July 9, 1942

LIB

Georges Parent (Speaker of the Senate)

Liberal

Mr. SPEAKER:

The hon. gentleman moves the adjournment of the house on a question of urgent public importance, namely, the policy of the government in respect to a prosecution under the defence of Canada regulations, which involves the urgent and vital question of whether Canadians are to be free to criticize inefficiency in the conduct of the war, without endangering their personal liberty.

This is a matter which has already been before the house; it is a matter of judicial inquiry at the present moment, and pending the decision of the courts it is not in order according to the rules. Therefore I must rule that there is no urgency in the motion made by the hon. member.

Topic:   DEFENCE OF CANADA REGULATIONS
Subtopic:   CHARGES AGAINST COLONEL DREW-MOTION FOR ADJOURNMENT UNDER STANDING ORDER 31
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NAT

Thomas Langton Church

National Government

Mr. CHURCH:

Might I ask the hon. and learned Minister of Justice (Mr. St. Laurent) if he would consider withdrawing the charge against the colonel?

Topic:   DEFENCE OF CANADA REGULATIONS
Subtopic:   CHARGES AGAINST COLONEL DREW-MOTION FOR ADJOURNMENT UNDER STANDING ORDER 31
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LIB

Georges Parent (Speaker of the Senate)

Liberal

Mr. SPEAKER:

Order.

Topic:   DEFENCE OF CANADA REGULATIONS
Subtopic:   CHARGES AGAINST COLONEL DREW-MOTION FOR ADJOURNMENT UNDER STANDING ORDER 31
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WAR RISK INSURANCE

PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY


The house resumed from Wednesday, July 8, consideration in committee of Bill No. 56, to make provision with respect to insurance of War Risk Insurance property against war risks and the payment of compensation for war damage-Mr. Usley -Mr. Vien in the chair. On section 2-Definitions.


SC

John Horne Blackmore

Social Credit

Mr. BLACKMORE:

When we adjourned last evening I had raised the question of the reason for the deletion of subsection (m) as it stood in the bill sent to the committee. I pointed out that in my judgment the deletion of that paragraph left the bill deficient in an important respect. I also said that I believe the bill as it at present stands is confused, because of the fact that those who drafted the bill were endeavouring to defer to two principles. I desired that before I should consent to the passage of section 2 some explanation should be given which would clarify matters which to me seemed confused.

I think it can be safely laid down as a fundamental principle that no Canadian family should be obliged to suffer inequality of sacrifice for war damage. I believe this bill was designed to take care of that situation so far as it may be possible so to do. There are those who say that equality of sacrifice is completely impossible. Suppose we grant that as a government and as a -parliament we ought to be guided by the general principle that wherever possible we shall ensure equality of sacrifice. This we certainly can do in financial matters.

I think we can lay it down as fundamental with respect to this bill that every Canadian family should be guaranteed the right to continue to possess and to live in its home. That is the first fundamental consideration. The second is that every Canadian community should be guaranteed the right to be able to supply as many people after war damage as it was able to supply before the war damage was done. I gather from the discussions which I heard in the banking and commerce committee and in this house and which I have had with other people that those two principles were in the minds of the men who drafted this bill.

As I understand it, the purpose of the bill is to empower the minister to bring about or to establish or to embody in his policy those two fundamental principles: first that every family in Canada shall be guaranteed the right to continue to live in its home as such; second, that every community in Canada shall be guaranteed the right to be able to support or supply with needed services as many people after war damage as it was able to supply before war damage. If such is the case, the primary object of this bill is to ensure human values rather than financial values. In this respect it differs materially from an ordinary

fire insurance measure. A fire insurance measure aims primarily to reimburse, to the extent of his financial loss, anyone who has suffered damage from fire, the financial loss to-be judged by the value on the open market of the property destroyed. The second objective of a fire insurance measure, I take it, is to enable a fire insurance company to carry the risk, as well as other risks, and not lose money but rather to make money.

