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House of Commons Hansard #254 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was cmhc.

Topics

Question Passed As Order For ReturnRoutine Proceedings

12:05 p.m.

Some hon. members

Agreed.

The House resumed consideration of the motion that Bill C-108, an act to amend the National Housing Act, be read the second time and referred to a committee.

National Housing ActGovernment Orders

12:05 p.m.

Reform

Ted White Reform North Vancouver, BC

Mr. Speaker, I am pleased to have the opportunity to speak on Bill C-108, an act to amend the National Housing Act. I am speaking on behalf of the member for Comox-Alberni, the Reform critic for Canada Mortgage and Housing Corporation.

This is actually a very brief bill and its intent is quite simply explained. Bill C-108 proposes to increase the aggregate amount of outstanding CMHC loan insurance from $100 billion to $150 billion, plus any additional amounts that may be authorized by Parliament. That means that CMHC's liability limit will be increased by $50 billion. That is billions, not millions-fifty thousand million dollars, a huge increase over the present liabilities.

I am not surprised that the Bloc would support such an increase in liabilities. It really thinks it is getting something for nothing. It thinks money grows on trees. The fact is it is a much more complex situation than that.

There are many areas of concern that are raised by this bill, concerns that are being voiced by Canadians right now. It surprises me that given the nature of this bill the government is not listening to those concerns. On second thought, maybe it is not such a surprise, given the history of the government so far.

Canadians are already very concerned about the current debt load. They are carrying that debt load and it is creating an inability for them to move forward financially or personally because of high taxes. Every way they turn they are being taxed over and over. There is no room to move. Pretty soon there will not be much left to tax.

The bill does nothing to halt the trend to ever bigger government and increasing public liabilities. It appears that the government is willing to gamble taxpayers' dollars at a time when the present debt is already more than $564 billion and climbing by $100 million every day.

Increasing the liability limit for insuring mortgages is nothing more than government speculation without any money. It is a trend that has been going on in other departments and it really must come to an end. The Liberal government has borrowed more than $80 billion in the first two years of its mandate, and it is continuing to spend beyond its means. This year alone the government had to borrow another $32 billion.

CMHC finances are actuarially accounted for every 20 years, so the Canada Mortgage and Housing Corporation does not know what its ultimate liability will be or what it really has outstanding right now. Bill C-108 should be of great concern to all Canadians, who can clearly see that the government is continuing to spend well beyond its means and incurring liabilities that on a standard accounting balance sheet would show that we are actually in very deep trouble.

By increasing Canada's liabilities we are increasing our risks. Although Bill C-108 does not ask for actual cash per se, it is increasing the liability, which will in the end cost taxpayers a tremendous amount of money if there is a major default. Loans and mortgages are not guaranteed; they can fall back on the government and lead to a further lowering of Canada's international standing and raise the overall debt.

Canadians are already staggering under an oppressive tax burden. They do not need government to dig them a deeper hole. They want to get out of the hole, as proven by the types of provincial governments they have been electing of late.

The government will not disclose its ongoing liability. I would like to see it publish a standard accounting style balance sheet once a year, as was done in New Zealand. Members know that I am originally from New Zealand. There is a law there that requires the government to actually print once a year all of its liabilities in standard accounting form. The first year the country did that, it discovered there was a negative worth in the country and it had to cancel a lot of the liabilities.

If standard accounting practices were used here in Canada to show the liabilities, we would probably find a network of debt and liabilities all strung together in a way that would be completely unacceptable and illegal probably in the private sector.

It certainly appears the government does not know how large the liabilities will be 10 or 15 years from now. Yet it is continuing to increase that liability load on us. This trend of increasing government liabilities across the board will only lead to the government overextending itself, to the detriment of taxpayers who bear the burden of the national debt.

Last week on television the Prime Minister spoke from Montreal with desperate pleas to Canada and promises to Quebec that the Liberal government would make changes if Quebec would stay in Canada. Yet it is ironic that on the eve of the Quebec referendum the government had the gall to table this bill. While the Prime Minister was in Montreal making overtures of a new and decentralized federal government, at the very same time his representatives in Ottawa were tabling a bill that takes us in exactly the opposite direction. So it should not be a surprise if Canadians find that the Prime Minister is trying to back down on his promise. Looking at this bill, it is obvious the government has no intention of decentralizing and that it really wants to cling to every piece of power it has.

When asked about promises of decentralization, all the Prime Minister could say is: "That is going to require a lot more thought and discussion, but I am sure there is going to be some of that". Some of that-what does that mean? Has the government not learned anything from the Quebec result? Did it not do any forward planning? Demands for decentralization are being heard across the country. They did not start with the Quebec referendum; they were there long before that. It takes a major crisis of unity in the country before the government will even begin to address the problems.

When asked about what degree of decentralization the government was considering, the Prime Minister responded that he did not know at this point in time. He did not know. More waffling as usual. Canadians are getting pretty tired of all the waffling from the Liberal Party.

The answer is right here in this bill. The government does not want to decentralize. It is looking to strengthen its federal control. Canadians are not going to tolerate the double talk for too long. Misrepresentation of intent from the government can be seen in the changes that are now sweeping the country at the political level.

The Liberal government's response to Canadians' desire for change has been totally inadequate to say the least. The status quo has got to go if we are going to move forward as a nation.

