A-18 - Act to promote farm improvement

Replaced on 11 August 1988

This document has official status.

chapter A-18

Act to promote farm improvement

Chapter A-18 is replaced by the Act respecting farm financing (chapter F-1.2). (1987, c. 86, s. 153).

1987, c. 86, s. 153.

1. The Office du crédit agricole du Québec shall have charge of the carrying out of this act.

R. S. 1964, c. 109, s. 1; 1977, c. 5, s. 14.

DIVISION I DEFINITIONS

2. In this act, unless the context indicates a different meaning, the following expressions and words mean and designate:

(a)  “agriculture” : the cultivation of the soil or the raising of livestock;

(b)  “farm operator” : any physical person whose principal occupation is agriculture;

(c)  “farmer” : any physical person who is the owner or lessee of a farm and whose principal occupation is agriculture; it also designates, in the case of undivided ownership of a farm, several physical persons provided that among them there are one or more farm operators holding at least sixty per cent of the rights of ownership in such farm;

(d)  “aspiring farmer” : any physical person not less than eighteen nor more than forty years of age who, being the owner or lessee of a farm, practises farming without making it his principal occupation and undertakes to make it his principal occupation within the delays and according to the conditions fixed by regulation;

(e)  “farm” : any immoveable operated or to be operated within a reasonable delay for agricultural purposes;

(f)  “economic farm” : any farm which, taking into account all of its resources, is capable of producing a revenue which enables the operators thereof to pay the operating costs thereof, including maintenance and depreciation, to fulfil their obligations and to support their family adequately;

(g)  “agricultural operations corporation” : a corporation constituted under the Companies Act (chapter C-38), whose principal object and principal activity are the operation of an economic farm which it owns or leases, provided that all of its shareholders are physical persons and that not less than sixty per cent of the issued shares of each class are owned by farm operators among whom the principal occupation of the majority is the operation of such farm;

(h)  “agricultural operations cooperative” : a cooperative governed by the Cooperatives Act (chapter C-67.2) whose main object and principal activity is the operation of an economic farm of which it is the owner or lessee, provided that all of its members are natural persons, that at least sixty per cent of the common shares are owned by farm operators and that the majority of its members are farm operators among whom the principal occupation of the majority is the operation of such farm;

(i)  “agricultural operations partnership” : a partnership within the meaning of the Civil Code whose principal object is the joint operation of an economic farm, of which it is the owner or lessee, which is constituted by a written contract complying with the regulations, which is composed of physical persons and in which at least sixty per cent of the interests are owned by farm operators among whom the principal occupation of the majority is the operation of such farm;

(j)  “joint borrowers” : several physical persons to whom a loan is granted jointly, who jointly operate an economic farm constituted of the aggregate of the farms of which they are the owners or lessees, while sharing, according to the proportions determined among them, the income from the aggregate of such farms, provided that not less than sixty per cent of the aggregate of the interests in such farm are owned by one or a number of farmers;

(k)  “loan” : any loan contracted in accordance with this act;

(l)  “borrower” : a farmer, an aspiring farmer, an agricultural operations corporation, an agricultural operations cooperative or an agricultural operations partnership to whom a loan is granted, and joint borrowers;

(m)  “union” : any savings and credit union governed by the Savings and Credit Unions Act (chapter C-4);

(n)  “bank” : any bank within the meaning of the Bank Act (Statutes of Canada) or the Québec Savings Banks Act (Statutes of Canada);

(o)  “lender” : any union or bank from which a loan has been obtained;

(p)  “federation” : La Confédération des caisses populaires et d’économie Desjardins du Québec, the Fédération de Montréal des Caisses Desjardins, the Fédération des Caisses d’établissement du Québec, the Fédération des Caisses d’économie du Québec and the Fédération des Caisses d’entraide économique du Québec;

(q)  “regulation” : any regulation made by the Government under this act;

(r)  “loan” : any loan granted in accordance with the provisions of this act.

A holder of a farm under a location ticket or an occupant under a contract for sale made with a veteran under the Veterans’ Land Act (Revised Statutes of Canada, 1970, chapter V-4) shall be deemed an owner for the purposes of this act.

R. S. 1964, c. 109, s. 2; 1965 (1st sess.), c. 40, s. 1; 1969, c. 43, s. 1; 1972, c. 33, s. 1; 1975, c. 34, s. 19; 1975, c. 35, s. 1; 1979, c. 90, s. 3; 1982, c. 26, s. 283.

DIVISION II CONTRIBUTION FOR THE IMPROVEMENT OF FARMS

3. Any bank or credit union may grant to any borrower, for one or more of the purposes mentioned in section 7, a loan which must in no case exceed $200 000.

The same borrower may obtain more than one loan provided that the amount of the last loan he obtains, added to the balance owing by him in principal, by succession or otherwise and determined in the manner provided in section 5, on any other loan, does not exceed $200 000.

Where farmers actually jointly operate an economic farm formed by the aggregate of their farms, they cannot obtain a loan except as joint borrowers.

R. S. 1964, c. 109, s. 3; 1965 (1st sess.), c. 40, s. 3; 1969, c. 43, s. 2; 1972, c. 33, s. 2; 1975, c. 35, s. 2; 1978, c. 45, s. 1; 1983, c. 7, s. 1.

4. In the cases and within the limits determined by regulation, the authorization of the Office du crédit agricole du Québec must be obtained prior to the granting of a loan.

The authorization required under the first paragraph is granted by any person designated for that purpose by the Office.

1975, c. 35, s. 2; 1977, c. 5, s. 14; 1978, c. 45, s. 2.

5. The total amount owing by a borrower under this Act must at no time exceed $200 000 in principal, except where the excess is the result of debts devolved to him by succession subsequently to the last loan contracted by him that he has not repaid in full.

1975, c. 35, s. 2; 1978, c. 45, s. 3; 1983, c. 7, s. 2.

5.1. Where the borrower is a farmer or an aspiring farmer, the maximum amount of $200 000 contemplated in section 5 is established by taking into account

(1)  the balance owing by him personnally on any other loan he has obtained or of which he has assumed payment; and

(2)  his relative share in the balance of any other loan he has obtained jointly with any other person or of which he has assumed payment in the same manner.

1983, c. 7, s. 2.

5.2. In the case of joint borrowers or undivided owners considered as one farmer, the maximum amount of $200 000 contemplated in section 5 is established by taking into account

(1)  the balance owing by them on any other loan they have obtained in that capacity or of which they have assumed payment;

(2)  the balance owing by each of them on every other loan he has obtained personally or of which he has assumed payment in the same manner; and

(3)  the relative share in the balance of any other loan obtained by each of them jointly with any other person or of which he has assumed payment in the same manner.

1983, c. 7, s. 2.

6. The Government is authorized to reimburse to a borrower who meets the criteria of need established by regulation, in the cases and according to the terms and conditions provided by regulation, an amount equal to the interest at three per cent on a sum not exceeding $15 000 owed in capital on one or several loans.

1975, c. 35, s. 2; 1977, c. 5, s. 14; 1978, c. 45, s. 4.

7. A loan may be granted for one or more of the following purposes:

(1)  improvement of the land;

(2)  purchase or repair of farm implements, agricultural tools or machinery and farm equipment, including a farm tractor and any other motor vehicle authorized by regulation;

(3)  purchase of breeding stock;

(4)  purchase, erection or improvement of farm buildings;

(5)  construction and organization of a fattening station;

(6)  installation or improvement of a drinking-water supply system;

(7)  installation or improvement of electric wiring;

(8)  purchase of contingents and quotas in the cases and according to the conditions provided for by regulation;

(9)  purchase of additional land;

(10)  repayment of the balance on an existing loan in the case provided for in section 10.

One or another of the loan purposes provided for in this section may, for the purposes of its application, be defined or listed in a regulation.

R. S. 1964, c. 109, s. 4; 1965 (1st sess.), c. 40, s. 4; 1969, c. 43, s. 3; 1972, c. 33, s. 3; 1975, c. 35, s. 3; 1978, c. 45, s. 5.

7.1. A loan may also be granted to repay the whole or a part of the balance owing in principal on a loan contracted otherwise than under this Act that was used to pay the price of any purchase contemplated in section 7, provided that

(1)  the application for this loan is submitted to the lender not later than one year from the date of the purchase,

(2)  the amount of the loan being repaid by means of this loan is repayable on demand or not later than one year after the date of the purchase, and that

(3)  the amount of the repayment does not exceed the price of the property acquired by means of the loan.

