[Recorded by Electronic Apparatus]
Tuesday, December 3, 1996
.0909 
[English]
The Chairman: Good morning, everyone.
Today we are continuing our clause-by-clause of Bill C-38, the Farm Debt Mediation Act.
When we concluded our last meeting, we were having a discussion of an amendment that had been put forward by the Bloc Québécois on clause 16, which is on page 10 of the bill.
I hope you still have the package of amendments that was circulated to you at the last meeting. If you do not have them with you, the clerk has two or three extra packages up here. Would anyone like a copy of those?
Mr. McKinnon (Brandon - Souris): I think I have the right copy here.
The Chairman: If you have the package you got the other day, you have the right package. It's on page 10 in the large black numbers of that package.
.0910
If I recall, a discussion was taking place on whether that amendment to clause 16 was equal to or better than the one to clause 11, which is a government amendment. I'm not putting words in anybody's mouth, but there was a debate on which one would be the best one to pass in order to make the changes that I think most people wanted to make. We are discussing the Bloc amendment at the present time.
[Translation]
Mr. Chrétien (Frontenac): You have an excellent memory, Mr. Chairman. When we adjourned last week, we were on clause 16, and we were about to decide which of the two amendments - the one put forward by the government or that of the Bloc québécois - was preferable.
After carefully rereading the two amendments, I have concluded that we in the Bloc Québécois prefer that the farmer himself be appointed guardian, whereas the government would like the farmer to be appointed guardian, but only under certain conditions.
I would appeal to your customary wisdom, Mr. Chairman, and ask you to consider the two amendments. The Liberal amendment is that clause 16 be amended by replacing line 3 to 14 on page 10 with the following:
- the administrator shall forthwith appoint a person as guardian of the farmer's assets, in
accordance with the following rules:
(i) if the farmer does not object to the nominee, either the nominee or another qualified person other than the farmer, or
This lessens the priority given to the farmer.
Subparagraph (ii) states
if the farmer objects to the nominee, another qualified person other than the farmer; or
our motion, on the other hand, would amend clause 16(1)(a) on page 10 as follows:
(a) the farmer, where the farmer is qualified to be the guardian;
Of course, if the farmer is incompetent of has a psychological disability, he should not be appointed guardian. That's what we are saying here.
Our proposed paragraph (b) reads as follows:
(b) any other qualified person nominated by any secured creditor or secured creditors listed in the application, where the farmer is not qualified to be the guardian; or
Our proposal and the government's are quite similar here. Our proposed subparagraph (c) states:
(c) any other qualified person chosen by the administrator...
The difference between the two, Mr. Chairman, is that the Bloc Québécois' motion gives more priority to the farmer.
I would like to remind you in closing that we in the Bloc Québécois have supported Bill C-38 from the beginning. However, you should show us some generosity, and not assume that all the amendments put forward by the opposition, either by the Reform Party or the Official Opposition, are necessarily bad. I am sticking to my position that the farmer should have priority as guardian of his farm.
[English]
The Chairman: Mr. Hermanson.
Mr. Hermanson (Kindersley - Lloydminster): Mr. Chairman, it appears we've just had another amendment passed. At first glance, it looks to me like the government is withdrawing its previous amendment and replacing it with a second amendment.
They must have done that without consultation with the Bloc, which I think they should have done. I agree with Mr. Chrétien that the Bloc's amendment was superior to the government's first amendment. It looks like the new government amendment clearly leaves the farmer as the first choice for guardian, which wasn't in the amendment it presented before. The government amendment is still a fair bit wordier than the amendment by the Bloc, so I just wonder why the government brought this amendment in and why they feel it's superior to the amendment brought in by Mr. Chrétien.
.0915
Mr. Jerry Pickard (Parliamentary Secretary to the Minister of Agriculture and Agri-Food): If I may, Mr. Chairman, in meeting with the committee on the last day, last Thursday, the government looked at the Bloc's intention and at the committee's discussion and wanted to bring into effect what the committee was saying it wanted. As a result, the government looked very carefully at the Bloc amendment.
We certainly agree with Mr. Chrétien's point that the farmer has to be the number one consideration in the bill. As a result, looking at the second part of the Bloc amendment did raise some concern. That is part (b):
- any other qualified person nominated by any secured creditor or secured creditors listed in the
application where the farmer is not qualified to be the guardian
We tried to bring in a balance, then, and leave the option - not restricted - to the administrator of proving the appointment of the creditor is not a good one or that he has to justify anything...but leaving it open for the administrator to appoint who the administrator feels is the best person, limiting that creditors' nominee, the same as any other nominee the administrator looks at.... As well, you might have a nominee from two or three different creditors and you might get into a hassle.
We felt the administrator should have the power to make the appointee from nominees or from an independent source if the administrator so felt. It gives the administrator more flexibility and that's what I believe the committee was asking for in the last meeting that we had.
The farmer, therefore, is first and foremost. If the farmer does not qualify or is not willing to do it, then the administrator can make the decision as to who the next person is. He doesn't have to follow a list and pick the creditors' nominee.
Mr. Hermanson: Mr. Chairman, the wording the Bloc used here was actually the wording in the original bill, so there's been a change of heart on the government's part regarding this point.
Mr. Pickard: Clearly, looking at (b) we felt that -
Mr. Hermanson: The administrator doesn't have to pick a creditors' guardian first. He can have the liberty to -
Mr. Pickard: Exactly right.
Mr. Hermanson: - find a person of his -
Mr. Pickard: Neutral.
Mr. Hermanson: - liking, a neutral person. In that case, then, I just think that now with the farmer put first, the government amendment is in fact the superior one compared to Mr. Chrétien's, because the government has made the biggest movement here in favour of the farmer.
The Chairman: Mr. Easter.
Mr. Easter (Malpèque): Maybe I'm wrong on this, but the way I read the government amendment, I think the intent is to have (a) say where the farmer is qualified to be the guardian, but the way the amendment reads, replacing lines 7 to 14 in fact takes line 7 out. So the farmer where the farmer is qualified is not in there the way the amendment reads. It should be line 8 -
Mr. Hermanson: That's line 6.
Mr. Easter: All right, I'm misreading it.
The Chairman: Mr. Chrétien.
[Translation]
Mr. Chrétien: Jerry, if you look at your amendment, you will see that the farmer has priority.
[English]
Mr. Pickard: Yes.
[Translation]
Mr. Chrétien: If you don't take the farmer, the administrator chooses himself, without consulting a creditor. He is free to do whatever he likes. Do you think that is a better solution?
.0920
[English]
Mr. Pickard: There can be nominees from any of the creditors, but we don't want to place the administrator in the position of having to say ``We didn't accept your creditor for these reasons''. We want the administrator to have full control, and if he doesn't want to accept the creditor, that creditor's nominee doesn't have higher priority than anybody else the administrator suggests.
Mr. Hermanson: Except the guardian.
Mr. Pickard: I'm sorry. You're correct.
Do you understand there is a difference? We're putting the administrator in total control, after the farmer. If the farmer isn't qualified or doesn't want to do it, the administrator has full control, rather than having to follow the creditor if the creditor pushes hard. I want that side of it so the administrator doesn't have to justify to the creditor why that person wasn't appointed.
[Translation]
Mr. Chrétien: Last week, Mr. Pickard, we heard that in 95% of the cases, the farmer himself was the guardian. In the remaining 5%, or 1 out of 20, how often does the farmer recover his property and start or continue operating his farm?
[English]
Mr. Pickard: I don't have stats on that, I'm afraid. Some of our officials may know.
When the farmer doesn't take over the job of being the guardian himself, do we have any statistics that say whether the farmer wins or loses in the Farm Debt Review Board case and is able to take his farm back again?
Ms Lois James (Manager, Adaptation Policy, Policy Branch, Agriculture and Agri-Food Canada): The only statistic we have is that in about 75% of the cases an arrangement is reached where all parties involved have signed an agreement, whether it's to liquidate some of the assets, to allow the farmer to continue farming, to reorganize or whatever it would be.
But we don't have any statistics on how many farmers actually end up retaining ownership of all or part of their farm operation and continue farming. Out of that 75% where there's a signed arrangement, it is a fairly high percentage, but we have no statistics on that. None have been kept on that basis over the last 10 years of the program.
