May 3, 1972

NDP

Roderick J. (Rod) Thomson

New Democratic Party

Mr. Thomson:

Mr. Speaker, may I ask the minister a question?

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
IND

Lucien Lamoureux (Speaker of the House of Commons)

Independent

Mr. Speaker:

Order, please. I apologize to the hon. member for Mackenzie. I am not sure if the hon. member for Battleford-Kindersley rose for the purpose of asking a question of the minister and if the minister was prepared to reply to that question before resuming his seat.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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LIB

Horace Andrew (Bud) Olson (Minister of Agriculture)

Liberal

Mr. Olson:

Mr. Speaker, I was willing to reply.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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IND

Lucien Lamoureux (Speaker of the House of Commons)

Independent

Mr. Speaker:

Is it agreed that the hon. member may ask his question?

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
?

Some hon. Members:

Agreed.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
NDP

Roderick J. (Rod) Thomson

New Democratic Party

Mr. Thomson:

Mr. Speaker, may I direct a question to the minister? He did not go into details to explain how the

May 3, 1972

Farm Credit Act

small farms development policy would work under this bill. Could he be more specific? Could he, perhaps, send me some written material showing how this policy will work under the bill? I want that information before speaking on this legislation.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
LIB

Horace Andrew (Bud) Olson (Minister of Agriculture)

Liberal

Mr. Olson:

Mr. Speaker, Bill C-5 relates to the small farms development program only in that it asks for statutory authority for the organization referred to previously to administer the small farms development program. We already have authority from this House for expenditures to be made. I have already sent the hon. member a complete explanation of the features of that program. Until the provinces agree to the division of administrative responsibility, I cannot, of course announce that division. There may be slight variations as between one province and another. We are rapidly approaching the point at which we simply will not be able to wait much longer for the provinces to reach these agreements. The farmers of this country want these programs to be established, and hope that this will happen quickly. All the information has been provided to the hon. member that is available in specific terms.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
NDP

Alfred Pullen Gleave

New Democratic Party

Mr. Gleave:

Will the minister not ascertain whether the provinces agree to this.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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PC

Stanley James Korchinski

Progressive Conservative

Mr. Stanley Korchinski (Mackenzie):

Mr. Speaker, I listened to the Minister of Agriculture (Mr. Olson) last night and again today, in the vain hope of hearing him say something about amendments which would be relevant to conditions today. I hoped to see evidence of a little foresight which would take us forward into the 1970's with a new approach. I did not want to see evidence of the approach that served in the 1960's and that is rapidly not fulfilling the requirements of today. Listening to the minister, I was under the impression, and I could not help it, that he was like a man blowing up a balloon. Having exhausted himself, he puffed but the air kept coming back from the balloon. That was my impression of the minister's comments. To me it seemed that the air was coming out of the balloon, and that the balloon was exerting more pressure than the minister.

I do not subscribe to the minister's position. I do not think all farmers are breathlessly waiting for this legislation to pass. Most of the proposed amendments will ease administrative problems. They are necessary if administration is to be made easier for those charged with that responsibility. To be fair, I suppose sometimes farmers have been denied loans because lenders have interpreted the law too narrowly. All the same, I do not think the minister has a grasp of what is needed today, as was evident from the answer he gave to the question raised by the hon. member for Battleford-Kindersley (Mr. Thomson).

The mystery that surrounds the small farms program is still with us, even though the minister has spoken. I suppose because his conscience is bothering him, he threw in the suggestion that this measure may be election bait. I do not see how he can bait anyone in an election on the basis of the amendments he is making to the Farm Credit Act at this time. There is nothing original or revolutionary in

|Mr. SkelUM.)

his ideas. They are simply ideas that came forward from the office. He was informed that in order to correct a series of problems and get around the fine print in the bill, these changes were necessary.

I wish to deal with some of the changes that are being introduced. For example, the suggestion has been made that a farmer can now borrow up to $100,000. Previously, the act stated that a combination of three farmers could borrow up to $100,000. According to the annual report, the average loan has been in the order of $28,000. If that is so, why would anyone suddenly require an additional $72,000? What the minister has done has been to make it appear as though it is a lot easier for farmers to get more money. However, many farmers do not want that kind of money. In the past, they have found that the interest they must pay has been a great burden. They will not be quick to pick up this $100,000 because they will be burdened for perhaps 30 years.

