House of Commons Hansard #221 of the 35th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was environment.

Topics

Peacekeeping Act
Private Members' Business

11:45 a.m.

The Deputy Speaker

Pursuant to the order made Friday, June 16, 1995, the recorded division stands deferred until later this day at 11.30 p.m.

The House proceeded to the consideration of Bill C-86, an act to amend the Canadian Dairy Commission Act, as reported (with amendments) from the committee.

Canadian Dairy Commission Act
Government Orders

June 19th, 1995 / 11:45 a.m.

The Deputy Speaker

There is one motion in amendment standing on the Notice Paper for the report stage of this bill. Motion No. 1 will be debated and voted on.

We are a little ahead of schedule, and apparently the member moving the amendment is on his way to the House. We can suspend for a few minutes, or we can wait for him. The choice is yours, colleagues.

Canadian Dairy Commission Act
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11:45 a.m.

Liberal

Alfonso Gagliano Saint-Léonard, QC

Mr. Speaker, if the member will be arriving shortly we will then suspend for a few minutes, but if we have no news of the member then we should put the question.

Canadian Dairy Commission Act
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11:45 a.m.

The Deputy Speaker

I am told he is on his way. We are a couple of minutes early. He might not have expected we would be doing this.

Does anyone else wish to comment? Could one of the members of the Reform Party indicate how long the member is gong to be?

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11:45 a.m.

Reform

Monte Solberg Medicine Hat, AB

Mr. Speaker, we are just checking on that now. If the House would indulge us and give us a minute or two, I will definitely get back right away and let you know what is going on. We expect him here any moment now.

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11:45 a.m.

The Deputy Speaker

Colleagues, shall we suspend for two or three minutes? If the member is not here in two or three minutes we will come back. Agreed?

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11:45 a.m.

Some hon. members

Agreed.

(The sitting of the House was suspended at 11.57 a.m.)

The House resumed at 12 p.m.

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11:45 a.m.

Reform

Leon Benoit Vegreville, AB

moved:

Motion No. 1

That Bill C-86 be amended by adding after line 43, on page 2, the following new Clause:

"2.1 the Act is amended by adding, after subsection 9(1), the following:

"(1.1) the Commission may exercise the powers described in paragraphs (1)( f ) to (i) only with the agreement of a ) the province where the power is to be exercised, or b ) the Board that has jurisdiction over milk or cream in the province where the power is to be exercised.''''

Mr. Speaker, I am pleased to rise to present an amendment to Bill C-86, which will change the Canadian Dairy Commission Act. I recognize and acknowledge up front that changes are necessary to the act which will allow it to operate within the trade agreements now in place, particularly the NAFTA and the GATT.

While acknowledging that the changes are needed, I have some concerns about Bill C-86. The main concern is that the Canadian Dairy Commission will be allowed to exercise powers which have traditionally belonged to the provinces. Concerns have been expressed by dairy farmers and others in several provinces about the movement into provincial jurisdiction.

While I have concerns about what is in Bill C-86, my larger concern is with the discussions which have taken place since its introduction. What I have heard in the discussions is that the bill will accommodate supply management. It will allow supply management to continue pretty much as it is with some changes. We have heard from the agriculture minister, the parliamentary

secretary to the agriculture minister and dairy groups that because the legislation will accommodate supply management no changes are required. That concerns me. Certainly a lot of dairy farmers who I have spoken to know that changes are coming in supply management. These changes will come not because of legislation passed in Canada but as a result of pressure, particularly from the United States, through the trade agreements NAFTA and GATT.

The discussion surrounding Bill C-86 is that it will fix the problem and allow supply management to continue. Supply management has been working well and this will allow it to continue to work well. As a result of that kind of discussion, many dairy farmers are not aware that change is inevitable. It is important for farmers to acknowledge that, to allow for a reasonable transition period and to move from the present supply management system which will be accommodated under this legislation to a system which will assist them to respond to more competition, particularly through more imports from the United States.

In the discussions the parliamentary secretary to the minister, the minister and even the leaders of some farm groups have said this will help solve an immediate problem but the long term concern is still there because change will come. Many farmers did not get that message. It will mean that the dairy supply managed industry will not have the transition time needed to move from the present system to a system with more competition.

That is my single largest concern surrounding the legislation. The amendment I propose is essential before the bill passes because it will prevent the federal government, once again through its agencies, from interfering in areas of provincial jurisdiction.