[Translation]
Mr. Chrétien: My question is not about the agreement signed between the creditors and the farmer, but rather about the guardianship of the farm. We have been told that in 95% of the cases, the farmer is responsible for overseeing the activities, and, if appropriate, continuing to operate his farm. Can you confirm, as Gerry was saying, that the farmer is the guardian of his property in 95% of the cases?
You agree with me. Do you agree with respect to the remaining 5%?
[English]
Ms James: Yes, it's about 95%. We don't have the exact figure, but it's up to 95%, yes.
[Translation]
Mr. Chrétien: Right. I would like to know whether you have any figures that show that in5% of all cases, the farmer is not the person responsible for looking after his property.
Of this 5%, how many farmers will ultimately reach an agreement with the creditors and start operating their farm normally again? If you tell me that in the last 20 years, in these 5% of cases, there was total, disastrous bankruptcy, then, I might change my attitude. However, if in some cases, the statistics show that farmers have a reasonable chance to recover their farm, my position will remain the same.
[English]
Mr. Pickard: Mr. Chrétien, we do not have that statistic with us and I'm not sure we can derive that statistic. If there's a possibility of getting a statistic of that nature, we certainly will do it.
The decision here isn't really a decision of whether or not we place the farmer in a better position. The viewpoint of the amendment from the government side was to take into consideration what people around this table were saying: ``Put the farmer first''. And that's exactly what you said. So that was part of the government's amendment.
.0925
The second part of it was that we didn't want to place the nominee of the creditor up front and make it the administrator's function to explain why the nominee of the creditor may not have been accepted. We want the administrator to have the full, open ability to appoint whomever he feels is best in the light of the situation. And certainly it would be best in light of the farmer. We feel this is really another part of it that's on the farmer's side, in reality.
The Chairman: I need a point of clarification before I go to Mr. Hermanson.
In comparing the amendment that's been circulated from the government in the last few minutes with Mr. Chrétien's amendment - and correct me if I'm wrong, officials - Mr. Chrétien's paragraph (a) and the government's would be identical with the exception of the fact that the government amendment adds the word ``or''. Is that right, Lois?
Ms James: That's correct, yes.
The Chairman: The difference between the government's paragraph (b) and his is thatMr. Chrétien's amendment adds to what is in the government amendment that's circulated the words ``where the farmer is not qualified to be the guardian''.
Ms James: That's correct.
The Chairman: Mr. Chrétien's paragraph (c) adds the words ``where neither paragraph (a) nor paragraph (b) applies''.
Ms James: That's correct.
The Chairman: So the biggest difference between the two of them is the addition of the word ``or'' after ``where the farmer is qualified to be the guardian'' in paragraph (a).
Ms James: As a point of clarification on the intent, the major difference is that under the amendment proposed by Mr. Chrétien, having neither paragraph (a) nor paragraph (b) applying under paragraph (c) in effect puts in a ranking. First, it's the farmer if he or she is qualified. If not, then it must be the person nominated by the secured creditor if that person is qualified. And then it must be only any other person, being an independent third party, if neither the farmer was qualified nor the secured creditor was qualified. So it puts a ranking in place, whereas the government allows the choice between (b) or (c), depending on the circumstances.
The Chairman: Mr. Hermanson, and then Mr. Easter.
Mr. Hermanson: I just want to clarify a couple of things here. If we pass the government's amendment, if the farmer is the guardian or if the administrator chooses a guardian other than someone recommended by the creditor, the farmer pays the expenses of the guardian. That's how I understand this clause. If the creditor chooses the guardian, it is clear that the creditor pays the expenses of the guardian, but it is not clear in here who pays the expenses if the farmer's or administrator's choice of guardian is selected. Is there an oversight in the legislation as to who pays the cost? Where does it indicate in this clause that the creditors pay the guardian's expenses?
The Chairman: Julie, can you shed some light there, please?
Ms Julie Mercantini (Senior Policy Development Officer, Adaptation Division, Department of Agriculture and Agri-Food): If the creditor nominates a guardian and that individual is appointed guardian, the creditor pays for that guardian.
Mr. Hermanson: That's clear.
Ms Mercantini: If the administrator appoints a neutral third party and not the farmer's or the creditor's appointee, then the administrator or the government pays for that neutral third-party guardian.
Mr. Hermanson: Where is that in this clause?
Ms Mercantini: It is under subclause 16(3).
Mr. Hermanson: Under subclause 16(3)? No, that says ``Where the administrator appoints a'' - and then we have a switch-over - ``person referred to in subparagraph (1)(b)(i) as guardian, the expenses of the guardian shall be paid by the secured creditor or secured creditors who nominated that person.'' It's not the administrator.
.0930
Ms Mercantini: Sorry. This was just pointed out to me. In the government's amendment, under subclause 16(4), by replacing line 25 on page 10 with the following: ``person referred to in subparagraph (1)(b)(ii)''....
Mr. Hermanson: Right.
Ms Mercantini: That ensures that the creditor pays for the guardian he nominates.
Mr. Hermanson: What if the farmer is the guardian?
Ms Mercantini: We don't pay the farmer to be the guardian. We didn't under the previous act. It was never an issue. That will continue to be the same. There's no mention of that in the act. It's just understood that the farmer would not get paid to guard his own assets.
Mr. Hermanson: Is the administrator in a bit of a jam here? He has to decide whether he wants to appoint the guardian. If the farmer's not qualified to be the guardian, the administrator has to decide whether to select the creditor's choice and have the creditor pay this or whether to make the decision and, with government funds, pay the costs that would be incurred by the guardian. Is that a fair position in which to put the administrator? Is that the way it's handled now? Has that been working satisfactorily?
Ms Mercantini: It's been working. His decision will not be based on the cost. It will be based on what is better for each individual case.
Mr. Hermanson: Does the administrator normally choose the guardian now? If the farmer's not qualified, does the administrator choose the creditor's choice, or does the administrator choose his own guardian? What's the preference now?
Ms Mercantini: I'm sorry, but I couldn't tell you now. I don't know what happens in practical terms. We would have to call -
Mr. Hermanson: Do you know, Jerry?
Mr. Pickard: No, I couldn't answer that. But quite frankly, I do believe the process is designed to make certain the administrator will carry on what is best for the farm community - the same as the Farm Debt Review Board. They're going to do, I believe, as have the Farm Debt Review Boards, what is best for the farm community in their light. I think who covers the bill of the guardian isn't at issue in this. It's the judgment of the administrator, and the administrator has to make the judgment in favour of what the best solution is.
Mr. Hermanson: What kinds of costs are traditionally associated with the work of a guardian? What are we looking at here in a normal...? I suppose there is no normal example, but can you give us some idea? Are we looking at just a few hundred dollars here, or are we looking at substantial amounts?
Mr. Pickard: I think this would be similar to asking what the average cost of a farm is or what the average assets of a farm are. It's going to vary dramatically from farm to farm. Obviously the assets, the size of the operation, and the type of operation will vary. Everything has a working relationship as to how much work is required for that guardian to do.
Mr. Hermanson: Does that factor have an impact on the administrator's decision as to who is competent to be the guardian, whether it's someone the creditor wishes to have as the guardian, or whether the administrator should make the decision if the farmer's not deemed to be qualified?
Mr. Pickard: I guess in a perfect world we could by cynical about whatever is going on. I can't say that there's perfection in everything, but it's my belief that a person in that responsibility is going to do what's best for the community. I have no question about that. The person has nothing to gain or lose. It's not a personal asset. It's not a savings of dollars. It's a function that's really required in the community. As a result, this whole structure is set up so we can help farmers with the debts and the problems they're having.
The thrust of the government is to put in proactive help. By the very nature of the bill and by the very nature of where we're going, we're trying to help that community resolve problems that we know have been addressed by getting at the debt at an early stage and doing what we can at an early stage.
I think that follows through the whole question of why we have this type of act in place. It's to protect the community. So I guess I wouldn't take the negative side and be cynical about what button might be pushed or pulled. I would look at the general nature.... If a person were operating in the context of what we're talking about here, would they make that decision? I would say yes; they would do what they can to help the community.
.0935
Mr. Hermanson: Are there going to be any regulations or guidelines for the administrators to know when to make the decision to go with a creditor's wish for a guardian or to go with his own decision on this? He has the latitude to do either here. The farmer, after the farmer is not deemed to be qualified, is basically out of the picture. What do we have to go on here? Will it be the administrator's own whims that determine who is the guardian?
Mr. Pickard: It's going to be a case where the administrator has to look at all the circumstances and make a judgment. We're going to have competent administrators in those positions. They're going to look at all of the factors that are required and they're going to make the decision.
