Debates of Nov. 7th, 1995

National Housing Act

[Ethel Blondin-Andrew, Liberal, Western Arctic, NT]

Mr. Speaker, it bears repeating that we must look at the question in the light of how it affects the majority of Canadians but also those with specific and unique needs, including aboriginal people, who often live in remote and isolated regions, the disabled and single parents. That is a very important issue.

I cannot express enough that the real empowerment of the family or the individual is home ownership. It provides a great deal of stability economically, emotionally and in terms of a safe environment. The safety and security of the person is dealt with in the sense of providing a home. It gives an opportunity for the future.

I have some additional information on the aboriginal housing policy the hon. member asked about. This has addressed the failures, experience and inefficiencies of previous programs and has led to self-sufficiency. Is there any new aboriginal policy? The government through CMHC is providing $307.8 million in this fiscal year to support social housing both off and on reserve.

Every bit of achievement in giving home ownership to individuals in remote regions or to aboriginal people who live on reserves or off reserves is a major struggle. Each time we achieve something it is not done without hard work and compromise. It is very difficult, and every time you make progress it is a major achievement.

[The Deputy Speaker]

Unfortunately, the time has expired. There are two more members who wish to ask questions. Is there unanimous consent to extend the question period?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

I hear members saying no.

Is the House ready for the question?

[Some hon. members]

Debate.

[The Deputy Speaker]

The hon. member for Broadview-Greenwood.

We will resume debate.

[Dennis Mills, Liberal, Parliamentary Secretary to Minister of Industry]

Mr. Speaker, I appreciate the opportunity to speak on the National Housing Act.

This bill will enable Canada Mortgage and Housing Corporation to continue underwriting home mortgage loan insurance within the legislative limit. I put the stress on the words "loan insurance" because when I listen to my friends from the Reform Party it sounds as if they feel that Canada Mortgage and Housing Corporation is essentially giving loans. This is loan insurance. As a result, that responsibility of the government to come in and cover when someone defaults is minimal.

I want to go back to 1987 when I was first nominated to be the Liberal candidate in my riding of Broadview-Greenwood. I said to my supporters in a room in the Slovenian Hall on Pape Avenue that one of the things I was going to try to work on was bringing Canada Mortgage and Housing Corporation out of mothballs. We had just come through three and a half years when the Brian Mulroney Conservative government had effectively parked the Canada Mortgage and Housing Corporation. In some instances, they not only parked the Canada Mortgage and Housing Corporation, put it in mothballs, but they also devolved a lot of responsibility for housing to the provinces.

I am one of those members in this House who believe the national government has a major role to play in the economy. I

never did share in the dismantling of the national government that Brian Mulroney and his colleagues engineered over 10 years. Even to this day, I have debates and differences with some of my own colleagues as we sell off, dismantle, and in some instances literally give away Government of Canada assets, Government of Canada instruments. I sincerely believe that by giving these instruments away or dismantling them we will lose our capacity to run this very large country.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

It is against the will of the people in the regions.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

No, it is not. It is not against the will of the people. The people believe in a strong national government. They do not believe in this decentralizing system that is evolving right now. They do not believe in it. I am going to be very candid. I am not walking away from what got me elected. If it means I will even have, from time to time, some differences over here, so be it.

Today the Government of Canada, through the minister responsible for Canadian Mortgage and Housing Corporation, is returning to traditional Liberal values. It gives me a great deal of satisfaction to stand in the House today and pay tribute to this minister. They are few and far between these days who will go back to traditional Liberal values and say they are going to bring Canada Mortgage and Housing Corporation out of mothballs and make sure it has the proper envelope to go out there and make sure the housing sector is given all the support it needs to get back on its feet.

The member for Capilano-Howe Sound, the senior economist and finance critic for the Reform Party, asks at whose expense. For two years I have been listening to members of the Reform Party. The thought process is cut, cut, cut, dismantle, give away. They have actually to their credit done so well in communicating that message that in fact we in the government have listened to the Reform Party too much.

We support eliminating waste and eliminating duplication, but we must also have growth in this country. The Reform Party cannot differentiate between those instruments of government that can accelerate and support growth and those areas where we support as well the elimination of waste and duplication.

