Debates of June 7th, 2001

Farm Credit Corporation Act

[The Deputy Speaker]

Is that agreed?

[Some hon. members]

Agreed.

[Kevin Sorenson, Canadian Alliance, Crowfoot, AB]

moved:

Motion No. 1

That Bill C-25, in Clause 5, be amended by replacing lines 12 to 18 on page 2 with the following:

“services and products to farming operations and to those small and medium-sized businesses in rural Canada that are businesses related to farming. The primary focus of the activities of the Corporation shall be on farming operations.”

Motion No. 2

That Bill C-25, in Clause 5, be amended by replacing lines 32 and 33 on page 2 with the following:

“that complement but do not directly compete with those available from the private sector, or that complement but do not duplicate those provided by other publicly owned institutions;”

Motion No. 3

That Bill C-25, in Clause 5, be amended by adding after line 44 on page 2 the following: f .4.1) dispose of farmland acquired by it, provided that the disposal is at fair market value and is done as quickly as possible, and in any case no longer than five years, after the acquisition.”

Mr. Speaker, again it is a privilege to stand in the House to debate some amendments to Bill C-25, an act to amend the Farm Credit Corporation Act.

It was my privilege to attend committee meetings and to hear the witnesses. We were fairly apprehensive as we went into the exercise of looking at Bill C-25. After the committee meetings we were even more apprehensive and maybe more concerned about some of the legislation that was being brought forward in this change.

The first amendment is designed to address one of our party's most serious concerns about Bill C-25, that the corporation would lose its focus of providing service to farmers because of its involvement in off farm businesses.

One concern of the Canadian Alliance and other members is that the Farm Credit Corporation would move away from being directly involved to the extent it is now in the family farm into a new realm that is currently controlled or benefited by other corporations. Consequently we believe the legislation would allow the Farm Credit Corporation to fund, help and provide service to larger businesses.

According to the current wording of the bill, the FCC could loan money to any agricultural business no matter how large or lucrative. For example, if an application were made by the Saskatchewan Wheat Pool to the government, the government could conclude that the FCC could help with the financial requirements the Saskatchewan Wheat Pool would be after. The amendment would ensure that any services offered to non-farm operations would only be given to small and medium size businesses and not to large corporations.

In committee the FCC and government officials said they would have no reason to fund the Saskatchewan Wheat Pool. That would move beyond the FCC's mandate. However the legislation as it is would not limit or prevent that from happening. If that financing began to happen we would soon see that the family farm would be put on the back burner and would lose another opportunity for funding.

The second amendment is designed to ensure that the federal government does not actively compete with private financial institutions, banks or credit unions. One of the interesting facts that came out of our committee meeting was from representatives of Canadian credit unions. They made very clear that in a number of instances the Farm Credit Corporation was directly competing for business the credit unions had already had.

In one instance the Farm Credit Corporation after hearing what interest rate percentages the credit union was offering competed by lowering its interest rate.

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Competition is good.

[Kevin Sorenson, Canadian Alliance, Crowfoot, AB]

Competition is good. I hear the Liberals questioning and heckling about competition. We love competition and a competitive economy, but businesses do not want to compete with the federal government. They do not want to compete with their own tax dollars. They do not want to compete directly with a federal corporation or institution in which they have put tax dollars.

We are also concerned that the expanding powers of the FCC would simply duplicate the existing authority of other public financial institutions such as the Business Development Bank. The Business Development Bank, which realistically does not have a great track record, would then perhaps move out of areas dealing with agriculture.

It would appear that Farm Credit Corporation would simply deal with agriculture and not the farm. Its name is to be changed to Farm Credit Canada. Maybe it should just be changed to agriculture because they have forgotten the family farm.

Our amendment would ensure that FCC's new powers do not duplicate the authority problem that is currently present in the Business Development Bank. We are also very concerned about one aspect which we brought to committee and which the hon. member for Cypress Hills—Grasslands raised in the House on a number of occasions.

We are concerned that Bill C-25 will allow Farm Credit Corporation or Farm Credit Canada to become a significant land holder. The amendment is designed to ensure that the federal government does not become a major holder of Canadian farmland. By so doing it would not influence the market price of land.

I think we would agree on all sides of the House that we have seen places and times in Saskatchewan when there was a great land bank. The government owned land that had been turned back to it. We want to see changes that would prohibit the owning of farmland by the government, thus influencing the market value of land.

Our concerns on this subject were increased during the clause by clause debate in committee. The chairman of FCC indicated that it could consider taking possession of land in the government's yet to be announced plans to facilitate intergenerational transfer of farmland. FCC and the government should have no objections to this motion because the FCC has stated in testimony before the committee that it was not its intention to become land holders.

We have seen time and time again that intentions may be the best, but obviously sometimes legislation allows for loopholes or just the opposite. Farm Credit has also testified that it works to ensure that land is sold at prevailing market prices and that FCC does not influence land values. All members of the House, even those on the other side, believe that the longer a federal government corporation holds on to land it will not sell it for this price because it has money vested in it. As long as that happens it will influence the value of that land on the market.

Motion No. 3 is similar to an amendment we brought forward at committee. With the consideration and the wisdom of the House I believe that all three amendments and recommendations will be accepted.

[Suzanne Tremblay, Bloc, Rimouski-Neigette-Et-La Mitis, QC]

Mr. Speaker, I am hugely pleased to speak today in the context of Bill C-25, an act to amend the Farm Credit Corporation Act and to make consequential amendments to other Acts.

I am also pleased to announce to my colleague in the Canadian Alliance that the Bloc Quebecois will support the three amendments he has proposed. Both the Bloc Quebecois and the Canadian Alliance tried everything in their power, while the committee was studying the bill clause by clause, to propose amendments. In some instances, the Canadian Alliance presented an amendment similar to our own, and we withdrew ours in order to debate theirs.

