June 19, 1951

LIB

Robert Henry Winters (Minister of Resources and Development)

Liberal

Hon. Robert H. Winters (Minister of Resources and Development) moved

the second reading of Bill No. 381, to amend the National Housing Act, 1944.

He said: On May 11 I made a statement to the house concerning changes to the National Housing Act. At that time I pointed out that in recent months mortgage interest rates, like other interest rates, had risen, and as a result lending institutions were participating in a lesser degree in National Housing Act loans. Other forms of investment have become relatively more attractive to lending institutions, and even in the mortgage field itself higher interest rates on conventional mortgage loans had the effect of reducing the interest of the lending institutions in loans under the National Housing Act.

This bill has the effect of making it possible for the government-within prescribed limits -to change the rate of interest payable by the borrower under National Housing Act loans. The bill authorizes the governor in council to establish interest rates payable by the borrower, provided that such rate, when established, shall not exceed two per cent in excess of the average yield upon long term government securities. This flexible approach departs from the fixed rate contained in the National Housing Act, 1944. However, hon. members will recall that the National Housing Act, 1938, provided that the rate of interest payable by the borrower was to be established by the governor in council. It is felt that this flexibility is desirable so that the government will be in a position to keep interest rates under the National Housing Act in relative conformity to other interest rates.

As I indicated in my statement of May 11, it is the government's intention, if this legislation receives the approval of parliament, to establish an interest rate, payable by the borrower on joint loans, of five per cent. In such circumstances the lending institutions, upon their share of the joint loan, would earn a gross interest rate of five and a half per cent, and Central Mortgage would earn three and a half per cent on its share of the joint loan. Upon approval of this legislation it would also be our intention to adjust interest

National Housing Act

rates for other types of loans under the act by a similar one-half of one per cent. For instance, loans to limited dividend companies under section 9 of the act would be made at 3J per cent. The rate of interest upon rental insurance loans would be at 4} per cent. Loans to primary producers would be at 4J per cent. The changes in the act, other than the one to which I have referred, give effect to the interest rate being established by the governor in council, and in themselves effect no change.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Donald M. Fleming (Eglinion):

Mr. Speaker, there are some features of this bill which I think the house will view with regret. The minister has sought to make out his case for assumption by the governor in council of the power to fix interest rates under various sections of the act by the plea that this will have the virtue of flexibility. That same argument might have been used not many years ago with opposite effect when complaints were being made that the rates then prevailing under the act were too high, and that construction of more housing would have been encouraged and assisted had the rates been lower. But we heard no talk from the government at that time about the virtue of greater flexibility in these rates.

I view with some degree of misgiving any further step by way of amendments to the housing act which takes legislative power away from parliament and vests more power in the governor in council. The demonstrations we have had in recent months of the way in which the governor in council not only uses the power it now possesses, but arrogates to itself powers that belong only to parliament, are not likely to commend to the house the assumption of further power on the part of the governor in council at the expense of parliament.

What have we seen done by the cabinet under the powers contained in the act, and indeed beyond the powers contained in the act? On February 5 we saw the governor in council completely nullify an important enactment of parliament in November, 1949, the importance of which was emphasized in 1949 not simply by opposition members but by the government, and which was put before the house and the country as the fulfilment by the government of a solemn promise made to the people of Canada in the election campaign of the previous spring.

The essence of the bill is to eliminate from the act a number of provisions establishing the rate of interest, and, in lieu of such provisions, to vest in the cabinet the power to determine such interest rates. If one had confidence that the rates would be

National Housing Act

established in a realistic manner, with due regard for the serious housing situation we still have in this country and the means available to the government to assist in meeting it, there might be less objection in principle than there is to amendments of this kind. But one cannot see anything in this bill except the assumption on the part of the cabinet of the right to determine interest rates under a number of sections of the act. Last February the government tore up the provision made by parliament with reference to the one-sixth additional loan. A month ago they announced an increase in the rates of interest to be permitted under part I of the housing act, and presumably what parliament is being asked to do. now is to give belated approval to a decision already taken by the government far in excess of any power it possesses under the act.

I, for my part, and with reference to this government, do not approve legislation that gives them these additional powers. I am not satisfied by any means that they have wisely, correctly or responsibly used the powers they already have under the act. They certainly have not used them fruitfully. On the contrary, in many important respects they have nullified provisions that parliament has made. I urge that the government would be better advised to apply their ingenuity and the powers they already possess to assist in the construction of more houses rather than in reaching out for more powers of this kind. Let them devote their energies to putting drive, impetus and energy behind the efforts that are being made by private builders, limited dividend housing corporations, municipalities and provinces to get more houses built.

