June 7, 1951

LIB

Louis-René Beaudoin (Deputy Chair of Committees of the Whole)

Liberal

The Deputy Chairman:

If that is agreeable to hon. members I will do so.

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
Permalink
?

Some hon. Members:

Agreed.

Item stands.

Housing-

427. Emergency shelter administration, $250,000.

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
Permalink
LIB

Robert Henry Winters (Minister of Resources and Development)

Liberal

Mr. Winters:

Perhaps I should begin with a statement about the present and future prospects for housing, and should say something about government activities in the housing field.

At the beginning of 1950 there were 59,503 houses under construction. In the course of the year 89,015 new houses were completed. In all, counting conversions, 91,754 were added to our stock of housing. There were 60,538 under construction on January 1 of this year. The total expenditure on these 150,000 houses that were under construction at one time or another during the year was about $836 million. Fifty per cent of the money came from the personal resources of the property owners. This represents cash investment both as equity in properties financed with mortgage assistance and full cash investments in properties purchased without mortgage financing. Institutional lenders furnished 25 per cent of the total, and other lenders 5 per cent; the remaining 20 per cent came from public funds either as loans or as expenditure by government on housing built on government account. There has been an increase in the proportion of new housing starts which contain some element of government assistance in the form of direct loans, joint loans or guarantees. In 1950, 47 per cent of all residential starts had such public assistance, as compared with 38 per cent in 1949 and 31 per cent in 1948. In units the comparison is 44,552 units in 1950, 35,354 in 1949, and 29,035 in 1948.

Canada has completed some 460,000 new units since 1944. This is an outstanding accomplishment which compares favourably with that of any other country in the world. But many more houses are still needed. The ratio of front doors to families has not improved greatly over the last several years. In the years 1939 to 1946, and again in 1948, the net family formation rate exceeded the number of houses built. In 1947 housing completions had a slight margin of about 4,000 units. In the last two years family formation declined and housing completions increased to the extent that we had a net margin of about 40,000 units.

Building costs which tended to level off in 1949 and early 1950 have been climbing steadily since last May. Cost increases, of course, make it more difficult for prospective home owners to meet the current equity requirements.

Last year the material supply situation for the construction industry was better than for many years. It is true that last summer, because of hydro and other construction programs, there were spot shortages of cement. However, almost right up to the end of the year there were no difficulties in supply except for a few spot shortages. Production of nearly all building materials reached! an all time high in 1950. We expected that material difficulties which were spotty last winter would rapidly become

more general as the defence construction program got under way. There was the danger that houses would be started which could not be completed. I am happy, however, that as yet material shortages have not interfered as greatly with house builders' operations as was expected. Continued high level of production of most materials has maintained supplies to the point where, with a little shopping around and some substitutions, builders are able to meet their requirements. Some builders of larger projects are finding their production schedules hampered by difficulty in maintaining a smooth flow of material. Although the situation on materials is in general fairly satisfactory, there are some real difficulties. Steel sheets and pipe and other metal materials are very scarce. Even if there is an abundance of all other materials, a shortage of sheet metal for furnaces, or pipe for plumbing, can cripple our housing program.

Two other problems relating to housing development are present in most localities. The first is a shortage of serviced land. With today's costs, both in general administration and in land development, many municipalities have difficulty in finding ways and means to finance the servicing of fringe areas to provide land for residential building. In those cities where residential areas are developed there is the second and resulting problem of providing educational facilities. This problem is particularly onerous in the newly expanded suburban municipalities where the assessment roll is largely residential property and where the householders are for the most part young couples bringing up families. With today's costs, building, equipping and maintaining the required additional schools places a serious financial problem before municipal and provincial governments.

Through the first four months of 1951 housing activity has kept up pretty well to the 1950 level. New housing starts in municipalities of 5,000 and over, at 13,847 are only 1J per cent below last year. Completions at 20,849 are up 18-7 per cent. On April 30 there were 33,943 houses under construction, or 2-7 per cent more than one year ago. Now, starts and completions in the first four months are not necessarily a sound guide to the year's performance, but it seems likely that in 1951 housing completions will come reasonably close to the 1950 mark. If those houses under construction at the beginning of the year, and those started before May 1 are completed, 1951 completions will be 85 per cent of 1950's but if the rate of new starts is maintained at near the 1950 level in May and June, we will come even closer to the 1950 mark.

7, 1951

Supply-Resources and Development

In the first four months of this year 8,436 joint loans for 10,148 units were approved under the National Housing Act. This compares with 8,916 loans for 10,147 units in the same period in 1950. However, the loan approvals in April were fewer than in April, 1950. In April, 1951, 2,533 joint loans were approved in respect of 3,141 units, as compared with 3,198 loans on 3,639 units in April, 1950.

