Mr. Abbott:

That is the legal position. I am afraid I cannot see just what my hon. friend's

difficulty is. It is exactly as though a single lump sum had been voted for this particular purpose.

Mr. Fleming:

Will the minister state the grand total that is being voted by the present resolution? I should like to have the exact amount.

Mr. Abbott:

I would have to do a quick sum in mental arithmetic here, Mr. Chairman. The amounts are set forth in the resolution which was read. It is $460,291,082, plus $541,666.67, plus $6,390,980.33, plus $4,213,181.17, plus $7,362,243.33, plus $414,855.83, or approximately $478 million in round figures; let us say $480 million.

Mr. Johnston:

There is a question that is giving us a great deal of concern in Alberta. It has to do with the Department of Reconstruction and Supply. As I pointed out to the minister the other day, the Manufacturers Life is being sued by some of the home owners in Calgary. It is a serious problem that confronts these men. I should like to take this opportunity of asking the Minister of Reconstruction and Supply just what the government plan to do with regard to the suit which is now pending, and if they have made any definite proposals whereby this Bow River Construction Company matter can be properly settled, and the owners involved in this affair properly and efficiently compensated for any expense and trouble they have been put to- because of, I was going to say, faulty government administration, but I will not put it just that way until we see what the government intends to do. It is a very serious matter. Will the minister make a statement in regard to that soon?

Mr. Winters:

I am aware of the situation to which the hon. member for Bow River refers. It is true that on April 27 a writ was issued jointly against the lending institution and the Central Mortgage and Housing Corporation. The writ was a long one, involving some thirty-seven pages. It was received only yesterday by the Central Mortgage and Housing Corporation. It has not yet been analysed. The legal agents of the corporation have not yet had a chance to study it fully. They are studying it now. They will recommend what action should be taken with respect to it.

These houses were built under the integrated housing plan, as my hon. friend knows, and some difficulty was experienced when the contractor was unable to carry out the terms of his contract. There is no contractual responsibility, involving the government, between the purchasers and the contractors; nevertheless the government has made close scrutiny of the situation. The committee will recall that on previous occasions I told the

house that where there is foreclosure action and the houses are not yet complete, the joint mortgagees will refund to the purchaser the amount of his equity. Where the purchaser is in possession, the lending institution and Central Mortgage and Housing Corporation will jointly increase the amount of the mortgage and extend the term of payment so that the purchaser may complete the house. Where there is full possession, it is not felt that any increase in the amount of the mortgage is either permissible or warranted if foreclosure action is necessary because of payment delinquencies.

Mr. Johnston:

I do not desire to prolong the debate, because I know the house is desirous of finishing its business; but I hesitate to allow the statement to stand as it is on the record at the moment. The minister has said, and it is a fact, that the mortgagee, together with Central Mortgage and Housing Corporation, has made certain promises or agreements with the builders to reimburse them for some of the losses which they are to suffer. The minister mentioned two instances, one in which the house was not occupied; and he said that the government or the Central Mortgage and Housing Corporation, together with the Manufacturers Life, would pay them their equity. This is decidedly unfair. The fact is that these men contracted to get a house at a certain set figure, which was stipulated by Central Mortgage and Housing Corporation. In one instance, out of a total of forty, the amount involved was $6,500. It is through no fault of the owner that he is not to be allowed to get a house. He may be given back the amount of the investment, or of his down payment, but he wants a house. He contracted to get a house. If he is denied that right, and he wants to buy another house, it will cost him at least $2,000 more, because the government, through its failure to get a competent contractor, through its failure to have proper inspection, has caused this man to lose the house. Therefore, no matter what happens, the owner stands to lose at least $2,000 in the first instance.

