Bill C-29: An Act to increase the availability of agricultural loans and to repeal the Farm Improvement Loans Act

Second Session, Fortieth Parliament, 57-58 Elizabeth II, 2009 STATUTES OF CANADA 2009CHAPTER 15 An Act to increase the availability of agricultural loans and to repeal the Farm Improvement Loans Act ASSENTED TO 18th JUNE, 2009 BILL C-29 RECOMMENDATION Her Excellency the Governor General recommends to the House of Commons the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in a measure entitled “An Act to increase the availability of agricultural loans and to repeal the Farm Improvement Loans Act”. SUMMARY This enactment amends the Farm Improvement and Marketing Cooperatives Loans Act to provide financial support for farmers, including beginning farmers, and farm products marketing cooperatives, as well as to allow for intergenerational farm transfers through a loan guarantee program. It also allows for the adjustment, by regulation, of amounts and percentages set out in the Act. Finally, it repeals the Farm Improvement Loans Act. Also available on the Parliament of Canada Web Site at the following address:http://www.parl.gc.ca .vis1 {position: absolute;display:block;} .vis2 {position: static;} 57-58 ELIZABETH II —————— CHAPTER 15 An Act to increase the availability of agricultural loans and to repeal the Farm Improvement Loans Act [Assented to 18th June, 2009] Her Majesty, by and with the advice and consent of the Senate and House of Commons of Canada, enacts as follows: R.S., c. 25 (3rd Supp.) FARM IMPROVEMENT AND MARKETING COOPERATIVES LOANS ACT 1. The long title of the Farm Improvement and Marketing Cooperatives Loans Act is replaced by the following: An Act to increase the availability of loans for the purpose of the establishment, improvement and development of farms and the processing, distribution or marketing of the products of farming by cooperative associations 2. Section 1 of the Act is replaced by the following: Short title 1. This Act may be cited as the Canadian Agricultural Loans Act. 3. (1) The definitions “farmer” and “farm products marketing cooperative” in section 2 of the Act are replaced by the following: “farmer”« agriculteur » “farmer” means any individual, partnership, corporation or cooperative association that is or intends to be engaged in farming in Canada; “farm products marketing cooperative”« coopérative de commercialisation des produits agricoles » “farm products marketing cooperative” means a cooperative association, incorporated under the laws of Canada or a province for the purpose of processing, distributing or marketing on a cooperative basis the products of farming, with a majority of 50 per cent plus one of members or shareholders that are farmers; (2) The definition “lender” in section 2 of the Act is amended by striking out “or” at the end of paragraph (c), by adding “or” at the end of paragraph (d) and by adding the following after paragraph (d): (e) any other organization that is designated by the Minister, with the approval of the Minister of Finance, on the application of that organization as a lender for the purposes of this Act. 4. The heading before section 4 of the Act is replaced by the following: GUARANTEED FARM LOANS 5. (1) The portion of subsection 4(1) of the Act before paragraph (a) is replaced by the following: Payment of lenders’ losses 4. (1) Subject to this Act and, in particular, to the conditions set out in subsection (3), the Minister is liable to pay to a lender 95 per cent — or if another percentage of not more than 95 per cent has been fixed by the regulations for the purpose of this subsection, that other percentage — of any loss sustained by it as a result of a loan made by it to a farmer for any of the following purposes in relation to farming in Canada: (2) The portion of paragraph 4(1)(c) of the Act before subparagraph (i) is replaced by the following: (c) subject to the regulations, if any, the purchase of livestock, including (3) Paragraph 4(1)(g) of the Act is replaced by the following: (g) the purchase of land; (g.1) the purchase of shares in a corporation, of an interest in a partnership, or of a share or membership in a cooperative, if 90 per cent or more of the fair market value of the property of the corporation, the partnership, or the cooperative was attributable to property referred to in this subsection that was used principally in the course of carrying on the business of farming in Canada; (g.2) the purchase of shares in a corporation, of an interest in a partnership or of a share or membership in a cooperative, if 90 per cent or more of the fair market value of the property of the corporation, the partnership, or the cooperative was attributable to shares, an interest in a partnership or memberships in a corporation, partnership or cooperative referred to in paragraph (g.1) or to property referred to in this subsection that was used principally in the course of carrying on the business of farming in Canada; (g.3) the purchase of shares in a corporation, of an interest in a partnership or of a share or membership in a cooperative, if 90 per cent or more of the fair market value of the property of the corporation, the partnership, or the cooperative was attributable to shares, an interest in a partnership or memberships in a corporation, partnership or cooperative referred to in paragraph (g.2) or to property referred to in this subsection that was used principally in the course of carrying on the business of farming in Canada; (4) Subsection 4(2) of the Act is replaced by the following: Exclusion of home improvements (2) Subsection (1) does not apply in respect of a loan made for the purpose of financing the construction of or improvements to a private dwelling. (5) Paragraphs 4(3)(b) and (c) of the Act are replaced by the following: (b) if the loan is with respect to property and the regulations prescribe an interest or right that the farmer must hold or intends to hold in that property, the application stated the nature of that interest or right; (c) the principal amount of the loan did not at the time of the making of the loan, together with the amount owing in respect of other loans under this Act previously made to the farmer and disclosed in the farmer’s application or of which the lender has knowledge, exceed (i) for all the purposes set out in subsection (1), an aggregate amount of $500,000 or, if another amount has been fixed by the regulations, that other amount, and (ii) for all the purposes set out in paragraphs (1)(a) to (e) and (g.1) to (i), an amount of $350,000 or, if another amount has been fixed by the regulations, that other amount; 6. Subsection 5(1) of the Act is replaced by the following: Principal amount where joint borrowers 5. (1) For the purposes of paragraph 4(3)(c), the principal amount of a loan shall, where the loan was made jointly to two or more farmers each of whom held a prescribed interest in a separate farm, be deemed to be, in respect of each of those farmers, an amount equal to the amount obtained by dividing the principal amount of the loan by the number of farmers. 