If individual farmers can borrow the $100,000, this will hasten the day when the large farms will be owned by one individual. It will certainly hasten the day when the small farmer will move off the land. In the past, the individual farmer could borrow up to $40,000. He can now borrow two and a half times that much. All the government hopes to achieve by this provision is to hasten the day when the small farmer will move off the land.

In another area, we are told that the reason for the amendment is that there are some administrative problems. It was not known in the offices how much equity a son should have or when a father and son could borrow more than $40,000. It is interesting to read the reply of Mr. Owen to a question that was raised in the Standing Committee on Agriculture. This is recorded in the seventh issue of the agriculture committee reports. He stated:

You will appreciate that one of the problems in these levels I have given you is the question of deciding when there are two farmers and when there are not. How much equity or interest in the farm should the farmer's son have in order to be, in fact, an owner-operator, or to be participating in the business?

This is one of the reasons the changes were necessary. There again it was a question of helping the administration. I stated at one time that in some cases loans had been denied because of the difficulty, in ascertaining the equity of a farmer, but I do not believe $100,000 is the magic figure to correct that situation. The same end might have been accomplished by establishing a level of $50,000 or $60,000.

Another amendment was introduced concerning the approval requirement for a farm improvement loan. That is not a difficult problem to overcome. By answering a letter by return mail or making a phone call to the office, authorization could be granted to allow the farmer to obtain a loan. This could be done very easily. I cannot see any dealer telling a farmer that if he does not get approval today, he will not sell him a machine tomorrow. I am sure any dealer would be glad to wait for a month until authorization is received. It does not create a real problem. I suppose a lot of unnecessary work will now be eliminated, but this, in itself, is not earthshaking. This, again, is a question of administration.

I now come to the additional amount of money that is being made available. Last night the minister stated that

May 3, 1972

approximately $245 million had not been lent. Last year the amount of loans was something in the order of $115 million. If loans are made at the same rate as last year, the funds available now could last for another two years. On that score, the minister did not really come forward with anything earthshaking. Under the present circumstances, we could have carried on for another couple of years.

The amendment just allows the farm credit corporation to administer the small farms development program, whatever it may be. A mystery still surrounds this particular program. I have received inquiries which I directed to the minister in the hope that I would be able to obtain some information as to how this program would work. I have not received any information and, therefore, I have not been able to provide other people with information. The minister might better serve the farmers if he introduced a piece of legislation to cover the small farm development program, set out the purpose of the bill and by what method he proposed to operate the whole scheme. Under the circumstances, there will be an item in the estimates which will allow approximately $30 million per year for the administration of this plan, whatever it may be.

This minister used the Farm Credit Act in order to throw in a few bits and pieces of administrative authorization so that he could say "Oh, yes, we have the authority. We have the farm credit corporation, and we have passed an item in the estimates." Nobody knows what this is all about. There is an item of expenditure that can be made by the government, but we do not even know whether or not the farm credit corporation is to be credited with that $30 million for this year.

The amount of money borrowed last year for the purpose of purchasing small farms was in the order of $37 million. That is all that was required. Is this $30 million to replace the $37 million that was used last year or will there be an additional $30 million? If there is to be an additional $30 million, what will be the purpose of it? In other words, we have been told very little about the way the scheme will operate; I hope that before long we shall be provided with far more detail. It is, really, improper for the minister to suggest he is about to introduce a program when, in fact, there is no program ready. We are told the program will begin as soon as the provinces agree. Will it be necessary, then, to wait until all the provinces are in agreement? The minister told us, almost in the same breath, that he could not wait very long, that he wanted to proceed. If he is at liberty to act, why did he not take action long ago? Does he intend to work out a scheme which would fit in with certain provincial schemes? Some of those schemes, I might say, are pretty hairy-I am not exactly in agreement with them, if the reports reaching me are correct.

