Geoff Regan

[National Housing Act, November 7th, 1995]

Mr. Speaker, it concerns me that members opposite have so little confidence in the economy of Canada. However, they should be aware that the mortgage fund insurance is actuarially sound. It returns money each year to the government which helps provide for any problems which may occur in the process. There are funds provided each year for non-repayment of loans.

If the situation arose where Canadians defaulted on $150 billion in mortgages, imagine what would happen to the banks across the country. It is somewhat like saying, why should we have banks because they may fail if people do not repay their loans. How can we trust putting our money in the banks because if people do not repay their mortgages, they will all fail? That is true also. We have to operate on certain assumptions that we will have good growth and an economy that works.

I am sure the hon. member will listen to my answer. We cannot assume the whole economy of the country is going to collapse tomorrow. We have to operate on cautious and reasonable assumptions. We have to take precautions. We are taking precautions with this bill. It is actuarially sound. It provides funds for failures and it is in good shape.

More important, it is interesting to me that the members opposite want to look at all the possible problems while ignoring the benefits of this very important program.

[National Housing Act, November 7th, 1995]

Mr. Speaker, I certainly agree with the hon. parliamentary secretary that this program permits us to enhance the quality of life of Canadians.

If we want to recognize what the quality of life means in terms of housing all we have to do is leave our country and go to many other countries in the world. In June I had the opportunity to visit Haiti as an election observer with the OAS. I certainly got a real appreciation of how fortunate we are to have the kind of housing we have and what it really means to quality of life when I saw the kind of housing that exists in Haiti.

Haiti is the poorest country in this hemisphere. It is not by any means the only country in the world with a lower standard of housing than we have. In fact, the vast majority of the world's inhabitants do not have the quality of life and quality of housing that we enjoy. Some do not even come close.

It is very important to recognize that this measure of expanding the loan insurance of CMHC is critical to the quality of life of Canadians. It is important for the housing industry in terms of job creation.

When I was in Haiti I saw houses that had dirt floors. Imagine the problems with disease and insects. There were houses that did not have facilities which we consider proper in Canada such as indoor plumbing. We are very fortunate to the ability to expand a program like CMHC which will add benefits to Canadians and to an important resource such as our housing stock.

When I visited Haiti I was struck by the many problems of extended families living in a house which would be the size of a small room in a normal Canadian house and how that affected their quality of life. It was really a shock. We often hear about people facing cultural shock when they visit foreign countries. Well, I certainly experienced it. When I came back to Canada it made me much more aware of how fortunate we are to live in this great country and to have the opportunity to live in good quality homes.

[National Housing Act, November 7th, 1995]

Mr. Speaker, the first question is what will it mean to Canadians if the mortgage insurance fund is capped at $100 billion. That is the point. We have a delay in the time between when mortgages are approved by local lenders and when we get the full figures for a year. We need to have it retroactive to 1994 to cover the fact that in that year there were more than $100 million worth of loans insured. That would be a huge problem for CMHC.

The other important point is what it would mean to Canadians if it were capped at that level. CMHC's ability to assist Canadians to access home ownership would be curtailed dramatically. It would mean that the 3,944 Canadians in the riding of the member for Comox-Alberni would be the last to achieve home ownership through these means. It also would mean that rural Canadians would be faced with even more obstacles when planning to purchase a home.

We can look at all the negatives and talk about the collapse of the economy. We would be in all kinds of problems if we had a huge collapse of the economy in any event. We have to look at the important role CMHC plays in building our country, in building home ownership, in building our housing stock and in helping the economy. If we can expand the amount of home ownership insurance CMHC can provide, we can expand the amount of housing activity.

I do not know about the member's riding but in my riding and in my region of Atlantic Canada, and I think across most of Canada, there is a need for increased activity in the housing sector. There

are real problems in that sector. People need to have a shot in the arm. This will help not only that whole sector, which will boost the economy, but it will help people who want to own their own homes.

[National Housing Act, November 7th, 1995]

Thank you, Mr. Speaker, for that reminder. I apologize for the error.

Earlier this year, the Minister of Public Works announced that the maximum eligible house prices for first home loan insurance were increased in 30 communities across the country. This initiative allows more first time homebuyers to purchase a home with a down payment of as little as five per cent. Anyone who buys or builds a home in Canada as their principal residence is eligible for the lower down payment, as long as they have not owned a home at any time during the last five years.

