October 14, 1983

LIB

Jeanne Sauvé (Speaker of the House of Commons)

Liberal

Madam Speaker:

Order, please.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   TRUST COMPANIES' RESTRICTIONS ON RENEWAL OF MORTGAGES
Permalink
PC

William James Kempling

Progressive Conservative

Mr. Kempling:

-mortgages-all right.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   TRUST COMPANIES' RESTRICTIONS ON RENEWAL OF MORTGAGES
Permalink
LIB

Jeanne Sauvé (Speaker of the House of Commons)

Liberal

Madam Speaker:

I really must interrupt the Hon. Member. He has not come to a question and he has already taken three minutes of his time.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   TRUST COMPANIES' RESTRICTIONS ON RENEWAL OF MORTGAGES
Permalink
PC

William James Kempling

Progressive Conservative

Mr. Kempling:

She informed the Hon. Member that trust companies were under provincial legislation.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   TRUST COMPANIES' RESTRICTIONS ON RENEWAL OF MORTGAGES
Permalink
LIB

Jeanne Sauvé (Speaker of the House of Commons)

Liberal

Madam Speaker:

No, no, I really meant the Hon. Member had to ask his question immediately.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   TRUST COMPANIES' RESTRICTIONS ON RENEWAL OF MORTGAGES
Permalink
PC

William James Kempling

Progressive Conservative

Mr. Kempling:

What does the Minister propose to do about some of our trust companies which put clauses in their mortgage agreements that require mortgagors to waive their rights under Section 10 of the Canada Interest Act and other federal-provincial acts dealing with the prepayment of mortgage contracts?

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   TRUST COMPANIES' RESTRICTIONS ON RENEWAL OF MORTGAGES
Permalink
LIB

Marc Lalonde (Minister of Finance)

Liberal

Hon. Marc Lalonde (Minister of Finance):

Madam Speaker, this is indeed a very long question, and I contest the allegations contained in the preamble. I would start, first of all, by answering the preamble, and then I will address the question.

As far as the preamble is concerned, the Hon. Member is quite wrong. We have taken a number of steps to help Canadians who were caught with high mortgages. One of the steps, for instance, cost the federal Treasury $75 million in help to Canadian consumers. That was the Canada Mortgage Renewal Plan that the Minister of Public Works introduced to help those who were facing difficulties in renewing their mortgages when the interest rates were quite high. The Hon. Member will remember that at that time the federal Government was giving up to $3,000 in subsidies for mortgage renewal. That program has been used by tens of thousands of Canadians and it helped them at a very, very difficult time.

In addition, when it comes to current renewal at lower rates, as the Hon. Member knows 1 have provided Members of Parliament with a list of senior officials in all the banks and trust companies in Canada to which representations could be made on behalf of constituents. I, myself, have made representations on behalf of constituents and Members of Parliament,

October 14, 1983

Oral Questions

repeatedly. The president of a trust company, for instance, appeared before the parliamentary committee on Finance two weeks ago, saying that in a single day he had received 36 letters from me addressing the issue on behalf of a number of Canadians who were facing difficulties, and steps have been taken following those representations, in a very large number of cases.

Finally, as far as the question raised by the Hon. Member is concerned, I have indicated to him, as the Minister of Consumer and Corporate Affairs indicated to him yesterday, that in a number of instances those trust companies are under provincial authority. As well, Canadian consumers, when they enter into contracts, must look at those contracts carefully and also shop around to find out whether they can get a better deal elsewhere.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   TRUST COMPANIES' RESTRICTIONS ON RENEWAL OF MORTGAGES
Permalink
?

An Hon. Member:

Statements by Ministers.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   TRUST COMPANIES' RESTRICTIONS ON RENEWAL OF MORTGAGES
Permalink
LIB

Marc Lalonde (Minister of Finance)

Liberal

Mr. Lalonde:

As far as the specific point is concerned, these are the steps that we have already taken.

Topic:   ORAL QUESTION PERIOD
Subtopic:   FINANCE
Sub-subtopic:   TRUST COMPANIES' RESTRICTIONS ON RENEWAL OF MORTGAGES
Permalink

REQUEST FOR LEGISLATION TO ASSIST HOME OWNERS

PC

William James Kempling

Progressive Conservative

Mr. Bill Kempling (Burlington):

Surely the Minister knows that, under Section 91(19) of the Constitution Act, interest is the jurisdiction of the federal Government, and it does have jurisdiction.

