Hon. J. R. Nicholson (Minister of Labour):
Mr. Speaker, I should like to make a brief statement concerning housing policy.
Additions to the housing stock in Canada reached a record level in 1966, with the completion of 162,192 new dwellings. Constructions starts, however, at 134,474 units were down 19.3 per cent, and this decline is reflected in the number of units under construction at the end of the year.
The reasons for the decline in starts and dwellings under construction are well known, I think, to most hon. members in this house. On more than one occasion I have indicated that demands on private capital resources were exerting undue restraint on residential construction in most parts of Canada. For this reason assurances were given that direct lending by Central Mortgage and Housing Corporation would provide for at least as many starts and new dwellings in 1966 as in 1965.
I should like to draw to the attention of members that in actual fact direct federal loans in 1966 increased by more than 10 per cent in terms of units and 18 per cent in terms of dollar volume. With some moderation in prospect this year in other demands on the economy and with an additional source of mortgage funds provided, I hope, by the proposed amendments to the Bank Act, we can, I believe, be somewhat more optimistic concerning housebuilding in 1967. Other incentives should arise from the November amendments to the National Housing Act and from the formula introduced to automatically adjust the interest rate on loans under the act.
However, Mr. Speaker, it will take time for these forces to exert maximum impact in the residential construction field, and the government has authorized Central Mortgage and Housing Corporation to institute a spring program of direct loans to builders. This program will be similar to recent annual fall direct lending activity that was so successful in encouraging winter construction and stabilizing
employment during winter months for workers generally.
Effective March 1, Central Mortgage and Housing Corporation will accept applications from merchant builders for loans to be made in the period April 1 to May 31 inclusive, without a presale requirement. Federal funds will be available for up to 20,000 new dwelling units during that two month period. I would estimate that some 16,000 of these units will take the form of single family dwellings for home ownership and about 4,000 will be rental units in smaller communities and in new resource areas.
While we hope it will be possible to introduce this special program without a quota arrangement, loans to any builder will not exceed his physical and financial capacities nor will lending in major centres be permitted to drain off excess amounts at the expense of resource or growth areas and smaller centres where the need for both home owner and rental housing is acute.
Of necessity, the program will be kept under close review. Its purpose, simply stated, is to ensure immediate stimulation of housebuilding activity.
Subtopic: ANNOUNCEMENT OF POLICY OF DIRECT LOANS TO BUILDERS