Let me point out the other instance, that in which the house is occupied. The condition we mentioned a moment ago does not apply where the house is occupied. In my view every one of these houses which is occupied is unfinished. The position of these owners at the moment is that they have a house which is partly finished-I will put it a little stronger than that-which is almost finished, but the entire amount of their down payment is spent. It will cost them $2,000 to finish the house. They have liens running anywhere from $500 to $15,000 on some of these houses. They have other obligations which are regi-

Interim Supply

stered against the title, and which amount to some $2,000 or $3,000; but in some cases the liens and the executions against the title amount to as high as $10,700. That is a very large amount, and yet all that the mortgage company is to say to the owners, as the minister indicated a moment ago, is: All we will do for you fellows is to increase your mortgage and amortize it over a longer period of time; but you have to complete the house; you have to take care of the liens; you have to take care of all of these other encumbrances registered against your title. That is the way the thing stands at the present time. Personally I do not think the minister would like to see that happen, and I hope he will do all in his power to see that there is a fair and equitable solution to this problem.

Certainly as it stands at the moment these people are in for a terrible beating. Mind you, Mr. Chairman, these are all veterans of the last war. These are the men who went over to fight for this country, and we promised them something different. The government should make every effort to settle the case out of court and give these men their due.

Mr. Winters:

Like the hon. member who has just taken his seat, I do not wish to prolong the discussion, but I think I should simply say that the relationship is the normal one between a purchaser of a house and a contractor. I do not believe there is a clear understanding on the part of some of these purchasers as to just what the relationship of the government is. There is no contractual relationship on behalf of the government in the deal between the purchaser of the house and the contractor.

Mr. Johnston:

Is not that a doubtful point?

Mr. Winters:

No; that point is clear. Nevertheless the government is fully aware of the situation. I can assure the hon. gentleman that every possible effort is being made to find a suitable, just and adequate solution. The same problem has arisen elsewhere, and solutions which have been mutually satisfactory have been worked out.

Mr. Fraser:

Hon. members should realize the fact that the $480 million which we are passing at this time is within a few million dollars of the total budgets of previous years. This is for four months only. It is within a few million dollars of the total budget of 1939. It is a tremendous amount, and we should have had a chance to criticize it.

Mr. Moore:

I wish to direct to the government a question which came to me just this morning. It arises out of government-owned property which is at Port Nelson in northern Manitoba. When the Hudson Bay railway ran to Nelson there was a steel bridge across

Interim Supply

the Nelson river which cost some $2 million. There were also in that area a very large dredge and a large quantity of other steel products. Apparently the government has decided to dispose of this material as scrap. I have not all the information in connection with this matter, but, according to the letter which I received this morning, a salvage company was set up known as the Port Nelson Salvage Company. Apparently this company intended to transport this scrap material from Port Nelson to the nearest point on the Hudson Bay railway. They hired ten men in The Pas, together with some sixteen Indians a little farther north. To make a long story short, this salvage company has gone bankrupt, and the cheques which were issued as wages for these men have come back marked n.s.f. Is there any guaranteeing clause in any of the contracts involved in this transaction which would enable the men to get their wages?

I think it is only necessary to say that a number of these men were already unemployed before they took on this job. They borrowed sufficient money to pay their fares north, and now when they land back in The Pas they find that their cheques cannot be cashed, owing to lack of funds in the account of the salvage company.

I have not much information about this company, although I am told that a Mr. M. A. Goodene, of Toronto, had something to do with the company. He rented a couple of tractors and some other equipment to take on the job. It may be that two departments of government are involved, the Department of Trade and Commerce and the Department of Transport. I would ask those who sold the properties on behalf of the government if they thoroughly investigated the matter, and I should like to know if there are any qualifying clauses in the contract which would enable these men to secure their wages.

Mr. Abbott:

I shall have the matter looked into.

Motion (Mr. Abbott) agreed to.

The Chairman:

Shall I report the resolution. Mr. Drew: On division.

Resolution reported, read the second time and concurred in. Mr. Abbott thereupon moved for leave to introduce Bill No. 248, for granting to His Majesty certain sums of money for the public service of the financial year ending March 31, 1950.

Mr. Abbott moved

that the bill be read the first time.

Mr. Speaker:

Is it the pleasure of the house

to adopt the motion?

Mr. Drew:

On division.

Motion agreed to and bill read the first time.

Mr. Speaker:

When shall said bill be read the second time?

Now.

Mr. Speaker:

Mr. Abbott moves, seconded by Mr. Claxton, that the said bill be read the second time. Is it the pleasure of the house to adopt the motion?