There are some real obstacles in the way of maintaining this level of housing activity. As well as the difficulties of an insufficient supply of serviced land, increasing building costs and a tightening of mortgage money, there is the possibility that the material supply situation will tighten. I spoke a few minutes ago about the shortage of steel sheets, pipe and other metal house components which is even now causing some difficulty. Even though there is every prospect of increasing the overall capacity of our construction industry, and notwithstanding the curtailment of some commercial construction because of the steel regulations and deferred depreciation, it may well be that house building will feel more general shortages before the end of the year. The defence program includes a substantial amount of new construction, and I think it unreasonable to expect that the construction industry can take the additional very heavy load of defence construction without a cut being made in other types of construction. It is likely that the house builder will be hardest hit when building materials in large quantities are channelled into defence construction. The probable curtailment of commercial construction will tend to reduce the competition to house builders. Perhaps the effect will be sufficient to compensate fully for the diversion of materials into defence construction.

As I said previously, Canada's accomplishments in the field of housing since the war rank us high among all nations in house production per capita. The standard of housing in Canada compares favourably with that of any other country. The housing shortage is general throughout the world, and in fact it is more severe in nearly all other countries than it is here. We sometimes hear it suggested that somewhere there is someone with an almost magic formula of new materials and methods which will produce the low cost house to end all housing problems. Perhaps some day there will be such a development. A method which would produce satisfactory housing under today's conditions at about half present costs, or say $4 or $5 per square foot, would provide a happy solution to many housing problems. Research toward this end is being carried on, not only in Canada,

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Supply-Resources and Development out also in many other countries throughout the world, but as yet only minor advances have been reported. Most of the developments so far have been in the nature of improvement in methods and materials. These improvements have not resulted in lower costs, but rather they have tended to give us a better house at about the same cost. The standard of house demanded by the Canadian housewife-and it is the housewife who in large measure determines our housing standards-continues to show an upward trend. If Canadian householders were willing to accept housing of the standard and pattern of the 1920's, about 15 per cent more houses could be built for the money now being spent.

The degree to which our housing stock can be increased through the next few years will be determined to an important extent by how much we are required to commit to the defence program. Housing as a whole is a part of the civilian economy. There must be general agreement that substantial expenditure on defence preparations must be accompanied by a reduction of spending in other fields. However, we have stated that the government attaches a high order of importance to housing and will emphasize it to a degree second only to the direct defence program itself. We will continue to make every effort to see that housing is built in the areas where it is most needed.

In September, 1949, the National Housing Act was amended by the addition of section 35. This section provided a method by which all levels of government may participate in public housing. Central Mortgage and Housing Corporation may, pursuant to agreements between the government of Canada and the government of any province, join with a provincial government or its agent in projects for the development of land and housing purposes or for the construction of houses for sale or rent. Capital cost and profits and losses are shared 75 per cent by the corporation and 25 per cent by the provincial authority. It is left to the province to decide whether a part of the province's share is to be borne by the municipal government.

After section 35 was adopted, it was necessary for a provincial government to adopt complementary legislation before any agreements could be concluded. It was well into 1950 before any of the provinces were able to pass such legislation. During that year seven of the provinces-Ontario, Quebec, New Brunswick, British Columbia, Manitoba, Saskatchewan and Newfoundland-enacted complementary legislation. Nova Scotia followed suit this year.

I Mr. Winters.l

Although it was well into 1950 before agreements were concluded with any of the provinces, some worth-while progress has been made in one year's operation. Newfoundland was the first province to enter into an agreement with the federal government for housing under this section. A rental housing project of 140 units is now almost complete in St. John's, and a land assembly project to provide some 600 building lots is under way. In Saint John, N.B., tenders have been called on a project of 88 low-rental units and a land assembly project is under discussion. In Ontario activity to date has been limited to land assembly. Projects involving a total of over 600 acres are under way in London, Windsor, Ottawa, St. Thomas, Kingston, and Atikokan. There have been recent discussions between the government of Ontario and the federal government about the possibility of expanding operations under this section, and we expect that before too long we shall receive specific proposals from them.

Several proposals are under active consideration by the province of Saskatchewan. An agreement has been reached with the province of British Columbia in respect of a 200 unit low rental project at Little Mountain in Vancouver now out to bid.

I am not too sure how extensive the dominion-provincial program will be in the immediate future. All the difficulties inherent in the over-all situation are present in public housing projects. In addition to possible difficulties in the supply of labour and materials, there is the very serious question of building costs. I am not at all sure that today's costs will permit the construction of rental housing that is truly low rental in character. This may well have to be found by the partners concerned.

Section 35 has the merit of enabling the various levels of government to act together in a direct way to place housing where it is urgently needed. I believe it will be generally agreed that public housing under this section should normally be contemplated only in the larger centres of population. Although we are not pleased at the prospect of public housing projects competing with private builders and operators for available building materials, we are willing to consider any firm proposals the provinces may advance for housing projects under section 35, especially in areas where the defence program has aggravated the housing shortage. If it appears that a project can be completed in a reasonable time at not too excessive cost, we will be willing to proceed. However, it is not our intention to enter into projects under section 35 where occupancy

will be limited to those higher income families whose needs are normally met by private house builders. We wish to avoid entering into competition with the building industry especially in the range of economic housing.

