Farm Credit Canada officials now have to consider personal integrity when deciding whether to approve a loan application.
In addition to scrutinizing an applicant’s business plan, cash flow and repayment schedule, FCC officials will have to look into questions involving personal integrity and whether public knowledge of the loan would affect FCC’s reputation.
These were new rules for five financial crown corporations announced late Sept. 6 by agriculture minister Gerry Ritz and trade minister Michael Fortier, hours before the Sept. 7 election call.
There was no explanation of why the policy change was being enacted by regulation or how personal integrity would be judged.
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“The concerned crown corporations will immediately begin 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,” said Ritz in the statement.
“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.
Requests to Ritz’s office for an explanation of the reasons for the policy change, how FCC officers are to assess personal integrity and what the definition is, brought a Sept. 8 response that there was nothing to add to the news release.
The crown corporations affected are Farm Credit Canada, the Business Development Bank of Canada, the Canada Mortgage and Housing Corporation, the Canadian Commercial Corporation and Export Development Canada.
Farm group and political opponents said they were outraged by the announcement. They suspected it came at least in part from Conservative government displeasure over news last week that the FCC had given a $550,000 loan to former Liberal public works minister Alfonso Gagliano to help him buy a Quebec vineyard and winery.
Gagliano, while blamed for his role in overseeing the controversial Quebec sponsorship program during the Jean Chrétien government that led to criminal charges for stolen money, was never criminally charged nor implicated with personal benefit.
He told reporters in Quebec he had met the financial criterion set out by FCC, applicable to all Canadians who want to invest in an agricultural enterprise.
Farm leaders and political opposition officials said they were stunned by the policy change.
“This is a joke,” said Laurent Pellerin, vice-president of the Canadian Federation of Agriculture.
“Who will decide if you are of good character? If you have cash flow and a business plan, that should be the basis of a decision by FCC. What is personal integrity? Who gets to decide, by whose standard?”
Richard Phillips, executive director of Grain Growers of Canada, said it was a “potentially dangerous” decision to cloud FCC business decision-making and to add political interference.
“Personal integrity is not a financial consideration. If you have a history of financial irresponsibility or a past conviction for some financial crime, I can see it, but this is much more broad.”
He said GGC will use access-to-information to try to find out what rules have been developed for deciding who is worthy of a loan.
Liberal agriculture critic Wayne Easter said it was a “Big Brother” attempt by the Conservative government to impose its views on government agencies, not unlike its interference with the Canadian Wheat Board.
“This is just another example of the bully tactics of this minister and this prime minister,” he said.