If these are the objects of a fire insurance measure, while the object of this measure is fundamentally human values rather than financial values, it becomes apparent that if the principles which govern the drafting of a fire insurance measure are applied to this measure there will be inconsistency and confusion. I believe that in at least two respects the principles governing the drafting of fire insurance measures are being applied in this bill as a means of governing the kind of measure which this shall be.

I maintain that we need to define clearly what we mean by values. How important this is may be seen by reference to section 7, subsection 1, where the whole meaning and intent and efficacy of the measure depends entirely on the definition of "diminution of value" in the third line. If there is no means of determining what that value is, how can the clause have any meaning? How can the bill have any meaning? It may be contended that this bill is aimed to pay its way just as a fire insurance measure aims to pay its way. This measure by section 7 empowers the minister, for example, to pay $3,000 to one who has sustained war damage. No reference is made to the necessity of the individual who sustained the damage having taken out an insurance policy; the minister is empowered, without any reservation, to pay $3,000 in consideration of war damage. This seems to indicate quite clearly that we are not concerned about making the whole scheme pay. If we are not aiming to make the whole scheme pay, then we do not need to be greatly concerned with the definition of value as it stood in the original bill. The original bill defined "value" as the value which the property would bring in the open market. I maintain that for the purpose of this measure that is not a meaning of value that we are at all concerned about.

Again we find in section 10 an exception of $50; that is, if the extent of the damage is less than $50 no payment is to be made. I maintain that that exception might be quite in order in a fire insurance measure, a regular policy of a fire insurance company, but it is inconsistent with the spirit and purpose of this bill.

, 1050

War Risk Insurance

May I turn for a moment to a discussion of the question of value as I think it should be. There are two main types of value with respect to properties such as dwellings. There is the social or prestige value, and there is the utility or service value. We might add another class of value, namely, the combination of the two. To illustrate what is in my mind, I would refer to a case which came under my observation. A young couple purchased a house for $450 when they were first married. They lived in it for fifteen years. As several children had come along they had found it impossible to buy a more commodious home. At the end of fifteen years they simply had to have more room. They raised up the house and put under it a basement with a seven-foot clearance, large enough to make possible a considerable addition to the house. As the house then stood it had cost them about $850. They had to let the house stand as it was, without improvements for several years. By that time the resale value on the open market would be hardly more than $150, the amount for which a person could sell the material if he salvaged the house.

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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LIB

Thomas Vien (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The CHAIRMAN:

There is far too much conversation going on in the chamber.

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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SC

John Horne Blackmore

Social Credit

Mr. BLACKMORE:

Mr. Chairman, I am surely glad you pointed that out, because the hon. gentlemen who are. talking have almost completely destroyed my ability to present this matter this afternoon. If they wrant to talk, I think they should go outside. I could hardly hear what you were saying, Mr. Chairman.

As I was pointing out, the house I have in mind cost the family $850, plus their work, but if they had had to sell it on the open market they would have been able to obtain only $150 or $200 for it. If this house were destroyed because of the war, it is conceivable that all that family would get as full compensation would be $150 or $200. This would mean that they would have insufficient money to build a new house. They would have to suffer an almost complete loss; in effect, they would be on the street. This house as it stood, while it might be impossible to sell it for anything near what it was worth, had a value to that family of a house which might have cost $2,500 because in it they were able to shelter their children and get by, as many Canadian families have to get by. If this house, which cost $850 and had a service or utility value to them of $2,500, were damaged to the extent of $49. according to this bill these people would

[Mr. Blackmore.)

receive nothing for damage which might render their place of residence entirely uninhabitable.

I think the illustration I have given is sufficient to show that as the bill now stands it is a rich man's bill, not a poor man's bill; that the application of the bill would bring into existence many inequalities and injustices. In order to show how many glaring inequalities might spring out of the application of the bill, may I point out that section 7 permits the minister to pay $3,000 for damages. As long as that section remains as it is, and I have no objection to it, a man with a house costing $3,000 which was destroyed would receive the full $3,000. In other words, he would have 100 per cent protection under this bill. There are many well-to-do Canadians who would come in his class. They would own houses costing from $3,000 to $5,000.