We can always challenge anybody who makes a decision and say that from time to time they might make a wrong decision. On the other hand, we can look at the track record of the people in those positions and the kinds of decisions that have been made, and I think we can be reasonably confident that people will do the best they can to make the system function well.
Mr. Hermanson: So there will be no guidelines? Your official is stating there will be guidelines.
A voice: No, no.
The Chairman: Ms James.
Ms James: There will definitely be guidelines for who is qualified and who is not qualified and in what circumstances. When you're looking at and determining in each case whether the farmer is qualified...we will be developing guidelines along that line. Then it is the same as far as the creditors are concerned.
Right now in general terms as to whether the farmer is qualified, we've been looking at those who are willing and able, and ``able'' means physically available and also competent to do so. The other question is the question of trust, which would need to be looked at as well. In some circumstances where the situation is broken down to that level, there is a question of whether there is still a level of trust between the creditor and the farmer involved. So that is another qualifying factor that would be looked at.
Mr. Hermanson: I sort of understand that, but -
The Chairman: This is the last comment, Mr. Hermanson.
Mr. Hermanson: When we're coming to subparagraph (b)(i) or (ii), the administrator has to make a decision. Am I going to go with the person nominated by the secured creditor, or am I going to go with another qualified person that I choose? Are there any guidelines when he gets to that position to say that he's going to go to the creditor's nominee or to his own choice?
Ms James: Yes, there will be guidelines developed in situations. I'll clarify. For example, let's say three or four creditors each put forth a nomination. We would definitely have to have some guidelines for administrators to help them in the decision of whether to go to one of those individuals or to an independent third party. So we will definitely be providing guidelines, and also it will provide some consistency across the country as well.
Mr. Hermanson: Will that be gazetted?
Ms James: We were not looking at having them as regulations but as policy guidelines. So no, in that case they would not.
The Chairman: Mr. Easter.
Mr. Easter: I think that you, Mr. Chair, and Ms James, clarified this, but clearly the government resolution gives the priority to the farmer being the guardian. The important words are ``in any other case'' in the government amendment. It's clear that the main priority in the new government amendment is the farmer.
On the discussion just held, do you know of any cases where under the old act, a guardian other than the farmer was appointed and the farmer actually got the farm back and survived? I would doubt if there are any, personally.
When a guardian is appointed by a creditor, it is one hell of an expensive business. If the operation is already in financial difficulty, then even if the creditor is paying it, there's not much chance of that farm being able to survive as an operating farm with the current landholder in charge. When you get to that stage, I think all you're really looking at is protecting the assets so there can be some moneys left over for the individual family and the creditors.
.0940
Do you know of any cases where a guardian other than the farmer has been appointed and the farm family was actually successful in keeping that farm? I doubt if there are any.
Ms James: I'm not personally aware of any, but it's something that we can certainly check on with our administrators over the last ten years.
As you said, your question is whether they will they retain the full operation. There will be some where they will retain part of the operation. With the home-quarter legislation in Saskatchewan, of course, that would be the case. Otherwise, I'm not personally aware of any.
Mr. Easter: Anyway, the key point, Mr. Chair, is that the government resolution is quite a bit more clear.... I know Mr. Chrétien's intent is being met, but the new government amendment very clearly indicates that the farmer is the guardian first and primarily.
The Chairman: We'll conclude the discussion on clause 16 with Mr. Chrétien's comments if he wishes. Then we are going to vote on the amendment.
[Translation]
Mr. Chrétien: Before making any comments, I would like to have a clarification to ensure that I understood correctly. Is it accurate to say that if the guardian were the farmer himself, he would not be paid, but if the guardian were someone from outside the farm, he would be paid?
[English]
Ms James: That's correct.
[Translation]
Mr. Chrétien: That makes no sense. Let me give you some very specific cases. Let's take the example of a maple syrup producer who's appointed guardian in September. There is no problem during the months of September, October, November and December, because there is no work at the sugar shack or on the sugar farm generally.
However, if he is appointed guardian in January, February, March or April, and is not paid, then there would be some serious problems. This is the time of year when the maple syrup producer has to work 20 hours a day, seven days a week. During this time, there is plenty of work. He is not merely watching to ensure that no one steals a maple tree. He has to produce syrup, prune trees, boil the sap, put it in barrels and make sure that no one steals his containers of syrup.
So there's a serious problem here. First, the farmer would not agree to work without pay90 hours a week for four months. The same goes for dairy farmers, who work ten hours a day, seven days a week. Cows have to be milked on Saturdays and Sundays too. So these farmers would not be paid, whereas if the neighbour were the guardian, he would be paid $15 or $20 an hour. That makes no sense.
[English]
The Chairman: Mr. Chrétien, if I may clarify this, you might be getting confused between being a guardian and running the operation. The farmer is still likely to run the operation, no matter what.
What we're talking about here is the guardian as the person who keeps watch over the assets but does not necessarily, if ever, run the operation. The farmer would be running the operation no matter what, so the question here is about who is given the responsibility to guard the assets. I don't like the term ``guard''. In my view, to ``watch over'' is a better term, as in to watch over the assets. And that person is the farmer, as has been clearly stated here as the preference, or if that's not the case, the other.
Unless there are further questions or comments, I think we've had a pretty full discussion and the amendment before -
Yes, Mr. Chrétien.
[Translation]
Mr. Chrétien: I want to understand this better. If I had a farm or a dairy farm, and Mr. X was appointed guardian, and I continued to operate the farm and to milk the cows morning and evening, when I sold my milk every two days, who would get the cheque? The creditors?
[English]
The Chairman: I think we need to clarify the difference between the operator - if I can call it that - and the guardian and the role of the guardian. The role of the guardian, if I may say so, is not to milk the cows.
Does one of the legal -
[Translation]
Ms Mercantini: The duties of the guardian are described in clause 17. His responsibilities are to prepare an inventory of all the assets of the farmer, verify periodically the presence and the condition of those assets and advise the administrator of any act or omission that would jeopardize those assets.
.0945
It is apparent from this that the duties of the guardian do not include managing the farm. The guardian would not be milking the cows, harvesting the crops or making decisions about the farm.
Mr. Chrétien: I would like some clarifications. In Quebec, there was a similar situation four or five years ago that made the headlines. A guardian had been appointed, and a television report showed that the livestock was in a pitiful state. The owner of the farm was supposed to be feeding the animals with what he had left. However, since he had nothing left, the animals had nothing to eat and almost nothing to drink. The Humane Society was called in. It was really a sad situation. The federal government, under the existing Act, may not be directly involved, but situations similar to this one could occur.
[English]
The Chairman: I have another comment. I think Mr. Easter summed it up a minute ago. The role of the guardian is to see - and this is very simple - that the cows are milked, the cattle are fed and the crops are managed. The role of the guardian is not to do the actual job himself, but to see that it is done. It may very well be done by the farmer. Or it may be done by someone else. But it's the role of the guardian to see that it gets done.
Can we move on to the amendment? The amendment that is before the committee is number 10 in the package you have before you, which is the amendment by the Bloc.
Amendment negatived
The Chairman: Next, there are two amendments before the committee. And I understand that the one most recently circulated to the committee is the one we certainly have discussed.
Is there a mover for that government amendment? It's moved by Mr. Collins. We've had considerable discussion already. Can I be bold and go straight to the question? Shall that amendment to clause 16 carry?
Amendment agreed to on division
Clause 16 as amended agreed to
The Chairman: Mr. Hermanson, go ahead.
Mr. Hermanson: Did the government officially withdraw its other amendment?
The Chairman: They didn't place it. They didn't put it on the table.
Mr. Hermanson: I thought it was on the table at the last meeting.
The Chairman: It was never moved. The only one that has been moved is the Bloc one.
There is an amendment to clause 17 on page 14 in your package that is an amendment in the French version only. It changes the wording in the French version. Is there a mover for that amendment? It's a government amendment to change the wording.
Yes, Mr. Easter.
Mr. Easter: Can we have a clarification from the officials or someone on that?
The Chairman: Yes.
Mr. Pickard: The intent is to make the wording in the French version the same as the wording in the English version, to make it a comparable translation.
The Chairman: The English version is paragraph 17(2)(b) and the English wording is ``verify periodically the presence and condition of those assets; and''. This is making the French wording of that clearer. Is that what you're doing?
