June 24, 1935

CON

George Douglass Stanley

Conservative (1867-1942)

Mr. G. D. STANLEY (East Calgary):

Mr. Speaker, I should like to offer a few observations in regard to this bill. First I feel that one should set down the basic understanding of what housing is. The discussion so far might lead one to suppose that it is a matter of construction mechanics, but we were given to understand in the special study of this matter which the committee made that housing as it is defined is a much larger problem than simply the construction of homes. It is a social question. It is very broad in its scope, and one might undertake to say that it includes preventive measures, for instance. It cannot be separated from the general consideration of town planning, and when one speaks of measures for housing one must consider it from that standpoint. Preventive measures certainly belong to it; for instance, the prevention of disease, the prevention of crime, the prevention of delinquency, the prevention of fire, and the consideration of the question must also include such very important things as transportation, parks and all these other matters which are included in the broader and more inclusive consideration of housing. Hence it is borne home to us that in entering upon a housing scheme now, we must do it with the understanding that it is a continuing problem, that we are simply making a start with some phases of it, and it is so important that the foundation of the policy which will direct the nation in its housing undertakings should be laid properly, carefully and well.

Various important points might be urged, but the first thing that occurs to me is that the committee after taking evidence and hearing reports from a large number of experts thoroughly conversant with the housing question brought in a report inclusive and much broader than a report covering simply the question of construction mechanics. The committee endeavoured to go into the whole question of housing or town planning, if you will, and the committee brought in a favourable report.

The next important point that occurs to me is that the government has accepted the principle. European countries, including Great Britain, have already established housing policies and have entered into the whole matter of housing in a very large way. The United States and Canada have not done so heretofore, but now the committee has reported favourably on the establishment of a national policy in Canada in connection

with housing. The government itself has accepted the principle and therefore it is acknowledged that if this bill becomes legislation the nation itself accepts the housing obligation. I think that is an important point to urge. No matter how far we go at the present time, so long as we have established the principle and accepted the state obligation, we have at least started on the proper basis and have made a safe and sound beginning.

Then the government gives us this measure. It is an implementing measure. It may not go as far as some of us might wish it to go. I know it does not go as far as my hon. friend from North Winnipeg (Mr. Heaps) and some others would like it to go. The main thing is that as a start it is implementing the recommendations of the committee which accepted this principle and by so doing it implies -a state obligation in connection with housing. The velocity of its progress is a detail. How far we go this year, how far we will go next year or the years after is for the next parliament or parliaments to decide. Our duty today is to make a start and see that that start is made on the proper basis.

When the ball was introduced there was some discussion in connection with the use of the word "commission." Hon. members who were members of the committee realized that in order to bring in a unanimous report it was necessary to compromise,, to give and take in one way and another. The result was what I consider to be a very excellent report. The word used in the first clause of the recommendation was "authority" while the resolution upon whioh this bill is founded used the word "commissioner." At the moment I am not particularly interested in whether the authority is a specific commission as long as we establish the basis upon which a start will be made. We must delegate to a specific authority the duty of establishing a national policy on housing. It was borne home to those of us who were on the committee that in order to make a success of any housing undertaking it would be necessary to delegate the administration of the policy to those who were trained in that particular kind of work. This work cannot be undertaken by busy officials attached to, say, the Department of Finance, it must be delegated to persons who are expert in this work and who are prepared to investigate, study, report and advise upon the whole question of housing. Consequently, the commission or whatever authority may be appointed must be competent to handle the problem of housing in its broadest sense.

Housing Act-Mr. Stanley

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LAB

Abraham Albert Heaps

Labour

Mr. HEAPS:

What interest do these private corporations want?

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CON

George Douglass Stanley

Conservative (1867-1942)

Mr. STANLEY:

That enters into another problem altogether.

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LAB

Abraham Albert Heaps

Labour

Mr. HEAPS:

It is vital at this stage; it is vital to the hon. gentleman's own argument.

