MARKETING ACT AMENDMENT

[Stage Direction]
Hon. ROBERT WEIR (Minister of Agriculture) moved for leave to introduce Bill No. 117, to amend the Natural Products Marketing Act, 1934.
He said: Mr. Speaker, the purpose of the bill is to make four amendments to the Natural Products Marketing Act. The first amendment is to change the definition of the expression "natural product" so that it will include pulp and paper, and other forest products. The second amendment is to provide for a system of providing loans to local boards in their early stage of operation before funds are available. The third is to make provision for 'the equalization of returns between two or more closely related products, and the fourth has to do with expediting proof of origin of a product.
Motion agreed to and bill read the first time.

[Stage Direction]
Right Hon. R. B. BENNETT (for the Minister of Marine) moved for leave to ihtroduce Bill No. 118, respecting the bridge across the Second Narrows of Burrard inlet in the province of British Columbia.
He said: I am asking for leave to introduce the bill, on behalf of the Minister of Marine (Mr. Duranleau). This bill has to do with certain legal difficulties which arose in connection with the original bridge, and it is desirable to relieve those responsible for the new structure from certain obligations which, apparently, might attach.
Motion agreed to and bill read the first time.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Questions

Mr. OHEVRIER:: Is any action being taken for the purpose of making applicable to the soldier settlement board the provisions of the Civil Service Act and particularly those of the Superannuation Act 1924?


Mr. BENNETT:: That is answered! by
action that has already been taken.


Mr. SPEAKER:: Answered.



BOY SCOUTS' ASSOCIATION

Mr. CARMICHAEL:: 1.	Does the dominion government give a grant to the Boy Scouts' Association?
2.	If so, for what years has this been paid and how much for each year?
3.	Through what department of government is this grant paid?
4.	Was the scout movement introduced into this country through the Department of Militia and Defence?


Mr. CAHAN:: 1.	Yes.
2.	Fiscal years	Annual grant
1915-1922	$ 5,000
1923-1932	 15,000
1933	 10,000
1934-1935	 9,000
3.	Department of Finance.
4.	No.



QUESTION PASSED AS ORDER FOR RETURN


Mr.   LAPLECHE@: How much was paid in legal fees to Mr. Aime Geoffrion, barrister, from 1921 to 1930, and 1930 to 1935?


Mr. CAHAN:: Return tabled herewith. MOTIONS FOR PARERS



INDIAN AFFAIRS-MEDICAL SUPPLIES

Mr. BARBER:: For a return showing:-
1.	Whether the Department of Indian Affairs supplies medicines and medical supplies to Indian tribes throughout Canada.
2.	The total cost of such supplies for the year 1934.
3.	Whether such medicines and medical supplies are provided through the Department of National Health.
4.	If so, does the said department secure all of such materials by public tenders.
5.	From whom the Department of National Health purchased such medicines and medical supplies during the year 1934.
6.	Whether the Department of Indian Affairs ships medicines and medical supplies to the different sections of British Columbia from Ottawa or some other eastern depot, or what the method is of handling such supplies.

7.	W'hether local druggists in different sections of Canada are invited to tender on supplies of medicines used by the Department of Indian Affairs.
8.	If so, how many druggists in British Columbia were invited to tender on such supplies.


Charles Hazlitt Cahan: Return tabled herewith.



ILLUSTRATION STATION, BAKER BROOK, N.B.

Mr. DUFF (for Mr. Michaud):: For a copy of all correspondence, reports, telegrams and petitions exchanged' between the Department of Agriculture and tihe Director of Experimental Farms and others, relating to the Illustration Station at Baker Brook, Madawaska county, Nerv Brunswick, from January 1, 1933, to June 1, 1935.



SECOND NARROWS BRIDGE

Mr. MUNN:: For a return showing the cost of operating the Second Narrows bridge at Vancouver, British Columbia, by the harbour board for the twelve months ended June 1, 1935; said report to give full details as to expenditures and receipts, giving total amounts.


Richard Bedford Bennett: The hon. gentleman
realizes, of course, that this return will necessitate communication with the harbour board at Vancouver, and it may be some time before the return is received.


[Stage Direction]
Motion agreed to.
lord's day act
Mr. BOULANGER moved:: For a copy of all petitions and correspondence coming from the province of Quebec and received by the House of Commons or by the government, in connection with the adoption by parliament of the Lord's Day Act.


Richard Bedford Bennett: I think part of this information at least was destroyed with the burning of the parliament building in 1916, but such correspondence as may be available we shall endeavour to find, although there will be a good deal of difficulty in getting it out.


[Stage Direction]
Motion agreed to.

Mr. SANDERSON (for Mr. Taylor):: For a copy of all correspondence between the Department of Finance and Milton C. Fox of Essex county, with regard' to his appointment under the Farmers' Creditors Arrangement Act.
Also a copy of all correspondence in regard to his resignation and reinstatement.



MORTGAGE CREDITS FOR FISHERMEN

[Stage Direction]
Hon. GROTE STIRLING (Acting Minister of Fisheries) moved that the house go into

B.C. Relief Camp Strikers
committee at the next sitting ,to consider the following proposed resolution:
That it is expedient to bring in a measure for the purpose of establishing a system of long term mortgage credit for fishermen, under the administration of the Canadian farm loan board, and to authorize the government of Canada to provide initial capital in an amount not exceeding three hundred thousand dollars, and to subscribe an amount of five per cent of the capital stock as loans are made; to purchase fishermen's long term loan bonds in an amount not exceeding five hundred thousand dollars; and to guarantee the principal and interest of such bonds to an amount not exceeding one million dollars.
He said:	His Excellency the Governor
General, having been made acquainted with the subject matter of this resolution, recommends it to the favourable consideration of the house.
BjC. relief camp strikers
On the orders of the day:
Mr. F. W. TURNBULL (Regina):: Mr. Speaker, would the Prime Minister advise the house of any recent developments in connection with the marchers from Regina?


Richard Bedford Bennett: Mr. Speaker, on Saturday last a
committee of the government met eight representatives of the so-called marchers at Regina. The spokesman was one Arthur H. Evans. The other seven admitted that they were not born in Canada. Evans was the only Canadian-born of the eight. He himself has a criminal record. He was apprehended in 1922 at Drumheller for gambling and was dismissed, as Arthur H. Evans. On January 16, 1923, at Drumheller, he was charged with forgery. His bail of $500 was estreated, the warrant having been issued at Calgary. In January 16, 1924, he was tried at Calgary for fraudulent conversion, which I may say under the criminal code is theft, and he was sentenced to three years in Saskatchewan penitentiary as Arthur H. Evans, No. 1042. On March 18, 1925, he was released on ticket of leave. On September 15, 1933, at Vernon, B.C., he was sentenced to one year in the provincial gaol.
The delegation made certain demands upon the government which I think beyond question it was realized were incapable of being granted by any government in whole at least. It was apparent from what Mr. Evans said that he represented what he called the Unity League and various other organizations the purpose of which was to destroy constituted authority. The government has given a very great deal of anxious thought to the situation that has thus been created. It is a
situation in which propaganda which is not confined to Canada is being carried on by well organized forces. The ends they have in mind are well known and they do not hesitate to express them, and their last threat was to call upon those whom they control to resist to the full any effort to maintain law and order.
The government realizes that a number of younger men of no evil disposition who have been taken from these camps and induced to believe that they were the victims of hardship and of wrong on the part of the government of the country have been misled. I endeavoured to point out to this delegation that the appeal to human sympathy is still very strong in a country such as this, and that these men more than any others knew that they were taking men who were inexperienced and young and exploiting them for the purpose of advancing their sinister purposes.
It is well perhaps for me to state to this house, in order that there may be no misapprehension, that the camps to which reference has been made have won the warm support and approval of those who have inspected them, including people well able to arrive at conclusions how single, homeless, unemployed men might be cared for, and some of the most distinguished social workers from other countries have expressed warm approval of the action that has been taken.
I endeavoured to explain to the delegation that these camps were in no sense regarded as permanent camps; that they were temporary institutions created to supply shelter, clothing and food to single homeless, unemployed men. They were not under discipline, and the only restraint imposed on them was that of good conduct. They were not compelled to work, but work was provided for them, and they were paid a very small sum, not as charity, but to enable them if they so desired to purchase small comforts. They received twenty cents per day. The amount paid in the province of Manitoba I think by the provincial authorities to tihe men in their camps is ten cents.
The Department of National Defence provided the administration-the administration of the commissariat and the supervision and the general administration connected with the maintenance of the camps. I myself have visited two of these camps unannounced, and I venture to say, as I said to the delegation on Saturday, that many, many Canadians who are living to-day on farms and others living in cities and towns are not nearly so well provided for as those who are living in these camps. Listening to the appeals made to them, the men left the
B.C. Relief Camp Strikers

camps. One of the representatives of the second group who admitted that his business was to agitate and to organize the forces of these men, and who had formerly been a resident of Glasgow, was a very well spoken man, and he had no hesitancy in stating what his purpose was.
We therefore made it quite clear that so far as the government was concerned it accepted its responsibility and that the challenge to organized society which these gentlemen had made would be met, and we asked as I now do that all good citizens in this country who believe in the maintenance of law and order shall use their influence and their power and their authority to that end.
The government is not unmindful of the difficulties that have arisen by reason of these men having moved as far east as they ' have. The eight who met me gave their residence as Vancouver but I take it that they meant that was the last place at which they had been. I think that was quite clear when they explained that they were not born in Canada and some of them had been here but a limited length of time. I endeavoured to explain to them what must be known to all the house, that to trespass upon railway property in large numbers, taking possession of cars and trains and moving eastward, endangered in t'he numbers that were gathered together not only human life, the carriage of the mails and the transportation of freight but the property of the railway companies. It was apparent that at the camp at Dundurn not far from Saskatoon, there had been a measurable amount -I shall endeavour to be very low in my estimation-of, shall I say comfort and satisfaction enjoyed by those who were at that camp. They had shown no disposition to leave the camp but when these agitators had finished with them they marched down and joined the others at Regina. Apparently word had been sent ahead to other men because a considerable number left other camps in Alberta, augmenting those from British Columbia by several hundreds. That being so, we explained to them as reasonably as we could that the challenge to government involved in that conduct would be met and that the organized forces to maintain society would endeavour to preserve law and public safety and human life and the property of the public utilities which I have mentioned.
The government also realizes that the numbers at Regina will have to be dealt with. I told the delegation that the men would be permitted to return to their camps assuming that that meant, as they understood, that the

agitators would neither want to go nor would go back to the camps. The government realized that something should be done in the way of making immediate provision for these men who were congregated at Regina. We suggested that we would establish under the auspices of Mr. Burgess, who represents the Department of Labour, a temporary camp at some point in the vicinity of Regina where the strike marchers may go if they so desire and where they will receive necessary food and shelter until their final destination is determined. Under the arrangement made by the Minister of Railways and Canals (Mr. Manion) and the Minister of Agriculture (Mr. Weir) with a committee of the strike leaders at Regina last week, the marchers will continue to be fed at the expense of the government until Wednesday forenoon of this week; after that, the marchers will be permitted to go into the temporary camp which will be established on Wednesday next, where food and shelter will be afforded. The government further desires that it be clearly known that consideration will be given to the wishes of the marchers who enter the temporary camp and who desire to return to the camps from whence they came or to other camps of a similar kind in western Canada. The cases of individuals who have homes to which they may go in other parts of Canada will be considered on the basis of assistance in transportation to enable them to reach their homes.
I desire to make known in the clearest terms I am capable of uttering that this movement in Canada is neither national nor continental, it is international. I regret to make that statement. I should like to quote a cable which I received from Paris, as follows:
We sharply protest police terror against striking	seamen dockers in Vancouver.
Demand withdrawal police from strike area and assurance of right to strike.
International of Seamen and Harbourworkers.
The hon. member for Vancouver Centre (Mr. Mackenzie) is familiar with the conditions which exist in that city and the mayor of Vancouver has declared the purposes of those in charge of this breach of the law. I was somewhat surprised to receive that cable from Paris but in view of what has happened in other parts of this continent in connection with these matters I do not know that I should have been surprised.
I desire to inform this House of Commons and I hope the country, that the government is fully seized of the seriousness of the situation and it believes as firmly as it is possible to believe that the present movement of these

Supply Bill
marchers upon Ottawa in defiance of the law is in reality an organized effort on the part of the various communists organizations throughout Canada to effect the overthrow of constituted authority in defiance of the laws of the land. The government is determined to maintain law and order by all the means within its power and calls upon all law abiding citizens to assist to that end. Definite instructions have been given to the Royal Canadian Mounted Police at Regina to assist the officials of both railways in preventing further trespasses upon railway property or upon railway trains and the marchers have been notified that they will not be permitted to continue their eastward journey by the unlawful use of railway transportation.


Mr. MacINNIS:: Owing to the admitted seriousness of this situation, I wonder if the Prime Minister (Mr. Bennett) would set aside a time in which this matter could be discussed in the house before adjournment takes place.


Some hon. MEMBERS:: No.


Angus MacInnis: I would prefer an answer from the Prime Minister.


Richard Bedford Bennett: I would not think that would serve any useful purpose at the moment, but I shall give it consideration.



SUPPLEMENTARY ESTIMATES, 1935-36

[Stage Direction]
A message from His Excellency the Governor General transmitting supplementary estimates for the financial year ending March 31, 1936, was presented by Right Hon. Sir George Perley (for the Minister of Finance), read by Mr. Speaker to the house, and referred to the committee of supply.
Mr. MACKENZIE KING:: Could the right hon. gentlemen inform the house if the estimates which he has just brought down will conclude those that will be presented to the house at this session or will there be still further supplementaries?


Sir. GEORGE PERLEY:: As far as I know there will be no further estimates.



DOMINION FRANCHISE ACT

[Stage Direction]
Hon. C. H. CAHAN (Secretary of State) moved the third reading of Rill No. 109, to amend the Dominion Franchise Act.
Motion agreed to on division, bill read the third time and passed.

Right Hon.   S@: That the reports made by the committee of supply on February 5, 8, 22 and 28; March 1,
4, 5, 11, 12, 14, 15, 18, 19, 25 and 29; April 1,
4, 5, and 12; June 3, 4, 6, 7, 14 and 20, be now received, read a first and second time and concurred in.


[Stage Direction]
Motion agreed to.
Resolutions reported, read the second time and concurred in.

[Stage Direction]
Sir GEORGE PERLEY (for the Minister of Finance) moved that the house go into committee of ways and means.
Motion agreed to and the house went into committee, Mr. Smith (Cumberland) in the chair.
George Halsey Perley: Resolved, that towards making good the supply granted to His Majesty on account of certain expenses of the public service for the fiscal year ending 31st March, 1936, the sum of $141,145,120.83 be granted out of the consolidated revenue fund of Canada.


[Stage Direction]
Motion agreed to.
Resolutions reported, read the second time and concurred in. Sir George Perley thereupon moved for leave to introduce bill No. 116, founded on the resolution.
William Lyon Mackenzie King: I had in mind to say to my right hon. friend a moment ago that we have no desire on this side of the house to delay the proceedings, but I do not think we ought to allow the government to get away with all the main estimates of the session until we have some definite understanding as to the time the session is to conclude. Perhaps my right hon. friend will let the bill stand at this stage and possibly before another sitting we can have an understanding as to further measures that will have to be considered before parliament prorogues.


George Halsey Perley: Perhaps my right hon. friend will allow the bill to be read the first time, and then it can stand.


William Lyon Mackenzie King: That will be all right.
Motion agreed to and bill read the first time.



COMPANIES ACT, 1934, AMENDMENT

[Stage Direction]
The house resumed from Friday, June 21, consideration in committee of bill' No. 85, to amend the Companies Act, 1934-Mr. Cahan-Mr. Smith (Cumberland) in the chair.
On section 5-Consideration for any shares allotted must be adequate.
Companies Act Amendment
Charles Hazlitt Cahan: We have had considerable discussion with regard to section 5 of the bill and I am going to suggest that the section be amended by striking out subsection 9 and substituting the following therefor:
(9) Shares in the capital stock of the company having a nominal or par value shall not be issued as fully paid except for a consideration payable in cash to the total nominal amount of the shares so issued or for a consideration payable in property or services which in all the circumstances of the transaction may justly be deemed adequate consideration therefor:
Then the latter part of the clause remains as it is now:
Provided that this subsection shall not apply to any mining company..
And so on.


Mr. BOTHWELL:: What effect will that have on the no par value shares? In the old subsection 9 which is being repealed reference is made to shares, whether common pr preferred, or whether with or without nominal or par value. This new amendment simply deals with shares having par value,. What effect has it on the no par value shares?


Charles Hazlitt Cahan: This does not apply to no par value shares because under the act as it now stands no par value shares are issued for a consideration to be fixed by the board of directors. There is a difference between no par value and par value shares; par value shares must be paid up in cash or the equivalent. All the no par value share gives is a pro rata interest in the property of the company.


Charles Edward Bothwell: Personally, I think it is an improvement.


