1982-02-08

ROUTINE PROCEEDINGS


Mr. Joe Reid (St. Catharines):: Madam Speaker, I rise under the provisions of Standing Order 43. Twenty-five hundred Canadians were exposed to atomic radiation while employed in federal government projects, such as the conducting of nuclear weapons tests in Nevada and the accident cleanup at Chalk River in 1958. The cancer rate in this group has been determined at six times the national average.
I move, seconded by the hon. member for Haldimand-Nor-folk (Mr. Bradley):
That this House instruct the Minister of National Health and Welfare to authorize immediately an impartial, in-depth study, to determine if this exceptionally high rate of cancer is attributable to radiation exposure, and that, since many of the victims are veterans, the results of that study, including the question of compensation, be referred to the Standing Committee on Veterans Affairs for report and recommendation.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.

[ Translation]


THE ECONOMY
Mr. David Kilgour (Edmonton-Strathcona):: Madam Speaker, pursuant to the provisions of Standing Order 43, I seek the unanimous consent of the House to extend our congratulations to the two ministers and the eight members of east central Montreal who had the courage to write to their leader and urge him to admit that the economic situation, which they created themselves, is disastrous, and that the time has come to cope with the alarming problem of unemployment. I therefore move, seconded by the hon. member for Joliette (Mr. La Salle):
That if those ten Liberal members fail to convince the Prime Minister (Mr. Trudeau) that he ought to establish immediately a genuine program to stimulate housing construction, and a genuine job-creation program for youths under age 25 rather than a mere snow job on unemployment, I therefore suggest that if those ministers and members are not heard they should resign and thus prove that they are more concerned over the interests of their voters than those of their party.


Madam Speaker:: The House has heard the hon. member's motion. Pursuant to the provisions of Standing Order 43, such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


POLITICAL PARTIES
Mr. John McDermid (Brampton-Georgetown):: Madam Speaker, in a blatant attempt to portray the Progressive Conservative Party as a party of white Anglo-Saxons, the member from Broadview-Greenwood (Mr. Rae), on Friday last made the following statement:
"You won't see a black or hear the French language... or the Italian language in Toryland".
Whereas Tories such as the Berniers, Pianes, Yaremkos, La Salles, Baetz, Alexanders, Grossmans, Brunelles, Yakabuskis, Colbacchins, Shymkos, Leluks, Mazankowskis, Villeneuves, Paproskis, just a few proud members of the PC party, whose support is a primary cause of the demise of the New Democratic Party in Ontario, take great exception to that statement, 1 move, seconded by the hon. member for Kingston and the Islands (Miss MacDonald):
That this House condemns the newly anointed Ontario leader of the NDP for his obvious racist remarks against members and supporters of the Progressive Conservative Party.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.

February 8, 1982
[ Translation]


THE ECONOMY
Mr. Lome Nystrom (Yorkton-Melville):: Madam Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to move a motion concerning an urgent and important matter. Over the weekend, ten Liberal members of the Montreal area urged the federal government to drop its restrictive fiscal policies with a view to adopting measures aimed at fighting unemployment. I therefore move, seconded by the hon. member for Brant (Mr. Blackburn):
That the House commend those ten Liberal members for their courage and request that the Minister of Finance (Mr. MacEachen), the new R.B. Bennett, table a new budget designed to reduce unemployment in Canada.


Madam Speaker:: Pursuant to the provisions of Standing Order 43, the presentation of such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


POLITICAL PARTIES
Mr. D. M. Collenette (York East):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity, all the more urgent and pressing in view of the motion under Standing Order 43 that was introduced here this afternoon. Last week the hon. member from Winnipeg-Assiniboine (Mr. McKenzie) was quoted in Contrast, a Toronto black community publication, that he condones many of the racial policies of the government of South Africa. It seems the hon. member came to this incredible conclusion following a free three-and-a-half week vacation in South Africa, paid for by the government of South Africa.
Considering that the Right Hon. Leader of the Opposition (Mr. Clark) last week dissociated himself and his caucus from the remarks of the member, I move, seconded by the hon. member for York South (Mrs. Appolloni):
That in view of the lack of support of his caucus for his repugnant stand, the hon. member from Winnipeg-Assiniboine retract his statements; failing this, that this House urge the caucus of the Progressive Conservative Party to expel the member from their ranks, forthwith.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


RAILWAYS
Mr. S. J. Korchinski (Mackenzie):: Madam Speaker, in spite of the recent promise to develop an economic strategy for the 1980s, today we had an announcement by the Minister of Transport (Mr. Pepin) on the Crow rate, which merely transfers the costs from the government to the wheat producer. Therefore I move:
That this House urge the government to assume its responsibility for future inflation, which it itself induces, on the movement of grain, which cost had been guaranteed under the Crow rate up until now.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: No.


THE ECONOMY
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, whereas the zero growth policy espoused by both the Liberal and New Democratic parties has proved to be such a miserable failure, I move, seconded by the hon. member for Brampton-Georgetown (Mr. McDermid):
That Canada now return to the progressive policies of the Clark government which were designed to increase employment, reduce interest rates, restore the stability of the Canadian dollar and stop the drain of money and jobs out of the country.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: No.


CONSULTATION URGED PRIOR TO INTRODUCTION OF LEGISLATION-MOTION UNDER S.O. 43
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker,
I rise under the provisions of Standing Order 43. During these times of depression level investor confidence, increasing business bankruptcies and government indecision, the Minister of National Revenue (Mr. Rompkey) recently indicated that he may again alter the terms of the small business bond. It was altered first on November 12, changed again on December 18, clarified in the latter part of January, and now is likely to be further altered. Canadians will not invest if the government continues to change the investment rules. Therefore, in an effort to establish stability and investor confidence, I move, seconded by the hon. member for The Battlefords-Meadow Lake (Mr. Anguish):
That this House urge the government to consult with parties involved in proposed legislation prior to its introduction, so that the government can avoid the embarrassment of continually having to change the rules of the game, which fuels the present climate of government indecision, instability and incompetence.
February 8, 1982


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, in light of the announced intention of the United States and the United Kingdom, two of Canada's partners in NATO, to apply sanctions against the U.S.S.R. for the role that country is playing in strengthening the hand of the military junta in Poland, I move, seconded by the hon. member for Edmonton North (Mr. Paproski):
That this House instructs the Prime Minister to repudiate forthwith the Canada-U.S.S.R. Friendship Protocol which he and Mr. Kosygin signed in Moscow in May, 1971, under the terms of which the two countries indicated their determination "to go on developing political and economic co-operation" and to expand "ties and exchanges in the fields of economy, trade, science, technology, culture and northern development".


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CAPITAL PUNISHMENT
Mr. Gordon Taylor (Bow River):: Madam Speaker, the Liberal Party is full of bleeding hearts, and lawlessness is running rampant throughout Canada. We pay Olson, who murdered 11 innocent young people, $90,000 and make a newspaper hero of him. A young boy was murdered in Ontario, and two young women were brutally murdered in the High River-Okotoks area, their bodies soaked in gasoline and burnt beyond recognition. A majority of Canadians want capital punishment reinstated, but the Liberals say "No". How many more have to be murdered before the government wakes up? Therefore I move, seconded by the hon. member for Peterborough (Mr. Domm):
That the House demands that the government bring in a bill to reinstate capital punishment at once, instituting punishment commensurate with the crime.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


POLITICAL PARTIES
Mr. Jim Fulton (Skeena):: Madam Speaker, I rise under the provisions of Standing Order 43. In view of the fact that both the Liberal and Conservative parties are now on record in support of continued high interest rates, and that Canadian workers, consumers and small businesses are suffering serious harm at the hands of the "Clark-Trudeau" coalition-


Some hon. Members:: Oh, oh!


James Ross Fulton: They are getting jumpy; they do not like the facts. 1 move, seconded by the hon. member for Nunatsiaq (Mr. Ittinuar):
That the leader of the Tory party explain its dismal voting record, in voting 20 times with the Liberals since October, while the NDP has voted 22 times with the Tories and only 13 times with the government.
Perhaps the Tories wish to purge "Joe Who" to make room for "Pierre" as the leader of the party in Canada with a room temperature IQ.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


METRIC CONVERSION
Mr. Bill Domm (Peterborough):: Madam Speaker, the Metric Commission has finally seen fit to set up $300,000 in Supplementary Estimates (C) of the Department of Industry, Trade and Commerce to reimburse the retail grocers of Peterborough for their total costs of converting back to imperial measurement in weigh scales from the metric weigh scale measurement. Therefore I move, seconded by the hon. member for Haldimand-Norfolk (Mr. Bradley):
That this government also set up sufficient funds to assist retail grocers from British Columbia to Newfoundland in their conversion back to imperial measurement, if they should experience the same difficulties with metric as grocers did in Peterborough.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.

February 8, 1982
Oral Questions



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is directed to the Prime Minister who will know that two of his cabinet colleagues, the Minister of National Health and Welfare and the Minister of State from Quebec, have broken cabinet solidarity and have publicly joined the demand for action to start fighting unemployment now and for changes in the government's budget. Is the Prime Minister going to heed their advice or is he going to ask for their resignations?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, the Leader of the Opposition has a curious definition of breaking cabinet solidarity. The ministers in question, and I believe a few backbenchers, signed a letter just taking up the Minister of Finance on a proposal that he had made in Toronto in suggesting that he consider certain remedial actions. If I can quote from the address of the Minister of Finance made in Toronto on January 25, he said this:
This is not to minimize the importance of the very considerable resources which the government is devoting to job creation within the existing fiscal framework. Fiscal restraint does not and will not prohibit the government from taking targeted and specific measures to improve growth, productivity, and investment.
That some members of our caucus should have decided to suggest what some of those targets and specific measures should be, does not seem to me, Madam Speaker, a breach of cabinet solidarity, or indeed, of caucus solidarity.


Mr. Crosbie:: Juvenility.


RESPONSIBILITY FOR BUDGETARY POLICY
Charles Joseph Clark: Madam Speaker, the Prime Minister referred to two ministers, one of them a very senior minister, both of whom are absent from the House today, and what he referred to disparagingly as just "a few backbenchers"-those few backbenchers number eight- which makes a total of ten at least who have taken issue with the government's policy and broken the support which governments usually find on budgetary matters.
The question which the Prime Minister has raised is whether or not members who have broken solidarity, and ministers who have broken it, are acting within the context of cabinet solidarity. The Prime Minister will know that there have been two statements on the budget made by senior ministers, one by the Minister of Finance in this House on Friday who said:
It would be tempting, but I think foolhardy, to undertake short-term palliatives or quick fixes which might give the appearance of action but which, down the road, would add further to the unemployment situation.
That is the view of the Minister of Finance.
The Minister of National Health and Welfare, the Minister of State, and at least eight colleagues-we do not know how many more are with them and against the minister in the Liberal caucus-said that they are convinced that measures to alleviate unemployment in the home construction industry and to alleviate the youth unemployment problem must be adopted right now, as such moves cannot wait for the results of a long-term economic policy. Those are two absolutely different views on the budget. May I ask the Prime Minister who speaks for the Government of Canada on budgetary matters?


Pierre Elliott Trudeau: Madam Speaker, I believe I dealt with the matter of cabinet solidarity. The Leader of the Opposition does not care to refer to the quotation I just gave of what the Minister of Finance said on January 25, followed up, as I say, by this request for specific action. I think the Leader of the Opposition is engaging in some somewhat byzantine attempts to find fissures in this caucus as a distraction to looking behind him and seeing his split caucus behind him.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


John Carnell Crosbie: That is a Mickey Mouse explanation.


Mr. Baker (Nepean-Carleton):: Look behind and around you, Allan.


STATEMENT MADE BY PARLIAMENTARY SECRETARY
Charles Joseph Clark: Madam Speaker, then let me ask the Prime Minister whether the Parliamentary Secretary to the Minister of Finance, that beleaguered gentleman from whom we hear more than he would like, because his minister does not have the courage to stand in the firing line himself, was speaking for the government when he said, in response to these specific proposals put forward by two cabinet ministers and eight other Liberal Members of Parliament, that the programs they were proposing would create worse problems in future. Is that a position of the Government of Canada? Was the Parliamentary Secretary to the Minister of Finance speaking for the government when he rejected categorically the proposal by two cabinet ministers and eight Liberal Members of Parliament?


John Carnell Crosbie: What about that, Pierre?


Pierre Elliott Trudeau: Madam Speaker, that is another example of the exiguousness in which the Leader of the Opposition is engaging, that is, a comparison of texts. He can continue this game.
I can assure him that the position of the Minister of Finance is supported in the very letter to which he refers, a letter which indicates the government is on the right macroeconomic
February 8, 1982

course, and which suggests certain specific actions of which the Minister of Finance spoke.
The parliamentary secretary is perfectly justified in suggesting there should be no departure from the macroeconomic stance and there should be no massive injection of public printed dollars into the economy at this time. I am happy to continue this examination of the text, Madam Speaker, but it is the reality on this side which is more important to me, the fact that this cabinet and caucus are very much united.


Walter David Baker: What is the reality?


Mr. Nielsen:: You would not recognize reality if you fell over it.


REQUESTS FOR CHANGES IN BUDGET
Charles Joseph Clark: Speaking of reality, 1 wonder if the Prime Minister could tell us how many-we know of ten-of his cabinet colleagues and caucus members not in cabinet have been in touch with him asking for changes in the budget. Could he give us a figure?


John Carnell Crosbie: That is macroeconomics for you.


Mr. Nowlan:: It is macaroni economics, not macroeconomics.


Pierre Elliott Trudeau: Madam Speaker, the Leader of the Opposition continues to insist that the letter asks for a change in the budget. Let me read from the third paragraph of that letter dated February 3.


Walter David Baker: Table it. It is an historic document.


Pierre Elliott Trudeau: The letter has been made public, Madam Speaker. The members themselves indicate that they are- Madam Speaker, the letter says:

As members for central and eastern Montreal, we realize that any real and durable but long-term improvement of the employment situation can only be achieved by controlling inflation.

That is exactly the position of the Minister of Finance and of this government, Madam Speaker. I would ask the Leader of the Opposition and his party to realize, once and for all, that if inflation is high the first thing we must do is bring it down.


John Carnell Crosbie: Bring down the government is the thing to do.


Pierre Elliott Trudeau: Well, the hon. member for St. John's West is now waxing nostalgic and talking about bringing down governments.


John Carnell Crosbie: Look where it got us.
Oral Questions


Pierre Elliott Trudeau: From his lofty perch in External Affairs I would hope he would reflect a little more on what he said about the people of Gabon last year-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: -and study the subject a little more.


EMPLOYMENT
Hon. Roch La Salle (Joliette):: Madam Speaker, I shall, if I may, continue reading the extract from the third paragraph read to us by the Right Hon. Prime Minister after he acknowledged that his policy depended on controlling inflation. The ten members, two of them ministers, also said:
However, we believe that it is possible, without overstimulating the economy, to create jobs now in certain critical sectors.
The sectors are specified in the letter. Also considering, Madam Speaker, that last week, the Right Hon. Prime Minister received proof that the ten premiers had completely lost faith in his basic philosophy regarding the economy, and that the province of Quebec proposed a program that would prevent and put a stop to the rash of factory shutdowns-a $200 million program to which Quebec is prepared to contribute $50 million-is the Right Hon. Prime Minister willing, in the circumstances and following representations made by his own members and ministers, to at least send one of these two ministers to discuss the program with Quebec, keeping in mind the best interests of Quebec as well?


Pierre Elliott Trudeau: Madam Speaker, every week the government has been announcing job-creation measures. Last week, the minister responsible for advanced technology was investing something like $90 million in the development of technology-based industries. Today, the Minister of Employment and Immigration announced a program to create jobs in the forestry industry. The Minister of Finance, in speeches to which I referred earlier, pointed out that something like $60 billion would be spent over the next five years to create employment. The minister invited the members of our caucus, who accepted the invitation, to indicate the critical sectors where they would like to see some action. And I shall repeat once again what the minister said on January 25: "Fiscal restraint does not and will not prohibit the government from taking targeted and specific measures to improve growth, productivity and investment."
So once again, if the official opposition wishes to make concrete proposals, we shall welcome them. Such proposals are

February 8, 1982
Oral Questions
even more welcome when they come from this side of the Elouse, and I hope that our Liberal members will continue to propose constructive measures for job creation, unlike the endless nitpicking and unrealistic arguing indulged in by those on the opposite side.


Roch La Salle: Madam Speaker, I have the distinct impression that the Prime Minister does not realize that Canada is going to lose another 175,000 jobs by next month, according to a study by the Canadian Manufacturers' Association. I do not think the Prime Minister realizes that 40 per cent of the jobs lost will be in Quebec.
In the circumstances, I would ask the Right Hon. Prime Minister whether he is ready to discuss, or at least to send a member of his cabinet to discuss, the program being proposed by Quebec, which has the support of other provincial premiers. It is clear that the present government's policy is a failure, as Yvon Guay said today in the newspaper La Presse, and only the Prime Minister still thinks he is the sole repository of the truth in this respect.


Pierre Elliott Trudeau: Madam Speaker, this is another little speech, not a question, by the member opposite, but since he mentioned Quebec, I should take this opportunity of giving another example, this very minute, of a statement by the Ministers of Energy, Mines and Resources and National Defence, who, with the hon. member for Bellechasse, announced a further contribution of $5 million to a gasification plant program at St-Just-de-Bretenieres in the province of Quebec.
Every day, and sometimes several times a day, we have been announcing new projects. The members opposite would rather discuss their concept of the budget and their concept of reality instead of looking at what is being done by the government and encouraging its efforts.


RAILWAYS
Mr. Edward Broadbent (Oshawa):: Madam Speaker, my question is directed to the Prime Minister.


Mr. Beatty:: Ed for leader!


John Edward Broadbent: A crucial part of the bargain of confederation for our prairie provinces has been the maintenance of the historic Crow rate. The Prime Minister has said in this House that this rate would not be changed unless there were a substantial consensus for so doing. In light of this I would like to ask the Prime Minister how the government can justify the announcement in Winnipeg today that the Crow rate is to be abandoned without at least having formal meetings with the
prairie-provincial governments, at least two of which are on record as opposing changes in the Crow rate.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, the hon. member is correct in suggesting that there is no unanimity concerning what should be done about the Crow. However, in all parties there is a difference of view between some people and other people. We do not have unanimity, but we have a large consensus which indicates that it is time to cease backing these reactionary ideas put forward by the New Democratic Party and to look to the future and to look to progress.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: These people are willing to engage with the government in the examination of some positive steps, not to get rid of the Crow, but, rather, to improve-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: -the situation in the west so that the grain movement in the west, as well as the movement of potash and other commodities, will be made possible by a modernization of the rail system and of the whole transportation system in the west.
The hon. member quotes two premiers who do not agree with two other western premiers. If he had been talking a month ago, it would have been three premiers in favour of reopening the Crow. Now it is two. 1 remind the Leader of the New Democratic Party that last week, at the public session of the first ministers' conference, I asked the western premiers whether they could agree among themselves and whether they were attempting to agree among themselves on what should be done to the Crow. There was no answer.
There is no intention among them to reach an agreement because they are divided on this matter. That is why the federal government, since it is responsible for railways and many aspects of grain transportation, must take the initiative a bit more courageously than the NDP would do, show some leadership and indicate ways in which this whole matter, after some 80 or 90 years, can be looked at again so that transportation in the west can be brought into the twentieth century, rather than once again taking the reactionary view of the NDP and hanging on to the past as though it will be our master for all time.


INVITATION TO GOVERNMENT TO ATTEND MEETING IN REGINA
John Edward Broadbent: Madam Speaker, in the Prime Minister's answer he clearly revealed why the Liberal Party in this country has only two seats in all of western Canada.
February 8, 1982

Considering that his government was invited to a meeting that is taking place next week in Regina, in which all the western governments will be participating, and the Government of Canada has been invited to participate to discuss grain handling, including the Crow, why is it that this government, which has talked about the need for consensus, turned down the invitation to this meeting in which it would have a thorough opportunity to meet with the premiers and discuss why, at least from their perspective as western Canadians, it is absolutely essential to maintain the Crow rate?


Pierre Elliott Trudeau: Madam Speaker, the answer to that is very simply that for years I have been attempting to get the western premiers to discuss this matter and to reach a consensus on it. Since the Western Economic Opportunities Conference in the early 1970s, we have been trying to come to grips with this. As the hon. member just said, the western premiers cannot agree among themselves in this area, which is largely under federal jurisdiction. That is why we decided to move.
As to the suggestion by Premier Blakeney to have a meeting in Regina on this subject, I think it is a little late in the day. He knows that for years we have been trying to get this matter discussed with them. He prefers to have a meeting on an area essentially under federal jurisdiction which he convenes, and to which he summons us to attend, and for which he no doubt thinks he will get a lot of electoral support in the west. Maybe that is possible. However, we have not made this an electoral matter. The proof is that the hon. member reminds us that we do not have many members in the west.
We are trying to find in the west a solution to a 90-year-old problem, a solution which will bring the transportation system into the end of the twentieth century, rather than once again thinking that there can be no possible change to something that was agreed to in the late 1890s without incurring the wrath of the reactionary sitting NDP.


REASONS FOR DECLINING INVITATION
John Edward Broadbent: Madam Speaker, the Prime Minister may think that his smart-aleck rhetoric about reactionary or any other equivalent term will carry weight among his backbenchers. I can assure him it means nothing to the people of Canada. Since the Prime Minister said there should be an attempt for consensus, and since the Conservative government of Alberta will be attending the conference, as well as the Social Credit government of British Columbia, and the two NDP governments of Manitoba and Saskatchewan, why is the federal Liberal Party of Canada so arrogant and indifferent that it is turning down an offer to sit down and discuss this seriously with the representatives of western Canada?


Pierre Elliott Trudeau: Madam Speaker, the hon. member is showing an interest in this matter very late in the day. 1 have told him that for years we have been attempting to discuss this matter and to create a consen-
Oral Questions
sus among the premiers. We have not managed to move Premier Blakeney from his stand that nothing must be done to the Crow. Therefore, the purpose of this meeting is one which I can only suspect has been based on crass electoralism.


John Edward Broadbent: Find out!


Pierre Elliott Trudeau: We are finding out, but not in this context. I believe it is next Monday that the members of the western affairs committee will be sitting down with the Manitoba cabinet to discuss this very matter. We are willing to discuss it, but we do not think it should be an occasion for grandstanding. That is why we are continuing to discuss it in this way.


REQUEST THAT MINISTER PROTECT WESTERN GRAIN PRODUCERS
Mr. Doug Neil (Moose Jaw):: Madam Speaker, my question is for the Minister of Agriculture. The statement of the Minister of Transport this morning in Winnipeg ostensibly freezes the federal government's contribution to the railways with respect to the shortfall between the Crow rate and the compensatory rate at the 1981-82 level. This places the burden of future increases in rates on the producers which, by 1987, will be in the neighbourhood of half a billion dollars. The minister is aware that, because of the high input costs, the high interest rates and low prices for grain, the western grain producers are in serious financial difficulty.
The minister is responsible for the welfare of the western farmer. I would ask him what guarantees he is prepared to give to protect the interests of the western grain producer. Has he discussed with his cabinet colleagues the disastrous effect that this government policy, of throwing the burden on the grain producers, will have on the financial future of the grain producers?


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, I disagree with the hon. member's statement that we have decided to throw the burden on the grain producer. That is not factual. We are asking the grain producer to share part of the burden of the cost of transportation. If we continue with the same old program, which will be 85 years old this year, and a lot of the other programs in agriculture that we used 85 years ago, 1 am sure the hon. member realizes as well as I do that we would not be producing anything like as much as we are producing in Canada today.
This has to be changed. By the year 1985 we would not even be paying 20 per cent of the cost of grain transportation. By the year 1990 we would only be paying 7 per cent of the cost of grain transportation. I met with many hundreds of farmers in western Canada and discussed this issue with them. 1 found a consensus there that they are willing to talk, negotiate, and accept some change.
Yes, I was in cabinet when we discussed this. I have been a proponent of adjusting the Crow rate for many months, actually several years. I proposed that an adjustment in the Crow rate take place. We are not saying that we are going to abandon the farmers under this program. When the hon.

February 8, 1982
Oral Questions
member studies it, he will realize that it is a pretty fair program.


REQUEST THAT MINISTER OFFER TO RESIGN ON ISSUE
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Madam Speaker, I would like to continue this questioning with the Minister of Agriculture. I introduce my question by saying that this morning the Prime Minister announced a pretty wide-ranging power to ministers to disagree with cabinet colleagues without being kicked out of the government. In view of that, will the minister take a hard look at the statement made by the Minister of Transport today in Winnipeg and accept my word, and I am sure the word of any person who looks at it objectively, that the Minister of Transport's statement this morning is a complete betrayal of the recommendations of the Hall commission report? Whether he likes it or not, and no matter how many farmers he may talk to, it is the Magna Carta of western Canada, and he should not forget that.
Second, the statement by the minister betrays what this Parliament decreed in the National Transportation Act of 1967.


Madam Speaker:: Order, please. I am sorry that the hon. member must be called back to order, but he is really making a speech and not asking a question.


Francis Alvin George Hamilton: Madam Speaker, I apologize to the House for taking longer than my usual 20 seconds. However, as the minister knows, this is a very important matter.
Would the minister accept my question with all fairness and honesty and consider what he has just said in answer to the hon. member for Moose Jaw, because the farmers have only one person to look to, and that is the Minister of Agriculture. They do not trust any other western minister. Would the minister stand and say that he will consider this again, that if this is a betrayal, as the conclusion will be, he is willing to offer his resignation as a sign of championship on the part of the farmers of Canada?


Some hon. Members:: Hear, hear!


Eugene Whelan: Madam Speaker, 1 have been involved in practically every discussion we have had in government, and many discussions outside of government, about the Crowsnest Pass rates. I do not feel that it is a betrayal when one studies the complete program. 1 do not feel it is a betrayal when one studies the need for the diversification of agriculture in the west, the things needed to encourage that kind of processing to take place in the west, the kind of development that is needed in the west, and the kind of improvement needed for the railroads.
I cannot accept what the hon. member has said-at one stage, maybe several years ago, it might have been a betrayal, but I think that it would be a betrayal not to do anything
about the Crowsnest Pass rate, to accept and go along with the old program, the old agreement of 1897 and not move ahead. If we did all things like that in our country we would not be the envy of the world for our agricultural industry.
I say that we have to move ahead with this program. 1 have said that from the very beginning in all the discussions in which we have been involved. It will be a fair program. It must be that kind so that our grain producers are not put at a disadvantage with any other grain producers in any part of the world with whom we are competing. I am satisfied that this program is that.


HALL COMMISSION RECOMMENDATION TO ESTABLISH PRAIRIE RAIL AUTHORITY
Francis Alvin George Hamilton: Madam Speaker, the minister has made a direct challenge to me on this point, and I am going to put it right to him. Will he recommend to the government that the recommendation of the Hall commission be accepted, that there be a prairie rail authority set up by the federal government-this is a federal issue, not a provincial issue-to take over those 2,000 miles of lines on which there are losses, run them by the federal government through this authority and show the railways how to make money out of them?


Eugene Whelan: Madam Speaker, of course, the intent is that all parts of our society, whether they be railways, farmers, business people or miners, make money. That is the idea. Profit is not a bad word in our party as far as we are concerned.


Some hon. Members:: Oh, oh!


Eugene Whelan: We want the railways to make a profit. I am willing to wait for the negotiator to finish his discussions and bring back the recommendations to us on what he thinks should be done. He will hold discussions across the prairies. The negotiations will take place with this person, whom, I am sure, the hon. member also knows and highly respects. He will be the main person involved in the negotiations. 1 am willing to wait, because we want it as quick as we can. I wanted those rates adjusted last year but we were not successful in getting it before the people early enough. So, we had further and longer discussions to make sure more people understood what we were trying to do, and also to make sure that we understood what more people wanted us to do. I think we are making that kind of proposition now. The negotiator will tell us better later.

[ Translation]


THE ECONOMY
Mr. Jacques Guilbault (Saint-Jacques):: Madam Speaker, my question is directed to the Right Hon. Prime Minister, and
February 8, 1982

it concerns the letter sent to him by the ten members for central and eastern Montreal. No, 1 can assure you, Madam Speaker, I am not going to play petty politics like the Leader of the Opposition tried to do when he quoted only certain parts of our letter, thus glossing over our support for the government's policy. I should like to know what results can be expected following this request which stresses incentives for housing construction and job creation for young people. 1 should therefore like to ask the Prime Minister whether he will give this letter the attention it deserves?


