement such an agreement in due course, namely sometime late in 1968 or 1969. I hope there will be a replacement by that time.
Those who have followed the deliberations of this international conference realize there are some real problems ahead. Not only is this an interim draft negotiated after some concessions; I think the minister would be the first to admit that before the governors are in a position to vote and the legislatures of the respective countries are in a position to ratify the agreement there must be more hard bargaining because of certain influences and pressures for radical change in the composition of international credit facilities.
Having said that, I should not like to minimize the contribution that has been made as a step forward in removing an area of unsettlement or unrest in respect of world credit facilities, having regard not only to the basis of exchange but a gathering of the international bank group and a decision to replenish the international development account. I am sure a great deal of the pressure and unrest in the world results from, shall we say, the agitation or the natural desire of some of the have-not countries for more extended facilities so they may develop their economies. We look forward to examining the minister's statement, which he indicated he will be tabling, and ultimately we will be examining the minister more closely during the consideration of his estimates or on some other appropriate occasion as to just what went on at this conference.


Mr. Colin Cameron (Nanaimo-Cowichan-The Islands):: Mr. Speaker, I am sure everyone who has been following the attempts that have been made to permit the world to break out of the strait-j acket it has been in for a number of years now, in fact ever since we set up the International Monetary Fund, will greet this development with considerable satisfaction. We shall, of course, be interested to know just what will be the terms upon which nations will be able to avail themselves of the special drawing rights which have been referred to by the minister.
I would hope myself that this perhaps is a first step toward a much wider and a much deeper international co-operation than is in-dictated by a purely monetary agreement. I would hope that the prophecy of the late John Maynard Keynes might eventually come true and that this sort of thing will be the first step toward some type of global administration.
Any such step, of course, will be greeted with shrieks of dismay from those who are deeply wedded to the past and its concepts of natural sovereignty. It has been obvious for a number of years that we could not go on as we have been, relying on the currencies of the United States and Great Britain and a gold supply which is really entirely beyond our control, as a means of financing world trade and world development. My only regret is that it has taken the monetary authorities of the world so many years to take even this step after the first proposals were made for developments of this sort. I have always been very pleased to note that Canada has been in the forefront in pressing for this much needed and long delayed reform.


Mr. Real Caouette (Villeneuve):: Mr. Speaker, we are pleased to have the Minister of Finance (Mr. Sharp) with us again in the house after a long week of absence.
Indeed, last week we needed him when we dealt with the question of gold, of subsidies to the gold mines of northwestern Quebec, as well as the wheat subsidies. But the minister was busy in Rio de Janeiro, in Brazil, at the conference of the International Monetary Fund and the Internal Bank for Reconstruction and Development.
He has just told us that the Canadian government does not necessarily share the conclusions arrived at, and that many compromises were made to achieve unanimity- which unanimity does not satisfy the government.

October 2, 1967

Now, when, in Rio de Janeiro, discussions took place about international finance, national finance, aid to countries where it is urgently needed and also to countries where the need is not so great, I wonder if the minister, who brought there attractive suggestions for the international financial community, was not questioned about how things were going over here in Canada, in relation, specifically, to the International Monetary Fund and the International Bank for Reconstruction and Development.
It is certainly a very good thing, Mr. Speaker, to deal with matters pertaining to international finance; still, I believe it might be more advisable, at the moment, to settle first our own national financial problems. No doubt the minister was asked about conditions prevailing in Canada, and I cannot help wondering if, at that time, he thought of calling the attention of the representatives of the various countries of the world to a statement made more than a hundred years ago by a former president of the United States, John Adams, whom I quote:
[DOT] (2:50 p.m.)

All the perplexities, confusion and distress in America arise, not from defects in their constitution or confederation; not from want of honor or virtue, so much as from downright ignorance of the nature of coin, credit and circulation.

Mr. Speaker, those questions precisely were discussed at the conference of the International Monetary Fund and I agree with the hon. member for Edmonton West (Mr. Lambert) that we must look into the minister's remarks or into the report he has just submitted.
We shall study the proposals made by that world monetary conference in order to draw some conclusions which, I hope, will open the eyes not only of a group of Canadians but of the whole people and will encourage the Canadian government to take some responsibilities in the field of finance, credit and currency in Canada.


Mr. Howard Johnston (Okanagan-Revelsloke):: Mr. Speaker, we appreciate the minister's statement at this time, but it would have been appreciated particularly last Friday in connection with the debate on the Gold Mining Assistance Act.
I was happy to see that the minister gave some indication of the long and rocky road
Questions
ahead of the proposed scheme, though I do not expect that this parliament will hold it up for very long when it comes up for discussion. There is an alarming tendency here always to assume that everything to do with the international monetary policy is somehow over the heads of the members of this institution. However, we know that in all likelihood there are parliaments in some countries which will take a much more intransigent stand against the proposals. We know also that this is just the first step in the working out of a new basis for the international settlement of trade balances. As we move into the area of international finance we must always be very sure that we obtain the best possible price for what we give away as we move through these steps.
The economic policies of this government at home have not been such as to particularly induce confidence in our ability to handle our national economy. In the latter part of the minister's statement when he discussed the International Development Bank he must have known surely that very quickly he would run into the political problem at home of selling to the Canadian people the idea of an increase. It will not be easy to find money for the International Development Bank when money is not available for housing and other much needed purposes at home.



VACANCY

Mr. Speaker:: If hon. members will allow me to do so at this time, I should like to inform the house that the following vacancy has occurred in the representation:
Of Eric A. Winkler, Esquire, member for the electoral district of Grey-Bruce, by resignation.
Accordingly I have issued my warrant to the chief electoral officer to make out a new writ of election for the said electoral district.



QUESTIONS

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)

Mr. Ricard: 1.	Is the government still considering the construction of a penal institution at Saint-Pie de Bagot?
2.	If so, on what approximate date will this institution be constructed?

October 2, 1967
Questions
3.	If not, what use will be made of the land purchased by the government for the construction of such an institution?


Hon. L. T. Pennell (Solicitor General):: Mr. Speaker, the answer to part 1 of the question is as follows. The property at Saint-Pie de Bagot is being retained by the government for penitentiary construction purposes when facilities additional to those at Cowansville and Ste. Anne des Plaines are required.
In answer to part 2, there is no immediate plan to construct a penal institution.
In view of the answers to parts 1 and 2, the answer to part 3 of the question is not applicable.


LOADING OF BUSES AT MALTON AIRPORT
Mr. Cowan: Is the Toronto Transportation Commission permitted to load buses at the "Arrival-Exit" of Malton airport in the same manner that the Ottawa Transportation Commission is able to load buses at the "Arrival-Exit" of Ottawa railway station and, if not, for what reason?


Mr. J. A. Byrne (Parliamentary Secretary to Minister of Transport):: No. The traffic on the Arrival-Exit levels is so congested that parking of additional buses cannot be accommodated. Curb space must be kept free for loading and unloading of passengers from private vehicles and taxis, and the limousine buses parking time is kept to a minimum.
Since the Toronto Transportation Commission buses are being used mainly by employees, the bus stop in the basement level has proved to be convenient both for the employees, and for those of the general public who wish to use this service.


AERIAL BUS SERVICE, EDMONTON-VANCOUVER
Mr. Lambert: 1.	Has Pacific Western Airlines filed with the Air Transport Board an application to operate a scheduled aerial bus service between Edmonton and Vancouver and return?
2.	If so, when?
3.	Has any decision been reached on this application, and (a) if so, what are the reasons therefor (b) if not, for what reasons?
4.	If such an application should be deemed beyond the jurisdiction of the Air Transport Board, where does the jurisdiction lie?
5.	How was authorization granted in 1962 or 1963 for the present aerial bus service between Edmonton and Calgary operated by Pacific Western Airlines?


James Allen (Jim) Byrne: 1. Yes. Pacific Western Airlines has filed an application for authority to operate a class 1 scheduled service between Vancouver and Edmonton municipal airport.

2.	May 15, 1967.
3.	No decision has been taken on the application which will be processed normally, including public advertisement.
4.	The application is within the jurisdiction of the Air Transport Board.
5.	Pacific Western Airlines is authorized under licence No. A.T.B. 1023/59CS) to operate a class 1 scheduled commercial air service serving the points Edmonton, Yellowknife, Fort McMurray and several other points including Calgary. The point Calgary was added to the licence in March 1963, by board order No. 3509 dated March 26, 1963, to permit the operation of a scheduled air bus service between Edmonton and Calgary. For this service the licence contains a restriction that all flights from Calgary must make a first stop at Edmonton municipal airport and all flights from Edmonton must be operated out of the municipal airport.


AIDS TO NAVIGATION, LAKE WINNIPEG
Mr. Sfefanson: 1.	How much money was spent for the aids to navigation program for lake Winnipeg and adjoining rivers and lakes for the fiscal year 1966-67, listing projects and locations?
2.	How much money is allocated for this program for the fiscal year 1967-68, listing proposed projects and locations?


James Allen (Jim) Byrne: 1. $15,065.41 was spent in aids to navigation program in 1966-
67, as follows:
Bloodvein River	$1,538.63
Deer Island	775.54
Spider Island	663.72
Selkirk Is. North End	612.50
Poplar River Entrance	476.76
Nelson River, Playgreen Lake	2,754.95
Winnipeg River	2,149.56
Spruce Island Channel	1,685.87
Berens River	682.40
Hecla Island	701.74
Red Rock Island	296.98
Clements Point	264.00
Loon Straits	265.26
Black Bear Island	304.87
Cox's Reef	138.43
George's Island	473.56
Mission Point	558.19
Dog Point	639.42
Cormorant Island	83.03

October 2, 1967

2.	$125,000 is allocated for aids to navigation program in 1967-68, as follows: Construction
George's Island	$45,000
(dwelling, light and fog alarm building)
Selkirk	$42,000
(structures for new aids, storage 

buildings, minor	improvements)	$87,000
Equipment
George's Island	$15,000
(generators, light and fog alarm equipment, stove, refrigerator, freezer)
Selkirk	$23,000
(lanterns and minor equipment, 

new and replacement buoys)	$38,000


FEDERAL RECEIPTS AND EXPENDITURES, BRITISH COLUMBIA
[Stage Direction]
Questions
owned enterprises and government operated institutions and housing, was 32.0 per cent.
2. The comparable percentage for 1949 was 26.8 per cent and for 1939, 28.5 per cent.

Mr. Isabelle: What amount will be spent by the Department of Public Works for the repairs now under way to the Alexandra bridge?


Hon. George J. Mcllraiih (Minister of Public Works):: An estimated amount of up to $1,300,000.


'ACTION ON FRESHWATER FISH MARKETING REPORT
Mr. Stefanson: Question No. 357-Mr. Davis:
1.	Taking into account, as between the federal government and the government of British Columbia, all the revenue received by the federal government (including direct taxes, indirect taxes and other revenue) and all expenditures on British Columbia's behalf (including conditional and unconditional grants to institutions and to individuals and expenditures incurred for public works and other purposes and by crown corporations in that province), for the fiscal year 1964-65, how much more, or less, did the federal government spend than it collected in the said province?
2.	What are the comparable figures for each of the remaining provinces of Canada?


Mitchell William Sharp: 1 and 2. Information is not now available to provide an accurate answer to this question and the necessary expert staff is not available to undertake the large amount of work which would be required to gather the necessary information.


NATIONAL INVESTMENT FROM PUBLIC SECTOR
Mr. Ormiston: 1.	What percentage of the national investment in the calendar year 1966 was derived from the combined public sector (federal, provincial, municipal) ?
2.	What was the comparable percentage for 1949 and 1939?


Mr. Jean-Charles Canlin (Parliamentary Secretary to Minister of Trade and Commerce):: 1. Preliminary estimates indicate that the percentage of investment in the public sector, defined to include capital expenditures of government departments, government
Is it the intention of the government to introduce legislation at this session of parliament, based on the recommendations of the Mclvor commission?


Hon. Robert Winters (Minister of Trade and Commerce):: Mr. Speaker, the recommendations of the commission of inquiry into freshwater fish marketing known as the Mclvor commission are under study by the provincial, territorial and federal authorities. The views of certain of the provincial and territorial authorities have not yet been received. When these views have been received and considered, an announcement of government policy will be made.


APPOINTMENT TO PROPERTY MANAGEMENT POSITION, PUBLIC WORKS DEPARTMENT
Mr. Reid: 1.	Did the Public Service Commission advertise a competition to fill the position-property management in the capital region-Department of Public Works, and (a) if not, for what reason (b) if so, how many applications were received from both within and outside the Department of Public Works, and what are the names of those who formed the board to select the winning candidate?
2.	What are the present duties of the present occupant of this position?
3.	What are the qualifications of the present occupant of this position?
4.	What is the remuneration for this position?
Hon. G. J. Mcllraiih (Minisler of Public
Works): 1. (a) The position of director of property management in the capital region of the Department of Public Works was filled

October 2, 1967
Questions
by means of an inventory search of applications registered at the Public Service Commission and of inventories of officers employed in the public service, (b) Thirty three candidates were considered by a board composed of the following members: Mr. R. B. Whiting, assistant deputy minister (program planning), Department of Public Works; Mr. J. A. Langford, assistant deputy minister (design), Department of Public Works; Mr. L. McGurran, director financial services, Department of Public Works; Mr. W. F. Nelson, director personnel administration, Department of Public Works; Mr. W. D. Egan, program evaluation officer, Department of Public Works. The then Civil Service Commission approved the recommendation of this board and appointed the successful candidate under section 25 (a) and (b) of the Civil Service Act.
2.	The present dtuies of this position consist of the administration of the departmental program for the region relating to accommodation, client requirements in buildings, maintenance, site acquisition and the administrative and personnel services entailed in fiscal control, manpower utilization, classification, pay, staff development and safety and fire prevention; the development of regional organization, establishment and policy within the intent of departmental program and directives; the recommendation of retention of firms for service contracts, the invoking of penalty clauses in contracts, the development of changes in departmental procedures designed to improve services to clients and the public by the region, and the acceptance or rejection of claims within assigned authority; and the performance of other duties related to the position.
3.	The present occupant is a graduate architect who was employed for seven years within the Department of Public Works between 1955 and 1962 in a number of different posts including those of assistant district architect and district architect of the Ottawa district office and of co-ordinating architect at Department of Public Works headquarters. Between 1963 and the time of his appointment to the position in question he was vice president of a development and construction company active in all fields of building development including management.
4.	The salary range for this position is $17,270 to $20,802 per annum.


QUESTION PASSED AS ORDER FOR RETURN
Mr. Godin: 1.	In each of the last three years, what was the sum of the purchases made by (a) the government (b) departmental corporations (c) crown corporations (d) each of the proprietary corporations?
2.	For each of the aforementioned sums, what were the annual proportions of Canadian and foreign products purchased?
Return tabled.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: Mr. Speaker, I
should like to direct a question to the Prime Minister. Has the Prime Minister received any information with respect to the attitude of the government of North Viet Nam or any of its allies toward President Johnson's latest offer to bring about a cease fire and commence negotiations for a settlement of the war in Viet Nam?


Right Hon. L. B. Pearson (Prime Minister):: No, Mr. Speaker, to my knowledge we have not received any information bearing on that particular statement of the President. However, I will look into the matter and see whether anything came in this morning.


Mr. Reid Scott (Danforth):: A supplementary question for the Prime Minister. Does the government have any information on the rumours circulating that United States bombers are refuelling in Canada as one of two stages, one stage being in Alberta and the other in Alaska? If so, can the Prime Minister say whether these rumours are true?


Lester Bowles Pearson: Mr. Speaker, I have no information whatever which would support that statement in so far as Alberta is concerned, but I will be glad to make inquiries.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. H. W. Herridge (Kootenay West):: Mr. Speaker, I wish to address a question to the Minister of National Health and Welfare,
October 2. 1967	COMMONS DEBATES	2697
based on a resolution passed by the union of British Columbia municipalities at their annual convention recently held in Prince Rupert. The resolution was to the effect that the U.B.C.M. called on all senior governments to introduce legislation to eliminate, modify or deglamorize all forms of tobacco advertising.
Has the minister received a copy of this resolution and, if so, can he inform the house of his response to same.


Mr. Speaker:: Order. I am sure the hon. member will agree with me that the question could easily be placed on the order paper. That is the suggestion I take the liberty of making to him.



FINANCE


[Stage Direction]
On the orders of the day:
David Réal Caouette: Mr. Speaker, my question is directed to my favourite minister, the Minister of Finance.
During the monetary discussions which took place in Rio de Janeiro, was the increase in the price of gold mentioned and, if so, what conclusions were arrived at during that conference?


Mitchell William Sharp: Mr. Speaker, the subject of the price of gold was not on the agenda of the meeting of the International Monetary Fund in Rio. Therefore I have nothing to report from the conference on this subject.



BILINGUALISM AND BICULTURALISM


[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is directed to the Prime Minister. In view of his call for a bipartisan approach to the problem of national unity, and the reported concentrated effort regarding national unity that the government is making at the present time, could the Prime Minister tell us if and when the final report of the B and B commission is going to be brought before the house?


Lester Bowles Pearson: Mr. Speaker, there was a question about this matter the other day, and I think I said at
Inquiries of the Ministry that time that there are three or four volumes of that report outstanding. The next volumes of the report are very important ones indeed and, I have been told, will be available at the end of next month, November.



WHEAT-SALES AT LESS THAN MINIMUM PRICE UNDER AGREEMENT

[Stage Direction]
On the orders of the day:
Mr. Eldon M. Woolliams (Bow River):: wish to direct a question to the Minister of Trade and Commerce, particularly as he has made an announcement about the subsidization of wheat. Has the minister directed the wheat board to sell wheat A1 below the minimum price as agreed to by the 52 countries in the international wheat agreement, or has the wheat board stated to the minister that wheat will be sold without a minimum price?


Robert Henry Winters: Mr. Speaker, I would imagine that these are regarded as internal matters between the minister and the wheat board. However, generally speaking, the wheat board has served notice that it intends to sell wheat at world prices, in competition with others who are competing for world markets.


Eldon Mattison Woolliams: A supplementary question, Mr. Speaker. I take it then that the minister has admitted that the wheat board will be selling wheat at below the minimum?


Mr. Speaker:: Order, please. That statement is argumentative.
[L ater:\


Eldon Mattison Woolliams: In further explanation, Mr. Speaker, I would like to put another question to the Minister of Trade and Commerce. I take it that in the discussions which he, on behalf of the government, had with the other exporting nations, the government took the position that there is no moral-


Mr. Speaker:: Order, please. The hon. member cannot embark on a debate with the minister on any point. He should ask a question.


Eldon Mattison Woolliams: All right, I will put my question. I take it, then, that there is no moral obligation on the part of Canada to adhere to a minimum price under the world wheat agreement?
2698	COMMONS
Inquiries of the Ministry


Mr. Speaker:: Order, please. This question is out of order.


Eldon Mattison Woolliams: Mr. Speaker, I think the minister wanted to answer. He was partly up on his feet.


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I wish to direct a supplementary question to the Minister of Trade and Commerce on the subject of the price of wheat. In view of the minister's statements this afternoon on this matter, has the government now decided to concur in United States policy of selling wheat at below world prices?


Robert Henry Winters: Mr. Speaker, the whole idea of the decision made by the government last week was to put the wheat board in a position where it could compete with other exporting countries by selling below the price range that was agreed to at Geneva and Rome, but not yet ratified.


Eldon Mattison Woolliams: As a supplementary question I would like to ask the minister whether he or his government has complained to the United States about selling wheat below the minimum set out in the agreement.


Robert Henry Winters: Mr. Speaker, there is no such agreement that is binding at this time. There was an understanding at Geneva, subsequently broadened at Rome, but not yet ratified. It is the period between the reaching of this understanding and its ratification that is a matter of concern to the government.


Eldon Mattison Woolliams: As a further supplementary question-


Mr. Speaker:: Order.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. T. S. Barnett (Comox-Alberni):: I wish to direct a question, of which I gave notice earlier today, to the new Minister of Transport. I wish to know whether the report of Dr. Tom Howe on the administration of small boat harbours has been received. If so, can the minister say when he will be able to table this report so that it may be available for study?


Hon. Paul Hellyer (Minister of Transport):: I beg your pardon, Mr. Speaker; I was looking at the notice of another question I had received from another hon. member.

DEBATES	October 2, 1967


Thomas Speakman Barnett: Mr. Speaker, I addressed a question to the Minister of Transport asking whether he had received the report of Dr. Tom Howe on the administration of small vessel harbours. If so, can he tell us when he will table this report for the information of members of the house?


Paul Theodore Hellyer: Yes, Mr. Speaker, the report has been received. It is a very comprehensive document, however, and because of its content it will take the department some time to consider it. The report, which is voluminous, was intended to be an internal document for the department. Once we have had a chance to review it I shall be prepared to make a further statement and to comment on the situation which is revealed in the report.



FREIGHT RATES


[Stage Direction]
On the orders of the day:
Mr. Thomas M. Bell (Saint John-Alberi):: Mr. Speaker, I have another question for the Minister of Transport of which I gave him notice. I welcome any efforts he may make to bring about changes that some think still remain to be made in the department. Is the minister aware of the great anxiety felt among maritime shippers with respect to the new non-carload rate structure? If so, will he promise a full review of this matter?


Paul Theodore Hellyer: Yes, Mr. Speaker. The matter has been brought to my attention and is being considered by the Canadian Transport Commission, which has jurisdiction under the powers given to it by parliament. I hope they will review it sympathetically for the benefit of all maritime members of parliament and others.


Thomas Miller Bell: A supplementary question, Mr. Speaker. Without commenting on the minister's answer, may I ask him if he will not examine the approaches that were made to the former minister, arrange a meeting, and consider using his good offices to bring about a stay or voluntary withdrawal of this new structure until satisfactory tariffs can be agreed on.


Mr. Speaker:: Order, please. That is a representation and not a question.
October 2, 1967	COMMONS



TRANSPORT


[Stage Direction]
On the orders of the day:
Mr. J. P. Nowlan (Digby-Annapolis-Kings):: Mr. Speaker, having given the minister notice of a perennial problem which I know he will handle with true dispatch, I should like to know whether he will repeat the assurance given by the previous minister that the government will soon make its long awaited announcement on the Digby-Saint John ferry situation.