Once again, we had the annoying experience of running headlong into an arrogant government, and an even more arrogant head of the corporation.

We noted that, basically, we were coming to parliament, but the die had already been cast. The members can take that as they will, that is their business.

We came here to legislate what the board of the Farm Credit Corporation had already decided. So much so that, at one point, the Bloc Quebecois had proposed an amendment to limit loans to $1 million. In discussions, we went as far as $5 million; actually, FCC loans should not exceed $5 million.

I know members will be very interested to learn that the head of the Farm Credit Corporation said “There is no point your introducing this amendment, my board of directors has already decided that the maximum loan would be $20 million”. Of course, we looked completely silly wanting to limit loans to $1 million or $5 million, when they had already decided they could lend up to $20 million.

That means that the Farm Credit Corporation wants to change its mission. Until now, the Farm Credit Corporation had been helping primary producers. It tried to help businesses which, very often, had not been able to get loans from traditional financial institutions. The FCC was there for the small farmer, the family farm that had problems making it.

Now, the Farm Credit Corporation will have a new name. It will be called Farm Credit Canada. It is intended that this new corporation will lend up to $20 million. It remains to be seen to whom that money will be lent. This suggests that we could have unpleasant surprises, because the Farm Credit Corporation could end up funding businesses that are either upstream or downstream in relation to traditional farm production and to traditional small farms.

According to the figures that we were given, currently, 94% of the corporation's loans are made to primary types of farm productions. We wanted to put it in the act that we were giving them a chance. We said that at least 80% of the loans should be made to primary farm productions.

We are truly concerned that the Farm Credit Corporation will fund mega-industries. When we look at how this government is behaving, that concern is justified. Since the past is indicative of the future, we are justified in being concerned by the government's action.

Then the government told us “We held consultations in Quebec. Everyone in Quebec agrees with this”. Everyone in Quebec was opposed to Bill C-7, but it did not stop the government, which is now telling us that “Everyone in Quebec agrees with us. They all agree with the Farm Credit Corporation”.

We contacted the UPA, or Union des producteurs agricoles du Québec. In a press release—not written by the Bloc Quebecois, but by the UPA—the union said:

We have reservations about the Farm Credit Corporation broadening its current mandate to include the funding of non-farming businesses that are not majority owned by farmers and to provide venture capital to businesses related to agriculture.

That is the UPA's position, not what we were told, which was that the UPA was in complete agreement with the government's bill.

I went further in my quest to check out what I was told. I always make a point of checking things out. The Fédération des caisses populaires Desjardins du Québec also told us it had reservations about the Farm Credit Corporation broadening its mandate to include companies upstream and downstream of agricultural production. In the lower St. Lawrence region prior to 1998, the corporation was not very present and it existed alongside the Société de financement agricole du Québec and the financial institutions present in the lower St. Lawrence region.

In fact, the corporation's interest rates were higher, credit conditions were more stringent, and the Farm Credit Corporation was less aggressive on the regional market. In those days, the Farm Credit Corporation was an alternative for farmers when they were turned down for a loan by the financial institutions or the Société de financement agricole du Québec.

Since 1998, the situation has changed completely. It must be remembered that, when the Farm Credit Corporation lends money, it gets it out of the pockets of Canadian taxpayers; this is the public's money. The corporation takes this money and engages in unfair competition with caisses populaires and financial institutions.

What does the Farm Credit Corporation do? It sends its officials out to the 5th, 6th or 7th concession to visit farms. They knock on doors and ask “You wouldn't happen to need any money, would you?” No longer need a farmer go and visit the banking institution. Now the banking institution leaves Ottawa and heads for the best farms in Quebec. They are hard to miss.

They find the best, most productive farms, knock on the door and ask “Could we by any chance lend you some money? Do you happen to need any? We will give you a great deal. We will lend it to you at at least 0.5% less than any other financial institution”.

In the City of Laval, they even went so far as to make a loan at 1.5% under the going rate; in Nicolet, for some loans the rate given was 1.1% under.

When we are told that people in the financial institutions are satisfied, it remains to see what the banks have to say. The banks submitted a brief to the Standing Committee on Agriculture and Agri-Food in which they stated:

Canada's banks are in favour of competition in the marketplace by institutions that are all subject to the same regulations.

We are, however, of the opinion that government agencies such as the Farm Credit Corporation, which operate thanks to government support and are not subject to the whole range of prudent regulatory requirements, ought not to be mandated to be in direct competition with private sector financial institutions.

Such a mandate falsifies market competition by enabling such suppliers of services to carry out activities under conditions that are not only different but less stringent than those applied to others in the same field.

Here we have a bill that is extremely dangerous for the financial institutions of Quebec and Canada. This will be an institution, an agency, in unfair competition with the financial institutions, which are governed by very, very strict rules.

As a result, although we in the Bloc Quebecois will support the Canadian Alliance amendments, we are unfortunately obliged to not support the government in the passage of Bill C-25.

[Greg Thompson, Progressive Conservative, New Brunswick Southwest, NB]

Mr. Speaker, I rise on a point of order. I seek unanimous consent of the House to introduce a motion, seconded by the member for South Surrey—White Rock—Langley, that the House of Commons resolves that Nelson Mandela be declared an honorary citizen of Canada and that a message be sent to the Senate requesting that house concur in this resolution.

[The Deputy Speaker]

Does the hon. member have consent of the House?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[Dick Proctor, NDP, Palliser, SK]

Mr. Speaker, I am pleased to take part in the debate this afternoon to make amendments to the proposed changes to the Farm Credit Corporation Act.

Some Canadians will know that the Standing Committee on Agriculture and Agri-Food has been considering this legislation over the past short while. We have heard from some of the groups that would be affected by the legislation. In opposition to what we have heard in the last two speeches, the New Democratic Party caucus does not have major concerns with what has been proposed.

