Mr. Ambrose Holowach (Edmonton East):
Mr. Speaker, I should like to say a few words on the matter which is presently before us. The order paper states that we are discussing a measure to amend the National Housing Act of 1954, which has as its purpose increasing from $250 million to $400 million the aggregate amount that may be paid out of the consolidated revenue fund under section 22 of the act, and also to provide for a reduction in down payments. Last evening we listened to the affable Minister of Public Works as he explained the purpose of this measure. During his remarks he showed considerable confidence with respect to the achievements these amendments would bring about. He painted a very rosy picture.
Sir, there are serious shortcomings in this bill which would indicate otherwise. Any consideration of the bill and the implications of its text necessitates, I think, a consideration of several broader aspects of the housing problem in this country. In doing this it will become obvious that there are serious and embarrassing facts which we must face squarely. Perhaps the advantage of doing that is that it may spur us on to more equitable legislation with respect to housing.
An illustration of what I have in mind is seen in a clipping from the Financial Post of December 14, where on the first page there appear a few figures of some considerable interest to all those who are interested in seeing the national housing problem solved. I read:
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You pay a high price for slums. They bring in only 6 per cent of total city tax revenues (reports Montreal's planning director C. E. Campeau), but they account for 33 per cent of total population, 45 per cent of major crimes, 60 per cent of tuberculosis victims, 35 per cent of fires and 45 per cent of total city service costs.
The measure itself is positive proof that previous government appropriations and policies have been quite inadequate to meet the needs of the people in the matter of their housing requirements. In my opinion we have never had really vigorous action in this field. I think we have been far too slow and ineffective in handling this problem. There is definite room for improvement. I believe we should profit to a greater extent by our past mistakes. In contrast to what has been accomplished thus far I honestly believe that the Twenty-Third parliament of Canada has a splendid opportunity to demonstrate that Canadian democracy can be made a dynamic process, and that we can do big things for all classes in our society who may be in need of better housing.
The bill proposes amendments which deal with only two aspects of the problem; first, an increase of $150 million in the aggregate amount and second, some reduction in the down payments. I must say that these are two worth-while purposes. As indicated by the hon. member for New Westminster last evening, these are forward steps and we in our group will support them. We hope they will make a contribution to the stepping up of the housing construction program in our country.
However, I cannot escape the feeling that to the extent that this is all that is being proposed, we have here nothing more than a few patches placed on already out-dated legislation which is inadequate and not in keeping with the requirements of our time. One of the obvious shortcomings in the proposal is that it does not make any provision for reducing the present excessive interest charges on loans, and for longer terms for amortization. These possibly would contribute to a more equitable solution of the housing problem. What our economy needs most at this time is bold government action against high interest rates, which have contributed to inflation more perhaps than any other factor.
Another tragic aspect of the existing housing program is the fact that there is too little provision for people who need help most. We are supposed to be interested in the common man, but there is no equality of opportunity for small income groups-elderly citizens, veterans, labouring men with large families-if they are unable to take advantage of available legislation providing assistance in home ownership. If we really believe in equality of opportunity I believe their
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special problems deserve our special attention at this particular time.
May I point out that the old age pensioners, the people on low incomes, are least able to take on any additional financial burdens at this time. Hence the reduced down payments proposed will not, in my opinion, help them very much. It is true that the down payments are proposed to be reduced, but at the same time the carrying charges and the required monthly payments have been considerably increased right across the board.
I mentioned equality of opportunity. May I say that equality of opportunity to these people in the low income groups can only come through amendments which (1) provide reasonable interest rates; (2) extend the terms of repayment of loans; (3) provide income tax exemptions on interest payments made in connection with home ownership; (4) substantially reduce required down payments; (5) provide government policies which aim at a program of minimum rent public housing projects designed for those on the lowest rung of the economic ladder, and in this category a housing program suited to the comforts and needs of our elderly people in the country; (6) permit a complete re-examination of taxing laws, sales and other tax reductions on essential building material, these with a view to reducing the high cost of construction. An example of what happens when prices come down is seen in a report in the latest edition of the Financial Times, that one real estate firm in the city of Toronto reported the sale of 70 houses in one subdivision in four days when the builder dropped his prices; (7) bring an energetic program for slum clearance as well as one to produce better and more functional homes for the rural population.