Mr. RALSTON:: I think this amendment would put a premium on the issuing of no par value shares; that is to say, no par vahie shares can be issued for such consideration as the directors may think fit, whereas the par value shares will have to be issued for such consideration as in all the circumstances of the transaction may justly be deemed an adequate consideration therefor. The trouble with that section, as was pointed out when the bill was up the other day, is that it leaves it to someone in the future to project his mind back and determine what was adequate consideration in all the circumstances at the time the shares were issued. In the interests of shareholders there ought to be some certainty about this matter. As I pointed out the other day, those who buy shares should not be left in the position of 
having it as a possibility that they may be put on a List of contributories two or three years hence on the ground that it was then possible to establish that the consideration was not adequate. The directors have to take come responsibility with regard to this matter. It is proposed by section 96B to bring that responsibility home to the directors by providing that any director is to be liable for the difference between the amount of the nominal value of the shares and the true amount which the property or service represents. This amendment should provide for an express resolution by the directors to the effect that they have determined in all the 'circumstances of the transaction that the property or service which it is proposed to transfer to the company in consideration of the issue of shares is a justly adequate consideration therefor. That means that the directors must go on record; they have before them those words and they must put them in the resolution: "A justly adequate consideration" for the shares which are being issued. Then section 96 would apply thus: in case of any shares issued where such a resolution has not been passed, or if it is proved that as a matter of fact the director knew the consideration was inadequate or that he failed to take reasonable steps to ascertain whether the consideration so received by the company was in fact adequate, he is liable for the deficiency between the actual value of the property and the nominal value of the shares which are to be issued. I do not see how we can go further than that without injecting a great deal of uncertainty and the possibility of a good deal of hardship in connection with the issue of shares. I am going to ask the Secretary of State (Mr. Cahan) if he will accept an amendment which I have just drawn up to the one which he has suggested so that subsection 9 will read:
Shares in the capital stock of the company having a nominal or par value shall not be issued as fully paid except for a consideration payable in cash to the total nominal amount of the shares so issued, or foT a consideration payable in property or services which the directors may determine by express resolution to be in all the circumstances of the transaction a justly adequate consideration therefor.
And then go on with proviso with regard to mining companies as is provided in the amendment the Secretary of State has just read. Otherwise we shall have a totally different state of affairs as regards no par value shares from that regarding par value shares. After all we have to put the responsibility on the directors, and section 96B puts a very stringent penalty upon the direc-

Companies Act Amendment
tor who does not do his duty with regard to inquiring as to the adequacy of the consideration.


Charles Hazlitt Cahan: If I understand the amendment suggested, it would mean that when shares are issued under these circumstances for property as fully paid, those to whom the shares , are allotted or the transferees of such allottees would not be liable even if the consideration were inadequate, but that the directors personally would be liable under the proposed section 96B. Is that the view of the hon. gentleman?


James Layton Ralston: That would be the effect.
Mr. 'CAHAN:	There was on Friday last
a quotation by the hon. member for Hants-Kings (Mr. Ilsley) from Mr. Wegenast in which I concurred. He quoted Mr. Wegenast as saying:
Present law requires consideration to be not merely adequate in all circumstances but to be equivalent of par value or issue price of stock although in some eases courts have shown reluctance to go behind honest decision of directors.
I think that is the present law. If that is an issue to be discussed, I can show from quotations from the 1934 act that that is the present law. On the other hand I am not surprised that courts have been reluctant to go behind the honest decision of the directors. We cannot require of directors any more than that they shall make adequate inquiry and then give an honest decision. I think that is the present law, but so far as I am concerned, if we are to consider amending section 96B so as to make directors liable to the limit, I do not object to the change as proposed by the hon. member for Shelburne-Yarmouth (Mr. Ralston).


Mr. ILSLEY:: I am sorry not to be able
to agree with the hon. member for Shelburne-Yarmouth. I think the section would be whittled down far too much by amending it in the way proposed by him. It seems to me that there is no hardship in requiring a subscriber for shares to pay for them in either cash or property or services, and I would have no objection, so far as that point is concerned, to the section as proposed by the Secretary of State. I would be afraid if we went any further we would not be making any reform whatever; in fact, we would be going backwards. Certainly if the law is as stated by Mr. Wegenast and by the Secretary of State, the section drafted by the Secretary of State merely states with almost exactitude the law as it exists at the present time, and I do not think we would make it easier than
it is at present for persons to get shares without paying for them.


James Layton Ralston: I think the hon. member for Hants-Kings is wrong in suggesting that we are going backwards. Where we are going forward and making a very long step forward is in section 96B; it never existed before and, as I understand the matter, is not the law to-day. If you come to the stage where you could prove the directors were actually guilty of fraud, then there might be some common law remedy by the company against the director. But now what I am suggesting is putting par value shares on exactly the same basis as no par value shares, namely, that the consideration shall be such as is solemnly, honestly, to use the word used by the Secretary of State, determined by the director as being an adequate and just consideration under all the circumstances. Then we come to section 96B which is a sweeping reform, which provides that any director who fails to take reasonable steps to ascertain the adequacy of the consideration; that is, even if he had an honest belief in the adequacy of the consideration, if it is proved that he did not take steps to check up that belief, he is going to be liable for the deficiency between the consideration received and the nominal value of the shares. That is a pretty stiff penalty to put on directors, and anybody who wished to make a step forward in that direction and wanted to make blue sky laws would have no apology to make for that particular section. But in subsection 9 under section 5 we place par value and no par value shares on the same basis as regards consideration in so far as the allottee is concerned. If he gets a certificate with the words "paid up" on the face of it as a receipt from the directors saying that they have determined that that is the consideration which he hands to them as a just and adequate consideration under all the circumstances, it does not seem to me that he ought to have to face a liquidator two or three years afterward in order to make up that consideration. Everyone knows how absolutely impossible it is to take a pencil and figure out exactly the dollar value of some of the considerations put into a company. As long as it is honest and adequate according to their judgment, after reasonable inquiry has been made as to its adequacy, it seems to me we should not go further.


Richard Bedford Bennett: I am in the position of agreeing with the hon. gentleman. I think if we a.re to enact this section it is an abundant precaution to provide that the
Companies Act Amendment

public shall be protected by resolution passed by the directors. The provision that the minister has made that action shall be taken in any event within three years to protect the situation to which attention was directed the other day by the hon. member seems to me most reasonable. But I believe it is in the public interest to have that on the record, that the directors pledge their judgment and the exercise of their discretion that the services or property received for the shares were just and adequate and warranted the issue of fully paid up shares to the extent mentioned. Then when you apply section 96 as amended by the minister I think you will have as complete a case as you ever get in the world. I think it is a strengthening of the position, may I say to the hon. member for Hants-Kings (Mr. Ilsley), because then anyone who inquires will have a resolution of these men that the consideration is in their judgment just and adequate. If there is fraud I think there is no doubt about their Liability. Now a statutory liability will be imposed upon them within the three years, being the limitation suggested by the minister. I believe this is a strengthening of the law.


Charles Hazlitt Cahan: If the house will consent, I withdraw the amendment I proposed, so that the vote may be on the amendment of the hon. member for Shelburne-Yarmouth.


The CHAIRMAN (Mr. Smith, Cumberland) :: The amendment to the amendment reads:
Shares in the capital stock of the company having a nominal or par value shall not be issued as fully paid except for a consideration payable in cash to the total nominal amount of the shares so issued, or for a consideration payable in property or services which the directors may determine by express resolution to be in all the circumstances of the transaction a justly adequate consideration therefor.


Richard Bedford Bennett: I think you had better say "just and adequate."


Charles Edward Bothwell: If I understand the remarks of the hon. member for Shelburne-Yarmouth (Mr. Ralston) he wishes to have not only this section but 96B amended so that stock in the hands of transferees cannot at any time be affected. I am opposed to this amendment. The wording of that is that the directors simply have to pass a resolution that in their opinion the consideration is just and adequate. For the exploiting promoter-and I understand it is being done now-the provisional directors of the company are clerks in the office of some firm of solicitors. What would prevent a company such as that having the first permanent 
directors consist of the same provisional' directors, and at a later time transfer to the actual people who are promoting the company?


Charles Hazlitt Cahan: If I may interrupt, that may no longer take place under this act, and no longer does take place under it. It is no longer permissible to file a statement in lieu of prospectus; if shares are put out to the public they must be put out with a prospectus and with all the particularity required by the prospectus. We have got beyond the stage, which the hon. gentleman suggests, in the 1934 act.


James Layton Ralston: My hon. friend is wrong also in his assumption in1 regard to the change in 96B. The only change I would suggest in that is-I presume it is intended to exempt mining companies; I do not care whether that is done or not-that a director be liable if this resolution has not been passed, as well as being liable if he has failed to make proper inquiry as to the adequacy of the consideration, or has knowledge that the consideration is inadequate.


Charles Hazlitt Cahan: We shall; consider that in a moment.


James Layton Ralston: I want to point out also that it is not simply passing an opinion, but a solemn determination by the directors.


Ernest D'Israeli Smith: I understand the hon. gentleman agrees to change the words-


Charles Hazlitt Cahan: No, he moves the whole as a new amendment.


James Lorimer Ilsley: The proviso about mining companies should certainly come out if that amendment goes in, should it not?


Charles Hazlitt Cahan: I am not particular about mining companies. I regard mining companies as no more speculative than most other companies. But that is the express recommendation of the price spreads commission, of which the hon. gentleman was a member.


James Lorimer Ilsley: But we are making all sorts of amendments in sections here, we are a hundred miles away from the price spreads commission.


Charles Hazlitt Cahan: No, we are getting nearer to it. I am perfectly willing, and if the hon. gentleman wishes, I think there will be no objection to strike out all the words of the proviso:
Provided that this subsection shall not apply to any mining company ...

Companies Act Amendment
Then the directors will have to make this solemn affirmation and be responsible if it is not-


James Layton Ralston: A true statement.


Charles Hazlitt Cahan: -a fair statement. We will strike out all the words after the word "services."


Mr. BRADETTE:: The minister is aware of the blue sky laws, that are very drastic as far as mining propositions are concerned. This law is likely to conflict with mining. In Ontario we have the blue sky law, very drastic.


Charles Hazlitt Cahan: But they apply to all these companies, and I am not infringing on provincial jurisdiction.


Joseph-Arthur Bradette: I believe originally it was better than it is now.


James Lorimer Ilsley: There is no conflict with any blue sky law. My amendment does not make it easier for directors of mining companies, it makes it harder.


Richard Bedford Bennett: There is no conflict.


Ernest D'Israeli Smith: Amendment carried without the
proviso.


Richard Bedford Bennett: Did you change the words "just and adequate"?


Charles Hazlitt Cahan: Now coming to the other section, I suggest and move, that section 96B be amended as shown in section 96B of section 15 of the bill, by striking out the first subsection, that is the one that remains. I think we have passed the other subsections, because we dealt with the word "speculate" and with the restriction to public companies. I suggest that we strike out subsection (1) of 96B and substitute the following therefor:
(1) The directors of a public company shall not authorize the issue and allotment as fully paid of shares in the capital stock of the company having a nominal or par value, except for a consideration payable in cash to the total nominal amount of the shares so issued, or for such consideration payable in property or services as the directors may determine by express resolution to be in all the circumstances of the transaction a just and adequate consideration therefor.
Then this amendment will correspond with the previous amendment. It should read "such services as may 'be deemed just and adequate," so as to correspond with the former amendment. Then, I also move -to strike out the words " of promoter."


Charles Edward Bothwell: That word appears in
subsection (2) of section 96B?


Charles Hazlitt Cahan: Yes, in subsection (2). I
am moving to strike out the word "promoter" because it does not apply in that subsection at all. We make the directors responsible.
Then, another suggestion made the other evening wTas to add to subsection (3) the following words-
And no such suit shall be commenced after the expiration of three years from the date of allotting such shares.


Ernest D'Israeli Smith: Shall the amendments carry?


James Lorimer Ilsley: I should like someone
to explain what directors will be liable for, if the section passes as amended. Are they liable for not passing the resolution for which provision is made in section 5?


Charles Hazlitt Cahan: I am simply amending the
first sifbsection. But if they comply with that subsection, then if you will' turn' to page 10 of the bill you will find that they are liable "at the suit of any director, shareholder or creditor of the company, to make good to the company the amount by which the consideration actually received by the company for any shares so issued1 and allotted as aforesaid, is found by the court, after full inquiry into the circumstances of the transaction, to be less than the amount of the consideration which the company ought to have received for such shares." So in the case of the par value shares the liability is for the difference, because now that amount is the full amount of the par value shares issued.


James Lorimer Ilsley: In the case of cash. But
in the case of property or services there is no obligation to get the full equivalent, if the amendment proposed is carried.


Charles Hazlitt Cahan: We provided for that in our amendment to section 5 of the bill when we stated that they must receive the just and adequate equivalent. We provide in this instance that if they do not receive the just and adequate consideration they are liable for the difference.


James Lorimer Ilsley: I would not think so. I
would think that by law all they are obliged to receive is what they say, by resolution, is a just and adequate consideration.


Charles Hazlitt Cahan: I beg the hon. member's
pardon. I do not wish to be petulent, but I must direct bis attention to the top of page 10 of the bill, where he will find these words:
Every director of a public company who is a party to authorizing the issue and allotment of any shares of the capital stock of the com-
Companies Act Amendment

pany as fully paid iip shall be liable, jointly and severally with his co-directors, at the suit of any director, shareholder or creditor of the company, to make good to the company the amount by which the consideration actually received by the company for any shares so issued and allotted as aforesaid is found by the court-
Not by the directors-
-after full inquiry into the circumstances of the transaction, to be less than the amount of the consideration which the company ought to have received for such shares.
Then it goes on to impose conditions as to knowledge, and that sort of thing.


James Lorimer Ilsley: That is what I have been
saying. Where is the obligation? There is no absolute obligation anywhere.


Charles Hazlitt Cahan: I beg the hon. member's
pardon.


James Lorimer Ilsley: Where is the obligation to
insist upon getting the full value?


Charles Hazlitt Cahan: The obligation is contained in section 5 of the bill, which we have just passed.


James Lorimer Ilsley: I understand that.


Charles Hazlitt Cahan: We have rendered it unlawful to issue shares for any consideration other than that which is just and adequate. Then, in the clause now before us, the penalty clause which I have just read, we say that if it is found by the court to be inadequate then each and every director is responsible for paying the difference to the company.


James Lorimer Ilsley: Yes. If it were as the
Secretary of State has explained, it would be all right, but section 5 has been amended. At first, section 5 was as the Secretary of State has now indicated. That is to say, what the court considered just and adequate consideration must be received for the shares. But by the amendment it is changed.


Charles Hazlitt Cahan: No.


James Lorimer Ilsley: So that the court does not have the say; the directors have the say.


Charles Hazlitt Cahan: The directors in the first
place, in issuing the shares, have by express terms in a resolution declared that they deemed it inadequate.


James Lorimer Ilsley: Yes.


Charles Hazlitt Cahan: That is what they must do, as a preliminary.


James Lorimer Ilsley: Yes, that is right.


Charles Hazlitt Cahan: But if that which they declare to be adequate is found subsequently by the court to be inadequate then the direc-

tors are liable, under this section, which is a penalty clause, and must pay to the company the difference so ascertained by the court.


James Lorimer Ilsley: I submit your section does not say that. It does not say it in those words, and does not make that implication.


Charles Hazlitt Cahan: I think it does.


James Lorimer Ilsley: In effect it states, "if it is
found to be less than the amount of consideration which the company ought to have received, for such shares"; and the amount which the company ought to have received for such shares is the amount fixed in the resolution by the directors. That is all,


James Layton Ralston: I submit, further, that the Secretary of State should include in the section a penalty to be imposed upon the directors if the resolution has not been passed. In other words they should be liable for the deficiency (a) if the resolution has not been passed, or (b) if they had knowledge of the inadequacy of the consideration, or (c) if they failed to take reasonable steps to ascertain whether or not consideration is inadequate. Therefore, in line 9 after the word "shares" I would have the section read:
If the resolution refered to in subsection (9) of section 12 of this act has not been passed, or if it is proved, as to any such first mentioned director, that such director (a) had knowledge of the inadequacy of the consideration so received by the company; or
(b) failed to take reasonable steps to ascertain whether the consideration so received by the company was in fact adequate consideration.


Charles Hazlitt Cahan: Do you make a new subsection out of it?


James Layton Ralston: I move it as an amendment to be inserted in subsection (2) of section 96B. It is " and which provides an additional contingency upon which directors are liable."


Charles Hazlitt Cahan: Where would the amendment
be inserted?


James Layton Ralston: After the word "shares"
in line 9 of the bill.


Charles Hazlitt Cahan: It simply imposes the same
liability, in case the directors' declaration has not been made on the issue of the shares.


James Layton Ralston: Yes.


Charles Hazlitt Cahan: I have no objection to that


Charles Edward Bothwell: Before the section is
carried I should like to express my view on the amendment to section 5 taken in conjunction with the amendment to this section. I think

Companies Act Amendment
the words "ought to have received" relate back only to the resolution that is spoken of in section 5, and if these amendments that are proposed go through with the amendment to section 5 that has been carried, I do not believe there is any penalty at all on the directors whether just and adequate consideration for the shares is given or not. The words "ought to have received" relate back to the resolution, and there is no penalty at all whether the consideration is just and adequate or not.


Charles Hazlitt Cahan: I can remedy that in a
moment. There is no doubt that we both desire the same thing. If you-strike out the words in line 8 on page 10, "amount of the" and substitute therefor the words "just and adequate" so that it will read, "to be less than the just and adequate consideration which the company ought to have received for such shares," I think that would meet the objection. What does my hon. friend from Hants-Kings (Mr. Ilsley) think? We all have the same intent, if we can only select the words to give expression to it.