Paul Theodore Hellyer: This question is high on the list of priority studies, Mr. Speaker. I hope to report to my hon. friend and his constituents as soon as possible.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Hon. Gordon Churchill (Winnipeg South Centre):: I have a question for the fresh Minister of Transport.


Some hon. Members:: Oh, oh.


Gordon Minto Churchill: An answer of yes or no. would be satisfactory.


Some hon. Members:: Oh, oh.


Gordon Minto Churchill: Recalling the minister's experience with the admirals over the past few years, is he confident that he will be able to deal just as ruthlessly with Sailor Jack Pickersgill?


Some hon. Members:: Oh, oh.


Mr. Speaker:: Order, please.


Paul Theodore Hellyer: I am sure there will be full co-operation-


Mr. Speaker:: Order, please.



FINANCE


[Stage Direction]
On the orders of the day:
Colin Cameron: I wish to address a question to the Prime Minister since it deals with two statements of ministers which seem to conflict. In this morning's paper I noticed a report of a statement made by the Minister of Trade and Commerce, who is said to have roundly condemned one of the principal
DEBATES	2699
Inquiries of the Ministry recommendations of the Carter report, the one dealing with depletion. That statement is contradictory to the one made by the Minister of Finance to this house, who informed us that the government would not decide its policy on the Carter commission report until a study has been made of it, a white paper published and the matter placed in the hands of hon. members. I should like to know from the Prime Minister which of his ministers has enunciated government policy.


Lester Bowles Pearson: Mr. Speaker, I shall be very glad to resolve that contradiction in my hon. friend's mind by discussing the matter with both ministers concerned.


Mr. G. H. Aiken (Parry Sound-Muskoka):: A supplementary question, Mr. Speaker. In view of the various statements which have been made about the matter of tax incentives for the mining industry, is the Prime Minister in a position to say whether the government has reached a decision on the matter?


Lester Bowles Pearson: The policy of the government on this and related matters will be made known-


An hon. Member:: In due course.


Lester Bowles Pearson: Yes, in due course. Thank you.


Mr. Robert Simpson (Churchill):: I wish to direct a supplementary question to the Minister of Trade and Commerce. Does the report of the minister's statement made at Fort McMurray over the past week end, to the effect that tax incentives to encourage mining development and exploration should be continued, represent government policy?


Robert Henry Winters: Mr. Speaker, I was merely stating that there-


Mr. Speaker:: Order, please. An hon. member cannot ask a minister to comment on a statement made outside the house.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
Hon. D. S. Harkness (Calgary North):: I have a question for the Minister of National Defence, but since he is absent overseas attending a NATO meeting I shall address it to the

October 2, 1967
Inquiries of the Ministry Prime Minister. Is the delay which has been announced in the promulgation of the amendments to the National Defence Act, providing for unification of the armed forces, due to the government having found that the proposed changes are not practical or desirable?


Lester Bowles Pearson: No, Mr. Speaker.



PILOTAGE


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (New Westminster):: Mr. Speaker, I have a question for the new Minister of Transport concerning another long standing problem or issue. Can he tell us what is the status of the long awaited report of the pilotage commission?


Paul Theodore Hellyer: I must take that question as notice, Mr. Speaker.



LABOUR CONDITIONS

[Stage Direction]
INQUIRY AS TO AMENDMENT OF LEGISLATION On the orders of the day:
Mr. J. N. Ormiston (Melville):: I wish to put a question to the Minister of Labour which has nothing to do with housing. As the annual meeting of the brotherhood of railway, transport and general workers is now being held in Ottawa, could the minister not give some indication when legislation will be brought forward to amend the Industrial Relations and Disputes Investigation Act?


Hon. J. R. Nicholson (Minister of Labour):: Mr. Speaker, the matter should be on the order paper before too long, I hope. I cannot fix any definite date, but it can reasonably be expected to be put on the order paper before the end of the month.



EXPO '67 LACK OF AGREEMENT TO ENSURE TRANSPORTATION SERVICE

[Stage Direction]
On the orders of the day:
Mr. Roger E. Regimbal (Argenieuil-Deux-Moniagnes):: I wish to address a question tion to the Minister of Trade and Commerce, who is responsible for Expo. Since we were given to understand that agreements had been arrived at with the various organizations involved which would protect the operation of Expo '67 against untimely labour-management conflicts, and since the present [Mr. Harkness.J
Montreal transport strike has already cost an estimated $7 million in revenue, is it correct to assume that the M.T.C. and its employees were overlooked in arriving at those agreements?


Mr. Speaker:: Order, please. The question as framed is not acceptable. The hon. member is asking an argumentative question.



AGRICULTURE


[Stage Direction]
On the orders of the day:
Hon. George Hees (Northumberland):: Mr. Speaker, I would like to direct a question to the Minister of Agriculture. Are measures being worked out by the government to ease the impact on agricultural producers adversely affected by Kennedy round tariff reductions?


Hon. J. J. Greene (Minister of Agriculture):: Mr. Speaker, I believe that some time ago the Minister of Trade and Commerce announced any measures that were being taken in this regard, but I do not think with respect to agriculture in particular. We are in constant discussion with the agricultural organizations, and certainly any appropriate action would be announced in the house in the proper manner.


George Harris Hees: Mr. Speaker, I would like to direct a supplementary question to the Minister of Trade and Commerce. As the Minister of Agriculture implied that the Minister of Trade and Commerce at some time had made a statement to the house on this matter, could the minister advise the house whether the government is taking steps to see that agricultural producers who are adversely affected by Kennedy round tariff reductions are going to be protected?


Robert Henry Winters: Mr. Speaker, this whole matter is one of continuing government consideration. No decisions have yet been arrived at.


George Harris Hees: As a further supplementary question, is this matter being actively considered with the idea of producing a plan to protect agricultural producers who are affected?


Mr. Speaker:: Order, please. This is a repetition of the previous question.
October 2, 1967



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. Lloyd R. Crouse (Queens-Lunenburg):: Mr. Speaker, I would like to address a question to the Minister of Fisheries. Would the minister take the House of Commons and the fishermen of Canada into his confidence and give us an up to date report on the negotiations being carried on with other countries toward establishing a 12 mile limit for Canada? At the same time would he inform us when we may expect geographical co-ordinates to be established, from which base lines will be drawn?


Mr. Speaker:: Order. The question as asked is not acceptable. The hon. member is asking for a statement, something which should be made on motions.



NATIONAL CAPITAL


[Stage Direction]
On the orders of the day:
Hon. R. A. Bell (Carlelon):: Mr. Speaker, having regard to the desirability of concluding before Christmas the long awaited parliamentary study on national capital planning, may I ask the Minister of Public Works when he proposes to ask the house to approve the establishment of a special joint committee on this subject?


George James McIlraith: Very shortly, Mr. Speaker.



EDUCATION


[Stage Direction]
On the orders of the day:
Mr. Reward Graffiey (Brome-Missisquoi):: Mr. Speaker, I would like to direct a question to the Minister of National Health and Welfare. Now that fall registrations have been completed has the minister been informed in the last few days that hundreds of qualified students have been refused entrance to Canadian medical schools because of the lack of teaching facilities?


Mr. Speaker:: Order. I have some doubt that the question as asked is acceptable. The hon. member is asking if the minister has been informed of a situation. I do not think the question in this form is in order.
Inquiries of the Ministry


William Heward Grafftey: May I rephrase my question to the minister. Now that fall registrations have been completed will the minister inform the house whether hundreds of medical students have been refused entrance to our universities because of a lack of teaching facilities?


Hon. A. J. MacEachen (Minister of National Health and Welfare):: Yes, Mr. Speaker, I will inform the house at the appropriate time.



FINANCE


[Stage Direction]
On the orders of the day:
Marcel Joseph Aimé Lambert: Mr. Speaker, I wish to direct a question to the Minister of Finance. In accordance with an undertaking given to the house the minister tabled a letter dated June 27, addressed to the premier of the province of Quebec, regarding proposed amendments that might have to be made to the Canada Deposit Insurance Corporation Act. Would the minister advise the house when it is proposed to bring forward these amendments, and when we may anticipate that we can get on with the consideration of them in committee?


Mitchell William Sharp: Mr. Speaker, I would like to say I am surprised that the matter is not on the order paper. The legislation is ready and it will be presented immediately.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I should like to direct a question to the Prime Minister. In view of reported differences in statements made by the Prime Minister and the Secretary of State for External Affairs with respect to the admission of mainland China to the United Nations, can the Prime Minister say what is now the Canadian government's position with respect to this matter?


Lester Bowles Pearson: Mr. Speaker, there are no differences as referred to by my hon. friend. Our position, as it was outlined to the last assembly of the United Nations and repeated by the Secretary of State for External Affairs last week in regard to the desirability of having the voice
October 2, 1967

Inquiries of the Ministry of continental China heard at the United Nations assembly has not changed. However, as I have said before, and so has the Secretary of State for External Affairs, this is not a time when an initiative of the kind we took last year is likely to be accepted. It was rejected at the last general assembly, and in. view of what is going on in China at the present time it is not likely that any initiative of that kind would be more acceptable this year than it was last year.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Ralph Cowan (York-Humber):: Mr. Speaker, I have a question for the Minister of National Health and Welfare of which I have given him notice. Will he advise the house whether the monthly payments made to nine provinces by the Canadian government under the Hospital Insurance and Diagnostic Services Act are up to date as of September 1967, and are the payments to the province of Quebec under the Interim Fiscal Arrangements Act also up to date as of September, 1967?


Mr. Speaker:: Order, this question should be placed on the order paper.


Ralph Bronson Cowan: Ten o'clock, sir.



COMPANY OF YOUNG CANADIANS


[Stage Direction]
On the orders of the day:
Mr. George Muir (Lisgar):: Mr. Speaker, I wish to direct a question to the Prime Minister. Considering the failure of the Company of Young Canadians to achieve the objectives for which the group was formed, is it the intention of the government to disband the company, particularly in light of the cost of over $2 million to the treasury this year?


Mr. Speaker:: Order. The question as asked includes allegations, and cannot be asked in that form.



DOMINION-PROVINCIAL RELATIONS NOVA SCOTIA-ASSISTANCE TO KEEP MCBEAN MINE IN OPERATION

[Stage Direction]
On the orders of the day:
Mr. H. Russell MacEwan (Pictou):: Mr. Speaker, I wish to direct a question to the

Minister of Energy, Mines and Resources. It is further to a meeting at Halifax attended by the united mine workers, community leaders and other interested people. Has the government made a decision on additional subventions to be provided in order to keep the McBean mine, with its 400 employees, operating during the next year or two?


Hon. Jean-Luc Pepin (Minister of Energy, Mines and Resources):: Mr. Speaker, subventions are being paid now, and with respect to what will happen in the future I am waiting for the corporation to become operative before deciding.



ROYAL CANADIAN MINT


[Stage Direction]
On the orders of the day:
Mr. D. V. Pugh (Okanagan Boundary):: Mr. Speaker, I wish to direct a question with reference to centennial coinage to the Minister of Finance. Has the production of centennial coinage for 1967 been cut off at the mint?


Mitchell William Sharp: Mr. Speaker, I would have to take notice of part of the question. In fact the intention is to supply the needs of our currency with 1967 coinage but not to carry that design forward into 1968. I am not absolutely sure about the precise answer to the question that has been asked.


David Vaughan Pugh: As a supplementary may I ask whether the old coinage has also been produced during the present year?


Mr. Speaker:: Order, please. I fail to see the immediate urgency of the question. There may be some aspect of the question which escapes me. If there is a matter of urgency, I will allow the question; otherwise I suggest that it be placed on the order paper.


David Vaughan Pugh: On this point, you will remember that before July 1-


Mr. Speaker:: It might be easier if the hon. member asked the question.


David Vaughan Pugh: May I argue it at ten o'clock?


Hon. E. J. Benson (Minister of National Revenue and President of the Treasury Board) moved: that the house go into committee of supply.
October 2. 1967



HOUSING-ALLEGED FAILURE OF GOVERNMENT POLICY

Mr. G. L. Challerion (Esquimalt-Saanich):: Mr. Speaker, in a young country such as Canada where the population is made up of people who have come from many countries, where there are vast distances over which people and goods must be transported, a country with a strategic location on this earth, it is natural that there will be many matters, that trouble Canadians. Canadians are serious about the unity of Canada; they are concerned about it. Canadians are worried about peace on earth, the Viet Nam situation, and the underdeveloped countries which need assistance. Parents are worried about future opportunities for their children to achieve their aims by individual effort and not by relying entirely on governments. Our people are concerned about the position of Christian principles within our society.
There are many things which concern Canadians and it is well that Canadians think about them. However, the motive of selfpreservation and self-interest-and I use the expression "self-interest" in the broad sense -is an overpowering one. Therefore I believe the one single factor with which most Canadians are concerned today is that of inflation and the increasing cost of living. Inflation steals from the poor and the prudent. I think of the elderly couple or the old age pensioner who are trying to survive on $105 a month. Out of this $105 the old age pensioner may have only $40 or $50 a month with which to provide a reasonable roof over his head. I know of many instances where such people do not have enough money toward the end of the month to satisfy their hunger.
I used the word "prudent". There are prudent people who are affected by inflation. I think of a friend of mine who retired about nine years ago. He had been a fairly senior official in a private company. Partly because of health reasons he retired at a somewhat early age, although he was not required to do so. He had given his family a reasonable home life. He had sent his children through school. He had never looked to any government for a handout. He had saved money and he had bought bonds. With his savings he bought a house. From the income on an annuity which he had bought and from the interest on his bonds he thought at the time he retired that he would be able to maintain a reasonable standard of living. Today he finds that the value of his annuity and the income from his bonds are not sufficient to
Discussion on Housing maintain him at a reasonable standard. He is now forced to sell some of his bonds. He figured he would try to live on some of his capital until he became eligible for old age security, but he finds that he is receiving only about 80 per cent on the dollar for the bonds he is selling.
I think of the hundreds and thousands of retired civil servants, many of whom have made representations to the Prime Minister (Mr. Pearson) and the government. They have indicated that in many instances the pensions they received at the time of retirement will now buy only 60 per cent of what they would have bought at the time they were retired. Truly inflation and the increasing cost of living do steal from the poor and the prudent.
But there is one aspect of Canadian life on which inflation has a devastating effect and that is housing. Housing is an essential element for the social well-being of the citizens of the country. Last Monday, on behalf of our party, I moved the adjournment of the house to consider a matter of urgent national importance, namely, the housing crisis. Realizing that the question would be raised by us again and that the motion might well be granted at a later date, the government therefore agreed to bring up the estimates of the Department of Labour last Thursday so that we could discuss the crisis.
I wish to make it clear that I do not use the word "crisis" in the sense that this is a problem which has arisen just now; it is a problem which has been with us for a long time. Repeatedly we have brought it to the attention of the government. For example, on May 16, 1966, a year and half ago, the hon. member for Northumberland (Mr. Hees) moved the following amendment to a supply motion:
The policies of the government in imposing tight money and denying builders and prospective home owners needed mortgage funds, constitute a negative approach to the problems facing our economy and are seriously impeding the development of the nation.
Let me describe briefly what the current situation is with regard to housing. We have brought it to the attention of the government before but it may need repeating in a brief manner. At page 193 of the fourth annual review of the Economic Council of Canada we find the following:
Nevertheless it appears that perhaps as many as one million Canadians are housed in substandard dwellings of this description.

October 2, 1967
Discussion on Housing
The reference is to a backlog in housing requirements. Roughly one million people were in need of housing this year as of the date of this report. I should like to quote from page 129 of the report of the special committee of the Senate on aging:
-300,000 elderly family and non-family households in 1961-were experiencing difficulties in their housing situation.
As a matter of fact, Mr. R. Adamson, C.M.H.C. economist, estimated when he appeared before the Senate committee on aging that at least 400,000 elderly persons as of that date were in need of housing assistance because of the backlog in the housing situation. What is being done to solve this backlog in housing requirements? I should like to quote from page 133 of the same report of the Economic Council of Canada:
We estimate that by the end of the 1960's housing starts and completions in Canada will need to rise to annual levels of at least 200,000 units to fully meet the nation's requirements at that time.
At another point it states that in the last four years of the 1960's an average of 194,000 housing starts will be required to meet the current requiremetns. Just speaking of one place, the city of Victoria and its environs, the capital regional planning board of British Columbia, at the time I was chairman, made a survey of housing requirements for elderly people in the greater Victoria area and arrived at the conclusion that at least 1,000 people in that area alone were in urgent need of housing accommodation. That is the present situation in respect of housing.
[DOT] (3:30 p.m.)
What is being done to meet, first of all, the current requirements and, second, to catch up on the backlog of shortages? In 1966 there were 134,000 housing starts in Canada. The minister indicated last week that this year there will be in the order of 150,000 housing starts.


John Robert (Jack) Nicholson: On a point of order, Mr. Speaker, I am sure the hon. member would not want to allow a misstatement to go by unchallenged. The figure I mentioned last Thursday was 150,000, not 130,000.


George Louis Chatterton: Perhaps the minister
misunderstood me. I did say that he estimated there will be 150,000 starts this year. In any event, in those two years alone, over and above the one million houses the Economic Council of Canada suggests are required there has been a shortage of requirement in the neighbourhood of 70,000 to 90,000 houses.

Therefore we are falling farther and farther behind.
Having recognized the situation as it is, let us consider the effect of this critical situation on Canadians. Let me refer first of all to page 136 of the report of the Economic Council of Canada. It enumerates certain effects which result from the housing situation in Canada including:
-shortages of suitable housing in many of the larger urban areas of the country, with adverse social consequences and inhibiting effects on labour mobility;
-widespread and significant increases in rents and house prices, which have been reflected in the cost of living and in upward pressures on wages

In the 12 months ended August, 1967, the consumer price index on housing went up from 145 to 152.2, an increase of 7.2 in one year alone. It is common knowledge that the shortage of housing in itself has tremendously increased the cost of houses which have been built. It is obvious that when there are more purchasers than there are houses the price goes up.
The third effect as reported at page 136 of the council's report is:
-the sharp drop-off in the utilization of productive capacity in the apartment building sector of the construction industry, with disruptive effects on efficiencies and on the longer-term retention of specialized and skilled labour.
Let me emphasize again the effect on apartment buildings. The minister indicated, and generally authorities agree, that the most efficient form of housing is the multiple type, not necessarily apartment blocks because it could include row houses. This does not mean that people who want to own their own houses should not be allowed to do so, but from the point of view of the provision of houses and the cost of land and services, apartment or multiple housing units are more efficient. The Economic Council points out that the existing situation has had a severe effect on this particular phase of the house construction industry.
Let me refer to a few words of a contractor in my area who has written to the minister to indicate the effect of this housing policy on contractors. First of all he says it prevents builders from building speculative housing which could be used to level out builders' production. Second, it makes it impossible for builders to engage in any kind of realistic planning or buying because builders cannot get volume prices and price discounts on material and subcontracts when neither they nor their suppliers know how many housing
October 2. 1967

starts they will have in the next few weeks, let alone in the next few months.
This man also suggests that builders cannot afford to develop land when the lack of mortgage money makes land unusable for months, leaving capital tied up. He suggests that banks are not interested in developing land of that sort. Therefore builders must wait for mortgage funds to be released and then scramble for whatever lands are available at a premium price which must be passed on to the consumer.
I am trying to point out the effect of the housing situation on Canadians. Let me quote from page 25 of the report of the Economic Council of Canada:
Many potential home-owner borrowers, for example, may be deterred by virtue of the fact that a higher mortgage interest rate finds significant reflection in the size of the monthly mortgage payment, particularly given the long-term nature of most of the loans now made.
Last week we attempted to point out the seriousness of the existing housing situation. Last Thursday we listened with a great deal of interest and anticipation to replies and answers from members on the government side. It was my impression that the general reaction of the government was, first of all, that this is not a serious situation and, second, that if it is serious there is nothing it can do about it. For example, the Minister of Labour (Mr. Nicholson) seems to be more concerned about the actual number of housing starts that should be made according to the report than the fact we are falling farther and farther behind. He has consoled himself with the fact that this year housing starts are 15 per cent above the level of 1966. What he did not say was that in 1966 there were
32.000	fewer starts than in 1965. Surely the number of starts should not be anything else but greater. The minister did not mention that the number of housing starts in 1966 was less than in 1958 when there were 164,000. The number of starts last year was less than in 1955 when there were 138,000.
The minister seems to be unconcerned about the fact that the Economic Council has pointed out that 140,000 houses are required per annum for new family formations and nonfamily requirements and that in addition
50.000	are required for replacement. Apparently this is not important. To indicate the attitude of the government let me refer to page 2596 of Hansard for September 28, 1967.
Discussion on Housing The minister interjected with this question to the hon. member for Danforth (Mr. Scott):
Does he know that from among those who have borrowed in excess of $500 million this year more than half the borrowers have incomes between $4,000 and $7,000 a year?
That question clearly implied that if that amount of money was borrowed by people earning between $4,000 and $7,000 per year there should be no difficulty in respect of those people who are earning less than $8,000 per year. What the minister fails to bring to the attention of the house is that according to the Canadian housing statistics for 1966 the average cost of a house to those people whose income was less than $4,000 was $12,560. The down payment required from the people in that group was $7,000. The minister knows the C.M.H.C. requirement that the payment to retire the debt and cover the taxes must not exceed 27 per cent of one's gross income. So the people in the low income group to whom the minister referred had to put up a great deal of cash in order to reduce their mortgages.
o (3:40 p.m.)
These people often had to borrow the money, without C.M.H.C.'s knowledge, in order to make the down payment. They borrow the money or sell a little home they have and they put down a large sum of money in order to meet the requirements of C.M.H.C. I am trying to point up the attitude of the government in this respect.
The hon. member for Verdun (Mr. Mac-kasey) spent a great deal of time the other day reading to the house excerpts from various newspapers indicating in effect that many houses are available and there is no problem at all. I think the hon. member spent ten minutes trying to convince us that there was no problem at all. In view of that attitude of the government we believe we should continue to bring to its attention the serious situation that exists.
Last Thursday the Minister of Labour said to us in effect: What does the Economic Council of Canada advise us to do? Do they prescribe any solutions for tiiis serious problem?
This brings me to the next point I wish to make. First of all, we should try to recognize what were the factors that caused the present situation, what were the conditions that led to it. How can any government find a solution to a problem unless it first recognizes the causes of the problem? I now wish to deal with the causes that led to this crisis in

October 2, 1967
Discussion on Housing housing. I quote from page 261 of the fourth annual review of the Economic Council of Canada:
Thus, the accelerated increase in government spending in 1966 and 1967 is outpacing the growth of government revenues at existing tax levels.
Now we are getting to the crux of the matter and the cause of the situation in which we find ourselves with respect to housing. I must point out that the excerpt I have just read from the fourth annual review of the Economic Council refers to government spending and includes all levels of government. Let us never say that the whole fault lies with the federal government. But I submit that according to the figures quoted in the report of the Economic Council of Canada the increase in spending by this government has been a major factor in arriving at the situation where it is not possible to obtain private money with which to finance housing mortgages.
On page 27 of the fourth annual review of the Economic Council of Canada the increases in expenditures of all governments are set out. For example, in the case of goods and services federal government expenditures in 1966 increased by 18.8 per cent over 1965. If we exclude defence, the increase in expenditures in 1966 over 1965 was 27.1 per cent. When the hon. member for Perth (Mr. Monteith) spoke in the budget debate on June 6 last he indicated that the increase in federal government expenditures in 1967 over 1966 would be another 20 per cent. We are trying to find out what are the factors which led to the situation we face today.


