Limitation of Minister’s Liability (continued)
Marginal note:Limit re appraised value
9 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
10 [Repealed, 2009, c. 15, s. 9]
Marginal note:Exception where risk increased
11 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
12 (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.
Marginal note:Legal fees
13 The Minister is not liable to pay the portion of a loss sustained by a lender that is attributable to legal fees, costs or disbursements incurred by the lender unless those fees, costs or disbursements are assessed in accordance with the rates established by the Minister in consultation with the Minister of Justice.
- R.S., 1985, c. 25 (3rd Supp.), s. 13
- 2009, c. 15, s. 10
Marginal note:Termination of operation of sections 4 and 6
14 (1) The Minister may, with the approval of the Governor in Council, by notice to a lender terminate the operation of section 4 or 6 in respect of loans made for any purpose, such termination to be effective after a time set out in the notice, and the Minister is not liable under this Act to make any payment to the lender in respect of any loan made for that purpose by the lender after that time.
Marginal note:When notice of termination effective
(2) A notice given to a lender under subsection (1) is not effective unless the time of termination set out therein is at least twenty-four hours after receipt of the notice at the head office of the lender.
Regulations and Orders
15 (1) The Governor in Council may, on the recommendation of the Minister and the Minister of Finance, make regulations
(a) defining for the purposes of this Act “repair”, “alteration”, “additions”, “major”, in relation to “repair” and “overhaul”, and “works for drainage”;
(b) prescribing, in respect of loans made for any purpose,
(i) the security to be taken by the lender for the repayment of loans made for that purpose,
(ii) the terms of repayment and other terms, including provisions in respect of insurance, on which loans made for that purpose are to be made, and
(iii) the maximum rate of interest payable by a farmer or farm products marketing cooperative or the manner of determining that maximum rate;
(b.1) prescribing, for the purposes of paragraph 4(1)(c), the purpose for which the livestock is kept or the minimum period that the livestock must remain in the possession of the farmer;
(b.2) fixing percentages for the purposes of subsections 4(1) and 6(1) and paragraphs 9(a) and (b);
(b.3) fixing amounts for the purposes of paragraphs 4(3)(c) and 6(2)(c), subsection 6(3) and section 7;
(c) prescribing that in the event of actual or impending default in the repayment of a loan the lender may, with the approval of the Minister and the farmer or farm products marketing cooperative, alter or revise by way of an extension of time or otherwise any of the terms of the loan, or any agreement in connection therewith, and that an alteration or revision shall not discharge the liability of the Minister in respect thereof under this Act;
(d) prescribing, in the event of default in the repayment of a loan, the legal or other measures to be taken by the lender and the procedure to be followed for the collection of the amount of the loan outstanding and the disposal or realization of any security for the repayment thereof held by the lender;
(e) prescribing the method of determination of the amount of loss sustained by a lender as a result of a loan;
(f) prescribing the procedure to be followed by a lender in making a claim for any loss sustained by it as a result of a loan;
(g) prescribing the steps to be taken by a lender to effect collection on behalf of the Minister of any loan in respect of which any payment has been made by the Minister to the lender under this Act and providing that, in the event of neglect by the lender to take such steps, the amount of the payment may be recovered by the Minister;
(h) prescribing the information to be furnished to the Minister by a lender in respect of loans made by it and the time when the information is to be furnished;
(i) prescribing any thing that is by this Act to be prescribed; and
(j) generally for carrying out the purposes and provisions of this Act.
(2) [Repealed, 2009, c. 15, s. 11]
- R.S., 1985, c. 25 (3rd Supp.), s. 15
- 1992, c. 1, s. 67
- 2009, c. 15, s. 11
16 [Repealed, 1992, c. 1, s. 146]
Offences and Punishment
Marginal note:False statements or misuse of loan
17 (1) Every person who makes a statement in an application for a loan that is false in any material respect or who uses the proceeds of a loan for a purpose other than that stated in that person’s application is guilty of an offence and liable on summary conviction to a fine of not more than two thousand dollars.
(2) Where a person is convicted of an offence under subsection (1), there shall be imposed on that person, in addition to any fine, a penalty equal to such amount of the loan made to that person in respect of which the offence was committed as has not been repaid by him, with interest thereon to the date of the conviction.