James Lorimer Ilsley: Yes.


James Layton Ralston: As I understand it, subsection 1 of the bill as printed is being amended by the Secretary of State in the amendment he read, but the latter words of that subsection are being suggested to meet the change which has been made in section 5. I pencilled an amendment to subsection 1 just to use exactly the same words as are used in section 5.


Charles Hazlitt Cahan: I have no objection to that. I thought that it passed. We are simply using the same phrase exactly in all three
cases.


James Layton Ralston: Does the Secretary of
State intend subsection 2 to apply to a private company?


Charles Hazlitt Cahan: No. We agreed, as I understood it, at the last sitting of the committee, that line 42 in 96B should apply, to "directors of a public company"-


James Layton Ralston: That is to be changed all through the section?


Charles Hazlitt Cahan: All through the section. Wherever the word "company" is found in the section the word "public" should precede it. I think we all agreed to that.


Ernest D'Israeli Smith: Shall the amendments carry?


Charles Edward Bothwell: Mr. Chairman, is it the amendment to subsection 1 that you are now putting?


Ernest D'Israeli Smith: The amendments to one, two _ and
three.


James Layton Ralston: Put them separately.


Ernest D'Israeli Smith: Shall the amendment to section 1,
clause 96B, carry?


[Stage Direction]
Amendment agreed to.
Charles Hazlitt Cahan: The amendment to subsection 2 strikes out the word "promoter" and adds the word "public" before "company" wherever it appears.


James Layton Ralston: And strikes out the words "amount of the" consideration in line 8 on page 10, and substitutes the words "just and adequate"?


Charles Hazlitt Cahan: Yes.


[Stage Direction]
Amendments agreed to.
Charles Hazlitt Cahan: We have struck out the
words, "or promoter" and we also agreed to add to subsection 3 "and no such suit shall be commenced after the expiration of three years from the date of the allotment of such shares."


James Layton Ralston: The consent of the Secretary of State is required when the suit is by a director or shareholder but not when the suit is by a creditor.


Charles Hazlitt Cahan: What we had in mind was this. We are going to have a board to which these investigations and inquiries will be submitted, and as between shareholders and suits between directors inter se, there shall be an inquiry and the Secretary of State will simply express the judgment given by the board of inquiry. But as to a creditor, if he wishes to .begin suit, he .must begin suit at least within three years after the transaction.


James Layton Ralston: It seem to me it leaves the opportunity for blackmail.


Charles Hazlitt Cahan: I know, but that is the whole difficulty.


James Layton Ralston: If you worded it so that an action brought by a creditor must have the consent of the Secretary of State, then you would have some dignified proceedings. But to permit creditors to run around and threaten actions against directors if they are not paid leaves the door open, I should think, to very .grave abuses.
Mr. CAHAN.: Will my hon. friend look at it again, for we all have the same object in view I am sure. Suppose that in line 24 after

Compunies Act Amendment

the words "in whole or in part" we .plaee a semicolon, and then the word which I suggest "and no such suit shall be commenced after the expiration of three years from the date of the allotment of such shares"; that will apply to the entire second subsection.


James Layton Ralston: I agree.


Charles Hazlitt Cahan: That is what is intended.


James Layton Ralston: I still think that the word "creditor" should be put in with director and shareholder. I think the simplest way would be to strike out the words "by any director or shareholder of the company" in line 18.


Charles Hazlitt Cahan: I am quite content. We lave the same object in view.


James Layton Ralston: I am talking about fairness. A director or shareholder may not bring any action without the consent of the Secretary of State but it is the -creditor who is -most likely to bring an action to annoy a director and say "If you don't pay me this, I will drag you into court."


Charles Hazlitt Cahan: Insert the word "creditor" after the word "any" in line 18. Then strike out the words "and no such suit shall be commenced by any creditor of the company until an execution," and so on. Then he has no right to bring his suit.


James Layton Ralston: A company is defunct and a creditor says, "I will bring an action against you, you had better pay me."


Charles Hazlitt Cahan: He cannot until he has exhausted the company's -resources.


James Layton Ralston: If an inquiry by the Secretary of State as to whether there has been honest administration of the company is necessary in the case of a shareholder or director it is equally necessary in the case of a creditor.


Charles Hazlitt Cahan: We have -provided f-or that -now.


Charles Edward Bothwell: I fail to see why a creditor or shareholder should have to make application to the Secretary of State -before taking such action. If the directors of a company were acting fraudulently or were issuing stock for an unjust or inadequate consideration, surely the shareholder or the creditor should have the opportunity of taking action in order to get justice? I thought the section was weak enough without the addition of the word "creditor."


James Layton Ralston: So far as I know this is the strongest section which has been passed in any parliament or legislature. I under-

stood that the price spreads commission had recommended the setting up of a commission and one would think that before any action was taken there would be an inquiry by the commission. If the commission found that they should come within the act, they would have to take their medicine.


[Stage Direction]
Amendment agreed to.
James Lorimer Ilsley: I moved an amendment to this section.


Charles Hazlitt Cahan: I thought the hon. member just suggested one.
Mr. ILSLEt: I was content to let it stand for the time being but I want it dealt with now. My amendment added a subsection to this section to preserve the present common law rights. The Secretary of State said that he thought my amendment would create some confusion but I do not see the force of that or any other objection he has taken.


Charles Hazlitt Cahan: The common or civil law rights remain. There is absolutely no doubt in my mind that the statutory liability stands according to the terms of the statute but a statutory liability does not wipe out a common law or civil law liability. In the criminal code we impose statutory liabilities but except where there are express terms to that effect they do not wipe out the common law liability.


James Lorimer Ilsley: There is a section in the criminal code which expressly makes that provision.


Charles Hazlitt Cahan: Unless it is so stated. If my hon. friend has had much experience in criminal work he will know that with respect to many crimes you may present your indictment under the statute or under the common law. I would prefer to leave out my hon. friend's amendment because it would only complicate the matter.


James Lorimer Ilsley: The criminal code contains a section which states that common law rights are not affected except in so far as the matter is dealt with by the act. A common law crime remains a common law crime. We are codifying the law of the liability of directors and I think that is the first point that will be raised. I think it will be found that we are dealing with a matter upon which there is some case law. There is a three-year limitation put into force by this section and it will cut down the rights against directors unless there is a saving clause inserted at the end. I do not see the force of my hon. friend's objection that this subsection will complicate

Companies Act Amendment
matters. I disagree also with the statement of the Secretary of State that this subsection is useless.


James Layton Ralston: Up to the present those who have issued shares wrongfully are exposed to action on the part of the liquidator. That is one front on which they are liable to fire. We are now proposing that they be exposed to fire from three other fronts, that is, from directors, shareholders or creditors. If that is what we propose to do, we certainly have done it. They are now open to fire from four different fronts and the hon. member for Hants-Kings (Mr. Ilsley) is suggesting that we preserve the line of fire from the liquidator as well as the line of fire from the shareholders, directors and creditors.. I do not think there can be any objection to this amendment. I think we are all agreed that it is not intended that the liquidator should be deprived of his right to bring an action against the directors or against anyone who may be involved in the issue of shares for an illusory consideration.


Mr. HACKETT:: That is provided under the Bankruptcy Act.


Charles Hazlitt Cahan: Quite so.


James Layton Ralston: I suggest that the Secretary of State make doubly sure by accepting this amendment.


Charles Hazlitt Cahan: I think it would complicate matters. Section 53 of the Winding-up Act reads:
53. Every shareholder or member of the company or his representative shall be liable to contribute the amount unpaid on his shares of the capital, or on his liability to the company, or to its members or creditors,' as the case maybe, under the act, charter or instrument of incorporation of the company, or otherwise.
(2) The amount which he is liable to contribute shall be deemed an asset of the company, and a debt due to the company, payable as directed or appointed under this act.
When a company goes into liquidation there is another provision provided by section 70 of the Bankruptcy Act which reads:
70. Every shareholder or member of a corporation or his representative shall be liable to contribute the amount unpaid on his shares of the capital or on his liability to the corporation or to its members or creditors, as the case may be, under the act, charter or instrument of incorporation of the company or otherwise.
2.	The amount which the contributory is liable to contribute shall be deemed an asset of the corporation and a debt payable to the trustee forthwith upon the making of a receiving order against the corporation or on the execution by the corporation of an authorized assignment.
92582-248}
3.	If a shareholder has transferred his shares under circumstances which do not, by law, free him from liability in respect thereof, or if he is by law liable to the corporation or to its members or creditors, as the case may be, to an amount beyond the amount unpaid on his shares, he shall be deemed a member of the corporation for the purposes of this act and shall be liable to contribute as aforesaid to the extent of his liability to the corporation or its members or creditors independently of this act.
4.	The amount which he is so liable to contribute shall be deemed an asset and a debt as aforesaid.
My point is that we deal with the statutory liability of the directors or the shareholders by the terms of the Companies Act, 1934, as we are n.ow amending it. We do not go on to determine the liability to the trustee or to the liquidator; and we never have dealt with such liability in any company legislation, except in the Winding-up Act and in the Bankruptcy, Act. I suggest that this proposed amendment complicates the situation unnecessarily. After all, we have an express statutory provision with regard to liability in the Winding-up Act, we have another express statutory provision under the Bankruptcy Act, and I think it is unwise to complicate matters with an amendment to the Companies Act such as that proposed by my hon. friend.


James Lorimer Ilsley: Upon looking at the sections read by the Secretary of State I would think that they applied to the liability of contributories, to shareholders who owed the company.


Charles Hazlitt Cahan: The directors also.


James Lorimer Ilsley: I do not know about that.


Charles Hazlitt Cahan: There is no doubt about it; there cannot be any doubt about it.


James Lorimer Ilsley: I suggest that we vote on the amendment.
Amendment negatived.


Charles Hazlitt Cahan: I have another suggestion to make. Since this bill was first printed there have been a number of changes in the numbering of the sections without a corresponding change in section 20. I suggest that in subsection 2 of section 20 the word "four" should be made "three" and that "eleven" and "twellve" should be struck out. We are now dealing with the application of this bill to companies incorporated before the 1934 act, and in order to carry out that intention properly I think the "four" should be changed to "three" and the "eleven" and "twelve" should be struck out. It is quite clear that section 11 on page 8 should not apply to
Companies Act Amendment

companies incorporated before 1934, nor do I think that section 12 should apply to such companies.
Mr. BOTHWElLL: The meaning then will be that companies incorporated prior to the act of 1934 are still able to carry on regardless of these sections.


Charles Hazlitt Cahan: Sections 11 and 12, yes.


Charles Edward Bothwell: That is to say, sections 2, 3, 5, 6, 7 and 16 will remain. In future operations of companies incorporated prior to 1934 these sections will not apply.


Charles Hazlitt Cahan: Yes.


Charles Edward Bothwell: Would not that permit existing companies to do the things that we are trying to prevent new companies from doing? We are strengthening the act with the intention of compelling companies incorporated since 1934 to receive a just and adequate consideration for stock issued. If we except- these sections with respect to existing companies then such companies, with regard to new stock issues, will be able to do the things we are trying to guard against.


Charles Hazlitt Cahan: Take 96A and 96B, for instance; they will apply to all companies, whether incorporated before 1934 or since. I have no objection if the bon. gentleman thinks that section 5 should apply to the old companies.
Mr. BOTHWElLL: If the "five" is struck out of this subsection it would meet my objection. I do not see why that section should n-ot apply to future issues by present companies.


Charles Hazlitt Cahan: I have no objection, except that we have always made provision that in the enactment of substantial amendments they should not apply to incorporations under previous acts. However, I am perfectly willing to accept the amendment proposed by the hon. member. I move that the subsection be so amended. In other words, "four" will be changed to "three" and the "five" will be struck out with the "eleven" and the "twelve."


[Stage Direction]
Amendment agreed to.
Section as amended agreed to.
Charles Hazlitt Cahan: I beg to move the following as a new section:
21. This act shall come into force in whole or in part upon dates to be fixed by one or more proclamations of the governor in council.
It would be unfair in regard to new accounting provisions not to give some weeks notice,

because some companies are making annual returns already in accordance with previous accounting provisions and they should have thirty or sixty days to enable them to bring these new provisions into effect.


[Stage Direction]
Section agreed to.
Bill reported, read the third time and passed. DOMINION HOUSING ACT

[Stage Direction]
Right Hon. Sir GEORGE PERLEY (for the Minister of Finance) moved the second reading of Bill No. 112, to assist the construction of houses.
He said: The plan covered by this bill is for the purpose of giving encouragement and assistance in the building of new houses, particularly of the kind suitable for the use of those who do not receive large wages. In my opinion nothing could be more helpful during these difficult times. It will provide homes for many of our good citizens who are not in a position to do this for themselves without assistance. This will put them and their families in more sanitary and healthy surroundings and so make for their comfort and ability to earn a living. Further it must not be forgotten tha<t the building of a large number of homes will give work to men in the building trades who are suffering more than any others from present conditions, and indirectly it will give business to many ether industries which provide the materials of various kinds used in the erection of these houses.
During this session we had the special committee on housing under the chairmanship of the hon. member for Charlotte (Mr. Ganong) which carefully considered all sides of this question and made a report on April 16. I wish to congratulate the chairman and the committee on -their careful work and the excellent report that they made. I hope every member of this house will find an opportunity of reading it. The bill to which I am now asking the house to give a second reading is for the purpose of making a beginning toward solving the very important problem of bringing abou-t healthier housing conditions throughout Canada. The committee recommended the establishment of a housing authority to control the administration and any funds that might be provided for this purpose. This suggestion was given most careful consideration by the government, but we think it advisable, for the present at least, to have the Department of Finance admin-

Housing Act-Sir George Perley
ister and control this expenditure and, as I stated when we were in committee on the resolution, it is proposed to appoint someone on the staff of that department to do that work under the Finance minister.
_ As hon. members will see by the bill, the intention is to arrange eighty per cent of the cost by way of loan-sixty per cent from approved lending institutions and another twenty per cent from the government out of the money provided for in this bill. No definite rate of interest is specified, but it is intended to keep this down as much as possible in order to encourage the construction of these much needed houses. In this way we would be able to put this plan into force without very much expense, and later on it can be further considered in the light of any experience that may be gained.
As will be seen, the bill provides by section 3 for further investigation of the various questions contained in the housing commission's report. It is proposed that the economic council shall make an investigation about these various matters and among others,
(c)	as to plans or proposals that have been adopted elsewhere than in Canada to improve housing conditions and the results that have been achieved; (d) upon the necessity for and as to the feasibility of undertaking clearance and redevelopment of overcrowded areas in any city or town; in other words an investigation into the question of slum areas and what action may be taken to improve them, and (e) as to the factors that enter into the cost of construction of houses and as to the feasibility by any means of securing economies and increased efficiency in such construction.
The intention is that the economic council which will be formed under an act passed this session, will make a report on these various matters, and when that is made it will of course be laid on the table of the house for consideration. I commend this bill to hon. members as a beginning to help cure conditions as they exist.
Hon. J. C. ELLIOTT (West Middlesex):: I do not propose to occupy much of the time of the house in a discussion of this bill; I do not think that would be advisable in view of its terms, but there are certain parts of it to which I would like to refer and to which I wish to take special exception. This bill is calculated to encourage housing for wage earners, particularly the lower paid ones, and I see in it no provision for anything except new construction. The provision now in the bill for new construction, unless it is remedied, prevents the possibility of utilizing what might
be the most advantageous assistance by way of housing that could be given. Under the terms of the bill submitted to the house, unless there is new construction there does not seem to be any provision for doing what I think is most necessary.
According to the evidence that was brought before the committee there were in the rural sections of Canada in 1931; 21,116 one-family households of owners and 7,261 one-family households of tenants consisting of two or more persons occupying only one room and 753 households of two or more families occupying one room only. In urban Canada there were only 11,975 households of one family of two or more persons in a single room, and only 94 households of two or more families in a single room.


Mr. STANLEY:: 1931.