Pierre Elliott Trudeau: Yes, Madam Speaker, in fact I referred to it earlier when I indicated that the Minister of Finance, in his statement on January 25 in Toronto, had pointed out that a number of concrete programs would have to be considered, and the letter referred to by the hon. member provides an example of those programs. I can assure him that the Minister of Finance and the government will consider the letter's recommendations with an open mind.


VETERANS AFFAIRS
Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, my question is for the Minister of Veterans Affairs. In view of the fact that two independent studies which were released indicate that veterans who were involved in nuclear exercises are showing 500 per cent to 600 per cent increased incidence of cancer over the normal population, and as a result of Allan Solomon, former chairman of the pension commission, asking two years ago that a thousand members of the armed forces be told the amount of radiation to which they were exposed, recognizing that early detection of cancer might preserve their lives, would the minister indicate and make a commitment to the House that he is prepared to notify quickly those members of the Armed Forces who were exposed to radiation, of the amount of radiation to which they were exposed, and advise them that close consultation with their family physicians would be advisable?


Hon. W. Bennett Campbell (Minister of Veterans Affairs):: Madam Speaker, in answer to the question by the hon. member, I would say that any individual can receive through his physician the radiation levels to which he was exposed during his activity, specifically in relation to the two occasions in the Chalk River cleanups and for those individuals who were involved in the Nevada testing. Their family physicians can request and receive the radiation levels as recorded by Atomic Energy of Canada in both occasions.


REQUEST FOR INDEPENDENT MEDICAL STUDY
Raymond John Skelly: Madam Speaker, the chairman of the pension commission had asked the govern-
Oral Questions
ment to move quickly in notifying these people. I ask the minister to make a commitment to notify those individuals in order that they can identify causes of degenerative disease.
Many of those records were destroyed. Many were inaccurate, and we even learned on the news today that they were falsified in the United States.
Many of the diseases are also of a degenerative nature, circulatory and others, not just cancer. Since we are dealing with a very unique group of individuals, would the minister make a commitment that he will support an independent and comprehensive study of those former members of the Armed Forces and their families?


Some hon. Members:: Hear, hear!


W. Bennett Campbell: Madam Speaker, as the hon. member is aware, a study which was commissioned by AECL is presently taking place on approximately 10,000 of their employees involved in activities such as the Chalk River clean-up and the Nevada testing. Approximately 300 of the Royal Canadian Air Force AntiNuclear Defence Group are also involved in that test group. I can also indicate to the hon. member that the study is progressing quite favourably and we anticipate the preliminary findings will be available sometime in early April.
I am more than happy to pursue with my colleagues, the Minister of Defence and the Minister of National Health and Welfare, the question as to what further steps should be taken in this matter.


CRITERIA APPLIED TO COMPENSATION APPLICATIONS
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam
Speaker, my question is also for the Minister of Veterans Affairs. How can the minister refuse compensation to veterans such as Bjarnie Paulson and the members of the Association of Veterans of the RCAF Nuclear Defence Group when, at the same time, Lieutenant Colonel O.R. Browne, of Victoria, B.C. has been receiving a disability pension since 1971 for cancer which he contracted by handling radioactive cobalt during his service? Will the minister now agree to apply the same criteria to the many other veterans in their struggle for compensation for cancer they contracted as a result of atomic radiation, as were applied to Colonel Browne's case?


Some hon. Members:: Hear, hear!


W. Bennett Campbell: Madam Speaker, I was not aware that different criteria have been applied by the Canadian Pension Commission in assessing all of those cases. As the hon. member can appreciate, the criteria being applied as to whether or not the present condition is associated with military service, and the rules, are applied consistently to all members who make application.

February 8, 1982
Oral Questions


DISTRIBUTION OF INFORMATION
A. Daniel McKenzie: Madam
Speaker, I would like to ask the minister if he would supply these veterans who are having this cancer problem with information about the same routine Colonel Browne used when he was able to obtain his pension because he contracted cancer 12 years ago? Will the minister distribute that information to those veterans immediately?


W. Bennett Campbell: Madam Speaker, as the hon. member is aware, we are more than happy to assist any veteran in making his application to the commission. I am not completely familiar with the process used by the gentleman in question, but I am certainly prepared to advise our pension advocates and the various organizations which support veterans' applications to the commission, of the specific details.


AUTOMOBILE INDUSTRY
Hon. Sinclair Stevens (York-Peel):: Madam Speaker, my question is directed to the Prime Minister. With 18,000 Canadian auto workers laid off, in addition to another 38 per cent of those who at one time were employed in the auto parts business in Canada, is the Prime Minister aware that last year Japanese truck imports were up 106 per cent compared with the year before, that car imports from that country were up 26 per cent, and that that compares with Japanese truck imports into the United States which fell 8 per cent and car imports which fell 3 per cent? If the Prime Minister is aware of that rather startling difference between Canada and the United States, would he agree that the two agreements, the one between Japan and the United States and the one between Canada and Japan, have not worked to the advantage of Canada?


Pierre Elliott Trudeau: Madam Speaker, I must confess that I do not know the details of those statistics, but it does not seem to me that the conclusion stated by the hon. member follows from the premise. There are many other circumstances which could explain Canada's difficult economic situation, and the main one I can think of is the high rate of inflation and the fact that we are no longer competitive with many of our competitors. That is why we believe it is the first task of this government to bring the inflation rate down. That is why we made a concrete suggestion in that direction to the first ministers' meeting last week. It is a suggestion which I also put to members of the opposition, and I wish they would give it their considered thinking.


NEGOTIATION OF IMPORT QUOTA LIMITATIONS
Sinclair McKnight Stevens: Madam Speaker, undoubtedly the Prime Minister is aware that representatives of his government are now in Japan negotiating a new arrangement with respect to auto imports from Japan into this country, and bearing in mind that last year 23 per cent of the auto sales in Canada were Japanese cars, would the Prime Minister indicate whether his delegation intends to have trucks included for the first time in any import limitations? Second, may we anticipate a lower quota than the 174,000 which was supposed to be the limit under the existing contract?


Pierre Elliott Trudeau: Madam Speaker, I was aware of this meeting in Tokyo. The Minister of Industry, Trade and Commerce referred to it at last week's conference. I am not aware of the details of the negotiations, nor whether trucks are being discussed at that meeting. I will be happy to take notice on behalf of the minister, but I must repeat to the hon. member that, over the longer run, the salvation of the economy will not come by reducing international trade or by increasing protectionism one against the other.


Sinclair McKnight Stevens: Tell that to the unemployed.


Pierre Elliott Trudeau: Canada's future as an exporting nation must essentially be in the direction of remaining competitive, and I repeat my previous statement to the hon. member that unless we agree amongst ourselves in this country to fight together the evil of inflation rather than looking at short-term painlessness, we will not be successful in breaking into international markets on a larger scale than we have.


FORESTRY
Mr. Herb Breau (Gloucester):: Madam Speaker, I have a question for the Minister of Employment and Immigration. In view of the joint announcement which he made today with the Ontario Minister of Natural Resources concerning a program to help Ontario forestry workers, would the minister tell the House whether this program could apply to other regions, and more specifically, whether there have been any discussions with the government of New Brunswick, where this industry is also facing very serious problems?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, I was very pleased today to be able to announce an agreement with the province of Ontario in relation to the provision of joint assistance that will bring several thousand forestry workers in that province back to employment in the very important areas of reforestation and development of the forest industries. I can tell the hon.
February 8, 1982

member for Gloucester that the same proposal is available to any other provincial government across Canada. If they have proposals by which we could engage in using funds under Section 38 of the Unemployment Insurance Act along with provincial contributions, we could put a number of workers in the forest industry back to work in local projects. We are also prepared to look at other work-creation projects of a similar kind which could be funded under the criteria of that program. We can use that fund as a way of enabling a number of workers in many of our key natural resource sectors to go back to work.


Some hon. Members:: Hear, hear!


ENVIRONMENTAL AFFAIRS
Mr. Derek Blackburn (Brant):: Madam Speaker, my question is directed to the Minister of the Environment, and it has to do with proposals Ontario Hydro has had before the National Energy Board for seven, eight or ten days. First, I would like to ask the minister why the federal argument was so pitifully weak in opposing Ontario Hydro's application to increase the sale of electricity to New Jersey-which, indeed, will increase acid precipitation in Ontario and in the United States-when Ontario Hydro's submission was so strong?


Hon. John Roberts (Minister of the Environment and Minister of State for Science and Technology):: Madam Speaker, I question the assumption in the hon. gentleman's question. The original presentation by Environment Canada to the National Energy Board was indeed brief, but that representation was supplemented the following week by very considerable depositions of both material and expert testimony, which were very full and, I believe, effective.


INSTALLATION OF ANTI-POLLUTION DEVICES
Derek Nigel Ernest Blackburn: Madam Speaker, if the deal goes through, the result will be an increase in acid precipitation coming out of such plants as Nanticoke, and that will go directly into Pennsylvania and upstate New York. In view of the fact that that will destroy completely the credibility of the acid rain subcommittee, which spent several hundred thousand dollars of taxpayers' money to produce an excellent report a few months ago, as well as destroy our credibility in the United States, what measures will the minister take now at the cabinet level to make sure Ontario Hydro does not increase exports of power to the United States before the federal government has assurances that scrubbers will be placed on Nanticoke or any other thermal generating power plant in Ontario, and that acid rain precipitation will not increase but in fact decrease, which would be in keeping with the acid rain report?
Oral Questions


John (Moody) Roberts: Madam Speaker, we have made it very clear on several occasions that we are entirely opposed to this application because of the consequences the hon. member has described. Indeed, we made that abundantly clear last week in reply to questions in the House of Commons. I suspect the hon. member would be one of the first to complain if 1 were to attempt to pre-empt procedures which are already established for the hearing of these questions before the National Energy Board. We have made the case there as effectively as we could. I am confident of the validity of that case. We must now await the decision of the National Energy Board and, if necessary, we will then consider whether further actions need to be taken.


THE JUDICIARY
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, my question is directed to the Prime Minister. In our 114 years of history there never has been a woman appointed to the Supreme Court of Canada. This week a vacancy will be created by the resignation of Mr. Justice Martland. Given that women have served with distinction in the superior and supreme courts of the provinces since 1969, will the Prime Minister now take this opportunity available to him to appoint a qualified woman, of whom there are a number, to the Supreme Court of Canada?


Pierre Elliott Trudeau: Madam Speaker, the hon. member is, of course, right in referring to the distinguished role many women have played in the superior and appeal courts of our provinces, and she will recall that just about every one of them was appointed by this government, so she can be assured that in the consideration of the upcoming vacancy in the Supreme Court of Canada we will be as objective and openminded as regards the sexes as we were in relation to those previous appointments.


Some hon. Members:: Hear, hear!


IMBALANCE IN APPOINTMENTS
Flora Isabel MacDonald: Madam Speaker, there are some 666 federally appointed judges throughout Canada, of whom only 26 are women, even though the number of qualified women in the legal profession has increased significantly in the last number of years. 1 would like to ask the Prime Minister if he will take steps now to rectify the imbalance in these appointments. At the present time 96 per cent of the appointments are men, while only 4 per cent are women. He now has a very real opportunity to begin to redress this imbalance, because there are 23 vacancies in judicial appointments at the present time.

February 8, 1982
Designation of Ministers


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: Madam Speaker, I believe that we are making a major effort in this area, and I am pleased to be able to say to the hon. member that, in the last 22 months, we have appointed more women judgesAhan during any other period and under any other government since Confederation. We always consider women for appointment to the bench and we are always very happy to appoint them. However, as I have stated several times in committee, the problem is that most women lawyers were called to the Bar not so long ago. I believe that there has been a substantial increase in the number of women judges in the last few years. As I have pointed out, we have appointed more women judges in the last 20 months than during the mandate of any other Minister of Justice. We always try to find qualified candidates for the bench, and we are even more pleased when a woman is appointed.


Flora Isabel MacDonald: Four per cent. Four per cent.

[ Translation]


PETITION
[Stage Direction]
MISS MacDONALD-POLAND-IMPOSITION OF MARTIAL LAW
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid on the Table the one hundred and seventy-fourth report of the Clerk of Petitions stating that he has examined the petition presented by the hon. member for Kingston and the Islands (Miss MacDonald), on Friday, February 5, 1982, and finds that it meets the requirements of the Standing Orders as to form.


THE ADMINISTRATION
Erik Nielsen: On a point of order, Madam Speaker, you will recall that on Friday I flagged the possibility of responding to the remarks of the government House leader in connection with past practices and procedure involved in making statements or announcements with respect to changes in the ministry.
While I can accept Madam Speaker, that it is up to ministers to make statements if they wish, there are certain circumstances, in my submission, where by custom and by precedent, which I have to cite, that out of respect to the House a statement on motions is clearly required.
The practice of making cabinet shuffles of importance without a statement was raised last Friday. In fact, there is a Beauchesne's fourth edition citation which clarifies precedent
here. I would like to refer the Chair to page 83 of that fourth edition of Beauchesne's, where it becomes apparent in Subparagraph (2) of Paragraph 89 that this practice has extended all the way back to 1889, when Parliament first dealt with the matter.
I quote Subparagraph (3) of the fourth edition:
When changes of portfolio between ministers do not involve any question of principle, it does not seem that the Prime Minister is bound to explain them in the House.
It goes on to quote Todd:
Todd, in the chapter dealing with the ministers' responsibility to Parliament, in the 2nd volume of his work, "Parliamentary Government in England", page 487, says: "But the House has no right to ask for more than a general exposition of the main principles on which a government is formed.
There is no doubt, in my submission, Madam Speaker, that in this instance a major reorganization did take place. External affairs is now subject to a whole new philosophy and has three ministers instead of one. There is a new approach to the departments of industry and regional expansion. Indeed, there were 21 order in council changes to implement the shuffle. Clearly, in my submission, Madam Speaker, the well established practice and precedent should have been followed, where there was a statement or an explanation given on motions.
1 would like to cite briefly four separate extracts from Hansard where this practice has been acknowledged, carrying on from my Beauchesne's citation, and bring it up to date. In Hansard for May 5, 1969, at page 8292, it will be seen under the heading "The Ministry, Announcement of Changes", the Right Hon. P. E. Trudeau (Prime Minister), said:
I should like to inform the House of certain changes in the ministry which shall take effect as of today.
It has been my pleasure to recommend to His Excellency the Governor General the appointment of the hon. member for Burin-Burgeo (Mr. Jamieson) as Minister of Transport.
He continued:
May I carry on, Mr. Speaker? The portfolio of Minister of Supply and Services has been assumed by the hon. member for Winnipeg South (Mr. Richardson).
Then there are other and further changes as will appear from that precedent.
I might say, Madam Speaker, that that precedent dealt with changes that were effective that day, as compared with the changes in subparagraph (2) of Paragraph 89 of Beauchesne's fourth edition, which dealt with changes which were made during recess. Then, on the first available occasion when the House returned, the Prime Minister of the day rose to make an announcement of those changes. That is the nature of the second precedent that I cite for consideration.
At page 8929 of Hansard for May 22, 1969, again under the heading "The Ministry, Readjustment of Ministerial Functions", the Prime Minister, having dealt with the matter of the return to the House, after a prolonged illness, of the then Minister of Energy, Mines and Resources, went on to say that that minister would bear full executive responsibility for the broad subject area of mines and geosciences, which included
February 8, 1982

several other functions. Then he went on, in the second column, to list other changes that he was making in the ministry. Those changes occurred as a result of the shifting of responsibilities because of the illness of the minister.
My third citation is from Hansard for October 5, 1970, page 8706, again under the heading "The Ministry, Announcement of Changes-Appointment of Parliamentary Secretaries." Here 1 would ask the Chair to pay particular attention to the words used by the Prime Minister on that occasion. He said:
Mr. Speaker, as is customary, I should like to inform the House of certain changes in the ministry since the House recessed on June 26, 1970.
Then he listed some rather extensive changes that he had made in the ministry during the recess. He took the first opportunity to make the explanation of those changes in the House.
I might say that in all of these citations, the previous three and this last one which I am about to quote, there was an opportunity to respond, as Beauchesne's sets forth there is, but the opportunity that was taken resulted in a very brief response by the leaders of the opposition parties of that day.
The last citation that I submit for consideration by the Chair is set forth in Hansard for Friday, February 18, 1972 at page 15. Again it is under the heading "The Ministry, Announcement of Changes-Tributes and Best Wishes to Member for Niagara Falls on Recovery from Illness". Here again I draw these particular words to the attention of the Chair, the words of the Prime Minister on that occasion. He said:
Mr. Speaker, as is customary, I should like to inform the House of certain changes made in the ministry since the recess began on January 12, 1972.
Then by far the most extensive changes in the ministry which up until that time had taken place were announced by the minister, wherein the minister of national defence, the minister of finance, the minister for manpower and immigration, the minister of energy, mines and resources, the minister of public works, the minister of state for urban affairs, and so on, were shifted.
It was customary on these four occasions at the very least- and on two of them when Parliament returned from recess- for the government, through the Prime Minister, to announce changes in its ministry. On two of those occasions where changes were extensive, as I submit that they certainly were here, the Prime Minister acknowledged the fact in the citations which I have quoted that that practice was customary; he used that very phrase.
Now we have the even more serious failure to make a statement in the House regarding the government's policy on the Crow rate. It might be regarded as a peripheral point of order, having nothing to do with the ministry. I think there is a much stronger case which I believe I have made for the Chair to consider in the case of our previous practice concerning the announcement of major changes in the ministry. But with respect to the Crow rate, we have just completed months of
Designation of Ministers
debate in the House over very important changes which were made to the Constitution. The Crow rate was an important element of that debate, since one important element was the agreement to finance the CPR as approved in the House. The CPR was a vital part of the confederation bargain. Now it would appear that elements of this bargain are being dismantled or tampered with without the slightest reference to the House. If this statement were made in the House, as it should have been, western members would be able properly to represent their constituents by asking important questions, and the public would be quickly informed both because of the activity of members and the broad publicity which television gives the House.
In my submission, the Prime Minister (Mr. Trudeau) or the Minister of Transport (Mr. Pepin) as soon as he returns should be required to rise and make a full statement in the House, as has been customary practice in the past, so that the matter might be fully discussed, involving as it does a major change in the policy of government.
When Madam Speaker considers these matters, I would ask that you consider them separately, even though they are closely relevant to each other. In the former one, the question of changes in the ministry, in my submission past practices are rather compelling and we should return to the traditions of the House which are clearly established back to 1889, right up until 1972 where such statements were made as a matter of course. The government need not justify anything beyond explanation, and there is a good reason for it. Shortly after we returned, there was not one but several questions asked by hon. members on this side in an attempt to elicit information as to which ministry their questions should be directed as a result of over 21 changes by order in council. There was confusion simply because a full explanation was not given.
I ask for that First question to be determined. I also ask for a ruling on the obligation of the government when it departs in such a radical way from its commitment to a policy which has existed since well prior to 1900 and now goes about dismantling a major policy without some kind of announcement. It is an affront, indeed a contempt, of the House and its members when the government, through its minister, goes to Winnipeg to make such an announcement rather than giving western members here an opportunity to question the minister on a statement which, properly, should have been made on motions.


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, the question raised by the hon. member for Yukon (Mr. Nielsen) is quite simple. Was the Prime Minister (Mr. Trudeau) obliged to make a statement in the House following the departmental changes mentioned a few days or rather a few weeks ago? I submit that the answer is also very simple. My learned colleague has referred to precedents, the first one going back more than a century. However, I must point out that precedents apply only when there are no rules or when the rules are obscure. In this case, before referring to precedents, we should look at the Standing Orders of the

February 8, 1982
Designation of Ministers
House of Commons and find out whether they include a provision that deals specifically with the problem or the question raised. In fact, Standing Order 15(3) offers a very clear answer. I quote:
(3) On statements by ministers, as listed in Section (2) of this Standing Order, a Minister of the Crown may make a short factual announcement or statement of government policy.
Under this provision, a minister of the Crown is not obliged to make a statement in the House. The minister has the option of doing so, and may, if he considers it desirable or appropriate, make a statement on a matter of government policy. In the cases raised by my colleague, the ministers of the Crown may, for very specific reasons, have decided to use their discretion to make a statement. But the question is: Were they obliged to do so? And the answer we find in the Standing Orders is that they are not, they have the option of doing so but they are not obliged to do so. Madam Speaker, with due respect, I submit that this is your answer. I would add that, to my knowledge, you yourself and your predecessor have often had cause to refer to this provision of Standing Order 15(3) to deal with points of order raised by the members opposite when they expressed their indignation that a policy had been announced outside the House instead of in the House, and without wishing to judge the reasons for my colleague's indignation-1 will come back to this shortly and very briefly- strictly as a matter of law and according to parliamentary procedure, there is absolutely no obligation on the Prime Minister or a minister of the Crown to make a statement on a change in policy, whatever it may be.
Now, 1 should like to point out to the hon. member that I have often had occasion to provide clarification on the subject he has raised and brought to our attention when he himself, his leader and his predecessor as House leader for the official opposition questioned the legality of the procedure. I am not getting a reaction, and assume they were convinced by the relevant legislation I quoted last week, in which a distinction is made, and I shall not go into this again, between creating a new ministry of state and appointing ministers of state responsible for assisting other ministers. So, the entire procedure is perfectly legal. In fact, I explained this in the House last week, during a debate on procedure. Finally, Parliament will still have a chance to discuss the changes since two new ministries of State have been created and under the legislation I mentioned last week, the government must submit its decision to create the two ministries of State to Parliament for approval.
For all practical purposes, the points raised by the hon. member for Yukon are dealt with not only in the Standing Orders but also in the Statutes, and Parliament will have a chance to debate the changes. Therefore, I submit that the hon. member's point of order was not supported by the Standing Orders of the House of Commons, nor by parliamentary practice or legislation.
Finally, the hon. member also referred to the statement made by the Minister of Transport (Mr. Pepin) earlier today, and complained that once again he was deprived of his right to make a statement in the House under Standing Order 15. His objection is again dismissed by the same legal arguments, and here again, I would remind the hon. member that there are still a number of opposition days between now and March 26, and that between March 26 and June 30 there will be thirteen additional opposition days, so that the opposition will have plenty of time to raise the subject mentioned in the statement made by the Minister of Transport in western Canada today. In any case, I do not see why a Canadian minister should not announce important policies to the people who are going to be directly affected by them, and in this case, the people in the west.
Here again, both parliamentary practice and the Standing Orders have been observed by the Minister of Transport, and Parliament will, if the opposition wishes, have a chance to debate the subject of the statement made by the Minister of Transport earlier today. Therefore, for all these reasons, Madam Speaker, I submit that we should proceed without further delay with the debate on a major bill aimed at assisting certain home owners in Canada, and tabled by the Minister of Public Works (Mr. Cosgrove).


Walter David Baker: Madam Speaker, we are not questioning the matter of legality. The politics might suggest that the shifts we are talking about in the ministry was another infusion of tired blood into the ministry.


Erik Nielsen: Changing the pallbearers.


Walter David Baker: And in any other way one might describe it. I am going to argue that because I do not believe the government House leader is quite correct in his interpretation of the rules respecting statements by ministers. In this connection I am looking at our rules, specifically Standing Order 15(3), dealing with statements by ministers. At the top of page 10 it deals with a factual announcement or a statement of government policy. It is in that sense that the rule reads:
-a minister of the Crown may make a short factual announcement or statement of government policy.
It may apply to many things ministers announce. Frankly, I do not like these major announcements being made outside of the House, but it could be argued that the rule may apply there too. But we are talking about much more than that when we talk about a major shift in the ministry. That is not a factual announcement or a statement of government policy in the sense of Subsection (3) of Standing Order 15, particularly having regard to a precedent on February 18, 1972, when the Prime Minister (Mr. Trudeau) made an announcement in the House of Commons. At that time there were no new ministers drawn into the ministry; rather, there was a shift in responsi-
February 8, 1982

bility of the ministry. On that occasion, there was something beyond a mere factual announcement or beyond a statement of government policy; there was an announcement under statements made by a minister. It was a very extensive announcement.
The practice seems to be that Standing Order 15(3) has a limited application. In that limited application it appears that the word "may" allows for some discretion on the part of the government. But parliamentary practice, parliamentary tradition and other things are not to be turned aside lightly. We regard any shift in the ministry, perhaps we regard a change in the ministry to be more important than some members of the government do-as an important change requiring a statement here in the House, not a press release. We believe that custom, tradition and indeed the precedents and practices of the House of Commons, as we found out during the constitutional debate, are just as important as the Standing Orders and demand being observed.
1 say to you, Madam Speaker, with respect, that the government, and the Prime Minister in particular-I am surprised at the government House leader, with his knowledge of parliamentary practice, supporting the Prime Minister in this; I am sure he never advised him with respect to this matter-ought to have made this announcement in the House. This change was significant enough that, within the framework and parameters of those practices which are the Chair's duty to protect for Parliament's sake, the announcement ought to have been made in this House of Commons. It can still be made in this House of Commons so that members can address themselves to it.
I am not going to argue the question of the Crow rate because I have not looked into that. I respectfully suggest that there is an argument that precedent, custom and practice, which are just as much a part of the rules of this House as are the Standing Orders, demand that appropriate action be taken by the government and that a statement be made here in the House, notwithstanding the fact that there has to be a debate on a bill later on. That latter point is peripheral and I suggest does not apply. But the government is bound by law to bring in a bill. This is what the government House leader says and I do not argue with him there. That only provides an opportunity for debate on the bill. What we are talking about is the observance of the rules with respect to statements by ministers, particularly statements by the Prime Minister, announcing changes that are rather substantial in the ministry. These do involve traditions and precedents of this House, which have to be looked after or they will wither away.
[ Translation]


Madam Speaker:: 1 should like give a ruling on this matter, to resolve the debate we have just had, but to do so I would have to be able to refer to a very clear-cut rule of procedure that would indicate exactly how I should direct my decision. However, the provision in our Standing Orders that deals with statements by ministers is permissive, as the President of the Privy Council (Mr. Pinard) said, and not mandatory. It says
Designation of Ministers
very clearly that a minister may, when motions are called, make a statement on a matter of policy or any other subject he may find appropriate.
The hon. member for Yukon (Mr. Nielsen) has said repeatedly that it was customary for ministers to make statements in the instances we are dealing with today. I have looked at some of the precedents, and precedents exist for both procedures. My reference is the Standing Order which clearly indicates that the minister has the option of making or not making a statement. Custom has supported decisions by ministers either way. The hon. member is aware that the Speaker of the House cannot oblige ministers to make a statement in the House. It is up to the minister to decide whether he wants to make a statement in the House or prefers to make an announcement outside the House. Hon. members may abhor this custom, but the rules are clear: it is up to the ministers, and if hon. members do not appreciate the manner in which the government announces its policies or its activities, they may keep on questioning the government inside the House until a minister finally gives in, but it is certainly not the role of the Speaker to oblige a minister to make a statement. Finally, I believe the problem can be resolved by the following Citation 264, page 87, Beauchesne's fifth edition, which I shall quote in English, since I have the English version here:

The option of a minister to make a statement either in the House or outside it may be the subject of comment, but is not the subject of a question of privilege.

I believe that was the case just now. We have had two comments on the subject, and I think the hon. member has had ample time to make his comments before the House and criticize the minister for not having made a statement on the matter in question. I should like to quote a precedent, a decision handed down by one of my predecessors:

Just to keep the record straight, since the hon. member has made reference to it, it reads:
The practice of making a statement is a practice which is within the authority of the minister to choose whether to do so here or not.

Hon. members have expressed their views on the government's decision to publicly announce changes in a department. Hon. members are free to disagree with this procedure. They can voice their complaints before the House and they have done so. I have listened to them because I felt they had something to say, and I am sure hon. members will understand that I cannot make a ruling obliging the minister to make a statement.


Erik Nielsen: For the sake of the record and my convenience I wonder, Madam Speaker, if you would be so kind as to

February 8, 1982
Committee Reports
repeat the citation of the last quotation you gave me. [Translation]


Madam Speaker:: My reference is Hansard, the official report of the debates, for October 16, 1979, page 42.
* *
*


BUSINESS OF THE HOUSE
Nelson Andrew Riis: Madam Speaker, while I appreciate it is the custom for the three House leaders to raise matters of House business, in the absence of the acting House leader of the New Democratic Party I would like to put a question to the government House leader.
Last week we were led to believe that the borrowing authority bill would be tabled in the House today and debated on Tuesday or Wednesday, 1 believe. Is that the present plan?


Yvon Pinard: Madam Speaker, last Friday 1 indicated that, because 1 promised to provide my colleagues with a draft of the bill so they could look at it before we started to debate it, I had to postpone introduction of the borrowing authority bill. I will be in a position to give a draft bill to my colleagues later tonight or perhaps tomorrow; therefore, the bill will not be introduced before tomorrow and the motion to concur on the Ways and Means will be moved tomorrow.