There was an example today in question period when we asked yet again about the Young Offenders Act. We have been asking week after week after week for two years and the government has done nothing to address the concerns of people. We still have these young punks out there who do not have their names or their pictures published. We have to get this government doing something for Canadians for a change.

Lingering uncertainty in Quebec continues to plague Canada's economic security. Only a few days ago it was reported in the newspapers that the bond raters are still uncertain about Canada's economic future because the Quebec situation remains unresolved. If the government cannot take steps to address the problems at hand, we are simply headed for more chaos.

The future financial stability of this country depends on how well this government addresses its fiscal problems. So far, the picture does not look very rosy. Canadians want a smaller federal government.

The minister responsible for the Canada Mortgage and Housing Corporation claims that his departments and responsibilities, including CMHC, are headed in that direction. However, this bill shows the federal government is actually moving in the opposite direction.

Instead of downsizing and moving away from the housing market, the government wants to put another $50 billion of mortgage liabilities on the backs of Canadian taxpayers. This will increase the federal role, not downsize it as the government claims. If the government is as committed to decentralization as it would want us to believe, then why is the minister responsible for the Canada Mortgage and Housing Corporation grabbing for more money?

The federal government must realign its responsibilities with other governments in this country and the time to start doing it is now. It is absolutely necessary that the government take steps in the right direction, not backward as it is doing with bills like this one. In the light of the disastrous campaign the government led during the referendum debate, it is a pity it has not learned any lessons.

Canadians are taxed to the hilt with all the levels of government they are financing. Not only are they paying for services whose needs are often questionable, but they are paying for the same services again and again through user fees, not just at the federal level but at the provincial and municipal levels as well.

The Reform Party proposed in its recent 20-point plan for decentralization to totally transfer over to the provinces a number of areas of operation at the federal level that are duplicated at the provincial level. Those areas illustrate mostly a federal level of meddling in affairs that are actually set under the Constitution to be provincial. The federal government is long overdue in getting out of those areas of provincial responsibility.

This is not the time for the government to put up its feet and relax because it thinks it won the Quebec debate. It is time for the government to start coming up with a plan that truly decentralizes. One of the things it could be doing is moving total responsibility for housing to the provincial level. If the government would come up with such a plan, it would begin to save the taxpayers some money.

Perhaps it would not be such a bad idea if the government tried adopting the suggestions the Reform Party has made. We have offered the government the entire plan. We have dropped the plain brown envelope on the floor outside the office door of the Deputy Prime Minister. All she has to do is look inside the envelope to see what good ideas are shown there.

Yesterday in his speech at the Canadian Club in Toronto, the leader of the Reform Party received a standing ovation for the suggestions in that 20-point plan. It was very well received as could be seen by the live telecast of that speech on the "National" yesterday.

The Reform Party has been listening to Canadians. If government members need some help heading in the right direction, we are more than happy to assist. They just have to pick up the plain brown envelope off the floor outside the Deputy Prime Minister's office.

As I said, one of our proposals is for the federal government to get out of the housing business. If crown corporations like CMHC are truly self-supporting let us turn them over to the private sector. Areas which are perhaps socially oriented should be turned over to the provincial level.

Not only do Canadians want an end to federal interference in areas of provincial responsibility, they also want clearer distinctions of responsibility between the provinces. They do not want this muddled thing we have right now where municipal, federal and provincial governments get all mixed up together giving one another grants. It is like government incest in a way.

Canadians also want an end to federal interference in the private sector. They are sick and tired of the federal government interfering unnecessarily in their affairs.

Bill C-108 allows the Canada Mortgage and Housing Corporation to significantly increase its presence in the mortgage market.

It represents a further intrusion into a private market and will lead to further distortions of that market.

The federal government is artificially inflating mortgages in urban areas in order to subsidize rural areas. The government's policy of cross-subsidization of mortgages means that houses in urban areas cost more to Canadians than they would if the federal government stepped out of the housing business in the first place. It is all very well to offer a lower price to rural residents, but why should urban areas bear the brunt of that cost? Federal meddling in the housing industry also means that private companies like GE are offering mortgages at a higher rate as well.

It is time for the government to stop artificially jacking up mortgage rates and to stop subsidizing one kind of mortgage by gouging rates on another. Let private industry do what it does best, provide consumers with competitive mortgage rates.

In terms of the 5 per cent down program, there is a very real danger that any economic downturn which continues the trend we have seen lately where property prices have been falling could create a situation where homeowners are left holding mortgages worth more than the property. It is a simplification for the government to say that the liabilities we are incurring have no cost. If the property market turns down and homeowners walk away from some of those commitments, the taxpayers are left holding the can.

I was in the U.K. in August over the summer break. Incidentally, my trip was paid for with my own funds and not those of taxpayers. I met with some bankers while I was in London. To my astonishment, I was told that because of the property downturn in the U.K. some banks are now holding a lot of mortgages in their portfolios which are currently valued at 120 per cent of the properties on which the mortgages were originally taken out.

The banks are also holding in their portfolios huge numbers of vacant properties because people have walked away from those commitments. That is a sign of the sort of disaster which can happen if the government does not take into account where these liabilities could lead.

It is pretty frightening that we are building up a liability account in this area of something of the order of $150 billion. It is wonderful to offer this opportunity for new homeowners to get into home ownership, but to do it on the backs of the taxpayers is not a good idea.