John Campbell Elliott: The report of the committee as printed looks as if it were the 1921 census to which reference was made. Probably my hon. friend is right, that that is an error in printing and it should be 1931. I do not think anyone in the house can realize that such a condition exists throughout the rural sections of this country. AVhat that means to the morals, the health and the comfort of these people, it is almost impossible to realize. From this it would look as if in certain of our rural sections conditions are as bad as in the slum areas of the cities. We have in rural Canada to-day-and it is unfortunate that this is true-on the outskirts of the cities thousands of small farms with houses that can be purchased for about the price the committee was considering for an ordinary residence for a low salaried worker. I am sure members particularly from Ontario will bear me out in saying that in that province a number of one-hundred acre farms with houses, foams, gardens and sometimes orchards on them have been sold within the last few years under pressure for less than three thousand dollars. The point I want to urge upon my hon. friend who is in charge of this bill and the government in particular is that encouragement and assistance should be given toward endeavouring to induce the financing for families who are now in the cities or about to be moved off the land, of those low priced farms, small plots, with reasonably adequate housing facilities already constructed upon them. If the bill is left as it is, that cannot be done, because if I read it correctly it provides for new construction only.
After all I do not suppose this proposal would have been considered at the present time except in view of the necessity of unemployment relief. It is part of a plan, or should
Housing Act-Mr. Elliott

be fitted into some plan, for the relief of unemployment. I submit that there is no other way in which many who are on relief in the cities, who are accustomed to rural life, and who would be willing under reasonable circumstances to go back on the land if they could get money at such a low rate that they would be able to finance can so well be aided to re-establish themselves. They would then be taken out of the bread lines in the cities, be placed in the country under fairly happy conditions, where they would be able to raise a considerable part of the necessaries of life, and their morale instead of being weakened would be strengthened. If this were done the various municipalities and the federal and provincial governments would be relieved in large measure of the tremendous burden now imposed upon them for relief. They would not be entirely relieved, but the burden would be substantially reduced.
Perhaps I might trouble the house by referring for a moment to what has been done in the past, both in Canada and in other countries. I fancy my hon. friend who is in charge of this bill has read a considerable portion of the evidence given before the housing committee. It shows the very bad results which followed the scheme adopted under the Ontario housing act of 1919. In the city of Ottawa I think the loss already amounts to something around $352,000. In the city of London, with which I am more familiar, the loss has been quite substantial. These losses have occurred-and this cannot be impressed too strongly on the house-from the fact that some organization was undertaking to build houses for -people who were making no contribution towards the cost. The houses were being supervised, and very badly supervised in the cases I have mentioned, by people wdio were not expecting to reside in them, who did not have a financial interest in them. To be successful any plan must be adapted to meet the natural desire of people to get a home of their own. That element was absent in those cases and therefore the plan did not succeed, the prospective occupants were making no investment themselves. I suppose some of them could not make an investment; for them there will have to be some different plan adopted, perhaps a low rental plan. I think that with the possible exception of Winnipeg perhaps, Toronto has made the greatest success of any city in Canada in the housing business. The plan adopted there was that 85 per cent of the bonds of the housing company, was guaranteed by the council for the construction of these houses. The housing commission paid interest on the 
money they raised at the rate of six per cent from the year 1923 to 1931. There were a couple of years then that they did not pay interest, and I understand that last year it was again on a fairly paying basis. That is being done by an organization consisting of people interested in the work, doing it as a matter .of public service without pay, apart from the manager who is devoting his whole time to it.
O'f course one cannot say that what will work well in one country will work equally well in another, where climatic and other conditions are different, but I think that the experience of Great Britain in recent years is the best example that this country can follow at the present time. Therefore I should like to refer the committee to a report which can be found in the December number of the Magazine Digest at page 11. I should like to read a couple of paragraphs:
Great Britain is now building houses at the rate of a thousand a day, and four-fifths are built by private enterprise without assistance of any kind from the government or from any town or city council. The building of houses on this vast scale has been one of the most important reasons why trade has improved in England.
I am giving you the article as it appears here. That may or may not be entirely accurate; it is the opinion of H. N. Casson, the editor of Efficiency magazine of London.
The British brickyards are working overtime. They cannot supply the demand. Bricks are being imported from Belgium.
Then it gives the terms on which the houses are sold. It states:
A typical house which I visited-a $3,125 house-was semi-detached, had a living room and dining room each 13 feet long, three bedrooms, large tiled kitchen, tiled bathroom, separate lavatory, a radio set, electric clock, gas cooker and gas boiler. It had space for a garage. This house had been sold for a deposit of $125 and instalments of $4.37 a week. It is only twelve miles from the centre of London.
Britain is rapidly becoming a nation of home owners. Almost all the new houses are being built in the suburbs. Every house has its little garden. Any working man who can save $150 can have his own home.
He points out that a vital point to remember about this greatest of all housebuilding booms in Great Britain is that it is due entirely to private enterprise and has come about- since the government decided to let housing alone. That is probably too strong a statement to be entirely applicable to this -country, but it does show the advantage of having a matter of this kind financed by the people who are directly interested.

Housing Act-Mr. Elliott


Mr. HEAPS:: Will the hon. member tell us who is financing these houses?


John Campbell Elliott: Yes, I intended to read the set-up as it is given here. Perhaps I can come to that now. First let me ffefer, without reading it in full, to what happened under the general housing scheme in Great Britain originally, when the government were in charge.
Immediately after the war the government took over the control of the whole matter of housing and building materials.
They did so in the first year after the war, and in that year -not. a thousand houses were built in the whole of Great Britain. It says -and I think this answers the hon. member:
Britain has solved the housing problem by cooperation between the speculative builders and the building societies. The builders design and construct the houses. They engage staffs of salesmen; they advertise in the daily press. The building societies take over the contract, pay cash to the builders and allow the house buyers to pay on the instalment system.
Hon. members will see from the report presented' by the housing committee that what has been done in England has to a large extent been accomplished through the encouragement of housing companies. A British building society is a combination of savings -bank and mortgage trust. It offers four per cent or five per cent for money. It Lends money to house buyers on- mortgages and, what -seems to me very remarkable, they lend nine-tenths of t-he price and receive no subsidy or state help. Then- the article goes on to outline the success building companies in Great Britain have had. Of the 1,013 building societies which have carried on business in Great Britain only one failure has been reported.
Special reference is made- to the Halifax Building Society in Great Britain which now overtops all the others. The article states:
It has assets of $463,000,000. It has 180,000 borrowers. Its income last year was $166,200,000, and its net profit was $2,184,000. It has been the largest building society in the world for twenty years.
Sir Enoch Hill is the mam credited with developing the Halifax Building Society. This man started out in a very modest way at an age when no factory in Canada would have been- permitted to engage his services. As a boy eight years of age he worked in a silk spinning factory, and when thirty-seven years of age he became manager of this gigantic corporation. To-day he is looked upon as perhaps the greatest authority in Great Britain on building societies and housing problems. He has visited Canada and the United States and is widely consulted on matters of this kind. The article contains this further statement:
The general tendency at present in Great Britain is toward less restriction and regulation. The swing is toward more liberty and private enterprise.
In this country I believe im order to be successful the greatest possible liberty and encouragement must be given to private enterprise, if the project is to be a success.
As I Stated earlier I do not intend to labour the discussion. In view of what has been done in the old country I -believe that many of the people on -the outskirts of our large cities engaged in industries could be housed under circumstances advantageous to themselves, the municipalities and the country as a whole. In- recent years there have been- tremendous drops in construction business. In 1929 the total- amount spent in construction in Canada-and this figure is not limited to housing-was $580,000,000. In 1934 the value of construction was only 8126,000,000. These figures were given in evidence by representatives of construction trades called- before the committee.
Mr. W. L. Sommerville, chairman of the housing committee of the national construction council was called before the committee of this house, and at page 100 of the evidence he states, in effect, that due to the curtailment of purchasing power of the primary producers special consideration should be given by the proposed national housing authority to means of financing farm building improvements, if funds are to be borrowed extensively for rural housing or rehabilitation. A great many people seem to be under the impression that this is a particularly advantageous time to commence construction on a large scale. Perhaps it is more advantageous than it would have been at the peak, but I should like to give to the house evidence indicating the change in material and labour prices. Having done so I believe hon. members will find that the advantage is not as great as they would have expected. At page 91 of the evidence Mr. J. Clark Reilly, an authority in the construction business makes reference to the 1926 material prices, placing them at the index figure of 100. Working from that figure he indicates that at the end of 1934 the figure was 82, against a peak in 1920 of 144. In connection with labour rates he has taken the figure 100 for the year 1913, giving a figure of 147 for 1934 as against 171 for 1926. It would appear that with care this should be a fairly advantageous time for purposes of construction. I have already
Housing Act-Mr. Elliott

referred to the congestion in rural communities. Of course we realize that there is great congestion in many of our larger cities, but I very much doubt whether or not the public realize just what congestion exists in the rural sections.
Directing my observations more particularly to the bill may I state that I am sure hon. members will appreciate what the sponsor of the bill has said respecting the work of the committee. It was a real privilege to sit with the other members under the chairmanship of the hon. member who acted as chairman, and I believe much valuable information was obtained. The evidence is on record, and I do not intend to discuss it at length. I have the greatest respect, for the sponsor of the bill, but I must observe that an examination of what took place before the committee would indicate that the time which elapsed between April 16, the date of presentation of the report and June 18, the date the resolution was moved in the house has not produced the kind of a bill which a matter of so great importance deserves.
Let us sum up what is contained in the bill. First of all we have the title, the first clause stating:
This act may be cited as the Dominion Housing Act, 1935.
That would not require a great deal of consideration. Then we come to the second clause, the interpretation clause of the bill. Paragraph '(a) defines the expression "approved lending institution," and states that an "approved lending institution" means a lending institution approved by the governor in council. Then paragraph (e) defines "lending institution" as follows:
(e) "lending institution" means a loan, insurance or other company authorized to lend money on the security of real or immovable property.
It occurs to me that had not the person in charge of drafting the bill been anxious to provide filling for the skeleton, he could have said that an "approved lending institution" meant a "loan, insurance or other company approved by the governor in council and authorized to lend money." Then we have a definition of the term "house," and in it I find nothing new. I think almost any abridged dictionary would give a more exhaustive definition of "house" than we have in this bill. The definition in the bill reads:
"House" means a building intended exclusively for human habitation comprising one or more self-contained dwelling places.
Really that must have been a strain on the man whose ingenuity devised the definition.

Then cost of construction is defined, and, Mr. Speaker, you will be interested to know that:
"Cost of construction" includes, as well as the actual expenditure for building, the cost of the land, legal expenses connected with any loan and any other expense necessary to complete the house.
Then housing scheme is defined:
"Housing scheme" means a scheme for the construction of houses and their occupation by tenants or purchasers.


George Halsey Perley: I do not want to interrupt the hon. gentleman, but this would really be better in committee, would it not?


John Campbell Elliott: I think I would like to go through with this because there is a principle, or lack of principle, involved in the whole bill, and what I am saying has a definite bearing on that.
Then section 3 tells what information can be collected by the economic council. It is similar, if I recollect aright, to .part 4 of the aict respecting unemployment insurance. This just enables .certain data to be collected.
Then we .come to the loaning provision, and I think this is something which the government should consider very carefully, and particularly whoever is in charge of the bill at this and subsequent stages. It has been decided that the government will advance, along with an approved lending institution, 80 per cent of the cost of whatever is constructed-60 per cent by the lending institution and 20 per cent by the government. That makes 80 per cent, and the other 20 per cent must come from some other source. I am not quarrelling with the proportions at all, but I want to point out that under another section of the bill the losses sustained as a result of this housing scheme are to foe fixed in the future by a contract made under regulations drawn up by the .minister and approved by the governor in council.


George Halsey Perley: The Minister of Finance.


John Campbell Elliott: Yes, the minister in charge of the bill is defined as the Minister of Finance. I think what this house is particularly interested in at the present time is this, and I do not want to discourage this project at all because we surely have reached the time when something along sound lines must be done; I think the house will be more interested in knowing the proportion of the loss that is to be borne by this government than in knowing the proportions in which this government and the lending institutions advance moneys for the various structures under the scheme. That is the view I have taken after reading the bill carefully. There

Housing Act-Mr. Stanley
is nothing further I have to suggest at the present time, but there are some amendments I would like to suggest when the bill is in committee.


George Douglass Stanley: Mr. Speaker, I should like to offer a few observations in regard to this bill. First I feel that one should set down the basic understanding of what housing is. The discussion so far might lead one to suppose that it is a matter of construction mechanics, but we were given to understand in the special study of this matter which the committee made that housing as it is defined is a much larger problem than simply the construction of homes. It is a social question. It is very broad in its scope, and one might undertake to say that it includes preventive measures, for instance. It cannot be separated from the general consideration of town planning, and when one speaks of measures for housing one must consider it from that standpoint. Preventive measures certainly belong to it; for instance, the prevention of disease, the prevention of crime, the prevention of delinquency, the prevention of fire, and the consideration of the question must also include such very important things as transportation, parks and all these other matters which are included in the broader and more inclusive consideration of housing. Hence it is borne home to us that in entering upon a housing scheme now, we must do it with the understanding that it is a continuing problem, that we are simply making a start with some phases of it, and it is so important that the foundation of the policy which will direct the nation in its housing undertakings should be laid properly, carefully and well.
Various important points might be urged, but the first thing that occurs to me is that the committee after taking evidence and hearing reports from a large number of experts thoroughly conversant with the housing question brought in a report inclusive and much broader than a report covering simply the question of construction mechanics. The committee endeavoured to go into the whole question of housing or town planning, if you will, and the committee brought in a favourable report.
The next important point that occurs to me is that the government has accepted the principle. European countries, including Great Britain, have already established housing policies and have entered into the whole matter of housing in a very large way. The United States and Canada have not done so heretofore, but now the committee has reported favourably on the establishment of a national policy in Canada in connection
with housing. The government itself has accepted the principle and therefore it is acknowledged that if this bill becomes legislation the nation itself accepts the housing obligation. I think that is an important point to urge. No matter how far we go at the present time, so long as we have established the principle and accepted the state obligation, we have at least started on the proper basis and have made a safe and sound beginning.
Then the government gives us this measure. It is an implementing measure. It may not go as far as some of us might wish it to go. I know it does not go as far as my hon. friend from North Winnipeg (Mr. Heaps) and some others would like it to go. The main thing is that as a start it is implementing the recommendations of the committee which accepted this principle and by so doing it implies -a state obligation in connection with housing. The velocity of its progress is a detail. How far we go this year, how far we will go next year or the years after is for the next parliament or parliaments to decide. Our duty today is to make a start and see that that start is made on the proper basis.
When the ball was introduced there was some discussion in connection with the use of the word "commission." Hon. members who were members of the committee realized that in order to bring in a unanimous report it was necessary to compromise,, to give and take in one way and another. The result was what I consider to be a very excellent report. The word used in the first clause of the recommendation was "authority" while the resolution upon whioh this bill is founded used the word "commissioner." At the moment I am not particularly interested in whether the authority is a specific commission as long as we establish the basis upon which a start will be made. We must delegate to a specific authority the duty of establishing a national policy on housing. It was borne home to those of us who were on the committee that in order to make a success of any housing undertaking it would be necessary to delegate the administration of the policy to those who were trained in that particular kind of work. This work cannot be undertaken by busy officials attached to, say, the Department of Finance, it must be delegated to persons who are expert in this work and who are prepared to investigate, study, report and advise upon the whole question of housing. Consequently, the commission or whatever authority may be appointed must be competent to handle the problem of housing in its broadest sense.
Housing Act-Mr. Stanley


Abraham Albert Heaps: What interest do these private corporations want?


George Douglass Stanley: That enters into another problem altogether.


Abraham Albert Heaps: It is vital at this stage; it is vital to the hon. gentleman's own argument.


George Douglass Stanley: Apart altogether from the specific rate of interest which they are charging, the hon. gentleman knows-and it was urged very decidedly before the commission- that a building program on the part of those who can afford to carry it out with private means, those who can afford to pay the rates of interest charged by the loan companies today, those who will finance for themselves, will relieve to a degree the demand for houses in the lower grades. And as the housing is undertaken in each classification higher up, the housing condition improves among those who can afford to pay only smaller sums in interest or rent.
Passing on to the next question of employment, I want to urge the point that as housebuilding employment is undertaken, it becomes a leaven which permeates through the
community by way of the money that is paid to labour in wages. Incidentally may I say that it was given in evidence before the committee that from eighty to eighty-two per cent of money spent on construction actually went into the pockets of the labourers and that money in turn went into every branch of industry and business in the community. Therefore housing construction is the best type of employment undertaking. I am not saying anything against employment, because employment is very important, but after all it is only incidental to the whole problem of housing and it should be considered in that light. Give all the employment that is possible; consider this question from the viewpoint of giving as much employment to labour as is possible, but the main point is first to get the housing policy basically sound and right, sane and proper, so that it will be a success, and the labour will come incidentally to the housing undertaking.
On pages 9 and 10 of the report there is a very good summary of what housing means in a social way. I have said that it is a social problem. It will be found in the Toronto report that infant mortality in that city as a whole was 63-4 per thousand whereas in the Moss Park area it was 121-2. As regards the question of juvenile delinquency, it was also found to be very much more prevalent in the poor housing districts. As to crime, a survey was made of 547 houses; 315 were reported as below the minimum standard and out of those 315, 100 had been "convicted" for various kinds of crimes.
Evidence was brought forward with regard to the city of Cleveland and I shall give these figures just to show the relationship of housing to the social problems of the day. Twenty-two per cent of all the murders committed in Cleveland were found in the slum district which contained two and a half per cent of the population; 6-8 per cent of boy delinquency and 124 per cent of tuberculosis deaths occurred in this area. On the question of fire protection, in Cleveland as a whole the cost was $3.12 per capita whereas in the slum area it was S18.72. Those figures give us a summary of the importance of proper housing in regard to the social problems of the day. Not only then is it a humanitarian undertaking, but it is good business for the country, the provinces, the municipalities, and the citizens in their private organizations and as taxpayers to undertake proper housing throughout the country, because it remedies these various social conditions of which I have spoken, improves the value of the property generally and the standing of the community, and saves life, property and morale.
Housing Act-Mr. Euler

I shall not deal at length with the slum clearance question which was considered at some length before the committee. The advantages of ridding a city or community of a slum are of course obvious. From Montreal and Toronto we had two elaborate reports, one showing that in Montreal it required1 at least 314,000,000 to fulfil the undertaking which they had recommended. The committee from Toronto recommended that at least 312,000,000 should be spent in the undertaking there. One of the witnesses-and others followed him-urged that slum clearance would be a problem this year, next year and for many years to come, and that an undertaking that would give homes to those who could finance them entirely or partly would assist in overcoming some of the slum difficulties. This was the point which one expert urged: When you start in on a housing scheme, do not start on slum clearance first or you invite defeat; start in with that plan which can be handled by the finances which are immediately available; make a success of your start and then develop the work from year to year and from time to time.
The main thought to my mind is that the principle has been accepted; that the obligation has been assumed and that the government now undertakes to implement to this extent the principle and national policy of housing.


