His summary is as follows:
(1) It would not accept hasty commitments in regard to the most difficult and complicated phases of the housing problem on which other countries have been working (without too much success) for a generation or more. Nevertheless, it would provide machinery for taking the first steps towards a rational and permanent solution of the whole problem.
(2) It would make possible a substantial volume of construction which would provide a stimulant to business recovery and absorb a considerable number of the unemployed.
(3) It would make possible a large volume of construction without pressing with undue heaviness upon an already over-burdened public exchequer. For instance, a $10,000,000 appropriation by the dominion government would make possible a $50,000,000 construction program.
(4) It would provide federal funds in the junior mortgage position where private funds are not obtainable at all, or if obtainable, only at prohibitive costs.
(5) It would make use of private lending agencies instead of driving them out of business, but it would provide for a financial setup which by the pooling of individual mortgages and the maintenance of proper margins, would make possible the securing of all the funds required on a reasonable cost basis. In other words, the individual mortgage would be liquefied and made a readily marketable credit instrument.
(6) It would provide for control in such a way as to assure the carrying out of the program on a sound and business-like basis.
I wish particularly to emphasize article No. 4 of Doctor Clark's summary:
It would provide federal funds in the junior mortgage position where private funds are not obtainable at all, or if obtainable, only at prohibitive costs.
I should like to read further from the evidence given by Doctor Clark:
It is possible that instead of the federal government coming in there on a central
Housing Commission-Mr. Hanbury
housing board to buy the preferred stock of these local bousing corporations, you might provide for the setting up of an insurance corporation to guarantee the last twenty per cent of an eighty per cent mortgage.
And further down on the page:
... and then provide this national insurance corporation which would guarantee that last twenty per cent, then you would have a scheme which would, in effect, give you the same results as the plan I originally outlined, but possibly a little simpler.
It is through the medium of the federal government placing itself in the junior position of mortgage holders that I suggest we may best lend a stimulus in the matter of encouraging the construction of houses for immediate relief of the unemployment situation.
We had many proposals placed before us, but I believe the function of any government, as outlined in Doctor Clark's evidence, is in the first place to avoid the socialization suggested by many of the witnesses. We had suggestions to the effect that the government should go into the house construction business, and furnish all the funds therefor. We had the suggestion that the funds should be furnished at practically no cost to the people. I believe there is money in Canada which could go to provide all the housing required. In my view one of the reasons the money is not available at the present time is to be found in the legislation passed by many of the provinces. If the moratoria in the various provinces were lifted there would immediately become available money for loan purposes in connection with the construction of houses. I cannot see wherein this parliament should lend itself to placing money in the various provinces through this or any other scheme when we have no protection from the provincial moratoria now existing or to be placed in the future.
The report of the committee has recommended the establishment of a housing authority. We considered the use of the expression "housing comipission," but it was the opinion held by a majority of the members of the committee that it was not a commission we wanted, but rather an authority. Interpreting the recommendations made 'before the committee by Doctor Clark I can see no necessity for setting in motion the ponderous machinery of another commission. If we wished to establish an insurance corporation to underwrite the junior securities of these mortgage companies I believe the Department of Finance could function in that particular, and it would not be necessary to have a commission for that purpose.
It is true that if we are going to give consideration to slum clearance and to other problems we must have some body or authority to make a thorough investigation, because the question of slum clearance is quite involved. It will require considerable investigation and much in the way of legislation on the part of municipalities, provinces and federal authorities. So I say we shall have to have some body to investigate slum clearances. But to my mind there is no necessity for a commission; an authority under some department of government could undertake that work. If we are to accept the recommendation of Doctor Clark, or give it the consideration to which it is entitled, there is no necessity for a commission. The Department of Finance or some other department could place these insurance funds as well as any other body.
