Short Title

Marginal note:Short title

1 This Act may be cited as the Farm Improvement Loans Act.

Interpretation

Marginal note:Definitions

• 2 (1) In this Act,

  agricultural equipment

  installations agricoles

  agricultural equipment means implements, apparatus, appliances and machinery of any kind usually affixed to real property, for use on a farm, but does not include a farm electric system; (installations agricoles)

  agricultural implements

  matériel agricole

  agricultural implements means tools, implements, apparatus, appliances and machines of any kind not usually affixed to real property, for use on or in connection with a farm, and vehicles for use in the business of farming, and, without limiting the generality of the foregoing, includes plows, harrows, drills, seeders, cultivators, mowing machines, reapers, binders, threshing machines, combines, tractors, movable granaries, trucks for carrying products of agriculture, cream separators, churns, washing machines, spraying apparatus, incubators, milking machines, refrigerators and heating and cooking appliances for farming operations or use in the farm home of a kind not usually affixed to real property; (matériel agricole)

  borrower

  emprunteur

  borrower means a farmer to whom a farm improvement loan has been made; (emprunteur)

  class of farm improvement loans

  catégorie de prêts

  class of farm improvement loans means a prescribed class of farm improvement loans; (catégorie de prêts)

  farm

  exploitation agricole

  farm means land in Canada used for the purpose of farming; (exploitation agricole)

  farm electric system

  installation électrique agricole

  farm electric system includes all machinery, apparatus and appliances for the generation or distribution of electricity on a farm, whether or not affixed to real property; (installation électrique agricole)

  farm improvement loan

  prêt

  farm improvement loan means a loan made by a lender to a farmer for the purpose of financing

  • (a) the purchase of, major repair to or major overhaul of agricultural implements or equipment for bee-keeping,

  • (b) the purchase of livestock or bee-stock,

  • (c) the purchase or installation of, major repair to or major overhaul of agricultural equipment or a farm electric system,

  • (d) the alteration or improvement of a farm electric system,

  • (e) the erection or construction of fencing or works for drainage on a farm,

  • (f) the construction, repair or alteration of, or making of additions to, any building or structure on a farm,

  • (g) the purchase, by the owner of a farm, of additional land for the purpose of farming, or

  • (h) any work for the improvement or development of a farm designated in the regulations; (prêt)

  farmer

  agriculteur

  farmer means a person who is in possession of a farm and whose principal occupation consists of farming that farm; (agriculteur)

  farming

  agriculture

  farming includes livestock raising, dairying, bee-keeping, fruit growing and all tillage of the soil; (agriculture)

  guaranteed farm improvement loan

  prêt garanti

  guaranteed farm improvement loan means a farm improvement loan made in accordance with the requirements of section 3 during the period when that section is in operation in respect of the class of farm improvement loans to which that loan belongs; (prêt garanti)

  lender

  prêteur

  lender means

  • (a) a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act,

  • (b) a credit union, caisse populaire or other cooperative credit society that is designated by the Minister on the application of that society as a lender for the purposes of this Act,

  • (c) a corporation that carries on the business of a trust company within the meaning of the Trust Companies Act, the business of a loan company within the meaning of the Loan Companies Act or the business of insurance within the meaning of the Canadian and British Insurance Companies Act, and that is designated by the Minister on the application of that corporation as a lender for the purposes of this Act, or

  • (d) a Province of Alberta Treasury Branch established pursuant to The Treasury Branches Act as enacted by the Legislature of the Province of Alberta; (prêteur)

  livestock

  bétail

  livestock includes horses and mares, bulls, cows, oxen, bullocks, steers, heifers and calves, sheep, swine, poultry and fur-bearing animals; (bétail)

  Minister

  ministre

  Minister means the Minister of Agriculture and Agri-Food; (ministre)

  prescribed

  Version anglaise seulement

  prescribed means prescribed by regulation. (Version anglaise seulement)

• Marginal note:Meaning of "farm" and "farming" in Bank Act

  (2) For the purposes of the Bank Act, the expressions farm and farming have, in respect of a farm improvement loan, the same meanings as they have in this Act.

