June 25, 1935

CON

George Halsey Perley (Minister Without Portfolio)

Conservative (1867-1942)

Sir GEORGE PERLEY:

I have nothing to add to what I said last night.

Housing Act

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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IND

Alan Webster Neill

Independent

Mr. NEILL:

Would not the objections of

the hon. member for North Winnipeg be met if subsection 1 of section 4 were amended to read as follows:

(1) The minister may, with the approval of the governor in council, enter into a contract with an approved lending institution or local authority.

I have added the words "or local authority." Under section 2, which is now under discussion, "local authority" is defined as "any province, municipality, society, association or corporation" and so on. I believe that would meet the objection of the hon. member. The local authority would then have the same opportunity to lend money as is now afforded under subsection (e) of section 2.

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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UFA

George Gibson Coote

United Farmers of Alberta

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
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CON

George Halsey Perley (Minister Without Portfolio)

Conservative (1867-1942)

Sir GEORGE PERLEY:

I regret to say

that there is no provision in this bill for rehabilitation.

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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UFA

George Gibson Coote

United Farmers of Alberta

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
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LAB

Humphrey Mitchell

Labour

Mr. MITCHELL:

I believe there is logic

in the point raised by the hon. members for Comox-Alberni and North Winnipeg. I think it is fair to say that one of the major driving forces behind the bill was the report of the

Lieutenant Governor of Ontario respecting slum conditions in Toronto and also the report on the contemplated policy of the civic government of Montreal in connection with slum clearance in that metropolitan centre. Considering the ability of the municipal organizations to borrow money at rates even lower than private companies can, I feel that every opportunity should be given them to avail themselves of this bill in the elimination of slum conditions in the urban centres of Canada. The insertion of the words "or local authority" would at least convey to the municipalities the idea that this bill was intended to meet the very pressing problem that confronts them at the moment in connection with slum clearance.

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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CON

George Halsey Perley (Minister Without Portfolio)

Conservative (1867-1942)

Sir GEORGE PERLEY:

Section 3 of the bill provides that the economic council shall go into all these matters most carefully; there are five different subsections. Among other questions the problem of slum clearance is indicated. I agree with the hon. gentleman that this is one of the most important questions involved in the housing scheme, but I would point out that my hon. friends opposite last night argued very strongly against our proceeding with the bill at all until the economic council had reported under section 3. We propose to have this question thoroughly investigated right away by the economic council, and in the meantime we have brought forward this moderate plan for giving assistance in the building of new houses. That is why we have not set up any authority to deal with this plan but are leaving it to the Minister of Finance to make arrangements with the loan and insurance companies to carry it out.

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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LAB

Humphrey Mitchell

Labour

Mr. MITCHELL:

Notwithstanding the fact that I criticized the bill, I do not agree with some members who have said that it should not be gone on with, because in my judgment the most important thing about it is the establishment of a principle, the recognition of responsibility on the part of the federal government in matters of this kind. I still think, however, that the government would be well advised to leave the thing open so as to permit the municipalities to take advantage of the same opportunities as the private loan companies are given under the bill. It would be a distinct advance in view of the fact that they can raise money so much more cheaply. When a working man pays seven per cent on a first mortgage he is licked before he starts. I submit that an opportunity should be given the municipalities. Further, I believe that the best kind of government with respect to legislation of this description is the govern-

Housing Act

ment that is closest to the people. I would rather see the municipalities undertake such work than have it done by a government at long distance, because as a rule things are watched more closely in the municipality than they are when they are supervised by a government so many miles away.

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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CON

George Halsey Perley (Minister Without Portfolio)

Conservative (1867-1942)

Sir GEORGE PERLEY:

Is the hon. gentleman suggesting that the municipalities should borrow money to put into effect a scheme of this kind, instead of the provision we have made for getting it from the loan companies?