.0950
Mr. Pickard: To make it not the presence of the assets but the condition of the assets. There was just a minor wording differential. They were concerned about protecting the condition of the assets, not just the presence.
The Chairman: Mr. Chrétien.
[Translation]
Mr. Chrétien: I would like to have a clarification about the role of the guardian. In the past, the guardian was not actually the farmer in only 5% of cases. I presume that the role of the guardian is to ensure that items do not disappear of get stolen, and that essential parts of machinery do not disappear either. Apart from watching out for theft or the changing of a tire, what is the role of the guardian? What is the role of the guardian in that 5% of cases?
[English]
Mr. Pickard: Clearly the object of the guardian is to make sure that operation...as was pointed out earlier, and you raised the question. If there's a problem with the operation which may endanger the dairy herd, the guardian would have to make certain proper steps are taken to make sure the operation is in reasonable shape as it moves along.
The question you asked earlier - or it may have been Mr. Hermanson - about dollars...there are going to be varying functions, depending on whether the farmer is capable of the operation or not capable. There could even be cases where the place has been left and somebody has gone and the guardian will have to take a greater role. So it's just to make sure the presence of everything is appropriate and looked after during that period. It could vary tremendously.
[Translation]
Mr. Chrétien: Mr. Pickard, I gave an example earlier of a herd in a pitiful state without anything to eat. The food that the animals were supposed to eat was dreadful. In such a case, could the administrator order the purchase of food to temporarily feed the cattle, even if the creditors know that they are going to lose more and perhaps everything by feeding the herd for a certain number of months?
[English]
Mr. Pickard: One way or another, you cannot allow an inhumane situation to develop and prolong itself. Quite clearly the responsibility of the guardian in that case would be to take action to make certain the problematic situation is rectified, whatever that situation is.
The Chairman: Shall the amendment to clause 17, which is only on the wording in the French translation in the bill, carry?
Amendment agreed to
Clause 17 as amended agreed to
The Chairman: I see no amendments for clauses 18, 19, or 20.... Mr. Hermanson.
On clause 20 - New applications under paragraph 5(1)(a)
Mr. Hermanson: Mr. Chairman, just a short question on clause 20. This is on reapplying after not being able to enter into an arrangement for a first time. It says that after paragraph 20.(1)(b):
- unless, before making the new application, the person seeking to apply obtains the written
consent of the administrator.
.0955
The Chairman: I would think it would have to be the administrator who was in charge at that time. It couldn't go back to a former administrator, because that former administrator may not even be alive, may not be an employee, etc. I shouldn't be interpreting, but I think the request would go to the administrator of the day.
Am I right or wrong, officials?
Ms James: That's correct.
Mr. Hermanson: So is the administrator selected required to review the case? How does that administrator determine whether they will allow a new application or not? That's the only thing I'm unclear about.
Ms James: They would look at the application that's coming in, review the case, and based on a whole variety of situations make that decision. Perhaps the person is reapplying because the relationship between the creditors and the farmer has broken down and they've said they need to go back to the table. That could be one circumstance where the administrator would say yes, I see you have lived up to your end, but maybe the creditor hasn't; or other new creditors have entered into it who weren't in the picture or at least did not show their heads and come to the table two years before and they are causing some problems for the farmer. Whatever the circumstances, each case would no doubt be individual, and there would be separate circumstances individually.
The reason the clause is there, the two years, is to prevent people, primarily under paragraph 5.(1)(a), from using that proposed section of the act where they would be able to have a stay. If you can apply as often as you want, once the stay is off, the 120 days, and you've reached an arrangement, a few months later they could be back applying again. It's to prevent the misuse or abuse -
Mr. Hermanson: I certainly understand that. What I don't understand is whether or not under the bill the administrator is required to give considerable review. Can they determine in five minutes ``this is not an acceptable application; I'm not going to look at it any further''? Can they delay for five months, determining whether they would allow the application to go forward? Is there any guidance for the administrator here?
Ms James: Again, it's another area where guidelines will be developed policy-wise on the types of situations where it would be allowable or it would not be allowable. That would not be in regulations, nor is it presumed that sort of thing would be in regulations. Some guidelines would be developed.
Clauses 18, 19, and 20 agreed to
On clause 21 - Notice by secured creditors
The Chairman: There is an amendment before you, number 15 in the package, an amendment put forward by the Bloc Québécois. Is there a mover for the amendment?
[Translation]
Mr. Chrétien: Yes, I so move, Mr. Chairman.
[English]
The Chairman: Do you wish to speak to it?
[Translation]
Mr. Chrétien: I would like an addition to be made to subclause 21(2) to ensure that the notice would be sent in the prescribed manner, that is 15 days beforehand, but there must be a guarantee that the farmer has received the said notice.
Therefore, the new subclause would read as follows:
(2) The notice referred to in subsection (1) must be given to the farmer in the prescribed manner and received by him at least fifteen business days before the doing of any act described in the paragraph (1)(a) or (b).
I would also add a third subclause:
(3) The burden of proof that the notice has been received by the farmer within the time referred to in subsection (2) lies on the person whose duty it is to give the notice.
We have seen cases in the past of notices being sent, by recognized means, but sometimes using a rather doubtful method, and the farmer receiving the notice only a few days before seizure or on the very morning. Therefore, this should be clearly stipulated in the bill.
I would reiterate that the reason why this should be stressed is to protect the farmer himself. My purpose is not to protect creditors but rather farmers.
[English]
The Chairman: Mr. Culbert.
Mr. Culbert (Carleton - Charlotte): Mr. Chairman, I just want a point of clarification from our witnesses here this morning.
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Subclause 21(2) refers to ``in the prescribed manner.'' In your opinion, is that referring only to ``written notice'' in the previous paragraph, or is there some prescribed manner of delivering that notice or message within the time constraints?
Mr. Pickard: Under the regulations there is a prescribed method - it's by personal delivery or by registered mail, priority post, or facsimile, to the residence of the people.
To explain further, in some cases there have been people who would not receive the delivery at the residence. They have refused - for one reason or another - the people in the houses. As a result, to make sure we cover this properly, there is the option for registered mail to be sent out, and that will be deemed to have been delivered if after 21 business days there is no response. Now, 21 business days gives four weeks plus a day to make sure it was delivered. After that, the 15-business-day clock starts ticking.
The process is to really design a seven-week period in which that notice can be given and all of the mechanisms be put in place. So they tried to extend that to quite a long period of time. Following what ``in the prescribed manner'' means, though, is very clearly stated in the regulations.
Mr. Culbert: So in the case that there was a desire to not be affected by proceedings, there could be an avoidance of receiving that notice.
Mr. Pickard: When that has occurred, the Canadian Bankers Association was very concerned - and I think so be it - that people would not receive the message.
Under the act, registered mail has a 21-day business period in which they could do it. Giving the registered mail four weeks to be delivered to the residence is deemed to be an appropriate time. Then they have a three-week period after that, so there is a seven-week period in which, if someone is difficult to reach - you've got almost two months to get things to them and give them the opportunity to apply to the administrator. Quite a time gap has been placed in there to help the communication of that message.
Mr. Culbert: Having been in business in a previous life, when you send out registered mail in those types of situations and the registered mail is refused from the mail carrier - what would happen in this particular circumstance?
Mr. Pickard: The registered mail - they would still attempt to get it.... If you recall, when the Bankers Association, I believe, were in, they asked to post signs -
The Chairman: They weren't in.
Mr. Pickard: Oh. Which group was it that asked...? One of the groups -
The Chairman: I don't know. The Bankers Association sent a letter to the committee.
Mr. Pickard: Oh, they did in the letter? Excuse me. I recall going through the letter, and they were talking about posting signs on the property. Posting signs on the property is somewhat archaic, to my mind. It reminds me of the times when we used to placard people with diseases in the country, and so on.
It seems to me that there's a long period of time to make sure that's delivered. If there is total resistance toward the communication, I don't know that anything else must be done, outside of having a time period in which that all lapses.
Mr. Culbert: Finally - referring to Mr. Chrétien's amendment - if we were then to approve that change of ``received by him at least 15 days'', we would then in fact be giving some jurisdiction to not wanting to receive it, and therefore encouraging avoidance of the whole situation.
Mr. Pickard: We would encourage the resistance to creditors. That's correct.
Mr. Culbert: Thank you. Thank you, chair.
The Chairman: Before I go to Mr. Easter, just a point of clarification for myself, Mr. Pickard. You said that the prescribed manner of delivery is registered mail -
Mr. Pickard: The prescribed manner is registered mail, priority post, fax machines to the residence of the farmer.
