1968-10-29

COMMITTEES OF THE HOUSE


[Stage Direction]
First report of standing committee on fisheries and forestry-Mr. Crossman.

[Stage Direction]
Mr. John M. Reid (Kenora-Rainy River)
presented the first report of the standing committee on broadcasting, films and assistance to the arts, and moved that the report be concurred in.
Motion agreed to.
[Note: Text of foregoing reports appears in today's Votes and Proceedings.]


Hon. Donald S. Macdonald (Rosedale):: Mr. Speaker, the chairman of the standing committee on public accounts has inquired regarding the reference to that committee of the volumes of the public accounts. With the leave of the house I should like to move the following motion in order that this request may be carried out. I move, seconded by Mr. Sharp:
That the public accounts, volumes I, II and III for the fiscal year ended March 31, 1966, laid before the house on January 9, 1967, and the report of the Auditor General thereon, and the public accounts, volumes I, II and III, for the fiscal year ended March 31, 1967, laid before the house on January 22, 1968 and the report of the Auditor General thereon, be referred to the standing committee on public accounts.


[Stage Direction]
Motion agreed to.

Hon. Mitchell Sharp (Secretary of State for External Affairs):: Mr. Speaker, I ask leave of the house to table, in French and in English, a number of agreements which recently have
been signed by Canada subject to ratification, or which have been entered into force for Canada.


Mr. Speaker:: Has the minister leave to table these documents?


Some hon. Members:: Agreed.



BRITISH NORTH AMERICA ACT


Mr. Hubert Badanai (Fort William) moved: for leave to introduce Bill No. C-122, to amend the British North America Act, 1867, (Canadian Bill of Rights).


Mr. Speaker:: Is it the pleasure of the house that the hon. member shall have leave to introduce this bill?


Some hon. Members:: Explain.
[DOT] (2:40 p.m.)


Hubert Badanai: Mr. Speaker, the purpose of this bill is to amend the British North America Act of 1867 by adding thereto as part of the federal constitution with regard to the power of parliament a Canadian Bill of Rights, in substitution for the act of parliament, chapter 44 passed in the year 1960. This latter statute has been, to a certain point, ineffective from the fact that it is not part of the Canadian constitution, and its application has been rather limited because most of the time the decisions of the courts have been to the effect that its provisions apply only to legislation adopted by parliament since its coming into force.
In other words, what this bill seeks to achieve is a practical universal application of the bill of rights.
Motion agreed to and bill read the first time.



PUBLIC SERVICE


[Stage Direction]
On the orders of the day:
Hon. Robert L. Stanfield (Leader of the Opposition):: Mr. Speaker, I should like to ask

October 29, 1968
Inquiries of the Ministry the right hon. Prime Minister whether his government has given consideration to requiring a year oi civil service similar to the military service in other countries, but devoted to peaceful ends?


Right Hon.   P.-E. Trudeau@Prime Minister: Our government has not given consideration to that, Mr. Speaker, but it is an idea I have discussed in conversations with some ministers as a very imaginative one, and something that might be done in the future in this country.


Robert Lorne Stanfield: Has the government given consideration in connection with this idea to the phasing out of the Company of Young Canadians?


Mr. Trudeau:: No, Mr. Speaker, there is nothing near the planning stage in regard to this idea of a year of civil service by the youth of this land. This is just an idea that was discussed in conversations.


Robert Lorne Stanfield: But it is an idea that is being discussed, Mr. Speaker, within government circles?


Pierre Elliott Trudeau: I said it was a matter that had been discussed in conversations between myself and a few ministers. We discuss a number of ideas of all kinds and natures. This was not meant as government business, but rather as a conversation. I do not claim any privilege on the conversations between privy council members, because it is not the kind of idea that would be taken for discussion.


Mr. Real Caouetie (Temiscamingue):: Mr. Speaker, I would like to ask the Prime Minister a supplementary question.
Can he state flatly that the Secretary of State (Mr. Pelletier) was not talking on behalf of the government last night when he spoke of peaceful conscription for the young people of Canada?


Pierre Elliott Trudeau: Of course, he was not speaking on behalf of the government, Mr. Speaker, since I told the Leader of the Opposition that the matter had not been discussed or decided at the government level.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. David Lewis (York South):: Mr. Speaker, I should like to ask whether the Secretary of State for External Affairs has received any direct report from the Canadian members of the observer team in Nigeria regarding the interference they are reported to have encountered from General Adekunle, also known as the Black Scorpion. In any case, has the government taken or is it contemplating taking any action arising out of this disturbing incident?


Mitchell William Sharp: Mr. Speaker, I expect that I will have a report on the incident directly from General Milroy, who is the chief member of the Canadian observer team. I have only one comment to make; that is, I believe the work of this observer team is so useful, not only in reporting on the conduct of the federal troops, but under circumstances of civil war, I do not think any incident like this would cause us to withdraw.


David Lewis: A supplementary question, Mr. Speaker. May I say, in view of the minister's answer, I am not for one moment suggesting that we should withdraw from the team. What I am sure we are all interested in knowing is whether the government is planning to obtain from the government of Nigeria a firm undertaking that such interference will not again occur, and that the team will have full freedom of movement.


Mitchell William Sharp: Mr. Speaker, the evidence that was given by General Milroy-perhaps I can be excused for referring to the committee- indicates that he personally had no interference, and I hope that reports we receive indicate that there is in fact no interference.


Mr. Andrew Brewin (Greenwood):: A further supplementary question, Mr. Speaker. Has the minister discussed with the Nigerian government the enlargement of the terms of reference for the observer team, as urgently proposed by the team itself in its report of October 15?


Mitchell William Sharp: Yes, Mr. Speaker.


Francis Andrew Brewin: A further supplementary question. As a result of this discussion does it appear that the terms of reference are likely to be enlarged?
October 29, 1968


Mitchell William Sharp: There has as yet been no answer from the Nigerian government, Mr. Speaker.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: A supplementary question, Mr. Speaker. Does the widely reported threat of a whipping by Colonel Adekunle constitute in the minister's mind a threat to the free movement of the observer team?


Mitchell William Sharp: Mr. Speaker, while I have very great confidence in the newspaper that reported this incident, I think we should all wait until we have a report from the Canadian observer.



NATIONAL PARKS


[Stage Direction]
On the orders of the day:
Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, I wish to direct a question to the honourable Minister of Indian Affairs and Northern Development.
As shown on page 392 of Hansard of September 24, 1968, the minister made a statement with regard to the non-existence of national parks in the province of Quebec, while the federal government during the last decade spent $225 million in other states of the Canadian federation.
Could the minister tell us when he will issue the statement which he had promised us?


Hon. Jean Chretien (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I am anxious to make a statement. However, I must wait for the answer of the Quebec government, and I hope that Quebecers will one day be able to enjoy national parks.


André-Gilles Fortin: Mr. Speaker, I have a supplementary question.
Does the honourable minister imply that the Quebec government is to be blamed for the delay in recuperating the $60 million which is due by the federal government?


Hon. W. G. Dinsdale (Brandon-Souris):: supplementary question, Mr. Speaker. Now that the minister has recognized the urgent need for additional national parks, including parks in Quebec and Ontario, would he also consider reviving the recreational parks program that was discontinued by the Liberal
Inquiries of the Ministry government in 1963, so that some of the pressure might be taken off our national parks?


Joseph Jacques Jean Chrétien: Mr. Speaker, that is the reason for creating recreational parks; the department is now studying that possibility.



REQUEST FOR EARLY REPORT BY TASK FORCE

[Stage Direction]
On the orders of the day:
Hon. George Hees (Prince Edward-Has-tings):: Mr. Speaker, I should like to address a question to the Prime Minister. As all Canadians would like to see our athletes make the best possible showing in international competition, and as this costs considerably more money than is now available for adequate coaching and preparation-


Some hon. Members:: Question.


George Harris Hees: I am coming to the question, and I thank hon. members for their interest. In view of this, would the Prime Minister request the task force that is presently looking into this matter to speed up their deliberations, so these additional finances may be made available as soon as possible? Also, would the government consider making tax free all donations toward financing our athletes preparing for international competitions?


Hon. John C. Munro (Minister of National Health and Welfare):: Mr. Speaker, if I may answer that question, I would advise the hon. member that the task force has these very matters under consideration and is trying to come forward with its report as quickly as possible.


George Harris Hees: A supplementary question, Mr. Speaker. While this deliberation is going on and it will probably go on long after the hockey season starts, would the Prime Minister and the government give consideration to putting our three gold medal winning horses on the payroll, as a former Liberal government did a few years ago?


Mr. A. D. Hales (Wellington):: A supplementary question to the Minister of National Health and Welfare. Can the minister advise the house why it was necessary to set up a task force at additional cost when we already have the advisory council-


Mr. Speaker:: Order, please. The question is argumentative.
214B

October 29, 1968
Inquiries of the Ministry AGRICULTURE



CORN-INQUIRY AS TO STATEMENT BY MINISTER

[Stage Direction]
On the orders of the day:
Mr. W. B. Nesbitt (Oxford):: My question is directed to the Prime Minister. Would he use his good offices to make arrangements for the Minister of Agriculture to appear in the house today so he can make his announcement concerning corn marketing? I ask this question of the Prime Minister in view of the statement by the Minister of Agriculture last Thursday in reply to a question from myself on this subject. The minister then said:
I expect that perhaps within a few hours, but certainly very shortly, I will be in a position to make an announcement in connection with the import competitive factors involved in the marketing problem.
The minister has not had an opportunity to make his announcement in the house, the price of corn is falling every day, and it is very important that this be done.


Right Hon.   P.-E. Trudeau@Prime Minister: I will use my good offices with the Minister of Agriculture to make sure he is here for the question period some other day this week.



SHIPPING


[Stage Direction]
On the orders of the day:
Mr. S. J. Korchinski (Mackenzie):: I have a question for the Prime Minister, if the right hon. gentleman has time for me at all. I have directed similar questions to the Minister of Transport on two occasions, and he has taken them as notice. The Prime Minister was also asked a question on this subject. The parliamentary secretary-


Mr. Speaker:: Order, please. The hon. member has had the floor for some minutes and he has not asked his question yet.


Stanley James Korchinski: I have been at this question for two months, Mr. Speaker. I want to ask whether the report on the extension of the season in Churchill will be provided to the house; whether this is to be a secret type of report, or whether it is to be an interdepartmental report.


Right Hon.   P.-E. Trudeau@Prime Minister: I shall be pleased to discuss the matter with the Minister of Transport when he is back in Ottawa from his tour in connection with the important question of housing.


An hon. Member:: What about tomorrow?


Pierre Elliott Trudeau: He will not be here
tomorrow.



REPORTED SALES NOT UNDER WHEAT BOARD REGULATIONS

[Stage Direction]
On the orders of the day:
Mr. Ed Schreyer (Selkirk):: In the absence of the Minister of Trade and Commerce perhaps my question could be taken as notice by the Minister without Portfolio, the hon. member for Saskatoon-Humboldt. What action is the government taking to investigate allegations of wholesale evasion of Canadian Wheat Board regulations and black marketing in grain outside the ambit of the board?


Hon. Oito E. Lang (Minister without Portfolio):: I will be very glad to take that question as notice.



NATIONAL SECURITY


[Stage Direction]
On the orders of the day:
Mr. Eldon M. Woolliams (Calgary North):: My question is directed to the Solicitor General. Does the minister know the name of the young lady employed in the public service of Canada who was very friendly with James Earl Ray, the alleged assassin of Martin Luther King; and was an investigation made to determine whether she or anyone else helped Ray obtain a forged Canadian passport?


Hon. G. J. Mcllraith (Solicitor General):: do not know the young lady, and I do not know what foundation there is for the hon. member's question, unless it is based on his acceptance of the stories appearing in today's newspapers.


Eldon Mattison Woolliams: May I ask a supplementary question.


Mr. MacEwan:: You're slipping, George.


Eldon Mattison Woolliams: I want to congratulate the Solicitor General upon his purity. Seriously, I wonder if the Solicitor General would be prepared to make a report with regard to the alleged forgery of the passport. Would he be prepared to table the documents that led up to the issuance of the forged passport?


George James McIlraith: The difficulty with the hon. member's question is that he is making a
October 29. 1968



great many assumptions. I presume he is referring to a story in this afternoon's newspaper. If he is, and wishes to be more precise in his question, I will be glad to make inquiries about the matter. I know nothing about it.


Eldon Mattison Woolliams: I have a further supplementary question. Will the minister make a statement on whether the passport in fact was forged? If so, would he table the documents that led up to the forgery?


George James McIlraith: No, I am not prepared to give a categorical answer to the question at this time. I do not believe it is proper to do so. If an investigation is going on or if one has been going on, it is not for me to disclose details of any investigation that may be going on in any criminal case until the matter is completed. I want to look at the question very carefully before saying whether I would answer.


Eldon Mattison Woolliams: Will the minister not say if there is in fact an investigation going on with reference to the forged passport? If so, when it is completed would he give the details to the house?


George James McIlraith: No, and I would not answer the latter question this time.



THE MINISTRY


[Stage Direction]
On the orders of the day:
Mr. J. M. Forrestall (Dartmoulh-Halifax):: My question is for the Prime Minister and arises out of a question put by the hon. member for Saint John-Lancaster yesterday. I should like to ask him whether, in light of the allegations about conduct that are being made in the country, he could use his good offices to make sure the Minister of Transport is here at a very early date?


Right Hon.   P.-E. Trudeau@Prime Minister: Yes; I am informed he will be in the house on Thursday.



VETERANS AFFAIRS


[Stage Direction]
On the orders of the day:
Hon. Marcel Lambert (Edmonton West):: My
question is for the Minister of Veterans Affairs. In view of the fact that the deadline for registration for certain benefits under the Veterans Land Act is October 31, and in view of the fact there are certain servicemen
Inquiries of the Ministry whose qualifications for these particular benefits are under review by the Department of National Defence, will the minister keep an open mind and leave the expiry date open in so far as this particular group of servicemen is concerned? I refer particularly to the members of the P.P.C.L.I. band which formed part of the Korean force in 1953.


Hon. Jean-Eudes Dube (Minister of Veterans Affairs):: Mr. Speaker, this date of October 31, 1968 was established by an act of parliament in 1962. The Department of Veterans Affairs has given ample publicity to the deadline. I should add that the efficiency of the publicity is evidenced by the great number of applications we have received in recent days. 1 do hope that all veterans who expect to qualify will do so before October 31. As to keeping an open mind, the minister always tries to keep an open mind.


Marcel Joseph Aimé Lambert: May I ask
a supplementary question. In view of the fact that applications that were made were turned down by the minister's department because of a certain ruling in the Department of National Defence, and in view of the fact that this ruling is now under review, surely the minister does not feel this group should be disqualified if their applications are not accepted by October 31.


Jean-Eudes Dubé: The department and the minister will try to treat all veterans with justice and equity.



SUGGESTED REFERENCE TO COMMITTEE OF ALLOWANCE ACT

[Stage Direction]
On the orders of the day:
Mr. Stanley Knowles (Winnipeg Norih Centre):: Mr. Speaker, may I direct a question to the Minister of Veterans Affairs. Now that the committee on veterans affairs has commenced its work, may I ask whether the government has yet decided to refer to that committee the War Veterans Allowance Act in order to make amendments and improvements thereto?


Jean-Eudes Dubé: No, Mr. Speaker. The committee will be studying the estimates; following that they will deal with the Woods report and then make a report. This should keep the committee busy for quite a few meetings.


Stanley Howard Knowles: supplementary question, Mr. Speaker. When the time comes that the government refers the Woods report to the committee, would it

October 29, 1968
Inquiries of the Ministry consider adding along with that report the question of the War Veterans Allowance Act?


Jean-Eudes Dubé: That is a possibility, Mr. Speaker, but it has not been decided yet.



HEALTH AND WELFARE


[Stage Direction]
On the orders of the day:
Mr. Barry Mather (Surrey):: I have a question for the Minister of National Health and Welfare. It is related to a question asked a short time ago with regard to federal support that may be given to Canadian athletics.
Having in mind the continuing and recent reports of increasing disease associated with cigarette smoking in Canada, and the fact that a further 8,000 young Canadians start smoking every month, what consideration is the minister giving to controlling the promotion of this dangerous product, at least in the field of television advertising?


Mr. Speaker:: Order. It appears to me that what the hon. member is asking for now is a statement of a nature that in my view should normally be made on motions.


Mr. W. M. Howe (Wellington-Grey):: A supplementary question, Mr. Speaker. I wonder whether the Minister of National Health and Welfare would consider referring the entire question of cigarette smoking to the committee on national health and welfare.


John Carr Munro: Mr. Speaker, that matter is under consideration.



INQUIRY OF THE MINISTRY

[Stage Direction]
On the orders of the day:
Hon. Theogene Ricard (Sainl-Hyacinthe):: Mr. Speaker, I should like to put a question to the Prime Minister.
Could he tell us whether Hon. Lionel Chev-rier was stating government policy last week when he forecast that within five years, Canadian assistance to the French-speaking countries would exceed $100 million?


Mr. Speaker:: Order. I do not think that the question, as put by the hon. member, is in order. Members can put questions concerning a statement made outside the house by a minister, but not by a member of the public service.



POST OFFICE DEPARTMENT


[Stage Direction]
On the orders of the day:
Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I should like to address a question to the Postmaster General. In view of the recent postal legislation that drastically increased postal rates, will the minister now consider giving postal delivery to urban areas that are now frozen?


Hon. Eric W. Kierans (Postmaster General):: No, Mr. Speaker.



FISHERIES


[Stage Direction]
On the orders of the day:
Mr. P. V. Noble (Grey-Simcoe):: Mr. Speaker, I should like to direct this question to the Minister of Fisheries. In view of the fact that the water used for cooling our thermonuclear plants is creating a hazard to our fisheries, does the minister plan on taking any action in this regard?


Mr. Speaker:: Order. I doubt whether the question is the type that should be asked at the present time. The hon. member might give some thought to placing the question on the order paper.



UNITED NATIONS


[Stage Direction]
On the orders of the day:
Hon. Martial Asselin (Charlevoix):: Mr. Speaker, I should like to put a question to the right hon. Prime Minister.
Can he tell the house whether, during this session of the United Nations, Canada will join other nations in presenting a resolution with a view to allowing Communist China to become a member of the United Nations?


Right Hon.   P.-E. Trudeau@Prime Minister: The government policy has not changed with regard to Communist China. This question is about to be studied but I can say that in matters relating to the United Nations in general, the Secretary of State for External Affairs (Mr. Sharp) is going to the United Nations this afternoon to discuss several problems.
October 29, 1968


Martial Asselin: Mr. Speaker, a supplementary question. Has the government decided whether the Canadian delegation will vote or abstain from voting on the admission of Communist China?


Mitchell William Sharp: Mr. Speaker, this is one of the questions that I will be discussing with the Canadian delegation when 1 visit it this afternoon and tomorrow.


Martial Asselin: Mr. Speaker, a supplementary question.
Can the Secretary of State for External Affairs tell the house whether the Canadian government has made progress with regard to the setting up of diplomatic relations with Communist China as mentioned during the last election campaign?


Mitchell William Sharp: Mr. Speaker, we are beginning better to understand the implications of the question. We have not yet had direct contacts with any Chinese representatives.



ATLANTIC DEVELOPMENT BOARD


[Stage Direction]
On the orders of the day:
Robert Lorne Stanfield: Mr. Speaker, I should like to ask the Prime Minister whether he will confirm that it is the intention of his government, through the Minister of Forestry and Rural Development, to announce in Halifax today that the Atlantic Development Board is to be reduced to the status of an advisory body.


Pierre Elliott Trudeau: Mr. Speaker, I believe that asking what the minister will announce later today is a hypothetical question.


Robert Lorne Stanfield: A supplementary question. Is it the policy and the intention of the government of Canada to change the status of the Atlantic Development Board to that of an advisory board?


Pierre Elliott Trudeau: Mr. Speaker, this question is under advisement by the minister and his department, and he will have an announcement to make at some time.


Robert Lorne Stanfield: A further supplementary question, Mr. Speaker. Would the Prime
Inquiries of the Ministry Minister inform the house whether, in making this announcement based upon a decision taken, the minister and the government are rejecting the recommendation of the Economic Council of Canada that the Atlantic Development Board ought to act as the planning and administrative agency in co-ordinating federal area development programs in the Atlantic provinces?


Pierre Elliott Trudeau: Mr. Speaker, again the question is hypothetical; the announcement has not yet been made.


Marcel Joseph Aimé Lambert: It is government policy. Now, come on.


Pierre Elliott Trudeau: Why? Because it is in the newspapers?


Marcel Joseph Aimé Lambert: It is under consideration. Dont give us this hypothetical bit.


Mr. Robert Muir (Cape Brelon-The Sydneys):: A supplementary question, Mr. Speaker. May I ask the right hon. gentleman whether, if and when such announcement is made, it will be made in the house or outside?


Mr. Speaker:: Order. I am afraid that supplementary is purely hypothetical.


Mr. John Lundrigan (Gander-Twillingate):: A supplementary question, Mr. Speaker. Has the Prime Minister had a change of heart from his election promise that the role of the A.D.B. would be expanded appreciably?


Mr. Speaker:: Order. The question is
argumentative, and I do not think is in order.


Marcel Joseph Aimé Lambert: It is
prophetic.


John Howard Lundrigan: Then may I rephrase my question. During the election compaign quite a bit of emphasis was placed on the role of the A.D.B.


Mr. Speaker:: Order, please. The hon. member for York South.


David Lewis: A supplementary question, Mr. Speaker. When the minister of forestry announces his intentions with respect to the Atlantic Development Board, I should like to ask the Prime Minister whether he will undertake that the house will also be given a general statement as to the machinery that is being set up and the plans that are being made to deal with

October 29, 1968
Inquiries of the Ministry regional disparities, particularly in the Atlantic region.


Pierre Elliott Trudeau: Mr. Speaker, the minister has stated on other occasions that as soon as these plans are in an advanced state of preparation he will make an announcement to the house.


Robert Lorne Stanfield: A further supplementary question, Mr. Speaker. Would the Prime Minister give the house an undertaking that such a fundamental change in the status of the Atlantic Development Board will not be made by the government until there has been a suitable opportunity to discuss the matter in the house?


Pierre Elliott Trudeau: Mr. Speaker, again the question assumes that the change will be made. This is not an assumption that is based on any statement made by the minister.



ESTABLISHMENT OF OFFICE OF PARLIAMENTARY COMMISSIONER

[Stage Direction]
On the orders of the day:
Mr. R. N. Thompson (Red Deer):: Mr. Speaker, my question is directed to the Prime Minister. In view of the fact that yet another province has announced its intention of establishing the office of ombudsman, and in view of repeated assurances from the government in previous sessions, could the Prime Minister tell the house whether it is the intention of the government to introduce legislation to establish the office of parliamentary commissioner during this session?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, no such legislation is contemplated for this session. The Minister of Justice does act as an ombudsman, and he is considering the possibility of appointing a specific officer called an ombudsman.



HUMAN RIGHTS


[Stage Direction]
On the orders of the day:
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to direct a question to the Minister of Indian Affairs and Northern Development. In view of the Supreme Court's reaffirmation of its decision in the Whitfield case, is the minister giving consideration to adopting a policy on non-discrimination so that companies doing business with the government or receiving permits from the government for development projects in northern

areas will be required to agree to a policy of non-discrimination on the basis of race, colour or religion?


Mr. Speaker:: I appreciate the importance of the question, but I wonder whether the hon. member would not rather expect a statement on motions. Otherwise the question should be placed on the order paper.



ADMINISTRATION OF JUSTICE


[Stage Direction]
On the orders of the day:
André-Gilles Fortin: Mr. Speaker, my question is directed to the Minister of Justice, but in his absence I would like the Prime Minister to take it as notice.
I am informed that that there is no French version of the rules of procedure in Exchequer Court. Does the Prime Minister intend to take immediate action to correct that situation, since all French-Canadian students must now study those rules in English.


Mr. Speaker:: The hon. member is making representations to the minister, but if he wishes to ask a question, I suggest that his question should be placed on the order paper. However, if there was some urgency, the matter could be discussed at the time of the adjournment.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr. David Anderson (Esquimall-Saanich):: Mr. Speaker, may I direct a question to the Secretary of State for External Affairs. Since Canadian airmen are now flying or soon will fly to and from an airstrip in Biafra that is subjected to daily bombing and intermittent artillery fire, will the minister inform the house of the details of agreements between the government of Canada and other governments or authorities, or between the International Red Cross and other governments and authorities, guaranteeing the safety of Canadian air crews?