I feel that these are basic requirements which deserve attention in considering amendments to the housing act. I believe we must recognize that there is a shortage of purchasing power in the hands of the people, and that it is time our taxation and fiscal policies took this fact into account. Until we recognize this situation as the principal consideration in formulating a program, decent homes and stability for Canadians will be difficult to achieve.
Continuation of policies that plainly place our people deeper and deeper into debt is not the solution. As an example of the trend which has developed in that connection I should like to point out that to a question I asked a few days ago with respect to the gross national debt I received an astonishing answer. The question was:
In terms of dollars, what is the present position of the federal government of Canada respecting (a) gross national debt including all liabilities; (b) public debt in terms of per capita liability?
The answer to the question was that at March 31, 1957, the total gross national debt of the nation was $18,326,200,000. The second portion of the question read:
Since its inception, what is the total amount of interest that has been paid on the nation's debt?
The answer to the question was to March 31, 1957, $9,924,493,432. That is an example of a trend and situation existing in other fields, for instance in personal, small business, municipal and provincial debt. I suppose the aggregate debt of all those agencies and fields must be staggering. It has always seemed strange to me that in a country such as Canada, housing and shortage of accommodation should ever have been allowed to become a persistent national problem. It is difficult to understand, considering that Canada is probably the largest and certainly the finest lumber producing country in the world. Our unemployment situation is worsening. There are many skilled hands to do the job of building. Many of our people are living in substandard dwellings and under overcrowded conditions. Hence it cannot be said that there is a lessening of demand for homes.
Clearly the problem is not what it would be if we had tens of millions of people. Our population is only 16 million. In relation to area the population density per square mile is approximately 4. Compare this figure with a country like Great Britain whose population is approximately 52 million, with a density of some 542 to the square mile. What about the situation in a country such as the Republic of West Germany? Their population is 52 million; yet in relation to the area, some 528 people are crowded into every square mile of that country.
What are they doing about their housing problems? Well, if we review the history of the remarkable recovery in those countries it is plain to see what can be done when money is not the limiting factor, and the only limiting factor is the physical capacity to do things. In a small book published by the press and information office of the federal West German government I was surprised to read that the turnover in the whole home construction industry in 1955 was over $4 billion. In our country in the 12 years of the activities of Central Mortgage and Housing Corporation they have approved some $3 billion worth of mortgage loans. In the official report published by the West German government, I see this interesting comment. In 1955 alone the number of newly constructed apartments totalled 541,000. Since 1950 a total of $9.8 billion has been expended in erecting apartment buildings and further, in 1955, nearly 49 per cent of the total expenditure on housing was accounted for in the
capital market, approximately $2.4 billion. These broad figures relate to the amount of capital invested in home construction.
Housing is centred on government aided social housing projects, as in the erection of apartments for which rent or other charges are kept at a low level by the means of loans at low rates of interest and with long-term amortization, within the reach of the broad masses of the population.
Their first housing act provided that a total of 2 million apartments of this kind should be built between 1951 and 1956. For the years 1957 to 1962 provision is made for a further 1.8 million apartments of' the same kind. At first the majority of apartments completed contained few rooms, but larger apartments are now being constructed in a much greater ratio. In 1955 more than half the new apartments had four or more rooms including the kitchen.
Well, now, that is a small nation with limited material resources and possessing a special problem of meeting the requirements of some 11 million refugees and expellees. That that country is able to make such an impressive housing program presents, it seems to me, a sharp contrast to our own slowness. It also indicates how much more we in Canada could accomplish.
Let us look at what has happened in a country closer to our own. In its 24 years of operation the United States federal housing administration has insured over $40 billion of home mortgages and property improvements. Translated into the number of families affected this means that one out of every three families in the United States has benefited. These are outstanding accomplishments, and suggest that in the field of housing similar potentialities exist in our own country. One fact is clear, that of all the problems we face in this great country of ours the housing problem is, to say the least, the most embarrassing.
