The federal government is sending mixed messages about risk at Farm
Credit Canada.
While Agriculture Minister Gerry Ritz says there is no risk to
taxpayers and he wants the FCC to loan more, not less, money, the government
has called for a risk review by the Office of the Superintendent of Financial
Institutions.
Thirty years ago the FCC needed a bailout that cost taxpayers about
$2.5 billion because the crown corporation had been too aggressive in lending
to farmers.
Now it holds loans worth more than $20 billion after two decades of
The Office of the Superintendent of Financial Institutions (OSFI) says
only that its report will go to the finance and agriculture departments.
Finance Minister Jim Flaherty has been consistently tightening lending
terms for mortgages, so it would be consistent if he’s preparing to tighten
lending terms for FCC.
Ritz said producers are being well served by Farm Credit Canada and
said ``they are constantly under pressure from the chartered banks and credit
unions to do less, not more.''
``I'm here to say very publicly that I expect Farm Credit (Canada) to
continue to play the dynamic role they play in the farm sector.''
Ritz said it is possible the FCC's role in agriculture could expand in
the future, but he didn't say how.
``We want to assure Canadians that even in doing that (backing FCC
loans) they don't have money at risk."
Write it down, folks. You will want to remind Ritz and the Harper government come election time, which is just about when I figure FCC will be in the red.
