It appears that the hope for recovery entertained by the government is the hope that private industry will absorb unemployment, and that this program is designed to take up the slack in the meantime. Now I have been following some of the newspapers, as doubtless other hon. members have from time to time. I find that one of the industries in which there should be a great deal of employment during the coming year is the housing industry. In the city of Toronto, according to the report of Lieutenant Governor Bruce, there are no less than 2,000, possibly more than 3,000 dwellings which by reason of unsanitary, verminous and grossly overcrowded conditions constitute a definite menace to the health and decency of the occupants, and "if reasonably full employment were to return and marriages delayed by the depression were to take place it is probable that a shortage of some 25,000 dwelling units would become apparent." In other words, in the city of Toronto there should be the possibility of building 25,000 dwelling units at once.
In the Saskatoon Star-Phoenix of April 4 last, Mayor Pinder of Saskatoon is reported as saying that Saskatoon spent on relief in 1935 the sum of $209,000, and he said further:
There was a great shortage of housing accommodation in the city, His Worship told those present, impressing listeners that a program affording work to those now on relief and at the same time providing better housing accommodation was needed badly.
Then I find this further article in the Star-Phoenix of April 3 last, from North Battle-ford:
"Fifty small modern houses are urgently needed here if we are to retain in this city people whose logical business centre is North Battleford, but who are being obliged to live elsewhere on account of the house shortage," Mayor W. M. Bowers declared this morning.
There is a note at the end of that article that Yorkton also has reported a shortage of houses. And so it goes; all over the dominion
there is a shortage of housing. If the housing needs of this country were to be supplied by a real building program within the next year or so, thousands of men to-day out of work would be employed, those engaged in the heavy industries would have more work, and housing conditions throughout the country, which to-day in parts of many cities and towns are a disgrace, would be remedied. When there is this great need for housing, why is it that private enterprise is not entering the field? Something was said about the housing program in England where so many houses have been built during the last few years and so many people have been absorbed into industry by virtue of that great building program. I believe one of the reasons the housing program has flourished in England is that the cost of the dole-the equivalent of unemployment relief here-is largely carried by the central government, whereas in Canada we have placed a large part of it upon the municipalities. The chief means by which the municipalities may raise money is by impositions upon improvements and real property. If we are going to place the main burdens of this unusual era upon real property and upon improvements to real property, burdens in the way of increased interest payments, increased expenditures for unemployment, and so on, how can we expect private industry to invest its wealth in a building . program when the buildings, the result of such programs, may face confiscation as a result of undue burdens placed upon municipalities. That is the situation confronting the committee.
We take the attitude that the present unemployment problem is only temporary. Very well; if it is temporary let the dominion government through means of taxation which it has and which do not bear upon improvements and private real property absorb the burden of these unusual conditions. In other words we would relieve the municipalities from Halifax to Vancouver of the burden
which is preventing private enterprise from entering the building trades. By our attitude of failing to consider the problem as a temporary one and to look after it through the efforts of our national government we are bidding well to make it permanent.
For a moment or so I should like to deal with some figures which I suggest bear out my contention that the tendency is to confiscate improvements on real property. I have in my hand a clipping from the Winnipeg Free Press of March 17, in which it is indicated that the gross total arrears in taxes in the last ten years has risen very much. Although the table is given I shall not take time to read it. I will however read the figure for 1929. In that year the arrears of taxes in Winnipeg amounted in round figures to $7,550,000 and in 1935 had increased to $12,040,000, or an increase of about $5,000,000 or almost seventy per cent. What is the result? The article goes on to state:
More property was sold for taxes last year than in any previous year. The taxes standing against it amounted to $580,304. The property sold for taxes in each of the last ten years was as follows-
And then the article goes on to give figures showing the amount of taxes against property sold for taxes in Winnipeg. In 1929 the taxes due on property sold for taxes amounted to $199,662. The taxes against property sold in 1935 had risen to the sum of $580,304. The statement continues as follows:
Just what the taxpayers have been up against is seen from the tax sales of the last three years. The property sold for taxes in those years had more than $1,500,000 of taxes against them. They were worth considerably more than that. And the amount of improved property, business places and homes going into the tax sale has greatly increased.
