Fisheries Improvement Loans Act

An Act respecting loans to assist fishermen engaged in a primary fishing enterprise Short title This Act may be cited as the Fisheries Improvement Loans Act. Definitions In this Act, application means an application for a guaranteed loan; (Version anglaise seulement) borrower means a fisherman to whom a guaranteed loan has been made; (emprunteur) engine means a steam or an internal combustion engine and includes the clutch, reduction gears, shaft, propeller, control and such accessories as properly form part of a mechanism for the propulsion of a fishing vessel; (machines) fish includes shellfish, crustaceans and all forms of aquatic life whether animal or vegetable; (poisson) fisherman means a person who has or intends to acquire a prescribed interest in a fishing vessel or a proprietory share in a fishing vessel, or a person who has a prescribed interest in a weir, or similar fish catching or trapping device, that is affixed to the ground, or a proprietory share in such a weir or similar fish catching or trapping device, and whose principal occupation is participation in a primary fishing enterprise; (pêcheur) fishing equipment means equipment of a prescribed class or kind used in connection with a primary fishing enterprise but does not include a shore installation; (matériel de pêche) fishing vessel means any ship or boat or any other description of a vessel, for use in a primary fishing enterprise, that has an engine for its propulsion, and includes the equipment affixed thereto for use in the operation thereof but does not include prescribed electronic equipment; (navire de pêche) guaranteed loan means a loan made in accordance with the requirements of section 3; (prêt garanti) lender means a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act, a credit union, caisse populaire or other cooperative credit society that is designated by the Minister on the application of that society as a lender for the purposes of this Act, and a corporation that carries on the business of a trust company within the meaning of the Trust Companies Act, the business of a loan company within the meaning of the Loan Companies Act or the business of insurance within the meaning of the Canadian and British Insurance Companies Act, and that is designated by the Minister on the application of that corporation as a lender for the purposes of this Act; (prêteur) Minister means the Minister of Fisheries and Oceans; (ministre) prescribed means prescribed by regulation; (Version anglaise seulement) primary fishing enterprise means an enterprise that is carried on for the purpose of catching or trapping fish for sale, and does not include the processing of fish except as prescribed; (entreprise de pêche primaire) shore installation means structures, appliances or machinery affixed to the ground of a prescribed class or kind used in connection with a primary fishing enterprise, but does not include fishing equipment. (installations au sol) Minister to pay losses of lenders The Minister shall, subject to this Act, pay to a lender the amount of loss sustained by it as a result of a loan made to a fisherman pursuant to an application by the fisherman in any case where the application stated that the loan was required by the fisherman for any of the following purposes: the purchase or construction of a fishing vessel, the purchase or construction of fishing equipment, the major repair or major overhaul of a fishing vessel or its hull, superstructure or engine, the purchase or construction of a shore installation, the purchase, construction, repair or alteration of or making of additions to any building used or to be used in carrying on a primary fishing enterprise, or any prescribed development or improvement of a primary fishing enterprise; the application was in prescribed form and was signed by the fisherman making the application; a responsible officer of the lender certified that he had scrutinized and checked the application for the loan with the care required by the lender in the conduct of its ordinary business; the aggregate of the principal amount of the loan and the amount that is owing in respect of previous guaranteed loans that were made to the borrower, or to the borrower and all other fishermen with whom the borrower is associated in the same primary fishing enterprise, if made in respect of that primary fishing enterprise, and that is disclosed in the application, or of which the lender had knowledge, did not exceed one hundred and fifty thousand dollars; the loan was repayable in full by the terms thereof in not more than fifteen years; no fee, service charge or charge of any kind other than simple interest at the rate prescribed and a prescribed charge for insurance was, by the terms of the loan, payable to the lender in respect of the loan as long as the fisherman was not in default on the loan; repayment of the loan was secured in prescribed manner; the loan was made on such terms and in accordance with such provisions in addition to those specified in paragraphs (a) to (g) as may be prescribed; and the loan was made prior to the termination of the liability of the Minister under section 5 or 6. Minister need not pay if non-compliance The Minister is not liable to pay any amount under section 3 with respect to any loan made after June 28, 1983 if the lender has failed to comply with any regulation made pursuant to this Act respecting the registration of the loan, the making of reports in respect of the loan or the procedure to be followed in making a claim for loss in respect of the loan and, where the Minister decides not to pay, the Minister shall so notify the lender by notice in writing to the lender’s head office. Termination of liability The Minister may, with the approval of the Governor in Council, by notice in writing to the head office of a lender terminate the Minister’s liability to the lender under this Act with respect to guaranteed loans made by the lender after a day fixed by the notice, being a day not less than fourteen days after the date of dispatch of the notice. Termination by proclamation The Governor in Council may by proclamation terminate the liability of the Minister in respect of guaranteed loans made in any locality for any of the purposes specified by or under this Act after a day fixed by the proclamation, being a day not less than fourteen days after the publication of the proclamation in the Canada Gazette. Revocation of termination Where a proclamation has been issued under subsection (1) terminating the liability of the Minister in respect of any guaranteed loans, the Governor in Council may by further proclamation revoke the termination in respect of any of those loans. Limitation of Minister’s liability The Minister is not liable under this Act to pay to a lender, in respect of losses sustained by it as a result of guaranteed loans made by it after September 12, 1968, a total amount in excess of ninety per cent of that part of the aggregate principal amount of the guaranteed loans made by the lender that does not exceed one hundred and twenty-five thousand dollars; fifty per cent of that part of the aggregate principal amount