Guaranteed Farm Improvement Loans

Marginal note:Payment of lenders' losses

3 The Minister shall, subject to sections 4 to 8, pay to a lender the amount of loss sustained by it as a result of a farm improvement loan, if

• (a) the loan was made pursuant to an application signed by the borrower in the prescribed form, stating the purpose for which the proceeds of the loan were to be expended;

• (b) the application stated that the borrower held an interest in the farm of the nature prescribed for the class of farm improvement loans to which the loan belongs;

• (c) a responsible officer of the lender certified that he had scrutinized and checked the application for the loan with the care required by the lender in the conduct of its ordinary business;

• (d) 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 guaranteed farm improvement loans previously made to the borrower and disclosed in the borrower’s application, or of which the lender has knowledge, exceed one hundred thousand dollars;

• (e) the loan was repayable in full by the terms thereof

  • (i) in the case of a loan made for the purpose described in paragraph (g) of the definition "farm improvement loan" in subsection 2(1), in not more than fifteen years, and

  • (ii) in the case of a loan made for any other purpose, in not more than ten years;

• (f) no fee, service charge or charge of any kind, other than simple interest at the rate prescribed and such charge for insurance as may be authorized by the regulations, was, by the terms of the loan, payable to the lender in respect of the loan as long as the borrower is not in default;

• (g) repayment of the loan was secured in the prescribed manner; and

• (h) the loan was made on terms and in accordance with conditions prescribed for the class of farm improvement loan to which the loan belongs.

Marginal note:Principal amount where joint borrowers

• 4 (1) For the purpose of paragraph 3(d), the principal amount of a loan shall, where the loan was made jointly to more than one borrower each of whom held an interest in a separate farm, which interest was of the nature prescribed for the class of farm improvement loans to which that loan belongs, and the principal amount of the loan did not exceed one hundred thousand dollars, be deemed to be, in respect of each of those borrowers, an amount equal to the amount obtained by dividing the principal amount of the loan by the number of borrowers.

• Marginal note:Amount owing where joint borrowers

  (2) For the purposes of paragraph 3(d), the amount owing in respect of any guaranteed farm improvement loan previously made to a borrower shall, where the loan was made jointly to that borrower and one or more other borrowers each of whom held an interest in a separate farm, which interest was of the nature prescribed for the class of farm improvement loans to which that loan belongs, be deemed to be an amount equal to the amount obtained by dividing the amount owing in respect of that loan by the number of borrowers.

Marginal note:Coming into force of section

5 The Minister is not liable under section 3 to make any payment to a lender in respect of a farm improvement loan unless that loan is within a class of farm improvement loans prescribed by regulation and is made after such day as may be fixed by the Minister with the approval of the Governor in Council for the coming into operation of that section in respect of that class.

Marginal note:Termination of operation of section 3

• 6 (1) The Minister may, with the approval of the Governor in Council, by notice to a lender terminate the operation of section 3 in respect of any class of farm improvement loans, such termination to be effective after a time set out in the notice, and the Minister is not liable under this Act to make any payment to the lender in respect of any loan in that class made by the lender after that time.

• Marginal note:When notice of termination effective

  (2) A notice given to a lender under subsection (1) is not effective unless the time of termination therein set out is at least twenty-four hours after receipt of the notice at the head office of the lender.

Marginal note:Limitation of Minister’s liability

7 The Minister is not liable under this Act to pay to a lender, in respect of losses sustained by it as a result of farm improvement loans made by it during the period referred to in subsection 8(1), a total amount in excess of

• (a) ninety per cent of that part of the aggregate principal amount of the guaranteed farm improvement loans made by it during that period that does not exceed one hundred and twenty-five thousand dollars;

• (b) fifty per cent of that part of the aggregate principal amount of the guaranteed farm improvement loans made by it during that period that exceeds one hundred and twenty-five thousand dollars but does not exceed two hundred and fifty thousand dollars; and

• (c) ten per cent of that part of the aggregate principal amount of the guaranteed farm improvement loans made by it during that period that exceeds two hundred and fifty thousand dollars.

