Mr. Chairman, this is the first opportunity I have had to congratulate you on your appointment to the high office you hold in this house. You have discharged your responsibilities since the beginning of the session with the efficiency and assurance of a master in the art of arbitration, and with the ease of a veteran parliamentarian. I wish you continued success in the execution of your duties.
Through you, Mr. Chairman, I should also like to join those who have already congratulated the Speaker in whom the house placed its confidence by asking him to conduct our proceedings. However, at the time the hon. member for Edmonton West was nominated for the office of Speaker, it seems to me that the Prime Minister made an incorrect statement when he praised and commended that candidate. I must point out that contrary to what he said then, it is not the first time that a French speaking Canadian representing a riding outside the province of Quebec has been appointed Speaker of this house. As a matter of fact, in 1904 the House of Commons elected to the office of Speaker the member for the riding of Ottawa, the Hon. N. A. Belcourt, a politician who left an indelible mark in the history of our country and whose memory we shall always cherish with emotion and gratefulness.
Mr. Chairman, since the beginning of this debate, a few days ago, we have heard an impressive number of speakers outdoing each other in eloquence and all agreeing at least on the necessity of financial help provided by the federal government to Canadian agriculture through farm credit. They all agree on
the principle of a legislation aimed at providing essential financial help to farmers. But we believe that the Farm Credit Act, 1959, even though it was inspired by the best possible intentions, did not prove to be, in practice, the complete answer to credit problems of farmers. When such legislation does not entirely meet the needs of the people which it is intended to protect, the legislator ought to think it anew, to give it further consideration and, without rejecting it altogether, at least to correct the weaknesses revealed by its use.
One would have to be deaf, blind or in bad faith not to recognize that many farmers in eastern Canada are not satisfied with the act under its present form or with the way it is being applied. The complaints made in this house by so many members speaking on behalf of their electors from farm areas cannot all be figments of imaginative minds. How could this dissatisfaction be denied? And yet, among the hon. members who, in this house, support the government, Mr. Chairman, those seated on your right have given the impression, in their speeches during this debate, that they feel our farmers no longer have any problems.
Thus, each time somebody in this house refers to difficulties in certain areas or to our farmers' sad plight, certain government supporters-those on your right, Mr. Chairman-raise cries of protest, as if those words were aimed at them, as if they felt responsible for those hardships.
Mr. Chairman, the lengthy discussions we have had until now will not have been in vain, if government supporters, from either side, accept our proposal to refer the bill to the committee on agriculture, where it will be possible not only to submit to the attention of the government the practical difficulties brought about by the existing act, but also to take part in the drawing up of a legislation better suited to the economic requirements of our farm population.
When the Farm Credit Act was passed by parliament in 1959 the specific object of the legislation was declared to be:
-to assist Canadian agriculture to voluntarily reorganize itself into economic family farm units, each of sufficient size to be capable, under the management of the owner, of producing sufficient income to pay operating and maintenance costs,
provide a good standard of living, and to repay the loan necessary to set up such a unit, within an appropriate period.
The important words in this statement made by the then minister of agriculture were his reference to the reorganization of family farm units. No one, of course, can overemphasize the vital role of the family farm as an element of economic and social stability. Preservation of the family unit's role in Canadian agriculture was the declared goal of the original legislation. This was the high purpose to which the legislation was officially dedicated. I pressure that this resolution, by increasing the working capital available to the corporation, proposes to further the same principle.
To be sure, the proposal to safeguard Canadian agriculture against the gradual disappearance of the family farm was commendable in every possible way. However, one might well ask at this juncture if the Farm Credit Act has achieved this main original purpose. It is my submission that the statute, since it was enacted in 1959, has achieved just the opposite result to the one it had been intended to produce. In point of fact the number of farms has been going down steadily in recent years, to the point where the agricultural population of Ontario represents a mere 8 per cent of the total population of the province. During the five year period ending in 1961, and including 1961, the number of farms in Canada decreased by approximately 15 per cent, falling from
575,000 to 480,000. In Ontario the number has decreased in the period from 1956 to 1961 from 140,600 to 121,000, a reduction of 14 per cent.
The facts behind this reduction in the number of farm units in Canada and in Ontario are entirely economic in nature. The most important of these facts is the practical unavailability of credit to the large number of farmers on small holdings who are not prepared, for good and valid personal reasons, to tackle expanded operations, additional land purchases, to take on the acquisition of increased herds and other costly expansion schemes which are actually the normal prerequisites to the approval of loans under the Farm Credit Act.
