March 4, 1935

UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

My understanding is that the moment the farmer places himself under the operation of this act he at once ceases to be a ward-shall we call it?- under the debt adjustment board of the province, or has exhausted his right to be a ward until the procedure under this act has been pursued to its ultimate conclusion.

Farmers' Creditors Act

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UFA

Alfred Speakman

United Farmers of Alberta

Mr. SPEAKMAN:

That was not my

understanding as I followed the legislation in this house and in the province. My understanding was that part I of the Bankruptcy Act came into force in the case of an individual farmer only after the proposal had been confirmed and filed with the courts. Up to that time he could commit no breach of conditions until the proposal had been filed with the court. Until the proposal had been filed with the court and the operation was complete he would still be exempt under part I of the Bankruptcy Act and therefore would be subject to the court procedure of the province in respect to proceedings by creditors. That was my understanding, and I am glad that in large measure it has been confirmed by the minister.

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CON

Percy Griffith Davies

Conservative (1867-1942)

Mr. DAVIES:

Mr. Chairman, as one who

in the course of the practice of his profession has had considerable experience with this a-ct in Alberta, may I take this opportunity to confirm the views expressed by the Minister of Finance? He has put it correctly. When the ninety days stay of proceedings under the Farmers' Creditors Arrangement Act has lapsed, the debt adjustment board in Alberta still has to issue a permit for proceedings under the provincial act. To my knowledge the representatives of the Farmers' Creditors Arrangement Act in Alberta are closely cooperating with the debt adjustment board officials of the province. I know personally of instances where the space of time having elapsed the debt adjustment board officials first got in touch with the official receiver's office, and upon learning that proceedings had not yet been concluded or that a stay of proceedings had not been extended, refused a permit to issue for proceedings against the debtor.

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IND

Joseph Henri Napoléon Bourassa

Independent

Mr. BOURASSA:

Before this clause carries I should like to say a few words as I did not have the opportunity to speak on the previous clause.

I wish to shed a different light on this measure as well as on the act which is amended by it. I have just found in my letter box a letter from a good farmer in the province of Ontario, in the part adjoining Quebec, who happens to be the creditor of another farmer. He protests strongly against the enlargement of this legislation. As he points out, he has saved a little money by living a frugal life year after year, and he lent a few dollars to some of his neighbours. One of them has spent his money in luxury. He is the proprietor of two automobiles; he has a piano in his house. He refuses to pay his debt, and now he is putting himself under the protection of this legislation. As

my correspondent says, "I have three boys whom I have to keep, while that man who is spending his money foolishly has only one boy. If he secures accommodation under this law he will be able to get along with his boy but I will be ruined and my three boys will be on the dole list. Why? Because I have saved for twenty years and because I have raised my family with economy and honesty."

I draw the attention of the house to the trend of all this legislation. I do not know the conditions in the western provinces. I presume that a large number of farmers there are indebted to lending companies. But with us in Quebec and in the part of Ontario adjoining Quebec, a very large number of creditors w'ho will be ruined by this law are farmers, small retired farmers living in villages, who have put by a few hundred or a few thousand dollars-a few thousand, very rarely -which they have lent to their fellow citizens living in the same parish, in the same village, relying upon the old traditions of honesty. I well remember the time when money was lent not only without mortgage but without note; money was lent from hand to hand and was always paid back, because the law of honesty was there, much stronger and more effective than any law that can be passed here or in any legislature. What is happening with this law?-and the tendency is increasing. The honest farmer who finds himself in difficult circumstances can hardly obtain credit. Money lenders, whether private citizens or lending companies, tell him that they have no more confidence in the farming community. They say, "If we lend you our money what will happen next year or two years hence? You will go bankrupt. We therefore refuse to give you credit." On the other hand the dishonest farmer takes advantage of this situation. I am afraid that at the rate we are going, making this tendency so much easier, we are fostering dishonesty among the farmers. We are ruining the credit of honest farmers; and at the same time we bring ruin to a large number of individuals, and a very useful class in our community, people who have worked steadily for twenty or thirty years, educated their families in the old traditions of thrift and honesty, and who have helped in their little sphere of action some of their neighbours, some of their fellow farmers, by lending them money. We are ruining one class financially and the other morally.

I do not want to add any more at this time. I suppose my protest is perfectly useless, as it was against another piece of legisla-

Farmers' Creditors Act

tion; because on the eve of an election the temptation, I am afraid, is to look for votes, and to look for votes especially among those people who give their votes according to their interest or their dishonesty. But I protest in the name of the old class of honest, thrifty farmers in my province. I admit that a good deal of extravagance has been going on in the last ten or twenty years, even in Quebec; yet Quebec has preserved more of the old domestic virtues of thrift, honesty, and sparing for old age; and now we are helping to destroy that spirit, we are helping to ruin a class of people who are preserving that spirit. I believe it is wrong economically and socially and for my humble part, although my voice may remain unsupported, I protest against this kind of legislation and against enlarging it all the time, making it easier for the dishonest debtor to cheat his honest creditor.

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

With the general tenor of what my hon. friend from Labelle has said I find no quarrel, but let me point out to him that he has proceeded to draw a general deduction from one isolated specific case.

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IND
CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

It is a truism that no law nor any lack of law will make an honest man out of a dishonest man.