There are other Canadians who are a little better off and who own houses costing from $6,000 to $10,000. If these houses are damaged in the war the owners will receive compensation which will go a long way toward covering the cost of repairing the damage. They will receive substantial benefits under the bill. It must be borne in mind that the man with the $3,000 house is probably in receipt of a salary of $3,000 a year, and consequently would be in a better position to repair damage than a man in the lower income brackets. The man who owns a house costing $6,000 or $7,000 is probably getting in the neighbourhood of $6,000 or $7,000 a year, and therefore would be able to repair any damage done to his house. When these facts are considered it becomes more evident how unjust this bill will be to a person owning a house worth only $450 which sustains damage of, we will say, $49. Such a man probably is receiving only a very small income and is not in position to rebuild or repair his house. His family is probably such that he has had to struggle all the time in order to make ends meet. This man will receive perhaps no recompense at all if the damage is under $50. If the damage amounts to $100 and he receives reimbursement he will not be much better off. He certainly would not be relatively as well off as the man with the house costing $3,000, or the still more fortunate man with the house costing $6,000 or $8,000, and which sustained damage to the extent of $3,000.

As the bill stands at the present time I think it is quite unjust. It discriminates against the poor man in favour of the rich man. I believe it should be amended in two important respects. It should be stipulated definitely in the bill just what is meant by

War Risk Insurance

value; I suggest that the wording of this stipulation should take some such form as this:

That the value with reference to a property means the amount which would be required to restore the property to the degree of capacity for utility or serviceability or habitability which the property had before it was damaged.

In such case if the house to which I refer, which cost $850 to construct and which enabled a considerable family to get by, were damaged, we will say to the extent of only $100, the bill would permit the minister to restore the house to a condition in which it would be able to render the same service to the family occupying it that it had rendered before the damage was sustained, regardless of the amount it might sell for on the open market. If that definition of value, or a similar one, were embodied in the bill, I believe it would help greatly.

Then I think the bill should be modified to eliminate almost entirely the $50 exemption. Many a poor man is living in a house that would scarcely sell for $200 on the open market. I think it is grossly unfair to refuse to pay any damages which are under $50 in value. Suppose the chimney were destroyed, or the door on the porch blown off, or a hole made in the basement; if the total damage were assessed at less than $50, that man would get nothing, and it might be impossible for him and his family to rebuild the dwelling so as to make it habitable.

Hon. members may imagine that there are not many Canadian people who live in houses of as small a value as I have indicated. But all they need to do is to go through the woods to see the number of very inexpensive shacks in which people are living, or see in the wide areas of the west the inexpensive shacks in which farmers and landowners are endeavouring to get by, or go through the outskirts of many of our small towns to realize the number of small, inadequate habitations in which many Canadian people are struggling to live. Even in this great city of Ottawa and our next door neighbour you will find a surprisingly large percentage of houses that are very cheap and probably assessed at anywhere from $175 to $250. If a dwelling of that sort were damaged to the extent of 10 per cent of its value, from a money standpoint that might seem very small, but from the standpoint of human values, from the standpoint of the ability of the family to continue to live in the house after the damage was done, or to rebuild it so that it would be in as good a condition as it was before it was bombed, it will easily be seen that it would be grossly unfair to apply rigidly this limitation that nothing shall be paid unless the damage is over $50.

I think, Mr. Chairman, that the modifications which I feel should be made in the bill can be brought up under other sections. With that understanding I would say to the minister that I am prepared to allow section 2 to pass, and I will bring up the matters I have in mind under subsequent sections where perhaps they can be more appropriately dealt with.

