Mr. Speaker, it is a pleasure to address an issue of great importance to my constituents. I will be raising questions that the government must answer before we can continue the debate. I look forward to hearing the answers which will, hopefully, be forthcoming.
For those watching on television, I will outline what we are debating today. Bill C-25 is an act to amend the Farm Credit Corporation Act and make consequential amendments to other acts that affect this area.
The purpose of the bill, as outlined by the government, is to modify the role of the Farm Credit Corporation. The bill proposes changes to three key areas.
The lending role of the FCC would be expanded to allow it to lend to businesses which are not directly involved in primary agricultural production and in which farmers are not necessarily the majority shareholders.
The lending role of the FCC would also be expanded to allow it to provide equity financing. This could be accomplished by allowing the FCC to hold non-fixed assets, for example cattle or other things, as collateral. Bill C-25 would formalize the FCC's leasing ability which could include farm land.
This is of primary importance to the people of Saskatchewan. I looked at some of the figures put out by the Farm Credit Corporation. Saskatchewan alone has $1.3 billion in loans. That is second only to Ontario, which has $2.1 billion. The other provinces fall in line. Alberta and Quebec are next with a little under $1 billion in assets in the portfolio.
Because that is of such critical importance to the people of Saskatchewan, and with the farm crisis we are currently experiencing, it is important that the government handle the issue very carefully. We need to ensure that primary producers, farmers of Saskatchewan, are properly protected and that we do not move away from properly serving them through the Farm Credit Corporation.
The bill before us would expand the focus of the Farm Credit Corporation past its original mandate of providing financial services only to family farms and businesses directly related to primary production. We need to ask whether the Farm Credit Corporation's involvement should go beyond direct farming operations and, if so, how primary producers would be protected.
My colleague from B.C. who is sitting beside me would ask the same question in relation to things that go on in B.C. People in the Maritimes would also like to know how they would be protected. They would like to know if the focus of the FCC would continue to be on farmers and their needs.
If we extended the FCC's lending abilities beyond primary production the bill would bring the Farm Credit Corporation into direct competition with private lending institutions and make it overlap with other government institutions such as the Business Development Bank.
In the little town I come from there is a credit union that was established many years ago to serve the clientele in that area. It is a co-operative of sorts. I need to know if the FCC will directly compete with organizations which were established to serve local people and which have done an excellent job of doing so. Sometimes a good thing can undermine one that is even better. We need to ensure that does not happen.
There is tremendous openness for interpretation in some of the bill's clauses. I will read a section from the bill:
The purpose of the Corporation is to enhance rural Canada by providing specialized and personalized business and financial services and products to farming operations, including family farms, and to those businesses in rural Canada, including small and medium-sized businesses, that are businesses related to farming. The primary focus of the activities of the Corporation shall be on farming operations, including family farms.
It sounds wonderful. It sounds good. It is an intention that we could never disagree with, but years down the road how will it be interpreted? What will a business related to farming include? What will it consist of?
Unless we have an assurance that somehow primary producers, farmers, will be protected, we would have difficulty supporting this idea. The idea is great, but we need to know what will happen and how it will be interpreted in the future.
We also note Bill C-25 that we are discussing will formalize the FCC's ability to own and lease land. The FCC has stated that this is not the intent of the amendment. It claims that the leasing provisions are for equipment. However, again the legislation does not make this clear. It can give the government the mandate to make changes behind the scenes, to slip in changes that would affect agriculture very adversely. It is not like other legislation that is often brought before the House. It is enabling legislation.
Through the administration of the bill many changes can be made that were not anticipated when the bill was debated in the House of Commons and often received the support of many members. We need to know if this will give the FCC the ability to begin to own land, possibly for long periods of time, without any limit as to how long it can hang on to the land.
Will this inflate the price of land and cause hardship for many farmers who right now have a difficult time competing with those who are not directly involved in agriculture? We need to know if that will be the case. We do not see any limitations within the bill that address some of these concerns. Will the FCC be allowed to permanently hold and lease land that could result in the market value of farmland increasing and hurting primary producers?
Those may not sound like major concerns at this point but years down the road, once the legislation comes into full effect, it could hurt the people involved across Canada. Allowing the FCC to permanently hold and lease land may provide that corporation with the incentive not to pursue every other possible means to allow farmers who are experiencing financial difficulty to stay on the land. In short, the bill could provide the FCC with the incentive to prematurely foreclose on Canadian farmland.
Will the FCC continue to look at its mandate to help farmers or will it become more involved in ensuring that the corporation is financially successful? That could have a very negative effect. We need to have the assurance and the proper amendments need to be made so that farmers have the guarantee that it will not move away from its mandate.