Mitchell William Sharp: Mr. Speaker, could I ask the hon. gentleman a question?


George Louis Chatterton: Mr. Speaker, I would prefer to answer questions at the end of my speech. We are trying to put our finger on the cause of this serious situation. The government has taken the attitude that there is a shortage of money and this is the reason they have had to raise the interest rate on C.M.H.C. loans to a maximum of 8J per cent. I agree with the minister that this does not mean the interest rate will be 8i per cent. That is the maximum. It may well be that it will not go up to 8J per cent.
The government says there is a shortage of money and they ask: What else could we do? The question is, Mr. Speaker, why is there this shortage of money? I wish to quote rather extensively from the speech of the hon. member for Perth in the budget debate of June 6 because the hon. member put his
[Mr. Chatterton.l
finger on the cause of this situation in which money cannot be obtained at a reasonable rate for housing mortgages. I quote from page 1192 of Hansard of June 6 last:
The other evening the minister casually brushed over the effect on the money markets, interest rates, international affairs and domestic prices-
And so on. I quote further from the hon. member's speech as reported on the same page of Hansard:
All the signs point to the government having to move into the money market in a very big way.
I listened to the Minister of Finance (Mr. Sharp) announce just a few minutes ago that this is a trend right across the world. I realize there is concern in Europe and many other western countries particularly because the United States is using the interest rate to ease the economy. I believe that the action of this government has greatly aggravated the situation which exists in Canada, though it is subject to influence from other parts of the world. The action of the government has contributed directly to the position in which we find ourselves today, where money at a reasonable rate cannot be obtained to finance such an essential article as housing. I quote again from the speech of the future minister, now the hon. member for Perth, at page 1193 of Hansard. I said "future minister", and I mean in the not too distant future.


Mr. Slewart:: You must mean that he is turning ecclesiastical.


George Louis Chatterton: As reported at page 1193 of Hansard, the hon. member for Perth said:
As the minister noted, prices are now 7.3 per cent above what they were two years ago. It is obvious, sir, that the grocery dollar is getting smaller and smaller. At the same time that prices are rising the government must attempt to raise funds of its own in competition with private business and with individuals so in effect the price of borrowing money rises too.
The hon. member then said, as reported on the same page:
It means interest rates will tend to stay high.
Further, the hon. member said, as reported at page 1193 of Hansard:
Sir my concern with the financial gyrations of this government is that it has a total disregard for the expenditure of the peoples' money.
We are beginning to put our finger upon what has caused or aggravated the housing shortage in this country. I shall now read a few of the excerpts which the hon. member in his speech read from the Globe and Mail
October 2, 1967

of June 5. This appears at page 1195 of Hansard for June 6:
In the past several years the public has acquired a good deal of experience in the methods of frenzied financiers and it therefore should have no great difficulty in recognizing the glibness of Finance Minister Sharp for what it is.
[DOT] (3:50 p.m.)
In his budget speech, which is the equivalent of the annual report to shareholders from the president of a financial institution, the finance minister put up a bold front, yet he was unable to conceal the one important fact, that the nation's financial operations are out of control.
Last Thursday members of all the opposition parties tended to blame only the Minister of Labour. I think he should carry a certain measure of blame for the situation in which we find ourselves today but I submit the basic cause leading to this problem does not lie with the Minister of Labour except in so far as he is a member of the government. It can be directly ascribed to the policies of this government as indicated by the Minister of Finance. It is he who has mainly contributed to the situation we face today.
I could continue quoting along the same lines for another half hour. I am trying to find explanations for the basic causes which have led to this situation. First of all I wish to quote from pages 108 and 109 of the report of the Economic Council of Canada. Reference is made here to the surplus and deficit positions on a national accounts basis. The expert reads as follows:
The major factor in this development in 1966 was an extraordinary rise in government purchases of goods and services, of 16 per cent, or $1.6 billion, the largest percentage increase since the Korean defence build-up.
A very significant comment is made on page 24 of the fourth annual review of the Economic Council of Canada regarding the shortage of housing. It reads as follows:
It is important to note that this situation has not developed as a result of any conscious choice, based on an ordering of the national priorities.
What is meant there is that the government has been drafted into this position because of a lack of a firm stand and because of a lack of a recognition of priorities.
Now let me quote a very eminent journalist and a great columnist, Mr. Bruce Hutchison, from the Ottawa Journal of September 25. The article reads partly as follows:
The Pearson government is trying desperately to extricate itself from a double blunder of economics and politics.
Farther on he wrote the following:
The moment of financial truth came in the last month when the government suddenly found that
Discussion on Housing it could not sell its bonds without paying exorbitant interest rates which have automatically raised those of all borrowers, public and private.
Mr. Hutchison, who I think is a greater authority on this subject than I am, went on to say:
Finally it found its fiscal policies under unprecedented attack by the impartial Economic Council-
Up to now the government, misjudging the economic climate has fed inflation with its deficits.
I do not think there is any doubt in anybody's mind that inflation is a factor which has contributed more than anything else to the position which we have a right to take today in the housing crisis.
Now I wish to quote the following from the Financial Post of September 2 of this year:
Ottawa can only blame itself for its present boxed-in position. If its increases in spending had been less exuberant across the board in the past few years, it would now be able to borrow more easily to finance its long-established housing program.
Farther on the same editorial, headed "Why .Housing Gets Hit", reads as follows:
If our political leaders in their beneficence wish to improve the outlook for housing in a more permanent way they must design and time their total spending in a way that encourages, not discourages, private investment in housing.
I think we are beginning to make our case. We recognize there is a shortage of money and tremendous competition in the capital market. We are trying to find out reasons for that situation, and I maintain it was the action of this government which has greatly contributed to that difficult position. I feel sorry for the Minister of Labour. I know he would like to go to the government and say: Please give me another $300 million so I can make direct loans available rather than have to raise the interest rate. I am sure he would love to be in a position where the Minister of Finance would agree to giving him $300 million more.
I recognize that the government has spent $900 million this year, but why did it have to do so? It is because the action of the government has made it impossible for private lenders to have money available to lend for housing. This is why the government has had to spend money on housing. I commend the government for having spent that much in difficult times, but why did it have to do it? Next year we will be in a worse position. As the Minister of National Revenue (Mr. Benson) told us on Thursday, next year we will not be able to get nearly as much. Therefore the

Ociober 2, 1967
Discussion on Housing government has to rely on a fantastically high interest rate to induce private investors to put their money into housing. I appreciate the position of the Minister of Labour and I acknowledge it is not of his making. I see the minister is smiling.
Mr. Connelly, the president of the National House Builders Association, had the following to say as reported in the association's news release of August 24, 1967:
Mr. Connelly said that his association shared the government's concern for deficit financing and he pointed out that heavy government borrowings at all levels to maintain many non-essential programs had cut into the supply of mortgage money. He agreed with the hope of the government that by reducing its demands on the capital market it will cause interest rates to fall and that more private money will then be attracted into mortgages.
There is not much hope of that now; they may go up to 8.25 per cent. I wish to quote now from the Telegram of September 29 in which the following comment is made:
Is Ottawa so blind to the growing inflation in this country, brought on in part by unwise government spending, not to know that even upper income families cannot afford new homes?
Are the government's expenditures in relation to its revenues in such desperate straits that it must sweeten the prospects of private capital buying up N.H.A. mortgages at the expense of the would-be home owner?
There is no doubt that the people who will suffer most from the present situation and from the present action of the government, which was in effect necessary because of the past actions of the government, are the people who can afford it least, namely, people earning less than $8,000 a year.
The Minister of Labour asked us on Thursday what the solution to the problem is. He said that the Economic Council of Canada did not put forward any constructive proposals. As I have said before, the first step is for the government to recognize the causative factors which led to the situation. Unless it recognizes and accepts them, how can it remove the causes?
I hope I have achieved something by impressing on the government that it was their actions that brought about the situation where mortgage money cannot be obtained for housing at a reasonable rate. The government should realize what is required in a practical way to achieve the objectives outlined by the Economic Council of Canada. On page 112 of its report the Economic Council wrote the following:
The increase in the housing stock, on the other hand, has not kept pace with the rise in new family and household formation in the recent period. Vacancy rates have been sharply reduced,

and the price of housing and rental accommodation has risen sharply. Over the period 1963-66, the average rate of growth in the physical volume of housing expenditures amounted to only 3.2 per cent per year.
This is what will be required from now on and the government should pay special attention to it. The report continues:
To meet the demand for housing which our projections of new family and household formation imply, an average of some 190,000 new housing units per year are required between the years 1966 and 1970. This would mean an average annual rate of growth in the real physical volume of housing expenditures of about 8.4 per cent per year to 1970, or well over twice the average rate for the 1983-66 period.
[DOT] (4:00 p.m.)
Therefore, Mr. Speaker, the government must be aware that this sum of money will be required from now on to meet the minimum objectives which have been set by the Economic Council. Unless they realize this, how can they take action to achieve those objectives?
On the negative side, on page 265 of the report of the Economic Council of Canada there is the following statement:
The use of housing as an economic regulator should not be continued to such an extent in the future.
This is also something the government must keep in mind. There must be an even flow of funds for housing so that the housing industry can operate in an efficient and effective manner in order to meet the needs for housing in Canada before too many years pass. On page 264 of the report of the Economic Council it is stated:
Of all the major sectors of the economy, none will have to grow more rapidly than housing- at least to 1970.
It is set forth on page 261 that there is a need-
-for consistent and comprehensive determination of objectives and priorities:-
Let us recognize, Mr. Speaker, what is important. Is housing important? If so, let us assign to it a certain priority, and let the government arrange its fiscal affairs in such manner that the objectives set by that priority can be achieved. The report goes on to say there is also a need-
-for continuing evaluation of the impact and effectiveness of the growing range and diversity of government programs in relation to their cost; and for increased co-ordination between governments in relation to these matters.
Then at page 262 the report continues:
Similarly, careful attention should be given to the possible ways in which rising government
October 2, 1967

spending could impinge, with adverse effects on the whole economy, on needed growth in housing, exports, and business investment.
If the government does nothing else but take heed of that advice by the Economic Council of Canada and recognizes that it should not repeat the errors of the past which caused this situation, then we have gone a long way toward finding a solution to these problems. But it is a prerequisite to any solution, Mr. Speaker, to recognize the causes of the situation and to take the advice of the Economic Council not to repeat the same actions which would lead to the same problems.
Other specific suggestions could also be made. I agree with the minister when he states what is the first obligation of the government. As reported at page 2577 of Hansard the Minister of Labour said:
As I have just indicated, the government intends to devote a larger proportion of its resources to the social needs of the lower income groups and to the trouble spots resulting from the fantastic urban growth that has taken place, in order to provide improved living conditions in urban areas.
I agree that it is the prime responsibility of the government to provide housing for those in greatest need, and I concede that there have been substantial improvements under the National Housing Act in the provision of housing to accommodate people in the low income brackets. But judging from the performance last year and this year, the fact of the matter is that the measures provided under the National Housing Act have not been effective.
For example, during the whole of 1966 only 5,676 housing units were provided under the National Housing Act. We must keep in mind that the Senate report on aging indicated that there is now an immediate requirement for
300,000	such units. In addition to the 5,676 units provided by the public housing authority, another 1,300 units were provided by way of the acquisition and renovation of existing property. In the first six months of 1967 a grand total of 1,170 housing units were provided for those in greatest need in the very low income brackets.
I realize that the minister has been criticized for being absent from the house, but I commend him for having travelled around the country trying to convince provinces and municipalities that these provisions of the act can help them solve their problems. I admit that the provinces and municipalities have been reluctant to accept this proposition, but both the minister and the provinces have
Discussion on Housing made some progress in this field. For example, eight of the provinces have now established agencies to co-ordinate these provisions so that advantage may be taken of them. Nevertheless I still submit to the minister that the provisions themselves require substantial improvement.
One of the biggest difficulties

I have experienced this situation myself-is that the municipalities have to find the finances required to purchase such land and then to service it. Therefore I urge the minister to consider amending the terms of the National Housing Act by going beyond the provision of assistance for sewers and assisting the municipalities in meeting their public housing needs in other ways. I think that this is one of the fields that the municipalities are the most reluctant to enter.


John Robert (Jack) Nicholson: If the hon. member will permit me a question, does he not know that under the act at the present time there is provision for assisting municipalities and provinces in the acquisition of land, that there are provisions for land assembly to meet future needs?


George Louis Chatterton: Yes, I agree. This is by agreement with the provinces. But the fact of the matter is that the municipalities still find it difficult to provide services. I point out that in some fields the federal government offers no assistance. Also it is only through federal-provincial agreement that assistance is provided in the acquisition of land.
Another aspect which could be improved substantially is that of limited dividend housing. These operations were largely at a standstill last year and only 300 units have been provided this year. Although this field is open to private capital, I think changes should be made in the provisions to ensure that private capital is given the chance to enter that field.
I do not want to take much more time, Mr. Speaker, but I point out that many excellent suggestions are made in the last chapter of the fourth annual review of the Economic Council of Canada under the heading "Policy Implications". I was glad to see that when the minister spoke last Thursday he recognized that there would have to be a thorough, comprehensive study made of the whole question of urbanization. I know this question was mentioned in the throne speech last May, but that was in May, Mr. Speaker. The minister has used the excuse that there are three provincial elections coming up and that we will have to wait until these are over, but I would ask him why he did not conduct this

October 2, 1967
Discussion on Housing study before. I am sure it is not the personal fault of the minister, but there does seem to be some confusion on the part of the government about what to do first. To my mind an objective, comprehensive study is certainly essential.
The provision of money for housing is not the only problem, as the minister knows. We also have to find the land, and there is the question of transportation to be considered. The whole thing is tied up with education and air pollution and the problem is a broad one. But I must say that unless a reasonable amount of funds is made available to provide housing we will not begin to find a solution. This is an urgent problem for which the government must find a fairly reasonable answer in the very near future.
I am going to move now to a motion which will give those members, particularly those on the other side of the house, who feel that the government by its actions has not contributed in any way to meeting this difficulty an opportunity to indicate their disapproval. It will also give those who feel that the government's policies have been demonstrated to be completely satisfactory and adequate a chance to vote against my motion. I therefore move, seconded by the hon. member for Gaspe (Mr. Keays):
[DOT] (4:10 p.m.)
That all the words after "that" be struck out and the following substituted therefor:
"This House asserts that the government by Its failure to assign priorities to essential programs and to co-ordinate fiscal policy to ensure the carrying out of such programs, has directly contributed to the difficulty of providing adequate housing at reasonable cost; that its recent action with respect to the interest rate has worsened the position of Canadians in the middle and low income brackets;
And this House regrets the failure of the government to recognize the housing shortage as a major crisis requiring immediate and co-ordinated steps for its solution as clearly indicated by the recent report of the Economic Council of Canada."


The Acting Speaker (Mr. Tardif):: The
question is on the amendment.


Mrs. Grace Maclnnis (Vancouver-Kings-way):: Mr. Speaker, in rising to take part in this debate I welcome the amendment moved by the speaker for the official opposition because it clearly expresses our party's objectives vis-a-vis the attitude of the present government to housing needs. I particularly refer to the last part of the amendment which says that the government has failed to recognize at this time the urgency of the housing crisis. I believe that the amendment clearly
[Mr. Chatterton.l
expresses the feelings not only of the official opposition and of our party but also of the Canadian people at this time. I intend to devote my time to expressing as well as I can what we feel about the utter bankruptcy of the government's policy in the face of the urgent housing situation.
There is little need for me to cite the report of the Economic Council as the previous speaker did that most carefully. To my mind the one thing this government lacks to deal with the housing crisis is the will to deal with it. I do not believe that money, materials or manpower are the essential ingredients which are lacking. The most necessary ingredient that is lacking is the will by this government to give housing the top priority that it ought to have.
Some hon. members may not think that this is a sophisticated way to talk of housing. I do not aim to be sophisticated. I aim to come before this house and to express the needs of my constituency, province and country as ably as I can. In the minds and lives of thousands across this country the need for housing has become the top priority at this time. In spite of the copious warnings in different parts of the Economic Council's report the government has no notion at all of dealing with housing as a matter of top priority.
The report was published approximately a week before we met here on September 25. In the report of the Economic Council are listed five goals of government policy. They are the five most important goals within the domestic field. At the top of the list is supplying adequate housing for the people of this country. No. 2 is educating the growing population; No. 3 is providing employment; No. 4 is maintaining price stability and No. 5 is solving urban problems.
Those of us who spent the summer in our constituencies, particularly if we live in urban constituencies, came to believe from our experience with our constituencies and constituents that housing would be the top to face parliament this fall. The government was warned about this. The Economic Council made it clear that housing should be the top priority in government policy this fall.
We returned to this House on September 25 and what did we find? First, housing was not mentioned at all on the order paper. Where was that question of urgent and top priority in the government's immediate legislative
October 2, 1967

program? Second, we found that the government resisted a discussion of the matter in the house. No provision had been made for discussion. When some hon. members pointed out that this was a matter of grave and urgent concern the government resisted discussing it. Ultimately, under great pressure a period for the discussion of this question was provided.
Third, we discovered that the entire matter of housing had been left for a federal-provincial conference which will be held some time this winter. I know that the provincial elections raise difficulties for housing conferences. Nevertheless, if a matter is of top urgency I maintain that the Prime Minister (Mr. Pearson) ought not to announce that he will meet with the provincial premiers at some future time in the winter to discuss the field of housing. That is not how one handles the No. 1 problem of the country.
Fourth, we heard the announcement two days after parliament reconvened that the interest rate on N.H.A. loans had been raised from 7i per cent to 8J per cent.


An hon. Member:: Shame.


Winona Grace MacInnis: Again, such a measure was flying directly in the face of the advice given by the Economic Council. That body had warned over and over again that housing should not be considered a regulator of the economy and that the money tap should not be turned on and off at will. The Economic Council warned that the housing sector ought to be protected in so far as possible from the full effects of monetary policy and should not have to suffer the full effects of any monetary restraints. Actually when action was taken it did not come in the form of restraints. Instead a go-ahead signal was given to banks and other private lending institutions to add an additional full percentage point to their interest rates.
[DOT] (4:20 p.m.)
There were monetary restraints, but they were not on the banks and the lending institutions. A tight money policy was firmly clamped on the ordinary people of this country who can no longer afford to buy homes at the present interest rate.
At present, in order to qualify for an N.H.A. loan at 8J per cent one has to have a minimum income of $8,000, and in order to carry a maximum $18,000 mortgage for a 25-year term it will cost $140.28 per month, not counting taxes. Thanks to this new government policy only well-to-do people can
Discussion on Housing
now afford to buy houses in Canada. It is the only policy the government has announced to date, and it makes it doubly certain that henceforth only well-to-do people can buy homes in this country. Certainly this was not what the ordinary people were anticipating.
In addition to the high interest rate the profit margin is a big factor in housing for people all across Canada. I have here the September bulletin of the Vancouver housing association, published before the new interest rate was announced. It points out that the shortage of mortgage money is not the only problem facing the home buyer. It also points out that a comparison of 6,000 new house sales in metropolitan Toronto during the first six months of 1965 and 1967 respectively showed that prices had risen by 26 per cent to 48 per cent, depending on areas, during the last two years. The average price of new houses sold this year was very close to $30,000. It adds:
In the Vancouver area the house cost index prepared for the Society of Residential Appraisers rose by less than 3 per cent between 1966 and 1967, but the price of new houses has risen during the same period by something nearer to 20 per cent, owing to the higher profit margins now obtainable.
What has the government done to control those higher profit margins? Has it done anything to show it would be desirable to control them?
I would like now to deal mainly with those income groups which are suffering tremendously because of the government's lack of recognition of the urgency of the situation. Had I the time, Mr. Speaker, I could tell you about many individual cases in my own riding and in other parts of Vancouver, with which I came in contact this summer. I can think of a woman with two children who travelled throughout that city using rental advertisements in the paprs in seeking a home. She had money to pay a good rental for a house but she could not find one where children were allowed. She had a car to travel around in but nowhere to live except in her sister's already too cramped quarters.
I can think of a woman in my own constituency, an amputation case, confined part time to a wheel chair and the rest of the time on crutches. She had to leave her basement suite, and a pitiful place it was, at the end of September. But she had literally no place to go. She went to all the agencies in Vancouver. First she went to the Vancouver housing authority which deals with low rental subsidized housing. Then she went to all

October 2, 1967
Discussion on Housing the other various housing associations, including the Vancouver housing association and the registry which was set up for a few days by the mayor's office but which I believe has since been closed.
I am informed that this registry office received some 11 or 12 calls over a period of five or six days offering accommodation, but one of the offers was at a rental of $225 per month. Finally she ended up where she began, with the Vancouver housing authority. There she was told, "We are very sorry. There are 1,700 people waiting for low rent publicly subsidized housing. Some 900 of them are single people like yourself, some of them disabled, but nothing short of death can make a vacancy available. Only death can bring about a vacancy for you or for anyone else in your position."
This is a terrible situation. I do not want to load all the blame upon the minister or the government. These sins go away back. This is a matter of arrears piled on arrears, piled on arrears, and we are sinking deeper and deeper into the quagmire of homelessness in which thousands of people across the country are caught. Something must be done because the problem is urgent.
Earlier this year the Vancouver city council finally took its courage in its hands. In May it produced five projects to provide housing for people with low incomes.


