February 17, 1953

PC

Edmund Davie Fulton

Progressive Conservative

Mr. Fulton:

I am not at all anxious to do that. If, rather than break up the debate into two or three parts, it would be more convenient for the government to leave it until the whole matter can be concluded, that would suit me.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

Louis Stephen St-Laurent (Prime Minister; President of the Privy Council)

Liberal

Mr. St. Laurent:

It is not a matter for the convenience of the government, it is for the

convenience of the Leader of the Opposition (Mr. Drew) who is not here this evening. I am quite prepared to reserve what I have to say until it will be possible to conclude the debate on the point.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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PC

Edmund Davie Fulton

Progressive Conservative

Mr. Fulton:

My only point in referring to the convenience of the government was to ascertain whether they would prefer to go on with other business now rather than go on with this. I was not making any invidious suggestion thereby. I merely thought it would be more convenient to leave the discussion until the whole matter could be concluded.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

Elie Beauregard (Speaker of the Senate)

Liberal

Mr. Speaker:

Naturally I am anxious to dispose of the matter as soon as possible. There are twen+y-five minutes left before ten o'clock, unless the house would prefer to dispose of the resolution which is before the house.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

Louis Stephen St-Laurent (Prime Minister; President of the Privy Council)

Liberal

Mr. St. Laurent:

I think it might be more convenient if we postponed the continuation of the debate on the point of order until the time we could expect to complete it and ask Your Honour then to consider the arguments and give your decision. We might, perhaps, proceed with this resolution. It is probably not of a controversial nature.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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CCF

Stanley Howard Knowles (Whip of the Co-operative Commonwealth Federation)

Co-operative Commonwealth Federation (C.C.F.)

Mr. Knowles:

Yes; give us a chance to prove our point.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

Elie Beauregard (Speaker of the Senate)

Liberal

Mr. Speaker:

Before proceeding with the resolution, I wish to thank the hon. member for Winnipeg North Centre (Mr. Knowles) for the manner in which he has presented his arguments. I can assure him they will receive my careful consideration. Other members of the house will have had the benefit of hearing his argument before presenting their arguments. I can assure him that I will read Hansard, and will give full consideration to the points he has raised.

Motion agreed to and the house went into committee, Mr. Beaudoin in the chair.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

As hon. members know, a system of encouraging intermediate credit for farm improvements was approved by parliament in the Farm Improvement Loans Act of 1944. The primary purpose of the act was to fill a gap in the credit system which has been developed in Canada to meet the needs of agriculture. That gap related chiefly to the provision of intermediate credit and certain types of shortterm credit to farmers for the improvement and development of farms and for the improvement of living conditions thereon. The act aims at assisting, particularly, the

Farm Improvement Loans Act average farmer who in the past has frequently not been able to secure bank credit for these purposes. It aims, moreover, at providing credit in a form and under terms and conditions which are convenient and suited to the needs and conditions of the particular farm borrower.

The principle of the act is that the government undertakes to reimburse the chartered banks for losses incurred on loans they make under the terms of the act up to a maximum of 10 per cent of the aggregate principal amount of loans made by each bank.

The original act established a limit on the total amount of loans that may be made from time to time under the act. The practice has been to set this over-all limit by three-year periods. The first period was the three years ended February 29, 1948, and the limit was set at $250 million. During that period the total loans made were of the order of $35 million. At September 30, 1952, the amount outstanding for that period was $258,282.18.

The second three-year period ended February 28, 1951 and had a limit of $150 million. In that period a further amount of $135 million was lent and at September 30, 1952, the outstanding amount for that period was $23,025,609.62. In March 1951, parliament set up a third three-year period ending February 28, 1954, with a limit of $200 million. At September 30, 1952 a total of nearly $170 million had been lent out of the $200 million and the amount outstanding was $122,454,211.34.

Up to the end of December, 1952, loans totalling nearly $350 million have been made under the act. Total losses paid to the banks from the inception of the act to the end of December, 1952, have amounted to $38,383.93 for 80 claims, and of this amount $2,010 has been subsequently recovered from borrowers.

_ The total number of loans from the inception of the act to December 31, 1952 has been 331,965, and at that date the total number of loans in default was 28,916. The trend of lending has been accelerated to such an extent that for the first 22 months of the current three-year period, loans under this act have reached a figure of over $183 million and it is clear that the $200 million limit presently in force would be reached some time in April or May. It therefore becomes necessary to amend the period and the limit if farm improvement loans are to continue to be available after April or May of this year.