I have specific concerns with the bill. I will address those later. My main concern is for the dairy farmers. I am extremely concerned they will not be prepared for the coming changes.

Over the past months I have made trips to different parts of Ontario and I made a point of talking to dairy farmers. This is an area where I feel Reform must do more work. Certainly I need more knowledge in the area. I make a point of talking to dairy farmers about what is going on in their industry. I find from discussing the industry with dairy farmers that different groups of dairy farmers look at the change in different ways.

For example, dairy farmers who are quite close to retirement and maybe plan on farming for five or ten years are asking why the system cannot remain exactly as it is. They do not even want to talk about change. They want us to do everything we can to get the maximum price now and pretend that change is not going to happen. I understand their thinking. Change is intimidating to most people.

These dairy farmers who will only be in business for maybe another five years would do well to keep the system exactly as it is. I understand their concern and acknowledge their view.

Another group of dairy farmers have borrowed a large amount of money to finance quota. They are concerned as we move into a more competitive system. Many are willing to acknowledge it will happen, that change is coming. They do not know whether it will be in five years, ten years, two years or three years. These farmers are concerned because if their quota loses value, which it certainly will when there is more competition allowed into the system, in some cases they will become insolvent. They will not have the equity to back loans. In other cases their retirement, even though it is down the road, is being eroded. This is a concern to them.

Then there are the young farmers coming into the system. Many of them feel they would do well not having to pay for quota at all. That means the competition is not as big a threat to them.

The amendment I have proposed will fix up one of the problems in the bill. It will allow provinces to keep jurisdiction which is rightfully theirs. It does not fix the problems with the change in the industry.

Mammoth changes are coming to the industry. That must be acknowledged. Let us discuss them openly as we discuss this amendment and this bill as it passes through the House.

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12:10 p.m.

Prince Edward—Hastings
Ontario

Liberal

Lyle Vanclief Parliamentary Secretary to Minister of Agriculture and Agri-food

Mr. Speaker, I would like to take a few minutes to comment on the motion that is before the House.

First, I am very disappointed in the lack of knowledge or understanding that the member who has just spoken has concerning the bill that is before us today. He needs a few more trips to some place in Canada where there is supply management and he needs to talk to more producers and more stakeholders in the industry to get a better understanding of it.

I am also disappointed he does not seem to recognize and have faith in the dairy industry that which the rest of us have to adapt to the changes that the dairy industry does know are happening. It is addressing them.

It is very clear that in all sectors of the dairy industry, including the primary producer and the processors, are prepared and are rolling with the punches as the industry evolves not only here in Canada but throughout the world.

The bill before the House does absolutely nothing to change the role and the participation at the present time. Reaching consensus on any major Canadian industry initiative, whether it is in the dairy industry or wherever, is always difficult. Reach-

ing unanimity is even more difficult but that is what has happened with this bill.

The representatives of 26,000 dairy farmers and some 300 processors and marketers have clearly voiced their strong support for the bill. I remind the House that the value of this industry to Canada is $8 billion a year.

The members of the national Canadian milk supply management committee, provincial governments and the milk marketing boards and agencies throughout Canada have agreed to all aspects of the bill. I find it very contradictory for the member to stand in this place, representing a party which continually says that the industry should be able to adapt the way the industry wants, and give a contradictory message. That is exactly what this bill does today. It is an industry decision.

None of the parties involved, and this shows the distance of the member from the issue we are discussing, agrees with this motion. The parties have been to the standing committee. None of the parties involved in this have asked for this.

The administration of pricing and the pooling of milk and of returns by the Canadian Dairy Commission on behalf of the producers requires legislation dovetailing certain provincial and federal powers. There is absolutely no infringement on provincial authority involved in this legislation.

Most provinces currently have legislation allowing milk pricing and pooling within their boundaries. Bill C-86 has absolutely no effect on current provincial powers.

To duplicate the equity which the current levy system provides to the new national pooling system, similar powers must be provided for milk sold across provincial borders and that is interprovincial movement of milk and for export.

There are four points in the bill. The first is the bill provides the power to establish and operate a pool or pools. The second is the power to establish the price of the milk or cream to be included in the pool.

The third is the power to collect the returns from the milk or cream to be pooled. The fourth is the power to establish and operate a special program that will enable processors and further processors to obtain milk or milk components at special prices.