Marginal note:Payment to lender or Receiver General
(3) The penalty referred to in subsection (2) shall be paid to the lender by which the loan was made or, if payment has been made by the Minister to the lender in respect of the loan under this Act, the penalty shall be paid to the Receiver General, and payment of the penalty discharges the liability of the person to repay the loan.
Marginal note:Limitation period
(4) Proceedings in respect of an offence under this section may be commenced at any time within twelve months after the day on which evidence, sufficient in the opinion of the Minister to justify prosecution for the offence, comes to the Minister’s knowledge, but may not be commenced later than three years after the time the subject-matter of the proceedings arose.
(5) For the purposes of subsection (4), a document purporting to have been issued by the Minister, certifying the day on which the evidence referred to in that subsection came to the knowledge of the Minister, shall be received in evidence as conclusive proof of that fact without proof of the signature or official character of the person appearing to have signed the document and without further proof.
Marginal note:Minister may establish or approve forms
18 The Minister may establish or approve
(a) forms of application for loans; and
(b) forms of notes, agreements, certificates and other documents to be used in connection with loans or necessary or advisable for the effective operation of this Act.
Marginal note:Minister subrogated in lender’s rights
19 (1) Where under this Act the Minister has paid to a lender the amount of any loss sustained by the lender as a result of a loan, the lender shall execute a receipt in favour of the Minister in the form established or approved by the Minister and the Minister is thereupon subrogated in all rights of the lender in respect of the loan.
(2) Without limiting the generality of subsection (1), the subrogation mentioned in that subsection vests in the Minister all rights and powers of the lender in respect of the loan, any judgment concerning the loan obtained by the lender and any security taken by the lender for the repayment of the loan, and the Minister is entitled to exercise all the rights, powers and privileges that the lender had or might exercise in respect of the loan, judgment or security, including the right to commence or continue any action or proceeding, to execute any release, transfer, sale or assignment or in any way to collect, realize or enforce the loan, judgment or security.
Marginal note:Receipt evidence of payment
(3) Any document purporting to be a receipt in the form approved by the Minister and purporting to be signed on behalf of the lender is evidence of the payment by the Minister to the lender under this Act in respect of the loan therein mentioned and of the execution of that document on behalf of the lender.
Marginal note:Repossession and disposal of securities
20 The Minister may enter into an agreement on such terms and conditions as the Minister may deem advisable with a lender or with any person engaged in the manufacture or distribution of tools, implements, apparatus, machinery or machines, whether or not of a kind that is usually affixed to real property, or of any supplies or materials that may be utilized in the making of any improvements to a farm or farm products marketing cooperative pursuant to a loan, or with both any such lender and any such person, to provide for the repossession or disposal of any property on which security is taken by the lender for the repayment of a loan.
Marginal note:Payments out of C.R.F.
21 Any amount payable by the Minister to a lender under this Act and any amount necessary to meet the expenses incurred in the administration of this Act may be paid out of the Consolidated Revenue Fund.
Marginal note:Annual report
22 The Minister shall, not later than June 30 in each year, prepare a report with respect to the administration of this Act during the fiscal year that ended on the preceding March 31 and shall cause a copy of the report to be laid before each House of Parliament on any of the first 15 days on which that House is sitting after the day the Minister completes it.
- R.S., 1985, c. 25 (3rd Supp.), s. 22
- 2009, c. 15, s. 12
Marginal note:Five-year review
22.1 (1) Every five years after the coming into force of this subsection, the Minister shall review the provisions and administration of this Act in consultation with the Minister of Finance.
Marginal note:Tabling of report
(2) The Minister shall cause a copy of the report on the review to be laid before each House of Parliament on any of the first 30 days on which that House is sitting after the report is completed.
- 2009, c. 15, s. 12
23 to 25 [Amendments]
26 to 32 [Amendments]
Coming into Force
Marginal note:Coming into force
Return to footnote *[Note: Act, other than sections 1 and 22 to 25, in force February 1, 1988, see SI/88-31.]
(2) Sections 1 and 22 to 25 shall come into force or be deemed to have come into force on July 1, 1987.
- Date modified: