Mr. Speaker, I believe that I am speaking on behalf of the entire Party, but I certainly believe that to begin with, mortgage financing must be treated quite differently from any other kind of financing. That is not unusual, and I say to the Parliamentary Secretary to the President of the Privy Council (Mr. Evans) who is looking at me quizzically, that it is not unusual to treat certain kinds of financing differently from others. He knows that as well as I do. For example, we in Canada have made money available to certain fields of endeavour at a variety of different interest rates with different structures and different time periods of repayment. The Government has pursued that as a matter of practice and as a matter of principle. I suggest to the Hon. Member that that is necessary in this case.
We must look at the benefits of putting money into housing and weigh them against those of putting money into other things. When money is put into housing, the risk of loss is considerably reduced. When money is put into housing, the asset or the house itself is always in existence. It is not an asset that one can put under one's arm and take away. Therefore, the risk to the collateral is much less for homes than it is for a number of other purchases which might be made.
I believe that you can appreciate, Mr. Speaker, as can others, that there is a greater risk involved in financing certain luxury items that can be purchased at interest rates that are in some instances lower than the interest rates that are now being charged for mortgages. I begin by recognizing that in the field of mortgage recovery, the actual loss ratio is very small. The overwhelming majority of mortgage holders continue to make their mortgage payments. More important than that, even those who default on their mortgage payments cannot take the asset with them and, therefore, the asset is available for resale.
We must recognize that every penny invested in housing is returnable in a number of different ways and is perhaps returnable even far in excess of the actual dollar value itself. The money is returned first through the mortgage payments themselves, plus whatever the interest is or the money is returned through rents, depending on whether the home is a rental accommodation or a purchased accommodation. The money is returned through taxes that are paid at the municipal level on the appreciated value of the property as a result of an apartment or single-family dwelling having been built. The money is returned in the form of income taxes that are charged against those who build the accommodation.
Workers who are presently unemployed could be building these accommodations and would be paying perhaps 30 per cent or 35 per cent of their income back in taxes to the federal and provincial Governments. The money is returned through corporate taxes, paid by the corporations, which enter into the business of building the homes that we require. The money is returned through the sales taxes that are applicable, where they are applicable, on materials that go into the building of the homes. When money is invested in a home, an overwhelming benefit is derived. Not only is every penny returned that is put into building a house, but there are tremendous spin-off effects as well.
May 29, 1984
National Housing Act
That is one of the reasons why we argue with the Govenr-ment that it must address the problem of affordable accommodation in a way far different from the way it is presently being addressed. For example, the Minister of Public Works (Mr. LeBlanc) knows that there have been dramatic cutbacks in funding for co-operative housing at a time when we need more housing. We will deal with that issue on another day in another way.
I would say to my colleague yes, we must establish that pool of finance that will enable us to meet the social need that can be met by the production of homes at an affordable price. If all of the other benefits to which I have referred are taken into account, housing is probably the single greatest economic motivator available to us. I do not have to tell you this, Mr. Speaker, because I know that you are an expert in the field, but for every one job that is created on-site when building a home, almost three jobs are created for the people who must make the various component parts that go into that home.
When a publicly financed, privately financed or a combined publicly and privately financed pool is established in such a way as to open up the field so that more people can afford to buy homes, thus holding interest rates down, then you can see that the evidence is abundant to show that we benefit in many ways. My colleague's question pertains directly to the subject before us and I think she is absolutely correct in saying that we must do that.
Subtopic: NATIONAL HOUSING ACT
Sub-subtopic: MEASURE TO AMEND