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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LAB

Humphrey Mitchell

Labour

Mr. MITCHELL:

Absolutely. Take the city of Montreal or Toronto: where in the judgment of the municipal council they think that the only way to eliminate slums is by their own initiative, they should not be denied the right of the assistance which this bill offers. They would undertake the work on their own initiative, because the private loan companies will not do it themselves. If we are to wait until the private loan companies eliminate slums in this country we shall wait a very long time.

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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CON

George Halsey Perley (Minister Without Portfolio)

Conservative (1867-1942)

Sir GEORGE PERLEY:

This bill is not intended primarily to take care of the slum question; I have explained that several times. We wish to have further reports from the economic council before taking up the question of slum areas. Bub as regards the municipalities going into this building program themselves, what I said1 last night I still feel, and that is that very few municipalities are in a position to borrow the money necessary to take the place of what we are getting from the loan companies. And if one of them did, all that is necessary for them to do is to form a company for that purpose, which they will control and provide with funds. It is quite simple.

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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LIB

John Campbell Elliott

Liberal

Mr. ELLIOTT:

I would1 point out to the minister that practically all the municipalities are prevented from incorporating companies for purposes of that kind, except by special act of the provincial legislature. They cannot do what my right hon. friend suggests.

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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CON

George Halsey Perley (Minister Without Portfolio)

Conservative (1867-1942)

Sir GEORGE PERLEY:

I am not sure that that is not a wise provision. We had a case in Ottawa, and I believe elsewhere, where they started a building program which turned out disastrously.

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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LIB

John Campbell Elliott

Liberal

Mr. ELLIOTT:

Yes. But what my right hon. friend said, if I understood him correctly, was that the municipalities would have a housing company formed.

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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CON

George Halsey Perley (Minister Without Portfolio)

Conservative (1867-1942)

Sir GEORGE PERLEY:

Yes.

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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LIB

John Campbell Elliott

Liberal

Mr. ELLIOTT:

But there is no authority under the municipal act in Ontario to do anything like that. The only way it could be done would be by means of a private act.

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

George Halsey Perley (Minister Without Portfolio)

Conservative (1867-1942)

Sir GEORGE PERLEY:

Quite so.

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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LAB

Abraham Albert Heaps

Labour

Mr. HEAPS:

There is involved in this

question a principle which I hope the right bon. gentleman in charge of the bill appreciates. I do not want to see any of our public-elected bodies in a subservient position in relation to financial institutions, and that is what this bill does. It means that the municipalities and even the provincial bodies, which are solvent in their own right, cannot proceed with a housing scheme under this bill unless they first of all go to the loaning corporations designated1 in the bill before us. That is what I object to. When we are speaking of the supremacy of parliament and when we are talking about the power of financial institutions, I think it is a most unfortunate time to emphasize such a principle in a bill of this kind. The right hon. gentleman has said that if the bill is allowed to go through as it is the economic council will at some future time investigate the question of slum clearance, and the question of the power which the municipal bodies should have. Assuming that the council did suggest such a thing, as the bill stands now the municipal bodies could- not do anything because the act would have to be amended before the elected bodies, either provincial or municipal, could take advantage of the very small percentage which the government is providing. It is true, as the minister is pointing out, that at present our municipalities are not in a position to go into the open market and obtain funds. Assuming that they want- to go into the housing scheme, they would have to go to the loan or mortgage companies and obtain the money at 5J per cent. We are forcing our municipalities to pay 5| per cent, whereas under more favourable conditions they might go into the open market and get it at 4 per cent. The very basis of any successful housing scheme in any municipality in Canada is that of low interest charges, and unless a municipality or any other body is able to secure funds at a low rate of interest, much below five or five and a half per cent which this bill would compel them to pay, I cannot conceive of any successful housing scheme ever being evolved out of the bill that is now before parliament. That is why I am so anxious in regard to the matter; I wish to see this bill made a success; I do not want to see a bill which is a failure before it goes

Housing Act

through the house, and that in my opinion is what this bill is likely to be. It is going to have very little effect upon building in this country.