The Farm Credit Corporation was established in 1959. Although it was originally the lender of last resort to family farms, that role has changed over the years. Probably most of those changes were introduced after 1993 when it became a self-financing operation.

The industry has been changing dramatically since the act was amended. There are active farmers in the House of Commons today who can attest to that only too well. There is an ongoing revolution in Canadian agriculture and perhaps around the world. It is more complex. There is much greater interdependency among suppliers, producers and processors than ever before.

Producers are growing new crops. In the standing committee this morning we had a lengthy debate on organic crops that have been multiplying enormously over the past 15 years or 16 years. They are growing new crops. They are diversifying into livestock production. They are entering into long term contracts with suppliers and buyers. Farmers are forming alliances to increase their purchasing and selling power. These are called new generation co-ops among other things. Some producers are exploring new generation co-ops and others are expanding into value added manufacturing.

In this environment producers need a broader and more complex range of financial and business management services to help them achieve the long term success they are striving for. Farm related businesses need greater access to capital, including equity and venture capital in order to achieve that growth.

In the winter of 2000 the standing committee was told by the chief executive officer and other senior officials of Farm Credit that they had held a number of stakeholder consultations with more than 100 national and regional organizations to discuss the proposed changes to the legislation. Almost all those organizations, we were told, were supportive of the amendment. Their main concern was that Farm Credit Corporation should continue to maintain its focus on family farms and on primary production.

We were told that one farm organization which was strongly opposed was the National Farmers' Union. The NFU's main objection, as we heard it and understood it, was that the proposal before us would allow the Farm Credit Corporation to finance farm related businesses which were not farmer owned and controlled.

That is a significant piece of the proposed change to the legislation. Until now it has had to demonstrate amply that it is farmer owned and controlled. This change is one that the NFU believes would enable Farm Credit to act like a private lender with its only goal being that of maximizing its profits.

The NFU believes that Farm Credit should focus only on family farms. It is concerned that if Farm Credit is allowed to lend to agribusiness that is not farmer owned or controlled it will emphasize operations geared to the export market instead to domestic family farms.

We have considered that point. We listened carefully to people who made representations to the standing committee on agriculture. Notwithstanding the concern expressed by the National Farmers Union, notwithstanding what my colleagues from the Bloc and perhaps the Alliance said, we think on balance the changes are warranted and support them.

Before I get into the Alliance recommendations, there is a name change. The acronym FCC would be the same but it would now be called Farm Credit Canada. Farm Credit Canada would be allowed to provide financial services to farm related business on the input or output side of primary production. For the first time FCC would be able to lend money to non-farmers. That is a change as I mentioned a moment ago.

In addition, equity financing would be extended to producers and farm related businesses either directly or in partnership with others.

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

That is a good idea.

[Dick Proctor, NDP, Palliser, SK]

Yes, I think it is a good idea. This financing would be aimed mainly at new businesses on a venture basis. There would be a statutory limit on the percentage Farm Credit Canada would be able to take. There would also be a fixed date by which the FCC would be required to sell its share back to the majority owners of the business.

Farm Credit Canada would be able to offer a range of business management services to producers across the country either directly or in partnership. These consulting and support services would include business and financial planning, risk management, succession and estate planning.

The FCC's ability to offer lease financing directly or in partnership with agriculture producers would be clarified. Farm Credit Canada would be able to create subsidiaries to enter into partnerships with other organizations and offer expanded financial services.

Just on that point, we heard from the Credit Union of Canada. It was generally supportive of the legislation. We heard a different approach from the Bloc member about caisses populaires, and perhaps it was true, but the Credit Union of Canada represents caisses populaires, as I understand it, and was generally supportive of the provisions contained in the bill.

The corporation would also have access to additional financial management tools to secure its portfolio and fund additional services. Overall the changes are positive so long as Farm Credit Canada continues to focus on primary production.

I mentioned that those who came before the committee were largely supportive. Let me read into the record a couple of their comments. The Canadian Federation of Agriculture said it had no objections to the legislation. The Credit Union of Canada, to which I referred a minute ago, said it had formed a committee to study the legislation. During the consultation process it fully supported the proposals as long as credit unions could participate in some of the new services, equity financing and partnerships.

Although the NFU is concerned that Farm Credit Canada will soften its focus on family farms and primary production, the government and Farm Credit have made a commitment that farming and the primary producer would continue to be the main focus of the corporation's work.

We were told that 94% of Farm Credit Canada's lending is directed to primary producers. An amendment to the act requires that the primary focus of the activities of the corporation shall be on family operations including family farms.

I will move to the recommendations before us today. There are three from the Alliance. One is on family farms. The Alliance amendment, as we understand it, would remove the references to family farms. We believe it is important that a reference to family farms be maintained in the definition of the corporation's purpose and primary focus. Therefore we oppose Motion No. 1.

On Motion No. 2 the Alliance remains consistent in opposing any FCC financial services that it feels might compete with the private sector. We heard the member for Crowfoot on that point a few moments ago.

In my opinion this would be detrimental to the agricultural community. A number of private lending institutions in rural Canada have recently gone out of business. Some of them have been taken over by smaller credit unions, at least their work and their mandate. There is not a lot of competition out there. There is not a lot of choice for farmers to secure a loan. We oppose Motion No. 2.

We also oppose Motion No. 3. The Alliance was concerned that FCC could acquire large blocks of land through acquisition, which would be harmful for private enterprise. John Ryan, the very well respected president and CEO of Farm Credit Canada, responded directly to the concern at committee by stating that it was not the corporation's intention to acquire blocks of land or be in the land management or land banking business.

He also noted that young farmers in Canada suggested that as long as there was this kind of leasing arrangement there would be an opportunity for intergenerational transfer and for new farmers to get on the land. We support the bill and we oppose the three Alliance recommendations.