The bill which will follow the resolution contains three things. First, it shortens the

Farm Improvement Loans Act present three-year period ending February 28, 1954, to an approximately two-year period ending March 31, 1953, March 31 being a more convenient terminal date than February 28. Second, it creates a new three-year period ending March 31, 1956. Third, it sets a limit of $300 million for this new three-year period.

I do not wish to take too much time to elaborate upon the value and usefulness of this act. In the past it has received unanimous support and the commendation of all sections of the House of Commons. However, it might interest hon. members to have some details on the operations under the act since the last report made by my predecessor in the house in February, 1951.

All hon. members know that in recent years economic conditions have made it both possible and desirable to improve and extend the mechanization of farm operations. The history of the act in that field, as well as in the general field of farm improvement, is

one of constantly growing and increasing usefulness. Farmers have been using more and more the facilities of the banks under this act to obtain intermediate and short-term credit.

In the first year of operation-that is to say in 1945-the total amount of loans was roughly $4 million. In 1951 the total was $85 million and in 1952-that was last year- an amount of over $98 million was reached. There was an increase of 15 per cent.

With the permission of the committee, Mr. Chairman, I should like to place on Hansard at this point a table showing the number and amounts of loans made in each year from 1945 to September 30, 1952. This table also shows the number and amounts of loans in each province for each year.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

Louis-René Beaudoin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Is it agreed?

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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?

Some hon. Members:

Agreed.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

The table is as follows:

THE FARM IMPROVEMENT LOANS ACT LOANS CLASSIFIED BY PROVINCES Yearly Since Inception 1945 to September 30, 1952

British Columbia Alberta Saskatchewan Manitoba Ontario No. Amount No. Amount No. Amount No. Amount No. Amount$ cts. $ cts. $ cts. $ cts. $ cts.1945 (10 Months) 71 66,849 83 1,633 1,250,447 85 1,035 834,498,85 751 537,450 53 586 523,518 111946 467 343,706 21 4,798 3,388,114 70 4,075 3,140,157 35 1,928 1,397,538 74 1,443 1,369,371 471947 525 444,078 50 8,169 6,537,872 92 7,798 6,464,263 64 3,237 2,518,362 19 1,876 1,845,830 861948 765 747,323 27 10,962 10,634,375 65 10,725 10,505,458 91 4,788 4,532,345 37 2,427 2,260,050 521949 1,344 1,358,712 27 14,430 14,659,490 19 15,588 16,497,396 97 7,128 7,242,324 01 4,340 4,260,504 551950 1,693 1,709,994 57 17,161 18,508,716 74 20,090 22,557,445 30 7,712 8,263,981 50 7,914 8,043,839 451951 2,010 2,070,467 54 20,309 23,240,815 82 23,272 27,876,923 08 10,120 11,370,755 09 11,323 12,178,465 301952 (9 Months) 1,626 1,758,793 43 18,404 22,226,055 93 23,974 30,343,023 98 8,262 9,392,948 34 9,193 10,051,377 17Total 8,501 8,499,925 62 95,866 100,445,889 80 106,557 118,219,168 08 43,926 45,255,705 77 39,102 40,532,957 43Quebec New Brunswick Nova Scotia Prince Edward Island Newfoundland Total No. Amount No. Amount No. Amount No. Amount No. Amount No. Amount$ cts. $ cts. $ cts. $ cts. $ cts. $ cts.150 Ill 965 75 29 26,437 20 37 23,213 40 19 7,360 50 4,311 3,381,742 021946 193 146,639 00 42 34,541 16 76 55,617 11 8 4,880 00 13,030 9,880,565 741947 315 246,366 81 55 46,392 35 56 46,223 20 15 11,431 00 22,046 18,160,821 47530 447,359 12 83 85,595 33 90 72,615 83 61 46,006 70 30,431 29,331,130 701 388 1,341,867 92 168 182,255 66 163 132,450 91 226 204,077 87 44,775 45,879,080 351950 3,003 3,097,204 42 348 358,755 50 340 274,940 47 706 605,518 45 2 966 66 58,969 63,421,363 061951 5,405 6,125,621 89 655 696,750 78 695 619,719 71 1,271 1,144,295 31 3 2,412 50 75,063 85,326,227 021952 (9 Months) 4,596 5,426,270 73 669 698,508 65 704 679,203 10 1,281 1,237,538 52 30 37,864 00 68,739 81,851,583 85Total 15,580 16,943,295 64 2,049 2,129,236 63 2,161 1,903,983 73 3,587 3,261,108 35 35 41,243 16 317,364 337,232,514 21