For that reason among others, the Reform Party does not support an increased federal role in the mortgage market. We do not support increasing federal liabilities. We do not support federal meddling in the private sector and therefore, we do not support this bill.

In conclusion, I move:

That the motion be amended by deleting all the words after the word "That" and substituting the following:

this House declines to give second reading to Bill C-108, an act to amend the National Housing Act, because the principle of the bill does not address the issue of transferring the responsibility of housing from the federal government to the provinces.

National Housing ActGovernment Orders

12:20 p.m.

Liberal

Peter Milliken Liberal Kingston and the Islands, ON

Mr. Speaker, I rise on a point of order. The motion the hon. member just moved was a substantive motion and not an amendment to the motion now before the House. I do not believe it is in order.

National Housing ActGovernment Orders

12:25 p.m.

The Acting Speaker (Mr. Kilger)

We certainly take every consideration necessary before making the proper ruling. Having reviewed the full contents of the motion and its form as it is written here, the motion is in order.

National Housing ActGovernment Orders

12:25 p.m.

Liberal

Ovid Jackson Liberal Bruce—Grey, ON

Mr. Speaker, it is a pleasure for me to speak about housing.

Since giving my first speech in this House during the throne speech debate, I have pledged to be one of those members who tries to make a difference and tries to make things work.

A wise man was once asked which was the most important level of government: provincial, federal or municipal. The wise man thought for a little while and responded by asking which was the most important leg of a three-legged stool.

We have had the referendum. I must say that I work in this House with all members from all sectors, the independents, the BQ, the Reform Party, the NDP, the Liberal Party and the Conservative Party. There is a lot of talent. Many of us are spending a lot of time on other things when the taxpayers have indicated there are so many restructuring things happening and the Canadian economy needs to be addressed. Yet we get into partisan discussions which are sometimes pretty nonsensical. We talk about devolution, restructuring and downsizing. Some people do not even know what the heck they are talking about with regard to those.

As a member of this House I am going to start talking directly to the Canadian people. They have sent us to this place to do a job. We have talents and we have to use those talents. We must use Canada's resources, both human and natural, to the best advantage for Canadians. Canadians expect to have jobs. They expect to have good health care and they expect to have good housing.

To address one of the points raised by the hon. member of the Reform Party, I remind him that the mortgage insurance premiums charged by the CMHC are sufficient to meet the risks being assumed at no cost to the government. The viability of CMHC's mortgage insurance fund is assessed annually by an independent actuary. An actuarial evaluation of the fund as of September 30, 1994 has confirmed its long term solvency.

Since 1946 CMHC has returned $1 billion in the form of taxes and profits. The mortgage insurance fund contributed an additional $35 million in 1992 to the consolidated revenue fund. The member also needs to be reminded that the activities of the fund contribute to the stable supply of affordable housing for all Canadians, including the handicapped and poor people.

No province has expressed an interest in moving into this sector of the economy. There is no duplication. A change in the market is essential for the viability of the fund. This balances the economic and budgetary risks. Clearly the third party is ignoring 320,000 Canadians who have purchased homes throughout the land with the fund.

Before returning to the substance of the bill I would like to address some comments by a member of the Bloc Quebecois. On one hand we have the Reform Party balance sheet argument. On the other hand I had a lot of sympathy for my friend from the BQ because he was looking at disadvantaged people. He talked about the fact that some of them made only $30,000 and had problems.

I will return to the facts. I say as a mayor of a community that we needed intervention by governments. There were slum landlords. There were cockroaches. There was inadequate housing. The heat would be turned off at certain periods of time. That intervention has brought real standards so that we could have good homes for all Canadians.

The member opposite did not give the correct statistics with regard to the amount of funds spent in Quebec. I will address some of his comments. Between 1986 and 1993 Quebec received 29 per cent of all federal social housing units committed nationwide. In 1994-95 in Quebec $357 million was spent on social housing. The member simply chooses to ignore the importance of that contribution.

That contribution means that 140,000 units of social housing received federal assistance in Quebec. It also means that Canadians in Quebec have benefited from federal programs like the residential rehabilitation assistance program.

One factor the member should be aware of is that the funding for new social housing commitments in Canada has been distributed according to a model established on need. That is why Quebec received 29 per cent of all federal units between 1986 and 1993. Additionally between 1992 and 1994 there were more than 53,000 instances of first home loan insurance for Canadians in Quebec. This is one example of what the federal government can do to assist all Canadians.

This program costs the government nothing. CMHC has returned more than $1 billion in profits and taxes to the federal government. Over and above this amount, the federal government has received $55 million from the mortgage insurance fund. This amount was returned to the consolidated revenue fund in 1992. It is being applied to reduce the federal deficit.

We have a great country in Canada. We have our problems but we have solutions to the problems. When we work collaboratively on the solutions the country will do well. That is why we are the best in the world, between number one and number three. That is why we have good standards.

Notwithstanding that globally we have a lot of structural change, Canadians will come out better because we will apply the programs for which the government was elected. We have the talent to do it and we have the will to do it.

I am pleased to have the opportunity to speak in support of Bill C-108, an act to amend the National Housing Act. This is an administrative bill, the purpose of which is to increase the ceiling of the CMHC mortgage loan insurance from the current $100 billion to $150 billion.

My colleague also described for us the importance of the role of the CMHC's mortgage loan insurance, the importance that it played and continues to play in helping Canadians to have access to home ownership.

