May 3, 1972

PC

Stanley James Korchinski

Progressive Conservative

Mr. Korchinski:

I would point out to him that present interest rates are a burden on the farmers. There is no incentive to stay on the farm. Interest rates have always

May 3, 1972

been a concern to farmers. My recollection of the thirties is somewhat dim, but I do recall that the prime concern of the farmers at that time was the discharge of any debts they had. It was not so much the debt that they could not manage but rather the interest rate; that was what finally broke the backs of many farmers. They could not burn the mortgage. As a matter of fact, they used up the best years of their lives in trying to pay off the interest. Many farmers had such a fear of the "banks that they preferred to leave their money at home. We have all read stories in the newspapers time and again about someone dying and money being found under a mattress or in a secluded place. This is the result of the fear these people have of banks. It is not a fear that the money will not be safe, but rather is a distrust which has developed because they have had to pay interest over the years and could not remove the yoke with which they had been saddled. I believe this is one thing the minister ought to consider at this time.

There is no incentive to any young farmer. Gradually, we find that the average age of farmers' keeps increasing. There is no incentive for a young farmer to remain on the farm. We must take this into account in this day and age. No consideration is being given to the people involved in farming, such as is given to those involved in industry and in labour, for example. The Opportunities for Youth Program, for example, is an incentive given by the government in order to provide work and accomplish something in that way. The LIP program, surely, is a program designed to provide jobs. Obviously, this also is an incentive for labour. Then, there are the DREE programs we hear about, involving incentives for industry to move into certain areas. We are living in the age of incentives. Everybody, except the people engaged in farming, shares in these incentives. The depressed areas we hear about receive special consideration. I am informed that when one totals the amount involved in these incentives it comes to about one-half billion dollars. I believe there should also be an incentive to remain on the farm.

I believe the farmers of our country deserve the same consideration that is given to other segments of our society. I do not believe the present situation will help preserve the family farm. I believe there was a period, when the Farm Credit Corporation was first initiated, in which this need was fulfilled, but at that time we had a pegged interest rate. Now, thanks to this government, the bottle has been uncorked and the interest rate has gone higher and higher. We find ourselves now with a rate as high as 85 per cent. The minister says he has the authority to refinance these loans at a lower rate, but he is not doing anything about it. Even though this authority exists, it has not been used to provide an incentive.

In respect of the land bank established by the New Democratic Party in Saskatchewan, it would seem to me that the farmer would have to pay the interest and taxes and the government would own the land. In effect the farmers would be told, "you pay the taxes and the interest and the government will end up owning the land". After making payments for years and years, the farmers would end up having nothing to show for their efforts.

Farm Credit Act

I am very concerned about the Regina manifesto. I believe the government should pay the interest and let the farmer own the land. This is part of our belief. We believe in the right of ownership. We do not believe it is the state which is the ultimate, but rather that the individual is more important than the state. One way in which this principle can be maintained is by reversing the method the NDP are following in Saskatchewan. The government should pay the interest. The farmers should pay the taxes on the land and make the capital payments, but the government should pay the interest. I say this is our answer to this type of program. We believe in individual ownership. The government does not have any position because it does not know where it is. I have indicated to the minister and to the House that we should use this approach in order to keep people on the farm.

We believe that any young man who starts farming needs incentives, just as incentives are necessary in any other part of the economy. I think the time has come when a similar approach should be taken with regard to the young farmers. I wish to make several suggestions. I have several proposals about how to achieve this. We believe that up to a certain age level, the interest on the borrowing should be forgiven. This type of assistance is similar to that given other industries. If any payments are made, they should be applied to the principal. In this way, when any payment is made on the principal, the principal would be reduced so the interest would also be reduced in succeeding years. This would provide an incentive to the young farmer to pay off the principal as quickly as possible. In that way he would be in a position to own the land. At the present time, there is no such incentive. I believe this is an approach we should take. After a certain age level, the interest would be paid by the borrower but prior to that time it would be deferred. If any payments are made they would be applied to the principal, again reducing the principal and thereby reducing the interest.