The Canada Mortgage and Housing Corporation is an instrument of the Government of Canada supported by the people of Canada that will help growth. That growth will generate jobs. It will generate an expansion of our economy.

When we talk about housing, we should not just focus on the craftsmen, craftswomen, and all of the trades related to the housing sector. We should also reflect on what other industries benefit from a strong, healthy, vibrant housing industry: landscapers, carpet manufacturers, stove and refrigerator manufacturers, people who make drapes. The list is endless. That is something the Reform Party is missing.

I am not trying to be partisan. I come from downtown Toronto. In my community if the housing industry is flat, if we have no growth in the housing industry, the ripple effect is almost catastrophic. It affects the entire confidence of the community.

The economist from Capilano-Howe Sound knows full well that when developing a sound economic equation you cannot ignore the confidence factor. The confidence factor is the biggest factor in that equation. If in a community like Toronto there is a housing industry that is absolutely flat, it affects all other sectors of the economy.

When members of the Reform Party came to this House they said they were not going to be here just to oppose for the sake of opposing. When a good idea came along that would not cost the treasury a lot of money they were going to support it.

There have been a couple of ideas that have come forward from the Reform Party that I have supported. In fact the government has become so right of centre in its actions that I think the Reform Party should back off a little. If we get so far to the right that we cut all of these instruments that can generate growth, we are all going to be in trouble.

Going back to this housing bill, it is so important that we do not just think of housing itself. These are not loans. We must think of all the spinoffs.

It is important for Canadians to realize that this home loan insurance is not a loan; it is an insurance on the loan. This insurance package is something most of the supporters of the Reform Party want. Most Canadians would agree that it tends to be larger businesses, like the financial institutions, which are so focused on deficit and debt, more so than I would be, that are actually encouraging us to get behind the Canada Mortgage and Housing Corporation loan insurance system. I know this for a fact.

There are big developers in my riding. The leaders of these organizations do not vote for me, although now and again I get a little contribution. I know a lot of their employees vote for me. Does the member for Capilano-Howe Sound know what these big developers say? The big developers say that when they go to their banks they are told that in order for them to get their development loan for their projects they need to produce a certificate of insurance from the Canada Mortgage and Housing Corporation. In other words, the major banks are saying to bring in that insurance guarantee and they will get behind the great job creation project.

By the way, I know of a lot of projects in Toronto. To the credit of the Canada Mortgage and Housing Corporation, under the direction of the minister from Cape Breton, one of the few traditional Liberals left in the House, the insurance guarantee is critical for the homebuilding industry to get on its feet. But he is not just saying to accept any project. Many good projects in the

greater Toronto area have been turned down because the element of risk was just a little too high.

I say to the member for Capilano-Howe Sound that Canada Mortgage and Housing Corporation has really become a much more efficient, more streamlined, more risk averse crown corporation. When we see that kind of behaviour in that crown corporation, it should give members of the Reform Party some confidence so that when the minister responsible says let us increase this envelope from $100 billion to $150 billion where the downside is negligible, in fairness the Reform Party should get behind us.

I want to make sure that some of the fundamentals of my argument are put on the table and the member agrees with them. First, I know the economist from Capilano-Howe Sound, the finance critic, would agree that a vibrant homebuilding sector is really a vital component in any economic equation. Second, he would agree with the spinoffs related to the housing sector. Third, he would also agree this is not a loan per se, it is a loan insurance plan.

He would also agree that this should be a national instrument, that this is an instrument we should not devolve to the provinces, an instrument the national government should continue to operate. We should not chop it into little pieces like a lot of other things we have done around here lately.

The last point I want to make concerns traditional values that all members in the House share, the values of caring and sharing, looking out for each other and family values. The member for Capilano-Howe Sound knows what a home, a roof over one's head and pride of ownership do in terms of strengthening the moral fabric of the country.

The Reform Party has been successful in the last two years in generating cuts, dismantling and offloading. Now that a good bill comes before the House that will accelerate growth in a most important sector of the economy, the housing sector, I appeal to the member for Capilano-Howe Sound to be fair and get behind it.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, I am very pleased to have been named so often in the member's address. I will summarize what I as an economist consider the argument against the bill to be.