Erik Nielsen: That, of course, raises the question when the borrowing bill will be proceeded with. I assume it will not be on Wednesday now in order to provide the necessary time. Does the government House leader have any idea what he is going to be doing on Wednesday and when the borrowing bill will be brought in?


Yvon Pinard: Madam Speaker, if we introduce the bill tomorrow we could start debating it on Wednesday, but I will not, because of the requested delay, call it unless my colleagues are ready to proceed. Therefore, if they are not ready to proceed on Wednesday and I wanted to call it, then 1 would, depending on the housing bill debate, call the customs tariff bill. This will be done on the next Wednesday unless we come to an agreement to deal with the borrowing authority bill if it is introduced tomorrow, as I plan to do. It all depends on the length of debate on the bill to amend the Canada Housing Act.



ROUTINE PROCEEDINGS


Mr. Maurice Foster (Algoma):: Madam Speaker, I have the honour to present the third report of the Standing Committee on Privileges and Elections.


TABLING OF LIST OF ACTING MINISTERS
Yvon Pinard: Madam Speaker, under Standing Order 41(2), I would like to table a list of acting ministers, and with the consent of the House I would ask that the list be appended to the official report of today's Debates.


Madam Speaker:: Is there unanimous consent for the list to appear in appendice to today's Hansard?


Some hon. Members:: Agreed.


PETITION
Lorne Edmund Nystrom: Madam Speaker, 1 have a very pleasant task to perform this afternoon, one that is often done by the hon. member for Winnipeg North Centre (Mr. Knowles) who is unable to be with us today. I would table for all hon. members to study and, hopefully, take action upon a petition, containing the signatures of over 5,000 senior citizens, which was organized by the Saskatchewan Senior Citizens Action Now Association.
As you know, under the rules I cannot read the six suggestions they have made to us, but I want to recommend to the House that it take seriously the request of over 5,000 people in my province to, among other things, increase pensions and establish a department of senior citizens' affairs in Canada.
* *
*


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Smith (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 2,491, 3,244, 3,563, 3,713 and 3,714.
February 8, 1982


Mr. Crosby: Is Mr. Zig Pollack retained or employed by the government and, if so (a) in which department (b) in what capacity (c) for what purpose (d) what amount did he receive for expenses, fees or other remuneration in 1980?


David P. Smith: I am informed by Employment and Immigration Canada and Transport Canada as follows:
(a)	No.
(b)	and (c) Not applicable.
(d) Mr. Isodore C. Pollack as Chairman of the Canada Employment and Immigration Advisory Council (April 18, 1978-April 18, 1981) was entitled to an honorarium of $325 per day with an annual limit of $25,000, plus travel and living expenses. In 1980, Mr. Pollack received $21,700 for 71 days plus $5,216.90 for travel and living expenses.
(a)	Yes, National Harbours Board.
(b)	Consultant.
(c)	Appointed on April 4, 1978 as a government observer on the Board of Maritime Employers Association.
(d)	Mr. Isodore C. Pollack is entitled to an honorarium of $350 per day to a maximum of 15 days, plus travel and living expenses. In 1980, Mr. Pollack received $3,100 for 11 days. No claim was submitted for travel and living expenses.


Mr. Ellis: 1.	Were homes purchased under the Rural and Native Housing program in Dcseronto, Ontario and, if so (a) how many and how many were resold (b) what amount did they cost, including repairs and what amount is being charged for each (c) were there defaults and, if so, how many and what were the extra costs after the defaults?
2.	Was there a net loss on the program in Deseronto and, if so, in what amount?
3.	What is the total loss of the program?


Hon. Paul J. Cosgrove (Minister of Public Works):: I am
informed by Canada Mortgage and Housing Corporation that as of the date this question was asked the response is as follows:
I.	Yes. (a) 21 existing units. All have been resold to Rural and Native Housing (RNH) clients, (b) See table below, (c) Yes, six.
	Additional	Recovered in	
Costs	Sales Price	Write OffPhase 1	2,673.08	Yes	Nil430.40	No	430.406,902.30	No	6,902.30Phase 2	Not yet available-Unit being recycled	Phase 3	3,014.20	Yes	NilPhase 4	Nil	Yes	NilTotal	$13,019.98	S7.332.70
Order Paper Questions
2.	Assuming net loss as amount not recovered by resale of unit to RNH clients, unrecovered costs are $7,969.92 ($7,332.70 + $637.22), of which $6,902.30 was for one recycled unit.
3.	From the inception of the program in March, 1974 to September, 1981, the total losses charged to the minister resulting from RNH account close-outs amounted to $849,720.76.
Rural and Native Housing Program Deseronto, Ontario
Mortgage to
Total Cost	Sale Price	Write Off	be reducedPhase 1	32,168.57 34,326.06 38,028.64 30.406.60 35,263.80 31,872.23	32,047.37 34,326.06 38,030.14 30,406.60 35,263.80 31,872.23	121.20	1.50Subtotal	202,065.90	201,946.20	121.20	1.50Phase 2	37,844.38	37,844.38	40,591.31	40,591.31	31,865.88	31,744.90	120.98	31,210.24	31,077.69	132.55	36,591.84	37,090.46	498.6237,001.91	36,880.41	121.50	Subtotal	215,105.56	215,229.15	375.03	498.62Phase 3	33,342.21	33,298.24	43.97	32,211.39	32,203.86	7.53	37,022.90	36,934.69	88.21	30,266.99	30,265.71	1.28	37,201.29	37,201.29	Subtotal	170,044.78	169,903.79	140.99	NilPhase 4	27,407.62	28,269.72	862.1033,530.89	35,973.99	2,443.1036,155.62	36,155.62	35,679.18	36,482.35	803.17Subtotal	132,773.31	136,881.68	Nil	4,108.37Total	$719,989.55	$723,960.82	$637.22	$4,608.49
Note: An explanation of the amounts in the "write-off" and "mortgage to be reduced" columns is as follows. Under Section 40 Rural and Native Housing Program in Ontario the sale price of a unit is established in a signed offer to purchase prior to the determination of the exact final unit costs. An amount shown to be written off indicates that the final unit cost exceeded the previously established sale price in the offer to purchase. An amount shown in the mortgage to be reduced column indicates the final cost of the unit was less than the amount indicated in the offer to purchase. Thus the client pays the amount shown in the offer to purchase or the actual unit cost, whichever is less.


Mr. Crosby: 1.	Is the Department of Employment and Immigration moving the immigration office from the Halifax Insurance Building on Spring Garden Road, Halifax to the Quinpool Road Shopping Centre on Quinpool Road, Halifax?

February 8, 1982
Order Paper Questions
2.	What was the lease arrangement at the (a) Halifax Insurance Building (b) Quinpool Road Shopping Centre and, in each case, what amount was paid for what amount of space?
3.	Who negotiated the lease arrangement at the Quinpool Road Shopping Centre?
4.	Were offers or proposals to provide equal office space requested and, if so, what was the response?


Lloyd Axworthy: 1. No. The immigration office in Halifax is accommodated on the Terminal Road and the commission/depart-ment is not planning to move this office. The office that is accommodated in the Halifax Insurance Building on Spring Gardfch Road is a Canada Employment Centre.
2.	(a) The lease for the office of 187.8 square metres at an annual rental of $23,285 in the Halifax Insurance Building is due to expire on November 30, 1985. The Immigration Office on the Terminal Road occupies 222.4 square metres of a total commission/department rental of 985 square metres at a total annual rental of $145,484.50. This lease is due to expire in November, 1985, and there is a two-year option on its renewal.
(b) Not applicable.
3.	Not applicable.
4.	Not applicable.


ORDER PAPER QUESTIONS
Mr. Cossitt: 1.	Is there a government policy to answer Order Paper questions as often as possible without giving specific information?
2.	Did the government adopt a policy of answering Order Paper questions with answers containing no information and, if so, what are all the reasons justifying such a policy?


Yvon Pinard: 1. and
2. The government answers questions in accordance with the relevant sections of Beauchesne's Parliamentary Rules and Forms, editions 1 through 5.


Mr. Cossitt: Is the government giving consideration to recommending a change in parliamentary rules and procedures that would bring about abolition of the rights of members to place questions on the Order Paper and, if so, are the grounds for such policy based on (a) its opinion that it is seldom "in the national interest" to answer questions (b) "it has not been customary to answer questions of a certain nature" (c) the government attempting to limit the rights of members of Parliament to ask questions and particularly their right to have access to information as elected representatives?


David P. Smith: (a), (b) and (c) No.


Madam Speaker:: The questions enumerated by the parliamentary secretary have been answered.


QUESTION PASSED AS ORDER FOR RETURN
David P. Smith: Madam Speaker, if question No. 3,522 could be made on order for return, this return would be tabled immediately.


Madam Speaker:: Is it the pleasure of the House that question No. 3,522 be deemed to have been made an order for return?


Some hon. Members:: Agreed.
[ Text]


PRIVATE FIRMS OR PERSONS RECEIVING GOVERNMENT CONTRACTS
Mr. Beatty: Which private firms or persons received government contracts to work on Telidon and, in each case, what was the value of the contract?
Return tabled.


David P. Smith: I would ask that the remaining questions be allowed to stand.


Madam Speaker:: Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Paul James Cosgrove: that Bill C-89, to amend the National Housing Act and the Canada Mortgage and Housing Corporation Act, be read the second time and referred to the Standing Committee on National Resources and Public Works.
He said: Madam Speaker, the bill before the House for second reading is a response to the serious difficulty which many Canadians are now facing in finding and maintaining good housing at affordable cost. The bill responds to these problems in two ways. In the first instance it provides the necessary legislative authority to put into effect the Canada mortgage renewal plan. Second, it enables the government to act more effectively in stimulating production of rental housing, and makes possible new kinds of assistance for young families who are buying for the first time.
February 8, 1982

I would like to emphasize, Mr. Speaker and hon. members, the urgency in dealing with the amendments regarding the Canada mortgage renewal plan. I know hon. members on all sides have been receiving letters and telephone calls from people having difficulty renewing their mortgages and in danger of losing their homes. They are asked how they can get help under the Canada mortgage renewal plan first announced by the Minister of Finance (Mr. MacEachen) on November 12.
The House will recall that the plan provides interest deferral guarantees for those who have some equity in their homes and are obliged to renew their mortgages at a higher interest rate. Those who have the same problem but have substantially no equity to use as collateral in deferring interest payments the government will assist by providing grants of up to $3,000.
It is very interesting to note that the government of Manitoba announced last week a similar plan which adopts most of the requirements introduced here on November 12. For example, it follows the common sense approach of this government in asking that we use the 30 per cent rule of income. That is, those who are asked to pay a disproportionate amount of their income are to be assisted. It is a short-term plan designed to meet the immediate problem, which we hope will not be repeated.
It is interesting as well, Mr. Speaker, to note that the newly elected leader of the provincial New Democratic Party has said that he will lead that party toward a more middle of the road, common sense approach in his policies. I would like to say, Mr. Speaker, that he did not really have to go into provincial politics to do that; he had only to step across the floor-


Some hon. Members:: Oh, oh!


Paul James Cosgrove: -and support the Uberal Party in its
common sense approach to housing problems, approaches such as the Canada mortgage renewal plan. People who call about that plan, Mr. Speaker, are directed to see their mortgage lenders, who have application forms and can help fill them out and return them to CMHC. Many people have already done that. Applications have been received and can be acted upon once the legislation has been given approval by this House. I sincerely hope that approval will not be unnecessarily delayed by prolonged debate. The plan was very thoroughly discussed by many hon. members on both sides of the House during the budget debate and has been the subject of a good deal of public comment in the news media.
I think my views on the plan are well known. I believe, given all of the circumstances, that it is the only sensible and sensitive action the government could have taken to assist those people who are in serious danger of losing their homes because of high interest rates. I observed that when one is sensible and sensitive, one is usually acting with a sense of common sense. That is what we believe the plan responds to.


John Horton McDermid: Doesn't give two cents.
Housing


Paul James Cosgrove: I suggest to hon. members opposite that many Canadian householders who have now had a chance to study the plan believe it would be helpful in solving their problems. Meetings have been held with representatives of the mortgage financing institutions, and they are prepared to do their part as well in putting the plan into effect. In view of the pressing necessity, I urge all hon. members to act as expeditiously as possible on this bill and on this plan.
At the same time the mortgage renewal plan was announced, the government declared its intention to take some action on behalf of people who rent their homes. The Minister of Finance included approximately $350 million for housing for the next two years, part of which is in his budget to finance the Canada rental supply plan, a rental construction stimulus program which would make available interest-free loans of up to $7,500 per year to stimulate the construction of 15,000 units of affordable rental accommodation in parts of the country where it is scarce. These loans, of course, would be in addition to the assistance provided under the regular non-profit and co-operative housing programs.

I then stated I would meet with the provincial ministers responsible for housing in order to discuss the details of implementing the new program. This has been done and I am generally satisfied with the way this initiative has been accepted.
In the course of these discussions, I emphasized that housing is a responsibility that should be shared by all levels of government in Canada. Each province, in co-operation with the Canadian government, must make housing more accessible and, above all, ensure that local requirements and priorities are taken into consideration.
It is my pleasure, to mention that a number of provinces acted on the federal initiative and are now developing programs that can complement the Canada Rental Supply Plan. [English]
The federal government's initiative, combined with ongoing social housing programs, has been welcomed as a contribution to a very serious problem. I have given the assurance that the available resources may be reallocated during the year if it is found that one region is not taking up all of the assistance which was designated for its use and that there is an urgent need in other areas.
The fact is that, without government support, the construction of rental accommodation in this country is simply not a viable business. In many cases, the rents that can be charged do not allow for a marginal profit. Sooner or later the market will have to be allowed to adjust and to find its normal balance. Our policy with regard to rental accommodation has been to help achieve a smooth transition to a more normal state of affairs and to see that no one suffers in the interim. We are doing that by helping to stimulate increased production of good, affordable rental units and, at the same time, providing assistance to low-income people, including native

February 8, 1982
Housing
people, the elderly, the handicapped and others who are not able to meet their needs in the market.
The fact that the Minister of Finance agreed to make the MURB tax provisions available until the end of 1981, as we know, gave rental production a real spurt in the last few months-


Some hon. Members:: Oh, oh!


Paul James Cosgrove: -of 1981, and 1 expect that momentum will carry into the spring months. At that time, the Canada rental supply plan will be taking effect and will provide the steam needed to keep production going.
1 would like to add that these 15,000 new units would mean not only affordable homes for 15,000 more families, but also an estimated 35,000 additional jobs for people involved in the construction industry and associated businesses.


An hon. Member:: That's performance!


Some hon. Members:: Oh, oh!


Paul James Cosgrove: The legislation we are talking about today will give us an additional stimulus to rental construction which is over and above these 15,000 units. It will do this by giving CMHC the flexibility to adjust its mortgage insurance premiums, and the corporation will thus then be in a position to raise its loan value ratio to a much more attractive level without jeopardizing the mortgage insurance fund. In other words, the corporation will be in a position to insure mortgages which represent a substantially higher proportion of the total cost of the project, thus permitting the entrepreneur to launch the project without having to put up a prohibitive amount of his own money.
The amendments as well will permit CMHC to be more helpful to home owners, particularly young families buying their first house. The problem is related, of course, to high mortgage interest rates, and high mortgage interest rates are part of our battle to reduce inflation and, of course, to restore healthy economic growth. But the problem is also in the mortgages themselves. The conventional mortgage, which served us very well over the last 30-odd years, just does not work in a time of high or volatile interest rates.


Mrs. Mitchell:: Why don't you keep interest rates under control, then? Do something about that.


Paul James Cosgrove: Lenders are reducing the term to a year or even six months to avoid getting locked in to what may turn out to be an unprofitable rate of interest. Unfortunately, this uncertainty about trends in interest rates falls most heavily on home owners and entrepreneurs who want to borrow money to construct rental accommodation. They have no assurance from year to year, or possibly even month to month, that they will be able to afford the new monthly payments.


Mr. Ittinuar:: Tell Allan MacEachen.


Paul James Cosgrove: What we need are new kinds of mortgage instruments, arrangements which will do away with some of the uncertainty. There are a number of them around, such as variable rate mortgages, equity participation mortgages and shared appreciation mortgages.


Peter Ittinuar: Maybe a new type of government!


Paul James Cosgrove: Some of them may very well help solve the problems of first-time purchasers. We would like these families to have the opportunity to use them, if they wish.
The government would like to help facilitate the introduction of these alternatives. The legislation now before the House will give CMHC more flexibility in premium setting and will allow us to do that.
CMHC has always had an important role, as the agent of the government, in the field of housing. At the same time, as a business corporation it administers the mortgage insurance fund on the government's behalf as a way of ensuring that there is always an adequate supply of mortgage money for people who need it.
When the fund was set up in 1954, it was intended to be self-financing. Premiums were set at a level which would be enough to offset claims which could be reasonably expected. In fact, until the late 1970s it worked pretty much in that way. In recent years, however, claims against the fund sharply increased, mainly because of the high proportion of defaults under the assisted home ownership and assisted rental programs, AHOP and ARP.


Peter Ittinuar: "No hope", not "AHOP"!


Paul James Cosgrove: This unprecedented rise in claims created a liquidity problem for the fund and a substantial sum had to be borrowed from the government to restore the fund's cash flow.
In addition to the liquidity problem, there was a question about the fund's solvency. The problem lies essentially with the fact that the premium which was set by the corporation and the premium which it, in turn, may charge for mortgage insurance is set out in the National Housing Act and cannot be adjusted except by an act of Parliament. Premiums for insuring mortgages under the two programs I announced were limited by the statute to 1 per cent. Actuaries estimate that, in order to prevent a serious drain on the fund, it would have been necessary to set the premium for these mortgages at more than 8 per cent.
Again, the solution to this situation is in the bill now before us. It would allow the corporation to adjust mortgage insurance premiums and set them at a level which would be appropriate for the risk and sufficient to cover the cost and expense of doing business. In short, CMHC would have the same flexibility with regard to premiums as a private insurer. This arrangement would allow CMHC to insure new, innovative mortgage instruments which it could not cover under the fixed-premium system. It will also permit the corporation to set premiums at a level which will allow it to insure mortgages for rental properties at a loan-to-value ratio that will be more
February 8, 1982

attractive to entrepreneurs. Both of these features go hand in hand, the provision which permits a loan-to-value ratio and the $7,500 per unit interest-free loan.
Another difficulty with the fund has to do with the costs of running the business; underwriting costs, the cost of generating new business, inspections and appraisals, and so on. The application fee charged has never been adequate to cover these costs and the shortfall has been covered by CMHC out of other revenues. The bill will correct the situation by permitting the corporation to charge application fees appropriate to the costs and by providing that the fund be operated on a self-sustaining basis.
Another restriction on the corporation has to do with the reserve fund. At the outset it was specified that the reserve fund should never exceed $5 million. That limit was reached, of course, very early in the history of the corporation. Since then it has not been allowed to engage in the customary business practice of setting aside surpluses in good years to provide for future deficiencies. The bill would rectify that situation by providing that the limit on the reserve fund would be established by order in council rather than by legislation.
The fund's difficulties have been compounded by the constraints set out in the NHA regarding the settlement of claims. This is another very important area that I would stress to all hon. members. It is a cost to the Government of Canada through Canada Mortgage and Housing which is unnecessary, one which can be remedied by supporting the legislation before us today.
The law requires that claims must be settled after the property is transferred to the fund. This means that CMHC cannot negotiate some other settlement that does not involve its acquiring the property, for instance by the lender exercising the power of sale. These restrictions are unnecessary. The cumulative effect is a significant unnecessary cost to the corporation and to taxpayers generally.
These changes will mean that more foreclosures and defaults will be avoided. It will also mean that the fund will not always be obliged to acquire property, as I indicated, depleting its liquid assets and incurring unnecessary costs.
These are some of the ways in which CMHC would become more flexible in responding to changing conditions, more businesslike in its operations and, I believe, more effective in helping to improve the housing situation in Canada.
I do not suggest that the bill now before us will solve all of our housing problems. As a matter of fact, I propose to bring before the House very shortly another bill which will make significant improvements in the program which serves the housing needs of native Canadians and low-income people in rural areas.
During the Christmas break and early in the new year, I had the opportunity to meet with representatives of native organizations, both nationally and provincially. I prepared submissions to my cabinet colleagues. As I indicated, that matter will
Housing
presently be before the government for consideration. My hope is that it will follow shortly upon this legislation. Indeed, there is a possibility that it might be part of this legislation.
All of the government's social housing programs have recently been the subject of a very thorough evaluation and I believe there will be other important changes. For example, members opposite and myself have asked about the role of the shelter allowance, a device used by other jurisdictions. It is something we have not to this point implemented in Canada. The Minister of Finance indicated that the resources for such a program, which would be costly, have to be considered.
All of these initiatives that I have indicated-the priority I place on the rural native program, the study and the prospect of a shelter allowance-will come forward. In the meantime, the legislation before us today will create the opportunity to take some urgently needed action affecting the supply of rental accommodation throughout Canada and the accessibility of home ownership, especially for young families who are not well served by our conventional mortgage arrangements.
In conclusion, I note that the housing minister of the province of British Columbia has asked that I meet with him and other housing ministers to discuss a wide range of subjects. My feeling is that it is time for action rather than further discussion. That is why we have this legislation before us today which will achieve the objectives I have set out. I would find it very encouraging if that minister and other ministers in the provincial jurisdictions would join with action, funds and specific programs to address the problem of housing in Canada.


Hon. James A. McGrath (St. John's East):: Mr. Speaker, this is a very important debate. I would like to be able to say that this is a very important bill, but we have very strong reservations about what the government proposes. Certainly we can support the principle of the bill, but we are concerned that it does not go far enough. Indeed, it does not even represent band-aid treatment for a critical housing problem facing this country today.
It is interesting that the minister should open on a positive note wherein he referred to the tri-level of responsibility in the area of housing. He said, and I wrote down his words, "the responsibility should be shared with all levels of government." I thought he would develop that theme throughout his speech, but he did not. Indeed, he ended his speech by saying that he refuses to meet with the ministers responsible for housing to discuss just exactly the course of action the government has embarked upon.
That is difficult for me to understand. One can only assume by that statement that the provincial ministers have had no - input whatsoever into this legislation. Indeed, I suppose the minister has not even taken them into his confidence in terms of discussing with them the provisions of the bill. So much for developing the concept of the need for co-operation, bearing in mind the fact that the responsibility for housing in this country is shared with three levels of government.
14762

Housing
It is not difficult for us to support the provisions to put Canada Mortgage and Housing Corporation on a stronger and more businesslike basis, although I will say that we intend, when the bill gets before the committee, to examine the bill in greater detail and question the officials from CMHC on these particular provisions. However, we must take advantage of this opportunity to zero in on what the legislation proposes to do to bring some measure of relief to the housing crisis facing this country today.
The Minister of Public Works responsible for housing (Mr. Cosgrove) is a member who comes to the House with a measure of experience in one of the three levels of government. He was the mayor of his city for some time and was a member of the metropolitan Toronto council. During the short period that I have had the responsibility of being housing critic, I have come to know the minister. I may say that 1 have great respect for him because he is a decent and honest man. 1 believe that he has been given a bum rap in having to bring this bill forward. What we have in this legislation is the embodiment of the inadequate measures which are contained in the budget of the Minister of Finance (Mr. MacEachen) to deal with the drastic housing crisis which faces Canada today. This legislation is an attempt to deal with the expectations which have been generated in the minds of the Canadian people by the minister responsible for housing when he told them to wait for the budget-expectations which have gone unfulfilled.
It is interesting to note as we commence second reading of this bill today that it coincides with the release of the seasonally adjusted housing starts for January. These starts show a drop of 18 per cent from the previous month of December, down to 148,700 starts. This provides me the opportunity to comment on what the minister said a few minutes ago with respect to MURBs. The reason for the surge in housing starts during November and December was due to a last minute effort to cash in on the MURB program which was to be terminated by the Minister of Finance in his budget. I will have more to say about that in a few moments.
It also coincides with today's release of a letter which was the subject of question period today. It was a letter from ten Liberal Members of Parliament, including two cabinet ministers, which was released with a communique. I will read the communique:


Mr. Roy:: En franqais.


James Aloysius McGrath: I will let the hon. member read it "en franqais". I look forward to hearing him participate in the debate and defending the views put forward by his ten hon. friends.


Marcel-Claude Roy: I put my name on the list.


Flora Isabel MacDonald: Good for you.
February 8, 1982


James Aloysius McGrath: The communique read as follows:
Following (wo meetings of their regional Caucus, the Members of Parliament for the Central-Eastern part of Montreal have released today a letter to the Prime Minister asking Mr. Trudeau to immediately initiate measures to fight unemployment.
The ten Members of Parliament have suggested two new programs to create jobs in certain specific sectors of the economy.
The first proposal calls for the stimulation of the housing construction industry because of its well known spinoff effects.
I will continue to quote:
The program would also help to make up for the deficit of some 50,000 housing units suffered by Canada in 1981.
Of course, that is a very conservative estimate.
As a second measure, the group suggests a program to help business hire more youths under age 25, as this group is the most severely affected by unemployment.
They then conclude by saying:
These MPs are also convinced that these measures must be adopted right now as they cannot wait for the results of a long-term economic policy which they otherwise consider sound and realistic.
That letter is signed by the hon. member for Saint-Leonard-Anjou who happens to be Minister of National Health and Welfare (Miss Begin), the hon. member for Hochelaga-Maisonneuve (Mr. Joyal) who is the Minister of State from Quebec, as well as the hon. member for Laurier (Mr. Berger), the hon. member for Montreal-Mercier (Mrs Hervieux-Payette), the hon. member for Rosemont (Mr. Lachance), the hon. member for Gamelin (Mr. Portelance), the hon. member for Saint-Jacques (Mr. Guilbault), the hon. member for Saint-Michel (Mrs. Killens), the hon. member for Montreal-Sainte-Marie (Mr. Malepart), and the hon. member for Bourassa (Mr. Rossi).


Flora Isabel MacDonald: They all did it after seeing the minister's bill.


James Aloysius McGrath: Interestingly enough, Mr. Speaker, they made their representations to the Prime Minister (Mr. Trudeau) after the bill had received first reading and before second reading debate on the bill in the House. It makes one wonder why it was necessary for a senior member of the cabinet and the most junior member of the cabinet, although he is very well respected, to communicate with the government in this way when they are members of that same government. I find that intriguing. I suspect there is more to it than meets the eye. Perhaps we are seeing the beginning of a little game to attempt to get the minister responsible for housing and the Minister of Finance off the hook. Perhaps we may see, even before this debate is finished, a magnanimous gesture on the part of the Minister of Finance and the minister responsible for housing to bring in further amendments which would go considerably beyond the measly provisions in the budget. Perhaps that is their objective.
Knowing the Minister of National Health and Welfare, a senior and experienced member of the House, and knowing the Minister of State, a very respected and competent member of the House, I suspect there is a great deal more to this than what is contained in the communique. It is interesting that the
February 8, 1982

Minister of Public Works responsible for housing made no reference to it. Before this debate is over 1 suspect we will hear more, probably a great deal more, about the letter.
One thing this letter does implicitly is to suggest there are inadequacies in this measure which is now before the House. This measure will do nothing to address the deficit in housing starts we will be facing in this current year. If nothing else, those ten hon. members have done a service by underlining that fact. To my recollection, there is no similar precedent to this happening in the past 20 years, where a minister of the Crown would publicly comment and criticize a bill on the very day that second reading debate is to commence. As I say, Mr. Speaker, I suspect there is a great deal more to it than meets the eye.
In order to put this monumental problem of the housing crisis in perspective-a crisis which is unprecedented since the Second World War when Canada Mortgage and Housing had to become directly involved in the housing construction industry to satisfy the needs of returning veterans-we should go back a decade to review the report of the Hellyer task force. For those hon. members who may not recall, Paul Hellyer was the deputy prime minister, minister of transport and minister responsible for housing. He felt so strongly about the housing problem and where it was headed that he put together a task force over which he presided and went across Canada to hold public hearings. He introduced a report with recommendations and a declaration of principles. It should be remembered that the executive assistant to the then minister of transport was none other than the present Minister of Employment and Immigration (Mr. Axworthy), who I suspect played a large role in writing the report.
I would like to quote one or two points from this declaration of principles contained in the recommendations of ten years ago. They are as follows:
1.	Housing and urban development are an urgent priority for the people of Canada and must be treated as such by their elected representatives at all levels.
2.	Every Canadian should be entitled to clean, warm shelter as a matter of basic human right.
3.	While it will take some time to realize this goal, a concerted effort is required by all concerned-governments and the private sector-in the years immediately ahead. A minimum objective must be to produce one million additional housing units within the next five years.
If the government of the day had taken the report of that task force seriously and implemented the recommendations of that task force-and we have the same Prime Minister and essentially the same government-we would not be facing the monumental problems in housing that we have today.
What happened? The recommendations received such a negative response from the Prime Minister and the members of the government that shortly after the presentation of the report the man who held the second highest elective office in the country, the deputy prime minister of Canada and the minister responsible for housing, saw fit to resign from the cabinet over the failure of the government to respond to the recommendations of the task force.
Housing
The present minister responsible for housing has not been a member of this House for very long, although he comes here with the experience of his municipal background, and I know from the pronouncements he made prior to the budget that he expected a great deal more from the government. All we have to do is read from that famous leaked document of October, a presentation made to the cabinet over the signature of the Minister of Public Works who is minister responsible for housing, wherein he identified the seriousness of the problem. One would have expected, consistent with what the Hon. Paul Hellyer did, that when the government failed to act on the advice contained in that document to respond to the alarm expressed in that document, the Minister of Public Works, who as I say is the minister responsible for housing, would have resigned from the cabinet.