Home ownership is a cherished dream held by many Canadians and there are good reasons for it. Home equity is a major portion of wealth accumulated by households and has been a great source of retirement savings for Canadians. The concept of home speaks to one of our basic human needs. Home is a place where people feel secure. Owning a home gives people a stake in their community and a sense of belonging.

Home ownership is a concept that the people of Canada support. That is not likely to change at any time soon. It is therefore critical that CMHC is able to continue to provide mortgage loan insurance to Canadians today and in the future.

One of the most important aspects of CMHC mortgage loan insurance is the public policy mandate to provide equal access to mortgage financing at the lowest possible cost for all Canadians regardless of where they live in Canada. Equal access is achieved through cross-subsidization. Surpluses generated from lower risk businesses are used to fund shortfalls in higher risk businesses.

The public policy mandate of equal access distinguishes the CMHC in a major way from the private insurer. Without access to

CMHC mortgage loan insurance Canadians in some parts of the country would have to come up with a conventional 25 per cent of the value of the house as a down payment. Needless to say, many Canadians would hardly ever be able to purchase a home if this were the case.

CMHC's mortgage insurance is therefore critical in helping Canadians to access home ownership. CMHC has long recognized that the housing financial needs of Canadians are diverse. The corporation's mortgage loan insurance has traditionally demonstrated the flexibility to respond to varying needs.

I refer to an example that has helped hundreds of Canadians realize the affordable home ownership dream. The manufactured housing or mobile home industry has contributed greatly to giving Canadians access to good quality, affordable housing. CMHC has been working in partnership with the manufactured housing industry for many years because of the importance of the housing sector in the economy of Canada as a whole.

Canada Mortgage and Housing Corporation introduced its chattel loan insurance program, known as CLIP, as a five-year experiment in 1988. The objectives of CLIP were twofold: first, to improve access to alternative forms of affordable housing without involving government expenditures and, second, to help place manufactured homes in a more competitive position with conventionally built homes.

CMHC completed an evaluation of CLIP last year which confirmed that the program is an important instrument in increasing access to good quality affordable housing without involving government expenditures. The evaluation also confirmed that CLIP has had a positive impact on the manufactured housing industry and mobile home park developments.

Following the results of the evaluation the minister responsible for CMHC was pleased to announce an expansion of the chattel loans insurance program. As a result it now includes new homes, resale homes and manufactured homes in Canada.

CLIP is an affordable alternative for many of the approximately 335,000 moderate income rental households that could not previously afford to purchase a mobile home. The CMHC and the manufactured housing industry have enjoyed a productive partnership for many years. They have been working together to help Canadians gain access to good quality, affordable housing and to enhance the viability of the industry. The enhancement of CLIP will lead to greater access to mobile homes as affordable options for many Canadians and will encourage growth in the housing industry.

CMHC and the mobile home industry have done their part. The consumers have shown they are interested in mobile homes as a housing option. Certainly there can be no doubt of the importance of NHA insurance in making the program possible.

This is only one example of how NHA mortgage insurance has met the specific need and why NHA mortgage insurance must be maintained as a public policy instrument capable of evolving to meet the future housing needs of Canadians.

With any eye on future needs CMHC is currently working to develop a variety of new housing finance instruments made possible by innovative uses of mortgage loan insurance. In developing new products CMHC is looking to the challenge the creativity of the financial community to ensure that the largest possible number of borrowers can find a product in the marketplace to meet their precise needs. A variety of choices will encourage lenders to compete on a basis of service and product differentiation.

The financial environment in which CMHC's mortgage loan insurance business operates has undergone significant changes in recent years. The introduction of one-stop financial services, the increased use of technological systems to support businesses and operations, and the need to manage expenditures and facilitate better risk management are factors that have had an impact on the way in which CMHC runs its mortgage insurance operations.

CMHC has responded to a changing environment by continually reviewing its processes for delivering mortgage insurance and introducing improvements and efficiencies where needed. Ensuring that CMHC's mortgage loan insurance remains relevant and capable of responding to the changing housing and financial needs of Canadians adds a major focus to the activity of the corporation.

CMHC is now focusing on the introduction of new processing mechanisms which will utilize the capabilities or electronic communications between CMHC and its approved lender clients. The enhancements will allow the corporation to serve better the needs of the Canadian housing consumer.

Mortgage loan insurance has played a significant public policy role in the past. CMHC's stewardship will continue to evolve to meet the changing needs of Canadians and the financial community.

National Housing ActGovernment Orders

12:40 p.m.

Reform

Margaret Bridgman Reform Surrey North, BC

Mr. Speaker, I have one question for the hon. member in relation to the overall concept of CMHC.

My understanding is that it was felt necessary in the past that we had to develop this corporation to address the needs of Canadians who were incapable of meeting the 25 per cent, et cetera, to realize their own homes.

If we are to put another $50 billion into it, it implies that more Canadians are in need of it. Since the economic situation in the first place did not allow them to buy their homes we created the

program and now we are expanding it. Would it not be better to put the $50 million into the economy so the people can get work, meet the 25 per cent requirement and reduce CMHC instead of increasing it?

National Housing ActGovernment Orders

12:40 p.m.

Liberal

Ovid Jackson Liberal Bruce—Grey, ON

Mr. Speaker, I thank the hon. member for her question. The corporation and the Government of Canada are responding to the housing need.

