OTTAWA – Beginning in the fall, the House of Commons agriculture committee will hold public hearings on a federal proposal to change the rules of the cash advance program, including making it tougher on defaulters.
Legislation to create a national cash advance program with similar rules across the country was debated last week and sent to the committee for hearings, to begin when the Commons sits again after mid-September.
The legislation also will reinstate in law the interest-free portion of the cash advance that now operates by cabinet order. The first $50,000 of an advance on unsold crop will be interest-free and the remaining loan, to a maximum $250,000, will be at preferential rates.
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The unsold crop is considered collateral. However, the law would make it tougher on farmers who take cash advances and then default on repayment.
They would have to pay the “reasonable” costs of government efforts to collect the debt, would be charged interest and not be able to get any other advances on government programs until the debt is repaid.
“This will result in significant savings to the taxpayer,” said Liberal MP Jerry Pickard, parliamentary secretary to the agriculture minister.
Although defaults fell to $10 million in 1994-95 from $64 million the year before, non-payment remains a problem, particularly on the Prairies, he said.
Same rules wanted
The program also meets a demand by Ontario farmers that the rules for their cash advance program be the same as those which have applied to the prairie program.
In the Commons, Opposition speakers said they supported the general principle but were critical of government motives.
Bloc QuŽbecois spokesman Jean-Guy ChrŽtien saw in the bill a way to reduce the amount of money Quebec receives.
Reform party spokesperson Elwin Hermanson saw it as an insignificant action that the Liberals hoped would divert attention from its failings in other areas, including lack of reform at the Canadian Wheat Board or in supply management.
“I believe the minister of agriculture is trying to divert some attention away from the problems he has by bringing forward legislation that is not of primary importance to the industry,” he said.
He also complained the Liberals were breaking a promise that up to $25,000 of the interest-free portion would be available to farmers in the spring, after seeding.
Liberal Rose-Marie Ur responded that in consultations with farmers before the bill was written, the government found little support for a spring advance.
“Most of these groups were either neutral on the issue or opposed to the concept of spring advances,” she said.
That issue, and the tougher default penalties, will be aired when witnesses are invited to appear before the committee in the fall.