John Robert (Jack) Nicholson: Does the hon. member not know that it was the Minister of Labour himself, who suggested such action to the city of Vancouver and that at a meeting in Vancouver he pleaded with the Vancouver council to act and said that the federal funds needed were already available?


Winona Grace MacInnis: know the minister is interested in this matter personally. I know he has gone to Vancouver and done his best to get various union organizations, co-operative organizations, societies of various kinds, probably veterans' organizations although these have already been involved, and other groups, to take their surplus funds and put them into housing.


John Robert (Jack) Nicholson: The question I asked was, does the hon. member not know that I pleaded with the representatives of the city council of Vancouver to show more initiative.


Winona Grace MacInnis: Yes, I do know that and I appreciate it. However, this is what happened. In May the Vancouver

city council went to the provincial government in Victoria with five projects for housing. In August it took five more projects to Victoria. But since then those project plans have been sitting on the desk of the provincial minister in Victoria, and according to what the provincial government says none of them will be proceeded with until such time as an exhaustive cost probe has been completed by the provincial government.
The Vancouver city council, a creature of the province, having been turned down by its parent, decided to approach Central Mortgage and Housing Corporation. It begged the corporation to help acquire land for these projects. What was the corporation's answer? Undoubtedly it did what it had to do under the rules. It simply said it could not help in negotiations for the purchase of land at the price to which land had risen.
e (4:30 p.m.)
As a result on September 25, the day parliament reopened, the Vancouver city planner recommended to the council that three of the ten projects be abandoned and that five others be postponed. These eight projects would have provided 484 housing units. The two remaining ones, smaller in size and designed for elderly people, should be proceeded with, according to the city officials. So out of the ten housing projects which the minister urged them to go ahead with, three are to be abandoned, five postponed and only two small ones proceeded with on the recommendation of the city planner. The reason given for this was the high cost of sites which was four times higher than previously and the fact that Victoria could not or would not approve these shared cost projects until their own cost probe was finished. C.M.H.C. in the past had refused to authorize negotiations to buy these sites. The city council met and instead of deciding to adopt the planners' report said they would take two weeks and explore the possibility of getting C.M.H.C. to give them some help. I do not know what will transpire in the period of those two weeks but I imagine that C.M.H.C., with its present instructions and policy, cannot do anything more than has been done in the past.
The problem of land assembly and land cost must be dealt with. I know that it comes under provincial jurisdiction so I do not need to be told this. But here we have a situation in respect of which the city does not have the resources to act. The provincial government apparently will not act at the present time and the federal government takes the attitude
October 2, 1967

that because this is the way things have been done for years it is up to the municipalities to initiate housing developments and projects in this country.


John B. Stewart: May I ask the hon. lady if this speech should not have been given in Victoria, British Columbia, rather than in the national capital?


Winona Grace MacInnis: No,
and I will give the reason in a moment. Under today's conditions I do not believe we can leave it to the municipalities to initiate housing. They do not have the resources to do so. We are very familiar with the difficulties and unevenness in the provincial situations in this country. I believe that if housing is the overriding national issue and concern-the Economic Council says it is and a lot of us believe it is-then it is a matter of urgent public concern for which the federal government will have to assume the initiative at the present time. I believe that until the federal government does so we will not have any action. I know that the federal government takes the position that it is ready to give help when the provincial governments are ready to move, but I do not think that is good enough. If this is an emergency issue I think Ottawa will have to draft a workable over-all plan in respect of all kinds of housing -public, private, separate domiciles, row housing, garden apartments, high rise, and low rental subsidized housing. When it has worked out the details of such a plan I believe the federal government will then have to send someone across the country to sell this idea in a big way to the people of this country.
I know about the seminars the minister has held throughout the country. I know that within the Lmit of these he has been doing the best he can. That, however, is not what I mean. I mean that the government of this country will have to devote to the question of housing the same attention and concern that it devoted to the war when the war came along.
Some hen. Members: Oh, oh.


Winona Grace MacInnis: right; you may put the war in a holy category if you like but I do not. Although there had been a depression and there was no money available for anything, when war broke out we cut the red tape. I know that. I know that if this government took the attitude that housing was a big enough problem to be a matter of national concern it could go to the 27053-172
Discussion on Housing provinces with a sensible, sound program which would lay out what the federal government, the provincial governments and the municipalities could do.
While speaking of municipalities I might point out that places like Vancouver, Toronto, and I hope Montreal, are big enough that they should be dealt with as regions or regional authorities which do not have to have every jot and tittle signed by the authorities at Victoria, Queen's Park or Quebec. This may not sit well with some people but it sits well with people who do not have housing. These are the people whom we should be considering. We send the Minister of Trade and Commerce (Mr. Winters) all over the world to drum up trade because we consider trade to be important. The government devotes money and time to matters of international trade for Canada. We have here a problem which goes to the very root of our Canadian life and yet we do not take it seriously.
Certainly the constitutional issue is important, but why should not constitutional policy at the different levels of government see that the money and the tasks are in the same place so that if the money is to remain in Ottawa the big jobs will be handled by Ottawa, and so on down the line? If some provinces are able and willing to handle some of the big jobs then the big money should be there within their jurisdiction. We will not achieve this by sitting here in Ottawa and saying that they must come here and see us about it.
The problem of housing is the war on poverty. The Privy Council issued a pamphlet before the summer which advises us of the priorities that Canadians have. These are partly because we have not had our sights raised for us by government policy and example. We are told that in an average year Canadians spend $500 million on travel abroad, $1 billion on alcohol, $400 million at the racetracks, $200 million on candy and $30 million on dog and cat food. What we spend on public housing is less than what we spend on dog and cat food.
I am not blaming the minister, but I am saying that the present housing policy is completely ineffective. It is just like holding out a straw to a drowning man. If you say to me, "Well, where is your detailed housing policy", I say to you it is up there in the gallery and in the offices around Ottawa. It is not the ability to set up a housing policy which is lacking at this time, nor is there a lack of

October 2, 1967
Discussion on Housing brains to do it. We have the ability and the brains in offices throughout Ottawa and in the provinces and cities of this country. It is the will to build homes for the people which is lacking.
Before you say that it will cost too much, let me remind you that the lives of thousands of Canadians across this country have been blighted because of the failure to build decent modern houses. If we take one of the most depressed groups, the Indian people, they have never had a chance because of the hovels and the misery in which they live. They live in hovels in which self-respecting people would not want to keep their animals. Many of them are living in conditions of that kind.
I could take you through areas in my riding where, although we have one fairly decent low-cost subsidized housing project, there are no facilities whatsoever, or at least there were none prior to this summer, for recreation or programs of development of any kind for the people who live there. After a great deal of hard work the Vancouver housing authority finally got the money to put up a fence around two tot lots in order to keep the pre-school children from being injured by traffic on the adjacent streets. Some people did not like the particular locations of these tot lots and felt they could find available land in better areas. One of the Vancouver housing authority officials suggested to me that this was probably right but said, "For goodness sake, don't mention it to Ottawa because we would be required to instal new toilets at such locations and it would take at least two years of negotiation with Ottawa before we could obtain the money for the new toilets." I just mention that as an example of the fact that we are not dealing with these things as we should.
[DOT] (4:40 p.m.)
We are supposed to be engaged in a war on poverty and one might ask where we might obtain the money to do the things required. Let me remind hon. members that almost all of the corporation tax revenue received by the federal government is being spent in two areas of federal responsibility, defence and borrowing. It is my feeling that we could cut down a great deal on our defence expenditure, although I realize not everyone will agree with me in this regard. Nevertheless, it is a fact that the federal government is spending about 40 per cent of its total revenue for defence and interest on borrowing.
Surely it is more important for the country to have a sound and satisfied population than

to spend a great deal of money on military hardware for defence. We should first consider provision of modern and comfortable homes. I am sure that by doing so we would be spending our money more effectively than by spending it on defence. In this nuclear age it is far more important to have a sound, healthy and happy population than a huge defence system.
Those are the comments I wanted to make this afternoon, and if I have not made them in a satisfactory manner it is because I have not got the capacity to do better. I feel very strongly that I have voiced the opinion of the people in my riding and the whole Vancouver area, particularly so far as urgency is concerned. Hundreds of people in my area will never have the opportunity of becoming home owners because there is no earthly way they can get a down payment. They do not want low rental public housing, although there are thousands of people who require this type of accommodation. I urge the government to consider seriously its new role as we enter the second century of confederation. If we want to keep Canada as one nation we will have to provide a high standard of living, adequate housing and training, and opportunities for all. This government has not yet been prepared to provide leadership in this regard. I am sure the people will continue to demand these things until their needs are satisfied.


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, I am pleased to speak on this motion that the house go into committee of supply-I was going to say to make some criticism-to make what I would call mainly remarks. We certainly do not have to prove to the minister the housing needs in Canada; he is as convinced as we are about that. We do not have to convince him further. However, we are more inclined to pity him instead of criticizing him severely. We pity this team caught in a strait jacket because of our fiscal system which imposes its will on Canada as a whole and makes puppets out of our ministers.
Each time I study some characteristics of our fiscal system, I feel the presence of a hidden power that it is impossible for us to detex-mine for the very good reason that it hides behind legislation. That despicable power often forces the government to do things it would rather not to do and not to do things that it would very much like to do.
This afternoon, Mr. Speaker, I would like to speak not only to the minister but to the
October 2, 1967


Mr. Mongrain:: It is three times.


Charles-Arthur Gauthier: I will say three times: once as taxes, once as interest and once to the builder. That is how you divide the monthly payments on property. But why? Is there anyone in the department who is serious enough to answer that question? Why do taxes and finance cost twice as much as building materials? It is utterly ridiculous!
Moreover, the average C.M.H.C. loan is $9,000, whereas the smallest houses-I made inquiries this summer-cost $14,000, $15,000, $16,000, $18,000 and $20,000. But do you think that a prospective owner can finance the construction of a $20,000 house with a $9,000 C.M.H.C. loan? It is impossible. How sensible is the C.M.H.C. Act?
Some members of this house travel around the country saying: Look at what we have done. Then at the end of the year, the government will put on our statute books all the legislation it has passed. When one takes the trouble to study those measures, one soon realizes that most are only smoke screens designed to cover up the actual truth. And the C.M.H.C. Act is one of those. Heads of families are led to believe that they can readily obtain the money needed to build a small house.
If only that head of a family was not forced to go through a contractor to get a loan from Central Mortgage and Housing

October 2, 1967
Discussion on Housing Corporation. That is another trick. The contractor will make a profit of 30 or 35 per cent, while the owner could get a loan to buy the necessary materials to build his house. No, he must accept the plans and specifications of Central Mortgage and Housing Corporation, go through a contractor and pay again that small financier after all the other sorts of finances.
Mr. Speaker, this legislation is only a smoke screen. Not even 10 per cent of the low-income people could qualify under the provisions of that legislation. I do not remember which hon. member said a few days ago that a man, the head of a family who earns $5,000 or $6,000 cannot even think of building himself a house, because he does not earn enough to take advantage of that legislation. And I believe this.
But does the head of a family have to struggle over the payment of a house when the main concern of the government is to pass legislation to protect and assist the people, to lay down conditions so that the head of a family may be able to become a home-owner?
I say, at this point, that the government is certainly not doing what it should, not because it does not want to, but because it is prevented from doing so by this financial power. What I say today-and I am not afraid to say it-is that where financial matters are concerned, it is not the government that is leading. It is quite another system, and our governments are the victims thereof. There are men of good will among the ministers, but they are bound, hand and foot, and lack the possibility of enabling our Canadian families to get a home.
Let us consider once more the Central Mortgage and Housing Corporation Act. I told you that I had spent the summer touring my constituency. In fact, I did more than that, for I came every week to Ottawa, endeavouring to solve such problems as were submitted to my attention. I also went to Quebec; in short, I travelled everywhere, trying to find out what was wrong.
Let me tell you about an experience I have had with Central Mortgage and Housing Corporation, which experience floored me. C.M.H.C. now grants loans for the construction of old folks' homes. There again-I will prove to you that it is nothing but a smoke screen-they do not go about it directly but in a round about way.
Out of 11 applications in our area in the last two or three years, only one home was

built. Only one, and even at that, those who were granted the authorization to build it had to fight to the last. One! Yet we pay people, bureaucrats to attend to the needs of the people. The second permit was held up- was blocked, in common language-for two years. The people responsible for organizing the benevolent association had gone from door to door and collected $17,000 to build that home. Then, for two years, those $17,000 were frozen there, all plans held up, and things got to the point where it was decided not to build.
Well, when the people decided to come and see me, I told them: "Friends, let us take the bull by the horns." I went to Ottawa to see what had been done. I went to the office in Hull, to see what was going on in the province of Quebec. I also looked into what was being done in Ontario. I went to Quebec because we are dealing with a joint plan. Talk about joint plans: the federal government says: See Quebec about it. Quebec says: See the federal government. I therefore went to all concerned.
And do you know what I found out? That the federal office in Chicoutimi was holding up the works. I can give you the name of the manager of that office if you want it. I even told him: "Your name has never been given out in the house; be careful that it is not."
[DOT] (5:00 p.m.)
They twice invited tenders; the first time, there were four tenderers, the second time, five. But the tenders were too high. I asked the officials if they had some kind of norms to determine whether a tender was too high or too low. I discovered that the norms in general-I was unable to obtain the specifications and will tell you why later-were $5,000 per bed in Quebec and $7,000 in Ontario.
The Quebec norm was established at $5,000, probably because the cost of living is higher in Ontario-I do not know-and in that province, they are entitled to build nicer houses than in Quebec. The norm was $7,000 per bed in Ontario and $5,000 in Quebec.
But our people in Chicoutimi had the lowest tender at $4,200 per bed, and it was still too much. I asked the office manager: Why do you refuse? He answered: Because our estimator thinks it is too much. The estimator no longer takes into account a norm of $5,000, $4,000 or $7,000 per bed; he is an estimator. I asked the office manager: Who is your estimator? And he told me: a student. A student
October 2, 1967

estimator, Mr. Speaker. That is a qualified estimator, imagine, a student!
Well, I asked him: Did you send your papers to Ottawa? He answered: No, no! He was causing these people to believe that the papers had been in Ottawa for two years, when here, at the headquarters, there was nothing. I told him: Tomorrow, immediately, send the papers to Ottawa and we will then see. As for me, I shall go back to Ottawa. After a week of discussions, the work resumed. The headquarters here in Ottawa accepted and the construction started a fortnight ago. I asked that chief: I do not know what are the orders, but let me have the rules that govern you, you bureaucrats, in that matter. He told me: We are forbidden from giving them to you. To me, a member of parliament, he said: We are forbidden from giving them to you. Then I told him: Listen, the legislation governing the building of homes for the aged is perfect. I studied it. But even if the act is perfect, is there some unknown body whose regulations can prevent the good administration of the act, cancel the good effects of the act. That is what I wanted to know. But I could not see their regulations and even less the standards which help them determine if they should grant a loan of $5,000, $7,000 or $4,000. I wrote to the department to get that information because I thought that I would find out through the minister. There are still secret regulations unknown to the elected representatives of the people but at the disposal of the bureaucrats. Bureaucrats. And I like to say it openly because I do not know why I was refused that information.


John Robert (Jack) Nicholson: May I rise on a point of order? I may have misunderstood the hon. member, but I understood him to say he had applied to me 'for information. I have no recollection of any such request and if the hon. member made such a request I would like to know what it was and when he made it.


Charles-Arthur Gauthier: No, I will say to the minister that he misunderstood me. I am not at all referring to the department, I am only speaking of the Chicoutimi office where bureaucrats told me that they have some regulations for the administration of the act in the various districts. I would have liked to obtain those regulations but I was told that they were unable to provide them. I wish to know the truth about that matter.
Discussion on Housing


John Robert (Jack) Nicholson: On the same point of order, Mr. Speaker, I would like to know if the hon. member, who has ready access to the minister, has ever asked the minister for any information along these lines on any single occasion.


Charles-Arthur Gauthier: Mr. Speaker, I thank the minister most sincerely, and as a matter of fact, I left my friend in Chicoutimi with these words: If I am unable to obtain from your office, I am sure that the minister will make them available to me. And I am still waiting for that information in order to complete my investigation and find out exactly what went wrong. We finally reached the construction stage, after a delay of two years and a half, not because of the head office here in Ottawa or of the Quebec office, but because of a small local office. A great many things are going to happen, because there are still ten applications from my area and others will keep coming in.
Homes for older persons are urgently needed in my district and I feel that in the future there should not be a two years' delay after an application has been received to have it approved. This is a proof, as I said earlier, that certain means are resorted to in order to thwart the object of the legislation for the construction of homes for older citizens and which is in fact almost perfect. Another piece of legislation which is a smoke screen is the one providing for a $30 monthly increase for old age pensioners.
All the newspapers announced that the old people would receive $30. That is another new piece of legislation, as reported in the newspapers, but what is it, really? Everybody will have to pay more taxes for the benefit of 24 or 25 per cent of the population, although we were told that all senior citizens would benefit from this allowance. I know old people who receive $1, $2 or $3 per month; you go and talk to them and you will see that they are aware of the effects of the act. And all this was anticipated, as I have said when the bill was passed; however, it was passed just to add one more act to the statutes.
And it was the same with the Canada Pension Plan, the very same thing: always to get more, levy another tax, and fleece the sheep a little closer!

October 2, 1967
Discussion on Housing [DOT] (5:10 p.m.)
For instance, take the case of a young man, aged 18; at first, he will pay $156 per year into the pension plan at age 18, and at age 65, if you add it up,-I did it during the holidays,-if, for 45 years, he pays $156 per year at a yearly interest rate of 6%, which is loaned at 6% yearly, after 45 years, his total contribution will be $35,000, and for what? A monthly pension of $104! Not even the total interest on the $35,000 that he would now be able to draw.
It is the man who lives to the age of 65 who will benefit. Again, this is not an act to provide security, but to tax the individual's security, to fleece him afterwards. If at least, the same efforts were made to find ways of getting money out of the pockets of rich people who exploit the country night and day, who pay $1 for what is worth $1,000, in brief, if our leaders racked their brains as much to And out or ferret out the hideouts where banks, for instance, stash away their secret loot, or to tax large corporations who exploit our resources for which they paid nothing. For instance, in the province of Quebec, iron ore is given away at half a cent per ton and bought at $300. But there, governments remain silent as the grave, they do not dare say a word and that is where we see the secret power-and the stronger the power the more silent it is-which imposes its will upon our leaders.
It is not because Liberals are here today; leaders have always been the same. We were the victims of financial powers, and still are today. We still have men in the government; I have said so in the beginning. I do not wish to criticize men, for they are the victims and I pity them. As a matter of fact, they are the victims of this infernal system which reduces our people to slavery. They are victims, and that is why I am making a speech today; it is for the population as well as for parliament, for I am trying to shatter this power which extends from one ocean to the other.
I also said that our laws, apart from being a smokescreen, are a web of injustice. And to name only one, I will simply mention the Income Tax Act.
In a few days, I will have the opportunity of presenting a notice of motion on that very subject. I simply wish to speak about income tax, particularly as it affects the worker and as opposed to the exemptions from which companies, trusts and banks still benefit. The worker pays taxes on his gross salary, even

though he has four, five, six and seven children to feed. The income tax is deducted right off, without his permission being asked. His daily bread is taken away, while trusts and large companies benefit from generous deductions.
For several years now, for example, we have asked for a reduction in the income tax paid by lumbermen. Nowadays they need a power saw and safety equipment, and they have to travel. The government has been asked to allow these workers to deduct from their income tax the price of their power saws and all their working equipment, as well as the maintenance costs which often reach $500, $600 or even $700.
Domtar enjoys tax exemptions for maintenance and every imaginable and possible depreciation on stationary machinery. A $400 or $500 tax deduction is asked for the head of a family who goes to break his back in the bush, a deduction of $500, $600 or $700 to buy his tools and pay his travelling expenses: No, it is impossible.
It is unfair. When a self-employed individual files his tax return at the end of the year, he will make every deduction he can and hide everything he can. That is all right, but the worker will be fleeced every week without the right to complain. If he does not submit, he will be thrown in jail. Do you not see the inequity of this legislation?
We had to put up with quite a lot; no wonder the people are dissatisfied. Do not play the hypocrites. You know it as well as I do.
The people are dissatisfied because their representatives are not acting in their best interests and fail to perform their duty as members of the House of Commons, that is, to protect society.
I wish that those words be mulled over not only by the people, but by all members. I ask them to examine their conscience in an attempt to come down to earth and to put the general interest before private interest.
This is what I was told by a great parliamentarian upon my arrival in parliament. It struck me and it is true. Here, we must first and foremost, in every area, whether a labour question or something else, make sure that the general interest comes first.
Well, I say that, particularly in the financial field, the general interest, the welfare of the people must come before the interest of any individual whether it is a trust, a bank, a chartered bank, or whatever it is. It is our
October 2, 1967

duty to defend the welfare of the people against these hidden powers.