The Chairman: Okay. Just a clarification: registered mail must be signed for.
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Mr. Pickard: Yes.
The Chairman: Must priority post be signed for?
Mr. Pickard: Yes.
The Chairman: In that prescribed manner, what is the method to know the individual received the fax?
Mr. Pickard: If you send a fax, that's a notification, but obviously there's no proof outside of the fact that there are telephone transmissions, and you don't know what was transmitted, so you do have a problem. To justify that 21-day period, I think they would have to follow that up with registered mail. If they can't get any response, they're going to have to move to the recorded methods such as priority post.
The Chairman: My concern is that is if sending a fax to someone's house is deemed to be the start of the 15-day notice, so would be putting the envelope between the front door and storm door of the house, and neither one would be recognized.
Mr. Pickard: That's right. I would agree.
The Chairman: One could say I put the fax in your office or I put the envelope in your door. You're supposed to sign for one, and if you didn't sign for the registered mail, the 15 days wouldn't start.
Mr. Pickard: That's right.
The Chairman: But the fax machine.... I'm playing the devil's advocate here, but to me there's a difference. You have to sign for two of those, but with one you just send it off, perhaps into a black hole, even though there is supposed to be and there is a fax machine on the other end. Yes, it goes somewhere or your fax machine would indicate that it didn't, but it could still go into a fax machine that perhaps was not attended to for a period of time.
Mr. Pickard: You're very correct.
The Chairman: Mr. Easter, did you have a comment?
Mr. Easter: Yes. The prescribed manner is going to be in the regulations, which is a problem, as regulations so often are. The act specifies at least 15 days. The 21 days you're talking about, it doesn't say that anywhere in the -
Mr. Pickard: No, the 21 days is an add-on. So you have a structured format where, if no one receives that registered mail, there is a 21-day period.... That's 21 working days, by the way, which means four weeks or about a month to get that delivered. That's the point here - we're trying to make certain there's all kinds of opportunity for that to be received.
Mr. Easter: I think that's where people who have never been in financial trouble don't understand the ``all kinds of opportunity''. There's nothing like the sheriff delivering the letter to wake you up. Registered mail sounds great, because you've got a month, but I can tell you about all kinds of cases in Alberta, Manitoba and Saskatchewan where the people are 30 miles from the post office and the mail doesn't get picked up for a month, such as at harvest and when they are seeding.
If you're in financial difficulty -
An hon. memeber: [Inaudible - Editor].
Mr. Easter: Well, Elwin is always at the mailbox looking for his cheque.
Some hon. memebers: Oh, oh!
Mr. Hermanson: I pay my bills on time.
Mr. Easter: Put yourself in the shoes of the person who is in financial trouble. Number one, they're scared. They don't know what the hell is going to happen to them, and they start to make mistakes they otherwise would not do because of that financial pressure. They start trying to avoid the issue and they're going as fast as they can to stay where they're at. Mail is not their priority, I'll tell you.
I like Mr. Chrétien's proposal, but my problem with it is.... In the discussion it came out that if a person doesn't sign for it and therefore it's not received, then we're creating other problems. I would like to find a better way of ensuring that the farmer is given the notice and knows he's been given the notice, and then the 15 days click in, because I do know of cases where the sheriff has landed on the door and they legitimately didn't know.
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I guess I don't have the answer here, Mr. Chairman, but I'd like us to be able to do what Mr. Chrétien is proposing without creating another problem.
Ms James: I agree with you. It's an extremely difficult one and it's one we have wrestled with and our current general managers of Farm Debt Review Boards have wrestled with. I guess the full intent in any regulations that will be developed is that the person is given every opportunity to be fully aware, to know when the clock starts ticking, when the 15 days start and there is proof that they have received it and are fully aware.
As Mr. Pickard mentioned, the one concern of the Canadian Bankers Association - and I guess it's somehow trying to find some way of accommodating that too - is that people are very ingenious and some of them more so when they're under pressure. There have been some cases in the past where it has been virtually impossible for creditors to serve a notice because there is never anyone there to accept the notice when it is being officially delivered. As the server is at the front door, the adults in the house are heading out the back door, so they've never been able to officially serve the notice. These sorts of situations can go on for months.
What we're trying to do, and we'd welcome your input and would appreciate it, is to develop regulations that would make sure the farmers involved receive the notice so that they are fully aware and we have proof that they have been served the notice and had their full 15 days to apply. On the other hand, we need to get around those ingenious people who can find ways of stalling the delay even longer. We would really appreciate your input. That's why we have the wording we have.
What is prescribed will occur in regulations, but exactly what those regulations will be has yet to be determined. All the help we can get would be greatly appreciated in covering both sides of the situation and being fair to everyone.
The Chairman: Mr. Hermanson.
Mr. Hermanson: Thank you, Mr. Chairman.
I think the government's legislation here is inadequate. I think Mr. Chrétien's amendment goes part way to solving the problem, and I can support his amendment, but perhaps there needs to be a fourth clause that would deal with those who refuse to receive the notice.
I would think if there were another subclause added that indicated that with witnesses present the farmer refused to receive notice, the notice could then have been deemed to have been received under those circumstances. That might solve the problem the officials and the banks are concerned about, yet still not leave the farmers vulnerable, as Mr. Easter has pointed out.
I will support Mr. Chrétien's amendment, because I think it's important that some of those facts or some of those protections are in the legislation, but I would not be opposed to seeing a further clause put forward by either ourselves - we may do that at report stage - or perhaps the government wishes to pursue it to deal with those rare cases where the farmer actually is avoiding the realities that are being forced upon him.
The Chairman: Mr. Chrétien.
[Translation]
Mr. Chrétien: We just talked about information being sent by ``registered letter'', ``priority post'' and ``fax''. But people also use the bailiff, and that is not too burdensome. In that case, the farmer is not required to sign. It is the bailiff who serves the notice on him, recording the time, date, etc, and subsequently - and if there are legal counsel here please correct me if I'm mistaken about this - after two or three visits to the farm the notice can be placed on the door of the refrigerator or, if my memory serves me correctly, near the toilet bowl. That is one way of proceeding.
[English]
The Chairman: Did you want to put that in any particular order?
Some hon. members: Oh, oh!
.1015
[Translation]
Mr. Chrétien: Even though a farmer may not collect his mail for one month, you can be sure that not a day will go by without his opening the door of the refrigerator or visiting the washroom.
[English]
The Chairman: Jerry.
Mr. Pickard: To answer Mr. Chrétien's point, he did focus on three vehicles, but there was also personal delivery, which was one that wasn't reiterated when the chairman asked what vehicles were being used. I did initially state personal delivery, and that would be the bailiff or anyone who would be carrying that message on a personal basis, knocking at the door, delivering the message.
[Translation]
Mr. Chrétien: But it is perhaps what is generally referred to as the huissier where I come from. Is that what you call him?
[English]
The Chairman: Right.
Mr. Pickard: Yes.
Mr. Easter: Mr. Chairman, could legal counsel give us an interpretation as to whatMr. Chrétien's clause 2 means ``and received by him''? I want to know both the pros and the cons of that statement. What is the problem it creates for a creditor if that clause is in there? Now, there is the qualifier we could put in that Mr. Hermanson talked about; that might be another way - deemed to have been received if the sheriff delivers it, or whatever. But what's the interpretation ofMr. Chrétien's point in clause 2?
Ms Diane Fillmore (Counsel, Legal Services, Agriculture and Agri-Food Canada): I would interpet having the words in there ``and received by him'' to be personal service, that it would not allow for the alternatives of posting or whatever, even after a certain length of time. That would be my concern with it, that it would be very easy to avoid it. As I say, I don't see what other meaning you could put to those words ``and received by him'' other than you would have to show personal service.
Mr. Easter: Unless there's a lot of it. Well, if there's a lot of it, we've got a problem with farm policy, if there are a lot of foreclosures. But I really can't see the problem of the sheriff or the bailiff having to.... I mean, if we're to go this far, it's an extraordinary act, really, to basically force foreclosure on someone, which this certainly can lead to, by creditors. To just drop a note in the mail is pretty easy. In terms of deciding whether they're going to force foreclosure or not, or to start the proceedings, because that's what it amounts to, maybe they should have to use the sheriff.