On the other hand it is quite possible there may 'be a few houses built under it; there may be a wealthy or fairly wealthy individual who may want to build a $20,000 home. If he wants to do that there is nothing that I know of in this bill that would prevent him from obtaining twenty per cent from- the government toward the construction of that home. He could obtain from the federal government $4,000 at four per cent and he might be able to put up $16,000 in cash out of his own pocket. But the poor man who is trying to buy a home on thie basis of a low rate of interest is completely barred so long as we have the high interest charges which this bill will foist upon the people of this country, assuming that any houses are built under this scheme.

'Sir GEORGE PERLEY: The hon. gentleman should not assume any case like the one he has cited, that an expensive house would be built under this scheme; there is not the slightest intention of anything of that kind being done. The matter is of course left to the discretion of the Minister of Finance, but the purpose of the bill is to assist the building of smaller houses.

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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IND

Alan Webster Neill

Independent

Mr. NEILL:

I am sorry the minister has rejected the proposal put forward iby the hon. member for North Winnipeg (Mr. Heaps) but as he has done so, I wish to deal with another aspect of the matter. The minister told us a few minutes ago that this bill did not propose to deal with slums. He also told us that it did not propose to deal with repairs. If he goes on explaining much more, we shall need a microscope to see what is left in the bill. He told us last night that the committee had brought in a report and1 that the government had implemented the recommendations by legislation. I cannot agree with that claim, and I rather agreed with the hon. member for North Winnipeg last night when he said that the relationship of the legislation to the report was no more close than that between pig and pig iron. I thought that was rather plainly and wittily expressed.

During the progress of the price spreads legislation, so to speak, through the house, we were told repeatedly that while legislation was introduced that appeared to be of somewhat doubtful constitutionality, this was done with the deliberate design and intention of complying as far as possible with the recommendations of the commission and that it

verged upon the unconstitutional in order to do so; that was the object and determination. This is a case where there is no constitutionality involved, and therefore, if anywhere, we would expect to see the legislation conform very closely to the recommendations, and that is exactly what it has not done in three material points which I shad mention. One is the question which I shall touch on in a moment as regards repairs; the committee were very insistent on that; that was one of their vital recommendations. The second was the question of interest, the necessity of having a low rate of interest. This bill entirely ignores and makes no provision for that. The third was a recommendation by the committee that special attention should be shown in regard to selective tenancy.

This report is a very able one, prepared by able men. Looking at the names, I find them with few exceptions able, outstanding men in this house and they have brought down a unanimous report. In the resolution under which they were acting I find these words:

To include the construction, reconstruction and repair of urban and rural dwelling houses.

Therefore the very foundation upon which the committee went to work was to have in mind the repair of buildings as well as the construction of new ones. We find a little later on that they devoted under a whole heading special attention to this rehabilitation, in other words to repairs. What did they say? They said:

More living units could be obtained more rapidly by repairing existing houses up to reasonable standards than by any other means.

That of course is quite obvious. They also said:

And had the merit of making available a large mass of work, general in nature, and more or less equitably distributed throughout the country.

They stated further:

Funds made available will provide a larger number of standard living units than if confined) to new construction alone.

In this legislation all that has gone by the board. We find them later pointing out that there had to be a very precise line drawn. If there was any plan costing above $3,500, it was only going to make it a little easier for men able to pay the difference between the cost and loan on a building to finance cheaply, but efforts had to be concentrated upon providing buildings by repair or construction for the low wage earners. The committee were very strong on that .point. We find them a little further on making two alternative proposals to the government, neither of which the

Housing Act

government has apparently hee'ded. One was that the government would advance eighty-five per cent of the necessary funds at five per cent or less; the other was that it would advance twenty-five per cent at a cost of not more than three and a half per cent and that this would meet the situation. The government has apparently paid no heed to that. The committee point out very emphatically and more than once that it is important to keep rents as low as possible and that there is nothing that can do more to keep down costs than a low rate of interest. They point out:

The lower the rent the larger the number who can afford to pay it.