Here again, the quicker the principal is paid off the lower the interest payment becomes. There is another reason for this suggestion. I think the proper approach would be to assist the young farmer to become established. Once he is established it is easier for him to pay interest. After having had the interest forgiven or deferred, he would be able to make the payments since he would have become established. This is only fair. I remember the situation when I started my own farming operation. It was easier to make payments as the years went by, after the machinery was collected and there was an equity in the farm. I also believe several other approaches should be taken.

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

Gérald Laniel (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Laniel):

Order, please. Is the hon. member rising on a point of order?

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

Duncan Gordon Blair

Liberal

Mr. Blair:

Mr. Speaker, I wonder whether I might 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:

Perhaps I might be permitted to outline these proposals, and then the hon. member might wish to ask his question later.

I believe there should be an adjustment of interest rates on which loans were taken out at higher rates. The minister has authority to do this. If the loan could be refi-

May 3, 1972

Farm Credit Act

nanced, the farmer would have an opportunity to save a few dollars. There might be a situation in which the farmer would wish to add to his loan in order to make improvements to his farm. In this case, I do not believe it should be necessary for him to refinance his loan, especially at a time when the interest rate may have increased. He could avoid legal fees.

It is quite strange that under Part III any farmer at age 45 can get a loan of $100,000, while no one at age 46 would be allowed to receive $90,000 and no one at age 47 would be allowed to receive $80,000. What is so magic about the age 45? If we drew up a schedule, I believe this problem could be relieved. It is essential to try to keep these people on the farm, not only to show our faith in the young farmers but also to reverse the existing trend in many communities. Often services are no longer provided in these communities and the older people no longer want to spend much money on the farm because they have not decided how much longer they wish to stay on the farm. Consequently, the whole community dies. We believe that it is time to give the young farmers an incentive, some reason to stay on the farm and some reason to take out a loan at an earlier stage.

I believe that some of the proposals which I have put forward would go a long way toward accomplishing this goal. Accordingly, I move:

That Bill C-5 be not now read a second time but that it be resolved that in the opinion of this House the government should give consideration to the introduction of legislation to amend the Farm Credit Act by incorporating the incentive principle-already approved by this House in other legislation-to provide for partial non repayment of interest where young farmers meet performance standards, for deferred interest payments on all loans during an initial period, for equitable adjustment of interest rates for the benefit of borrowers; and, as well, to provide for open-end loans which will allow additional borrowing without refinancing costs.

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

Gérald Laniel (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Laniel):

The Chair is ready to accept the amendment moved by the hon. member although I might have reservations regarding its form, its wording and its length. However, precedents in the House would make it acceptable, unless hon. members have a different opinion.

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, I know that amendments of this nature have been moved on second reading, and I will not raise any procedural objection to this one, but I think hon. members should be well aware of the fact that their support of the amendment would do nothing but kill the bill.

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

Some hon. Members:

Oh, oh!

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

Harold Warren Danforth (Progressive Conservative Party Caucus Chair)

Progressive Conservative

Mr. Danforth:

That is a political speech.

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

Gérald Laniel (Deputy Chair of Committees of the Whole)

Liberal

The Acting Speaker (Mr. Laniel):

Hon. members have heard the motion put forward by the hon. member for Mackenzie (Mr. Korchinski).

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. A. P. Gleave (Saskatoon-Biggar):

Mr. Speaker, inasmuch as the effect of the amendment would be to set aside any discussion of the bill, and any action that might be taken now, I can hardly go along with the amendment. It may be that after a full discussion of this amendment

hon. members may be able to convince me that they have a case, and I may be able to consider it.

What we are considering in this bill is a proposal to increase the amount of money that can be borrowed. However, some other important programs are involved which will have to be examined as part of the bill. I hope that when and if this bill goes to committee it will receive a thorough examination. I hope, too, that we will call before the committee representatives of farm organizations, as well as the Farm Credit Corporation. Indeed, we should call before the committee officials of the Department of Manpower and Immigration, officials in charge of manpower training, and officials of ARDA or whatever organization has succeeded it. Judging from the statements which the minister has made and some of the provisions in the bill, manpower retraining forms an integral part of the proposals which the government has laid before the House last night and today. Those proposals need to be examined very carefully.