Ms Fillmore: If that's the decision, that could be, but I think the ``received by him'' puts a real onus, because that would mean the sheriff has to find the person. I think it would not be that difficult to avoid service, even by a sheriff.
It may be that you could have something in the regulations that after a sheriff visits three times, or whatever, and is unable to serve, that the person isn't available. I don't know. Otherwise, you've left it that service could be avoided just by not appearing personally.
Mr. Easter: Mr. Chairman, I guess it can be done at report stage, but personally I feel uncomfortable with this clause without having found a way round it. If we're not going to finish today, I'm wondering if it can be revisited. I'm talking process here.
The Chairman: I'm at the wish of the committee.
Mr. Collins, did you have a comment?
Mr. Collins (Souris - Moose Mountain): Mr. Chairman, if we dealt with every other business like we are dealing with this scenario today, God help us. We'd be in some pretty dire straits.
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We have the mechanism in place. I think it's a reasonable mechanism. I do come from an agricultural community, and I think most people who are in the farming business are responsible. Yes, some get themselves into problems, but we can't write every scenario that everyone would try to avoid in order not to face the consequences. I think we have to be fair with both sides of the issue. There are people who have extended credit over time and they've come to the end of their tether too. All they're asking for is to be provided with a mechanism.
It would be nice to write in everybody's scenario that would deal with their unfortunate happenings, but let's get into the real world here. You have put in a mechanism, 15 days or whatever it is. I think that's fair. If I tried to avoid it, I'm sure they would be at my door giving me some kind of a message. Don't tell me you don't go to the mail.
The Chairman: Mr. Collins, are you finished?
Mr. Collins: I'm just saying, Mr. Chairman, that in fairness to those people who have drafted it, I don't want everything in the legislation. I want some in the regulations so we do have some flexibility to visit that. It may be something that Elwin has discussed with folks out in his area, I don't know. I'm prepared to look at that, but I think the gist of what you have there is acceptable and I would prefer that we get on with it and not leave it.
The Chairman: A comment I might make for consideration of the committee is that I think the committee members on all sides of the table have expressed their concern with this. The officials have stated that it can be and would be dealt with in the regulations. The committee members might consider - I say consider, because I'm not directing - leaving it at that because the views and the concerns have been made very clear. I would trust that the officials would address those concerns in the regulations, but I'm open to direction from the committee.
I'll take a couple more comments and then I think we have to deal with the amendment or the direction of the committee. Mr. Culbert.
Mr. Culbert: Yes, just quickly, Mr. Chair.
If you look at that paragraph 21(1)(b) just prior to subclause 21(2), it says ``shall give the farmer written notice''. That's one point. You must have written notice. That's the way I look at it. Subclause 21(2) itself then refers to the notice. It says ``must be given...in the prescribed manner''.
You were making a point, Chair, about the regulations on what that prescribed manner is. You could add to that ``or in such other method that would guarantee that the farmer had that delivery''. I don't care how you do it, dog sled if you have to, as long as that discretion is there and the emphasis is placed on it, as my colleague Wayne has indicated. That written notice must be received.
The Chairman: Mr. McKinnon.
Mr. McKinnon: I think it was Bernie who made the point that the process is being extended substantially now. I'll pick up on what my colleague on my left has been saying in terms of process and whether it's actual or whether it's deemed to have occurred. I ask the officials to consider the deeming process as well, as Mr. Chrétien or Mr. Hermanson also articulated. Thank you.
Mr. Hermanson: I just have an observation. This bill has come to committee prior to second reading precisely so that we can get into some of these details, and I'm a little bit offended thatMr. Collins thinks it's not important that we do that.
Mr. Collins: I didn't say that, Mr. Chairman.
Mr. Hermanson: I think the Liberal government's purpose in bringing a bill to this committee before second reading was for this very exercise. I think working in this clause is one of the best exercises we've ever had in this committee, and I applaud that type of in-depth study into the clause. I think it's about time we started to get involved with the legislative process.
The Chairman: I'm at the direction of the committee, but we have an amendment before us and we have to deal with that. If there's further direction after that, you will have to deal with that when we deal with the clause itself.
Mr. Easter.
Mr. Easter: I forget what you said earlier about the prescribed manner. Is that guidelines or regulations? Is it going to be published?
.1025
Ms James: It's in regulations.
I was going to say that the regulations are pre-published. They're gazetted. If the committee wishes we could make sure that we ourselves - or Mr. Pickard - send the regulations directly to each one of you for your input at that time if it would assist you. Then we could be sure that you did have them in advance and could comment on them.
The Chairman: Okay. I think that's clarified it.
The amendment before us is the Bloc Québécois amendment to clause 21.
Amendment negatived
Clause 21 agreed to on division
Clauses 22 and 23 agreed to
On clause 24-Communication of information
The Chairman: There is a Bloc Québécois amendment to clause 24. Is there a mover for the amendment? Mr. Chrétien.
[Translation]
Mr. Chrétien: Yes. We accept clause 24 in full, but we would like to add a fourth subclause. Here again, the purpose is to provide maximum protection for the farmer.
I would like to read it quickly:
(4) Notwithstanding any Act of Parliament, or law, the following document may not be used, referred to or produced in evidence in any proceeding brought under any other Act:
(a) an application under section 5;
(b) an inventory of a farmer's assets prepared under subsection 9(2);
(c) financial statements of a farmer's farming operation prepared under subsection 9(2);
(d) a report prepared under subsection 9(4);
(e) a recovery plan prepared under this Act for the purposes of reaching a financial arrangement with a farmer and the farmer's creditors.
Therefore, the purpose is to protect the farmer in difficulty, in trouble up to his neck or almost, and to prevent anyone using those five documents against him, except in accordance with the provisions of Bill C-38 which might eventually be adopted.
[English]
The Chairman: Are there any comments or questions about that amendment? Mr. Easter.
Mr. Easter: I'll ask the officials this. Is Mr. Chrétien's amendment not covered under the first part of clause 21? Mr. Chrétien is getting down to spelling out the very technical specifics, but is it not already covered under the first part of that clause?
Ms James: Yes.
Mr. Easter: Thank you. Therefore, I'm opposed to it.
The Chairman: Mr. Chrétien.
[Translation]
Mr. Chrétien: Mr. Easter asked a very relevant question. Someone answered, but the interpreter said the answer was inaudible.
Who answered, and could the answer be given again?
[English]
The Chairman: Mr. Pickard, go ahead.
Mr. Pickard: The answer is yes. It's covered in the clause.
[Translation]
Mr. Chrétien: In which part?
[English]
Mr. Pickard: The clause says:
- Except as authorized by subsection (2), no person shall knowingly communicate or knowingly
allow to be communicated to any person any information obtained under this Act from a farmer
or from any creditor of a farmer, or knowingly allow any person to inspect or have access to any
such information.
When the bill says ``any information'', this naturally includes items (a) to (e) that are listed in the proposed amendment. The inventory, financial statements and report and recovery plan will not be allowed to be communicated to anyone under the bill. Therefore, your amendment doesn't provide for any extra protection for a farmer or a community. It's already covered within the bill itself.
A voice: Question.
Ms James: It's subclause 24(1).
[Translation]
Mr. Chrétien: Mr Chairman, it's my turn.
[English]
The Chairman: Let's get this clear. A minute ago, the question from Mr. Easter to the officials was, if I understood it correctly, are the contents of this amendment by Monsieur Chrétien covered in clause 21.
A voice: It's subclause 24(1).
The Chairman: You said 24(1)? I thought you said clause 21.
Mr. Chrétien, the answer, then, is that your concerns are covered in subclause 24(1). Do you have any further comments?
[Translation]
Mr. Chrétien: Yes, of course, I would like a clarification, Mr. Pickard.
You say in subclause 24(1) that information may not be communicated. Many things should not be communicated, but they still become public knowledge.
My amendment stipulates that the documents listed in paragraph (a), (b), (c), (d) and (e) could not be used under any other piece of legislation than the one currently before us to bring proceedings against a farmer.
I understand what you are saying. That cannot be communicated or transmitted, but if it is transmitted, can someone use it? That is the question.
[English]
Mr. Pickard: The point that is being made is ``any information'', in other words, paragraphs (a) to (e), subclause 24(1), is covered. No information can be transmitted. So what you're suggesting in your amendment is redundant to what is already in the act.
The Chairman: Mr. Chrétien.
[Translation]
Mr. Chrétien: Earlier, in your answer to Wayne Easter, you said ``may not be transmitted''.