Marcel Joseph Aimé Lambert: This question is purely hypothetical.


Mitchell William Sharp: Mr. Speaker, I am sure everyone in the house will agree that the hon.
October 29, 1968	COMMONS
member's question is very important. During discussions on this question it has been assumed there is no risk for our airmen. There is. The Canadian government is taking every precaution it can take. The general arrangement is that the flights are to be under arrangements made by the International Red Cross with the Nigerian authorities-


Mr. Baldwin:: On a point of order, Mr. Speaker, I am sure the house is most anxious to hear the minister, but I think the minister owes it to the house to revert to motions. I am sure he will obtain unanimous consent. Then there will be an opportunity for various spokesmen to make the adequate responses which need to be made.


Mitchell William Sharp: I have just one sentence to add to my answer. I was saying that the arrangements for the flights are in accordance with the arrangements made by the International Red Cross with the Nigerian authorities. Actually the commander of the aircraft himself is responsible for the safety of the crew.


J. Michael Forrestall: A supplementary question, Mr. Speaker. Can the Secretary of State for External Affairs tell us whether Hercules aircraft so far have flown into Biafra, or into the Nigerian sector?


Mitchell William Sharp: No, Mr. Speaker. The aircraft is at Fernando Po. The first flight has not yet been made.


J. Michael Forrestall: A further supplementary question, Mr. Speaker. When does the minister anticipate the first flight will be made?


Mitchell William Sharp: Mr. Speaker, it will be as soon as the commander of the aircraft believes it is safe to make the flight.



RESEARCH


[Stage Direction]
On the orders of the day:
Mr. G. H. Aiken (Parry Sound-Muskoka):: Mr. Speaker, I have a question for the President of the Treasury Board. In light of the fourth report of the Science Council of Canada made public today concerning national science policy, is action being taken at the Privy Council level to review current science programs?


Hon. C. M. Drury (President of the Treasury Board):: Yes, Mr. Speaker. For some time there has been a review in progress on current science policy.
DEBATES	2151
Inquiries of the Ministry


Gordon Harvey Aiken: A supplementary question, Mr. Speaker. May I ask whether consideration is being given to reviving any cancelled programs?


Charles Mills (Bud) Drury: Mr. Speaker, I do not know that specific consideration is being given to acts of revival, but we are looking at the entire matter.



FISHERIES


[Stage Direction]
On the orders of the day:
John Howard Lundrigan: Mr. Speaker, my question is for the Minister of Fisheries. Is the minister, as was promised by the Prime Minister yesterday, prepared to make a statement to this house regarding price support or deficiency payments with regard to Atlantic cod this week?


Hon. Jack Davis (Minister of Fisheries):: Mr. Speaker, before making a statement we are awaiting submissions from the Atlantic provinces in this regard.



INDIAN AFFAIRS


[Stage Direction]
On the orders of the day:
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. In light of the minister's meeting this morning with the president of the Armstrong Indian Association, will the minister make a grant available to Mr. Hector King, president of the association, as a means of encouraging direct involvement of the Indian peoples in the political process?


Mr. Speaker:: I suggest to the hon. member this question might well be placed on the order paper.



INDUSTRY


[Stage Direction]
On the orders of the day:
Mr. James A. McGrafh (St. John's East):: Mr. Speaker, my question is directed to the President of the Treasury Board. Can the minister confirm whether the government is reconsidering its announced intention to provide $20 million in aid to a linerboard mill of Canadian Javelin Limited which is proposed for Newfoundland?

October 29, 1968
Inquiries of the Ministry


Charles Mills (Bud) Drury: Mr. Speaker, this matter has been under discussion or under consideration for some time.


James Aloysius McGrath: A supplementary question, Mr. Speaker. The minister didn't answer my question. Can he confirm or deny press reports to the effect that the government is reconsidering its announced intention to provide some $20 million in aid to this proposed plant?


Mr. Speaker:: Order, please. I suggest the hon. member cannot ask the minister to confirm or deny reports.



RURAL DEVELOPMENT


[Stage Direction]
On the orders of the day:
Mr. R. R. Souiham (Qu'Appelle-Moose Mountain):: Mr. Speaker, may I direct a question to the Minister of Indian Affairs and Northern Development. In light of the publication in a Toronto newspaper of excerpts from an ARDA report on Indian poverty areas, the government previously having declined to make these excerpts public, will the minister now table this document in the house?


Joseph Jacques Jean Chrétien: Mr. Speaker, I have read the article in which it is stated that I received this document a long time ago.
I received the document at my office scarcely a few days ago. I have read it. It is a confidential document concerning another department: the Department of Forestry and Rural Development.


Richard Russell Southam: A supplementary question, Mr. Speaker. Is it correct to say that this report is highly critical of the paternalism of the department of Indian affairs?


Joseph Jacques Jean Chrétien: Mr. Speaker, the department is criticized by many people, but there are also a lot of persons who agree that there never was a government more concerned than ours with the economic and social progress of the Indians.


Mr. Speaker:: Order, please. This is becoming a debate between the minister and the hon. member. I recognize the hon. member for Fundy-Royal.


EXTERNAL AFFAIRS
[Stage Direction]
On the orders of the day:
Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Speaking in Montreal the minister said that the solution to the Middle East question will have to be found within the area itself. Is it now the position of the government that direct negotiations must take place between Israel and the United Arab Republic?


Mitchell William Sharp: Mr. Speaker, it is our hope-I believe this hope is shared by all members of the United Nations-that a settlement will be found within resolution 242, under the distinguished guidance of Gunnar Jarring. He is dealing with the question of direct confrontation.



NATIONAL DEFENCE


[Stage Direction]
On the orders of the day:
J. Michael Forrestall: Mr. Speaker, my question is for the Minister of National Defence. Since it is seven or eight months since a special study was conducted, is the minister in a position to say whether a decision has been reached with regard to the replacement of the C-141? Is the government to acquire aircraft which can refuel in the air our new support CF-5's?


Mr. Speaker:: Order, please. I do not think the question as asked is a matter of urgency. However, the minister might be allowed to reply.


Hon. Leo Cadieux (Minister of National Defence):: Mr. Speaker, we must first decide whether there is a strategic requirement for our procuring a tanker. If there is, then we shall have to make an assessment of what is available and we shall have to begin negotiations. We have not done that yet because so far the CF-5 has been considered a tactical aircraft.
October 29, 1968	COMMONS


J. Michael Forrestall: A supplementary question, Mr. Speaker. Am I to understand from the minister's answer that the government is now reassessing the role of the CF-5?


Léo Alphonse Joseph Cadieux: No. So far as procuring a tanker to refuel the CF-5 is concerned, we shall have to determine whether to go for strategic mobility or tactical mobility. I was saying that so far we have not made that decision.


Francis Andrew Brewin: A supplementary question, Mr. Speaker. Will the minister tell the house whether his department is preparing a new white paper? We have not had one for six years, and we should like one to explain some of these mysterious matters over which he presides.


Léo Alphonse Joseph Cadieux: I contend, Mr. Speaker, that some time is still required for the first one to be digested.


Marcel Joseph Aimé Lambert: supplementary question, Mr. Speaker. Is the assessment of the strategic or tactical role of the CF-5 the first such assessment the minister's department has initiated since the purchase inquiry for some C-141's over one year ago?


Mr. Speaker:: Order. The hon. member would be the first one to admit that the question is argumentative.


Marcel Joseph Aimé Lambert: With the greatest respect, Mr. Speaker, the question was on the order paper and the department answered it to the effect that it did place an order for the aircraft. It is not an argumentative question.


Mr. Speaker:: It is a question of argument whether it is argumentative or not.
Hon. Robert L. Stanfield (Leader of the
Opposition): As a further supplementary question, Mr. Speaker, I would like to ask the Minister of National Defence who needs the time to consider this six year old report; the minister and his department?


Léo Alphonse Joseph Cadieux: My implication, of course, was that the opposition needed the time.
DEBATES	2153
Inquiries of the Ministry [Translation]



FINANCE


[Stage Direction]
On the orders of the day:
André-Gilles Fortin: Mr. Speaker, I should like to direct a question to the right hon. Prime Minister.
Following the federal-provincial meeting which took place on October 25, 1968, with regard to the creation of a Canadian securities commission, does the Prime Minister intend to make a statement and to table in the house the studies made in this respect, so that the members of the house may be well informed on this important matter, since they profit by all the information they receive?


Right Hon.   P.-E. Trudeau@Prime Minister: Mr. Speaker, these meetings between senior officials of the federal and provincial governments are still proceeding. The matter is still under consideration and we are not yet ready to draft legislation.


Mr. Speaker:: Orders of the day.


Mr. Jack Horner (Crowfoot):: I wonder if I might ask a quick question of the Prime Minister.


Mr. Speaker:: Order. We have already gone beyond the period of time allocated for questions.


John (Jack) Henry Horner: On a point of order, Mr. Speaker, we were told that the Minister of Agriculture is not on the roster today or on Monday, and all during this question period we were told that he was busy in his office. This is the reason we have been given for the change in the question period, but I would point out that during this question period the Minister of Agriculture was floating behind the curtains while he could have been in the house. Surely the Prime Minister will allow him into the house on the days he is not on the roster.


Mr. Speaker:: Orders of the day.


Mr. Lloyd R. Crouse (Souih Shore):: On a
point of order, Mr. Speaker, I wonder if I might take a moment of the house's time at the beginning of fish and food month to say to the right hon. Prime Minister that I congratulate him on today receiving the gift of a salmon from the Minister of Fisheries. I want him to know that the members who are here

October 29, 1968
Farm Credit Act
from the Atlantic provinces are only too willing to offer their services to him if he has any doubt as to the proper preparation of this fine sea food.


Mr. Speaker:: Order, please. I can only say this is a fishy point of order.



PRAIRIE GRAIN ADVANCE PAYMENTS ACT


Otto Emil Lang: the third reading of Bill No. C-113, to amend the Prairie Grain Advance Payments Act.
Motion agreed to and bill read the third time and passed.



FARM CREDIT ACT


[Stage Direction]
The house resumed, from Monday, October 28, consideration in committee of Bill No. C-110, to amend the Farm Credit Act-Mr. Olson-Mr. Faulkner in the chair.
The Chairman:: When the committee rose on Monday, October 28, clause 1 of the bill was under consideration.
On clause 1-"Farmer".


Wallace Bickford (Wally) Nesbitt: Mr. Chairman, now that the minister is with us, and apart from the wider platitudes with respect to clause 1 of this bill concerning credit, could he make his announcement, which he said last Thursday he was going to make in a matter of hours, concerning corn marketing and the result of his conversation with United States officials? Farm broadcasts on the C.B.C. both yesterday morning and today indicated that his long-awaited announcement was expected momentarily. I am sure members of the committee would give the minister unanimous consent to make his announcement if he is now able to do so.


Mr. Olson:: Mr. Chairman, I wonder whether I might be permitted to ask unanimous consent to do whatever is necessary at exactly four o'clock. At that time I would like to read a press statement.


James Hugh Faulkner: Shall clause 1 carry?


Wallace Bickford (Wally) Nesbitt: Mr. Chairman, in his reply the minister made a suggestion that will be welcomed by most hon. members. I am wondering whether you could use your good offices

with the Speaker so that the minister may be able to revert to motions and make his announcement at four o'clock.


Horace Andrew (Bud) Olson: Mr. Chairman, maybe the procedure that ought to be followed is to revert to motions, but I should point out that it will take me only two or three minutes to make my statement at that time. It may take less time to make the statement than to go through the process of reverting to motions with the Speaker in the chair.


James Hugh Faulkner: We have half an hour before the time of the announcement, and I think I will probably be able to work out an arrangement in the interval.


Mr. Harding:: Mr. Chairman, clause 1 covers the main aspects of the bill. It seems to me that the main objection to this legislation is the government's plan to change the fixed rate of interest on loans and have it set by the governor in council. I feel that the 5 per cent interest rate should be retained and that the government should, if necessary, subsidize the interest rate. This matter has been raised on numerous occasions in the house. We would not be doing anything that had not been done previously. Again I would like to point out to the minister that in last year's annual report of the Farm Credit Corporation it was shown that interest rates were subsidized. Further, in last year's main estimates for the Department of Agriculture a sum of $3,809,176 was included which I understand was mainly to take care of the excess of interest costs accrued by the Farm Credit Corporation. In view of the difficulties the agricultural sector of our economy is experiencing this year I see no reason why the department should not carry this subsidization forward for at least the next year or two.
e (3:30 p.m.)
There is another point I should like to make. The bill before us will increase the amount of money available for borrowing through the Farm Credit Corporation by approximately $400 million. Last year an amount of $194.5 million, I believe, was lent. If an amount of $3.8 million was required to subsidize the interest rates on the 1967 and 1968 loans, the amount needed to subsidize this additional $400 million over the next year or two, whenever the amount is used up, will not be excessive. I say to the minister and to the government that this is a very small price to pay to provide some degree of stability to
October 29, 1968

the farmers who need these loans. I suggest again, as I have on other occasions, that we make this subsidy available to the farmers, particularly in the coming year.


Robert Norman Thompson: Mr. Chairman, I have a question I should like to ask the minister at this time rather than deal with it on a specific clause. It has been some months now since farm credit loans have been available to farmers. During this interval a number of loans have been approved in principle. In fact a number of these loan contracts have actually been signed except that the rate of interest is not indicated in the contract. Has it been the policy of the department to sign contracts for farm loans leaving the rate of interest open but approving the loans? It seems to me that this certainly is not a very good way to conduct business, particularly when there are farmers whose approved loans are being held up.


Horace Andrew (Bud) Olson: Mr. Chairman, any approved loan includes the interest rate and the rates and amounts of repayment along with the dates.


Robert Norman Thompson: But do the old
rates of interest not apply until the new bill is actually passed? In respect of loans that have been approved in the last two or three months is it the policy of the government to require that the rate of interest be according to the new legislation rather than the old legislation which has been in effect?


Horace Andrew (Bud) Olson: In response to the hon. member's question, all loans that are approved are in fact contracts. The terms set down in those contracts carry on to the expiration of the contracts. If the hon. gentleman is asking whether any interest rates on existing contracts will be changed, the answer is no. Whatever they are they are until termination.


Robert Norman Thompson: The minister does not understand my question. I know of several cases in which the loan has been approved, the money has been granted and the rate of interest to be charged under that loan contract apparently has not been specified while the new legislation is pending. The contracts have been signed and the loans have been approved while the interest rates to be charged hypothetically in the future are held in abeyance until this legislation is passed.


Horace Andrew (Bud) Olson: I am advised that all loans that have been approved carry the interest rate in effect at the time of approval. If an indication
Farm Credit Act
has been given that loans have been approved pending this legislation or anything else, there is a misunderstanding of what was intended.


Robert Norman Thompson: I will be very pleased to refer one case in particular to the minister.


Randolph Harding: Mr. Chairman, earlier I raised a point concerning subsidization. Probably I should put a question to the minister. Have we subsidized the interest rates on any loans and, if so, will this subsidization carry on for the full period of the loan?


Horace Andrew (Bud) Olson: In respect of all loans that were granted at the statutory limit of 5 per cent, whatever the difference between that 5 per cent and the actual cost of the money to the corporation is could be construed as a subsidy. The Department of Agriculture in its estimates makes up the deficit of the corporation each year.
The difference between the rate of interest at which the contracts have been let-5 per cent for the first $20,000 in many cases and an economic rate beyond $20,000-and the cost to the corporation I suppose is a subsidy. But those contracts will carry on to their termination and certainly the estimates of the Department of Agriculture wifi have to provide for the deficit to the end of those contracts.


Randolph Harding: I have another question, Mr. Chairman. What is the total of the loans that have been subsidized in this fashion? Is it $194.5 million?


Horace Andrew (Bud) Olson: I am advised that they have been subsidizing greater or lesser amounts depending on what the cost of the money has been since 1959.


Randolph Harding: Would the total be $194.5 million?


Horace Andrew (Bud) Olson: I think it would be far in excess of $194.5 million, but it would take us a minute or two to try to get an approximation of the amount.


Randolph Harding: If we can subsidize an
amount of approximately $200 million in loans why can we not continue the same policy with regard to the additional $400 million which we are preparing to advance to the Farm Credit Corporation now?


Horace Andrew (Bud) Olson: The reason is that we would have to find the money by way of taxation. While it may be desirable to subsidize certain

October 29, 1968
Farm Credit Act
sections of the agricultural community, and indeed we do in greater or lesser degree, the point here is that I am of the opinion that there are far more desirable ways in which to subsidize agriculture than by being so selective in respect of subsidization that only those who borrow from the Farm Credit Corporation would be subsidized.
The policy changes from time to time. I would be the first to admit that. It seems to me, however, that if we have massive subsidization by way of interest rates of only a minority of the farmers in Canada-in this case it is about one out of four commercial farms which have loans from the Farm Credit Corporations-this would be discriminatory at least in some sense.
[DOT] (3:40 p.m.)


Mr. Danforih:: Mr. Chairman, I should like to pose a question and perhaps make a suggestion which might facilitate the passage of this legislation. I am sure the minister realizes that the members on this side of the house are very much concerned about the rate of interest that might be charged to the farmers under this legislation particularly, as has been pointed out many times, because it is long term in its application. May I suggest that when we reach the clause of the bill which deals with the proposed change in the interest rates the minister should give us a very detailed statement as to the formula he believes will be used, the method of its application, what we can expect as the interest rate in the view of the government under this proposed legislation and whether or not the interest rate will be reviewed periodically for adjustment upwards or downwards as the case may be. Would the minister consider giving us such a statement? I am sure it would facilitate the passage of the bill and make unnecessary a series of amendments to be proposed by the opposition in this regard.


Horace Andrew (Bud) Olson: That item could more properly be discussed under clause 5. However, I think the formula is very simple.


Harold Warren Danforth: I do not think the minister understood me. I am well aware it comes under clause 5. All I am asking the minister at this time is whether he is prepared to give us a detailed statement when we reach clause 5.


Horace Andrew (Bud) Olson: The formula is so simple I can give it now, although I have already given it. The interest rate will not be more than 1 per

cent above what the money costs the Minister of Finance.


John (Jack) Henry Horner: Would the minister indicate whether that is short or long term money?


Horace Andrew (Bud) Olson: It is comparable term.


John (Jack) Henry Horner: Comparable term; that is long
term or short term?


Horace Andrew (Bud) Olson: Mr. Chairman, there are ways of calculating comparable terms in respect of what the Minister of Finance has to pay for money and the money that goes out as loans under the Farm Credit Corporation. We would take an average of a comparable term.


Randolph Harding: To follow that up, what would the interest rate be today? Surely the minister knows that. If you were to go out on the market today what would be the interest rate? You say it would be 1 per cent above that.


Horace Andrew (Bud) Olson: Mr. Chairman, I am advised that the last loan made to the corporation by the Minister of Finance was at 6| per cent.


Randolph Harding: What was the date of the last loan?


Horace Andrew (Bud) Olson: It was October 1, 1968.


Mr. Skoberg:: Mr. Chairman, let me deal specifically with clause 1. I have some concern as to how the criterion is to be set down in respect of individual shareholders of corporations, having in mind the provision, principally occupied in farming. I have some concern in this regard because of a clipping from a recent copy of the Western Producer. This is an article from Madison, Wisconsin, and it warns that corporation farming would cause higher grocery bills. The article spells out here the penalties that would apply if corporation farms displaced family owned farms in this country. They would be considerable. The article goes on to suggest that a heavy burden of taxes would be borne by consumers to relieve crushing social problems as displaced farmers move to already overcrowded cities. It concludes by suggesting that a farm official has warned that the movement of nonfarm corporations into agriculture is not an idle threat.
I should like to know how the criterion is to be set down in so far as the definition of the words "principally occupied" in this clause is concerned.


Horace Andrew (Bud) Olson: Mr. Chairman, I am advised that "principally occupied" means simply
October 29, 1968

that. The man must be principally occupied in making his living from the occupation of farming.
Let me also reply to the hon. member for Red Deer and advise him that we are checking out the matter he raised in respect of a specific case. As soon as I have received a report I will make a further reply. According to the information passed on to me, this is contrary to the regulations.


John Leroy Skoberg: To follow that up in reference to the phrase, "a farming corporation where that individual is a shareholder of the corporation", the minister has suggested that the man must be principally occupied in farming and the majority of his time must be spent in that occupation. I am quite sure the act does not spell it out in that way or in so many words. There is no indication that he would have to spend upwards of 50 per cent of his time in farming occupations.


Horace Andrew (Bud) Olson: The man must be occupied in farming.


John Leroy Skoberg: Who will set down the criterion and who will police this particular part of the measure?


Horace Andrew (Bud) Olson: The F.C.C. officials in the field will make an assessment and I am sure an applicant for a loan would also have to make a declaration that this is the fact.


Martial Asselin: Mr. Chairman, like the member who spoke before me, I feel that the definition in clause 1 is not clear, that it is ambiguous.
The minister must know that the work of the eastern farmer is not necessarily the same as that of a western farmer. In short, our farmer cannot operate his farm the whole year round. In fact, he might leave his farm for three or four months during the winter to work elsewhere.
If I refer to the meaning given to the words "farmer" and "farming corporation" and if I go by the answer given earlier by the minister, I must take it that whoever wants to get a loan must engage in farming only and exclusively. But that definition cannot apply to the farmers in eastern Quebec, because at least 50 per cent will never be able to meet the conditions outlined in clause 1 of Bill No. C-110.
I would like to know if, in reply to a question put to him earlier, the minister really said that the farmer's sole occupation must
Farm Credit Act
be farming and that he must work at it full time. Does it mean that the farmer who cannot live all year round but only during seven or eight months on his farm income will be penalized or discriminated against when he tries to get a loan for his farming operation from the corporation the minister wants to set up?
Since I have the floor, I would like to ask another question. I would also like to know if the type of investigation made by the federal government with regard to loans made to Quebec farmers will change. Last year I had the opportunity of seeing in my office farmers who had applied for a federal loan; in almost every case, the federal government investigators simply went to the provincial Department of Agriculture to check the farmers' records, and if the standards of the provincial Department of Agriculture were not met, the farmers were refused those loans. I would like to know if the federal government investigation will be carried out independently from that usually made by a provincial investigator for a farm loan granted by the province.
Often, in eastern Quebec, the federal investigator consults the files of the provincial Department of Agriculture and merely by referring to that file, when he realizes that the request of the farmer was turned down by that department, he automatically refuses the request for a loan filed with the Farm Credit Corporation.
I therefore say to the minister that this bill will not serve the interests of the farmers of eastern Canada, because if one goes by the definition given in the bill, as soon as a farmer does not work on his farm twelve months a year he is not eligible under clause 1 as a "farmer" whose main occupation is agriculture and, therefore, he is unable to obtain a loan from the Farm Credit Corporation.
I wonder if the minister could enlighten us in this regard.
[DOT] (3:50 p.m.)


Horace Andrew (Bud) Olson: Mr. Chairman, in reply to the hon. member I would like to say that the Farm Credit Corporation have never excluded anyone for taking employment off the farm in off seasons. Indeed, grain farmers do not work on their farms the entire season, and they are not excluded. The words "principally occupied" do apply, however, and we mean by these words that it must be his principal occupation. The majority of his time

October 29, 1968
Farm Credit Act
must be spent in that occupation, and his income in particular must come from the occupation of farming.
So far as the other question is concerned, I would like to advise my hon. friend that the F.C.C. makes an independent assessment of the situation with regard to every application in the province of Quebec and everywhere else. But it does, of course, as do all agencies of this nature, obtain whatever information is available in order to make as accurate an assessment as possible of the credit standing of the applicant.


