June 25, 1935

IND

Alan Webster Neill

Independent

Mr. NEILL:

That is putting the cart before the horse.

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:

Not at all. My feeling is that we are doing very well to bring in a bill to provide for housing, something that has been discussed for many years, but this government has had the courage to do it. And at the same time it is designed to give work. If a proposal for slum clearance is brought up another year and I am here I shall be very glad to give assistance to any reasonable plan for that purpose also. In spite of the argument of the hon. gentleman last night, who stated that we ought not to go on with this bill at all without more information, the government say: We will do this now and we will have an investigation as well. Then another year we shall be in a position to consider the matter more fully.

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

William Daum Euler

Liberal

Mr. EULER:

I would gather from what the minister said that the chief purpose of the bill is to provide that further investigation may be made. Surely that is a rather barren resullt to come from the deliberations of the committee.

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 do not think I said anything of the kind.

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

William Daum Euler

Liberal

Mr. EULER:

That is the inference I drew. I want to refer again to what I said yesterday because the minister made a reply to a certain representation I made yesterday. I criticized the bill as being almost useless from a practical point of view because of its financial set up. First a lending company is to provide sixty per cent of the capital, the government providing twenty per cent and the owner the final twenty per cent. The government is joined with the lending company in the mortgage which is to be given for the eighty per cent advanced by those two bodies. I criticized the bill from that point of view. If this bill is intended to make it possible for the small wage earner to own his own house I say it is impracticable in

the first place because of the fact that the small wage earner will not have ordinarily the S500 or $600 which it is necessary for him to provide. Anyone who knows the situation in the towns and cities of this country after four or five years of depression will admit that there are very few mien earning small wages who will be able to provide the $500 or $600 necessary to start under the scheme at all. I think the hon. member for Comox-Alberni (Mr. Neill) is needlessly concerned when he expresses the fear that well-to-do men are going to take the advantage of this legislation. Even they will not be able to take advantage of it because in their case it involves getting sixty per cent from the lending companies, which are then to join in a mortgage with the government on an eighty per cent loan. I said yesterday, and I reiterate to-day and I would like a further reply from the minister, that no lending company in this country will lend money to the extent of eighty per cent, which is what it amounts to. It is entirely contrary to their principles. The minister stated yesterday that he had had some interviews with lending companies. The hon. member for West Lamibton (Mr. Gray) said that there are only two lending companies with federal charters. I do not know as to that, but my right hon. friend may have information to-day more definite than he had yesterday as to there being lending companies willing to put up sixty per cent and have their security lowered by the government coming in on that security for their twenty per cent. The chairman of the committee said yesterday, as reported at page 3931 of Hansard, referring to what I had said in regard to that:

The hon. member for North Waterloo (Mr. Euler) said that the mortgage companies would not be willing to advance an eighty per cent mortgage. We had the representatives of the mortgage companies before our committee, and they said that there was a great deal of money available at five and a half per cent. Further, they were very anxious to lend it. Section 5, under which the minister and the lending institutions jointly take the mortgage, is no doubt there for some special reason. This I do not know, but I should be inclined to think, and it will undoubtedly be discussed in committee, that the mortgage companies would be willing to do it.

Some of my objection to the bill as being useless would be removed if the minister could assure the committee that the mortgage companies which he interviewed or which interviewed him gave him any specific undertaking that they were willing to lend money under the conditions outlined in this bill. I said yesterday I would be very much surprised, and the minister replied that I have been surprised

Housing Act

at other times, which is true, but I wish the minister would tell us specifically if these companies are willing to advance sixty per cent of the cost of the house together with the land and then share their mortgage with the government which has advanced twenty per cent making the mortgage up to eighty per cent. It means then that the mortgage company has a very poor security relatively speaking, because out of the eighty per cent the government puts up twenty per cent, which is twenty-five per cent of the total advance. In case of depreciation in value 'the margin of security would be very small indeed.