In the construction industry housing is a major motor of the Canadian economy. When the housing sector falters the whole system falters. Many people are looking for jobs right now. In my earlier dissertation I alluded to the fact that nobody in the private markets is not responding.

The initiative does not cost the government a cent. Using my old hat as mayor of Owen Sound, we have had private sector and CMHC interventions. The main role of CMHC is to make sure that handicapped people are looked after, that the heating requirements and other construction requirements are met before they are allowed insurance. There has to be a balance in the system. If the government intervenes too much it probably affects the private sector people. In the communities there is a groundswell to keep that from happening.

I assure the member there is a need for the initiative. Infusion in this category is probably better than putting it in other places because of the spinoff effects of building homes in communities. There will be a multiplier effect on the dollar and job creation. The activity it will create in the hardware store, the corner store and for construction workers, et cetera, will be enormous.

It is simply that there is a real need and it is a great thing to happen. As I have said before, health, work and housing are the three most important things for Canadians. This initiative helps those exactly.

National Housing ActGovernment Orders

12:45 p.m.

Cochrane—Superior Ontario

Liberal

Réginald Bélair LiberalParliamentary Secretary to Minister of Public Works and Government Services

Mr. Speaker, I rise again to tell the Canadian audience that the speech made by the hon. member for North Vancouver was somewhat wrong. First, I wonder if he has read the bill and second, I do not know why he disagreed so strongly with the fact that this is a cost revenue neutral program.

As a matter of fact, the Government of Canada made money in 1994. The mortgage insurance fund gave $55 million back to the treasury. It is beyond my wildest imagination why members of the Reform Party would so strongly object to this bill.

My colleague from Bruce-Grey made an eloquent speech. It was obvious that he had read and understood the thrust of the bill which says essentially that $50 billion in liability will be added to the $100 billion that the Government of Canada already has to provide those Canadians with low incomes the backing to be able to own their own homes. This is extremely important because in many cases a 25 per cent requirement for a down payment is not there. They simply do not have the revenue. However, if they have 5 per cent or 10 per cent, the Government of Canada comes in and guarantees their loan with any bank in Canada.

I would like to ask my colleague from Bruce-Grey how important is this initiative for those Canadians who would not otherwise have the opportunity to buy their dream home?

National Housing ActGovernment Orders

12:45 p.m.

Liberal

Ovid Jackson Liberal Bruce—Grey, ON

Mr. Speaker, the CMHC gives Canadians a choice of mortgage loan insurance. Without the CMHC Canadians would be served by a private sector monopoly. The risks with a monopoly are higher prices and fewer choices, making housing less affordable, particularly for first time home buyers.

National Housing ActGovernment Orders

12:45 p.m.

Moncton New Brunswick

Liberal

George S. Rideout LiberalParliamentary Secretary to Minister of Natural Resources

Mr. Speaker, it is a pleasure to rise and speak on Bill C-108, an act to amend the National Housing Act.

In 1987, CMHC introduced National Housing Act mortgage backed securities, a new way of attracting investors into the mortgage market and increasing the supply of funds available for home buyers. Since then the program has become a key part of the financial system in two respects: first, as an attractive real estate based investment offering very good yields and maximum safety; second, as a source of financing for the Canadian housing industry. The mortgages are all insured under the National Housing Act.

The fact that these blue chip securities are the only ones of their kind backed by the federal government makes them as solid as Canada Savings Bonds but with the added advantage of higher yields. Yields are greater because their liquidity is market based and their value fluctuates with market interest rates.

MBSs help to increase the amount of private capital available to finance the construction and purchase of homes and rental accommodation and encourages competition in the mortgage market. MBSs help to support the availability of lower mortgage interest rates by assisting smaller approved lenders to compete with the larger ones.

MBSs have also improved the security of tenure for Canadians through longer term mortgages. Before they were introduced, mortgage terms usually ranged from six months to three years and now consumers can benefit with terms of up to 25 years. Over $25 billion worth of mortgage backed securities have been issued since the initiative began in 1987.

Turning to the bill itself, it is quite straightforward. It is intended to increase the maximum aggregate mortgage loan insurance from $100 billion to $150 billion. It sounds like a large sum of money, but at the same time we have heard members on this side of the House explain that this is really a profit making venture on the part of the government, which contributes to the reduction of the

national debt and at the same time encourages housing construction.

Many really do not understand what we are talking about when we say mortgage insurance. Some people have the view that it is like life insurance and it is something that is put on a mortgage to insure someone's life. Most lending institutions will only lend up to 75 per cent of the value of a house or a property available for construction, so there is the leftover portion of roughly 25 per cent. That can only be accommodated in one of two ways, either the person who is building the home or buying the home comes up with that 25 per cent, or the financial institution receives a guarantee that it will be paid back that 25 per cent. That is where mortgage insurance comes in and that is why it is essential.

It is clear from everything I have read that if mortgage insurance was not available for that 25 per cent, housing construction would literally grind to a halt and we would see no activity at all.

I have gone through the joys of constructing a house of my own. I use the term joy very loosely. It is a challenge more than a joy. I contracted out the work myself, which means I used to be seven feet tall and have no grey hair, but after having being beat up by all of the contractors and chasing around, I realized exactly what goes into constructing a home.