[Gerald Keddy, Progressive Conservative, South Shore, NS]

Mr. Speaker, it is a pleasure to speak specifically to the three amendments to Bill C-25 proposed by the Canadian Alliance Party. I begin by saying that all three Alliance amendments before us today were discussed and debated at committee, as I understand it, and were changed slightly and brought back to the House. Although the member of parliament for Cypress Hills—Grasslands has modified them slightly, he has not modified them enough to suit the member for Brandon—Souris, our agriculture critic, and therefore the tenets of the Conservative Party.

Motion No. 1 would actually remove the words family farm from the bill, as was stated by my NDP colleague. Members of the House and people across Canada have different definitions of what a family farm actually constitutes, but our party believes it is important for family farms to be recognized specifically in the mandate of the Farm Credit Corporation.

I have said at other times in the House that I grew up on a very small family farm. The farm I actually own today is one piece of land. It is a piece of woodland and not an actual piece of agricultural land. It is a very small piece of only 20 acres, but it has been in my family for five generations. My sons, if they inherit that property, would have that piece of land for a six generation.

There are those of us in the House who are not far away from the family farm. I am quite shocked and surprised the Alliance that claims to represent large segments of rural Canada would allow itself to be divorced or separated from the notion of the family farm, which I think many of us hold very near and dear to our hearts.

The family farm and primary production should be the primary focus of the activities of the Farm Credit Corporation, not simply farming operations, agribusinesses or something that is divorced and removed from the word farm.

Is that the next to go? Will it be not just family farms but farming operations altogether? Suddenly those of us who were farmers in another life will be not farmers any longer but producers. I am very proud to say I was a farmer and expect to be a farmer again some day, not a producer which does not mean anything. I could produce cardboard boxes. A farmer is a definition that holds a totally different meaning from the word producer.

By eliminating family farms from the clause would definitely be a step backward. It would actually do a disservice to family farms across Canada by omitting them from the bill. Furthermore, as was mentioned already, John Ryan, president of the Farm Credit Corporation, stated in the standing committee that discussions were held with the Canadian Federation of Agriculture on the wording of the bill and ultimately it was satisfied. He also stated:

So we clearly do, very seriously, take the fact that it's primary production that's our focus.

Even with that being said, we will not be supporting the motion.

Motion No. 2 speaks to the issue of competition. I find it difficult to believe that the Alliance Party has actually introduced this amendment again. The amendment is not only restrictive and limiting to Farm Credit Corporation activities but it speaks against the idea of competition. Perhaps it is another policy shift for the Alliance Party and now it does not support open competition.

The Farm Credit Corporation should be allowed to compete with other financial institutions. Competition is healthy. The mandate of the FCC has been significantly expanded since its creation. It is no longer a lender of last resort. Nor should it be. It has tailored its operations to the agriculture and agribusiness community.

If commercial banks want to enter those areas, and I think we should encourage them to do so, they are welcome. It is pretty difficult as a farmer to get any kind of serious loan from a commercial bank based on the merits of a farming operation. The competition will only benefit farmers in the end. Again the PC Party will not be supporting the motion.

Motion No. 3 speaks to the issue of farmland ownership. Once again this matter was discussed during committee deliberations. The amendment could place limitations on Farm Credit Corporation activities. Let us take the example of young farmers and the opportunity for an intergenerational transfer of farms: for one to be able to acquire land directly from family members and lease it back to them over a long period of time so they can eventually acquire ownership. The amendment could prevent it from happening if a time limit were imposed.

The president of the Farm Credit Corporation stated in committee that he would be quite comfortable with a five year limit. That was consistent with remarks he made at a previous committee meeting. The average time for land disposal at the Farm Credit Corporation is actually about eight months, which allows for more than enough time set out in the amendment.

On the basis of what the president of the Farm Credit Corporation said, the PC Party will consider the passage of the amendment, but it is certainly one that we do not look at lightly. We have deliberated on it and put some serious thought into it.

In conclusion, I urge all members of the House to remember that many of us in the agriculture business are representatives of family farms or people who are first, second, third, fourth, fifth, sixth generation, or even more, on family farms. For goodness' sake, let us remember the family farm is an important institution and should be preserved.

[Larry McCormick, Liberal, Parliamentary Secretary to Minister of Agriculture and Agri-Food]

Mr. Speaker, thank you very much for the opportunity to speak to the bill. Farm Credit Corporation has been very successful across the country and it certainly looks forward to working even more for the benefit of the farmers and the primary producers.

I will take a moment to note that I was very glad to hear that at committee in the past week or two one of my colleagues from the Alliance Party put the fact on the table that the Standing Committee on Agriculture and Agri-Food still has the reputation of getting along better for all the right reasons than any other committee, in support of farmers across the country. I trust that we can work together in future in the same way.

I will speak to Motion No. 1. Farm Credit Corporation's proposed amendment in Bill C-25 is consistent with the current legislation, with the exception of the following add-on:

The primary focus of the activities of the Corporation shall be on farming operations including family farms.

Farm Credit Corporation held consultations on the future role of FCC with over 100 regional and national groups across the country, more than 100 farm and agribusiness organizations and all major financial organizations in each and every province, as well as institutions and provincial governments. Over 400 individuals participated in the consultation meetings across Canada.

Yes, concerns were expressed that Farm Credit Corporation's focus could be diverted from the primary producer. However the Canadian Federation of Agriculture appeared before the House of Commons standing committee in regard to the bill. The CFA represents some 220,000 Canadian family farms, many in your riding, Mr. Speaker. The CFA asked that FCC maintain the focus on the primary producer. That is what the bill would do. The CFA's exact words were:

We believe that primary producers must always have the first priority in accessing FCC financing.