Who is to blame for all this? To be honest about it, I believe it is the horse and buggy thinking at the government level. The real story would show that money trusts have been operating against the best interests of our people. Government publicity keeps telling us of the tremendous progress we are making. That is not so. I am not suggesting we have not made progress, but I am saying that our progress in terms of what could be done has been quite unsatisfactory.
Let us look at these facts. It cannot be said that housing shortages in our country are of recent origin; the problem has been with us for the past 25 years, irrespective of who was in power, both in depression years and in times of relative prosperity. The
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question of providing adequate housing for our people has just never been resolved. The unhappy fact is that we have never made a proper effort to develop a comprehensive broad scale attack to eliminate substandard dwellings. Consequently today the greatest unmet need of our people is still in the field of providing homes on a fair basis.
What is the situation today? The minister in speaking recently somewhat played this down, but it is a fact that for two years now residential construction has been substantially dropping. This year starts were considerably lower than last year. I have in my hand daily bulletins from the dominion bureau of statistics, one dated Monday, May 6, 1957, which has this to say:
Starts on the construction of new residential units were sharply lower in this year's first quarter, dropping to 7,769 units from 14,473 in the first three months of 1956.
A further bulletin dated Tuesday, July 9, 1957, has this to say:
Fewer new dwelling units were started or completed in the first five months of this year than last, D.B.S. reports in an advance statement. Number of units in various stages of construction at the end of May was also smaller than a year earlier.
Then as recently as December 6 we have this information.
Starts on the construction of new dwelling units in the January-Oetober period this year numbered 102,197 units, some 11.3 per cent fewer than 1956's comparable total of 115,188, according to an advance D.B.S. statement.
Further on it says:
Completions in the 10 months totalled 94,868 units, down 13.1 per cent from the year-earlier total of 109,160 units.
In many cities of Canada the sag in the home building program has become a very serious problem. In my own city of Eamonton this has been especially so. May I point out to the minister that in 1956 only 3,800 dwelling units were built in that city, while during that year we had a population increase of over 14,000 persons. The difficulties experienced with our growth have been compounded by the tight money policies prevailing. Mortgage restrictions have hit our city harder than any other area in Canada. We made repeated submissions to the previous government; nothing happened. It is true that many of their candidates said something would happen after June 10 when they were back in power, but I would sincerely hope that the new Minister of Public Works, in facing the situation, will take heed of Edmonton's interest by making substantial increases in the number of N.H.A. credits available for that area.
I would also ask that we look at the history of this national problem in order that we
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may know what to do in the future. During the depression years we had a period of decline in residential building. That was a period of paradox. The only thing that was short was money; there were plenty of materials and manpower available. There was no decline in the volume of homes needed then, but in spite of these factors it was a period in which everything sagged because of the shortage of money. There were the demands and the physical facilities at our disposal, but the money just was not there.
In 1939 Canada was involved in a war. Suddenly and mysteriously money was no problem. Our capacity to do things in a big way was demonstrated to the world. People were prepared to forgo satisfying their personal needs and convenience and comforts in order to meet the drastic requirements of that great war.
Immediately after the termination of the war the tremendous housing requirement and public opinion forced the government to make one notable change. They enacted the National Housing Act in 1946 and we had a short period of boom in building. Then suddenly they turned on the tight money policy again. The government allowed tight money policies to be forced on the people of Canada, which resulted in interest rates being raised seven times in the course of one and a half years.
The country was told that these policies were necessary in order to stop inflation. The actual consequences were the highest cost of living ever, the restriction of building, higher cost of building for prospective home buyers, and a drastically reduced amount of credit for home construction.
It is a very significant fact that the building going on of late is limited almost entirely to families of middle or higher incomes. I believe the minister is aware of this, because in the first statement he made he pointed out that the average income of the borrower was $5,829. Perhaps I had better quote this statement as made by the minister at page 1878 of Hansard, where he says:
I was very much surprised to find that the qualifying income for the average National Housing Act loan made by approved lenders in the month of September of this year was $5,350. The average income for borrowers under the National Housing Act was $5,829.
