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Canadian Agricultural Loans Act (R.S.C., 1985, c. 25 (3rd Supp.))

Act current to 2020-11-17 and last amended on 2009-06-18. Previous Versions

Guaranteed Farm Loans (continued)

Marginal note:Principal amount where joint borrowers

  •  (1) For the purposes of paragraph 4(3)(c), the principal amount of a loan shall, where the loan was made jointly to two or more farmers each of whom held a prescribed interest in a separate farm, be deemed to be, in respect of each of those farmers, an amount equal to the amount obtained by dividing the principal amount of the loan by the number of farmers.

  • Marginal note:Amount owing where joint borrowers

    (2) For the purposes of paragraph 4(3)(c), the amount owing in respect of any loan previously made to a farmer shall, where the loan was made jointly to that farmer and one or more other farmers each of whom held a prescribed interest in a separate farm, 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 farmers.

  • R.S., 1985, c. 25 (3rd Supp.), s. 5
  • 2009, c. 15, s. 6

Guaranteed Farm Products Marketing Loans

Marginal note:Payment of lenders’ losses

  •  (1) Subject to this Act and, in particular, to the conditions set out in subsection (2), the Minister is liable to pay to a lender 95 per cent — or if another percentage of not more than 95 per cent has been fixed by the regulations for the purpose of this subsection, that other percentage — of any loss sustained by it as a result of a loan made by it to a farm products marketing cooperative for any of the following purposes in relation to the processing, distribution or marketing in Canada of the products of farming:

    • (a) the purchase of land;

    • (b) the purchase or construction of any building or structure;

    • (c) the repair or alteration of, or making of additions to, any building or structure;

    • (d) the purchase or repair of machinery or apparatus; or

    • (e) the consolidation or refinancing of the debts of the cooperative incurred for such purpose described in any of paragraphs (a) to (d) as is prescribed.

  • Marginal note:Conditions

    (2) The conditions referred to in subsection (1) are as follows:

    • (a) the loan was made pursuant to an application signed by the farm products marketing cooperative in the form established or approved by the Minister stating the purpose for which the proceeds of the loan were to be expended;

    • (b) the application stated that 50 per cent plus one of the members or shareholders, as the case may be, of the farm products marketing cooperative are farmers and, if the loan is with respect to property and the regulations prescribe an interest or right that the cooperative must hold in that property, the application stated the nature of that interest or right;

    • (c) 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 loans previously made to the farm products marketing cooperative and disclosed in the cooperative’s application or of which the lender has knowledge, exceed

      • (i) for all the purposes set out in subsection (1), an aggregate amount of $500,000 or, if another amount has been fixed by the regulations or any greater amount approved by the Minister pursuant to subsection (3), that other amount, and

      • (ii) for all the purposes set out in paragraphs (1)(d) and (e), an amount of $350,000 or, if another amount has been fixed by the regulations or any greater amount approved by the Minister pursuant to subsection (3), that other amount;

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

      • (i) in the case of a loan made for the purpose described in paragraph (1)(a) or (b), in not more than twenty years, and

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

    • (e) no fee, service charge or charge of any kind was by the terms of the loan payable to the lender in respect of the loan as long as the farm products marketing cooperative was not in default, other than

      • (i) a prescribed fee or charge,

      • (ii) a charge not exceeding the amount of the fee payable by the lender pursuant to paragraph 12(1)(b), and

      • (iii) interest at a rate not exceeding the prescribed rate or the rate determined by the prescribed formula or formulae;

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

    • (g) the loan was made on such terms and in accordance with such conditions, in addition to those specified in paragraphs (a) to (f), as were prescribed for loans made for that purpose; and

    • (h) the lender exercised the same care and prudence in granting and administering the loan as it exercises in granting and administering, in the ordinary course of its business, loans in respect of which this Act does not apply.

  • Marginal note:Minister may increase limits

    (3) The Minister may, on the application of a lender made before the granting of a loan, approve an increase in each of the monetary limits referred to in paragraph (2)(c) to an aggregate amount not exceeding $3 million or, if another amount has been fixed by the regulations for the purpose of this subsection, that other amount.

  • R.S., 1985, c. 25 (3rd Supp.), s. 6
  • 2009, c. 15, s. 7

Limitation of Minister’s Liability

Marginal note:Aggregate limit

 The Minister is not liable under this Act to make any payment to a lender in respect of any loss sustained by it as a result of a loan made by it during a fiscal year after the aggregate principal amount of the loans under this Act made during that fiscal year and the four preceding fiscal years by all lenders exceeds $3 billion, or if another amount has been fixed by the regulations for the purpose of this section, that other amount.

  • R.S., 1985, c. 25 (3rd Supp.), s. 7
  • 1995, c. 13, s. 1
  • 2009, c. 15, s. 8

Marginal note:Limit re lender

 The Minister is not liable under this Act to pay to a lender in respect of losses sustained by it as a result of loans made by it during a fiscal year and the four preceding fiscal years a total amount in excess of

  • (a) ninety per cent of that part of the aggregate principal amount of the loans made by it during that fiscal year and the four preceding fiscal years that does not exceed one million dollars;

  • (b) fifty per cent of that part of the aggregate principal amount of the loans made by it during that fiscal year and the four preceding fiscal years that exceeds one million dollars but does not exceed two million dollars; and

  • (c) ten per cent of that part of the aggregate principal amount of the loans made by it during that fiscal year and the four preceding fiscal years that exceeds two million dollars.

Marginal note:Limit re appraised value

 The Minister is not liable under this Act to make any payment to a lender in respect of that portion of the loss sustained by it as a result of a loan that exceeds

  • (a) in the case of a farmer who, on the date of a loan application referred to in paragraph 4(3)(b) or 6(2)(b), intends to be or has been engaged in farming in Canada for less than six years, 90 per cent — or if another percentage of not more than 90 per cent has been fixed by the regulations for the purpose of this paragraph, that other percentage — of the appraised value, determined as of the day the loan is made, of the property in respect of which the loan is made; and

  • (b) in the case of any other farmer, 80 per cent — or if another percentage of not more than 80 per cent has been fixed by the regulations for the purpose of this paragraph, that other percentage — of that value.

  • R.S., 1985, c. 25 (3rd Supp.), s. 9
  • 2009, c. 15, s. 9

 [Repealed, 2009, c. 15, s. 9]

Marginal note:Exception where risk increased

 The Minister is not liable under this Act to make any payment to a lender in respect of any loss sustained by it as a result of a loan where, after the loan is made, the farmer or farm products marketing cooperative and the lender enter into an arrangement or agreement, whether or not it alters or revises the terms or conditions of that loan, that might increase the risk that the loan will not be repaid according to its terms, unless the Minister approves the arrangement or agreement before it is entered into.

Marginal note:Compliance required

  •  (1) The Minister is not liable under this Act to make any payment to a lender in respect of any loss sustained by it as a result of a loan unless

    • (a) the lender has complied with the regulations made pursuant to this Act; and

    • (b) the lender has, at such time as is prescribed, paid to the Minister a fee of one-half of one per cent of the amount of the loan or such other fee as is prescribed or calculated in the manner prescribed.

  • Marginal note:Partial refund of fee

    (2) Where a lender advances less than three quarters of the amount of a loan to a farmer or farm products marketing cooperative, the Minister may, on application by the lender made within one year after the first instalment of the loan was advanced, refund to the lender that portion of the fee paid pursuant to paragraph (1)(b) that is attributable to the unadvanced portion of the loan.

 
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