To ensure that the corporation continues to meet the needs of primary producers, FCC formulated the wording of the clause in collaboration with the CFA's board of directors. The wording of the bill expresses the concerns of the CFA word for word. Let me repeat that it is word for word. The wording is:

The primary focus of activities of the Corporation shall be on farming operations including family farms.

FCC recognizes the necessity of serving farm related businesses to benefit producers and rural communities. The corporation's number one focus will continue to be primary production. Currently more than 90% of FCC's financing is directed to farming operations.

According to Statistics Canada, 98% of farms are family owned and operated. This means that the great majority of FCC services is directed to family farms and to farm families. For this reason it is very important that the bill go forward with the wording as proposed by the FCC.

Because of the importance of the family farm for the social and economic fabric of rural Canada, the words family farm were specified in the legislation. The government supports the new legislation as an important contribution to sustainable growth in rural Canada and recommends that Bill C-25 not be changed to remove the words family farms from the legislation.

No one definition exists in common usage that clearly defines the levels of business enterprise. The continued growth of the value added industry means that the definition of small and medium sized enterprises will continue to evolve. FCC's role is to provide an environment for the growth of the agricultural industry to occur by continuing to meet the needs of the industry.

FCC's lending limit established by the board of directors is currently $20 million and has been since 1995. Limits such as these clearly indicate that all FCC loans will be to small and medium sized businesses related to agriculture. It should also be noted that FCC's average mortgage loan size is $106,704 to primary producers and $498,909 to agribusiness clients. The average non-mortgage loan size for personal property loans is $31,000 to primary producers and $42,000 to alliance clients. There are currently no plans to increase this lending limit. In fact our emphasis has shifted over the past few years from doing full proposals on our own to joint financing with other institutions. Therefore, the government supports the legislation.

With regard to Motion No. 2, as introduced by the Canadian Alliance, it is too limiting. I was glad to hear that my colleague from Palliser agreed. More than 100 organizations across Canada also agreed. We cannot agree to Motion No. 2 because farming operations are growing more complex and the marketplace is more competitive. In order to achieve long term success, producers and farm related businesses need access to a broader range of business management services.

Services can be significantly different by geography, making it difficult to serve those who need a particular service not available from other institutions in any given area. As a national organization, the FCC can dedicate its efforts to delivering services where services are required.

During the consultation process, it was identified that there was a gap in business services in rural Canada. Certainly we all agree with that. The Canadian Young Farmers Forum enthusiastically endorsed FCC complimentary services on a fee basis, while several groups noted that the FCC does not provide services already being offered in the private sector. As a result of this input, Bill C-25 states that the FCC's intent is to provide business services and products that complement those available from the public and the private sectors.

The business management services that the FCC proposes would complement existing services, not compete directly with other providers. The FCC would work in partnership with existing service providers to increase access to business services through its network of 100 offices.

One of the strengths of the FCC is that most of the people who work with the farmers and the producers have a farming or a farm related background and do a great job across the country. The FCC only intends to offer business management services where a clear need is identified.

The FCC would work in partnership with public and private sector organizations, wherever possible, to enhance the product and service offerings available to rural Canada. The FCC has a memorandum of understanding with BDC and has 27 partnership agreements with public and private sector organizations.

Over time, financing needs of producers and farm related businesses change quickly. Private institutions respond to providing services based on the profitability of products which can change based on the number of clients in a particular area and the level of competition.

The government will not support Motion No. 2 because it is too limiting. The government and I appreciate the hard work of all our colleagues from all parties.

It is good to be able to say that we will support Motion No. 3 as moved by the Canadian Alliance.

[Carol Skelton, Canadian Alliance, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, it is indeed a pleasure to speak on the amendments put forward by the Canadian Alliance to Bill C-25, an act to amend the Farm Credit Corporation Act.

Motion No. 3 reads:

That Bill C-25, in Clause 5, be amended by adding after line 44 on page 2 the following:

“(f.4.1.) dispose of farmland acquired by it, provided that the disposal is at fair market value and is done as quickly as possible, and in any case no longer than five years, after the acquisition.”

The Canadian Alliance is concerned that Bill C-25 would allow the Farm Credit Corporation to become a significant landholder. We are seeing that especially in the province of Saskatchewan. The amendment is designed to ensure that the federal government does not become a major holder of Canadian farmland and does not unduly influence the market price of land.

I have spoken to many farmers who have told me that the Farm Credit Corporation has had an effect on farmland prices. The hon. parliamentary secretary can come to Saskatchewan and visit my riding to see the truth.

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

I have been there and it is a great riding.

[Carol Skelton, Canadian Alliance, Saskatoon—Rosetown—Biggar, SK]

You have not been there long enough because—

[The Deputy Speaker]

Order, please. It is on the record that this committee has wonderful working relations. We also tend to take pride in our own working relations in the House. The parliamentary secretary just had the floor and the House was very attentive. I hope the same courtesy will be given to the member for Saskatoon—Rosetown—Biggar. I would guide or a little bit by reminding her to make her interventions through the Chair.

[Carol Skelton, Canadian Alliance, Saskatoon—Rosetown—Biggar, SK]

Mr. Speaker, our concerns on this subject were increased during the clause by clause debate in committee. The chairman of the FCC indicated that FCC could consider taking possession of land in the government's yet to be announced plans to facilitate the intergenerational transfer of farmland. As a mother who has lost two sons from the farm, I am very concerned about this.

The FCC and the government should have no objections to the motion because the FCC has stated, in testimony before the committee, that it is not FCC's intention to become a landholder. The FCC has also testified that it works to ensure that land is sold at prevailing market prices and that FCC does not influence land values. I know in my own riding that it does.