The previous speaker was greatly exercised about some legislation that is proposed in the province of Saskatchewan. But, Mr. Speaker, the proposals in this bill are very far reaching with respect to the future development of farms and farming communities. If we examine a proposal which deals with the consolidation of farms, the other side of the proposal must deal with the elimination of some farms. If we pass legislation dealing with the consolidation of farms and the lending of larger amounts of money, we must attempt to see what the results will be in the future.

Clause 1 of this bill will amend section 11 of the Farm Credit Act so that it will read in part:

The Corporation has all the powers necessary to carry out such duties or functions as may be assigned to it by the Governor in Council in relation to the administration of any agricultural program or as are assigned to it pursuant to any other Act of the Parliament of Canada.

Once this legislation is passed, the government can take action through orders in council. It can make very important decisions regarding complete phases of agriculture in some parts of the country, without having to lay its program before this House and defend what it proposes to do to people and for people. I am sure that the minister can advance logical arguments in support of the proposal in this bill to increase the amount of money which can be lent. Even on a compact family farm, the investment in land, cattle and machinery can be very substantial.

Every once in a while I read articles in newspapers which say how wonderful it is to have a one-man dairy farm, a one-man grain farm, or a one-man hog farm. But, Mr. Speaker, the individual concerned will be working 12 to 16 hours a day, and must have a very substantial capital investment. I am concerned with how this bill will affect the farmer and the communities in the farming regions of the country. What is needed here is companion action to increase farm income.

This afternoon questions were asked about the final pool payment on oats. Questions were asked yesterday about the price of rapeseed. Questions were also asked yesterday about the initial price of barley. In each case,

May 3, 1972

those questions were not answered except by the minister saying, "We are going to continue to do what we are doing in respect of the pricing structure."

With respect to the hog subsidy which the government recently paid out, I ask was the amount of the subsidy related to the cost of production on farms in Saskatchewan, Ontario and Manitoba? The answer is no. The record shows that the payments were related to the ratio between the price which existed in central markets in the United States and the price in the Toronto market. On that basis, it was decided to pay $5 a hog.

According to a term which has become popular amongst economists, the cost of money enters into the costs of production of every commercial farm in Canada. What we are talking about here is the cost of money and the use of money. The other day in committee we had a look at what is happening to Farm Credit Corporation loans in western Canada. Here, I quote an answer given by the Chairman of the Farm Credit Corporation, Mr. Owen:

-we had in Alberta $6,106,000 of arrears, which amounted to about 25.5 per cent of the amount due during the previous 12 months; in Saskatchewan, $6,411,000, representing 23.8 per cent; in Manitoba, $2,580,000, representing 28.2 per cent.

This is the picture of a depressed industry, Mr. Speaker. Our party met with representatives of farm organizations not more than two weeks ago, and one of those representatives said to me, "When you look at figures like that, you are getting pretty close to a debt adjustment program." The Conservatives can cry if they like about the legislation which is being proposed in Saskatchewan. I suggest they could better spend their time crying about the situation in which western farmers find themselves, rather than lambasting a provincial government which is doing its best to remedy a situation which is totally unacceptable to our citizens.

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

Richard Russell Southam

Progressive Conservative

Mr. Southam:

We are not crying; we are just giving you some good advice.

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:

Any advice we get from that corner we could do without. The previous speaker was talking about legislation that will not even be dealt with at this session of that legislature. It will be studied by a committee to see how best to deal with the foreign ownership problem which is developing in our province. I would say, Mr. Speaker, that you will not find us trying to deal with foreign ownership the way the government is trying to deal with it in Canada, with a lame brain policy.

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

An hon. Member:

Is that what Schreyer said?

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

Murray Arndell McBride

Liberal

Mr. McBride:

Check with an NDP government.

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

Edmund Boyd Osler

Liberal

Mr. Osier:

Would the hon. member permit a question?

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:

Not really.

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

Some hon. Members:

Oh, oh!

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

Murray Arndell McBride

Liberal

Mr. McBride:

You know what he is going to ask.

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:

If it were really urgent, I could accept it but I would rather carry on.

Farm Credit Act

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

Murray Arndell McBride

Liberal

Mr. McBride:

I would not accept it either.

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

May 3, 1972