1983, c. 7, s. 3.

8. Each loan must be evidenced by a note or by an acknowledgement of indebtedness in the tenor prescribed by regulation or by a deed of loan; in addition, the borrower must, in the cases provided for by regulation, furnish to the lender the security specified therein.

When the borrower is the lessee or the emphyteutic lessee of a farm, his lease must comply with the standards prescribed by regulation.

R. S. 1964, c. 109, s. 5; 1965 (1st sess.), c. 40, s. 5; 1969, c. 43, s. 4; 1972, c. 33, s. 4; 1975, c. 35, s. 4.

9. The term of a loan must not exceed ten years, except in the case of a loan for the purchase of additional land or for land improvement by underground drainage, where such term must not exceed fifteen years.

R. S. 1964, c. 109, s. 6; 1965 (1st sess.), c. 40, s. 7; 1969, c. 43, s. 5; 1975, c. 35, s. 5.

DIVISION III PROVISIONS COMMON TO ALL LOANS

10. Any borrower who, on or pursuant to the disposition or expropriation of his farm, resettles on another farm, may obtain a loan for the purpose provided for in subparagraph 10 of the first paragraph of section 7.

R. S. 1964, c. 109, s. 9; 1965 (1st sess.), c. 40, s. 9; 1969, c. 43, s. 6; 1972, c. 33, s. 5; 1975, c. 35, s. 6; 1978, c. 45, s. 6.

11. The rate of interest on any loan must not exceed the maximum fixed by regulation.

R. S. 1964, c. 109, s. 10; 1975, c. 35, s. 7.

12. Every loan contemplated by this act shall be repaid in equal and consecutive instalments which may be, as agreed between the borrower and the lender, monthly, quarterly, semi-annual or annual.

R. S. 1964, c. 109, s. 11.

13. Notwithstanding any inconsistent stipulation, the borrower shall always have the right to repay the capital of his loan, in whole or in part, by anticipation.

R. S. 1964, c. 109, s. 12.

14. No issue, allotment or transfer of shares in an agricultural operations corporation which is a borrower shall be valid without the authorization of the Office du crédit agricole du Québec.

No amendment to the contract constituting an agricultural operations partnership which is a borrower shall be valid without the authorization of the Office.

No issue, allotment, transfer or reimbursement of ordinary shares or common shares, as the case may be, of an agricultural operations cooperative to which a loan is granted is valid without the authorization of the Office.

1969, c. 43, s. 7; 1975, c. 34, s. 19; 1975, c. 35, s. 8; 1977, c. 5, s. 14.

15. The amount repayable by the Government shall be paid to the borrower, every six months; but it shall only be payable to the extent to which the borrower has himself paid the instalments due in principal and interest and to which he continues to fulfil the conditions required to benefit from this act.

No repayment shall be made respecting interest on overdue payments.

R. S. 1964, c. 109, s. 14; 1969, c. 43, s. 9; 1975, c. 35, s. 10; 1977, c. 5, s. 14.

16. Whenever, at the end of the term provided in section 9, a borrower has not met his obligations in full and the lender grants him a delay to pay the balance of the loan, the borrower shall no longer be entitled to the repayment of interest, but the lender shall continue to benefit by the guarantee provided in the first paragraph of section 19 or, as the case may be, by the guarantee contemplated in the third paragraph of the same section.

R. S. 1964, c. 109, s. 15; 1965 (1st sess.), c. 40, s. 10; 1978, c. 49, s. 29.

17. A borrower who obtains a repayment of interest by false statements or on false pretences, or uses the proceeds of the loan or any part thereof for purposes other than those for which the loan was obtained, shall ipso facto forfeit the right to repayment and must return to the Office du crédit agricole du Québec what he has received.

R. S. 1964, c. 109, s. 16; 1969, c. 43, s. 10; 1977, c. 5, s. 14.

18. The Office du crédit agricole du Québec or the lender may make any inquiry respecting a loan application or a loan and visit or inspect property serving as security for a loan at any reasonable time or at any time if it is required, in the circumstances, to protect a claim or the property serving as security for a loan or to ensure that the borrower’s operation is carried on.

The representative or employee designated by the Office or by the lender shall, on request, identify himself and produce a certificate of his capacity issued by the Office or by the lender.