Paul James Cosgrove: Have you read the Matthews report?


James Aloysius McGrath: If the government does not change its disastrous course, perhaps it will come to pass that the Minister of Public Works will have no choice but to do the honourable thing and resign from this government and divorce himself from the disastrous policies of the Minister of Finance which he now has to carry on his back.
Let us take a look at that leaked document. Although it has been quoted in this House, it bears repetition because of its relevance to the bill now before the House and the failure of the government to respond. The document dealt with the implications of the current level of mortgage rates in the housing sector and the impact of prolonged high interest rates. The leaked document states at page 7:
Over the next two years approximately 1.2 million households will be renewing their mortgage. Most of those renewing will be able to do so although the adjustment will be painful. For those households house payments will increase but they will still be paying less than 30 per cent of income for mortgage debt service and taxes.
It then goes on to say:
An estimated 30,000 to 40,000 households cannot even take the steps to help themselves and retain their home. They would have to pay well over 30 per cent of household income for principal, interest and taxes. For these households the situation is one of hardship. Their choices are to pay a very large proportion of their income to retain their home, try to sell their home, or just walk away and face foreclosure.
We know that the proposals contained in this bill will affect only about 12,000 households in Canada out of approximately
900,000	which will be renewing. It barely addresses the problem, and those who are in "dire straits"-a term used by the Prime Minister in addressing what the government intended to do; he suggested it would help those in dire straits-can look forward to a one-time payment. Yet we are told that mortgage interest rates are on the way back up again after falling from the high of 21.4 per cent of last September. We are told they are on their way back up again and will again reach 20 per cent this year.
The problem of lack of housing can best be described in terms of availability and affordability. Let me deal with availability for a moment. On Friday, February 5, CMHC reported that housing starts fell to the seasonally adjusted

February 8, 1982
Housing
annual rate of 148,000 units in the month of January. That is a substantial drop of 18 per cent from the month of December. Actual housing starts in urban areas numbered 10,349, up 26 per cent from the comparable number of January, 1981. CMHC showed that housing starts were down sharply from the month before. I have already referred to the fact that the surge in December and November can be directly attributed to the desire to cash in on the MURB program before it was phased out by the Minister of Finance in his budget. Starts on single detached units in urban areas were down 59 per cent for the year, and most of the multiple unit starts were apparently the result of this surge. CMHC states that we need to produce an average of 220,000 new housing units each year between 1981 and 1986 to meet our requirements.
Let us take a closer look at these CMHC figures because they project requirements to the end of the century. In terms of requirements, in the five-year period from 1976 to 1981 the requirement was 222,000 starts per year in rental and home ownership accommodation. From 1981 to 1986 the requirement is 210,000. From 1986 to 1991 the requirement is 181,000, a gradual decline as demand drops off. However, the key, critical period is from 1981 to 1986, which this bill fails to address, because if we look at requirements and actual housing starts, we find that therein lies the true story. For example, there were 178,000 starts in the year just past, 1981, whereas the actual requirement was 222,000. That, of course, speaks to the deficit referred to in the letter from the two ministers and the eight hon. members. We shall be having much more to say about these statistics in terms of requirements and in terms of the failure of the government to meet the need which was foreseen by the Hon. Paul Hellverat the time he brought in the report of his task force.
In terms of the question of availability and housing inventory, I would like to go back and quote from the minister's document at page 19 as follows:
The present level of interest rates renders rental investment uneconomic across the country. The average metropolitan area rent of $400 quoted in this document compares with average investor carrying costs of $750 on the mortgage and property tax for a newly constructed unit with a 30 per cent down payment.
Then he went on to say:
Rental investment will thus dry up in most markets. Even when vacancy rates have dropped to zero there will be no new building until there is a better correspondence between investor costs and market rents for new units. This correspondence will only be achieved after a period during which waiting lists prevail and tenants have little choice of accommodation. Vacancy rates in most markets will approach zero by 1983.
At the rate we are going, Mr. Speaker, we will approach zero vacancy rates in most of the major metropolitan areas of the country before the present year is out. Indeed, we have almost arrived at that particular unhappy situation in metropolitan Toronto. Indeed, it was reached in the city of Oshawa before the end of the year. If you look at the situation across the country, starting from Vancouver and going east to Halifax, to St. John's, Newfoundland, the situation is no better.
Yet what is the response of the government, with the shortfall in rental accommodation? Let us take a look at what they did. They cancelled the MURB program, which was responsible for 25,000 starts last year, and replaced it by a measure contained in this bill, whereby 15,000 units will be eligible for an interest-free loan of $7,500. That means, of course, 10,000 fewer starts this year in rental units.
On top of that, Mr. Speaker, if you examine the budget in terms of social housing, there is a net reduction, down to
25,000	social housing units from the 30,000 starts we had last year. That is a net reduction of 5,000. That is to say, there is a net reduction of 15,000 starts in rental units as a result of this budget.
All we are doing with the $7,500 interest-free loans for the 1 5,000 units to be spread across the country is making up for that shortfall. The CMHC document itself makes the point, and it is a prediction that is well on the way to being realized, that there will be no new rental units started in Canada this year other than those that are publicly assisted. The reason for that is very simple. Given the interest rate situation in the country today, there has to be a greater correspondence between starts and rental income for housing units in order to make them economically viable.
For example, if an investor has to achieve a return of $750 a month on a one-bedroom apartment in order to meet his interest payments and property tax, then obviously he is stuck; because-and here I give full credit to the minister; he made reference to this when he met with his provincial counterparts-that same apartment today, if you take any of the large metropolitan areas of the country, would rent for about $450. That is because of rent controls.
I believe we have to start thinking seriously in terms of rent control. I agree with the minister that if you are going to allow the market forces to work you have to take a look at the kind of impact that rent controls have on the marketplace. If you accept that, obviously it follows that you have to do something to make up for those who cannot afford to pay the market price.
I was sorry to hear the minister dismiss out of hand the question of shelter allowance. I believe that is the way we should be approaching it; we should have a policy of shelter allowance.


An hon. Member:: Without rent controls.


James Aloysius McGrath: We should have a policy of shelter allowances in order to allow the market to operate, so that we can start building rental units in this country. Otherwise we will have a situation-which again was predicted by the minister in his document-whereby we will have a black market situation in Canada, which would lead to key money and all sorts of dreadful things.
We know what key money is. Key money occurs in a black market situation. There was the black market situation that developed during the Second World War, whereby you had to bribe the superintendent of an apartment building. If there
February 8, 1982

was a vacant apartment in that building, you bribed him to let you have a look at the apartment; and if you wanted to rent the apartment you had to give him a bribe for every month you were renting. That is key money.
Many people will be faced with the prospect-predicted by the minister in his document to his cabinet colleagues-of not being able to find rental accommodation and consequently having to double up with their parents and with their friends. What a desperate situation! What a desperate situation we are in in this country today!
This bill, Mr. Speaker, does not come anywhere close to addressing the need. The 15,000 units that will be scattered across the country which will qualify for the interest-free loan of $7,500 would barely satisfy the demand in metropolitan Vancouver. We are told that it would barely satisfy the demand in the city of Calgary. We have the elimination of the MURB program, and what do we get in its place? We get
15,000	units that will be the subject of the $7,500 interest-free loans.
The situation is desperate, Mr. Speaker, and it is getting worse. In 1979, apartment starts were only 58,000; in 1980, apartment starts dropped another 10,000 units, for a total of 48,000; last year, in 1981, apartment starts were approximately 52,000 units. Since 1978, apartment starts have fallen short of apartment requirements by 77,000 units, or a full years requirements. This shortfall in apartment starts is occurring at a time when apartment vacancy rates are rapidly reaching the zero mark, as I have already indicated.
These are astonishing facts, Mr. Speaker, at a time when apartment vacancy rates are continuing to drop, we are seeing apartment starts continually falling behind our requirements.
To repeat what the minister said in his document, we are rapidly approaching a zero vacancy rate across the country. It is 0.4 per cent in the City of Toronto, in the last figures released from CMHC; in the City of Oshawa; we are already down to 0.0 per cent; and it is 0.2 per cent in Vancouver, and so on.
Let me speak for a moment about the question of affordability, because it is related. If you cannot find an apartment and if you cannot afford to buy a house, what do you do? Where do you go; where do you look for shelter? You double up, if you are not affluent enough to be able to afford the black market?
Let us look at the housing situation in 1965. In 1965, when most families in Canada had only one income, one in two families could afford to buy a home and carry the mortgage for 30 per cent of the family income. In 1965, the average Canadian wage earner was making about $5,000 per year, according to Statistics Canada. In that year mortgage interest rates were about 7 per cent, according to Bank of Canada figures. A three-bedroom bungalow in 1965 could be purchased for between $16,000 and $18,000. That three-bedroom bungalow was a new bungalow. Resold homes could be purchased for less.
Housing
In 1981, the situation was drastically different for Canadians wanting to purchase their own homes. In 1981, the average Canadian industrial wage was $18,468 a year. Mortgage interest rates have fluctuated from 15.17 per cent in January,
1981	to a high of 21.6 per cent in October, and are currently hovering around 18 per cent; and we are told by all of the market analysts that they will go to 20 per cent before this year is out. In 1981, the same three-bedroom bungalow, which could be purchased for $16,000 in 1965, cost about $74,000 to purchase on resale or $100,000 to build new. Between 1965 and 1981 the price of that bungalow rose by approximately 600 per cent. The concomitant increase in wages during that time does not even come close; wages between 1965 and 1981 rose by about 300 per cent. Of course, the implication is obvious-to own a home has become an impossible dream. As well, between 1965 and 1981 mortgage interest rates rose by about 300 per cent.
Let me take a look at the government's response in the November budget. The government proposed to provide $50 million in 1982 in the form of relief to home owners faced with mortgage renewals and the added burden of increased fuel costs. We should not forget increased fuel costs. The government came up with a mortgage interest deferral plan, but in
1982	close to 900,000 Canadians will have to renew their mortgages. As 1 have indicated, barely 2 per cent of that
900,000	will qualify for assistance. If a person is one of the unlucky ones who had to renew before September when mortgage interest rates were 21 per cent, he or she is out of luck and does not qualify.
The government's response with a mortgage renewal plan will put home owners further into debt because the program only allows people to defer interest payments. It is interesting to refer to the minister's document in respect of what he thought of the option of interest deferral payments. It reads:
Options such as interest deferral and lengthened amortization periods appear unlikely to be able to resolve the difficulties faced by all households renewing their mortgages.
What a pity the minister did not see fit to follow that advice!


Paul James Cosgrove: It is called "the grants provision" of the program.


James Aloysius McGrath: When the bill goes before committee, we will have an opportunity to examine the minister on his proposals. He did not tell us much in the 25-minute speech he made to the House. Obviously we will have to wait until the bill gets to committee. The minister could have brought in or carried on with the mortgage interest and property tax credit program which would have meant $1,500 to the average mortgage holder this year.
The energy fuel tax credit program which would have addressed the rising cost of home heating could have been continued in the budget. The government could have brought in a proposal for shelter allowance which would have made it easier for provinces to lift rent controls. It is not enough for the

February 8, 1982
Housing
minister to tell us that shelter allowances are too expensive. Unless there is some form of shelter allowance which will allow the lifting or easing of rent controls, I see no relief in sight, because the market will not have a chance or be allowed to function. With the elimination of MURBs there is no investment incentive left. Unfortunately the prediction of the minister in his document that the only rental units which will be built in Canada in 1982 will be those that will receive government assistance is all too true.
The minister said that he hoped the debate would be a short one because he was anxious to get the bill passed. I can understand why he would want a short debate, but surely he must realize the depth of the feeling in the country. All he has to do is look at the letter of his own colleagues to the Prime Minister to have some feeling of how deeply the situation runs in the country. I look forward to the ten hon. members on the other side who signed that letter standing in their places and expanding on their remarks. This is the time and place to do it, in this debate, not by way of a letter to the Prime Minister which is released in a communique on the day the bill comes before the House for second reading. I hope they will participate in the debate, as many of us will and have to, because it is our responsibility to bring home to the government the desperate need in the country which, unfortunately, is not being addressed by the budget and is being totally ignored by the bill.


Margaret Anne Mitchell: Mr. Speaker, every Member of Parliament is well aware of the housing crisis which affects many of his or her constituents. The cost of rents or mortgages is consuming half the incomes of families. Additional housing units are not being constructed, as my colleagues have pointed out, to meet the needs of young people who have reached child-rearing years but must remain childless. Those houses which are being built are so costly that even middle-income professional families cannot afford them. Workers are moving westward looking for jobs. In places such as Vancouver, thousands of immigrants who have come to the country recently are competing with them in an attempt to find places in which to live. One million poor people, many of whom are single-parent families and elderly pensioners, need decent shelter. In most of our large cities today we are displacing them from inner city areas with new development and white painting, yet no public housing is being built. Housing conditions on Indian reserves are a national disgrace.
These are only some of the reasons we in this party feel that major amendments to the National Housing Act are required. In preparing to speak on the bill, I reviewed the history leading up to the present housing crisis in Canada and indeed the history of the Canada Mortgage and Housing Corporation. The more I researched, the angrier I became. I have concluded that the disastrous housing situation which is hurting so many Canadians did not just happen. It is not only a result of unavoidable economic trends; it is directly attributable to deliberate federal government policy. The facts show that the Liberal government has created, nurtured and even exploited housing problems of Canadians.
Bill C-89 is the latest step of the Liberal government to divest itself of direct responsibility for housing, at the very time when the housing crisis is the worst in Canada's history. It is another sell-out following a whole series of CMHC cutbacks over the past five years, cutbacks aimed at removing government from all public responsibility for housing. This policy denies the rights of Canadians to decent, affordable housing, a right which we feel should have been enshrined in the Charter of Rights and Freedoms.
A review of historical facts shows that the federal government itself is the villain. It is not just the economy, it is the federal government. The Liberals could have and should have planned for housing needs and continued their direct mortgage policies which were so successful in the 1940s, 1950s and 1960s. Instead, they decided to move out of the areas of direct responsibility for mortgages and for housing programs and to leave them to the private sector. They must have taken lessons from the Tories.
Therefore, the government has not only been negligent or ignored the increasing housing problems of a growing, aging and migrating population, but surely it has not been unaware of the terrific escalation in housing costs. We have challenged the government every day in the House about housing costs faced by renters and home owners alike, costs which are destroying families. An analysis of the budget of CMHC over the past five years proves beyond a doubt that this was a deliberate Liberal policy. The government itself is responsible for the housing crisis in Canada. We on this side of the House accuse the government of committing a crime against the people of our country.
The CMHC budget has been reduced substantially over the past five years, years of mounting housing crises. The over-all CMHC budget was reduced from $1.8 billion in 1976 to $392 million in 1981. That is a drastic reduction. This reduction was made during the very period when times were getting tough and costs were escalating. Yet CMHC was cutting back. The cutback had a direct impact on housing starts over that period. Housing starts dropped from over 245,000 to under 180,000. As my colleague from St. John's East (Mr. McGrath) has pointed out, housing starts are dropping even more dramatically today.
Between 1976 and 1981 the federal government reduced substantially every type of housing assistance, except in one area, that being rehabilitation housing. Money for rental housing was reduced from $100 million to zero. Imagine no money allocated to rental housing. The amount of money for non-profit housing was reduced from $286.5 million to a mere $1 million. Money for co-op housing was reduced from $51 million to only $800,000. The amount for public housing was reduced from $268 million to $33 million. The only people who have any right to have public housing are Pierre Elliott Trudeau and his sidekick, Joe Clark.
The budget for rehabilitation of old housing was increased, although 100,000 victims of urea formaldehyde foam insulated
February 8, 1982

houses, of course, have not been included in these rehab programs.


Mr. Kristiansen:: Trudeau will lose his house, too.


Margaret Anne Mitchell: Let's hope so, and Joe Clark as well.
The budget for native and rural housing, which should have been expanded as a top priority, was reduced from $178 million to $115 million. Native and rural housing should have been top priority for this government. The condition of native housing, as my colleagues here can substantiate, is one of our greatest national problems.
Finally, the budget for community service programs, to which one of my colleagues will speak next, was reduced for municipalities from just over $434 million to a mere $25 million. Now we know that both the community service grant program and the neighbourhood improvement program have been cancelled altogether.
These figures reflect the fact that the federal government's policy has been to withdraw from direct housing assistance programs. This decision was made over a time when there was the most urgent need in our history for increased, not diminished, involvement in every federal program.
We have a government that ignored the increasing need for a steady supply of rental housing in most urban centres, private, non-profit and public housing. It has deprived municipalities and native communities of essential funds for land banking, for housing infrastructure, servicing of land and for neighbourhood improvements. This is particularly important for older communities in Canada. The government has been of very little help to the private housing sector as well, as my colleague from the Progressive Conservative Party has just documented.
On top of CMHC cutbacks, and over the same period, the government adopted a high interest rate monetary policy, which policy is completely destroying the home ownership dream in Canada.
It is necessary to have an overview of housing conditions as a basis for evaluating the principles of Bill C-89. First, let me deal with home ownership. Flousing starts over the past three years have averaged an all-time low of 177,000. New houses have been built but they are so costly they are out of the reach of most Canadians regardless of income. Monthly house payments now consume between 50 per cent and 80 per cent of an average family's income. It takes not just two but three family wage earners in most communities to pay off a mortgage now.
In 1980 an average home in Vancouver cost $100,000; $94,000 in Calgary; $75,000 in Toronto; $51,000 in Montreal and Flalifax; and $41,000 in St. John's where prices are rising rapidly. By 1981, within just one year, the over-all national average for a modest home was up to $109,000. In Vancouver, the average house price rose to $165,000. Speculators flipped houses making thousands of dollars overnight. When average prices dropped in the late fall to about $130,000, many could not afford to pay the mortgage renewals and had to consider selling. Of course, by then the market had dropped out of
Housing
housing sales and people could not sell without facing severe losses. Meanwhile, in Toronto, prices escalated to $104,000. This was an increase of 35.2 per cent over 1980 prices. I mention both Vancouver and Toronto as examples because 1 am sure we all realize that the trends experienced in those two cities could hit every major urban centre in Canada. This boom or bust real estate market in Canada which has made many people homeless was encouraged by the lack of government spending, the lack of controls on speculation and the general encouragement of the myth that home ownership is the best hedge against inflation. There is nothing in Bill C-89 that will prevent such nightmares from continuing and spreading to the Atlantic provinces and to other regions as resource developments get under way.
As far as rental housing is concerned, Canada needs at least
100,000	new rental units a year. In 1980, when thousands of refugees were welcomed to Canada, only 48,000 apartments were being built to house Canadians as well as newcomers. In 1981, the number of apartments being built rose to 52,000. However, the minister himself predicts that there will be well under 40,000 new rental units constructed this year. We have a situation where 40 per cent of Canadians are tenants, many paying over 50 per cent of their incomes on rent. This trend will increase in the years ahead since home ownership is virtually impossible for most people.
Rent for a two-bedroom apartment in either Toronto or Vancouver costs an average now of $750 per month. Other cities' prices are not far behind. In most major cities there is simply no accommodation despite the price. We have said before in this House that we knew of people sleeping in cars and tents because they could not even get poor rental accommodation in Vancouver.
There are long waiting lists for apartments. People must double up. I suggest that the Conservative critic might like to double up with the minister responsible for CMHC inasmuch as they seem to have the same philosophy on some of these things.


Mr. Dinsdale:: That would be the odd couple.


Margaret Anne Mitchell: People on fixed incomes have no hope of finding accommodation they can afford. Increasingly parents are having to continue supporting their adult children, children in their twenties and even close to the age of 30, because these young adults cannot find work nor can they afford to rent their own apartments.
In a confidential report to cabinet last fall, the minister admitted that the rental market was the first victim of our construction slowdown. This slowdown was caused by high interest rates despite the MURB tax write-offs which were the minister's giveaway to investors, which are now being extolled by the Tories. This report also predicted that no private rental starts would occur this year because of current interest rates. The minister cannot say he did not know about this situation. The situation was predicted in his own report, which we had to release to the public.

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Housing
The rental situation will, of course, worsen in 1982. As the report indicates, a black market in rental units is within the realm of possibility. Minus zero vacancy rates and the doubling of average rents will also occur if controls are removed. They are being removed in the main because of the campaign by this minister.
If the rental situation is bad for average working people, how much worse is it for pensioners on fixed incomes, some of whom we met today here in Ottawa, and I will say more about that in a moment. How much worse is it for single parents struggling to raise a family on their own, for the disabled, for immigrants working for minimum wages, and for students struggling to get an education and who are lucky if they can find a very crowded basement room with consequently no chance of doing their studies.
So, Mr. Speaker, it is a truly desperate situation. To the existing one million poor people Canada is now adding every week thousands of laid-off workers. How can these people possibly afford rent or mortgage payments which are far in excess of 30 per cent of their income? They simply cannot. Who can on unemployment insurance or welfare? The minister responsible for CMHC obviously is not concerned about the rental problems of Canadians except, of course, from the point of view of the construction industry and wealthy people who want a tax rebate.
Responding to pressure from his HUDAC friends, he continues his campaign to persuade provinces to do away with rent controls. That I feel is immoral. How can this possibly help the rental situation? I mentioned earlier the pensioners we talked to today. One of them in Vancouver had his rent raised to $302 a month for a small one-bedroom apartment. Because that increase brought it out from under rent controls, within a few months his rent jumped to $492. This is the kind of thing that happens if you do not have rent controls. Of course, we need fair rent controls and help for landlords as well, although they can write off some of their costs on their income tax.
The hon. member for St. John's East extolled the virtue of shelter allowances. Obviously he has not read the report on this subject from the Canadian Council on Social Development which has serious questions about this. Unless there are rent controls and an adequate stock of housing at an affordable rent, how can the government afford shelter allowances which are going to subsidize rents of $750?
What has the government done about this disgraceful situation? Well, the poor minister should certainly be shamefaced to have to stand up in this House and announce he is going to provide 15,000 rental units this year when the need is for 100,000.


Paul James Cosgrove: Forty thousand.


Margaret Anne Mitchell: Forty thousand with non-profit housing. I am referring to private rental housing for the ordinary market.
As we know, in the past most rental programs introduced by this government are really just a way of getting into the market, as they did with the MURB write-offs, and then they roll these over, turn them into condominiums, sell them off and the rental housing stock the government has been attempting to introduce is lost. This 15,000 units will do nothing to meet the demand for rental housing. The minister says they will be affordable. He has yet to prove that, so we will be interested to hear his explanation in committee. Bill C-89 and the government policies will do nothing to alleviate the worsening rental situation in Canada and this government must bear the responsibility.
The minister mentioned non-profit housing. This is the only program in Canada which ensures affordable housing at 30 per cent of a family income. It is a good program, we believe in it and would like to see it expanded.
I mentioned the one million poor who are most affected by this government's housing cutbacks and are the hardest hit by the housing crisis. Section 43, the public housing section, remains in the National Housing Act. I notice it is even being amended in this bill, but there is no budget allocation and public housing has not been built for many years in most provinces. Low-income housing built by non-profit societies does not even meet the needs of pensioners in most provinces. Of course, most provinces do not have provincial or municipal housing corporations. Our government is forcing on to the streets those least able to defend themselves.
Funds for non-profit, co-operative housing also must be expanded since this is the only affordable housing for average income and some low-income families today. Funds for tenants to purchase and rehabilitate older homes as a co-operative are also a very good move and a priority. We should have more funds for this. Co-operative communities consisting of mixed-pensioners, working people and low-income people- have been developed. This is a very successful concept in Canada and we would like to see more of it, but we need to have more emphasis on it by the government and a larger allocation of funds. We also, of course, need to have interest rates controlled and reduced so the allocated moneys will go further.
Some federal housing programs are an economic investment as well as a social asset. Land-leasing programs, which are very much needed, and government rental housing are permanent assets. They are not just giveaways, as are some of these tax write-offs for private housing. They are permanent assets which will retain housing stocks for future generations.
Major government investment in housing programs, including public, co-op and private units, would create thousands of much needed jobs during a time of high unemployment. We have proposed repeatedly that a $500 million housing investment fund be established immediately to produce extra housing units to meet the target of 220,000 units which CMHC says is needed each year. This would create some 92,000 extra jobs.
In the time remaining I would like to speak more directly to Bill C-89, and a great number of my colleagues want to speak
February 8, 1982

to this important bill in more detail. The intent of this legislation is clear. The federal government wants to be relieved of all direct responsibility for housing. This is a trend which started well over five years ago. CMHC is being privatized and divested of its public responsibility as a housing corporation which, until recently, has assumed a very important social housing function in Canada. This function was the only way to protect Canadians during times of crisis such as we are experiencing today.
The minister has repeatedly spouted his privatization line, most recently on November 25 when he said governments do not build houses-certainly this government does not build any-and that the dynamic force has been the private construction industry and Financial institutions. I would like to suggest the minister check his facts more carefully, since over 50 per cent of the housing stock produced in Canada since 1945 has had direct or indirect CMHC involvement.
History also shows that in a housing crisis, such as the one after World War II, major government leadership is absolutely essential. We have such a crisis today-surely the minister realizes it-and the experience of the past year shows that the private market cannot and will not solve this crisis by itself. The equity principle, which the minister also has been referring to and as espoused by the Minister of Finance, requires government intervention. That is just common sense. How else can we build affordable housing for those in greatest need?
The amendments to the CMHC mortgage insurance scheme, which are the main aspects of Bill C-89, are prime examples of this government's privatization policy. The Conservatives, of course, should be very supportive of this bill, and the last speaker said he did support it very strongly in principle because, of course, this is their policy-privatize it, leave it to the private sector. And, of course, as far as the Tories are concerned, do away with CMHC altogether.


Paul James Cosgrove: Shame, shame!


Margaret Anne Mitchell: Well, you are doing just as good a job of doing away with it. The minister will be history pretty soon. The history of CMHC in the insurance-


Paul James Cosgrove: Good history, no doubt.


Margaret Anne Mitchell: -field is indeed a scenario of embarrassment. From assets of $631 million at the end of 1978, the insurance fund declined to $314 million in 1980. Just think! It lost about $300 million which could have gone into sensible housing.


John Horton McDermid: And the stupid AHOP program!


Margaret Anne Mitchell: You are right, brother. This high rate of insurance claims was a direct result of the Liberal government's ill-conceived AHOP and ARP housing programs, which resulted in mortgage defaults and landed CMHC with many unwanted properties and, of course, landed people without homes as well.
Housing
Bill C-89 is designed to avoid such embarrassments for the government in the future. How neat! Although the minister speaks of more flexibility as his reason for the proposed insurance changes, our research indicates that the impact of these changes will cause insurance costs to go substantially higher. Higher costs of premiums may be added to the higher interest rate charges which are facing home owners every time they must renew their mortgages. This is a trend which is already starting in the United States. The insurance change in the bill, as I understand it, will open this up in Canada.
The mortgage insurance amendments attempt to protect CMHC and private lenders from high-risk mortgage situations. Of course, it protects the corporations, and it protects their friends, the lenders, the banks.


Paul James Cosgrove: And the taxpayer.


Margaret Anne Mitchell: Not the taxpayers, Sir.


Paul James Cosgrove: Yes, the taxpayers.


Margaret Anne Mitchell: It protects them from situations which have been created by faulty government policies and programs such as AHOP, and the kind of programs with mortgage deferment types of arrangements, which are likely to continue.
One might be more sympathetic to this legislation if the proposed insurance amendments were to offer some protection for home owners. We would like to see this discussed in committee. Why should the home owners themselves not be protected against the high interest rate policy of this government? Then it might make some sense. However, it just protects, again, the people who are making the profits out of the whole mortgage scheme. As usual, only the banks and the Financial institutions are protected from their risk and, of course, their profits are protected. I would like to remind the House that bank profits were up to $1.7 billion in 1981, which was a 30 per cent increase over proFits in 1978. I mention this just in case hon. members have forgoten.


