George Gibson COOTE

COOTE, George Gibson

Personal Data

Party
United Farmers of Alberta
Constituency
Macleod (Alberta)
Birth Date
August 18, 1880
Deceased Date
November 24, 1959
Website
http://en.wikipedia.org/wiki/George_Gibson_Coote
PARLINFO
http://www.parl.gc.ca/parlinfo/Files/Parliamentarian.aspx?Item=717ab1d6-e8dc-480c-aba9-4552f242369a&Language=E&Section=ALL
Profession
accountant, bank manager, farmer

Parliamentary Career

December 6, 1921 - September 5, 1925
PRO
  Macleod (Alberta)
October 29, 1925 - July 2, 1926
PRO
  Macleod (Alberta)
September 14, 1926 - May 30, 1930
UFA
  Macleod (Alberta)
July 28, 1930 - August 14, 1935
UFA
  Macleod (Alberta)

Most Recent Speeches (Page 2 of 662)


June 25, 1935

Mr. COOTE:

I should like to say a few

words in connection with this bill; perhaps they relate a little more to section 4 but since section 2 is the interpretation section it has a certain bearing on all the other sections of the bill. I have several objections to this bill. I may say that I have been interested in the question -of government action in connection with housing in Canada for some years and in 1932, during the debate on the unemployment relief bill, I suggested the formation of a housing commission in order to get under way a project for the construction of houses in Canada.

My first objection to the bill is that sixty per cent of the funds will have to be advanced by one of the lending companies and, as the bill is drafted, it seems that this refers in effect to existing mortgage, insurance and loan companies. So it does seem to me that the effect of the bill is to continue to load all housing in Canada with an interest charge of five and a half or six per cent. I should like hon. members to consider carefully the interest burden that is attached to any house carrying that rate of interest. Even on a house costing $3,000-and it seems to me that is the smallest amount for which a habitable house can be built t'o-day-a rate of five and a half per cent per annum means an interest charge of S13.75 per month before you include other charges for depreciation, upkeep, taxes or anything else. That seems to me too high; it seems definitely to make the type of houses that would be possible under this act available only to people with incomes of perhaps more than $1,200 per year.

Then it is quite evident that under this scheme only those wiho can advance twenty per cent of the purchase price will be able to secure any advantage. I think it is clear from the telegrams that were read by the right hon. gentleman that we cannot expect any lower rate than five and a half per cent, and I want to say again that an interest

change of $13.75 per month for any house makes this thing prohibitive to the class of people who need houses so badly.

Mr. JACOBS': Where do you find the interest rate in the bill?

Topic:   DOMINION HOUSING ACT
Subtopic:   PROVISION FOR LOANS BY GOVERNMENT AND LENDING INSTITUTIONS UP TO EIGHTY PER CENT OF COST OF CONSTRUCTION
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June 25, 1935

Mr. COOTE:

Five per cent in the rural districts of Canada.

Topic:   DOMINION HOUSING ACT
Subtopic:   PROVISION FOR LOANS BY GOVERNMENT AND LENDING INSTITUTIONS UP TO EIGHTY PER CENT OF COST OF CONSTRUCTION
Full View Permalink

June 25, 1935

Mr. COOTE:

I believe tlhe suggestion

offered by the hon. member for Comox-Alberni is a very sensible one, and I cannot understand why "local authority" under paragraph (f) is meant to include a province or municipality unless it is intended that under this measure a municipality might have the same rights as a mortgage or loan company. I believe the minister might very well take that point into consideration.

While on my feet I should like to .put another question to the minister. I find that paragraph (d) of section 2 is as follows:

(d) "Housing scheme" means a scheme for the construction of houses and their occupation by tenants or purchasers.

Will that limit the scheme to the construction of new houses? In other words, under the measure will rehabilitation of present buildings be possible?

Topic:   DOMINION HOUSING ACT
Subtopic:   PROVISION FOR LOANS BY GOVERNMENT AND LENDING INSTITUTIONS UP TO EIGHTY PER CENT OF COST OF CONSTRUCTION
Full View Permalink

June 25, 1935

Mr. COOTE:

himself in this class of people has interviewed the Canadian National railway authorities and has secured from them the use, or I might say the gift, of a lot of old railway coaches and freight cars which the Canadian National Railways would be dismantling because they are going to build new equipment. He has also secured a piece of property and is getting the railway company to lay a spur line to it and is running a lot of these old coaches out to that district and expects to have enough coaches to house three thousand people. That gentleman is to be commended for that work because these people are being forced out of their homes and out of their rooms in Montreal. I was told by another gentleman from Montreal who interviewed me last week, that there is nowhere for them to go. This man before referred to is doing splendid work but I think where a housing scheme ought to start is to provide housing for people in Canada who cannot afford, on their income to-day, to pay economic rent.

Under this housing scheme the government is to advance only twenty per cent of the cost of the houses. I would suggest to the government that they might very well advance sixty or eighty per cent, and at a low rate of interest, and then we could build houses that could be rented to these people for not much more than half the rental necessary under the present contemplated setup.

Perhaps I will be asked where can we find the money to do it? We have in Canada a machine for the creation of money, and we could very well afford to set aside-this would suit me-$100,000,000 as a start until this scheme is in operation.