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Farm Improvement Loans Act

2042 HOUSE OF

Farm Improvement Loans Act

From this table it will be noticed that in the first years of operation of the act its facilities were used mostly in the western provinces. However, the farmers of the eastern provinces in recent years have been using them to a greater and greater extent, especially for the mechanization of their farms. They have been doing so to such a point that from the table it will be seen that the increase in the amount of loans in 1951 over 1950 in the maritime provinces was a little over 100 per cent; in the province of Quebec, 97-7 per cent; and in Ontario, 51-4 per cent.

I have with me another table which I believe would be highly interesting to members of this committee. It gives the number of farmers for each province according to the 1951 census, with the number of loans made in each province for the period January 1, 1951, to September 30, 1952. The percentage relationship is indicated for each province and for the whole of Canada. Is it agreed that I may put this table on Hansard!

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

Louis-René Beaudoin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Is it agreed that this table go on Hansard?

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
Permalink
?

Some hon. Members:

Agreed.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

The table is as follows:

The Farm Improvement Loans Act

Percentage Relationship between the Number of Loans and the Number of Farmers

for the period- -Jan. 1, 1951 to Sept. 30, 1952

Number Number

of of PerLoans Farmers centBritish Columbia 3,636 26,406 14Alberta 38,713 84,315 46Saskatchewan .... 47,246 112,018 42Manitoba 18,382 52,383 35Ontario 20,516 149,920 13Quebec 10,001 134,336 7New Brunswick 1,324 26,431 5Nova Scotia 1,399 23,515 6Prince Edward Island 2,552 10,137 25Newfoundland .. 33 3,626 1Total 143,802 623,087 23

From that table it will be seen that while the figure for the whole of Canada is 23 per cent, the figure for Alberta is 46 per cent; for Saskatchewan, 42 per cent; for Manitoba, 35 per cent; then it drops to 25 per cent for Prince Edward Island; 14 per cent for British Columbia; 13 per cent for Ontario; and 7 per cent, 5 per cent and 6 per cent respectively for Quebec, New Brunswick and Nova Scotia and only 1 per cent for Newfoundland.

If the western farmers have been using the facilities of this act to a greater extent than have their eastern friends, it is mainly owing to the fact that in the west the farms are much larger and also relatively new, so that the total cost of implements to the western farmer is usually much higher. In the east the farms are smaller. As an easterner I can say that we have principally mixed farming. Most of our farms are old establishments of one, two or even three centuries.

The number of loans made under the act in the last full calendar year for which we have complete data-that is 1951-was 75,063, an increase of 27 per cent over 1950. In that year loans for agricultural implements, including farm trucks, again constituted by far the largest percentage, namely 92 per cent. The purchase of livestock accounted for 4 per cent. Loans for the construction, repair or alteration of farm buildings accounted for 3 per cent; and all other loans, 1 per cent.

A table giving a statement on loans, classified by purposes, for the years 1950 and 1951, and also giving the total from the inception of the act up to December 31, 1951, can be found on page 12 of the annual report of the Farm Improvement Loans Act for the calendar year 1951. I have with me a table giving the number of loans and the total amount of such loans, classified by purposes, up to September 30, 1952. With the permission of the committee I should like to have it printed in Hansard at this point.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

Louis-René Beaudoin (Deputy Speaker and Chair of Committees of the Whole of the House of Commons)

Liberal

The Chairman:

Is that request agreed to?

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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?

Some hon. Members:

Agreed.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

The table is as follows:

The Farm Improvement Loans Act Loans Classified by Purposes to September 30, 1952

1. For purchase of agricultural implements

2. For purchase of livestock

3. For purchase or installation of agricultural equipment or a

farm electric system

4. For alteration or improvement of farm electric system

5. For erection or construction of fencing or works for drainage

on a farm

6. For construction, repair or alteration of, or making additions to,

any building or structure on a farm

7. For any other work for the improvement or development of a

farm designated in the regulations

Total

No. Amount

279,453 $306,611,040.41

10,357 8,440,187.66

1,923 908,139.44

53 51,336.43

407 252,434.50

14,798 16,166,259.11

10,373 4,833,116.66

317,364 $337,232,514.21

In the year 1951 farm implement loans amounting to $78,302,384 were made. This represents an actual sales volume of farm implements and trucks of $136,798,751. Loans for the purchase of trucks showed a sharp increase over the preceding year, namely by 61 per cent. Combine loans also increased substantially, namely by 47 per cent. For tractor loans the increase was 13 per cent. It is estimated that approximately 45 per cent of new tractors and 60 per cent of new combines sold in Canada in 1951 were financed under the act.