Motion No. 2 reads:

That Bill C-25, in Clause 5, be amended by replacing lines 32 and 33 on page 2 with the following:

“that complement but do not directly compete with those available from the private sector, or that complement but do not duplicate those provided by other publicly owned institutions;”

The motion is designed to ensure that the federal government does not actively compete with private financial institutions, such as credit unions and the banks.

During the committee review of Bill C-25, representatives of Canada's credit unions indicated that the Farm Credit Corporation currently actively competes for business. I know it does in my own riding. One witness testified that his credit union lost a customer because the FCC dropped its loan rate after learning of the rate offered by the credit union. The expansion of the FCC's powers would make this active competitive behaviour much more likely.

We are also concerned that the expanded powers of the FCC would simply duplicate the existing authority of other public financial institutions ,such as the Business Development Bank which, as we all know, does not have a good track record. The motion would ensure that the FCC's new powers would not duplicate the authority and problems of the BDC.

Motion No. 1 reads:

That Bill C-25, in Clause 5, be amended by replacing lines 12 to 18 on page 2, with the following:

“services and products to farming operations and to those small and medium-sized businesses in rural Canada that are businesses related to farming. The primary focus of the activities of the Corporation shall be on farming operations.”

This motion is designed to address one of our most serious concerns with Bill C-25; that the corporation could lose its focus on providing services to farmers because of its involvement in off-farm businesses.

According to the current wording of the bill, the FCC could loan money to agriculture businesses, no matter how large or lucrative. For example, the Farm Credit Corporation could give a loan to the Saskatchewan Wheat Pool if the government concluded that this was the direction in which they wanted to go. The motion would ensure that any services offered to non-farm operations would only be given to small and medium sized businesses and not large corporations.

The government and the FCC should not object to the motion because they have repeatedly stated that they have no interest in providing financial services to large corporations.

I ask members sitting opposite to look at our motions and, on behalf of the rural residents in my riding of Saskatoon—Rosetown—Biggar, to respect our opinion as farm people from western Canada.

[Elsie Wayne, Progressive Conservative, Saint John, NB]

Mr. Speaker, I would like to begin by saying that all the motions before us today were introduced by the Canadian Alliance. The member for Cypress Hills—Grasslands has modified them slightly but they are in essence the same motions that were presented during clause by clause study of the bill in committee.

Motion No. 1 would remove the words “family farm” which are already in the bill. I know members of the House and a lot of people across Canada have different definitions of what constitutes a family farm.

I did not grow up on a farm but my family and I have a lot of friends living on farms. I have to say that there are different definitions, as stated, of what constitutes a family farm. The PC Party believes that it is important for family farms to be recognized specifically in the mandate of the FCC.

It is the family farm and primary production that should be the primary focus of the FCC's activities, not simply farming operations in general terms. By eliminating family farms from the clause, we strongly feel that it is a step backward and actually does a disservice to family farms across Canada. Not one of us would be sitting here today, not the young pages nor anyone else, if we did not have our farmers who produce the carrots, potatoes, vegetables, milk and meat that we need to survive. These are produced by our farmers and their families from generation to generation. The farm is important.

The president of the FCC stated in committee that discussions were held with the Canadian Federation of Agriculture on the wording of the bill and that ultimately the CFA was satisfied. He also said that the FCC took very seriously the fact that primary production was its focus.

That being said, the PC Party will not be supporting the motion. It is very important that family farms be referred to in the bill. There is no question about that.

When I went out west in 1993, I met with the Canadian Federation of Agriculture. We had a discussion at that time that really shocked me. Where I come from, a large city in the province of New Brunswick and the greatest city in the east, the farmers and the people are hurting. When we forget about the family farm by removing it from the bill, we create a major problem. That will only be the first change and, before we know it, the needs of the farmers will not be addressed.

Motion No. 2 speaks to the issue of competition. I find it rather difficult to believe that the Canadian Alliance has actually introduced this motion. It is not only restrictive and limiting to the FCC's activities but it speaks against the idea of competition. It is another Canadian Alliance policy shift. Now it seems it does not support open competition.

We have to have open competition because that is when we get the best prices. The FCC should be allowed to compete with all other financial institutions. Competition is healthy and no matter whether it is, farmers, car dealers or whatever is being sold, competition is good.

The mandate of the FCC has been expanded since its creation and it is no longer a lender of last resort, nor should it be. It has tailored its operations to the agriculture and agribusiness community.

If commercial banks want to enter those areas they are welcome to do so. The competition will only benefit farmers in the end. I have to say that the PC Party will therefore not be supporting this motion either.

Motion No. 3 speaks to the issue of farmland ownership. Once again this matter was discussed during the committee's deliberations. This amendment could place limitations on FCC activities.

I will use the example of young farmers and the opportunity for an intergenerational transfer of farms. It does not matter whether we live in rural areas or in cities, towns or villages. Parents who own their home, their car, a business or a lot want to leave them to their children.

In this case the farm is their home, their business. That is the way it is. They want to leave it to the family. It is the family farm that they want to pass from generation to generation. This was discussed during the committee's deliberations. This amendment would place limitations on that. People should be allowed to acquire land directly from family members. They would lease it over a long period of time and eventually acquire ownership. If this amendment's time limit were imposed it could prevent this from happening.

That being said, the president of the FCC stated in committee that he would be quite comfortable with a five year limit, which was consistent with the remarks he made at the previous committee meetings. The average time for land disposal at the FCC is actually about eight months, which allows for more than enough time set out in this amendment. The PC Party will support this amendment.

I have to say that if members take a look at FCC and how long it has been in place, they will see it has been there to work for the farmers, to make sure that the farmers are indeed viable and that their farms will be there for their children and for all of us. We must bring forth legislation that is good for the farmers. The farmers know what is good for them and when they say it is good for them, then it is good for us. That is why we have to work with the farmers.