The construction program of Wartime Housing Limited, the veterans rental housing program, and the houses constructed by Housing Enterprises Limited which were later taken over by Central Mortgage and Housing Corporation, have resulted in some 53,000 rental housing units being owned by Central Mortgage and Housing Corporation at one time or another. Over 30,600 of these houses have been offered for sale. To date, a total of 20,700 have been sold. Sales are running at a good rate, and I would guess that by the end of the summer at least 4,500 more will be sold. For the most part these houses are sold to veteran tenants. One hundred and sixty-four have been sold for removal from site, and 2,126 have been sold en bloc to municipal governments.

It is to be remembered that these houses are not sold in the open market but that the tenant has first opportunity to purchase. If a tenant is unwilling or unable to buy, normally he may continue to occupy the house as a tenant. There are a few cases from time to time where a tenant who does not intend to purchase is requested to move to another house owned by the corporation in the same area to make his house available to a veteran purchaser. Houses which have been rented and which become vacant are not rented again but are held for sale to a veteran applicant. The sales program is going very well indeed, and the corporation's position as Canada's largest landlord is being steadily reduced. The reduction in the corporation's real estate account is, of course, offset by a corresponding increase in its mortgage and sale agreement portfolio.

There are two items in the estimates dealing with housing. One-an item under loans and investments in the amount of $12,700,000 -is to provide funds which may be borrowed by Central Mortgage and Housing Corporation under section 34 of the National Housing Act, 1944. This sum is required to complete housing projects under the 1949 veterans' rental housing program and a project at Deep River, Ontario; for financing permanent Improvements to munition workers' houses now under sale, and for the construction of additional houses at Deep River. On April 1 there were 621 houses under construction in the projects still to be completed; permanent improvements were under way on 752 houses. A project which will add 200 houses at Deep River will be started under the 1951 program.

Supply-Resources and Development

The other, an item in the departmental estimates for emergency shelter administration in the amount of $250,000, is to provide for administration costs and operating deficits in connection with emergency shelter projects operated by Central Mortgage and Housing Corporation, and to meet restoration costs connected with the closing out of emergency shelter projects. Considerable progress has been made in closing out projects operated by the corporation, universities and municipalities. We have every hope that 1951 will see many more of these projects closed or reduced.

It is difficult to forecast the prospects for housing in 1952 and 1953 with much certainty. Conditions have been changing from day to day, and the opinions of today may well be altered by the developments of tomorrow.

However, it is apparent that -many of the conditions now present are unfavourable to an increased volume of housing. Indeed, the big problem may be to prevent the present volume from being decreased to the full extent of the unfavourable conditions we are now encountering.

Construction costs have increased about 15 per cent in the last 'year. This means that the same size house is now available only to individuals whose income is approximately 15 per cent higher than the people who bought or rented this type of house a year ago. I cannot see that increasing the level of National Housing Act loans to meet these higher costs would be a solution. Such higher loans would add to the pressure on housing costs. Furthermore, the higher the mortgage loan, the higher the monthly payment. It is for this reason that we have held firmly to our January 1950 level of lending values. Moreover, even under present conditions houses are being built and occupied to the full extent of available mortgage funds. It would seem prudent, therefore, to aim at spreading available mortgage money over as wide a number of new houses as possible, thereby encouraging maximum production. Although the high down payment is an obstacle and an initial hardship on the home owner who must himself finance the increase in cost, I believe it is better than encouraging him to assume debt service costs beyond his means.

Earlier this year increases in interest rates made lending institutions increasingly unwilling to lend money for mortgage purposes under the National Housing Act. It seemed to be in the interest of housing and the public generally to have the terms of this act remain operative. Accordingly, I announced the government's intention to increase interest rates, and I am hopeful that the increase to be permitted under the National Housing Act,

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Supply-Resources and Development to which I referred earlier in the house, will assist in maintaining the flow of mortgage money at a good level. An amendment to deal with this proposal will be before the house shortly.

As I said earlier, it seems possible that in 1951 we will complete about the same number of houses as we did in 1950. However, current conditions may well reflect themselves most clearly in a reduction in the carry-over of houses under construction into 1952. I would not wish to hazard a forecast from this distance of what our 1951 carryover will be.

The government recognizes the need for iiousing, and, as far as present circumstances permit, we are doing everything to keep house building at a high level. We will pay particular attention to the communities where housing is most needed. Because defence production is the main effort of the country today the government is anxious to do everything it can to meet the housing needs in defence production areas.

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

Mr. Chairman, I am sure the committee will be glad to have this opportunity to debate the whole housing situation in Canada. It is anomalous, it seems to me, that this problem, which is still so serious, has received relatively little attention in the debates in the house at the present session. On two occasions the minister made statements containing announcements of change of policy on the part of the government, but they were made under circumstances which precluded debate. I think you will agree, sir, that this is the first occasion on which the house at the present session-although we have been in session now for something like four and a half months-has had an opportunity of expressing itself with regard to the housing situation in general.

The committee will appreciate the full statement which has been made by the minister this afternoon. The committee is glad to have information which, in the up-to-date form in which it was given to the committee by the minister, had not been previously issued in' complete form in any of the publications under government auspices.