Robert Norman Thompson: October 2, 1967
Discussion on Housing
It is conservatively estimated that we shall need about a million new homes in Canada in the next seven years. With costs of construction and materials increasing year by year, this means an investment within the next seven years of between $12 billion to $15 billion to provide our people with adequate and proper shelter. How are we to meet this goal? Certainly not by increasing interest rates. These rates have risen from 5 per cent to 8J per cent in the last few years. The government is specifically responsible for this problem and it must find the solution to it. A way must be found to finance home construction in Canada. I submit that the government would be well advised to seek a new approach to the housing question.
Housing is so important for the welfare of our people that the needs of the housing industry for money should not be met on the open market where high interest rates are charged. Housing capital cannot be placed in the same category as investment capital which will provide a return when the investment develops. The sooner we realize that housing capital falls into a category different from investment and resource capital, the sooner we shall find a new approach to the problem. The money required for housing ought to be given special consideration so far as interest rates are concerned. I therefore suggest to the minister that he would be well advised to set up a national housing fund. It should be a revolving fund, with the money that is paid back on home mortgages being lent again to provide more capital for more new houses.


John Robert (Jack) Nicholson: Mr. Speaker, would the hon. member permit a question? Does he not know that that is what happens now, that all the money that comes back on housing loans goes right into new housing in addition to the hundreds of millions of dollars more provided each year by government and parliamentary action?


Robert Norman Thompson: Yes, I am aware of that, but the minister refers to something that is slightly different from my suggestion. The operation of the present policy is not adequate. Initially this revolving fund ought to have not less than $5 billion. Some of that money will return as mortgages are paid and will be returned in new loans. If it is found after a period of years, that this fund is not sufficient, then possibly $500 million a year through private investment might be put into this field. The revolving aspect of the fund would grow year by year, keeping pace with the need for new housing.

[DOT] (5:30 p.m.)
Certain government moneys or certain areas of government income ought to be used to provide money for this fund. It seems to me that resource development income is a legitimate type of income which, so far as government is concerned, could well be transferred to another type of resource investment. Certainly there is no more important kind of resource investment than housing. But beyond this it seems to me that money must be provided for housing investment at low interest. It would not be unreasonable if the government in setting up the kind of fund I am talking about would consider an interest rate of 2 per cent or 3 per cent per year.
As the policy of the government builds up year by year a greater obligation in foreign investment we are giving soft loans to foreign countries over long periods, up to 50 years, and charging no interest at all. In some areas this soft loan investment or aid to foreign countries is merely carrying a service charge of approximately half of one per cent. If this is necessary to aid developing countries in other parts of the world I am not against the policy. It is a legitimate type of aid. But how much more necessary it is to have a similar policy in Canada to meet an urgent need. We need an urgent aid program ourselves because if we do not do anything we shall blunder along as we are at present, with the housing backlog year by year becoming greater than it was the previous year.
I am not making an unreasonable suggestion. A previous speaker pointed out that if a war broke out in which Canada found itself necessarily involved there would be no question but that we would have to get the money to finance the war. To compare a war situation with a housing situation may seem farfetched, but the crisis and the need are just the same so far as our economy and the welfare of the Canadian people are concerned.
In this connection my mind goes back to world war II. I believe it was in 1943 that the then minister of finance, Mr. Ilsley, announced a large loan to finance the war effort. Nobody in the House of Commons raised any objection because the urgency and the need for the money were evident. Nevertheless a question was asked of Mr. Ilsley as to how much he was paying as interest on the money. The answer was three-quarters of 1 per cent. He was then asked how it was, when the average interest rate was 4 per cent or 5 per cent, that he could get money at
October 2, 1967

three quarters of 1 per cent. His reply was: "That is what it cost. In view of the war effort and the crisis we are in, why should we pay more than it cost?"
If we could finance the war effort with money at that rate, then it seems to me that money to meet the housing crisis in Canada should be available at less than 8J per cent. It seems to me it would be a good policy if the Bank of Canada were used to provide the part of this fund, say half a billion dollars a year, that is not available from some special source of income such as I referred to previously. If this were done a $12,000 home would not cost $25,000 at the end of a 20-year purchase period. The cost would be cut from $25,000 to $15,000 or $16,000.
My point in bringing this up this afternoon is simply to emphasize the fact that it is not good enough to go along in the manner in which we have been proceeding during the past few years. Each year the backlog becomes greater. Each year the need becomes more imperative and yet each year the only alternative seems to be to raise interest rates and thus put the increasing cost of acquiring homes on the shoulders of the people who can least afford it.
I strongly urge the minister that in his consultations with his cabinet colleagues he see to it that the government comes up with a different approach to the question of financing home construction. As long as this is not done it seems to me it will be impossible for anyone on this side of the house to express confidence in the government on this kind of issue, simply because the facts are so clearly before us.
That is the gist of what I wanted to say, Mr. Speaker. In summary, what we are being offered today as a solution to the housing problem is inadequate, and the problem will continue to grow, as it has for the last number of years, until it reaches a point where it will become impossible to solve. I suggest that a new approach be taken. I suggest that we stop fiddling around with policies that over and over again have proven to be unable to meet the need.
We should use our own resources to provide the homes that we need. We have the building materials. We have the cement and the gravel to provide the foundations for basements. We have building materials in ample abundance to build not one million homes in the next ten years but two million homes if necessary. We have the tools, the manpower and the know-how. Why can we not do it? It is because we are tied to an
Discussion on Housing antiquated financial policy totally inadequate to fulfil our potential. Surely there ought to be something better. I realize it is a difficult problem for the minister but I hope he will take the lead in providing an alternative policy to what he is now suggesting.


Mr. H. E. Gray (Essex West):: Mr. Speaker, in debating the amendment before us we are dealing with something fundamental for all Canadians, the need for shelter and decent housing. As the director of the special project on low income housing for the Canadian Welfare Council put it in a recent speech, "House and home stand at the centre of people's lives."
Listening to the remarks of the spokesman for the official opposition and to those of other members who have participated in the debate, one would have thought it would have been better if more time had been devoted to analysing our present situation with respect to what could be done about the availability and the cost of housing, as well as our ability to provide the funds, both from government and from the private sector, in order to do as much as is necessary to make sure our people have available to them decent housing at a cost they can afford. However, listening in particular to the remarks of the spokesman for the official opposition it seemed to me he attempted to dwell more on the past, and his analysis was based more on trying to attribute blame and find reasons for failure with respect to the present situation.
Because of the approach adopted by the mover of the amendment it is at least in part necessary for us to look back over the same period of time, and when we do that we must carry out a somewhat similar analysis. But first of all I would like to draw to the attention of the house the inconsistency and contradiction which lie behind the presentation of the amendment, an inconsistency and a contradiction so great that the seemingly attractive wording of the amendment do not make up for them, with the result that it seems to me that reasonable and fairminded people in this house, no matter what their concern about the housing situation may be, could not possibly support the amendment.
[DOT] (5:40 p.m.)
According to the spokesman for the official opposition the government has aggravated -that is the exact word that was used-the present situation by its spending. In other

Oclober 2, 1967
Discussion on Housing words, the spokesman for the official opposition in effect is saying that the government has aggravated the situation by spending money on youth allowances, student loans, payments to the dairy industry and increased old age pensions for our senior citizens. He is saying we have aggravated the situation by spending more money on incentives to help areas of slow growth and industrial recession. In effect the official opposition is saying that we have aggravated the situation by tripling the amount-$900 million has been spent in 1967-spent on housing by this government over that spent by the official opposition when it was in office. That is the reason that today they are in the position where they belong, in the opposition.
The official opposition is now saying that we should eliminate or cut back the programs we have put into effect. These are programs which we presented to this parliament. In the main they were supported by the official opposition. On a number of occasions they even called upon us to accelerate the timing of these measures. Are they in effect saying that we should cut out the youth allowances, the studen loans, the incentives to industry and slow growth areas? Are they saying we should eliminate the guaranteed income supplement for older Canadians? This would appear to be a not unreasonable analysis of what the spokesman for the official opposition had to say in putting forward his amendment this afternoon.


Thomas Miller Bell: The usual nonsense.


Herbert Eser (Herb) Gray: Are they saying we should not have trebled the spending on housing since the present government took office in 1963? This also seemed to be implicit in the argument put forward in respect of the amendment which is before us.
The spokesman for the official opposition has spoken critically of the borrowing and the deficits of this government. A large proportion of the borrowing has been necessary in part to raise money for housing. Had this money not been spent there would be a much worse situation in respect of housing than there is today. I might add that these comments about deficits came from a very good source, because no other group in this house has a greater knowledge of deficits and how to create them than the official opposition. The difference between the deficits of their day and what we may have now is that their deficits did not come about through a program to increase the growth of the country, to increase jobs or housing starts in this (Mr. Gray.]
country. They came about through mismanagement. This is something which was recognized at the polls by the voters of this country.


Mr. Keays:: Get down to facts and stop talking about the past.


Herbert Eser (Herb) Gray: If members of this house and the public wish to pursue the same type of analysis made the hon. member for Esquimalt-Saanich (Mr. Chatterton) and develop it, they will come to the conclusion that at least in part with respect to our present housing situation one cannot overlook as a cause the neglect, lack of concern and lack of priorities on the part of the official opposition when it had the opportunity as the government of this country to deal with this problem.
It seems to me that a prime reason for the efforts we have been making and must continue to make is that we have to deal with a problem which accumulated when the need for housing of all types was not dealt with by the previous government in any way which could be termed even slightly effective. The building which should have been carried out, the planning which should have been undertaken and the projects which should have been under way between 1957 and 1962 were not carried out. Certainly it is obvious, at least in my opinion, that the present government has to deal not only with the matter of our growing economy and growing population at the present time but also has to make up for what was not done between 1957 and 1962.
Let me attempt to buttress this point by citing some examples. Did the previous government pass legislation to make possible federal loans covering 90 per cent of the cost of public housing for families and senior citizens? Did it make possible National Housing Act loans for older homes? Did it increase to the present level of $18,000 the maximum amount available through N.H.A. mortgage loans? Did it increase by billions of dollars the total amount available through C.M.H.C. for housing and urban renewal programs? Did it take the initiative which led to the creation of the provincial housing corporations in most of the provinces and which over the past few years has enabled the provinces to take care of their constitutional responsibilities in this field more adequately? The answer is obvious. The previous government did none of these things. These things came into effect only after the present government took office.
October 2, 1967

Let me cite an example in my area of Windsor. The people in this area know very well the situation with which they had to contend before the present government took office in 1963. The present government certainly did make efforts in this regard which were very successful in helping to overcome the unemployment and lack of growth that prevailed during the years of office of the previous government. I am informed that since September of 1965 695 public housing units for families and senior citizens have been or are almost completed. In the years between 1957 and 1962 only one project of some 137 units was planned and built. If I am not mistaken, almost half of the public housing units in the city of Windsor today came about through the initiative and legislation in the matter of housing of the present government.
There has been a lot of talk about housing starts and certainly there is justifiable concern about the level of starts this year and what may happen in the coming year. I was informed this afternoon that while housing starts in the Windsor area from January to August, 1966 totalled 761 the number of starts in the same period this year totalled 928. I am not suggesting there is not still a lot more to be done both in the Windsor area and across the country to help provide adequate and decent housing at reasonable cost for the people of this country, but I certainly think it is wrong to urge, as the spokesman for the opposition did in presenting his amendment to us, that it should be adopted and, in other words, the government defeated.
I am one of those, Mr. Speaker, who call for increased federal initiative and activity in the housing area, but at the same time I cannot ignore the fact, under our existing constitutional arrangements, of provincial responsibility and jurisdiction. While calling for greater federal concern and initiative, I think it is also very important at this time to call for greater provincial concern and responsibility when it comes to operating in this vital area of national policy.
[DOT] (5:50 p.m.)
Let me cite some examples. In June of 1966 the Ontario Housing Corporation carried out a survey in the Windsor area in respect of housing needs. One of the recommendations which resulted from this survey was that in each of the years 1966 and 1967 a total of 350 units of public housing-300 family units and 50 senior citizen units-would be sufficient for the community's need. There have been 27053-1731
Discussion on Housing hundreds of applications filed with the housing authority, the city of Windsor building corporation, which is in large part responsible for senior citizen housing. The remarks in Windsor city council and by many others would certainly indicate that at the present time there is room in Windsor for a substantially greater effort in the public housing field, and certainly that is my view. However, at the same time, under our existing structure this is still a matter for initiative by the provincial government. I might say, and I will enlarge upon this later in my remarks, that in spite of the provincial constitutional position there is room at the present time for greater federal initiative. The point I am trying to make is that even taking these facts into account, under the existing laws and the existing financial arrangements in the province of Ontario and across this country, provincial governments at this time could be doing a lot more than they are doing to help alleviate the present housing situation.
Let me mention another matter which perhaps has a more local application. There is a public housing project being constructed at this time in the Bloomfield road area of Windsor. At one point, although a number of these units had been completed permission was not granted by the Ontario Housing Corporation for occupation by families that had been assigned to them. The explanation given was that even though the units themselves had been completed the landscaping had not been finished and the sidewalks were not laid. I wonder about a provincial government which, even though it may have had the best of motivations, seems to put greater importance on landscaping, lawns and sidewalks than the basic need for shelter.
Let me refer to another point which seems to me to deserve much greater importance than it receives at this time. There is a lot more room for effort by provincial governments to take advantage of existing legislation in order to carry out greater and more numerous projects of land assembly. One of the problems referred to in the debate today and last week is that relating to the cost of land. Certainly there is room for greater activity in the federal-provincial land assembly area. This means at this time greater activity by provincial governments which would have some positive effect on the availability of land at a reasonable cost. If properly serviced land is not available in this way, this undoubtedly is a factor which creates a serious effect on the cost of housing.

October 2, 1967
Discussion on Housing


William Heward Grafftey: Just another lecture to the provinces. You are hiding behind the constitution again.


Herbert Eser (Herb) Gray: I do not suggest that the present distribution of powers in respect of responsibility as to some matters of social welfare is a distribution which brings about the most effective solution to these problems under twentieth century conditions, but the constitution as interpreted by the courts exists and it is simply not fair to the public to say-I am trying to use moderate language-that this constitutional division of responsibility between provincial and federal governments does not exist.


William Heward Grafftey: Would the hon. member permit a question?


Herbert Eser (Herb) Gray: I will answer questions when I have completed my remarks.


William Heward Grafftey: Is this crisis not of national concern?


Mitchell William Sharp: Yes, and of provincial concern.


Herbert Eser (Herb) Gray: I will deal with this aspect later in my remarks. As the hon. member suggests, it is of national concern, but it is also of provincial and local concern. I do not hesitate to say, as I have said already, that it is one in respect of which the federal government must be prepared to take immediate and ever-increasing initiatives in line with its present abilities to find a method of carrying out this and other programs which the people of Canada expect.


Stanley Howard Knowles: That is what the amendment suggests.


Herbert Eser (Herb) Gray: There has been a lot of comment today and last week about the increase in the N.H.A. interest rate. It should again be stressed that this rate is the maximum rate of interest which can be charged for mortgages insured under the National Housing Act. There may be arguments about the effect of this rate, and certainly they must be considered, but often this change is referred to in terms which seem to indicate that the government has fixed the rate at 8J per cent for all National Housing Act mortgages. That is simply not the case. Surely it is in order to stress again that the government has not decreed that all National Housing Act mortgages should bear 8J per cent interest, even though I agree there may be some argument about the effect of this step.

The aim of the government, as I understand it, is to encourage a range of rates below the 8J- per cent ceiling in order to provide more funds from the private sector and, hopefully, lower rates for housing purposes through market forces. At the end of last week, and I speak subject to correction, the Bank of Montreal indicated that its mortgages for housing would be available at the rate of 7| per cent. If that is correct it would indicate that, rather than having created a single fixed rate for all mortgages in the housing field, the action of the government is a step toward its goal of providing a range of rates below 8J per cent for housing mortgages. It is hoped that in many areas of the country this rate will be well below the 8^ per cent maximum. Mr. Speaker, may I call it six o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to standing order 39A, to inform the house that the questions to be raised at ten o'clock this day are as follows: The hon. member for Winnipeg North Centre (Mr. Knowles), Old Age Security-inquiry as to possible increase in pensions; the hon. member for York-Humber (Mr. Cowan), Health and Welfare-payments to provinces under hospital legislation; the hon. member for Okanagan Boundary (Mr. Pugh), Royal Canadian Mint-inquiry as to production of centennial coinage.
Pursuant to provisional standing order 6 (1) and standing order 15(4) I do now leave the chair.
At six o'clock the house took recess.


[Stage Direction]
AFTER RECESS

The house resumed at 8 p.m.
[Stage Direction]
The house resumed consideration of the motion of Mr. Benson for committee of supply, and the amendment thereto of Mr. Chatterton.
Herbert Eser (Herb) Gray: Mr. Speaker, when this house recessed at six o'clock I was pointing out that
October 2, 1967

the government had merely made the 8i per cent rate the maximum rate and had not moved, as some have attempted to suggest, to make it the sole rate for insured lending under the National Housing Act. At the same time, while recognizing that the government's intentions in making this move were of the best, with the aim of attempting to attract more private funds into the home mortgage market, I wish to make clear that in my opinion raising the ceiling of the interest rate in this way is at most a partial and an incomplete answer to the need for more housing. It is certainly not the answer for those earning $8,000 a year or less.
The government must be prepared to take further initiatives to assist people with moderate and lower incomes to have decent housing, in addition to the steps already taken which I referred to earlier in my remarks. This must be done if private enterprise cannot or will not do the job adequately. The Windsor Star, in a recent editorial which I must admit was not particularly favourable to the change in the maximum rate, made this point:
It is a curious feature of our economy that money seemingly is available for almost everything but that which is most needed. It's apparently possible to get money for new supermarkets, sky-scraping office buildings, etc., but not for homes for the people.
This illustrates once again that our private enterprise system has failed lamentably in the post-war period in the field of housing. The situation is acute and becoming more so. It would be quite desperate were it not for governmental housing developments, subsidies, etc.
The editorial reads in part:
It may be the day is coming when most housing will be built by public enterprise. Housing will be provided by governments, just as educating, water, police and fire protection and many other essentials now are provided.
The editorial, at another point, reads:
This is just another example of governmental intervention brought about by failure of private enterprise to meet public needs.
I have said that the change in the maximum rate cannot be the sole answer to the need for more housing. However, I recognize the significance of the situation surrounding the federal government's present borrowing ability. It will help no one Mr. Speaker, to call for measures which would worsen this situation and which would make it more difficult for the federal government to finance its activities at this time.
I think that measures calling for increased borrowing at this time will increase the upward pressure on interest rates, the present
Discussion on Housing levels of which are of concern to many. This will lead to increasing inflationary pressures which hurt everyone, especially those with lower incomes. The other side of the coin, of course, is that the public at large is concerned about the present level and burden of taxation; and, of course, taxation is obviously the government's only other immediate source of funds.
We must act responsibly to improve this situation, so we will be in a position to move ahead in the housing area as quickly as possible in ways that may call for further expenditure. In the meantime we must spend the moneys the federal government has available in ways that provide the most to areas of greatest immediate need in housing. The federal government must be prepared not only to explore but to move into new areas both with existing funds and funds which may be raised in the future, to ensure the filling of the basic need for housing, something which is coming to be considered, if it is not already considered, a basic right of Canadians.
While recognizing provincial constitutional responsibility-and I referred to this question earlier in my remarks-I think there is room at this time for greater federal initiative and action. I think the time has come for a federal minister having as his sole responsibility federal government action in the field of housing and urban affairs. I believe there is a great deal to be said for the suggestion made by the hon. member for St. Paul's (Mr. Wahn), calling for the creation of special house building corporations in effective partnership with the provinces, if possible, or under federal auspices alone, if necessary, to build houses at reasonable cost as was done by the wartime housing corporation.
I believe the emergency is of such proportions, in spite of the efforts taken and the achievements that have resulted through measures to which I referred earlier, that this type of initiative could be justified and could very well be supported in the event of a test being made of the constitutional question. I think, too, that the time has come to explore making mortgages available, either by allocating a portion of our existing funds or other funds that will be raised in future, directly by the federal government with interest rates subsidized by the federal government, to people with lower incomes.
Certainly, it is time we reached the situation where there is government action, federal government action if necessary, in partnership with the provinces if possible, to buy

October 2, 1967
Discussion on Housing and hold-to stockpile, in other words-land across the country to help eliminate speculation and profiteering in land. This is something which in my opinion creates unjustifiable pressures on the cost of land and is a vital factor in the question of the cost of housing today.
Also, Mr. Speaker, I wonder whether the time has not come to consider the possibility of creating disincentives to private builders who prefer to concentrate on office buildings and luxury dwellings rather than doing more in the field of private homes.
[DOT] (8:10 p.m.)
While calling on this government to do more in the field of housing, I certainly would say that this government, contrary to what has been suggested by hon. members opposite, has not failed to recognize the nature of the problem in the country. It has worked to deal with it, and definite progress has been made. What this government has accomplished in this area in the past I think justifies my belief that it deserves the continued confidence of this house and this country with respect to its ability to go on and do even more in this vital field of national policy. This fact also justifies the rejection by this house of the amendment before it.
The adoption by this house of the amendment would do nothing to help the present situation. The amendment will change no existing law. It will bring about the passing of no new law. It will not add one dollar to the money already available for housing. It will cause not one more house to be built. It will only bring about another election which will cause uncertainty and delay in the taking of further steps to provide more housing at reasonable cost. I think that in any event the people of this country are in a position to judge the ability of the present government to do a more effective job in the field of housing as compared with the ability of the parties opposite to do the same. Certainly, as I pointed out at the beginning of my remarks, there is nothing that the official opposition were able to accomplish during their period of office which would cause anyone in this house or in this country to take the wording of their amendment as seriously as they hope.


William Heward Grafftey: The hon. member should fire his speech writer.


Herbert Eser (Herb) Gray: I would say that because of what the government has accomplished in the past, because of the initiatives it has taken, because of what I think will be the further

initiatives it will take in the future, this house should reject the amendment.