I just wonder how many of our people qualify under those terms, or have salaries of that kind. The fact that the answer to inflation is production does not seem to have entered into the consideration of the government. This government and the previous government in sustaining tight money policies kept telling us they were necessary in order to stop inflation. Well, sir, there never was inflation
in the first place, certainly not in the sense of the term which means, properly speaking, too much money chasing too few goods. It is true that we have had cost and price increases, but they were a direct consequence of the present taxation policies, and these increases were aggravated by the tight money policies being applied. There was a marked decline in residential construction, yet the proponents of tight money just went their own way.
I wish now to say a word about present interest rates. In this connection we regretted very much to hear the minister state that the government has no present intention of reducing the 6 per cent interest rate on N.H.A. loans. This denial of intention to lower interest rates is serious, and nullifies whatever advantage is proposed in the reduction of down payments.
I have never been able to figure out government thinking with respect to high interest rates and tight money. On the one hand they claim that this policy keeps housing costs down, but in fact the very opposite is the case, because as capital becomes scarce it becomes dearer to acquire, interest rates rise, and high interest rates result in less construction. Less construction, in turn, encourages higher, rents and a very vicious discount practice which is being carried on in this country at the moment.
Instead of operating in the interests of people the existing policies seem to be operating in the best interests of lending institutions. Instead of homes being built, bigger profits are being allowed for a few. Instead of contributing to stability in the lumbering and construction industries the administration's tight money policies have depressed those industries. Tight money has contributed to promotional schemes and giantism in business.
What about the future? At the fourteenth annual convention of the national house builders' association, which met in Montreal on January 9, 1957, an important message was given by the association's president. I quote from the Ottawa Citizen of January 19, 1957:
He told the 500 convention delegates that home construction cannot be allowed to lag if the "truly colossal" growth of Canada continues far into the future, as many economists predict.
"It has been predicted that we will require 4 milhon new homes in the next 20 years, necessitating a mortgage credit of $20 billion. If this is correct, and I think it is, the situation could become serious in my opinion if the production of houses is allowed to slip below the 1956 level", he said.
Well, it has slipped. Now, in bringing these facts to the attention of the house I do so because they illustrate how unsatisfactory the situation is, and how seriously the present government and the previous government have failed to solve the problem of housing
on a long-term basis. We Social Crediters believe it is high time the government did something about this situation and made sure that public moneys are deployed for the benefit of the people and not for the sake of the profits of lending institutions. We want to see the finance costs of housing lowered in order that the small income man may benefit first. We want to see mortgage credits forthcoming in sufficient quantities and on a steady basis, not on a stop and go basis. We want to see interest rates lowered.
In this respect it is sheer nonsence to insist that an iron-clad government-backed guarantee would require an interest rate of 6 per cent. Our people are excellent credit risks, and this has been proven by the low percentage of losses on approved loans. The rate of interest return offered recently on the No. 12 series of Canada savings bonds was
4.46 per cent, which was advertised as the highest yield ever offered by the dominion government, and as being a very good investment. I agree that this is a good investment and a good yield, but if a government-backed bond produces interest at the rate of
4.46 per cent, then these housing loans, made through lending agencies and guaranteed by the government, should not require more than
4.46 per cent interest. In fact the loan should be issued at cost.
Finally, in our view there is no greater responsibility of government at this time than that of instituting a brand new approach, a far-reaching housing program designed to make home ownership possible for every Canadian family, not just for a select few. Toward this end we are prepared to give full co-operation.
I might point out that we had an election on June 10. The Liberals lost the confidence of the public. Temporarily the Conservatives are in power. It seems to me that the moral of this story is that no government in Canada remains long in power which does not give the people the type of management they desire. This government and all governments will have to recognize that a new period is dawning in which people are thinking of a better life and, consequently, a new and more dynamic concept of government is necessary. Our policies on housing must reflect this concept.
Topic: NATIONAL HOUSING ACT
Subtopic: AMENDMENTS RESPECTING AGGREGATE AMOUNT AVAILABLE, DOWN PAYMENTS, ETC.