[Stage Direction]
Clause agreed to.
Clauses 2 and 3 agreed to.
On clause 4-
Harold Warren Danforth: Mr. Chairman, with regard to clause 4 I am particularly interested in subclause 2 (b) (i) which provides as follows:
(i) in the case of an individual, where in the opinion of the corporation the experience, ability and character of that individual are such as to warrant the belief that the farm to be mortgaged will be successfully operated.
I am particularly concerned about the fact that throughout this bill there seem to be provisions made under various clauses-I shall deal later with another clause which further amplifies my contention-whereby it will be possible for corporations or business enterprises, whose main purpose is the investment of capital rather than the promotion of agriculture, to move into the agricultural field using government money, having qualified under this act. I simply ask the minister whether this is the intention of the bill.
Under a previous clause the minister defined "farmer" as being an individual whose principal occupation is farming. But later in the bill we see that money may be lent to a corporation of which only one shareholder is engaged in farming. The only qualification is that he be principally engaged in farming and be 21 years of age. He may have three partners of any age who may be engaged in any business, but because of their financial investment they are a part of the corporation. I bring this matter to the attention of the minister at this time because it seems to me that if this is the interpretation to be placed on the bill it is designed to bring about vertical integration rather than to extend credit to individual farmers.


Horace Andrew (Bud) Olson: Mr. Chairman, I reply by saying that I cannot accept the argument that this will make it easier for corporations, the
IMr. Olson.]
shareholders of which are not farmers, to obtain funds from the F.C.C. for the purpose of setting up a farming unit. In clause 4 (2) (b) (i) there is spelled out the definition of an individual who would qualify under the bill. The provision is:
-where in the opinion of the corporation the experience, ability and character of that individual are such as to warrant the belief that the farm to be mortgaged will be successfully operated-
And so on. The purpose of this amendment is to relate these characteristics to the individual shareholders of farming corporations as members of co-operative associations, since it is recognized that these are qualities of individuals as distinct from the qualities of the incorporated body. Therefore we think this provision ought to be in the bill so that the opinion of the field men of the Farm Credit Corporation can be taken into account in assessing the individual's capabilities as a potentially successful farmer, rather than the corporate entity, even though the loan may be made to the corporation. We also believe that this will assist family farms, rather than hindering them, in competing with corporate farms, because it will give them availability to larger amounts of credit within the family.
Since it is four o'clock, Mr. Chairman, I wonder whether I might be permitted to read a press release respecting corn.


James Hugh Faulkner: Does the committee give unanimous consent to allow the minister to make the statement?


Some hon. Members:: Agreed.


Harold Warren Danforth: On a question of privilege, Mr. Chairman, may I request that if the minister is allowed to make this statement we be allowed the same latitude in commenting on the statement or questioning the minister on it?


James Hugh Faulkner: Yes. I would like to suggest to the committee that we follow the procedure that is normally followed when Mr. Speaker is in the chair. I will recognize a spokesman from each of the opposition parties, if there is one who wishes to speak to the statement, and we will try to limit the discussion in this way.


Horace Andrew (Bud) Olson: Mr. Chairman, a few extra copies of the statement have just been brought in. Perhaps hon. gentlemen opposite would like to have them. There are some in English and some in French.
Effective October 30, the federal government will apply value for duty on United
October 29, 1968

States corn imported into Canada. This will ensure that corn will not move into Canada at prices below the U.S. support level of $1.05 U.S. per bushel. We have made this move after full consultation with the United States in accordance with our international trading obligations. I am confident that our action will bring a considerable measure of stability to the current corn marketing picture. I am pleased that we have been able to do this before quantities of U.S. corn have been imported into Canada at prices below their support level.
[DOT] (4:00 p.m.)
While the application of value for duty will bring considerable immediate benefit, there is no thought that it represents a permanent solution. Very fundamental marketing problems still exist for our corn growers in southwestern Ontario. For our part, we are continuing to pursue every possible avenue for answers to these problems. In the final analysis, however, producers themselves must play an active role in bringing about solutions. As I have said before, the means exist by which producers could relieve the marketing problem by creating a corn marketing agency under provincial legislation. Such an agency would be able, through more orderly marketing of Canadian corn, to stabilize and strengthen corn prices.
I also wish to note that other recent federal government action has included accelerating the depreciation allowance for farm storage facilities and the guaranteeing of storage space for corn in downstream elevators.


Harold Warren Danforth: Mr. Chairman, the minister through his statement today has finally conceded the truth of the contention by the farmers of Ontario that corn has in effect been dumped into this country from the United States-


Horace Andrew (Bud) Olson: No, I did not.


Harold Warren Danforth: -and action has at this late date been taken by the government to apply value for duty on United States corn imported into Canada, although only to the extent of the U.S. support level of $1.05 a bushel.
The minister did not state how this affects the 8 cent duty already established against United States corn, a rate which was unable to protect our market. We would like to know whether the 8 cents a bushel duty will continue in addition to the value for duty provision or whether one will be substituted for the other.
Farm. Credit Act
It is unfortunate that for the most part the damage has already been done to the Canadian market this year. A tremendous amount of Ontario and 'Canadian corn has already been harvested and sold through normal market channels. The minister's announcement will be cold comfort indeed for those farmers who have already been forced to dispose of their crops. Through its action even at this late date the government has finally recognized that the contention of the producers was valid.
The minister himself says this is only a temporary measure. I hope, therefore, that active consideration will be given immediately to methods by which the Canadian market will be protected for the 1969 crop. Surely the producers of this crop are entitled to a fair market return for their investment and labour, as are those who work in other segments of the industry.
These arrangements could certainly have a stabilizing effect on the corn market in Canada-I am not saying they will-and might stabilize sales at better than the current price. But the lateness of government action and its limited scope indicate that the over-all picture for corn growers in 1968 will be a gloomy one.


Mr. Gleave:: Might I ask the Minister of Agriculture a question? What does this announcement really mean in terms of a stabilized price for producers? Is the minister in a position to answer this question? I am not speaking facetiously.


Horace Andrew (Bud) Olson: I realize that this is probably against the rules under which we normally proceed but perhaps I could reply by saying this. I omitted to tell the committee that $1.05 works out at around $1.28 in Canadian funds making allowance, according to our calculations, for 8 cents duty, 8 cents exchange and 7 or 8 cents in transportation costs.
Mr- Gleave: The important factor, now that the government has taken this action, is what this really means to the producer. I talked to some of the corn growers when they were here, as I am sure the minister did. One figure they gave me for production cost was $1.27 per bushel. They quoted that figure as being the actual cost of production. I think it is fairly reliable though, of course, costs of production figures vary, as any of us who farm know. So the action proposed, taking into the account the information the minister has just given us, would just about bring the price within a cent of the cost of production.

October 29, 1968
Farm Credit Act
In accordance with the assumption just made, it would not leave the farmer anything by way of a profit or net return.
However, I say quite frankly that I think the government has moved to meet the situation at least in a temporary way. I judge from talking to these farmers that their situation is as serious in its way as the one farmers face in western Canada. I hope the government will now move seriously and quickly, either on its own or together with the province, to stabilize the price of corn at a level which will enable growers to operate successfully and, to use the term we normally use, economically. Some of the things which might be done are mentioned in the press release.
[DOT] (4:10 p.m.)


André-Gilles Fortin: Mr. Chairman, first of all, I want to tell the Minister of Agriculture (Mr. Olson) that we welcome his statement concerning the application of value for duty on United States com imported into Canada, since this solves in part the problems raised by a great number of Ontario farmers as to the price of Canadian corn and the dumping practised by the United States.
However, Mr. Chairman, we maintain that this measure is incomplete, because it is not drastic enough. Let us say that it is a makeshift, since it does not involve a complete solution designed to protect Canadian production.
For instance-and I should like to point this out to the minister-we face the same problem as concerns the Canadian celery production and the potato production in eastern Canada. I think it rests with the minister and his officials to look into the problem immediately, so that we are not faced with urgent situations as the one that arose a few days ago about corn.
I also want to thank the minister for having given us the French version of his statement; we are pleased to mention this, because most statements made in this house are usually delivered in English, without a translation being handed to us.
Mr. Chairman, our anti-dumping legislation must be drastic. That is why I am puzzled at this announcement of the Minister of Agriculture, because it creates a buffer situation which will have to be faced again some time from now. I understand that our economic situation, like that of other countries, changes constantly, and that we must adjust to it.

That is why I think that when the government intervenes too late, when the damage has already been done, remedial measures must be taken. That is why I ask the honourable minister whether he anticipates the introduction of measures providing for a compensation for the losses incurred by the farmers during the crop year 1968. I notice that no such measure is provided in his statement.
In closing, I should like to call the attention of the honourable minister to another subject which is not really related to this discussion but which comes under his department. We would greatly appreciate it if he would tell us soon whether the Canadian Dairy Commission might issue new milk quotas and raise the present quotas for the farmers concerned. I know that in the Lotbiniere riding, for instance, many farmers are deprived of revenues to which they are entitled for the simple reason that the policy of the Canadian Dairy Commission at the present time is restrictive.
I think that, at the present time, it is an urgent matter for eastern Canada, and although I praise the minister for his work with regard to western farming, I should like him now to turn his attention towards the eastern farmers and to take drastic measures with regard to the dumping of some American goods.


Mr. McCulcheon:: Would the minister permit one brief question?


James Hugh Faulkner: Order, please. I do not want to be too severe, and perhaps by leave of the committee we might allow the hon. member for Lambton-Kent one question. The understanding was we would hear from the official spokesmen of the various parties and then revert to the bill. Is it the will of the committee that the member be allowed to ask a question?


Some hon. Members:: Agreed.


Mr. McCutcheon:: Thank you, Mr. Chairman. The minister mentioned in his statement that corn would be roughly $1.28 per bushel, having regard to the exchange and all the other factors. Cash corn in Chicago has been $1.07 but Canadian corn has been much lower. In fact, was the minister not saying that United States corn in Canada would be $1.28, not necessarily Canadian corn.


Horace Andrew (Bud) Olson: The answer, Mr. Chairman, is yes. But I am of the opinion also that the
October 29, 1968

possibility of what is referred to as free United States corn coming into Canada at substantially lower prices than the United States support level is causing a depressing effect on our market in Canada now. By putting on a value for duty we are not going to change the price immediately but all the the traders who are in the business will know their competitors will not some day, two weeks or some time from now within the navigation season, be able to obtain corn at a substantially lower price than they are paying Canadians now.
I am fully aware of the fact there are other problems, as I mentioned in the statement, with regard to competition in Canada, such as competition for drying and storage facilities because of the congestion at harvest time. We do not claim to have corrected that problem by this action. However, it will put a floor under the competitive factor in so far as United States corn is concerned. I hope that will have a stabilizing effect.


Maclyn (Mac) Thomas McCutcheon: I do not want to impose, but the price relates to No. 2 corn, does it?


Horace Andrew (Bud) Olson: There is no grade mentioned in the statement.


James Hugh Faulkner: Order. The committee will now revert to the consideration of Bill No. C-110. Shall clause 4 carry?


Mr. Burton:: Unfortunately I had to be out of the house for a few minutes when clauses 2 and 3 were being considered. I wonder whether I might have the permission of the committee to revert briefly to these clauses in order to ask one question on each of them?


James Hugh Faulkner: Does the committee grant leave to revert for the purpose of two questions by the hon. member?


Some hon. Members:: Agreed.


John Stratford Burton: Clause 2 deals with the security for mortgages and loans. I should like to draw the attention of the committee and the minister to a letter which the minister has received and of which he will be fully aware. However, I do want to raise the matter in the house. This letter was sent to the minister by the National Farmers Union and relates to the security arrangements. It is dated October 8 and is from the president of that organization. Copies of it have been made available to some members. It reads:
We have been concerned in the past about the security demanded by Farm Credit Corporation to back its loans, which appears to be in excess of what seems essential.
Farm Credit Act
In our submission to your government on March 7 of this year, we gave the example of a farm wife in Saskatchewan who was required to sign away her rights under the provincial homestead act on the home quarter section of land which, in addition to two other quarter sections of land, was required by the Farm Credit Corporation as collateral for a loan of $12,000 for the construction of a farm home. It is our feeling that security of this type exceeds the need.
Furthermore, there appears to be a conflict between the federal and the Saskatchewan homestead acts in this instance.
We would appreciate some assurance from you that the proposed amendments would be broad enough to eliminate the need for the wife of a farmer to be dispossessed of her rights guaranteed under provincial legislation where such rights exist.
I would be interested in having the minister's opinion on this representation that was made to him.
If I may, I should like at the same time to ask my question on clause 3. I understand that this provision raises the capital of the corporation to $56 million and also has the effect of raising by $400 million the amount of money that may be lent by the government of Canada to the Farm Credit Corporation. How long does the corporation, in its forward planning, expect this additional amount of money will be adequate to meet its lending needs in so far as can be foreseen at this time?


Horace Andrew (Bud) Olson: In reply to the hon. member's question on clause 2, I do not believe that the matter the hon. gentleman raised regarding the provision that a wife sign away any of her rights applies to this clause. From time to time borrowers wish to rearrange their holdings and make substitution for the security on the mortgage to the corporation. The purpose of clause 2 is to make it clear the corporation has the power to agree to such exchanges without the necessity of proceeding by way of an entirely new loan. That is the purpose of this amendment.
With regard to the provision of the Saskatchewan homestead act which requires that a wife agree to sign any mortgage being placed on the home quarter, it should be noted she does not sign away her rights nor is she dispossessed of any rights under the homestead act. She gives priority to the claim of the mortgage, and only to the extent of the interest of the mortgagee in the property. Since the loan given is as much in the interest of the wife and family as it is of the borrower, there can be no injustice in this requirement, and any individual person or institution must have the wife's signature if a

October 29, 1968
Farm Credit Act
valid first mortgage is to be taken as security for a debt.
This requirement is not peculiar to Saskatchewan. In Ontario, for example, a wife must bar her dower rights in order that a valid first mortgage can be registered against the home unit.
So far as the second question is concerned regarding clause 3, we estimate that the additional fund, together with the repayments that will be coming in from loans already extended, will last about two and a half or three years, although we cannot estimate that precisely.


James Hugh Faulkner: Shall clause 4 carry?


Harold Warren Danforth: I am still convinced in my own mind, although we have a statement to the effect that loans will be made only to individuals whose principal occupation is farming, that other clauses in the bill circumvent the purport of this clause. It is my contention that this provision is an admirable vehicle for vertical integration. If I were so inclined I could take advantage of it for vertical integration. There is another clause in the bill which states that the Farm Credit Corporation may lend to a farming corporation, and only one shareholder need be principally occupied in the farming operations of the corporation. The only other qualification is that he must be 21 years of age.
[DOT] (4:20 p.m.)
To bear out my argument in this regard I point out that there is also a provision in the bill that will delete a regulation under the act which stated that an individual had to have five years' experience in farming. Under the proposed amendment to the act a man who proposes to take up farming does not even require five years' experience.
Therefore, my contention is that it is possible for a group of businessmen to come within the terms of the act by associating with one individual who is over 21 years of age and willing to undertake the profession of farming, the only other qualification being that they must satisfy the corporation that as a group they will be able to carry on an economic farm operation. Although there does seem to be sufficient protection under clause 1 and clause 4, further clauses in the bill give the Farm Credit Corporation the power to make loans to establish strong, vertically integrated corporations, formed as business or capital investments to carry on the business

of farming, an occupation that the act was designed to help.


Horace Andrew (Bud) Olson: Mr. Chairman, the answer to the hon. gentleman's question is, I think, to be found in clause 1 which states that the corporation cannot lend money to anyone who does not qualify as a farmer as defined in clause 1.


Harold Warren Danforth: All that the clause says about a farmer, Mr. Chairman, is that he is an individual whose principal occupation is farming.


Horace Andrew (Bud) Olson: The clause goes on.


Harold Warren Danforth: I know it goes on. It goes on to define what a farmer is. It goes on to say that a farmer is an individual who is the owner of farm land and that he must be 21 years of age. I contend that a corporation could thus qualify. The clause defines a cooperative farm. A co-operative farm has to satisfy the corporation that it is being carried on as an economic unit.
Clause 1 and, by interpretation, later clauses of the bill make it possible, I suggest, to carry out the type of farming operation to which I have referred. It depends on how the Farm Credit Corporation interprets the regulations. The clauses of the bill set out in no uncertain terms that the corporation may make loans to farm corporations. Clause 10 provides that a loan may be made-
(b) in the case of a farming corporation of which, at the date the loan is approved by the corporation, only one shareholder has attained the age of twenty-one years and is principally occupied in the farming operations of the corporation-
Under clause 1 a farmer is defined as an individual whose principal occupation is farming, or who could be established on a corporation farm as a farmer. All that is required is the fulfilment of the rest of the qualifications so as to satisfy the corporation that the farming business will be an economic one when carried on in this fashion.
According to other provisions in the bill such a corporation may borrow money only as long as it shows to the satisfaction of the corporation that such money will be used for farming purposes. I am wondering whether the minister is aware of this and whether he can point to any further safeguards which are not apparent to me and may make such a proposition impossible.


Horace Andrew (Bud) Olson: Mr. Chairman, clause 1 defines a farmer as an individual whose principal occupation is farming. Then it goes on to say that
October 29, 1968

a farming corporation will be defined by regulation. I think the hon. member realizes that the majority shareholder in such corporation must be a person or persons who is or are primarily occupied in farming. The change from a family farm corporation to a farming corporation allows for the kind of arrangements to be made that I mentioned some time ago. It allows people who are not closely related to take advantage of efficient farm operations and to compete with large commercial corporations in the farming industry.


John (Jack) Henry Horner: May I interject a question here that perhaps the minister can clear up? Is the minister saying that somewhere in the bill there is a clause that provides that the majority shareholders of a corporation must be actively engaged in farming? Is there a clause that specifically spells that out? According to clause 11, the direct opposite is the case. According to clause 11 only one person has to be a farmer.


Horace Andrew (Bud) Olson: This will be dealt with by the regulations. I would advise my hon. friend that the holding would perhaps be substantially above 51 per cent.


Harold Warren Danforth: Mr. Chairman, in spite of what the minister has just said, in the clauses of the proposed bill there is provision that the corporation may make loans to any shareholders who are principally occupied in, or shortly to become principally occupied in, farming operations. If I wish to invest capital in a farm corporation and I am not engaged at the time in an occupation or trade but am receiving even small remuneration from corporate farm holdings, then under this act I can classify myself as a farmer since I derive a source of revenue from farming. Therefore I still contend that under this act no definite provision in this regard is made because the one provision, in my considered opinion, completely nullifies the other regulations as stipulated.


Horace Andrew (Bud) Olson: Mr. Chairman, according to the clauses of the bill a farming corporation must be one that is defined by regulation. This is not new; this has been the case in the past. I did mention to my hon. friend from Crowfoot that 51 per cent of the shares must be held by practising farmers. He need have no fear of the regulations with regard to this matter; it could be substantially higher than that figure.


John (Jack) Henry Horner: Would the minister permit a question on that point? What is the thinking
29180-137J
Farm Credit Act
behind this figure of 49 per cent or some lesser amount in order to bring non-farmers within the terms of the bill?


Horace Andrew (Bud) Olson: One of the main reasons is that there may be in a family corporation a minor who has been willed or in some other way bequeathed an interest in the farm. If there were no provision in the regulations in relation to a minority interest in a farm on the part of someone who is not an active farmer, then active farmers or an active farmer in a family corporation would be prohibited from making application for a loan. This will be very much of a minority interest. By restricting this matter it seems that we shall be doing the other members of the family who are active in farming a service by not prohibiting them from making an application.
[DOT] (4:30 p.m.)


John (Jack) Henry Horner: By permitting junior members of the family corporation to enter into agreements with the Farm Credit Corporation is the government not creating a loophole which will allow businessmen and others not particularly interested in agriculture to borrow money and invest it in land? Could businessmen not join together, buy up farm land and hold on to it as an investment? Farm land has become more valuable, and many have bought it purely as an investment.


Horace Andrew (Bud) Olson: I do not think that would happen because the regulations and instructions to those administering the legislation will be such that we shall avoid that happening. I might explain to the hon. members for Kent-Essex and Crowfoot that except for the provisions of this legislation young members of a farm family who wanted to apply to the corporation for a loan would first have to find cash to buy out other interested members of the family. To remedy this situation is one reason for the provisions of this legislation.
With regard to the second point raised by the hon. member for Crowfoot, I can assure him that we do not intend to let land speculators use F.C.C. money.


John (Jack) Henry Horner: It is hard for anyone to read intentions in a man's mind. A farmer might buy land, hold on to it for a while and sell it three or four years later. No one knows a man's ultimate intention when he applies for a loan.


Harold Warren Danforth: Perhaps I can make my point clear by citing an illustration. Say that under this act three individuals approach the

October 29, 1968
Farm Credit Act
Farm Credit Corporation and borrow $100,000. This is possible. These individuals would, of course, form themselves into a corporate farm. Conceivably, another three men might become interested in an adjacent property and with respect to that property the six individuals could form themselves into a syndicate. As a syndicate they could borrow up to $100,000 for the purpose of establishing, say, a grain dryer. The result is that we then have a vertical corporate enterprise that has borrowed up to $200,000 of the government's money at a stipulated rate of interest for a long term.
Under the present proposal it seems that only two of the individuals concerned would have to be farmers. If six men were involved altogether it would mean that less than 50 per cent of the corporate members would be actively engaged in farming. It seems that the minister's proposal will enable businessmen to move into agriculture. Let me say at once that I am not averse to business or capital moving into this field. Nevertheless, it could well be that individuals who now find it hard to farm might even find it harder under the new legislation.


Horace Andrew (Bud) Olson: I hope my answer may clear the matter in my hon. friend's mind. Those who make such applications must be occupied principally in farming. The case of corporations is clearly defined. It has been said already that well over 50 per cent, perhaps up to 75 per cent, of the shares in the corporation must be held by those actively engaged in farming.
In the hon. gentleman's example, three farmers acting together might, under this legislation, borrow up to $100,000 from the corporation. In the case of a syndicate the loan would be three times $15,000 or $45,000, to set up a grain dryer. These amendments are to allow farmers to form themselves into co-operatives or corporations. They will then be able to form large units and buy all the necessary equipment to make farming an economic proposition. In fact, farmers will be able to compete with those whose principal occupation is not farming and who enter farming on a commercial basis. We hope that our amendments will result in making it easier for farmers to farm and to form themselves into co-operative corporations so that they can farm economically and successfully.


John Leroy Skoberg: I am sure we all think that for the good of our country we must have successful farmers. Nevertheless, I have my doubts about the legislation and I think the
[Mr. Danforth.l
fears expressed about farming being taken over by corporations may become a reality.
May I direct the minister's attention to clause 4(2)(b)(i), which begins with the words "in the case of an individual, where", etc. How much practical knowledge do the field men who make the final determination with regard to F.C.C. loans have? I expect other hon. members have heard what I am about to say. Rightly or wrongly, some farmers maintain that the field men employed by the corporation have no practical knowledge of agriculture. It is true they have been to university and have qualified for the jobs they have been asked to fill. All the same, they have had little experience of practical farming. Is practical knowledge a requirement when men are asked to fill field positions? Let me say I am completely in favour of agricultural schools at which people can obtain agricultural degrees. Nevertheless, a man's practical experience ought to be considered.


Horace Andrew (Bud) Olson: Mr. Chairman, we do require our field men to have practical experience in farming. Many of our field men have university degrees in agriculture. They have attended agricultural schools and specialized in various subjects at those schools. When they are engaged by the Farm Credit Corporation they are given further training in management and are told their functions and the purposes behind the administration of the act. I think we have a proud record in the quality of personnel administering the act in the field. The specific answer to the question is that they must indicate that they have had some practical experience in farming.
[DOT] (4:40 p.m.)


John Leroy Skoberg: I am a little disappointed that we do not have the regulations before us because as far as I can see they really form the basis for the bill. I hope that the men in the field will not be placed in the position of putting different interpretations on what the regulations mean or should mean. Will the regulations be clear enough to spell out exactly what is required in this regard?


Horace Andrew (Bud) Olson: The regulations made under any act, and this bill is certainly not unique, are always written after the act has been passed. That will be done in this case. I can assure the hon. gentleman that the regulations, directives and instructions to the field men will be drafted and given in such a way as to carry out the letter, intent and spirit of the act.
Ociober 29, 1968


Harold Warren Danforth: The minister has given us an undertaking that the last annual report of the Farm Credit Corporation will be placed at the disposal of the standing committee on agriculture. Presumably this bill will have been passed and proclaimed in the interim. Will we then have an opportunity to examine the regulations in detail and satisfy ourselves that the problems we are faced with are being met?


