the amount which it is now receiving from the dominion in lieu of taxes. In this event the tenant's monthly bill would amount to a net rental of $27.50, and taxes for the municipality of $5, making a total of $32.50. Wartime Housing is willing to renegotiate existing contracts on application from the municipality. I would like to make it perfectly clear, however, that the dominion is not willing to make increased payments in lieu of taxes out of the net rentals now being received.
As I mentioned earlier, the 1946 Wartime Housing Limited programme is now committed at some 4,700 units. It is not our intention to proceed with more of these units during the current year. Future operations of Wartime Housing Limited will be dependent upon the 1947 programme for housing and the extent to which it is deemed advisable for government directly to enter the field with low rental housing to be owned by them. It is also dependent upon the willingness of the municipalities to sponsor additional projects within their boundaries.
Next I should like to turn to the small holdings provisions of the Veterans Land Act as it relates to housing units which are not rural in all their aspects. Hon. members will recall that the purpose of the small holdings provision is to provide a place in the country for veterans who have regular employment, the land to make contribution to the veteran's livelihood. In some instances the regular employment is in an urban area, and in others it is in a rural area adjacent to the small holding.
With the very great shortage of housing there has been a tendency for the small holdings section of the Veterans Land Act to be used as a vehicle for supplying urban housing to veterans. Hon. members will recall that in the small holdings provision there is a conditional grant up to $1,400 for veterans who take advantage of it. The grant involves the veteran giving up his reestablishment credit, which for veterans as a whole averages somewhat less than $500.
Earlier in this statement I made reference to an arrangement between myself and my colleague, the Minister of Veterans Affairs. Under this arrangement we agreed that it would be advisable for approval for new small holdings which were not- strictly rural in character to be cleared with the central operating group which has been established to look after all of the government's interests in housing. In our arrangement my colleague and I confirmed the policy of the government in that the director of the Veterans Land Act is generally not prepared to approve purchases under the small
holdings provision within the boundaries of a municipality of over 5,000 people, and on the fringe areas of municipalities in excess of
15,000 people. The government is not prepared to extend this type of financing, involving a subsidy of some $1,000 over and above the veterans' reestablishment grant, into urban areas. We are very anxious to see the small holdings provision implemented to the full, provided it is implemented in the manner contemplated by parliament when the legislation was passed. My colleague and I have arrested a trend towards the small holdings section becoming a vehicle for financing veterans' urban housing.
I have outlined the working rule in determining the areas where we do not consider small holdings appropriate. There have been and will be exceptions on both sides of this general rule. For instance, we will not agree to the approval of a small holding within the boundaries of a municipality of under 5,000 people if that community in itself forms part of a metropolitan area. On the other hand there are communities of over 5,000 people which are distant from other urban areas and located in the centre of a large agricultural area. We have been prepared in such instances to approve a small holding, particularly where the municipal boundaries of the community are very wide.
Up to May 31 of this year, 17,359 ex-servicemen had qualified under the terms of the Veterans Land Act for small holdings. In the same period 4,885 land purchases were made by the director of the Veterans Land Act for small holdings. At the same date, 3,959 applications had been approved for small holdings.
I will not explain further the workings of the Veterans Land Act, because, notwithstanding the arrangement with my colleague, the responsibility remains with him. Our main purpose in entering into this arrangement is to coordinate the activities of his department with other forms of housing.
At this point I should like to refer to the National Housing Act, to which this resolution seeks certain amendments. The National Housing Act, as hon. members know, is designed primarily to finance and promote the construction of new housing, rather than to participate actively in the construction field as is the case of Wartime Housing Limited and the Veterans Land Act.
I wish to deal rather fully with the activities under the various sections of the act, since the legislation introduced by this resolution will, I hope, allow a wider application of the terms of the act and permit Central Mortgage
and Housing Corporation to extend its facilities. As I come to them I will indicate the nature of the more important amendments we seek. I do not intend, however, to explain them in detail. I would prefer to discuss them more fully when I move the second reading and after hon. members have had an opportunity to study the bill.
It might be said that the adequate financing provided for home owners by the National Housing Act at a time when mortgage money is plentiful does not result in one extra house being built. In some measure this may be true. However, the application of the act does have a very real influence on the types of houses being built, on who owns and occupies them, on the terms upon which they are purchased, on the quality of construction, and on the manner in which the mortgages are paid off by the owners.
I can assure hon. members that the National Housing Act is being vigorously administered. Operating techniques are constantly being improved, red tape eliminated. Loan approvals by Central Mortgage and Housing Corporation have been decentralized by the establishment of regional and branch offices throughout the country. Meetings are being held constantly with the lending institutions. Arrangements have been made for the handling of loan applications in' all parts of Canada-city, town, village and rural areas. Lending values have been increased by eight to ten per cent. Amendments have been made to the minimum standards and specifications. Loan approvals are being cleared at a much faster rate. The integrated housing plan is being pressed forward and has been extended to include duplexes.
The National Housing Act is, in my opinion, a good piece of legislation which we seek by these amendments to improve and make more effective.
Under the National Housing Act the government is in the business of lending money on long terns for the construction of houses. Loans are of three kinds: joint loans made through private lending institutions; direct advances to limited dividend corporations up to 90 per cent of the lending value of a low-rental project, and home extension loans.
The first and most familiar of these is joint loans. Under part I of the act, loans are made jointly by Central Mortgage and Housing Corporation and approved lending institutions to prospective home owners or to builders of houses for sale to occupants.
Indicative of both the tremendous demand for housing and the fact that the National Housing Act is filling a definite need are the
following statistics covering loan approvals under part I by provinces during the first six months of 1946, with comparative figures for the same period last year:
January 1-June 30
Province Loans $
Prince Edward Island ... -
Nova Scotia .. . 75 360.120New Brunswick ... 39 189,000Quebec ... 361 1.744,160Ontario ... 1,726 7.810.020Manitoba ... 522 2,536,000Saskatchewan ... 158 693,880Alberta ... 425 1.924,660British Columbia ... 623 2.595,680Total ... 3,929 17,853,520 1945 Province Loans $Prince Edward Island ... - -Nova Scotia .. . 17 79.940New Brunswick .. . 5 20,280Quebec . . . 200 1.026,200Ontario ... 1.400 5.937,425Manitoba ... 331 1,385.660Saskatchewan . .. 41 180,600Alberta ... 116 521.000British Columbia ... 307 1.187,180Total
It will be remembered that maximum loans to home-owners are based upon 90 per cent of the first $4,000 and 70 per cent of additional lending value. By regulation loans may not exceed S6.40O because we are unwilling to lend any encouragement to large houses when the emphasis should be on small homes.
Present-day costs and sales prices present real difficulty. The $4,000 house of 1939 costs at least $6,000 and is often priced far above this figure. This has borne heavily upon the married veteran who, with so little rental housing available, has been forced to buy. He is faced with a larger down payment and larger monthly payments than he had anticipated.
Three steps could be taken to help meet this problem:
First, increase lending values to the current level of building costs which is of the order of 150 per cent of the 1939 level, with variations in different parts of the country. This has been done by the corporation increasing lending values by an additional 8 per cent-10 per cent as from April 29, 1946, so as to bring lending values into line with cost levels. We believe that present lending values are very close to the actual cost of building plus a fair builder's profit, but do not make allowance for extra costs such as delays in delivery of materials, inefficient labour and the very long profit being taken by some builders. We are unwilling to make loans