First home loan insurance was initially in effect for a two-year period but was extended for an additional five years until 1999. The 5 per cent down initiative has been a major success in helping to increase home ownership in Canada. That speaks for itself as to the importance of the bill.

The statistics also speak for themselves. Since November 1993 over 210,000 Canadian households have taken advantage of the lower down payment to become the proud owners of either a new or existing home. In April 1994 a survey of Canadians who bought a home with less than 10 per cent down showed that 72 per cent of them would not have been able to purchase their home when they did without the reduced down payment. That says a lot.

The first home loan insurance initiative is constantly being monitored to ensure it continues to meet the needs of Canadians. CMHC is committed to helping Canadians who desire to own a home and who have the proven financial management capability to do so. First home loan insurance is an excellent example of CMHC's ability to adapt its mortgage loan insurance activity to ensure Canadians can enjoy the benefits of home ownership.

As I have stated, Bill C-108 is an administrative bill to facilitate the continuation of mortgage loan insurance under the National Housing Act. CMHC's mortgage loan insurance, which provides relatively equal access to Canadians throughout the country, is important to achieving that goal. This is one of the major factors

which distinguishes CMHC's operation from private mortgage loan insurance operations.

Without CMHC's commitment to providing mortgage loan insurance in the small communities of the country, places that private insurers have not traditionally wanted to serve, many Canadians might not be able to buy a home.

Our government knows just how much Canadians value home ownership. It represents a major portion of the wealth accumulated by households. For some, it is a source of retirement income. It is also an important component of quality of life. We believe that every Canadian should have access to home ownership. CMHC mortgage loan insurance can turn the dream of owning a home into a reality. It is therefore critical that CMHC be able to continue to provide mortgage loan insurance to Canadians now and in the future.

That is why I support Bill C-108 and why I hope my colleagues will see fit to give swift passage to this administrative bill so that CMHC can continue to help Canadians realize their dreams of owning a home.

The concept of home speaks to our basic human needs. Home is a place where people feel secure. Owning a home gives people a stake in their communities and a sense of belonging. Home ownership is a concept the people of Canada support. It is therefore essential that CMHC be able to continue to provide mortgage loan insurance to Canadians today and in the future.

The corporation's mortgage loan insurance has traditionally demonstrated the flexibility to respond to varying needs and must be maintained as a public policy instrument capable of evolving to meet the future housing needs of Canadians.

With an eye on these 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 challenge the creativity of the financial community to ensure the largest possible number of borrowers can find a product in their marketplace to meet their precise needs. A variety of choices will encourage lenders to compete on the basis of services and product differentiation.

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

CMHC is now focusing on introducing new processing mechanisms which will utilize the capabilities of electronic communications between CMHC and approved lender clients. These enhancements will allow the corporation to better serve the needs of Canadian housing consumers. In light of all these good arguments, I urge passage of the bill.

[National Housing Act, November 7th, 1995]

Mr. Speaker, as my colleagues know, the purpose of the bill is to increase the ceiling for mortgage loan insurance under the National Housing Act. This will enable Canada Mortgage and Housing Corporation to continue underwriting home mortgage loan insurance within the legislative limit.

The bill is an administrative bill. Bill C-108 will increase the existing limit on outstanding loan insurance from the current $100 billion to $150 billion. The bill also includes a provision to increase the ceiling further through appropriation in the future.

Members of the House should know that CMHC loan insurance is self-financing and self-sustaining and does not cost the government anything. Moreover, it has great benefits for the country.

The mortgage insurance fund is regularly evaluated according to rigorous insurance principles. It is fully adequate to cover all insured losses as well as all overhead.

The amendments in this bill deal with administrative matters, but they must be adopted to allow the CMHC to continue to provide mortgage insurance. Allow me to explain briefly how important this bill is for Canadians.

The desire to own a home remains strong among Canadians. Yet many people who can afford the monthly mortgage payments are still unable to access home ownership because they are finding it difficult to save for a down payment for conventional loans.

Because the CMHC assumes the risks if borrowers fail to meet their obligations, approved mortgage lenders can loan money to more Canadians. By reducing the down payment required to buy a house, the loan insurance program allows more middle income households to have access to home ownership. This is an essential element of the system to ensure that all Canadians, wherever they live, can have the same access to the mortgage loans they need to buy adequate and affordable housing.

