January 21, 1957


On the orders of the day:


PC

Wallace Bickford (Wally) Nesbitt

Progressive Conservative

Mr. W. B. Nesbitt (Oxford):

Mr. Speaker, I should like to direct a question to the Minister of Finance. Is it correct that, by a recent order in council, the Bank of Canada has been ordered to revalue its bond portfolios on an amortized cost basis instead of a market value basis as formerly? If so, will the chartered banks be forced to do the same thing with respect to their portfolios of dominion and provincial bonds?

Topic:   FINANCE
Subtopic:   BANK OF CANADA
Sub-subtopic:   REVALUATION OF BOND PORTFOLIOS
Permalink
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Hon. W. E. Harris (Minister of Finance):

Yes, Mr. Speaker.

Topic:   FINANCE
Subtopic:   BANK OF CANADA
Sub-subtopic:   REVALUATION OF BOND PORTFOLIOS
Permalink
PC

Wallace Bickford (Wally) Nesbitt

Progressive Conservative

Mr. Nesbiii:

I should like to ask the Minister of Finance a supplementary question in view of his answer. Can the minister give an opinion as to the effect on Canada's monetary policy?

Topic:   FINANCE
Subtopic:   BANK OF CANADA
Sub-subtopic:   REVALUATION OF BOND PORTFOLIOS
Permalink
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

Offhand, Mr. Speaker, I do not know what effect it will have on the monetary policy. I shall be glad to look at it and give an answer on my estimates if we reach that

point.

Topic:   FINANCE
Subtopic:   BANK OF CANADA
Sub-subtopic:   REVALUATION OF BOND PORTFOLIOS
Permalink
PC

Edmund Davie Fulton

Progressive Conservative

Mr. E. D. Fulion (Kamloops):

May I ask

the Minister of Finance a supplementary question, Mr. Speaker, arising out of his last answer. With respect to monetary policy does the government pass orders in council of which the Minister of Finance does not know the effect? I find it difficult to believe that it does so. Would the minister care to reconsider his last answer and now tell us what the effect is?

Topic:   FINANCE
Subtopic:   BANK OF CANADA
Sub-subtopic:   REVALUATION OF BOND PORTFOLIOS
Permalink
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

Mr. Speaker, of course we do not take action without being aware of the general implications involved. Perhaps my answer to the hon. member for Oxford might have been a little bit more forthcoming than it was. The effect on monetary policy, if any, was so little that it was not a factor in the decision. If my answer was not that clear, I must apologize for it. But I am quite sure that the effect on the monetary policy was such that, as I say, it was not a factor in the decision which was made for other reasons.

Topic:   FINANCE
Subtopic:   BANK OF CANADA
Sub-subtopic:   REVALUATION OF BOND PORTFOLIOS
Permalink

POSSIBLE CONFLICT BETWEEN CREDIT RESTRICTIONS AND HOUSING LOANS


On the orders of the day:


CCF

Colin Cameron

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

Mr. Colin Cameron (Nanaimo):

I would like to address a question to the Minister of Finance. Does the minister not consider that there is a conflict between the government policy, announced this morning by the Minister of Public Works, of encouraging the banks to make long-term loans in connection with housing, and the policy of the Bank of Canada to persuade the chartered banks to curtail their term loans?

Topic:   POSSIBLE CONFLICT BETWEEN CREDIT RESTRICTIONS AND HOUSING LOANS
Permalink
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Hon. W. E. Harris (Minister of Finance):

The policy of the Bank of Canada with respect to term credit has been, for over a year I think, to restrict the growth of credit at the rate that it was then proceeding. This has been the policy since October, or a little earlier, in 1955. That does not mean that it is a straight curtailment of credit. It is a curtailment of the rate of growth at that time. I think that we have been successful in restraining that growth to the point where credit is still growing though at a more modest rate. Therefore, I do not see any particular conflict.

Topic:   POSSIBLE CONFLICT BETWEEN CREDIT RESTRICTIONS AND HOUSING LOANS
Permalink
CCF

Colin Cameron

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

Mr. Cameron (Nanaimo):

Is the minister aware that the governor of the Bank of Canada informed the banking and commerce committee a few months ago that he made representations to the chartered banks to curtail a particular form of credit which was long-term credit.

Topic:   POSSIBLE CONFLICT BETWEEN CREDIT RESTRICTIONS AND HOUSING LOANS
Permalink
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

That is right.

Topic:   POSSIBLE CONFLICT BETWEEN CREDIT RESTRICTIONS AND HOUSING LOANS
Permalink
CCF

Colin Cameron

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

Mr. Cameron (Nanaimo):

Does he not consider that the National Housing Act loans come under that category?

Topic:   POSSIBLE CONFLICT BETWEEN CREDIT RESTRICTIONS AND HOUSING LOANS
Permalink
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Mr. Harris:

Mr. Speaker, I do not have in mind the particular phraseology used by the governor of the Bank of Canada but I agree that although the purpose was to apply credit restrictions to long-term loaning, nevertheless I think that the governor of the Bank of Canada would not want the application of any policy to be such that one could say there was rank discrimination in any particular form of credit granting.

Topic:   POSSIBLE CONFLICT BETWEEN CREDIT RESTRICTIONS AND HOUSING LOANS
Permalink

TABLING OF ESTIMATES AND DELIVERY OF BUDGET


On the orders of the day:


CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

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

Mr. Stanley Knowles (Winnipeg North Centre):

Mr. Speaker, in the light of the

reference made a moment ago by the Minister of Finance to his estimates, is he in a position to tell the house when the estimates for the next fiscal year will be tabled? Can he also tell the house when he intends to bring down his budget?

Inquiries of the Ministry

Topic:   TABLING OF ESTIMATES AND DELIVERY OF BUDGET
Permalink
LIB

Walter Edward Harris (Minister of Finance and Receiver General; Leader of the Government in the House of Commons; Liberal Party House Leader)

Liberal

Hon. W. E. Harris (Minister of Finance):

These are, of course, questions which should not be answered, but I propose to do so by saying that the estimates will be tabled either tomorrow or Wednesday and the budget I hope will be delivered some time before dissolution.

Topic:   TABLING OF ESTIMATES AND DELIVERY OF BUDGET
Permalink
CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

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

Mr. Knowles:

Is that another of those forthcoming answers the minister sometimes makes?

Topic:   TABLING OF ESTIMATES AND DELIVERY OF BUDGET
Permalink

January 21, 1957