Only the last of the powers is subject to formal agreement between the Canadian Dairy Commission and the provincial milk marketing boards. While the other three powers will be delegated to the provincial authorities under the new pricing and pooling system they are and should remain strictly within federal jurisdiction.

The legislative changes replicate the same federal-provincial power sharing now in effect through the levy system and the special assistance program for processors and further processors. The bill will allow maintenance of the dairy sector's current successful, effective and equitable framework for the orderly marketing of milk and dairy products in Canada.

In closing I emphasize to the member and to other members in the House that the motion would not represent a change from what exists at the present time. It certainly would not be what the industry asked for. I remind the member to touch base closer with the industry so that he can assist us in doing exactly what he keeps asking us to do: provide the industry with what it wants.

More formal agreements between the federal and provincial governments would only be further restrictions on the dairy industry which is not our wish. Our wish is to do what is wanted by the Canadian milk supply management committee which represents the total industry. That is what the bill does.

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12:15 p.m.

Bloc

Jean-Guy Chrétien Frontenac, QC

Mr. Speaker, it is with pleasure that I rise this afternoon to discuss Bill C-86 and more specifically the amendment proposed by my colleague, the hon. member for Vegreville.

First I would like to make a statement that contradicts my colleague's assertions about supply management. When you want to fill a glass with water, it's easy, you turn on the tap. If you want the glass to be filled right to the brim, you take care to turn off the tap just at the right moment for the glass to be filled up; if you only want half a glass, you turn off the tap when the water reaches halfway.

In the early 1970s, farmers, provincial governments and processors got together and introduced what is now generally referred to as supply management. Regulated supply management in the dairy industry is profitable for all levels. First of all it is profitable for the farmers, who are the base of the dairy pyramid.

Previously, our producers found it much more advantageous to produce milk in May, June and July, when their herds were at pasture. In those three months they could make a better profit on their milk while in the winter it was less profitable, more costly, to produce milk. The result was that consumers and processors ran short of the raw material, milk, that was needed for a full year, so that there were periods when there were no fresh dairy products the way we always have now.

Today dairy producers are assured steady income throughout the year, and not just for one defined portion of the year. Consumers can get fresh butter and cheese every day, thanks to competent management of dairy production. And processors can run their plants all year round and not just for a few months.

I have to say to my colleague from Vegreville, who has visited dairy producers in southern Ontario who want to keep the existing arrangement, that this is not in compliance with the agreements we have signed with our international partners.

We are not in compliance with our GATT commitments and we have to modernize, we have to position ourselves by the start of August to respect the agreements signed by the Canadian government with the 140 other GATT members.

The amendment moved by the hon. member for Vegreville does not, given the present system, constitute a change that gives more powers to provinces, as its wording might suggest at first glance. Given the system as we know it, this amendment would simply limit the effectiveness of the consultation process that exists at the present time through the Canadian Milk Supply Management Committee.

Currently industrial milk is managed by the Canadian Milk Supply Management Committee. The committee is made up of the chairmen of all the provincial milk marketing boards. The Canadian Dairy Commission just chairs the committee. The committee operates on a consensus basis and in case of dispute on any point that requires unanimity, the budget for example, a preliminary management committee will be struck.

If consensus is still not possible after three meetings of this committee, the majority decides. As in any good family-you know this, Mr. Speaker, you are the father of a family-there comes a time when someone has to wear the trousers and make the decisions. If after three meetings unanimity is not possible, the majority decides. In no case does the Canadian Dairy Commission have a right of veto.

Moreover, it is important to point out that the Canadian Milk Supply Management Committee has never, in living memory, failed to reach agreement. That means that the Canadian Dairy Commission cannot impose its views on representatives of the provincial boards. So why include in the bill that their agreement is necessary?

There are some other anomalies in the wording of this amendment. It refers to amending a clause affecting the Canadian Dairy Commission. That commission has jurisdiction over industrial milk only, while the provinces are responsible for fluid milk.

The proposed amendment means that the Canadian Dairy Commission can exercise certain powers only with the agreement of the provinces in which the power is to be exercised, but the provinces have no say with regard to industrial milk. Most importantly, when the amendment refers to agreement by the province, it does not seem to take into account the fact that the provinces do not sit on the Canadian Milk Supply Management Committee.