Paul James Cosgrove: Talk about CMHC losses.


Margaret Anne Mitchell: We also believe the government should require banks to provide a specific proportion of their lending portfolio for long-term mortgages.


John Horton McDermid: How long term?


Margaret Anne Mitchell: These policies should have been introduced in Bill C-89 and through the Bank Act. Another part of this bill refers to disposition of properties through CMHC. Bill C-89 attempts to relieve CMHC of the burden of acquiring properties. 1 have mentioned many home owners who received government assistance, some of whom are still in their homes, who simply cannot meet the mortgage interest charges, especially those which have increased as a result of mortgage renewals. As well as mortgage renewals, these home owners face inflated costs in every area of their lives.

February 8, 1982
Housing
In the past, CMHC sold off these reclaimed AHOP houses at below market value in some cases, and we have complained about this in the House.


John Horton McDermid: In most cases.


Margaret Anne Mitchell: Surely these houses should at least have been retained as rent-geared-to-income housing. Why did we sell them off? Why did we not make them available to people who needed them?


John Horton McDermid: What about the people who stayed there to make it work?


Margaret Anne Mitchell: We will let the hon. member speak next. Bill C-89 encourages lenders to do their own selling of defaulted houses in order to save CMHC from financial embarrassment.


Paul James Cosgrove: As well as the taxpayer.


Margaret Anne Mitchell: It does not help people to keep their homes. I would like to ask the minister, through Your Honour, to explain in committee whether or not this change to the insurance regulations will do anything at all to help people to keep their homes.


Paul James Cosgrove: Yes, it reduces their taxes.


Margaret Anne Mitchell: I would like to refer to mortgage renewal plans. I spoke at length on this subject, the whole question of mortgage interest deferral schemes, in my response to the budget last November. Since then, I have checked back with a number of the people I mentioned as being case examples. I have found, of course, that these people are in worse dire straits today, and they see no solution in deferring mortgage interest payments, which the government and the minister offered as their salvation, because they will only face the same situation, but with a much higher cost and a much higher lifetime debt, and they will be faced with losing their homes one year from now.
I have yet to find any one person, and I have deliberately asked, who will qualify for the government grants which have been offered to some of the poor people and the desperate, low-income home owners who have no equity in their homes.


Paul James Cosgrove: I will send you the 600.


Margaret Anne Mitchell: I do not think such people exist because surely very few people get into a home without putting something down.


Mr. Murphy:: Joe Clark, Pierre Trudeau.


Margaret Anne Mitchell: That is right. That is a good point. The two leaders of the other parties would be the only ones to qualify.
I repeat my November statement with regard to the mortgage renewal plan which will be authorized in Bill C-89. Instead of lowering mortgage interest rates, the government will subsidize continuing high mortgage interest rates. Instead of requiring the banks to establish an affordable mortgage
lending portfolio from their billion dollar profits, the government will guarantee mortgage deferral plans which will bring thousands more dollars to mortgagees, the lenders, while keeping home owners in permanent, lifetime debt. The Canada mortgage renewal program will be a program of guaranteed usury, therefore, sponsored and encouraged by this government.


Paul James Cosgrove: And the government of Manitoba.


Margaret Anne Mitchell: It will be no solution for the problems of home owners.
I want to conclude by reiterating a concern of the New Democratic Party that this bill is a further step to limit CMHC to an insurance function, further diminishing direct CMHC responsibility for housing programs and assistance which should be a top government priority. I therefore recommend that the government withdraw Bill C-89 or expand it to restructure and reform CMHC so that it will become a national housing corporation with real teeth and with the power and responsibility to do the following: to plan for housing needs on a long-term basis. Why should we not have a five-year plan for housing? We have it for defence. Why should we not have some of that defence money as well? To administer mortgages directly under controlled, long-term mortgage interest policy; to provide direct services to build and assist in the development of affordable rental housing and social housing; finally, to own and control housing assets and Crown land assets for housing to provide a permanent investment for the future.
The policy of this government, of Canada Mortgage and Housing, and of the Department of Public Works, for which this minister shares responsibility, is to sell off assets instead of trading them or going into land bank programs with municipalities which would enable us to retain land and lease it for affordable housing.
Finally, we request that a national housing investment fund of $500 million be immediately established to invest in the needed 220,000 new housing units, both private and public, which would provide an additional 92,000 jobs which are very much needed in the related construction and forestry industries in 1982.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
[ Translation]

The Acting Speaker (Mr. Ethier):: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Nepean-Carleton (Mr. February 8, 1982

Baker)-Government of Canada-Transfer of Tourism Office from Ottawa to Yarmouth, N.S. (b) Advice tendered by Minister; the hon. member for York-Peel (Mr. Stevens)-The Economy-Query respecting matters considered when preparing budget-(b) Duration or recession; the hon. member for Hamilton-West (Mr. Hudecki)-Health-Request for vaccination program to combat red measles.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of the Minister of Public Works (Mr. Cosgrove) that Bill C-89, to amend the National Housing Act and the Canada Mortgage and Housing Corporation Act, be read the second time and referred to the Standing Committee on National Resources and Public Works.
Mr. Russell MacLellan (Parliamentary Secretary to Minister of Regional Economic Expansion):: Mr. Speaker, in rising to take part in this debate, I would like to pay tribue to Canada Mortgage and Housing Corporation for the part it has played for more than 35 years in the development of mortgage financing in residential construction in this country.
CMHC introduced mortgage insurance in Canada in 1954 as a way of protecting mortgage insurers against loss, making mortgages more attractive as an investment, and as a way of making sure there was enough capital available for all of the housing which had to be built. In that year, 1954, the Bank Act was amended to allow the chartered banks to make mortgage loans. Until that time, the loans were available only from insurance companies and loan and trust companies.
The first year that CMHC offered mortgage insurance- and the corporation was alone in that field for quite a while, and certainly at that time-lending institutions approved $636 million in loans for new construction, an increase of 70 per cent over the previous year. In 1966 CMHC began insuring mortgages on existing houses as well as new construction. Nowadays with private insurers in the field, CMHC still insures nearly a third of all institutional lending for both new and existing housing.
The corporation now has $24 billion worth of mortgages insured. Its own mortgage portfolio amounts to almost $9 billion. It has played this role through the mechanism of mortgage insurance which, by enabling the introduction and use of the high ratio loan for both home ownership and rental
Housing
production, has contributed to our status among the best housed people in the world.
The legislation under which CMHC conducts its insurance business, the National Housing Act, was framed and evolved in an extended period of relatively stable growth and low inflation. That world, as we know, changed abruptly in the mid-seventies. With that change, our existing ways of financing housing no longer seemed to be appropriate.
In a time of high inflation and high interest rates, people with five-year level payment mortgages are forced to make very high payments in the early years of the mortgage. These initial high payments effectively block many young families from owning their own homes.
In the last few years interest rates have not only climbed, they have become very much more volatile as well. As a result, it is even more difficult for Canadians to buy homes. Mortgage terms have become shorter because lenders cannot attract longer-term funds. Borrowers, on the other hand, do not want to be stuck with a high rate mortgage if interest rates decline.
As we all know, many borrowers are in serious difficulty because they are suddenly faced with a sharp increase in payments on renewal. The Canada mortgage renewal plan, which this bill will authorize, will bring at least temporary relief to people who are in the most serious trouble. The most disturbing aspect of the situation, however, is the increase in uncertainty about the future of interest rates which affects both lenders and potential home buyers. This uncertainty dampens both the effective demand for housing and the supply of investment capital.
Clearly the time has come to examine alternatives to the rollover mortgages that are more appropriate to these times of high and fluctuating interest rates and to widen the choice for the borrower. 1 believe the government has a responsibility to play a role in this process. There is no shortage of ideas in the private sector. Due to legislative constraints in the National Housing Act, however, the government cannot play the essential supportive role it would like to in the process of increasing the choice of borrowing instruments and encouraging lenders to assume some of the risk for borrowers in difficulty.
The constraints that I refer to relate to the terms and conditions under which CMHC may insure mortgages, the way it may charge for that insurance and the methods by which it may settle claims on these mortgages. These three factors are all interwoven. The detailed terms and conditions specified in the act prevent the corporation from being receptive to alternative mortgage instruments proposed by builders, lenders and the public. Even if the corporation were given this flexibility, the entrenching of premiums in the act itself would prevent the corporation from charging a premium commensurate with risk. As a result it could not insure the more innovative instruments without causing a drain on the Consolidated Revenue Fund.
.. Finally, the claim settlement procedures in the act now, because of limitations on interest arrears which the lender could claim on default, discourage the lender from deferring

February 8, 1982
Housing
default action when borrowers are in temporary difficulty. In summary then, the corporation is hemmed in by legislative constraints which impede its role of ensuring that mortgage markets work well and that prevailing mortgage finance mechanisms facilitate ownership and rental investment.
1 believe that the legislative amendments will enable the corporation to be responsive to consumer needs and to the preferences and concerns of the lending industry, builders and experts in the mortgage field. They will permit CMHC to widen the choice of financing options available to the home purchaser and the investor. 1 believe that the way to a solution to the present-day difficulties in the housing sector lies to a great extent in modifications to financing mechanisms.
Back in 1954 the government showed the initiative in introducing mortgage insurance for high ratio loans to offer more Canadians the opportunity to build their own homes and more investors to build rental housing. Today we need to show initiative comparable to that shown by our predecessors in this House of Commons over 25 years ago. We face economic circumstances very different from those that they faced, and the answers are correspondingly different. The 1980s will be a time of evolving mortgage financing techniques.
The mechanism of mortgage insurance is an essential element of this evolution, but it can only play a part if the legislation is sufficiently flexible. While much of the attention of late has focused on access to ownership and renewal difficulties, we all know that the problems in the rental sector are formidable. Due to the large sums involved in financing large rental projects, public mortgage insurance plays a particularly important role.
A major impediment in this area has been the fact that cost recovery underwriting, given existing premiums, requires the investor to put up an inordinately high proportion of the required capital out of his own funds. In other words, the investor must provide an unacceptably high down payment. In today's circumstances of extremely tight rental markets, the corporation must be in a position to underwrite the size of rental loan which would make rental investment feasible.
To the extent that investors are not willing to finance rental accommodation, there is an increased demand for taxpayers' money for that purpose. The facility to set premiums commensurate with risk will enable the corporation to show more flexibility in its underwriting practices with no cost to the taxpayer.
Similar considerations apply to the ownership side. Aside from affordability, the question of uncertainty is a major consideration for purchasers. With some imagination, mechanisms can be developed which transfer some of the interest-rate risk from the home buyer to the mortgage lender. I think this is extremely significant. The lender's risk can then be underwritten by the government on payment of the appropori-ate premium.
Mortgage insurance is there because mortgage lending is, and always has been, a risky proposition. It will remain a risky
proposition. The bill before us today is designed to ensure that money continues to flow into housing in a way that provides the home buyer with the widest possible choice of how he or she will borrow the money and on what terms he or she will pay it back.


Mr. Blenkarn:: On a point of order, Mr. Speaker, would the parliamentary secretary permit a question? I do not believe that his time is up.


The Acting Speaker (Mr. Ethier):: Is that agreed?


Some hon. Members:: Agreed.


Donald Alex Blenkarn: Could the parliamentary secretary tell us if one of the contemplated schemes in the act is to have Canada Mortgage and Housing Corporation guarantee a fixed rate of interest for five years upon the payment of an appropriate insurance fee?


Russell Gregoire MacLellan: Mr. Speaker, in answer to the question of the hon. member, I would say that it would be one point of view which we could consider in committee.


Joseph Lloyd Reid: Mr. Speaker, I am pleased that members on the opposite side have come forward with a bill to amend the Canada Mortgage and Housing Corporation Act and the National Housing Act. Members of the House will now have an opportunity to give serious consideration to the problems which face home owners from coast to coast. No member of the House denies that these problems are serious.
In his introductory remarks, the minister spoke of the urgency of the bill and the opportunity it will give to young people to acquire new homes. I agree with the urgency and the necessity for the House to make it possible for those who already own homes to be able to continue to do so. However, I do not see any provision in the amendments to either act to make it easier for any person, young or old, to buy a new home.
The minister spoke positively and in rather glowing terms about how the provisions will make it possible for home owners in Canada to purchase homes as a result of the flexibility in the Canada Mortgage and Housing Corporation. But the amendment which was brought forward simply reflects an outdated budget which was brought in on November 12, a budget which was an established disaster and disappointment in the eyes of most people across Canada.
It is my hope that the flexibility which the minister says will be introduced in this legislation will enable people who purchased a home under the AHOP agreement five or six years ago at affordable mortgage rates to stay in their homes. I hope this flexibility will allow those home owners to be given the same financial opportunity as the entrepreneur down the street. Even if these home owners do not qualify under the provisions of the 30 per cent shelter cost ratio, I hope they would be able to become a tenant on the property which they have been paying for over the years rather than having to
February 8, 1982

move and rent another CME1C accommodation down the street. This practice has happened in the past. 1 trust that it will not continue in the future.
At the outset, I would like to say that it is a pretty sad commentary on the state of our economy and the actions of the government when home owner and builder alike are in such dire straits that the minister responsible for housing must ask for speedy passage of this bill. The bill may not offer much, they say, but it is all there is or will be. In other words, the home owner and builder have given up expecting anything but platitudes and empty promises from the government.
Reference has already been made to the letter addressed to the Prime Minister (Mr. Trudeau) by ten members of his own government. I would like to quote two paragraphs from that letter:
It is well known that the construction industry creates numerous jobs in related fields in addition to the direct jobs that it produces. In view of the present slump in the construction industry, we think that incentives in this area would have beneficial, stimulating effects on the job situation throughout the country.
By putting emphasis on the construction of homes we would be killing two birds with one stone since such a step would help to make up for the deficit of the 50,000 housing units suffered by Canada in 1981.
Last summer and fall, the minister of housing saw fit to raise the hopes and dreams of home owners by making vague and cryptic comments about an assistance program which would soon be forthcoming. He was obviously thinking about the November 12 budget without giving the date it would be brought down. The heart of this campaign, a campaign born of the bunker, was reached on September 15 when the minister met with representatives of the "Convoy of Anger", or the Save Our Homes Campaign Committee. His message to these outraged home owners was quite clear and specific: "Help is on the way." That message was repeated over and over again throughout September, October and the first days of November until even members on this side of the House, as well as myself, being an optimist by nature, took it as a statement we could follow and we urged our constituents to hold off giving up on their homes and to wait until budget night.
We should have known better. The assistance program which was announced on budget night and is under discussion today gives new meaning to the phrase, "Well, that is the least that could be done." Under this program, a home owner must go hat in hand to the mortgage holder at renewal time-but only at renewal time-and set out his personal financial life in detail. If it is found that the principal and interest payments on the mortgage plus property tax and, if applicable, half of the condominium common element costs exceed 30 per cent of the household income, then negotiations might begin. However, those negotiations are really just between the government and the mortgage holder. If both are agreed that the home owner qualifies for assistance and both are prepared to assist, it is then determined how much equity that home owner has built up in his property, and if that equity is sufficient to permit an increase in the mortgage, the mortgagee may increase that mortgage up by a further $3,000. The amount of the increase is deducted from the annual payable interest.
Therefore, if a home owner's mortgage payments were to increase from $400 to $600 per month and that home owner
Housing
qualified for assistance, $2,400 would be added to his or her mortgage payments for one year. The mortgage payment would remain at $400 per month. But in the instance of the home owner being without equity and subject to the criteria that was mentioned earlier, CMHC will pay the mortgage holder up to $3,000 to offset the increase in the monthly mortgage payment that the home owner is unable to meet. CMHC's contribution is not repayable by either the home owner or the mortgagee. That in essence is how this assistance program as set out is intended to operate. It is too little and too late. The great mortgage renewal crunch came in August of 1981. What does this government propose to do? It proposes to exclude those home owners by limiting the application of this assistance program to home owners renewing their mortgages between September 1, 1981 and November 11, 1982. In addition, this program is sufficiently mired in red tape that it is expected to assist only 50,000 home owners out of a total of
920,000	home owners who will have to renew their mortgages over the course of the program's short existence. That represents about 5 per cent of the total.
Let us not forget the home owner with equity. The home owner with equity is not receiving assistance as such but merely a deferral of his problem. Sooner or later that home owner will have to pay the bill. Out of the 50,000 home owners who will be assisted, 37,500 will receive nothing more than a temporary respite from their dilemma. The other 12,500-or less than 2 per cent of all home owners renewing-are the only ones who will really receive financial or genuine assistance. Twelve thousand five hundred people may sound like many people at first blush, but 1 want to tell hon. members that following the presentation of the budget an assessment was made in the city of St. Catharines, and it was determined that of a population of 125,000 people, not more than 15 home owners would likely qualify for this assistance. The odds are somewhat better than the odds in a lottery, but they are not something of which the government can be proud. Let us not forget that the majority of home owners who will be renewing their mortgages will be doing so without assistance and without interest deferral.
1 have been impressed by the number of home owners in my home town and across the country who are making financial sacrifices to maintain their homes. The social and economic cost is incalculable. Entertainment budgets are being cut. Car repairs are being put off. Shoes and clothes have to do for another year. Home renovation plans are being scrapped, and grocery budgets are being pared to the bare minimum. More and more we will see home owners looking on their houses as onerous financial burdens they cannot sell and cannot manage or, if they can manage, are barely doing so. The dream of home ownership and the pride of home ownership we had in years gone by was part of a way of life in this country, but it is becoming a nightmare, all because of this government's insane high interest rate policy and this government's broken election promise to hard-pressed home owners.

February 8, 1982
Housing
We in this party are often taunted by the government and by the press for having followed a high interest rate policy ourselves during that Conservative interlude. The current Minister of Industry, Trade and Commerce (Mr. Gray) was so concerned about the damaging effects of that policy that he vowed to resign if interest rates exceeded 14 per cent under a Liberal government.


John Horton McDermid: He is still around.


Joseph Lloyd Reid: Yes, we did follow a high interest rate policy but, unlike the present government and the present Minister of Industry, Trade and Commerce, we honoured our election commitments. We told home owners that there would be high interest rates, but let us not forget that interest rates at that time were 12 per cent and 14 per cent. Our policy was that high interest rates would not be permitted to destroy the market or the joy of continuing home ownership. We provided meaningful relief in the form of a mortgage interest and property tax deductibility program. For 1982 that program would have reduced the effective interest rate on an average $40,000 mortgage calculated at 18 per cent to 13.5 per cent. That is what we on this side of the House call assistance to home owners. Unlike the proposal put forward in the disastrous November 12 budget, our assistance program would have helped every home owner and not just 2 per cent of those renewing or those faced with the renewal of mortgages.
One wag told me that the difference between the Progressive Conservative policy and that of the Liberal Party was the difference between renting and owning. The sad part of it is that the government is not promoting rental policies as an effective alternative. Bill C-89 was written at a time when CMHC itself was predicting a zero vacancy rate by 1983, a black market in rental accommodation and a critical slowdown in rental unit construction. Still, Bill C-89 was written, and since it was written, CMHC forecasts indicate that a zero vacancy rate could be reached as early as this summer. In fact, in many communities across this country that rate has already been reached.
In view of the impending rental crisis, what is this government prepared to do? It says the first step was announced on November 12, and that first step was to slash any private sector incentive to provide the necessary construction of rental units. Soft cost write-offs were eliminated. The multiple unit residential building tax shelter was scrapped and, in return, the government offered interest-free loans of up to $7,500 per unit. The net effect of all that was to say goodbye to some $1 billion worth of new construction in return for $30 million in new tax revenue. Even the Minister of Finance (Mr. MacEac-hen)-and he indeed has a checkered record in doing his arithmetic-could see that this was not a particularly good deal for Canada. Accordingly, the minister reinstated the soft cost deduction and the MURB program for just a little while longer, thus putting off real disaster for a little while longer.
What of that $7,500 in rental construction assistance? Builders estimate that this assistance program will give rise to
15,000	starts, or 10,000 fewer starts than was the case last
year under the MURB program. For the government's part, it is assisting the rental crisis by reducing its commitment to social housing by 5,000 units this year. The two programs combined will result in 15,000 fewer places for Canadians to live.
Further, when attempting to project housing and apartment construction starts, we cannot as yet assess the impact of some additional sections contained within the budget proposals. I refer, of course, to the taxation of capital gains on the disposition of an asset, the reduction of the capital cost allowance and those measures which have the effect of reducing people's incentive to save. Savings represent a supply of mortgage funds. By taxing a capital gain at the time of a sale and not when cash is received, the government is in effect demanding a substantially higher down payment for, to pay the tax, the vendor has to get the money to do so. Not only is this tax measure patently unfair and inequitable, but it will also place home ownership further and further away from the ordinary Canadian.
Contrary to what the minister says, the amendments contained in this bill do not provide the flexibility necessary to make it easier for Canadians to acquire homes because under this program there is no way a large number of potential home owners will come close to being able to pay the price. Capital cost allowances, that this government once boasted were the best in the world, have been reduced by half and are bound to drive up housing costs. The builder, especially the landlord constructing new rental accommodation, is already hard pressed to provide affordable living quarters, and this additional cost will not and cannot be absorbed; it must be passed on to the consumer, the potential home occupier. In these times of ever and widely fluctuating interest rates, those with money to invest are less and less attracted to mortgages. Why would anyone want to invest in a mortgage when the interest rate may be five points higher next month? Short-term investments are the preferred choice of many. Anyone looking at the market can see. The stability of mortgage funds supply was being maintained through people's savings, and now even that source of mortgage funds through insurance corporations is being threatened by the November 12 budget.
Canadians, ordinary working Canadians, are discouraged from purchasing their own registered retirement savings plans, as one can no longer claim the interest paid on moneys borrowed for that purpose. Life insurance policies are being attacked as tax loopholes, and this will discourage the purchasing of permanent policies, the kind of policy that provided the source for insurance loan money.
Mr. Speaker, against this backdrop of doom and gloom, the rental and home ownership assistance offered in this Bill C-89 is woefully inadequate. There can be no question that a crisis is looming, and yet we see the federal government sitting idly by, neither caring nor acting. And the minister urges action. Renewing a mortgage today is a nightmare. Trying to find decent, affordable rental accommodation is like trying to find
February 8, 1982

a needle in the proverbial haystack; and trying to make a living in the construction business is even worse than that, it is well nigh impossible. To this list must be added another segment of our society-that I have not yet referred to in any length or detail-which is potentially the hardest hit of all. I might add that the implications to Canada and for Canada are far reaching. What the government is doing is allowing the housing crisis to continue and, by keeping mortgage rates out of sight, is spawning a whole generation of Canadians who no longer believe in the dream of home ownership. They talk in terms of public housing. Our young people have been particularly hard hit by unemployment and are also barely able to make ends meet while living in rented accommodation. They see their parents scrambling to pay the taxes, to meet the mortgage payments, to keep their homes going and to keep food on the table. They see this and they vow that they will not let it happen to them, that they will not be caught in the same position. A house is not a dream or a goal for them to strive for. It is an in and out nightmare that is driving their parents to the wall. They say "Thank you very much, we will avoid that government trap, we will find housing or demand that housing be made available to us from public sources."
Those young people are not deterred by the problem of the marketplace. To purchase an average price home, and the figures were quoted earlier today, to purchase an average price house in Halifax requires a family income of $35,700; in Montreal it is $36,000; and from there you can only go upwards. That is the average cost to acquire a home. But the average household income in Canada is only $27,000. Therefore, even if our average young Canadian family did want to buy a home, the cost of doing so would be prohibitive to him. The end result is that home ownership, the right to hold and own property, is dropped as an objective by this new generation. No longer will we be a nation of home owners. To many it will just be a dream, if they happen to have that kind of dream. What a future, what a futile future for this great country of plenty!
Mr. Speaker, are we, a country of vast geographic expanse, to become a nation of apartment dwellers, a nation where only the rich might own and live in a home, a house of the kind we are used to in this modern day? Is this the goal that brought our forebears to this great country of ours? I would say, surely not. Surely we have been raised to believe in this country and in its promise, and surely one of those promises is that there is an opportunity here to own a piece of land and to build a house upon it. That was my belief and it means as well that it is my desire that this kind of promise in this country be continued.


Some hon. Members:: Hear, hear!


Joseph Lloyd Reid: Bill C-89 is not in keeping with this philosophy, as it is the product of a worn out, cynical and indifferent government that has lost the courage, the vision and the wisdom to stand up for Canadians. I can understand the discomfiture of the minister who sponsored this bill today. But, if he does not want to preside over the destruction of the
Housing
Canadian housing industry or the shattering of that Canadian dream, he should resign, and he is honour bound to resign, and thus highlight the housing crisis which he finds himself in; and he must give an opportunity for a new and fresh beginning. Thank you, Mr. Speaker.


Mr. Jim Peterson (Parliamentary Secretary to Minister of Justice and Minister of State for Social Development):: Mr. Speaker, I am pleased to rise to speak on this important bill about housing. Before commencing my remarks, I cannot avoid making a response to the hon. member for St. Catharines (Mr. Reid). I listened very carefully to his words this evening. I felt that he was offering us two solutions to the housing problem. Let us all agree that in the ideal world we would want every Canadian to own his own detached, single family dwelling. We would like to see that. Unfortunately, we are not living in a utopian world. We have harsh realities which affect every one of us and which call upon all of us to exercise, at certain times in our economic history, a period of restraint.
I believe that even the members opposite, even those who are slightly noisy in the back rows, agree that we cannot promise everyone everything, even though we would like to see them have it.
What were the two solutions put forward by the hon. member for St. Catharines to the housing problem? Mr. Speaker, the key of his speech was en recherche du temps passe. He presented to us two solutions. Number one was to get rid of our high interest rates. But did he tell us one concrete way we could get rid of those high interest rates? No. He said it would be desirable, that we should get rid of them. Well, that is marvellous, but we know the implications of irresponsible actions, as much as we would like to see high interest rates go down. He did not tell us, if we drove them down below the United States rates, whether his party would be interested in implementing international exchange controls here, in order to keep the money here. He did not tell us about the implications, as to whether he wanted that or not. He, as a matter of fact, condemned the hon. leader of the New Democratic Party when those suggestions were put forward from that quarter. He has not offered us a responsible alternative in any of the measures he suggested, although we would all like to see lower interest rates at this time.
He criticized us, en recherche du temps passe, for getting rid of MURBs. Need I remind hon. members opposite that in their "Clark-Crosbie" budget they First did away with MURBs? It hardly lies within them, when they made a pretence of the integrity of their budget, having told the people what it was, to now rise and criticize us for abolishing MURBs. Perhaps they have reconsidered and believe that MURBs would be a good instrument for getting housing going. But I say that many new foundations have been laid under the MURB program which was extended to December 31 in order to provide rental housing. It has been shown in the past to have been a very effective instrument. If hon. members

February 8, 1982
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opposite are in favour of the MURB program, I should like to see them rise and say it directly rather than wallow in rhetoric without recognizing that it was their party which first abolished the MURB program.
Another possible solution was toyed with by the hon. member for St. Catharines, the solution of mortgage interest deductibility. He said it would be a solution to high housing and mortgage costs. Under their program, mortgage interest deductibility would apply to a limited extent but essentially in an unfair manner. I reject this alternative which would have given the biggest break to the richest taxpayers.


Joseph Lloyd Reid: Untrue!


John Horton McDermid: They do not have mortgages on their homes.


James Scott (Jim) Peterson: A deductibility program for any type of expense always benefits higher-bracket income tax payers more than the lower ones; there is no way to refute it. If that is the hon. member's concept of social justice, if that is a Tory alternative to the government's housing program, it hardly entitles them to damn the positive specific programs outlined in Bill C-89.


John Horton McDermid: Name one.


James Scott (Jim) Peterson: I wish to proceed with an enunciation of those particular programs. In summary, the bill enables the Canada mortgage renewal plan to succeed. Also it allows the Canada rental supply plan to operate. It contains provisions for home owners, especially first time ones, and finally, it will enable CMHC to conduct its activities in a more efficient and more responsive manner, considering the difficult financial complexities we now see in Canada's capital markets.


John Horton McDermid: Put them more in debt; that is what you are doing.