Hon. W. D. EULER (North Waterloo):: With the broad general principles enunciated by the hon. member for East Calgary (Mr. Stanley) I think I might find myself in agreement, but I do not propose to discuss the bill in any other way than in its specific terms. The minister who introduced the bill I think had in mind two or three chief purposes: one was, as he stated, to make it possible for men who earn small wages to acquire their own houses; the second was to make up the deficiency in the supply of houses in the country, and the third and not unimportant one, was to provide employment. To my mind-and I shall be very frank in what I say-I believe the bill will fail in every one of these purposes. I say that from a study of the financial arrangements proposed by the bill. They are as follows: that the investment company, the loaning company, shall supply sixty per cent of the cost of the house, which I take it includes also the cost of the land; that the government will supply twenty per cent, and the man who is to own the house will supply the final twenty per cent. I am told that in the report of the committee it was suggested that the cost of an average house such as
fMr. Stanley.]
contemplated by this bill would be about 32,700. If the owner, the small wage earner,, has to find twenty per cent of that he would have to have at least 3500 or S600. I leave it to the house whether in their opinion,, under conditions as they are to-day in the towns and cities, any large proportion of low wage earners are in possession of that sum.


George Douglass Stanley: He would get it from the local building society.


William Daum Euler: The local building society, I take it, is providing the first sixty per cent. I think the plan is utterly impracticable so far as the low wage earner is concerned, he will not have enough money to avail himself of its provisions. The second feature which I think is absolutely fatal to the success of the measure is that the building society or loan company will not consent to share its security with the government. It is supposed to advance sixty per cent of the cost of the undertaking. In my own province, and I suppose it applies in others, loan companies may not loan more than sixty per cent of the value of the property on first mortgage. They are prohibited by law, and this government cannot interfere with that in the case of any loan company holding a provincial charter. This bill proposes that the loan companies shall supply sixty per cent of the cost. Ordinarily, the loaning company has one hundred per cent of value as security for the loans. This bill proposes that the advance of twenty per cent made by the government shall entitle the government to share in that first mortgage, thereby reducing the security held by the investment company. I say with considerable confidence that there is not an insurance company or a loan company that will advance money to the extent of sixty per cent of the value of the property unless it has the full one hundred per cent of value behind it as security. Therefore I say the bill is utterly impracticable. The money will not be advanced for those two reasons.
The hon. member for East Calgary advanced another argument, and the minister presenting the bill mentioned it also, that this bill is a start, it enunciates the principle that governments are taking some of the responsibility for housing. In reply I say that no start at all would be better than a bad start. I heard some legislation described here the other day by the former Minister of Trade and Commerce (Mr. Stevens) as anaemic. I certainly would describe this bill as anaemic to the degree that it will be still bom. I believe that the government will have to advance practically no money under

Housing Act-Mr. Heaps
this scheme. I am not opposing any well considered policy of housing, I think we may have to come to that, but I would like to see something practical introduced rather than that the public should be misled,-I do not say intentionally-into thinking that something is being given them when it really amounts to nothing at all.
As it is almost six o'clock I would close with this comment: we have had during the last session and others a good deal of legislation enacted for the benefit of the farming community. I have no objection to that, they need all the help they can get, but they have received considerable by way of the wheat bonus, the Farmers' Creditors Arrangement Act, the purchase of wheat by the government and now the grain board bill. I am not offhand making any particular criticism of them, although I do not know where we are coming out with this sort of thing, but I say that the forgotten man to-day is in the [DOT]cities and towns. We are trying to make some little provision for the low wage earner so that he may own his house, but what is to become of the man who now nominally owns his house but who has practically no equity left in it? Nothing has been done for the man in the cities or towns who is out of work and can no longer pay interest and taxes and is losing his house. I would recommend that the government pay a little attention to that phase of the question.
I say again that the bill is absolutely innocuous, it will do no good and it may do harm by destroying the belief that the government meant anything at all in the way of providing for housing. If the government want to make this bill practicable I might make a suggestion. The loaning companies, as I say, will not allow anyone to share in their security. But if the government would agree to accept a second mortgage for their twenty per cent and leave intact the security that the loaning company expects for its sixty per cent something might be done. But I am quite certain that with the bill as it stands there will be no success and the government will not be under the necessity of advancing a dollar of the $10,000,000 that it proposes to provide under this bill.
At six o'clock the house took recess.
After Recess
The house resumed at eight o'clock.


Abraham Albert Heaps: Mr. Speaker, I regret very much that when the minister introduced the bill I happened to be
out of the house. I should have liked very much to hear a comprehensive explanation of the actual meaning of the bill. However we did have some observations from the minister when the resolution was introduced. This afternoon there has been considerable discussion, but of the hon. members who qpoke only the hon. member who was speaking at six o'clock dealt with the actual bill. Many beautiful phrases were used when hon. members referred to the importance of adequate consideration of the housing situation and pointed out what adequate housing means to the nation. I intend, however, to deal more specifically with the bill, because I believe it is from the bill we must have guidance in our consideration of the intention of the government.
First of all we must realize that on February 18 the government appointed a committee to consider a national housing policy. After sitting for some weeks and hearing the evidence of many witnesses the committee came to what was practically a unanimous decision concerning a housing policy for the dominion. Some hon. members who preceded me have referred to the failure of a housing scheme in the year 1920. It is true that when after the war Canada undertook the expenditure of $25,000,000 to improve housing conditions in certain parts of the country the scheme was not entirely a success. It would appear that in the cities of Ottawa and London, Ontario, the scheme was unsuccessful and resulted in losses to those [DOT]municipalities. On the other hand in the city of Winnipeg, where there were more houses built than in both the other cities, the scheme was a success. There may have been two reasons why the scheme of 1920 did not succeed. I believe one was that there was not a proper supervision of the funds provided by the federal government. Had there been proper supervision by federal, provincial and local authorities I do not believe the schemes in Ottawa and London would have failed. Secondly, the houses were built when building costs were at the peak, and in a few years equities in the houses constructed disappeared; in fact they were worth less after two or three years than they weTe at the time they were built. Perhaps there may be several reasons why the housing scheme brought forward immediately after the war did not succeed. I hold the view, however, that if we have suffered' financial losses as a result of our experience after the war, at least we have gained through those experiences, and they shoidd stand us in good stead to-day.
Housing Act-Mr. Heaps

720 homes were built-I am speaking from memory but I believe that is the correct figure-a profit on that housing scheme has been shown in each year since 1920. Over 32,000.000 was loaned by the city of Winnipeg and with operating costs of one per cent they were able to show a profit on the housing commission of about $12,000 to $14,000 per year, So successful was the city in carrying out the scheme that the gentleman who appeared before the committee to represent the mortgage companies congratulated the city on the efficient manner in which it had handled the situation. He admitted that the loan companies could not do in their private capacity what the city had done in its public capacity. Under the provisions of the bill now before us the city of Winnipeg, which has shown what could be done in this regard, would be unable to get one cent. It could obtain about twenty per cent of the funds necessary at a certain rate of interest, but where could it get the rest? Is there any reason why a city or other corporation prepared to proceed with a proper housing scheme under the supervision of federal or provincial authorities should not be able from the federal exchequer to obtain one hundred per cent of the funds needed? Ten million dollars is being provided by this bill and a municipality which was prepared to carry out a proper housing scheme should be able to obtain the necessary funds. According to the bill as it is at present all they can do is to accept sixty per cent of the funds necessary from a private corporation and the other forty per cent would have to be found somewhere else.


George Halsey Perley: If a city set up a company for the purpose of doing this work it would come within the terms of this bill.


Abraham Albert Heaps: -But the city cannot obtain more than twenty per cent of the costs of construction.


George Halsey Perley: The city could
lend sixty per -cent through a loan company.


Abraham Albert Heaps: That is the weakness of the bill; the city would have to lend sixty per cent while the individual would have to borrow another twenty per cent. After that the government would -come along with its twenty per cent. I am suggesting -that the government do what it did in 1920: provide the entire cost of construction and take as security either municipal or provincial bonds, or perhaps mortgages on the houses. If that were done we could accomplish something but if we are to proceed on this basis of twenty, sixty and twenty we will never get anywhere. As was suggested by the hon.

member for North Waterloo just before the recess, there will be no houses built.
I am anxious to see something accomplished. I want to see the government do something tangible in providing homes and employment. I cannot agree with the statement of the minister who introduced this bill that it is going to provide homes for the low wage earner. As I understand the bill, that cannot be done. I ask the government to do exactly what it did fourteen or fifteen years ago and provide all the funds at a rate of interest not more than three per cent. I want to see the $10,000,000 provided for in this bill expended in as efficient a manner as it is possible to expend money. I am prepared to vest in the commission or other body to be designated a certain amount of control to see that these houses are built in a proper manner. Under the bill as it is at present there will be no worthwhile supervision of this work. The government is to lend the money to individuals and no one knows what will happen to those individuals once the money has been received. This seems to be going contrary to all the precepts of parliamentary government. We are being asked to vote money and then we lose complete control over the money voted. It is to be handed over to private corporations to spend and we will not know what becomes of it. I am always a little dubious when money is to be spent by private corporations because I am always afraid there will be losses. That has been our experience in the past. I ask the minister to eliminate from the bill the reference to the twenty per cent advance by the government. We should vote $10,000,000 for the purpose of carrying out a national housing scheme under the supervision of those who are capable of undertaking such a scheme. I do not care whether this supervision is by a private body in conjunction with public bodies, or just what it is, as long as there is proper supervision by the government.
As the bill now stands I am afraid it will be a disappointment to the people who expected that many houses would be built. The people will find that this money will cost them just as much as they had to pay private corporations last year or even many years ago, and the men who are looking for work will be disappointed. As a member representing a constituency in which there are thousands of building artisans out of work I ask the government to constitute a proper housing commission to go ahead with the construction of houses so that our people may be housed decently and provided with work.

Housing Act-Mr. Gray


Mr. R. W. GRAY (West Lambton):: Housing Act-Mr. Gray

until the dying days of the session before bringing in a measure which is of rather doubtful validity to begin with-because here once more we find in section 5 a qualification with which we are now familiar: in line 16 we have the words "subject to the jurisdiction of parliament." Where have we heard these words before? In nearly every bill which this government has brought down in the latter part of this session we find the same thing, "subject to the jurisdiction of parliament." This afternoon the Secretary of State (Mr. Cahan) a man with years of experience in company law and parliamentary jurisprudence, came into the house saying, in connection with the Companies Act, "We will put a semicolon here; we will add a few words there; we will put a period here; we will lead pencil something here." And so on. Can you imagine the type of legislation which is going out from this parliament at this session? Were we sent to parliament to legislate simply because this or that measure appears to be politically expedient, or were we sent to legislate in the interests of the people and to enact into law measures that will stand the test of time?
Had we set uip a national unemployment council to cooperate with individuals and with the municipalities and provinces, there would have been no need to state in section 5, "subject to the jurisdiction of parliament." There would have been cooperation and there would therefore have been no need to insert this question mark in the way it is here expressed.


Mr. GEARY:: Are not those words a mere qualification of "lending institutions"?


Ross Wilfred Gray: They may be a qualification
of lending institutions, but when I tell the hon. gentleman that of the large lending companies of this dominion only two have a federal charter-the Canada Permanent and the Huron & Erie-the great bulk of the companies possessing provincial charters, he will realize that they cannot possibly be affected by the section. So that to put in a clause such as this is merely misleading and farcical; it is a part of the shadow boxing I have mentioned.
As the right hon. member for Argenteuil (Sir George Perley) rightly said, the abject of the committee was to attempt to erect houses for the benefit of the low wage earners. I am glad he made that statement; it shows that he has given some attention to the report. He realizes that the main abject of the committee, and the object in getting the evidence adduced before that committee, was to see whether we could not establish better housing

for low wage earners. Unfortunately he overlooked the fact that in discussing this whole subject matter we found according to the preponderance of evidence that the so called low wage earners might be regarded as those receiving an annual income of from $550 to $1,250. We found, as appears at page 18 of the report, that in order to build an ordinary dwelling, with moderate comforts for a man, his wife and family, in the unit type of housing, the cost would be around $2,500 per house; and under the Bruce report, in Toronto, it was estimated that the same type of house would be about $2,700. The evidence showed what a house of that description would involve. We found from the evidence that a wage earner earning from $550 to $1,250 could not possibly be expected to pay more than from $10 to $15 a month rent. Let us put it at the maximum of $15 and we shall find what it costs annually to carry a house costing $2,700, as confirmed by the national construction council:
Taxes on land and buildings.. . .$ 55 00 Management	 15	00
I think these figures are very conservative'; I believe the committee found them so.
Insurance	$ 400
Maintenance	
40	00Amortization over fifty years. ...	16	95
Interest on $2,700 at four per cent. 108 00
Total	$238	95
I doubt very much whether the money can be had at four per cent. In twelve months at $15 a month there will be received by way of rental $180, so that it will be observed that there is an annual deficit of some $58.95 without any return or suggestion of return to the investor. Do you think for a minute that we are going to get the lending companies to launch into a scheme of this kind?
When one takes the evidence from beginning to end, one can almost feel that this bill was based upon the fears of the lending institutions that the government might start an insurance company of one kind or another, and therefore they came in with a scheme such as this: We will advance sixty per cent; you advance twenty per cent and people will start building houses. But let us take the evidence of Mr. D'Arcy Leonard, who is a reputable solicitor and secretary of the Dominion Mortgage Investment Association, which includes not only the large loan corporations but the insurance companies of Canada. Be was questioned in connection with this matter by Mr. Cauchon, head of the town planning commission of the city of Ottawa. This is

Housing Act-Mr. Gray
from Mr. Leonard's evidence as found on page 351 of the proceedings of the special committee on housing:
By Mr. Cauehon:
Q. I would like to ask Mr. Leonard a question, because I think that needs to be cleared up. It has been repeatedly stated' here that the class of housing which this committee advisedly has in view, is housing for the low wage earners where they cannot pay an economic rent, and there is need of assistance in that class of housing; does it or does it not interfere in any way with the class of housing to which loan companies make advances, say houses that rent at $15 a month rental, average-$10 or $15, perhaps as high as $18?
A. Well, we certainly could not loan on a house on a basis that would enable it to rent at $12 or $15 a month.
Later on he was asked:
Q. Where would you say was the medium line as to cost?
A. I think that our class of construction, as I know it, particularly in Toronto, we started loaning on a house that cost about $3,500 up.
If this bill is to go forward as one for new construction only, I think

and I speak with some knowledge-even a man. who is able to put up forty per cent of the cost will have difficulty in getting the lending companies to lend him the amount required, although they will admit, as the hon. member for East Calgary said this afternoon, their walls are bulging with perhaps some 875,000,000 to lend. There is perhaps a reason for that. We realize under the existing conditions with provincial moratoria, the Farmers' Creditors Arrangement Act and other acts of that nature, the lending companies are loath to put out money. But for this government to pretend they are launching a housing scheme, to lead the people to believe they are implementing the. promise made by the Prime Minister (Mr. Bennett) in his seventh radio address on January 24, 1935, that he was going to tackle the housing problem, is simply, as the hon. member for North Winnipeg stated, leading astray the workmen, those who would like t.o build.
Again-and this is my final word in connection with this matter-the government in my opinion have missed the main recommendation of the committee. The committee recommended to the government that its first consideration should be in respect to rehabilitation and repairs at present needed. The hon. member for East Essex (Mr. Mor-and), the chairman himself-in fact all the members of the committee-were struck with the fact that the first consideration was the rehabilitation of houses. We cannot attempt to launch into a state aided project at the expense of those who already have built their homes and who cannot make needed repairs 92582-2491
because of lack of assistance. Your committee therefore felt that those who had staked perhaps their all, who during the depression had made sacrifice after sacrifice, were the ones who should first be given consideration by the government in a national housing scheme. Does the government make any suggestion that it is to consider rehabilitation or repairs? No. I repeat that this scheme is launched by reason of the fear of the lending companies that unless they come forward with some suggestion, the government will introduce state aid legislation that will materially affect such companies. The government grasped at a chance to bring forward legislation of this kind, legislation which I think the hon. member who has introduced this bill will admit, cannot, when seriously considered, produce the results that the government hoped, and I know sincerely, it would produce.
The government should not press this bill as it now stands. Let the economic council engage in further investigation; let it look if you will into the question of slum clearance, which the committee found to be a complicated and perhaps costly experiment. We realized in the meetings which we held that we did not have sufficient evidence even to make a recommendation in that regard to the government. Let the economic council go into the matter further. It is not possible that any great assistance can be given to the construction trades in the next few months under this bill, leaving as it does, as someone has already pointed out, so much to the lending companies which from one end of Canada to the other have almost unanimously refused to lend. Let the council later on bring in a comprehensive report in order that the house may give proper and due consideration to this most important problem.