7. (1) The portion of subsection 6(1) of the Act before paragraph (a) is replaced by the following: Payment of lenders’ losses 6. (1) Subject to this Act and, in particular, to the conditions set out in subsection (2), the Minister is liable to pay to a lender 95 per cent — or if another percentage of not more than 95 per cent has been fixed by the regulations for the purpose of this subsection, that other percentage — of any loss sustained by it as a result of a loan made by it to a farm products marketing cooperative for any of the following purposes in relation to the processing, distribution or marketing in Canada of the products of farming: (2) Paragraphs 6(2)(b) and (c) of the Act are replaced by the following: (b) the application stated that 50 per cent plus one of the members or shareholders, as the case may be, of the farm products marketing cooperative are farmers and, if the loan is with respect to property and the regulations prescribe an interest or right that the cooperative must hold in that property, the application stated the nature of that interest or right; (c) the principal amount of the loan did not at the time of the making of the loan, together with the amount owing in respect of other loans previously made to the farm products marketing cooperative and disclosed in the cooperative’s application or of which the lender has knowledge, exceed (i) for all the purposes set out in subsection (1), an aggregate amount of $500,000 or, if another amount has been fixed by the regulations or any greater amount approved by the Minister pursuant to subsection (3), that other amount, and (ii) for all the purposes set out in paragraphs (1)(d) and (e), an amount of $350,000 or, if another amount has been fixed by the regulations or any greater amount approved by the Minister pursuant to subsection (3), that other amount; (3) Subsection 6(3) of the Act is replaced by the following: Minister may increase limits (3) The Minister may, on the application of a lender made before the granting of a loan, approve an increase in each of the monetary limits referred to in paragraph (2)(c) to an aggregate amount not exceeding $3 million or, if another amount has been fixed by the regulations for the purpose of this subsection, that other amount. 1995, c. 13, s. 1 8. Section 7 of the Act is replaced by the following: Aggregate limit 7. The Minister is not liable under this Act to make any payment to a lender in respect of any loss sustained by it as a result of a loan made by it during a fiscal year after the aggregate principal amount of the loans under this Act made during that fiscal year and the four preceding fiscal years by all lenders exceeds $3 billion, or if another amount has been fixed by the regulations for the purpose of this section, that other amount. 9. Sections 9 and 10 of the Act are replaced by the following: Limit re appraised value 9. The Minister is not liable under this Act to make any payment to a lender in respect of that portion of the loss sustained by it as a result of a loan that exceeds (a) in the case of a farmer who, on the date of a loan application referred to in paragraph 4(3)(b) or 6(2)(b), intends to be or has been engaged in farming in Canada for less than six years, 90 per cent — or if another percentage of not more than 90 per cent has been fixed by the regulations for the purpose of this paragraph, that other percentage — of the appraised value, determined as of the day the loan is made, of the property in respect of which the loan is made; and (b) in the case of any other farmer, 80 per cent — or if another percentage of not more than 80 per cent has been fixed by the regulations for the purpose of this paragraph, that other percentage — of that value. 10. Section 13 of the Act is replaced by the following: Legal fees 13. The Minister is not liable to pay the portion of a loss sustained by a lender that is attributable to legal fees, costs or disbursements incurred by the lender unless those fees, costs or disbursements are assessed in accordance with the rates established by the Minister in consultation with the Minister of Justice. 11. (1) Subsection 15(1) of the Act is amended by adding the following after paragraph (b): (b.1) prescribing, for the purposes of paragraph 4(1)(c), the purpose for which the livestock is kept or the minimum period that the livestock must remain in the possession of the farmer; (b.2) fixing percentages for the purposes of subsections 4(1) and 6(1) and paragraphs 9(a) and (b); (b.3) fixing amounts for the purposes of paragraphs 4(3)(c) and 6(2)(c), subsection 6(3) and section 7; (2) Paragraph 15(1)(h) of the Act is replaced by the following: (h) prescribing the information to be fur- nished to the Minister by a lender in respect of loans made by it and the time when the information is to be furnished; (3) Subsection 15(2) of the Act is repealed. 12. Section 22 of the Act is replaced by the following: Annual report 22. The Minister shall, not later than June 30 in each year, prepare a report with respect to the administration of this Act during the fiscal year that ended on the preceding March 31 and shall cause a copy of the report to be laid before each House of Parliament on any of the first 15 days on which that House is sitting after the day the Minister completes it. Five-year review 22.1 (1) Every five years after the coming into force of this subsection, the Minister shall review the provisions and administration of this Act in consultation with the Minister of Finance. Tabling of report (2) The Minister shall cause a copy of the report on the review to be laid before each House of Parliament on any of the first 30 days on which that House is sitting after the report is completed. 1991, c. 46 CONSEQUENTIAL AMENDMENTS TO THE BANK ACT 1998, c. 36, s. 21 13. (1) Subparagraph 427(1)(m)(v) of the Bank Act is replaced by the following: (v) any works for the improvement or development of an aquaculture operation for which a loan, as defined in the Canada Small Business Financing Act, or a business improvement loan, as defined in the Small Business Loans Act, may be made, (2) Subparagraphs 427(1)(n)(v) and (vi) of the Act are replaced by the following: (vi) any purpose for which a loan as defined in the Canadian Agricultural Loans Act may be made, REPEAL Repeal of R.S., c. F-3 14. The Farm Improvement Loans Act is repealed. Published under authority of the Speaker of the House of CommonsAvailable from:Publishing and Depository ServicesPublic Works and Government Services Canada