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CON

George Douglass Stanley

Conservative (1867-1942)

Mr. STANLEY:

Apart altogether from the specific rate of interest which they are charging, the hon. gentleman knows-and it was urged very decidedly before the commission- that a building program on the part of those who can afford to carry it out with private means, those who can afford to pay the rates of interest charged by the loan companies today, those who will finance for themselves, will relieve to a degree the demand for houses in the lower grades. And as the housing is undertaken in each classification higher up, the housing condition improves among those who can afford to pay only smaller sums in interest or rent.

Passing on to the next question of employment, I want to urge the point that as housebuilding employment is undertaken, it becomes a leaven which permeates through the

community by way of the money that is paid to labour in wages. Incidentally may I say that it was given in evidence before the committee that from eighty to eighty-two per cent of money spent on construction actually went into the pockets of the labourers and that money in turn went into every branch of industry and business in the community. Therefore housing construction is the best type of employment undertaking. I am not saying anything against employment, because employment is very important, but after all it is only incidental to the whole problem of housing and it should be considered in that light. Give all the employment that is possible; consider this question from the viewpoint of giving as much employment to labour as is possible, but the main point is first to get the housing policy basically sound and right, sane and proper, so that it will be a success, and the labour will come incidentally to the housing undertaking.

On pages 9 and 10 of the report there is a very good summary of what housing means in a social way. I have said that it is a social problem. It will be found in the Toronto report that infant mortality in that city as a whole was 63-4 per thousand whereas in the Moss Park area it was 121-2. As regards the question of juvenile delinquency, it was also found to be very much more prevalent in the poor housing districts. As to crime, a survey was made of 547 houses; 315 were reported as below the minimum standard and out of those 315, 100 had been "convicted" for various kinds of crimes.

Evidence was brought forward with regard to the city of Cleveland and I shall give these figures just to show the relationship of housing to the social problems of the day. Twenty-two per cent of all the murders committed in Cleveland were found in the slum district which contained two and a half per cent of the population; 6-8 per cent of boy delinquency and 124 per cent of tuberculosis deaths occurred in this area. On the question of fire protection, in Cleveland as a whole the cost was $3.12 per capita whereas in the slum area it was S18.72. Those figures give us a summary of the importance of proper housing in regard to the social problems of the day. Not only then is it a humanitarian undertaking, but it is good business for the country, the provinces, the municipalities, and the citizens in their private organizations and as taxpayers to undertake proper housing throughout the country, because it remedies these various social conditions of which I have spoken, improves the value of the property generally and the standing of the community, and saves life, property and morale.

Housing Act-Mr. Euler

I shall not deal at length with the slum clearance question which was considered at some length before the committee. The advantages of ridding a city or community of a slum are of course obvious. From Montreal and Toronto we had two elaborate reports, one showing that in Montreal it required1 at least 314,000,000 to fulfil the undertaking which they had recommended. The committee from Toronto recommended that at least 312,000,000 should be spent in the undertaking there. One of the witnesses-and others followed him-urged that slum clearance would be a problem this year, next year and for many years to come, and that an undertaking that would give homes to those who could finance them entirely or partly would assist in overcoming some of the slum difficulties. This was the point which one expert urged: When you start in on a housing scheme, do not start on slum clearance first or you invite defeat; start in with that plan which can be handled by the finances which are immediately available; make a success of your start and then develop the work from year to year and from time to time.

The main thought to my mind is that the principle has been accepted; that the obligation has been assumed and that the government now undertakes to implement to this extent the principle and national policy of housing.

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LIB

William Daum Euler

Liberal

Hon. W. D. EULER (North Waterloo):

With the broad general principles enunciated by the hon. member for East Calgary (Mr. Stanley) I think I might find myself in agreement, but I do not propose to discuss the bill in any other way than in its specific terms. The minister who introduced the bill I think had in mind two or three chief purposes: one was, as he stated, to make it possible for men who earn small wages to acquire their own houses; the second was to make up the deficiency in the supply of houses in the country, and the third and not unimportant one, was to provide employment. To my mind-and I shall be very frank in what I say-I believe the bill will fail in every one of these purposes. I say that from a study of the financial arrangements proposed by the bill. They are as follows: that the investment company, the loaning company, shall supply sixty per cent of the cost of the house, which I take it includes also the cost of the land; that the government will supply twenty per cent, and the man who is to own the house will supply the final twenty per cent. I am told that in the report of the committee it was suggested that the cost of an average house such as

fMr. Stanley.]

contemplated by this bill would be about 32,700. If the owner, the small wage earner,, has to find twenty per cent of that he would have to have at least 3500 or S600. I leave it to the house whether in their opinion,, under conditions as they are to-day in the towns and cities, any large proportion of low wage earners are in possession of that sum.

