Mr. Macdonald (Rosedale):
Last night I brought to the attention of the committee and the minister a legal objection to some of the terminology used in the proposed amendment to section 21(a) 2 (e) and section 21(a) 6(b). The words in question to which I referred are "interest in any such instrument". The objection I brought forward at that time was that the instrument in question is a negotiable instrument and is transferable with all the interest in it or is not transferable at all. It is not severable. The minister subsequently advised me of the government's intention in this amendment, which was apparently to refer to a common banking practice whereby a contract can be entered into between the
Export Credits Insurance Act corporation and a commercial bank and, tor a consideration, give the commercial bank participation in the instrument.
I should like to suggest to the minister that the section might be further amended to extend the powers of the corporation so as to give the corporation the power to exchange any guaranteed instrument for two or more instruments of lesser principal amount, aggregating the amount of the original instrument, and to sell all or any part of such instruments. The minister is aware of a recent negotiation under this statute which provided for the refunding of obligations which had previously been created, and I should like to recommend to him the possibility of incorporating in the powers of the corporation this further power so that if it becomes commercially feasible the corporation may sell some of its obligations on the public money market or to private purchasers. My submission is that the wording at the present time does not give the corporation this power, and being a statutory corporation it is strictly limited to the powers conferred under the statute. Therefore I would propose that amendment to the minister.
Topic: EXPORT CREDITS INSURANCE ACT
Subtopic: AMENDMENTS INCREASING LIABILITY LIMIT, ETC.