Provincial representation is provided through the provincial marketing boards. Thus paragraph (a) of the amendment adds nothing to Bill C-86, because it refers to a level of government that, under the present system, has no direct jurisdiction. Since the agreement needed under paragraph (a) of the amendment will be that of the marketing boards, we now question whether paragraph (b) of the amendment is relevant.

In my opinion, there is even a problem of interpretation with the bill itself and with the principle underlying the amendment; since the Canadian Milk Supply Management Committee operates by consensus, why include in the bill that the commission can exercise the powers mentioned therein only with the agreement of the boards?

Even if the provinces had jurisdiction in the area to which the amendment refers, the amendment's reference to either the provinces or the boards would not succeed in achieving a majority whereas, at present, as I was saying, the committee operates on consensus.

For these reasons, we of the Bloc Quebecois would ask our colleagues to oppose this amendment proposed to us this morning by the hon. member from Vegreville, who represents the Reform Party on the agriculture committee.

Overall, maintaining the system as it now operates beyond August 1 would be illegal. The government, in consultation with the provinces, reached agreements with the vast majority of them, with the result that today six provinces out of nine participate in milk marketing. Six provinces agreed to sign the memorandum of agreement. Those six provinces, including two important ones, Quebec and Ontario, produce 82 per cent of all the milk in Canada.

At present three provinces have signed partial agreements, but on very specific points, still hesitating to jump in with the six other provinces. They are the three western provinces: Alberta, Saskatchewan and British Columbia, which together produce 18 per cent of Canada's milk, an average of 6 per cent each, if we do a very simple calculation.

I am delighted that in 13 or 14 months at the outside, milk producers in all parts of Canada will be paid a single price for their milk. There will be no more discrimination between industrial milk and fluid milk.

You know, Mr. Speaker, right now there is still a discrepancy of more than 10 per cent between prices for these two types of milk. The odd thing is that it is often the same cow that produces the milk. One day she produces fluid milk, the next day industrial milk; one day that cow is 10 per cent more profitable, the next day she is being milked at a 10 per cent loss. You have the same standards for cleanliness, the same care, the same cooler, or ball tank, of milk. You have the same cows, the same

dairy producer, of course-and there is a 10 per cent difference. That is unaccceptable.

If we go back 30 or 40 years, it was logical and even acceptable that there be a 10 per cent discrepancy because fluid milk producers had to be much more careful, they had to produce 12 months every year, and they were subject to supply management: if they produced too much milk, they could not sell it.

In closing, then, I ask my colleagues in the Bloc Quebecois to oppose the Reform Party's amendment. In fact, I have just learned that the party in power does not agreee to this amendment either.

Thank you, Mr. Speaker, for your careful attention to my remarks.

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12:30 p.m.

Reform

Elwin Hermanson Kindersley—Lloydminster, SK

Mr. Speaker, I rise today to address Bill C-86, the act to amend the Dairy Commission Act.

This bill is significant because it provides for the replacement of the existing system of levies with a system of pooling market returns from the different classes of milk. The government claims the move to a pooling system will maintain equity among producers and will be consistent with Canada's international trade agreements, NAFTA and GATT.

Changes are needed to allow supply management to continue while meeting the requirement of our agreements. For this reason my colleagues and I can support the stated purpose of the legislation.

We have talked to dairy farmers and others in the industry and they have said they feel the legislation is necessary to allow supply management to continue under GATT and NAFTA. For this reason we can at least support the intent of the legislation.

We do have some major concern with clause 2, which affects clause 9 of the Dairy Commission Act. This bill extends the powers of the Canadian Dairy Commission and could possibly diminish the authority given to the provinces under the original act. Therefore to guard against this possible erosion, my colleague from Vegreville has proposed an amendment which will affect clause 9 of the Dairy Commission Act.

There is a problem in supply management in maintaining the status quo. With respect to supply management, change is inevitable. We have already seen change and nothing stands still in the face of time and advancement. Dairy farmers will be forced to compete more and more with American farmers and the odds are change will come sooner than the Liberal government is prepared to admit.

I am not saying this is what I want, but this is what reality tells us. The rules are changing and dairy farmers will need transition time in order to adapt to more open trade in the future. This bill will allow the supply managed system to continue for some time but there are nagging doubts as to the longevity of the current system if we do not consider changes.

Members of the Canadian Dairy Commission claim this bill properly reflects the changes affecting dairy farmers, but what the bill actually does is maintain the status quo for now. Given that a change to supply management is inevitable, there will be a problem over the long run.