The article continues later on:
But more improved property is passing through the tax sales now. and the city may be expected to obtain title to an increasing number of such properties.
Then, may I read an excerpt from an editorial of the Free Press of March 17 last:
The taxes actually collected under last year's budget were nearly three-quarters of a million dollars less than in 1931, in spite of the imposing of a new tax on motorists, an increase in the water rates for general revenue purposes, and an increase in the business tax. A large amount of property again passed into the city's hands at the last tax sale, and hundreds of small home ow'ners again asked for the privilege of working on the streets to earn their tax money and save their homes.
There are thousands of individual taxpayers who find it extremely difficult to pay the levies on their homes and many have lost their homes to the city or mortgage company.
Why do we have this confiscation of money invested in private homes throughout Canada? One of the reasons is shown in a tabulation prepared by Professor H. Carl Goldenberg, M.A., B.C.L., F.R. Econ. S. I shall read only a few figures to indicate what is happening in Canada. I submit that sitting here in parliament it is our duty to face and study the facts, and to base our opinions upon facts, and not upon theory.
Since I have come to the House of Commons, on many occasions I have heard the statement that there is no royal road out of the depression, that there is no easy way out of it. The statement is made that there is no panacea. Are we to shut our eyes and refuse to face the facts, or are we to look the facts in the face and try to find some solution? It is not sufficient to oppose reform far-reaching enough to meet our problems because it is said there is no royal road or no panacea. Of course that is exactly what has stopped progress in the past. There has been the old cynical cry, "There is no royal road." I submit it is up to the House of Commons to find some road out of our present situation, whether it is a royal road or not.
I find on page 2 of the report figures which indicate that the decline in the assessed value of real property has been accompanied, in many cases, by an increase in the tax rate. For example, in 1929, the tax rate in Kitchener was 36-75, and in 1935 it had increased to 41-7. In Ottawa the rate in 1930 was 31-35 and in 1935 it was 36-80. In Montreal the tax rate in 1931 was 24-8 and had risen in 1936 to 27-7. Coming to western cities we find that the rate in Winnipeg in 1929 was 33, and in 1935 it was 34-5. In Saskatoon the rate in 1933 was 42-9 and in 1935 it was 44-9. The tax rate was recently struck for the year at slightly over 45. That means a tax of almost five per cent on real property in Saskatoon, and five per cent on sixty per cent of the improvements thereon. Coming to Calgary we find that in 1929 the rate was 44-5 and that in 1935 it had risen to 50. In Nanaimo the rate in 1929 stood at 47 and in 1935 had risen to 55.
There is the situation. We have a confiscatory tax on real property and improvements. The increase in tax rates has brought about an increase in tax arrears. What do we find in connection with arrears? The tax arrears are a first charge on the real property or the homes of the people of Canada. We find that in the city of Montreal tax arrears in 1931 amounted to $15,650,000 and in 1936, to $23,083,000, an increase of about $8,000,000 which stands as a charge against the homes and business places of Montreal, wiping out
the equity of the owners to that extent. The arrears for the city of Oshawa, which in 1929 amounted to $230,301, were $601,559 in 1936. The figures for the city of Winnipeg indicate arrears of $4,818,000 in 1931 and $6,288,000 in 1934. For Saskatoon the figures are $1,134,000 in 1929 and $2,969,000 in 1935, an increase of more than 100 per cent in that city. The figure for Edmonton increased from $1,754,000 in 1932 to $2,130,000 in 1933. This increase represents a charge against improvements and against the homes of Canadian people. The tax burden of the municipal taxpayer has been inoreased because these people have had to shoulder the burden of looking after the unemployed and meeting the ever increasing interest of their public debt.