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CON

George Douglass Stanley

Conservative (1867-1942)

Mr. STANLEY:

He would get it from the local building society.

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LIB

William Daum Euler

Liberal

Mr. EULER:

The local building society, I take it, is providing the first sixty per cent. I think the plan is utterly impracticable so far as the low wage earner is concerned, he will not have enough money to avail himself of its provisions. The second feature which I think is absolutely fatal to the success of the measure is that the building society or loan company will not consent to share its security with the government. It is supposed to advance sixty per cent of the cost of the undertaking. In my own province, and I suppose it applies in others, loan companies may not loan more than sixty per cent of the value of the property on first mortgage. They are prohibited by law, and this government cannot interfere with that in the case of any loan company holding a provincial charter. This bill proposes that the loan companies shall supply sixty per cent of the cost. Ordinarily, the loaning company has one hundred per cent of value as security for the loans. This bill proposes that the advance of twenty per cent made by the government shall entitle the government to share in that first mortgage, thereby reducing the security held by the investment company. I say with considerable confidence that there is not an insurance company or a loan company that will advance money to the extent of sixty per cent of the value of the property unless it has the full one hundred per cent of value behind it as security. Therefore I say the bill is utterly impracticable. The money will not be advanced for those two reasons.

The hon. member for East Calgary advanced another argument, and the minister presenting the bill mentioned it also, that this bill is a start, it enunciates the principle that governments are taking some of the responsibility for housing. In reply I say that no start at all would be better than a bad start. I heard some legislation described here the other day by the former Minister of Trade and Commerce (Mr. Stevens) as anaemic. I certainly would describe this bill as anaemic to the degree that it will be still bom. I believe that the government will have to advance practically no money under

Housing Act-Mr. Heaps

this scheme. I am not opposing any well considered policy of housing, I think we may have to come to that, but I would like to see something practical introduced rather than that the public should be misled,-I do not say intentionally-into thinking that something is being given them when it really amounts to nothing at all.

As it is almost six o'clock I would close with this comment: we have had during the last session and others a good deal of legislation enacted for the benefit of the farming community. I have no objection to that, they need all the help they can get, but they have received considerable by way of the wheat bonus, the Farmers' Creditors Arrangement Act, the purchase of wheat by the government and now the grain board bill. I am not offhand making any particular criticism of them, although I do not know where we are coming out with this sort of thing, but I say that the forgotten man to-day is in the [DOT]cities and towns. We are trying to make some little provision for the low wage earner so that he may own his house, but what is to become of the man who now nominally owns his house but who has practically no equity left in it? Nothing has been done for the man in the cities or towns who is out of work and can no longer pay interest and taxes and is losing his house. I would recommend that the government pay a little attention to that phase of the question.

I say again that the bill is absolutely innocuous, it will do no good and it may do harm by destroying the belief that the government meant anything at all in the way of providing for housing. If the government want to make this bill practicable I might make a suggestion. The loaning companies, as I say, will not allow anyone to share in their security. But if the government would agree to accept a second mortgage for their twenty per cent and leave intact the security that the loaning company expects for its sixty per cent something might be done. But I am quite certain that with the bill as it stands there will be no success and the government will not be under the necessity of advancing a dollar of the $10,000,000 that it proposes to provide under this bill.

At six o'clock the house took recess.

After Recess

The house resumed at eight o'clock.

