Madam Speaker, I am pleased to share a few brief thoughts on the group of amendments proposed by the member for Kelowna, for whom I have great respect.
Generally, I do not share the member's concern over the expansion of CMHC's insurance products. As a homeowner I can understand and appreciate the value of being able to buy insurance to protect my mortgage against any wild fluctuations in interest rates.
Yes, the financial institutions will benefit because the loan will be insured. More importantly, homeowners who hold mortgages will be protected against financial hardship. This is no different than any loan insurance. Car insurance, for example, protects the car owner as much or more than the bank that holds the car loan.
Regarding this group of amendments, I would specifically like to zero in on Motion No. 6, which proposes to amend the new section 18 of the National Housing Act. This section authorizes the CMHC to pay fees to the federal government in return for the crown backing of CMHC's loan insurance and guarantee operations. The principle of this change to the act is simple. GE Capital and any other private sector provider of mortgage insurance which may join the industry have to pay fees to have the crown back their insurance products, but the CMHC has not been required to do that. This meant that the CMHC had an unfair cost advantage to provide insurance products over private sector competitors. This provision in the bill changes all of that. Now the CMHC will have to pay fees equivalent to those paid by the private sector. That only makes sense and I agree with the intent of the bill on this matter.
Motion No. 6, if I understand the member for Kelowna correctly, deals with what we should call this payment; whether it should be called a fee or a dividend. I really do not care what the government calls this payment in the end, but I would point out that it is the intention to create a new expense for the corporation, just as the private sector companies have an expense involved in providing their insurance products. Therefore, the payment should be reflected on the government's accounts as such.
The Financial Administration Act recognizes payments to the government from crown corporations that are fees in exchange for services. To be consistent, these payments should be treated as a fee as opposed to a dividend.
If I may speak to this amendment more broadly, what the member is missing in his motion and what the government has missed in this section is the effect this change will have on the books of the corporation.
According to the CMHC corporate plan, between 1997 and 2002 the Canada Mortgage and Housing Corporation will have paid $198 million to the receiver general in fees under this new section of the bill. This money will be paid out of the mortgage insurance fund and put into general government revenues. In other words, this money will be lost to the Canada Mortgage and Housing Corporation forever and cannot be used by the corporation to increase its investment in the social housing portfolio.
Because this money will be dumped into general revenues, it could be used for any scheme the government might cook up. It could be used to redecorate the offices of the public works minister. It could be used to fly the finance minister across the country so that he can speak at fundraising dinners to pad his own leadership campaign fund. It could be put in some government slush fund to dole out grants to companies with devious connections to the Liberal Party, based on the flimsiest of criteria, not that we have ever seen that happen before.
Where the government has missed out and where the member for Kelowna has missed out with his amendment is that neither has addressed the concern about what to do with the money generated by this new fee.
I suggest to the member that we should take that money and put it back into social housing under the minister's account. This money will be generated by the commercial activities of the Canada Mortgage and Housing Corporation and should remain with the Canada Mortgage and Housing Corporation.
As I stated earlier, I agree that there must be a fee paid in order to put the Canada Mortgage and Housing Corporation on a level playing field with its private sector competitors. However, having said that, there is an opportunity here, which I am sure the hon. member will recognize, to put that money to good use.
The member proposed in his amendment that this payment be called a dividend. I say, let us give a dividend to the 1.2 million Canadians who lack affordable and adequate housing. Let us give a dividend to the tens of thousands of Canadians who are homeless in this country. To make this happen, all the government has to do is make a policy change in cabinet to return this money to the minister's account at the Canada Mortgage and Housing Corporation so that we can increase and fund the supply of affordable housing for all Canadians.
I know that $198 million does not go as far as it used to when it comes to housing, but if the government is truly determined to make a dent in the problem of homelessness in this country, this would be a good place to start. I am sure the member for Kelowna would agree with me.