Mr. Chairman, like other Members who have preceded me I welcome the resolution in the knowledge that this amendment will benefit some fishermen in some parts of Canada. Having said that, I must point out that I was glad the Minister himself recognized the fact that this legislation will not be of any material benefit to the people of my riding, and I doubt that it will be of very much benefit to the fishermen of Newfoundland generally.
Some Members have attributed this to the lack of banks. It is true that we have very few branches of chartered banks in the smaller fishing communities of Newfoundland. In my own riding there are six. Two of them are quite close together on the Burin peninsula and the others are scattered along a coastline that extends for nearly 1,000 miles. But that is not the main reason. Even in those communities where banks are readily accessible
Fisheries Improvement Loans Act the fishermen cannot make any use of this legislation mainly because the bank managers, for some reason which I have not been able to fathom, are very reluctant to make loans to fishermen even though the loans are guaranteed by the Government.
I think the hon. Member for Comox-Alberni said that up to the time the Dominion-Provincial Conference was held a year ago 12 loans had been made in Newfoundland amounting in total to $19,000. Two of those loans were made in my own riding, and I know about them because I know they would never have been made if I had not personally underwritten them. Therefore this amendment will not improve the situation so far as Newfoundland fishermen are concerned.
The Minister said he was disappointed that fishermen had not made more use of this legislation, but I was glad to hear him say that this is changing and fishermen are gradually making more and more use of it. I presume that is the reason for the extension of the maximum amount of loan. As I listened to the Minister I was struck by the similarity between this legislation and the legislation placed on the statute books several years ago making provision for loans to small businesses. I think the Minister said that the total amount of loans made under this legislation would not exceed $20 million. The same thing has happened in the case of small business loans. So far as my riding and province are concerned, that legislation has not served the purpose for which it was intended.
We in Newfoundland would be quite happy with smaller loans, even less than $4,000, if they were obtainable but, as I said, we have so few banks and no credit unions and the banks are not accessible to fishermen. They are hundreds and hundreds of miles distant. The only way to get to them is by sea, which is expensive and can take a lot of time. So it is just impossible for the fishermen to make any use of the legislation.
I was glad to hear the Minister say that some other provision would have to be made to take care of the problem in Newfoundland. We need small loans to look after special needs. In Newfoundland we have the inshore fishery and the deep sea fishery. The deep sea fishery is taken care of under the shipbuilding program and the measures to which the Minister referred in his interjection in the remarks of the hon. Member for Comox-Alberni. But so far as the inshore fishery is concerned, it is not in the fisherman's interest to saddle himself with a huge amount of
Fisheries Improvement Loans Act debt. The smaller he can keep the capital investment, the better. In my opinion it should not exceed $5,000 per person and the maximum of $10,000 should preferably be divided among two or three persons.
[DOT] (3:20 p.m.)
What we need in Newfoundland is a loan fund that will take care of emergencies. A fisherman may need a new boat. He can go into the woods and cut the timber for the frame but he needs some ready cash, $400 or $500 or perhaps $1,000, to buy planking for the hull and deck. If he has a boat, it is probably in his interest to get one of the small diesel engines that are now available on the world market. These little engines range in power from 5 horsepower up to 15 or 20 horsepower, but usually from 5 to 10 horsepower. They cost anywhere from $500 to $800. There should be a fund to which the fishermen can go to secure that amount of money. He is not saddled with a great amount of debt, and he is in a fair position to repay it over a short period.
Last winter one of my fishermen fishing with a longliner suddenly had $1,000 worth of gear destroyed by a foreign trawler. Well, this was a tremendous loss. He could not go to the bank because he had no more security to put up to satisfy the bank. He had to do without this gear until a merchant or a plant operator provided him with it. Only last week I had a letter from a constituent who said he could make a fairly good living if he could get a fleet of nylon gill nets. He has not been able to afford to get them up until now. These nets can be purchased through a Government agency for about $50, and can be put into the water for perhaps $75, fitted with moorings, floats and everything. He needs the cash, and he does not have it. The only other alternative for him is to purchase these nets through a supplier, but instead of paying $50 for the nets he will pay $100 or perhaps $120, exclusive of the moorings. These are examples of the needs which our fishermen want met.
The trouble with this legislation is that it does not help the people who most need help. If a person can go to a bank and get a loan of $10,000 under this legislation, he does not need the legislation. He could likely get the $10,000 loan anyway. It is the poor fisherman who has no security to offer except his good name, his industry and his reputation as a fisherman, who needs the help. Somebody has to take him at his face value and advance money on his character.
DEBATES June 18, 1965
Now, we have two loan funds in Newfoundland. We have the Fisheries Development Loan Fund, and that fund is used mainly for large loans for fishermen who want to buy Danish seiners. I do not believe that fund has been successful at all. What has happened has been this: A fisherman goes to this loan fund and obtains a loan of $40,000 or $45,000 to build a Danish seiner of about 75 feet. This is a tremendous amount of debt. Along with that, the marine insurance on this ship is very high and the operating expenses are high. By the time this man pays off his loan, he is right back where he started. He catches more fish, but he is no better off. The extra production goes to pay off the loan.
The most successful arrangement we have had in my Province has been a little fund that originated when the Premier of Newfoundland sold the Newfoundland Savings Bank to the Bank of Montreal. About $1 million was produced from that sale and it was split into two funds, half for the farmers and half for the fishermen. The purpose of the fund was to grant small loans to fishermen. There was a limitation as to what they could buy. They could buy only those types of gear and build those types of boats which met Government specifications. However, this fund could not begin to satisfy the demand. The amount of the loan was limited to less than $1,000. I think the average loan would be about $450.
Now, this legislation will not touch that need at all because the person who needs the help is not in a position to take advantage of it. I do want to appeal once more to the Minister. This legislation is all right. It will help somebody, and we will support it. However, so far as my Province is concerned and so far as my riding is concerned, we want a different form of financing. I hope the Minister will see to it that a fishermen's loan fund will be set up. I disagree with the hon. Member for Queens when he says this should be a provincial responsibility. I do not see why it should not be the responsibility of the Federal Government to provide this form of help to the fishermen, just as the Federal Government aids the farmers. We have more or less committed ourselves to do as well for the fishermen as we do for the farmers. I do hope the Minister will tackle this problem without any further delay.
Topic: WAYS AND MEANS
Subtopic: FISHERIES IMPROVEMENT LOANS ACT