Let the minister use his influence with the Minister of Defence Production to see that the importance of constructing houses is recognized when it comes to the allocation of essential materials. The minister indicated in a speech made in London a week or ten days ago, which was referred to in the house the following day, that no priorities have yet been established in favour of housing with respect to building materials. As long as that situation prevails, housing is going to come out second best in the competition with other forms of building enterprise for the limited and now quite inadequate supply of building materials available. I urge that the government open their eyes and see the serious situation in which the country finds itself at the present time as the result of inadequacy of housing, and use the powers they now possess to redress that serious situation

instead of reaching out for powers which will be used by the government to raise interest rates.

The increase of one-half of one per cent in the interest rates announced by the minister is not, as I said before, nearly as serious an obstacle in the way of increased housing as some of the other mistakes the government has made. One in particular which they made last February, when they cancelled the provision of the act providing for the additional one-sixth loan, came on top of the freezing of lending values under the act, a policy which I submit was directly contrary to the expressed determination of parliament.

The increases that the minister has announced are not necessarily the end of increases of interest rates under the act, and if the bill before the house today passes the government will be in a position to increase further the interest rates prevailing under various sections of the act without ever coming back to parliament for approval. At least this may be said for the present provisions of the act fixing the rates of interest right in the terms of the legislation, that the government cannot change them without coming back to parliament. Parliament then has an opportunity to express its views on any proposal for an increase. If we ever had a situation in this house where members supporting the government would view the Canadian housing situation in its naked and ugly reality, then we might have the occasion in this house to express our disapproval by rejecting the proposals of the government for such changes as upward increases in interest rates.

Because it is so vitally important that parliament should retain control over policy in these matters, that parliament should be consulted before upward adjustments in interest rates are made under the act, I think the house should reject the request of the minister for more and more power to make such changes in interest rates as are proposed in this bill. It is true that some limitations upon the power of the minister to make these upward adjustments are proposed in the bill, but no one can foresee the extent to which interest rates may be varied under this bill. I believe parliament ought to retain the right to say, in the light of increases or decreases in prevailing interest rates in the bond or mortgage markets, whether corresponding changes should be made in the rates to be charged under this bill. Let parliament retain power for once. Let parliament retain

the right to say now and in the future whether conditions do or do not justify increases in these interests rates.

Under the National Housing Act interest rates have been considered of very great importance. Right from the time this bill was introduced in 1944, interest rates under the act have been properly regarded as one feature of the legislative housing program of very high importance. Now the government is saying: Turn over to us the power to set the interest rates, and to do so without consulting parliament. In the light of its experience and the treatment its legislative enactments have received at the hands of this government, I do not think parliament is justified in giving the government this further power and at the same time giving up its own control over these interest rates. In the mind of the government unquestionably that would be equivalent to approving what it has done in nullifying enactments made by parliament in this very act. I hope nothing parliament may do will give any measure of approval to What this government has done, without the slightest consultation with parliament, to the enactments we adopted in the fall of 1949 with high purpose and high hope, which this government has chosen to destroy. The sort of bill we have before us invites an extension of the powers of the government. By its actions in the past the government has not justified any such extension of its powers at the expense of parliament.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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CCF

Joseph William Noseworthy

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

Mr. J. W. Noseworthy (York South):

Certainly there is need for some legislation such as this at the present time in order to meet the housing situation. As I understand it, building is practically at a standstill. I have personal knowledge of builders who took orders for houses months ago, but who have refused even to turn a sod in order to proceed with those houses until the matter of interest rates is settled. What has happened in the building industry is that the finance companies have gone on strike. There has been what labour would call a sit-down strike so far as the finance companies are concerned in relation to national housing. They just refuse to lend money at the interest rate set forth in the statute, and they will continue to do so until the matter of interest rates is settled to their satisfaction. Consequently some such legislation such as this is needed.

The need grows out of government policy. The housing policy of this government, as set forth in the National Housing Act, is tied hand and foot to the finance companies. The government, the builders and the purchasers of this country are completely at their mercy

National Housing Act

so far as building houses under that act is concerned. These companies are in a position to determine whether or not they will lend money at the rates set forth in the statute. They are in a position to determine to whom they will lend money. They, not the national housing authorities, must approve the borrower if the money is to be made available. So long as the government is wedded to these concerns, as it is, just so long will it be necessary for us to provide legislation such as this, or we will get no money. What we need in Canada today is houses. The government's policy provides for the building of houses only through loans made by finance companies. So long as that policy prevails we must meet the terms of those companies or get no houses.