Horace Andrew (Bud) Olson: Certainly, Mr. Chairman. When the annual report of the Farm Credit Corporation is referred to the committee we shall be willing to attach a copy of the regulations drawn up following passage of this bill. Obviously they will be drafted as quickly as possible following passage of the bill. 1 can foresee nothing to stop the committee inquiring into the regulations.


Harold Warren Danforth: Then I am satisfied.


Alfred Pullen Gleave: Clause 4(2)(b)(i) reads:
-in the case of an individual, where in the opinion of the corporation the experience, ability and character of that individual are such as to warrant the belief that the farm to be mortgaged will be successfully operated-
I hope the corporation will place some emphasis on this part of its operation. Rightly or wrongly, evidence in certain instances has forced me to the conclusion that in recent years the corporation has placed considerable emphasis on the amount of security demanded. It bothers me to think that a senior farmer, in order to get a younger member of his family established in farming, is faced with a demand that he mortgage most of his holding. I would like to hear the minister's comment on what the policy will be. I expect that if I were responsible for the affairs of the Farm Credit Corporation I would want as much security as possible. However, excessive security demands should not be made.
I should also like to ask the minister how many supervisors the corporation has to assist the type of individual envisaged by this clause? I know the corporation has competent men in the field to assess loans. Does it have men specifically trained to assist a farmer after he has received a loan and to help a group of farmers within a given area in matters of farm management? Such an area might extend over 100 or 150 miles. Does the corporation train staff for this purpose?


Horace Andrew (Bud) Olson: I suggest that the hon. member could more satisfactorily ask those questions of witnesses who will be called before the agricultural committee when the corporation
Farm Credit Act
report is referred to it. However, I should advise him that there are approximately 275 advisors who are trained in assessment and supervision. I should also advise him that all of them are trained in farm management practices.


Alfred Pullen Gleave: Is the minister seriously suggesting that all of the staff which the corporation uses to make loans are competent to give a farmer advice and help year by year or month by month and assist a young farmer with the operation and management of his farm? Surely he is not seriously suggesting that all the staff are in that category?


Horace Andrew (Bud) Olson: I certainly do not want to leave the wrong impression. The figure of 275 is not the_ total personnel of the Farm Credit Corporation. We have 275 field men and all of them are trained for purposes of supervision, assessment and farm management. So far as competence is concerned, that is a relative thing. No doubt one could find farmers in all parts of Canada whose competence and managerial skills would be equal, or superior in some cases, to those of F.C.C. personnel. Further, we have an advisory committee composed of competent farmers, or what we hope are competent farmers. In any event, we regard them as competent farmers. That committee gives us advice on how the regulations should be applied from time to time.
It is difficult for me to give a positive answer on the relative degree of farm managerial skills possessed by any one or by all of the corporation's personnel, but I am satisfied it has a good field staff and we are aomg all that can reasonably be done to keep the standards as high as possible.
[DOT] (4:50 p.m.)


Alfred Pullen Gleave: I am sure you are doing all that can be done, but I am trying to point out that I believe there is a hole in the operation. If it really is the intention to carry out the supervisory role, to really do something in respect of a program for the younger farmer who is entering the field and make credit available on the basis of the individual rather than on the basis of massive security, I think you will find that you have not a large but rather a limited number of people who are capable of effectively carrying on this type of work. I do not believe you have them, Mr. Minister.


Horace Andrew (Bud) Olson: I do not like to disagree with my hon. friend at this point when we are

October 29. 1968
Farm Credit Act
getting along so well, but I must tell him rather frankly that I think we do have them.


André-Gilles Fortin: Mr. Chairman, I should like not only to address some brief remarks to the minister at this stage, but also ask him a few questions concerning farm credit.
We are talking about the regulations and personnel of the Farm Credit Corporation. In answer to a question which I had put on the order paper concerning the administration and the administrative staff of this corporation, I was given some figures-I do not remember them, but they could be checked- showing that the Farm Credit Corporation is a sort of Anglo-Saxon reservation.
First of all, I should like to ask the minister, if he has the figures with him, to confirm or deny what I say and to tell me that is how the Farm Credit Corporation, like other crown corporations, incidentally, applies the bilingual policy of the government.
In the second place, Mr. Chairman, I would like to specify that we earnestly hope that the style of the regulations enacted after the passage of the bill will be simple, comprehensible and will fully indicate all implications of the legislation, especially from the financial point of view.
I therefore conclude my brief comments by asking the minister to make a very great effort so that bilinguism will become an actual fact in the public service, especially in the Farm Credit Corporation.


William Marvin Howe: Mr. Chairman, in my earlier remarks concerning this credit legislation I made reference to a situation which developed in my own area this year when hurricanes and disaster plagued the farmers in part of Grey county. At that time I asked the minister whether there was a policy whereby the corporation might grant a moratorium in respect of future payments if any of these farmers, because of the disaster, are not able to make their payments on farm credit loans. I point out that I asked the minister whether he would consider matching a provincial government grant or matching dollar for dollar the money raised in the area by friends and neighbours. I am wondering whether the officers of the corporation in that area, or the corporation generally, have any policy with regard to extending the time in which these farmers may make their payments if there should be farmers who find themselves in difficulty.


Horace Andrew (Bud) Olson: Yes, Mr. Chairman. I am
advised that we do not do this for an area. We do not declare a general moratorium in respect of payment for a whole area. But with regard to individuals in an area where a natural disaster, if one may call it that, has occurred, very sympathetic consideration is given to applications that payments be deferred.


Mr. Howard (Okanagan Boundary):: I
should like to comment on the question raised a few moments ago regarding the competence of the departmental examiners. I have had some experience in working with these people in my own riding. I have found them to be most competent. I have seen evidence that they knew far more about the farming business than did some of the applicants for loans. I believe it is very much to their credit that they should have this much knowledge and experience.
A method is used in the United States that might be worth mentioning here as something which might be applicable when consideration is being given to further revisions of this act. Under the land bank system in the United States loans of this kind are made by a board in each community. The board is composed of experienced farmers from the area. These farmers have the power and authority to grant the loans in conjunction with the government representative.
This type of arrangement makes it possible for the farmers themselves to give to a new farmer the kind of assistance and advice that has been mentioned. In this way the loan board in effect goes farther than just providing money. It is in a position to provide both experience and assistance to a man who may be in need of it. I have watched this type of operation in the United States and it would appear to be a most effective way to handle this problem. This might be something we could consider in respect of our own Farm Credit Corporation at some time in the future.


Horace Andrew (Bud) Olson: All I wish to say in response to the hon. member's comments and suggestions is that I am advised by the chairman of the Farm Credit Corporation that they are familiar with this organization in the United States.


Edward Richard Schreyer: Mr. Chairman, the hon.
member for Kent-Essex and the hon. member for Crowfoot have attempted to obtain from the minister the assurance that nothing in this
October 29, 1968

bill will encourage the greater entry of corporate farming into the Canadian scene. I know the minister has given the verbal assurance that it is not the intent of Bill No. C-110 that this situation should come about. However, when one looks at certain provisions in the bill-I refer particularly to clause 4, subclause 2(b), and clause 11-one cannot help but feel a little uneasy because it would seem there is more than adequate provision here. There would appear to be a large loophole in the bill which would enable the Farm Credit Corporation at some future date to extend loans in a massive way, if there should be a change in policy to that end, to large companies which wish to become involved in argicultural production. For example, in subclause 2 (b) (ii) we see the following:
-in the case of a farming corporation or a cooperative farm association, where in the opinion of the Corporation the experience, ability and character of those shareholders or members who are principally occupied in the farming operations-
I shall stop there because the implication is clear that certain shareholders need not be principally occupied in farming operations. It would seem equally clear in clause 11 that there is again reference to a loan being extendable to persons or corporations which have not become involved in agricultural operations but merely have the intent to do so at some future date.
[DOT] (5:00 p.m.)
I merely want to point out to the minister that with the passage of this legislation there will be a great onus on him to live up to the words of assurance given a few days ago and again today, that in fact this bill is not intended to encourage in the slightest way a greater entry of corporate structures into farming and agricultural production. I realize that the minister can get up again and say that all he can do is reaffirm that this is not the intention of this legislation or this government. But let me point out to him that the wording of the proposed legislation is such that it certainly creates a loophole big enough for a team of horses to be driven through.


Horace Andrew (Bud) Olson: The hon. member anticipated the answer. I gave an undertaking that this legislation was being brought forward for the purpose of assisting family farm units to compete with the invasion-I think that was the hon. member's word-by commercial enterprises into farming. I have to rely on the explanation I gave. As is mentioned in the bill, the corporations are those limited type of
Farm Credit Act
corporations as defined in clause 1, and this will be spelled out in so far as the shareholder's interest in the corporation is concerned. It will be spelled out in the regulations. Those shareholders, except for the very few or the minority which I mentioned a few moments ago, will have to be principally occupied in farming. They will have to be persons actively engaged in operating farms.


Stanley James Korchinski: Now that the minister has gone that far I should like to know exactly where we are drifting. My opinion is that we are moving directly toward corporation farming. The minister has given us the assurance that he is trying to stave off this movement. I hope he can be successful. He suggests that the prime interest must be in agriculture. How does he intend to move toward this goal? Does the minister intend to require that so much money must be gained from farming? If that is so, how will the regulations apply in a bad year when everyone knows darn well that he is not going to make any money out of farming? These people are likely to find occupations in which they can make some income. It is in these years that people want credit from the Farm Credit Corporation.
The minister has not convinced me that we are not moving toward corporation farming. What are we going to do about those people who find themselves in this twilight zone, if you like? We will find many people in this position. This is not a laughing matter. The minister thinks it is funny because he is smiling.


Horace Andrew (Bud) Olson: No, he does not, Mr. Chairman.


Stanley James Korchinski: Let me tell the minister in all sincerity that there are many people who are honestly trying to make a living from farming. They dearly want to be able to do so. They need credit. What will happen is that someone here will decide whether they should be given credit or whether they will have to get out of farming.


Horace Andrew (Bud) Olson: Perhaps I could reply to the hon. gentleman by reminding him that over the years this matter has been controlled satisfactorily in relation to the provision that an applicant must principally be occupied in farming. This is not going to change. These words have to be added in order that this will apply to individuals who are also in corporations, family farm corporations and so on. That is not going to change.

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Farm Credit Act
If because of adverse weather conditions or anything of that nature someone finds it necessary to obtain some income from farming, the regulations will not be any more severe than they have been in the past. This is something that must be looked at every year, I suppose in some part of Canada. The same rules and the same spirit, if you like, will be followed in making allowances in respect of applications. I am sure my hon. friends will agree that these people have done a very satisfactory job in the past in this regard.


Stanley James Korchinski: Those are fine and dandy words-great phraseology. The man involved in agriculture who is trying to eke out a living on the farm finds himself in direct competition with the service station and machine shop operators.


An hon. Member:: Ha, ha.


Stanley James Korchinski: Someone said "ha, ha". I do not know whether that came just from the Toronto section or from the Liberal section. I suggest that the Liberal party better have a caucus and realize that there is a problem in agriculture. One thing members opposite had better learn is that the farmers are not fleecing the country; they are feeding the country. Let us face up to that fact. The hon. member who was trying to be funny a few moments ago had better remember a few things. Farmers are not farming because they want to be generous. Every one of these farmers would like to live in the same kind of house the people of Toronto live in, but nobody seems to be worried about that aspect of farming. They are worried about the kind of houses that people in Toronto, Montreal and Ottawa live in, and they spend a great deal of time working on their problems.
Perhaps this worry is justified, Mr. Chairman, and that is fine. However, if you are living in a log shack I suppose that is fine too because people think you are doing so for the benefit of the country. This is supposed to be a just society. I say to you, Mr. Chairman, that it is about time the heehaws stopped on the Liberal side. The Indian communities have a just right to complain about what they are up against. They are not living in beautiful homes such as-


An hon. Member:: Order, order.


Stanley James Korchinski: Someone has said "order, order". I wish there were some order but there is no order in this just society. This minister right now-


The Deputy Chairman:: Order, please.
There should be order in the committee, and I ask the hon. member to kindly come back to the consideration of clause 4.


Stanley James Korchinski: I will gladly come back to the clause, Mr. Chairman. All I am suggesting at the moment is that if we do not consider the situation in which these people find themselves we might as well throw this whole bill out the window. If we are not at all concerned about the welfare of these people or bringing up their standard of living, I should like to ask the minister what is the purpose of this bill.


Horace Andrew (Bud) Olson: Let me assure my hon. friend that this is the purpose of the bill.


Stanley James Korchinski: Those are nice words, but does the minister really believe what he says?


Horace Andrew (Bud) Olson: Yes, he does, Mr. Chairman.


Stanley James Korchinski: I have to accept the
minister's statement. The point is that in a few years' time when we see these huge United States corporations taking over all our land in Canada and a large number of people drifting away and we go with our hats in our hands to the minister, I am sure the minister will simply suggest that we wait. I asked the Prime Minister today whether consideration was being given to a moratorium on the interest rate, and he said no.
[DOT] (5:10 p.m.)


Albert Béchard: Order. For the
second time I would ask the hon. member to restrict his remarks to clause 4 of the bill, which we are discussing at the moment.


Stanley James Korchinski: Mr. Chairman, I do not think I have to say very much more. I believe the minister has already got the message. The minister is very well aware of what is happening in the farming industry. I may have been slightly off base in my remarks with regard to what is intended in the bill, and the Chairman has called me to order, but I did not intend to do this. However, this discussion gives me a forum to make my point. I believe the minister will accept the fact that we are quite prepared to go ahead with certain aspects of the legislation but we must point out certain matters to him. The minister has been bragging about the legislation and saying we are the only ones stopping if from being the salvation of the farmers.
We are quite prepared, as I say, to go ahead with certain aspects of the bill but
October 29, 1968

there are matters which have to be dealt with. The minister will be in real trouble in a few years' time when American corporations and others enter the agricultural field. I am sure the Minister of Agriculture really wants to be helpful in this regard but finds himself in a position where his hands are tied because he is trying to be too helpful to too many people at the same time. I do not think he wants to help the wrong people. I believe he is sincere about what he wants to do for agriculture.


Some hon. Members:: Hear, hear.


Stanley James Korchinski: I am glad to receive
applause, Mr. Chairman. I think the minister knows what the problem is and I want to express it before anybody else does. But if he does not do anything to solve the problem I will be the first to criticize him. I say that he is doing nothing to prevent corporations entering the agricultural field and swallowing us up. This is a question which the minister has to consider seriously.


Edward Richard Schreyer: Mr. Chairman, I would ask the minister to focus his attention on lines 30 to 40 of clause 4 as they appear on page 3 of the bill. I ask the minister to visualize the following specific case. Let us say that a packinghouse company or a food processing company of some kind decides to set up a subsidiary operation and hires the services of a competent farm operator by allocating to him a share interest in the operation. Such a person would have the experience, ability and character necessary to impress the Farm Credit Corporation, and on the basis of his qualities and experience they would be prepared to make a loan. Does the minister not agree that in a circumstance such as this it would be not only conceivable but quite likely that a corporate enterprise of this kind, provided it engaged the services of a known and experienced farm operator, could very well qualify for a loan in so far as the provisions of this clause are concemed-


Horace Andrew (Bud) Olson: The fact is that all the clauses have a bearing in respect of making an application for a loan. In addition to the provision the hon. gentleman has outlined, such a person would also have to be the owner or would have to control the corporation through holding substantially more than a simple majority of the shares in the corporation, and indeed he would have to qualify under clause 1 of the bill as an individual whose principal occupation is farming. He would have to be in the corporate farming
Farm Credit Act
business himself. Therefore in the example the hon. gentleman has outlined I think a person trying to use the credit facilities of the Farm Credit Corporation would fail in many respects.


[Stage Direction]
Clause agreed to.
On clause 5-Interest.
John (Jack) Henry Horner: Mr. Chairman, clause 5 has been debated quite a bit already. We have attempted to induce the minister to give us some information with regard to the formula to be adopted in respect of the interest rate. The minister went part way today in dealing with this question.
Basically, there are three major parts to the bill: first, it will allow farming corporations to obtain loans; second, it will increase the interest rate by about 2 per cent on all government loans; and third, it will make provision for Indian bands to borrow money from the Farm Credit Corporation. I am really simplifying the bill but I think it can be broken down into those three important points. The interest rate that will be payable on these loans is the most important point.
The bill is basically a poor one and clause 5 does not improve it at all. The bill moves generally in the wrong direction. We have seen the report of the Economic Council of Canada. While I do not agree with their comparison of the agricultural industry in Canada with those of other countries, the report does point out that our agricultural industry needs to catch up and maintain pace with the United States, and to do this we must have a greater influx of capital at an interest rate the agricultural industry can afford.
We have tried to learn from the minister what rate of interest will be permissible under clause 5 of the bill. He said this afternoon that the formula would have to be flexible. He said earlier in the debate that it would be a prescribed rate. I gather from the minister's answer that it will be prescribed for six months and then adjusted in accordance with government borrowings, or prescribed for a year and adjusted to government borrowings. The minister has not told us how long a prescribed rate will be in effect. Will it fluctuate every month? Will it fluctuate with every borrowing of the Farm Credit Corporation from the Minister of Finance? The minister has not given us the answers to these questions.
In this regard one should study the borrowings of the Farm Credit Corporation. These are listed on page 24 of their annual report.

October 29, 1968
Farm Credit Act
One can readily see that the corporation is making several borrowings a year from the Minister of Finance at varying rates of interest. Will the prescribed rate correspond with the borrowings from the Minister of Finance? The minister said this afternoon that it would not be more than 1 per cent higher than government borrowings. Then he said it would not be more than 1 per cent above the rate at which the corporation borrows from the Minister of Finance.
This raises a very interesting situation. During the debate on the Farm Improvement Loans Act the minister said he believed that the government guarantee to the banks was worth 1 per cent. He also led us to believe that the interest rate finally arrived at between the government and the banks under the Farm Improvement Loans Act would be 1 per cent or not more than 1 per cent above government borrowings. If I am wrong, the minister can correct me.
[DOT] (5:20 p.m.)
Let us take the figure the minister gave this afternoon, namely, that the last corporation borrowing from the Minister of Finance was at an interest rate of 6.75 per cent. In fact the report has it listed as 6.8 per cent, but it does not really matter. One per cent above that would be 7.25 per cent, nearly 3 percentage points above the rate at which the Farm Credit Corporation is operating today when lending money to farmers. This is what we are debating today.
Can the agricultural industry absorb a 3 per cent hike in interest rates by the Farm Credit Corporation? The danger is that this bill will simply make tenants out of farmers who borrow from the corporation. Everyone knows that people who borrow money on a long term basis are often fortunate if they can repay the interest on what they borrow, let alone part of the capital. We must be careful about passing this clause because by supporting an interest rate close to 8 per cent we may be making tenant farmers out of everyone who borrows from the corporation. It is true that some believe farmers should just rent their land anyway and never pay for it. The former minister of agriculture from Alberta suggested this in one of his speeches. He suggested that the Farm Credit Corporation might own the land and that the farmers should pay so much every year for it-in essence, a rental. On this basis the land would pass from father to son.

I still believe that farmers want to own their land. There is a greater sense of security and well being attached to owning a farm rather than renting it on whatever basis. We must be very careful about passing clause 5 and approving an interest rate which might prevent farmers paying back anything more than the interest on their loans. The industry faces increasing competition from synthetics. But despite fierce competition on every side, $1.5 billion worth of our exports are produced by agriculture. Agriculture is a major part of our economy and parliament has to create a climate in which it can survive. The amount of the interest rate of farm credit loans will signify whether the government really believes in the industry, really believes it is a necessary part of this country.
Hon. gentlemen opposite have said that the government guarantee to the banks is worth 1 per cent. They have said that the interest rate on farm improvement loans from the banks will be 1 per cent above the rate at which the government borrows. This could well result in bank loans to farmers being made at a lower rate of interest than the corporation is offering.
I believe the Financial Post stated last week that in the course of the coming year the government would be borrowing to the extent of $2 billion and was prepared to pay as high as 6.75 per cent for the money. Over a billion dollars worth of government bonds have just been issued at the highest interest rate ever recorded. Even if we agree to the minister's prescribed rate, it will still be a fluctuating rate. With the government continuing to squander our money hither and yon, interest rates are bound to increase, as the article in the Financial Post suggested, and new borrowings will be made at an interest rate of something like 6.75 per cent. In fact, interest rates generally have gone up since the budget. Some may say: 7 per cent is not a bad interest rate, considering the times. But if we pass this clause we shall place farmers in a position where they will have to face escalating interest rates periodically while no corresponding increase is apparent in the prices of the products they are selling. The farmer has only two courses open to him. Either he can go out of business or he can try to increase the size and efficiency of his operation hoping to stay ahead in the struggle to meet expenses and repay the loans he has taken out.
Having this dangerous situation in mind, I propose to move an amendment to clause 5. My amendment will spell out the rate of
October 29, 1968

interest by providing that loans made to individual farmers should be at the rate of 5 per cent. Loans of amounts greater than $40,000 may be made at such prescribed rates as the minister may wish to approve. I put this forward because I am concerned about the lack of any fundamental base for interest rates today. Even in the last two weeks interest rates on government borrowings have gone up by something like .2 per cent and are continuing to climb as the government wastes money.
Under the arrangements as they stand today there are in effect two interest rates with which borrowers from the Farm Credit Corporation are concerned. There is the 5 per cent rate to the individual borrower who borrows less than $27,500 and the rate offered to those who borrow more than that, which is 1 per cent above the rate at which the corporation itself borrows from the Minister of Finance. In the farm syndicate legislation provision is made for another rate which is 1 per cent above the rate at which the corporation borrows from the minister.
Thus we find in the present legislation two interest rates. Eighty per cent of the loans made by the Farm Credit Corporation have been made at the 5 per cent rate. And over 50 per cent of the corporation's loans have been made in connection with the purchase of land. I firmly believe that farmers today still want to own their own land. For all the reasons I have outlined I move:
That in line 6 on page 4 in clause 5 the following be substituted after the word "rate":
Not more than 5 per cent where the amount of the loan does not exceed $40,000. For loans above this amount, at rates prescribed by the Governor in Council.
[DOT] (5:30 p.m.)
I put in a limit of $40,000 because, as I understand the bill, this is all a family farm or an individual can borrow. Corporate enterprises and other people may be eligible under this act for greater loans, perhaps at a higher rate of interest. The minister suggested that corporate entities would likely be more efficient and have more things going for them. This may or may not be the case. I certainly do not want to agree with him at this time. I do want to say that under the act as it is now there are two rates of interest, the lower rate being for the individual who borrows a limited amount of money, and this amendment sets up the same criteria that were in effect. I move that amendment, Mr. Chairman.
Farm Credit Act


John Stratford Burton: In taking a look at clause 5 of Bill C-110 I think we have to examine it very closely because of the impact of the changes proposed on the farmers of Canada and on the agricultural industry as a whole. We should examine what changes it does make. The provisions now in effect provide for 5 per cent interest on loans up to $20,000 under part II and 5 per cent on loans up to $27,500 under part III. Above these amounts, of course, the rates are prescribed by the governor in council. The new clause gives to the governor in council the power to set rates. It gives him a blanket authority to set the rates that will be applicable to loans made under the Farm Credit Act. I believe it has been admitted that this will mean higher interest rates to the farmers.
Briefly, Mr. Chairman, I should like to take a look at some of the alternatives that are available to us. One step we might take would be to leave the interest rate structure as it is now or with some modification such as has been proposed in the amendment just moved by the hon. member for Crowfoot.
I can recognize that there are some administrative problems in the present arrangement with regard to the differences in the rates at which money is borrowed by the government and transferred to the Farm Credit Corporation and the interest rates that apply to money lent to farmers for agricultural purposes. It seems to me that this is a problem that could be overcome without having to upset the entire structure as we have known it up to the present time. The legislation, of course, proposes to take away from parliament the right to prescribe what interest rates shall apply to farm loans.
I think we should examine some of the implications involved. First of all, we should take a look at the cost of this change to the agricultural industry and to the farmers. The ultimate cost, if we take the entire amount of money that could be lent by the Farm Credit Corporation, could conceivably at some point in time reach as high as $14 million per year for every 1 per cent the interest rate is above 5 per cent. This, of course, would have to be modified by the fact there are existing loans at the 5 per cent rate and also by other factors as well. I think we could reasonably conclude that in time this change in the interest rate structure could quite likely cost the farmers approximately $50 million in extra interest charges on farm loans.
The essential point being advocated by those of us who are opposed to increasing the