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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NAT

Richard Burpee Hanson (Leader of the Official Opposition)

National Government

Mr. HANSON (York-Sunbury):

Mr. Chairman, I rise not to discuss the questions raised by the hon. member for Lethbridge, but to point out that this is the ninth day of July and we are in the sixth month of the session. This is a business proposition we are discussing ; it is not in any sense a political question. While members have quite properly occupied a substantial amount of time in discussing the rights of fishermen to protection, I do think the time has arrived when we as business men ought to get down to putting this bill through on its merits so that we can bring this session to a conclusion.

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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SC

Ernest George Hansell

Social Credit

Mr. HANSELL:

I should like to rise in support of what the hon. member for Lethbridge has said in respect to the valuation of houses and the damage that may be done in the case of a wealthy man's home as compared with the home of a poor man.

I see no reason why we should not indemnify everyone in Canada, be he fisherman, tradesman, farmer or what have you, for every cent of loss that may be caused through war damage, bombing, and so forth. I know that we have spent a good deal of time on this bill, but I am perfectly satisfied that we do not 3ret realize the serious damage that may be caused, since we are so far distant from actual bombing. But sometimes the seriousness of it can be brought home to us very forcibly. The other day I received a letter from my mother in England, telling me that my mother and father had been bombed out. They escaped or were rescued from the debris with nothing but the clothes on their backs. I am going to suggest to you, sir, that if the cities of Canada were afflicted with the bombings that have taken place in other parts of the world every member of parliament would be in his seat urging the government to pay compensation for any type of war damage sustained by our people. That letter from my mother brought the seriousness of the situation home very forcibly to me.

I assume that should there be much bombing of Canadian cities there would be set up an administration which would be running all over the place trying to adjust claims and to decide whether a window is worth 75 cents or $5, and all that sort of thing. We have had that sort of machinery

War Risk Insurance

set up in connection with the bonuses for agriculture in Canada, some of which are not yet paid. The people of this country would not stand for anything like that if this country were going through a bombing. I refer again to my mother's letter. In spite of the fact that my mother and father had nothing left in the world, they said, "The government administration here in England in behalf of bombed-out victims is marvellous." I sent my mother and father a little money, not because they were bombed out, but because I thought they needed it. It arrived a few days after they had lost everything, and my mother said, "You do not need to send us any more money, because we are well provided for." I know that there is a bombed^ out victims' fund, but my mother went on to say, "The government are very apt to visit us and discover just what our loss may be, and urge us to put in our claim now." That bit of news gladdened my heart, and I trust that after this bill is passed the government will see to it that those who are the victims of war damage will not have to worry, worry, worry, as to when their claims will be settled and how much they are to get.

During the discussion on this bill I have noticed, as no doubt other hon. members have, that there seems to be a fear on the part of the government as to whether they will be able to meet all these claims. You see, Mr. Chairman, it is the same old story: Can we afford to pay for the damage done? It is the same old story-we have no money. It does not make any difference how much lumber or stone or cement we have for repairs, or how much skilled labour is available; we are afraid that maybe we will not have the money. The same financial advisers who were advising the government in pre-war depression years are advising them to-day, and are doing so in respect to the financing involved in the present bill, which may be described as partly a postwar measure.

I stand with the hon. member for Lethbridge in what he has asked the committee to do.

I go further, and say that every nickel of damage done to anyone in Canada, be he fisherman, farmer or anyone else, should be paid promptly; and let our people know that if war should come to our shores we have a government which will stop at nothing to give them adequate and complete compensation.