During the first 34 years of FCC and the Farm Credit Act there were many evolutions and many changes had to take place. The farmers came forward and spoke about it. I have to say that I have major concerns about these motions, as do my colleagues and my colleague who sits on the committee.

On behalf of my colleagues in the PC Party I want to state that we are addressing these concerns. We hope the House will take our concerns under advisement. Perhaps there will be amendments so that we can support all the motions, but as it stands now we cannot do that.

[Loyola Hearn, Progressive Conservative, St. John's West, NL]

Mr. Speaker, I have listened to the various members speak on the bill, some of them extremely familiar with the farming sector, and some not so much, but who do have a concern for the principle of providing funds to those who need funds in a way that will enable them to continue to work and make a living and to hold on, in a lot of cases, to the property they own.

In my own case I cannot claim to be familiar with the farming area to any great extent, although certainly in my district we do have farms, despite what people think about the province of Newfoundland. A lot of people think it is a rock because it is referred to as The Rock, but it is a very big island, as we all know, and there are many very fertile areas on that island where we have large farming operations.

However, what we are talking about here is not unlike an industry with which I am much more familiar, and that is the fishing industry.

When we talk about agencies, whether it be the Farm Credit Corporation or whether we call it Farm Credit Canada or whatever, what difference does it make as long they do the job that the farmers want it to do? If it will be costly to start implementing changes, although I cannot see why it really would be, then we certainly should look at why the name should be changed. Other than that, the bill itself basically is one that is supported by farmers. The amendments would not be, certainly not Amendments Nos. 1 and 2.

I mentioned the fishing industry. There are commonalities. Within the fishery we also have agencies that provide assistance directly to the people in the fishing industry. If they were not there, the people who participate in the fishing industry would have no one to turn to, especially the little fellow, as we say, the person who is operating on his own, who is not backed by a major company, who is not owned by a company or corporation, who is trying to operate his family fishing business the same way as a farmer would operate a family farm, quite often when the going is tough, whether it is a poor fishing season or a poor farming season.

If we did not have such agencies it would be the regular bank we would have to turn to. Banks are great. If we have money in the bank and are worth a few bucks we have absolutely no trouble getting money from a regular chartered bank. However if we have no money in the bank and times are tough, try getting money from the bank then. A lot of farmers and a lot of fisherpersons are really left in a bind.

Unless we have assistance groups such as credit corporations dealing with the various sectors, many of the people who are trying to operate within these sectors, in most cases successfully, find the going very tough in times of need.

In western Canada in particular, unless we have a change in the weather, this year could be an extremely tough year for farmers. Mother Nature is a very rough person to try to fight, and as many of us have learned, whether we are farmers or operate on the ocean, it is a battle we cannot win. As we debate legislation that is so important to them, they are undoubtedly wondering if the protective clauses will be there to protect them if they need assistance from such agencies during the fall.

As we proceed through this legislation, we should try to protect those who most need the protection. Those who need the protection most generally are the family farm owners, the small boat fishermen, the family enterprises. They do not have the support of the major corporations. They are not owned and manipulated by the big corporations.

When we hear the words family farm and we hear people talking about the difficulties some farmers and some families go through, we all think of the old westerns that we watched when we were growing up. They are almost gone from the screen. It is very difficult to see a good John Wayne movie or any other movie. It may be because of the violence. If those movies caused violence, we would all be pretty violent people, I would say, looking around here. We ran around with guns strapped to our hips when we were young and playing cowboys. However, many of these old shows talked about the family farm, with the bank holding the mortgage and calling in the mortgage, whereby the family would lose the farm except for the hero.

Perhaps in this scenario here the hero is actually the Farm Credit Corporation or Farm Credit Canada or whatever we want to call it. It is agencies such as this that the owner of the farm now has to depend on to make sure that he is not just swallowed up in the process, that when he is paying his bills there is not a problem, and that when he runs into difficult times, as we have seen in the last couple of years and as we may looking at this year, he needs a crutch to lean on. It is up to government to ensure that the crutch is there and that the family farm and farms generally will exist beyond the period of drought, beyond the period of fires and beyond the period of rough agricultural times. One of the things we have to remember is that it is the farmers and the fishermen of the country who provide the sustenance needed to keep the country going.

We hear people talk about subsidies. What is the alternative to farming and fishing in this country, the provision of the very food we need to keep the country going? We must make sure these people have every break they can get in order to carry on such worthwhile industries, because they are such worthwhile contributors to the country themselves.

We support the bill. We cannot support Amendments Nos. 1 and 2 at this stage because of the effects they might have on the smaller operations within the farming system.

[John Herron, Progressive Conservative, Fundy Royal, NB]

Mr. Speaker, thank you for the opportunity to join with my colleagues here in the Progressive Conservative Party to speak to this group of amendments with respect to the Farm Credit Corporation.

The crux of our difficulty is that although we as a party are indeed in support of the bill itself, as the member for St. John's West said a few moments ago we have grave concerns that the amendments before us in this group will indeed have a detrimental effect on smaller farm operations, the family farms. As the hon. member for Saint John said, they are indeed the cornerstone of rural Canada and small rural towns. Those family farms in fact essentially represent the main street of rural Canada. They are where people live. They are where they earn a living. They also provide for the infrastructure that we have in rural Canada.

My riding, the great riding of Fundy—Royal, is one of the dairy capitals of this great country. Over half the milk production for the province of New Brunswick is from Fundy—Royal. Some of the farm operations are small farms that make a valuable contribution to the rural community despite the fact that they may only be milking 35 or 40 cows. The average is more often than not in the neighbourhood of 80 cows. Whether we are talking Jerseys, Guernseys or Holsteins, the role that dairy farms play in my riding in particular and the role these small operations play are intrinsic to rural Canada and that way of life.