October 29, 1968
Farm Credit Act
level of interest rates is that we are proposing that the principle of subsidization of the industry should be applied. This is really what would be involved in leaving the basic interest rate structure as it is. So far as I am concerned, I do not automatically advocate or approve subsidization simply because it may be of some benefit to an industry or a sector of the economy in which I or some other people may be interested. It seems to me a rational case does have to be established in favour of such subsidization.
Various approaches are used, of course, in deciding whether or not a rational case is established or can be established. One obvious approach would be to use what might be termed a cost-benefit analysis. In other words, this really means that if the benefits achieved through subsidization are greater than the cost involved to the country, then the justification is apparent. This method could then be readily approved and adopted by parliament.
I am sure the minister is fully aware of the reaction of farm organizations to the proposed change in the interest rate structure. I am really quite disappointed that the government has been unresponsive to the representations of farm organizations, nor has it provided an adequate opportunity for farm organizations to make their point of view known. I should like to refer to a communication sent by the National Farmers Union to the Minister of Agriculture some time ago and place some portions of it on the record. Mr. Roy Atkinson, president of the National Farmers Union, writing to the Minister of Agriculture on October 8, stated:
We are further concerned by the proposals under section 16A-
This is the clause now under consideration.
-which free interest rates permitting these to be prescribed by the governor in council. This, in effect, removes the ceiling on interest rates on farm loans.
Credit has become an almost indispensable need for farmers. Rising interest rates for Canadian farmers are therefore a serious factor. Canadian farmers cannot afford the present high rates of interest demanded by private lenders on the basis of the present demoralizing level of farm prices. While this, in itself, is of growing concern, it is particularly serious for our younger farmers. The dilemma in the present situation, of course, has been that banking institutions have not made available to farmers the 5 per cent credit and as a consequence they have become more vulnerable to the scalping rates of private finance companies.
The proposed amendments will certainly result in higher rates under the publicly-sponsored farm financing programs and in this sense legitimatize high interest rates for farmers. The consequence

of this cost increasing factor, we feel, will serve to make farmers less competitive in the world markets and less competitive with those corporations which now threaten the livehihood of farmers through a growing trend toward vertical integration of food production. As a consequence, if interest rates are freed, we reiterate our request that your government subsidize the interest rates over 5 per cent under the Farm Credit Act and the Farm Improvement Loans Act until such time as the money supply on the market will again make it possible for farmers to acquire their financial needs at the 5 per cent rate, and/or until such time as farmers receive adequate prices from the sale of farm produce.
[DOT] (5:40 p.m.)
Then the letter concludes by urging the minister to give earliest consideration to the matters raised.
This is one representation that has been made to the minister and I am sure others have been made as well. Certainly representations have been made to me as one member of the house on the subject of interest rates. I feel that the government should be more responsive to the urgent pleadings of farmers and farm organizations on the question of interest rates.
I should like to outline briefly some of the reasons for the approach that is being suggested on this side of the house. First of all, I think we have to examine the structure and fabric of the agricultural industry and note that this structure and fabric are in jeopardy. It is not a case of the old being replaced by a new, more positive and useful type of social and economic structure. What we are really witnessing is the disintegration of our rural society and our rural economy in Canada.
I suggest, that this will have very serious effects on all parts of the Canadian economy and on each and every person in Canada. This is evidenced in part by the reduction in the number of farmers across Canada, a fact well known to all members. This reduction in the number of farmers is in part due to the liquidation of uneconomic farm units, but it is also in part due to the impact of mechanization and technology. I suggest that at least part of the liquidation of farm units which has taken place in Canada over the past number of years has resulted from the needless waste of both social and economic resources in this country. In fact, as a result of serious negligence on the part of those responsible for public policy in this country we have been unable to find a more adequate program to deal with the problems facing our agricultural industry. At the same time may I make it quite clear that I feel that the Farm Credit
October 29, 1968

Corporation, in conducting its operations, has made a useful contribution and has helped to prevent the problem from becoming even more serious than it is today.
I suggest that we need an agricultural industry that is capable of adjusting to changing conditions. At the present time the agricultural industry has great difficulty in accomplishing this objective. I suggest that it will have even greater difficulty in doing so if it is saddled with higher interest rates than those now in effect. The agricultural industry has been confronted with static and unreliable prices and price levels. At the same time it has had to meet steadily increasing costs which have risen some 4 to 5 per cent per year. The net result of this has been that the level of return to farmers has been insufficient and will not enable them to carry the higher interest rates that are now being proposed. The result of the present cost-price squeeze is obvious to all hon. members, and I think should be a matter of serious concern to all of us.
Reference has already been made to the need for greater capitalization in our agricultural industry. The Economic Council of Canada pointed this out quite clearly in its recent report wherein it noted, in the first place, that a major portion of the increase in agricultural productivity over recent years is attributable to increased capital and materials inputs. That is noted at page 98 of the most recent annual review of the Economic Council of Canada. At page 101 of the review, the Economic Council of Canada points out:
We believe that a high rate of future productivity growth in agriculture is necessary for the long term growth of farm incomes in Canada.
Here, Mr. Chairman, I suggest that policy with respect to capital and the ease of entry of capital into the agricultural industry is an essential requirement. It seems to me that the retention of the present interest rate structure, or at least the essentials of it, would encourage further capitalization in the agricultural industry.
I cannot really quarrel with the present basic concept of the interest rate structure applying to Farm Credit Corporation loans. This provides for a fixed level of interest rates for a basic amount of capital, at present $20,000 for part II loans and $27,500 for part III loans. As has been indicated by the nature of the amendment just moved, this set of figures is not necessarily fixed; it can be varied depending on current situations. However, it seems to me that it does ensure
Farm Credit Act
that a basic amount of capital is available to each farm unit, sufficient to enable it to carry the debt load that many farmers have to face. Once this basic capital requirement has been assured, then the farmer is in a better position to handle whatever higher interest rates may apply in the economy from time to time.
I urge the minister to reconsider his stand with respect to this clause. I also urge the government, while time still remains, to find a solution to some of the problems facing our agricultural industry, to take advantage of that time and to change the stand it is now taking in the house.
According to answers to questions provided by the Minister of Agriculture in the house, the report of the special task force which was set up will be presented in the very near future. I would urge that consideration be given to maintaining the present interest rate structure until we are able to review the agricultural situation in the light of the report of the task force. This would enable us to examine the entire operation of the agricultural industry.
I also noted in an answer to a question given a little earlier this afternoon that the minister said that the extra capital that would be available to the Farm Credit Corporation as a result of the amendments contained in this bill will be sufficient to meet the financial requirements of the corporation for some two and half to three years. This is not too long a period of time to continue to maintain the present interest rate policy.
For all of these reasons, Mr. Chairman, I hope that clause 5 as now set out in the bill will be rejected and that we will maintain the present basic interest rate structure either in the form in which it is now or as proposed in the amendment that has just been moved.


Albert Béchard: Order. The Chair has some doubt about the validity of the proposed amendment of the hon. member for Crowfoot for this reason: It seems to the Chair, having read the resolution which is to be found in Votes and Proceedings for October 1, 1968, that the amendment would amount to a new proposal. If there is any doubt about the matter perhaps it might be best to leave the decision to the committee.
[DOT] (5:50 p.m.)


John (Jack) Henry Horner: Mr. Chairman, what was the date of Votes and Proceedings to which you referred?

October 29, 1968
Farm Credit Act


Albert Béchard: October 1, 1968, page 87.


Richard Russell Southam: Mr. Chairman, at this time I have no alternative but to say a tew words in support of the amendment the hon. member for Crowfoot presented to the committee this afternoon.


George James McIlraith: It is out of order.


An hon. Member:: It is not.


Horace Andrew (Bud) Olson: In addition to the point that you raised, Mr. Chairman, I want to say that the amendment goes beyond the terms of the resolution. I therefore doubt that the wording of the amendment is legal. However, I have no objection to taking the sense of the committee and having the matter voted on.


Albert Béchard: Is the committee ready for the question?
Amendment (Mr. Horner) negatived: Yeas, 34; nays, 61.


Albert Béchard: I declare the
amendment lost. Shall clause 5 carry?


Richard Russell Southam: As I said a few moments ago, Mr. Chairman, I have no alternative but to make a few remarks on this clause of Bill C-110. I support the remarks of my colleagues. Their position is supported by ample evidence. As has been said on numerous occasions in this house, credit is a commodity. Since this bill has to do with interest rates, its present provisions ask us to buy a pig in a poke.
When anyone wants credit he goes to the marketplace to obtain it. When the farmer wants to borrow money he must pay interest on it. For that reason we ought to have something concrete in the bill; otherwise there is too much ambiguity. There is too much of a question mark in the minds of those engaged in agriculture in this country for them to be satisfied with this measure.
The previous speaker referred to the views of a leading farm organization of western Canada on this matter. The hon. members for Crowfoot, Essex-Kent and Mackenzie have put their attitudes very ably to the minister. He knows what they think about this legislation. I am obtaining a feed-back from the riding I represent, a dairy and agricultural district of western Canada. There are many small farmers in my area. The name of the riding, Qu'Appelle-Moose Mountain, suggests rivers, creeks and a broken-up terrain which is conducive to farming on a small scale.

Farmers in such areas eke out a living, as do the farmers represented by the hon. member for Mackenzie. All our farmers must have credit at reasonable rates.
The difficulties of our farmers have been particularly aggravated in the last year or two by the lapsing of the international wheat agreement. Their income has been reduced. In the last few months money under the Farm Improvement Loans Act has not been available and farmers seeking to borrow money in the marketplace have had to pay exorbitant rates of interest of 10 or 12 per cent. Naturally I support other opposition members in their attitude that we must have some type of formula governing the interest rates. We have a right to it.
The minister's philosophy with regard to this farm legislation will make the big farmer bigger and the small farmer smaller. Ultimately small farmers will be squeezed out. The minister's attitude is summed up by a sentence from the Bible to this effect: To him that hath shall be given and from him that hath not shall be taken away even that which he hath.
I was disturbed and annoyed to hear the minister's suggestion while out west recently, that some members were blocking passage of the farm legislation. He referred to the hon. member for Crowfoot. The suggestion was that he and others in his party were filibustering and obstructing this legislation. Let me say at once that our remarks express the feelings of western farmers on the subject. When we place on the record our strong objection to buying this pig in a poke we are expressing the feelings of our constituents. Some of the minister's references seemed to be flamboyant and even facetious, and it was not fair of him to take that attitude. He himself is a farmer from western Canada and he knows how strongly the farmers object.
Again I suggest that the minister ought to reconsider this matter and arrive at a definite formula regarding interest rates along the lines proposed a few moments ago by the hon. member for Crowfoot. Unfortunately his amendment was defeated in committee.


Albert Béchard: Order, please. To permit the house to proceed to the consideration of private members' business, in accordance with section 3 of standing order 15 it is my duty to leave the chair.
Ociober 29, 1968	COMMONS



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Bechard):: It is my
duty, pursuant to provisional order 39A, to inform the house that the question to be raised at the time of adjournment tonight is as follows: the hon. member for Frontenac (Mr. Dumont)-Inquiry as to Nigeria.
It being six o'clock, the house will now proceed to consideration of private members' business as listed on today's order paper namely private and public bills.



PRIVATE BILL


[Stage Direction]
The house in committee on Bill No. C-101, respecting London and Midland General Insurance Company-Mr. Lind-Mr. Bechard in the chair.
[DOT] (6:00 p.m.)
On clause 1-Change of name.
Edward Richard Schreyer: Ostensibly the purpose of the bill, Mr. Chairman, is to allow the insurance company in question to undergo a change of name. On the surface that would seem to be simple and harmless enough but the question should be asked why it is that important and necessary to have a change in name as to warrant bringing a private bill before parliament.
From the evidence of the parliamentary agent for this company one is given to understand that the company would like a change of name because a similar name is used by other insurance companies elsewhere. So it seeks to change its name to Avco General Insurance Company. But one finds that other corporations exist in the United States with names very similar to that and so the picture is left quite confusing.
I suspect that the sponsors of the bill feel that a change of name would result in an improvement in the corporation's image. Therefore with that improvement the company, hopefully, would be able to be more
DEBATES	2175
London and Midland Insurance Company successful in selling insurance policies to Canadian policyholders and as a result would have more money for investment in various industrial corporate securities, with the further result of an increase in profits redounding to the benefit of the company and its shareholders. That kind of reasoning is logical but at a time like this the question should be asked, what good purpose is served by this bill? In fact, what good purpose is served by the very existence of this particular insurance company?
This company is a Canadian subsidiary of an American parent firm which we are told is a corporation engaged in conglomerate ownership and management, a phenomenon that has been on the increase in the United States during the present decade. Admittedly if a corporation takes on a conglomerate form it begins to enjoy greater size and with it greater financial strength and durability against the exigencies of the economy. It is supposed to be able to withstand better the business cycles that we experience in our North American economy. There is nothing particularly wrong with that, but on repeated occasions over the past few years hon. members of this house have questioned the degree of usefulness of subsidiaries of foreign corporations that are allowed to operate in Canada.
If the existence of a subsidiary of a foreign parent meant there would be more capital coming into Canada for industrial development, there would be a point. But in this case it seems quite clear that the company in question, like other insurance companies, is merely taking investable funds or capital from persons through the sale of policies and then using that capital for investment as the management of the insurance company sees fit. In this respect it is in a sense a rather sterile operation.
This particular insurance company will be competing with other insurance companies, some of them wholly or in large part owned by Canadian shareholders. It will be competing for investable funds. It will be preempting other insurance companies and industrial corporations from securing more investment capital from the same people, that is to say, the Canadian public.
From the evidence that was given to the committee about a week ago, I understand this insurance company invests about 75 per cent of its investable funds, money on deposit with it, in Canadian industrial enterprises and the remaining 25 per cent in American industrial enterprises. In other words, 25 per
October 29, 1968
2176	COMMONS
London and Midland Insurance Company cent of the money it raises from Canadian policyholders does not go into investment for the economic, social and industrial development of our country. By decision of the management of the London and Midland General Insurance Company, 25 per cent of its investment funds flow out of Canada. I do not think that a change in name, if we consent to it, will make a substantial difference. In fact I fail to see what difference it can make.
Here is an opportunity to voice dissatisfaction with the practice whereby out of every $100,000 which this insurance company raises from the pocketbooks of Canadian policyholders 25 per cent goes outside our country for investment elsewhere and as such makes a zero contribution to the industrial development of our country. We talk about the scarcity and inadequacy of capital for development purposes in Canada. Small wonder that there is that scarcity when a leakage of this size is to be seen in the operations of only one company. Multiply this by the number of other insurance companies and mutual funds in Canada, almost all of which have a tendency to allow a fairly large leakage of Canadian investment funds into foreign markets, into the purchase of foreign securities and into the share capital of foreign enterprises, and one can see one of the reasons why we have a problem of inadequate amounts of capital for our own industrial development.
One hon. member of the standing committee on finance trade and economic affairs which examined this bill was able to bring out by questioning representatives of this company the fact that through the operations of the parent firm the company is able to invest in a great diversity of industry. But the question was never asked as to what extent the 75 per cent of its investable funds which we are told is invested in Canada goes into a particular industrial sector related to this insurance company through interlocking directorships, through affiliation of interests or which, in fact, are member companies of the same conglomerate parent. If there is any significant amount invested by the parent company-
[DOT] (6:10 p.m.)


Albert Béchard: Order. I think at this moment it is important that I bring to the attention of the hon. member and other members of the committee that the sole purpose of this bill is to change the name of the insurance company to Avco Insurance Company and in French to L'Avco, Compagnie d'Assurance Generate. I believe the hon.


member has departed from the subject of the bill. I would very kindly ask him to restrict his remarks to the matter of the change of name.


Edward Richard Schreyer: May I submit to you, sir, that if the representatives of this insurance company come before parliament asking for a change of name they must have some purpose in mind. Earlier in my remarks I suggested that the purpose they have in mind must be to improve either the operation of the company or change its image. If it is to improve the image then I suggest this means that the insurance company will be selling more policies. If it sells more policies then it will be receiving more investable Canadian funds. If it receives more Canadian investable funds then I believe this is a matter which should be discussed in parliament because this company is a subsidiary of a United States parent and a member of the conglomerate whole which would be attracting more capital from the Canadian public.


Albert Béchard: I think it is desirable that we discuss the change of name. That is the only purpose of the bill. .Again I ask the hon. member to restrict his remarks to the desirability or otherwise of changing the name.


Edward Richard Schreyer: Mr. Chairman, this insurance company is seeking to change its name, but we should ask ourselves what purpose or intent it has in mind in so doing. I submit to you that the insurance company must be seeking to improve its corporate image. If it is successful in this, then presumably it will be in a position to sell more insurance policies and thereby increase the amount of investment capital it is able to marshal. I suggest that if this insurance company does succeed in changing its name and thereby does get its hands on more investment capital, we must bear in mind that it would be investing outside this country at least 25 per cent of any increment of investment capital. This is a point which no one can escape.
The parliamentary agents for this insurance company have stated that 25 per cent of the investable funds which come into their possession go into investment outside the country. If there is any increase in the amount of investable funds this company is able to realize, there would be a proportionate increase of investment of Canadian money outside the country. We are told by our own ministers as well as by the economic experts that Canada has a shortage of investable
October 29, 1963	COMMONS
funds. That is a point which some of us from time to time like to contest. However, this is the information we are given by those who are supposed to be experts on the subject.
I make no apology whatsoever, Mr. Chairman, for referring to the fact that this insurance company is investing outside this country an amount of money which I suggest hon. members should find unacceptable. About a week ago we were told by Mr. Watkins, the former chairman of the royal commission on foreign ownership which completed its work about a year ago and handed down its report several months ago, that in Canada the subsidiaries of foreign parent companies were still not being effectively controlled by the public administration of the country.
Mr. Watkins went on to suggest that the so-called guide lines for good corporate citizenship by some firms operating in Canada leave a good deal to be desired. He said that the guide lines in respect of good corporate citizenship for a company such as this one are still a Boy Scout approach and that it is important there should be enforcement of more effective guide lines for the operations in this country of the subsidiaries of foreign parents.
Now we have before us Bill No. C-101 the effect of which will be to change the name of this insurance company. I believe it should be apparent to all hon. members what the hope of the board of directors and executive of this insurance company is in this regard. Why would they bother with a change of name unless they thought it would somehow help them sell insurance policies in this country? This is precisely what we should not want to see happen because we have enough insurance companies now.
In many ways we are being asked to indulge in a sterile operation here in discussing a bill to change the corporate title from one name to another. I do not believe it is just as simple as merely a change of name. The officials of this company must have something else in mind. If what they have in mind is that this will enable them to obtain a greater control of Canadian investable funds, then I am opposed to the bill. It is as simple as that, Mr. Chairman.


Mr. Ritchie:: Mr. Chairman, I have followed the consideration of this bill in the standing committee. On behalf of hon. members on this side of the house may I say that we are satisfied that this change of name is justifiable in the interests of the company concerned.
DEBATES	2177
London and Midland Insurance Company


Mr. Gilbert:: Mr. Chairman, I notice that Bill No. C-101 is sponsored by the hon. member for Middlesex who I believe is a successful businessman in his own right. I notice also that it is seconded by the hon. member for Etobicoke, a new member of this house who also is a successful businessman in his own right. I see from the explanatory note that the sole purpose of the bill is to change the name of the company to Avco General Insurance Company and in French to L'Avco Compagnie d'Assurance Generale. I also read the proceedings before the finance committee and I note that the president of the company is H. P. Paterno, that the vice president and general manager is Ralph Green, that the solicitor of record is F. W. Rhodes and that the agent in Ottawa is David Alexandor.
[DOT] (6:20 p.m.)
If the purpose of this bill is simply to change the name of the company to Avco General Insurance company, it brings to mind that Shakespearean quotation:
What's in a name? That which we call a rose
By any other name would smell as sweet.
I notice that the London and Midland General Insurance Company was incorporated on July 17, 1947 under the name of the Progressive Insurance company. Only ten years later, in 1957, by application to this house the name was changed to London and Midland General Insurance company. To follow that chain of events we find that the Delta Acceptance Corporation of Canada was incorporated on March 26, 1954. In the month of July, 1962, Delta acquired the outstanding share capital of the London and Midland General Insurance Company.
Reading from the statement of the parliamentary agent, I note that the purpose of this bill is to obtain cohesion in respect of the different companies that Delta Acceptance Corporation of Canada controls. We must take the sequence back one step further. We find that Delta Acceptance Corporation is owned by a United States company, the Avco Corporation of New York. This is the parent company and Delta Acceptance Corporation is the Canadian subsidiary.
When one thinks of the name Delta Acceptance or even the name Avco one must consider the term "acceptance" as being a financial term with reference to a company that lends money to borrowers, in many cases at rather high interest rates, but nevertheless lending institutions. We do not think of them as being insurance institutions.

October 29, 1968
London and Midland Insurance Company
The thing that strikes me in respect of Bill No. C-101 is the massive holdings this Avco group has. When I read the statement by Mr. Alexandor as to the holdings this strikes me very forcibly. He said:
In addition to London and Midland General Insurance Company the following companies are also subsidiaries of Avco Delta Corporation Canada Limited. Avco C.F.C. Limited which was formerly C.F.C. Finance Corporation Limited, Avco Delta Dominion Limited which was formerly Delta Acceptance Canada Limited, Avco Delta Quebec Limited, which was formerly called D.A.C. (Quebec) Ltd., Avco Finance Limited which was formerly The Crescent Finance Corporation Limited, Avco Highland Plan Limited, which was formerly called Highland Trail Plan Limited, Avco Delta Realty Limited, which was formerly Grand Prairie Investments Limited, Adanac General Insurance Company of Canada, Avco Delta Realty, Manitoba, Limited, which was formerly called the Northwest Mortgage and Finance Company Limited, Consolidated Finance Western Limited, Empire Acceptance Corporation Limited, General Finance Company Limited, Lome Bruce Motors Limited and Waverly Finance Company Limited.
He ended by saying:
This latter company is presently making application for a change of name to Avco Security Canada Limited.
Then he goes on to say that some of the companies are in the process of being wound up. I guess this is to fit in with the general impression of a cohesive approach taken in respect of the numerous holdings of Avco Acceptance Corporation of Canada.
The question was asked by one of the committee members:
What does "Avco" stand for?
The parliamentary secretary then replied:
It is an abbreviation of Aviation Companies and through the years has sort of dwindled down to Avco, an abbreviation then later adapted as the name for Avco Corporation of New York.
We find that Avco has taken a strange course. It started off as a group of aviation companies and as it developed it embraced finance companies, insurance companies and other companies. In fact, I would think that the word "Avco" led the hon. member for Etobicoke to ask what the nature of Avco's business was. That brought forth this reply from the president of the company who must be very well informed about it:
Of course Avco Corporation, the parent company in New York, has become something along the lines that we now call a conglomerate to a very great extent, and the different types of manufacturing and business that it is in are very broad.
The word "conglomerate" is one we have been using quite frequently lately. I happen
IMr. Gilbert.]
to be a lawyer by profession but I never got into the corporate field. I have never incorporated a company. Most of my practice was in respect of criminal law and court work, although I did a little estate work. The word "conglomerate" strikes me very forcibly. The hon. member for Etobicoke, having wide experience in business, is probably familiar with it.
I understand there are different types of conglomerate institutions. There is a vertical type and a horizontal type. Quite frankly I am at a loss to determine whether this is a vertical or horizontal conglomerate. It has always been my understanding that a vertical conglomerate is one where you have a single business and you build on that business by acquiring the interests of other companies and thereby erect a pyramid of companies in a vertical way. This company appears to be a horizontal conglomerate. I am sure the hon. member for Etobicoke was surprised when he asked what this company participates in because he was given the answer that it spreads itself horizontally and has manufacturing companies, aviation companies, finance companies and insurance companies. It strikes me we should all be aware that this company is a conglomerate in the horizontal sense.
The parliamentary agent said in his answer to the hon. member for Etobicoke:
It starts with engines and airplane parts for both military and the new air bus and things of that nature, to research and development-quite extensively research and development-including the mechanical heart.
[DOT] (6:30 p.m.)
That is a very interesting observation. We are talking about the mechanical heart being developed by an insurance company that is now seeking to change its name. It operates in a wide variety of fields, including the manufacture of mechanical hearts. The president of the company continues:
One of our Avco research and development groups did the second heart transplant in the United States and in the world. It is also involved in ordnance, appliances, broadcasting.
In research it has the great piece of the re-entry vehicle which, incidentally, splashed down today. Part of that is part of Avco's research and development group. And of course it has very extensive ffnancial holdings in such things as the Credit Card Company and Carte Blanche, savings and loan companies, the Avco-Delta group, which is 40 per cent in Canada and 60 per cent in the United States and which encompasses small loan companies, several life companies in the United States, automobile finance companies, home improvement finance companies and all related companies in the financial area.
October 29, 1968


Mr. Matte:: Mr. Chairman, I support my colleagues who tried earlier to find out the true reasons why this company is asking to change its name. Even if at first sight that does not seem very important, it remains that we must think of all the possible implications of such a change.
I would not like to stretch out my remarks on that matter-either vertically or horizontally-but allow me to stress a few points. The changes in the names of companies which are quite numerous have a special meaning in Quebec. It often happens that a company changes its name simply to give the people of Quebec a better impression.
I wonder whether that might not be one of the reasons which prompts the company to change its name, because almost one third of its investments come from the Quebec population. Yet the name London et Midland does not sound very well to the ears of Quebecers.
Is that not a way of trying sometimes-I am not accusing the company of doing so-to draw the sympathy of the majority of the people under false representations?
It might also be advisable to mention another fact related to that one. Many such insurance companies, while receiving a great deal of money from the province of Quebec, invest almost nothing there. Many Quebec people are not too well informed, and as soon as a company uses a name which, at first glance, seems logical, it is encouraged only for that reason, forgetting that the money thus paid to that company never comes back to the area. It was just said-


André-Gilles Fortin: Mr. Chairman, I rise on a point of order.


