I explained the situation
the other evening when I indicated why the government was of the opinion that a bill such as this should not be passed, and I also intimated that the representatives of the insurance companies had filed with the Minister of Finance an undertaking to the effect indicated just now by the hon. member for Macleod. The representatives of the insurance companies stated that they would file a formal agreement in tenms to be satisfactory to the Department of Finance and the Superintendent of Insurance, and an undertaking to that effect has been given. If the bill were withdrawn the reasons that apply to its not being proceeded with, as stated by me the other evening, apply with equal force to the amendment of the hon. member for Mount Royal (Mr. White). It is the principle of imposing an obligation upon either the company or the policyholder at variance with the contract entered into between them which I was speaking of the other evening. That is what I was discussing, and the effect upon the credit of the country generally. And especially is that so with respect to companies carrying on business in Canada, registered under the provisions of the statute. I am indebted to the chairman for a copy of the amended proposal, which reads: #
(1) No company shall charge, stipulate for, or recover as interest in respect of any loan made to any person on a policy of insurance issued or effected upon the life of any person resident in Canada at the time the policy was issued or effected, any amount in excess of five per centum per annum, compounded annually, on the balance of the loan from time to time unpaid by the borrower.
That covers all expenses.
(3) This section shall not apply to any loan or unpaid balance thereof made under an agreement executed, or advanced automatically under any policy issued, before the first day of January, 1936.
Companies Act-Mr. Cahan
So that its provisions do not become retroactive except from the first day of January, affecting no agreement that might be outstanding, carrying any rate of interest, and would automatically reduce the rate to five per cent. Apart from the question of jurisdiction, which is a delicate matter that has been discussed so often in this house and in the privy council, the other question still remains an integral part of the proposal, namely:
This section shall not apply to any loan or unpaid balance thereof made under an agreement executed, or advanced automatically under any policy issued, before the first day of January, 1936.
It still has that effect on contracts that might be outstanding with respect to it. I think, however, I should say this to the hon. gentleman, from what was stated to .me, that the companies would be .prepared to execute with the Minister of Finance or the Superintendent of Insurance, whoever is the appropriate person, an agreement in the terms suggested, which he himself inspected at the office of the Superintendent of Insurance, reserving an interest rate not exceeding six per cent. May I say to the hon. gentleman that I think if he accepts the proposal, undoubtedly the agitation will be such that the companies will probably reduce the rate to five per cent in another year. Personally I think the companies should charge not more than five per cent; I am wholly in accord with that view. That is one matter. Another is how to effect this. Having regard to the conditions that exist, I cannot endeavour to impose the will of parliament upon parties who .make the rates.
I do not intend to traverse the ground I covered the other evening,, but I believe as a result of what, the hon. gentleman has done, if he accepts the agreement and does not limit it as to time, the agitation that will be carried on will be sufficient to make the rate not exceeding five per cent rather than not exceeding six. That is my personal view about the matter. If it is not possible for the hon. gentleman to accept the proposal suggested, I would make a motion that the committee rise. If the committee did rise, that would be a short way of ending the difficulty.