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LAB

Abraham Albert Heaps

Labour

Mr. A. A. HEAPS (North Winnipeg):

Mr. Speaker, I regret very much that when the minister introduced the bill I happened to be

out of the house. I should have liked very much to hear a comprehensive explanation of the actual meaning of the bill. However we did have some observations from the minister when the resolution was introduced. This afternoon there has been considerable discussion, but of the hon. members who qpoke only the hon. member who was speaking at six o'clock dealt with the actual bill. Many beautiful phrases were used when hon. members referred to the importance of adequate consideration of the housing situation and pointed out what adequate housing means to the nation. I intend, however, to deal more specifically with the bill, because I believe it is from the bill we must have guidance in our consideration of the intention of the government.

First of all we must realize that on February 18 the government appointed a committee to consider a national housing policy. After sitting for some weeks and hearing the evidence of many witnesses the committee came to what was practically a unanimous decision concerning a housing policy for the dominion. Some hon. members who preceded me have referred to the failure of a housing scheme in the year 1920. It is true that when after the war Canada undertook the expenditure of $25,000,000 to improve housing conditions in certain parts of the country the scheme was not entirely a success. It would appear that in the cities of Ottawa and London, Ontario, the scheme was unsuccessful and resulted in losses to those [DOT]municipalities. On the other hand in the city of Winnipeg, where there were more houses built than in both the other cities, the scheme was a success. There may have been two reasons why the scheme of 1920 did not succeed. I believe one was that there was not a proper supervision of the funds provided by the federal government. Had there been proper supervision by federal, provincial and local authorities I do not believe the schemes in Ottawa and London would have failed. Secondly, the houses were built when building costs were at the peak, and in a few years equities in the houses constructed disappeared; in fact they were worth less after two or three years than they weTe at the time they were built. Perhaps there may be several reasons why the housing scheme brought forward immediately after the war did not succeed. I hold the view, however, that if we have suffered' financial losses as a result of our experience after the war, at least we have gained through those experiences, and they shoidd stand us in good stead to-day.

Housing Act-Mr. Heaps

720 homes were built-I am speaking from memory but I believe that is the correct figure-a profit on that housing scheme has been shown in each year since 1920. Over 32,000.000 was loaned by the city of Winnipeg and with operating costs of one per cent they were able to show a profit on the housing commission of about $12,000 to $14,000 per year, So successful was the city in carrying out the scheme that the gentleman who appeared before the committee to represent the mortgage companies congratulated the city on the efficient manner in which it had handled the situation. He admitted that the loan companies could not do in their private capacity what the city had done in its public capacity. Under the provisions of the bill now before us the city of Winnipeg, which has shown what could be done in this regard, would be unable to get one cent. It could obtain about twenty per cent of the funds necessary at a certain rate of interest, but where could it get the rest? Is there any reason why a city or other corporation prepared to proceed with a proper housing scheme under the supervision of federal or provincial authorities should not be able from the federal exchequer to obtain one hundred per cent of the funds needed? Ten million dollars is being provided by this bill and a municipality which was prepared to carry out a proper housing scheme should be able to obtain the necessary funds. According to the bill as it is at present all they can do is to accept sixty per cent of the funds necessary from a private corporation and the other forty per cent would have to be found somewhere else.

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CON

George Halsey Perley (Minister Without Portfolio)

Conservative (1867-1942)

Sir GEORGE PERLEY:

If a city set up a company for the purpose of doing this work it would come within the terms of this bill.

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LAB

Abraham Albert Heaps

Labour

Mr. HEAPS:

-But the city cannot obtain more than twenty per cent of the costs of construction.

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CON

George Halsey Perley (Minister Without Portfolio)

Conservative (1867-1942)

Sir GEORGE PERLEY:

The city could

lend sixty per -cent through a loan company.

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LAB

Abraham Albert Heaps

Labour

Mr. HEAPS:

That is the weakness of the bill; the city would have to lend sixty per cent while the individual would have to borrow another twenty per cent. After that the government would -come along with its twenty per cent. I am suggesting -that the government do what it did in 1920: provide the entire cost of construction and take as security either municipal or provincial bonds, or perhaps mortgages on the houses. If that were done we could accomplish something but if we are to proceed on this basis of twenty, sixty and twenty we will never get anywhere. As was suggested by the hon.

member for North Waterloo just before the recess, there will be no houses built.