Now the question comes up that has been raised by the hon. member for Eglinton (Mr. Fleming), whether these rates should be determined by the governor in council or whether the authority should be retained by parliament. Here again, as long as the policy of this government prevails, which I presume is supported by the party to which the hon. member for Eglinton belongs, if we are to get money there must be some flexibility in the regulations governing the making of loans. If we were to fix a definite rate of interest and three months later such fluctuations had taken place in the bond market that the finance companies refused to lend at that rate, as they might, we would be left without the finances necessary to build houses. The need for this flexibility is due entirely to the policy followed by the government in relation to this whole matter of financing the construction of houses.

The second point is that I do not know whether it makes a great deal of difference in this particular parliament whether the government or parliament has the right. With the majority the government has, I see no difference between what parliament says and what the government says. I have not witnessed any occasion here on which any considerable number of members on the other side of the house were in opposition to any measure or policy introduced by the government. So I think in this house government policy and the policy of parliament are synonymous. There are those of us on this side of the house, of course, who will oppose government policy. Probably there are those of us who will be critical, but my experience here has been that the majority is always willing to go along with the government regardless of what the measure may be. So far as the building of houses is concerned

National Housing Act

I do not think it will make much difference whether parliament has the last word in determining the interest rates, or whether the governor in council has the last word, because whatever measure the governor in council recommends to this house is likely to be supported by the Liberal majority.

There are two or three things m relation to this bill that I want to mention. I hope that this measure will be helpful, and that these rates will meet with the approval of the finance companies who control our national housing policy. The government, even the governor in council, is completely at the mercy of these finance companies so far as securing money to build houses is concerned. If the government were willing to give direct loans under the National Housing Act, except somewhere in the backwoods where the finance companies will not make a loan, then there might be some chance of the government asserting its independence of these finance companies. Personally I can see no reason whatever for the government catering to these finance companies to the extent that, no matter how desperately houses may be needed, the government must leave the financing to them. If the project is located in territory in which the finance companies have no offices, where it is going to be a little costly for them to send valuators and they do not want to make a loan, then the government will make one. They made one last year, I believe, to one farmer in Canada.

The first thing the government should do is to revise its policy with respect to the making of loans, and, if the finance companies will not lend money under proper interest rates where houses are needed, then the government should make the loan directly. The second change needed is the restoration of that additional one-sixth loan. There are still a great many people in the middle class brackets for whom national housing units are suitable, and who would buy houses if the down payments were within their reach. The one-sixth additional loan was very popular. A high percentage of the houses built under the National Housing Act while the one-sixth loan was in effect were built with the assistance of that one-sixth loan. If we want to provide houses for people we must first make it possible for the houses to be built, and then for the purchasers to be able to secure them. The removal of that one-sixth loan has created a difficulty which will deprive a great many people of homes they would otherwise be able to secure. With the cost of houses running from $8,000 to $10,000, and the down payment demanded now, the

(Mr. Noseworthy.]

National Housing Act does not provide houses for the great mass of the people who need them. No matter what change we made in the interest rate, it would not affect the great mass of people. Those who are in greatest need of houses can only be provided with houses under a joint partnership of the federal and provincial governments for the construction of low rental housing projects. If such agreements can be reached and more houses built under those agreements, then there may be some prospect of those in the lower income groups securing houses.

Another thing which is necessary is that definite priorities should be established on building materials for use in the construction of houses. The minister's report recognizes that residential properties never get the first opportunity of securing building materials. In a market such as we have today, houses are simply left out of the picture. There is no question about it; unless the government can establish some priorities on building materials for residential properties, housing projects are going to be hampered more and more by material shortages.

I believe that the restoration of the one-sixth addition loan, the establishment of priorities for building materials, and a change in government policy to the point where the government will make loans directly through the National Housing Act, are needed in order to meet the housing requirements of the Canadian people.