Mr. Jack A. Irvine (London):: Mr. Speaker,
I welcome the opportunity of being able to enter this debate. First of all, I should like to congratulate the hon. member for Esquimalt-Saanich (Mr. Chatterton) upon the amendment he proposed. I should like also to state that on Thursday night of last week when the house was about to close I had the opportunity, after having heard the statement by the Minister of Labour (Mr. Nicholson) on the previous day, to make a few comments. At that time I mentioned the fact that even in the city of London, the riding which I have the pleasure to represent, we are short of some 4,000 dwelling units at the present time. This represents a considerable crisis. It has been reliably stated also that at the present time we are short of some 250,000 units across Canada.
I was rather surprised to hear some of the statements made by the hon. member for Essex West (Mr. Gray) because I consider him a good friend of mine. I thought he was somewhat above making some of the partisan statements he made. I do not think it was necessary for him to make them. Our function in the house is to try and get along together. It is the function of the members of the official opposition to put forward ideas which we believe to be in the best interests of the country. The hon. member attacked the former administration and at the same time kept repeating that the hon. member for Esquimalt-Saanich was thinking in terms of the last year and of previous years. Yet, the same hon. member spoke about the previous administration in a way which I do not think contributed a great deal to the well-being of this house or to the well-being of parliament. I wonder if perhaps some of the remarks he made might not have been the product of a guilty conscience. However, we will leave that for what it may be.
The announcement made by the minister the other evening that the interest rate would be increased to a maximum of 8.25 per cent came, I am sure, as quite a blow to many of us. Many people who think in terms of the general good of Canada-and I do not mean to imply that the minister is not because I know him to be the kind of person who does-think of doing those things which are best not necessarily for their own party but for the country. I recognize the minister to be a great Canadian. Tonight, I am concerned about an item which appeared in a newspaper. I will not read it. Let me say only that it
October 2, 1967

related to an $18,000 mortgage. The newspaper stated that by the time a person has paid off this mortgage, the amount of money that he would have repaid would have totalled $42,000, including interest. This is a fantastic amount of money with which to saddle a younger person or even an older person. We find that a person wishing to buy a house costing that much would have to pay in the neighbourhood of $1,000 a year in interest. I wonder whether this would not make private ownership of a dwelling an uneconomic proposition. This is something about which we should think. There was a time when we used to encourage the young people of this country to acquire a home of their own. It used to be our feeling that in so doing we were at least going through the motion of encouraging them to be better citizens. We used to think that owning a home gave us a stake in the community, made us feel we were part of the overall picture. It was our feeling that it made better citizens of us.
I recall the time when I purchased my first home. At that time I think the down payment was $300, and I felt very proud of the fact that I had a stake in the community in which I was privileged to live.
Let us think for a moment about the penalties which we are forcing on prospective home owners today. First, let us think of the interest which they have to pay for 25 years, which may amount to $24,000. To that we must add the 11 per cent tax on building materials-and I do not intend to comment on whether this is good or bad at the moment-or another $1,800. Then, let us think of the average increase in property taxes in urban areas. This adds another $300 for the duration of this program, which comes to another $7,500. These people were fortunate enough to be able to pay $10,000 down, and there are few who can. If you add that to the figures I have already mentioned you will come up with something in the neighborhood of $43,300 which they would be paying just for the privilege of having a stake in the community.
These are some of the things that I am concerned about, and I think everyone in this house should be very disturbed about these impediments that we are throwing in the way of the young people particularly. There are other factors such as land values which are escalating all the time. They are part of the inflationary tendency. This is a further handicap which we are putting in the way of these people.
Discussion on Housing
However, let us look at the problem from another angle. Suppose these people do not own a home. They are, nevertheless faced with the law of business balance, so they must pay higher rent because naturally the value of a home on which owners must pay up to 8.25 per cent will go up and therefore the value of replacement homes will go up. The value of the home which a person is renting will go up, and therefore he will have to pay more by way of rental.
This is a very serious situation, particularly for the young people who are raising a family. These are some of the things that contribute to the ever increasing inflationary pressures.
[DOT] (8:20 p.m.)
Let us consider, for instance, the minimum income factor of $8,000 that was mentioned. What about the lower income earner, the man who, let us say, earns $5,000 a year and is paying $75 to $100 per month rent for his home? This man cannot qualify for this type of mortgage. The result is that when his rent goes up he will be paying more money just to subsidize those people in the $8,000 and over income bracket. Is this man not worthy of consideration, or is he supposed to be some kind of second class citizen? Is he not entitled to the dignity of the individual? The same inflationary pressures are going to send his rent up, and I ask the government what it intends to do in such a situation. I feel that these are the people we should be assisting. Of that I am sure, because I lived on that kind of income for many years. It is the man in the lower income group for whom we should have a program.
Let me mention for a moment, Mr. Speaker, something that has been referred to in this house many times, namely the 11 per cent tax on building materials which is collected by the Department of National Revenue at great expense and lent back again through the N.H.A. at a lesser interest rate. I should like to know the actual net figure derived from this tax on building materials. How much does it cost us to administer the tax? For example, how much does the book work cost? How much does it cost the supplier of building materials and the builder himself to handle the administrative work? All of these expenses, which are legitimate expenses, are charged against the company concerned, if these charges are exempt from tax this just means that the government derives even less tax in each particular case.

October 2, 1967
Discussion on Housing
The net amount received from this tax has been reliably estimated to be in the neighbourhood of 2| per cent of the full tax, yet these people must pay the full tax of 11 per cent. This is another obstacle tossed in the way, particularly of our young people today who want a home of their own.
I would ask whether this permitted increase in the interest rate that the minister has mentioned will make it possible for people to build, or will it make it impossible? Will it mean that eventually the private dwelling will become an uneconomic unit and that it will not be reasonable for a person to think in terms of building a home for himself? I am sure that every member in this chamber is well aware that this situation will place the lower income family right in the middle of another inflationary squeeze.
We are subsidizing, Mr. Speaker, such persons as the wheat farmers and the dairy farmers. We also subsidize the coal industry. I do not disapprove of this; indeed, I think it is all to the good. In view of the fact that the Minister of Trade and Commerce (Mr. Winters) found himself in a very embarrassing position vis-a-vis the wheat farmers, I think the government had to subsidize them. But why do we not think in terms of protecting the jewels of our society? Why do we not think of protecting those people in the lower income brackets so that they can qualify for a mortgage to build a home of their own?
I contend that if we made it possible for people in the wage bracket of between $5,000 to $7,000 or $8,000 to qualify for a mortgage to build a home of their own, first of all we would be making better Canadians. As I said a moment ago we would give such persons a stake in their community. I suggest that we should do some very real thinking along the line of making it possible for people within that income bracket to obtain a mortgage at an interest rate of 5 per cent.
Surely, Mr. Speaker, we are not above subsidizing our own people in order to help them out, particularly those in the younger age groups starting a family. It does not make sense for them to live in the low-cost housing developments that we have; they want a place of their own where the kiddies can romp about outside in the back yard, be it big or small. I know from experience that this is important to such people.
I should like to impress upon the government at this time the importance of doing something to help the people in that wage bracket. These young people are Canada's greatest asset. During the war it was the

young people who were sent overseas to fight for us; I think it is now time we did a little bit of fighting for them.
It is true that some of these people will never own a home; that has always been true. But are we going to condemn them to live in these low-cost public housing developments? These developments do not harmonize with the outlook of young people with a young and growing family. We grant loans to foreign developing countries interest-free, yet we forget the most important asset that we have in our own country.
Let us look at the situation objectively, Mr. Speaker. This morning I called on two banking institutions. Not too long ago it was possible to obtain a mortgage from these institutions at the rate of 7 per cent, though I admit they were selective in placing those mortgages. I asked the manager of one of these institutions this morning what they were charging at the moment, and he told me it was 8 per cent. I contend that that is the thin edge of the wedge, and that within a very short space of time they will increase that rate to the maximum amount of 8-J per cent. I asked him whether that would be the case, but he replied he did not know.
Supposing, Mr. Speaker, this does happen and these rates do go up to 8J per cent. Are the institutions that lend money for this purpose going to lend money at a lesser rate for commercial purposes? We will also find a restraint in the business community. The prices of all other homes are going to increase correspondingly. Let us say that a house is built today for $20,000 and the amount of $20,000 is paid in interest over the term of the mortgage. At the former rate of interest the same house may still have cost $20,000 to build but the interest would have amounted, say, to $12,000. This means that the price of the house has risen by $8,000. The effect of these increases will be felt all the way down to the man who is paying $75 a month rent. That rent will be increased perhaps to $100 a month. This fellow who is making, shall we say, $100 a week will pay an increased rent, according to inflationary trends, perhaps of $115 or $120. The time when he can buy his own home will be postponed. Perhaps he will be too old to qualify for a mortgage when he has saved the money. [DOT] (8:30 p.m.)
It is this point with which I am concerned. I am speaking on behalf of the little man who goes to work every day and carries a lunch pail. He is the man in my mind because he
October 2, 1967

makes this country great. I implore the government tonight to do something to assist him and others like him. Let us help them reach the goals aspired to by good Canadians.
Charity begins at home. I do not say that we should stop the great work we are doing for some developing nations, but let us look at home first. Let us protect those who are the very jewels of this country in which we are privileged to live.
One might ask, where are we to get the money? I say that the first place we ought to look is at our bureaucracy. We ought to cut down the amount of bureaucracy in this country. Perhaps we could cut down on the empire building that has been going on, shall we say, from 1939, I am not excepting the former administration because this is no time to be political and we ought to call a spade a spade. We serve in this house first as Canadians and secondly as party members. As I say, if we can cut down on bureaucracy, it would be all to the good.
I wish to read from the editorial page of the Stratford Beacon Herald of August 1, 1967. Hon. members may not be familiar with this newspaper which is published about 40 miles from the riding I have the privilege to represent. The article reads:
An Ottawa report setting forth the average income of income taxpayers in Canadian cities was published in this newspaper a few days ago. Average income reported by taxpayers in a number of Western Ontario cities, including Stratford, St. Thomas, Woodstock, Galt and Owen Sound, was in the $4,500-4,700 bracket. In smaller or less industrialized centres the average would be lower. Beacon Herald Ottawa correspondent Richard Jackson, in more than one of his columns, has discussed the civil service salaries ranging, for senior officials, from $18,000 to $35,000, with a few drawing more.
The Ottawa correspondent earlier this year had reported 372,890 persons in the federal public service,-
That is 372,890 persons, Mr. Speaker, a fantastic figure.
-as it is now called, with a payroll of $2,063,892,000, not including the armed forces. It is taking one of every four tax dollars to provide this payroll. If one of these Western Ontario taxpayers reporting around $4,500 income was married, had one dependent, paid union dues and made some charitable donations, he might pay $160 income tax, of which $40 would go to pay federal employees receiving, in general, far more than the taxpayer.
Of course, the comparison is not really accurate; every taxpayer indirectly pays customs duties and federal sales tax on goods purchased, and this would make up part of his $40. It is also the case that civil servants in the higher salary brackets pay far more income tax. The important fact remains that we have 10 times as many people in the public service as in 1939-
Discussion on Housing
Ten times as many. Mr. Speaker, these are astounding figures:
-an increase out of all relation to population rise, taxpayers' incomes or anything else except the proliferation of Government departments. Ten times as many persons means far more than 10 times the salary total, because of increases granted from time to time since 1939. Now the public service is organized, under legislation discussed in these columns a few months ago, and is reported planning to shake down the Treasury for substantially higher rates of pay.
This is only human. I continue:
There is nothing in the Treasury but what is put there by taxpayers, and the biggest source is the income tax-not the tax on large incomes, but on the great number of medium and small incomes.
I wish to make clear that I am by no means advocating a program of wholesale firing or disposing of public service people. No, I have not that in mind at all; but I do suggest a serious job evaluation program to take the square pegs out of round holes and vice-versa. That is long overdue.
I do not suggest that these people ought to be laid off or summarily dismissed. But I do suggest, in all sincerity, that as personnel reach retirement age, let us take a good look. Many of them need not be replaced, perhaps. We might be able to cut down the service by 2 per cent, 3 per cent or 5 per cent every year without unduly crucifying anyone, thereby reducing the payroll which stands at over $2 billion. If we reduce the service, say, by 5 per cent, that would mean that $100 million would be released to aid the younger people with small families in purchasing a home. The 5 per cent of payroll that will be saved could go toward establishing those with small families as good citizens of this country of ours.
I contend, Mr. Speaker, that the backbone of this country is that little man. Let us give him a chance. Let us not kick him while he is down. Let us not make it that much more difficult for him to rise above his present level. Let us do something to assist him. It is time that we thought in terms of charity at home and of subsidizing the little man.
[DOT] (8:40 p.m.)
First of all, make it possible for him to own his own home. Make it possible for him to enjoy the dignity to which he is entitled as an individual. Make it possible for him to hold up his head and be proud to be a Canadian.
Tonight I would like to ask the minister and his colleagues on the government front bench what they envisage? What do they

October 2, 1967
Discussion on Housing
plan for this man? Are we going to drop him entirely or are we going to give him a hand up?


Mitchell William Sharp: Mr. Speaker, it had in any event been my intention to enter this debate, and when I heard the terms of the amendment proposed by the hon. member who spoke on behalf of the official opposition my intention was confirmed.
I share the concern of all hon. members about housing. Notwithstanding the very substantial efforts and very substantial successes of the government in the last few years in adding to the housing supply, and in introducing measures as progressive as any in the world, there is no doubt that now there is a shortage of housing accommodation in Canada. This shortage, of course, is particularly to be found in the very rapidly growing urban centres, one of which I help to represent in this house.
I am also satisfied, and I think all hon. members are satisfied, that the demands for housing are likely to remain at unprecedentedly high levels for as far ahead as anyone can foresee. The Economic Council has made the case very well, but I do not think it would have needed the Economic Council to make their detailed analysis to have demonstrated to any of us what is so obvious.
A country like Canada, with the most rapidly growing labour force in the world, is bound to have a housing problem. This is recognized by the minister responsible for housing. It is recognized by the Minister of Finance, and is recognized by this government. I also agree with the hon. member for Esquimalt-Saanich (Mr. Chatterton) in emphasizing the question of fiscal priorities, although I find this advice passing strange, even hypocritical, coming from a party that has on so many recent occasions urged the government to take on vast new spending programs as quickly as possible without regard to fiscal responsibility or priorities, or anything else for that matter.


Gordon Minto Churchill: I think "hypocritical" is unparliamentary language.


Mitchell William Sharp: I had thought of looking up the voting record of the hon. member for Esquimalt-Saanich and of the hon. member for Perth (Mr. Monteith), whose eloquent words were quoted by the hon. member for Esquimalt-Saanich.


Mr. Monteith:: How true they turned out to be.


Mitchell William Sharp: But I decided it really was not necessary because I remember with what wholehearted enthusiasm the members of the official opposition urged us on to spend hundreds of millions of dollars in excess of what we have-


Gordon Minto Churchill: Specify.


Mitchell William Sharp: They were specified on particular things, but I never did hear from the official opposition any recommendations that in order to make room for a particular priority we should drop other programs costing hundreds of millions of dollars, or urging us to increase taxes for that purpose. I trust, Mr. Speaker, when the government, in the interests of fiscal stability and fiscal responsibility, has again to establish priorities the hon. member and his colleagues will be supporting and encouraging us. That would be a very welcome change.


Some hon. Members:: Hear, hear.


Gordon Harvey Aiken: May I ask the minister a question at this point. I wonder if the minister would be kind enough to outline for us the government's priorities?


Mitchell William Sharp: Yes, Mr. Speaker, I am just coming to that. When we resume the budget debate sometime this week I shall be discussing our general financial situation at greater length, and I shall be asking this house to support the government in maintaining and establishing priorities, and in keeping our borrowing requirements within appropriate limits. I trust that when I do so the applause from the other side will be deafening.
I have listened to these exhortations on economy, Mr. Speaker. I listen to them not only from hon. members opposite. I listen to them almost constantly and, Mr. Speaker, nothing so heartens a minister of finance as that kind of support. But may I add this, that on this field the battles are fought on particular issues and not in terms of generalities. I do hope when I become specific and when, in the interests of the economic future of this country, I shall be urging that we continue the kind of responsible policies we have been following, instead of the customary criticism I have received from the opposition there will be that general support that has been forecast by the speeches made today.


Mr. McIntosh:: Keep the politics for the hustings.


Mitchell William Sharp: Mr. Speaker, this is not politics; this is the future of our country. And I say

October 2, 1967

quite sincerely that I hope every member of this house has as high a regard for the importance of fiscal and monetary stability and responsibility as ministers of finance customarily have, and I do hope that there will be that same spirit exhibited when we come down to the particulars. Now, Mr. Speaker, I would like-


Thomas Miller Bell: Like you did in 1962?


Mitchell William Sharp: Well now, Mr. Speaker, I have taken the advice of one of the former speakers that I should not go back in history behind this parliament, and I shall refrain from doing that because I know what I might say on this occasion. I am dealing only with this parliament and the attitude of members sitting here today.


Mr. Maclnnis (Cape Breton South):: You
don't know your history.


Mitchell William Sharp: I would like to come back to the problem that is facing us and to say something about its nature. The first problem we have to deal with, if we are going to face up to the housing problem adequately and not in a partisan fashion, looking at the realities of the situation, is the shortage of capital or I might say, if you want to put it another way, the shortage of savings. Housing takes not only labour and materials, and at this point may I say we can help to improve the supply of both. Even the federal government has a role to play in this, and many of the efforts that have been made by the Minister of Manpower and Immigration (Mr. Mar-chand) in recent years and months will, I believe, help to improve that situation.
We can also, I believe, improve our building methods. But housing also takes capital in the form of savings. Most buyers of housing are unable to pay cash. Most of them require to borrow some money to build houses, and therefore someone else must have savings in order to enable them to buy houses at the time they want them.
It is the savings to finance the purchase and rental of housing which are scarce today and, I have every reason to think, are likely to be scarce over the next few years. Housing must compete for capital with industry, and it must compete for capital with governments. We must have capital to provide jobs in industry, and governments must have capital to provide the infrastructure, the roads, the schools and all the other things governments must provide if there are going to be cities fit to live in.
Discussion on Housing
[DOT] (8:50 p.m.)
There is no easy answer to this. Canada probably will face a shortage of capital over the next few years, and we certainly shall have to import it in large amounts. This has been recognized by the Economic Council whose report has been quoted on so many occasions.


An hon. Member:: Not by Walter Gordon.


Mitchell William Sharp: This is a statement I have made on many occasions and which my colleague the President of the Privy Council has made on many occasions. We shall have to import capital to meet our requirements. We have many demands on it. We must try to establish priorities intelligently and realistically. I know of no easy choices for low priorities in this competition. The test of people who believe in priorities is not what they put at the top but what they drop off at the bottom. These are the real problems we must face in ensuring that there is an adequate supply of capital for housing.
If housing is to compete effectively for the capital which will be required in the next few years, it must be able to offer attractive terms to investors. I regret to say that under present circumstances this means higher interest rates than we have been used to in the past.
Canadian rates must be high enough in relation to those of the United States that they will attract into Canada the capital required to supply our deficiency. This is just a fact of life. There is nothing we can do about it unless we can increase our own savings, and I do not think they can be increased quickly enough to enable us to dispense with foreign capital. Therefore, our interest rates must bear a proper relationship to those in the United States. Canada's interest rates must be such that they will enable us to balance the demands of our capital markets with the supply of funds from savings, both domestic and foreign.
I am concerned about these high interest rates. I regret very much that interest rates have had to rise. They have been rising throughout the western world. They have been rising in industrialized countries and in the underdeveloped countries of the world. As I said in my statement on motions today, last week I was in Rio. There, I had the opportunity to meet all the ministers of finance of the world. We met many times in large groups and in small groups. One of the main problems we discussed was the problem

problem and unless we tackle it, along with a general reform of our tax structure, we will not have dealt with one of the major difficulties that face this country and which is at the root of the housing problem.
It has been suggested that we, as the federal government, should take some action about housing by removing the tax on building materials. There is nothing I should like to do more than that, but I have a problem. It is a problem that is shared by everyone in this house; that is, to raise enough revenue to meet the expenditures of the government. The Economic Council of Canada made a comment on this matter, not quite in the form in which it has been quoted from time to time. The council only suggested that the issue be re-examined, and I can assure you that I have re-examined it over and over again.
The Carter commission, however, made a more pertinent comment when it said:
The complete exemption from tax of all building materials would be desirable both on economic and social grounds, but may have to be deferred for the present time and reconsidered in the future in the light of revenue requirements.
Those are the circumstances in which I believe we now find ourselves. When we can afford this, and I hope that will be soon, perhaps the first step might be to refund on each housing unit a certain sum of money so that the relief would go in the main to those who need it most.


Donald MacInnis: You
are stealing an idea.


Mitchell William Sharp: This was an idea I had, and perhaps someone stole it from me. However, originality is not really the test, it is the soundness of the idea, and if I borrowed it from someone I heartily acknowledge my indebtedness. It is a sound idea and I hope in due course we will be able to follow it. In the meantime, it is quite evident, I believe to everyone in the house, and I shall be setting this forth in greater detail during the budget debate, that we cannot afford that particular tax remission now.
However, I did make some calculations as to the amounts involved in sales tax on a house of average size and cost, which is probably in the amount of some $540 as a once and for all cost. This is about the amount of sales tax on the building materials involved in a typical house.


Mr. Prittie:: On what value of house?