I read the clause in the bill which can be interpreted in many other ways. We would agree that businesses in rural Canada, including small and medium size businesses and businesses related to farming, should get the help they need, but how far away from farming does a business have to be before one begins to say it is not really related to farming?
Will the Saskatchewan Wheat Pool be eligible for loans under the legislation? I would like to know. I do not know. We are asking some tough questions that need answers.
Under the current legislation, the FCC will become a significant landowner. In 2000 the FCC owned over 360,000 acres. Guess where most of that farmland was owned? Some 95% of it was in the province of Saskatchewan, the province that is experiencing the most difficulty right now in the farm crisis. Not to belittle the problems that farmers are having in Manitoba, Alberta and across the country, but this is having a major impact because of the dependence on grain and oilseed crops in the province.
While it is impossible for the FCC to avoid holding land for short periods of time, the act should somehow explicitly state that the FCC would divest itself of any holdings as quickly as possible.
Bill C-25 also extends the FCC's lending ability into the area of equity financing. This would be done by allowing the FCC to hold non-fixed assets such as cattle as collateral for loans. This change would allow the FCC to provide farm financing to primary producers who are not eligible under current legislation. In many cases this would provide financing that would not be available from private lenders. This is a very positive change to the legislation. The funding that would often be limited to primary producers would no longer be available.
In the Canadian Alliance policy we state very clearly that we will foster a healthy economic environment for the benefit of consumers by pursuing free and open trade at home and abroad, including the elimination of interprovincial trade barriers.
We will withdraw government from areas of the economy where the private sector could deliver the same services more efficiently. We will end the unfair practice of providing subsidies to industries, businesses and special interest groups.
We do not want the government to compete with areas in the private sector that are providing a good service and possibly undermine that service. That is what we are saying in our policy and we stand by that.
We will withdraw from areas in the economy where the private sector could deliver the same services more efficiently. I already pointed out that they might be competing with another institution, namely the Business Development Bank.
Will Bill C-25 take away the primary focus of the FCC from providing credit to primary producers? If that were to happen, we as Canadian Alliance members of parliament believe that this would be a shift in the wrong direction. This would be a move away from where we should be moving.
The FCC should not be providing funding for non-farming operations if it hurts farmers and primary producers. Lending institutions are already in that area, for example the Business Development Bank of Canada.
We in the Alliance Party do not want the Farm Credit Corporation under Bill C-25 to go into direct competition with private sector lenders. That would be wrong and that would get the government involved in areas that it should not be involved in. That is a basic policy area of the Canadian Alliance.
The bill formalizes a lot of the FCC's leasing ability. We have to be very careful. Short term ownership of land is unavoidable in some cases, but the FCC should not go into the business of owning farmland in the long term. It could inflate the price of land and hurt the whole agricultural sector. This might make it more difficult for farmers and for primary producers to get credit where they normally would be able to access that credit.
I have a couple of other questions, but the key question still needs to be asked and has to be answered by the government. Does the bill ensure that farmers will be properly served? Will farmers have to compete for capital now that they normally did not have to compete for before?
I need to mention something else. Will Canadian taxpayers be on the hook for loans that would not normally have been made but would be made and in turn be a higher risk loan? Would taxpayers be on the hook for any bad decisions made?
I mentioned about this being enabling legislation, enabling the government to do things behind the scenes that it would not openly do. I am noted for following the Firearms Act issue. One thing I have found through that piece of enabling legislation is that the government has brought forward many things it originally said was not its intention, such as private police and enforcement agencies. The kinds of things we were assured would not happen are in fact happening.
What does that have to do with this legislation? Will this bill be an open book for the government to bring in government policy through the back door that may hurt farmers but may not be directly visible at this time? We need to have that kind of protection. Are the changes here in the best interest of farmers?
Will adequate provisions be made in Bill C-25 that would prevent the FCC from bailing out large, non-farmer owned businesses at a future date? I do not see that protection right now. Large corporations could possibly access capital for a bailout that would hurt farmers directly. A large agribusiness, possibly even a multinational agribusiness, could access the money unless there are proper provisions put in place that this would not happen.
If we read the legislation it sounds good, but it could be interpreted years down the road in a very different manner than we are expected to interpret it at this point. Would a limit be set on the size of loans offered to businesses that are not majority owned by farmers? We need to have that protection put in the bill.
Would a farm equipment dealer be able to access the resources of the Farm Credit Corporation? Could these businesses access capital through other lending institutions? We do not know what checks and balances will be provided to ensure that certain companies will not be able to access the capital, which would then remove that capital base or pool of capital from primary producers.
All these things need to be addressed. I should like to hear some of these questions answered by the government. I see that my time is up. I have asked what I think are the key questions farmers in my riding are asking. I would like the government to answer those questions today.