Mr. Jacques Flynn (Quebec South):
Mr. Speaker, since I took my seat in this house I have been wondering whether, without a prepared text, I could successfully discuss any problem in English. I have decided to make the experiment tonight.
I believe that the aim of this bill is good, inasmuch as it seeks to suppress usurious rates of interest. I think the hon. member for Assiniboia (Mr. Argue) has good intentions and good motives, but I am not sure that the bill as presented would have the results he expects. I doubt that placing a ceiling of 12 per cent or any other arbitrary figure on the permissible rate of interest would achieve the end which he has in mind.
Credit, as we know it today, has not been long in existence. If we were to go back only some 50 years I think we should find that in those days only the wealthier people or the merchants were able to secure credit. Nobody could borrow to buy consumer goods. Nobody could borrow to buy automobiles, a house or ordinary things necessary for the ordinary life. When we think of the Bankruptcy Act, which is the law that was devised because of the progress of credit, we find that that act was applicable only to merchants for the very good reason that the average citizen could not find any credit. However, over the last 25 years credit has become an important business. Whereas, I would say, 50 years ago there were only a few people who could borrow and there were only a few institutions that were lending money, we now have several institutions that offer credit to the people in general.
If I take the figures given by the sponsor of the bill, we now have about $2 billion in circulation in this business of credit. As I think he mentioned in the debate which took place in 1956 on his proposed bill to amend the Small Loans Act, this figure of $2 billion had doubled in four years, something which shows that we are in a new field of economic activity with respect to credit as we know it today. The question which arises is this. Would the bill as drafted correct the situation which he has outlined? As I said before, I am not sure because many of the cases to which hon. members have referred-especially those who are in favour of this bill- are not cases of usurious rates of interest but rather cases of fraud. I was thinking of the
case cited by the hon. member for Burnaby-Coquitlam (Mr. Regier). He mentioned the case of a person who purchased an automobile and who was obliged to pay several hundred dollars interest on a loan of $350. I think this is a case where the law was violated. If I understand the situation rightly, according to the law as it stands now loans under $500 cannot be made at a rate of interest higher than 12 per cent.
Subtopic: AMENDMENT TO PLACE CEILING ON INTEREST RATES