February 2, 1937

LIB

Norman McLeod Rogers (Minister of Labour)

Liberal

Mr. ROGERS:

Is the hon. member now

speaking of housing in its social aspects as a measure of improving the health of our people? He will agree with me that there is a marked distinction between different purposes that may be effected by housing legislation. This home improvement plan is designed, as I understand it and as I think he must understand it, rather to afford employment to the building trades; it is not designed to improve the conditions of which he has complained.

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

James Shaver Woodsworth

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

Mr. WOODSWORTH:

Yes, but it has

been put forward in a general way as being a housing scheme, and there is no other housing scheme which has so far been presented by the government. We heard a few years ago the expression "nuisance value." I am afraid this bill may have a sort of nuisance value-

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

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Not to the men getting

wages as a result of it.

Topic:   HOME IMPROVEMENT LOANS
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CCF

James Shaver Woodsworth

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

Mr. WOODSWORTH:

No; it has a value to a comparatively limited number of people. The trouble is that it may become a substitute for a more comprehensive scheme. I think we should consider carefully the larger question which so far has not been before the house. While it is all very well to distinguish theoretically between housing as it affects the health and social conditions of the people and housing as a means by which builders may earn a livelihood, I think the two should be considered together. I would remind the minister that even the people engaged in the building trades are themselves living in houses, and some of them amid very wretched conditions, so that even the class of workers engaged in the building industry must be considered, not merely as workmen but also as human beings having to live with their families in certain houses. But I am speaking not merely of building workers but of industrial workers generally, and this bill makes very little provision for the mass of industrial workers.

Just one other consideration at this point. The bill provides that the government shall stand behind the approved lending institutions. The government does not stand behind the home owners, and I think there is a very considerable distinction. If a man enters into this arrangement and is not able to make good I assume he may lose his home.

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

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

It has nothing to do with that at all.

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

James Shaver Woodsworth

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

Mr. WOODSWORTH:

Why not?

Topic:   HOME IMPROVEMENT LOANS
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Simply because this bill takes no account of whether or not he may have a mortgage on his home.

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

James Shaver Woodsworth

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

Mr. WOODSWORTH:

That is the point.

Topic:   HOME IMPROVEMENT LOANS
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

The point is that nonpayment of the loan he secures under this act certainly cannot affect the question of his being deprived of his home.

Topic:   HOME IMPROVEMENT LOANS
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CCF

James Shaver Woodsworth

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

Mr. WOODSWORTH:

I am sure the

minister must recognize that the amount he can make use of under the act is only a fraction of the value of his home.

Home Improvement Loans-Mr. Bennett

Topic:   HOME IMPROVEMENT LOANS
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Of course.

Topic:   HOME IMPROVEMENT LOANS
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CCF

James Shaver Woodsworth

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

Mr. WOODSWORTH:

This bill does not stand behind him in his struggle to obtain a home for himself. He may be heavily mortgaged at the present time, and if he is too heavily mortgaged I doubt whether he can qualify under the bill. But in the long effort he is putting forth to establish a home for himself the government does not stand behind him, whereas the government does stand behind the lending institutions, so that they are saved from any loss. An hon. member behind me suggested to me a little while ago, it might be possible that a bonus to home owners, to some such extent as this, might be just as sure a way of helping the home owners and might do just as much to stimulate employment. I have not gone into that question.

Topic:   HOME IMPROVEMENT LOANS
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

I have.

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

James Shaver Woodsworth

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

Mr. WOODSWORTH:

Well, I shall be very glad to hear the minister explain that in due course. My point was simply that the government stands behind the lending institutions and guarantees them against loss, and considers only the aggregate loss. It does not stand behind the individual home owner in his efforts to secure a clear title to his home. There is one of the real difficulties.

As I said before I shall be glad to vote for the bill, but I regret that the government so far have not brought down more comprehensive measures which would deal with the outstanding problems which I have tried to enumerate.

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

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Right Hon. R. B. BENNETT (Leader of the Opposition):

On second reading the principle of the measure is to be considered by the house; the details stand for consideration in committee. The principle of this bill, as far as the government is concerned, is to guarantee lending institutions against loss to the extent of fifteen per cent of any sums they advance for the improvement of homes, not more than 12,000 in any one case.

There are two or three observations which might be made as to details in connection with that guarantee. The lending institutions are to be approved by the governor in council. We will assume that "lending institution" will mean any bank or insurance company or trust company or financial institution of any kind. The other day in answer to a question the minister said that the guarantee was for the aggregate of fifteen per cent to any lending institution, which institution might have many branches. A result of that might be that in a favoured community all the loans might go bad. That is, if the

total sums advanced by any lending institution having a hundred branches throughout Canada amount to $300,000, the country has guaranteed $45,000, and that $45,000 might all be lost in one community. That is perfectly clear. Whether or not it will be satisfactory to work it out in that way I cannot say; I merely direct attention to the facts disclosed by the measure itself. But it does appear to me that, assuming an institution lends $1,000,000, there might be a loss of $150,000, distributed over two or three communities, representing fifty or sixty per cent of the loans made in those communities, and as a result of careful supervision of the loans made in other communities there is no loss there. So that the guarantee provision applied in that way might not work out as was intended.

