May 26, 1925

SOLDIER SETTLEMENT ACT, 1919, AMENDMENT


Hon. J. A. ROBB (Minister of Immigration and Colonization) moved that the House go into committee to consider the following proposed resolution: That it is expedient to amend the Soldier Settlement Act, 1919, and amending Acts, and to provide that notwithstanding anything in the acts, in the case of any settler who has not repaid his indebtedness to the Board, or who has not abandoned his land, or whose agreement with the Board has not been terminated or rescinded, the Board shall credit his account with an amount, in reduction of his indebtedness to the Board, determined as follows:- Forty per centum of the purchase price of all live stock advanced to the settler and purchased prior to the first day of October, 1920; Twenty per centum of the purchase price of all live stock advanced to the settler and purchased on or after dal Tn 0{ °atober' 1920- and P™r '° the first day of October, 1921; and nrJilf acc°unt sha11 be credited with the total "n 1925?™" " aforesaid' a3 «* 'he standard Motion agreed to and the House went into committee, Mr. Gordon in the chair.


CON

George Black

Conservative (1867-1942)

Mr. BLACK (Yukon):

What is to be done as regards the man who has paid up' Is the department going to keep the money?

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LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Mr. ROBB:

Hon. members will recall that this question was studied last year by a special committee which went into it very carefully and submitted a report. There has been from time to time a difference of opinion expressed. It has been represented to us, for instance, that there should be a revaluation of land as well as of stock. There are two sides to this as to every question. The Ralston commission, who made a very exhaustive study of this question, indicated that while there was some justification for a revaluation of stock and equipment the real value of the land, whether it was a good or a bad purchase, could be determined only at the end of the period. The country advanced the money for twenty-five years. I am prepared to admit at once that there may be some places where the land was not well purchased, but, generally speaking, the land was fairly well bought. There is this to be said of all the land, whether it was well bought or whether they paid too much, the soldier himself saw this land, accepted it and, in some cases I am told, was prepared to pay even more than it was thought he should at the time. The bill which we propose to present based on this resolution will provide that forty per cent reduction shall be allowed on the purchase price of all live stock purchased prior to 1st October, 1920, and twenty per cent on live stock purchased on or after 1st October, 1920, and prior to 1st October,

1921. In the annual report of the Soldier Settlement board dated December, 1924, in dealing with the deflation in values, this is stated1 on page 8:

The greater number of soldier settlers in Canada bought at the peak of war-time prices. Those who sold to them reaped the benefit of the inflated prices and they now find the property to be worth less than the government charged them for it; that is, they have become the victims of a deflation caused by the aftermath of the war they had won.

That referred particularly to live stock. They go on to say:

For instance, soldier settlers bought in Canada before the slump in values livestock to the extent of approximately $13,500,000. To-day that livestock is worth less than half that amount.

I am quoting that as the words of the soldier settler. If We bear in mind the bill that has just been introduced, amending the Animal Contagious Diseases Act, it will be observed that the valuation of stock has been considerably reduced. The committee will, perhaps, be interested to know at this stage that loans were granted to 24,224. The total capital advanced on loan account was $103 -894,073.56. '

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

That is, land and stock.

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LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Mr. ROBB:

Yes. The total capital outstanding on loan account at the present time is $88,393,376.17. There has been paid on loan account, on principal, $15,540,733.49 and, in interest, $5,220,781.71.

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CON
LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Mr. ROBB:

I will1 come to that in a few

moments. I said a moment ago that the land, generally speaking, had been fairly well bought. I will admit that there are, perhaps, some places where too much was paid for the land, but when you take the whole business throughout the various provinces the amount that was over-paid was very small. Resales are made from time to time owing to the fact that for one reason or another the soldiers find it necessary to give up their properties. I have a statement here showing that the gain in respect of these resales was $714,015.85.

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PRO

Thomas Wakem Caldwell

Progressive

Mr. CALDWELL:

Does that include the

ten per cent which the soldier paid down on the land as well as subsequent payments made on it? If I remember rightly, those payments would not be included in that amount.

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LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Mr. ROBB:

No, I do not think so.

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PRO

Thomas Wakem Caldwell

Progressive

Mr. CALDWELL:

So that, in order to

make the statement complete, we should know how much the land actually cost, apart from

Soldier Settlement Act

any question, of how much the government had against it.

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PRO

John Morrison

Progressive

Mr. MORRISON:

That resale I think, includes all improvements which the soldier put on the land.

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LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Mr. ROBB:

Possibly it does. Now, while the gain was, as I have said, $714,015.85, the loss on stock and equipment amounted to $799,552.88, resulting in a net loss on land, stock and equipment of $85,537.03.