The message the government has been presenting along with the legislation concerns us. I want to speak briefly about a concern with Bill C-86 from the discussions we have had with the minister of agriculture, the parliamentary secretary to the minister, some farm groups and some dairy farmers we have had the opportunity to meet with.

The legislation will allow supply management in the dairy industry to continue in a form quite similar to the present system. This does not mean supply management will continue in this form forever. Several trade issues may lead to more direct competition from the U.S. by allowing more access to dairy products from the Americans.

Before I begin discussing trade issues which could have a substantial impact on our present supply management system, I will make one thing very clear to the House. I am not talking about these issues because I want to see the demise of supply management or because Reform wants to see the demise of supply management. We are discussing these issues because they could have a dramatic impact on the dairy industry, and this discussion will provide an important service to the dairy farmers and others in the industry. Just because change will be difficult and is not wanted does not mean it should not be discussed.

Reformers have had enough courage to talk about probable change while the minister and the parliamentary secretary and even leaders of the dairy organizations publicly pretend the present system will exist indefinitely. This sends a dangerous message to dairy farmers that they can be protected against further competition, particularly from the American dairy farmers. This was the message the previous Conservative government gave to dairy farmers. It said article XI of GATT will not be touched under the new arrangements it was negotiating, and several Liberals echoed that. The NDP said it would not let anybody stand in the way of article XI. None of them could carry out that promise because it was not feasible.

I want to talk about why some change is inevitable and why it may be sooner than later. NAFTA began as an agreement between Canada and the United States. The deal is already being expanded now to include Chile and other countries. The world is forming into international trade blocks and we cannot be

certain that our supply managed industries will be totally isolated from new arrangements being negotiated.

What must the government do? It must acknowledge there is a high probability of more access for American dairy products, therefore a move to more competition. The government must help ease diary farmers' legitimate fears that Americans will not compete fairly unless they are forced to through tough action by the Canadian government

We need a government that stands up for our producers and will not be bowled over by the Americans. We need to make the commitment to our dairy farmers that our government will stand with them.

We must start working toward levelling the playing field between Canada and the U.S. before more competition occurs. Now is the time to set the rules for the new economy. We should not go into this blindfolded and not prepared to deal with the inevitable consequences of relaxed trading agreements with our trading partners.

We must recognize there are different concerns about change to the supply management system among different groups of dairy farmers. They are not homogeneous. Each group must be listened to and asked for recommendations on how to deal with problems which will result from the move to competition for more imported products.

My colleague from Vegreville has put forward an amendment to the bill before us today in report stage. We have spoken to dairy producers and many in the west have expressed concern with certain aspects of the bill. Clause 2 of Bill C-86 extends the powers of the Canadian Dairy Commission which could possibly limit authority of the provinces. That is a concern. The proposed amendments appear to give the CDC very wide new powers. They appear to include much wider powers than would be needed to address the reduction of export subsidies and the provision for national pooling of milk returns. Though delegated administrative functions, the amendments do not necessarily reflect the stated objectives of the CDC to delegate all these powers to provincial boards by way of agreement.

Therefore to prevent this from taking place the motion put forward would make the proposed new statutory powers of the CDC subject to agreement from the province or the board. I think that is very important. I hope hon. members can see the merits of this motion and that they will support it.

My colleagues and I are supporting the legislation despite the fact we feel it is not always sending the right message to supply managed farmers. However, we cannot argue with what the industry and the majority of farmers want.

When change does come we will have to take into account older dairy producers who are close to retirement who want to hold their quota and make sure things stay the same while they are still in the industry, and younger producers who may have borrowed money and bought quota at high prices. Their equity is tied up in their share of the quota. We need to consider consumers, those who consume the products dairy farmers so adequately supply.

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12:35 p.m.

Prince Edward—Hastings
Ontario

Liberal

Lyle Vanclief Parliamentary Secretary to Minister of Agriculture and Agri-food

Mr. Speaker, on a point of order.

We all know the importance of moving the bill through the House for the dairy industry and the unanimity out there. In the spirit of co-operation this side of the House showed a few minutes ago to get debate on the bill, I wonder if there would be unanimous consent to move right to third reading to move this along for the good of the Canadian dairy industry.

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12:35 p.m.

The Deputy Speaker

Is there unanimous consent to move to third reading?