George Halsey Perley: May I ask the hon. gentleman a question? Do I understand that he is opposed to this bill?


Ross Wilfred Gray: What I tried to make clear is that I am heartily in accord with the suggestion that in principle we are adopting a national housing program, and if the government will bring in that particular type of legislation and bring in clause 3 of the recommendations. leaving for further investigation this whole matter which we as a committee did not have time to investigate fully; if the government will do that and then, as I say, bring in a bill based upon the recommendations of that economic council, I have no doubt the members on this side will support it.
Housing Act-Mr. Mitchell


Mr. HUMPHREY MITCHELL (East Hamilton):: I have listened with considerable attention to the hon. member who introduced the bill and those who have spoken since. Coming from what is predominantly a working class constituency, in which there is a large measure of unemployment in the building trades, having regard to the report of the medical health officer placing before the municipal authorities the need for slum clearance in m-y community, I feel that I should state my opinion on this important problem.
The bill is predicated upon two things : the desire of the government, arising out of the speeches of the Prime Minister (Mr. Bennett) last January, to meet the tremendous unemployment situation in the building trades, and the report of the commission under the chairmanship of the lieutenant-governor of Ontario on slum conditions in Toronto and the reports from Montreal and other large centres indicating the necessity of a building program to do away with the intolerable housing conditions existing in the larger urban centres. On top of that you have figures from those who have gone into the question showing that as a result of the stagnation of the building trades in the last five years a building program is necessary to meet the inevitable need for housing, because our young people still get married notwithstanding that we are passing through a severe depression. In a biological sense one tries to recognize the parents through the children, and if there is not some similarity awkward questions are asked. In connection with this bill I think it is fair to say that the reputed father is the report of the housing commission, but I do not think we could recognize the parent from the bill that is now before the house.
There is ample precedent for a sound building policy. In the provision of housing for the people of Vienna, Austria has achieved something in the midist of a tremendous depression which in the opinion of those who have made a close study of hurraing problems is an example worthy of emulation by the rest of the civilized world. Then you havie the advances made by Great Britain, Belgium, Germany, and in a smaller degree Holland and even Mexico. I am well aware that any policy adopted in this country must breathe the spirit of the Canadian people and reflect their viewpoint, but notwithstanding that we have ample precedent in the recommendations of the international labour office to the world economic conference that was attended by the Prime Minister

in, I think, 1932. I have always maintained that one cannot have freedom without ownership. I believe the most contented nation is that nation whose policies permit its people to live in their own castle or under their own roof. I remember discussing that matter once with a high American official representing his government in the Saar, and he said that, largely through the instrumentality of the international commission there setting in motion policies of rehousing in the most radical section, by the time that that policy was in active operation and those people lived in the houses they had completely changed their political outlook. This in his opinion proved the soundness of a proper plan of housing for the people, entirely apart from the health point of view.
There are two problems involved: first, that of providing housing for people of low incomes who can do nothing but rent, and second, that of providing housing for people who still think that the best way to keep a roof over their heads is to own their own home. I have been through that experience myself. I am a comparatively young man- I may no't look it, but I am-and I know something from my own experience in that regard, when I was first married1 and lived in a little frame cottage built on posts,, and the thrill I got ou't of it. There are two needs staring us in the face, as enunciated in the reports of the various commissions; the need for provision of bousing for people who find it necessary to rent, and the need for cheap money for those who desire to own their own homes. The hon. member for West Lamibton (Mr. Gray) said that of the many witnesses who appeared before the committee, none seemed to have a solution. In my judgment the solution of the housing problem in this country depends on cheap money. The borrowing policies of the various governments in Canada up to two or three years ago have shown lack of vision in the enormous interest rates they paid to the lenders of money. That policy automatically froze up the building industry of this country. With this government paying five per cant and more, and some provincial governments as high as eight per cent and municipalities in proportion, no sound building policy could be carried on by any government or any private concern. When a working man pays seven per cent on the first mortgage on a house he is licked before he starts. Seven per cent is an economic impossibility for the average working man trying to own his own home. A helper of mine once bought a little cottage on the

Housing Act-Mr. Hackett
repayment plan under which the man who sold it paid the taxes and so on, and I think the interest rate was eight per cent. He paid SIS a month. We sat down and figured how long it would take him to own the place provided he paid every month, and found it would take one hundred and twenty-three years. When the man bought it be did not go into the financial aspect.
Another important matter is the question of second mortgages and the discount on them. On a second mortgage for $1,000, a man gets $600 to $750 and' pays seven per cent interest on the one thousandl dollars, so that he may be paying between thirty and forty per cent on the second mortgage in an effort to own a home. That is a common occurrence. Buyers of second mortgages axe now suffering for their sins. Second mortgages have been practically wiped out in this depression. In a housing policy I believe it essential that people be given an opportunity to purchase their homes on the understanding that they have the right of repayment almost at any time; where necessary it should be spread over long periods, possibly in some cases over terms of twenty-five years. I do not believe the losses would be very great. Despite the enormous amount of business done by automobile companies we learn that their losses are only about one-half of one per cent, and I believe it is safe to say that the loss in connection with a housing scheme .might be less.
Frankly I am disappointed in the bill; I do not believe there will be one house built under its provisions. In the first place, a first mortgage of eighty per cent is unsound. No person ever heard of lending eighty per cent of the money in that way-and I am speaking, of course, of a private undertaking. Governments might do it, but certainly I do not know of any private company which would lend eighty per cent on a first mortgage, having regard to the dips and cycles of trade, the cost of lending money, and so on. In view of the necessity for housing I believe the government would have done well to take more time in analysing the situation, and that it should have launched a vigorous and courageous policy in an effort to meet the obvious shortage of housing and to eliminate slums in some of our cities. It may be argued, and perhaps wtih some weight, that the bill was drawn up quickly. I believe it is fair to say, however, that for some time members of the government have had in their minds the setting in motion of a policy of this kind. But the present bill will not even scratch the surface of a solution of the problems of slum clearance, housing, and the providing of work for the building mechanics of Canada.
Mr. JOHN T. HACKETT (Stanstead): Mr. Speaker, it is not my intention to discuss those phases of the bill which so far seem to have attracted most attention. One section of the bill appears to have escaped attention thus far; I refer to section 3, which provides for investigation by the economic council of Canada.


Ross Wilfred Gray: I discussed that feature of the bill.


John Thomas Hackett: Distinguished as were
members of the committee, and valiantly as they worked, I do not think any person would contend, least of all members of the committee, that in the few sittings held they could outline or lay the basis of a definite scheme. I believe that as preliminary legislation the bill is well advised; it affords opportunity for further study and for an examination of all the factors which should be considered before defining a vast national housing scheme. It may very well be that there is some opportunity for immediate construction. But the point to which I wish to address myself for a few moments is not how we are going to build, not how we are going to finance that building but where we are going to build. The hon. member for North Winnipeg (Mr. Heaps), the hon. member for East Hamilton (Mr. Mitchell) and other hon. members have spoken as if of necessity construction must take place in the urban centres. If one examines figures now available concerning unemployment he will see that unemployment is found almost exclusively in the larger centres of population, and while a vast program of construction might furnish temporary employment for those unemployed craftsmen susceptible of absorption into the building trades, there is no guarantee of perpetual work in those centres in which homes may be erected. It may well be that by providing homes for large sections of the population in places where there is no permanent work we would be perpetuating unemployment. As the hon. member who spoke last (Mr. Mitchell) was addressing the house I reviewed rapidly figures which I believe have been made available to eveiy hon. member, and which show the number of people on relief in various centres of the dominion. I turn to Hamilton: I admit that a proportion of the unemployed in that city might be absorbed into the building trades, but I believe it is a fact that to no inconsiderable extent unemployment in that city is a result of stagnation in the manufacturing industries which depend for their activity upon foreign markets. I shall say only a word about Hamilton, because I prefer to speak about Montreal, with which I am more familiar. At the moment it is difficult
Housing Act-Mr. Hackett

to see how we are going to regain those markets so long as the commodities we offer are being produced in large quantities by nearly every country. If we restrict to the cities a great proportion of a building program I fail to see how we can make such a program beneficial to the whole people.
For instance, I find that in Hamilton 2,495 labourers, 269 machinists, 141 mechanics, 132 moulders, 152 steel workers and 177 in miscellaneous trades are on the dole. I point this out only to indicate that it is a shortsighted policy which assumes that even after we have built homes for them there is going to be work in that city for these people. I suggest that a wiser plan would be to construct homes outside the cities for those who have recently left the land so that they might find themselves in an environment where at least they could provide for themselves.
I have before me a document prepared by the Department of Social Research of McGill university and which, I believe, was given to all hon. members when the mayors visited the city of Ottawa. This document discloses that in greater Montreal, with a population of 1,149,900, there were 213,263 on relief, and that $6,049,100 was expended by government last year for their maintenance. It furthermore shows that since 1930, $175,794,000 has been spent in providing for people who are out of work. I suggest, as I have frequently done in the last three or four years, that the only permanent and effective cure for unemployment is to remove from the cities a very substantial element that has recently found its way into the cities and to put them where they can provide for themselves. It is beside the question to cite the example of Great Britain, which is a highly industrialized and densely populated country, with a very small area. The last speaker made some reference to Austria. Austria now has a very restricted territory with a capital city whose population, if my memory serves me well, constitutes nearly half the population of the entire country. The housing problem of such a country cannot be compared with our problem and should not be referred to by people who are seeking the benefit of useful experience acquired elsewhere.
I submit, Mr. Speaker, that a building program is an excellent thing but it is folly to assume that this building should be carried on in its entirety in the cities. We talk about slum clearance; I suggest that it is much better to take people away from these sordid conditions, away from unemployment, and put them into organized communities outside the cities, and build them homes where they will cost less than they do in the
[Mr Hackett.]
cities, and where on a few acres of ground these people can at least provide for themselves the essentials of fuel, raiment and food. It is not necessary that these people should engage in farming on a large scale, but it is essential that they be free from the corroding inactivity and the many temptations which result from herding unemployed men in large cities. I therefore hope that whatever may be done, no definite program will be undertaken until a thorough canvass has been made of the whole situation, and that it be made a part of a definite plan to reestablish equilibrium in the country.


Mr. WILLIAM IRVINE (Wetaskiwin):: Mr. Speaker, I assume that the principle of the bill now before us is a national housing scheme or program for Canada. I recognize, of course, that so far as carrying that program into effect is concerned the provisions of the bill are very inadequate, but so far as that principle has been adopted I think it is all to the good.
This legislation is very much like a great deal of the legislation of this session; it is far more acceptable in its tendencies than it is from the point of view of anticipated practical results. There can be little doubt that there is a great need for the building of many houses in Canada. The previous speaker (Mr. Hackett) was wondering where they were going to be built, in the cities or in the country, but the answer is that they will have to be built both in urban and in rural districts, wherever they are needed. But that many houses are required no one doubts; neither does anyone doubt that there is an abundance of building material in Canada to supply all the houses that are needed. In addition to that, there is any amount of skilled labour now idle, men who are anxious to get the opportunity of building houses for the people of Canada. So we oome down to the same old question which has stood in the way of this government and previous governments on every occasion, that of getting the money to do the job that needs to be done. The very fact that the government have taken this baby step in the great task of building for the people of Canada homes that are required is sufficient proof that the need is there, but the fact that they have provided only a meagre $10,000,000 with which to do it indicates the belief of the government that this country is too poor financially to do the job.
I am interested in this bill not in order to provide employment; I think it would be a foolish policy to build houses just to give people jobs. If the houses are going to be built they should be built because they are

Housing Act-Mr. Irvine
required, and, sir, if they are required then I suggest that there is not any monetary policy that should prevent them from being built. I want to state in connection with this bill a principle which is not new to this house, although it is not accepted by this house, a principle which has been enunciated from this corner of the house from year to year. It is this: if there is a human need for certain services, and if it is physically possible to produce those services, then it is always financially possible and financially advisable to provide those services.
I am going to take exception to this bill, not as I have said against its principle, because with its principle I am in agreement; but I take exception in the first place to the meagre amount that is provided for the great task with which the bill presumes to deal. As the hon. member for East Hamilton (Mr. Mitchell) has just said, I doubt whether any houses will be built under the provisions of this measure; but even if the act be taken advantage of, the amount of money provided will be far short of what is actually needed for the building of houses in Canada to-day. Then on more important grounds, I take exception to the manner in which the money is provided. Everyone recognizes that capitalism has fallen down in the building of houses just as it has in almost every other undertaking of human service in 'Canada. Just as the grain trade fell down in the marketing of grain, so have the private builders and contractors failed to provide houses for the people. The manner in which this bill provides for assistance where the capitalistic system has fallen down is on an entirely capitalistic basis. It proposes to borrow money from the money mongers for the purpose of building houses for the people of Canada, houses which must be paid for at a certain rate of interest. Under prevailing conditions these houses will never be paid for under the rates of interest to be charged.
I want to suggest that instead of a meagre $10,000,000 the government advance $300,000.000. This advance can be made from the national credit. If the undertaking is good enough for the money lenders, it is good enough for the government. The assets will be just as safe for government- investment as they would be for the investments of private corporations. The amount of money which I have suggested will not create inflation as there is far too little money in circulation at the present time. It would simply provide a little stimulus to business by putting that much more money into circulation. This bill suggests merely a shot in the arm for the capitalistic system; it creates only ten grains
of pep, not enough even to raise the arm or furnish a single kick. I doubt if this amount will bring about the construction of any houses, whereas $300,000,000 provided out of the national credit and devoted to the building of houses would make a considerable difference.
The question will be asked: How are these homes to be paid for by the people who will live in them? I suggest that the whole thing should be carried out under an amortization plan by which the occupants of the houses would pay an annual sum based upon the deterioration of the houses so that when the asset was wiped out the government would have in its coffers every penny which had been expended. This would not provide for a single copper by way of interest to anyone. At the moment I am not advocating that all public services should be carried on in this way, although I think they should be; but this is a very necessary service. The people need homes and the government should provide them. Whatever is physically possible is financially possible, and everything necessary should be dlone for the comforts of the people. I ask the right hon. gentleman who is in charge of this bill to indicate what is wrong, either from a financial or economic point of view, with the suggestion I have made. I do not think any hon. member, either on the government side or on this side of the house, will say that the financing of a national housing scheme can be justified on any other basis than the one I have suggested1. I hope the government will alter this bill accordingly.


Mr. A. D. GANONG (Charlotte):: Mr. Speaker in dealing with this matter we must consider two closely related problems. The 1931 census shows that for the last three years the population of Canada has been growing at the rate of 27,000 families of 4-68 persons per year. As families are growing smaller, the probabilities are that the increase in the number of families is even greater. The need for houses is even greater than is shown by the increase in the number of families. Last year there were 26,000 fires in residential properties and many houses must have been totally destroyed. Other houses are tom down for sanitary reasons or to make room for other buildings. We would probably need at least 35,000 new houses each year, but according to the records, only 10,000 houses per year have been built in Canada during the last three years. At the present time we need at least 25,000 housing units. It is only a matter of arithmetic to arrive at the conclusion that unless something is done to encourage housing within the next two years we will be faced with a housing crisis.
Housing Act-Mr. Ganong

With all due respect to the minister who has introduced this bill, I must say that it makes no provision for housing the low paid worker. However, for the $10,000,000 provided by the bill we will be able to get $50,000,000 worth of new houses. I believe the government are trying to build the most houses in the best way with the least money and in that way they are taking a step towards the solving of the housing problem. The reference to the committee contained the phrase, "and the burden to be imposed upon the treasury of Canada." Should this scheme work out-and I shall take up that point in a few minutes-we will be investing $10,000,000 for which we will get $50,000,000 worth of new houses. These houses will be built as a mass production proposition; the rates of interest will probably be lower than ordinary commercial rates, and the houses should rent easier than houses built under ordinary conditions. For these reasons the $10,000,000 should be particularly secure. It is estimated in England that for every $1,000 expended in new housing, $250 is saved in relief expenditures. If that same formula applies to this country, this investment of $10,000,000 will save us over $10,000,000 in relief expenditures by the municipal, provincial and dominion governments. I believe that this bill will provide the houses which are needed at a price lower than could be provided by any other method. The bill is only what its title states, an act to assist the construction of houses; it is in no way an act to take care of the housing of the low paid worker.
The second problem which we must face is the distressful conditions under whicn many of our people are forced to live. A survey of the city of Winnipeg showed that in four districts there were 1,300 families each of which was living, cooking and sleeping in one room, many of them attic rooms. In all our cities similar conditions prevail and something should be done to take care of these people. In this regard we have an entirely different problem and a much more difficult one than they had in Great Britain.	In
England they build a great many houses; under the Addison scheme they built 176,000 houses. To show how much study this subject requires, it is estimated that with the same amount of money-the Addison scheme was instituted in 1919-they could build today 1,000,000 houses and rent at half the rate at which the Addison houses were rented. In England they can build what they call a standard house, that is a house for the low. wage earner, which will provide sleeping rooms for the parents and for the children 
of both sexes, separate, and a living room kitchen, for $1,760. According to the report made by the Montreal board of trade, which is the best we have in Canada on housing, it would cost $3,500 to build a similar house in this country, a house that would give equal living conditions. We have a great handicap in our climate. In England that house with interest at three and a quarter per cent amortized at one-half per cent for sixty years can rent at $11.05 per month. In Canada, for a house that would give equal accommodation and an equal standard of living, with the money at three and a half per cent, which is probably cheaper than it could possibly be obtained, and amortized for sixty years at three-quarters per cent, the rental would be $28.73 per month.
The ordinary workman can pay only one-fifth of his income in rent; otherwise he has to take away from his food or clothing or from something else which will interfere with his health. You can readily see the problem we are up against in this country when we come to take care of the low wage earner. In England they have given outright over $800,000,000 and they are pledged to $80,000,000 for the next twenty or thirty years; and in addition to that they have invested almost $2,000,000,000 on which they will get interest. In this country the cost would be so tremendous that it should never be undertaken without a great deal of study. The present bill tends to take care of the housing problem- the crisis we shall have to face within the next two or three years. We must remember that this country is growing faster to-day than it has done at any other time. We are 'holding our birth rate, something we have never done before. The immigration that came in used to make this a stepping stone to the United States and we lost a great many of our own people. The bill takes care of this problem to some extent from the standpoint of what is going to be done for the low wage earner; under section 3 the economic council of Canada is to study the question.
As chairman of the committee I met a good many persons who might be called town planning and housing cranks. I worked with them for two months and at the end of that time was converted. I think that rather than cranks they are torch bearers to something that is coming. This housing problem must be faced. We cannot continue to allow thousands of families in this country to live in one room under unsanitary conditions as they are and have been for the last few years. It is a tremendous problem and we should not touch it without a great deal of study.