There are some features in the situation which are not altogether dark, Mr. Chairman. Nevertheless I think that the general tone and effect of the minister's statement today is such as to leave us with a rather gloomy outlook in regard to the possibility of meeting the serious housing situation that still prevails in Canada. There are several factors that, as I think the committee will recognize at once, inevitably present difficulties. The first of these is the shortage of materials. The minister has indicated that

shortage of materials has not as yet been seriously retarding house construction. I do not know how general that experience has been. I think that a good many builders- certainly those in the larger civic areas where housing conditions are so difficult-have been experiencing difficulties on account of shortages of materials. I am disposed to think that the picture in Canada is not nearly as bright in that respect as the minister's statement this afternoon might have been taken by some to indicate. I do not think the minister has adequately recognized the problem that the builders of the country are facing with respect to shortages of needed building materials.

The picture as to building costs is likewise growing more serious. The daily bulletin of the dominion bureau of statistics of May 23 draws attention to the rise in the price index of general and residential building materials. It gives these figures:

Wholesale prices of both general and residential building materials moved to higher levels in April, according to index numbers compiled by the dominion bureau of statistics. The index for general building materials advanced to 293-9 from 291-5 in March and 234-5 in April last year, and for residential building materials it rose to 237-2 from 282-6 in March and 227 a year earlier.

Just think what that means, Mr. Chairman, in terms of building costs. Since last we had an effective opportunity for debate on this question in the house a year ago, the costs of residential building materials has risen from 227 to 287 [DOT] 2. That is an alarming increase. Moreover that increase in the cost of materials has been paralleled, if indeed not outdistanced, by the rise in building labour costs. The situation with respect to the cost of building therefore presents a serious picture indeed, and it is not one which is likely to warrant any great optimism on the part of the minister or anyone facing this problem in its serious aspects.

Notwithstanding the increase in the cost of building materials and of labour costs, construction in 1950 in Canada-I am speaking now of the total volume of construction of all kinds-reached an all-time high. Figures which I saw this week have indicated that the volume of construction-these figures come from the records of construction associations-so far this year is likely to be above last year. Taking out of that the portion relating to housing, I think it is evident that there is very serious competition in Canada today for a quite inadequate supply of building materials, and in that competition housing construction is beginning to suffer, and will increasingly suffer from this point on in competition with other forms of demand for building materials

and building labour. On these various accounts, Mr. Chairman, I think it must be recognized that the housing situation still has to be measured in terms of critical proportions. It is no exaggeration to say that we still have a housing crisis in Canada.

The mayors of this country met in Montreal in February last at the annual meeting of the Canadian Federation of Mayors and Municipalities. At that meeting these municipal officials, the heads of their municipalities from coast to coast, people who are in the closest possible contact with housing problems in all their ramifications in all parts of Canada, said that housing is the No. 1 problem in Canada, still the No. 1 problem. They went on to express views with respect to the housing situation in Canada in which they indicated alarm over the situation as it has been developed.

That is the expression of a representative group than whom I think there is no group in the Dominion of Canada who are closer to this problem. We have similar statements as well following recent announcements on the part of the government as to changes in housing policy, which give expression to alarm as to the effect of these changes in government policy. I hope to have an opportunity of referring to them later in my remarks.

These are serious problems. These developments to which I have referred are developments that underline not only the fact that we have a continuing housing problem, but that that housing problem is likely to be reflected in reduction in the rate of construction, while at the same time the demand for housing increases apace.

It is evident that the government must give some thought to deciding what are the most important demands for available material. It is evident that it will not be enough for the government simply to be content to allow a situation of this kind- I am speaking particularly of building materials-to take care of itself, because in the competition that is going on for that inadequate supply of building materials housing is losing out, and the figures show that to be increasingly the fact.

Against that background what are we to say of government policy as it has been unfolded at this present session? I think it is fair to say there have been three stages of the development of government housing policy in the lifetime of the present parliament. The first, of course, was in the fall of

1949. We all well remember that the government had made unqualified promises in the election campaign about the measures that

Supply-Resources and Development they were going to take to cure the housing problem. One might have thought that the people of Canada had had sufficient experience by that time of the way in which the government had failed to measure up to promises. Nevertheless, apparently the people of Canada took those lavish election promises at their face value.

In the fall session of 1949 we looked for at least a measure of performance of the promises. Well, you will recall, Mr. Chairman, that early in the fall session the minister made a statement in which great emphasis was put upon the fact that the government was going to increase mortgages by one-sixth, and this was going to be very effective in meeting the problems of those who did not have sufficient funds to make the down payment then required as between the prevailing cost of houses on the one hand and the amount available under National Housing Act mortgages on the other, and so with loud trumpetings this new policy was introduced and found its way into the act. You will recall that at that time some of us pointed out that if the government chose to do so it could largely nullify the effect of the lending provisions of the act by holding down the approved lending value of properties. After all, there is not much sense in talking about increasing the mortgages by one-sixth, if in fact you are working under the same total percentage of lending value and you set about to hold lending values down till they are quite out of keeping with actual increases in property values and prices. And, sir, that is exactly what happened.

It was not very long before the government undertook-and, if you please, deliberately-to reduce the benefits that they had held out to the people of Canada as likely to flow from the 1949 amendments, and by this new housing policy they deliberately held down lending values. You will remember that as of January 1, 1950, in effect the government through its agency froze lending values, and, from that time to this, lending values have, so far as the government is concerned, remained frozen, notwithstanding the continued increase in the prices of residential property and the increases in the costs of construction.

