Mr. Speaker, I rise today to speak to Bill C-25, an act to amend the Farm Credit Corporation Act. As a mother living on a family farm and who has lost two sons from that farm, I speak passionately about the Farm Credit Corporation and the institution that it is in western Canada and for farmers.
It provides services that are not available through other more traditional financial institutions. Farmers have come to rely upon the Farm Credit Corporation. The bill would expand the focus of the Farm Credit Corporation past its original purpose of providing financial services only to family farms and the businesses that are directly related to primary production.
The lending role of the Farm Credit Corporation would be expanded to allow the corporation to lend to other businesses that are not necessarily directed or involved in primary agriculture production and do not necessarily have farmers as major shareholders. It raises some serious issues with respect to government getting involved in areas where the private sector already operates.
By extending the lending abilities of the Farm Credit Corporation beyond primary production, the bill would bring the Farm Credit Corporation into direct competition with private lending institutions and would overlap with other government institutions such as the Business Development Bank of Canada.
The problem with the proposal is that it lacks clear definition. It is not stated clearly. It raises more questions than it answers. For example, if the Saskatchewan Wheat Pool needed an infusion of cash, would the provision allow the Farm Credit Corporation to become a major lender to the Saskatchewan Wheat Pool? That is of great concern to a lot of people. The Canadian Alliance has always opposed government expansion into areas already competently served by the private sector.
Bill C-25 would formalize the ability of the Farm Credit Corporation to own and lease land. The Farm Credit Corporation has stated that it is not the intent of the amendment. It claims the leasing provisions would be for equipment. However it is not made clear in the legislation.
It is not appropriate for the federal government to be the owner of farmland. Canadian farmers are supposed to own farmland. Allowing the Farm Credit Corporation to permanently hold and lease land could result in the government holding and influencing the market value of farmland. We have seen that lately in our own district.
Allowing the Farm Credit Corporation to permanently hold and lease land may also provide the corporation with an incentive not to pursue every possible means to allow farmers to stay on the land if they are experiencing financial difficulty. In short, the bill could provide Farm Credit Corporation with an incentive to prematurely foreclose on farmers.
Even under the current legislation the Farm Credit Corporation has become a significant landowner. In 2000 the Farm Credit Corporation owned over 360,000 acres in Canada. Ninety-five per cent of that land is held in Saskatchewan, the province that has been the hardest hit by the farm income crisis. That is scary. The last thing Saskatchewan needs is for the federal government, through the Farm Credit Corporation, to start distorting the market value of farmland.
While it is impossible for the Farm Credit Corporation to avoid holding land for short periods of time, the act should explicitly state that the Farm Credit Corporation should divest itself of any holdings as quickly as possible. My party hopes to convince the government to bring forward amendments to the bill to clarify this situation.
Bill C-25 would extend the lending ability of the Farm Credit Corporation into the area of equity financing. It would be done by allowing the Farm Credit Corporation to hold non-fixed assets such as cattle as collateral for loans. This change would allow the Farm Credit Corporation to provide farm financing to primary producers who are not eligible under the current legislation. In many cases it would provide financing that would not be available from private lenders. It is a positive change to legislation of which my colleagues and I are supportive, provided financing is limited to operations involving primary producers.
A point not directly addressed by the legislation is the issue of fairness. In many cases the Farm Credit Corporation treats supply managed sectors differently than it does sectors not governed by supply management. This is something that my party is opposed to. It would be far better for the Farm Credit Corporation to treat equally all producers, regardless of which sector they may be a part.
Once again we have a situation where the Liberals have introduced provisions that we object to for sound reasons coupled with reasons we support. Extending the equity financing capability of the Farm Credit Corporation to non-fixed assets like livestock is certainly a positive move and one which we support. However, if we put that up against extending the ability of the Farm Credit Corporation to lease and hold land and to lend beyond primary producers we have a stalemate.
As a result, the Canadian Alliance has decided to oppose the legislation unless significant amendments are made to clarify the problems I have identified.