What I was struck by in the process was the amount of employment created in the construction of just one home. People have no real appreciation of the facts because a lot of people have contractors build their homes and do not really see the full effect of what one house has in the construction industry.

I had five framers working on my house for six weeks. Those are the people who build the house and do all the rough construction. I had two plumbers working on my house for at least two weeks and three electricians working for another two to three weeks. Eight roofers put on the roof in two days, which I was very impressed with, but there were eight people scampering all over the roof. Four people put up the gyprock and another two put on the plaster. As well, there were painters and finish carpenters.

I was lucky to have fixed contracts so that I did not get beat up by the time that it took on this particular contract, or else I really would have been looking stupid, but fixed contracts are very important in these circumstances. What struck me was the sheer number of jobs created. That does not even account for the other people who were involved, the building supply people, the manufacturers of the pipes, the sinks, the toilets, the sewer pipes and those types of things, the cabinet makers, the people who do the hardwood floors and the carpets.

I am sure I have forgotten some of the people who were actually involved in the process. My wife is sitting at home telling me I have forgotten about this and I have forgotten about that because she did it all and that is why I do not know. She did most of the contracting rather than me.

The fact is that literally hundreds of jobs are created because one person chooses to build a house. If we can make that happen throughout the country, then we are really going to be creating a large amount of employment. It is clear that housing is a major contributor to the creation and the maintenance of employment. That is why mortgage insurance and CMHC have a very critical role to play.

In this major indication of commitment, the government is saying it wants to spur on the housing industry. For those on the opposite side that say it is crazy, that we should not do it, that we should let the marketplace do it on its own, I would like to read some of the stats that are put out by the housing industry.

In a press release in September of this year CMHC forecast housing starts of 112,500 for 1995, an astonishing 30,000 drop from the initial forecast of 141,000 starts at the beginning of the year and far below national housing requirements of 165,000 starts. While the news is a little better in 1996 with CMHC forecasting another 127,000 starts, the housing industry is at recession levels. Ways have to be found to encourage the housing industry because it creates the employment Canada needs.

The press release went on to state that lower interest rates are not the cure all for the current situation. Lower rates will not address the principal problem, the loss of confidence among many Canadians in their employment prospects.

That is why we have a double barrelled task here. First, to create that confidence, which is what the Liberal government is doing now by getting our financial house in order, while at the same time providing those mechanisms like mortgage insurance so that the housing industry can easily facilitate the increase in construction which is necessary. I want to emphasize that the key is confidence. We have to establish confidence. We have now turned the corner on the referendum. It is time to start talking about confidence, about creating employment and carrying this country into the 21st century.

New approaches and new directions for financing the housing industry have to be found. I know the industry has brought forward a number of imaginative approaches. It talked about RRSP loans for mortgages and all of those things. I found it interesting to look at some of the things that Central Mortgage and Housing is actually doing now. I thought I should read those into the record because they are important as we try to grapple with housing. If this country is going to succeed, one of the areas which will help cure crime

problems, create jobs and, in effect, fuel a positive, caring society is through the provision of adequate and proper housing.

Here are some of the objectives of the National Housing Act and what CMHC supports. Through social housing, CMHC works with provincial, territorial and municipal housing agencies and with local non-profit organizations, co-operatives, urban native groups and First Nations, for those whose needs cannot be met by the private market. Assistance is provided to more than 661,000 social housing units.

CMHC's direct lending program enables CMHC to act as a break even lender to public and private, non-profit and co-operative projects that are subsidized by CMHC.

CMHC is helping the Canadian housing industry to promote the Canadian housing system abroad by helping to develop housing export strategies to assist the Canadian housing industry market Canadian housing technology, products and services in world markets.

CMHC's Canada Centre for Public-Private Partnerships in Housing facilitates housing partnership projects involving the production of affordable and accessible housing for low to moderate income households without ongoing federal subsidies.

CMHC continues to provide leadership in improving not only Canadian but international housing standards. Those are just a few of the things that are ongoing.

In conclusion, this bill will be pooh-poohed by the members opposite, some saying it is too little and some saying it is too much. Mortgage insurance has been one of those key catalysts to keeping the housing industry functioning and a positive contributor to the economy and to the creation of jobs. At the same time, as has been mentioned before, it makes a contribution to the reduction of our debt as CMHC returns a profit to the Government of Canada.

I am sure that members opposite will see their way clear to quickly support and pass this piece of legislation.

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12:55 p.m.

Liberal

Dianne Brushett Liberal Cumberland—Colchester, NS

Mr. Speaker, I am really pleased to hear the hon. member's comments regarding this bill and the positive forces it will have on the economy of our country.

Only a few weeks ago I had the ambassador from Poland in my riding of Cumberland-Colchester, Nova Scotia. The purpose of his visit was to look at housing for Poland and eastern Europe. The interest is there because they know that Canada and particularly Atlantic Canada have numerous sawmills making new houses constructed of wood, high insulation products and meeting the R-2000 code for insulation standards.

When we had the G-7 conference in Halifax in June, we produced a G-7 model home. This was the interest the east European countries had in looking at Canada and the great potential in development. Could the hon. member elaborate a bit on the value of this construction, on the high prestige of construction of homes, on the value to the world structure, on the peace and economic development it will bring, as well as bringing jobs here at home and adding to that great potential of export for our country?

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1 p.m.

