Mr. RHEAUME (Translation):
I don't know. However, a moment ago I heard the Minister of Finance (Mr. Rhodes) say, in answer to the hon. member for Provencher (Mr. Beaubien), that a farmer must be very highly rated to obtain money with which to settle his debts under the Farmers' Creditors Arrangement Act. When you wish to find fault with somebody, nothing is easier. I understand that the Minister of Finance is a good lawyer; he is in that respect about the equal of the Prime Minister (Mr. Bennett): he never commits himself. His answer, to my mind, is very wise; if the farmer's standing is very good, if he is a first class man, the board will probably consider his case. But he did not commit himself.
I read in the newspaper La Presse that, in the province of Quebec, one can get but 60 per cent of the assessed value of his farm while in the other provinces, one can obtain two-thirds. When the bill is before the house for consideration, I hope the Minister of Finance will tell us why the farmers of the province of Quebec can obtain but 60 per cent of the valuation of their farms.
On what will the hon. minister base his valuation? On the municipal valuation or on that of the board's inspector? I know personally that, in a few cases, the inspector for the St. Jean-Iberville district, a man of high standing, had fixed the valuation of a farm, a valuation that met with the approval of the Quebec government, but which was refused by Ottawa. An inspector of the central board was sent to fix the valuation; the loan however was refused.
When you talk of lending 60 per cent, I ask you: On what valuation? If you take the inspector's appraisal, and if, in a number of cases, he values the land at $15 or $20 an acre, 60 per cent on that will not amount to much: from $9 to $12 an acre. It would mean that, on a 100 acre farm, a farmer could borrow under this great piece of legislation from $900 to $1,200. When the bill is introduced, I hope the Minister of Finance will give us some explanation. If you take the inspector's appraisal1, I can predict that the act will be a failure, as in 1934. I do not think there are five members from Quebec in this house who can say that two thirds or 50 per cent of the applications have been granted. In the electoral district of St. Jean-Iberville, eighteen applications have been made but not one has been granted. And we were told the new arrangement would give farmers a chance to borrow money! If there is nothing in the
act by which the lending of a fixed amount of money is authorized, and if you leave that to the inspector's discretion, I think there is no sense in that. Inspectors appointed may not be any better than their predecessors.
The Canadian Farm Loan Act passed in 1927 proved to be very advantageous in 1928, 1929, 1930 and 1931; it was of some use in 1032; but since that time, it has rendered no service at all. A few Joans have been made in the electoral district of St. Jean-Iberville at $40 or $45 an acre, which was a reasonable amount. But, when you come to lending 60 per cent on the basis of a valuation made by an appraiser who values the land at $20 or $25 an acre, I say the thing is perfect nonsense and you waste the time of this house by discussing a piece of legislation under which the decision is left to the discretion of inspectors who are, in a great many cases, political appointees.
Now I would like to touch upon that great Farmers' Creditors Arrangement Act. Much has been said about it. The Minister of Finance has just given notice that the period will be extended from 60 to 90 days. A lawyer practising in St. Johns, who has quite a number of cases before that tribunal, was telling me yesterday: "That is not of much importance; I have a case pending since last November; no tribunal has yet been organized; I asked for a postponement of 60 days and it was granted."
With this precious arrangement act, the government has absolutely killed the farmer's credit. No farmer is able to get $100 from a bank, but, before that act, two farmers could go to a bank and borrow money on a promissory note endorsed by one of them. What I am telling you now, I learned from three managers of our banks in St. Johns, where we have branches of the Banque Canadienne Nationale, the Royal Bank of Canada and the Canadian Bank of Commerce. The managers have received instructions not to lend a single cent to farmers. The farmers' credit has been completely ruined.
I know the proposed amendments may have their good points; but, if you want practical legislation, you necessarily must fix a minimum valuation per acre. Otherwise, your legislation will be worthless, because, if you leave the valuation to the discretion of inspectors, it will certainly be a failure, like all the rest.
Mr. OIROLTARiD (Translation): Mr. Speaker, the fact that the suggestion made by the hon. member for Provencher (Mr. Beaubien) has not appealed to the honourable minister of Finance (Mr. Rhodes), is very unfortunate. If the government is really
Farm Loan Act
anxious to help the farmers, I think that the Canadian Farm Loan Act and the Farmer's Creditors Arrangement Act should necessarily supplement each other.
As it is now, the Farmer's Creditors Arrangement Act operates as follows: a farmer appears before the receiver appointed by the government and files his statement of affairs. A meeting of the creditors is called for a certain date. If the creditors cannot come to an agreement, a compromise is out of question and then the fanner has the right to ask that his terms be submitted to the board of review. That board of review, as far as I know, has not yet operated in the rural districts of the province of Quebec, although the law is in force since the 1st of October, 1934.
The board of review has the power, under the provisions of the act, to compel the creditor or the debtor to accept the compromise that the board sees fit to determine. The board is composed of three members appointed by the government. The point raised by my hon. friend, the member for Proven-cher, is as follows: supposing that a compromise is arrived at and that it is approved by the board, where will the debtor find the necessary amount of money if it is agreed that a certain amount should be raised in cash? The only people a farmer can apply to in order to raise the money is obviously the Farm Loan Board. Without a Farm Loan Board, the only compromise a debtor could offer would be by way of instalments. The farmer having come to terms, and being compelled to make some payments at a more or less distant date, I am afraid he will not be in a position to do so and, under the act, i'f he does not comply with the terms of the arrangement, that failure is tantamount to bankruptcy and his property is sold by the receiver. Consequently, the necessity of giving the farmer the means of raising money by way of loans and to come to terms on a basis of a cash payment, which is of course a much better arrangement than an instalment plan, is apparent. As I have already said, the Farm Loan Board, and nobody else, can supply him with the necessary amount of money. I respectfully submit that, if the government wishes to see those two acts fairly and efficiently applied, the honourable Minister of Finance should amend the Canadian Farm Loan Act so as to compel the Farm Loan Board to advance to the farmers the amount required under the arrangement approved by the board of review.
Subtopic: AMENDMENT TO FACILITATE AND INCREASE THE EXTENSION OF CREDIT TO FARMERS