I am anxious to see something accomplished. I want to see the government do something tangible in providing homes and employment. I cannot agree with the statement of the minister who introduced this bill that it is going to provide homes for the low wage earner. As I understand the bill, that cannot be done. I ask the government to do exactly what it did fourteen or fifteen years ago and provide all the funds at a rate of interest not more than three per cent. I want to see the $10,000,000 provided for in this bill expended in as efficient a manner as it is possible to expend money. I am prepared to vest in the commission or other body to be designated a certain amount of control to see that these houses are built in a proper manner. Under the bill as it is at present there will be no worthwhile supervision of this work. The government is to lend the money to individuals and no one knows what will happen to those individuals once the money has been received. This seems to be going contrary to all the precepts of parliamentary government. We are being asked to vote money and then we lose complete control over the money voted. It is to be handed over to private corporations to spend and we will not know what becomes of it. I am always a little dubious when money is to be spent by private corporations because I am always afraid there will be losses. That has been our experience in the past. I ask the minister to eliminate from the bill the reference to the twenty per cent advance by the government. We should vote $10,000,000 for the purpose of carrying out a national housing scheme under the supervision of those who are capable of undertaking such a scheme. I do not care whether this supervision is by a private body in conjunction with public bodies, or just what it is, as long as there is proper supervision by the government.

As the bill now stands I am afraid it will be a disappointment to the people who expected that many houses would be built. The people will find that this money will cost them just as much as they had to pay private corporations last year or even many years ago, and the men who are looking for work will be disappointed. As a member representing a constituency in which there are thousands of building artisans out of work I ask the government to constitute a proper housing commission to go ahead with the construction of houses so that our people may be housed decently and provided with work.

Housing Act-Mr. Gray

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LIB

Ross Wilfred Gray

Liberal

Mr. R. W. GRAY (West Lambton):

Housing Act-Mr. Gray

until the dying days of the session before bringing in a measure which is of rather doubtful validity to begin with-because here once more we find in section 5 a qualification with which we are now familiar: in line 16 we have the words "subject to the jurisdiction of parliament." Where have we heard these words before? In nearly every bill which this government has brought down in the latter part of this session we find the same thing, "subject to the jurisdiction of parliament." This afternoon the Secretary of State (Mr. Cahan) a man with years of experience in company law and parliamentary jurisprudence, came into the house saying, in connection with the Companies Act, "We will put a semicolon here; we will add a few words there; we will put a period here; we will lead pencil something here." And so on. Can you imagine the type of legislation which is going out from this parliament at this session? Were we sent to parliament to legislate simply because this or that measure appears to be politically expedient, or were we sent to legislate in the interests of the people and to enact into law measures that will stand the test of time?

Had we set uip a national unemployment council to cooperate with individuals and with the municipalities and provinces, there would have been no need to state in section 5, "subject to the jurisdiction of parliament." There would have been cooperation and there would therefore have been no need to insert this question mark in the way it is here expressed.

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CON

George Reginald Geary

Conservative (1867-1942)

Mr. GEARY:

Are not those words a mere qualification of "lending institutions"?

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LIB

Ross Wilfred Gray

Liberal

Mr. GRAY:

They may be a qualification

of lending institutions, but when I tell the hon. gentleman that of the large lending companies of this dominion only two have a federal charter-the Canada Permanent and the Huron & Erie-the great bulk of the companies possessing provincial charters, he will realize that they cannot possibly be affected by the section. So that to put in a clause such as this is merely misleading and farcical; it is a part of the shadow boxing I have mentioned.