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IND
CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

This law is designed to take care of the honest farmer who is in difficulties. Now, in the instance referred to by my hon. friend, it will be time enough for the farmer of whom he speaks and with whom I have every sympathy-it is a worthy case- to cry after he is hurt, to use an old and homely phrase. I venture to believe that farmer has not had a hearing or a decision handed down by the board of reviews. If the circumstances are as related by my hon. friend, and I have no reason to question that they are properly related, I venture to say that if a proposal is formulated by the creditor and he eventually goes before the board of review, the good sense of the board of review will refuse to penalize that creditor for the benefit of the thriftless debtor of whom the hon. gentleman has spoken. His case would be strong enough if he would come into this house and say that the man had been injured because of a finding of the board of review. No doubt there have been instances, I know of instances, where dishonest farmers have attempted to defraud their creditors by using the machinery of this act which was intended to be applied

only to the honest, needy, deserving farmer who could benefit by its provisions. But notwithstanding that fact we have to look at the picture in the large and see what the act is designed to do, and my hon. friend will be the first to admit that it is designed to deal with a class of farmers of whom I have spoken; and when my hon. friend speaks of our amendments enlarging the act, it does so to the extent of extending the stay of proceedings to ninety as against sixty days. It is a difference in degree and not in kind. So far as I am concerned, my hon. friend must remember that I have been resisting the appeals of my hon. friend from Macleod to have the period extended. I told him I thought we had gone as far as we could in limiting it to ninety days. However, let me say this to my hon. friend from Labelle. If in the operation of this act he should find that it does become subject to abuse in practice in keeping with the fears expressed by the farmer of whom he has spoken, it will be his duty to bring the matter to public attention with a view to having a remedy provided.

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IND

Joseph Henri Napoléon Bourassa

Independent

Mr. BOURASSA:

I thank the minister for his explanation, which I will bring to the attention of my correspondent. I hope it will be effective all through. My hon. friend said that we cannot by law make dishonest people honest. That I quite admit. But we can by law induce honest people to become dishonest, and I am afraid we have done it in many respects. I could point to what has been done in connection with many of our so called social laws adopted since the war. There is no doubt about it in connection with many circumstances arising out of the war, with regard to the adjustment of soldier's claims, the enlargement of the soldiers' pensions legislation and the reversal of the most elementary principle of law in regard to evidence, when we have allowed soldiers to make claims on account of illness which, occurring fifteen years after the war, they attribute to the war itself, forcing the government to prove that it did not originate in the war. I remember, in the previous parliament, giving an instance of horrible frauds committed in that way by some returned soldiers. My remarks are general and go beyond the scope of that clause, as I explained, because I was not here when the first clause was discussed. But I thank the minister again for his explanation and I hope the press at least of Quebec will make it quite clear that in such cases as this the attention of the board of review should be directed to the necessity of protecting the honest people,

Farmers' Creditors Act

whether they are creditors or debtors, and not helping the dishonest at the expense of the honest.

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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

I would like to get back for a moment to the question of the relationship of the debt adjustment board of the province to the creditor coming under this act. As I followed the statements of the Minister of Finance and the hon. member for Athabaska regarding a farmer whose case is being reviewed, and indeed upon whose case a decision is pending but has not yet been filed with the court, and where the ninety days' stay of proceedings has elapsed, I am now informed by both these hon. gentlemen that the debt adjustment board of the province would necessitate the creditor going to that board to apply for an order to take court action. Does that imply that the debt adjustment board under the debt adjustment act of the province would then have power irrespective of the decision of the court to prevent the operation of this act in the case of that man? Or if such power does exist at all, is it not simply the fact that the creditor would be taking temporary advantage of some anomaly in the relationship between the two acts; that his action at that time could be merely a perfunctory one and not at all binding; that this law must be binding to its conclusion upon the creditor who goes under it and that the debt adjustment act of the province cannot apply to such a man once he has gone under the operation of the act? Is that correct?

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

I have only this to add to my original statement in answer to the hon. member for Bow River: Once this act is invoked it continues in operation to its ultimate conclusion when a finding is brought down by the board of review. But let us assume that prior to the finding of the board of review the ninety days' period has elapsed and the stay of proceedings has therefore ceased in favour of the debtor; in that event, if there is no move on the part of the registrar of the board of review on behalf of the debtor to have the stay of proceedings renewed, it would be competent for the creditor to go before the debt adjustment board of Alberta and apply for leave to bring action. But in practice what would happen would be this, that if for no other reason, that would serve to notify the officials under this act that such a proceeding had been taken, and I have no doubt the result would be that the registrar would apply to the court for a renewal of stay of proceedings and would be granted it. I hope that answers my hon. friend's question.

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UFA

Edward Joseph Garland

United Farmers of Alberta

Mr. GARLAND (Bow River):

Almost.

There is just one point. Is it correct to say that the provincial debt adjustment act could not override the operation of this act once a farmer had placed himself under it?

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Quite so. This act takes precedence and overrides entirely the provincial debt adjustment act up to the end of the period excepting only in the instance that I cited.

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UFA
CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Only so far as the stay o( proceedings is concerned.

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UFA

Section agreed to. Section 3 agreed to. On section 4-Board may confirm proposal.


LIB

Harry Butcher

Liberal

Mr. BUTCHER:

With regard to the proposed amendment in section 4, I would like to suggest this to the minister: Would it not be necessary or advisable to make the same change in section 2, subsection 3, and sections S and 10 of the original act? The words are "approved by" in each case. Section 2, subsection 3 reads:

In any case where the affairs of a farmer have been arranged by a proposal approved by the court or confirmed by the board as here inafter provided-

And so forth. Section 10 reads:

Whenever a proposal has been approved bj the court.

Is it not necessary to change the words "approved by" to "filed in" in those sections also?

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CON

Edgar Nelson Rhodes (Minister of Finance and Receiver General)

Conservative (1867-1942)

Mr. RHODES:

Would my hon. friend state that point again? I have not got the full force of it.

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March 4, 1935