In point of fact we know that the government's record with respect to agriculture on a broad stroke of issues has been suspect at best. Members probably recall the federal government's inability and almost unwillingness at one point to actually fight on behalf of potato farmers and those small, vibrant businesses on Prince Edward Island. At that time the government needed to defend the interests of P.E.I. potato farmers and point out that the potato blight that was detected was in one corner of one field and by no means had any kind of detrimental effect with respect to the potato crop on Prince Edward Island as a whole.

The Government of Canada really did not step up to the plate for this. The efforts were made by the Progressive Conservative Party, by our agriculture critic, the hon. member for Brandon—Souris, and in particular by the member from the neighbouring riding across the Northumberland Strait, the hon. member for Pictou—Antigonish—Guysborough, who brought up this particular issue on the floor of the House of Commons time and time again.

I would point out that it was the Liberal Party of Canada who gave us the credit. The Liberals thought they had made the first correction with the Americans and we were the first people they tried to attack, to point to, saying that they had solved the problem. They looked over toward us because they knew it was the Progressive Conservative Party that was defining the P.E.I. potato blight issue.

The Progressive Conservative Party of Canada is an ardent supporter of the supply management regime we have, particularly in dairy products. If we look at all the other commodities within agriculture that have difficulty because of international subsidies, we know that our supply management regime has been critical to our capacity to maintain a solid market.

However, we need to have proper protection for supply management. I know the NDP agriculture critic has been an advocate of this issue as well. We cannot have supply management unless we protect our borders. It was shameless of the Government of Canada to do what it did when we went to the WTO with respect to agriculture issues and protecting supply management. In place of article 11 we accepted the tariff rate quota regime.

Here is what happened when the Minister for International Trade provided ministerial permits so that, in this case, cheese sticks could come into Canada. That actually consumed the equivalent of the production of 70 Canadian dairy farms. We gave that away unilaterally. To show how disingenuous that actually was, it was done without even informing the agricultural or dairy community of the country. The government did it unilaterally. It was almost by accident that the Government of Canada was outed on this particular issue.

Now the dairy farmers of Canada are saying quite clearly that they are very suspicious about whether the Liberal Party is in fact a supporter of supply management to the degree that it should be. I do not think it supports the same position that I know the Bloc, the New Democrats and the Conservatives have with respect to supply management in dairy farming in this country.

We will be here on this side of the House to ensure that the Liberal government does not squander livelihoods with respect to supply management and small farms.

There is another case where the Government of Canada did not defend the rights of the dairy community. It permitted, with hardly a fuss, the importing into Canada of butter oil and sugar blends. These butter oil and sugar blends are essentially a dairy replacement and replaced almost $50 million worth of milk quota that actually rightfully belonged to Canadian dairy farmers.

Quite honestly I wish the Liberal Party of Canada would understand that in Canada we are supposed to milk the cows, not the dairy farmers. We should ensure that we actually protect what Canada now freely negotiates at the WTO. We should not give it away unilaterally. These butter oil and sugar blends actually displaced $50 million worth of industrial milk and cream that we clearly could have been purchasing from our own dairy farmers. We want to take the initiative to defend our dairy farmers.

My colleague, the member for Pictou—Antigonish—Guysborough, is interested in saying a few words on this bill as well. Given that our time is running out, I want to make sure that all of us on this side of the House defend the rights and responsibilities that the Government of Canada should have in protecting the small farms, protecting supply management and particularly in protecting the dairy farmers in this great country of Canada.

[Peter MacKay, Progressive Conservative, Pictou—Antigonish—Guysborough, NS]

Mr. Speaker, I would like to commend my colleague from Fundy—Royal and other members of the Progressive Conservative Party who have spoken to this bill. Some might view this legislation as being of little consequence and a case of semantics because in essence what appears to be the major change is one of name only, whereby it creates the Farm Credit Canada logo, the FCC.

However it takes on much more than that. My colleagues have noted and highlighted some of the changes that would come about as a result of the legislation. The bill speaks in particular detail of expanding the financial services available to farm operations and businesses throughout Canada. The bill would allow authority to provide loans to businesses related to farming activities in Canada, in cases where the business is majority owned by farmers and in cases where it is not. It would touch upon farming in a critical way.

It goes without saying, but bears repeating, that farming in Canada is very much in jeopardy. We have seen crises, particularly in western Canada and the province of Manitoba, because of the elements and because of flooding. We have also seen drought in other parts of the country. The expansive size of Canada and the distances involved in bringing produce to market is one of the biggest challenges farmers face apart from the weather.

When it comes to the government's involvement in the farm industry, we have on many occasions seen farmers throughout Canada left with a feeling of abandonment when it comes to their ability to be competitive not only in Canada or North America but globally. A great deal more could be done.

Members of the Progressive Conservative Party and other members in the House have spoken at length and quite passionately about the need for government assistance in times of need, when market change or legislation has hindered the ability of farmers to get their produce to market.

That is perhaps one of the highlights of the bill and hopefully one that can be brought through quickly. It would help farmers get on with the business of produce and participate fully in the economy.

The Conservative Party is very supportive of the legislation as we have been in the past with efforts to assist farmers. My colleague spoke of the situation in Prince Edward Island with respect to potatoes. There have been other situations throughout the country where farmers have been left destitute and literally high and dry when it came to the government coming to their assistance when they were most in need.

My friend also spoke of the dairy industry. In my constituency of Pictou—Antigonish—Guysborough there are numerous examples. Scotsburn Dairy Cooperative has a storied and very proud history of participation in the dairy industry in Canada. It is continuing to expand and make great contributions on behalf of its industry, and it is very much a part of the vibrant and growing economy of Atlantic Canada.

We support the legislation. We are pleased that there is an opportunity to see the bill pass through the Parliament of Canada and hopefully come into being in the other place.

[The Deputy Speaker]

Is the House ready for the question?