February 2, 1937

LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

I shall try to deal with that point when we are in committee.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
CON

John Ritchie MacNicol

Conservative (1867-1942)

Mr. MacNICOL:

With the point I have just raised?

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Yes.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
CON

John Ritchie MacNicol

Conservative (1867-1942)

Mr. MacNICOL:

With reference to costs, I cannot see how this measure will be as beneficial as we hope it to be if the municipalities are to share the costs. Many municipalities are bankrupt.

Home Improvement Loans-Mr. Marshall

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

There is to be no sharing of the cost.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
CON

John Ritchie MacNicol

Conservative (1867-1942)

Mr. MacNICOL:

I understood the minister to say that part of the cost was to be borne by the business interests which would benefit from this work, and also a part by the municipalities which would benefit. I am glad to know that the municipalities will not have anything to do with the cost.

When the bill was introduced I was under the impression, apparently wrongly, that 15 per cent of the individual loans were to be guaranteed by the government. I realize that such a method of guarantee would mean a great deal of bookkeeping, but this is a measure to give relief in most serious times and we ought to be prepared to do some bookkeeping. I am afraid that when a man such as the one to whom I referred goes to a banker for a loan of $750 he will be told that the bank does not want to be bothered with a loan of that size because the government does not guarantee the loans individually. He may be told that a good deal of red tape will be necessary before the loan can be collected out of the aggregate guarantee in case of his failure. I know the government proposes to guarantee fifteen per cent of the aggregate and I hope some provision will be made to prevent lending companies from refusing to advance loans because individual loans will not be guaranteed.

There is one further item I should like to discuss. In my opinion this bill was designed primarily to benefit the home owner who has not been able to obtain necessary loans during these very strenuous and hard times. However, I note that the bill covers multiple houses. I have no objection to duplexes, but I should like to see some limitation placed upon the number of apartments in a building upon which a loan could be obtained. Unless that is done the large apartment owners will get too much of this money.

I want to thank the hon. member for Broadview (Mr. Church) for speaking so highly of the people in my riding. At one time he represented part of my riding and he gave the people very good representation. They are thrifty and sound1 people and I hope this bill will benefit them. I cannot see how it will be other than beneficial unless its effectiveness is reduced by some of the matters to which I have referred.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
SC

James Alexander Marshall

Social Credit

Mr. J. A. MARSHALL (Camrose):

Mr. Speaker, the Social Credit party has refrained up to the present from criticizing the appointment of the National Employment Commission because we hoped that some good would come out of it. On many occasions we

have urged that the problem of unemployment can never be solved in its entirety, that in this mechanized age it is impossible to give work to all men. This opinion was upheld the other day by the Minister of Labour (Mr. Rogers), when he said that public works will never solve unemployment.

I think it is generally understood that the home improvement loan scheme is the brainchild of the chairman and other members of the employment commission. I do not believe it, for I credit these gentlemen with more intelligence than to offer just this one solution of the problem after almost a year's work. To me the price we have paid for the plan has been very high, and certainly it far outweighs the material benefits we have received. If my information is correct, and I have no reason to doubt the authenticity of it, this is not an original scheme. It has been in operation in the United States, and we are told that a similar scheme was hatched by officials of the federal Department of Finance, collaborating with bankers, and offered to the people of Windsor, Ontario,, some time ago as a means whereby they might solve their economic problems. Evidently all has not been well in the city of Windsor.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
LIB

Paul Joseph James Martin

Liberal

Mr. MARTIN:

It is improving, though.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
SC

James Alexander Marshall

Social Credit

Mr. MARSHALL:

It has had its financial difficulties as many other Canadian cities have, and because the people of Windsor were thinking in terms of reduction of interest and perhaps of repudiation, terms which supposedly came out of the west but which have been in constant use in many of the cities of the east, this scheme was presented to the people of that city in order that they might become home conscious and that their minds might be kept away or diverted from the large burden of debt they are shouldering.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
LIB

Paul Joseph James Martin

Liberal

Mr. MARTIN:

Quite wrong.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
SC

James Alexander Marshall

Social Credit

Mr. MARSHALL:

The general outline of the scheme is well known to all, so that it is not necessary for me to go into it fully. It has been brought to the attention of the people of Canada by an intensive advertising campaign. In my humble judgment it is going to cost this country a great deal more than $7,500,000 when we take into consideration the cost of the commission, the cost of advertising, the cost of broadcasting and finally the amount we will pay eventually to the banks as a guarantee under this scheme.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

If my hon. friend will

permit me, doubtless he did not hear my statement that the whole cost of the publicity campaign in connection with the home im-

474 COMMONS

Home Improvement Loans-Mr. Marshall

provement scheme is being borne not by the government but by voluntary contributions gathered from all over the dominion.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
SC

James Alexander Marshall

Social Credit

Mr. MARSHALL:

I heard the statement

made by the Minister of Finance, but eventually the cost of advertising will be included in the cost of goods and the people of Canada will have to pay it.