As the right hon. member for Argenteuil (Sir George Perley) rightly said, the abject of the committee was to attempt to erect houses for the benefit of the low wage earners. I am glad he made that statement; it shows that he has given some attention to the report. He realizes that the main abject of the committee, and the object in getting the evidence adduced before that committee, was to see whether we could not establish better housing

for low wage earners. Unfortunately he overlooked the fact that in discussing this whole subject matter we found according to the preponderance of evidence that the so called low wage earners might be regarded as those receiving an annual income of from $550 to $1,250. We found, as appears at page 18 of the report, that in order to build an ordinary dwelling, with moderate comforts for a man, his wife and family, in the unit type of housing, the cost would be around $2,500 per house; and under the Bruce report, in Toronto, it was estimated that the same type of house would be about $2,700. The evidence showed what a house of that description would involve. We found from the evidence that a wage earner earning from $550 to $1,250 could not possibly be expected to pay more than from $10 to $15 a month rent. Let us put it at the maximum of $15 and we shall find what it costs annually to carry a house costing $2,700, as confirmed by the national construction council:

Taxes on land and buildings.. . .$ 55 00 Management 15 00

I think these figures are very conservative'; I believe the committee found them so.

Insurance $ 400

Maintenance

40 00Amortization over fifty years. ... 16 95

Interest on $2,700 at four per cent. 108 00

Total $238 95

I doubt very much whether the money can be had at four per cent. In twelve months at $15 a month there will be received by way of rental $180, so that it will be observed that there is an annual deficit of some $58.95 without any return or suggestion of return to the investor. Do you think for a minute that we are going to get the lending companies to launch into a scheme of this kind?

When one takes the evidence from beginning to end, one can almost feel that this bill was based upon the fears of the lending institutions that the government might start an insurance company of one kind or another, and therefore they came in with a scheme such as this: We will advance sixty per cent; you advance twenty per cent and people will start building houses. But let us take the evidence of Mr. D'Arcy Leonard, who is a reputable solicitor and secretary of the Dominion Mortgage Investment Association, which includes not only the large loan corporations but the insurance companies of Canada. Be was questioned in connection with this matter by Mr. Cauchon, head of the town planning commission of the city of Ottawa. This is

Housing Act-Mr. Gray

from Mr. Leonard's evidence as found on page 351 of the proceedings of the special committee on housing:

By Mr. Cauehon:

Q. I would like to ask Mr. Leonard a question, because I think that needs to be cleared up. It has been repeatedly stated' here that the class of housing which this committee advisedly has in view, is housing for the low wage earners where they cannot pay an economic rent, and there is need of assistance in that class of housing; does it or does it not interfere in any way with the class of housing to which loan companies make advances, say houses that rent at $15 a month rental, average-$10 or $15, perhaps as high as $18?

A. Well, we certainly could not loan on a house on a basis that would enable it to rent at $12 or $15 a month.

Later on he was asked:

Q. Where would you say was the medium line as to cost?

A. I think that our class of construction, as I know it, particularly in Toronto, we started loaning on a house that cost about $3,500 up.

If this bill is to go forward as one for new construction only, I think

and I speak with some knowledge-even a man. who is able to put up forty per cent of the cost will have difficulty in getting the lending companies to lend him the amount required, although they will admit, as the hon. member for East Calgary said this afternoon, their walls are bulging with perhaps some 875,000,000 to lend. There is perhaps a reason for that. We realize under the existing conditions with provincial moratoria, the Farmers' Creditors Arrangement Act and other acts of that nature, the lending companies are loath to put out money. But for this government to pretend they are launching a housing scheme, to lead the people to believe they are implementing the. promise made by the Prime Minister (Mr. Bennett) in his seventh radio address on January 24, 1935, that he was going to tackle the housing problem, is simply, as the hon. member for North Winnipeg stated, leading astray the workmen, those who would like t.o build.

Again-and this is my final word in connection with this matter-the government in my opinion have missed the main recommendation of the committee. The committee recommended to the government that its first consideration should be in respect to rehabilitation and repairs at present needed. The hon. member for East Essex (Mr. Mor-and), the chairman himself-in fact all the members of the committee-were struck with the fact that the first consideration was the rehabilitation of houses. We cannot attempt to launch into a state aided project at the expense of those who already have built their homes and who cannot make needed repairs 92582-2491

because of lack of assistance. Your committee therefore felt that those who had staked perhaps their all, who during the depression had made sacrifice after sacrifice, were the ones who should first be given consideration by the government in a national housing scheme. Does the government make any suggestion that it is to consider rehabilitation or repairs? No. I repeat that this scheme is launched by reason of the fear of the lending companies that unless they come forward with some suggestion, the government will introduce state aid legislation that will materially affect such companies. The government grasped at a chance to bring forward legislation of this kind, legislation which I think the hon. member who has introduced this bill will admit, cannot, when seriously considered, produce the results that the government hoped, and I know sincerely, it would produce.