Let me give an idea of the extent to which Canadians depend on mortgage loan insurance to fulfil their dream of owning a home. My colleagues may be interested to learn that this means approximately 40 per cent of the residential mortgage stock in Canada involved financing by CMHC mortgage insurance last year.

Without mortgage loan insurance Canadians who do not have a 25 per cent down payment would generally never have access to home ownership.

The CMHC mortgage loan insurance has already proven flexible enough to allow for innovative housing financing. This is an essential feature given the constant evolution of borrowers' needs and of the markets meeting these needs.

In 1987, the program was modified to insure junior mortgage loans, an innovation especially helpful to those needing additional funds for renovations.

In the following year the chattel loan insurance program was introduced as a five-year experiment to cover loans made on mobile homes and to help people who choose this kind of affordable home ownership. The coverage for mobile homes has now been made a regular part of the mortgage insurance program as per the announcement made by the minister responsible for the Canada Mortgage and Housing Corporation at the beginning of this year.

In 1992 the mortgage insurance program was expanded to accommodate a reduced down payment for first time homebuyers, making home ownership even more accessible to moderate income households. This program, called the first home loan insurance program, has provided Canadians with their entry point to home ownership. Again I reiterate to my hon. colleagues that the success of the initiative has been achieved without cost to the government.

We want to ensure that the CMHC can continue to provide this assistance to the housing market. This is the intent of the bill before us today. The CMHC is constantly reviewing and making regular changes to the mortgage loan program in order to make it more effective and convenient for both approved lenders and home buyers.

By exploring new housing finance options for Canadians, we are looking to promote greater choices, lower the cost, increase accessibility of housing finance and assist borrowers to meet their financing needs within their own resources.

The CMHC will continue to encourage innovation and creativity in residential financing through the mortgage insurance fund, in order to improve access to home ownership for all Canadians.

The private housing market is now in a position to meet the needs of the vast majority of Canadian households. There is no question that the CMHC mortgage loan insurance played a crucial role in this achievement. The CMHC mortgage loan insurance program had a record year in 1994 in terms of volume. Several unexpected factors led to a significant increase in activity last year. Mortgage interest rates fell to their lowest level in 30 years, a level that was much lower than expected. The low inflation rate kept house prices stable and affordable. In addition, the rapid, consistent success of incentive policies, including the loan insurance program for home buyers and the home buyers' plan, helped generate a record level of insurance activity last year.

When the Mortgage Insurance Company of Canada stopped underwriting new mortgage insurance business in April 1993, CMHC had to assume 100 per cent of residential mortgage insurance activity. Furthermore a greater proportion of all mortgages has been insured by CMHC in recent years. In 1994, CMHC insured 40 per cent of all residential mortgages initiated, up from 22 per cent in 1991.

Because there is some lag time between insuring loans and receiving the reports from approved lenders, it was only in 1995 that the figures for 1994 were all compiled. At that time it was realized that the $100 billion maximum aggregate loan insurance

currently stipulated in the NHA had been exceeded. For this reason, provisions of the bill are effective starting in 1994.

I hope members will see fit to give swift passage to Bill C-108 so that CMHC can continue to promote access to home ownership through mortgage loan insurance.

Through its mortgage loan insurance program, CMHC continues to make housing more accessible for Canadians. The Corporation is also working to improve housing affordability. Through CMHC, the federal government is committed to a stable supply of affordable and accessible housing that increases economic opportunities for all Canadians.

CMHC's market housing programs promote affordable housing and equal access to financing through financial instruments such as mortgage loan insurance.

Moreover, CMHC provides mortgage insurance to all Canadians, regardless of where they live, at the smallest feasible down payment and the lowest cost.

To improve access to an affordable form of housing, CMHC also provides mortgage insurance for manufactured houses and mobile homes. In January of this year the hon. David Dingwall announced an expanded chattel loan insurance program, CLIP, that includes a resale of manufactured housing units.

CMHC is also contributing to making housing more affordable through better housing regulations. The affordability and choice today program funded by CMHC encourages regulatory innovation in municipalities across Canada. The ACT program encourages the housing industry and municipalities to work in partnership to improve housing affordability and choice.

More than 80 ACT projects are developing a wide range of practical approaches to streamlining approval processes, developing new forms of affordable housing, facilitating in-fill and conversion and adopting alternative development and building standards.

As I have said, Bill C-108 is an administrative bill. As my colleagues know, the bill is important in ensuring CMHC can continue to offer mortgage loan insurance to Canadians.