As far as the general purposes are concerned I doubt very much whether this will accomplish what was intended by the promoters of it. Much might be said, and will be said at another time and place, with respect to the character of the publicity that has been given to it and the consequent misunderstanding on the part of many people as to what it really means. That there is such misunderstanding I think will be found by those who desire to make inquiry concerning it. The Minister of Labour (Mr. Rogers) a moment ago said it has nothing to do with the housing question. That of course is true. These loans may be made on a property mortgaged to the hilt, provided the owner can induce the lending institution to advance the money, and companies which have security on the property will of course be only too pleased to see money expended on it; for whatever may be said, such improvements will enure to their advantage. A judgment against a defaulting borrower will not be available for the execution holder against the property, yet the security of the mortgage has been increased. As far as that phase is concerned, however, I do not think it seriously enters into the matter. The whole question is, will the lending institutions in the exercise of their discretion in the several communities throughout Canada, whether urban or rural, in which advances may be made, grant credit-for that is what it gets down to-for improvements on terms indicated by this measure to any appreciable extent? And by appreciable extent I mean an extent which will provide employment to any substantial number of craftsmen.

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

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

That is the point.

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

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

That is the whole issue.

The government's action violates some of the tenets of faith so dear to professors and others of the Liberal party, notably the ex-

478 COMMONS

Home Improvement Loans-Mr. Bennett

tending of credit before parliament has authorized it, and the undertaking by mere letters of responsibilities that never should be undertaken. How the welkin would have rung had any effort of this kind been made by the preceding administration ! It was done, as will be recalled, in a smaller way with respect to some matters. The very idea of authorizing the expenditure of public moneys without a vote of -parliament is so contrary to all principles which govern and control public finance that I was horror-struck when I read in the press the original statement made by the Prime Minister (Mr. Mackenzie King), that when parliament met money would be authorized and appropriated and the scheme put in operation. A few days later that position was abandoned and it was said that by arrangement with the lending institutions the finance minister had succeeded in inducing them to be assured that with the 'large majority behind the administration they could rest in perfect peace that the guarantee would be honoured and in effect would be retroactive.

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

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

I did not say tihat.

Topic:   HOME IMPROVEMENT LOANS
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CON

Richard Bedford Bennett (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. BENNETT:

No, but that is the sense of it. The language of the letter read the other day makes it abundantly clear.

I congratulate the government upon adopting plans which they find now in practice are essential, although in theory they may seem unsound. So often during the last few months we have seen evidence of this. The cold, calm theorist in opposition becomes wedded at once to plans of concrete usefulness when he is in office. If the Minister of Finance sees it is essential that a plan become operative in order that unemployment may be lessened, of course he should1 bring it into operation. I have no doubt about it, and never have had. The fact that we are now in opposition and the government are doing what they opposed when they were in opposition is no reason why I should reverse my position. I support the government in what they have done; what they did was right and proper and1 sound, and what we did and would do to-morrow if we hadi the same responsibility. But we throw back to the government now the criticisms they made in those days, and remind them that after all you can quote at great length books on public finance, but the cold-blooded fact is that when the public interest demands that employment be furnished now-not then, not at some other time in the future, but now if possible-by the operation of a plan which 's thought to be effective, it is not the time -o oppose if within the general bounds of

our constitutional practice it is possible to give immediate effect to that which is useful.

There is one other matter in connection with the guarantees which I think is important. If the lending institutions are bound by the strict law of guarantee as it now stands, no extension of time can be given in case of default, not a single day. A variation to the slightest extent of the terms of the guarantee would operate to release it. And no one knows that better than the lending institutions themselves. Unless, therefore, it is provided-and I think it would- have to be done by statute, not by regulation-that the granting of an extension of time by the lending institutions shall not operate to discharge the guarantee, it is quite obvious that the institutions will not for a moment permit their guarantee to lapse by granting an extension of time. They will at once institute proceedings for the purpose of collecting the moneys that may be due. I mention that because I think it should be a statutory provision rather than a mere regulation. That is, a statutory power should be conferred upon the lending institution to grant extensions of time; for the maximum time extends over sixty payments. The minimum is thirty-six, is it not?

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

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

With the larger loans it extends over five years.

Topic:   HOME IMPROVEMENT LOANS
Subtopic:   PROVISION TO ENCOURAGE REPAIR OF RURAL AND URBAN DWELLINGS
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February 2, 1937