One of the things to which I take strong exception is the use of the term "discount 3J per cent." To me that is misleading. Those who are not constantly dealing with financial concerns might easily confuse discount with interest. They not only might; they actually do. Last fall I was in conversation with many people in regard to this scheme. They seemed to think it was a splendid idea that the government, through the medium of the banks, should place

850,000,000 at the disposal of the people of Canada at such a low rate of interest. They had confused discount with interest. When I drew to their attention the fact that discount at 3J per cent was equivalent to interest charges at 6-32 per cent, the scheme took on a different complexion.

I was surprised to leam that at one time -the financial institutions had asked for a discount rate of five per cent, or interest at approximately ten per cent. I also learned with a great deal of surprise that commercial loans carry a rate of interest equal to this and that instalment buying is carried on at a rate of interest almost double. Is it any wonder, Mr. Speaker, that this country is on the verge of bankruptcy? This racket has been going on for so long that we are experiencing the greatest difficulty in stamping it out. I wonder when the people will awake to the fact that international finance is responsible for most of the present ills of this dominion. The government boasts that it can borrow short term money for less than one per cent and on long term bonds at less than four per cent. Yet it gives its blessing, it sanctions, it permits financial institutions to charge 6-32 per cent, and by every means at its command urges people to patronize the scheme.

The other day the Minister of Finance stated that the borrower required no backing on his note. Why should he? What finer backing could any financial institution have than the word of the dominion government? We were told that the borrower must have character and credit. These are characteristics which will obtain a loan for any individual at any time from any financial institution; at least they should. If the borrower has both those qualities I maintain that he requires no backing. Under this

scheme, when a man goes into a financial institution he is asked such questions as: Is there a mortgage on the property? What is its size? What shape is it in to-day? He is asked about the taxes, whether they have been paid up, whether they are in arrears or whether the property is in danger of being offered for sale under the taxation laws. He is asked about the insurance on the property; he is also asked if he has a job, and, if so, whether it is a permanent or a temporary one. Finally he is asked what his monthly earnings are, and if he can answer all these questions satisfactorily the loan is granted to him. I venture to say that any individual who went to a financial institution and was able to answer these questions satisfactorily should have no difficulty in raising a loan to-day, without any backing or guarantee of any sort.

Certain things have been said with regard to the person who improves his property but does not wish to have the matter known to the taxation authorities. In other words, there is a certain type of citizen who realizes that improvement means increased valuations, and that an increased valuation means increased taxation. We have been assured that this- supposedly-will not be taken into consideration when valuations are placed upon property, but I do not think the dominion government has any power in the matter of assessments or of municipal taxation.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

It does not pretend to have.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
SC

James Alexander Marshall

Social Credit

Mr. MARSHALL:

I do not see why one individual should be allowed to be free of additional taxation because he obtains a loan under this plan from a financial institution, while another who puts his own money into improvements is not granted the same privilege. In short, the scheme is this. The banks, finding a strong current of public opinion against them, come forward as the saviours of our country. They propose by means of bookkeeping entries to create $50,000,000 of credit, lend it to the people of Canada and in process of time take back $50,000,000 plus $3,160,000 for services rendered. Why is it that we do not hear a word about inflation? Simply because it is the banks who are doing it on this occasion. The banks create $50,000,000 against $50,000,000 of production, and they place a stranglehold on the country by demanding $3,160,000 which was never created in the first place, and this, too, with the full sanction of the government. The Canadian Farm Loan Board to-day charges only five per cent, and that board, I understand, is making profits.

Home Improvement Loans-Mr. Woodsworth

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

The hon. member is misinformed.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
SC

James Alexander Marshall

Social Credit

Mr. MARSHALL:

The farmers' creditors arrangement boards operating throughout the country are cutting down interest to five per cent. Why, then, I ask, are banks allowed to charge 6-32 per cent? The government itself could easily have created this $50,000,000 through the central bank and lent the money at lower rates to the people to whom the banks are lending it to-day, and the profits, if any, could be used to reduce our debt. But naturally in that case we would hear the cry that it is "inflation." It is said that we have not the facilities for doing so. I do not agree. We have soldier settlement board officers throughout the country; we have farmers' creditors arrangement boards; we have inspectors; we have a hundred and one different agencies operating under the dominion government. Why could we not ask them to do what we are asking the banks to do? The solution of our difficulty lies in the control of currency and credit to be used for public needs rather than private gain. If this scheme is all the National Employment Commission can offer, even as a partial solution of the unemployment problem, after almost a year in office, it might well be abolished and the responsibility again placed where it rightfully belongs, on the shoulders of the Minister of Labour. I feel quite confident that a man of his intelligence and capability could easily have done as much as the commission has done, in less time and at less cost to the country. The government of Canada by commissions is a costly affair, and it may be that at some future time the present government, to its sorrow, will find that out.