Then, as I said at the outset of my remarks to-day, practically the only merit the bill has is that it provides for further investigation. There was one other point, and this was advanced yesterday by one hon. member as well as by the minister; this provides a start and establishes the principle that it is the duty of the government to interest itself in housing. I do not think it has even that merit, and my hon. friend from East Hamilton said the same thing, because I think in 1919 this government established the principle that it should be interested in housing. I think it was in that year that the government loaned something like 823,000,000 to the provinces, and the provinces then advanced that money to others for the construction of houses. I think I am right also when I say that, with the exception of the money loaned to the province of Ontario, that money was never paid back to the government, at least not in full. I am informed, though I am open to correction-and I should like the minister to say something with regard to this-that of the $23,000,000 odd advanced by this government to the provinces for the purpose of promoting housing, only about $10,000.000 was ever returned. I should like to ask the minister what prospect there is that the provinces will ever return the balance owing on this account.

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:

I am informed that the money is coming in gradually, though I am unable to give my hon. friend any figures in that regard. I think I said yesterday that this would not be the first time my hon. friend had been surprised, and I was very glad that he was not quite so positive to-day as he was yesterday.

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

William Daum Euler

Liberal

Mr. EULER:

Just as positive.

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:

Not quite. I have two telegrams that came in this morning which I should like to read. The first is signed by Mr. T. Bradshaw of the North American Life Insurance Company. It reads:

[Mr. Euler.l

For some time have not been important loaners on house property but now looking forward to proposed housing legislation to stimulate legitimate residential construction and will be prepared to loan considerable mortgage money on suitable house properties on basis of sixty per cent sound valuation at current rates now approximating five.and half.

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

William Daum Euler

Liberal

Mr. EULER:

Is that all there is to it?

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:

That is that telegram.

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

William Daum Euler

Liberal

Mr. EULER:

If I may say so there is absolutely nothing in that telegram that would indicate that the insurance company is willing to loan its money on the basis of a joint mortgage with the government. That is the point.

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:

The telegram is sent on the basis of this bill. The next telegram is signed by Mr. W. H. Sommerville, of the Mutual Life of Canada. It reads:

We see no reason why the housing act should not be successful. In any event the hearty cooperation and support of our company in its operation may be expected.

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

William Daum Euler

Liberal

Mr. EULER:

That is not definite at all.

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:

Of course if the hon. gentleman questions telegrams of that kind I have nothing further to say, but I should like to read an extract from a memorandum by Mr. T. D'Arcy Leonard, solicitor for the Dominion Mortgage and Investment Association and secretary of the Ontario Mortgage Companies' Association, which was handed to Mr. Clark some days ago:

We believe that the soundest housing scheme would be one that would enable the existing mortgage lending institutions to lend up to eighty per cent on approved new houses, in approved locations, to be built for home owners.... If approved, a loan up to an amount of eighty per cent of the value of the property would be made by a lending institution, of which sixty per cent would be supplied by the institution and twenty per cent by the government. The government's contribution would be in the form of a cheque handled by the lending institution so that the borrower would have only the one organization to deal with himself.

If that is not an expression of opinion that the proposed bill is workable and that the loan companies will join together to help make it successful, then I do not understand what it is.

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

William Daum Euler

Liberal

Mr. EULER:

Is the last telegram from a

loan company?

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:

That was a

memorandum from Mr. T. D'Arcy Leonard, solicitor for the Dominion Mortgage and Investment Association.

Housing Act

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

Abraham Albert Heaps

Labour

Mr. HEAPS:

What is the date of that

memorandum?

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:

There is no date on it, but it was handed to Mr. Clark two or three weeks ago. I suppose the hon. gentleman will tell me now that all this is in bad faith, but I do not think that is quite fair.

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

Abraham Albert Heaps

Labour

Mr. HEAPS:

That was prepared before

the bill was drafted.

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

William Daum Euler

Liberal

Mr. EULER:

I do not wish to delay the

committee, but not one of the telegrams read by the minister specifically commits any company to loan money on the basis of the terms of this bill.

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