Albert Béchard: The honourable member for Lotbiniere on a point of order.


André-Gilles Fortin: Mr. Chairman, I rise on a point of order and I wish to direct your attention to the fact that there is not a quorum in the house at this time. I am surprised, in view of the fact that there are 263 members.


Albert Béchard: I have to draw the attention of the committee to citation 60 of Beauchesne in connection with the point of

DEBATES	October 29. 1968
order raised by the hon. member for Lotbiniere.

Any member may direct the Speaker's attention to the fact that there is not a quorum present. The Speaker will proceed at once to count the House, and if there are not twenty members present, including himself, the Clerk will take down the names, and the Speaker will then adjourn the House without question first put until the usual hour on the next sitting day.
Therefore, I ask the Clerk of the House to count the house.

And there being only 18 members present, including the Chairman, the Chairman reported accordingly to the Speaker.


Mr. Speaker:: According to citation 60 (2) of Beauchesne's fourth edition with which hon. members are familiar, it is now the duty of the Chair, in view of the report made by the chairman of the committee, to proceed with a count of hon. members now present in the house.
And on the count being made, 20 members were declared to be present.
* (6:50 p.m.)


Mr. Speaker:: There being a quorum in the house, we will now resume in committee.
And the house having resumed in committee:


René Matte: Mr. Chairman, I should like to conclude my remarks by saying that we must be concerned and find out the true reasons, which prompt the said company to change its name.
In my opinion, the reasons mentioned are valid but it should not be possible to continuously change names without any serious reasons.


Mr. Peters:: I should like to say, Mr. Chairman, that I am glad to see the influx of members for the discussion of this bill. The process of changing the name of a company by means of a parliamentary bill, Mr. Chairman, has been considered by yourself and others to be a very simple matter. However, I believe that a great deal must be at stake before a company would go through the various procedures in parliament in order to change its name. In so far as an individual applying for a change of name is concerned, I
October 29. 1968

would think there would be good reasons for changing the name. One reason might be the inability of one's friends or acquaintances to pronounce the name. In other cases, perhaps, the name would be undesirable socially or in some other sense.
You may or may not be a lawyer, Mr. Chairman, I do not know. I am sure if you are you will probably realize that if changing the name of a company were as small a matter as some seem to think, it would be done by means of letters patent. We have been able to divert some of these requests for name changes into the responsible department, so that they can be done by letters patent.
This particular company, however, has come before parliament for this purpose over a period of several years. I note that in the report to the committee the company says it desires the change in name because the name is the same as the London and Midland Insurance Company in England, and that company had gone into bankruptcy. This may be a factor. This fact certainly has not had much effect on the company because the London and Midland has been before us for some time, and when it first came before us it indicated there was a deficit in the surplus account. Not being a mathematician, I am not sure what a deficit in the surplus means. However, I suppose it means there was less money there than there was supposed to be. There was an indication the deficit was in excess of a million dollars. When anyone talks about a million dollars, he must be serious.
Since that time, and during this period when the company was trying to change its name, they were able to reduce the deficit from a million dollars to $53,000. I congratulate them on their ability to do that. The company also gave the impression the change of name was desired because there were a lot of companies in the insurance business with similar names. I have looked through the list of companies and there are, in fact, only about four with somewhat the same name.
I found the London and Lancashire, which is not quite the same. Then there is the London and Canada, and that is the extent of names similar to this company registered with the department of insurance. I suggest the reason for requesting a change is not because of duplication of names, but that there is a much more important matter involved. Members of parliament have a duty to ascertain that reason. I was impressed by a remark made by the previous speaker who,
Farm Credit Act
speaking on behalf of his party, said he saw nothing wrong with the company. I am sure he does not see anything wrong because I do not think he has looked. I do not believe he has considered why the name is being changed and I am not sure he would be concerned if he did look. I think we, as members, have an obligation to look at it.
I think on another occasion, it will be very interesting to discuss the number of subsidiary companies connected with this company.


Albert Béchard: Order. It being seven o'clock, it is my duty to rise, report progress and ask leave to sit again at the next sitting of the house.
Progress reported.



FARM CREDIT ACT


[Stage Direction]
The house resumed consideration in committee of Bill No. C-110, to amend the Farm Credit Act-Mr. Olson-Mr. Bechard in the chair.
Albert Béchard: It being seven o'clock, I now leave the chair until eight o'clock pursuant to standing order 6, section 2.
At seven o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
James Hugh Faulkner: Order. House again in committee of the whole on Bill No. C-110, an act to amend the Farm Credit Act.
On clause 5-Interest.


James Hugh Faulkner: Shall clause 5 carry?


Harold Warren Danforth: Mr. Chairman, now that the amendment we proposed to clause 5 has been defeated, I am wondering whether the minister would be inclined either to propose an amendment himself or to accept one, similarly based on the provisions of the bill, as a result of which young men who are just starting farming operations, or farmers applying for their first loan, would be charged an interest rate of 5 per cent for at least a portion of the loan that the minister in his wisdom, in consultation with the corporation, may decide. I suggest a figure of $10,000 or $20,000 should be lent at that rate of interest.

October 29, 1968
Farm Credit Act
This would provide a definite advantage to young men with farming experience who expressed the determination to engage in the business of farming. We are all interested in finding ways and means of keeping our younger people on the farm, especially those with technical training in farming who are expressing a sincere desire to remain in that calling.
I realize we have voted on the amendment that was proposed, but I am wondering whether the minister is inclined to consider such a proposal at this time.


Horace Andrew (Bud) Olson: Mr. Chairman, I should like to advise the hon. member that the rate proposed in clause 5, which amends section 16A, is a prescribed rate and may not necessarily be a high rate. The rate will be determined from time to time by the governor in council. The undertaking that I gave hon. gentlemen opposite, particularly the hon. member for Crowfoot, was that it would not be more than 1 per cent higher than the cost of the money to the corporation.
If this amendment to the act proposed in clause 5 is passed, Mr. Chairman, then in the future when budgetary considerations are not so stringent there will be this latitude and flexibility. It would be open to the governor in council to prescribe a rate that is somewhat lower than 1 per cent more than the cost of the money to the corporation. I suggest to hon. gentlemen opposite that this proposal leaves that option open, instead of spelling out the rate as an economic rate, as has been the case in the past in regard to certain operations of the Farm Credit Corporation.
An economic rate, Mr. Chairman, is by definition a rate that is sufficiently high to recover all costs; that is to say, the cost of the money, plus the cost of administration and a reasonable reserve for losses. With a prescribed rate the governor in council is not under the obligation to recover all costs. Indeed, any time the government feels that it would be not only desirable but expedient to do so, the governor in council may prescribe a rate that is substantially below a rate which would be 1 per cent above the cost of the money to the corporation.
Hon. gentlemen will also realize that arguments have been advanced during the course of debate on this bill that indicate it is not entirely advantageous to the farming community to have low rates of interest. The hon. member for Saskatoon-Biggar and several other members opposite have argued that
availability of funds almost automatically inflates the price of land.


Alfred Pullen Gleave: Mr. Chairman, I would ask the minister to show me in Hansard where I made such a statement. On a point of order, I believe the minister is right when he says this statement was made by somebody, but it was not made by me.


John (Jack) Henry Horner: It was made by me and by the present Minister of Agriculture.


Horace Andrew (Bud) Olson: If the hon. member for Saskatoon-Biggar says he did not make the statement, then I accept that. But I do know I have heard it said many times from that direction.


John (Jack) Henry Horner: That is because you used to sit over there.


Horace Andrew (Bud) Olson: It came from that comer of the house. I suppose I have been persuaded by the admonitions of my hon. friends opposite, but I think statistics will bear out that there is a direct relationship between increased availability of funds and the price of land. The more funds that are made available, the higher the price of land. So this question must also be taken into consideration.
On the other hand, Mr. Chairman, another argument against holding a statutory rate substantially below current commercial rates is that it does not have equal application to all those engaged in agriculture. To be just, we must bear in mind that to date only about a quarter of the farming community of Canada has made use of the facilities offered by the Farm Credit Corporation. Therefore any heavy subsidy of the F.C.C. would be of benefit to only about a quarter of the farmers of Canada.


Robert Lorne Stanfield: Mr. Chairman, I hope the minister will not be offended if I suggest ta him that the assurance he has given with regard to the level at which the rate will be set is really not worth very much. It is not worth very much in the sense that his assurance would not be binding on anybody else. There would be nothing to prevent even this government from deciding for some reason in, say, a year's time, that the rate should be above 1 per cent. The government would not be restricted by statute. I am not questioning the minister's good faith in saying this, Mr. Chairman, but he surely must realize that any assurance he gives the committee in this regard is of very limited value.

October 29, 1968


Horace Andrew (Bud) Olson: Mr. Chairman, I have to say to the Leader of the Opposition that nothing is absolute and forever.


John (Jack) Henry Horner: A 5 per cent rate was till the Liberals came into power.


Horace Andrew (Bud) Olson: The undertaking that we give now is predicated on our expecting to be in office for a rather long term.


Robert Lorne Stanfield: Before the minister gives any undertaking here tonight that is intended to be valid, in all sincerity I would suggest the committee would have no guarantee that the government would not decide in a year's time that there were compelling reasons for moving the rate above 1 per cent.


Horace Andrew (Bud) Olson: Except, Mr. Chairman, that 1 per cent above the cost of the money received by the Farm Credit Corporation from the Department of Finance does take care of the administrative costs of the Farm Credit Corporation, plus a fraction of a percentage point to take care of losses. That in fact meets all the conditions and intentions with regard to the Farm Credit Corporation as enunciated, not only by this government and the previous government but also by the government sympathetic to the views of the Leader of the Opposition. There is no intention at present of having the Farm Credit Corporation make a profit. Perhaps at some future time the government, through an order in council, might set interest rates that will enable the corporation to show a profit over and above its costs of operation. Nevertheless I suggest to my hon. friend that that would be a difficult decision for any government to take.
[DOT] (8:10 p.m.)


Robert Lorne Stanfield: Despite the minister's assurance, I say he is asking the committee for a blank cheque.


Horace Andrew (Bud) Olson: No, Mr. Chairman, it is not a blank cheque. The rate may fluctuate, but the undertaking that it will not be more than 1 per cent above the cost to the corporation is not a blank cheque.


Robert Lorne Stanfield: Last winter we heard an undertaking in this house, no doubt sincerely given, that expenditures would not exceed $10.3 billion. We know what happened to expenditures.


Horace Andrew (Bud) Olson: Yet I notice that members of the hon. gentleman's party are asking for greater
Farm Credit Act
and greater expenditures with lesser and lesser taxation.


Some hon. Members:: Hear, hear.


Alfred Pullen Gleave: The minister argues against a low or subsized interest rate on the grounds that it would be selective, apply to only 25 per cent of all farmers, and therefore, in the minister's terms of reference, unacceptable. Yet we have a subsidy to dairy farmers who form a relatively small proportion of the farming community. We make subsidies available to a particular segment of the farming community where that is advisable, an example being subsidies paid under the Wheat Reserves Act. Surely under this legislation we could make a subsidy available to any farmers who wish to avail themselves of it. The young, beginning farmer with limited money would find this most welcome.


Horace Andrew (Bud) Olson: One can rationalize in any way he chooses. We do more than the hon. member suggests. We pay part of the costs of crop insurance. Crop insurance is not available with respect to every commodity in every part of the country on the same basis, and my hon. friend knows that.
If we subsidized credit interest rates we should be making discriminatory subsidies available to different farmers in the same area who might be producing the same crop. That is a different situation from one in which commodities are selected in certain areas or under certain provincial administrations under shared cost programs, and so on. We have tried to meet emergency situations by way of government assistance, but no subsidy program has ever been perfect. We can make better use of the government's money if we try to make subsidies available to producers of the same commodities who grow them in the same region and under similar conditions.


Alfred Pullen Gleave: I can accept the minister's point of view. He wants to keep subsidies fair, and I think we all accept that. Our objective in this bill is to help the young farmer who is at a disadvantage in the credit field. Surely we ought to help the younger man who is beginning to farm. Is the minister saying that the government prefers to give everyone an equal chance? Is the farmer who is beginning, the farmer who is at a disadvantage, to try his luck with the rest?


Horace Andrew (Bud) Olson: That is not what I said. Surely the hon. member realizes that before any farmer can take advantage of a subsidy with

October 29, 1968
Farm Credit Act
regard to interest rates he would first have to go into debt. I do not think we should be on sound ground in discriminating against those who try to paddle their own canoe.


John (Jack) Henry Horner: Surely, Mr. Chairaian, the hon. member for Saskatoon-Biggar is suggesting that there ought not to be one rate for all applicants. The minister went on his high horse and said piously, "Surely you are not asking farmers to go into debt." The hon. member was talking about young farmers or disadvantaged farmers, whether they operate individual, family or corporate farms. The minister does not want them to have any advantage.
I refer the minister to page 20 of the Farm Credit Corporation's financial statement which proves definitely that in 1968 a surplus of $1,212,000 in interest was paid back to the government. The hon. member for Saskatoon-Biggar I suggest was trying to tell the minister that the principle well established under the old act ought to be carried forward into new legislation. The minister ought to give special recognition (a) to young farmers who are establishing themselves in the agricultural industry, either as newcomers or as farmers taking over from their parents and (b) to the fact that a special interest rate ought to be available to individual family farms. I think that is what the hon. member for Saskatoon-Biggar was driving at.
Certainly if the interest rate for corporate farms is higher than that available for preferred farmers, no one will quarrel. But the principle I have enunciated has existed for five or six years and I think the minister can say very quickly whether that principle is to be carried forward to the new legislation. The principle I refer to is that of two interest rates, one rate being applicable to the family farm, and the other to the corporate entity. Or is there to be one, uniform interest rate?


Horace Andrew (Bud) Olson: The corporate entity my hon. friend speaks of is a corporation composed of a small number of shareholders. There might be three; in any event, they are of limited number. In most instances corporations are made up of members of the family.
[DOT] (8:20 p.m.)


John (Jack) Henry Horner: Where does it specify that a corporate entity shall be made up of small numbers?


Horace Andrew (Bud) Olson: It does not say that and I have given my hon. friend assurances time after time that a very large majority, substantially

more than 51 per cent of the controlling interest by way of shares, must be held by an operating farmer, a person who is actually operating a farm.


John (Jack) Henry Horner: A person; what is the legal definition of a person?


Horace Andrew (Bud) Olson: That is why we changed the definition from "person" to "individual" because we wanted to make sure under clause 1 of the provisions of the bill that the individuals within the corporation are looked at to make sure that they too are active farmers, operating farmers-an individual whose principal occupation is farming. I have explained all that.
The other part of the hon. member's statement that there was in fact an excess of $1,212,000 of interest collected, earned on mortgages to farmers, over the interest payable to the government of Canada, is true for 1968; but after this year that disappears and turns into a deficit, and the deficit escalates from this year on. I have no reservation or hesitation in telling my hon. friend that what we are doing is a most responsible action and in keeping with the spirit of the setting up of the Farm Credit Corporation in the first instance-that it was going to make money available to farmers in large volume, at cost. That is what we are doing.


John (Jack) Henry Horner: Mr. Chairman, the minister did a fine job of skating around the problem. One would almost think he was a hockey player. I asked him a simple question to which he could answer yes or no: In effect is the principle of two interest rates going to be carried on under the Farm Credit Corporation? He went to great lengths to skate around that question, and he pointed out that I was using a table which may not be true in the years ahead. I did not go on and use the most optimistic figure. I could have read from page 20 of the corporation's report, that with appraisal and legal fees another $1,127,000 is considered income, and other income is given as $140,000.
The total income of the Farm Credit Corporation with regard to interest and operational services, over interest paid to the government of Canada, is in fact nearly $2J million. Taking into consideration what the minister said yesterday, that the government is fully prepared to stand the operational costs of granting the loans I point out, Mr. Chairman, that the government even in 1968, if you examine the figures on page 20 of the corporation's report, never had to stand the operational
October 29, 1968

costs of the Farm Credit Corporation. Let me make it abundantly clear that never in 1968 did the government absorb all the operational costs.
All the minister has to say is, "Yes, there is room for a lower rate of interest for an individual, for family farms, for young farmers, than there will be for corporate entities." That is all he has to say-yes there is, or no there isn't. I want to get through this bill tonight; I don't want a long exercise in skating.


Horace Andrew (Bud) Olson: Mr. Chairman, the present intention is that there shall be one rate of interest.


John (Jack) Henry Horner: Therein lies the problem. A few minutes ago the minister said that the principle upon which the act was established will be carried forward. He failed to answer that question in the affirmative. He recognizes then that the principle upon which the act was founded to help the small farmer, to help the farmer not on an economic unit to acquire an economic unit, is changed. He has established once and for all that under clause 5, from here on the Farm Credit Corporation shall operate on one interest rate, with no special privileges to a young farmer, no special privileges to the family farm, and no special privileges to an individual farmer. They must borrow money at the same rate as a corporate entity, or as several farmers combined in a small corporation. Mr. Chairman, I believe the minister has failed to protect or safeguard in any way, shape or form, the well established principle that the family farm is a necessary entity and a very efficient farming enterprise. I want that clearly understood.
The minister shakes his head. He agrees with himself that the family farm is no longer an efficient enterprise, that no longer should it be given special consideration by the government. This is what he said by shaking his head to my remarks. If he denies it, I say to him stand up and say so.


Horace Andrew (Bud) Olson: I will do it as soon as the hon. member sits down.


John (Jack) Henry Horner: He says as soon as I sit down; well, I am interested in hearing him. I will yield the floor.


Horace Andrew (Bud) Olson: Mr. Chairman, just to correct the erroneous impression my hon. friend mentioned about the original intention and
Farm Credit Act
principle of establishing the Farm Credit Corporation, I would like to remind him that the 5 per cent interest statutory limit, set when this act first came into being, was substantially above the interest rate that the minister of finance was paying for funds at that time-


Some hon. Members:: Hear, hear.


Horace Andrew (Bud) Olson: And the second thing about which I would like to remind the hon. gentleman is that most of the amendments are changes for the purpose of enhancing the position of family farms, and not the opposite, as he claims. Therefore those assertions are absolutely contradictory to the facts.


Some hon. Members:: Hear, hear.


John (Jack) Henry Horner: The backbenchers in the Liberal party are such a group of trained seals-


Some hon. Members:: Hear, hear.


John (Jack) Henry Horner: -they agree with the minister without knowing the facts.


Some hon. Members:: Hear, hear.


John (Jack) Henry Horner: Let them deny this fact, that the Farm Credit Corporation was established in the year 1959.


Some hon. Members:: Oh, oh.


John (Jack) Henry Horner: Nobody denies that fact, so we are in agreement on premise No. 1. I say to the minister, turn to page 24 of the Farm Credit Corporation financial report. What did the Farm Credit Corporation pay for money from the minister of finance in the year 1959? It paid 5.75 per cent interest.


Horace Andrew (Bud) Olson: Oh, no, read it right. It was 4 per cent.


John (Jack) Henry Horner: For $21 million; for $10 million 5.75 per cent.


Horace Andrew (Bud) Olson: Four per cent.


James Hugh Faulkner: Order.


John (Jack) Henry Horner: The minister says substantially below-


James Hugh Faulkner: Order, please. I hesitate to interrupt the hon. member but it is in the interests of the committee as a whole that it allow the hon. member for Crowfoot to complete his remarks without unnecessary interference.

October 29, 1968
Farm Credit Act


John (Jack) Henry Horner: The point is that the minister said that at the time the government set the 5 per cent interest ceiling the corporation was in fact borrowing money from the minister of finance at a rate substantially below that.


An hon. Member:: Why don't you read it right?


John (Jack) Henry Horner: Read tomorrow's Hansard if you doubt what I am saying. Page 24 of the Farm Credit Corporation's annual statement states that in the year 1959-60-1959 was the year in which the act was established-the corporation of the day borrowed $13 million at a rate of 5.75 per cent. Is that substantially below the 5 per cent rate at which they were lending it out? To me it is not.
[DOT] (8:30 p.m.)
The minister went on to say that there is no attempt in this new bill to try to do away with the family farm or give preference to the family farm. For the benefit of all the backbenchers on the other side I wish to point to clause 8 in the bill. If they will read paragraph (b) they will see the word "farming" underlined. Then if they look at the opposite page they will see this supplanted by "farming corporation". The expression "family farm" is being removed and in its place we have "farming corporation". Now I ask you trained seals to judge who is right in this argument. The minister said the family farm shall be maintained and that in no way are they taking any different attitude toward the family farm than was taken when the act was first established. I ask you to look at the facts and then pound your desks and clap your hands.


Some hon. Members:: Hear, hear.


John (Jack) Henry Horner: Mr. Chairman, those trained seals do not even recognize who their master is. They clap their hands when I say so. There are the facts. Let the minister defend them any way he likes or attempt to distort them in any way he likes.


Mr. Thomson (Battleford-Kindersley):: Mr. Chairman, I wish to direct some comments to the minister concerning the interest rates he mentioned. He said that at one tune money could be borrowed for less than the rate the Farm Credit Corporation was charging. I suggest that if this were true, and that if he were to carry his analogy a little further the income of the farmer should have gone up as much proportionately today as in that day. I suggest that this is not the case.
[The Chairman.]
I could not conscientiously go back to the people in my constituency and tell them that I have allowed a higher interest rate in respect of the Farm Credit Corporation without a voice of protest, because the income of the farmer has not changed that much; he is in a bind at the moment. The government may feel that it is expedient to increase the interest rate in this particular case. I would go along with this if the farm economy were in a viable economic condition. But since it is not, and since there does not seem to be any indication that it will be so in the immediate future, I suggest to the minister that we could at least keep these costs under control.
I am sure the minister is aware, because of the large amount of capital required for an efficient farm unit in this day, that in effect farms nowadays have a perpetual mortgage on them. One might consider that an additional 2 per cent on an amount of $40,000 in one year represents $800. I realize that this is not paid during all the years of the mortgage, but in any event it is a substantial increase. I hereby register a protest against this increase on behalf of the people in my riding who, because of a lack of grain sales, are not in an economically sound position.
Had the minister or other representatives of the government sold the amount of grain they should have during this past year, things might have been better. However, this is not the case, and for this reason I protest.


Harold Warren Danforth: Mr. Chairman, the minister has stated very strongly that the interest rates shall be the same to all individuals who borrow money under this act. Is it not true that the minister must qualify this statement? The only case when the interest rates will be the same to all individuals will be when these individuals all borrow the money in the same period of time. If the bank rate should change, the governor in council is empowered to change the interest rate. Therefore in a period of two or three years we may have three or four different interest rates, and farmers who borrow money in that period in effect could be paying four different rates of interest rather than the same rate, as the minister indicated.


