December 18, 1957

PC

Howard Charles Green (Minister of Defence Production; Minister of Public Works; Leader of the Government in the House of Commons; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Green:

I think the hon. member's difficulty is this, that in addition to lending their own money, the lending institutions are acting as agents for Central Mortgage and Housing Corporation in putting out this $150 million which will be increased when we get the amendment through.

There are two types of loans. You may go to an approved lender and get a loan under the insured plan or you may get it under the agency loan plan. In the latter case the money is government money, but mind you the agency loan plan money is only available for these small homes. If you want to build a big house on Shaughnessy Heights you cannot get any money under the agency plan. You would have then to come under the insurance plan and take your chances with the lender.

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CCF

Erhart Regier

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

Mr. Regier:

I wish to thank the minister. However, perhaps now the minister can answer this, and this is what I have been after all along. Who gets the difference between the cost of this money to the government and the rate that the purchaser has to pay? I believe the government obtains its money at slightly under 4 per cent. Who gets the spread between the 4 per cent or whatever it is and the 6 per cent? Is it the approved lender who is acting as agent in this case or is it the Central Mortgage and Housing Corporation?

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PC

Howard Charles Green (Minister of Defence Production; Minister of Public Works; Leader of the Government in the House of Commons; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Green:

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CCF
PC

Howard Charles Green (Minister of Defence Production; Minister of Public Works; Leader of the Government in the House of Commons; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Green:

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LIB
PC

Howard Charles Green (Minister of Defence Production; Minister of Public Works; Leader of the Government in the House of Commons; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Green:

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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

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

Mr. Knowles (Winnipeg Norlh Centre):

realize the hon. member for Burnaby-Co-quitlam was referring to himself just as an example and the Minister of Public Works was answering him as though he was an example, but just to have the record clear is it not a fact that by a provision of the Senate and the House of Commons Act members of parliament are barred from the advantages of the National Housing Act?

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LIB
PC

Howard Charles Green (Minister of Defence Production; Minister of Public Works; Leader of the Government in the House of Commons; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Green:

I am afraid I do not know.

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CCF

George Hugh Castleden

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

Mr. Casfleden:

I had difficulty in following the minister's answer to one of the questions that came from this corner of the house. It was stated we thought the government should lower the rate of interest, and that was our amendment. The minister stated that they could not possibly lower the rate of interest being charged for these loans because that would discourage investment. I should like to ask the minister this. Is it not a fact that if he were to lower the rate there would be more houses built than if the rate were allowed to continue where it is? If you lowered the rate of interest you would lower the cost of building houses.

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PC

Howard Charles Green (Minister of Defence Production; Minister of Public Works; Leader of the Government in the House of Commons; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Green:

I think the result would be exactly the opposite. If we lowered the rate on these agency loans, then the rate is automatically lowered on the insured loans and that would probably mean the lending institutions would stop lending their money on first mortgages and would put it into some other investment. Then, there would not be sufficient money available in Canada to build houses.

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CCF

George Hugh Castleden

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

Mr. Casfleden:

In other words, we are doing more good to the investors in insured loans than we are to the potential home owners.

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?

Some hon. Members:

Nonsense.

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CCF

George Hugh Castleden

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

Mr. Casfleden:

Supposing we take the example of a person who was fortunate enough to obtain a serviced lot and who paid his 10 per cent down, which would be $1,000 on a $10,000 house. If he amortized the balance over a 30-year period, what would be the total of all payments which he would have to make before he finally owned that house at the end of a 30-year period?

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LIB
CCF

George Hugh Castleden

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

Mr. Casfleden:

I suppose we can figure that out. The balance he would owe would be $9,000 and at the end of 30 years he would have paid $18,000.

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?

An hon. Member:

Part of it is rent.

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CCF

George Hugh Castleden

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

Mr. Casfleden:

Yes, part of it is rent. The reason housing is not available to the people who need it is that they cannot afford to pay that amount. If the interest rate is 6 per cent and you amortize it over a 30-year period, a person has to pay double for the house. Part of this trouble goes back a long way. It goes back to the high cost of building, and some years ago we advocated that price controls be kept on. If that had been done a house costing $10,000 to construct today could be built for $6,000. Then, people could afford to build. You are saddling these people with a load of debt from which they will not free themselves within an ordinary earning lifetime.

Let us get these things down into the realm where they can be used, where greater consideration will be given for the safety of the people, the kind of houses in which they live and the social value of good houses instead of slum houses or in other words the safety value and the health value. You are denying to the people who need it most a commodity that is essential to good standards of Canadian living. I think that has been said before in other words by other hon. members of this house. The party will go ahead and put this bill through. We have pointed out to them that they will just continue to fail to provide what should be provided, namely housing for the vast number of Canadian people who need it, such as the fellow on the small salary, people living out in the smaller communities where it is absolutely impossible for them to come under the provisions of this bill and where perhaps if the burden of interest were not left loaded on top of them they could provide themselves with houses.

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PC

Howard Charles Green (Minister of Defence Production; Minister of Public Works; Leader of the Government in the House of Commons; Progressive Conservative Party House Leader)

Progressive Conservative

Mr. Green:

The hon. member must not overlook the fact that a great deal of money is being lent out directly by Central Mortgage and Housing Corporation in the smaller communities, quite apart from the agency loans. I have here figures for the loans under section 40 which are in that category. They amount to $57,210,071 since the act of 1954 came into effect. These are additional loans which are made directly by the corporation and they have not entered into the discussions which have taken place earlier this evening.

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December 18, 1957