Bill C-40 (Historical)

An Act to amend the Canada Grain Act and the Canada Transportation Act

This enactment amends the Canada Grain Act and the Canada Transportation Act to implement a decision of the Dispute Settlement Body of the World Trade Organization relating to the handling and transportation of foreign grain and grain products in Canada.

Canada Grain Act

[Mario Laframboise, Bloc, Argenteuil—Papineau—Mirabel, QC]

Mr. Speaker, I am pleased to speak on behalf of the Bloc Québécois on Bill C-39, An Act to amend the Canada Grain Act. I would like to start by saying that the Bloc Québécois supports the principle of this bill, which would modernize the Canada Grain Act.

We are uncertain about some parts of the bill, though. For example, what would replace payment securities for producers? The Bloc Québécois therefore reserves judgment on the bill. We hope to hear comments from producers, but unfortunately very few of them testified before the Standing Committee on Agriculture and Agri-Food.

In addition, we need to recognize that the bill does not affect Quebec producers directly. We remain vigilant. The reform of the Canadian Grain Commission is taking place in a specific context. The Conservatives are trying to dismantle the marketing mechanisms that protect the interests of producers, such as the Canadian Wheat Board and supply management.

The Conservative government has appointed a friend of the minister to head the Canadian Grain Commission. The Bloc Québécois wonders whether the new commissioner will defend producers' interests or the minister's.

As for the details of the bill, the Bloc Québécois notes that the government is implementing some recommendations of the Standing Committee on Agriculture and Agri-Food, such as modernizing the mandate of the Canadian Grain Commission and eliminating mandatory inward inspection and weighing.

However, the Bloc Québécois is skeptical about the elimination of the Grain Appeal Tribunal and the payment security program, because we do not know what will replace it.

The Bloc Québécois also condemns the fact that the government has not introduced an office of grain farmer advocacy, as the Standing Committee on Agriculture and Agri-Food recommended.

The Canada Grain Act has been amended several times since the early 1970, but not substantially. The legislation was last amended in May 2005 to enable Canada to meet its WTO commitments. During the legislative process, stakeholders called for an amendment to require a comprehensive review of the Canada Grain Act and the Canadian Grain Commission.

On August 1, 2005, clause 2.1 of Bill C-40 came into force, adding section 120.1 to the Canada Grain Act, which requires a review of the Canadian Grain Commission. COMPAS Inc., a consulting firm, was hired to conduct the review, which was based on reviews carried out over the previous six years. COMPAS Inc. held extensive online consultations with industry stakeholders as well as public meetings across the country.

The COMPAS report, which was tabled in the House of Commons and the Senate in September 2006, was referred to the Standing Committee on Agriculture and Agri-Food for review. The committee issued its report in December 2006.

In summary, Bill C-39 amends the Canada Grain Act.

It clarifies the Canadian Grain Commission’s objects; combines terminal elevators and transfer elevators into a single class of elevators called “terminal elevators”; eliminates mandatory inward inspection and weighing as well as some requirements for weigh-overs at elevators; extends the right to require the Commission to determine the grade and dockage of grain at process elevators and grain dealers’ premises; eliminates the Grain Appeal Tribunals; eliminates the Commission’s ability to require security as a condition for obtaining or maintaining a licence; creates additional regulatory powers for the Commission; modifies enforcement provisions and creating certain new offences; and ensures that some of the requirements and procedures set out are clarified and modernized and that certain language is updated.

The bill also amends the Act to amend the Canada Grain Act and the Agriculture and Agri-Food Administrative Monetary Penalties Act and to repeal the Grain Futures Act as well as another act, and includes transitional provisions and coordinating amendments.

It is important for the Bloc Québécois to quickly describe grain production in Quebec.

The grain grown in Quebec is primarily for domestic consumption, especially for feeding Quebec poultry, cattle and hogs.

For these two reasons, producers in Quebec have never felt the need for a marketing system as centralized as the one in western Canada. Marketing in Quebec is governed by the Act respecting the marketing of agricultural, food and fish products. Under that act, the Régie may, on the application of any interested person, designate a person to inspect grain facilities or to grade or inspect grain. After the inspection or grading, the Régie shall issue a grain grading or grain inspection certificate to the interested person.

The Plan conjoint des producteurs de cultures commerciales, which was adopted and implemented in October 1982, gave the federation of Quebec producers of cash crops the means to negotiate the terms and conditions under which certain crops would be sold.

Until very recently, that federation had a fairly limited mandate in respect to the marketing of crops. In 2005, however, two-thirds of the affected producers agreed to the cooperative food-grade wheat marketing regulations—Règlement sur la mise en vente en commun du blé destiné à la consommation humaine—and that marked the beginning of their collective assumption of control over marketing. This was followed by a mandate from the Quebec National Assembly to establish terms and conditions for the sale of other grains, in particular, centralized payment management, the obligatory provision of information about transactions and a floor-price system.

There are more than 11,000 farmers in Quebec who grow and market such grains as oats, wheat, canola, corn, barley and soybeans on nearly a million hectares of land. Total grain production is about four million tonnes, worth a total of $750 million at the farm gate.

Our grains do have some special characteristics and uses. Quebec is especially responsive to niche export markets, such as GMO-free soybeans for human consumption. Quebec oats are also particularly prized in the United States for horse feed.

Bill C-39 obviously makes some changes to the Canadian Grain Commission. I want to turn now to the most important issues for grain producers—issues that were actually already addressed when the parliamentary committee considered the 100 recommendations from COMPAS.

Let us look at the change in the Canadian Grain Commission's mandate. Through this bill, the government would change it in such a way that, in addition to the interests of grain producers, the Commission would also consider the interests of the industry as a whole, including grain processors.

The Canadian Grain Commission’s mandate will be split into two parts. Part one will set out the CGC's core mandate to establish and maintain standards of quality for Canadian grain and regulate grain handling in Canada to ensure a dependable commodity for domestic and export markets. Part two will establish that the CGC shall specifically protect producer interests with respect to deliveries to elevators and grain dealers, access to binding CGC determination of the grade and dockage of grain deliveries, and the allocation of producer cars.

At present, the mandate of the Canadian Grain Commission is to, “in the interests of producers, establish and maintain standards of quality for Canadian grain and regulate grain handling in Canada, to ensure a dependable commodity for domestic and export markets”.

Clause 3 of the bill amends section 13 of the Canada Grain Act by removing the words “in the interests of producers” from the purpose for which “standards of quality for Canadian grain and regulate grain handling in Canada to ensure a dependable commodity for domestic and export markets” are to be established and maintained.

Like the Standing Committee on Agriculture and Agri-food, the Bloc Québécois supports modernization of the Canadian Grain Commission’s mandate. Our party recognizes that the commission must be able to consider broader interests, such as public health, preserving the enviable reputation of Canadian grain producers, and other interests.

Obviously, the Bloc Québécois is sensitive to the concerns of grain producers who believe that Bill C-39 is drafted in such a way as to reduce the protection it affords grain producers. That was one of the questions we had and we will pursue it in committee.

The National Farmers Union has told us, for example, that it is essential to preserve the language of the existing Act, which includes the expression “in the interests of producers” to describe the purpose of the Canadian Grain Commission and the standards of quality in the regulations respecting grain handling operations in Canada.

We know that the Conservative government is allergic to collective marketing mechanisms and instruments that enable producers to earn a fair market return. Deregulation and reducing constraints on the free market are key components of their ideology.

Agricultural producers in Quebec and Canada are quite right to distrust this government, which has set its sights on the Canadian Grain Commission and would like to dismantle supply management in the milk, poultry and egg industries.

On the question of the object or mission of the Canadian Grain Commission, the Bloc Québécois would support any amendment proposed in committee that could provide grain producers with satisfactory protection.

For that reason, the Bloc Québécois will be very vigilant. It is important that this bill be sent to committee so we can examine it in depth, to ensure that producers feel properly protected. That is what is important to the Bloc Québécois. If the producers have doubts about this bill, the Conservatives will find the Bloc Québécois standing up to them.

Obviously governance is going to be an issue with this bill. It is therefore necessary that the Canadian Grain Commission not be politicized. It is important to have a commission in the Canadian quality control system for grain. That is what guarantees the quality of Canadian exports.

The Commission cannot allow itself to be exposed to criticism. It cannot give the impression that its decisions are based on anything other than science and protecting the economic interests in the grain and oilseed supply chain.

It was extremely unwise of the Conservative government to appoint a former Reform Party MP, Elwin Hermanson, to head the Canadian Grain Commission in December 2007. While he has been a grain producer himself, we believe that his close political ties to the present Prime Minister, with whom he sat from 1993 to 1997, cast doubt on his credibility.

It must also be pointed out that there are very close ties between Mr. Hermanson and the present Minister of Agriculture and Agri-food. According to the minister’s website, the minister was Mr. Hermanson's campaign manager in 1993. He was even Mr. Hermanson's constituency office coordinator from 1993 to 1997. The close ties between the minister and Mr. Hermanson, the Chief Commissioner of the Canadian Grain Commission, could not be clearer.

Those close ties prompt us to ask the question that is on everyone’s lips: will the new Commissioner of the Canadian Grain Commission stand up for the interests of producers, or the interests of the minister?

Thus, there ought to be an office to defend the rights of grain farmers. As regards the protection of the interests of agricultural producers, the Bloc Québécois deplores the fact that the government rejected the third recommendation of the parliamentary committee, proposing the establishment of an office of grain farmer advocacy that would have reported directly to the Minister of Agriculture and Agri-Food.

The mandate of the office of grain farmer advocacy, whose role would have been similar to that of an ombudsman, would have been to ensure that producers understand their rights under the act, and to defend their interests in disputes with other stakeholders.

Like the parliamentary committee, we think that such an office would have ensured that the interests of producers are defended in disputes with other stakeholders involved, including the Canadian Grain Commission.

We believe that the communication, consultation, liaison and complaint investigation responsibilities assumed by such an office would have helped strengthened Canada's grain quality assurance system.

As for the elimination of grain appeal tribunals, it goes without saying that the Bloc Québécois has a problem with that part of the bill. Let me explain what the bill does. The grain appeal tribunal hears the complaints of grain producers and companies that are not satisfied with the grades given by the Canadian Grain Commission's inspectors. The chair of the tribunal is an authorized grain inspector, but acting at arm's length. The other members of the tribunal come from the grain industry.

The tribunal's position within the Canadian Grain Commission limits its legitimacy and perceived effectiveness.

Clause 14 of the bill proposes to abolish grain appeal tribunals, which are currently established under sections 35 to 38 of the Canada Grain Act.

We understand that, in case of a disagreement over a ruling made by the chief inspector, who is the first level of appeal, grain producers will no longer be able to turn to the grain appeal tribunal. They will have to turn to the regular courts, which is a costly, long and frustrating process.

That is why the Bloc Québécois maintains that the parliamentary committee did not rule on this issue, and notes that the COMPAS report stated that the Canadian Grain Commission's grain appeal tribunal “has earned some plaudits for effectiveness”.

COMPAS continued, saying, “We believe that the tribunal is respected for the role it plays in disputes over grades, even though some stakeholders may have occasionally felt that the office of the Chief Grain Inspector exerted undue influence”.

The Bloc Québécois is waiting for the government to explain this amendment. We think it is important to refer this bill to committee as quickly as possible so that our party can change it, fill in what is missing, and improve it.

With respect to eliminating inspection and mandatory inward weighing, this is what the bill would do. Weighing and inspection of grain is carried out by the Canadian Grain Commission and is mandatory on bulk shipments overseas but not for container movement or for exports to the United States, where these are optional. Inward inspections are the weighing and grading that take place when railcars or trucks arrive at transfer elevators or terminal elevators. The Canadian Grain Commission then provides third-party weighing so as to forestall errors and to provide assurance to producers.

The government is proposing that inward inspections take place only at the request of the shipper, but that outward weighing and shipping remain mandatory. Terminal and transfer elevator operators will be required to allow access to service providers who will do the weighing and inspection.

While the Canadian Grain Commission will no longer be involved in the delivery of this optional service, both shippers and elevator operators will have access to binding Canadian Grain Commission arbitration in the event of dispute over a grain grade.

Like the Standing Committee on Agriculture and Agri-Food, The Bloc Québécois supports optional inward inspection, as proposed by the government. We agree with this provision of the bill because inward inspection is no longer universally required. Such inspection does not seem to be required in the case of grain shipped to the United States, among other destinations, or by container. The cost of this inspection makes Canadian products less competitive. Grain companies, particularly those that ship grain to companies abroad, want to avoid costs that are not essential to their ability to manage their affairs efficiently. According to COMPAS, “half of the cars unloading grain at terminal elevators come from primary elevators belonging to the same company.”

Mandatory outward inspection and weighing of grains is maintained, and this will help protect the reputation of Canada’s grain products at the international level. We must be careful, however. Since inward inspection is optional, this could increase unit costs and prices by decreasing economies of scale. Making it optional would likely put smaller grain companies that do not have a terminal elevator at a disadvantage in terms of competitiveness. Inspection and weighing fees are collected from the farmer at the primary elevator. Optional inward inspection would benefit larger companies that have a terminal elevator by allowing them to avoid payment of the fees and offering a better price to farmers. Grain companies that have a better geographic location will be in a better position to take advantage of mixed shipments.

The Bloc Québécois believes it is important to promote competition in the grain handling system by helping the smaller companies. That is why our party believes that the Canadian Grain Commission must have sufficient funding so that the commission can maintain efficient and timely services for both producers and smaller handlers who need such services for transactional purposes.

What does the bill do in terms of guaranteeing payment for farmers? The Canadian Grain Commission has long been demanding that licensees provide farmers with guaranteed protection in case of bankruptcy. The guarantee can be in the form of security bonds, cash deposits, credit letters, guarantee insurance or payables insurance in sufficient amounts to cover the eligible liabilities, that is, the amount to be paid to the farmers, or any other acceptable financial instrument. All companies must report their eligible liabilities to the Canadian Grain Commission on a monthly basis. In the past, the amount of the guarantee has been enough to cover most of their obligations to the farmers in most cases of bankruptcy, but not all.

According to COMPAS, since 1982 there have been 19 failures of licensed, bonded companies. Of these 19, there are three instances where the payout was less than 100%, one of which was 98.4%. There are two other instances where the CGC paid producers 100% for failures of companies that were not licensed or carrying security. The CGC made payments in addition to or in the absence of security provisions in a total of five cases.

The Bloc Québécois recognizes, as did the Standing Committee on Agriculture and Agri-Food, that modernization of the system requires an effective and flexible mechanism for contractual security for all participants. Because they are at the beginning of the chain, grain producers need to be contractually protected against breakdowns that could occur down the line.

Our party has noted that the federal government does not require eastern Canada's grain industry—or producers of other crops—to participate in similar guarantee programs.

The Bloc Québécois has noticed that the current system has created a great deal of dissatisfaction. For example, the Western Barley Growers Association recommended a study of costs and benefits.

It is therefore important to understand that the Bloc Québécois believes that this bill should be sent to committee quickly because it is important that changes be made in the interest of grain producers.

We need to take a hard look at this position. This bill must be modernized, but in the interest of producers. The Bloc Québécois will see to it that the interests of producers are respected.

Agriculture

[Wayne Easter, Liberal, Parliamentary Secretary to the Minister of Agriculture and Agri-Food (Rural Development)]

Mr. Speaker, the fact is it was the governing party that suggested there be a review of the Canadian Grain Commission when we were doing Bill C-40. The ministers and others have been in discussion with the industry to see what is the best way to proceed and that will happen in due course.

We are doing our job, as we committed ourselves to do when we discussed Bill C-40.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Mr. Speaker, for too long the Liberal government has been ignoring Canadian grain producers.

