Statement made on 09 June 2009 by Senator Frank Mahovlich
Hon. Francis William Mahovlich:
Honourable senators, I rise today with the privilege to speak on Bill C-29, an Act to increase the availability of agricultural loans and to repeal the Farm Improvement Loans Act.
Farmers are the backbone of Canada. For many years, I have worked hard, with many of my colleagues, to promote the plight of farmers from coast to coast. Only last year, the Standing Senate Committee on Agriculture and Forestry released its multi-year study into the situation of rural poverty in Canada. We were met at nearly every turn with the harsh realities farmers in this country face. Operational costs are rising, but revenues are not.
Unfortunately, some of the people we met were forced to leave farming because they just simply could not afford it.
Our Canadian farmers do not need to become a distant memory. Rather, we need our farmers to be strong and reliable for the country.
In fact, honourable senators, Canada is the fourth largest agricultural and agri-food exporter in the world. Just last week, the Foreign Affairs and International Trade Committee heard from witnesses who told us that in 2007, Canada exported $34 billion worth of agricultural products. This shows that not only do we need to keep our Canadian farms strong for our own domestic needs, but we also need them to help us generate billions of dollars annually to help the Canadian economy.
That is why, honourable senators, Bill C-29 is so important. One of the main goals of this bill is to help make credit available to new farmers — that is, those who have been in the farming business for six years or less. It will help to provide these farmers with an eligible loan rate of up to 90 per cent. It also aims to double the loan limits for farmers to $500,000 for real property and increase the limit for all other farming purposes from $250,000 to $350,000. These improvements will surely be a big help to Canadians who are trying to get their farms started. Of course, farmers will need to have access to these funds in a timely manner. This bill also addresses this need, as it aims to develop and implement an online electronic delivery system to help reduce the wait time to process the loan applications, and also simplify the claims submission process.
This bill also addresses agricultural cooperatives. Currently, there is a 100 per cent farm-owned requirement to participate in the program. This bill responds to the requests of many agricultural stakeholders for that 100 per cent number to be reduced.
With the passage of this bill, the new requirement would be 50 per cent plus 1 farmers for agricultural cooperatives, thereby potentially expanding these benefits to a whole group of farmers who need them.
Although I agree with the principles of this bill, I would like to comment on some aspects that the honourable senators could discuss in greater detail if this bill is sent to committee.
For example, the loans farmers would take out through this program would be a variable rate based on prime. Currently, the interest rate in Canada is at an historic low. However, interest rates were in the double digits not 20 years ago. I would hate to see farmers hit with rising interest and inflation rates that are out of their control.
Another criticism of this bill brought forth by at least one financial institution is the fee that farmers must pay to participate in this program. While it is a relatively small fee of 0.85 per cent of the loan, it would still add unnecessary hardship for new farmers. There has also been a call to have the loan amounts raised even higher so that these new farmers would have a larger financial net to support their growing operation.
As I stated previously, I generally agree with this bill and feel it is of the utmost importance to help our Canadian farmers. These are issues that we, as the chamber of sober second thought, may wish to address.
Implementation will take place upon Royal Assent. I urge honourable senators to give this bill thorough study, yet speedy passage. As we rely on the farmers of this great country to provide us with fresh and healthy food, they rely on us — their representatives in Parliament — to provide them with the support they most rightly deserve.