The act was used considerably to assist the farmers of Canada to finance the building of new homes, new barns and other buildings, and the repair or renovation of their present buildings. Since the commencement of the act, $14,798,000 has been provided for these purposes.

Livestock loans have marked the largest increase in any classification since 1950. The total of loans for that purpose, which amounted to $3,815,000 at the end of 1950 had reached a total of $8,440,187 at September 30, 1952. The amount has more than doubled in those 22 months of operation.

Improvements to and developments in connection with Canadian farms, valued at $1,010,109, were financed under the act in 1951. The loans for this purpose were $694,460 and were made for a variety of purposes, the most important of which is the clearing and breaking of new land. The extent to which the act has been used for this purpose is such that to the end of 1951, 373,641 acres had been brought under cultivation with 7,764 direct loans for this purpose. In addition, loans under the act have been made for a considerable amount of machinery and equipment for this same purpose. No record of the acreage brought under cultivation as a result of the purchase of this machinery is maintained, but it must be substantial.

In conclusion, I believe hon. members will agree that this legislation has done very much to improve the economic status of the Canadian farmer. Anything that helps the farmer contributes to the economic welfare of all Canadians. In addition, the expanded mechanization and electrification of Canadian farms and improvements to farm homes have added much to the farm family's way of life.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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PC

James Arthur Ross

Progressive Conservative

Mr. Ross (Souris):

I should like to say a word in reference to this proposed legislation. As the parliamentary assistant has pointed out, this has meant a great deal to

Farm Improvement Loans Act the agricultural areas of this country. He pointed out the great amount of credit that had been issued in western Canada as a result of this legislation. I know some communities in western Canada where a great deal of the farm implement business has been financed through this Farm Improvement Loans Act. I remember a discussion back in February, 1951, to which he referred, when we had had some six years of the operation of this legislation. I think the amount of money and the percentage used for the purchase of farm implements were comparable to the figures he has given for the period since that date. The same applies to livestock. It is rather surprising that such a small percentage has been used for the construction or the repair of farm buildings under this set-up.

Since the act was first brought into being in 1944 there has been a great increase in inflation in this country. The maximum individual loan provided under the act is $3,000. I do not think that is adequate under present-day conditions, especially when one takes into consideration the price of the big farm implements themselves. The parliamentary assistant dealt with the matter of tractors and combines; but the self-propelled combine, for instance, which is in very great use in western Canada today, costs almost twice as much as it did at the time this legislation was enacted. Likewise the diesel tractor is at least 80 per cent higher today than the retail price of the machine at the time this legislation was enacted.

I am wondering whether the government has given any consideration to increasing the individual maximum loan limit to more than $3,000. I should think they might well increase it to at least $5,000 at this time. As proof of that necessity the parliamentary assistant will realize that at the last session of parliament an amendment was made to the Canadian Farm Loan Act, which is a different form of legislation for financing the purchase of land for farming purposes. If my memory serves me right-I have not checked on this-I think the original maximum individual loan was increased from $5,000 to $10,000; in other words the amount was doubled. If that was necessary at that time, I think it is equally necessary that the individual maximum provided under this act should be increased to some extent, and I would suggest at least from $3,000 to $5,000. Can the parliamentary assistant say whether consideration has been given to that matter? I shall have some other questions later on.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

Jean Lesage (Parliamentary Assistant to the Minister of Finance)

Liberal

Mr. Lesage:

Yes, consideration has been given to that matter. In considering the possibility of increasing the ceiling of $3,000

Farm Improvement Loans Act on individual loans, the government has taken into account the amount of pressure from farmers to obtain maximum loans of $3,000. I hold in my hand a table showing all loans in the amount of $3,000 which have been made since the inception of the act, to September 30, 1952. With the permission of the committee I should like to have this table printed in Hansard at this point.

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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LIB

René Jutras

Liberal

Mr. Jutras:

Is that for all provinces?

Topic:   FARM IMPROVEMENT LOANS ACT
Subtopic:   PROVISION TO EXTEND OPERATION FOR A FURTHER PERIOD, ETC.
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February 17, 1953