Bill C-40, which became law on May 19 of this year, legislated an independent and comprehensive review of the Canada Grain Act to be completed within one year of the bill's passing.

Would the Minister of Agriculture please inform the House what action, if any, he has taken to conduct this desperately needed review of the Canada Grain Act?

Act to authorize the Minister of Finance to Make Certain Payments

[The Deputy Speaker]

Order, please. I have the honour to inform the House that a communication has been received as follows:

Mr. Speaker:

I have the honour to inform you that the Honourable Morris Fish, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, signified royal assent by written declaration to the bills listed in the schedule to this letter on the 19th day of May, 2005, at 4:05 p.m.

Yours sincerely,

Barbara Uteck

Secretary to the Governor General

The schedule indicates that royal assent was given to: Bill C-10, an act to amend the Criminal Code (mental disorder) and to make consequential amendments to other acts--Chapter No. 22; Bill C-15, an act to amend the Migratory Birds Convention Act, 1994 and the Canadian Environmental Protection Act, 1999--Chapter No. 23; Bill C-40, an act to amend the Canada Grain Act and the Canada Transportation Act, Chapter No. 24; Bill C-13, an act to amend the Criminal Code, the DNA Identification Act and the National Defence Act, Chapter No. 25; and Bill S-25, an act to amend the act of incorporation of The General Synod of the Anglican Church of Canada.

It is my duty pursuant to Standing Order 38 to inform the House that the question to be raised tonight at the time of adjournment is as follows: the hon. member for Pitt Meadows—Maple Ridge—Mission, Fisheries.

Canada Grain Act

[Paul Steckle, Liberal, Huron—Bruce, ON]

Mr. Speaker, if the House gives its consent, I move:

That Bill C-40, an act to amend the Canada Grain Act and the Canada Transportation Act, as amended, be concurred in at report stage, read a third time and passed.

Credit Ombudsman Act

[Pat Martin, NDP, Winnipeg Centre, MB]

moved for leave to introduce Bill C-389, an act to establish the position and Office of the Credit Ombudsman, who shall be an advocate of the interests of consumers and small businesses in credit matters and who shall investigate and report on the provision, by financial institutions, of consumer and small-business credit on a community basis and on an industry basis, in order to ensure equity in the distribution of credit resources.

Mr. Speaker, I will certainly try to be brief because I know you do not like it when I go on too long, but I was trying to explain the four key elements of my previous bill.

The bill that I have just introduced is an act to establish the office of a credit ombudsman simply because there has been a growing demand for access to credit from people. The greatest evidence of that is the burgeoning growth of the private payday loan operations and Money Marts.

The purpose of the bill is to establish the office of a credit ombudsman to be an advocate for the interests of consumers in all credit matters and to ensure that ordinary Canadians have access to adequate credit when they need it. When the banks really have this obligation and payday loans are having to fill that void, we need an ombudsman to whom Canadians can complain.

(Motions deemed adopted, bill read the first time and printed)

(Bill C-40. On the Order: Government Orders:)

May 12, 2005--the Minister of Agriculture and Agri-Food--report stage and third reading of Bill C-40, an act to amend the Canada Grain Act and the Canada Transportation Act.

Committees of the House

[Paul Steckle, Liberal, Huron—Bruce, ON]

Mr. Speaker, I have the honour to present, in both official languages, the fourth report of the Standing Committee on Agriculture and Agri-Food in accordance with its order of reference on Tuesday, April 19.

The committee has considered Bill C-40, an act to amend the Canada Grain Act and the Canada Transportation Act and agreed on Tuesday, May 10 to report it with an amendment.

Canada Grain Act

[Rob Merrifield, Conservative, Yellowhead, AB]

Madam Speaker, it is a privilege for me to stand on behalf of the residents of Yellowhead on this particular piece of legislation before us, Bill C-40.

I will say right off the top that I am not necessarily opposing this piece of legislation, but I do want to lay before the House some concerns I have as a representative of the people of Yellowhead.

Actually this issue is a little closer to my heart than many in this House, because agriculture has been my profession for as long as I have been in the workplace. My family and I started with a dairy farm and milked close to 100 cows. I had a very modern dairy operation and was very proud of raising my two boys in that situation.

I took very close note of the comments of some of the other members who said that people who pass on an agricultural industry to their children could be charged with child abuse. That is a standard joke, but it is actually a very sobering thought. When one understands what actually is happening with regard to agriculture in communities and ridings like mine, one becomes sober at the thought of what is actually happening down on the farm.

We sold the dairy operation in 1996 and moved on to a beef operation as well as grains and oilseeds. We farm up to 3,000 acres, which is one of the larger farms in the area, and we are very proud of it. It is a wonderful profession. It is one of those professions where one goes to work in the morning, very early, I might add, and does not really worry about what time it is. In fact, quite often we will miss meals and not be too concerned about what hour of the day it is because our whole motivation is not so much about what time we get home in the evening. Our whole motivation is what we can get accomplished during that day.

It is an exciting profession from that aspect. Because of that, a lot of people are drawn to it. If one can be drawn to it and still make a good living, that is a tremendous success, but I want to lay before the House some of the pressures people are facing so that members can understand.

I would like members to realize that in my riding of Yellowhead, in our area of Alberta, we have had a significant number of years of drought. We have had two years of very significant drought and one year of unbelievable pest problems with grasshoppers. They ate absolutely everything that did grow in the midst of the drought. That was devastation.

As has been referred to in other speeches, there was the problem with lack of feed, but there was Hay West and how farmer to farmer actually rallied in this country and sent hay into my riding and ridings around my area to provide some relief. One has to understand that the Hay West project was not necessarily started by a government in power at all; it was initiated farmer to farmer. Farmers understand the pressures and they wanted to help out where they could. That is something that every profession and industry in this country could learn from.

Something else we should also take note of, because it has been mentioned by many of my colleagues, is that the Liberal government has failed farmers. It has failed to understand the pressures and failed to understand that it has to support agriculture.

Before I get into that, I want to explain for members that after the drought and the grasshoppers, we had the BSE issue. The beef industry is a significant part of the primary agriculture of my riding. I cannot explain how dramatically this has impacted my area. I can say that there have been many, many calls to my office from individuals who are beside themselves, who do not know what to do. Some are suicidal. My staff can tell horror stories from over the last couple of years. Some of the calls they received were unbelievably intense. That gives members a perspective of how we are coming at this piece of legislation and the stress that is on it.

Why should the government even protect farming? I think that is a fair question in this House and I believe it is one that our colleagues on the other side have wrestled with, because budget after budget, if one reads between the lines and understands exactly the lack of support that has come forward for agriculture, one gets the sense that the government has no intention of supporting agriculture and would prefer that farmers were out of the industry.

It is unbelievable it would think that way. When we look at the actual number of spinoff jobs that are created for every primary job in agriculture, it is one to seven. It is much different than the oil patch or in the lumber industry, where it is one and four. In small communities or in rural areas where communities grow and thrive on the strength of agriculture, it has immense repercussions to them and the livelihoods of the people who live there.

When bills like this come forward, we get into this whole idea of “Why should we support agriculture?” It is because of that impact. It is also because it is very important as a sovereign nation that we can feed ourselves and continue to do that long into the future.

A lot of Canadians say that we have such a small population compared to our land mass and that they do not believe we will ever go hungry. Therein lies a bit of a problem.

In Europe, it is a little different. Europeans have gone hungry. They support their agriculture to the tune of 75% or more in subsidization.

The United States does it as well. In fact, in the years ahead, if we look at the amount of money the Americans will put into agriculture, they will eclipse the subsidization in Europe. They understand that to be a sovereign nation they must have secure, safe food for their society.

Unfortunately, in Canada the government does not believe that this will be problem. It is a problem. It is something that we have realize, if we lose our agriculture and our agricultural sector.

I have always said that our farmers should be subsidized because they have subsidized low food costs for many years. Farmers do not appreciate going to a mailbox and getting a cheque from a government. That is not the intent. I do not know a farmer who wants to do that. However, farmers want fair value for their product.

This brings me to the legislation, If as a country, we are not prepared to at least support some of the rules so they are fair, so farmers have a fighting chance when it comes to some of the trade issues and fairer value for product, then we have failed them miserably and we have failed society as a whole because of the repercussions of it.

International trade is a major issue. We have talked about the Wheat Board. Many have spoken about its inability to be flexible with regard to allowing farmers to trade internationally on their own, only in western Canada, not in all of Canada.

We have had many repercussions of international trade, particularly with the United States. It has a population of 300 million. We have 30 million. It is 10 times larger. We have a tremendous amount of resources with regard to agriculture that we would like to trade into a market that large. We can compete very easily on a fair and level playing field, and we have a free trade agreement. However, when a neighbour to the south becomes aggressive, whether it is with softwood lumber or with the BSE, which has yet to be proven that it has do with science or health, it is all about politics and bad politics at that, there is a negative repercussion on the agriculture industry and that has some tremendous impacts.

With regard to the legislation we have to ask, why did we not appeal the decision made by the WTO panel? The United States has appealed any decision that went against it. However, when it comes to our side of it, we have been very slack and lax in doing that.

That sends another message to our people down on the farm that we are not prepared to stand behind them and to work for them in an industry with which they are have a tremendous amount of problems and stress. I do not believe that is where Canadians want us to be. Most Canadians want us to look after the farming industry. They have a sense and an understanding that it is an occupation that is worth supporting and worth looking after.

I had the opportunity to be in Taiwan about three weeks ago. We used to trade a tremendous amount of beef with Taiwan before the mad cow issue. In fact, it was about $4 million a month and could progress to about $8 million a month. When I was there, Taiwan had just announced it would open the border to United States beef as of April 16. We argued that if it were to open the border to United States beef, then it would have to come up with a very good reason why not to open it up to Canadian beef.

Not only is our protocol on beef with regard to health and safety better, which the people of Taiwan were somewhat concerned about and that was the reason they had shut the border, but it is a better quality and a better price.Those were three good reasons to open it up and we pressed upon them to do that. I believe that will happen. It is important not just to Taiwan, but it will send a message to all the Pacific Rim countries that it will have major repercussions as far as an agricultural community.

Why do we need that? We have to depend on more countries than just the United States as trading partners. If we are to have a thriving agricultural community and a community that has to compete internationally, then we have to do these things.

Where have we been in the last decade? Not only has the government been trying to shut agriculture down in the country, but it has been retarding farmers from pushing for international trade in other countries. That has been a tremendous failure of the government, and it is unfortunate. Understanding the agriculture community really starts with knowing a bit about it and knowing where people are hurting, then discerning how we can help to create other markets and support the industry.

Diversification on the farm was the call of the age about a decade ago. We knew that to survive in agriculture we needed to diversify. Canada has beef herds, grains and oilseeds and an elk industry, which is another industry that has been badly hurt by international trade.

The elk industry has gone through the BSE crisis just as our cattle industry went through it. The big problem is the government does not understand the impact of chronic wasting disease on the elk industry. However, chronic wasting disease has been looked after and we have not had a case in three or four years. We have to aggressively pursue international markets to get that industry back on its feet.

Our agricultural industry was impacted by mad cow disease through no science whatsoever. What was amazing was when a Liberal member of Parliament went to the association a week ago and said that he knew absolutely nothing about the problems in the elk industry. That amazes me because he is a member of Parliament who sits on the other side of the House, but comes from my province. An article appeared in the Western Producer last week about this.

I get frustrated when I see members of Parliament make decisions on issues that they do not clearly understand and that have major repercussions, especially on an industry that is fragile and in such dire straights. I know how fragile it is because the farm development company, which is a federal banking organization, phoned me at my office and told me that if the border did not open on March 7, many farmers in my riding would be in serious trouble. They would be unable to support their loans throughout the summer. Not only can they not get capital, but they cannot get any support from the government or a government agency which is supposed to be in the business of supporting them.

In defence, I am sure my colleagues on the other side would say that they have been putting billions of dollars into agriculture over the last couple of years. We have to work in conjunction with farmers. A systemic problem has happened, not only over the last couple of years with mad cow disease, but it is a philosophy that has gone on with the Liberal government over the last decade. While it has been in power, it has destroyed the agriculture industry by not promoting it in the way it needs to be promoted or supporting it in the way it needs to be supported on both the international side as well as on the domestic side.

We have seen a shrinking number of farmers right across the country. Small family farms are no longer able to support their livelihoods. They are being forced to sell out to larger ones. The larger corporations are taking over and that is a sobering thought. We should be asking ourselves if that is the direction in which we need to go. Is that a positive direction for Canada as a society, or is it something where we should put measures in to have some checks and balances?

We have to take a serious look at what is in the best interests of Canada and what is in the best interests of the taxpayers of this country, because we are all taxpayers. Some governments will say that the farmers are always asking for more and more money. As I said earlier, I do not believe any farmer wants subsidies. What farmers really want is fair market value for their products. They want a government that will support them in achieving that in the most aggressive ways it can.

Pieces of legislation like this one and rulings from the WTO have got to be dealt with. We will support the bill reluctantly in the sense that it should have been done much more aggressively. We look forward to some of the amendments that we will be able to capture as the bill goes into the committee process. Hopefully coming out of committee we will be able to support the bill in a much more fulsome way.

A motion to adjourn the House under Standing Order 38 deemed to have been moved.

[Ken Epp, Conservative, Edmonton—Sherwood Park, AB]

Madam Speaker, I am privileged to enter this debate on behalf of farmers in our country.

A little known fact is that I grew up on a farm. That is where I learned my love of food. It is also true that the very first dollar I ever earned in my life came from the farm, which they say among young people is significant. They ask, “How did you earn your first dollar?” Well, believe it or not my first dollar was earned by taking over a shed on the farm that my dad said I could have.

We moved to a different place and when we got there, there was this one shed that had nothing but junk in it. It had old wood and old barrels. Among other things, I found a really wonderful antique clock in that shed. That started another love that I have, and that was repairing mechanical clocks. I do that to this day as much as time permits. I still have that clock. It is on the wall in my office at home. I cherish it because of what it represents.

Anyway, I got into the chicken business as a young man. I had to buy the chickens. My dad was interested in not only teaching me a worth ethic but also in making sure that I understood the principles of business. So even though I lived on a farm and the granaries were full of grain, I had to buy the grain from him. He insisted that I keep track of it. Later on when we sold the chickens in the fall, and let people make soup out of them or whatever they did, maybe even Kentucky Fried Chicken, I had to take that money and pay back the debt I had. My father helped me a great deal with that.

At the time, I sort of thought he could have just given me the wheat. However, later on I realized the wisdom that he had in teaching me the principles of business.

I should maybe tell members that in that first year, after looking after all these chickens, my net profit was $6. I will never forget that either. I took them right from the time they were wee, little, itty-bitty guys right out of the hatchery and I looked after them. I will not give the House the graphic details of some of the things that one has to do with little chicks, but sometimes, for example, they get plugged up and one has to unplug them, and I did that. Again, I look back at it now and think that maybe that was part of the preparation of my future life in politics. At any rate, the farm was just an integral part of it.

My father loved farming. He started farming in 1935, when things were really tough in Saskatchewan. There were some really rough years. I remember when I was born, well I do not remember the day I was born, but shortly after, that we were exceptionally poor, but we did not know it because we were so happy. We lived in a wonderful, loving family, with extended family around as well, grandparents and so on. We all stuck together. Even though we did not have money, we had everything else that one would need in life. One of the things that a farm provides is the ability to produce food for the farm family as well. We butchered our own chickens and slaughtered our own animals, and we dressed them right on the farm. We did not have all these fancy abattoirs and all those other things. I remember taking eggs to town and selling them.