The government should not press this bill as it now stands. Let the economic council engage in further investigation; let it look if you will into the question of slum clearance, which the committee found to be a complicated and perhaps costly experiment. We realized in the meetings which we held that we did not have sufficient evidence even to make a recommendation in that regard to the government. Let the economic council go into the matter further. It is not possible that any great assistance can be given to the construction trades in the next few months under this bill, leaving as it does, as someone has already pointed out, so much to the lending companies which from one end of Canada to the other have almost unanimously refused to lend. Let the council later on bring in a comprehensive report in order that the house may give proper and due consideration to this most important problem.

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CON

George Halsey Perley (Minister Without Portfolio)

Conservative (1867-1942)

Sir GEORGE PERLEY:

May I ask the hon. gentleman a question? Do I understand that he is opposed to this bill?

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LIB

Ross Wilfred Gray

Liberal

Mr. GRAY:

What I tried to make clear is that I am heartily in accord with the suggestion that in principle we are adopting a national housing program, and if the government will bring in that particular type of legislation and bring in clause 3 of the recommendations. leaving for further investigation this whole matter which we as a committee did not have time to investigate fully; if the government will do that and then, as I say, bring in a bill based upon the recommendations of that economic council, I have no doubt the members on this side will support it.

Housing Act-Mr. Mitchell

Topic:   PROVISION FOR LOANS BY GOVERNMENT AND LENDING INSTITUTIONS UP TO EIGHTY PER CENT OF COST OF CONSTRUCTION
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LAB

Humphrey Mitchell

Labour

Mr. HUMPHREY MITCHELL (East Hamilton):

I have listened with considerable attention to the hon. member who introduced the bill and those who have spoken since. Coming from what is predominantly a working class constituency, in which there is a large measure of unemployment in the building trades, having regard to the report of the medical health officer placing before the municipal authorities the need for slum clearance in m-y community, I feel that I should state my opinion on this important problem.

The bill is predicated upon two things : the desire of the government, arising out of the speeches of the Prime Minister (Mr. Bennett) last January, to meet the tremendous unemployment situation in the building trades, and the report of the commission under the chairmanship of the lieutenant-governor of Ontario on slum conditions in Toronto and the reports from Montreal and other large centres indicating the necessity of a building program to do away with the intolerable housing conditions existing in the larger urban centres. On top of that you have figures from those who have gone into the question showing that as a result of the stagnation of the building trades in the last five years a building program is necessary to meet the inevitable need for housing, because our young people still get married notwithstanding that we are passing through a severe depression. In a biological sense one tries to recognize the parents through the children, and if there is not some similarity awkward questions are asked. In connection with this bill I think it is fair to say that the reputed father is the report of the housing commission, but I do not think we could recognize the parent from the bill that is now before the house.

There is ample precedent for a sound building policy. In the provision of housing for the people of Vienna, Austria has achieved something in the midist of a tremendous depression which in the opinion of those who have made a close study of hurraing problems is an example worthy of emulation by the rest of the civilized world. Then you havie the advances made by Great Britain, Belgium, Germany, and in a smaller degree Holland and even Mexico. I am well aware that any policy adopted in this country must breathe the spirit of the Canadian people and reflect their viewpoint, but notwithstanding that we have ample precedent in the recommendations of the international labour office to the world economic conference that was attended by the Prime Minister

in, I think, 1932. I have always maintained that one cannot have freedom without ownership. I believe the most contented nation is that nation whose policies permit its people to live in their own castle or under their own roof. I remember discussing that matter once with a high American official representing his government in the Saar, and he said that, largely through the instrumentality of the international commission there setting in motion policies of rehousing in the most radical section, by the time that that policy was in active operation and those people lived in the houses they had completely changed their political outlook. This in his opinion proved the soundness of a proper plan of housing for the people, entirely apart from the health point of view.

