Thank you, Mr. Chairman. I would like to recommend to the committee that we, first of all, consider Bill 7 and then Bill 13 and, if we happen to get through those two, that we continue on with bills 3 and 4.

Thank you, Mr. Chairman. As part of a program of major commercial law reforms, a draft Personal Property Security Act was released to the public and specifically circulated to the legal profession, financial institutions and consumer groups for their input. After considering responses which were received and similar legislation which, by then, had been introduced in Saskatchewan, an updated version of the bill was tabled last spring. The bill which has now been introduced includes a number of changes from the tabled bill.

In this respect, the favourable response of the Standing Committee on Legislation should be acknowledged. In fact, the input from the committee and its advisors was invaluable in the final preparation of the bill before introduction. Also, as suggested in the committee's first report on the tabled bill, a summary of the bill in Inuktitut has now been provided. For the benefit of those Members who were not in attendance at the initial meeting of the Standing Committee on Legislation or the meeting of the standing committee this past Saturday, the purpose of this bill is to replace existing laws with a comprehensive and modern set of rules for lenders and borrowers.

While this bill will not actively promote economic development, it will establish a proper foundation for commercial and consumer lending activities by removing obstacles, creating greater certainty and striking a more fair balance between purchasers, borrowers and lenders. Implementation of the bill will include replacing the present manual registration system with a computer-based system of recording. Right now, it takes approximately a half hour to manually search the name of borrowers to identify those which match the name being searched. A computer-based system will now take seconds to complete a search.

Computerization of the registration system will also allow for the possibility of decentralizing some services which are now available only in Yellowknife. In fact, one of the most significant benefits of passing the act at this time is that it will be much less costly to deal with when dividing the Northwest Territories than with the present manual system. In order for lenders and borrowers to be in the same position after the creation of Nunavut as before, it would now be necessary to duplicate the thousands of manual records in existence at the time. If this act is passed, the cost of duplicating the system will be minimal since it is relatively inexpensive to reproduce a computer data base. Most importantly, both territories would have modern legislation similar to the rest of Canada.

This initiative has prompted only positive feedback. Document registry staff frequently receive calls from either those who are surprised that we do not yet have a Personal Property Security Act in place or enquiries as to when it will be in force. It should be noted that the model act upon which this bill is based was adopted in British Columbia and Alberta in 1990 and has been introduced or passed in New Brunswick, Saskatchewan or Manitoba within the past year.

The proposed bill is lengthy and complex, but no more so than the present law in this area. The present law is set out in a number of very old acts and a great many complex judicial decisions. The system of registration is established by the Document Registry Act, and there is a duplication of registration requirements for certain companies in the Companies Act. Transactions must now be classified by type, for example, as chattel mortgages or conditional sales contracts, even if there is little or no practical difference between the two types of agreements. Rules for registration of priorities vary according to the type of transaction, usually for no apparent reason, and there is often uncertainty with respect to the rights of each lender on default when property is the subject of more than one type of transaction.

In short, the law has evolved in a most unsystematic fashion and has not accommodated changes in consumer and commercial lending practices. This act would replace the present laws and registries with one set of rules and a single registry. Specifically, the act will result in the following improvements:

1. It will no longer be necessary to classify each transaction, as the general term "security agreement" is applied to all transactions which create a security interest;

2. A single set of priority rules will govern all types of security interest, resulting in greater certainty for all parties involved. These rules also establish a fair balance between the interests of borrowers, lenders, secured lenders, unsecured lenders and purchasers;

3. The rights and remedies of secured lenders which apply in the case of default by a borrower are comprehensively set out in the act;

4. The duplication of registration requirements under the Companies Act will be eliminated;

5. As already noted, the computerized registration system will eliminate the time-consuming searches and the delay in receiving search results;

6. With respect to certain goods which can be described by serial number -- automobiles, for example -- it will be possible to conduct searches against a serial number. This is a service which is very frequently requested but which is not possible now because the registry is set up only for searches according to the borrower's name;

7. Since lenders can choose their own term of registration, it will be rare that they will be required to renew the registration;

8. The amount of information available on a search certificate will be much greater than in the present registration system, but the more detailed financial information contained in the agreement between the parties will no longer be available to those who do not have a legitimate interest in the information; and,

9. Delays in the lending process can be reduced by registering a notice of an interest before the security agreement is signed.

Those are the good points of this act. Thank you, Mr. Chairman.

Thank you, Mr. Chairman. I have with me Diane Buckland, the legislative counsel from Justice, and Mr. Gary MacDougall who is the director of legal registries, also with the Department of Justice.

Yes, Mr. Chairman. There is some drafting under way.