My dad told a story. He was part of the credit union movement in Saskatchewan for many years. On his retirement, after serving for many years on various boards with the credit union, he was given some tributes. One of the gentlemen got up and said, “I knew Corny Epp”. My dad's name was Corny, Cornelius actually, but everybody called him Corny, which was his nickname and was not a pejorative term in those years. “I knew Corny Epp when he was an MP”, he said, “Oh, no, he's never been a member of Parliament. I knew him when he was meat peddler”. That is how we made our living. Things were tough, but we just got to work and we did it.

Farmers have been that way throughout the years. They are very innovative. If they cannot buy something they need, they make it. If they cannot fix something that needs fixing because parts are not available or they are too expensive, they improvise. In fact, one of the jokes going around Saskatchewan in those years was that some farmers tied together their machinery with baling wire. They made it work and they survived.

One of the despicable things though that has happened to farmers is that as their costs have gone up dramatically, lo and behold, they have not had the luxury that so many other people in the country have had, and that is the cost of living allowance.

Whether we are talking about members of Parliament or members of other professions, or the profession that I was in, the education profession, we were always contracting and negotiating agreements. We would always put cost of living increases into those agreements. Why? It was because fuel went up and therefore we needed more income, so that we could afford to buy the fuel. Groceries went up, so we needed more money to feed our families. It went on and on like that.

The truth of the matter is that farmers have had just the opposite. It is just amazing, when we think about it, that our agriculture industry in the country is as strong as it is because of the huge challenges that it has had over the last number of years.

I know that the cost of chemicals, pesticides, machinery, fertilizer, and the whole cost of fuel and property taxes, all of these things have gone up dramatically, and yet can the farmer demand a higher price for his product? No, he cannot. He has to take what he can get.

I remember having a number of farmers over the years talk to me, both before I was in politics and since, about the dilemma they face when their costs keep increasing and they land up actually borrowing against their capital equipment. They cannot afford to replace it and decide to make it go one more year. One more year becomes two years, three and four. Finally, they have decrepit old equipment and they do not have enough income to actually replace it. Eventually they get driven out of business. That is not acceptable.

We need to do everything that we possibly can to strengthen the agricultural industry in the country. This Liberal government has done a dreadfully awful job of recognizing the importance of the agricultural industry, and of doing anything proper with it.

It just so happens that our daughter married a farmer in Saskatchewan. When I graduated from university, I moved to Alberta and subsequently that is where our children were born. Then one of our kids goes and moves back to Saskatchewan, and marries a farmer. I thought, well, kid, I wish you well. I hope things go okay.

We went to Regina about a year ago or so. It was the first time that I saw this. Some farmer had rented or bought an old used, probably unusable, 40-foot trailer and painted a big sign on it, and parked it on his field so that visitors from the United States could see it. The sign said, “Welcome to Canada, the country where rapists, murderers and robbers go free, but farmers who sell their own grain go to jail”. Imagine the depth of frustration that illustrates.

I talked to another farmer, also in southern Saskatchewan, who said he was in a real dilemma. This was a number of years back before I was in politics. He owed money to the Farm Credit Corporation. The Farm Credit Corporation, a Government of Canada organization, was telling him to pay. It wanted its money back. He told them he had no cash and that he could not make his payment. However, he said his grain bins were full of durum wheat that the Wheat Board would not sell for him.

That particular farmer told me he had driven across the border to Montana and found an actual pasta plant. Can we believe it, an actual pasta plant? They are not permitted in Canada under the rules. The Liberal government faced that issue in Saskatoon a couple of years ago and with its policies made it impossible to have a home-grown pasta plant right in our own country for added value and a market for our own farmers' grain.

The farmer told me he could have taken his wheat across the border and could have sold it. Instead of getting $4 a bushel that the Wheat Board would offer if it had a quota, he would get $2 now and then hopefully another $2 when the final payments came in. If he took it to Montana, he would get $8 a bushel, cash, right away. The guy would write a cheque when it was delivered.

Under Canadian rules he was not permitted to take it into the United States. He had to sell it to the Wheat Board for $2 a bushel and then buy it back. This has nothing to do with the Americans preventing him from taking it into the United States. The Canadian government told him he could not sell a single kernel of wheat unless it went through the Wheat Board.

One can only imagine the farmer's frustration. One government agency, the Farm Credit Corporation, was telling him, “Pay us some cash”. He had the chance to convert his grain into instant cash but the other government agency, the Canadian Wheat Board, told him he could not do it. What is he going to do? The interest has been piling up. Threats from creditors have increased. He is getting more and more frustrated. I cannot for the life of me understand how a government that uses the word liberal, which means freedom, liberate, can pound a farmer into the ground so hard that he cannot survive.

The government ought to be ashamed of its record over the last 11 years. In the 11 years it has been in power, it is absolutely atrocious that it has not been able to address the agriculture issue with some long term solutions and some innovation that would provide farmers with the ability to market their product at a competitive price. Instead, farmers have to go through the Wheat Board where the lowest price is the law. It is like Zeller's, except Zeller's gives a bit of competition in its business.

I am not against the Wheat Board. Some people love it, and that is fine. I have no problem with that. Anybody who wants to market their grain through the Wheat Board should absolutely have the freedom to do so. I also think that a farmer who has found a market for grain that the Wheat Board is not selling should have the right to sell that grain to the highest bidder, just like every other merchant in this country. Whether I order water for my office or whether I am buying groceries or clothing, no matter what product I buy, I can see what kind of deal different people will give me. I am able to make a decision.

What is doubly offensive is that the Wheat Board only applies to the prairie provinces, which is incredible. I cannot believe the government would allow this to continue over all these years. The government has been crowing about being the party of national unity, but the things it has done in the last five or six years with respect to ad scam has done exactly the opposite. This country has never been so divided and un-unified as it has been because of the policies of the government.

The same thing is true when it comes to treating farmers across the country equally and equitably. The government has rules which apply in one part of the country but do not apply in another part. Obviously that makes competition very difficult.

Bill C-40 deals with some of the problems that farmers have had with marketing their grain, particularly with the WTO. This is another case of the government dithering on an issue which should be dealt with expeditiously. At the last minute the government is trying to push through some legislation which the World Trade Organization's dispute settlement body says must be done by August 1.

All parliamentarians are being backed into a corner. I am one of them and I will accept my responsibility. I will support Bill C-40 because of pragmatic necessity. We cannot afford to invite more WTO trade sanctions against us. The legislation must be implemented. Therefore, I will reluctantly support the bill so that it can get done.

At the same time I must emphasize I am willing to do that only because I expect that when the bill goes to committee, the amendments that will be put forward at committee will be dealt with rationally and decently by all of the people in the committee and also by the Liberal members for a change.

We need to look at this in the long term. We need to look seriously at the whole Canadian Grain Commission. We need to make sure the issues that are always before us are solved.

The amendment, for which we are asking for support as a condition of our supporting the bill receiving second reading and going to committee, would actually say that we want to have a comprehensive review of the Canada Grain Act and all of the organizations mandated by that act, and that the review should be completed within one year. If a Conservative government of the day had any say in it, we would certainly be acting on those recommendations. We would try to bring some long term stability and business balance to the country's agriculture industry.

One of the issues in dispute was with respect to transportation. Rail car allocation and grain transportation is a huge issue. People have no idea of the tonnes and tonnes of grain that come from our farms, particularly in the Prairies.

I grew up in Saskatchewan, the wheat basket of the country, acres and acres of fields of flowing grain. It is a beautiful sight. When we get in there with a swather or a combine and the sickle makes that swishing noise, it is such a thrill. My brother, who farmed for many years, said that there is something very special in knowing that his profession provides food for hundreds of thousands of--

[Dale Johnston, Conservative, Wetaskiwin, AB]

Madam Speaker, I am pleased to be able to speak to Bill C-40 today. I wish to remind the House of what Bill C-40 is actually about. It is “an act to amend the Canada Grain Act and the Canada Transportation Act”.

One thing I noticed right off the bat is that this refers to the Canada Grain Act and the Canada Transportation Act, but really it is what I would call “the western Canadian grain act and the western Canadian transportation act”. It has very little if anything to do with Ontario. Ontario falls under a set of circumstances that is different from the western grain marketing system.

Agriculture is in a tremendous crisis and has been for some time. For the last four years we have dealt with droughts and low commodity prices. Since the spring of 1993 we have had to deal with the fact that the border has been closed, so any time that grain farmers are able to export their grain and make a profit doing so certainly is desirable. It is much more desirable than to have the government coming up with programs.

I have been a farmer for 35 years. I do not know of a farmer yet, and I have known a lot of them, who would want to have an income from the government. Farmers want to be able to raise their crops and their livestock. They want a market for their crops and livestock and they want to sell them at a decent price. A reasonable expectation of profit is all that farmers are hoping for.

As my colleague from Yorkton—Melville pointed out, it is becoming more of a struggle all the time. We are having a tremendously difficult time trying to attract young people to the farm and the agricultural way of life because that expectation of profit is simply dwindling all the time.

Bill C-40 seeks to make amendments in order to comply with the WTO ruling. Although my colleagues are much more versed in this, I find it rather unusual that we would in fact win the Canadian Wheat Board issue and the railcar allocation issue--we won them, but the U.S. immediately appealed--but be ruled against on the railcar revenue cap and the grain entry authorization and mixing issues. We did not appeal this and I am wondering why.

Why would Canada not appeal that? Why would we stand by and watch our neighbours to the south appeal the decisions that did not go their way while we simply stand back and accept the ruling that we did not win?

It is unfortunate that we are on such a short timeline on this bill. We need to have these amendments in in order to comply by August 1. My colleague from Haldimand—Norfolk has suggested that we amend this bill. I certainly hope there is time to do so. I am confident that the amendment will not only be an amendment but an improvement.

Bill C-40 is necessary to respect our international trade obligations. We recognize that this tight timeline certainly puts us under the gun. I really admonish the government because it did not do something sooner about this. I think it is a tremendously important issue, one that we should not rush through the House or take lightly or not give due and appropriate consideration to.

Our amendment would draw attention to concerns raised both by farmers and by the grain industry. I think that is what is important. It is not just the farmers who are concerned about this. The grain industry is very concerned.

What is also at stake is our credibility as an international supplier of a quality product. Canadians grow some of the finest quality grains and oilseeds in the world. As my friend from the Battlefords said, we have to clean it to a very high international standard. Once it reaches port we have to clean it down to 1% dockage, that is, 1% foreign material. Once it is loaded on the ship it can contain up to 4% of foreign material. I think that is totally unacceptable. I think it is damaging to our international reputation. It is also not fair to our customers, who then have to clean all the foreign material out of the grain in order to process it.

Our grain is used for livestock feed but most of our customers buy it for human feed, so as agriculturalists we should try our very best to keep it pure and clean. We should also expect that much from the people who handle it and ship it and certainly our customers should expect that.

I am interested to hear what my colleague from Haldimand--Norfolk has in the way of an amendment. Unfortunately, I do not have it in front of me. I would like to see it and I look forward to debating that too.

Other colleagues who have spoken on this issue have said they are going to have great difficulty supporting this legislation, but I do not think we have much choice. I think our backs are against the wall. We have to support this legislation in order for it to get through the House and in order to comply with these extremely short timelines.

The United States of course has been a big customer of ours as far as agricultural commodities are concerned. There is an onus on us to provide the Americans with a high quality product. Time and time again we have provided that high quality product and yet the United States has been challenging us under the WTO because it feels we are unfairly subsidized or for some financial reason. The United States challenges the WTO decisions, but we win these challenges over and over again. It does not seem that we benefit all that much from winning all these challenges. I have to agree with my colleague from the Battlefords who said we entered into this back alley fight but did not emerge as victors. We were beaten up pretty badly.

With respect to Bill C-40, I will go with the recommendation of our agricultural critic, who I think has been doing a great job on this file. I will be supporting the bill, but only in the hope that we can get an amendment to it and get agricultural products back on the front burner of Parliament.

I asked my colleague from Yorkton--Melville about western alienation. I really think the way this government has treated agriculture in general and western agriculture in particular has a lot to do with this whole feeling of western alienation. I am probably a bit off topic, but in the western alienation realm, let me say further that the way the Liberal government has treated the petroleum industry, the energy industry, which is largely in the west, has certainly contributed significantly to the feeling of western alienation.

The Prime Minister talked about fixing the democratic deficit. What is definitely a big part of the democratic deficit is the fact that western Canadians feel there is little or nothing being done to correct the injustices taking place as far as agriculture and, for that matter, petroleum and energy products that come out of the west.

We need the Canadian government to pay attention to our agricultural industry. It has reached the point where I own a farm and neither of my children want to have anything to do with running it. What will happen to it? Will it become part of a large conglomerate, a large factory farm industry, or will we expect young people to run it?

There is kind of a joke, and there is a lot of bitter irony in it, that says if farmers insists that their children stay home and farm, that is one of the most severe forms of child abuse. The fact of the matter is--

[Garry Breitkreuz, Conservative, Yorkton—Melville, SK]

Madam Speaker, I have been listening with interest to this debate as it has unfolded here today. I will take the opportunity to remind those listening what the debate is all about before I address some of these issues and give the views of my constituents.

The bill that we are discussing is Bill C-40. It is a small bill that amends the Canada Grain Act and the Canada Transportation Act. Those two acts are being amended with some minor adjustments to Canada's system for handling and transporting foreign grain and grain products in Canada. These measures of course will reflect a recent decision made by the World Trade Organization dispute settlement body.

I want to point out that this decision was released in April 2004. The decision ruled in favour of Canada on the Wheat Board issue and in the rail car allocation issue but against Canada on three things: the rail revenue cap, the grain entry authorization and the grain mixing issues. That is what is being dealt with by this bill. Canada did not appeal the policy issues which it lost. The U.S. appealed its decision when it lost in regard to the Wheat Board.

The deadline that was created as a result of this is August 1, 2005. The government has delayed until the eleventh hour and now seeks to quickly rush through this bill. That is why we as Conservatives will have to hold our noses and support this as we have to do it at this point, but we will try to make an amendment. Hopefully the government will consider to have a review of this entire issue because there are huge concerns, as my colleagues have pointed out.

The American government has requested that the WTO examine the consistency of certain activities of the Canadian Wheat Board and other policies affecting the importation of grain and whether they adhere to WTO rules. I have just explained how these rulings came to be and the deadlines involved.

Now let me talk about the substance of this bill. This bill amends the Canada Grain Act to remove the requirement that authorization must be sought from the Canadian Grain Commission before foreign grain can enter licensed grain elevators. That authorization requirement will be removed. It no longer has to seek the approval of the Canadian Grain Commission.

The second thing Bill C-40 does is amend the Canada Grain Act and Canada grain regulations to remove the requirement that operators of licensed terminals or transfer elevators must seek the permission of the Grain Commission to mix grain. Third, it amends the Canada Transportation Act, so that the railway revenue cap will be extended to imported grain.

This bill, of course, will have the greatest impact on the Prairies, the western Canadian grain industry. I would like to point out, before I go further in my remarks, that one of the things desperately needed when we make these international agreements, and I think we have to do this for the future, is to negotiate mechanisms that more quickly resolve disputes. Some of these issues in regard to trade drag on and on, disrupt trade, and have a very negative effect on people who are involved in the particular industry that is under dispute.

International trade agreements like NAFTA and the WTO will only work for us if we can make the appropriate changes in Canada to adjust to them. We signed these agreements many years ago, but yet have failed to properly make them work for us because we do not ensure that our economy and the industries involved in these negotiations are structured to take advantage of these free trade agreements.

Market economics often do not drive the process, yet they should. We have to make a lot of regulatory changes in Canada to adjust to the new realities of our trade agreements, yet we have not properly done that.