There are two problems involved: first, that of providing housing for people of low incomes who can do nothing but rent, and second, that of providing housing for people who still think that the best way to keep a roof over their heads is to own their own home. I have been through that experience myself. I am a comparatively young man- I may no't look it, but I am-and I know something from my own experience in that regard, when I was first married1 and lived in a little frame cottage built on posts,, and the thrill I got ou't of it. There are two needs staring us in the face, as enunciated in the reports of the various commissions; the need for provision of bousing for people who find it necessary to rent, and the need for cheap money for those who desire to own their own homes. The hon. member for West Lamibton (Mr. Gray) said that of the many witnesses who appeared before the committee, none seemed to have a solution. In my judgment the solution of the housing problem in this country depends on cheap money. The borrowing policies of the various governments in Canada up to two or three years ago have shown lack of vision in the enormous interest rates they paid to the lenders of money. That policy automatically froze up the building industry of this country. With this government paying five per cant and more, and some provincial governments as high as eight per cent and municipalities in proportion, no sound building policy could be carried on by any government or any private concern. When a working man pays seven per cent on the first mortgage on a house he is licked before he starts. Seven per cent is an economic impossibility for the average working man trying to own his own home. A helper of mine once bought a little cottage on the

Housing Act-Mr. Hackett

repayment plan under which the man who sold it paid the taxes and so on, and I think the interest rate was eight per cent. He paid SIS a month. We sat down and figured how long it would take him to own the place provided he paid every month, and found it would take one hundred and twenty-three years. When the man bought it be did not go into the financial aspect.

Another important matter is the question of second mortgages and the discount on them. On a second mortgage for $1,000, a man gets $600 to $750 and' pays seven per cent interest on the one thousandl dollars, so that he may be paying between thirty and forty per cent on the second mortgage in an effort to own a home. That is a common occurrence. Buyers of second mortgages axe now suffering for their sins. Second mortgages have been practically wiped out in this depression. In a housing policy I believe it essential that people be given an opportunity to purchase their homes on the understanding that they have the right of repayment almost at any time; where necessary it should be spread over long periods, possibly in some cases over terms of twenty-five years. I do not believe the losses would be very great. Despite the enormous amount of business done by automobile companies we learn that their losses are only about one-half of one per cent, and I believe it is safe to say that the loss in connection with a housing scheme .might be less.

Frankly I am disappointed in the bill; I do not believe there will be one house built under its provisions. In the first place, a first mortgage of eighty per cent is unsound. No person ever heard of lending eighty per cent of the money in that way-and I am speaking, of course, of a private undertaking. Governments might do it, but certainly I do not know of any private company which would lend eighty per cent on a first mortgage, having regard to the dips and cycles of trade, the cost of lending money, and so on. In view of the necessity for housing I believe the government would have done well to take more time in analysing the situation, and that it should have launched a vigorous and courageous policy in an effort to meet the obvious shortage of housing and to eliminate slums in some of our cities. It may be argued, and perhaps wtih some weight, that the bill was drawn up quickly. I believe it is fair to say, however, that for some time members of the government have had in their minds the setting in motion of a policy of this kind. But the present bill will not even scratch the surface of a solution of the problems of slum clearance, housing, and the providing of work for the building mechanics of Canada.

Mr. JOHN T. HACKETT (Stanstead): Mr. Speaker, it is not my intention to discuss those phases of the bill which so far seem to have attracted most attention. One section of the bill appears to have escaped attention thus far; I refer to section 3, which provides for investigation by the economic council of Canada.

Topic:   PROVISION FOR LOANS BY GOVERNMENT AND LENDING INSTITUTIONS UP TO EIGHTY PER CENT OF COST OF CONSTRUCTION
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LIB

Ross Wilfred Gray

Liberal

Mr. GRAY:

I discussed that feature of the bill.

Topic:   PROVISION FOR LOANS BY GOVERNMENT AND LENDING INSTITUTIONS UP TO EIGHTY PER CENT OF COST OF CONSTRUCTION
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June 24, 1935