One view we have heard again and again in today's speeches is that CMHC is self-supporting, that it does not really cost anything. Economists are asking why the government is in the business if this is so. Are members opposite suggesting that the free market will not work, that the free market does not produce services more efficiently than the public sector? The evidence is strongly against that because throughout the world, governments are privatizing and taking these kinds of activities out of the market.

Strangely enough, other members are bragging about the fact that the CMHC system is providing subsidies to others so that they can have houses that otherwise they would not have. How is this possible? If the organization is breaking even, where does it get its resources with which to pay the subsidies? It is conceivable that some activities undertaken by CMHC are creating a surplus. Thus a surplus is being forced or squeezed out of some unsuspecting Canadians participating in CMHC. It is taken by the system to subsidize others.

As a conservative I would suggest that is not the way we should run our society. If there are reasons for subsidizing some types of housing such as that for natives, I believe we could reach agreement on it. Let us make it obvious. Let us make it transparent. Let us not have it hidden in the operation of some huge bureaucracy or in some obscure book.

Another point made by the hon. member was that the housing industry would collapse unless the insurance was there. Whenever we have a subsidy program the economy and the industry adjust to take advantage of it. If we take away the subsidy there is a reduction in output. If subsidies are offered to banks or to anyone they will take them. That is not an argument in favour of saying that we need it.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

It is not a subsidy.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

The hon. member says it is not a subsidy. It is breaking even, but where does the organization get the resources to do what it is claiming? It is making it possible for some people to have houses who otherwise would not have them. By definition that is a subsidy. Where is the money coming from?

To say that unless we subsidize and encourage the housing industry the economy will not boom is what we call vulgar Keynesianism. Vulgar Keynesianism means that unless we run a deficit and subsidize a certain activity, the economy left on its own will never produce a full employment equilibrium. That idea was current and fashionable in the 1960s. Today it is totally defunct. Most members opposite seem to have gone to university and have studied it in the 1960s, in the dark ages of Keynesian economics.

We know today that if we subsidize some industries by raising-

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

This is a speech; this is debate. Where is the question?

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

This is debate.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

It is called questions.

[Herb Grubel, Reform, Capilano—Howe Sound, BC]

Mr. Speaker, this is debate. This is not question period. We are debating the bill and I am giving an opposite view. I want to conclude with one last point.

If the government takes money that it does not have and gives it to an industry to expand, the industry will employ people and there will be an increase in output. However we have found people as a whole look at the increase in the debt. They begin to realize that their future tax obligations will go up to service the debt. They are worried about their children and grandchildren. This is why we find the spending of those who have to pay the bills in the future is down. That reduces demand, output and employment the same amount by which deficit spending increased on the other side.

That is a very well accepted proposition in economics.

[Dennis Mills, Liberal, Broadview—Greenwood, ON]

Mr. Speaker, I will try to be brief and to the point on the member's questions.

First, the member asked why the government was in this business. If the government were not in the business at this moment in time there would be a virtual monopoly. Is the member from the Reform Party promoting monopolies? I do not think so.

Second, he called it a subsidy. It is not a subsidy. The whole premise of the member's argument was based on the word subsidy. It is loan insurance. It is not the Government of Canada making direct loans. In the judgment of the officials it is a collaborative effort by the Canada Mortgage and Housing Corporation, the banks and the private sector.

The third item has to do with why we are all in this room. This room is not a bus going down the street so that we can look out the window and see people crying out for our help, whether they be young people, middle aged people or older people. This room is not a bus that drives by and says that it only has time for those who can look after themselves.

In essence we are in this room so that when we look out the window of a bus driving down the street, stop the bus, get out and help people in need. There are many people who do not have financial resources either to own a home or have shelter over their heads without this lever or this instrument of national government. I am getting sick and tired of being in the House of Commons with the Reform Party encouraging the bus to go down the street and disregard the people who are crying out for help.

The bill before the House looks after disadvantaged people and the Reform Party should get behind it.

[The Deputy Speaker]

The time has expired for questions and comments.

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour will please say yea.

[Some hon. members]

Yea.