I agree with my colleagues who have said that we need to have people come before our committee and explain to us what needs to be done. I also wish, while I am on this topic, that the government would be as quick to fix our agriculture programs, especially the CAIS program, as it is to fix other problems. Here we have something being rushed through. Liberals quickly address it, but we have huge problems in the agriculture industry, such as the CAIS program, which is a huge problem for farmers. It is very costly but not addressing some of the issues that are on the farm in a timely fashion.

As I talk about the regulatory changes that have to be made, let me point out that we have already had two major commissions, the Estey commission and the Kroeger commission, who made recommendations in the nineties to fix our grain handling and transportation system and the Wheat Board. They made very good recommendations and yet the government failed to implement these. This is the problem. We study these things and then we do not make the changes that we should make, and then all of a sudden we are rushing through things like this when we would not have to do so if we would have made the proper changes that we should have made ahead of time.

One of my colleagues pointed out that we need to go to a more commercial transportation system and I would agree with him. We have problems within our system and one of those is that the Canadian Wheat Board takes charge of our grain but then has to negotiate with the railroads. I will point out a little later on how that has created huge costs for farmers because we are not using a more commercial transportation system to drive the process. And it can be done.

Australians have made the necessary adjustments. Their farmers have opened up their wheat board and privatized it. They can buy shares in it and it has helped them. It has not hurt them. The scare tactic that if something is opened up or changed, it will destroy our marketing system is not true. In fact, the reverse may be true, that if we do not make some of these changes, it is going to have a very negative effect upon us.

I have many farmer friends in the U.S. and we compare our grading systems. I farmed for a few years and became quite familiar with it. They are flabbergasted at the archaic method that we use in grading. Very often someone takes wheat to the elevator, the agent there will look at the outside colour characteristics and a few other superficial things, and will grade the grain accordingly. This is so out of date. We have so many different grades that it almost becomes impossible to understand the system.

In fact, the 40 or 50 grades in our grading system tend to be quite arbitrary. When it comes to consumers trying to understand our system, they give up. It is not meeting the needs of a market driven economy and what we should have. For example, wheat should be graded on its milling characteristics, the quality of bread that it can produce. That is really not happening at this point. We have moved a bit to looking at the protein content and so on, but it is still not what it could be. Because the government has refused to implement the Estey and Kroeger commission reports, we have the problems before us.

I want to read some comments from a farmer in Wawota, Saskatchewan, which is not far from Yorkton--Melville. Keith Lewis writes:

The Grain Commission has become a problem for grain farming. In particular, the grading system. We've got just way too many grades and the segregation creates a lot of extra costs that really aren't necessary. The whole idea has to be looked at. I have talked to a number of grain farmers and we all agree that it is so difficult to manage separate grading factors.

Another problem is visual distinguishing. It is kind of unique to Canada. Our wheat has to be visually distinguishable. It is a factor that costs a lot of money.

We need to make the Canadian Grain Commission more relevant. In order to get a grade, the commission has to give it seal of approval. There are other guys able to do it, but it has to be the Grain Commission. The Grain Commission charges for all these services and in most cases it is not necessary.

There are a lot of issues that surround grading at the elevators-- inland terminals and elevators at the port. The fact that these people work for the Grain Commission and can go on strike when there are other privately-run agencies who can do the same job...Any time there is a disruption, it comes out of the farmers' pockets.

The Canadian Grain Commission is almost outdated, it's not relevant any more. We need to determine the role of the commission.

He makes some excellent points. There are other people who can provide the service. There are private corporations and private companies that can do the job probably for much less cost. Farmers are being saddled with these costs. They have no choice in the matter. They have to comply with this. Yet, it is not a service that is provided at the lowest cost to farmers.

I will not go through all the other points that he makes, but I think we have to listen to people like this who have experience with it and can point out to us the problems.

Another problem with the Grain Commission is that it is very secretive. Just like many parts of government we need to have more transparency. If we had that transparency, we could begin to make it work better.

Farmers are often forced to pay for this and yet they do not have any choice in the matter. If anyone else is interested in this I think the Hansard record will contain that letter.

I would also like to quote from a news release that was put out by the Western Barley Growers Association. I think it is useful for me to put this letter on the record as well because it points out other huge problems that we have.

We have the Liberal government opposite often defending what it is doing and saddling western farmers with its policies. I think this example is just unbelievable. It will point out that we have huge problems and we need to take another look at how we are dealing with the grains issue on the prairies. The title of the news release is “Canadian Wheat Board shipping fiasco costly for farmers”. It states:

“This backhauling of grain by the Canadian Wheat Board is turning top quality wheat into $80 per tonne wheat” said Douglas McBain, President, Western Barley Growers Association, when commenting on the fact that wheat in store in Churchill, Manitoba is now being reloaded and railed west to Vancouver.

I just want to interrupt this. The $80 per tonne is not a price that farmers can receive for their grain and still be economically viable. That is less than a quarter of what they should be receiving. People who are not familiar with this issue may not know that $80 a tonne for wheat is a deplorable price. In any event, I will go on to the next paragraph:

In November 2004, after shipping was closed for the season, the CWB moved wheat to Churchill. The farmers paid all costs of transportation and handling. That wheat is now being reloaded and shipped west to Vancouver to meet a sale commitment. The cost of extra elevations and handling and the additional rail freight charges could cost farmers another $100 per tonne.

“Why was this wheat shipped to Churchill in the first place, especially when the shipping season would be closed until sometime in June 2005?” asked McBain. “What we have here is the CWB calling contracts on wheat and putting it into commercial storage when they have no sale for it. This kind of action costs farmers some $80 million each year in storage costs with no one being held to account” said McBain.

Wheat and barley exported by the CWB is in the grain handling system some 40 days longer than canola which is handled outside the CWB (59 days versus 19 days).

“In western Canada we have a world class grain handling and transportation system which is capable of responding to market demands. If the system were allowed to function without CWB interference, farmers would save $80 million annually. This fiasco demonstrates that the CWB must be removed from any involvement in the gathering and shipping of grain” commented McBain.

It is astounding that wheat is taken from the Prairies, shipped all the way to a port in Churchill on Hudson Bay, put into the terminals there and then unloaded and taken all the way back to Vancouver. It is unbelievable that this kind of thing is happening. The cost is being borne by prairie farmers and they have no choice in the matter.

Let me also quote from a recent news release by the wheat growers and barley growers:

Farmers questioned Measner on the Board's recent decision to ship wheat from the ports of Churchill, Baie-Comeau and Thunder Bay to meet sales contracts at the Port of Vancouver.

“I don't think most farmers were satisfied with the explanation the CWB provided,” says WCWGA President Cherilyn Jolly. “Of course we understand the need to meet sales commitments, but there has to be cheaper options than shipping grain backwards all the way across the country.”

Canadian Grain Commission (CGC) Chief Commissioner Chris Hamblin discussed the many downgrading factors in the 2004 harvest. She also spoke about the CGC's view that the industry needs to retain KVD as the cornerstone of Canada's grain grading system. The Wheat Growers and Barley Growers responded with a joint resolution calling for changes in Canada's grading and marketing system to allow for grain to be purchased from farmers on the basis of its quality attributes, as opposed to its visual characteristics.

This is the point that I was making before. We have to change our grading system. The bill does not address some of the serious problems. That is why we, as Conservatives, will be asking for a review by the government of this entire issue. It just cannot be a review that then is forgotten and gathers dust on the shelf. It must be a review that is acted on. The Estey and Kroeger reports are now gathering dust on a shelf. We have to ensure that this report does not.

Let me continue the quote:

“KVD imposes too many restrictions on our ability to develop and market varieties that both farmers and our customers need,” says Jolly. “We need to move beyond a rigid visually-based grading system to one which is responsive to the quality traits that end-users are seeking.”

Saskatchewan Wheat Pool CEO Mayo Schmidt gave the keynote address last night saying we need to restore the profitability of wheat. Instead of it being a crop most farmers use to get rotation, we want to make wheat win. Schmidt stressed the global competitiveness of Canadian wheat will depend on greater research, improved market access, lower worldwide subsidies and a focus on product innovation.

That is why I was saying that we need to ensure that our international agreements begin to work for us. We need to make the changes here.

There are other things I could mention, but I think that members get the drift. We have to remove barriers that are restricting value added on the Prairies. The present structure is not working, and the wheat board is included in that structure. The claim is it does not hinder that in Canada, but when we talk to some of the people who really are involved in the industry, they will tell us otherwise.

In summary, we will be supporting Bill C-40. We will hold our noses and support this bill, even though there need to be a lot more changes. We are hoping the government will act as quickly to address many of the other problems in agriculture that do not seem to be on the top of its agenda. We will be pushing an amendment to Bill C-40 to have a review and make sure that Bill C-40 gets passed in time to comply with our agreement at the WTO.

[Mario Laframboise, Bloc, Argenteuil—Mirabel, QC]

Madam Speaker, it is my pleasure to speak to Bill C-40, which partially reforms the operations of the Canadian Wheat Board.

I would point out immediately to viewers, to Quebeckers and to Canadians, that section 147 of the Canada Transportation Act, which applies to the Canadian Wheat Board, among others, pertains to grain grown in western Canada. Quebec, therefore, is not directly affected by Bill C-40.

The bill pertains to grains grown outside the country and imported into Canada. This could affect Quebec somewhat, however the aspect of transportation in the west does not. Still, the subject is of direct concern to us as it involves the Liberal government's handling of agriculture generally.

I recently attended a talk by Jacques Proulx, president of Solidarité rurale au Québec and former president of the Union des producteurs agricoles du Québec. He made it clear to his audience, very nicely and very politely, that, even if Quebec and Canada produced nothing, we would be lacking nothing. Clearly, we would be deluged by foreign products. The issue is their price and quality.

As our population is not the world's biggest, we must make sure we produce everything we need here at home. If we do not, we will be at the mercy of other countries that do not perhaps set the same high standards for food quality, even though we still have a lot to learn and a lot to do to ensure good quality foods on our table.

This is important, because the aim of Bill C-40 is to comply with a decision by the World Trade Organization. That is always very difficult. In fact, we have had a number of reversals before the WTO. We have also had some successes in other areas. There is softwood lumber, for example. Finally, the successes aside, there is always some hesitancy. We keep wondering whether we always have to agree and be the first to comply with WTO decisions.

I can understand my colleagues from the Conservative Party, among others, when they say we should look at the bill closely, take the necessary time to consider it and hear witnesses. I agree with them on that. Even though, in principle, we have to comply with WTO decisions, we still have to be extremely rigorous in how we interpret these decisions, in how we choose the type of intervention we will use and the impact it will have on our productions. I can understand them.

Bill C-40 proposes three decisions that will lead to three major changes to the industry. First, the grain entry authorization requirement has been dropped. This decision was made following a complaint filed by the Americans. Foreign grain entry no longer requires authorization from the Canadian Wheat Commission.

This means the borders are completely open. I can understand that grain growers in Canada are worried. There will need to be witnesses heard in committee to ensure we are not harming the industry more than we are helping it with this bill.

The second measure has to do with the authorization formerly required for the famous mixed grains. It will be replaced by information only and by labelling. It will ensure that grain products in Canada are labelled “grains from Canada only” and that they are not mixed with foreign grains. Finally, the required authorization is replaced with simple information. This opens the markets to foreign grains even more. Again, I can understand the industry questioning the pertinence of this change and the obligation to conform to it so quickly.

The third measure deals with the railway companies' maximum revenue entitlement. This is a cap on the revenue railway companies can earn from the movement of grain. There was a revenue cap for domestic grain, but not for foreign grain. Shipping foreign grain probably cost more than shipping domestic grain. Now, a cap is imposed on foreign grain as well. This means that the cap for the movement of Canadian local grain will apply to our foreign competitors.

I can understand the concern of industry and producers, because the border will now be wide open. What impact will that have on the industry? We will have to be very vigilant, and the House can count on the Bloc Québécois. While this situation does not primarily affect Quebec, it can affect the entire agricultural industry. As hon. members know, and we can never stress it enough, in Quebec, what matters to Quebeckers is that the producers be the ones making marketing decisions about their production. That is why we have a very strong supply management system in three sectors in particular: dairy, table and breeder eggs, and poultry. Some sectors are supply managed and subject to quotas.

So, it is important that I explain what supply management is and how Quebeckers are protecting their agriculture. Having said that, I want to come back to the statement made by Jacques Proulx, the president of Solidarité rurale and former president of the Union des producteurs agricoles. It is true that, even if we did not produce anything, there would be no shortage of food on our tables, but at what price and what quality? We have to take charge.

That is why, in Quebec, there is this strong will to have the agricultural community, the producers themselves, decide how they want to handle the marketing of their products. This way, they can ensure the best quality and some degree of profitability, to avoid experiencing the kind of situations we are witnessing now. This is disastrous for agriculture across Quebec and Canada.

The mad cow crisis and the problems facing grain and large-scale producers are very serious and are hurting the entire industry. If we go along with the WTO, given what is happening with the Canadian Wheat Board, will this apply to production in Quebec and supply management? Will the Canadian government abolish the whole supply management system and, one day, introduce a bill in the House to that effect? That is the problem, and that is why we object so strongly to this bill.

Once again, I want to explain what the management of products such as eggs and poultry involves: it is based on import control; by limiting foreign imports, we protect domestic markets and reduce the risk of price fluctuations tied to increased supply.

The first measure in managing supply is to control imports.

The second measure is to control prices. By controlling retail prices, we can ensure better prices for consumers, without government subsidies to the industry, in addition to providing producers with a more stable income. For example, the price of a quart of milk is set by a national board, so as to ensure reasonable profitability for producers. The last measure is production control, or quotas. By controlling domestic production, we can ensure stable income for producers and good retail prices.

This is the system. It is a whole. We cannot get rid of one part of the whole, because this would create a total imbalance. This imbalance would call the entire system into question and would weaken it. Consequently, we would no longer be able to meet our own needs for these products. We would be at the mercy of other countries. Some of you will say that all these products should not be subject to any import standards so as to ensure the best price. When would it end?

When we no longer produce what goes on our tables—when our markets have been completely destroyed—perhaps then retail prices would be lower. However, what about when we are at the mercy of foreign markets?

We will have nothing left to use as a guide, and will be totally at the mercy of foreign business and industry. Perhaps that is when people will understand what the supply management and other systems in place in Quebec are all about, involving joint plans with other products as they do, potatoes for instance, where the joint plan is in the process of being revised, and will become increasingly strict, with a system that will gradually head toward supply management.

The problem is that, when all these approaches are abolished, there comes a day when industry needs to be subsidized. Supply management means there is no industry subsidy, and independent revenue is possible. This needs saying more than ever. I am proud to be able to refer to Friday's decision to adopt a Bloc Québécois motion on supply management in committee. In short, the federal government must at all times support supply management at the WTO. That is the objective and that is what the Bloc Québécois wanted, and still wants.

There is no guarantee that the government will take such action just because a motion has been adopted in this House. It is a matter of providing the government with our opinion. What we have today is a bill that will change the Canadian Grain Commission and the entire industry. It is therefore up to the producers, and those who represent their ridings, to take great care, in the west in particular, to ensure that the Liberal government does not go too far and set itself the objective of no longer protecting the interests of the farmers of Canada and of western Canada, but rather of playing by the WTO rules.

This has, of course, been brought up by the Quebec dairy, egg and poultry producers in connection with supply management. There are instances where Canada has been tolerant, despite decisions that have been taken, cheese sticks and whether or not they are dairy products, butter oils. There is a whole system in Canada that attempts to show we are open to foreign markets, that we allow certain products in, that we have tightened up the law because anything that contains more than 50% dairy products cannot enter Canada.