1 am going back to one other question which I discussed with the Minister of Finance (Mr. Abbott). I cannot understand why the government cannot give some assurance to United States investors that the money they invest in a housing project, if that project can be liquidated within a period of three or four years, can be taken back to the United States. The minister's answer was that it has been government policy to permit foreign investors who might liquidate their assets to take those original assets back to the United States. The minister states that that continued to be government policy even during the war years, and is government policy now. But the foreign exchange control board will give no assurance whatever to a United States investor that the policy may not be changed overnight. They will give no assurance-

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abboii:

That is one of the incidents of control.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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CCF

Joseph William Noseworthy

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

Mr. Noseworthy:

-that if in two years' time those assets can be liquidated there will not be a foreign exchange control board regulation which will prevent those assets from

being taken back to the United States. I cannot see where Canada would lose by giving some such assurance.

Let us assume that here is a building project and here is American, capital up to, let us say, a quarter of a million dollars; and there is American capital available for housing projects in Canada under the National Housing Act if those investors could be assured that when the project is completed, when the houses are sold, when their assets are liquidated, they will be able, if they so desire, to take that money back to the United States. I cannot for the life of me see how Canada is adversely affected by giving some such assurance. Without it, we shall not get for investment some of that money at least; and the worst that we could expect is that these original investments, which we would not have received in any case, are the only ones that would be restored to the country of their origin.

The minister has not shown me how the giving of any such assurance for a limited period-I can understand that you would not want to give it for an unlimited period of time-would adversely affect the Canadian economy. If the minister convinces me, he will certainly have to give something more than the bare statement which he made when I raised this question before.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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LIB

John William Gordon Hunter

Liberal

Mr. John Hunter (Parkdale):

Mr. Speaker, I was surprised to hear the hon. member for Eglinton (Mr. Fleming) object to these interest rates being made more flexible. Goodness knows, some of his party should realize that with other interest rates going up and down, flexibility must be made possible in these interest rates. I feel, however, that that view is no more inconsistent than, is the general policy of that party.

As to the objective of this bill, namely, to make interest rates flexible under the minister, I feel that it is a sound move and a necessary one if we wish to get more money out on the market under the National Housing Act. A large percentage of the money comes from the lending institutions; and in order to get it out, we have to meet the current interest rates. I note with regret, however, that there is nothing in this act to indicate that housing is to be promoted more rapidly than it has been promoted in the past, and there is nothing in the statement of the minister to indicate that housing will not fall off. I am not particularly concerned about the one-sixth loan, which is the one-sixth second mortgage. That is only one method of achieving the same thing. The question of a low down payment can be met equally by having a more realistic lending value.

National Housing Act

But the point is this. We are either going to have to accept this as a straightforward anti-inflationary measure, or we are going to have to accept the view that housing is something more than materials' and dollars and cents-of course those things are obviously important-and that it has a social value. In my opinion, Mr. Speaker, housing is one of those things that go beyond dollars and cents and beyond shortages of building material. Housing is something that affects the whole nation. It does so in many ways. By a shortage of housing, and by the use of obsolete housing, we place ourselves in the position of paying large bills through taxation and in other ways. We all know the social need for housing. If hon. members were acquainted with some of the frightful conditions existing in some places in Canada -for instance, in the city of Toronto-they would realize that housing is not just a matter of dollars and cents.

I have the greatest admiration for the cleverness of the president of the Central Mortgage and Housing Corporation, but sometimes I wonder whether his wisdom matches his cleverness. I have great admiration for his intelligence, but sometimes I wonder whether his humanity matches his intelligence.

The question of housing is one that must be taken from the point of view of human suffering and human welfare. For instance, if we were to adopt an anti-inflationary measure, a real one would be the cutting off of the old age pension. But obviously we do not cut off the old age pension because that is a social welfare measure which is much needed in this country. Similarly, we do not cut off the family allowance. Obviously to do that would be an antiinflationary measure. We do not do it, obviously because it is a social necessity.

I urge the minister to consider seriously whether housing does not come under the same category. If he considers the matter seriously, I think he will find it does. I know that he set it second to national defence. I think he must realize that something must be done, and soon. I think he will find that housing has been and is recognized by this government as a matter of social welfare.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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SC

Charles Edward Johnston

Social Credit

Mr. C. E. Johnston (Bow River):

Mr. Speaker, I want to say a few words generally about this bill. I have spoken on it on various occasions, and I have expressed myself clearly with regard to it. I think that the time has come-and I believe that everyone in this house recognizes it-when housing must be considered as an emergency measure. It is an emergency measure from

National Housing Act

more than one point of view. It is an emergency measure from the standpoint of the morale of the people of Canada. You cannot expect people who are living in unhealthy conditions, in unhealthy surroundings, to have the moral standards that we require of the Canadian people. Social life is affected directly by the housing problem. No matter where you go, if you find congested living conditions, you find deterioration in the social standards. That is not good from the point of view of the standard of citizenship. It is not good for the building of Canadian morale.