And so on. As regards selective tenancy, they said:

There is no justification for allowing those who can afford economic rents

That is rents based on houses put up in the ordinary way.

*-to be housed at less cost to themselves in subsidized houses at the expense of the public purse. Selective tendancy, based on the ability to pay, is essential.

That is in their report, and we know what "essential" means.

Then they submit seventeen points which they say require emphasis, and the eighth one reads:

Selective tenancy of government-aided housing should be based on total family income and ability to pay economic rent.

The eleventh one reads:

A major item in the financing of houses is interest charges. There is, therefore, a close and vital relationship between interest charges and economic rents.

Is that to be found in this legislation? There is no mention of any suggestion of what the interest charges should be. Then the committee boiled their recommendations down to four points, and the second one is:

That said authority be authorized to negotiate agreements ... with a view to promoting construction, reconstruction and repairs of such buildings-

Then the third one is:

That as its first consideration-

Mark this!

-the said authority be urged to take action in respect to repairs (rehabilitation), presently needed. ,

There is this one other point I would like to mention that appears not to have been brought up by hon. members who have been criticising this section of the bill. The whole benefit of the legislation will be nullified to a large extent if we are going to confine it to

rMr. Neill.]

the building of houses and to the selling of them. That is to say, this scheme will help to build a house which is to be purchased by a working man. The average worker of the lower grade of income has not to-day $500 to put down as a deposit. He hasn't got a hundred dollars. Unless you can do something to help him his condition is going to be made worse, for he is going to be forced out of the more or less slum-like condition in which he is now into another slum where it will be more congested and therefore worse, because the slum he is now living in will be taken away and there will be a nice house built for $3,500 which is quite out of reach of his purse. It will go to the white collar worker with an income of $1,200 to $1,800, who will take advantage of the cheaper rate and move into this house, which will be cheaper than that for which he is now paying an economic rent. He will be the man who gets the benefit, not the man for whom it was primarily designed. No provision has been made in the bill so far as I can see for a system of tenancy. The hon. member for North Winnipeg, I think, glimpsed the idea when he suggested that the municipality should be allowed to put up the sixty per cent, then they would have control and could see that the benefit went to the class of people it is desirable to help, the low wage earner living on the verge of slumdom. When the house is built, which apparently may be done by a speculator, aided by a loan from the lending institution, and twenty per cent from the government, is there any obligation on him under this bill to rent that house at a rent in conformity with the assistance he has received from the government in order that the poor man shall get cheap rent? I cannot see it. The speculator, or private citizen, call him that if it sounds better, is going to be induced by a government loan at a low rate of interest-at least we hope it will be a low rate, there is no evidence of it-to build these houses, but there is no obligation expressed or implied that he shall rent them at a low rent. He may charge as much as the traffic will bear, and if there is competition for that class of house, as we know there is, for you can easily rent a house at a low rent when you cannot rent houses of higher value; he is liable to get the same rent as now and there is nothing to compel him to do anything else. I say the bill should be framed with a view to provide a ready and cheap form of tenancy, a selected tenancy is the term used in the report, so that the need of the people for whose benefit it is designed can be supplied, and through some guarantee to the municipality

Housing Act

or the local authority or in some way there will be an obligation on the man who builds the house to rent it at a reasonable rent. I should like to hear from the minister on that.

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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CON

George Halsey Perley (Minister Without Portfolio)

Conservative (1867-1942)

Sir GEORGE PERLEY:

I think the hon. gentleman overlooks the fact that this is a bill for one purpose at the present time. That purpose is to help the building of houses, and also to give work to the trades which perhaps need it most now, those having to do with building of all kinds. The purpose is twofold. Under section 3 it provides for further investigation and report by the economic council-

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

June 25, 1935