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PRO

Arthur John Lewis

Progressive

Mr. LEWIS:

Is it not a fact that only the very best portions of these lands are being resold? A great number of farms in my own district owe the Soldier Settlement Board between $5,000 and $7,000 a quarter, and they could not be sold to-day at $2,500. For that reason these lands are not being sold; they are being held, rented rather than put upon a forced market at reduced prices.

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LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Mr. ROBB:

I shall come to that in a moment. In considering this matter I think it is well for us to be fair to the country generally, to the tax-payers who are advancing the money, as well as to the thousands of soldiers who came back and entered upon their work as citizens without receiving any advances from the government. I submit that of all the countries that were in the war not one has dealt more generously with its soldiers than Canada has done. Both the government of Canada and1 the people were unanimous in extending generous treatment to the returned men, and I want to put on record for the information of the House just what this country has done in the matter of soldier settlement, leaving aside altogether the gratuities that were given to the men when they returned. I am dealing now particularly with the scheme of settling soldiers on the land. In the first place, no interest on stock and equipment purchased was charged for two years, and this consideration represented a saving to the soldiers who settled on the land of approximately $1,500,000. There was also pay and allowance to the soldiers while in training, and to their dependents, amounting to $224,418.04. By the 1922 amendment to the Soldier Settlement Act, those soldiers who had been established up to 1921 were granted interest exemptions amounting, it is estimated, to $10,269,108.87. Adding all these concessions together we find that the total contribution to the returned soldiers in this direction was $11,993,526.91. But there was another contribution to the soldier settlers who took advantage of the government plan of the day and went on the land; I refer to the matter of low interest. They were charged interest on their advances at five

per cent, while at that time, as every hon. member knows, money was worth considerably more; many of their civilian neighbours were paying from 6i to 8 per cent. I have here a record of the losses on reverted lands. In 1,571 cases where land, equipment and stock have been completely resold, the deficit on stock and equipment amounted to $779,660. Then we paid taxes, insurance and sundry charges to an additional amount of $431,646. That made a total loss to the department of $1,211,306.

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CON

Arthur Meighen (Leader of the Official Opposition)

Conservative (1867-1942)

Mr. MEIGHEN:

What taxes were those?

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LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Mr. ROBB:

When any land was resold we had to pay arrears of taxes on the property. As against this loss there was a surplus on land of $592,735, leaving a net deficit of .$618,571 on that transaction. Another concession to the soldiers was the opportunity-given them to settle on a cash-down payment of only ten per cent of the land value. This meant financial assistance without a business margin of security, and the assuming of a risk which no other agency would have undertaken. Reference was made a moment ago to the value of the land as resold. Let me quote from the Ralston report:

The position, however, as it appears to the commission, is that the handicap is more contingent than actual. The value of the farm is not to be taken as of this or any arbitrary date for the purpose of measuring the loss or profit of the soldier farmer. The farm is bought to be worked and paid for gradually. The only definite date for testing the improvidence or otherwise of the bargain is the date on which the purchase was made. At that time the settler himself, who was assumed to have some knowledge of the value of farm lands, decided that the farm was worth the price and in this the best available judgment of the settlement board officials concurred. If the subsequent fluctuations in value are to be looked at to see whether the bargain was a good one, then the date which is at least as important as any other is the date when the farm is to be actually and finally paid for, twenty-five years hence.

The commission then dea's with the concessions granted in 1922, providing for interest exemption, and states on page 57:

This exemption was not an inconsequential concession. It represented in many cases a complete cancellation of interest amounting to about 16 per cent of the principal sum, or in other words by spreading it over the twenty-five years, it meant that the interest-bearing principal was reduced by 16 per cent.

They go on to say:

It is only fair to remember that the effect of the proposed revaluation is to ask the country to agree to forego its claim under the terms of a solemn contract admittedly much more liberal than would be entered into by any private interest, and that the settler was himself satisfied as to the value of the land which was the basis of the contract and the security for the loan.

In concluding, the commission declined to make any definite recommendation and merely

Soldier Settlement Act

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UFA

William Thomas Lucas

United Farmers of Alberta

Mr. LUCAS:

farms sold?

On what terms were those

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LIB

James Alexander Robb (Minister of Immigration and Colonization)

Liberal

Mr. ROBB:

I suppose on the same terms

as to the soldier settlers.

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PRO

Edward Joseph Garland

Progressive

Mr. GARLAND (Bow River):

Is it not

true, just as was pointed out a few moments ago by a member from New Brunswick (Mr. Caldwell) that most of this land that is being resold has been improved by the toil and the personal expenditure of the soldiers themselves, and that the price obtained does not represent the actual deflation in raw land value?

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May 26, 1925