It is true that there has been an increase in the price of building materials, but there has never been any decrease in the desire of people to obtain houses. The only thing that stopped the building of more houses- the only thing that lessened the increased construction of new housing-was the fact that the lending companies went on a sit-down strike. I can understand any business concern, labour organization or industrial concern going on a sit-down strike if they are not making a reasonable profit. But surely this cannot be said of the lending institutions, It would seem to me that five per cent is an exceptionally good return on one's capital. I know that most individuals would be well satisfied if they could get a five per cent return on their capital. Not only that, Mr. Speaker, but this enterprise is the more enticing because the government guarantees them against twenty-five per cent loss. I do not see where you could find a better investment for mortgage companies in the building of houses. Yet we have come to the point, as the minister indicated in his speech the other day, where building is being retarded because the lending companies will not make the necessary loans, and their excuse is that they could make better investments in other fields. It should not be forgotten that the government came to the assistance of the lending companies not many years ago when this national housing program was put into effect. The lending companies were practically at a loss to make investments, and the government started the national housing program. Then the lending companies were able to find a lucrative field of investment. They received a guarantee against loss.

It seems to me that since we have guaranteed the companies against loss they should be a little bit reasonable in this time of emergency in housing. You will recall, Mr. [Mr. Johnston.1

Speaker, that a few years ago we reduced the interest rates on annuities. That was the only field in which the ordinary little man had a chance to invest his money with a chance of fair return. It used to be four per cent, but the government took the view that four per cent on annuities was too much in comparison with the interest rates on other securities.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbotl:

Earning power of government bonds.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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?

Mr. Johnsion@

Yes.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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LIB

Douglas Charles Abbott (Minister of Finance and Receiver General)

Liberal

Mr. Abbott:

The interest return on government bonds.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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SC

Charles Edward Johnston

Social Credit

Mr. Johnston:

Yes; but look at government bonds today. The government appealed to the people to invest their money in bonds. This was the one sure investment. You would not stand any losses there. But look at government bonds today. All the other companies are demanding increases in interest rates. We have the lending companies in the housing field-an essential activity, one that is necessary to the well-being of Canada- saying that they will not lend any money unless they get an increase in rate. But the government do not say that since other fields of investment are increasing interest rates, therefore they are going to increase the interest return on annuities, or that they are going to pay higher interest rates on government bonds. There should not be such a great divergence between the interest rates which the lending companies get on their money, and that which private individuals get on theirs.

It may be said that there is a greater risk from the point of view of the lending companies, but in this particular field there is no risk. Experience has proven that the companies have not taken any loss whatever under this plan. Building costs have increased because of increased wages, but there is some excuse for that, because increased wages have to be paid on account of the general rise in the cost of living.

Then we have had an increase in the cost of materials. That too was probably necessary under these conditions. It seems to me that this bill is not so much concerned with assisting housing as it is with assisting lending companies. The ibill is wrongly entitled. It should be a bill to assist finance companies.

Even though this increased rate of interest is applied, people are going to take advantage of it because they must have houses. But

just look at the position in which it puts the purchaser of a house. I am saying to you, Mr. Speaker, that five per cent is too much for a man to pay to get a house built. He just cannot pay that kind of interest. When he was speaking the other day I think the hon. member for Spadina (Mr. Croll) made the same suggestion that I have made on many occasions, namely, that the government itself should go into the lending business for house building. It is so necessary from more than one point of view.

If the government can borrow money at three per cent or less, then why can they not lend it out under this national housing program? They do not even have to lend it at three per cent; they could lend it at an even higher rate and still be away below what the lending companies are asking. If we really consider that housing is so necessary, and if the government are so desirous of everybody having a house in which to live, a home in which to raise a family, surely this could be done.

I think, too, that this would be an opportune time to reinstate the additional one-sixth loan. It is difficult for people now to get money to start out. In fact it is just impossible under this plan for people to get sufficient money to make their down payments under the housing plan.

I should like the government to reconsider their stand on national housing. We should not now increase the interest rates to the common man who must have a house. The common man must have a house. Even though the government decides to allow this increase, the people will have to accept it. They have no alternative, because they must have some place in which to rear their families. But it seems an arbitrary way of forcing these people to come into line.