Well, that was the first step on the part of the government-and a very weighty step it was, too-in nullifying the effect of the 1949 amendment of the housing act. That, sir, had some other serious aspects to it, in this respect: that in Ontario the government of that province had previously been in the field of second mortgage loans in order to assist intending house builders in meeting that very serious problem of the spread between the mortgage allowed under the

3802 HOUSE OF

Supply-Resources and Development National Housing Act and the prices at which houses, were being constructed. As a matter of fact, the Ontario plan was much more favourable to house construction than was the federal plan, because the rate of interest in Ontario on second mortgages was just 3J per cent, whereas the rate of interest applied by the federal government through its agency to the additional one-sixth loan under the 1949 amendment was 4J per cent. But the government of Ontario, relying in good faith upon this bland assurance of the federal government, and upon the enactment by parliament in November, 1949, of the amendments to the act, had only one course open to it in this respect, and that was to step out of the field of second mortgages. Accordingly it did so.

Theoretically the dominion stepped in. But, Mr. Chairman, it just got its toe wedged inside the door far enough to oust the government of Ontario and its progressive plan of assistance, and then it proceeded to withdraw that foot by steady degrees. And so we have seen, in effect, a nullification-perhaps not a complete nullification, but at least a substantial measure of nullification-on the part of the government opposite of the intent of parliament as reflected in its enactment of amendments to the housing act in November of 1949.

That was regrettable enough. Surely that was a heavy enough burden to cast upon the people of this country. Particularly is that true when applied to the younger people setting up homes, who just have not had the opportunity in the face of the high cost of living, to set aside enough money to provide for that spread between the cost of house construction on the one hand and National Housing Act mortgages on the other.

The next backward step taken by the federal government, the next step taken by this government to nullify the enactment of parliament, to defeat the wishes of parliament and to break faith with the people of Canada in the light of the promises made to them during the election campaign of two years ago, was taken in February of this year.

Hon. members will recall the statement made by the minister on February 5, when he announced in the house that, effective at once, the federal government was withdrawing the one-sixth additional mortgage provision. Immediately that statement was accompanied by some veiled suggestions that the move was temporary. But if it is temporary, at least it has been in effect now for four months. Although hon. members have tried to drag a statement from the minister as to when this temporary policy will have run its course, they have been met with the stock and stale fMr. Fleming.]

answer, an answer which has been worn to death in the house by members of the government who say: "That is a matter of government policy upon which announcement will be made in due course."

This announcement of breach of faith the minister made on February 5 has already been in effect for four months, and there has not been the slightest indication from the government opposite of any change of heart or any intention of bringing to an end this measure that they suggested, in a veiled way, was to be only temporary in its effect.

Mark you, that step was taken by the government opposite without the slightest consultation with parliament. They had no authority from parliament to tear up section 35 of the act. That was an enactment of the parliament of Canada. But the government opposite simply says, "We are going to reduce-"

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
Permalink
LIB

Robert Henry Winters (Minister of Resources and Development)

Liberal

Mr. Winters:

I think perhaps I should correct the hon. member. Section 35 is not involved in this one-sixth arrangement at all.

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

I misquoted the section; I am sorry. I meant section 4, but the number is not the important thing.

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
Permalink
LIB

Robert Henry Winters (Minister of Resources and Development)

Liberal

Mr. Winters:

That is right.

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
Permalink
PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

The important thing right now is that the government nullified the section without any consultation with parliament. There was no such thing as coming before parliament and so much as asking "by your leave"; none of that at all. The government simply said, in effect: We are stopping from this time forward the effect of the 1949 amendment of the act; there will be no more one-sixth additions to the loans. Why? It was not because parliament said they should stop; it was because the government said they should stop.

Is anyone going to rise in this chamber and say that was the will of parliament? I do not believe it is the will of Liberal members from Toronto. Nevertheless this government, not caring what had been said in parliament in 1949, and apparently not caring what they said to the people of Canada when they sought their votes two years ago, just decided that, notwithstanding the fact that parliament had enacted these new provisions in 1949, it would have the effrontery to step in and say: That enactment of parliament becomes a dead letter from this date forward, and will remain a dead letter until we, the government, decide that it shall be revived.

Mr. Chairman, is the House of Commons going to accept treatment like that from the government in respect of legislation it enacted

in good faith in 1949? If the house is prepared to see its legislation torn up and scattered to the four winds in that way, simply because the government decides to do so, then we are all of us just wasting our time here. It is only a waste of time for us to legislate if our legislation is thus to be nullified by the government opposite.

I said there were three stages to the development of government policy-or perhaps one might more accurately describe it as a retreat from government promises. The third step was taken on May 11 of this year. We know that from the time the National Housing Act was enacted in 1944 that act held out much of its effective promise through the simple fact that the rate of interest on loans was, while I will not say low, still very reasonable. It was a rate somewhat below the normal market rate.