The minister implies that we should move along as rapidly as possible, as if the whole world were waiting to see what will happen. Well, farmers may be waiting, but they are not waiting for these amendments, or for the type of legislation proposed by the minister. I do not think anything in this bill will improve the situation on the farms. We can, of course, readily agree with some of these amendments, because they are of a housekeeping charac-

Farm Credit Act

ter, but there is nothing which is forward-looking in the bill as a whole.

Last night the minister informed us he already has authority to refinance loans which were taken out at high rates of interest, some at a rate of 81 per cent. So, what has prevented him from acting earlier? If his intentions were good, he should have proceeded without waiting for these amendments to be approved.

Let us take a look at the overall loan picture. At the present time, the total of loans taken out by farmers amounts to about $1,200,000,000. This is a terrific amount for farmers to have borrowed. As of the latest report available, the report for 1970-71, more than 70,000 farmers had taken out loans. This represents almost the total number of farmers in Saskatchewan; it equals the combined totals of all the farms in Newfoundland, Prince Edward Island, Nova Scotia, New Brunswick, Manitoba and British Columbia. Looked at in another way, it means that a number equivalent to all the farmers of Manitoba and half the farmers of Alberta have taken out loans. This does not necessarily mean that farmers share the optimism which the minister has expressed.

Four or five years ago there was, perhaps, greater optimism; farmers took out some 12,000 loans. Last year, only about 4,100 loans were taken out, about one-third of the number taken out five years ago. Whatever the minister may say, farmers are not rushing to take out loans. They no longer see a great future before them and this is proof of the lack of optimism felt in the industry. Last year the amount advanced by way of loans declined by 28 per cent compared with the previous year. The minister told us only a few minutes ago that there had been a great upturn in farm fortunes. The facts are these: in 1969-70, 87 per cent of the farmers were in arrears. Last year, in 1970-71, 83.9 per cent were in arrears. Obviously, optimism is not reflected in a comparable amount of money in farmers' pockets, and that is the kind of optimism they understand.

The annual report of the Farm Credit Corporation from which I took these figures has further information. Perhaps I should read it for the benefit of the minister, since apparently he did not find the time to read it himself and learn what is happening. He indicated there was great optimism in the industry. At page six, the report has this to say:

The decline in the purchase of land to enlarge farms reflects in part the unwillingness of many farmers to expand their businesses during a period of uncertainty in the agricultural industry.

I am sure that if the minister took time to read the reports which are published by his own department he would find in them an entirely different story from the one he tells the House. Further, on page eight of the report, we find:

Younger farmers accounted for a somewhat smaller proportion of loans than in preceding years.

If young farmers in Canada do not share the minister's optimism there is certainly not much future in agriculture. I am sure this report has been honestly compiled. If the minister would only listen to the advice given to him by his senior officials, he might make some progress. Unless he does so, he will not succeed in producing amendments which meet the requirements of the seventies.

May 3, 1972

Farm. Credit Act

We find that in 1971, there are 15 per cent fewer farmers than in 1966. We have failed to reverse this trend. In the last 20 years, the number of farmers has declined by half. Worst of all, the average age of farmers has risen and is continuing to rise. At the present rate, it will not be long before the average age of farmers is around 60 years.

I am somewhat concerned about recent legislation which the Province of Saskatchewan has enacted and about legislation which it proposes to enact. In my view it will hinder the operation of the Farm Credit Corporation. It may be that because of the lack of optimism in the rural areas, farmers have lost their spirit and are willing to accept next to nothing, or something which in the long run will not be in their interest, and this disturbs me. I am always mindful of the Regina manifesto.

If the Minister of Agriculture signs an agreement with the province, the agreement should take into account the fact that we should try by every means possible to retain possession of the land in the hands of the farmers. They should be given every opportunity to own the land. In this respect, I am concerned at the attitude of the New Democratic Party in the province of Saskatchewan which has been amply demonstrated, and I presume that, being blood brothers, the federal NDP subscribe to a similar line of thinking. I am concerned about several developments in the last couple of years having to do with legislation dealing with estate taxes, capital gains, the land bank proposal and the foreign ownership proposals for land advocated by the government of Saskatchewan. This last matter is a real mystery. There is no bill; it is simply a proposal put forward by the government and which I presume is subscribed to by the federal NDP. The proposal is that no "foreigner" may own land in the province of Saskatchewan. Within one year he has to dispose of any property he owns. Foreigner, in their interpretation of the word, means anyone who is not a resident of Saskatchewan.