I understand from that that information may not be transmitted, but if it were to be transmitted it could be used as evidence before another court, in the case of proceedings by a third neighbour or another creditor, for example, and pursuant to a piece of legislation other than Bill C-38.
[English]
Mr. Pickard: The wording I gave was ``knowingly allow any person to inspect or have access to any such information''. No access to the information means no access.
Ms Fillmore: Including in a court proceeding or whatever.... It would be an offence under the act if it was knowingly communicated in any form in any forum.
The Chairman: Okay, Mr. Chrétien?
[Translation]
Mr. Chrétien: Yes.
[English]
The Chairman: Mr. Hermanson.
Mr. Hermanson: If Mr. Chrétien's amendment was accepted...after the mediation process had terminated, and suppose it terminated unsuccessfully, nothing in this amendment would prevent the creditors from looking for the evidence or the documentation they need to proceed with foreclosure or bankruptcy or whatever. Do I understand that correctly? With this amendment we're not locking the door after the mediation process is complete, are we?
Maybe Mr. Chrétien would like to answer that. Would this just take effect during the foreclosure, would that be the only time your subclause (4) would take effect?
The Chairman: Through the whole process.
[Translation]
Mr. Chrétien: Mr. Hermanson, I am saying that other people, perhaps possibly secured or non-secured creditors, could take proceedings against the farmer in civil court or at the superior court level on an issue other than that covered in Bill C-38. The proceedings would be based on some other grounds.
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I would like that the said documents be placed under seal and that it not be possible for them to be used against the farmer. That is the purpose of the amendment proposed by my party, so as to protect the farmer. If the purpose is to protect the farmer to a small degree and creditors to a large degree, we will have to vote against the amendment. As far as I'm concerned, I will vote in favour.
[English]
The Chairman: Diane.
Ms Fillmore: I do think subclause 24.(1) is much broader. The problem in interpretation is if you have a more particular one that follows, then it's questionable what the more general version in subclause 24.(1) means, with its much broader scope. It would continue after the process as well. The information that was gathered and presented as part of the process here could not be used for any other purpose or communicated to anybody.
Mr. Hermanson: However, you could re-collect the information under a bankruptcy or foreclosure proceeding.
Ms Fillmore: No question - for sure.
Mr. Hermanson: You would just have to start over from scratch.
Ms Fillmore: Yes, they would have to obtain it by different means.
Mr. Pickard: The information from the proposed act would remain not circulated anywhere; it would be contained.
Mr. Hermanson: Right. That's what I thought.
Amendment negatived
Clause 24 agreed to on division
On clause 25 - *Personal liability
The Chairman: An amendment is before us. Is there a mover for the amendment?Mr. Chrétien.
[Translation]
Mr. Chrétien: I move that clause 25 on page 13 be amended by replacing the words ``n'encourent aucune'' on line 23 with ``engagent leur''.
[English]
Mr. Hermanson: Mr. Chrétien, if we pass this amendment the administrator would be liable to legal action by a disaffected party in the mediation process, either the creditor or the farmer. Is that the intent of your amendment?
[Translation]
Mr. Chrétien: No, not really. They would be personally liable for acts or omissions. That could arise if someone were doing his or her work in a nonchalant way. No one is protected from that, except perhaps members of Parliament, Mr. Hermanson, who can say the most stupid things in the House of Commons.
We had such a case yesterday. We asked the Deputy Prime Minister to repeat outside what she said on the floor of the House of Commons, something she refused to do. But proceedings will have to be taken against an administrator who failed to do his or her work properly.
[English]
The Chairman: Mrs. Ur.
Mrs. Ur (Lambton - Middlesex): Mr. Chair, I find this would certainly limit the people who would want to take on this job. With this kind of clause being implemented, rest assured it would probably be one of the last résumés I would send in for a job application. So I find it a little difficult to accept. I have nothing against Mr. Chrétien, but I find it very limiting.
Mr. Reed (Halton - Peel): I'll concur with Mrs. Ur on this. This flies right in the face of.... I don't know of any place in legislation where someone becomes personally liable in a situation such as this.
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It's one thing to remove a person from their job if they do something horrifically wrong -
A voice: Or recall.
Some hon. members: Oh, oh!
Mr. Reed: Recall, yes. But it's quite another thing to hold a person personally liable. I just can't accept that.
The Chairman: Mr. Pickard.
Mr. Pickard: This is where we hit the nail right on the head. There's absolutely no question that, from what Mr. Chrétien said, the act does say ``in good faith'', which means this person is acting in good faith and doing the job properly.
Although we hope no one would ever make an omission or a minor error that may cause someone to think a lawsuit might be the answer, I believe it would be almost impossible to get anyone to work under the circumstances that every action they take may result in a personal lawsuit.
You're dead right, Mrs. Ur. We just find it incredible that anyone would be placed in that position.
The Chairman: Mr. Hermanson.
Mr. Hermanson: Mr. Chairman, this amendment does sound rather severe, and I don't think I would support it, but I am wondering what protection is in the legislation for an administrator who doesn't make an unintentional goof-up but is particularly incompetent or takes a blatantly improper action. What recourse is there for the creditor or the farmer and what implications would it have on the department of the government itself if in fact there is a major blunder, a purposeful blunder, or a wrong deed by an administrator?
Mr. Pickard: That clearly is covered in good faith. If it's a purposeful blunder, that's a problem.
Mr. Hermanson: I understand that.
Mr. Pickard: The other side of that -
Mr. Hermanson: I'm just wondering what happens if that's the case.
Mr. Pickard: I'm just carrying on, thank you.
We certainly hope the people we appoint and the people who apply for the job and have the qualifications to be the administrator will not be incompetent, but if it is found that someone cannot handle the job adequately, they can be replaced. Quite frankly, that's what would happen.
But they must act within good faith as well. So you have a person who has to do the job appropriately, have the qualifications to do the job and act in good faith during the job. Those are reasonable protections that we put in a job description.
Mr. Hermanson: If an administrator makes an under-the-table deal with a creditor, is the administrator liable and is the government liable?
Mr. Pickard: That's not acting in good faith.
Mr. Hermanson: If he's acting in bad faith, what happens? I'm not arguing about what happens if he does something in good faith. I'm asking if he does something in bad faith, what happens?
Mr. Pickard: The consequence of the action certainly would be his job. There could be other actions taken as well, but it's his job, obviously, and he is contravening the act, so he's in problems in contravening the act. He's not acting in good faith.
Mr. Hermanson: And the government could be sued?
Ms Fillmore: And the person could be sued personally if you take them outside the protection of clause 25. If they're not acting in good faith, then they could be sued personally.
Mr. Hermanson: Okay. That's what I wanted to know. Thank you.
The Chairman: Mr. Easter, you wanted to speak to this.
Mr. Easter: I'd just say that in the interest of protecting Mr. Chrétien from an avalanche of love letters from the current board members for him to tape to his fridge -
An hon. member: Or washroom.
Mr. Easter: - should this amendment go through, I'll have to oppose this amendment.
Amendment negatived [See Minutes of Proceedings]
Clause 25 agreed to
The Chairman: I see no amendments before us for clauses 26 and 27.
Mr. Hermanson: I want to be recorded as opposing clause 26.
The Chairman: Okay, we'll do them separately, then.
Clause 26 agreed to on division
.1045
Clause 27 agreed to
On clause 28 - Review of Act after three years
The Chairman: A number of amendments on clause 28 are before us. There is an amendment in the package, no. 18. We'll deal with that first. Is there a mover for the Bloc Québécois amendment?
[Translation]
Mr. Chrétien: Yes, I myself, Mr. Chairman. The only major amendment to clause 28 concerns the first subclause. If I may, I would like the read the few lines in question.
Subclause 28(1), as amended, would read as follows:
28.(1) As soon as possible after the second anniversary...
therefore after the second anniversary instead of the third
- ... anniversary of the coming into force of this Act and every three years thereafter, the minister
shall undertake a review of...
[English]
The Chairman: The change, if I understand it, is that according to this amendment the first review would take place after the second year. In the present wording in the bill it's after the third year. The present reading of the bill makes no reference to any further reviews, but the amendment says it's not only after the second year but every three years thereafter. I ask the officials, is that the right interpretation of the amendment?
[Translation]
Mr. Chrétien: You've understood everything.
[English]
The Chairman: I have a question for the officials. The way the bill was written originally, it asks for a review after the third year but does not refer to any further reviews. This amendment says there will be reviews after the second year and every third year thereafter.