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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SC

Robert Fair

Social Credit

Mr. FAIR:

The hon. member for Macleod has just told us about his parents who were bombed out in England. I will take a couple of minutes to speak of a section of our Canadian people who have been blasted and bombed ever since Canada became Canada, and I see that they are being bombed once

more on this occasion. I am referring now to paragraph (j) (ii). If this legislation goes through as it is at the present time, "growing crops, plants and trees" will be excluded from the benefits of the measure. I think the committee is well aware of the fact that 90 per cent of farmers are in debt up to their necks, in some cases a little deeper. One of my neighbours in Paradise Valley, who came to this country fairly recently, gave me a plan which he thought could be put into operation to burn out the crops of the countries which have been overrun by Germany. If that plan is feasible over there, as I believe to a certain extent it is, then it is possible that our enemies may put it into effect and burn out our crops here. I do not think it is necessary to point out how very easy it is to burn a field of wheat or oats, either when it is grown and ready for cutting, or when it is harvested and in the stook, or when it is gathered in around the farmers' buildings, either in eastern or western Canada. Because farmers are in debt to the extent they are, if a farmer loses his crop he is "on the road" or, if he is lucky enough, on relief. For these reasons I think the government should not exclude, as is now proposed, farmers' crops from the benefits of this insurance. Farmers up to the present time-and the days to come will be no exception-have paid directly or indirectly, or both, the weight of the taxes of this country. That statement cannot be successfully challenged. While they are working harder and longer hours than any other class, we find among them more poverty and destitution than among any other class. Therefore I appeal to the minister to remove paragraph (j) (ii) from section 2 of the bill and give farmers the benefit of this insurance.

Section as amended agreed to.

On section 3-Insurance against war damage.

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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NAT

Howard Charles Green

National Government

Mr. GREEN:

I should like to ask the

minister a question concerning two points. First, is power taken in this bill to bring in a compulsory insurance scheme? I do not interpret section 3 as giving that power, yet Mr. D'Arcy Leonard, who advised the government on this measure, recommended in paragraph 15 of his report as follows:

Furthermore, the power should now be taken to institute a compulsory scheme or schemes; and in the event of the voluntary plan proving inadequate, a compulsory scheme could then be put into effect. With the advantage of the experience and preparation under the voluntary scheme, the compulsory plan would be on a more equitable basis than is now possible.

Is power being given to institute a compulsory scheme?

War Risk Insurance

Then, this section is the one which gives the minister the power to enter into contracts of insurance, and specifies among other things the power to set the rate or rates of premium.

I should like to know whether or not it is definitely understood that the premiums are to be the same in all parts of Canada. In other words, if a policy is taken out in Ontario or Quebec, will the rate be just as high or just as low as the rate paid in Nova Scotia or in British Columbia, which provinces are the ones in which damage is most likely to be suffered?

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

On the first point, as I read the bill and as I understand it to read, there is no power to institute a compulsory system of insurance. I find no empowering provisions which would enable the government to levy compulsorily against all the property owners of Canada rates which would be used later for indemnity against war damage. If it becomes necessary to carry out Mr. Leonard's recommendation it will have to be done by some subsequent measure.

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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NAT

Howard Charles Green

National Government

Mr. GREEN:

In other words, his recommendation in that regard is not being accepted?

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Not as far as this is concerned, no. As I pointed out yesterday, we have the power under other measures to do that, if it should become necessary, by order in council.

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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NAT

Howard Charles Green

National Government

Mr. GREEN:

That is, under the War Measures Act?

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Yes, under the War Measures Act, and possibly under the War Appropriation Act-I do not know about that, but one step at a time. This is a bill to authorize the minister to enter into contracts of insurance, and that is all it is, as I read it.

As to whether the rate will be the same in all parts of Canada, the answer to that is, yes, it will be, for the same class of property. There will be no territorial discrimination. Inland points with low risks will get no advantage from that fact, and the coastal points with their high degree of risk will not be penalized because of that fact.

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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NAT

Howard Charles Green

National Government

Mr. GREEN:

The idea is to spread the cost across Canada?

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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LIB

James Lorimer Ilsley (Minister of Finance and Receiver General)

Liberal

Mr. ILSLEY:

Yes.

Topic:   WAR RISK INSURANCE
Subtopic:   PROVISION FOR COMPENSATION FOR WAR DAMAGE TO PROPERTY
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July 9, 1942