According to the last report of the corporation, the average amount of approved loans has increased as follows: 1957-58, $5,748; 1958-59, $6,273; 1959-60, $7,498; 1960-61, $10,846; 1961-62, $11,652. The significant fact in these statistics is the very considerable increase in the size of the average loan following the enactment of the Farm Credit Act. The average individual loan increased by
Farm Credit Act
44 per cent from the year 1959-60 to the year 1960-61. In Ontario the average farm credit loan in 1961-62 was $12,367.
Now, Mr. Chairman, there is nothing wrong with the corporation or the Department of Agriculture or any department of the government advancing $12,367 to a farmer who wants to expand his operations. In fact some of us feel that the present ceiling should be increased to take care of cases where the appraised value is much in excess of $20,000. But the typical loan now is the large loan, and there is very little room left for assistance to the average owner of a small holding who does not want to embark upon the considerable business venture which is represented by a $12,000 or $15,000 farm expansion. I repeat that the weakness of this type of loan is that it affords financial help to a limited group of individuals and does little for the no less deserving farmer who, for good reasons such as personal health or family circumstances, or the type of operation he conducts, may not wish to undertake an expansion program, but who may yet be in dire need of financial assistance to meet immediate commitments. The act as it now operates leaves a vacuum in the field of small loan assistance to the majority of farmers who operate family units. The act encourages the development of larger holdings, and thus carries a large part of the responsibility for the serious reduction in the number of family farms.
At the outset of this legislation, the committee was told that the loans would be advanced for a number of purposes, including land purchases, payment of debts, improvements, and the purchase of livestock and equipment. However, it is interesting to note that during recent years the moneys advanced by way of farm loans have been used in ever increasing proportion to acquire new lands. In 1957-58, on the average, 27.7 per cent of the mortgage moneys went toward land purchase; four years later, in 1961-62, the figure has more than doubled and 57.8 per cent of moneys lent are used for the purchase of additional lands. Only 4.5 per cent of moneys advanced now go toward livestock and equipment purchases.
It is obvious that the proposal to increase the capitalization of the corporation is deserving of support, inasmuch as and to the extent that it will encourage all those who are engaged in agriculture to stay on the farm. But I think the corporation should seize on the opportunity given to it by the increase in its working capital to liberalize the approval of loans, so as to reach out and help all those
Farm Credit Act
on small holdings who cannot afford the luxury of a $12,000 or $15,000 mortgage debt, but who are in very real and immediate need of financial help.
After the last increase in the capitalization of the corporation the amount actually lent increased by 13.3 per cent, but the number of persons helped increased by only 5.4 per cent. Thus the increased funds were used mainly to increase the size of the loans rather than to help more people. Let us hope that this further increased capitalization will not again result primarily in higher loans, but rather in a larger number of individual loans and in a larger number of farmers helped and assisted.
I further think that I should bring to the minister's attention the prolonged delays which happen too often after the loan has been approved, until the time when the required amount is actually paid to the borrower. I do not know who should be blamed or held responsible for those delays which are often a cause of serious trouble and even considerable damage for those farmers. Delays of six months and over after the loan application is approved are, in fact, quite common. Indeed, I would invite the minister to tell us what the average period has been for the united counties of Stormont, Dundas and Glengarry, between the day when the official request was signed by the borrower and the day when the transaction was closed and the money handed over to the borrower; I should like to have that information for the loans approved in those three counties in 1961. I would be very surprised if the figures in that regard did not confirm the general opinion that, in practice, the administration of the Farm Credit Act is too often unfair, because the borrower is subjected to a system of delays which can only harm him.
It is therefore imperative, Mr. Chairman, that provisions be made to accelerate the examination of applications submitted to the corporation, and the eventual paying out of the loan.
I therefore suggest, first of all, that the administration of the act be made more liberal, and that the act itself be amended, to the extent deemed necessary, so as to facilitate loans to the small farmers and, in this way to put a stop to the tragic erosion of the family farm system; and, second, that the act be administered so as to accelerate the approval and paying out of the loans.
Mr. Chairman, only if this matter is referred to the committee on agriculture can these proposals which I have made, and others
which have been submitted in the course of this debate, receive appropriate consideration; and only in this way can the bill be of real and valuable assistance to over-all prosperity and progress in the farming communities of Canada.
Topic: FARM CREDIT ACT
Subtopic: PROVISION FOR INCREASE IN LENDING CAPACITY