Is that right, Lois?
Ms James: Yes, that's right.
The Chairman: Okay; just so we all know what the amendment means.
Any questions of comments on the amendment?
Mr. Pickard: The department has no problem with accepting the Bloc's amendment. The reason we went to a three-year review initially was we felt there would be more accumulated evidence than within two years. So it was a matter of getting enough information to review this adequately and properly. However, if the committee feels it should be reviewed after two years rather than three, the department has no problem with that.
Mr. Hermanson: I would like to know Mr. Chrétien's rationale for the ongoing reviews every three years. Is there a reason why he's making that recommendation?
[Translation]
Mr. Chrétien: Mr. Hermanson, you understand that even though we members do very serious and often very hard work, the bills we examine clause by clause and that we vote on in the House of Commons are not always perfect. By bringing this forward one year, we'll be able to evaluate the Act a year sooner and make whatever corrections are necessary.
These corrections could be made every three years after that instead of every four. In this respect, the government of the day, after two or three years, could decide on its own to suggest amendments to the Act.
As you know this is very hard and it would be easier to include this right away rather than coming back in two or three years to make the necessary corrections. That is the purpose of the amendment.
[English]
Amendment negatived
.1050
The Chairman: There's another amendment, number 19 in your package, this one by the Reform Party. Is there a mover? Mr. Hermanson, do you wish to speak to it?
Mr. Hermanson: Mr. Chairman, I move Bill C-38 in clause 28 be amended by replacing lines 29 to 40 on page 14 with the following:
As soon as possible after the third anniversary of the coming into force of this Act, the committee of the House of Commons that normally considers matters relating to agriculture shall conduct a detailed review of the operation of this Act and, within a reasonable time after completing the review, shall cause a report on the results of the review to be laid before the House of Commons.
What we're doing is amending the bill as it now reads to remove the minister as responsible for this review, although I would suspect a responsible Minister of Agriculture would be reviewing it on an ongoing basis, I would think even more often than on the third anniversary.
We feel it would be more productive if this committee reviewed the proposed act, which is a common procedure. I know the Bank Act, for instance, is reviewed periodically by the finance committee of the House of Commons, even though of course the government reviews the Bank Act more often than that. We would therefore suggest this committee make that review after the three-year period, recognizing, of course, that we have on the committee members from all across Canada and they probably would have as much insight as anyone into how the proposed act is working, how the debt mediation process is working across the country, and whether the consultation service is in fact meeting the expectations we have set out for it.
Therefore I'm happy to ask you for your support for this amendment.
The Chairman: Are there are any questions or comments on the amendment? Mr. Pickard.
Mr. Pickard: Mr. Chairman, I believe at this point the minister is empowered to do those reviews, and as the minister does the reviews they are tabled in the House of Commons. This committee has access to those reviews and can deal with all the issues Mr. Hermanson raised. It can review what has been tabled. It can look at the minister's reviews and it can make comment on them.
To assign the task of doing the reviews to this committee again overburdens the committee. It just throws more work on the committee. I'm not sure we have the facility to do that review, but regardless of that, it's an additional empowerment of the committee. I'm not sure taking the reviews out of the hands of the minister is a wise direction in which to go.
So I would oppose the amendment as such, but I would make certain everyone in the committee realizes all of that information is available to you whenever the minister does the review. We can look at that, we can bring witnesses in, and we can talk about the reviews. We can question them here and make recommendations. All those vehicles are in place for the committee, with that information coming forward to it from the review.
Mr. Hermanson: Mr. Pickard is right, but what my amendment would do would be to require this committee to take that review, as other committees are required under sections in other acts similar to what we are proposing in this amendment.
I'm not arguing, Mr. Pickard, that we can't.... We can do anything we agree to do as a committee. But under the bill, the way the government is proposing it, we're not required to undertake that review. I'm suggesting we should be required to do it. That's the argument I'm making.
Amendment negatived
The Chairman: There's a Liberal amendment. Mr. Easter.
Mr. Easter: It's the amendment the clerk just passed out, not the one that's on page 20. I had given that to the clerk last week.
I move that Bill C-38 in clause 28 be amended by replacing line 36 on page 14 with the following:
(2) In conducting the review under subsection (1), the Minister shall review the operation of any agency or service that is created after this section comes into force for the purpose of undertaking a detailed review of the financial affairs of a farmer in financial difficulty, at the farmer's request, and making proposals for measures to alleviate or end the farmer's financial difficulties.
Then subclause (3), which would be the current (2):
As soon as possible after completing the
...and it goes on.
.1055
I make that amendment, Mr. Chair, really to ensure.... And one of the problems is that the farm consultation service hasn't been named yet, so you couldn't put the name in. The purpose is to ensure the farm consultation service, or whatever it might be called, is subject to a review process, as are the provisions of the Farm Debt Mediation Act itself, in order to ensure that there is some assurance to the majority of farmers who have used the farm debt service but are not insolvent that this structure not only performs the tasks it's assigned to do but continues to exist.
As further explanation, Mr. Chairman, I do that in part because there was a lot of discussion at this committee on the farm consultation service and whether or not it would have the funding and do the job the current Farm Debt Review Board does under...I'm not sure if it's section 15 or 20.
In any event, in a letter Ms James wrote to me on it, this is what she had to say, and I think it enforces the need for the amendment I put forward. Ms James said, and I quote:
- ...Bill C-38 currently provides assistance for farmers in financial difficulty who are insolvent.
The Farm Consultation Service, which would be a broader service available to farmers in
financial difficulty regardless of their solvency position, would be provided under the
department's general authority given in Section 5 of the Department of Agriculture and
Agri-Food Act. This general authority allows the Minister to provide the FCS, but it does not
enforce, by a statutory requirement, the provision of the service.
The Chairman: Committee members, there is another committee that needs this room and is booked for two minutes from now. We're obviously not going to get done, because we still have another amendment and then the rest of the clauses to review. So I think we're going to have to continue tomorrow.
Mr. Hermanson, do you have a comment on that rather than the amendment?
Mr. Hermanson: It's a small point. When this amendment comes back, perhaps Mr. Easter might want to clarify that it's any federal agency or service, rather than just any agency or service. We may be going beyond our jurisdiction unless we correct that.
The Chairman: I think we'll have to conclude today's meeting.
Before you leave, the room is not allocated for us tomorrow, but to give a schedule to the members so you can set your calendars and block the time out, tomorrow we will complete this bill.
On Thursday we will have officials before us on the discussion and explanation of the supplementary estimates we discussed.
Next Tuesday is the session on cost recovery. We can only get a room until 11 a.m., so I ask the question: If we provided muffins, and so on, what's the objection to meeting at 8 a.m. so we can have three hours?
Mr. McKinnon: Which day?
The Chairman: That's Tuesday, December 10. We'll set that up for Tuesday, from 8 a.m. until 11 a.m.
As for Wednesday, we've had requests for people to come before us and make presentations on rural renewal. They can attend on Wednesday.
The only time the minister could come before the committee between now and Christmas was next Thursday afternoon, December 12, so that is now arranged for 3:30 p.m. I'm informing everyone of that.
So we'll see you someplace tomorrow when the clerk notifies us of the location.
[Translation]
Mr. Chrétien.
Mr. Chrétien: When will we be through with the clause-by-clause on C-38? You didn't say.
[English]
The Chairman: Tomorrow.
[Translation]
Mr. Chrétien: Tomorrow?
[English]
The Chairman: Mr. Hermanson.
.1100
Mr. Hermanson: Mr. Chairman, at our steering committee meeting we agreed that it was paramount for the minister to appear this week and that Thursday was totally unacceptable. Now you're telling us that Thursday is the only time the minister can meet with us. In fact, your own committee members suggested that there may not be that many around.
The Chairman: Mr. Hermanson, I understand that very clearly. I made that point very strongly and very firmly, as well as making some other comments about the minister's presentation to the minister's staff. I'm sorry, I can't set a schedule. I could not make the wish of the steering committee and the committee known any more strongly than I did.
The clerk was informed that the first and only time the minister can come before the committee is Thursday afternoon, December 12. If the committee does not wish to meet with the minister then I think we need to notify him, but unless I hear differently from the committee we will continue to schedule that.
Mrs. Ur.
Mrs. Ur: Mr. Chairman, I won't be in until about 9:30 a.m. next Tuesday.
The Chairman: Okay.
The meeting is adjourned.