June 2, 1939

LIB

Thomas Reid

Liberal

Mr. REID:

Very often a first mortgage is held by a company and the second mortgage is taken out with private individuals. If the first mortgage is readjusted in the clean up, what will happen to the second?

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

The second mortgage

does not change its status at all but remains as is.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Joseph-Arsène Bonnier

Liberal

Mr. BONNIER:

If I am here next year

and if the minister is here I shall try to have an amendment to make the rate five per cent.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Donald Alexander McNiven

Liberal

Mr. McNIVEN:

A great deal has been said in this house and elsewhere with regard to debt legislation. There is a difference of opinion as to its efficacy, and much of the conflict has centred in western Canada, particularly in Saskatchewan, because of conditions that have prevailed there, where for a period of ten years we have suffered from every kind of agricultural distress known to man. Men and women who went into western Canada and into our province went to build homes, and notwithstanding the situation in the west, and I believe this is true of the whole of Canada, none of this debt adjustment legislation has been applicable to urban home owners until the introduction of this bill. The Farmers' Creditors Arrangement Act had no application to urban home owners. The provinces were powerless to introduce legislation to bring about a reduction in principal

or in a reduction of interest. In 1936 an adjustment was made of farm mortgages in our province, where all the interest in arrears at the first of January, 1935, was written off and the interest rate on farm mortgages reduced to six per cent. None of these benefits extended to urban owners. Notwithstanding that fact, notwithstanding that the depressed condition of agriculture in the west has had a direct effect upon the urban resident, I am glad to say that the urban resident in my province has lived up to every tradition that impelled him to go to western Canada. He went to build a home, to own something, ar\d the urban home owner has done his utmost in maintaining and preserving that home.

In the city of Saskatoon there is a total of 1,546 urban loans-this is the record of twenty-six mortgage companies operating in the province-and of that number there are only forty-three upon which there is interest in arrears for three or more years. In Regina there are 2,223 urban loans and only on forty-seven is interest in arrrears for three years or more. In Moose Jaw there are 240 loans, and only fourteen in arrears for three years or more. In Prince Albert there are eighty loans and only on two is interest in arrears for three years or more. In other words, there is a total of 4,089 urban loans, of which 106 are in arrears for three years or more.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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CON

Charles Hazlitt Cahan

Conservative (1867-1942)

Mr. CAHAN:

How many for two years?

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Donald Alexander McNiven

Liberal

Mr. McNIVEN:

I have not the figures; the only ones supplied me were for three years. The urban resident is again asked to accept a higher rate of interest in the adjustment of his home indebtedness than the rural resident, and I am going to take the responsibility for not complaining about this differentiation- I had almost said discrimination-because I regard this legislation as highly beneficial to the home owner of Canada, and particularly to those who reside in the west. It is such a boon to those of us who have been paying interest at six and a half per cent-comparatively few-seven, seven and a half, eight, eight and a half, and nine per cent, that to come down to a rate of five and a half per cent brings us perilously close to utopia itself.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

Can we be " perilously " close to utopia?

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Donald Alexander McNiven

Liberal

Mr. McNIVEN:

I know it is a mixed metaphor, but I thought I would say it anyway. The payment of these interest rates, the effort that has been made by the urban residents to preserve their homes, has involved sacrifice on the part of individuals. It has

Central Mortgage Bank

involved the elimination of anything in the way of extravagance. It has involved saving in a great many ways. In that regard and on that account I think that the people of western Canada are entitled to a good deal of credit.

It has been said that mortgage companies are going to make an adjustment. That is the situation as far as twenty-six mortgage companies are concerned. I would have you note that the head offices of those twenty-six mortgage companies are in Toronto or other eastern centres, and whatever adjustment is made in the way of interest will increase the purchasing power of the urban resident, who will use that purchasing power- to buy the manufactured products of eastern Canada. Much has been said about people in the west as having lived extravagantly, bought high priced automobiles, taken holidays in California, and so on. This record of urban Saskatchewan in preservation of its homes [DOT]belies the statements so made.

One other observation for the benefit of the hon. members for Parkdale and Davenport. These twenty-six mortgage companies informed me that their percentage of collections of principal and interest is better in Regina than it is in Toronto.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Louis-Prudent-Alexandre Robichaud

Liberal

Mr. ROBICHAUD:

In paragraph (s) the rate of interest on the debentures to be delivered to the member company by the central bank is not stated. Is it necessary that it should be?

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

It is covered in section 18. Three per cent is stated there.

To return to the typographical errors: on page 8, line 32, the word " the " should be deleted. In line 34, following the word " advances," the word " made " has been omitted by the printer. On page 9, the first line of paragraph (s), the letter "a" is omitted from the word " performance."

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Louis-Prudent-Alexandre Robichaud

Liberal

Mr. ROBICHAUD:

In subsection 2 of

section 16, the interest rate is 3* per cent. Further on, on page 12-

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Frederick George Sanderson (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

Order. I must remind the hon. member that he is discussing clause 20. We are on clause 17.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Louis-Prudent-Alexandre Robichaud

Liberal

Mr. ROBICHAUD:

I am discussing clause 16, which has not been carried yet.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Frederick George Sanderson (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

I suggest to the hon. member that he should wait until we get to clause 20.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Louis-Prudent-Alexandre Robichaud

Liberal

Mr. ROBICHAUD:

But there seems to be a contradiction in clause 16.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

No, there is no contradiction. The debentures referred to in

subsection 2 of section 16 are the debentures of the company. The debentures referred to in section 18 are the debentures of the bank.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Louis-Prudent-Alexandre Robichaud

Liberal

Mr. ROBICHAUD:

I am not referring to section 18; I am referring to section 20, subsection 3.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Frederick George Sanderson (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

Order. In my opinion the hon. member is out of order in dealing with section 20.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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SC

John Horne Blackmore

Social Credit

Mr. BLACKMORE:

What basis is used for the determination of the present value of a property?

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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LIB

Charles Avery Dunning (Minister of Finance and Receiver General)

Liberal

Mr. DUNNING:

There are provisions for appraisal and appraisal committees in section 16. First, there can be agreements between borrower and lender as to what is a fair appraisal, but that is subject to subsequent approval by the central mortgage bank. There is also provision for committees of appraisal, consisting of a representative of the central mortgage bank, one of the mortgage company, and one other appointed by those two.

Topic:   CENTRAL MORTGAGE BANK
Subtopic:   PROVISION FOR INCORPORATION, PURCHASE OF SHARES, GUARANTEE OF DEBENTURES, ETC.
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June 2, 1939