Mr. A. L. BEAUBIEN (Provencher):
Mr. Speaker, I should like to offer a few suggestions to the minister and the house based on the conditions that I have found prevailing in the riding that I have the honour to represent. During the last three or four years I have had occasion to come in contact with farmers' indebtedness to a very large degree, and the conditions I have found are these-and incidentally may I say that I do not think anybody can discuss this resolution without linking it up with the Farmers' Creditors Arrangement Act.
In my riding the average farm consists of 240 to 320 acres. We will take, for the sake of argument, a farm of 320 acres. Say that a man owes $8,000 on a half section of land. If he is able to take advantage of the Farmers' Creditors Arrangement Act and get his indebtedness reduced, say, fifty per cent, that still leaves him with an indebtedness of $4,000. Now if this resolution and the bill to be founded upon it will take care of such a case and allow a man who has had his indebtedness reduced say forty or fifty per cent to consolidate his remaining indebtedness in one loan spread over a period of years, twenty or twenty-two years I think the act says, and only very small annual payments are provided for, he might be able to get out from under. But unless the Farm Loan Act and the regulations that will govern its administration are able to take care of that situation I doubt very much if we are going to make much headway in the readjustment of farmers' indebtedness. In the last few years I have found that many creditors were willing to make readjustments, but they all asked the farmer: What consideration will the loan company get if I reduce your indebtedness? The farmer finds himself in a position where he is unable to say to the loan company or to any of his creditors: I will give you your cash if you will reduce my indebtedness.
I do not think there is any great demand in the country for new loans. Of course there might be in certain districts where people want to get a start, but in my opinion the great demand is to relieve the farmer of the indebtedness which he incurred during the period of high commodity prices, and unless this act takes care of that situation so that the farmer after he has had his debt readjusted will be able to consolidate his remaining indebtedness in one loan, I doubt very much whether this legislation is going to be a success.
May I make these few observations to the Minister of Finance (Mr. Rhodes)-and I do not do it at all in any way of criticism
Farm Loan Act-Mr. Beaubien
[DOT]of the Farmers' Creditors Arrangement Act which was passed last summer. Probably it took a little time to get the act under way. As far as I can find out, in the province of Manitoba the board of review has not as yet given any decisions to speak of; if so, it must have been very recently. I find this fear existing, that the farmer was not sure whether the board of review had the right to force a secured creditor to readjust the farmer's indebtedness. In fact I took this matter up with several legal minds in the city of Winnipeg, and I have not yet been able to get a clear and definite understanding whether the board of review has or has not the right to say to the secured creditor who has, say, a first mortgage on the farm: You will have to take so much, and the readjustment will be based on the value that you voluntarily put on the productivity of the farm, or that the board of review puts on it.
When the provincial boards are abolished I assume a provincial representative will have to be appointed for each province. I trust that these representatives and the board here in Ottawa will make every effort to relieve the farmer who is indebted to such an extent that he will never get out from under unless he is able to readjust his debt under the Farmers' Creditors Arrangement Act, and I would urge that the board be not too critical of the loans after the man's whole indebtedness has been reviewed by the receivers and the board of review under the Farmers' Creditors Arrangement Act. If this legislation, with the increased credit facilities that are to be placed at the disposal of the board, is administered as it should be, and if due consideration is given to the ability of the farmer under present conditions to pay and to the capacity of his land to produce enough to pay at present prices, some good might be accomplished. But even when you have reduced your debt by say fifty per cent, calculate on the basis, not of 18,500 but of $4,000, at 51 per cent, and you have $220; and then you have to figure on your municipal and school taxes, at least fifty cents an acre. You must also take into consideration repairs and upkeep of buildings, which would not be less than $100 a year. Then there are other incidental expenses which would add to your overhead, to say nothing of the cost of seeding and of harvesting your crops, and many other costs which enter into farming. So that when you take all these things into consideration the farmer will still find it very
difficult to make both ends meet. It is therefore only by amortizing his indebtedness, consolidating it under one head and making small annual payments, the rate of interest being reasonably low, that he can clear his home from indebtedness.
I offer these suggestions in the hope that they will be considered. Very often we feel that the officials are not administering the act as we should like them to, but the difficulties are numerous and they do the best they can. At the same time I think the government should instruct the boards which will administer the act to carry out its provisions having in mind present commodity prices and the conditions that exist in Canada at the present time.
Topic: CANADIAN FARM LOAN ACT