Marginal note:Further limitation of liability

• 8 (1) The Minister is not liable under this Act to make any payment to a lender in respect of loss sustained by it as a result of a farm improvement loan made during the period commencing July 1, 1980 and ending on the day on which sections 2 to 21 of the Farm Improvement and Marketing Cooperatives Loans Act come into force, after the aggregate principal amount of the guaranteed farm improvement loans made during that period by all lenders exceeds one billion five hundred and fifty million dollars.

• Marginal note:Idem

  (2) The Minister is not liable under this Act to make any payment to a lender in respect of loss sustained by it as a result of a farm improvement loan made after the day on which sections 2 to 21 of the Farm Improvement and Marketing Cooperatives Loans Act come into force.

Regulations

Marginal note:Regulations

• 9 (1) The Governor in Council may, subject to subsection (2), on the recommendation of the Minister, make regulations

  • (a) defining for the purposes of this Act the following expressions:

    • (i) "repair", "alteration" and "additions", and "major" in relation to "repair" and "overhaul",

    • (ii) "works for drainage", and

    • (iii) "responsible officer of the lender";

  • (b) designating works for the improvement or development of a farm, in addition to those specified in paragraphs (a) to (f) of the definition "farm improvement loan" in subsection 2(1), for which farm improvement loans may be made;

  • (c) prescribing a form of application for guaranteed farm improvement loans;

  • (d) prescribing classes of farm improvement loans having regard to the purposes for which those loans are to be made, or otherwise;

  • (e) prescribing, in respect of any class of farm improvement loans,

    • (i) the nature of the interest in a farm to be held by a borrower of a loan within the class,

    • (ii) the security to be taken by the lender for the repayment of loans within the class,

    • (iii) the terms of repayment and other terms, including provisions in respect of insurance, on which loans within the class are to be made,

    • (iv) conditions as to the liability of the Minister under this Act in respect of loans within the class in addition to but not inconsistent with the conditions set out in paragraphs 3(a) to (g), and

    • (v) the rate of interest payable by a borrower;

  • (f) prescribing forms of notes, agreements, certificates and other documents to be used in connection with a guaranteed farm improvement loan, or necessary or advisable for the effective operation of this Act;

  • (g) providing that in the event of actual or impending default in the repayment of a guaranteed farm improvement loan the lender may, notwithstanding anything in this Act, with the approval of the borrower, alter or revise by way of an extension of time or otherwise any of the terms of the loan, or any agreement in connection therewith, and that an alteration or revision shall not discharge the liability of the Minister in respect thereof under this Act;

  • (h) prescribing in the event of default in the repayment of a guaranteed farm improvement loan, the legal or other measures to be taken by the lender and the procedure to be followed for the collection of the amount of the loan outstanding and the disposal or realization of any security for the repayment thereof held by the lender;

  • (i) prescribing the method of determination of the amount of loss sustained by a lender as a result of a guaranteed farm improvement loan;

  • (j) prescribing the procedure to be followed by a lender in making a claim for any loss sustained by it as a result of a guaranteed farm improvement loan;

  • (k) prescribing the steps to be taken by a lender to effect collection on behalf of the Minister of any guaranteed farm improvement loan in respect of which any payment has been made by the Minister to the lender under this Act and providing that in the event of neglect by the lender to take such steps the amount of the payment may be recovered by the Minister;

  • (l) requiring reports to be made periodically to the Minister by a lender in respect of guaranteed farm improvement loans made by it; and

  • (m) making provision for any other matter that the Governor in Council deems necessary or advisable to carry out the purpose and intention of this Act.

• Marginal note:Regulations re certain terms

  (2) A regulation by the Governor in Council under subparagraph (1)(e)(v) respecting the rate of interest payable by a borrower in respect of any class of farm improvement loans shall be made on the recommendation of the Minister and the Minister of Finance.

Special Powers of a Bank

Marginal note:Bank security

• 10 (1) Notwithstanding anything in the Bank Act or any other Act of Parliament, a bank may at the time of making a guaranteed farm improvement loan take as security for the repayment thereof and the payment of interest thereon

  • (a) a mortgage or hypothec on the farm in respect of which the proceeds of the loan are to be expended; or

  • (b) an assignment of the rights and interest of a purchaser of the farm under an agreement of sale.

