June 2, 1939 (18th Parliament, 4th Session)


Charles Avery Dunning (Minister of Finance and Receiver General)



It seeks to deal with a specific part of the economic problem and not to bring about a new heaven and a new earth. Neither does it purport in any particular to attempt to deal with the export values of our commodities which, as the hon. member has properly said, is largely responsible for the inability of some classes of producers to meet their fixed charges. I take it that while the hon. member damns the measure with faint praise, he takes the view that it is better to accept it than to refuse to support it.
With regard to the observations of the hon. member for Kootenay East (Mr. Stevens), here again we find an instructive, analytical
Central Mortgage Bank

and critical address but, may I say, one which does not propose any alternative, and one which, generally speaking, was more favourable to the bill as a whole than one might have expected. The criticism that this new organization will be tied up to the Bank of Canada was made by the hon. member for Kootenay East in the banking and commerce committee. There is a difference of opinion between us as to the advisability of adopting the course here proposed. I believe it to be most practicable to have.tMs governmental institution handled in the way prescribed by the bill, and placed under the control of the governor of the Bank of Canada. I disagree with the idea that this is a mortgage institution. It will not itself take mortgages; it will not itself value lands; it will not itself be dealing with mortgage debtors. It will be engaged in the business of providing refinancing facilities for those who are engaged in that business. And hence, as I said in the committee, the term "mortgage bank" most accurately describes, in my judgment, the functions which this institution will perform. I believe it to be desirable to concentrate control, rather than to create an entirely separate institution, partly because of the experience in other countries with respect to various financial measures. For instance, in the United States there are entirely separate governmental financial agencies set up to deal with different aspects of the same general financial and economic problems. In Australia the mortgage aspect of finance is combined with the ordinary banking aspect of finance, in the governmental banking institution of that country. There is a definite mortgage branch of the central governmental banking institution of Australia. Looking over the experience in other countries in that regard, the government reached the decision indicated in the bill regarding the connection between the two institutions in this country.
The hon. member for Kootenay East left the wrong impression in one particular when he said he did not agree that the state or the treasury should pay anything in order to secure a reduction in interest for people who could pay interest in terms of their existing contracts. That statement is likely to lead to a misconception. There is nothing in this bill to provide for any payment from the treasury with respect to reductions in interest in the future which may be brought about by the bill. That is to say, if a farm mortgage is adjusted within the terms of this statute and the future rate of interest is reduced in accordance with the terms of the bill to 5 per cent, the state does not make any contribution toward that reduction in interest rate for the future.

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