There have been occasions on which the government has been asked, with a measure of justification, to reduce that rate in order to give greater encouragement to house construction. But whether the government was right or wrong in maintaining that rate through those intervening years, is anyone going to justify now the increase in the rate? It is true that the prevailing market rates on mortgage loans have risen; there has been a general increase in interest rates within the last four months. Unquestionably the mortgage market has been affected by that fact. But while this increase in the rate of interest on National Housing Act mortgage loans is not in my opinion going to be as serious in its effect upon house construction as the other step to which I have referred, nevertheless it is likely to have some effect.

It is not going to be, as I have indicated so far as my opinion is concerned, as serious in its effect as the step taken to reduce the lending value, to nullify the provision of the one-sixth additional loan, but nevertheless these are all going to have their cumulative effects.

What has been the effect of these changes in government housing policy, these retreats on the part of the government from its promises and from the intent of parliament? I have a Canadian Press dispatch of February 19 from Montreal, which reads:

F. A. Mager, president of the National House Builders' Association, said today that Canada's housing shortage will get worse, not better, in the coming year. In his annual report to the association convention, Mr. Mager said curtailment of the National Housing Act by eliminating the "additional one-sixth loan" is an "alarming move." He said this will make down payments $1,000 more than at present on five-room houses, and $1,500 on six-room houses. "I say the greatest bulwark we can

7, 1951

Supply-Resources and Development erect against the inroads of communism will be to extend the facilities of home ownership to an ever widening segment of our population," he said.

This step naturally was of great concern in the province of Ontario where, as I have already indicated, the government of that province, having been in the field of second mortgage loans, had vacated that field in favour of the dominion when parliament in November, 1949, enacted those loudly trumpeted amendments to the act. The grave concern of the people of Ontario was reflected in a statement made by the premier of the province in the legislature following the announcement of the minister of February 5 when he told this house in effect that the government had repealed an enactment of parliament with respect to the provision of the one-sixth additional loan. Premier Frost in the legislature, and I may say with general approval on the part of all parties represented therein, expressed his entire disagreement with the move which had thus been announced by the federal government. He said: "Of all things to be cut back, housing should be the last."

So far as I am concerned, apart from those things that must be done to meet the immediate and critical demands of the rearmament program-and I am speaking there of only the critical and immediate needs in that respect-certainly there can be no qualification whatever of the view here expressed by Premier Frost, a view that I am sure is shared by the people of Canada-

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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L L

William Moore Benidickson (Parliamentary Assistant to the Minister of Transport)

Liberal Labour

Mr. Benidickson:

Why does he not restore second mortgages?

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

-that of all things to be cut back housing should be the last. Here we are in June faced, I think, with a situation that is likely to be reflected in a further diminution of the rate of construction of houses, with higher costs of construction, and, so far as one can see in the minister's statement, no effective measures being concerted by the government to meet the situation. It is undeniable that right now there are thousands of families in this country who, if the one-sixth mortgage provision had not been withdrawn in February last, would have been prepared this year to take advantage of it but who, by reason of this backward step on the part of the government, have now been deprived of any opportunity of acquiring homes under present conditions. I think you are going to see, because of the elimination of that large and necessitous group from the effective market for new houses, a curtailment in house construction. You are going to see far more need with

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Supply-Resources and Development respect to housing, far more distress with respect to housing conditions than has been the case for some time.

At a time like this with inflation going on and nothing effective being done by the government to stop it, with a moderate expansion in population, and with obsolescence always a factor in connection with housing, we are not likely, apart from effective and concerted measures, to see anything very significant done under present conditions to alleviate what has again become a growing problem. It seems quite evident to me that the first effective step that the government ought to take is to restore to its full vigor the legislation that parliament enacted in 1949 to meet just such a situation as we are confronted with now.

That is the first step, and it is a step that is long overdue. Let the minister come forward now and say that the policy announced on February 5, which was then said to be temporary, was in fact temporary, that it is at an end now and that parliament's enactments are going to be given their full effect and are going to be restored to full vigour.

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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LIB

William F. Carroll

Liberal

Mr. Carroll:

Does the hon. member say there is a special section of this act which has been torn to shreds or does he suggest that the whole act has been?

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

I am referring to the 1949 amendments. The hon. member will recall the amendments parliament enacted in 1949, the most important one of which was to provide for the additional one-sixth on mortgage loans authorized by the act. That is the provision which the government nullified as announced in the house on February 5.

It seems to me, as I have indicated, that the first step the government should take now is to restore the 1949 amendments to their full vigour and effect. If I may say this in all frankness to the minister, I think that we all know that the minister has a cooperative attitude. He is not one of the ministers who are hard to get along with. He is the sort of minister who, we hope, will be able to co-operate fully with the provinces in working out schemes of mutual interest and advantage to meet housing conditions, particularly in areas where they are so acute.

The rate of growth in some of our urban areas in recent years, and even more particularly in recent months, has been little short of prodigious. The growth in greater Toronto, for instance, has been at a literally amazing rate, but the housing problem in Toronto has not grown any less severe even with the very extraordinary development of housing construction in the greater Toronto

area. With the continuing influx of population into our larger centres, unless we have something more to look forward to than the statement made by the minister today and the barren results of these retreats in government housing policy, it will be necessary for this house to go on demanding on the part of the government some effective appreciation of the seriousness of the situation and effective action to meet it. What is required first of all is a sense of reality on the part of the government in appreciating the seriousness of this situation, and then courage to retrace its steps at least back to last February 5 and restore the provisions of the 1949 amendments.