• Marginal note:Application of the Bank Act

  (2) A bank has and may exercise, in respect of any mortgage, hypothec or assignment made under subsection (1) and the real property affected thereby, all rights and powers that it would have or might exercise if the mortgage, hypothec or assignment had been taken by the bank by way of additional security under the Bank Act.

• Marginal note:Meaning of "bank"

  (3) In this section, bank means a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act.

Offences and Punishment

Marginal note:False statements or misuse of loan

• 11 (1) Every person who makes a statement in an application for a guaranteed farm improvement loan that is false in any material respect or who uses the proceeds of a guaranteed farm improvement loan for a purpose other than that stated in that person’s application is guilty of an offence and liable on summary conviction to a fine of not more than five hundred dollars.

• Marginal note:Penalty

  (2) Where a person is convicted of an offence under subsection (1), there shall be imposed on that person, in addition to any fine, a penalty equal to such amount of the farm improvement loan made to that person in respect of which the offence was committed as has not been repaid by him, with interest thereon to the date of the conviction.

• Marginal note:Payment to lender or Receiver General

  (3) The penalty referred to in subsection (2) shall be paid to the lender by which the loan was made, or, if payment has been made by the Minister to the lender in respect of the loan under this Act, the penalty shall be paid to the Receiver General, and payment of the penalty discharges the liability of the person to repay the loan.

• Marginal note:Limitation period

  (4) Proceedings in respect of an offence under this section may be commenced at any time within twelve months from the day on which evidence, sufficient in the opinion of the Minister to justify prosecution for the offence, comes to the Minister’s knowledge, but may not be commenced later than three years from the time the subject-matter of the proceedings arose.

• Marginal note:Certificate

  (5) For the purposes of subsection (4), a document purporting to have been issued by the Minister, certifying the day on which the evidence referred to in that subsection came to the knowledge of the Minister, shall be received in evidence as conclusive proof of that fact without proof of the signature or of the official character of the person appearing to have signed the document and without further proof.

General

Marginal note:Minister subrogated in lender’s rights

• 12 (1) Where under this Act the Minister has paid to a lender the amount of any loss sustained by the lender as a result of a guaranteed farm improvement loan, the lender shall execute a receipt in favour of the Minister in prescribed form and the Minister is thereupon subrogated in all rights of the lender in respect of the loan.

• Marginal note:Idem

  (2) Without limiting the generality of subsection (1), the subrogation mentioned in that subsection vests in the Minister all rights and powers of the lender in respect of the guaranteed farm improvement loan, any judgment concerning the loan obtained by the lender and any security taken by the lender for the repayment of the loan, and the Minister is entitled to exercise all the rights, powers and privileges that the lender had or might exercise in respect of the loan, judgment or security, including the right to commence or continue any action or proceeding, to execute any release, transfer, sale or assignment or in any way to collect, realize or enforce the loan, judgment or security.

• Marginal note:Receipt evidence of payment

  (3) Any document purporting to be a receipt in the prescribed form and purporting to be signed on behalf of the lender is evidence of the payment by the Minister to the lender under this Act in respect of the guaranteed farm improvement loan therein mentioned and of the execution of that document on behalf of the lender.

Marginal note:Repossession and disposal of securities

13 The Minister may enter into an agreement on such terms and conditions as the Minister may deem advisable with a lender or with any person engaged in the manufacture or distribution of agricultural implements, agricultural equipment, electrical appliances and supplies or of any supplies or materials that may be utilized in the making of any improvements to a farm pursuant to a farm improvement loan, or with both any such lender and any such person, to provide for the repossession or disposal of any property on which security is taken by the lender for the repayment of a guaranteed farm improvement loan.

14 [Repealed, R.S., 1985, c. 25 (3rd Supp.), s. 24]

Marginal note:Payments and expenses

15 The Minister may authorize the payment of any amount payable to a lender under this Act and any amount necessary to meet the expenses incurred in the administration of this Act out of unappropriated moneys in the Consolidated Revenue Fund.

16 [Repealed, R.S., 1985, c. 25 (3rd Supp.), s. 25]