Liberal

George S. Rideout Liberal Moncton, NB

Mr. Speaker, I thank the member for her question. It is an interesting one, because in a country the size of Canada, with a population of roughly 30 million, the key to a lot of our economic success is the role we are to play on the international market and what we will accomplish there.

What is very gratifying for me in my role as parliamentary secretary to the Minister of Natural Resources is dealing with companies that are actually building model homes or sending building materials into the international marketplace.

I recently had a meeting with a model home builder who is building homes for the Japanese market. A lot of people said that would not happen, that we could not crack that market. The manufacturer was telling me that he cannot supply the demand, that if he could generate more he would. The market is flooded with the types of housing that do not fit the strict criteria necessary in the Japanese market. Canadians have developed the techniques, the building standards, and those types of things that make it easier for us to introduce our products into the international marketplace.

I hear the Reform Party from time to time talk about doing away with the Department of Natural Resources, saying that the federal government has no role to play. As we set the standards so that we can meet the international criteria and the International Standards Association requirements, as we do the research and the development that is necessary and develop the new technologies that allow our industries to compete in the international marketplace, we are making that contribution to creating jobs in Canada. That is where the housing market has an integral role to play.

In my home province, Kent Homes, part of a larger company, is building model homes and is trying to sell those all around the world. Just as I described the number of people who were working on my house when I was building it, the same sorts of things are going on in the construction of model homes. These are job creators. They are a transfer of money, jobs, and growth to the international marketplace so that we can then reap the returns from those activities.

The Department of Natural Resources has an excellent role to play, CMHC has a role to play, and we at the federal government

level have a very important role to play in creating employment through housing. This bill will make one small step for that approach.

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1 p.m.

The Acting Speaker (Mr. Kilger)

In closing the intervention to the hon. parliamentary secretary, the word from Moncton from many subcontractors is they wish he had stayed in Ottawa and let Mrs. Rideout look after the contracting.

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Parkdale—High Park Ontario

Liberal

Jesse Flis LiberalParliamentary Secretary to Minister of Foreign Affairs

Mr. Speaker, a lot has been said about CMHC's involvement in providing insurance so that more people can afford homes. I would like to touch on the area of social housing and the way the National Housing Act and CMHC have helped in the social housing. I would like to use experiences in my riding.

Canadians of Lithuanian descent in my constituency saw the need for housing for seniors. In no way could these seniors afford individual homes, et cetera, so they built Vilnius Manor. How did they build it? They got a long term mortgage from CMHC at a very low percentage over a long period of time. Today these seniors are enjoying one of the most beautiful homes in Toronto, probably. In this home the seniors not only mix with Canadians of other heritages but they can also hear their own language. They can also see part of their own culture that they brought with them to Canada. It is a real success story, situated right on Bloor Street in Toronto.

An example of a similar project, again funded or assisted by CMHC, is Copernicus Lodge. A group of Polish descent built Copernicus Lodge as a home for seniors. It was filled up before it was even completed. In these models some people have to pay the full rent and others get a subsidized rent. Again, there is a women's auxiliary with this Copernicus Lodge who provide activities for the seniors. You will not see happier Canadian citizens than the ones living at Copernicus Lodge.

Another example in my constituency is Wawel Villa. Again thanks to CMHC funding a group of seniors can live in Wawel Villa just opposite High Park. They can walk through the park and enjoy life in their older years.

I had the experience also of helping Canadians of Latvian descent to build Kristus Darzs in the Woodbridge area. Again, this home would never have been built if it were not for the assistance of long term loans from CMHC.

I hope this program will never be cut. We have thousands of such homes across Canada providing comfortable living for those in these kinds of homes.

A problem is beginning to develop that I would like to share with the minister, the mover of this bill. As these people age in these homes they now need more intensive care. Many need ongoing nursing care. Many require chronic care assistance and they do not want to move out. These homes were not built for these kinds of clients.

Do they move out? Where do they move to? Most of them want to stay. All the homes I have mentioned are looking. Copernicus Lodge has already built a second phase. They have floors that provide more intensive care for the people who need it. This is a problem that is facing our country. We build affordable homes for senior citizens as they get into their eighties and nineties. And I am so pleased that many are living into their eighties and nineties, and some are reaching a hundred and over. But they need special care.

Rather than move the people out, we have to provide in these homes more intensive assistance, which requires a different kind of personnel. It requires highly trained nurses, psychologists, social workers, and so on. Yet these are the areas where unfortunately the Conservative provincial government is cutting back. I do not know why the Premier of Ontario wants to cut back on the backs of seniors. I believe we have to reduce our deficit. We have to run a much leaner government, but not a meaner government, such as the province of Ontario appears to be doing. This is an important issue, which will be facing the country even more intensively.

This brings me to the issue of jurisdictions. We have been talking over the last month about perhaps moving some of the powers the federal government has to provincial jurisdictions and co-operating with the provinces to decide who can deliver these programs the best.

We are talking about federal programs in housing. The province of Ontario also is involved in housing. If someone in the greater Toronto area wants a subsidized unit, they go to the metropolitan Toronto level. The city of Toronto has a program called City Homes to help people with affordable housing. There are four levels of government-federal, provincial, metro Toronto, and Toronto-all involved in housing.

If we want to keep the country together, these are the areas we must look at to see who can deliver the housing programs best, most efficiently, et cetera. And let us talk with the other levels of government. If there is one level that can do it better, fine, it can take over a certain area. If the federal government can do it better, it would take over, with the caution that the federal government will still need a strong central government to maintain standards coast to coast to coast, be it in housing, day care, or health care.