I turn again to Doctor Clark's evidence, and in particular his reference to slum clearance. At page 354 I find the following:
It would be wise to avoid any hasty commitments in regard to the most difficult and the most complicated aspects of housing; for instance, the problem of slum clearance, that problem seems to me is going to take a great deal of cooperation between provincial and municipal authorities, and dominion authorities probably. It is going to involve a good deal of legal and other considerations. It is going to involve a lot of cost. I do not think it is a problem that we ought to jump into hastily. If we did I think we would quickly be saddled with a very heavy loss, so far as that long-run problem is concerned. I would suggest that you recommend further investigation, however, by some central housing body to be set up, or by some appropriate body. I would like to have a start made on the solution of that problem, but I would not jump too far into it over night.
I read that statement to support my suggestion that if we are going to accept Doctor Clark's recommendations there is no necessity at the present time to establish another commission. If we did establish a commission, by the time .they had their machinery in operation months would have passed. On the suggiestion which Doctor Clark has made and which I support, I can see no reason why, through the use of existing channels such as mortgage and loan companies, the money could not be put into circulation for this purpose at an early date. I do not see why we should not consider using the established institutions. They have over a period of years developed a personnel to the point where they understand the lending business thoroughly. I think it is fair to assume that it is not our purpose here to give our money away. Rather we propose to lend money for legitimate purposes, and, Mr. Speaker, I want to accent the
Housing Commission-Mr. Heaps
word "lend." We do not propose to give money away. We are going to lend money, and if we are going to lend money it must be lent on an economic and sound basis. I repeat that the existing loan and insurance companies have their personnel who have been well trained in the lending business over a period of years.
The existing loan and insurance companies have large sums of money available. If we can assist them andi assist ourselves at the same time by having these provincial mora-toria raised, the loan and insurance companies would have money available to lend up to fifty or sixty per cent of the total value. I think it is reasonable to assume that no member of this chamber or anyone else who is active in the interests of the people would suggest that any money should be put out to any individual or company which did not have in the first place a reasonable amount of its own to add to the amount they were borrowing. I suggest that a minimum of twenty per cent should be required of any individual or company before any amount was lent to them for construction purposes under this housing scheme. With that money available on the part of the borrower, if the existing loan and mortgage companies would add to that fifty or sixty per cent of the total amount required, then if through this insurance company which has been suggested the balance of the money, probably fifteen or twenty or even twenty-five per cent was made available, I think on that basis we would have a sound and businesslike proposition. If we require people to put up their own money I think we will have a sound, businesslike proposition. If we leave the insurance and loan companies, with the experience they have had in these matters, in charge of this affair, we need have no fear that our money will not be properly spent, and we need have little fear of politics entering in or of bureaucracy which undoubtedly will creep in if we have a commission.
There was one other point which was made before the members of the committee. We were told of the necessity of providing homes for the underpaid workers which they might rent on a basis that was not economically sound, on a basis that would not give a fair return to the investor. I prefer, M*r. Speaker, to look at that problem in a different light. I think our duty here, instead of relegating these people for all time to the position of underpaid workers, instead of expecting to have underpaid workers in Canada for all time, is to see that our workers are properly paid so that they can provide their own homes,
and for that reason I think we must take into consideration the general conditions in Canada. Under present conditions even the higher paid worker is not able to provide his own home. So the question of housing is not simply a question of providing money. It is a question of general conditions, and as general conditions improve and when they do improve, as I am sure every person believes they will, housing is not going to be the serious matter it is to-day. I should be very sorry to see the government go into a general policy of socialism based on the general conditions today. The fact there is a large number of people in Canada who Cannot provide proper housing for themselves does not in my opinion justify a policy for all time to meet these special conditions of to-day.
I come back to my point that an authority under one of the departments of government could meet this situation and could probably make the funds available much more quickly than if we attempted to establish another commission at this time. I am going to suggest to the government that they give very serious consideration to letting the Department of Finance or some other department of government try it out-not necessarily the Department of Finance, but some department. It will be only a matter of a ferw months before parliament will be meeting again and if in the meantime the department has not been able to meet the situation as they should1 have done, it will be an easy enough matter to establish a commission. At present I think we have too many commissions and I believe the general public are coming to be of the same opinion.
Topic: PROPOSED LEGISLATION PROVIDING FOR ASSISTANCE IN THE CONSTRUCTION OF HOUSES, SALARIES OF COMMISSIONERS AND STAFF AND ADVANCES