Housing Act-Mr. Moore (Ontario)
This bill does so to a small extent. As I say, my association with these men convinced me that something should be done and done at once. When the resolution was first brought in it was moved as:
expedient to bring in a measure to establish a dominion housing commission and to assist in the construction of houses.
I was rather disappointed when the minister changed this resolution. I might frankly say that I know the majority of the committee are not in favour of the commission, but the problem is so great, it has so many different implications, that I do not believe, unless under this economic council a special committee is appointed, that we shall1 ever have a solution of the problem. I do feel however that the present, bill does go part of the way in solving it.
The hon. member for North Waterloo (Mr. Euler) said that the mortgage companies would not be willing to advance an eighty per cent mortgage. We had the representatives of the mortgage companies before our committee and they said that there was a great deal of money available at 5i per cent. Further, they were very anxious to lend it. Section 5, under which the minister and the lending institutions jointly take the mortgage, is no doubt there for some special reason. This I do not know, but I should be inclined to think, and it will undoubtedly be discussed in committee, that the mortgage companies 'would be willing to do it.
The hon. member for East Hamilton (Mr. Mitchell1) spoke of building for the ordinary workman, In the city the workman has to move from time to time to the place where his work is, and from the evidence given before the committee it does not seem wise for the ordinary unskilled workman to own his own home. It is far better for him to have some security, whereby he will have ready money in the event of his having to move, than for him to tie himself up with a house.
I should like to say a word about the work of the committee. The hon. member for West Lambton (Mr. Gray) referred to the chairman. This report is not the chairman's report. We had one of the best committees that could be picked from this house. They worked well together; a stranger, if he were in the committee at, any time, could not tell which side of the house any one of the members belonged to. There was an honest endeavour to ascertain the facts and to find some solution, and I think if the members will read and study the report, considering the time we had, the evidence we could get
and the very limited information at our disposal, they will realize that it is an excellent report.


Mr. W. H. MOORE (Ontario):: 
Mr. ROBERT McKENZIE (Assiniboia) :: I was not a member of the special committee on housing, but I desire to make a few remarks, and, like the hon. member who preceded me (Mr. Moore, Ontario),, I might make a suggestion. This bill is designed to assist the small wage earners, particularly in our cities and towns, who are unable to provide homes for themselves. The purpose is a very laudable one. But in our towns and villages to-day you can buy houses for fifty per cent of what it would cost to build them. Why? Because people are fast losing their equity in their homes and will sell them even at a sacrifice price while they can get a little out of them for themselves. In many cases the buildings are getting out of repair; taxes are an important factor, and that situation is not being helped by such measures as are proposed in this bill and some others that have been brought before this house. Therefore I say that some consideration must be given to the man who is to-day holding on to his property, struggling to save it, keeping his taxes paid and his interest, if he has any, and other charges.
I was interested in reading the report of the committee, and I noticed in it one clause which suggested that something be done in regard to repairs. This bill provides that loans are to be made for the purpose of constructing houses. Paragraph (b) of subsection 2 of section 4 provides that not exceeding twenty per cent of the cost may be

Housing Act-Mr. McKenzie
advanced by the government, the expectation being that sixty per cent will be advanced by lending institutions, the applicant himself making up the remaining twenty per cent. That simply means, as has been said, that there will be no money advanced, because the mortgage companies will not lend sixty per cent of the appraised value with only eighty per cent security behind it. At present you cannot get them to lend fifty per cent with one hundred per cent of the value of the property behind it.
I am sorry that this bill does not contain anything to carry out the suggestion made by the committee in regard to repairs. In the part of the country from which I come there are plenty of houses, but unfortunately they are getting very much out of repair. If the government could devise some scheme under which small loans could be made to the owners of property for the purposes of repairs, at a low rate of interest or at no interest-because we are giving out enormous sums of money without interest, such as the million dollars for the tunnel in Toronto- an immense impetus would be given to business. To-day if a building goes out of repair it is allowed to remain so; if a door is off the hinges they do not buy new hinges and repair it. We read in the papers of houses being burnt simply because the chimney was out of repair. The people cannot afford to make these repairs. In my community the trades hardest hit by unemployment are carpenters, masons and painters, and the businesses suffering most are hardware and lumber. If a small part of this money were set aside for small loans for repairs at a very low rate of interest, the painting and repairing which would be done would give a great deal of employment to those who need it in the building trades and would also help the hardware business and the lumber industry, which are in sore need.


Frederick George Sanderson: I was not a member of the housing committee but 1 took a good deal of interest in its deliberations and report. I am thoroughly in accord with the principle of a housing scheme; I am only sorry that the scheme that has been brought down by the government does not meet the situation at all, The hon. member for East Calgary (Mr. Stanley), who is now acting Speaker, said this afternoon that in this bill the government were implementing a housing scheme, and I quite agree with him. But I am afraid that there is very little in the bill to help the low wage earner, and I contend that the first principle of this Ml should be something to assist the
wage earner, especially the low wage earner, in 'building and owning a house for himself and his family. Apparently there is conflict among members on the government side in regard to the provisions of this bill, because we had it from the acting Prime Minister (Sir George Perley) this afternoon that the bill was primarily for the assistance of the low wage earner,, and we heard from the chairman of the committee (Mr. Ganong) that it was the intention of the committee and in its report it had in view the giving of assistance to the low wage earner in building a house. But if I heard aright the remarks of the chairman of the committee -and if I am wrong I shall be glad to be corrected-I understood him to say he did not agree with the minister who introduced the bill; that it offered very little by way of assistance to the low wage earner. Am I night in that?


Arthur D. Ganong: What I tried to say was that the 'bill is exactly as is stated on the face of it. It is an act to assist the construction of houses, but that does not necessarily mean houses for low wage earners.


Frederick George Sanderson: Then I still think what I have in mind is correct, namely, that the bill offens no relief to the low wage earner who may wish to build a home.
I consider this one of the most important measures of social legislation the government has brought down this session. If it were a measure so framed as to help the working people of Canada its effect would be far reaching. But the bill before us gives no relief to the unemployed; it gives no relief to the employed man working at low wages and very little relief to any person receiving a salary and desiring assistance in the building of a house. The purpose behind a bill such as this should first of all be that of giving some measure of relief to the unemployed. I have no desire to be critical of the government, ibut it does appear to me that this bill came in on crutches, so far as the possibility of its helping that for which it was designed is concerned. There is nothing in the bill which would help the common people, the workers or the labourers desiring to build houses. The right hon. member for Argenteuil (Sir George Perley) stated when introducing the bill that the government was introducing a measure to help the poor man. Well, if the right hon. gentleman thinks this bill will help the low wage earner or the poor man, I am afraid he knows very little about the problems the poor people of Canada are facing. Again I say I do not wish to be
Housing Act-Mr. Sanderson

misunderstood. I am heartily in support of and in sympathy with any measure brought down by this or any other government to give relief to the poor people of Canada facing the housing problem. It appears to me that if the government wanted to give assistance through a housing scheme it should have brought the legislation down earlier in the session, and not in the dying days of a dying parliament, when there is not very much life left in the government-and there will be very much less life left in it after they have appealed to the people. Had they brought the legislation down in 1930, 1931 or 1932, it might have been of some use. They have forgotten that the great majority of Canadian working people have found it very difficult even to keep roofs over their heads. Not only tha-t, but the government have forgotten that the ordinary wage earner has not been able to get enough work to earn the money to pay rent. They have forgotten that in certain parts of Canada today there are more vacant houses than there have ever been in our history. Yet the government come in at this late hour of the session with a half-baked scheme-because that is what it is -to build houses for people who cannot afford to build their own.
Let us turn to some of the provisions indicating the assistance the borrower would get under the scheme. If he -can get a loan company to put up sixty per cent of the amount he wishes to borrow, a borrower will have against him a mortgage to the extent of eighty per cent of the value of his property.
I doubt very much, however, whether any loan or insurance companies in Canada would advance much money under the bill as it now stands. Prom what I know of the history of insurance -companies I do not believe they would lend much money under a measure containing the restrictions which are found in the measure before us. Within the last two weeks representations were made to a committee by the life insurance companies to rhe effect that they did not want any reduction in the rate of interest on money they had loaned to their policyholders. I do not intend to discuss that point, but I must say that if the life insurance companies have money to lend to their own policyholders, the best asset they have, not very much money would come out of their vaults to be advanced as loans under this measure.
The borrower is handicapped before he starts. He must arrange with either a loan company or an insurance company for a loan up to sixty per cent of the value of the land and building. Then the government will come in and lend twenty per cent, placing him in 
the position of starting out with a mortgage of eighty per- cent. If he has it, he puts up the balance. How many wage earners in Canada, men receiving $550, $1,200, $1,250 or $1,500 a year, can put up twenty per cent of the amount they want to borrow? Very few. They have not that much money because they have not been able to earn it. I can readily understand that if some scheme were worked out under which a large number of houses could be built, mechanics, carpenters, bricklayers, plasterers, plumbers and labourers of other kinds would receive a great deal of work. That is one of the best features of the bill. But that work will not be given, because the restrictions are such that people wanting to borrow money will not find it available.
I suggest that the government withdraw this bill, give the matter further consideration and place before us a bill upon which we could be unanimous. I do not -believe there is an hon. member who is not in full accord and sympathy with and anxious to support a housing scheme that is a housing scheme. But a bill of this kind is nothing more than a pretence, nothing more than a sham. If the bill passes and becomes law, while I will not go as far as my hon. friend from East Hamilton and say that not one house will be built under it, I predict that the number built will be very few. What we want is an act that will help the situation and assist in the building of houses, but the government, have missed the point in every way.
Mr. CAMERON R. McINTOSH (North Battleford): Mr. Speaker, I desire to occupy just a few minutes of the time of the house to take part in the discussion of this bill to assist in the construction of houses. I have not had the opportunity this afternoon of listening to all the speakers who have participated -in the debate, but so far as. the importance of the subject is concerned I think there is no question about it. As a matter of fact when the government took upon itself the duty of appointing a special committee of the house to investigate housing conditions in Canada, that in itself was proof that the government w-as at least taking an interest in a new problem, a problem in which a great deal of interest has been taken in the republic across the border, in Great Britain and on the continent of Europe. As their housing problems have developed and as they have approached them and to some extent solved them, interest in the problem has spread to Canada, and the fact that the government appointed a committee of the house to investigate housing;

Housing Act-Mr. McIntosh
conditions in this dominion was a forward step, a step in the right direction. We may-say that it is a small beginning, but after all, small beginnings sometimes bring forth large results. As I was a member of that committee I thought I would make a few remarks on the bill and also on the work of the committee.
The committee held quite a number of meetings and considerable evidence was adduced. I think it was the general opinion of the committee, of the chairman, whom I was pleased to hear speak this afternoon, and of every member of the committee, that we did not have time enough to investigate this problem in all its ramifications. The feeling of every member of the committee was that the investigation as far as that special committee of the house was concerned had just started, that its work was by no means consummated, that a great deal of ground had not been touched at all, that there was a great deal of investigation still to be undertaken which should foe dealt with by a standing or special committee of this house on some future occasion. That means what? It means that although it was a hopeful sign that the government appointed the committee, as it is also a hopeful sign that hon. members of the house are taking a great deal of interest in the question, yet we do not thoroughly know all the ground that ought to be known, and I do not think any person can successfully argue, against that position. A few years ago the house was investigating the question of insurance against unemployment, sickness and invalidity, and when the investigation had been completed and the report of the committee accepted by the house we found that the provinces lagged behind. We passed on the report to the provinces and the provinces took no interest in the question. I maintain, Mr. Speaker, that this report of the housing committee ought to be passed on to every provincial government in Canada; their reactions to i.t ought to be got, and after that the dominion government will know better where it stands in respect to the question. Combined action as far as possible is very desirable.
There is no question about the importance of the problem. I believe we all recognize that. But so far as the municipalities and the provinces are concerned, and even the dominion government itself in a large way, we do not know much about just what ought to be done or precisely what is required to be done. The government has simply made a start on the problem of housing. That is all. The amount involved' does
not amount to much. I agree with the hon. member for South Perth (Mr. Sanderson) and the hon. member for West Lambton (Mr. Gray) and some other speakers that from the standpoint of the ten million dollars involved the bill does not go very far, and therefore if we test the sincerity of the government and its objective by the amount of money .it intends to vote to make a start on this thing, there is no doubt that the conclusion is discouraging. It is no wonder that some hon. members who have spoken have taken the ground that the government should have given the question more consideration, should have come forward with perhaps a more constructive and encouraging bill and should have started, as it were, on larger ground to build an edifice so far as housing is concerned that would1 have been a credit and honour to the dominion. I believe the government could have done much better than it has done in the introduction of this bill.
The discussion that I have heard in the house so far has largely been concerned with urban housing, with the building of bouses for the low paid wage earner in the metropolitan centres of Canada, in the industrial centres which have been built up largely by protection in Canada. It is admitted that their housing conditions are poor and that t)he time has come for constructive action, and the tendency of the argument during this debate has been that this bill applies in the main to the large industrial centres and to the low paid industrial workers. But as a member representing a great rural riding in western Canada I am not going to take that point of view. I am going to take a larger view. There is certainly room for the expenditure of money on housing in Winnipeg, in Vancouver, in Montreal, Ottawa and Toronto, in Halifax and other centres, but I am bound to say that if that is the conception the government has of housing, its housing program will not amount to much as far as solving the housing problem in this country is concerned. We must take a larger view, and that larger view flakes in the housing accommodation of the hundreds of thousands of farmers in the western provinces, in Alberta, in Saskatchewan, in Manitoba-that is in the great middle west. The housing accommodation of these poor farmers who have been up against high protection for the last thirty or forty years, paying very dearly for everything they have to buy and getting very little for what they have to sell, is deplorable. They cannot build houses, and so numbers of them are living in shacks,
Homing Act-Mr. McIntosh

many of them in hovels. If this housing program does not touch these people at all, then as Bright says: We have yet to learn the art of government, yet to learn how by legislating to bring happiness and joy into the homes of the poor people whether in the rural areas or the cities and towns. But the bill does not say very much about improving the housing coanditions in the rural areas, and. since I -come from a great rural area that is fast developing,, I maintain that these rural areas ouight to be included in this housing program and ought to be put on a parity at least with the industrial centres of this dominion. If this were the intention of the government I believe there would be a larger .amount mentioned in the bill; there is no doubt about it.
This problem should be investigated thoroughly and that is going to take time. The question arises as to what body will do this investigating. I believe the members of the committee were of the opinion that a special housing committee would be established for this purpose, but I notice that the bill provides that the economic council, commonly known as the "brain trust," is to be entrusted with the investigation of this important problem. This brain trust is made up. of heads of departments of government residing in Ottawa, and if these departmental heads are to undertake the complete investigation of this matter they will have to change themselves into a perambulating body. They will have to go out into the west and through the rural areas to see how the people are living and why they cannot build better homes. If they do they will conclude that economic and industrial conditions are against these people, that they make it impossible for them to improve their living conditions. The very foundation of this housing problem is the reconstruction of our economic and industrial life and until we take some action in that respect I am afraid the government will never come forward with sufficient money to make housing conditions in the rural and urban areas what they ought to be. I again stress the importance of getting all the available facts. It may be necessary to enlarge the membership of the economic council or to establish a real housing body to investigate this problem in all its details. In that way a report which means something more truly national can be obtained and the government of Canada, backed by the required public opinion developed from year to year, can-with the cooperation of provinces, municipalities and various lending and building

corporations-put into effect a housing program eminently worth while.


Right Hon.   S@: Mr. Speaker, I have listened with great interest to the speeches made by hon. members on both sides of the house in connection with this very important question. I think my hon. friends opposite are entitled to considerable sympathy because of the position in which they find themselves with regard to this bill. They take the position that there is nothing in it but at the same time they are prepared to support it. The hon. gentleman who has just sat down (Mr. McIntosh) says in one breath that we are doing nothing and in the next breath that it does not amount to much. According to his argument we are doing what he wishes us to do-nothing. Look at the position in which the Liberal party finds itself.