It is possible to get around this by fractioning milk products. There are high performance machines that fraction milk products to a point where they can enter Canada as derivatives, even if it means reconstituting them in Canada to finally put them on the market. This technology exists and is currently used. Milk is broken down into derivatives with a milk product content of less than 50%, and then allowed into Canada, and all this is done openly.

The industry takes notice. It makes recommendations to the federal government. The Liberals wait, listen, check the market. The problem is they are wasting too much time. I will say that the Prime Minister is a case in point, with his new title as Mr. Dithers that suits very well the handling of agricultural issues. The industry complains, asks for changes and, in the end, the government dithers, waits, examines, listens while our industry is being penalized. I hope that, with Bill C-40, the western grain industry will not be penalized by this laxness, this approach of never knowing where you are going.

That is the problem: the government does not know where it is going, or where it is coming from for that matter. We have seen it with the sponsorship scandal. We are realizing that, with their approach, they were having problems knowing where they were coming from. It is very hard to know where you are going when you do not know where you are coming from. That is the problem with the Liberal Party. Now, the entire agricultural industry is waiting to see what the Liberal Party will do in the WTO negotiations. Let me just give an example taken from the brief the Government of Canada submitted to the WTO in August 2002. This brief was presented at a Liberal caucus meeting held in Saguenay in August 2002.

The Liberal Party targeted the problem. I quote: “The problem: negotiations involve compromise”. A document that begins with “The problem: negotiations involve compromise” makes it clear from the outset that our system perhaps is not up to standard. In other words, in negotiations, compromises will have to be made.

Reading further: “Supply-managed producers of eggs, poultry and dairy products, the textile and clothing industry, and certain service sectors will probably object to any changes that would lead to increased foreign competition.” Liberal supporters are being told that all these people will hold huge demonstrations to show their opposition to change of any kind and that the good Liberal Party must resist to ensure standards are met. These are the men and women at the heart of our farming, textile and service industries they are talking about, the core of our economy, and they say these people will resist. That is to be expected.

If the government adopts the whole WTO system, jobs must not be lost totally to the outside in the end, and we must not become consumers only, because then we will be producing nothing. That is the problem.

When documents begin this way, and bills, such as C-40, are introduced, vigilance is essential. We must make sure the industry understands the issues very well, that all the relevant witnesses will be called to appear in committee and that the necessary time is taken. Nothing is perfect, but the broadest possible range of opinions must be obtained from people with various levels of involvement in the industry to ensure the right decision is made so that we are not relying solely on imports and that we are not just buyers or consumers because we will not be producing anything anymore. That is often the problem of countries with 30 million inhabitants facing competition from countries of 300 million, 400 million or 500 million or all of Europe.

So we have to be careful. We have to be firm in our discussions. This is the problem with the Liberal Party: it is dithery, unsure of where it is headed, never firm in its stance. It must state strongly that we are a consumer society, but want primarily to maintain our production, including farm production. We must be able to feed ourselves by producing what we put on the table. This is a major advantage of a society, and one we must keep.

That is why, even though we are open to Bill C-40 and we are interested in taking part in the debate, we are trying to make sure that the debate in committee will be comprehensive and that all relevant witnesses are called so that the grain industry in Canada, once this bill is passed, is not weaker than it was before. There must be no repercussion on all the other sectors. The government must not take advantage of the situation to weaken this industry, in the name of the WTO, only to come back later—even if Parliament passes the Bloc Québécois motion not to call into question supply management—and table a bill in this House to do the exact opposite, in the name of the sacrosanct WTO.

The government knows full well that a rigorous approach is needed in a country as vast as ours, which is less heavily populated than other competitors. We must protect our industry on behalf of our fellow citizens. In the short term, they could face terrible competition in the food sector and one day our agricultural production could disappear. The future would be very difficult for our children and our grandchildren. One day they will be angry with us for making decisions in this House that jeopardize but one part of agriculture in Quebec and Canada. The food we eat is far too important. We must maintain control of it for the sake of future generations.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Madam Speaker, it is a pleasure to stand today on behalf of the producers of Battlefords—Lloydminster to discuss Bill C-40. This is the first chance we have had to look at the bill. It is a fairly innocuous piece of legislation, just a few little paragraphs that comprise the bill, but the effects are far-reaching.

We need to have rules based trade. No one will argue with that. The problem I find, time after time, is that Canadian producers seem to be held to a different standard from other producers in the world. We always seem to be getting the short end of the stick. I am not sure if that is because we bargained in bad faith or that we have turned in too easily and allowed other countries to overrun the system that we work with here.

I have some major concerns with this little piece of legislation. No one has a problem with the WTO and with good, sound rules based negotiations and trade around the world. The problem is how do we do that without having these sidebar deals constantly caught up in trade actions that take years to come to agreement and hundreds of millions, if not billions, of dollars in hurt that we, as Canadians, seem to face on many different levels. I have some real concerns with being forced to make these changes as quickly as we are being asked to do so.

The government knew this was coming down when it starting forming legislation in September. It finally got around to doing this now. This has to be in place by August 1, the start of the next crop year, or we will face sanctions. There is no doubt in my mind that someone will pull the pin and we will face sanctions. The concern I have is the government wants us to treat this as housekeeping, look the other way and let it go through.

A lot has been made about the so-called consultative process that the minister undertook through his parliamentary secretary. The parliamentary secretary had a few meetings across the country. He lands at an airport, books a room in a hotel, invites three or four people from around the area to make a presentation, jumps back on an airplane three hours later and he is on to the next venue. That is not really a consultative process. We need to talk to a myriad of farm organizations, not just the ones that are government-friendly.

The Minister of Public Health introduced the bill, which I found a little strange in that the agriculture minister is here. He was here in question period. It was strange to have the Minister of Public Health from downtown Toronto introduce a bill that really has far-reaching effects on my producers in western Canada.

There was not a lot of agricultural intelligence in that speech. I am sure it was a canned speech from Agriculture Canada. She talked about the glowing results of what we are looking at. It just did not go anywhere. I asked a question about the billion dollar bail-out about which she was going on and on and she did not have the answer. I would have thought that if she was appointed and gave a glowing recommendation of this last announcement, she would have some idea about the aspect of the delivery and how far along it was, but she did not. I suppose someone forgot to give her that sheet.

Bill C-40 talks about doing three things. The government will now require, under the Canadian Grain Commission, entry permits, but there is no timeline in place as to how and when that will happen. We know that this will face the oversight of the other countries, especially the United States to which this is targeted, on August 1. However, we have no idea what form those permits will take, how they will be authorized, what the chain of command will be and what the bureaucracy will shape up to be. That is a concern.

The Grain Commission has become a real thorn in various parts of western Canada in the way it is operating. It is very secretive. It cuts back services, yet gets more and more money in its budgetary process. We have some major concerns with that as western farmers.

Another thing the bill talks about is blending. A person has to have permission from the Grain Commission whenever this is done. We have always had a blending aspect, but my concern is that we are losing the capacity to do that on the prairies. The Grain Commission really only wants that done at port. That could potentially cost my farmers hundreds of millions of dollars in a crop year by not being able to blend like we do.

The member for Macleod made the argument earlier, and I totally agree with him, that we have far too many grades and too complex a system in the country. We are graded at the various levels in protein and so on under milling wheat, yet when it goes into the boat to head off to Japan or whatever country is lucky enough to buy our product, it goes back in as milling wheat, period.

We clean it to export standards on the Prairies at these big huge terminals we built. When it gets back to the coast, then they are allowed a different standard and they tend to load garbage back into the hold of the boat.

I have heard complaints from the Japanese who import about stratified boatloads of Canadian grain that I have sold at a certain grade, cleaned to export standards, the 1% dockage or less that I am allowed. It is cleaned, but when it gets to the coast, they are allowed up to 4% on certain grades and they dump in lumber, bottles, crap and corruption. We had loads rejected at the other end a few years ago because of deer droppings.

If anybody knows how many times that grain has gone up and down an auger and an elevator and through machinery into trucks and back and forth to town before it got to Japan, one would wonder how that product could still be mixed in with the grain other than somebody bought the screenings and dumped it back in the boat after the farmer was done.

Part of the major concern I have is at what point along that chain do I no longer own and am answerable for it. I have dumped it in the pit at my elevator, however many miles away from my farm. We are fortunate because my farm is very close to some large terminals. Six months, eight months later, I can get a letter back from somebody saying, “We have now rejected your malt barley because”. How do I fight that?

In my role as an MP, I have had four of those instances come to the attention of my office. We have had three of them overturned and forced the company to take the hit, not the farmer. When is it no longer my product?

That is why I look to organizations like the Wheat Board, which is supposed to be there to help me. Lately it is not doing a lot of that. A gentleman by the name of Ken Ritter heads up the Wheat Board. Ken and I ran against each other in 1997. We get together a couple of times a year and I often kid Ken . I say to him that I supposedly won, but he got the better job. He gets to go home nights. His paycheque looks as good or better than mine. He does not have 75,000 people to whom he has to answer. His job can disappear, so can mine. That is the game we play.

I do not see a lot farmer farm gate-friendly resolutions coming out of the Wheat Board, the Canadian Grain Commission and a lot of the government programs out there. Therefore, I am very concerned about the bill and the impact it could have.

When we look at the blending and how we have to keep track of all the products now, under the legislation we have country of origin labelling inserted into Canada through the back door. There is a big uproar over why we would want to do that, and the cost of that labelling, but there it is. This is going to happen.

I do not know how they will do that without grain confetti or something. A few bushels here and there get blended off, but we do not run a separate train car or a separate truck for a few bushels of product. We tend to blend it and make the run pay. I am not sure how we will enforce that. I think we will see a tremendous amount of paper chase. A lot of bureaucrats will be happy with this. However, it will cost my producers a lot more in lost revenue because they will have to pay for it.

The third and final thing that is affected, and it is a sleeper issue, is the rail cap. This only affects board grains basically and it really will negatively affect our delivery, especially closer to the U.S. border. I know the member for Macleod made that point earlier about peak times when we need our grain moving. Right now there is no grain moving. He talked about the amount of elevators and granaries on the farms that were full. He is absolutely right, the system is plugged.

We have road bans on now in western Canada because of the spring thaw. We just had some more rain and snow up in our area so those bans will be on for longer than we would like. Farmers will then be in the field and forced to haul their grain while they try to do other portions of their farm work such as spraying in June and haying in July. Then we have the end of the crop year and they have been unable to move their product because they have not had the time to do so. However, will the cars be available?

This is a major concern in that the captive states in the north tier of the United States will, through this bill, be able to haul into the south part of Canada and use our rail system to get it to port. They will not like the turnaround times, but it does give them an extra access they do not have at this point. I know in the system, Portland. They drive right out on Roberts Bank and drop right into the containers that go off shore. We do not. We handle the grain three or four more times before it gets into the container.

I am not sure they are going to like the turnaround time or the freight rates, but the problem I have with this is that the rail cap was supposed to help western farmers access the 13,000 cars that the federal government owns and is in the process of supposedly rolling over to the Farmer Rail Car Coalition. It is a major concern at this point because then we would no longer control access to those cars to the same extent we do now, which is questionable.

We could not say no to a farmer from North Dakota, South Dakota or Montana who wants to make use of those same cars up into Canada. If he gets an elevator that will take his grain, under this bill we have to allow it. That is another concern in having access to those railcars: timely access to them. It may or may not put in jeopardy the whole Farmer Rail Car Coalition bid, because there will be some major drain on those cars. People have talked both sides of the fence in allocation of cars. This adds to that muddied water, let us say, in car allocation so that it is not in the best interests of our farmers in western Canada.

The U.S. has a vested interest in doing that, but the Americans also have access to the Mississippi River. They barge grain down at virtually no cost at all. Upgrades and maintenance required on the Mississippi are done by the Army Corps of Engineers. They use it as a training exercise. No cost goes back to the overhead for WTO compliance for American farmers. That is quite an ace in the hole. It makes a big difference. If the Americans start to load up our rail system plus having the ace in the hole of the Mississippi system, my guys are hit twice. That is why I have some major concerns.

I have no problem with this bill going through to committee, but I certainly want to see a full and open debate and a good strong witness list coming forward so that we can get this done in time for the August deadline.

We have another bill before committee right now. Bill C-27 is tying us up and does not have a snowball's chance in hell of passing before this session ends in the spring, election or not. No one other than the CFIA likes that bill. I would argue very strongly that the committee drop its hearings on Bill C-27 and get right into Bill C-40 if we are to make that deadline. This is something that we are going to have to do to hit that implementation.

Rules based trade is fantastic. My concern is that we seem to get mired down and continue to think that we are hewers of wood and drawers of water. We think that bulk commodities are all we can do in western Canada. A lot of this WTO compliance is targeted to our bulk commodities, as are the complaints, for that matter. If we were allowed to value add, to process that product on the Prairies, and if farmers owned those processing plants, we would see an extra $1 or $2 a bushel in added revenue, plus then we would be shipping a processed commodity that would not face all of this rigmarole under the WTO.

This would also get us into the emerging markets in the Pacific Rim that do not have the infrastructure to process. We could start to fill those markets. Right now we are not filling those markets. They do not want bulk grain. They want flour. They want malt ready to go into their malt plants that they have started to develop over there. They want the durum flour and pasta. We need to start filling those markets. This legislation does not help that out at all.

We really have to wonder whose side the government bureaucrats organizing these things are on. Are the bureaucrats thinking this through or are we just going in there being the white knight and signing all these international agreements while our producers here in Canada take the hit?

We are seeing emerging markets and emerging producers such as Brazil coming forward. They can produce twice the product for half the cost because they do not face the taxation and regulatory burden that my guys do, but we have to compete with them out there in the global market. Now, with WTO agreements and so on, I am going to have to start competing with them for the domestic market here in Canada. That is great. Good for them. Come on strong, I say, but let us get a level playing field. When they are starting to be the world supplier on several different commodities, how do they still fall under this developing nation preferred status and get the gold key to my domestic markets here in Canada?

Someone has to start to think this through and look after my farmers first, not someone else. As much as we like to see them coming forward as well, it cannot be on the backs of my farmers.

I do not really see how this rule change is going to help my producers in any positive way at all. Certainly until we get some amendments, as the member for Haldimand—Norfolk said today, this bill has no chance at all of getting through in time for the August 1 deadline.

Whose fault is that? Is that our fault for giving the bill due diligence as we should? Or is it the fault of the government, which agreed to this in this short term timeframe and is trying to push it through in the dying days of this session? Or in an election for that matter, it will try to point the finger and say, “You put our guys at risk”. No, the risks are in the day we signed on to this stuff. That is my concern.

In 2002 there was a very fulsome report on the grain commission and the whole grain trade. No one has yet seen a copy of that report. It has been hidden away. I asked for a copy of that report over two months ago at the agriculture committee. I finally got a letter back. The clerk of the committee showed it to me at the last committee meeting, last Thursday. We got a reply from the government. The government will get the report to me just as soon as it has a chance to translate it.

As far as I remember, the Official Languages Act was in place in 2002, so if that report was tabled as it was supposed to have been and as we were told it was, it is already in both official languages. The government is stalling. There are things in the report the government does not want us to see. Let us imagine that: these guys are being secretive.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Madam Speaker, I will start with the last point raised by my colleague. In terms of Bill C-40, it is not that complicated for us to implement. As I indicated in the latter part of my remarks, the government is choosing the avenue that is most appropriate.

Second, the ruling is based not on the fact that there was a disadvantage, but that there was an increased risk even though no harm had yet been proven. That is roughly the sense of it. That is not the larger issue with the legislation. We comply and I believe we still get to protect the Canadian industry as well as before.