James Scott (Jim) Peterson: I hear the hon. member opposite. Their programs are the ones which ignore restraint and give universal help, across the board, to everyone. This demonstrates more than ever that a Tory is a person who looks forward with optimism to the nineteenth century!
As the hon. Minister of Public Works (Mr. Cosgrove) said, the bill does not represent the government's full agenda for housing concerns. It provides a framework within which we will be able to achieve our full agenda. It provides for very important needs and is necessary for the government to deal effectively with housing issues. It is important to all participants in the housing market-home owners, prospective home owners, developers of rental accommodation, renters, builders and lending institutions.
While there are a number of ways to assess the importance of the bill, perhaps the most direct one is to list briefly what I consider to be the housing problems facing the country at this time and to show how the bill is relevant in meeting those concerns. I believe hon. members on all sides of the House share the first concern, that is the uncertainty facing home
owners because of mortgage renewals when rates are in a great state of flux. There is no doubt that the vast majority of the estimated 635,000 householders expected to renew mortgages this year have the financial capacity to do so, without undue burden on household income, because of the large amount of equity they have in their homes at this time. This equity, or their other resources, will enable many of them to meet the problem of renewing their mortgages because they will have adequate cash flow. Nevertheless, the most important aspect of the bill is that it addresses itself to those people who face real difficulty-those people who cannot renew because of higher interest rates and would be in a position where they might lose their homes, households where families are required to use more than 30 per cent of their income to pay principal, interest and taxes. Primarily the bill addresses itself to those people in need.
We would like to give more money to every home owner, we would like to make every renter a home owner overnight, but in times of restraint ours is a responsible approach to meeting the needs of particular individuals.
This is why we must look at a few facts of the situation. The Canada mortgage renewal plan recognized that home owners have signifcantly higher incomes than renters-$28,000 on average for an owner as against $17,000 for renters. Also home owners have much greater wealth with $72,000 in assets, versus $9,000 for renters. Householders renewing three-year or five-year mortgage plans have generally experienced significant increases in their equity over the past few years. Therefore, a general and high cost program of mortgage renewal assistance, as has been argued by hon. members opposite, would simply be a transfer of income and would not meet the real needs. As we go into tough days ahead, we will have to address the particular needs of those citizens in the country in many of our programs. We will have to reassess the advisability of universal programs. This is one reason our approach to helping home owners with renewal problems, those in the greatest difficulty, is a responsible one in that it meets the most important problems at this particular time of restraint.
There are many other things I should like to say, but I reiterate that at this time we are simply starting our housing program-


The Acting Speaker (Mr. Ethier):: Order, please. It being six o'clock, I do now leave the chair until eight o'clock this evening.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8. p.m.
The Acting Speaker (Mr. Blaker):: When the House rose at 6 p.m. this evening, I believe the hon. member for Willowdale (Mr. Peterson), who had the floor, had completed his remarks. In any event, I do not see him here in the House and
February 8, 1982

accordingly the hon. member for Calgary North (Mr. Wright) can have the floor.


Mr. Bill Wright (Calgary North):: Mr. Speaker, I rise this evening to speak on Bill C-89, an act to amend the National Housing Act and the Canada Mortgage and Housing Corporation Act. In summary this act is to provide legislative authority for the mortgage interest deferral plan outlined in the budget. It is also to provide legislative authority for interest-free loans up to $7,500 per unit per landlord constructing new buildings. It is also to provide an expansion of the types of lending arrangements.
Initially, I would like to refer to a number of statements that have been made in the House by three cabinet ministers. First,
I refer to the Minister of Public Works (Mr. Cosgrove) who said on December 10, 1981, referring to the housing crisis in Canada, that this is not the worst crisis we have had. I do not think anyone wants to question whether or not it is the worst housing crisis, but to most people who have outstanding mortgages on their homes it is by far and away the worst that they have ever seen.
Next I want to refer to statements made by the Prime Minister (Mr. Trudeau). On December 3, while in Toronto, the Prime Minister stated that the blame for high interest rates lies with the banks, the market economy and individuals who want good returns on Canada Savings Bonds, and not with his government. If that is not bad enough, the Minister of Finance (Mr. MacEachen) in his budget of November 12, 1981, stated, in part, that we can only expect a decline in interest rates of 1 per cent per year over the next four years. That is not very encouraging for Canadians. In fact, to most Canadians who are attempting to buy homes or who are renewing mortgages, it is close to being a disaster.
I now want to refer to a statement made in the House before dinner this evening. The hon. member for Willowdale (Mr. Peterson) referred to high interest rates in Canada. He wondered what suggestions we have. I asked him to come back this evening so that I could tell him what suggestions we have. Unfortunately, he has not yet returned to the House. But we must ask ourselves why we have high interest rates. Why are high interest rates causing Canadians so many problems? There must be a reason. Bill C-89 deals with the symptoms but not the disease.
Let us look briefly at why we have high interest rates. The Minister of Finance would like us all to know and believe that we have high interest rates because of our high inflation, and that we must keep interest rates high in order to bring down inflation. Unfortunately, that is not the real reason. I would ask those members opposite who are interested to examine the balance of national payments in Canada for the past year. If they do that, the reason will become apparent to them. The government cannot lower interest rates because of its policies. If it did, it would bring about a monetary crisis in Canada. It recognizes that. Let me spell out very quickly why this is so.
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If one examines the national account balances, one sees that over the past two years $17 billion in long-term capital has left Canada. Now we have been able to bring capital back. In fact, the figure comes to approximately $16 billion which has returned to Canada. Unfortunately, Mr. Speaker, most of that has been short term. The investment industry calls it hot money. It follows high interest rates. If interest rates are higher here than in other countries, it will flow in; if lower, it will flow out.
So the government's policies discourage long-term capital. This is not speculation, there is no question the figures are there for everyone to see. We have had an exodus of capital and that is so because our world credit rating is not as high as that of some other nations, namely, the United States. That is a fact. Normally our rates should be at least 1 per cent or 2 per cent higher than in the United States in order to encourage long-term capital. So the government's policies have led to this problem.
However, they have another problem. If government has a large deficit, then its demand for capital leads to higher interest rates. 1 do not think anyone will dispute that. We must remember that 50 per cent of all borrowing in Canada today is done by federal and provincial governments.
Another major problem is the defence of the dollar. Provincial governments, with a higher credit rating than Canadian corporations, can borrow money in the United States or Europe cheaper than they can here. That, in turn helps to support the dollar. One has only to look at the amount of borrowing abroad by the provinces to see that is so. This was a policy that the government persuaded the provinces to enact in 1975 or 1976. There was a huge bulge of borrowing by the provinces which has continued to this day. Those are the reasons we have high interest rates. It has little to do with inflation, that is a minor factor. The reason for the outflow of capital is that basically this government has discouraged investment in Canada. The national accounts figures show an exodus of long-term capital.
The other factor, of course, is the government's efforts to nationalize energy companies at a time when they were becoming more Canadian. The government felt it was a good opportunity to step in and buy Canadian companies. If not Canadian-owned, they at best were operated in Canada as good corporate citizens, managed by Canadians. The government decided it wants to own a bigger part of the energy industry. The hon. member for Willowdale says he does not like high interest rates, but he would like to see them lowered; he says the Conservatives do not have any answers.
First of all we have to define the problem. I think I have defined the problem. The question is: what can we do about it? Can we lower interest rates? Yes, but there are certain things we must do, such as encourage exports.
Of course, the hon. member for Willowdale would ask: what exports? We have a surplus of goods that we are not selling abroad, such as natural gas from western Canada. Quite

February 8, 1982
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frankly, if that surplus were in Ontario or in Quebec it would be exported, but because it is in western Canada, the government decided it does not want to do anything else to help western Canada. That is the only reason why our suplus gas is not being exported. The amount of gas available for export has been estimated by provincial governments as approximately $2 billion worth each year. That would be money flowing into this country. We could allow the dollar to float and it would decline, but if we encouraged exports it would not decline that much. And if it did, it would make our manufacturing industries more competitive as they obviously are not at the present time. The Canadian Manufacturers' Association will admit that they are not as competitive as they would like to be. We must encourage long-term, not short-term capital. However, this government would have to do a complete reversal on policy.
What we need, what everyone in Canada has asked for, is a new budget because this one does not address today's problems. It was drawn up a year ago. Thirty Liberal MPs met with the Minister of Finance last fall to tell him it was not a good budget. Ten Liberal MPs wrote a letter to the minister just recently. We could allow our interest rates, Mr. Speaker, to drop by 3 per cent or 4 per cent and it would not harm our dollar that much. It would not drop below 78 cents to 79 cents.
I would now like to come to the housing market. We have to deal with it piecemeal because the government refuses to recognize why we have high interest rates. In the spring of 1980 Calgary had a vacancy rate of 1 per cent, and it is now 0.2 per cent because construction has fallen off. In many parts of Canada, including Alberta, there is a vacancy rate of zero. In effect, there are no vacancies. At the present time, the cost of the average home in Calgary is $111,000. I am referring to the average home. One must make an income of $62,000 just to afford a home in Calgary. The average mortgage is $50,000. The average Canadian cannot afford that.
During the last three years, the average increase in interest cost per year for a home has been between $2,000 and $3,000. That is absolutely ridiculous. It is not due to the mortgage companies and it is not due to the banks; it is due to the interest rates brought in by this government and carried out by the Bank of Canada. In Canada at this time, we need an average of 220,000 homes or units constructed each year; however, according to the Conference Board, 180,000 may be constructed next year, resulting in a shortfall of 40,000 units. The outlook for the next two years is no better. We will have a shortfall of over 100,000 units over the next two to three years, and this government is not addressing the problem. What is the government suggesting? It is suggesting that it will bring in a plan to assist the renters and home owners. What is this plan? This two-year plan would have a capital requirement of $350 million spent over two years, of which $150 million would be spent this year, and $200 million spent next year.
What does it actually mean when one breaks it down? It means that the government will provide a subsidy to lenders to
build up to 15,000 rental units at $7,500 per unit. The government will provide rental assistance for 15,000 units in Canada when there is a need for 100,000 units. The government has hardly scratched the surface of the problem.
What rental units will this help? The average break-even cost for a lender in rental units today is $800. When a lender constructs an apartment block, he must receive a rent of $800 per unit in order to break even. The average subsidized housing in Canada has a rental cost of $400 per month. That means that if one lives in subsidized housing, one pays an average of $400 a month. The average cost is $800 for all other people in Canada.
What will the government do? It will provide a benefit to the lenders to construct rental apartments for those in the higher rental brackets, not those in the lower brackets. Once again, people in lower income tax brackets will be left out because no lender will build subsidized homes unless forced. How does one force them to build for the lower rental market? One cannot.
Therefore, if we look at the $150 million subsidy the government will provide, we find that 15,000 units times $7,500 amounts to $112 million which the government will provide for rental housing. Out of $150 million, the government will have $38 million left over to assist those who are in dire straits as a result of their mortgage renewals. Obviously, this will not help them If one is renewing a mortgage, and 30 per cent of one's gross income is less than one's principal and interest, one may apply for a loan guarantee. If one's equity in one's home is less than five per cent, the government may allow a one-time grant of $3,000. However, one must have renewed one's mortgage between September 1, 1981, and November 12, 1982.
It does not appear that this will do very many people any good. Surely most people who have owned a home for three to five years would have more than five per cent equity in their homes. Obviously, this offers nothing for most people. If one calculates this benefit, one finds that the maximum number of people who will be helped by this loan or guarantee or loan grant will be 15,000. However, 1,200,000 people will renew mortgages over the next two years. Where is the help the minister promised? It is not there.
Let us look at the MURB program, which is of benefit only when interest rates are high. It was not of much benefit, as the builders will tell us, at lower interest rates, those below 13 per cent or 14 per cent. However, at interest rates above 16 per cent to 18 per cent, the MURBs become very attractive.


Mr. MacKay:: Go to Whistler!


Frederick William Wright: What has the government stated? It has stated that it will eliminate the MURB program. Concerning rental units, whereas the government is now providing subsidies for
25.000	rental units, it will reduce that to 15,000 units, amounting to a reduction of 10,000 units per year. Concerning subsidized housing, the government will reduce the subsidy from the former 30,000 down to 25,000, amounting to a reduction of 5,000 units. That amounts to a total reduction of
15.000	units over the next year. What does the construction
February 8, 1982

industry state? It states that for every unit built, whether a rental unit or a home, it takes one and a half construction workers to build that unit, on the average. That means that there will be 15,000 fewer units, multiplied by the one and a half employees who would have built those units. That means we will have an increase in unemployment of 22,500 over the next year. Where is the justice in that? The government really does not know how to solve the problem. All it can do is to create more unemployment as a result of this bill.
If we look at the mobility of labour in Canada, we find that as a result of the high interest rates, the high cost of rental units and the high cost of homes, people are unwilling to move from one part of Canada to another because it is too expensive. They may decide they should stay in an area of high unemployment and receive unemployment benefits or welfare benefits rather than move to a high employment area. Where is the justice in that? Why would a government bring out a budget and a bill such as this which would encourage unemployment?
People within the mortgage market recently told the government that, for all intent and purposes, the mortgage market in Canada has dried up. If one asks the Minister of Public Works in the House, he will deny that. He will say we still have an active mortgage market, but the average Canadian is no longer involved in buying a home. He cannot afford it. Many Canadians cannot afford $800 a month in rent, but still this government wishes to continue with its high interest policy.
Why has the mortgagee market dried up? It is because the government brought out Canada Savings Bonds last fall by which it raised $19.5 billion. It took much potential money out of the mortgage market and put it into savings where it will remain for one to two years. By increasing interest rates, other lenders who would have put their money into mortgages, put it into short-term investment in order to obtain a better return. That is why the mortgage industry has been saying the mortgage market has dried up.
What about the life insurance companies which are noted for providing long-term mortgages? Even during the last couple of years, a period of high interest rates and short-term investments, they have been providing 15, 20 and 25-year mortgages, but the government does not tell you that. What does it do? It virtually cancelled income annuities.
In Alberta there would be no homes or apartments built if it were not for Alberta Housing. That is the only reason the people of Alberta are now able to buy or rent new accommodation. That comes from the Alberta Heritage Fund. For those who wonder about the Alberta Heritage Fund, it was that fund which protected Albertans from the scarcity of housing that has occurred in other parts of Canada.
This minister has not given us anything that we really want or need or that will help the people of Canada. We are going to be very interested in discussing some of these questions with the minister in committee. Bill C-89 does not address the
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problem. The housing industry in its desperation is saying, "We don't like it, but it is better than nothing. If we cannot have it all, give us a little piece. If we cannot have lower rates and fairness in the mortgage markets, we will accept this little bit." They will have to come back to the government in six months or a year and ask whether there is something else that can be done for them. The government may think about it. It may give them another little bit to help the mortgage market, but far less than it should. However, it will at least help it.
We are going to examine this bill in committee very carefully and find out why this minister goes along with high interest rates, why he is not prepared to help those Canadians in desperate need of accommodation and why he has provided nothing but a drop in the bucket. The Minister of Public Works is the minister of a drop in the bucket.


Mr. Hal Herbert (Vaudreuil):: Mr. Speaker, in my remarks in support of Bill C-89, an act to amend the National Housing Act and the Canada Mortgage and Housing Corporation Act, I will be concentrating on the mortgage insurance fund and the two major social housing programs that have had a considerable impact on the financial status of that fund. To put my comments in the proper perspective 1 want to make a few general remarks about the housing situation in Canada today.
There have always been persons inadequately housed, even in 1982. I understand that about 2 per cent of the houses in this country are still without modern conveniences. Nevertheless, during the last decade, housing starts in Canada averaged over 230,000 units per annum. Compare that to the United States, the prosperous country to the south, where during the same decade housing starts averaged 1.77 million per annum. Thus, on a per capita basis we were building housing in Canada at a rate more than 30 per cent greater than in the United States.
Because I am from the construction industry, have experience in all provinces and have visited many of the states, I am prepared to add that our standards of quality are generally superior to those in the United States. I give full credit for that exceptional performance to the Canada Housing and Mortgage Corporation. Their success has been in spite of the provincial governments and with no thanks to the Constitution which leaves the major responsibility for construction activity under provincial control.
1 was angry last week when 1 watched the federal-provincial conference of first ministers. The provinces restrain, hinder and impede and still come with their hands out for more money. How many people in Quebec know that the federal government shares with the provincial government the cost of rent subsidies, that it shares the cost of deficits and provides financing or the guarantee of financing for up to 90 per cent, 95 per cent and even 100 per cent for rental accommodation for which the provincial government tries to take all the credit?
In 1980 CMHC contributed over $9 million in operating grants in Quebec and $34 million in contributions to deficits. The housing critic for the Official Opposition received a response to a question on January 27 last indicating that as at

February 8, 1982
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December 31, 1980, there were 148,336 units under the administration of the NHA that were provincially-owned rentals, CMHC-financed. That same answer to the question of the hon. member for St. John's East (Mr. McGrath) indicated that CMHC, through the mortgage insurance fund, had, on September 30, 1981, 9,538 vacant housing units of which 1,882 were acknowledged to be in areas where there was no demand. That left 7,656 units available for occupancy. I would like to read the following paragraph from the 1980 annual report of CMHC:
By the beginning of 1980, the federal government, through CMHC, was committed to providing operating subsidies on a long-term basis for 225,000 dwelling units. For 1980 it authorized CMHC to make commitments for a further 26,750 dwelling units. During the year, however, approval was given for commitments for an additional 5,000 new dwelling units, to help alleviate very tight rental markets in such cities as Vancouver, Calgary and Toronto.
That means that total NHA social housing subsidy commitments exceed a quarter million units. This country can be very proud of the contribution that the Canada Mortgage and Housing Corporation has made in providing the financing or the guarantee of financing that has helped and is helping so many millions of Canadians.
I want to turn now to the subject of the mortgage insurance fund. In 1978, the assets of the mortgage insurance fund decreased for the first time since it was established in 1954. There was a further decrease in the fund in the year 1980 from $512 million at the beginning of the year to $314 million at year end. Mortgage loan insurance was introduced in 1954 when the National Housing Act was amended to permit the chartered banks to enter into the residential lending field. By protecting the lenders against the risk of loss, NHA mortgage insurance encouraged approved lenders to invest in mortgages. Mortgage insurance fees paid to CMHC by brokers are accumulated in a mortgage insurance reserve fund. Lenders may claim against the fund in the event that a borrower defaults on his payments and a foreclosure results.
Over 40 per cent of the five million dwellings completed since 1954 have been insured by CMHC. Over $50 billion in capital funds has been attracted toward investment in housing since the amendment to the National Housing Act over 25 years ago.
A letter which I received from the minister responsible for Canada Mortgage and Housing dated October 22, 1980, signed by the minister himself, stated:
I agree that it would be inequitable for CMHC to raise its mortgage insurance premiums to recover the losses incurred in insuring loans under the Assisted Home Ownership Program and the Assisted Rental Program.
As you point out in your letter, these were social programs and accordingly, their social cost should not be borne by those seeking National Housing Act mortgage insurance, but by the government.
Mr. Speaker, no provision was made at that time for these programs which were introduced then, with the result that the mortgage insurance fund has borne this risk and is now bearing the cost.
I have read this excerpt from the letter of the minister because at that time I heard rumours that there may be an increase in the percentage which was to be charged by CMHC and, as everyone knows, at one time the amount in the mortgage insurance fund exceeded $600 million. 1 was most anxious to ensure that if we were going to introduce social housing programs to use up these available funds, the cost should not be borne by those who had taken out regular mortgages.
In the mid-1970s, the mortgage insurance fund reserve was in excess of $600 million. This was several hundred million more than all the expected liabilities. The government used this excess to underwrite two social housing programs; the Assisted Home Ownership Program known as AHOP and the Assisted Rental Program known as ARP. These programs were designed to make home ownership available to more people and to put more rental units into tight markets. Well over 200,000 units were constructed under these programs.
Until now, the cost of initiating mortgage insurance business was borne by the corporation, for which it received an application fee. This fee originally was $35 and was increased to $100 last year. It never has been adequate to cover the associated costs. The costs not charged to the mortgage insurance fund are estimated to be approximately $75 million. The reason I mention this figure is to keep all the costs which have been charged to the mortgage insurance fund in perspective.
The cost of business initiation included the receiving and reviewing of applications, the receipt and posting of fees and insurance premiums, recording of insurance policy information in the corporation's files and computing systems and the carrying out of inspections and appraisals. These inspections ensure compliance with housing standards.
I would like to make a few remarks about the inspection process since I feel that it is relevant. I was always somewhat intrigued by the fact that CMHC was insuring mortgages and that most people were able to get somewhat preferential rates from the bank or lending institution if the mortgage was insured by CMHC. Why, then, would there be any private company in business in apparent competition with CMHC? One of the reasons concerns inspections.
Being in the construction industry, 1 wanted to find out for myself. I travelled across the country and visited several construction sites where contractors whom I knew were working with the company in the private sector which was insuring mortgages. In almost all cases there was no doubt that the consumer, or occupant of the house, would generally be paying about one half per cent more in the final analysis. The builder was expressing dissatisfaction with the inspection practices of CMHC. In fact, it was not so much the inspection practices which were at fault as the fact that the standard being imposed upon the construction by CMHC inspectors was higher than the standard being imposed by the private sector. Not only was the home owner being protected, he was also obtaining the benefit of a slightly lower interest rate on his house.
February 8, 1982

Nevertheless, this company continued to operate. Of course, the company is the Mortgage Insurance Company of Canada. Just last month, on January 19, I read that one of the developments in the history of this company was its merger with the only other private sector mortgage insurer in Canada, Insmor Holdings Ltd. of Toronto.
1 make the point now that, apart from this one organization, there is only Canada Mortgage and Housing Corporation to turn to if we want to be sure that the consumer has the protection of the government. The claim was made that the merged companies can better compete against the other source of mortgage insurance, Canada Mortgage and Housing Corporation.
I found it interesting that in the same article there was a comment attributed to William Mulholland, Chairman of the Bank of Montreal, who said that the number of mortgages in arrears by three months or more dropped by 15 per cent between June, 1980 and June, 1981, despite a 5 per cent increase in interest rates during that period. These two items are not particularly tied together but they happen to appear in the same article, and 1 thought that the second comment by the Chairman of the Bank of Montreal was worth recording here.
I will take a few moments to put on the record the present status of the mortgage insurance fund. As at November 30 last year, the fund assets were as follows: mortgage assets, that is mortgages held by the fund, totalled $124 million; real estate assets, these real estate assets are at market value, totalled $424 million. For those interested in the book value-the acquisition price-the figure is $523 million. This loss is included in the loss figures which are to be mentioned in connection with this particular program.
The fund had $24 million in other assets. The current deficit in the fund is $339.3 million. That is made up of a debt to CMHC of $56 million and a debt to the Government of Canada of $283.6 million.
The total assets as at November 30 were $232 million. Incidentally, the fund receives approximately $30 million per annum in premiums. An actuarial study suggests the fund is deficient by about $210 million.
Bill C-89 is intended to assist in putting the mortgage insurance fund back on a sound financial basis. I should interject, as 1 talk about AHOP and ARP, to say that the rundown of the amount in the mortgage insurance fund is almost entirely attributable to these two programs which were introduced as social housing programs and which, for reasons 1 shall be explaining, resulted in a depletion of the cash, the amount of which at one time exceeded $600 million.
The provisions relating to the underwriting of loan insurance are largely of an administrative nature. A significant change is the new section proposed by the bill by which the corporation is given the authority to determine the insurance premium in relation to an approved loan, the premium to be in such amount as the corporation considers appropriate in view of the
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risks entailed and the costs and expenses incurred by the corporation in relation to the insurance. Each line of business is to be analysed actuarially with a view to establishing and quantifying the risk posed by that line of business. Such an analysis will consider, among other things, historical foreclosure rates, borrower's capacity to repay and the expected economic climate during the risky part of the mortgage life. This analysis will enable the fund to strike a suitable premium for each business line. With such an arrangement, the fund can serve the government's social purposes but with a knowledge of the total financial implications of each program. This will allow full consideration of the total costs of the proposed program.
I must interject that if we had known the costs of the two programs, AHOP and ARP, perhaps we might not have proceeded, or we might not have proceeded to the extent we did and, in my opinion, Canada would have been the poorer for that.
Once this legislation is passed, the old and new funds will be kept separately on the corporation's books so that the problems of the past do not drag the newly instituted fund into financial disarray. The new fund can be monitored and premiums adjusted according to changes in programs.
I want to spend a few minutes discussing the two major social housing programs which are the principal reason why the cash in the mortgage insurance fund has been so depleted. Under the Assisted Home Ownership Program total claims to date come to $515 million. The accumulated loss to date totals $230 million, and this includes known future losses not yet incurred. Actuaries calculate that 4 per cent of insured value would be the fee necessary to cover risk, and 1 have no hesitation in suggesting that it would be pointless to introduce a program such as AHOP and at that point to impose on those persons who are to be assisted a fee of 4 per cent.
It should be noted that the program provided for a 5 per cent down payment. That was to be the equity of the purchaser of the home. However, there were some federal grants which reduced the down payment even further, and additionally- always, apparently, working at cross-purposes-provincial grants further reduced the down payment to the point where, with assistance from the builder, it was possible for the occupants of AHOP houses to move in with little or no down payment whatsoever. Thus, the owner of the house-and 1 probably should put "owner" in quotation marks-was occupying premises with little or no down payment at a monthly mortgage repayment figure which was, because of its deferral, less than the normal amount he or she could be expected to pay and, therefore, the owner was in effect able to live for a period of up to five years in what one might term subsidized accommodation.
Some 99,000 units were produced, and of those 99,000 units approximately 13,000 are termed walk-aways; they were occupied and then the owners left, often at the end of the five-year period when mortgages were automatically increased to take care of the lower payments which had been made during the first five years.

