Farm Credit Canada will do its best to respect a new federal government edict that it assess the personal integrity of loan applicants before a lending decision is made, said FCC general counsel and corporate secretary Greg Willner.
In the aftermath of an FCC loan to former Liberal cabinet minister Alfonso Gagliano, implicated in the Quebec sponsorship scandal, federal agriculture minister Gerry Ritz issued an edict that “personal integrity” must be a factor in judging loan or grant applications to five financial crown corporations including FCC.
The government has offered no public definition of what personal integrity means and who should judge it.
Read Also
AI expected to make itself felt in food systems
Artificial intelligence is already transforming the food we eat, how farmers produce it and how it reaches the consumer, experts say
Willner said the farm lender already assesses the character and trustworthiness of loan applicants. The government edict simply means FCC officials will have to be more vigilant.
“We believe that lending is as much an art as a science and it is more than totalling up your assets and liabilities,” he said.
“We received this directive and we will sincerely look at all our lending policies and see to what extent we can include that directive in our decisions.”
Willner said personal integrity is already a factor in FCC decision-making.
“Whenever one enters into a contract with someone, their personal integrity is important,” he said. “We rely on their personal integrity to honour their commitment that they will repay the loan.”
But the Sept. 6 declaration by Ritz, along with trade minister Michael Fortier, did not limit the need for a personal integrity judgment call to their financial record. It seemed more open-ended.
Affected crown corporations were instructed “to review their policies and programs to ensure that due consideration is given to the personal integrity of persons applying for financial assistance or other benefits from the corporations.
Due consideration will also be given to the effect that a proposed transaction would have on the corporation’s reputation and its ability to attract and retain other persons or entities to use the corporation’s services.
Fortier said in the same statement it was to make sure “responsible” Canadians had access to government agency financial support.
Farm leader and political critics denounced it as an attempt by the Conservatives to inject their own values and political interference in what is supposed to be an arm’s-length financial lender.
Although the government refused to elaborate, critics suspected that the rule was in part a Conservative reaction to news that Gagliano had received $550,000 to buy a Quebec vineyard and winery.
He was implicated but never criminally charged as one of the overseers of the sponsorship program that saw Liberal allies skim off money.
At the time, prime minister Stephen Harper’s press secretary, Dimitri Soudas, said: “Alfonso Gagliano receiving a loan from Farm Credit Canada was disturbing. The Conservative government believes that money should go to help farmers, not former Liberal cabinet ministers.”
Willner said he could not comment on Soudas’s apparent point that Gagliano’s Liberal past should have disqualified him.
He was asked if under the new edict, the loan to Gagliano was inappropriate.
“I don’t think that I can answer that,” said the senior FCC official. “I’m uncomfortable talking about the specifics of a particular loan. In addition, I don’t think it would be prudent to comment.”