That being said, obviously we need to continue to do more to protect various industries under the World Trade Organization, agriculture more particularly. This is where both the member and I will disagree with some of the comments we heard earlier. This form of a Hobbesian state of nature that was described earlier, as if we could simply ignore international trading rules and that would be better, is sheer and utter nonsense. That was the NDP member. I see the member across seems to be worried that I somehow attributed that to him.

I, for one, am of the view that we need stricter international trading rules. In that environment, Canadian industry can better compete. I have no doubt that the farmers of my constituency are every bit as good as farmers elsewhere, not only in Canada, which is already the case, but internationally as well.

What we need is good trading rules so as to prevent countries from bombarding each other with subsidies, as the EU and the United States are doing now. This has the effect of lowering world prices and of course damaging Canadian agricultural interests in the process. And it is not just Canadian interests that are damaged in the process. Not that long ago, I was reading in a publication about the state of farming in Africa.

Madam Speaker, you and I are both members of the Canada-Africa parliamentary friendship group. We have been told, for instance, how the price of cotton in Africa has gone down to virtually nothing, which means that some of the poorest people in the world producing that particular agricultural commodity cannot get any price for it. People are starving because people in other countries are artificially subsidizing a commodity that has the effect of lowering that price.

What do we need, then? We need stronger trading rules, not weaker ones. We need a good multilateral environment that would protect farmers everywhere from the large treasuries of some countries when they do this kind of damage, not only to agriculture but to other areas as well.

[Paul Szabo, Liberal, Mississauga South, ON]

Madam Speaker, earlier in debate there was some interesting discussion about the WTO between the member for Glengarry--Prescott--Russell and the NDP member who raised it and its relevance or assistance in the matter now before the House. It seems that there is a problem, at least with regard to grain matters. The WTO is causing some difficulties. I know from prior work on this file that issues to do with subsidies, particularly within European markets, put Canadian grains at a substantial disadvantage.

I wonder if the member for Glengarry--Prescott--Russell might be able to reaffirm the need for the WTO in regard to the broader context of a trade organization. I wonder if he would also indicate whether or not matters as they relate to Bill C-40 are now in fact a problem with regard to the recent rulings of the WTO.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Madam Speaker, it is my pleasure to speak today to Bill C-40, to amend the Canada Grain Act and the Canada Transportation Act.

I would like to start with the grain related provisions in the Canada Transportation Act. The revenue cap is shipper protection that places a limit on the revenues that CN, Canadian National, and CPR, Canadian Pacific Railway, can earn from certain Prairie grain movements. The revenue cap provisions came into effect in August 2000, and the revenue cap replaced the maximum rate regulation that had been in place for over 100 years.

First, I will provide a brief historical review to help illustrate key aspects of the revenue cap. In the late 19th century, the Government of Canada asked the CPR to provide reduced rates on certain railway movements, as a condition for funding the construction of a rail line from Lethbridge, Alberta, through the Crow's Nest Pass to Nelson, British Columbia. Among other things, the reduced rates applied to eastbound grain and flour shipments from the Prairies to what is now Thunder Bay. I think it was called Fort William at the time. These reduced rates became known as the “Crow rates” and only applied to the CPR shipping points existing at the time of the agreement.

In the 1920s, the Crow rates were expanded and applied by statute to shipments from all existing and future points in the Prairies on all railways and to both western and eastern movements. The statutory rates for eastbound movements applied regardless of whether grain was intended for domestic use or export, and were imposed as far as Armstrong and Thunder Bay, Ontario, the two shipping ports.

The statutory rates for westbound movements applied only to exports through Vancouver and Prince Rupert. In 1931, the rates were further extended to include northbound export grain shipments to Churchill, Manitoba. Shipping from Manitoba, especially to northern Europe, involved shorter distances for ships.

In 1984, the Western Grain Transportation Act introduced a period of cost-based rate setting. The WGTA applied to the same essentially eastern and western movements of grain, but replaced the fixed statutory rates with a system that established maximum rates based on railway costs. In essence, it was designed to allow the railways to recover their variable costs plus a full and fair contribution to their constant or fixed costs, that is, system costs that did not vary with traffic. The WGTA included government subsidies to the railways to offset the full freight rate.

In 1995, the WGTA was repealed and superseded by new western grain transportation provisions, which were incorporated into the CTA when it was implemented on July 1, 1996. This second regime continued maximum rate regulation based on the maximum rates in place but eliminated the government subsidies.

On May 10, 2000, the government announced reforms to its grain handling and transportation policies to promote a more commercial, competitive and accountable system.

The policy reforms followed extensive consultations led by Justice Willard Estey in 1998 and by Arthur Kroeger in 1999.

One of the major policy reforms was an amendment to the CTA that replaced maximum rates with a cap on railway revenues from grain movements. Other amendments included grain-dependent branch line rationalization improvements, and refinements to the Final Offer Arbitration process. As well, there were other reforms related to grain handling and transportation system monitoring, Canadian Wheat Board tendering, and funding for roads in the Prairies.

I would like to speak briefly about these latter reforms before I discuss the revenue cap. The 2000 amendments to the branch line provisions facilitated the transfer of grain-dependent branch lines to community-based shortlines, and required the railways to provide transitional compensation of $10,000 per mile annually for three years to affected municipalities when a grain-dependent branch line is closed.

To respond to a long-standing concern from shippers, a faster Final Offer Arbitration process for disputes under $750,000 was introduced. The time frame for this process was set at 30 days versus 60 days for larger disputes.

The 2000 policy reforms also saw the introduction of a program to monitor and report on the grain handling and transportation system. The program is providing key information to the federal government and other interested parties on the impact of grain handling and transportation reforms, and the overall performance of the system.

The Canadian Wheat Board committed to tender an increasing portion of its shipments to the ports of Vancouver, Prince Rupert, Churchill, and Thunder Bay.

Finally, recognizing that the new reforms would increase pressures on rural roads, a five-year, $175 million funding program was established.

I would now like to address the revenue cap.

The goal of the revenue cap is to provide the two major railways, CN and CPR, with greater flexibility to price their services based on commercial considerations, thereby promoting more innovative railway service offerings and generating better market signals for grain to move more efficiently.

The revenue cap applies to grain grown in western Canada and to processed products of grain grown in western Canada. There are over 50 types of grains defined in the legislation as eligible grains under the revenue cap. These include the six major grains—wheat, barley, canola, oats, rye and flax.

The revenue cap applies to the same movements previously covered by the regulated maximum rates. Western grain movements must originate in western Canada, that is, from any point of origin west of Thunder Bay or Armstrong, Ontario, and be destined to the Port of Vancouver or Prince Rupert, British Columbia, for export, or Thunder Bay or Armstrong, Ontario, for domestic consumption or export, or Churchill, Manitoba, for export.

In practice, the cap does not apply to movements to Churchill, Manitoba, because traffic moving to Churchill is inter-changed with a shortline railway that is not an eligible railway under the Act.

As you are aware, grain is exported from Vancouver and Prince Rupert by ship to world markets.

Both CN and CPR serve the Port of Vancouver, while Prince Rupert is served exclusively by CN.

I will continue my remarks after oral question period.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Madam Speaker, I agree that we need these organizations and we need to strengthen them and make sure that they actually do the job they were set out to do.

The problem is we are seeing over and over again that these organizations are being influenced unduly by bigger interests, well funded, well heeled interests, to the detriment of the smaller countries, smaller interests, small farm producers in Canada. We, as a government, duly elected by the people, need to have more backbone. We need to be willing to stand up more often and say, “Hang on here. We are moving too quickly. We do not fully understand the whole consequence of this ruling on us. We want to have some time to take a look at it and see it through and understand the impact that it will have”.

Every time the World Bank or other organizations that direct investment and development around the world meet, they are being targeted by civil society, by groups of ordinary men and women who understand that these organizations, and in some instances duly elected governments, are being unduly affected by well heeled and resourced organizations with tremendously narrow self-interests. That is my concern.

Canada in this instance under Bill C-40 has to consider absolutely everything, including the timing in terms of what we do. We do not want our grain system contaminated in any way and our farmers affected negatively; just as we do not want this terminator seed introduced into our country or third world countries so that it affects the industry and actually decimates it.

We want to see countries like the U.S. brought to heel and have them, as well as us, respond in a respectful way to some of these rulings. We do not want it to seem that it is always the big guys who are winning at the expense of the little ones.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Madam Speaker, I appreciate the opportunity to rise in the House today and put a few thoughts on the record concerning Bill C-40 and the protection of Canada's right to identify what grain is coming in, what grain is moving across our land and what grain is making its way into all of those industries in our country that make product and supply consumers. This is so that all of us are confident and convinced that our health is protected, our economy is protected and, most important in this instance, our farmers are protected.

Having been here for the last eight or nine months and having listened to debate in this House, I have to say that I get a very uneasy feeling that the government does not really understand in a fulsome way the challenges faced by farmers across this country, challenges faced by farmers in my own riding of Sault Ste. Marie, in constituencies across Ontario and in other provinces.

We have had at least three take note debates in this House about the issue of BSE and the impact it is having on producers across this country. People and families invest their life savings and every ounce of energy they have to bring their best game to the table, yet at the end of the day decisions are made at higher levels by governments and organizations that do not seem to understand the priority of the small farmer in this country, and they continue to make decisions negatively.

We have some concern that this is in fact what is happening again in Bill C-40. In some ways we are putting the cart before the horse here. In other ways we are being hauled around by the nose by these organizations out there on the world level, organizations that continue to protect the interests of the most powerful against the smaller entities, the smaller countries that simply want to have a level playing field where these kinds of things are concerned.

BSE continues to rage as a huge challenge to farmers and to farming. The family farm is affected very directly by this. We still cannot get our product across the border because, from everything that I have read, the Americans have decided that it is in their best economic interests not to do that. There is nothing in that decision about health or science or good farm practices. It is all about politics and power and influence. This concerns me. It concerns me in that instance and it concerns me in regard to Bill C-40. I will certainly talk more specifically about the bill in a few minutes.

Just a few minutes ago, we heard the member for Joliette talk about the impact of a decision that came down last week on milk products and supply management. Supply management is a very important vehicle in this country to protect farmers and to protect the dairy farm. In constituencies across this country and in my own riding, particularly out in East Algoma, supply management is what keeps producers viable where dairy farming is concerned. It is what keeps them from falling into the very difficult circumstances that we see in the cattle and beef industry at the moment in this country. As a matter of fact, dairy producers are certainly affected by it, both directly and indirectly.

Let us not start meddling with the supply management template that is out there now. As has been spoken of, 20% now is going to be taken away because of new imports coming in, a ruling by the WTO that affects Canada negatively, and this government does not have the intestinal fortitude to stand up and call on article XXVIII to be put in place so we can actually go to the table and appeal that ruling and decision.

All we have to do is look at the effectiveness of the United States, the American farmers. When they see absolutely anything coming down the pipe, by a WTO ruling or something the Canadian industry or government does, they immediately use every vehicle at their disposal to challenge those decisions if they think it will affect negatively their industry, their farmers, their economy and their communities.

In Canada we seem to always be timid, almost afraid, to stand up to the powers that be. In the instance of supply management, it seems the country we are most concerned about somehow insulting or affecting in some negative way is New Zealand. Apparently calling on the World Trade Organization to appeal the decision would somehow affect negatively our relationship with New Zealand.

What about our relationship with our farmers? What about our relationship with those communities that depend on farming as their prime industry? What about the relationship of the government with its economy overall, recognizing that farming is one of those pillars of the economy that has served us so well for so long? We now are so ready and so easily willing to say that there are bigger priorities that we have to be concerned about and that we have to play on a national playing field. We have to be concerned about the temperament of other countries and what they do.

The government has a responsibility to have some backbone. It has a responsibility to stand up whenever a sector of our economy, our country, our industry is challenged and affected. It has a responsibility to say no, to hang on for a minute and look at it. It should not be afraid to appeal decisions by organizations like the World Trade Organization.

The purpose of the bill before us is to amend the Canada Grain Act and the Canada Transportation Act to bring them into compliance with the WTO ruling that decided Canadian grain handling and transportation practices violated Canada's national treatment obligations under GATT. Here we go again. The government wants the bill passed before the current crop year of July 31 in order to coincide with the WTO deadline of August 1. We do not want to attract retaliation from the U.S. We want to avoid paying compensation, but there should be some way for us to put on the table some of our very real concerns about the bill.

We have to understand that even though the purpose of the changes affect grain shipments west of and not including Thunder Bay, this is a national issue, something about which all farmers need to be concerned. It could be another block in that wall which will expose the Canadian farming and agricultural industry to all kinds of attack by big U.S. and European interests and organizations that do not readily, if we do not challenge them, recognize the impact all this will have on Canada and Canadian farmers.

Within the framework of the WTO ruling, these changes need to happen before August 1. However, there are a few areas of concern that are not addressed in the new legislation. Some concerns are on the implications in treating imported grain differently than Canadian produced grain.

The proposed amendments will repeal or amend existing provisions in the two acts which treat imported grain differently from Canadian produced grain. This includes removing the requirement that authorization be sought from the Canadian Grain Commission before foreign grain can enter licensed grain elevators. They remove the requirement that operators of licensed terminal or transfer elevators must seek Canadian Grain Commission permission to mix grain and extends the railway revenue cap to imported grain.

The first concern with the bill is with the provision of reporting U.S. and other grain imports into Canada. The proposed amendments allow for reporting, but there is little direction or evidence it will be effective as it now will come after the act instead of before. It is like closing the gate when the horses are already out

To fill the gap, the amendments to cause the process of reporting, the government has stated that it will put in place a regulation that will require elevator operators to report to the CGC, the Canadian Grain Commission, the origin of all grain and if they mix Canadian with foreign grain, to identify them as mixed.

However, it is our understanding that the CGC, CFIA and CWB are only now drafting the regulation. The timeframe allows for it to not be put in place until August 2006, a full year after Bill C-40 has gone through the House. This again brings us back to the point of closing the gate after the horses are out.

The second concern with the bill is the differentiation between imported grain and in transit grain. The legislation does not seem to be clear whether these will continue to be treated differently, or how the requirements might be different or if they will become one and the same. Currently, most grain coming into western Canada from the U.S. is simply in transit, being shipped to one of the ports. The WTO ruling seems to allow for in transit grain to be treated just as that so it does not need to receive national treatment. However, the legislation seems to redefine all grain coming in from the U.S. as imported.

Our party believes it is very important we define that in transit grain should not receive national treatment, otherwise we are left vulnerable and with very little recourse should American producers choose to take advantage of our rail line and our elevators.

Our party does not see a real problem with amending the two acts so we are in compliance with the WTO ruling. The government has already stated clearly that it will not appeal the decision. If we take too long, farmers might end up facing retaliation from the U.S. and WTO, which will not help them at all. However, the government should be making these changes with care. We do not want to leave western grain producers without regulations or protections. Those in the field have pointed out that previous protocols or regulations established by the CGC have had questionable results. This cannot be allowed to happen with the mixing of grain as it could call into question the quality of Canadian grain.

We are hearing that most producers are okay with the amendment to be in compliance, but are concerned that there be a defined difference between the treatment of in transit and imported. As well, there is the worry of the loss of reporting and what that will mean in keeping out unregistered varieties or even genetically modified grain or seed.

This brings me to another point that was raised in the House, which still has not been addressed by the government. It is an area where the government is being weak-kneed again and not taking a stand. What will we do about genetically modified seed and what is referred to as the terminator seed?