I should like now to deal shortly with another set of figures without giving them all. I have here a table showing municipal expenditure on unemployment relief and how it has grown. The expenditure on unemployment relief in the city of Montreal, for example, which in 1931 was $2,309,000, had risen in 1935 to $6,324,000, an increase of more than 200 per cent, an increase of more than $4,000,000 for the city of Montreal alone. In the city of Winnipeg in 1931 the expenditure on unemployment relief amounted to $905,750, and in 1935 it had risen to $1,886,000, an increase of 100 per cent. In Saskatoon-and here are some striking figures-the expenditure on unemployment relief in 1930 was $4,231; in 1935 it had risen to $290,000, in a city of about 40,000 people. All that extra burden was placed upon the people and had to be met largely by taxation on real property and improvements, and yet we expect people faced with that ever increasing burden on their homes, the future extent of which burden is unknown to go into a building program. There is the situation, and it is something which the house should recognize. We have this ever increasing burden of unemployment; more and more homes are being sold to carry that increasing burden, and yet we expect people to go into an increased building program.
Just for a moment I should draw to the attention of the committee our attitude towards those who in the past have invested in homes and in industry in this country as compared with those who have invested their capital in bonds. Let us take a citizen with, say, $10,000 to invest. Suppose he puts $5,000 into a home and $5,000 into some industrial enterprise giving work to people. We will suppose that his neighbour across the road says: I will not do that service; I will not bother risking my money in an industrial enterprise, nor will I build a house; I will
buy government bonds. Just let us see what is the difference in our attitude towards these two citizens. To-day the man who put $5,000 into a house in the city of Edmonton, for example, will have to pay roughly $250 a year, a five per cent tax on that home. On account of the heavy taxation upon industrial enterprise in this country a great many industries are not making anything at all with which to pay interest on the bonds they have issued, and the result is that the man who invested in industrial enterprise in many cases has lost his income from that source. How has that come about? Because above all things the dominion government has so far refused to adopt a more advanced policy in regard to banking and monetary reform. Instead they say: We will force the municipalities to borrow from private institutions at high rates of interest; we will not help them out at all in that regard. And so they have had to devote a large part of their revenues to payment of debt charges. There has also been placed to a great extent upon the backs of the municipalities the burden of looking after unemployment, without any promise on the part of the dominion government to relieve them of that burden. On the other hand the man who put his $10,000 into government bonds draws his interest regularly, while his neighbours are being sold out. Homes have had to foe sold because their owners were unable to meet the increased tax burden, yet all the while the government bondholder continues to draw almost five per cent on his $10,000 of government bonds; in other words, his neighbour must lose his home and his position in order that he shall be paid the $500 interest on his bonds every year. It seems to be quite all right to confiscate the capital invested in homes, but if we suggest that we should leave the bondholder his principal intact and take only some of his interest in order to lighten the burden on the home owner and the factory owner, we are told that is confiscation.
I put it to you this way. On the one hand, the home owner has his home, his capital, confiscated. There is no thought of his income, for that went long ago. On the other hand, the bondholder has his principal intact, and he howls to high heaven if you touch even his interest. You are selling out the home owner and the factory owner in order to pay interest to the bondholder.
I submit to you, Mr. Chairman, that this high court of parliament must now look that situation right in the face. It cannot afford longer to accept dictation from the financial interests of this country. It must put the best interests of the people ahead of the dictation
of any financial interest in the whole of Canada, in order- to save the homes of this country, in order to encourage private enterprise. It must lift this intolerable burden from the backs of the home owners. It is, I think, the duty of this government, if it believes that this is only a temporary problem, to treat it as such, and to lift off the backs of the municipalities the burden of looking after unemployment. Then people will see that the burden against their homes or against any houses they may build under the government program will not become intolerable. Can you expect people to put money into houses when they see the rapidly rising tax rate against them? Unless there is a change of policy they are going to say: No, apparently the thing that is always going to be protected in this country is government bonds; we will not put our money into homes or industrial enterprise because people who have done so in the past have lost what they put in; we will put our money into government bonds where the principal is safe, and the interest on which will be paid even if the government have to use the entire police force of the country to see that we get it.
Is not that what we are saying to the people of this country? Is it not time that we faced that situation? Is it not time that we saw that if we continue to tax and in effect to confiscate the money that is put into homes, people will not put money into homes? We must take steps to lift that intolerable burden from municipalities if we expect them and their citizens to put their money into enterprises which will provide labour for their fellow citizens.