Madam Speaker, I am rising today to speak to third reading of Bill C-25, an act to amend the Farm Credit Corporation Act. I intend to be brief because we dealt with this at report stage yesterday. I made an intervention at that time and I have no intention of repeating myself.
The major provisions of the bill would allow the Farm Credit Corporation, soon to be called farm credit Canada, to lend money to farm related businesses not owned by farmers, in other words by agribusiness, and extend equity financing to producers and farm related businesses.
The Canadian Federation of Agriculture, as I mentioned yesterday, supported the bill in committee. I failed to mention at that time that the Canadian Cattlemen's Association also supported the bill. Both groups indicated that more financing and more equity financing was required and, in particular, the Canadian Federation of Agriculture was confident that the primary producers would remain the primary focus for farm credit Canada.
Credit Union Central of Canada was not opposed to the bill so long as it complemented its work in the community. We endeavoured to have an amendment added to the bill to ensure that this kind of complementary activity worked. We were not successful but it was not for lack of effort.
In my legislative report, I said that the only farm group opposed to the bill was the National Farmers Union. The Canadian Bankers Association was also opposed. It indicated that a broader mandate would allow farm credit Canada to compete unfairly with private lenders.
We heard yesterday, and just now from Bloc Quebecois representatives, that the UPA in Quebec, which represents Quebec farmers, have said that it has serious reservations about the bill. It is unfortunate that the UPA did not come before the Standing Committee on Agriculture and Agri-Food when we had the debate so that it could have informed the committee of its reservations.
At least one group from Quebec was present, a group that purported to deal with a number of co-operatives in that province. Overall it was supportive of the change in the mandate of Farm Credit Canada.
We heard this morning from both the Canadian Alliance and the Bloc Quebecois in committee. The objections to the bill were based on two major issues: first, to what extent a business has to be involved in farming to be considered a business related to farming and, second, with the changes to the mandate of Farm Credit Canada, how much of the corporations lending activities may be transferred from the primary producer to agribusiness.
In 1995 the FCC board of directors set the maximum loan size at $20 million. We were advised that less than 2% of the current loans in the portfolio of the corporation exceed $1 million.
Currently primary producers are about 94% of the FCC's overall clientele. With the proposed changes FCC president, John Ryan, anticipates that this would change to about 80%. There would be a change over the next five years as it grows and moves out into this emerging field. Some 20% of its lending would be to farm related enterprises.
I listened with some care to points that were made this morning by my colleague on the agriculture committee from the Canadian Alliance as well as by the member from the Bloc Quebecois. The Alliance member was concerned that the Farm Credit Corporation was intruding into the marketplace. Whereas I believe in many parts of rural Canada there is not an explosion of choice when it comes to lending institutions. It is just the reverse. There is less and less choice.
For example, in the province of Saskatchewan a number of small banks have recently gone out of business. In most cases the local credit union has taken over those operations. It is not that there is too much choice among lending institutions. It is that there is not enough choice. That was recognized by two Saskatchewan members who sit in the Canadian Alliance who I noted voted against their party's recommendation on the bill yesterday at third reading.
There is no doubt the primary focus will continue to remain on primary producers. There are times when Farm Credit Canada will probably have more land than it would want to hold on to, depending on the ups and downs and the cyclical nature of the agricultural industry. We saw no evidence that it is interested in getting into the landholding business in any serious way.
The Bloc Quebecois, which incidentally voted in favour of it at second reading but appears to have changed its mind, indicates that the gates are being opened too wide. However there is an ongoing revolution in agriculture across the country. We are trying to get more value added on the prairies and elsewhere. In order to do that we will have to take some initiative, break some new ground, get out there and encourage value added. Farm Credit Canada is one of the tools in the kit that we could use.
The New Democratic Party supports the changes and will be voting in favour of the bill at third reading.