The WTO wants to allow big seed corporations and multinationals to introduce the terminator seed which will, after a seed is used once, render it useless again. The impact that will have on our own farmers, particularly small farmers who go from year to year wanting to reuse their seeds, and on developing countries and smaller third world countries, not to speak of a crime against nature, is it will decimate those economies and farming operations. We are afraid that Bill C-40 will have an impact too where we might not have the facility to recognize and know what is crossing through our territory, particularly where GM grain and seed is concerned.

We have some concerns about the WTO, an unelected body. Why does Canada have to endanger the quality of its grain because an unelected trade body says so and do so in a timeframe that is obviously too rushed for the government?

As well the U.S. consistently chooses to ignore WTO rulings, as well as those through NAFTA. Why do we have to follow through to make trade easier for American producers when the U.S. is violating such trade obligations, such as those under the GATT, with impunity?

Again I raise and point out what is happening with BSE and cattle. It is not a big stretch to talk in the House about the impact on our industry with regard to softwood lumber and the tough stand that the Americans have taken. Why can we not have that kind of backbone and intestinal fortitude?

The government is going along with globalization, but is not dotting the i 's and crossing the t 's. If we are not careful when we change legislation like this to create compliance, we could be allowing a back door where problems like unregistered seed and GM crops could get in and contaminate Canada's grain supply, which is certainly not something Canadian farmers need.

We have consulted with a fair number of western farm organizations, as well as with the Canadian Wheat Board. All in all, most producers are okay with amending to be in compliance, but are concerned that there be a defined difference between the treatment of in transit and imported, as well as the worry of the loss of reporting and what that will mean in keeping out unregistered varieties or GM grain or seed. The Wheat Board in particular believes that without regulatory changes that coincide with the implementation of the bill, Canada's reputation for providing high quality, value added grain will be diminished because imported grain will not be reported properly.

[Pierre Paquette, Bloc, Joliette, QC]

Madam Speaker, it is my pleasure to participate in this debate on C-40, although the bill has little impact on Quebec and Quebec agriculture, I have to say right off. However, it allows us to look at a number of matters pertaining to agriculture and WTO negotiations.

I must say right off that we will support the principle of this bill, as it arises from a decision by the dispute settlement body of the WTO. In addition, we believe that international trade law must apply. We wish the American authorities were as vigilant as the government in this specific matter. I would point out that the WTO ruled against the American government with respect to the Byrd amendment. Since then, the U.S. government has still not budged, and we have been obliged therefore to implement a series of retaliatory measures, with the help of other countries, in order to force the Americans to move.

Obviously, we consider it entirely reasonable for the Canadian government to make the adjustments necessary pursuant to the decision by the WTO. In this context, we will support the principle.

That said, we want to hear from witnesses in committee on the financial repercussions of this bill, in order to find out the western grain producers' concerns. As I mentioned, Quebec is not involved, but it will be important for us to hear what westerners have to say.

I am rather surprised, this morning, opinions are not unanimous with regard to the Canadian Wheat Board, as I had thought. We therefore think it important for the committee to hear witnesses so the Bloc can get a clearer idea of whether to support or reject the bill. At this point, however, I repeat, we support the principle.

Having said that, while we support the principle of the bill because this legislation results from a decision of the World Trade Organization, the Bloc Québécois intends to continue to defend producers' ability to choose how they want to market their products. As hon. members know, in Quebec it is possible for producers to have mixed plans. The decision to set up these plans is made through discussions by the agricultural sector involved. When a majority of producers wish to set up a mixed plan, this plan applies to the whole sector. This seems perfectly reasonable, because it not only allows farm producers to have a better balance of power with the companies that buy their products and which, incidentally, are often multinationals, it also allows them, by negotiating as a single entity, to get better prices for their products. Moreover, this gives them some stability in terms of revenues, while also allowing processors to have access to quality products that are also safe.

Therefore, in the negotiations that are taking place at the World Trade Organization on agriculture, we must ensure that this ability to market agricultural products is protected. In this regard, we are somewhat concerned by the Liberal government's behaviour. There is this lax approach by the government and a lack of determination in its positions. There is also the fact that, sometimes—as least based on what we can read on its Website—the government is not taking very firm positions on issues such as supply management or the protection, as I was saying, of an agricultural model that we can call our own.

I want to point out to the House that the Bloc Québécois has given its support to a movement called Maé-Maé. This is the acronym for the Mouvement pour une agriculture équitable. This movement for fair agriculture caught on in Quebec with the union of agricultural producers, particularly the chapter dealing with international development, which is enjoying a great deal of success in francophone African countries.

This movement stands for a number of principles, including the capacity of individual countries to adopt an agricultural model that not only suits their needs in terms of food security but also ensures adequate incomes for farm producers, particularly those operating small or family farms.

We hope that, while acting on the WTO decision, Canada will take a much firmer stand for fair trade agriculture, that is agriculture as determined with complete autonomy by the producers in each country.

In this context, it is extremely important that the Liberal government take note of the motion unanimously passed in this House on Friday. This motion calls on the government not to agree to any concession with respect to the supply management system during the World Trade Organization negotiations. In light of this unanimous decision of the House, we would not want the government to continue to act as if no vote had been taken here. In this context, we expect the Government of Canada to raise its voice in defence of this supply management system which, as I said earlier, reflects the choices made by a number of producers in specific agricultural sectors.

We know that supply management is extremely important for the milk sector, particularly in Quebec, but also in Ontario. It also applies to table and breeder eggs as well as to poultry. I will come back to that later.

We are in favour of Bill C-40. As I indicated, since its purpose is to implement a decision of the World Trade Organization, a number of principles will have to be defended much more firmly by the Government of Canada, a Liberal government for the time being.

We know that in the United States, New Zealand and Australia, there is a real guerilla war being waged against the agricultural system in Canada and Quebec. The agricultural model used in Canada and Quebec is misunderstood and repeatedly challenged on the grounds that it violates the WTO rules. In fact, there is a similar misunderstanding among the Americans right now in relation to softwood lumber.

Interestingly enough, the WTO decision, which led to Bill C-40, does not call into question the fact that the Canadian Wheat Board is the exclusive exporter of wheat in western Canada. That is not at issue whatsoever. Other things are. Therefore, we must build on the positive points in the decision handed down by the WTO's dispute settlement body. In my opinion, this is a very clear message, which is valid for the Canadian Wheat Board, as well as other marketing boards and practices in Canada and Quebec.

In essence, three practices used to date have been ruled inconsistent with WTO policies. Canada has been asked to comply with these policies by April 1, 2005. Bill C-40, then, is very timely.

The first practice is the rail revenue cap. A cap currently limits transportation costs for local grain; there is no such cap for foreign grain. The Canada Transportation Act must therefore be amended so that foreign grain can have the same access to the rail network as Canadian grain. Consequently, the word grain will be redefined. Clause 3 (b) of the bill makes reference to this. The same cap will apply to the transportation of local and foreign grain. The WTO had considered this practice a form of export subsidy.

The second practice is grain entry authorization. Currently, the Canadian Grain Commission must allow foreign operators to store foreign grain in licensed facilities.

The World Trade Organization felt that this section gave Canadian grain an unfair advantage, thus, subsection 57( c ) of the Canada Grain Act was simply dropped.

One final aspect contested by the World Trade Organization was the authorization to mix grains. Before domestic grain could be mixed with foreign grain, authorization was needed from the Canadian Grain Commission. This was thought to be a way of hindering foreign grain import.

Thus, clauses 1 and 2 of the bill are being replaced to address what the WTO considered anti-competitive conduct, that is, requiring operators to inform the Canadian Grain Commission when there is a mix of several grains, of foreign grains and Canadian grains. Paragraph 72(1)( b ) of the Canada Grain Act was kept. It ensures that purely Canadian grain is properly labelled in order to preserve the excellent reputation of Canadian grain in international markets.

These are extremely specific changes. As I have been saying since the start, it is interesting that in this World Trade Organization decision there was no dispute over the legitimacy of collective marketing for grain. Farmers in the west can say what they want about this, but personally I think it is perfectly reasonable for farmers to form groups to sell their products collectively to processors.

Earlier, there was discussion over french fries and how there is no marketing office in the west. In Quebec there is no potato marketing office, but there is a joint plan. I can tell you, there are some intense negotiations between potato farmers and chip makers over the price of potatoes. I was the executive director of CSN when I left, and I used to provide training to potato farmers on how to achieve a strong bargaining position and how to negotiate with multinationals.

This is one thing that is done, then, and a choice Quebec producers have made. American multinationals and Canadian ones, which do more business in the west and in Ontario, fail to understand it, however.

I think it important to note that, while the Americans have often contested the role of the Canadian Wheat Board at the WTO, the organization has never found fault with it. I would like to draw members' attention to the fact the decision provides these principles are not infringed when a state trading enterprise acts on the basis of commercial considerations. I will read some passages from the decision by the WTO dispute settlement body.

First, it provides that the Canadian Wheat Board is controlled by the grain producers whose grain it markets. Second, it provides that the fact that the Canadian government does not oversee the selling operations of the Canadian Wheat Board increases rather than decreases the probability that the Canadian Wheat Board will act in the commercial interests of the producers. Therefore, the special body concluded that, given the structure of the management of the Canadian Wheat Board, the Board is motivated to maximize the income of the producers whose products it markets.

In other words, the Canadian Wheat Board acts as a corporate selling agent, but within the context of market mechanisms, that is, the law of supply and demand intended to maximize profits. Its aim then is to maximize profits for producers. I believe therefore that the government would do well to take note of the considerations of the dispute settlement body, especially in the area of supply management.

I am going to take the time to go into some detail on this, as it is vital to us in Quebec. In the region I represent, the Lanaudière region, there are a lot of dairy, poultry and egg producers operating under supply management.

As you know, what is interesting about supply management is that its decisions are made by producers and it ensures a continuous supply to processors, fair revenues to producers and high product quality.

There are three pillars that must all be maintained if this is to be accomplished. The first is production planning, which is why it is called supply management. The second pillar consists of a pricing mechanism that ensures a fair income without government subsidies. This is very important. When supply is managed as a function of demand, this ensures proper income and proper prices for the product. There are no government subsidies.

There is a serious problem at the present time and Canada needs to start taking notice of it. At the present time there is a debate under way at the WTO on import duties and, as far as subsidies are concerned, it is a free for all. The Americans and the Europeans are heavily into agricultural subsidies. This disadvantages the developing countries in particular, but Canada as well, since it has decided to place more emphasis on administering its domestic market.

In order to administer that domestic market, a third pillar is needed. This third pillar deals with import quota control. Since the Marrakesh accord, these have been controlled by import tariffs to discourage foreign exporters from entering the Canadian and Quebec markets.

The problem is that the federal Liberal government is guilty of totally unacceptable laxity with respect to this third pillar, despite the statements made over and over again by the Minister of International Trade, the Minister of Agriculture and Agri-Food, and the former Minister of International Trade now Minister of Foreign Affairs. Dairy substitutes or products containing dairy substitutes are still being let in.

Last Friday, I gave the example of butter oil. In fact, 49% of dairy products are not covered by the list of commodities subject to quota by Canada. A policy decision absolutely must be made to add butter oils to the definition of dairy products, in order to ensure that these enter our market at rates compatible with supply management and with the third pillar, that is limitation of imports aimed at better coordinating supply and demand.

Even more serious is the fact that the Liberal government seems to be living in a bubble. Despite its rhetoric, it does not notice the extremely important technological changes that now allow us to separate the various components of milk. First, it was lactose, proteins and fat. Now, it is possible to break these by-products down even further and import them as separate products. In a few years, nothing will prevent someone from importing these products to Canada without any restrictions, reconstituting the milk and then selling it on the Canadian and Quebec markets. This undermines the very foundations of the supply management system. That is the problem.

Currently, the WTO does not have any problems with supply management. This is reaffirmed, in a way, in this ruling on the Canadian Wheat Board's practices regarding grain. However, the federal government does not seem to be taking into consideration the new reality of milk substitutes entering the market made up of 49% milk components. Indeed, it is now possible to break milk down into various components that can enter the country almost without being subject to quotas.

As I mentioned earlier, under the Marrakesh agreement, it was decided to substitute import controls. This means that we are now using tariff quotas, instead of import quotas. So, the government must take the necessary steps to change its tariff lines, so that these products are deemed to be, on the one hand, milk products and, on the other hand, products that are subject to the protective tariffs that apply to imports.

I will conclude by providing a very concrete example that would require two changes. In tariff item No. 2106.90.93 and in the following one, instead of saying “containing 50% or more by weight of dairy content”, we should say “containing 10% or more by weight of dairy content”. These products would then be subject to tariff duties of 274.5%, which would allow us to maintain that system.

Again, the only thing preventing us from taking such a measure is the government's lack of will. Let us hope that the federal government will wake up and ensure that our producers, particularly our dairy producers, are better protected.

[Garry Breitkreuz, Conservative, Yorkton—Melville, SK]

Madam Speaker, I listened with great interest as my colleague outlined some of his concerns with regard to Bill C-40. I wish that he would complete his remarks and give me a little bit of the feeling of what his constituents are saying with regard to this. I will give him an opportunity to complete his remarks that he was unable to do in the time allotted. I feel it is very important to get some of these comments from the people in Alberta, Saskatchewan and Manitoba on the record. I hope the member will comment on some of these things.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I welcome the opportunity to speak to Bill C-40. I would like to acknowledge the tremendous work that my hon. colleague from Haldimand—Norfolk has done in providing support for this piece of legislation.

I am having a great deal of difficulty supporting the bill. However, I will support it. Once again the Liberal government has dragged its feet for so long on something that should have been fixed a long time ago, but it will not be the Liberal government that suffers if we do not pass this legislation. It will once again be the taxpayers, and in this case it will be farmers. It is with some disgust that I have to support Bill C-40 in its present condition.

I am glad that the hon. member for Haldimand—Norfolk is recommending an amendment to the bill. It is very critical that we address the fundamental workings of the archaic Canadian Grain Commission which is in place for all of Canada but which certainly plays a leading role in western Canadian grains and oilseeds.

This bill to amend the Canada Grain Act and the Canada Transportation Act would never have come into play if we had taken the recommendations of a study that was done back in the mid-1990s. Justice Willard Estey travelled across the country and consulted with farmers and people in the transportation industry to find out what was wrong with the system.

The Canadian Wheat Board monopoly, not necessarily the Canadian Wheat Board itself but the Canadian Wheat Board monopoly, the single buyer of wheat and barley for human consumption in western Canada, and I emphasize in western Canada alone, was found to be very flawed when Justice Estey put forward his recommendations. These recommendations were backed up by a follow-up process by a very well-respected former deputy minister in many portfolios in the government, Arthur Kroeger. He agreed with all of Justice Estey's findings.

Justice Estey would like to have seen the monopoly gone completely, but his recommendation was that we go to a commercial transportation system where the Canadian Wheat Board took ownership of the grain at port. What a wonderful, novel idea, but would the Liberal government adopt that? No. It chose to maintain the monopoly that provides no benefit to western farmers. The emphasis needs to be placed on the fact that it is western farmers alone who are under the control of the Canadian Wheat Board monopoly.

There have been similar systems around the world. The Australians had a wheat board. They chose to privatize it. Those who want to participate in it buy shares. It is run like a publicly traded company. It works wonderfully. Can we do that in Canada? No. The Liberal government said that farmers should not have control of their own destiny.

There are a lot of things the Liberal government could have changed so we would not be scrambling at the last minute to change a piece of legislation which, if we do not change it, will once again impact western Canadian farmers. Indeed, it probably will impact farmers all across the country if we do not make these changes.

A lot of what the WTO panel ruled on was impacted by the Canadian Wheat Board's monopoly. It was not the first time it had challenged the Wheat Board and it will not be the last time. It will simply tweak the system to make it fit for the present time and I am sure we will be dealing with this again in the future.