Frederick George Sanderson: What about the position in which the government finds itself?


George Halsey Perley: We have been criticized to-night by several hon. members on the other side.


Mr. McINTOSH:: I admitted that you had made a start.


George Halsey Perley: I take it that the hon. member is prepared to support the bill. Why did not hon. gentlemen opposite bring this in several years ago? This government has had the courage to bring in such a bill and we must be given credit for that. Although my hon. friends opposite were in power for years they never thought of bringing in a bill of this kind.


Ross Wilfred Gray: Everybody had a house then.


Cameron Ross McIntosh: There were good times.


Frederick George Sanderson: The times were prosperous then.


William Daum Euler: Is this not really the bill of the hon. member for East Toronto (Mr. Church)? He introduced a resolution in this connection.


George Halsey Perley: The hon. member for East Toronto raised the question.


William Daum Euler: And not the government.


George Halsey Perley: A committee was appointed but we have implemented the recommendations of that committee with legislation, and our action has been criticized on the other side. There is not an hon. member who has said he will not support the bill.


Ross Wilfred Gray: It has been criticized on your side.

Housing Act (Sir George Perley)


George Halsey Perley: I stated that at any rate we were making a beginning in tackling this problem. The hon. member for West Lambton (Mr. Gray) has said that we ought to investigate this matter further before doing anything, but that is provided for in the bill. We are doing all that he wishes us to do and we are making a beginning with a scheme to provide new houses in this country.


William Daum Euler: It will not provide any.


George Halsey Perley: The hon. member for North Waterloo (Mr. Euler) says that the insurance and loan companies will not lend any money under this scheme, but I may say to him that private conversations have been held between officials of the government and representatives of some of these companies and they would show the hon. gentleman to 'be entirely mistaken in his opinion.


William Daum Euler: I shall be very much surprised if any houses are built.


George Halsey Perley: Quite so, but that will not be the first time the hon. gentleman has been surprised.


Cameron Ross McIntosh: Not at this government; there is a surprise every day.


George Halsey Perley: The hon. member for North Winnipeg (Mr. Heaps) stated that the city of Winnipeg or any other city could not take advantage of this scheme. It would be quite simple after eighty per cent had been provided by other sources for a municipality to make arrangements for the other twenty per cent in order to take advantage of the hill. The hon. member for West Lambton suggests that the bill is of doubtful validity, but I do not think he was in earnest when he made that statement. Apparently he was trying to tie it up to the arguments made by the opposition in connection with other bills which we have brought down this session. In order to fortify his argument he quoted the words, "subject to the jurisdiction of parliament " which appear in the bill, but that was hardly fair. Those words were put in to show that we gave authority to any company under the jurisdiction of parliament to lend a larger amount of money than it previously had authority to do.


Ross Wilfred Gray: I pointed out that there were only two under federal jurisdiction.


George Halsey Perley: Quite so, but it was necessary that those words should appear
in the bill. We would not attempt to give authority to any provincial company such as we would give to a company under the jurisdiction of parliament.


William Daum Euler: You could not anyway.


George Halsey Perley: Quite so, but the hon. gentleman is hardly fair in commenting on those words and suggesting that the bill is of doubtful validity. I am sure he does not think that for one minute. After the house rose this afternoon I was rather interested in looking over a copy of Punch.


William Daum Euler: This is a joke, is it?


George Halsey Perley: I listened to so much serious talk this afternoon that I thought I would enjoy something of that nature.


John Campbell Elliott: That is not where the
hon. member got the bill, is it?


George Halsey Perley: I propose to give the bill a little punch from this side.


John Campbell Elliott: It can stand it.


George Halsey Perley: A lot of the
criticism to-night has been on the ground that we were not going far enough and that this matter should have further consideration. We are going to give the problem further consideration but we hope we are starting a scheme which will be very beneficial. We are making a start and we hope that the matter will be given further consideration by the economic council and also by parliament when it resumes its sittings. I noticed the other day that there was a long discussion in the British house with regard to housing. Mr. Geoffrey Shakespeare being in charge of the bill. He detailed the achievements of his department, which included a large rehousing scheme. Mr. Greenwood, who had brought in the first housing scheme, was there at the time and expressed the view that the old bill was a far better one. When I come back twenty years from now and see my hon. friend from West Middlesex here in the house, with a new housing scheme going a great deal further, and when I listen to him, I shall probably say, as this gentleman did, "I think the bill we brought in years ago was a far better one." This is not a simple question and must be considerd quietly and slowly. As the years go by progress will be made in the direction of better housing facilities in this country.
Motion agreed to and the house went into committee, Mr. Smith (Cumberland) in the chair.
Housing Act

On section 1-Short title.


Abraham Albert Heaps: In introducing the bill the
minister gave certain information. In view of what he has said I think the committee is entitled to more information than he gave a few minutes ago. He referred to certain conversations with several of the mortgage companies, who were prepared to lend money under the existing terms. I had that impression from the minister, but if I am wrong I want to be corrected.


George Halsey Perley: What I intended to say and hope I did say was that there had been conversations between representatives of some of the insurance and loan companies and officials of the department with regard to the possibility of making arrangements under this bill as it reads. But there has not yet been any definite arrangement.


Abraham Albert Heaps: I should like the minister
to give some idea of those conversations, because the impression has been given the house, and I am under that impression, that the ordinary lending companies will not be prepared to lend money under the bill unless the government gives some assistance. I would therefore ask the minister to give whatever information he can in that regard.


George Halsey Perley: That is all the
information I have; no record was taken of the conversations.


Abraham Albert Heaps: Under a section which we
shall reach later, and which is the crux of the bill so far as the government is concerned, it is suggested that the government will lend twenty per cent of the value of houses. Will the minister give us an idea as to the terms under which that twenty per cent will be lent?


George Halsey Perley: Does the hon. member mean the rate of interest?


Abraham Albert Heaps: I mean the whole question; there is more than the rate of interest to be considered. What losses is the government prepared to accept, and what will be the rate of interest?


George Halsey Perley: This matter is left with the Minister of Finance to make an arrangement afterwards with respect to agreements with- the -loan companies or trust companies and the method by which the whole plan will be carried out. We have no definite suggestions to -make at the present time, but every care will be taken by the government and the Minister of Finance to see that the conditions are made as favourable as possible and the rate of interest will be kept as low as it can be.


Abraham Albert Heaps: That is not an illuminating answer; it is not satisfactory. However, I will discuss the question when we come to the appropriate section. We are now discussing section 1, which declares this to foe the Dominion Housing Act. There are certain features which I would- ask the minister to explain: first, the relationship between the bill itself and the recommendations made by the committee that considered thd3 question of housing. In the report submitted by the committee certain recommendations were made with respect to rehabilitation in both rural and urban centres. In this bill1 I believe there is no provision for the problem of rehabilitation in rural or urban centres. That question has been totally eliminated.


George Halsey Perley: The committee
made many recommendations, and we have been told by several speakers to-day that we have not enough information on which to base a bill. We have been told that we should wait. My hon. friends opposite-several of them-though they did not go so far as to say that they would not vote for the bill, practically said that it ought to 'be withdrawn pending further information. This bill goes -as far as the government feels it can go at the present time in carrying out the recommendations of the committee. If the hon. gentleman will read section 3 he will see that the economic council is to be asked to go into all these problems further and make a report as soon as possible. But there is nothing in the 'bill with respect to rehabilitation, though the question will be given consideration by the economic council when they are going into the various problems connected with housing.


Abraham Albert Heaps: That is, of course, one way of partially shelving -the problem. In this house we have a faculty which is known as Sjpeak-ing in a political sense, and when members of a political party requested that this matter be shelved or that further consideration be given it, I do not know whether they were serious, because in the same breath they asked for a more comprehensive measure than is -contained in this bill. I have not suggested that this problem should be shelved; I have asked that the government proceed with a comprehensive scheme of housing wherever -practicable. I have in mind my own city of Winnipeg where for quite a long time the -city -council has had a committee working on a- scheme of housing, and they are ready to proceed with it if it -can be financed on a basis of low interest. Under the terms of the bill as it is now before the

Housing Act
committee, I am afraid the city of Winnipeg could not proceed with a housing scheme copies of which have at different times been submitted to the present government. I am very anxious, for two reasons, to see Winnipeg proceed with a housing scheme: first of afl, because of the necessity of a certain number of low rental houses or cheaper houses, and second, for the purpose of in some way providing employment for members of the building trades who for years have 'been out of employment. In spite of what the right hon. gentleman stated to the house a few moments ago, Winnipeg will not be able to proceed with a housing scheme, because, according to the terms of the bill, that city, even though it is a municipal body, could obtain only twenty per cent from the federal government and the balance of the money would have to be obtained from other sources. If that city went to a loan company, we are informed that those loan companies cannot lend funds at less than five and a half or six per cent. I think the right hon. gentleman must know as well as other members of the committee do, that there can be no successful scheme of housing in Canada at the present time on a six per cent basis; it cannot be done..


George Halsey Perley: We are hoping that it will be possible to arrange that the average rate for a loan of this kind wild be as low as five per cent.


Abraham Albert Heaps: Will the minister state how he arrives at that basis of five per cent?


George Halsey Perley: I .must ask the committee to bear with me; I am not making any definite statement as to what is to be done, because it will have to be worked out first by the Minister of Finance. But I would say this to the hon. gentleman: What we are hoping is that if we can manage to get money from the insurance or loan companies at five and a half per cent or perhaps less, the money advanced by the dominion will be at a rate that will make the average rate about five per cent; that is what we are hoping to do. I am of course unable to go into these figures definitely this evening.


Abraham Albert Heaps: As has been pointed out
to-night, any housing scheme in order to be successful must be based upon a low interest rate, and unless we can get the rates down to as low as even three per cent, there is no possibility of any housing scheme being a success. According to what the right hon. gentleman has stated, the loan companies will lend money at five and a half per cent and the government will lend 92582-250
money at four per cent, so that sixty per cent of the funds will be provided on a basis of five and a half per cent and twenty per cent on a basis of four per cent.


George Halsey Perley: The hon. gentleman is working out a plan on a basis which he does not understand and on which I am unable to give him definite figures. The companies may be able to lend money at a lower rate. I must ask him not to expect me to put on record this evening definite figures with regard to this matter. I am piloting this bill through for the Minister of Finance and I am trying to give the hon. gentleman all the information I can. I can assure him that if the city of Winnipeg wishes to proceed with a scheme such as he has outlined!, the Minister of Finance will be very glad to talk the matter over and see if some arrangements cannot be made regarding it.


Abraham Albert Heaps: I do not see why Winnipeg as a municipal body should have t)o go to a private loan company to obtain its funds. If it is good business for a private loan company to lend the city of Winnipeg money at five per cent, there is no reason in the world why the same security should not be equally good to the government so that the city could get its money at cost from the government. That is where my objection comes in.


George Halsey Perley: The hon. gentleman must remember that this government has advanced a great deal of money to the Manitoba government for the city of Winnipeg. We have a plan under contemplation now in regard to the sewage of Winnipeg whereby we would advance further sums of money through the Manitoba government to that city. The resources of the dominion government are not unlimited', and the idea that we have an mind is to get as large a number of houses built in this country as we can without 'leaning too 'heavily on the federal exchequer.


Abraham Albert Heaps: A couple of years ago the
government undertook a system of federal works across the dominion and issued $40,000,000 worth of neiw currency to finance them. I think at that time it was stated from some source-if I am wrong I am subject to correction-the government were entitled to issue neiw currency to the extent of $100,000,000, of which an amount of $40,000,000 has been issued. If that is so and if the government are still in a position where they can issue $60,000,000 in new cur-

Housing Act

rency against the present gold' coverage, is there any reason why that extra money could not be issued and a proper scheme of bousing financed from such a new issue?


George Halsey Perley: If the hon.
gentleman will excuse me, I think I would prefer not to get into a discussion about currency or matters of that kind this evening.


Abraham Albert Heaps: It is very vital to this bill. I do not like to press the question too hard; I claim to know very little about the currency question, and it is only because this statement was made in the house, I believe by one of the responsible ministers, that the government were entitled to issue all this new currency and only a small proportion of it had been issued, that I ask the question. If it were entitled to issue the balance, then the municipal and provincial authorities would not have to lean very heavily on the resources of the federal government because the resources are there. The government might as well use the resources they have at hand, and they could use them for no better purpose than to finance a federal housing scheme.


[Stage Direction]
Section agreed to.
On section 2-Interpretation.
Mr. OOOTE:: Would the minister explain what sort of lending institutions are contemplated under this bill?


George Halsey Perley: Paragraph (e) reads:
"Lending institution" means a loan, insurance or other company authorized to lend money on the security of real or immovable property.


George Gibson Coote: Has the government discussed this matter with the companies in question? Has it reason to believe companies now in existence will enter into this scheme and make loans for the construction of houses contemplated under this measure, or does the government anticipate that some new type of company will be set up to operate under this bill?


George Halsey Perley: I have already explained to the hon. member for North Winnipeg that there have been private conversations between representatives of some of the existing loan companies and officials of the Department of Finance in regard to this question. We certainly expect that it will be possible to make suitable arrangements with them under this bill.


Mr. SPENCER:: Have the insurance and
loan companies been consulted with regard to the bill, and are they satisfied with its terms?


George Halsey Perley: I believe the
companies were not consulted beforehand regarding this bill. The bill was prepared by the government. But there have been private conversations in regard to the carrying out of the terms laid down for these loans, and we anticipate that it will be possible to finance the scheme under this plan.


Humphrey Mitchell: Did these loan companies make any representations to the government in anticipation of this legislation?


George Halsey Perley: As far as I
know they did not approach the government regarding the matter, but Mr. Leonard, a representative of the companies, appeared before the housing committee.


Humphrey Mitchell: Then the government
is not sure that the loan companies are going to cooperate at all?


George Halsey Perley: Well, I have
stated three times-


Humphrey Mitchell: I may be a little dense. I asked whether they had made any representations to the government; the minister said, no. I imagine this was not drawn out of a clear sky; there must have been some understanding.


George Halsey Perley: I understood the hon. member to ask whether they had made any representations in regard to this legislation before it was prepared. I said that as far as I know they did not, but since the bill was prepared there have been conversations between representatives of the insurance and loan companies and officials of the Department of Finance in regard to carrying out this clause of the bill relating to provision of the money, and we have every reason to believe that housing can be financed in this way.


Humphrey Mitchell: The government must
have taken a big chance in drawing a bill up in anticipation, not knowing whether the people it is intended to benefit are going to cooperate with them. When a bill is being drawn it is generally understood that interested parties make representations to the government, and I imagine the government generally gets some assurance, particularly with a bill of this kind, that the people concerned are going to adopt the policy contemplated; if not, the whole thing falls to the ground.

Pension Act Amendment


Abraham Albert Heaps: Subsection (e) of clause 2
defines a lending institution, and states that it means a loan, insurance or other company authorized to lend money on the security of real or immovable property. Is it the intention to confine it to the lending institutions named in this subsection?


George Halsey Perley: Any company
authorized to lend money on the security of real estate. This will be real estate.


Abraham Albert Heaps: Suppose a municipality wishes to build under a housing scheme and does not go to a loan company for its funds but obtains money from some other source at a lower rate, would they come under the terms of this bill?


George Halsey Perley: If a municipality wished to go into business of that kind they would probably incorporate a company for the purpose.


Abraham Albert Heaps: I did not quite hear what the minister said. What I am trying to find out is this: suppose a municipality, say the city of Ottawa, wanted to go into a housing scheme, and were able to obtain the necessary sixty per cent from sources which would give better terms than a lending institution-for instance, it might issue its own bonds at four per cent. Is the oity able to go to the government for the twenty per cent or would it be contravening the terms of the bill if they went outside of the loan companies to obtain those funds?


George Halsey Perley: There is no power to deal directly with municipalities under this bill. If the hon. gentleman has any suggestion to make I shall be glad to listen to it.


Abraham Albert Heaps: If the city of Ottawa wished to go into a housing scheme and wanted to take advantage of the twenty per cent provided by the government under this bill, would the municipality be compelled to go to a lending institution as defined in this bill for sixty per cent of the money?


George Halsey Perley: The municipality could incorporate a company the bonds of which they would guarantee, and provide the sixty per cent through that company.


Abraham Albert Heaps: But suppose the municipality wanted to do it as a municipality and to obtain the sixty per cent by the issue of bonds. What I am trying to find out is whether in that oase the government would provide the twenty per cent as in the case of ordinary loan companies, or is the municipality compelled to go to a loan company?
92582-250 i


George Halsey Perley: I have answered that there is no power under this bill to deal directly with the municipality.


Abraham Albert Heaps: Should not a municipality be on an equality with these private corporations? I think it is most unfair that a municipality which might wish to go into a building scheme as a municipal enterprise should be practically barred from the benefit of the bill.


George Halsey Perley: The ordinary and usual way is for a municipality to form a corporation for such a purpose and to guarantee its bonds.	In that way the city
accomplishes all the purposes the hon. gentleman has in mind.


Mr. PECK:: I want to bring that same question up when we come to consider clause 4.
Progress reported.


[Stage Direction]
At eleven o'clock the house adjourned without question put, pursuant to standing order.
Tuesday, June 25, 1935