Mitchell William Sharp: One can figure that the 11 per cent sales tax is paid on approximately half
Discussion on Housing of the cost of construction, so you get down to figures of this order. Perhaps it would be a little bit less than half. I had these calculations made by some of my experts and I am sure they are within the proper range. On an expensive house the tax would be more and on a less expensive house it would be less. This is based on C.M.H.C. averages of the cost of house building in this country in recent years.
When you compare that figure with the burden on housing involved in property taxes, the average property tax being about $350 a year including semi-detached or row houses, I suggest that while a remission of the sales tax on building materials is a desirable reform, it is one that is not nearly as important as many others, or many other more important steps that may be taken.
Let me now come to what I believe should be the policies of the government in this field. We are pressing forward on several fronts in our attack on this housing problem. As a first step to meet the urgent shortage in funds experienced last year we instituted major direct lending programs. Indeed, the other day when I looked at the figures of the financing of C.M.H.C. I was astounded at the change that had taken place. I found that C.M.H.C. was taking from me, as Minister of Finance, out of the public purse as a loan, hundreds of millions of dollars. A few years ago we were providing something like $100 million. This is the measure of the priority that the government has given to housing since we took office. By comparison, the amount of resources that the government has placed in housing in recent years has been completely out of proportion to any previous period, whether under the previous administration or under the previous Liberal administration. A massive attack has been made on several fronts.
This brings me to what I believe is the second front upon which we should proceed. We are planning next year to provide capital directly through C.M.H.C. to meet the needs for public housing-specialized housing for old people, student housing and urban development-on a much larger scale than ever before, and we do not intend any of the measures we propose in respect of housing to be cut back on these priorities. This is where we believe our primary responsibility as a government resides; that is, in helping those who need help most. We established that priority and I hope it will be supported by everyone in this house.

October 2, 1967
Discussion on Housing
We plan that the bulk of housing should continue to be financed through the market, as it has been in the past. This is especially important for rental housing which is urgently needed. The government will continue to provide exactly the same guarantees it has in the past on National Housing Act mortgages. We have now given sufficient flexibility so that money can be directed to those instruments at going market rates. I submit this will increase the volume of money available for housing in this country. The combination of the government concentrating its direct activity upon areas of social need and allowing the market to operate under guarantee for private housing is, I believe, the best combination of policies under present circumstances.
To meet the longer term problems I have been outlining, we have indicated our readiness to discuss with the provinces the variety of measures that may be needed to solve other problems than those of housing finance. We have already had many meetings with the provinces in this field. The extent of our co-operation with the provinces and municipalities is far greater than anything that has taken place in the past. The hon. member for Essex West (Mr. Gray) gave us some figures in respect of projects in one city. This information came to me as news, but it illustrates the general scope of the government's activity in those areas where housing needs should have the highest demand upon government resources.
This is the government's policy and I suggest to you that we, as a government, have recognized our responsibilities in this field; we have recognized our fiscal responsibility and we have recognized the need for priorities. I hope that we shall have the support of the opposition on these priorities as they are now and may be in the future. I submit that we recognize the importance of the housing problem and I hope we will have the support of the whole house in respect of the measures we intend to take.
[DOT] (9:10 p.m.)


James Russell Keays: Mr. Speaker, I should like to ask the minister a question concerning his good intentions about coming to the aid of those in the low income bracket next year. What income ceiling would the minister consider for the low income earner.


Mitchell William Sharp: Mr. Speaker, I think that question should be directed to the Minister of Labour (Mr. Nicholson), who will be taking part in the debate later.


Gordon Harvey Aiken: Is the minister going to give us the priorities, too?


Mr. L. M. Brand (Saskatoon):: Mr. Speaker, I have listened to many hon. members from the government side of the house in the last few days. One line from Shakespeare kept crossing my mind when they were discussing housing, namely, methinks he doth protest too much. When I heard the exposition of the traveller from Rio just a few minutes ago I thought perhaps I should thank the minister, on behalf of the burdened Canadian taxpayer, for delineating in such detail all the costs and taxes which the present government is making him bear.
However, as I listened to the debate I have heard a diversity of views. At times, there seemed to be a degree of unanimity among the government supporters. They all seemed to be hiding behind that great shield of provincial rights and responsibilities. Apparently, in this manner they hoped to be able to avoid the true responsibility for this crisis which is, of course, the failure of the government to do anything realistic not only towards solving the housing crisis but towards solving the money crisis that is facing our country.
Surely, as has been pointed out by other hon. members on this side of the house, there exists not only a housing crisis but a crisis in monetary policy. This crisis has been intensified and prolonged by months of government ineptitude, government inaction and government fumbling which has led from crisis to crisis and from stopgap measure to stopgap measure. The government has been going to the cupboard for a bone with which perhaps to seduce the Canadian voter, but finally, like Mother Hubbard, they have found the cupboard bare. They have been caught up in a web spun by their own fingers. They have been trying desperately to extricate themselves by using the classic economic ploy that the interest rate is not sufficient to attract more money into the mortgage field, hoping desperately to save the situation. At the same time, there has been an attempt to rescue this government once again from the consequences of its own folly. But, Mr. Speaker, the question the people of Canada are asking is: will these measures work?
Let us look at the situation. The Minister of Labour (Mr. Nicholson) has pointed out very forcefully that because of the high cost of building and the unavailability of mortgage money the average individual must look not toward home ownership but toward
October 2, 1967



rental accommodation, probably government subsidized. Hon. members will recall the words of the minister when he stated that we must look at the possibility of raising the income ceiling for limited dividend housing. In other words, the minister indicated that it is in the field of multiple dwellings that government action must be directed; that is, low cost, subsidized, multiple housing. Apparently it is not a matter of whether this is a good thing at this stage. Surely, the average Canadian should be given a choice in this regard and should not be forced by sheer economic necessity, made so by the actions of this government, into public housing? This is exactly what the government is trying to do.
I noticed that the Minister of Labour and the Minister of Finance (Mr. Sharp) were very careful to point out that the interest rates on loans for public housing projects for families with low incomes would not be increased. Am I to understand from this that there is no need to attract private capital into the field of low rental housing or student housing, which were dealt with by the Minister of Finance? The minister shakes his head; apparently there is no such need. It seems to me there is a basic contradiction of view here.
Let me illustrate this, Mr. Speaker, by quoting from the minister's announcement in respect of an increased interest rate on mortgage loans. I wish to quote from page 2577 of Hansard as follows:
In order to attract private funds into housing and to enable the government to concentrate its future lending in the important social areas of greatest need, namely, public housing, housing for elderly people, housing for students and urban renewal, the government has decided to take full advantage of the spread authorized in the statute. We anticipate this change will result in increased lending activity on the part of primary lenders and at the same time substantially increase activity in the secondary mortgage market, which is very important at this time.
The minister went on to say that the maximum rate would come into effect on October 1. In making this announcement he made it quite clear that there would be no change in the N.H.A. interest rate on loans for public housing projects for families of low income, housing for elderly persons, student housing, land assembly, urban renewal and sewage treatment plants. I see a basic contradiction here. Apparently we can obtain enough money, according to the ministers' thinking, with which to house families of low income, the elderly, the students, and so on. I ask, Mr. Speaker, is this what the minister means?
Discussion on Housing


John Robert (Jack) Nicholson: Mr. Speaker, that is a question I shall be glad to answer. That is not what I meant. The statement could not possibly mean that.


Lewis Mackenzie Brand: Well, Mr. Speaker, I will just leave it on the record.


John Robert (Jack) Nicholson: I shall be glad to answer that question.


Lewis Mackenzie Brand: At the end of my speech, Mr. Speaker, I shall be very glad indeed to hear the minister's answer. Of course, the claim is made by hon. members opposite that this increase in the interest rate will not have the least inflationary effect. However, I wonder whether the government and the Minister of Finance, after his trip to Rio, will deny that an increase in the mortgage interest rate will increase the cost of construction and the cost of land. Can they deny that there will be pressure to obtain higher wages in this field in order to meet the increases forced upon the workers? Can they deny that this will result in increases in consumer costs and services, accentuating the spiral in costs? Does the minister deny, or will he agree, that this policy of the government will increase costs?
In this connection, Mr. Speaker, I should like to refer to the latest report of the Economic Council of Canada. In order that there be no mistake, I should like to quote exactly what the report says. The following appears at page 265 of the report. This passage deals with the effect of monetary restraint on new housing starts in 1966:
This, in turn, means that even though monetary conditions started to ease before the end of 1966, the volume of new housing completions will decline in 1957. With the rising numbers of new households, these developments have already resulted in very tight markets for housing in a number of urban areas, in a widespread reduction in vacancies, in a general increase in shelter costs, and in indirect upward pressure on wages (next to increases in food prices, increases in such costs appear to have the most direct and powerful effects of all consumer price changes exerting upward pressure on wages).
However, Mr. Speaker, the most serious of the implications as far as I am concerned is the government's indication that apparently people are to be forced by sheer economic necessity into apartment and low rental dwellings.
o (9:20 p.m.)
Many prefer living in apartments, but surely we should have the right to choose where we may live with our families. However, 80 per cent of the people of Canada will no

October 2, 1967
Discussion on Housing longer be able to obtain C.M.H.C. loans. Is this the intent of government policy at this time? Is this all part of a government scheme to create a rabbit warren complex for the people of Canada? Perhaps the minister wonders what I mean by a rabbit warren complex. One can certainly see that in future the people of Canada will be housed like rabbits in a warren. Perhaps they will even be denied the right to the one propensity for which rabbits have gained a certain degree of notoriety over the years. Surely, it is obvious that the more children we have in this country the more serious the housing problem will become. The government, therefore, will have to take steps-perhaps this is one of the guide lines-to ensure that the birth rate does not increase unduly outside the bounds of policies laid down by the government.
As we look at the over-all picture, it does seem clear that the government has failed to recognize the crisis as it exists or to take adequate steps to meet it. Every measure the government has taken has been a stop-gap measure, the finger-in-the-dike principle, and only a symptom of the serious malaise in the present government. There are many other examples of the finger-in-the-dike principle. We had one the other day when the Minister of Trade and Commerce (Mr. Winters) brought in a measure to maintain wheat prices in the international market. Incidentally, I understand he pulled his finger out over night.
What the people of Canada are asking is, when are we in the House of Commons going to take a long, hard look at this problem and implement some really effective measures. I am certainly no economist and I make no pretense to be one, but the implications of these government policies to the individual is something that it does not take an economist to realize. This is the question: is it the responsibility of the government to gear the economy of our country to allow individuals to purchase their own homes if they so wish, or is it, as the minister implies, the responsibility of the government to control and decide the type of housing that each individual must have? Are we going to force the individual, by the inexorable pressure of adverse economic factors, to live, as I said before, like rabbits in warrens in government subsidized housing? As we listen to the various speakers on the government side we seem to be coming to the inescapable conclusion that the latter is the answer.
What if we took a brief look into the future? I noticed the Minister of Finance (Mr. 
Sharp) was doing that; he did not want to look back either. What would be the ultimate result of this type of Liberal philosophy? Perhaps a new generation of Canadians will evolve, stamped not with the mark of Cain but with the mark of Liberalism, which is, I believe, the generic equivalent. Are Canadians to become faceless, amorphous, indistinguishable from one another, going about their daily tasks in government subsidized training or in government subsidized jobs? I think of the rapidly expanding civil service. Will they be eating in cafeterias owned and operated by the government because that will be the economic thing to do? Will they be taking the government subsidized rapid transit system back to the government subsidized apartments where they will listen to the government subsidized television and radio announcing further plans to control other facets of their life, including the right of procreation. That is the one thing I do not believe the government would dare subsidize, but would control so that a too rapidly increasing birth rate would not overburden the already serious housing shortage which, as the minister pointed out, is to continue for many years to come. Is this what we want for our fellow Canadians? It may be said that this could not happen, but it can happen.
Unless we in the House of Commons come to some realization of what is happening, it will be a reality before many years go by. But it need not happen if we stop this program of stop-gap measures and if we take a few definitive steps to examine our problem in depth. I have heard from the other side, and I agree, that the problem is serious enough so that partisan considerations can be held in abeyance. Surely, the time has come to sit down together in the relatively nonpartisan atmosphere of a joint committee of the Senate and the House of Commons and see what can be done. The minister looked favourably upon this when he spoke the other day. Surely, this would give us an opportunity at least to get the advice of the experts. I do not refer to experts from the C.M.H.C. personnel because they have a vested interest in what is going on, but I am speaking about experts in the field of sociology and perhaps all the other fields which have been carefully documented as being part of the housing field.
Let me point out that the first National Housing Act of 1935 came about in this fashion. Can we do any less in face of the serious situation which confronts our nation
October 2. 1967

today? After all, raising the mortgage interest rate may be the economists' way of stimulating private investment in the mortgage field, but the results to the average Canadian can only be catastrophic. The low income groups can no longer afford to own their own homes and the middle income groups, making up the bulk of our population, are now in exactly the same position. Are they to continue to have the hope of pride of ownership, one of the few things left in this day of government intervention, snatched away as well? So far as I and my constituents are concerned, we are sick to death of listening to this type of pusillanimous sophistry which this government is feeding the people of Canada.
I wonder if we would not be wise to go back-even though the Minister of Finance feels we should not-to January 23, 1935 and read from page 137 of Hansard? At that time Mr. T. L. Church, the hon. member for East Toronto, said:
It is the duty of a Christian country, a Christian community, to do all in its power to see to it that its citizens live in healthy homes. Housing cannot in any locality be separated from the problems of roads, light, water, sanitation or other similar questions.
One of the evils of to-day is the high mortgage rates that are charged-
So what else is new?
-They are retarding progress and recovery. As I say, I cannot emphasize too strongly the necessity of the government taking some action to reduce these mortgage rates which are bearing so heavily on the poor people. In the city from which I come many old workers are losing their little homes because they cannot pay the high mortgage rates which are asked-
The only difference now of course is that they could not hope to get one in order to lose it.
I hope that in some way perhaps through the provinces and the municipalities,-
Does that not sound familiar?
-the government may take some action so that loans may be made at reasonable rates of interest to aid the reconstruction of old buildings and the construction of new houses. I believe such a step will be in the right direction,
That is taken from the private members' resolution on the proposed national policy of building and reconstruction as an economic and social necessity. As a result of that private resolution, the then prime minister, Right Hon. R. B. Bennett set up a committee of the House of Commons, and from that came the first National Housing Act which was the precursor of the many acts which we have had over the years. We have had massive revisions of these acts since that time.
Discussion on Housing From 1938, to 1944 and in the present act of 1954, massive revisions have been undertaken in order to attempt to deal with the problems of the day. These were revisions undertaken by thoughtful ministers-one of them is sitting opposite in a somewhat different portfolio-such as Hon. J. Ilsley and others. The work that they did at the time, along with the members of the opposition, had the effect or producing bills which, with reference to their own particular problems, did a fairly adequate job. Surely, Mr. Speaker, the time has come once again for a massive revision, for a long and in depth look to be taken, as I said before, at the present act. I am, of course, aware of the revisions that were made in November 1966; but I feel that as a result of a very careful study the act may possibly be entirely different.
[DOT] (9:30 p.m.)
After all, Mr. Speaker, what were the initial purposes of the National Housing Act? We know that Central Mortgage and Housing Corporation was a crown agency incorporated by act of parliament in 1945 to administer the National Housing Act and to co-ordinate activities in housing. We sometimes forget when we talk of provincial co-operation and otherwise, that authority over and responsibility for a variety of functions affecting housing is part of the duties of C.M.H.C., both in the long term as well as in meeting the immediate requirements of the country. C.M.H.C. has power to act as insurer of mortgage loans, as lender or investor of public funds, as a guarantor and owner of property and other assets.
Another thing which is forgotten is that C.M.H.C. also acts as a research agency in fields associated with housing, and it assists provinces and municipalities in many aspects of urban growth.
However, it seems to me that somewhere along the line something has been omitted. The government's aim through these successive housing acts has surely been to stimulate and supplement the market for housing, to increase the flow of mortgage money, and to encourage lenders to make loans on more favourable terms to prospective home owners. These have been the purposes of the acts, Mr. Speaker, but it seems that the government has forgotten them.
Looking at all of the suggestions which have been made to date, several facts have emerged quite clearly. First of all, nobody appears to have an absolute answer to the problem. It is surely self-evident, as I said

October 2, 1967
Discussion on Housing before, that the time has come to do away with stop-gap measures, to put an end to finger-in-the-dike policies. It is obvious that the time has now come to make a complete reappraisal of the situation. I am not talking of next month or at the end of the next quarter when the interest rate is reviewed; now is the time to set up a joint committee of the kind I have suggested with all the power and means to look into and report on every facet of the housing crisis in this country. Perhaps at the same time the committee can look into the real cause of the monetary crisis which has been brought on by the policies of the government opposite.
In this regard, Mr. Speaker, I have never attempted to lay the blame for the present situation totally at the feet of the Minister of Labour (Mr. Nicholson). However, I am sure he must share some of the blame along with the other members of the government of which he is part.


William Heward Grafftey: He has lost the fight.


Lewis Mackenzie Brand: That is true. The minister is surely the prisoner of the economic policies of the government. I even noticed the manner in which the Minister of Finance (Mr. Sharp) talked, as though the policies and decisions that are going to be made were his, not those of the cabinet or government.
I am well aware that the measures proposed by the Minister of Labour are probably all he can manage in the present circumstances within the framework of the economic chains that bind him. But I am also aware, Mr. Speaker, that this government has failed miserably to take adequate steps to head off the economic crisis that has precipitated this debate in the house.
It is a funny thing, Mr. Speaker, but even as the Minister of Labour was making his announcement about the increased interest rates the other night, thus increasing housing costs for every Canadian, the Minister of Finance was making another speech in Rio de Janeiro to the International Monetary Fund about the decision of the government to increase Canadian foreign aid.
The Minister of Finance made a rather revealing statement, Mr. Speaker. He said:
This decision has only recently been reaffirmed despite the efforts which we shall be making by budgetary policies and otherwise to limit the upward pressures on costs and prices to which I have already referred.
I might say I have a copy of his speech before me; indeed, the minister referred to it earlier.
Just imagine, Mr. Speaker, one minister sitting in the House of Commons suggesting measures to increase costs for the average Canadian, while another minister a few thousand miles away is making a pious speech to other ministers of finance, suggesting that we in Canada are going to do everything we can to keep down prices. These two ministers did not even have the decency to make these statements on different days.
As reported at page 3 of his speech, the Minister of Finance said:
Canada has had its share of difficulties in finding the right combination of policies to achieve our various goals.
Then a little later on he said:
But It is clear that we have been more successful in maintaining economic growth than we have been in achieving stability of costs and prices. It is our purpose, however, to combine continued growth with price stability-indeed I doubt whether in the long run the one can be achieved without the other-and we intend to make use of every means available to us to restore the balance.
That sort of thing does make one wonder, Mr. Speaker.
As I have said, Mr. Speaker, surely the time has come for a reappraisal of our national economic needs. For example, perhaps it is time to take another look at breaking with the fixed exchange rate system and supporting instead a floating rate. That has been suggested. Perhaps we, as a country, have been tied too long to the federal reserve system of the United States and this is the cause of our trouble. Certainly, some economists say it is.
I should like to see the government set up some sort of inquiry. I have suggested a joint committee of the Senate and House of Commons. After all, if such a committee were able to do the kind of job done by the Senate committee on aging, their report would be very worth while indeed. Let the committee talk to the most knowledgeable men in the country. This is the least we can do for the poor taxpayer no longer able to afford to buy his own home and with no sign of any tax relief on the horizon.
You no doubt know the difference, Mr. Speaker, between the home owner in the United States and the home owner in Canada. In the United States the home owner can deduct interest and real estate taxes paid on his home from income tax. This encourages the person who rents to buy a home of his own since a saving is possible by way of tax deduction for his monthly interest payment,

October 2, 1967

But no such incentive is given Canadian taxpayers. In Canada, it is cheaper to rent than to buy, and that is certainly true.
If the truth were known, Mr. Speaker, I wonder how many members of the house have already received letters from their constituents in which they say, in effect, that they were going to buy a home but cannot now afford one. I would be very surprised if there was one member in this house who has not received one such letter. Most of us have received many. The impact of this increase is catastrophic, as I said before. I suggest the minister ask some of the people who work in the House of Commons what they think and how this will affect their desire to become homeowners; I think he will get quite a surprise.
[DOT] (9:40 p.m.)
I ask this government to stop the finger-in-the-dike principle. Let it set up a committee to look at this question in depth and come up with real solutions. Let us put an end to having a crisis every few months. We do not want, as the Prime Minister said, a crisis so that we can deal with the situation more effectively. There is no need for this country to have a crisis economy. The time has come for common sense. I plead with the government to come to its senses and to come to the aid of the average Canadian who is in deep trouble now, financial and otherwise, as a result of the policies which the government has engendered.