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I note from the figures that in Quebec-and this information was made available on February 3-some 40,000 units were sold at a total value of $1,148 billion. This compares with 41,500 units in the province of Ontario at a total value of $1,628 billion. It is interesting, when looking at these two figures, to note that in the province of Quebec, where the total number of units sold was approximately the same as in Ontario, there was a total of 1,836 actions taken on AHOP units, that is, acquisitions, for a total of $53 million, whereas in the province of Ontario, with only a few more units built, the number of actions taken, acquisitions, was 8,581 for a total of $318 million. I intend to discuss the reason for the difference in these two figures in Quebec and Ontario; however, it is important to emphasize that the successfully housed rate was over 80 per cent of all the units built.
We should break down the remaining less than 20 per cent. About 13 per cent were the walk-aways to which I referred earlier, the acquisitions, those who did not continue with their houses, and approximately 6.5 per cent or 7 per cent were not even occupied. This makes up the total of about 19.5 per cent, which one might term the failure rate. However, let us bear in mind that among that 13 per cent I have been talking about there were many people who enjoyed living in houses for periods of up to five years, making what was, in effect, subsidized monthly payments with little or no down payments. Thus, approximately seven out of every eight who occupied houses under this program were successfully housed, that is, given the opportunity to own their own homes as the result of the introduction of this program.
An analysis of the market factors behind the high AHOP default experience is appropriate. AHOP claims are primarily from Ontario and British Columbia. In fact, 77 per cent of the
9.000	AHOP units acquired by the mortgage insurance fund were in those two provinces. The ratio of mortgage insurance fund acquisitions compared with approvals in Quebec is only 2.8 per cent, whereas in Ontario the ratio of acquisitions to approvals is 9.7 per cent, and in British Columbia it is 10.5 per cent.
To examine the issue regarding substantial variations in the AHOP default rate between Ontario and Quebec, one needs to look at the types of housing unit produced under the AHOP in the two provinces.
In Quebec, of the 43,000 units, just over 1,000 were condominiums and 42,000 were freehold and other units. However, of the 50,000 in Ontario, 33,000 were condominiums and
17.000	were freehold and other units. Thus, although the default rate in condominiums is approximately the same in Quebec as in Ontario, 10.6 per cent in Quebec and 12.6 per cent in Ontario, because of the lower number of condominiums, when one compares it to the default rate in the freehold and other types, 2.6 per cent in Quebec and 3.8 per cent in Ontario, one can see that while the rate in Quebec is much lower than the rate in Ontario, in fact the rate in Ontario is
more than three times, almost four times, the default rate in the province of Quebec.
These figures reveal a significant difference between the types of dwelling units produced in the two provinces. In Ontario, condominium rows and apartments represented two thirds of the production of AHOP units, whereas in Quebec more than 95 per cent of the AHOP units were single and semi-detached freehold units. The insurance risk is higher for condominium than for freehold units, and it is therefore not surprising that AHOP default rates in Ontario are substantially higher than in Quebec.
The second social housing program which has impacted heavily on the mortgage insurance fund is the assisted rental program where the accumulated losses totalled $186 million, and most of this loss has been and is being incurred in Montreal.
Actuaries calculate that 8 per cent of insured value would be the fee necessary to cover risk. Under this program, 123,000 units of rental housing were produced; and 1 think it would be abundantly apparent to everyone that if 8 per cent had been added to the cost of the mortgage in order to cover the actuarially calculated risk factor, there would have been very few of those 123,000 units produced. To assess the consequences of the impact of the Assisted Rental Program, requires an analysis of the market factors behind the high ARP default experience. As of March 31, 1980, 78.3 per cent of the 6,741 ARP units acquired by the mortgage insurance fund were in Quebec. In the first half of the 1970s, the demand for new rental housing in Montreal averaged 18,700 units per year, while only 14,000 units were being supplied per year. As a result, the Montreal rental market experienced increasing tightness. The demand for new rental housing resulted in part from the large expansion of employment in the province. The average annual growth in employment opportunities between 1970 and 1976 was 55,000 jobs.
These favourable economic circumstances were associated with the turnaround in migration patterns. Rather than experiencing a net outward movement of population, the situation was one in which there was an actual net population gain between June 1974 and May 1975. The tremendous demand pressure pushed rental vacancy rates down from 8.2 per cent in 1970 to only 0.6 per cent in April, 1976; and apartment construction in Montreal responded rapidly.
However, economic conditions worsened in Quebec in 1976. Employment growth stagnated, with a net loss of 23,000 jobs in 1977. In addition, after the election of the Parti Quebecois in November, 1976, net outflows of population from Quebec accelerated from 9,600 between June, 1976 and May, 1977, to
54,000	between June, 1977 and May, 1978. It is estimated that the reduction in job creation, coupled with the acceleration of out-migration, translated into a drop in rental demand from an average of 18,700 units per year during the first half of the 1970s, to 8,800 units in 1976, to 4,500 units in 1977 and to 5,200 units in 1978. The upsurge in apartment starts, pushed completions up from 12,500 units in 1976 to 18,600 units in 1977; and vacancy rates in Montreal rose rapidly.
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The occupancy rate in new projects was reported to be around 48 per cent; and in April, 1980, the rate fell to 27 per cent.
In 1976, net migration began to increase significantly as economic conditions worsened and because of political developments in the province. Migration flows had a major impact on the assisted rental program default experience. The impact of net migration on foreclosures can be illustrated by these figures. In the province of Quebec, between 1973 and 1976 the net change in the population was an increase of 1,096; in the period from 1976 to 1979 the loss was 103,992.
Mr. Speaker, it is relevant, I think, to read a short extract from a letter dated December 2, 1981, which the Housing and Urban Development Association of Canada sent to the Prime Minister (Mr. Trudeau) and members of the federal cabinet. It reads:
Current levels of rent are so out of line with the costs of producing rental accommodation that there is no prospect for easing the vacancy problem without additional incentives or subsidies.
HUDAC, that is, the Housing and Urban Development Association of Canada go on to estimate in the same letter that to put rental housing on a basis that would attract investor participation would require rent increases of 60 per cent or more.
I wanted to read that extract from what is considered the foremost housing association in Canada because of the significance of those Figures when they talk about the need for rent increases of 60 per cent or more in order to attract investor participation.
When one invests in a house, one looks at one's ability to pay the mortgage, it is true, but also one feels that in due course, because of inflation, there is likely to be some appreciation in value; and in fact, for most people in this country, there has been a reasonably good increase in equity over the years. However, with rental accommodation, the value of the property is of little significance. Investors are concerned solely with return on investment.
One of the difficult experiences for the mortgage insurance fund has been the realization that while one can build an apartment complex-and I have an example in my hand of one which is not too far from my constituency-it may cost some $7 million. In this particular case the mortgage was a little more than $6 million. If the owner of a project goes bankrupt because of rental experience and, as a result, Canada Mortgage and Housing Corporation ends up being the owner of the property, when it comes to sell the project, since it is not the intention of CMHC to stay in the real estate business, the price will be substantially lower than the amount of the mortgage. It has nothing to do with the value of the property from a construction point of view. It is simply because rents are so low that there is an inadequate return on investment. In the case of the purchase of such a property, it is rather like buying a bond-one looks simply at the amount of the cost and the amount of the return.
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In looking at the project to which I have referred, I found it interesting that in a period of some 19 years gross revenues exceeded gross expenditures by only $2 million, comparing a little under $13 million of expenditures with a little under $15 million of gross revenues. At the time the project was started, it had a mortgage at 5'/s per cent. It occurred to me to look at what would have been the amount of money one would have received, compounded on the mortgage at that percentage, and it came to something over $5 million. Thus we see a project with construction costs of $7 million, a mortgage of $6 million, but a return which meant that when it was offered for sale it was difficult to obtain a bid of $3 million.


Sinclair McKnight Stevens: Mr. Speaker, I rise on a point of order. I was wondering whether the hon. member would entertain a question.


The Acting Speaker (Mr. Kempling):: The hon. member for Vaudreuil (Mr. Herbert) has approximately two minutes remaining. If he wishes to take a question, it is up to him.


Harold Thomas Herbert: In the two minutes remaining I will finish my remarks, and if there are a few seconds left, I will accept a question.
The point I was making was that one must look at the experience of the Assisted Rental Program in the mortgage insurance fund to understand why there was such an apparent loss in what has been an excellent rental as well as an excellent social program. I have only one more point to make in my remaining minute. It is an answer to a question which I received on June 17, 1981, wherein the minister responsible for CMHC pointed out that the average time lag from the date of a borrower's default on payments to the time when title is conveyed to CMHC, under the terms of the mortgage loan insurance policy, is 414 calendar days. I suggest that the 414 calendar days on the average for the takeover of a property is unacceptable. That is why I am pleased to see in this bill that, in addition to other measures, there will be measures to make it possible for the acquisition to proceed more quickly, thus reducing loss to the insurer.


The Acting Speaker (Mr. Kempling):: The hon. member for York-Peel (Mr. Stevens) has a question. There is approximately 45 seconds remaining, if the hon. member wishes to accept it.


Sinclair McKnight Stevens: Would the hon. member indicate whether he was one of the group of ten who chose to criticize the government's budget and, if not, why not?


The Acting Speaker (Mr. Kempling):: Order, please. I do not believe that is relevant to the bill before the House.


Some hon. Members:: Hear, hear!


Mr. Bill Vankoughnet (Hastings-Frontenac-Lennox and Addington):: Mr. Speaker, I am pleased to participate in the debate on Bill C-89 to amend the National Housing Act and the Canada Mortgage and Housing Corporation Act. Housing is a vital industry in Canada, and its continued existence and

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growth is fundamental as more and more Canadians require shelter in a shrinking market and face severe economic hardships. Our society is built upon the premise that ownership of private property is an inherent freedom. The erosion of ability to own property is a serious social problem in Canada today. The right to own property guards the troubled boundary between the individual and the state. It is not the only separation as many other traditions, institutions and laws are also important, but Canadians have always taken pride in ownership of property.
There is no question that record high interest rates have done much to harm seriously the housing situation in Canada. The dream of many Canadians to acquire a home of their own has been shattered largely as a result of government economic policies or lack thereof. Two serious housing problems have developed in Canada over the past two years, those being availability and affordability, both largely as a result of high interest rates. When not enough housing units are produced to support the demand, we see shortages in supply. It has been estimated that Canada needs some 220,000 new housing units each year. During 1980, only some 159,000 new units were built, while in 1981, only some 178,000 units were built. The November, 1981, Conference Board forecast predicts that only
180,000	units will be constructed in 1982. These figures indicate a possible shortage of 143,000 units over a three-year period. Investors faced with high interest rates think twice about investing money in construction these days. As a result, apartment construction has virtually ground to a halt. The national vacancy rate fell from 2.8 per cent in April 1980 to some 1.2 per cent in October 1981, and continues to fall. As we have heard in the House this evening, in some areas it is zero. Many large centres across Canada experience serious shortages as more and more people compete with fewer housing unit vacancies. It is not just home owners who are experiencing problems these days, but also renters who are facing a bleak housing market. This will continue unless current adverse trends are turned around.
It is hard to believe that in a country with so much space and so many resources, as well as the over-all potential of a standard of living second to none, there should be any housing problems. It is up to the Government of Canada to implement programs to reduce interest rates for housing in an effort to provide Canadians with an adequate supply of housing units which are basic to the strength of any country. The government should realize it is difficult to ask Canadians to deal with the serious economic issues facing them today, without the added worry of struggling just to keep the basic necessity of a roof over their heads. Canadians must feel confident about the security of their family units and the basics such as food, shelter and clothing, as we tackle the problems of high inflation, interest rates, unemployment and rapidly increasing energy costs.
High mortgage rates are clearly having an impact upon the affordability of housing. In the third quarter of 1981, the average price of a home sold in Canada was $77,900. Assuming a 10 per cent down payment and $1,000 in property taxes.
and using the rule of thumb that total payments for principal, interest and taxes should not exceed 30 per cent of gross income, a family income of $45,000 is now needed to afford an average-priced home. Canadian home owners, or hopeful home owners, have been faced with dramatic price increases due to high interest rates and rising house prices on the market in the last few years, the results of which are being felt today.
According to CMHC, as many as 40,000 Canadian families may lose their homes because of high interest rates. Many of these people are hardworking members of society trying to get ahead but frustrated in their efforts by the poor state of our economy brought about by years of federal government neglect and high interest rate policy. Approximately 1,200,000 Canadian families will have to renew their mortgages over the next two years, many at substantial increases in monthly payments. This will place undue pressure on an already stretched budget. These two problems of availability and affordability of housing units are serious indeed and deserve and demand immediate and effective government action in an effort to set things straight.
Canadians expected relief in the form of responsible solutions to the economic problems facing the country, but have found that relief in the recent federal budget was virtually non-existent. While the budget offers builders some assistance in the construction of new apartments, the limited assistance will only have a slight impact on the high break-even costs faced by most builders.
The MURB program which was responsible for the construction of some 25,000 rental units last year has been cancelled, and the government will reduce its commitment to subsidize social housing in 1982 from 30,000 units to 25,000 units. That is a drop of 5,000 units. The net effect of the above two policy decisions is a reduction of some 15,000 needed housing starts. The government promised, after continuous criticism throughout the summer and early fall, to bring in some form of relief for home owners in dire straits, such as people facing huge mortgage rate increases because of the government's high interest rate policy. The relief brought forward in the budget, if you can call it relief, or for that matter if you can call it a budget, is little more than a program which allows people to keep their homes by going further into debt.
The proposed Canada mortgage renewal plan as contained in Bill C-89 does little, if anything, to resolve Canada's current housing crisis. On an average-priced home in Canada today at the high level of interest being paid on a mortgage spread over the length of a usual repayment period, a Government of Canada guarantee to defer interest or for those who qualify for a grant, the maximum relief of $3,000 is minimal and not an effective solution to such a serious problem. This proposed plan is to expire on November 11, 1982, and apply to mortgages which matured on or after September 1, 1981. Such a short-term measure, which the minister responsible for CMHC indicated "is providing the help people need to get
February 8, 1982

them through these difficult times," must be questioned as to its effectiveness since some three months after the federal budget we see no improvement on the economic and housing horizon. This is not surprising since the so-called budget did not address itself to providing solutions to the causes of our economic and housing woes.
In the information kit on the proposed Canada mortgage renewal plan issued on November 12, 1981, in the questions and answers section, this question is posed: "This proposed plan appears to me to be simply a postponement of the inevitable. I will still face a hardship situation in a year from now when this plan runs out. What do I do then?"
The answer section indicates that the Canadian government "is simply unable to afford an extended benefit plan." Recent reports indicate the federal government is to spend millions of dollars on advertising the new Canadian Constitution, which I am sure will be of small comfort to struggling home owners. The answer goes on as follows:
It is hoped, however, that while the plan is in operation, the personal financial situation of home owners will improve to the point where a decreasing proportion of income will be required to carry monthly mortgage charges. At the same time, this is an opportunity for home owners to consider their personal situations and to plan for the period when the plan terminates.
I would suggest that if the personal financial situation of home owners improves to any degree between now and November 11, 1982, it will not be as a result of any efforts on behalf of the federal government whose three-months-old budget has done little but slam the average Canadian.
I would also suggest, Mr. Speaker, that, at the same time, this is an opportunity for home owners, and indeed for all Canadians, to consider the economic mess in which this government has put the country, and an opportunity to plan to replace this worn out government with a Progressive Conservative government.
Bill C-89, while dealing with provisions of the mortgage interest renewal plan, also deals with various other measures which the government says will make CMHC "more businesslike and more flexible". I would hope that such changes would result in effective and efficient programs and service to the public through fair and effective programs designed to improve the housing situation in Canada.
These are trying times for many Canadians. The 12.5 per cent annual average rate of inflation in 1981 was the largest annual average rate in 33 years. Unbelievable interest rates, record unemployment and energy costs, are changing the lifestyles of many hardworking Canadians through no fault of their own. Luxuries are the first items to go as part of the cost-cutting forced by rapidly increasing costs and more slowly increasing incomes. Canadians can learn to live with temporary reductions in their standard of living if they realize that effective solutions are forthcoming to get the nation's economy on the rails again.
After so many years of economic mismanagement by the present government, the Canadian people are losing their patience. In 1968, Canada's standard of living was the third highest in the western world; by 1981, it was thirteenth. With
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our abundant resources, Canada should have the highest standard of living and be on top. Many hardworking Canadians are finding that these economic hardships are gouging out not just the luxuries of life, but the necessities of life as well. Many Canadians, often families where both the husband and wife work, are finding it difficult to provide food, clothing and shelter for their families. It used to be in Canada that a single breadwinner maintained an increasing standard of living while paying off a mortgage, but now such a concept is but a dream to many Canadians. It is bad enough that many unemployed Canadians are having serious problems maintaining adequate housing, but when working families start losing their homes, the government must realize the seriousness of the problem.
The rural and native housing program, which is administered by CMHC, has caused a great deal of controversy in my riding of Hastings-Frontenac-Lennox and Addington. This program was approved by the federal cabinet in 1974. Its original objectives were to ensure adequate housing for low-income persons living in rural areas and small communities with a population of 2,500 or less. The program encourages client involvement to motivate and help the program's clients solve their housing problems through their own organization and efforts by providing the opportunity for client involvement in the planning and building of the units.
The program operates with various benefits and assistance available to those eligible. Section 40 of the National Housing Act is considered the lead provision under the rural and native housing program. Section 40 is the home ownership part of the program whereby ownership is made possible to low-income families by gearing monthly payments to income in accordance with a purchase-payment-to-income scale. This is a federal-provincial cost-sharing program whereby capital costs and losses are shared on a 72-25 per cent basis. I understand that under this part of the program the houses were to be built or acquired by CMHC and then sold to clients at the subsidized rates.
The program is designed to assist people to purchase a home and to pay for it based on their capacity to pay rather than the housing cost. Payments are based on 25 per cent of income with a minimum down payment of $500-or "sweat equity."
I understand that the program went into operation very quickly after it was approved by cabinet but before adequate guidelines and procedures could be developed, and that in October, 1976, the first formal directives were issued to the field offices, giving decentralized authority to branch managers for rural and native housing under Section 40, resulting in some inconsistencies.
In 1977, because of difficulties encountered in achieving targeted goals for the first few years of the program, a special task force was appointed by CMHC to review the total program, and a number of policy and procedural issues were identified and brought to the attention of management for resolution. In light of recent concerns in my riding over the program, I ask the minister to review policies and procedures

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to ensure the smooth and effective working of the rural and native housing program.
In view of the very high interest rates of the last two years, the housing crisis in Canada has deepened beyond certain select groups. People in the cities, towns and on farms are experiencing problems in trying to keep a roof over their heads. Families where both spouses work hard to get ahead are finding it hard to hold on to their houses, if they can even afford one at all. Many who work hard just to hang on to their homes find that many other sacrifices are necessary also.
In light of such troubled times facing so many Canadians, it is necessary that various government programs be not only fair but be seen to be fair and appropriate for the times. Many people who work hard to get ahead and pay their taxes do not feel it is fair when, through no fault of their own, they lose their homes or have to struggle to maintain them, while at the same time the government offers a heavily subsidized program to a chosen few to acquire housing. Such a program, while commendable in principle during sound economic times, is felt by some to be out of tune with today's troubled times. This is not to say there is no need for government programs to aid Canadians' housing problems, but rather that existing programs should be equitable and appropriate.
I understand that under Section 40, CMHC can either purchase existing homes or have new homes built. This would, or perhaps should, entail an adequate selection of sites, builders, or an inventory of houses in a targeted area. Questions arise as to the criteria to be followed, the search process and the best decision for those affected. Questions also arise as to the selection of participants, and here we must remember this program is set up for communities of fewer than 2,500 people where often you find they know each other and what goes on in their community.
There is a controversy in my riding concerning the home ownership aspect of the rural and native housing program, and 1 would like to set out what I perceive to be some problems associated with it, particularly in Madoc and Marmora. When it is decided to go into an area with the program, it is necessary to select the best way to advertise and make the program known to eligible persons. At a time when so many Canadians are experiencing high housing costs and shortages, it is important that any program be adequately made known to avoid controversy and achieve a fair and representative response.
What are the best means of getting the information to and identifying potential applicants? Does CMHC contact local municipalities, welfare, community and social agencies, or federal and provincial Members of Parliament for a possible client list? Is there to be television, radio or newspaper advertising, or public meetings in target areas to acquaint all interested local residents with the program? After all, this is a taxpayer subsidized program for certain people at a time when many other taxpayers are losing their homes and going into debt. It is imperative that suitable guidelines exist to ensure adequate information and feedback.
Then there is the decision on whether to build new or buy existing housing, which raises questions and concerns. Who does CMHC approach to assess local housing and land markets? Should it be local real estate agents, municipal officials, the applicants, local residents or the local media? Are only those houses and lots listed for sale looked into, or is an effort made to find out about additional property which might come on the market? What guidelines exist as to requirements for the housing being sought, and on what basis is the decision made to buy existing or build new homes? I feel these and other issues must be addressed in order to provide comprehensive guidelines for this important program.
There are also areas of concern as to the successful applicants. How are they assessed and what are the priorities? Is there an application cutoff time, and how is it determined? How much weight is given to such matters as the order in which the application was made, initiative shown, recommendations by various agencies, family income, number of dependants, ability to meet commitments, source of income, credit rating, current housing situation and any interrelationship between applicants? I feel that it is of the utmost importance to have objective and equitable guidelines for this crucial stage of the program, especially in smaller communities where adequate public knowledge and consultation is fundamental to the effective working of such a program.
The concept of any such program and the methods to be followed in its implementation must be comprehensive, objective, fair and make common sense if the program is to work. If one family is struggling hard to keep their home as their expenses increase faster than their income, a program whereby another family in the community is provided with a new subsidized home is bound to create controversy unless managed in a most convincing way. With today's economy and tight housing situation, many beleagured taxpayers trying to keep their homes find it hard to be convinced about such programs because of many of the concerns and problems I have just raised.
I have seen many of these concerns raised at meetings in Madoc and Marmora where people attend from other areas with similar questions concerning the rural and native housing program. Residents of the target area were quite concerned over various aspects of the program such as type of housing selection, availability and applicant selection. During one meeting, a friend and local politician suffered a heart attack and passed away after expressing his feelings on the program. Another politician resigned his post, and a local election of officers resulted to fill council vacancies.
I have been contacted by constituents expressing their concerns on the program as planned for various areas in the riding. Many of the concerns are over topics I have already mentioned, and go to stress the necessity of suitable guidelines and an appropriate program in tune with the economic times if Canadians are to be convinced of the program and if it is to operate effectively and efficiently.
Public consultation, input and acceptance is important to the functioning of such programs in small municipalities, and
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it is usually more acceptable for the public to find out things first-hand rather than by rumours. People like to be made aware of the implications of such programs, especially when they are subsidized by taxpayers' money.
Canada is facing severe economic problems right now, and a housing shortage is one of the aspects of the poor state of the economy. The latest budget did little to help Canadians, many of whom continue to struggle in an uphill battle to get ahead. There is a need for federal programs and assistance to get the economy moving again. There is also the need for a comprehensive housing policy to aid various levels of Canadians struggling to acquire or maintain shelter. Such policies must realize the seriousness of the problems facing the country when hardworking families are having a hard time keeping their homes. Programs must be assessed and reassessed to take into account the problems, needs and concerns of all Canadians if they are to be effective and respected in practice. Thank you, Mr. Speaker.
[ Translation]


Mrs. Celine Hervieux-Payette (Parliamentary Secretary to Solicitor General):: Mr. Speaker, I appreciate having this opportunity to speak before the House this evening, especially after publicly announcing my interest in the construction industry this weekend. In fact, I should like to point out that although my colleagues from central and eastern Montreal and I may have asked the Prime Minister (Mr. Trudeau) to add further measures to assist the construction industry, our request to the Prime Minister should not be interpreted as a criticism of the bill now before the House, which has my full support.
To me, this bill is extremely important for the operation and administration of the mortgage insurance fund. It will help the government and the Canada Mortgage and Housing Corporation to be more effective in the area of public mortgage insurance. However, 1 should like to focus on the social aspects of the bill. Bill C-89 is important because it deals directly with two urgent social problems, namely, renewal of mortgage loans and rental accommodation. The bill is also a tool for dealing with other social problems. It enables the Canada Mortgage and Housing Corporation to facilitate the provision of mortgage loans that are adapted to periods when mortgage rates fluctuate considerably. These loans offer greater security with respect to monthly payments, so that people can still consider purchasing a home as a way of increasing their security and providing for their retirement years.
The bill will help to ensure that the mortgage funds required in the long term will be available on the market. I agree with the minister that the bill does not reproduce all his plans for the housing sector. It is a start in the right direction, but again I agree with the minister that we must go further and deal with the problems of rural and native housing and low-income tenants. In fact, in a few weeks I shall be celebrating, with the
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people of my constituency, to mark the acquisition of several hundred co-operative housing units by the citizens of the riding of Montreal-Mercier. We have here a federal government program that is helping low-income people to become home owners. Mr. Speaker, it would not be fair to hold up this bill too long because of the provisions it does not contain, since the minister has clearly indicated his intention of dealing with other problems in due time. Members will recall that the decision to set up the plan was first announced in the budget speech by the Minister of Finance (Mr. MacEachen) on November 12. In fact, the previous speaker was asking the minister to elaborate on the programs. Mr. Speaker, I feel that those who attend the proceedings of this House have several times witnessed the indignation and outrage shown by opposition members when the minister made his announcement, and this evening, the same members are asking us to announce the details of these programs. So, Mr. Speaker, what else can I do, except commend a bill aimed at helping our fellow citizens. The first aspect of the bill, Mr. Speaker, is a security provided by the government to those lenders willing to allow home owners with liquidity problems to delay payment of the interest on their mortgage loan. Would-be eligible home owners who must pay more than 30 per cent of the household's gross income in principal, interests and taxes and, as the case may be, half of joint condominium charges. Consequently, those people would have a substantial equity in their home, in that the home has a much higher value than the amount still outstanding on the mortgage loan. The above-mentioned plan will allow them to use their equity to solve their liquidity problems.
This arrangement is not available to everyone. Thus, individuals who do not have a substantial equity in their home, for example, the co-owners of a condominium unit whose value has decreased throughout the years could not resort to that solution. To those who only have a small equity in their home and who have to repay more than 30 per cent of their income in monthly payments, the plan provides a direct grant of up to $3,000.
Mr. Speaker, I am aware that many hon. members have received letters and phone calls from their constituents who are anxious to know whether the plan would apply to their particular circumstances and how they could take advantage of it. Canada Mortgage and Housing Corporation officials who administer the scheme advise people to first contact their lenders. These lenders, I mean the banks, trust companies, credit unions, etc., which grant mortgage loans, are aware of the terms and conditions of the plan and have the application forms. They are ready to discuss this plan with their borrowers and help them decide whether they are eligible for the assistance provided by way of insurance or a grant, as well as fill out the application form. This form is then sent to a branch of the Canada Mortgage and Housing Corporation. CMHC officials advise me that they have already received a number of

February 8, 1982
Housing
applications, but they will not be in a position to offer either insurance or a grant as long as this bill which is now before the House has not been passed and as long as Parliament has not empowered it to act. As everybody knows, Mr. Speaker, there are measures provided for in the MacEachen budget, but for this program to be implemented, this bill must be passed by the House.
There are a few facts which people interested in this scheme should know. First of all, only those who own their own homes and live in them are eligible. For instance, a home owner could not obtain either insurance or a grant for a second house which he is renting out to others or which is occupied by members of his family. However, if he occupies an apartment a duplex or a triplex he owns, he will be deemed to be the home owner occupying that apartment for the purpose of this program. The assistance will apply to only one mortgage, either the first, second or any other, whichever the borrower chooses, on condition this mortgage loan was obtained when the house was bought. Of course, the assistance would apply to only one mortgage renewal. The grants will be paid to the lender on behalf of the borrower and not directly to the latter. It is understood that these grants would be tax free.
Mr. Speaker, I have made it clear to my constituents that a cheque will not be addressed directly to the home owner who is experiencing difficulties but that the Canada Mortgage and Housing Corporation will send one to the lending institution after it has approved the application.
To decide whether or not the income of a borrower makes him eligible for assistance under this bill, the income of the whole family before taxes is taken into account. That is, the income of the wife and husband, as well as other sources of income such as rental income, investment income, family allowances. As l have said before, the mortgage lenders are quite willing to discuss the program with their clients. I can even say that the willingness with which lending institutions have lent a hand with the application of the program has been of great value to the public. Because they have agreed to assume part of the administration of the plan by screening applications for assistance and putting up the funds, those institutions have enabled the government to make substantial savings in terms of costs and man-years.
Indeed, Mr. Speaker, I must emphasize that the Liberal government has always respected that long-standing tradition between the Canada Mortgage and Housing Corporation and the Canadian lending institutions, and co-operated with the private sector to bolster our economy and, of course, the housing sector as well.
Naturally the plan has come under criticism, particularly because it has failed to find a lasting solution to the problems of Canadians who occupy their own homes and who are faced with the difficult rearrangement of their personal expenditures as a result of soaring interest rates. Still we must admit that the program plan does meet its objective which is to help those
people who may lose their home owing to high interest rates. I should even add, Mr. Speaker, that the plan offers that assistance in such a way as to make it possible to take into consideration at the same time the restraint which the government must use in the administration of public funds in these trying times and, of course, the urge to help the home owner keep the house on which he has already made sizeable payments.
The Canada mortgage renewal plan is an adequate answer to the problem of the current economic situation. It is a major feature of the bill introduced in the House, and I urge my colleagues to study it very carefully and diligently. The Canada mortgage renewal plan amounts to a fair solution of the problems inherent in renewing mortgages. Generally speaking, owners living in their own home earn appreciably higher incomes than renters do and, something which is just as significant, they have much larger assets than renters do. An over-all assistance program for mortgage renewals would be extremely costly, of course, and it would have transferred the income of small-wage earners to others who are much better off. It would then have been very difficult to reconcile such a program with the will of the government to help the most needy.
This is why in 1979 1 so strongly opposed Bill C-20. The program was very unfair. It promoted subsidies and grants for everyone. This, of course, was to be done using the money for those who cannot afford a property.
[ Translation]
However, the government realized that the tendency of mortgage terms to get increasingly shorter has caused great uncertainty among home owners. Mortgage renewal can affect in many ways the wellbeing of families and create cash problems. Mortgage renewal has been a source of uncertainty both for existing and prospective home owners and rental housing contractors. Confidence is very low, Mr. Speaker, and measures will have to be taken to renew confidence. The Canada mortgage renewal plan helps reduce uncertainty in households that are or will be renewing their mortgages. Other steps no doubt will be needed later, and I am ready to discuss them at other times.
Numerous discussions have dealt directly with the current mortgage instrument problems, namely, their short term, which generally is one year, and their uncertainty. Many people have urged that this instrument be changed. Home owner associations suggested we should come back to a 25-year mortgage term, because it would give families the certainty of being able to meet their monthly payments. Home owners want the assurance they will be able to meet their payments. With that security, families can plan for years ahead. However, Mr. Speaker, I am not sure the current
February 8, 1982

global and North American economic situation can make such a program possible. And at any rate, I am not sure either that a return to a 25-year term would necessarily solve the problem, such a plan would transfer to investors the uncertainty pertaining to interest rate fluctuations, which finally would lead to a reduced supply of mortgage funds. Other solutions have been put forward, for instance, variable rate loans, loans with capital gain participation, loans with indexed principal. 1 am not sure these proposals will succeed, but they certainly deserve to be put to the test, and it will take time for the market to accept them. That is why I am happy that Bill C-89 enables the Canada Mortgage and Housing Corporation to propose those types of mortage loans in order that present and future home owners may take advantage of them if they so decide.
Mr. Speaker, it is not possible to consider the social impact of this legislation or the broader question of housing without dealing with rental housing. This is an area I am quite aware of, because the constituency of Montreal-Mercier probably includes a majority of renters. All members of the House are concerned with the supply of rental housing and the problems faced by low-income renters in tight markets.
Earlier, I mentioned the co-op housing program and noted that this was a formula introduced by the Liberal government to allow low-wage earners to become home owners. Mr. Speaker, I believe that this program has proven effective and 1 am happy that the residents of the Mercier riding can benefit from it. Moreover, the Canadian government will finance 40,000 new rental units in 1982, including 25,000 units under the non-profit and co-op housing programs, which provide housing for low and middle-income tenants. In addition, the Canada rental supply plan will finance another 15,000 units to prevent a worsening of the shortage of rental housing. The bill will play a major role in providing these 15,000 units by enabling the Canada Mortgage and Housing Corporation to insure more substantial loans for rental housing.
Mr. Speaker, we are facing four major social problems: the first is that of the availability and supply of rental housing at reasonable prices. In this regard, the bill now before the House will help to ensure that the 15,000 rental units announced in the budget will prevent a further deterioration of the markets which are faced with a rental housing shortage. No one will claim that this bill will solve every housing problem in Canada, but I believe that it is a positive beginning and this is why I support the minister's efforts and this bill. The commitment entered upon by the government is obvious if we consider the 25,000 non-profit or co-op housing units to be built in 1982.
The second problem concerns low-income tenants throughout the country. Through its non-profit and co-op housing programs, the government has shown its concern for these people. The minister has also expressed support for a housing allowance program and his wish to consider this proposal at length.
Hons inf;
The third problem, Mr. Speaker, is the lack of confidence or the uncertainty which besets present and future occupant home owners. The Canada mortgage renewal plan and the provisions of this bill, which will allow CMHC to help develop new forms of mortgage loans, are aimed at solving this problem. In any case, Mr. Speaker, 1 want to take this opportunity to remind hon. members that it would be a complete fraud to pretend to solve all of Canada's economic problems with the introduction of such a bill. This is why I invite my colleagues in the opposition to consider this positive measure, to try to improve its content, but also to approve it as soon as possible since our constituents are anxious to see it passed quickly.
The fourth problem, Mr. Speaker, concerns the miserable housing conditions of our native and rural population. As I came from a rural area before settling down in an urban area, Mr. Speaker, I must say that 1 am aware that the housing situation is indeed distressing and in this respect agree with my colleagues across the aisle. However, I do not believe that this is a good reason to prevent or delay the implementation of such a bill. If we are aware of problems in other sectors, Mr. Speaker, other action could be taken, and this is why 1 urge my colleagues to support this bill. 1 believe that the government has shown concern for the native people, the problems of employment and the rural situation. With respect to financing, we have had the previous bill on Canagrex, and I believe that this government has shown no reluctance in supporting positive action to help the Canadian people.
I think that a short discussion of this bill is needed. I hope that my colleagues will support Bill C-89. Although 1 recognize it is the role of the opposition to oppose, they should also take part in discussions and approval of measures.
This is a very positive measure. I believe that Canadians can afford this program and approve these measures, and it is my hope that we will vote on this important bill shortly.