Then, Mr. Chairman, I do not know how long the government can expect, in the face of these increases in the cost of construction and the cost of residential properties, to hold lending values to the terms of January 1,

1950. To that extent they are simply whittling down the lending provisions of the National Housing Act, quite apart from the one-sixth additional loan provided for by parliament late in 1949. It seems to me this house ought to sound a call to the government to stop nullifying the provisions parliament has enacted to meet this situation, and the government should recognize that this problem is beginning to develop even more serious proportions than have been apparent in recent months. The government should take prompt steps, in concert with the provincial and municipal authorities, to work out measures that will meet these needs where they are most acute today, but the first step must be the full restoration of the law enacted by parliament.

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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CCF

Wilbert Ross Thatcher

Co-operative Commonwealth Federation (C.C.F.)

Mr. Thatcher:

As an opposition member,

like the hon. member for Eglinton I am afraid I am going to have to say a few sour things about this department. Before doing so, however, I want to thank the minister on behalf of the people of Saskatchewan for the co-operation he recently displayed when the provincial minister of reconstruction and social welfare was here discussing housing for Saskatchewan. The problem in that province is very severe; proportionately I believe it is just as serious as in Ontario. Several weeks ago our minister asked for 2,000 houses, I believe it was, under section 35. The Minister of Resources and Development gave him only 500; but he intimated that there was hope that we might get a few more a little later on. Thus I wish to tell -the minister we do appreciate the gesture he has made.

At the same time I think most hon. members will be a little disturbed by some of the

statements made this afternoon by the minister. He made it fairly obvious that nothing will be done again this year to catch up on the backlog of housing; and as everyone knows that backlog is very substantial. I believe it was the hon. member for Eglinton who said that a short time ago in Montreal the mayors and municipal heads said that housing was Canada's No. 1 domestic problem. I remember reading the report of Mr. Mansur, president of Central Mortgage and Housing Corporation, a short time ago, and on page 3 I found this:

Effective demand for new housing, both home ownership and rental, has never been stronger.

The reasons for this situation are obvious. A short time ago it was announced that we were going to try to bring 150,000 people to Canada in the coming year. I want to say at once that I heartily support that policy, but surely if we are going to bring those people here we should build homes in, which to place them. In addition there will be a heavy natural increase in population. Those two factors, and the defence program, have brought the housing problem to desperate proportions in many cities.

What has the government done to alleviate this abnormal demand for housing? This year it has taken a number of steps which will accentuate the crisis. The first step the minister announced was an increase in the down payment, under N.H.A., which today amounts to roughly 25 per cent of the purchase price. This means that if a working man wants to build even a small, five-room house he must have about $3,000. Not many years ago you could build a whole home for $3,000. With higher taxes and the higher cost of living, such a down payment virtually bars about 90 per cent of the people of this country from building homes. That is the effect of the provision, whether or not the minister wanted it that way. But this is not the worst feature of the present situation. For one reason or another-and I contend largely because of government policy-in many parts of Canada the insurance companies are refusing to make loans under the National Housing Act. They can lend their money in other ways and get higher returns. No doubt they are still making loans in the residential sections of Toronto, Ottawa and Montreal, but I know that in most parts of my own province and in many parts of western Canada and the maritimes the insurance companies are not making those loans today. Surely if that is the case the minister should take advantage of the provisions of the National Housing Act, which permit him to make the full loan where necessary. I

Supply-Resources and Development earnestly plead with him to do so in those areas where the insurance companies are not making loans.

The government took another step this year that bewilders me. At the very time we want more homes, Central Mortgage and Housing seems to be cutting down its building program. I think it was the hon. member for Vancouver-Quadra who stated that the Fraserview project in Vancouver had been pretty well abandoned, and there have been other instances of that kind. What does this mean? It means that at a time when people are huddled together because of an increasing shortage of dwellings, at a time when we are bringing more than 100,000 immigrants into this country, at a time when we are trying to step up defence industry, instead of building more homes we are going to build fewer. The program just does not make sense to me. Why are we curtailing our program? Last February the minister said that was being done simply because materials were not available. At page 69 of Hansard for February 5 the minister said:

. . . starts at the 1950 rate are beyond the capacity of the house-building industry under present and foreseen circumstances. Building supply materials, and particularly products of steel, are in short supply, with the result that many builders and owners are unable to complete houses.

That was the reason the minister gave us last February, but a few days ago at page 3671 of Hansard I asked the Minister of Defence Production this question:

In view of reports that housing is being held up in many sections of Canada because of lack of materials, will the minister tell us what recent steps the government has taken to see to it that housing is given adequate priorities to obtain essential building materials?

The minister made this reply:

I have had no report that housing is being held up.

Both statements cannot be right. The minister whose estimates we are now discussing told us-

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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LIB

David Arnold Croll

Liberal

Mr. Croll:

Would the hon. member read the second question and answer, just to give the committee the continuity?

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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CCF

Wilbert Ross Thatcher

Co-operative Commonwealth Federation (C.C.F.)