I wanted to put on the record the kind of assistance my constituency received thanks to the type of bill we are amending here today, the National Housing Act.

The House has heard the problems that are facing the Parkdale area of my riding, with prostitution, drug trade, high school dropouts, et cetera. We are trying to analyse why in one part of my riding there is such a heavy concentration of all these social problems yet in another part of the riding there are not the same problems. One thing, in my analysis, that contributed to this is the

lack of home ownership in the troubled area. In that area only six per cent of the population own their homes.

Again, if all levels of government got together to make it possible for people to afford their own homes and build a family unit, et cetera, I think we would reduce the numbers and the kinds of problems facing the Parkdale area. We are working on it, but we do need help from legislation such as we have here today.

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1:10 p.m.

Liberal

Dianne Brushett Liberal Cumberland—Colchester, NS

Mr. Speaker, I appreciate the hon. member's comments about the value of housing to seniors. I am sure every member in the House can appreciate that in his or her own community.

So often we hear criticism about CMHC, about government involvement in mortgages. I would like to ask the hon. member why the government is involved or should be involved in the issuing of mortgages for housing here in Canada.

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1:10 p.m.

Liberal

Jesse Flis Liberal Parkdale—High Park, ON

Mr. Speaker, wherever government involvement creates unfair competition, I feel government has no right to be there. However, the mortgage insurance that is provided with this legislation is fair and equal competition. It provides insurance for people who would normally not get it through private insurance companies. By providing this alternative, it keeps the rates down also. If we believe in the free market forces, which I do, it is good for consumers, because it does keep the rates down and it makes mortgage insurance available to those who otherwise would not get the insurance and consequently would not be able to purchase a home.

We made some amendments not long ago about allowing first time homebuyers to make a down payment of just 5 per cent. This was another good move to make home ownership more accessible and affordable to more Canadians. It is the same with the insurance.

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1:15 p.m.

Liberal

Jane Stewart Liberal Brant, ON

Mr. Speaker, it has been interesting to listen to the comments of my colleague and others who have spoken on the bill and to understand the intricacy of this legislation. It touches the aspect of social housing, to which my colleague has just referred. Previously we heard how it will impact the building trades and local economies across the country.

We also understand that this legislation will have an impact on our ability to trade in foreign markets. As the hon. Parliamentary Secretary to the Minister of Foreign Affairs knows, this is an important aspect of this legislation as well. Here we have a bill presented in the House of Commons that is prepared for the national good and yet we have the third party challenging it, wanting this responsibility for housing to be devolved to the provincial level.

I would like to ask the parliamentary secretary if he can see any real value in that kind of solution, given the kinds of things that we are hearing and the facilitative role that this particular and single piece of legislation has for all Canadians in so many different ways.

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1:15 p.m.

Liberal

Jesse Flis Liberal Parkdale—High Park, ON

Mr. Speaker, I thank the hon. member for her concerns and for raising these issues. She ran and I ran and I think most people in this House ran on one theme in our platform, which was prosperity and job creation.

The more homes made available to Canadians the more jobs are created. When you consider what is bought when someone purchases a home, people mention immediately fridges, stoves, et cetera, but those you need in an apartment when you do not buy a home. Think of all the other infrastructure, the landscaping, the garden, the paving of the driveway and how many jobs this creates.

I am glad we are having this debate because the member mentioned her experience with the Polish ambassador and his interest in our housing system. When I was taking cour des français in Saint-Jean, I met with a representative of a company from Quebec who wants to export 240 homes to Krakow, Poland. The technology is totally Canadian, totally Quebec. It would be shipped out to Poland all prefab and later put together.

Imagine the kind of job creation that project alone would have. However, the problem in Poland was that people cannot get mortgages to buy those homes. Poland is looking very closely at the legislation we are discussing today because through such a program the people in Krakow, Poland could buy those 240 homes.

If it is successful, we can repeat this model not only in Poland, but in Ukraine, in Russia, all over the world. This would be a niche for Canadian manufacturers of housing. This would be a niche for getting into the export field.

The Standing Committee on Foreign Affairs and International Trade is now looking at how we can help the SMEs, the small and medium sized companies, to get into the export market. We have such great entrepreneurs who are sharing their expertise with our foreign affairs committee. Again, I keep stressing jobs because if you increase exports by $1 million, you have created about 35 new jobs. When you are exporting in the billions, imagine the kind of jobs that will create.

We have a beautiful country. We have a country like no other in the world. Let us stick together. Let us co-operate with every province and the nation. Let us co-operate with every province and the world. We have expertise such as I have mentioned here and we

will keep our number one position. Not only that, but we will improve the lifestyle of people in other countries.

I thank the member for that question.

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1:20 p.m.

The Acting Speaker (Mr. Kilger)

Is the House ready for the question?

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1:20 p.m.

Some hon. members

Question.

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1:20 p.m.

The Acting Speaker (Mr. Kilger)

The question is on the amendment. Is it the pleasure of the House to adopt the amendment.

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1:20 p.m.

Some hon. members

Agreed.

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1:20 p.m.

Some hon. members

No.

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1:20 p.m.

The Acting Speaker (Mr. Kilger)

All those in favour of the amendment will please say yea.