May I point out to the committee just what has happened in Canada in regard to the amount of money that the government or the government agency has under issue. The Bank of Canada's last statement shows that they have a note issue outstanding of approximately $75,000,000 and they have deposit liabilities of $183,000,000, which is largely the deposits of the chartered banks. Their total deposit liabilities are $259,000,000. The gold reserve of the Bank of Canada is $106,000,000, with gold valued at $20.67 per ounce, but now it is agreed that gold is worth $35 per ounce, so at that valuation the present gold reserve held by the Bank of Canada is worth $180,000,000. The Bank of Canada Act provides for a reserve of 25 per cent against notes and deposit liabilities, and on that basis the present gold reserve of 1180,000,000 is sufficient for a total liability of note issue and deposit liabilities of $720,000,000.

At the present time, as I say, the deposit liabilities of the Bank of Canada together with the note issue amounts to $259,000,000. So that there is a margin for the bank to work on of $460,000,000. Surely with that wide margin the central bank might safely issue another $100,000,000 for the financing of a housing program, and that I think would be quite within the canons of sound finance. The margin that would still be left to the Bank of Canada would be almost two to one.

I would like hon. members to compare the present issue of notes in Canada with what it was in 1920. I take these figures from the Canada Year Book for 1933. On June 30, 1919, the issue of dominion notes outstanding was $300,000,000, and the amount of bank notes outstanding was $228,000,000, or a total of $528,000,000. The issue of Bank of Canada notes at the present time is $75,000,000, and of the notes of the chartered banks $120,000.000, or $195,000,000. I suppose there is still $10,000,000 of dominion notes outstanding, but taking them all together it is not half what it was in the year 1920. I assume that somebody will say that the deposits of the chartered banks in the central bank are equivalent to a holding of dominion notes. For the sake of argument I will grant that. The deposits of the chartered banks are $165,000,000, and adding that to the $75,000000 of notes issued and outstanding, makes a total of $240,000,000 issued. As I said before, with the gold reserve of the Bank of Canada at approximately $180,000,000 there you have the basis for an issue of $720,000,000 including deposits. I cannot see but what it would be the most sensible thing in the world to issue $100,000,000 and to make it available for any housing project which the economic council might recommend, and that it be advanced at a rate of interest not more than two per cent I would say, to build homes for the classes of people in Canada that are most in need of them. I do not want to labour this point.

I just want to say again that what I have suggested here is quite within what I think might be called the orthodox ideas of money, that we must have a 25 per cent reserve for our notes and deposit liabilities of the central bank. It would only be making use of the right of issue of a little over 50 per cent of what is possible under the Bank of Canada Act and I really cannot see what objection there can be to it.

Before I sit down I would like to say again that we are badly in need of some assistance in securing adequate homes in the rural areas, and if this bill does not make provision for

Housing Act

that I hope that such provision will be made in tihe bill before it passes this committee, even though the scheme is not availed of until the projects have been approved by the economic council. But once approved I would like this bill to be wide enough for such schemes as are approved of to be carried out.

I would also like to be sure that there is available money for this project at a rate less than 5J per cent. I agree with what was said by my hon. friend from East Hamilton (Mr. Mitchell) last night, that the man who starts off to pay for a house with money costing 6 or 7 per cent is defeated before he starts. We have seen thousands of cases during the last five years of people who have lost their homes because there was an interest rate of six or seven or eight per cent which had to be carried in the man's payments, and with the low level of wages which the masses of the people are getting to-day and the low prices our farmers are getting for their products they cannot stand these high interest rates. If this scheme is to be started in only a small way, let us at least start it in a sound way. I am not so much concerned about it being started in a big way as I am that it be started in a sound way. I know it is stated that tfhe interest rate under this scheme will be 5J per cent, but by the time the purchaser pays the various charges, inspection fees, and cost of drawing papers the rate is not likely to be under six per cent, and I think six per cent is too high a rate. I do not think it is economically possible for people to carry it. I believe that those who have studied economics extending over the last few hundred years agree with Thomas Woodlock that nature in the long run will allow for a very low rate of interest if indeed she will allow for the payment of any. Let us not begin a housing scheme on an unsound basis. The basis of this scheme is the interest rate; I say the interest rate at six per cent is too high, and the scheme will not amount to very much if it is built on that foundation.

Topic:   DOMINION HOUSING ACT
Subtopic:   PROVISION FOR LOANS BY GOVERNMENT AND LENDING INSTITUTIONS UP TO EIGHTY PER CENT OF COST OF CONSTRUCTION
Full View Permalink

June 25, 1935

Mr. COOTE:

No provision for rehabilitation? Then I should like to suggest to the government that before the bill is passed a section be inserted to make such rehabilitation possible. I believe a great deal of employment could be given through rehabilitation, and if such work were permitted under this section the other provisions in the bill are wide enough to allow it to be done. I hope the bill as finally passed will not shut out the rehabilitation of present dwellings. That is one thing that is very necessary and which should be made possible, if we are to pass this bill.

Topic:   DOMINION HOUSING ACT
Subtopic:   PROVISION FOR LOANS BY GOVERNMENT AND LENDING INSTITUTIONS UP TO EIGHTY PER CENT OF COST OF CONSTRUCTION
Full View Permalink