Mr. Thaicher:

Which?

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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LIB

David Arnold Croll

Liberal

Mr. Croll:

The hon. member followed that up with a second question on the same page.

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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CCF

Wilbert Ross Thatcher

Co-operative Commonwealth Federation (C.C.F.)

Mr. Thatcher:

I will be glad to put the next question on Hansard also:

I should like to ask a supplementary question . . . Does his department give specific priorities to housing projects for the purpose of getting building material?

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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LIB

Clarence Decatur Howe (Minister of Defence Production; Minister of Trade and Commerce)

Liberal

Mr. Howe:

No, Mr. Speaker; there is no specific

priority-

3SC6

Supply-Resources and Development That is one of the points I am coming to. -but certainly there is a working arrangement with my colleague the Minister of Resources and1 Development for priority assistance in building houses, where that assistance is required.

There is a working arrangement, but the Minister of Defence Production stated categorically that there is no special priority. I remember the Prime Minister telling us a short time ago that housing was to have a very special priority. I think he said it was No. 2, after defence. If there is any priority in housing today I have not been able to find any indication of it, nor have any of the builders in my particular riding.

We in this group are conscious of the needs of the defence industries. We think that everything should be done to facilitate and make the defence program a success. But we also say that in peacetime, while there is no major war, only defence industries of the most critical nature should be given priority over housing. Most of the houses which have not been finished to date are being held up possibly because they cannot get steel or cement. Surely it is sensible that the minister whose estimates we are now discussing should go to the Minister of Defence Production and demand that he be given the necessary priorities, so that materials can be made available.

This group has a number of specific recommendations that we would make to the minister in the hope that he would carry them out. One of the main criticisms that I have had in any talks I have had with the minister is that he is too prone to depend upon private enterprise to carry out his program. If he were more willing to go along with his own department, and with state-owned construction, we might make a little more progress. I cannot help but think of some of the promises my hon. friends opposite made in 1945. Here is one of the pamphlets in which they said: New housing plan.

I am going to quote from it:

. . . more and better homes for hundreds of thousands of families. It means closing the present gap between our housing needs and the number of homes available.

Then they promised that houses would be available for a payment of as low as $13.82 per month. There are not very many of those in Canada today. Before the 1945 election every government spokesman promised that returning veterans would be given proper homes.

The C.C.F. program is fourfold. We suggest these specific points to cope with the housing crisis. First, let Central Mortgage and Housing Corporation or some other government agency immediately undertake a

large-scale building program of low cost houses to be sold or rented to Canadians in the lower income brackets. Second, let housing be given a top priority for the obtaining of essential materials, second only to urgent defence projects. Third, let down payments and credit terms generally under the National Housing Act be relaxed to encourage private building. Fourth, in localities where insurance companies will not lend money under the National Housing Act, let the government step into the field and provide the total National Housing Act loan.

Mr. Chairman, the minister stated a few minutes ago that the amount of money which was available for housing mortgages was limited. Then surely the time has come for the government to increase the amount of money available for mortgages of that type. I believe this year we are spending $3 -7 billion. I say that to meet this problem the government must find a little more money, not to spend heedlessly, but to invest in the Health and comfort of our people, to invest in a way that cannot be measured in dollars or cents.

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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SC

Charles Edward Johnston

Social Credit

Mr. Johnston:

Mr. Chairman, I wish to

say a few words at this time concerning this subject. I do not intend to take very long. I want to say to the minister that since he has been the head of this department there has been a great deal more satisfaction in the construction of houses than there was previously. It is an important problem, and one in which I believe every member of this house should take his responsibility. It seems to me that, from a national point of view, there is nothing that could be developed in this country that would bring greater satisfaction, greater comfort to the people of Canada, than properly built homes. The idea of having the dominion government continue in the field of building homes is questionable. The hon. member who just preceded me thought that greater emphasis should be placed on socially constructed homes, as I believe he called it. I take it from that that what he had in mind was that the government itself should proceed with a much greater program for building homes.

I am not sure, Mr. Chairman, that that is a wise procedure. In the past we have had a great deal of experience with the government building homes. I must congratulate the present minister on getting out from under some of those difficulties. It is true that he has passed the buck to the provinces, and the provinces are going to find a great deal of difficulty with it if they embark on a large-scale home building plan. One of the greatest difficulties the federal government has had in building homes has been the proper supervision of construction. They

have had specific plans with detailed specifications drawn up, but invariably those specifications were not lived up to, solely because the inspectors who were employed fell down on the job. I have always recognized that the government could not personally supervise every house that is constructed across Canada. It is an utter impossibility. They must depend, therefore, upon the inspectors whom they appoint. I am sorry to say this, but I must say that I believe a great number of the inspectors were appointed more from a political point of view than from the standpoint of their ability. That is one of the reasons why there was such poor construction.

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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LIB

Robert Henry Winters (Minister of Resources and Development)

Liberal

Mr. Winters:

Oh, no.

Topic:   INDIAN ACT
Subtopic:   AMENDMENT AND CONSOLIDATION
Sub-subtopic:   CONCURRENCE IN SENATE AMENDMENTS
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June 7, 1951