1975, c. 35, s. 11; 1977, c. 5, s. 14; 1986, c. 95, s. 15.

DIVISION IV PARTIAL GUARANTEE BY THE GOVERNMENT OR GUARANTEE BY THE FONDS D’ASSURANCE-PRÊTS AGRICOLES ET FORESTIERS

1978, c. 49, s. 30.

19. The Gouvernement du Québec shall guarantee to the lender the repayment of losses in capital and interest, and the expenses allowable by regulation that are incurred to claim or obtain the payment thereof, resulting from loans contemplated by this act and sustained by

(a)  any bank, up to ten per cent of the total amount of such loans made by such bank;

(b)  any credit union not affiliated with a federation, up to ten per cent of the total amount of such loans made by such union;

(c)  any credit union affiliated with a federation, up to ten per cent of the total amount of such loans made by credit unions affiliated with such federation.

The guarantee contemplated in the first paragraph applies only to loans contracted before 1 August 1978.

The Fonds d’assurance-prêts agricoles et forestiers established under the Act respecting farm-loan insurance and forestry-loan insurance (chapter A-29.1) guarantees to the lender, in conformity with that act, the repayment of losses in principal and interest resulting from loans contracted from the date mentioned in the second paragraph, and of the expenses allowable by regulation under the said act that are incurred to claim or obtain the payment thereof.

Where the Office du crédit agricole du Québec repays, in the name of the Government, a loss resulting from a loan contracted under this act, it is subrogated in the rights of the lender to whom a repayment is so made, up to the amount of such repayment.

The borrower whose default entails the repayment contemplated in the fourth paragraph or, as the case may be, that contemplated in section 17 of the Act respecting farm-loan insurance and forestry-loan insurance, shall not benefit by another loan without the prior consent of the Office.

R. S. 1964, c. 109, s. 17; 1965 (1st sess.), c. 40, s. 11; 1969, c. 43, s. 11; 1975, c. 35, s. 12; 1977, c. 5, s. 14; 1978, c. 49, s. 31.

20. When a loss is repaid by the Government under section 19 or, as the case may be, by the Fonds d’assurance-prêts agricoles et forestiers under the Act respecting farm-loan insurance and forestry-loan insurance, the borrower whose default has entailed such repayment shall no longer be entitled to repayment of interest on any other loan which he has contracted.

1969, c. 43, s. 12; 1977, c. 5, s. 14; 1978, c. 49, s. 32.

DIVISION V CARRYING OUT

21. The Government may:

(a)  define by regulation the expressions “principal occupation”, “principal activity”, “cultivation of the soil” and “raising of livestock” used in section 2;

(b)  make any regulation contemplated in paragraphs d and i of section 2 and in sections 3, 4, 6, 7, 8, 11 and 19;

(c)  fix the accessory or secondary conditions to which the loans are subject, respecting the titles of the borrower, the deeds of loan, the protection of the security and other matters of the same nature and fix that part of the price of purchase or of the cost of the work which must be paid by the borrower otherwise than with the proceeds of a loan when such purchase or work is a purpose of the loan;

(d)  prescribe, by regulation, the forms to be used, the documents and information to be filed and the delay for their filing.

Every regulation made under this Act shall come into force from its publication in the Gazette officielle du Québec or on any later date fixed therein.

R. S. 1964, c. 109, s. 18; 1965 (1st sess.), c. 40, s. 13; 1969, c. 43, s. 13; 1975, c. 35, s. 13.

22. The sums due by reason of the guarantee provided for in the first paragraph of section 19 shall be payable out of the consolidated revenue fund and the other expenses out of the money voted annually for that purpose by the Legislature.

R. S. 1964, c. 109, s. 19; 1978, c. 49, s. 33.

DIVISION VI

This Division ceased to have effect on 17 April 1987.

23. (This section ceased to have effect on 17 April 1987).

1982, c. 21, s. 1; U. K., 1982, c. 11, Sch. B, Part I, s. 33.

REPEAL SCHEDULE

In accordance with section 17 of the Act respecting the consolidation of the statutes (chapter R-3), chapter 109 of the Revised Statutes, 1964, in force on 31 December 1977, is repealed effective from the coming into force of chapter A-18 of the Revised Statutes.