I am wondering how the Farm Credit Corporation is going to operate with this type of restriction, one that I believe is unconstitutional. Surely to goodness, we are not Balkanizing Canada yet. Surely, we have not reached the point where every province is a country within its own boundaries. To suggest that a foreigner is someone who lives in another province and that he should not own land in the province of Saskatchewan is, to my way of thinking, not going to be conducive to improving the farm economy. In addition, it will depress land prices.

Many farmers have had land given to them, or have bought land after working elsewhere for many years. A farmer who did not have sufficient capital to start with went to work. Then, when he had saved enough he bought a quarter section, and then he bought another quarter section and started a farming operation. Since he became sick and tired to carrying a lunch pail, he took up residence in the province of Saskatchewan. How is the Farm Credit Corporation going to get around that situation? I am wondering whether the minister is aware of the developments taking place in the province and whether, if the proposed legislation becomes law, he will be the first to take it to the Supreme Court of Canada to test its constitutionality.

I believe we must not allow such developments to take place. We have not had a statement from the minister or from the Minister of Justice (Mr. Lang) on the matter. We should not even entertain such an idea in this country. I do not know what the motivation for the proposal is, other than the Regina manifesto. I do not know whether the province is concerned about estate tax, but we have to pay estate tax whether we reside in Saskatchewan or not. Anyone wishing to buy land in Saskatchewan from a non-resident will sit around for a whole year. Every day that goes by, the seller will become more and more desperate to dispose of it for next to nothing. That sort of thing is not going to be healthy for the economy. I think the minister should investigate this situation, if not the Minister of Agriculture, certainly the Minister of Justice.

I see nothing in this bill which indicates the federal government has taken into account the existence of the land bank in the province of Saskatchewan. I should like to know how this is going to jibe with his small farm development program. I am just wondering whether the minister is going to be prepared to sign an agreement with the province of Saskatchewan. I think we should know what is the position of the federal government if this type of legislation is enacted.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
LIB

Horace Andrew (Bud) Olson (Minister of Agriculture)

Liberal

Mr. Olson:

May I ask the hon. member a question?

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
PC

Stanley James Korchinski

Progressive Conservative

Mr. Korchinski:

Yes.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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LIB

Horace Andrew (Bud) Olson (Minister of Agriculture)

Liberal

Mr. Olson:

I am not sure I understand the hon. member, but is he suggesting that we should review provincial legislation and pass opinions on whether the province can or cannot pass legislation of this nature?

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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PC

John (Jack) Henry Horner

Progressive Conservative

Mr. Horner:

As a former Social Crediter you should know that it has been done before. Remember the Bank Act of 1937?

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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LIB

Horace Andrew (Bud) Olson (Minister of Agriculture)

Liberal

Mr. Olson:

That is a little bit of ancient history.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
PC

Stanley James Korchinski

Progressive Conservative

Mr. Korchinski:

Knowing that this legislation is proposed, I think the minister should indicate to the House how it conflicts with his small farm development program. We have not had any details of this particular program, so I do not know what is the position. But I do know what is the position of the NDP in the province of Saskatchewan.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
LIB

Horace Andrew (Bud) Olson (Minister of Agriculture)

Liberal

Mr. Olson:

I have already stated that we are not participating in the Saskatchewan land bank scheme.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
PC

Stanley James Korchinski

Progressive Conservative

Mr. Korchinski:

Then, at least we have that from the minister.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
LIB

Horace Andrew (Bud) Olson (Minister of Agriculture)

Liberal

Mr. Olson:

I said that months ago.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
PC

Stanley James Korchinski

Progressive Conservative

Mr. Korchinski:

May I turn now to what I believe the amendments should include at this time. The minister has not recognized the need for the next 10 years or so, despite what he said in his remarks.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
Permalink
LIB

Horace Andrew (Bud) Olson (Minister of Agriculture)

Liberal

Mr. Olson:

I said for four or five years.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM CREDIT ACT
Sub-subtopic:   AMENDMENTS RESPECTING LOANS AND POWERS AND CAPITAL OF CORPORATION
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May 3, 1972