I would like to take a few minutes to talk about a complementary initiative, first home loan insurance, introduced by CMHC in February 1992, to make home ownership even more accessible.

Earlier this year, the hon. David Dingwall announced that the maximum eligible house prices-

[National Housing Act, November 7th, 1995]

Mr. Speaker, is the hon. member aware that approximately one-third of the housing stock in the country has been built with the assistance of National Housing Act insured financing? In other words, without this kind of financing, one-third of the houses with all the benefits and all the spinoff effects they had for the economy would not have been built.

Is the member for Comox-Alberni aware that 3,944 of his constituents have purchased homes using funds insured by CMHC since 1992? Is he aware that 917 of his constituents have purchased homes taking advantage of CMHC's first home loan insurance program since 1992?

[Quebec Referendum, October 31st, 1995]

Mr. Speaker, I spent the last five days in the Quebec provincial riding of Labelle. I spoke to many Quebecers about their concerns and frustrations.

The day before yesterday, it was obvious that a majority of Quebecers do not want Quebec to separate from Canada but they do want changes. They have this profound desire to have their language and culture recognized and respected. They want renewed federalism. They want to live in an open and tolerant country.

We in the other provinces must live up to the promise of the past week. We have had on both sides a frightening failure to understand each other and a failure to understand the consequences of a yes vote.

Never again must Canada be allowed to come so close to the brink of destruction.

We must talk and take action.

[Atlantic Investment Fund, October 16th, 1995]

Mr. Speaker, my question is for the Minister of Public Works and Government Services.

I understand the details of the Atlantic investment fund are near completion and that provinces and banks are showing their support for the fund. Members of the third party may criticize the idea but Atlantic Canadians know the need for small business capital in our region.

Will the minister tell the House that he is going ahead with the Atlantic investment fund?

[Underground Economy, October 5th, 1995]

Mr. Speaker, today in question period I asked a question about the share of spinoffs from Canadian international development aid that goes to Quebec. From what I have heard over the past few weeks in question period from Bloc Quebecois members, it seems they cannot decide whether or not they want the federal government to spend money in Quebec.

The Bloc claims that Quebec would be better off outside Canada in a separate country. However the facts and even the reports put out by the Parti Quebecois government in Quebec show that is not true. They show that Quebec is much better off inside Canada than it would be as a separate country.

One example of those kinds of facts is the case of international development aid.

For the year 1992-93, the last year for which provincial comparisons were made, nearly 30 per cent of IDA supplies came from Quebec. One third-which means 33.4 per cent-of registered consultants are from Quebec. More than one third-which means 36.3 per cent-of the contracts go to Quebec. The value of these

contracts-a little less than $100 million-represents about one third or 33.1 per cent of the national total.

It is very clear that with approximately 25 per cent or a little less of the population of Canada or about one-third of these contracts in relation to international aid, Quebec does very well under the CIDA programs and under programs relating to international aid.

On the other hand, in the past at least, Atlantic Canada has done so well. Atlantic Canada in recent years has received less than its share of international development aid spinoffs. We are seeking improvements in that regard.

I had the pleasure of serving on the foreign affairs committee until recently when I was moved to the justice committee. Last spring we had the president of the Canadian International Development Agency before our committee on the estimates. I had the opportunity to question her about a number of things. One of the matters I asked her about was the share of development aid contracts and spinoffs going to the Atlantic region. She agreed that there needed to be work done to improve that number. She recognizes or should recognize that Atlantic Canadian companies can perform as well as anyone else. I think we showed during the Halifax G-7 meeting that Atlantic Canadians can do things as well as anyone in the rest of the country and in fact the rest of the world.

I am looking forward to seeing the results of this year. I am hoping to see considerable improvements in regard to the level of the share of CIDA contracts going to Atlantic Canada.

Atlantic Canada has other complaints in other areas where we feel we do not necessarily always get our share. However we believe very strongly in the country. I think the majority of Quebecers believe strongly in the country; they believe strongly in Canada. Like the majority of Quebecers, we believe we can continue to work together to work out our problems. We can continue to improve and build Canada, the best country in the world.

[Official Development Assistance, October 5th, 1995]

Mr. Speaker, my question is for the Minister of Foreign Affairs. It appears that members of the Bloc Quebecois cannot decide whether or not they want the federal government to spend money in Quebec.

Does Quebec get its fair share of economic benefits from official development assistance?