John B. Stewart: Mr. Speaker, the debate to this point at least has made one thing clear, namely, that the problem of scarce housing is neither new nor confined to Canada. The quotation of the remarks of Mr. T. L. Church by the hon. member for Saskatoon (Mr. Brand) shows that this subject has busied the Parliament of Canada over many decades. But perhaps the highly publicized awareness of the importance of the problem is new. A provincial election is taking place in Ontario.
I do not think that the peculiar circumstances which have brought about this awareness should cause us to underestimate the genuine problem that exists in the field of housing.
An attempt has been made to suggest that the fourth annual review of the Economic Council of Canada berates the government for allowing a housing crisis to develop. Some of those making this attempt evidently have not read the review. This is quite evident in
Discussion on Housing the exchanges that took place in the committee of supply here, last Thursday, and more particularly, in those exchanges that took place at pages 2586 and 2587 of Hansard.
The hon. member for Esquimalt-Saanich (Mr. Chatterton) in moving his motion, quoted part of the most relevant paragraph in the review. Since we are referring again and again to that paragraph I think it would be well to read it in its entirety. It begins at page 133, and reads as follows:
We estimate that by the end of the 1960's housing starts and completions in Canada will need to rise to annual levels of at least 200,000 units to fully meet the nation's requirements at that time. The increase in the number of new households in 1970 is estimated to account for some 140,000 of these requirements, based on the projections discussed in Chapter 3. In addition, we estimate that replacement demand will have risen to 50,000 units per year by 1970; this is the amount of new building necessary simply to keep the total housing stock intact after allowing for various removals of units from use due to the elimination of substandard housing, population shifts, and changing economic land uses from residential into commercial, industrial, traffic and other public uses. Finally, it is estimated that by 1970 total stock of vacant dwellings available on the housing market would have to increase by roughly 10,000 units per year to provide for a minimum stock of unoccupied housing required to accommodate the mobility of the population and to facilitate a smooth adjustment between the demand and supply for housing. In 1966, with a decline in housing construction under conditions of monetary restraint and reduced mortgage financing, available vacancies appear to have fallen to inappropriately low levels, especially in some of the larger urban areas such as Toronto.
That is the famous paragraph on which so much of our discussion has centered. Let us look at the situation about which the amendment of the hon. member for Esquimalt-Saanich complains.
The hon. member for Vancouver-Kingsway (Mrs. Maclnnis), when she spoke earlier today, blurred the distinction between the field of public housing and certain other programs which are similar on the one hand and the field of approved-lender mortgages on the other. We must keep these distinctions clearly in mind because it is to the latter field, not the former, that the 8| per cent interest ceiling applies.
Under the amendments made by Parliament in 1964, Central Mortgage and Housing Corporation was authorized to make 90 per cent loans to provinces, municipalities or their agencies for public housing accommodation for low income families or individuals. Provision in those amendments was made for a program of land acquisition and servicing

October 2, 1967
Discussion on Housing for public housing purposes, and the corporation was permitted to make loans of up to 90 per cent for this purpose.
To take advantage of these provisions, the provinces had to set up housing corporations. Eight provinces have done this. I cannot help but think that the hon. member for Van-couver-Kingsway should have directed the brunt of her argument more directly to those at whom it should properly have been directed. Frankly, and of her own volition, she ought to have admitted that her own province, British Columbia, had not set up a housing corporation and that some of the difficulties of which she complained could be attributed to this fact. In other words, Mr. Speaker, I think she ought to have been as rough with the Social Credit people as she was with the Liberals.
The corporations in the eight provinces were set up in the period between May 8, 1964 and July 1, 1967. Only one was set up in 1964, the one in Ontario. In 1966 three were set up. On April 6, 1966, the province of Nova Scotia set up the Nova Scotia housing commission. On April 7, 1966, the Prince Edward Island housing authority was established. In 1966 also the Newfoundland and Labrador housing corporation was set up.
Then, in 1967, four other provincial housing corporations came into being. I mention these figures to suggest, sir, that it is a little early to say that the provisions in the amendments of 1964 are not working. Perhaps it is not fair to single Ontario out because, undoubtedly, the housing pressures in Ontario are especially great; yet it can be noted that in Ontario at least 12,000 public housing units have been placed. The total for all Canada has been something like 16,000 units. In other words, approximately three quarters of all the public housing units to date are in the one province that set up its housing corporation in 1964.
The next province, in terms of numbers of public housing units, is Newfoundland and Labrador. This is followed by Manitoba. In Nova Scotia, up to the end of August, 1967, 321 public housing units had been placed.
[DOT] (9:50 p.m.)
I say, sir, that the dates on which the corporations were set up and the number of units achieved are significant because they suggest that it is really too early to decide whether the amendments made in 1964 have been successful or have been failures. What is notable is that already in 1967 about $150 million has been provided for public housing projects throughout Canada by the C.M.H.C.

In addition, $52 million has been allocated for student housing; an additional $21 million has been provided for construction of housing for senior citizens; the sum of $55 million has gone for urban renewal; and 29 million for municipal sewage facilities. The total is over 300 million in this year alone toward the areas of greatest social need. Over $300 million has gone for those special kinds of needs in the housing field toward whose cost the taxpayer contributes openly.
This evening we heard the Minister of Finance (Mr. Sharp) say it was to this field of public housing and to related areas of housing requirements that the government was proposing to give special priority.
The ceiling of 8J per cent applies in the field of what we call approved lender mortgages. What has been happening in this field is really very plain. The Minister of Labour (Mr. Nicholson) when he made his announcement the other day, and the Minister of Finance tonight, have not attempted to conceal the truth. Those with money to lend have not found the rate of interest attainable sufficiently attractive. They have invested their money elsewhere. Consequently the number of houses built with conventional mortgages or with approved lender mortgages has not been as high as one might have hoped.
Confronted with this situation the government had two options. It could make it possible for approved lenders to lend money at rates more attractive to them. It could have raised the ceiling on the interest rate somewhat. Or, at the other extreme, the government could go out and borrow money itself to permit more and more C.M.H.C. loans at a rate below the open market interest rate. This presumably would have meant that the government itself would have had to pay more for the money it was borrowing. An alternative would have been to increase taxes. But no matter which way the government went about raising this additional money the basic result would have been the same. The taxpayer would be subsidizing the homebuilder to a higher extent.
Frankly, sir, that in itself does not jar me. All kinds of cross-subsidizations take place in our society; and cross-subsidization becomes more and more complex as our society becomes more and more complex. The point that must not be forgotten is that if this second option had been taken the taxpayer would be subsidizing a homebuilder to a higher extent.
I found that the hon. member for Saskatoon was confusing me a little on this point when he came out so strongly on the one
October 2, 1967	COMMONS
hand against subsidies and, on the other hand, insisted that unless the government reverses its policy the private homeowner will soon be driven out of existence.
An effort has been made to suggest that the high cost of housing is due to the expenditures of the government in other fields. This,
I think, shows that the opposition is underrating the genuine seriousness of the problem. As each topic comes up, whether it is the cost of food, the cost of education or the cost of defence, members of the opposition tend to resort to this narrow argument. They tend to insist that if the government would make savings in some other field it would not need to expend as much money on borrowing, and would not need to raise as much in the way of taxes. In other words, by tackling the various phases of government expenditure separately the opposition implies that the budget of the country is made up of watertight compartments. I do not think that is right at all.
We must think of the economy as something like a balloon. If you push it here it is going to bulge there. If you put more money into, let us say, old age pensions, it is going to have its effects on other parts of the economy. That is why the comments which the Minister of Finance made earlier this evening were so relevant, and I was so pleased to note that the members of the opposition were listening so attentively.


Jay Waldo Monteith: To his excuses.


John B. Stewart: Well, Mr. Speaker, I think what hon. gentlemen opposite are saying is that the Minister of Finance has listened to them too much. One would hope that the advice they are going to give, now that they have adopted their vaunted new look, will be different, particularly if they are going to complain about the results.


Mr. Macdonald (Rosedale):: The same old bunch.


John B. Stewart: Mr. Speaker, let us hope it is not the same old bunch.
The government had to take into account the amount of money that has been put into the property mortgage field over the years by C.M.H.C.


Donald MacInnis: On a
point of order, Mr. Speaker, one which I raise quite often with respect to hon. members opposite, there is a rule that no member is allowed to read continually a prepared text,
DEBATES	2741
Proceedings on Adjournment Motion and I think that the rule should be applied to the hon. member for Antigonish-Guysborough (Mr. Stewart). Not one word of this is his. He is reading something prepared by somebody else.


John B. Stewart: Mr. Speaker, the hon. member has made a statement which is quite inaccurate. However, I do not intend to ask that this statement be withdrawn. I think members of the house are quite prepared to appreciate his comment with all the seriousness bestowed upon it by its source.


Some hon. Members:: Hear, hear.


John B. Stewart: Mr Speaker, I should like to read certain figures to you concerning the money put into the housing field by C.M.H.C. over a certain period of years. In 1962 the input was $245 million; in 1963, $376 million; in 1964, $451 million; in 1965, $545 million; in 1966, $664 million; and the budgetary estimate for 1967 is $962,600,000. May I call it ten o'clock, Mr. Speaker?


[Stage Direction]
A motion to adjourn the house under provisional standing order 39A deemed to have been moved.
Stanley Howard Knowles: Mr. Speaker, on Tuesday, September 26, as recorded in Hansard at page 2484, I addressed this question to the Minister of National Health and Welfare (Mr. Mac-Eachen):
In view of increases that have taken place In the cost of living, and in view of the amendment respecting this matter which was written into the Old Age Security Act in 1965, has it been determined that there will be an increase in old age pensions this coming January and, if so, by what amount?
[DOT] (10:00 p.m.)
When I asked the question, Mr. Speaker thought it was not quite appropriate for orders of the day. Accordingly I posted it for one of these late show periods. In asking this question, I wish it to be clear that I am quite aware of the provision in our law under which the old age security pension, also the supplement that is attached to it in some cases, and the Canada Pension Plan are to be escalated. The provision is that each January there can be a percentage increase in these pensions if the consumer price index has gone up by a certain amount for the previous
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Proceedings on Adjournment Motion year. There is a formula in the statute which indicates how this is to be calculated and so on. The statute provides that a consumer price increase of less than one per cent is to be ignored and that a consumer price increase of more than two per cent does not result in an increase in the pension of more than that figure, namely two per cent.
The cost of living index, or the consumer price index as it is officially known, has been rising quite a bit lately. It follows, I have no doubt, that there will be a statutory increase in the old age security pension this coming January. The reason I asked the question was that I was anxious to know whether the necessary regulations had been passed and whether the necessary determination had been made so that an announcement could be made which would let our people know that the increase which is provided for is actually going to take place.
It was also my purpose in asking my question to get a clear statement as to what the amount of the increase will be. I realize that the legislation has in it a ceiling. It says that the increase cannot be more than two per cent in any one year. I should like, however, to express the hope that even after the government has made the announcement, which I trust will now be made tonight, it will face up to the fact that under the present circumstances an increase of only two per cent is hardly fair to our senior citizens
I do not wish to burden this house at this time of night with a great list of figures, but I have one or two which I should like to give. The consumer price index for October, 1963, stood at 133.6. The reason I give the index for that month in that year is because it was in October, 1963, that the old age security pension first became $75 a month. The consumer price index for August, 1967, which is the latest figure I have been able to get so far, stood at 150.9. In other words, from the date the old age security pension was set at $75 a month to the present time there has been an increase in the consumer price index of 17.3 percentage points. I do not wish to confuse anyone by seeming to imply that 17-3 percentage points is 17.3 per cent. So, let me make it clear that when you start out with 133.6 and go up 17.3 percentage points you have made an actual increase of 12.9 or almost 13 per cent.
In the face of this 13 per cent increase in the cost of living since the old age security pension was fixed at $75 a month I plead with the government not to be satisfied with


an increase in the old age security pension in January of only two per cent. I suggest that to use the argument that this is all the statute provides is not good enough. I am sure parliament would readily accede to an amendment to the statute to allow for an increase comparable to the increase in the cost of living itself. A 2 per cent increase in the $75 pension will provide an increase of only $1.50 per month. A 13 per cent increase, which would be comparable to the increase that has taken place in the consumer price index, would amount to $10.75 per month. I am aware of the fact that this increase will apply not only to the basic $75 pension but also to the $30 per month supplement in the case of those who meet the income test and are receiving it. In other words, if a person is receiving the $30 supplement he will get an increase of 60 cents as well as the $1.50, making a total increase of $2.10 per month. I am also aware of the fact that those drawing Canada Pension Plan benefits will get the same percentage increase. However, I plead with the government, in the light of the tremendous increases that have taken place in the consumer price index, to realize that it is not good enough to talk now about an increase of only 2 per cent or $1.50 per month in pensions. I hope the government will now make the appropriate announcement as to what is going to be done, and I hope it will also indicate that a way will be found to do better than merely increasing the pension by 2 per cent. Obviously, this is not enough.


Allan Joseph MacEachen: Mr. Speaker, I wish to make two points in reply to the question raised by the hon. member for Winnipeg North Centre (Mr. Knowles). First, I should like to draw to the attention of the house that the guaranteed income supplement, which provided for many hundreds of thousands of pensioners a $30 per month increase, must be taken into consideration when one attempts to relate this to the 13 per cent increase that has taken place in the cost of living since the $75 pension was established. In the meantime there have been distinct improvements. Last session we made the largest percentage increase in the old age pension that has ever been made. Certainly, that is a very relevant point.
The second point I want to make has reference to the hon. member's request for an announcement in respect of the calculations that will be in effect. I should like to make such an announcement but the available data upon which we depend for these calculations
October 2, 1967	COMMONS
is not yet available in final form. I will have to defer making such an announcement a little longer, but I will make it at the earliest possible date.


Ralph Bronson Cowan: Mr. Speaker, this afternoon I asked the Minister of National Health and Welfare (Mr. Mac-Eachen) to advise the house whether or not the monthly payments made to nine provinces by the Canadian government under the Hospital Insurance and Diagnostic Services Act are up to date as of September, 1967, and whether the payments to the province of Quebec under the Interim Fiscal Arrangements Act are also up to date as of September, 1967. This question was preliminary to a supplementary question I intended to ask.
I do not have the slightest doubt but that the payments that should be made by the Canadian government to individual provinces on behalf of hospital services are being made in the proper amounts and on time. That is only proper and I am sure that the Minister of National Health and Welfare would see to it that this duty of his department was carried out religiously and accurately.
Over the week end I went to the city of Montreal to visit a married daughter who lives there, a married brother who lives in Beaurepaire, a cousin on the staff of the Montreal Protestant School Board and a niece who lives in Montreal. During that time I visited a large number of friends. During this visitation from Saturday to Sunday I was absolutely scandalized to learn that there are hospitals in the city of Montreal which have not received a single cent from the Quebec government department of health; in the case of three hospitals for over six months and in the case of one hospital for more than a year.
[DOT] (10:10 p.m.)
The fact that the department of health of the provincial government of Quebec is not making the normal remittances to cover the operating expenses of these Quebec hospitals is putting the hospitals in dire straits financially. It is not incumbent on me to investigate all the hospitals and I do not have the time to do so. But in this case I had friends on the boards of governors of four of the large hospitals in Montreal and I confirmed the facts that were produced to me. These facts were attested also by members of the medical staffs.
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Surely, if the Dominion of Canada is making payments to the Quebec department of health under the Interim Financial Arrangements Act, since Quebec opted out of the Hospital Insurance and Diagnostic Services Act, the taxpayers of Canada are entitled to an explanation as to why the hospitals of the province of Quebec are in dire financial straits at the present time because they are not receiving any payments whatsoever from the provincial government of Quebec against their operating accounts.
I have made inquiries in the proper places and I know that no hospital in Canada outside the province of Quebec has any reason to complain about the speed with which their accounts are covered by the provincial departments of health. This includes the nine provinces outside of Quebec. Why is it that the province of Quebec, where they claim to be so much smarter than the officials of the Department of National Health and Welfare and its minister in Ottawa, where they claim that they can run their own hospital scheme much better than anybody else, is the only province in which hospitals complain that they have had no remittances from the department of health of the province to cover their operating expenses? I believe that the taxpayers of Canada are entitled to an explanation on this score.
We are a very heavily taxed country. The taxpayers of this country realize some of their taxes are being remitted to a provincial government which at no time makes any effort to explain the manner in which those funds are spent in the province, but stands up and makes the statement that the provincial government will establish the priorities under which expenditures shall be made. When this money is provided by the federal government in Ottawa, I think that the taxpayers of Canada are entitled to an explanation as to what is happening to the money the federal government takes from them and turns over to the provinces.
The other nine provinces do not hesitate to explain the manner of spending the federal funds that are entrusted to them under these shared-costs programs for hospital service. Why therefore, can we not get an explanation from the province of Quebec as to why the moneys sent to Quebec city from Ottawa are not used, apparently, for this purpose? I know for a fact that these moneys are remitted every month. They are remitted properly and on time.
Why cannot these federal funds reach the individual hospitals, even if the province of
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Proceedings on Adjournment Motion Quebec decides it is not going to send the proper grants to those hospitals to cover their operating accounts? This policy of opting out of shared-cost programs is endorsed by some people who are not very familiar, I am certain, with human nature or cost accounting, because when a province opts out it then makes the claim that it does not have to explain its expenditures. It does not have to tell the government, in this case the dominion government, how it is spending the money which the government remits to it on the basis that it will be used for hospital purposes.
I know that no moneys are being advanced by the province to these four hospitals. One hospital in Montreal has not received a remittance from the Quebec government for over 12 months and the board of directors are at their wits end. A hospital in Montreal that has hundreds and hundreds of beds only last week had an order with the printers for letterheads, statements and order forms simply to replenish its supplies. The printer asked the hospital for cash on the barrel-head and also asked it to send a truck to pick up the supplies. Suppliers are simply refusing to forward any materials to these hospitals because of the delay in money being remitted by Quebec city.
Is this money being squandered on Expo? We are always hearing tremendous praise of the province of Quebec because of its great contribution which has made Expo such a success. If they have made such a success of Expo by withholding the proper funds from the hospitals which are entitled to the money and are using moneys that are sent to Quebec city by the federal government for hospital purposes, then this is a crying disgrace and I believe the federal government should give an explanation to the taxpayers of Canada as to why the hospitals in the province of Quebec are not receiving the money that the federal government remits to Quebec. Even if the federal government cannot speak for the province of Quebec, surely it can ask for an accounting of its remittances. There are many Canadians in the nine provinces outside of Quebec who take ill in Quebec and who, because of the portability of the hospital schemes in the ten provinces, are treated in Quebec hospitals. I believe that considering the fact that federal funds are being remitted to Quebec for hospital purposes and considering the number of Canadians from the other nine provinces who are treated in Quebec hospitals as a result of accidents or illness which they suffer when travelling through

DEBATES	October 2, 1967
that province, the federal government is entitled to an explanation as to what is happening to the federal tax moneys being remitted to Quebec for hospital purposes once every month, on time and in full. We know now that the hospitals in Quebec are not receiving grants regularly from the provincial government in Quebec city. I could name four hospitals in Montreal, three of them large, which have not received a cent in six months from the provincial department of health, while another large hospital has not received any remittance from the Quebec department of health in more than 12 months.
This cannot continue and I believe the Canadian government should ask for an accounting of what is happening to the federal hospital funds being remitted to Quebec city under that heading.


Mrs. Margaret Rideout (Parliamentary Secretary to Minister of National Health and Welfare):: All provinces, except Quebec, submit monthly claims for advances which are paid within a few days of receipt; Quebec being the only province to exercise its right under the Established Programs (Interim Arrangements) Act, submits estimates of cost which, after examination by the Minister of National Health and Welfare, (Mr. Mac-Eachen) form the basis for calculation by the Minister of Finance for tax equalization payments.
As of September 30, 1967, all advance claims received had been paid; three monthly claims had not yet been received at that date (Newfoundland, New Brunswick and Northwest Territories). My colleague, the Minister of Finance, (Mr. Sharp) informs me that the monthly equalization payments for Quebec are up to date.


David Vaughan Pugh: Mr. Speaker, over the last few months, starting in June, I have asked a series of questions on the apparent shortage of new centennial coinage throughout Canada. My reason for asking these questions was that one does not see this coinage in the tills, at the banks or anywhere in Canada, except for the odd coin. I think the idea of 1967 centennial coinage was an excellent one but I do not think that its distribution has been carried out very well. My question related primarily to the west because in the beginning there was some centennial coinage in eastern Canada but very little in western Canada despite inquiries by
October 2, 1967

banks, commercial institutions and ordinary people as well as coin collectors. It was impossible to get hold of these coins.
When I first made my inquiries the minister replied that regional distribution was not good. I brought it up several more times as I was interested more specifically in the total amount of centennial coinage turned out by the mint as against the total amount of old coinage.
The minister's answer to that question was that this year commercial shipments had been in excess of new centennial coinage by 42 per cent over regular coinage of 1966. If that is so, very little of it ever found its way into people's hands. I am referring to actual shipments. I have asked many people in banks and various stores across the country whether they had seen these new coins, and many of them had not even had a peek at a penny.
[DOT] (10:20 p.m.)
There is no question in my mind that there has been a serious shortage. I do not care what the minister's figures are. I tried to follow up my question about the 42 per cent increase this year with a supplementary and to ask whether the centennial coinage was proportionate to the ordinary minted new coinage, but I received no answer. Perhaps I will get one tonight.
Then to cap it all, Mr. Speaker, today 1 asked the minister whether the mint had cut off the supply of coinage. I asked the same question in not just one or two but a number of banks, and I was told: "We have not seen any new coins for the last three or four months". This has been the answer I received in many branch banks, and one of the main branches in Ottawa even went further than that. They have not seen any despite the fact they have probably asked for them. I take it that the normal currency outlet for new coinage is the banking institutions.
As I say, Mr. Speaker, today I asked the minister whether production of this centennial coinage had been cut off at the mint, and his answer was no, but in fact the intention was to supply currency needs with 1967 coinage and not to carry the design forward into 1968.
The sort of question I am asked in correspondence and other media is: Where is this coinage? We have all heard lots of stories about large shipments going here, there and everywhere. If you apply for new coinage in
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Proceedings on Adjournment Motion sets, you are told you can get new coinage in sets from the mint. But this is only soft pedalling the question. I am talking about 1967 coinage for the normal use of the people of Canada.
I do not know whether there is any answer or whether the government intends to push the mint and to tell them to grind it out. Or perhaps they will just stick to the coin sets. But the fact of the matter is that very few of these new 1967 centennial coins have been issued and are in circulation in Canada.


Hon. Jean Chretien (Minister without Portfolio):: Mr. Speaker, in reply to the question put by my hon. friend, we did make an inquiry of the mint and I am glad to reply that the mint has been manufacturing and will continue to manufacture coins bearing the centennial wild life designs until December 31, 1967. These coins will be distributed across the nation through the agencies of the Bank of Canada.
At the present time the mint has three full shifts employed in the coining and medal division. It is turning out approximately 12 million pieces per week of the various denominations. This is supposed to be sufficient to meet the requirements of the public.
They assure me that the procedure is to distribute the coins across the country in the normal manner. I do not know whether people such as collectors intervene in this process, but they do manufacture 12 million pieces per week and should be able to satisfy the demand. They cannot do more than this. As I say, they are working three shifts a day, so the mint is doing its best.
The matter raised by the hon. member tonight will be studied, and I hope that all those who want these new coins will be able to get them before the end of the year.


David Vaughan Pugh: Might I ask the minister a question? Could he say how long this production of three shifts has been going on?


Joseph Jacques Jean Chrétien: For this design they would continue to the last day of the year, December 31.


David Vaughan Pugh: When did it start?


Joseph Jacques Jean Chrétien: I cannot tell you, but they probably started at the beginning of the year.
Motion agreed to and the house adjourned at 10.27 p.m.
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Tuesday, October 3, 1967