I have never contended that individuals or companies should work for nothing. I have always maintained that everybody is entitled to a fair return on money invested or on services rendered. But I do not think we would be imposing a hardship on anyone in this instance, particularly with all the guarantees behind it, if we asked that this increase in interest rate be not implemented at this time.

I should like to suggest very seriously that the government go into the field of lending money at a much lower rate of interest than is provided for under this plan.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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CCF

William Scottie Bryce

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

Mr. William Bryce (Selkirk):

Mr. Speaker, I want to let the minister know that I do object to this increase in interest rates. In my experience in Canada I do not think there

National Housing Act

is anything that has broken more people than high interest rates. To be anything in Canada you must have your own house. If a man has to pay more interest over a period of years than he pays for his house, it just breaks him. I have seen this even in the farming business. I have known men who bought farms and who have paid far more in interest than they ever paid for the farm. And that sort of thing breaks the back of so many people.

I agree with what the hon. gentleman who preceded me (Mr. Johnston) said about the government lending the money. I do not see why they should not lend the money. They do it in other countries, and they could do it here. If the rates are not satisfactory to the insurance companies who are lending money at the present time, then the government should look after the people first.

I appeal to the minister to take a trip to New Zealand and see what they have done there. I am not going to go into it. I am not going to put it on the record, but if the minister wants the information I can give it to him, because I was there and saw it at first hand, along with some,of my colleagues in the house.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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CCF

Angus MacInnis

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

Mr. Angus Maclnnis (Vancouver East):

Mr. Speaker, I doubt very much if this measure is worth all the time we are giving to it this morning. What this country needs is a. measure that will help people who need houses and who are not able to finance them,, either to build or to buy houses. This bill will not assist in that way. Those fortunate persons who can come within the provisions of the National Housing Act in connection with building houses could build them without the National Housing Act. If the minister is going to do something to enable the ever-increasing number of families in Canada who need houses to get them, something better than what is contained in this act will have to be provided.

I am an inveterate reader of newspapers, and I seldom open a paper these days without finding statements by jurists who are called upon to deal with delinquents that our deplorable housing conditions are leading to crime and immorality. Social workers say the same thing. If a sufficient number of houses could not be built under the interest rate provided heretofore in the act, the raising of the interest rates is not going to facilitate building.

I do not believe that we should blame the lending companies for wanting higher interest

4292 HOUSE OF

Natural Resources-Prairie Provinces rates, because, after all, they are in the lending business to make a living. Regardless of whether we 'believe that an interest rate of -five per cent, six per cent, or whatever it may be, is high enough, is not particularly 'important to the lending companies. What is important is the rate they can get by holding out by refusing to lend money unless they get those rates. The people need houses, and need them badly, and I suggest to the minister that he bring in a measure that will help the people to meet that need.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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Motion agreed to, bill read the second time and the house went into committee thereon, Mr. Beaudoin in the chair. Sections 1, 2 and 3 agreed to. On section 4-Interest, amount and term of loan.


PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

In view of the appearance in this section of the term "lending value", I should like to ask the minister if any change is contemplated by his department or by Central Mortgage and Housing Corporation in regard to the present method of determining lending value. Is the department still adhering to the retention of the lending value as of January 1, 1950?

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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LIB

Robert Henry Winters (Minister of Resources and Development)

Liberal

Mr. Winters:

Yes. The policy is still to adhere to the lending value prevailing at January 1, 1950, for reasons which I am sure are obvious to all hon. members and which have been discussed previously in this house. It is an anti-inflationary measure designed to act in the interest of home owners in seeing that they do not pay more for their houses than they have to under the circumstances.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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PC

Donald Methuen Fleming

Progressive Conservative

Mr. Fleming:

It may be an anti-inflationary measure, but it is also an anti-house building measure, as things stand at the present time.

Topic:   NATIONAL HOUSING ACT
Subtopic:   AMENDMENT WITH RESPECT TO INTEREST RATES, REPAYMENT OF LOANS, ETC.
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Section agreed to. Sections 5 to 18 inclusive agreed to. Bill reported. At one o'clock the house took recess. The house resumed at three o'clock.


RAILWAYS, CANALS AND TELEGRAPH LINES


Ninth and tenth reports of standing committee on railways, canals and telegraph lines.-Mr. Breithaupt. IMr. Maclnnis.]


June 19, 1951