of the guaranteed loans made by the lender that exceeds one hundred and twenty-five thousand dollars but does not exceed two hundred and fifty thousand dollars; and ten per cent of that part of the aggregate principal amount of the guaranteed loans made by the lender that exceeds two hundred and fifty thousand dollars. Further limitation of liability The Minister is not liable under this Act to make any payment to a lender in respect of loss sustained by it as a result of a guaranteed loan made during the period commencing on July 1, 1983 and ending on June 30, 1985, after the aggregate principal amount of the guaranteed loans made by all lenders during that period exceeds one hundred million dollars; or made during the period commencing on July 1, 1985 and ending on June 30, 1987, after the aggregate principal amount of the guaranteed loans made by all lenders during that period exceeds thirty million dollars. Idem The Minister is not liable under this Act to make a payment to any lender in respect of a guaranteed loan made after June 30, 1987. Regulations The Governor in Council may, subject to subsection (2), on the recommendation of the Minister, make regulations prescribing anything that, by this Act, is to be prescribed by regulation; defining for the purposes of this Act the expressions “principal occupation”, “hull” and “superstructure”, “repair”, “alteration” and “additions”, and “major” in relation to “repair” and “overhaul”, and “responsible officer of the lender”; prescribing the forms of receipts, notes and documents to be used in connection with the guaranteed loans or for the effective operation of this Act; respecting the registration of guaranteed loans; providing, notwithstanding anything to the contrary in this Act, that in the event of impending or actual default in the repayment of a guaranteed loan the lender may with the approval of the borrower alter or revise such of the terms of the guaranteed loan or any document connected therewith as are prescribed; prescribing, in the event of default in the repayment of a guaranteed 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; prescribing the method of determination of the amount of any loss sustained by a lender as a result of a guaranteed loan; prescribing the procedure to be followed by a lender in making a claim for any loss sustained by it as a result of a guaranteed loan; prescribing the steps to be taken by a lender to effect collection on behalf of the Minister of any guaranteed loan in respect of which payment has been made by the Minister to the lender under this Act, and to provide that on failure by the lender to take such steps the amount of the payment may be recovered by the Minister; requiring reports to be made periodically to the Minister by a lender in respect of guaranteed loans; and generally for carrying the purposes and provisions of this Act into effect. Regulations re certain terms A regulation by the Governor in Council under subsection (1) respecting a rate of interest that may be charged as a term on which a guaranteed loan is to be made shall be made on the recommendation of the Minister and the Minister of Finance. Effect of alteration on Minister’s liability Where any of the terms of a guaranteed loan or any document connected therewith have been altered or revised under paragraph (1)(e), the alteration or revision does not discharge the liability of the Minister in respect of the guaranteed loan. Bank security Notwithstanding anything in the Bank Act or any other Act of Parliament, if a bank makes a guaranteed loan in respect of which it is required by regulation to take security on real or personal property, the bank may at the time of making the loan take as security for the repayment thereof and the payment of interest thereon, a mortgage or hypothec on real or personal property whether or not all or part of the proceeds of the guaranteed loan are to be expended in respect thereof, or an assignment of the rights and interest of a purchaser under an agreement for sale of real or personal property, or a lien or conditional sale contract for personal property, whether or not all or part of the proceeds of the guaranteed loan are to be expended in respect thereof. Rights in respect of security A bank has and may exercise, in respect of any mortgage, hypothec or assignment taken under this Act and the real or personal property affected thereby, all rights and powers that it would have or might exercise if the mortgage, hypothec or assignment had been taken by the bank by way of subsequent security under the Bank Act. Meaning of “bank” In this section, bank means a bank or an authorized foreign bank within the meaning of section 2 of the Bank Act. False statements or misuse of loan Every person who makes in an application for a guaranteed loan a statement that is false in any material respect, uses the proceeds of a guaranteed loan for a purpose other than that stated in his application, or while indebted to a lender under a guaranteed loan, without the consent in writing of the lender, encumbers or disposes of any property in respect of which the proceeds of the loan were expended, is guilty of an offence and liable on summary conviction to a fine not exceeding five hundred dollars. Penalty 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 guaranteed 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 payment of the penalty. Payment to lender or Receiver General The penalty referred to in subsection (2) shall be paid to the lender by which the guaranteed loan was made, or, if payment has been made by the Minister to that lender in respect of the guaranteed loan, to the Receiver General, and the payment of the penalty to the lender or the Receiver General under this section discharges the liability of the person so convicted to pay the loan. Minister subrogated in lender’s rights 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 guaranteed loan, the lender shall execute a receipt in favour of the Minister in prescribed form and the Minister is thereupon subrogated in all rights of the lender in respect of the loan. 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 guaranteed loan, of any judgment concerning the loan obtained by the lender and of 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. Receipt evidence of payment Any document purporting to be a receipt in prescribed form 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 guaranteed loan therein mentioned and of the execution of that document on behalf of the lender. Payment out of C.R.F. The Minister may pay any amount payable to a lender under this Act out of the Consolidated Revenue Fund. Annual report The Minister shall, as soon as possible after the termination of each fiscal year, and in any event within three months thereafter, prepare a report with regard to the administration of this Act during that fiscal year. Report to be laid before Parliament The Minister shall lay before Parliament the report prepared under subsection (1) within fifteen days after it is prepared or, if Parliament is not then sitting, on any of the first fifteen days next thereafter that either House of Parliament is sitting.