Horace Andrew (Bud) Olson: I agree with the hon. member that the rate can change from time to time; but the rate to any borrower at any given time will be the same. Therefore we are on common ground.


Harold Warren Danforth: The minister also indicated that over a period of time the interest rate
Ociober 29, 1968

could go down instead of up. This of course is something that could be anticipated; but this has not been the history so far as the farmers are concerned. They have not found that the costs go down. Is it not a fact that under the terms of this bill as now proposed, if the rate of interest should be changed to 1 per cent or 3 per cent, because the farmer has entered into a contract with the corporation at a specific time at a specific rate of interest he will not be allowed the new rate and will have to pay the full amount for the entire period of the contract.


Horace Andrew (Bud) Olson: In response to my hon. friend's direct question the answer is very simple. A contract is a contract.


Mr, Danforih:: In other words they are hung up.


André-Gilles Fortin: Mr. Chairman, I should like to put a question to the hon. Minister of Agriculture (Mr. Olson).
Would the minister not agree that, in view of increased interest rates and the excessively high cost of farming equipment, within a short time the small farmer could lose his farm?
Will he not agree that the small farmer might, at some point, lose his farm because his financial obligations are so high that he cannot meet them?


Horace Andrew (Bud) Olson: Well, I do not know that I can answer directly the question as to whether a farmer will lose his farm because the interest rate is too high. I suppose any farmer or any other businessman who has extended himself to the point where the interest charges to service his debt are in excess of his ability to meet them runs a risk. But this is not unique to farmers.


André-Gilles Fortin: Mr. Chairman, I wonder whether the honourable Minister of Agriculture (Mr. Olson) does not recognize the fact that there could come a time where, due to increased administration costs and the high cost of living, some Quebec farmers might lose their farms because they cannot sell their produce or else they sell it at low prices.
I should like the minister to comment on this.
29180-138J
Farm Credit Act


Horace Andrew (Bud) Olson: Wherever that occurs because of depressed market prices, whether in Quebec or in any other part of Canada, it is so. I suggest to the hon. member that it is not a problem that is specifically confined to the province of Quebec.


André-Gilles Fortin: Mr. Chairman, I do not think that is any sort of answer.
The question is not only whether the products are not sold in Quebec, in Ontario, or in British Columbia, but whether the farmer will be able to stow a profit at the end of the year under the new legislation introduced by the minister, after having covered his costs and sold his products at a profit.
I do not think it is any sort of an answer to tell me that the problem does not only exist in Quebec.
Mr. Chairman, I should like to point out that the minister seems to be evading questions rather than answering them.


Horace Andrew (Bud) Olson: In direct reply, as it concerns this bill and particularly this clause, I should like to advise the hon. member that in the year 1967 the corporation took back only 11 properties out of a total of 64,000.


André-Gilles Fortin: 
Horace Andrew (Bud) Olson: We would have no way of knowing how many farmers decided in their own minds that they wanted to sell out and retire their debts. We have no way of knowing how many liquidate or for what reason.


William Gordon Ritchie: Mr. Chairman, if a farmer made a loan at the going rate of interest and subsequently the rate fell, would he have the privilege of renegotiating this loan? If he did so it would be an advantage and would make this bill more acceptable.


Horace Andrew (Bud) Olson: Mr. Chairman, it would be somewhat difficult in answer to that question to say that the farmer would be able directly to refinance with the Farm Credit Corporation. Certainly if there were a retirement of a loan at some higher interest rate than was

October 29, 1968
Farm Credit Act
being charged at a given time the possibility would be open for him to refinance at a lower rate.


Robert Norman Thompson: Having regard to this question of rigidity, as far as this bill is concerned, Mr. Chairman, it strikes me of particular interest to hear what the minister has said about the impossibility of making provision for special areas of the agricultural community. I should like to remind him of some of the remarks he made in past years about this topic. On June 2, 1964 at page 3873 of Hansard for that day we read these words:
-there should be provision made for supervised credit primarily for young farmers in low income families. We know there are many very ambitious and capable young men who have the talent to go into the business of farming as a lifetime occupation but are unable to do so because there is not enough credit available for them at the outset to set up an economic farm unit. The raising of the maximum limit alone will not solve this problem.


Martial Asselin: When did you change your mind?


An hon. Member:: When he changed his seat.


Robert Norman Thompson: In 1966 when we were again dealing with farm credit legislation the minister is reported as having said at page 4324 of Hansard for that day:
The situation is perhaps not so difficult for well established farmers, who have accumulated the necessary capital, but it is extremely difficult for a young farmer to obtain this amount of capital. If the young farmer does not obtain the capital he is unable to obtain the productivity necessary to provide a reasonable standard of living, his net income is not sufficient.
If we refer to the records of the Farm Credit Corporation we find that the regulations applicable to young people who wish to start farming have perhaps been a little too rigid.
If that was true then, how can the minister justify this legislation in relation to exactly this same point? It is not even as strong in this regard as the previous act, because it omits certain wording which did at least place the onus on the government to give consideration to young farmers or family farm units?


Horace Andrew (Bud) Olson: Mr. Chairman, perhaps I should suggest to the hon. member for Red Deer that it might be advisable for both him and me not to read too many of our own speeches.


Robert Norman Thompson: Speak for thyself, John, not for me.


Horace Andrew (Bud) Olson: Let me say in all seriousness, and I do not intend to quote other speeches, 
there have been things said in the past when we were defending a certain position. Fortunately for me, almost all of the principles on which I enunciated a position have remained constant.


Some hon. Members:: Oh, oh.


John (Jack) Henry Horner: Stow that. The minister cannot even say that with a straight face.


Horace Andrew (Bud) Olson: The minister is laughing
because of something else he is thinking. Let me say to the hon. member for Red Deer that we have corrected that problem in respect of young people. Young farmers can get established as a result of moving up to 90 per cent the credit available under this act. Let me also say to him that there are other reasons, and I have explained this in detail on several occasions during this debate, that it is not advisable to have an especially low rate of interest. The main reason is the inflation of land costs. These costs go up almost in direct proportion to the availability of these loans. I am sure the hon. member does not want provisions put into this act which would discriminate against certain people. As soon as you make more money available to a greater number of people, for some strange reason- it is not so strange if you understand the practicalities of this-the price of land goes up. That is not a service to young people.
The increasing of the amount available to 90 per cent of the requirements from former levels for the establishment of these units is of great benefit. That is why I said these principles I enunciated some time ago are still valid.


Robert Norman Thompson: Let us try this one on for size. On April 12, 1965 as recorded at page 237 of Hansard for that day the minister said about the increase in the value of land-and we were not talking about credit that-
-credit is no longer the answer. We have now to provide our farmers with an opportunity of repaying some of the credit extended to them during the past few years.
All the minister is saying is that we are not going to increase the facilities for repaying the credit that is extended. We are going to make it more difficult because we are going to make the act so rigid that the benefit of the doubt in respect to interest rate fluctuation will not go to the farmer.
Let me refer to another point that is very relevant to this debate at this time. Again I refer to the minister's words, this time on June 6, 1967, and this can be found at page
October 29. 1968

1210 of Hansard for that day. He spoke about the necessity of providing funds for the Farm Credit Corporation, and referred to the fact that the Bank of Canada was used by the government to provide at least part of $1,520,000,000 to the C.M.H.C. Then he said:
It we are to be faced with this kind of deficit or national debt in Canada, I would certainly hope that the minister-
That was the minister of finance at that time.
-will expand a practice which has been started. I hope he will obtain a larger share of that money from the Bank of Canada.
Has the minister contemplated using the Bank of Canada to provide some of these funds, and allow this money to come back, as was discussed yesterday, on a revolving basis so the interest rate can be kept down instead of accelerated by this kind of policy?


Horace Andrew (Bud) Olson: What I said about making provision so farmers could repay this debt is just as valid today as it was then. I suggest the hon. member should recall some of the actions this government has taken since June 25 along precisely these lines. Let me remind the hon. member of the action we took this afternoon so far as corn producers are concerned. That is one of the steps we have taken, along with many others.
That is not what is now considered in Bill No. C-110. We are dealing with credit facilities under the Farm Credit Corporation. I am rather proud of the fact that there are amendments involved in this act which will make it easier and more beneficial to the agricultural community in general and some of the young farmers and family farms in particular.
[DOT] (8:50 p.m.)
I would also like to say to my hon. friends opposite that one of the purposes of making some of these amendments is to reduce the deficits about which my hon. friend spoke, because we think this is in keeping with responsible government.


Robert Norman Thompson: Mr. Chairman, if the minister is speaking about increasing the amount of credit that will be available to farmers, I would agree with him. But we are talking about credit alone not being the answer. We are talking about the cost of this credit. All we will be doing is allowing the farmer to come under increased pressure that will raise the cost of the credit, and make it less possible and practicable for him to repay a loan.
Farm Credit Act
For this reason it seems to me that the question is still what it was when the minister enunciated it in 1964, 1965 and 1967; that is, we must do something to hold down the cost of credit. That is what this argument is about; it is about the interest rates that the minister refuses to bring under any kind of control or regulation, in so far as concerns giving the farmer the benefit of the doubt.


Randolph Harding: Mr. Chairman, I will be less than a minute in what I have to say. The latest information which we had from the minister this afternoon was that for a loan to the Farm Credit Corporation the interest rate was 6.45 per cent, and loans to farmers are 1 per cent higher than this. This brings the interest rate to almost 7J per cent; in fact, to 7.45 per cent.
There is a crisis in agriculture today; probably one of the worst we have had in many years. At this time, when many farmers are in need of assistance by way of a loan, we are taking the ceiling off the interest rate, which means another burden loaded on the farmer who is in the unfortunate position of having to borrow money. I recall that during the debate some days ago the minister indicated that he felt interest rates were coming down. I think the mere fact that he has introduced in this piece of legislation the idea of taking the ceiling off the interest rates is a clearcut indication that the government knows very well that interest rates will remain high. I think it is also a clearcut indication that this government has not a hope of controlling inflationary interest rates.
That is the government's admission to this house and the people of Canada, namely that they are in serious trouble as far as costs are concerned. We should have a real drive on curtailing costs, the cost of money and the cost of everything else. If this drive were made by the government we would not be in the position tonight of having to take the ceiling off interest rates and loading a terrific burden on those farmers who have to borrow money at the high rate the minister is going to set.


James Hugh Faulkner: The hon. member for
Lotbiniere.


John (Jack) Henry Horner: Mr. Chairman, just before clause 5 carries-


James Hugh Faulkner: Order, please. The Chair has recognized the hon. member for Lotbiniere.

October 29, 1968
Farm Credit Act


André-Gilles Fortin: Mr. Chairman, I would like to make a few brief remarks.
I asked the Minister of Agriculture (Mr. Olson) a few questions earlier, but he did not seem ready to answer them. In fact, he knows the answer but he cannot give it because his hands are tied. It is quite obvious, Mr. Chairman, that this measure will increase the operation costs of the farm. It is quite obvious that this measure will increase the administration costs and, in that regard, I agree with the previous speaker.
I therefore ask the minister once again to admit that this measure will eventually result in the disappearance of a great number of family farms in Quebec to the benefit of the bigger operators and that high finance will be able to put under its control the same farmers who can barely survive now. I am asking the same question as before, hoping to get a satisfactory answer this time.


John (Jack) Henry Horner: Mr. Chairman, I have just one quick question under clause 5 and interest rates.


Horace Andrew (Bud) Olson: Mr. Chairman, may I reply to the hon. member for Lotbiniere? I thought I had answered the hon. member when I said we do not expect that this provision will get rid of the smaller farms. Indeed we hope that the amendments in the bill will make it possible for smaller farmers or groups of smaller farmers to be competitive with the larger commercial enterprises that may have developed around them. We hope this measure will be beneficial and not harmful.


John (Jack) Henry Horner: Mr. Chairman, there is one very quick and simple question I would like to ask before we get off interest rates. I believe it has been the policy, and the minister can correct me if I am wrong, that in a year in which a farmer for one reason or another has had a difficult harvest-take this year for example-and is unable to get his crop off the land due to weather conditions, and because of this is unable to meet his commitments to the Farm Credit Corporation, the corporation will charge him an increased interest rate of one half of one per cent on the amount of money he has failed to pay off, for the period in which he has failed to pay it off. In other words, if he fails to pay it off one year they charge him an increase, over and above the amount they are already charging him, of one half of one per cent.
[The Chairman.)
This is a simple question: Is this practice going to continue, in the light of the difficult harvest this year, or will the minister be generous in his setting of the new interest rates, and will the new interest rate encompass all situations?


Horace Andrew (Bud) Olson: Mr. Chairman, I answered that question earlier today in reply to the hon. member for Wellington-Grey, to the effect that the Farm Credit Corporation does give consideration, and I may say sympathetic consideration, to any individual farmer who has been adversely affected by some natural cause, whether it be hail, flood or what have you.


John (Jack) Henry Horner: Rain and snow.


Horace Andrew (Bud) Olson: Yes, rain and snow also. While we do not declare a moratorium on interest rates or payments for an area, it has been the practice, and we will continue that practice, to receive sympathetically applications from individual borrowers who have been caught in adverse conditions.


Mr.   La Salle@: Mr. Chairman, I would not want to delay the business of the house either. I am as anxious as everyone here to see this bill passed.
Lastly, I should like to put a specific question to the honourable Minister of Agriculture. I admit, as he does, that this bill is not bad and that, on the whole, it is quite acceptable.
However, with regard to the interest rate, this is where the trouble starts, if I may be allowed to use this phrase. The honourable minister said that it was not possible nowadays to recover sums of money at a 5 per cent interest rate. We quite agree with him. But, has he considered the fact that the government could pay the difference between 5 and 7 or 8 per cent?
The farmers, at least those in the area with which I am quite familiar, want to know what will be the cost considering the present farm situation. They seem quite concerned about this legislation. In fact, they want all honourable members to know that the farmers would like this interest rate to be established and maintained at a reasonable level. I think that some members even suggested a percentage, provided that the minister specifies the rate of interest and sets a maximum. As he refused to do so, we have to reject the very principle of the bill.
October 29, 1968

Could the government not accept a compromise as to the rate of interest, so as to truly serve the agricultural class which is going through a difficult situation?
As far as other clauses of the bill are concerned, I think they are acceptable and I even recognize their merits.


Horace Andrew (Bud) Olson: What I have tried to explain is that the Farm Credit Corporation supplies these credit facilities to the farmers of Canada at cost. What I have also said many times is that the interest rate will not be more than 1 per cent above the cost of the money to the corporation from the Minister of Finance. That changes from time to time. I think this is as precise as it is possible to be and I hope my hon. friend will accept it as a satisfactory answer for the time being, because it is in fact in keeping with the original intent that it shall be a service provided to the farming community at cost.
[DOT] (9:00 p.m.)


Mr.   La Salle@: Mr. Chairman, if I am allowed a remark, I must say that this is not very clear. Will the minister say whether or not he intends to set the rate at 5 per cent?


Horace Andrew (Bud) Olson: No. Quite obviously, the rate was 5 per cent and now we are changing it to a prescribed rate. So it will not be 5 per cent.


Martial Asselin: Just a few words, Mr. Chairman.
It has just been said that the bill before the house is excellent for the farmers-


Some hon. Members:: Hear, hear.


Martial Asselin: Since the beginning of the session, Mr. Chairman, we see on your left "yes men" who applaud anybody and anything.


Some hon. Members:: Hear, hear.


Martial Asselin: They have learned very quickly to approve anything which is done by the government, whether it is good or not and I leave them to their illusions.
If the hon. minister does not put a ceiling on the interest rate and leaves it to the corporation to set a margin of 1J per cent, his bill will be inoperative. Even now, I do not know any farmer in eastern Canada who has the
Farm Credit Act
means of borrowing money at the rate suggested by the hon. minister. If the rate is set at 7 per cent, some farmers will be in such dire financial straits that they will be forced to leave their farms. Indeed, when we speak of a 7 per cent interest rate, they know full well that they will not be able to benefit from the provisions of the act.
As the farmers in eastern Canada, and especially those in Quebec, have an average income of $2,000 to $2,500 a year, how does the minister expect them to be able to borrow at a rate of 7 or 7J per cent to improve their farming operations?
I say that the minister could at least assure the house that, this bill having been passed, should interest rates become exorbitant and prohibitive-which as I said a while ago would make this act inoperative and inefficient-the governor in council would set a maximum interest rate in order to allow the farmers, especially those of eastern Canada, to benefit from the act.
I ask the minister to adopt flexible rules enabling him to intervene from time to time and put a ceiling on the interest rates, so that the farmers might benefit from the bill he introduced to the house.


Horace Andrew (Bud) Olson: Under the prescribed interest rate provision the governor in council may set the interest rate at any level.


Mr. Stewart (Marquette):: Did I understand the minister to say that under certain conditions a farmer's payments can be extended for a year without additional charge? Does the minister not feel that the circumstances this year-the frost and the bad harvest conditions-warrant such consideration?


Horace Andrew (Bud) Olson: The minister did not say deferment would be possible without any charge. I think there has been a charge of one half of one per cent in the past. I did say, though, that consideration has been given to individual applications for deferment in any year when an applicant, through no fault of his own, was deprived of his income. To date, in many parts of western Canada, there has been no harvest because of severe weather conditions. In my view this would certainly be a reason for making such an individual application to the corporation.
It would not be prudent, in my opinion, to declare a moratorium applicable to a whole area because in any given area there are farmers whose operations are different from

October 29. 1968
Farm Credit Act
those oi their neighbours, and who may have obtained a satisfactory harvest. As I have said, we shall continue the practice of giving consideration to the position of farmers who have been affected adversely to the point at which they have no income of their own in a particular year.


Maclyn (Mac) Thomas McCutcheon: I understand from the minister's remarks earlier that a farmer pays roughly 1 per cent above the cost of money to the Farm Credit Corporation. Is there any undertaking that the money will be transferred by the Minister of Finance to the corporation without a surcharge? In other words, is there a possibility that one day a tight-fisted minister of finance might feel it was desirable on his part to become a hero and charge the corporation one half or one per cent more than the rate at which he had been able to raise the money? I hope I have made myself clear.


Horace Andrew (Bud) Olson: I think the hon. member has done so. The Minister of Finance sets rates from time to time with repsect to loans to crown corporations. The hon. member used the word "tight-fisted" but I do not think any minister of finance would set a substantially higher rate than the cost of the money to him. I do not think this would happen at any time.


Maclyn (Mac) Thomas McCutcheon: Does the minister say, then, that the money is turned over without a surcharge?


Horace Andrew (Bud) Olson: No, I did not say that; I said it was a very, very small charge which the minister of finance makes. It is not easy to determine precisely what the cost is, because there are different rates in public issues for different terms, and rates have to be averaged out to some extent in order that the corporation would be paying a rate comparable to that which the Minister of Finance has to pay. However, we expect that the corporation will have the use of this money at almost the same rate, taking into account the calculations which would need to be done to make provision for a comparable term.
[DOT] (9:10 p.m.)
Clause 5 agreed to: Yeas, 77; nays, 53.
On clause 6-Agreement re loans to Indians on reserves.


John (Jack) Henry Horner: Clause 6, Mr. Chairman, is a new clause in which I am pleased to see the Farm Credit Corporation, even poorly in a bad bill, make a small gesture toward the

Indians. However, I feel the government has failed to recognize a very serious problem in the country today. I say this as a member for the constituency of Crowfoot. I should like to answer the slur that was cast upon the name of Crowfoot here the other day by the Prime Minister. My constituency is named after a great Indian chief, Chief Crowfoot. The Blackfoot Indians now live within the constituency of Crowfoot. I want to make it abundantly clear that it was Chief Crowfoot who signed the peace treaty with Colonel Macleod and said, "There will be peace as long as the rivers flow and the grass grows on the prairies". It is an honour indeed for me to carry his name into this chamber.
I cannot help but rise to point out the inequities in this particular clause. There are many of them. I say to the minister that it is a hollow gesture to give the Indians the opportuntiy of borrowing from the Farm Credit Corporation. It is a gesture, however, which will get the government and the department of Indian affairs off the hook; that is what it will do. When an Indian tribe or band goes to the Indian affairs branch and says, "We want to borrow money", the branch will be able to tell them to go to the Farm Credit Corporation.


An hon. Member:: Good.


John (Jack) Henry Horner: Some members on the government side clap their hands, but they know not why they clap their hands. I am very serious about this particular point. Clause 6 of this bill says, in effect that three white men are equal to a whole tribe of Indians. Sit in your seats now and clap your hands.


An hon. Member:: I cannot hear you.


John (Jack) Henry Horner: This bill indicates that three white men are equal to the total number of people of the Blackfoot reserve. This is a serious matter. There is a hush in the chamber now when hon. member know the facts; they are not so happy. They realize what they are doing. Is this equality? I say to the minister through you, Mr. Chairman, that this is nothing but a hollow gesture.
I may say that the Indians on the reservation in my constituency have already borrowed $100,000 to form a cattle co-op. The minister should know this, and I think perhaps he does. They are buying steers and selling cattle; they are making money with that cattle co-op. However, only a small percentage of the Indians on the reservation are in that co-op, not more than a third of the
October 29, 19S8

whole tribe on that reservation. They have made good use of the $100,000. Clause 6 limits to $100,000 the amount an Indian band or tribe on a reservation may borrow. According to one of the following clauses in the bill three individuals, other than Indians, can borrow $100,000.
I say to the minister that this principle is wrong. It is disgraceful in a day and age when equality is considered just and fair. I say it is wrong in a just society; I say it is wrong in any kind of society in the twentieth century. I have already moved an amendment to clause 5 of this bill and I am prepared to move an amendment to clause 6. No one on the government side supported my amendment to clause 5.
An hon Member: Nobody will on clause 6, either.


John (Jack) Henry Horner: A member says that no one will on this clause, either. I want every one of you on the backbenches on the government side to realize what the amendment I am moving is going to mean. It is going to mean that three people, other than Indians, shall not be equal to a whole Indian band as this clause suggests now. If you disagree with the hon. member for Crowfoot you will be saying that you believe three people shall be equal to that number of Indians. In essence, this is the matter upon which you will be voting. I want each and every one of you backbenchers, you trained seals, to weigh this in your own mind and not be guided by everything the minister suggests or everything the Prime Minister suggests, especially when the Prime Minister has no regard for Crowfoot.
I have a very high regard for Crowfoot. I have visited the monument that is near the town of Gleichen, Alberta, where Chief Crowfoot and Colonel Macleod signed the peace treaty. I was there-


Some hon. Members:: Oh, oh.


John (Jack) Henry Horner: Perhaps hon. members are a little too eager to laugh. I was there with Chief Yellowfly who is now the administrator, and Mr. Adam Solway who is now the chief of the reservation. I was very much impressed by the high respect-


An hon. Member:: Heap big respect.


John (Jack) Henry Horner: That remark only belittles the hon. member making it, and I will not name him. I was there and I was very much impressed by the high regard in which Chief Crowfoot was held. I was greatly impressed
Farm, Credit Act
by the attitude of these Indians toward the act of Chief Crowfoot when he signed the peace treaty with Colonel Macleod. The Indians all over western Canada at that time wanted to rise to the battle call of Gabriel Dumont and Louis Riel at the battle of Batoche. The Indians all over wanted to answer that call, but Chief Crowfoot stopped them.


James Hugh Faulkner: Order, please. I would invite the hon. member for Crowfoot to return to the provisions of clause 6.
[DOT] (9:20 p.m.)


John (Jack) Henry Horner: I am sure, Mr. Chairman, that you and other hon. members will forgive me for getting carried away for a minute. I happen to represent a constituency that is named after a great Canadian, and I suggest that this clause is a disgrace to this government and the minister. The Minister of Agriculture comes from western Canada and formerly represented part of the area of which I speak. The proposed section 17A reads as follows: With the approval ol the governor in council, the corporation may enter into an agreement with the Minister of Indian Affairs and Northern Development-
I see the minister in charge of Indian Affairs and Northern Development is now in his seat. I am pleased he is taking part in this debate. I would ask him whether he thinks that a band of Indians could be considered equal to three people who are not Indians.