The Acting Speaker (Mr. Blaker):: I believe the hon. member for Winnipeg-St. James (Mr. Keeper) wishes to be recognized now so that he may be recognized tomorrow. Is that the case?


Mr. Keeper:: Yes, Mr. Speaker.


The Acting Speaker (Mr. Blaker):: The Chair has recognized the hon. member for Winnipeg-St. James.

February 8, 1982
Adjournment Debate



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.

Walter David Baker: Mr. Speaker, until November 30, 1981, the main ingredients of the government's decentralization policy were patronage, lack of respect for the taxpayers' dollar, political advantage to a particular ministry and secrecy.
On that day, as a result of two questions to the President of the Treasury Board (Mr. Johnston) and the Minister of State for Small Businesses and Tourism (Mr. Lapointe) on the proposed move of the distribution unit of the Canadian Government Tourism Office, two new elements were added-stupidity and weakness.
Lest you think, Mr. Speaker, that I am too hard on these two hon. gentlemen, I should tell the House the facts. Let me begin by saying that it is now common knowledge that in stopping the decentralization program in 1979, the Clark government saved the Canadian taxpayer approximately $250 million and eliminated countless negative effects on the delivery of government services to the people of Canada. I presume that if this government had asked for the same advice on costs and efficiency from the same public service, it would have received the same advice as our government received. Therefore, the present policy must be based on political advantage, and lack of respect for the taxpayers' dollars, laced with a generous amount of patronage. But there is more, and this is where stupidity and weakness enter.
In 1977, before the Clark government stopped the move, the Minister of State for Small Businesses advised the President of the Treasury Board not to move the tourism distribution unit to Yarmouth. Again, on April 29, 1981, in a letter that the Minister of State for Small Businesses admitted writing to the President of the Treasury Board-which everyone can see if they ask-the minister pleaded an eloquent case against the move. He recalled the consistent advice against the move over the years, related how the standard of service would be lowered and described the distribution centre as much more than a warehousing operation; rather, a sophisticated office with national and international responsibilities to get Canada's message out within a critical delivery component. He detailed how the move to Yarmouth would increase the costs of the operation, impose time penalties on the service and agreed that if there was a strong case against the move to Yarmouth in 1977, there was an even stronger case in 1981, and certainly stronger today.
Only in Ottawa, only within the Treasury Board could such foolishness abound. For example, a distribution unit is to be moved where no postal workers will be available. Material which should be out in the marketplace will have to be stored in the post office in Halifax. These delays will mean missing media deadlines. Agents, embassies and offices abroad will suffer from unco-ordinated shipments, and cost increases will be enormous. For example, with regard to provincial costs, Ontario provided 124,000 pounds of literature in the past twelve months at a shipping cost of $3,200. The Yarmouth cost would be $17,240. British Columbia provided 53,000 pounds at a cost of $9,600. That cost would climb to $15,565. Some might grow fainthearted in the face of this logic and the good sense of the letter, but no one should ever accuse the government of faintheartedness when it comes to stupidity. It embraces stupidity in a manner which is truly breathtaking. The Minister of State for Small Businesses and Tourism recognized stupidity for what it was and admitted it to the House. He said he wrote the letter; he did not agree with the move; it would make him a laughing stock; and he asked for another unit to be moved. When I read that, I said there was a glimmer of hope for this poor benighted creature. However, seconds later, he dashed this slim glimmer of hope to the ground. He said, and this is where he demonstrated his weakness: "Please save me from the member from Yarmouth. She is thrashing me to death with her purse. Find me another unit for Yarmouth. I can't stand it." Another unit could not be found, so he changed his mind, and what was ridiculous, what was irrelevant, and what was stupid before now became the order of the day for government business.
Even this tired, listless, weak-willed, patronage-ridden and ramshackle excuse for a government has to account to the people at some time. Let it do so now. Let it produce all the correspondence. The parliamentary secretary is here. Let him produce all the correspondence and the studies on decentralization. Let the government find that other department or unit to go to Yarmouth. Nobody disagrees with the federal presence in Yarmouth, but how can the government fly in the face of a move which has been condemned by everyone and even by the minister himself? Who is in charge over there? What establishes the rule over there? Is it good sense; is it patronage; is it the appropriate delivery of government service; or is it the hon. member for South West Nova (Miss Campbell) or the public interest? Find another unit, please, Mr. Speaker, even if you have to intervene personally. It is painful for me to have to sit here day after day and to see the government make such a fool of itself.


Mr. Ralph Ferguson (Parliamentary Secretary to Minister of State (Small Businesses and Tourism)):: Mr. Speaker, I am somewhat shocked to hear some of the adjectives used by the hon. member for Nepean-Carleton (Mr. Baker) because when we look at the employment rate of that area of Nova Scotia and compare it with that here in the nation's capital, we note that it is over 4 per cent higher than here in central Canada. There are, therefore, humanitarian reasons behind this move, and humanitarian reasons behind moves to other areas in the
February 8, 1982

Atlantic region which do not enjoy the opportunities we enjoy here in central Canada. Part of the decision was based on the need for decentralization so we could be in closer contact with people in outlying areas. We should look at this matter in the true Canadian context of sharing. We must provide the people of that area with a standard of living comparable to that in the nation's capital. I hope this is one move in that direction. We should not be greedy and hold everything in central Canada. We should be willing to share.
Work is proceeding on the Canadian Government Office of Tourism facility in Yarmouth, Nova Scotia. Completion of the new structure and occupancy is scheduled for 1983. Officials of the office of tourism have had several meetings with officials of the city, Canada Post and the Department of Employment and Immigration, to ensure the transition is done as smoothly as possible so as not to inconvenience people seeking travel information and literature on Canada. Transportation companies, including CP Transport, have been asked for plans and estimates of costs for moving the tourist information to the Yarmouth distribution centre. Officials of the Canadian Government Office of Tourism also met with Canada Post officials in Halifax recently and were assured of the fullest co-operation possible. A postal plan for servicing Yarmouth will be presented to the CGOT shortly to allow time for the new Crown corporation to settle in.
Meetings have also been held in Yarmouth with Employment and Immigration Canada in relation to possible staffing requirements for the new facility. Here in Ottawa a professional career counsellor is advising those employees of the distribution centre who will be relocating in the national capital area on retraining, job rotation and relocation.
The Canadian government wants to decentralize, and, in view of the high unemployment figures in the Yarmouth area compared with those in the city of Ottawa, I do not think we should be complaining but, rather, trying to help those people who are disadvantaged.


THE ECONOMY-QUERY RESPECTING MATTERS CONSIDERED WHEN PREPARING BUDGET. (B) DURATION OF RECESSION
Sinclair McKnight Stevens: Mr. Speaker, my remarks tonight centre on a question I put to the Prime Minister (Mr. Trudeau) on December 9 of last year. At that time I was pointing out to him that, in the absence of the Minister of Industry, Trade and Commerce, (Mr. Gray) in the House, 1 felt he should inform the House concerning the plight of some 140,000 people who the Canadian Manufacturers' Association had indicated only that day had lost their jobs over the last three months. The emperor was in one of his snarky moods that day and simply said "I will be very happy to convey the hon. member's representations to the minister; I believe he will be in the House presently." I followed up my question by asking would he indicate why he and the Minister of Finance (Mr. MacEachen) and the Minister of Industry, Trade and Commerce had put us in the place where we were experiencing such a serious recession in Canada. The emperor
Adjournment Debate
then came back and said that he could not agree with that premise and that he had no answer to give.
The reason I have reiterated the question and the two answers is that I think that in reality this government does not fully realize the hardship it is creating in this country. The CMA people at that time indicated that 140,000 people had lost their jobs. As we know, within the last week the president of the CMA is now saying that it may be 400,000 Canadians who will be out of work as a result of the present recession we are in.
The Prime Minister may feel he can quibble with our words. He may feel he can say that it is technically not a recession, but every economist in Canada would disagree with him. The fact is that for the last four years this country has had a negative real growth on a per capita basis in each of those four years.
Let me not ask you to accept my figures, Mr. Speaker. In the October issue of the internationally well regarded magazine Euromoney, it was pointed out that Canada among world countries had an economic performance between 1974 and 1981 ranking number thirtieth. That means we ranked after countries such as Taiwan, Singapore, Hong Kong, Saudi Arabia, Malaysia, Iraq, Egypt, Thailand, Cyprus, Japan, Korea, Burma, Paraguay, India, Honduras, Libya, Pakistan, Indonesia, Tunisia, Trinidad and Tobago, The Philippines, Panama, Guatemala, Ecuador, United States of America, Norway, Germany, Austria, Malawi-and then Canada.
I mention this because I think it is time that not only the emperor himself but his ministers, those dwarf ministers that surround him, somehow accepted the plight they have caused in the country. We have a competitively high inflation level in Canada. In fact, the same economic review I have referred to, the October issue of Euromoney, says that as far as inflation is concerned we have the nineteenth worst inflation level they record. As far as economic growth in those years is concerned, 1974 to 1981, we ranked forty-eighth.
I am suggesting to the House this evening that, bearing in mind the riches we have in this country, the resources that we have, the agricultural produce and capability we have, our talented people, and the proximity we have to the wealthiest market in the world, it is time the government accepted the challenge to make us number one again among world nations.
This is why I am suggesting, since we have now slipped into a recession, that the Prime Minister should offer some explanation not only to the House but to the people of Canada. He should be willing to tell us why, in terms of personal wealth, for example, we have slipped behind Switzerland which now has personal wealth for every man, woman and child of $14,240 in United States dollars. He should be willing to tell us why we are behind Luxembourg with $12,820 in personal earnings; Sweden with $11,920; Denmark, $11,900; Germany, $11,730; Belgium, $10,890; United States, $10,820; Norway, $10,710; Iceland, $10,490; The Netherlands, $10,240; France,

February 8, 1982
Adjournment Debate
$9,940. Then comes Canada! We used to be a proud No. 2 on the list. How come the emperor has allowed us to sink so low?


Mr. Doug Frith (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, several points were raised by the hon. member for York-Peel (Mr. Stevens) with which I will deal in the order he presented them. Originally the hon. member asked his question on December 9, 1981. In his preamble he said to the Prime Minister (Mr. Trudeau):
In view of the fact that we are now faced with the worst red ink figures in our relationship with the rest of the world in terms of trade-
Then he went on to ask why we were in the same situation in terms of losing jobs; basically that was the question he asked.
If one listened to the rhetoric of the question, one would assume that in fact our trade balance in 1981 was the worst on record. In fact, the way it was worded one would think there was a trade deficit in 1981. Yet the figures show that in 1981, despite the fact that the hon. member quoted from Euromoney, the economic review, Canada had a $6.5 billion trade surplus. Admittedly that is not quite as good as the record of 1980. I remind the hon. member that there was still a Liberal government on this side of the House when Canada had its largest trade surplus in history of $7.8 billion. If one listened only to the rhetoric of the hon. member opposite, one would think that the country was faced with a trade deficit, and the facts prove the opposite.
In 1981, in terms of trade, had the fourth quarter or the last quarter of that year been projected on a yearly basis, the result would have shown an even better record trade surplus between Canada and its major trading partners in the world. Evidently the Minister of State for International Trade (Mr. Lumley) has done an excellent job in terms of promoting Canadian products. This shows up in our trade surplus with other markets.
In addition, the hon. member asked why Canada was doing so poorly when we were in such close proximity to the wealthiest market in the world. I would assume by that he meant the United States. It is fair to say that roughly 70 per cent of all exported Canadian products are traded with the United States. The hon. member opposite would be in agreement with me that the United States is in its worst recessionary period since the post war period as well. It should be borne in mind that when 70 per cent of everything produced in the country goes to the United States, whose economy is in trouble as well, that the Canadian economy will be in trouble. With the budget and by some of the measures we have introduced we are trying to alleviate the unemployment situation to which the hon. member referred. I am confident that as the United States economy turns around, we will find the economy of Canada will correspond in a like manner.


HEALTH-REQUEST FOR VACCINATION PROGRAM TO COMBAT RED MEASLES
Mr. Stanley Hudecki (Hamilton West):: Madam Speaker, on November 20, 1981, my question to the Minister of National Health and Welfare was phrased as follows:
A disease which is seriously underrated by the public and also by some health workers, as far as morbidity is concerned, and one that can and does cause significant brain damage, is red measles. This serious virus infection is preventable by vaccination. The United States is committed to a national vaccination program, with a goal of completely eliminating the disease arising within that country by 1982. Does the Minister of National Health and Welfare have any plans to stimulate and co-ordinate such a program in Canada where the responsibility for health rests with the provinces?
The Minister of National Health and Welfare answered:
Madam Speaker, the jurisdiction for implementing such health policy remains with the provincial health authorities. However, the fact is that the National Advisory Committee on Immunization which prepared guidelines for the eradication of measles in Canada strongly recommended that legislation be enacted in each of the ten provinces requiring measle immunization prior to school entry. Unfortunately it has not been implemented in some parts of Canada. I do not have the direct power to do it, so I guess an occasion such as this to tell the public is of value.
My purpose in bringing this question to the attention of the minister again is because I fee! this is an important issue and one which focuses on the physical wellbeing of all Canadians and our progeny.
The urgency of this situation is heightened by the fact that in 1980 the reported rate of measles in Canada was approximately ten times higher than in the United States. In Canada there were 13,750 cases, having a rate of 58 per 100,000 population; whereas in the U.S.A. there were 13,430 cases (the rate being 6 per 100,000 population).
It was estimated that approximately 2,500 Canadians were infected with red measles in 1981. While this figure is down considerably from previous years, it becomes less impressive when we realize that only 2,347 measle cases were reported in the entire United States during the first 26 weeks of 1981. What we must all realize is that we have reached a point where we can eliminate this infectious disease. Red measles has hitherto been referred to in Canada as a common childhood disease. It is not by any yardstick a benign disease. Complications such as middle-ear infection and bronchopneumonia occur in one out of every 15 cases. Inflammation of the brain or encephalitis occurs in one out of every 1,000 cases of measles. This condition leaves some with permanent brain damage and others with residual paralysis. Mental retardation occurs once in every 3,000 cases sometimes due to a result of the encephalitis. The disease can be eradicated but in order to do so a 100 per cent comprehensive program of public, not private, vaccination is required.
In June, 1981, the Canadian Paediatric Society passed a resolution promoting a more universal use of the vaccine to immunize citizens against the disease. The National Advisory Committee for Immunization has continually made similar recommendations. In addition, the Canadian Medical Association in August, 1981, recommended compulsory vaccinations to eradicate this disease. Implementation of such a program is
February 8, 1982

the responsibility of the provincial legislature. The response to these submissions has not been favourable in any province except the province of New Brunswick.
Compare this response with that in the United States where all 50 states have such legislation in force. There, children must have a certificate in order to be admitted to school and if a case of measles breaks out, all members of the school must show an immunization record as proof of having been vaccinated. If no such proof is available, they are excluded from school. It is only through well supervised programs of this nature that the 1982 goal of completely eliminating the disease within that country will be realized.
Relating this back to Canada, Mr. Speaker, since supplies of the vaccine are already available at the provincial level it seems to me that the federal government's role should not only entail providing educational information and encouraging universal acceptance of vaccination programs, especially those relating to certain age groups, but it should also be encouraging the remainder of the provinces to enact legislation which would facilitate the degree of control now being achieved over the disease in the United States. In this way we would be encouraging a national health strategy to eliminate indigenous measles in Canada. A commitment must be made by the federal government to do this.


Royce Herbert Frith: Mr. Speaker, may I just begin by saying that the minister is in agreement with everything the hon. member has said in his preamble. I think the hon. member has correctly pointed out the saddest situation that can arise, which is when the government or the medical profession has the wherewithal and the weapons to eliminate disease and we Find these are not being used properly. From a
Adjournment Debate
medical practitioner's standpoint, that is one of the saddest things in terms of trying to educate the public.
As an example of that, Mr. Speaker, the major commitment of the World Health Organization in the 1970s was to eradicate smallpox on a worldwide scale. From the medical practitioner's standpoint, one realizes that that is much more difficult in terms of immunization than it would be in the case of measles. I think basically what we have to do as a national government is educate the Canadian public as to the ease with which we can eliminate or eradicate the incidence of measles in Canada. We have to begin by educating the parents to have their youngsters undergo vaccination prior to their entering school, or at least in their very early school years.
The hon. member for Hamilton West (Mr. Hudecki) points out quite correctly that roughly one in every 15 reported cases results in ear infections and pulmonary pneumonia. As he mentioned, we have severe brain inflammation in one out of every thousand cases. Even more important, we have records of several unnecessary deaths occurring in Canada in the last few years because young children contacted measles.
The minister has pointed out that the United States, on the other hand, in 1978 instituted a program to eliminate measles by the year 1982, and it has been rather successful. I just want to point out, Mr. Speaker, that the Minister of National Health and Welfare (Miss Begin) will be meeting with her provincial counterparts in the next six to seven weeks and we hope to be able to convince those provincial ministers to institute compulsory immunization programs. That is the only way we are going to eradicate measles in this country.


The Acting Speaker (Mr. Blaker):: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at two o'clock p.m.
At 10.29 p.m. the House adjourned, without question put, pursuant to Standing Order.
14794

February 8, 1982


APPENDIX
[Stage Direction]
Certified to be a true copy of a Meeting of the Committee of the Privy Council, approved by His Excellency the Governor General on the 8 February, 1982
The Committee of the Privy Council, on the recommendation of the Prime Minister, advise:
1.	that in the absence from Ottawa of the Prime Minister or in the event of his being unable to perform the functions of his office, the next senior minister who is in Ottawa and is able to perform the functions of the Office of Prime Minister, be authorized to act for the Prime Minister;
2.	that in the absence from Ottawa of a Minister whose name is set out in Column II of an item of the Schedule to this Minute, or in the event of that Minister being unable to perform the functions of his Office, the Minister whose name is set out in Column HI of the item be authorized to act for the Minister named in Column II in respect of the Office set out in Column I of the item;
3.	that in the absence from Ottawa of the Ministers named in Columns II and III of an item of the Schedule to this Minute, or in the event of both of those Ministers being unable to perform the functions of their Office, the Minister whose name is set out in Column IV of the item be authorized to act for the Minister named in Column II in respect of the Office set out in Column I of the item;
4.	that in the absence from Ottawa of the Ministers named in Columns II, III and IV of an item of the Schedule to this Minute, or in the event of all those Ministers being unable to perform the functions of their Office, the Prime Minister or, if the Prime Minister is absent from Ottawa or unable to perform the functions of his Office, the next senior minister who is in Ottawa be authorized to act for the Minister named in Column II in respect of the Office set out in Column I of the item;
5.	that where an Office set out in Column I of an item of the Schedule to this Minute is vacant, the Minister whose name is set out in Column III of that item be authorized to act in the Office of the Minister whose Office is set out in Column I of that item; and
6.	that where an Office set out in Column I of an item of the Schedule to this Minute is vacant, in the absence from Ottawa of the Minister whose name is set out in Column III of that item, or in the event of that Minister being unable to perform the functions of the Office set out in Column I of that item, the Minister whose name is set out in Column IV of that item be authorized to act in the Office of the Minister whose Office is set out in Column I of that item.

[Stage Direction]
COLUMN 1	COLUMN II	COLUMN III	COLUMN IV
				SECOND ACTING
[Stage Direction]
OFFICE
[Stage Direction]
NAME
[Stage Direction]
ACTING MINISTER
[Stage Direction]
MINISTER
[Stage Direction]
1.
[Stage Direction]
Agriculture
[Stage Direction]
Mr. E. Whelan
[Stage Direction]
Mr. J.-L. Pepin
[Stage Direction]
Mr. L. Axworthy
[Stage Direction]
2.
[Stage Direction]
Communications
[Stage Direction]
Mr. F. Fox
[Stage Direction]
Mr. J. Roberts
[Stage Direction]
Mr. H. Gray
[Stage Direction]
3.
[Stage Direction]
Consumer and Corporate Affairs and Canada Post
[Stage Direction]
Mr. A. Ouellet
[Stage Direction]
Mr. C. Lapointe
[Stage Direction]
Mr. D. Johnston
[Stage Direction]
Corporation
[Stage Direction]
4.
[Stage Direction]
Economic Development
[Stage Direction]
Mr. H. A. Olson
[Stage Direction]
Mr. M. Lalonde
[Stage Direction]
Mr. H. Gray
[Stage Direction]
5.
[Stage Direction]
Employment and Immigration
[Stage Direction]
Mr. L. Axworthy
[Stage Direction]
Mr. P. De Bane
[Stage Direction]
Mr. C. Caccia
[Stage Direction]
6.
[Stage Direction]
Energy, Mines and Resources
[Stage Direction]
Mr. M. Lalonde
[Stage Direction]
Mrs. J. Erola
[Stage Direction]
Mr. J.-L. Pepin
[Stage Direction]
7.
[Stage Direction]
External Affairs
[Stage Direction]
Mr. M. MacGuigan
[Stage Direction]
Mr. E. Lumley
[Stage Direction]
Mr. P. De Bane
[Stage Direction]
8.
[Stage Direction]
Finance
[Stage Direction]
Mr. A. MacEachen
[Stage Direction]
Mr. P. Bussieres
[Stage Direction]
Mr. D. Johnston
[Stage Direction]
9.
[Stage Direction]
Fisheries and Oceans
[Stage Direction]
Mr. R. LeBlanc
[Stage Direction]
Mr. J. Roberts
[Stage Direction]
Mr. W. Rompkey
[Stage Direction]
10.
[Stage Direction]
Indian Affairs and Northern Development
[Stage Direction]
Mr. J. Munro
[Stage Direction]
Miss M. Begin
[Stage Direction]
Mr. M. Lalonde
[Stage Direction]
11a.
[Stage Direction]
Industry, Trade and Commerce
[Stage Direction]
Mr. H. Gray
[Stage Direction]
Mr. C. Lapointe
[Stage Direction]
Mr. E. Lumley
[Stage Direction]
February 8. 1982
[Stage Direction]
COLUMN I
[Stage Direction]
COLUMN 11
[Stage Direction]
COLUMN III
[Stage Direction]
COLUMN IV SECOND ACTING
[Stage Direction]
OFFICE
[Stage Direction]
NAME
[Stage Direction]
ACTING MINISTER
[Stage Direction]
MINISTER
[Stage Direction]
1 lb. Regional Economic Expansion
[Stage Direction]
Mr. H. Gray
[Stage Direction]
Mr. C. Lapointe
[Stage Direction]
Mr. E. Lumley
[Stage Direction]
12a. Justice and Attorney General
[Stage Direction]
Mr. J. Chretien
[Stage Direction]
Mr. R. Kaplan
[Stage Direction]
Mr. A. Ouellet
[Stage Direction]
12b. Social Development
[Stage Direction]
Mr. J. Chretien
[Stage Direction]
Mr. J. S. Fleming
[Stage Direction]
Miss M. Begin
[Stage Direction]
13. Labour
[Stage Direction]
Mr. C. Caccia
[Stage Direction]
Mr. L. Axworthy
[Stage Direction]
Mr. F. Fox
[Stage Direction]
14. National Defence
[Stage Direction]
Mr. G. Lamontagne
[Stage Direction]
Mr. M. MacGuigan
[Stage Direction]
Mr. W. B. Campbell
[Stage Direction]
15. National Flealth and Welfare
[Stage Direction]
Miss M. Begin
[Stage Direction]
Mr. J. Chretien
[Stage Direction]
Mr. W. B. Campbell
[Stage Direction]
16. National Revenue
[Stage Direction]
Mr. W. Rompkey
[Stage Direction]
Mr. J.-J. Blais
[Stage Direction]
Mr. A. MacEachen
[Stage Direction]
17. Privy Council
[Stage Direction]
Mr. Y. Pinard
[Stage Direction]
Mr. W. Rompkey
[Stage Direction]
Mr. R. Kaplan
[Stage Direction]
18. Public Works
[Stage Direction]
Mr. P. Cosgrove
[Stage Direction]
Mr. Y. Pinard
[Stage Direction]
Mr. J.-J. Blais
[Stage Direction]
19a. Science and Technology
[Stage Direction]
Mr. J. Roberts
[Stage Direction]
Mr. R. LeBlanc
[Stage Direction]
Mr. J. Munro
[Stage Direction]
19b. Environment
[Stage Direction]
Mr. J. Roberts
[Stage Direction]
Mr. R. LeBlanc
[Stage Direction]
Mr. J. Munro
[Stage Direction]
20. Secretary of State
[Stage Direction]
Mr. G. Regan
[Stage Direction]
Mr. J. S. Fleming
[Stage Direction]
Mr. F. Fox
[Stage Direction]
21. Solicitor General
[Stage Direction]
Mr. R. Kaplan
[Stage Direction]
Mr. J. Chretien
[Stage Direction]
Mr. Y. Pinard
[Stage Direction]
22. Supply and Services
[Stage Direction]
Mr. J.-J. Blais
[Stage Direction]
Mr. P. Cosgrove
[Stage Direction]
Mr. P. De Bane
[Stage Direction]
23. Transport
[Stage Direction]
Mr. J.-L. Pepin
[Stage Direction]
Mr. L. Axworthy
[Stage Direction]
Mr. E. Whelan
[Stage Direction]
24. Treasury Board
[Stage Direction]
Mr. D. Johnston
[Stage Direction]
Mr. A. MacEachen
[Stage Direction]
Mr. A. Ouellet
[Stage Direction]
25. Veterans Affairs
[Stage Direction]
Mr. W. B. Campbell
[Stage Direction]
Mr. G. Lamontagne
[Stage Direction]
Miss M. Begin
[Stage Direction]
Tuesday, February 9, 1982