I am not opposed to the idea which is behind the bill, but I object to financial institutions being given a monopoly in the matter; I object most strongly to the excessive interest charged; and I most strongly object to the government giving a guarantee when in the first place the scheme in every essential is being promoted to assist financial institutions in gouging from the people of Canada at least three millions of dollars.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. J. S. WOODSWORTH (Winnipeg North Centre):

As I read the bill, it seems to me that it is designed to give some benefit, but that the benefits to be conferred are very limited and will be of advantage to a very small group of people. There are several outstanding problems which we in Canada must face: unemployment, cheaper credit, debt, and housing, and in my judgment this bill does very little to help in their solution. It is put

forward with the idea of helping employment. Possibly it may stimulate a certain amount of employment in the building trades, and for that reason I think it is along the right lines. But, as has been pointed out by the previous speaker (Mr. Marshall), this is the only measure which has been given us by the employment commission, and if this is all that is to be put forward I would say that it does not begin to touch the great mass of the unemployed people of this country.

One of the dangers is that, upon the government putting forth this scheme, there is a great hullaballoo about it; the people think they are getting something, only to find later on that it has very little real effect on the mass of unemployment. Further than that, we need cheap credit, but I cannot think that this is the best way in which cheap credit can be given to those who most need it to-day.

Again, as a previous speaker has said, I believe that the government itself is in just as good a position directly to advance credit as the banks are; or, if it is not desirable that the government should do this, steps might be taken to force down the rates which the banks charge. But here apparently the banks or other lending institutions are to be very carefully protected. Clause 3 seems to contain the principle of the bill; that is, the guarantee to approved lending institutions against losses which they may sustain as a result of home improvement loans made by them. The arrangement is a help to the lending institutions.

Again, no credit is offered to many people who very greatly need it at the present time. I quite admit that certain classes of people whose homes are run down might not be able to get credit, and under this scheme they can. So far, so good. But there are large numbers of people who very much need credit and who will not be able to qualify under this scheme; no provision whatever is made for them.

But there is a still more serious question which must be considered, and that is debt. Not only are the industrial workers head over ears in debt, but a great many of them are actually losing their homes; and much the same is true in the country districts. Until therefore there is some more comprehensive way of dealing with the debt problem, I do not think we have advanced very far towards promoting that general prosperity which in itself, if it were here, would solve a great many of these problems.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
LIB

Gordon Benjamin Isnor

Liberal

Mr. ISNOR:

What class of person coming within the scope of this bill is not taken care of?

476 COMMONS

Home Improvement Loans-Mr. Woodsworth

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink
CCF

James Shaver Woodsworth

Co-operative Commonwealth Federation (C.C.F.)

Mr. WOODSWORTH:

I do not suggest

that the people who come within the scope of this bill are not being taken care of. What I said was that the majority of the people who need help, do not come within its scope. I am speaking of the limitations of the bill. As far as it goes the bill may bring benefits to some, but the benefits are so limited in scope that I cannot be very enthusiastic about the bill.

The point that has been stressed in the elaborate broadcasting of this proposal is that it is a splendid housing scheme. The fact is, it simply does not touch the great problem of housing that faces the country at the present time. In common with many other members I have read some of the housing surveys made by a number of our cities in recent years. I had thought it might possibly be well to put some of these figures on Hansard, but I do not want simply to clutter the pages of Hansard with them. The conditions in many of our cities are, however, simply appalling, and this bill does not touch them. Most of the people who are in the worst condition cannot take advantage of the provisions of the bill. I wish the minister could lay this bill over until we could have a discussion on the resolution standing in the name of the hon. member for Greenwood (Mr. Massey). He proposes to bring before us this whole question of housing, and it seems to me that the house should discuss that resolution and then come to a consideration of this bill in the light of such a discussion of the whole problem. As it is, a bill which touches a very small segment of the problem is presented to us and we are asked to pass it. Some will say. "Very well; raise your objections to this, that and the other particular clause, but let us pass the bill." That is not the way in which these things should be done. We ought to have a survey of the whole problem of housing in Canada, and then we should be in a position to say how far the provisions of this bill might help in solving that problem, especially in regard to home owners.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
Permalink

February 2, 1937