Mr. Perrault:: That is nonsense, and you know it.


John (Jack) Henry Horner: Someone says that is nonsense and I know it. I would ask him to read clause 6 (4), to be found on page 5 of the bill. If what I said was nonsense then I would be interested to see how he votes on the amendment that I now propose to move. I move, Mr. Chairman:
That all the words after "shall" in line 3, page 5, paragraph (4) be deleted and the following substituted therefor: "be determined by agreement between the corporation and the Minister of Indian Affairs and Northern Development, with the approval of the governor in council".
This amendment does not seek to do anything drastic, Mr. Chairman; I want everyone to abide by it. If the department of northern affairs and the governor in council believe that an Indian band should be limited under the act to a loan of $100,000, then they may do so. But let them be brave enough not to make a public declaration that three people

October 29, 1968
Farm Credit Act
who are other than Indians are equal to one Indian band. Let us be gentlemen in a land where we pride ourselves that we put equality above all else. Let us be just in this supposedly just socety.
I am not saying that the limit should be $200,000 or $300,000, Mr. Chairman. All I seek to do is to remove the limitation that this clause now places upon an Indian band. Clause 6 (4) reads:
The total amount outstanding of loans that may be made to any one band under this act shall not exceed one hundred thousand dollars.
I would ask these backbenchers who vote for the government on every amendment to look a little further at this bill. In clause 10 it is provided that three people who are other than Indians on a reservation can borrow up to $100,000. I am not suggesting that Indian bands should be able to borrow more money than they are capable of repaying; I am suggesting that there should be no limit imposed at all. The limit should be decided by their ability to repay, following thorough discussion of the matter with the Minister of Agriculture and the Farm Credit Corporation. They should decide whether an Indian band in a particular part of Canada should be able to borrow $75,000 or that an Indian band in another part that is a little more viable can borrow $125,000 or $200,000.


An hon. Member:: Let it be.


John (Jack) Henry Horner: Mr. Chairman, someone says "Let it be". I cannot let it be so easily. To me this means a lot. I have seen the reputation of these trained seals who vote with the government no matter how just an amendment might be. I ask them not to make a hurried decision on this matter. Do not let it be said that the Liberal party believes that one band of Indians on a reservation is considered equal to three non-Indians not on a reservation.
I am heartened to see the minister of Indian affairs now talking this matter over with the Minister of Agriculture. If there is any doubt about it I would be willing to discuss the question. If the minister has any doubt about my amendment let him stand clause 6 and we can move on to clause 7. We would agree to this if the minister requires further time to discuss the matter. No one is more congenial on this point than I. But I ask hon. members opposite not to rush into a decision, particularly when they tell the people of Canada that they believe in a just society with equal treatment for all. They may be in

deep trouble if they move hurriedly on this question.


James Hugh Faulkner: Order. Is the committee ready for the question on the amendment? The hon. member for-


Horace Andrew (Bud) Olson: Mr. Chairman-


Mr. Maclnnis (Cape Breton-East Richmond):: Mr. Chairman, a point of order.


James Hugh Faulkner: Order. The hon. member is rising on a point of order.


Donald MacInnis: Mr. Chairman, I rise on a point of order to clearly indicate to you that as chairman of the committee it is for you to make the decision who has been recognized for the purpose of taking part in this debate. It is not for the minister of Indian affairs to rise in his place and indicate that some other member should be given the floor.


James Hugh Faulkner: Order, please. That was precisely what the chair was doing. I was having some difficulty recalling the name of the riding. The hon. member for Selkirk.


Edward Richard Schreyer: Mr. Chairman, I support the spirit of the amendment that has just been moved by the hon. member for Crowfoot. To the eloquence that he used in putting his case to the Minister of Agriculture I wish to add words of support. I do not know how the Minister of Agriculture, levelheaded man that he is, could possibly allow this blatant discrimination to creep into the drafting of Bill No. C-110. There is something about the amendment moved by the hon. member for Crowfoot, as I heard him read it into the record, that is not quite acceptable to me. Not having it before me it seemed that no specific reference was made in the amendment to the position of Indian bands themselves. In his amendment the hon. member sought to omit any reference to a limit of $100,000 on loans to Indian bands, leaving the amount to the discretion of the minister and the department of Indian affairs.
It seems to me, Mr. Chairman, that the amendment should have provided for consultation or tripartite consideration among the Farm Credit Corporation, the department of Indian affairs and the Indian bands themselves. That is the vital point of the hon. member's amendment.
[DOT] (9:30 p.m.)
To return to a consideration of clause 6 and the amendment moved by the hon. member, I
October 29, 1968

ask the Minister of Agriculture what possible justification there is for limiting loans to Indian bands. No doubt the minister knows that on sizeable reservations three, four or five farm operations may be carried on simultaneously. In my old constituency of Springfield there exists an Indian reservation with a population of between 2,000 and 2,500 people. In 1966 the reservation made plans to carry on three or four different kinds of farming operation. Four or five Indians were to be in each group or co-operative, and each co-operative was to engage in a different kind of farming operation. One group within that band might raise livestock, another grow grain and a third engage in yet another form of farming, and so on.
Limiting the amount available to one band to $100,000 will have serious practical consequences. It would be much better if the limit of $100,000 were to apply to each group of farmers within a band. That way the blatant discrimination of clause 6 would be removed. I recall what the hon. member for Crowfoot said about $100,000 under this bill being available to three farmers working together. I submit that a similar provision ought to make a similar kind of loan available to any three or four Indians working together as a group within a band. I ask the minister to remember that in the near future we shall see three, four or five different agricultural operations carried on within the same band. Why should any one of these groups be subjected to legislation that is more restrictive than that applicable to similar sized groups of non-Indian people. I ask the Minister of Agriculture specifically to answer this question when he replies to the mover of the amendment.
In conclusion may I say that so blatantly discriminatory is this provision that if it were before the United States congress there would be rioting in the streets of United States cities.


Mr. Gauthier:: Mr. Chairman, I would like to say a few words about the amendment which has just been moved.
Although I do not fully agree with the provisions of the bill under consideration, I feel that those contained in the amendment are not much more acceptable since for two or three days we have been discussing Bill No. C-110 in this house to prevent the Minister of Agriculture (Mr. Olson) from setting the interest rate of the Farm Credit Corporation, because we feel that it belongs to the house to do it.
29180-139^
Farm Credit Act
However, under that amendment, the minister is being asked to determine, in cooperation with the bands, the amount that can be loaned to each band. I realize that that is rather contradictory and that we should find another formula.
I cannot suggest one at this time, because the matter has just been introduced in the house. However, I would like to ask the hon. minister whether, in fixing this maximum of $100,000 for each reservation, he took into consideration the population of each reservation? Obviously, all the reservations do not have the same population.
For my part-I shall not say it too loudly-I think $100,000 can certainly help the small reservation of Blue Point. There are only a few farmers in that area, and they will certainly be satisfied if they can get $100,000, just like the Indians on larger reservations. That is the main point which I wish to bring to the attention of the Minister of Agriculture, because he suggests the sum of $100,000 for all reservations, whatever the size of their population. The minister should at least set a percentage, for example for a farmer operating a farm on a given reservation but, in any event, I think that more precise provisions are certainly necessary. The minister at least showed his good will by fixing a sum.
The house wants a sum to be determined and an interest rate to be fixed. The minister is on the right track, but I do not think this legislation goes quite far enough in making precise provisions for each particular case.
The hon. member who moved the amendment said that fixing a sum of $100,000 he was considering a reservation equal to three white men. Now, on the basis of the reservation located in my riding, I think that the amount of $100,000 is worth more for a reservation than for three white farmers, because the latters' lands can be mortgaged. As far as Indians are concerned, their lands will not be mortgaged under the law.
I would like to put a question to the minister. He is now discussing with another member, but I would like him to tell me how this amount of $100,000 will be guaranteed.
The bill reads as follows:
Where an agreement has been entered into pursuant to subsection (1), the Corporation may make loans under this act to farmers and bands-
In my opinion, the terms used are somewhat confusing, because the Farm Credit Corporation will have to secure some guarantees. Could the minister tell me whether it is

October 29, 1968
Farm Credit Act
the council of the band or the government that will provide the guarantees, in short whether the corporation will lend, as it sometimes does, to the council of the band, so that the latter can accommodate the farmers, or whether it will lend directly to them.
If it lends to farmers, it is strange to read in the bill that:
-the Corporation may make loans under this act to farmers and bands referred to in that subsection without obtaining a first mortgage on farm lands or on farm lands and chattels.
[DOT] (9:40 p.m.)
Mr. Chairman, that worries me a bit, and I wonder where the corporation will get guarantees should it make loans directly to the bands. If it makes a loan to the band council, as in the past this money will be managed by the council. I should like the minister to give us some information in this regard.
Concerning the amount now set at $100,000,
I feel that the act is not explicit enough; all the reservations should be taken into account. This may be quite suitable in my area, but in the case of large reservations it will certainly not be. I agree with the member who moved the amendment in this regard, and I feel that the minister should give us additional information to throw light on that provision of the act. Otherwise, we shall have to support the amendment. I do not think the department should have the full responsibility of setting the amount of money to be voted for each of the reservations.
I bank on the minister to enlighten us on these matters and if, in the end, we get specific figures, the majority of the members may be satisfied, and the Indians can no longer say that the act is discriminatory.


Mr. Marchand (Kamloops-Cariboo):: Mr. Chairman, I do not want to hold up the passage of this very important bill but I would like to make a few remarks in connection with those clauses that relate to the matter of making money available to Indian people. I also wish to ask the minister a few questions so that he can clarify certain provisions of the bill. I share some of the concern expressed by hon. members on the other side, and I hope that in his remarks the minister will clarify the situation for us.
I would first like to commend the minister and the government for including these changes in the bill. One of the important factors limiting or prohibiting the development of Indian people, and of resources on reservations, has been the lack of available capital

from sources that are available to other Canadians. If this capital were available Indians could get into business ventures of their own.
I hope that the changes in this bill are only a beginning in making farm credit sources, provided by federal legislation, available to the Indian people. I hope that the Farm Machinery Syndicates Credit Act, for instance, will receive further consideration from the minister, so that this source of lending will be made available to the Indian people. I hope that consideration will be given also to similar amendments with respect to the Farm Improvement Loans Act. I know that the amending bill has already been passed but I urge that amendments be made so that that source of credit can be made available to the Indian people.
There are some 6 million acres of Indian land in this country, much of it very valuable. Much of it is on the prairies, about which hon. members have talked. Much of it is valuable farmland. I submit that much of it can be developed by the Indian people, if capital were made available to them. If this were done I can assure the minister that many Indians would get into farming ventures on their own.
I believe that Indians must participate in all aspects of Canadian life, whether social, economic or political. In the past there has been too much of a tendency on the part of the Indian people to go to the Indian Affairs branch, and look to it for everything. The Indian Affairs branch must not be all things to the Indian people. The Indian people must have sources of capital and of information available to them, sources that are available to other Canadians. Along this line I believe that the provincial governments also have a responsibility to provide services to the Indian people on the same basis as they are provided to other citizens.
Some of the sources of credit available to other Canadians from the provincial governments should be made available to Indian people. I hope that the Minister of Indian Affairs and Northern Development will pursue this course when dealing with provincial ministers, and that the Prime Minister will pursue it in dealing with provincial premiers, to work out arrangements with the provinces so that they will expedite the provision of services to the Indian people.
This is a must, if we are to succeed as citizens in this country. We must have all the
October 29, 1968

services made available to us that are available to other citizens. I know that there is a peculiar mortgage position with respect to Indian lands. Here again I commend the minister for taking the action he did in this bill, because I believe that he and the government must take responsibility in guaranteeing certain loans for Indians. We need a time cushion. We need a cushion so that we can develop, and eventually we must reach a position where we can take on the responsibilities that other Canadians share. We must not always be looking to the government and asking what the government can do for us. We must also ask what we can do for ourselves. But before we can do things for ourselves we must have available to us the sources of credit, services and other things that are available to other citizens.
[DOT] (9:50 p.m.)
I had not intended to launch into a lecture on this matter tonight, Mr. Chairman. I would like the minister to explain the meaning of subclause (4) on page 5 of the bill, referring to the maximum amount of loans available to an Indian band. Does this refer to the maximum amount available to a band for a band operated project, or does it mean that it is the total amount of money that would be available to a band, including the total amount individual Indian borrowers might borrow?
I said in my opening remarks that I shared some of the concern of hon. members on the other side. I hope that this $100,000 will not be too restrictive. I hope it does not mean that it applies only to individuals within the band. I would hope that perhaps if the Indians could get together and form a co-operative of their own they would have sources of credit available to them for individual projects. I would not like to see them limited in this instance. Perhaps the minister would give us an explanation on these points.


Horace Andrew (Bud) Olson: I have listened with a great deal of interest to the comments that have been made about clause 6 of the bill now before us. I thank hon. members opposite, and the hon. member for Kamloops-Cariboo on this side, first for their concern and second for their comments. With regard to the matter of including Indians and Indian bands within those qualifying to make an application to the Farm Credit Corporation, first of all I should like to answer the hon. member for Kamloops-Cariboo by saying that subsection (4) of section 17A under clause 6 has exactly the same effect for an Indian band as for any
Farm Credit Act
other corporation; that is, the maximum is $100,000. That $100,000 is for an indebtedness by the band as a corporation.
Perhaps the Leader of the Opposition would wait until he hears the remainder of the explanation because it might take some of the smile off his face. Any number of Indians who live on a reserve or belong to a band, if they enter into a corporate entity or indeed into a partnership which is recognized by the Minister of Indian Affairs and Northern Development, may borrow up to an amount of $100,000 for each group.


John (Jack) Henry Horner: May I ask a question on that very point?


Horace Andrew (Bud) Olson: Just a moment. The hon. member did not even read this clause before he made his amendment.


John (Jack) Henry Horner: Mr. Chairman, I rise on a point of privilege. The minister imputed motives to me when he said I had not even read the clause. I was merely rising to ask him a question which would clear up the matter. He said that any group of Indians could become a corporate entity-


Horace Andrew (Bud) Olson: That is not a point of privilege.


James Hugh Faulkner: The hon. member rose on a point of privilege but seems now to have shifted to a question. He may either state his point of privilege or wait until the minister has finished before putting his question.


John (Jack) Henry Horner: Mr. Chairman, I beg your indulgence to bear with me. My point of privilege arose out of the minister's remarks and the fact that he stated I had not even read the clause. In order to make it clear to him, I must pose a question. The minister stated as a matter of fact that any group of Indians could become a corporate entity, but under this clause can a band borrow more than $100,000?


James Hugh Faulkner: Order, please. I fail to see the point of privilege.


Horace Andrew (Bud) Olson: Mr. Chairman, I intend to prove what I said a moment ago to the satisfaction of all reasonable people. Three or more Indians who form themselves into a corporate partnership, with the approval under clause 1 of the Minister of Indian Affairs and Northern Development, may borrow up to $100,000 per corporation. If you read subsection (5) you will note that in addition any individual Indian who is a farmer and who qualifies in respect of the security needed by the Minister

October 29, 1968
Farm Credit Act
of Indian Affairs and Northern Development may borrow up to an amount of $40,000. If the hon. gentleman had read subsection (1) he would have noted-I shall not read it all-the following:
-loans to be made under this Act to farmers who are Indians on reserves and to bands-
I should like the hon. member to take note of the word "and". Then he might look down at subsection (5) where he will note:
The provisions of this act, in so far as practicable, shall apply to all loans made or to be made to farmers and bands-
If he will look further down in subsection (5) he will note this:
-shall be deemed to be a reference to the land that is being farmed or is to be farmed by the farmer or the band.
Mr. Chairman, with all the qualifications within this clause the situation is made completely clear. That was the intent of having it written in that way. All the facilities and services, without any discrimination whatever, will be available to the Indians in the same way they are available to anyone else in this country.
In reply to the hon. member for Kamloops-Cariboo I should say we have placed an upper limit, on any corporation or any entity, of $100,000. That is the maximum amount of credit that any entity can receive from the Farm Credit Corporation. That is precisely the meaning of subsection (4) under the act.


John (Jack) Henry Horner: May I ask one question, Mr. Chairman.


James Hugh Faulkner: Order, please.


Horace Andrew (Bud) Olson: Mr. Chairman-


James Hugh Faulkner: Order, please. It being ten o'clock-


Horace Andrew (Bud) Olson: Mr. Chairman, may I ask that the committee rise and request leave to sit until eleven o'clock tonight.


John (Jack) Henry Horner: If I might, I have one question-


James Hugh Faulkner: Order, please. Perhaps I might rise, report progress, and then leave could be requested of the Chair at that point. Therefore, shall I rise, report progress and ask leave to sit at the next sitting of the house or later today.


Some hon. Members:: Agreed.
Progress reported.
[Mr. Olson.1


Donald Stovel Macdonald: Mr. Speaker, pursuant to standing order 6(6), I should like to move that the house sit for one additional hour.


William Arnold Peters: No, Mr. Speaker.


Mr. Deputy Speaker:: Does the President of the Privy Council (Mr. Macdonald) have unanimous consent?


An hon. Member:: No, Mr. Speaker.


Donald Stovel Macdonald: Mr. Speaker, might I call attention to the fact that under the provisions of standing order 6(6) it is my privilege to move this motion and if the hon. member can get nine other members to join with him he can prevent the house sitting.


William Arnold Peters: We know the rules. You do not need to lecture us.
[DOT] (10:00 p.m.)


Donald Stovel Macdonald: Perhaps I might be heard.


Mr. Deputy Speaker:: Order, please. There is a question as to when this motion should be put and whether it should be put before 10 o'clock. Perhaps I might consult with the learned gentleman in front of me.
Apparently the precedent has been set in the past that a motion must be put before ten o'clock, and failing unanimous consent we will follow the normal procedure.



BUSINESS OF THE HOUSE

Gerald William Baldwin: Mr. Speaker, would the government house leader indicate the business for tomorrow?


Donald Stovel Macdonald: Yes, Mr. Speaker, we will call again the committee stage of the present bill. After that we will proceed to the resolution preceding the bill dealing with financing of the Canadian National Railways.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the house under provisional standing order 39A deemed to have been moved.

Mr. Bernard Dumont (Frontenac):: Mr. Speaker, on October 17 last I asked the
October 29, 1968

Secretary of State for External Affairs (Mr. Sharp) the following question:
I should like to ask the hon. Secretary of State for External Affairs whether the $8 million loaned to Nigeria will contribute to pay for the bombs that England sells to that country to murder the Biafrans?
When I ask the Secretary of State for External Affairs a question concerning the possibility for the Canadian government to intervene with England so that it may stop selling arms to Nigeria, he answers me that the right hon. Prime Minister (Mr. Trudeau) has already answered this question. When I put the same question to the Prime Minister, he told me that the Secretary of State for External Affairs had already answered that question. They remind me of Pontius Pilate who washed his hands saying: I am innocent of the blood of that victim.
The Prime Minister and the Secretary of State for External Affairs who will not ask England to stop selling arms are doing the same thing, as well as those opposite who talk and could be heard saying-


An hon. Member:: Innocent.


Bernard Dumont: I will repeat the word, Mr. Speaker, because I heard it quite well. They said: Innocent. They are heard saying: We are innocent of the blood of those Biafrans who wanted to preserve their freedom of speech.
Those Biafrans wanted to escape the domination of the federal government that wanted to take over the oil wells located in Biafran territory. The smell of the oil wells of the Shell Company, the supplier of Great Britain which is unable to go through the Suez Canal allow us to realize that 3 million Biafrans are readily sacrificed to take possession of that area which is rich in oil resources.
Mr. Speaker, when a Prime Minister mentions the warmth and the affection between Canadians and Britishers in the introduction to an 8 page article which the Financial Time of London devotes to Canada, it is no doubt appropriate to denounce Great Britain for selling arms to Nigeria.
The Prime Minister stated: Canada has borrowed much from Great Britain. We have borrowed from its institutions, its traditions and its people. Whatever may be their origin, all Canadians will remain for ever grateful to Great Britain for what it has lent us.
The warmth and affection which characterize the relations between our two countries, both at the official level and at the individual
DEBATES	2199
Proceedings on Adjournment Motion level, are dear to the Canadian people as much as they are dear I am sure to the British people.
It is not surprising that the Prime Minister and the Secretary of State for External Affairs (Mr. Sharp) would want to disguise the answers given in the house. Together they practise the ostrich policy; they bury their heads up to their ears in the sand so as to pretend that they know nothing of the existing genocide, under the pretext that we cannot support the Biafrans, because that corner of land is not recognized as a state. We will let millions of individuals die so that the Canadian people may remain eternally grateful to England; those hypocrite English whose only concern is to divide to better rule, without any concern at all for the human factor.
Besides, it is a historical fact. No federation established by the English has ever managed to survive because, living on their island, having in that country no worthwhile resources, those British people have to exploit other countries to survive, as they did in Canada and continue to do so now in Biafra.
The federal government of Nigeria, supported right from the outset by the two-faced British government, thought it would be able to bring this war to a happy conclusion in a few weeks, just enough time to humble the oil-possessing Christians.
It started out as an economic blockage, but an invasion quickly followed. That was not a bona fide war. It was, from the very beginning the onrush of a swarm of vandals-as those opposite-destroying anything that stood in their way, killing on sight any Biafran that happened to be there, plundering houses, churches and schools. In a year, Mr. Speaker, the Biafran war made more victims than the seven-year Viet Nam conflict. Why such fierceness? Because they want the Biafran people to disappear completely; 6,000 people die every day and the good Liberals agree to let this slaughter go on. This can be best proved by this article, and I quote:
-the Soviet MIGs, piloted by Egyptians, started to shower English bombs on Biafran towns and villages. Out of 68 raids, only two were aimed at military objectives; the rest of them were released over the civil population.
Small wonder that, in the face of such acts, the population should flees and fall back. Small wonder that, concentrated within an ever shrinking territority, that population should starve to death . .. and all this with the complicity of a part of the world, and before the indifference or the helplessness of the other-
October 29, 1968

Proceedings on Adjournment Motion
Mr. Speaker, let us not be misled in this Biafran affair. We are not asking for the recognition of that small homeland. We want the Canadian government to protest against those countries which continue to sell arms to the Nigerians.
Exactly 34 days ago, I called the attention of the government to this problem. It therefore has on its conscience the death of over two million people assassinated to save the oil wells of England. And that genocide continues with the approval of our good friends across the way, who seem to have no other concern but trying to ridicule serious situations which should be brought to an end without delay. That is why I urge again the Secretary of State for External Affairs to support our request and prevent England from selling arms to the Nigerian federal troops.
[DOT] (10:10 p.m.)


Mr. Yves Forest (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, on behalf of the Secretary of State for External Affairs (Mr. Sharp) who is at the United Nations right now to discuss those various matters, and without agreeing with the many statements made by the hon. member for Frontenac especially about England's participation in the civil war now raging in Nigeria, I want to quote to the hon. member the words of the Prime Minister (Mr. Trudeau): Canada, under international law and
within limits that we must respect, as well as within the framework of the United Nations and by means of international contacts, has done everything to put an end, if possible, to that civil war in which we cannot, of course, intervene directly. Besides, that is what the member countries of the Organization of African States have asked.
Thanks particularly to the help of the international Red Cross and to negotiations with Nigeria, the Canadian government does its utmost to give assistance to Biafrans and help them overcome their difficulties.


Bernard Dumont: The government is merely asked to protest against the sale of arms.


Yves Forest: The hon. member is obviously referring to England. We owe a great deal to England but we are now an independent state and we have our own external policy. We surely cannot intervene in British affairs and they must make their own decisions.
As far as the war is concerned, I think that Canada, as the Prime Minister repeated many times in this house, has done its utmost to give assistance to Biafrans through the international Red Cross. It also endeavoured, through negotiations, to bring the war to an end.

Motion agreed to and the house adjourned at 10.13 p.m.

Wednesday, October 30, 1968



COMMITTEES OF THE HOUSE


[Stage Direction]
First report of standing committee on fisheries and forestry-Mr. Crossman.

[Stage Direction]
Mr. John M. Reid (Kenora-Rainy River)
presented the first report of the standing committee on broadcasting, films and assistance to the arts, and moved that the report be concurred in.
Motion agreed to.
[Note: Text of foregoing reports appears in today's Votes and Proceedings.]