November 25, 1909 (11th Parliament, 2nd Session)

LIB

Joseph Pierre Turcotte

Liberal

Mr. JOSEPH PIERRE TURCOTTE (Quebec county).

(Translation). Mr. Speaker, I wish to make a few remarks in regard to this Bill. Were such a proposal to carry, its effect would be to entirely do away with mortgages. While I do not deny that grievances may exist, I do not think they can properly be dealt with by this parliament. It does not behoove us who represent the general interests of the Dominion to enact a law with the object of doing away with grievances which, I admit, may at times be excessive on the part of the creditor by opening the door to downright abuses on the part of the debtor. I do not think it is our duty to state in our statute-books that henceforth the debtor shall no longer be left at the mercy of his creditor, but rather the

creditor who shall be left at the mercy of his borrower.
This Bill provides that whenever a sum of money has been obtained under deed of mortgage for a certain fixed period, that sum may be paid back at any time after maturity, notwithstanding the fact that there mav be in the deed a covenant whereby the parties have agreed that such payment should not be effected at any date after maturity, but only at the expiry of a term of two, five or ten years. According to the provisions of the Bill, the borrower would have the right by giving a month's notice or paying one month's interest, to terminate the mortgage.
This is what occurs as a matter of fact. Take the case of a small capitalist or of an estate. The sum of $10,000, let us say is loaned for a period of ten years, and it is covenanted in the deed that, if at the expiry of ten years the sum borrowed has not been paid back, the borrower will have to keep it for another period of five or ten years more. That clause is inserted because, as everybody knows, it is at times a difficult matter to find a good investment, ami also because the rate of interest varies from year to year. It may happen very likely that the borrower finds it more difficult to borrow at the expiry of ten years than to-day; or, on the other hand, the creditor may experience greater difficulty in finding an investment at an equal rate of interest. The creditor when negotiating a loan at a rate of interest of 6 per cent per annum, to be paid back at the end of a period of ten years, covenants that if ten years hence the amount is not reimbursed, the loan will run for five years longer as a means of providing against the ups and downs of the money market. The lender, who had the 'assurance of drawing 6 per cent on his capital during fifteen years, will have to be content with drawing 6 per cent during the first ten years; after which, if he is bound to accept payment of the principal, according to the provisions of this Bill, he may not be able to secure more than 3 or 4 per cent. It was in view of such a contingency that the lender covenanted in the deed that should the borrower fail to repay the principal at the expiry of ten years, then the loan would run for five years more on the same terms. It must be admitted, therefore, that the provisions of this Bill interfere with the fundamental principles underlying contracts, the agreements entered into being actually as law to the contracting parties.
In the province of Quebec we have been in the habit on considering agreements as something which should not be broken, something which should be lived up to, provided they contain nothing contrary to morals or public interest. Well, an agreement such as I have outlined above, would
be entirely lawful, and to my mind it would be undue interference on the part of this parliament to cancel the agreement entered into by the contracting parties.
My hon. friend referred to the grievances which occur in the province of Ontario. Of course, excesses will happen. But one of two things must be admitted: either those arguments are lawful or they are unlawful, and remedies other than the proposed legislation are available. True, it often happens that a borrower puts himself in the hands of his creditor; but that is the outcome of circumstances over which this parliament .has no control.
I am satisfied the principle of this Bill is antagonistic to the spirit of legislation in the province of Quebec, and for that reason I am bound to oppose it.

Topic:   INTEREST ACT-AMENDMENT.
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