Right Hon. R. B. BENNETT (Leader of the Opposition):

Before the orders of the day are called: I am advised that the city of Halifax has passed a strong resolution with respect to the agreement proposed between the dominion and the province of Nova Scotia, pointing out that the city has been very careful in its distribution of relief and has received a relatively small sum of money for that purpose as compared with other cities of Canada. The question is whether or not the government is prepared to reconsider the terms of the agreement between the province of Nova Scotia and the dominion in the light of the effect it would have upon the city of Halifax. If the hon. gentleman does not desire to answer the question now, it can stand as notice and he can answer it on Monday.

Hon. NORMAN McL. ROGERS (Minister of Labour): This matter has been brought to my attention by the hon. members for the city of Halifax; also I have received a telegram direct from the city clerk of Halifax, and am communicating with him by telegram to-day.

Right Hon. W. L. MACKENZIE KING (Prime Minister):

Yesterday the right hon.

leader of the opposition (Mr. Bennett) asked

a question with respect to the alleged lack of feed for live stock and the need of relief experienced by farmers at Ravenscrag, Saskatchewan. The answer to my right hon. friend's question is that, following the receipt of complaint by the dominion Department of Agriculture from Ravenscrag, Saskatchewan, it has been ascertained that six hundred and twenty tons of fodder have been delivered to the local improvement district in which Ravenscrag is located, and the one adjacent to the north to which deliveries have been made from Ravenscrag. Three carloads have been delivered to date to Ravenscrag in the month of February and one hundred and forty tons are on order for delivery to that point.

Complaint received on February 17 from Ravenscrag by the government of Saskatchewan, by whom the fodder is distributed, was signed by farmers who did not reduce their live stock to the basis on which feed is being supplied, when given an opportunity to do so with assistance from the dominion government.

Mr. BENNETT:

How is the remuneration for the auditors fixed?

Mr. HOWE:

The remuneration is fixed

annually by order in council. For several years, I think since the passage of the Canadian National-Canadian Pacific Act, the remuneration has been S50.000 per annum.

Mr. DUNNING:

Mr. Chairman, perhaps I had better outline briefly the amendments which are contemplated by the bill which will be based upon this resolution. In doing so, I do not want to anticipate the detailed discussion on the bill itself but to give, so far as I can, general information. A number of members advised me last night that they would be unable to be here to-day but would like to be present when there is any general discussion of the Farmers' Creditors Arrangement Act, and in that regard I would point out that there will be opportunity for general discussion both on the second reading of the bill itself and in committee of the whole on the bill. At this time I shall content myself with a brief outline of the nature of the proposed amendments and the reasons therefor.

The bill will seek to amend the act in five important respects. The first amendment will attempt to define more adequately the word " creditor," so as to include as a creditor of a farmer a person holding a mortgage, hypothec or other charge upon the property of the farmer even though no privity of contract exists between the farmer and such person. The practice of the boards of review in the various provinces in dealing with cases in which there is no privity of contract has varied quite considerably. Recently, however, certain decisions, particularly one by the appeal court of the province of Ontario, have made it necessary to have a clarifying amendment, which will now make it clear that the word "creditor" does include the creditor of a farmer, although no privity of contract exists between that creditor and the farmer, because of the fact that he is a mortgagee of a previous owner of the property.

The second amendment is designed to permit the legal representative of a deceased farmer to

apply to the court for an order to continue proceedings under a proposal filed by the farmer before his death or for leave to make a proposal on behalf of the estate of a deceased farmer, and the court would be empowered to grant the necessary application upon being satisfied that a member of the family of the deceased farmer resides, and will continue to reside, upon the farm, and intends and is able to operate the farm.

The third amendment is intended to change the present provision which provides that a stay of proceedings is effective only for ninety days, subject to extension by order of the court. Where a delay in hearing the case occurs the official receiver has to apply to the court within ninety days for an extension of the order, and in some cases many extensions have had to be obtained. The new provision will make the stay of proceedings effective until the proposal is finally disposed of. Any creditor, however, may in the interim apply to the court for an order to proceed should circumstances develop justifying such action.

The fourth amendment proposed will enable the governor in council to appoint more than one board of review in a province. In some provinces the number of cases referred to the board has been so great that the boards have not been able to keep up to date with the work. It is not anticipated that action will be taken in all provinces under this amendment or that action will be taken except under circumstances which indicate that such is absolutely necessary in order to catch up with the work and clear it up.

The fifth amendment will enable the governor in council by proclamation to provide that no proposal shall be filed in any province after a date fixed in such proclamation. This amendment is in order to enable the government to meet the very varied conditions which exist in Canada with respect to the operation of this act.

Strong representations have been made from some of the provinces that the operation of the act is no longer beneficial but rather harmful to farmers in that the conditions which gave rise to its enactment and its operation in the province, have now sufficiently improved that there is no need for it; and representations are also made that the fact that it does continue to operate under such circumstances has an impairing effect upon the credit of farmers. The government desires to be in a position to treat each province according to the circumstances of the farmers in that province. By providing that the act should cease to operate, that no new applications will be accepted after a certain date, the same method is followed as was adopted in bringing the act into force. It is hoped

Farmers' Creditors Act

that the amendment will relieve the government of a great volume of requests from some provinces for the complete repeal of the whole statute, because the government have no doubt that the statute is still a necessary instrument in certain provinces. The intention is to keep it in operation in every province so long as real need for it is demonstrated. But the government is definitely of opinion also that the continuance in operation of this piece of machinery within a province after the need for it has vanished tends to lower the credit of the agricultural industry in that province, which is to say the least an undesirable result.

That, Mr. Chairman, is a brief explanation of the purpose of the amendments which will be covered by the bill to which this resolution is a preliminary. On the second reading of the bill and in committee I shall have available all possible information with respect to the operation of the act. As I stated at the outset, a number of hon. members on both sides who are not here to-day have asked to be given an opportunity to get such information from me, and I can undertake to be in a position, if not to answer all questions, at least to supply such information as I have on every aspect of the matter when we come to the further stage.

Mr. STEWART:

Mr. Chairman, the amendments proposed by the minister are twofold. Taking the latter one first, I heartily approve of it on the grounds he has put forward. During the past two years I have had many interviews with farmers who felt that the act was detrimental to them in that they did not come under the act but desired to borrow money and found the act a serious obstacle to their doing so. For that reason they advocated repeal. I had proposed and in fact had drafted a bill to present to this house which differs from what the minister has outlined in only one respect: I was going to suggest July 1, 1938, as a suitable date for the repeal of the act in Ontario. I admit at once that the minister may be in a better position to judge when the repeal in any province should become effective, but I think the date I mentioned is a reasonable one for Ontario. It is to be borne in mind that this act has no application to a debt incurred after the enactment of the legislation in 1934, over three years ago. The act of course is based upon the assumption that the farmer is insolvent; that is the fundamental requirement.