Topic:   ORAL QUESTION PERIOD
Subtopic:   REQUEST FOR LEGISLATION TO ASSIST HOME OWNERS
Permalink
?

Some Hon. Members:

Hear, hear!

Topic:   ORAL QUESTION PERIOD
Subtopic:   REQUEST FOR LEGISLATION TO ASSIST HOME OWNERS
Permalink
PC

William James Kempling

Progressive Conservative

Mr. Kempling:

In the United States, under the Federal Housing Act it is illegal to charge a fee or penalty for a prepayment of a mortgage.

In 1976 the Government introduced Bill C-16, the Borrowers and Depositors Protection Act, that included a clause in Section 15 which dealt with this very matter. Is the Government prepared to introduce such legislation again, and will it attempt to deal with the 750,000 Canadians who are trapped in this mess?

Topic:   ORAL QUESTION PERIOD
Subtopic:   REQUEST FOR LEGISLATION TO ASSIST HOME OWNERS
Permalink
LIB

Marc Lalonde (Minister of Finance)

Liberal

Hon. Marc Lalonde (Minister of Finance):

Madam Speaker, the Hon. Member mentions the figure of 750,000 citizens. I would urge him to be careful in terms of the numbers he is using. He may find himself very much off base in that regard.

The Hon. Minister of Consumer and Corporate Affairs and I have indicated that we are examining the situation, reviewing it, and will continue to do so. When we have reached a decision we will make it known promptly.

It is important that we avoid any steps that will mean that Canadian citizens in general will end up paying more than they are presently paying for mortgages as a result of Government intervention, or which may lead to a situation where certain types of mortgages that are available now would disappear from the market. The Hon. Member knows that interest rates fluctuate and that we cannot have a situation where one can benefit from interest rates going down and be

fully protected when they go up. No country in the world has been able to arrange that.

Topic:   ORAL QUESTION PERIOD
Subtopic:   REQUEST FOR LEGISLATION TO ASSIST HOME OWNERS
Permalink
PC

William James Kempling

Progressive Conservative

Mr. Kempling:

The 750,000 figure is established by Canada Mortgage and Housing Corporation which advises that 715,000 people are trapped with mortgages above 17 per cent. I am sure there are another 35,000 people out there somewhere. That is the basis for the figure.

Topic:   ORAL QUESTION PERIOD
Subtopic:   REQUEST FOR LEGISLATION TO ASSIST HOME OWNERS
Permalink

GOVERNMENT POSITION

PC

William James Kempling

Progressive Conservative

Mr. Bill Kempling (Burlington):

Madam Speaker, the Minister's rationale does not stand up. In the United States where they have lower rates, and interest deductibility, there is no shortage of mortgage money.

In this mortgage monopoly game that is being played, the prize is $3.5 billion to $4 billion. The Minister should realize that, and make some calculations. Does the Government stand with a handful of trust companies or with the 750,000 people who are trapped in this mess?

Topic:   ORAL QUESTION PERIOD
Subtopic:   GOVERNMENT POSITION
Permalink
LIB

Marc Lalonde (Minister of Finance)

Liberal

Hon. Marc Lalonde (Minister of Finance):

Madam Speaker, I believe I have demonstrated to the Hon. Member that the Government stands quite clearly not only with the 750,000 people who have mortgages whom he is talking about but with the 24 million Canadians who will eventually have mortgages in many instances. We want to avoid taking any steps that would not be carefully planned and would cause more trouble and prejudice to those Canadian citizens than they may face at the present time in some instances resulting from their own decisions. This is something that must be looked at very carefully before steps are taken which would hurt Canadian consumers.

Topic:   ORAL QUESTION PERIOD
Subtopic:   GOVERNMENT POSITION
Permalink

AMENDMENT OF INTEREST ACT

PC

Douglas Grinslade Lewis

Progressive Conservative

Mr. Doug Lewis (Simcoe North):

Madam Speaker, my question is also directed to the Minister of Finance. The Minister of Consumer and Corporate Affairs is on record as saying that the federal Government is considering changes to the Canada Interest Act in order to allow all home owners who are caught in the trap of mortgage interest as high as 22 per cent, to renegotiate their mortgages. Is the Government in fact considering this legislation and, if so, when does the Minister intend to introduce it in the House?

Topic:   ORAL QUESTION PERIOD
Subtopic:   AMENDMENT OF INTEREST ACT
Permalink

October 14, 1983