I represent the riding of Macleod in Alberta. The majority of farmers in my riding and in fact the majority of grains and oilseeds producers in western Canada are way beyond requiring a monopoly market their own grain. Wheat and barley are only a minor part of production in western Canada. Every other commodity we grow on our farms we market ourselves.

We have heard in the House today about what a wonderful job the Canadian Wheat Board has done by providing excess returns to Canadian farmers. That is not a fact. Our returns have actually been reduced.

We are also faced with the issue of the rail revenue cap. Justice Estey recommended that we move to a commercial system. The reason we have a rail revenue cap is because the Liberal government did not want to adopt the recommendations Justice Estey put in place. Once again we are paying for the ineptness of the government.

As was mentioned previously by the hon. member for Haldimand--Norfolk, the Canadian Grain Commission is an outdated system. I had an opportunity to question the chief commissioner who was before the standing committee a week or two ago, and I asked her why we do not have a Canadian french fry commission if the Canadian Grain Commission is so wonderful? Canada has a huge industry that turns potatoes into french fries, but we do not have a commission to market those french fries. We do not have a commission that grades french fries.

We do have however a grain commission that puts an arbitrary grade on grains. That is part of the reason why we are going to have issues with grain mixing. This piece of legislation attempts to address that problem through our elevator systems.

I need to raise one other concern along these lines. The northern tier states in the United States are captive shippers. There is one railway company that provides delivery for them to the west coast. Their freight rates are not quite double what ours are in Canada, but they are certainly in excess of ours. If we were to include the import of grains, then the way this legislation reads, we would see a huge influx of American grain coming through Canada because it would be cheaper to truck it into Canada, load it on rail cars, and send it to the west coast. What is going to happen to car availability for our western grains?

Farmers in my riding are concerned because their bins are still full from last year. It is a question of whether or not the Wheat Board will actually sell the grain or whether or not we will be able to move it to the coast. Farmers are putting in new crops for this year and yet their bins are still full from last year. We can ill afford to take on a larger capacity of grain to be moved to the west coast.

I wish I had been able to address Bill C-40 as well as the hon. member for Haldimand--Norfolk did. I did want to raise the concerns that farmers in my riding have raised with me. As I have said, we will be supporting this bill, but only with amendments and only with the provision that we take a serious look at the Canadian Grain Commission.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Mr. Speaker, last summer a World Trade Organization panel ruled against Canadian policies affecting the importation of grain from the United States. The panel ruled that Canada should not treat imported grain differently from Canadian grain when it is mixed or authorized for entry into the system. The panel also found that the rail revenue cap treated imported grain less favourably than western Canadian grain.

The Conservative Party recognizes that implementing the WTO's decision is critical if we are to respect our international trade obligations. We understand it is important to treat foreign products the way we would want Canadian products to be treated in foreign countries. We recognize that there is a tight timeline regarding passage of this bill. However, if the Canada Grain Act is going to be amended, then the concerns of farmers and others in the grain industry should be formally recognized.

The Canadian Grain Commission is integral to our country's system of grain handling, but unfortunately the commission has been unable to keep up with changes in the industry both in Canada and abroad. The result has been a restrictive approach to regulating Canada's grain industry, an industry that demands that it has influence in establishing and maintaining a seamless grain handling system.

The Western Grain Elevator Association, an organization that represents major grain handling companies, has described in detail to the Standing Committee on Agriculture and Agri-Food how the grain commission is not enhancing the international position of Canada's producers; rather, it has become an obstacle to growth. In order to put the commission back on track to keep pace with the industry, simple amendments to its governing legislation, the Canada Grain Act, are no longer a viable option.

The obvious place to start would be to focus on the single barrier to realizing change, that being the governance structure of the grain commission. It is obvious that the role of the chief commissioner and the entire governing board must be looked at. The current governance structure of the grain commission has created a reporting relationship of commissioners that does not take into account the best interests of the industry. We would like to see the commission led by a more accountable body whose objective would be to serve the industry.

Those of us on this side of the House care about accountability. We recognize that a democratic process requires accountability to ensure that those who are subject to the decisions of a governing body are treated fairly.

This may be shocking to hear, but the regulatory decisions of the Canadian Grain Commission are not subject to appeal. These decisions can and do have far-reaching consequences for producers as well as for the entire grain sector. Nearly all commercially oriented transactions have dispute resolution mechanisms, so why does the Canadian Grain Commission leave industry participants without recourse? The answer is to amend the act to give members of the industry the ability to appeal decisions of the grain commission in a quick and cost effective manner.

The mandate of the Canadian Grain Commission must also be addressed. The principal objective of the commission is clearly stated in the Canada Grain Act. Clearly, it leaves out the interests of participants that handle grain after it has entered the system.

A key role of the grain commission is to protect primary producers from the risks of industry participants going belly up. The commission requires that all elevators post a bond to the commission, an amount equal to the value of the grain they are handling, but a frequent complaint in this regard has been a lack of enforcement on the part of the grain commission. Rather than address the lack of enforcement, the commission instead warns producers that the onus is on them, that they should only deal with licensed grain dealers.

Unfortunately we have seen that despite the licensing regime, the bonding system does not necessarily protect producers from the financial failure of grain elevators. Even if an elevator is bonded, the security held by the grain commission is occasionally not sufficient, and producers are still left with the loss if a company goes under. A requirement that results in such a major lack of operating capital within the industry should at least work.

Last but not least is a serious concern which the minister is well aware of but has not corrected. The issue is surrounding the certificate finals which are issued by the Canadian Grain Commission. These certificates are issued to grain companies identifying the grade of grain stocks that are destined for port. They are not so final. In some instances the grain commission has carried out tests of grain stocks after they have left for port, or even after they have left port. At that point certificates have actually been withdrawn and revised certificates have been issued. As the Western Grain Elevator Association puts it, this is like making an offside call in a hockey game and adjusting the score once the game is over.

Companies cannot manage their risk nor their business under such a system. The issue is so serious that it ended up in a federal court. The court recommended that either testing be done on a timely basis, or that a system of insurance be implemented so that grain handlers are not exposed to unreasonable liability due to no fault of their own.

Unfortunately, the court also pointed out that the commission can simply enact new regulations that allow it to cancel inspection certificates and issue new ones. That is exactly what the Canadian Grain Commission intends to do. This will not fix the problem though. It will simply allow this unacceptable situation to continue. This is indicative of the government's approach to agriculture policy. It is a top down approach with a certain disregard, if not outright contempt, for Canadian agricultural producers.

As previously mentioned, we recognize that there is a tight timeline regarding passage of this bill, but the current state of the Canada Grain Act must be formally recognized. The concerns of producers and others in the grain industry cannot continue to be ignored.

That being said, opening up the Canada Grain Act would be like opening up a can of worms. The worms are the concerns of primary producers and elevator operators, disgruntled participants in Canada's grain handling system. Opening up this legislation would present an opportunity to address many needed changes to the Canadian Grain Commission which is mandated by this act.

From a pragmatic point of view, the reforms needed cannot be made within the timeframe allotted to pass Bill C-40. That is why the Conservative Party of Canada will, among other things, propose an amendment that upon passage of this legislation the government initiate a mandatory comprehensive review of the Canada Grain Act and all organizations mandated by the act to be completed within one year of the bill coming into force.

Our amendment would draw attention to concerns raised both by primary producers and the grain industry. It would ensure that the concerns of the industry were formally recognized in a timely manner, paving the way for a comprehensive bill that would legislate much needed reform for the Canadian Grain Commission. We will be asking for the bill to be amended to reflect our party's concerns and those of the Canadian grain industry.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Mr. Speaker, I rise in the House today on Bill C-40, an act to amend the Canada Grain Act and the Canada Transportation Act. Before I continue, I would seek the unanimous consent of the House to split my time with the hon. member for Macleod.

[Carolyn Bennett, Liberal, Minister of State (Public Health)]

Mr. Speaker, I am pleased to rise in support of Bill C-40, an act to amend the Canada Grain Act and the Canada Transportation Act.

This bill amends the Canada Grain Act and the Canada Transportation Act in order to bring them in line with a decision by a special panel of the World Trade Organization, whereby certain practices of grain handling and transfer in Canada do not comply with Canada's obligations of national treatment under the 1994 General Agreement on Tariffs and Trade.

When we look at all the tremendous accomplishments of the Canadian agriculture and agri-food industry over the past 100 years, the Canadian grain sector stands out as a great success story in its own right. Today Canadian wheat, barley and other grains are known by our customers all over the world for their outstanding quality, consistency, cleanliness and innovation.

Each and every year Canada's grain industry does $10 billion worth of business here in Canada and around the world. Those dollars create jobs and prosperity for Canadians here at home. They support our rural communities, which are the lifeblood of Canada's economy. Canada's grain growers sustain our health and well-being as Canadians by putting the very bread on our tables. We must never forget that; to quote the old saying, “If you ate today, thank a farmer”.

Canadian grain is about much more than bread. It is about a large number of products, such as durum wheat in pasta, oats in porridge, barley in beer, and so on.

Whatever the product in question, when Canada's global customers purchase Canadian grain for processing, they can count on getting the same high levels of quality and cleanliness that they have come to expect, load after load. They can count on knowing exactly how that grain will perform during processing, load after load.

This world class reputation that our Canadian grains enjoy around the globe has been earned. It has been earned in large part through the hard work first and foremost by our farmers. It has also been earned by grain handling companies, by research scientists, and by organizations such as the Canadian Grain Commission, the Canadian International Grains Institute, the Canadian Wheat Board and others.

Today and for the future the Government of Canada will continue to stand behind both the Canadian grains and the Canadian oilseeds sectors. In March we announced a $1 billion farm income payment program of which we estimate about $480 million will help grains and oilseeds producers with immediate cash flow pressures brought about by a number of factors, including weather losses, low market prices and unfavourable exchange rates. These funds will help our producers as a long term strategy is put in place to help the sector deal with a projected continuing decline in grains and oilseeds commodity prices.

Part of the strategy is growing and expanding our export markets for grains. We are working in partnership with the Canadian grain sector to do that. We are also working to secure and maintain the world class grain quality assurance systems that continue to open new doors in marketplaces around the world.

As members of the House will know, Canada's marketing system for wheat has been challenged by the United States on a number of occasions in recent years. Each time the major issue has been the Canadian Wheat Board, and each time the ruling has gone in Canada's favour. Both at NAFTA and the World Trade Organization, panels have consistently upheld Canada's position that the Canadian Wheat Board is a fair trader and that its mandate, structure and activities are consistent with our international trading obligations.

In April 2004 a WTO dispute settlement panel ruled that the Canadian Wheat Board was consistent with Canada's international trade obligations. The U.S. immediately appealed. In August 2004 the appellate body of the WTO upheld the original ruling, namely, that the U.S. had not provided any evidence whatsoever that the Canadian Wheat Board had acted contrary to Canada's international trade obligations.

Once again that ruling confirmed that the Canadian Wheat Board operates within the rules. It further supports Canada's position at the WTO negotiating table, namely, the Canadian Wheat Board is a fair trader.

The WTO did find against Canada regarding certain grain handling and transportation policies. In response to those findings, Canada decided that changes to Canadian legislation could be made that would both serve to meet our international trade responsibilities and at the same time maintain our world-leading grain quality assurance systems.

To summarize briefly, the WTO ruling requires action by Canada on three particular grain policies currently in force under the auspices of the Canadian Grain Commission and Transport Canada.

The first is entry authorization requirements. Under the Canada Grain Act, permission must be sought from the Canadian Grain Commission before foreign grain can enter licensed Canadian elevators.

The second is mixing of foreign grain. Under the Canada Grain Act, permission must be sought from the Canadian Grain Commission before a foreign grain can be mixed with domestic grain.

The third is the rail revenue cap program. Under the Canada Transportation Act, a maximum is imposed on the revenues that railroads may receive on certain shipments of Canadian domestic grain.

To comply with the WTO rulings in these areas, the government is proposing amendments to the Canada Grain Act and the Canada Transportation Act. First, to address the issue of entry authorization requirements, the amendments to the Canada Grain Act remove the requirement that Canadian Grain Commission permission must be sought before foreign grain can enter licensed Canadian elevators. Instead, a regulation will be added requiring licensees operating grain elevators to report to the CGC the origin of all grain.

Second, to address the issue of mixing of foreign grain, the amendments remove the requirement that CGC permission must be sought before foreign grain can be mixed with eastern Canadian grain. The new regulation will also stipulate that if licensees operating elevators mix Canadian and foreign grain, they must identify that grain as mixed.

Further, all licensed elevator operators will be required to maintain the origin of grains at all times to ensure that grain is never misrepresented. It is essential that Canada continue to have the capacity to assure our buyers that they are getting what they pay for, namely, the consistent high quality they have come to expect from Canadian grain. The Canadian Grain Commission is confident that these changes in no way compromise our ability to do this.

In addition to the amendments to the CGA, amendments are required to the revenue cap provisions of the Canada Transportation Act in order to bring the cap into compliance with the WTO decision. One option would be to simply repeal the revenue cap provisions. Let me assure western Canadian grain farmers that the government has no intention of repealing the cap. It will function as usual for Canadian grain industry stakeholders.

Instead, the revenue cap will be extended to foreign grain that is imported into Canada. It will not apply to foreign grain that is in transit through Canada to some other destination. The government believes this change will not have a significant impact on the grain handling and transportation system.

At the same time, by implementing these changes, Canada will comply with our obligations under the WTO in the same way as we would expect other WTO member nations to do were they in our position.

The deadline for Canada to act in these matters has been negotiated with the U.S. It has been agreed that changes to the acts and associated regulations will need to be implemented by August 1, 2005.

Canada's grain quality assurance system is designed to ensure that the varieties of grain produced in Canada meet the strict quality specifications that customers have come to rely on.

We are confident that the amendments we are proposing today in no way compromise Canada's ability to fully protect and safeguard the integrity of this system, which has won and continues to win so many loyal customers the world over. We believe that Canada can conform with the WTO panel findings in a way that will have little practical impact on the Canadian grain handling and transportation system.

I can assure everyone that the grain sector is on side in the course of action we are taking. In fact, in January the parliamentary secretary for rural affairs held extensive consultations in western Canada with a wide range of stakeholders, including farmers, producer organizations, general farm groups, elevator operators and private grain companies. Overall, stakeholders were broadly supportive of the government's proposed approach and believed that the changes would have little or no impact on the current system.

There was also strong support for Canada to meet its WTO obligations. It is important to note that while indicating areas of non-compliance, the WTO panel nonetheless recognized Canada's fundamental right to maintain our own quality systems.

The WTO panel in no way ruled against grain quality assurance. In fact, the panel clearly articulated Canada's right to segregate grain to ensure the quality of grain shipments. Nothing in the ruling changes, compromises or dilutes Canada's fundamental right to safeguard the integrity of our world class grain quality systems.

The panel rulings back up Canada's position in the WTO negotiations, namely, that no disciplines on state trading enterprises, like the CWB, are needed beyond those agreed to by the WTO members in the July 2004 framework on agriculture.

It also supports our position that CWB is a fair trader, that its mandate, structure and activities are fully consistent with commercial considerations. It is Canada's hope that the decision by the WTO and our compliance in the areas I have outlined will lead other nations to turn the page and put our collective focus where it should be, namely on levelling the international playing field so our producers and processors can compete fairly and effectively in the global marketplace.

As the Doha round proceeds, Canada will continue to work closely with the Canadian grain sector and the entire range of agrifood stakeholders to achieve an outcome that is positive for the entire agrifood sector. We will continue to defend the ability of our producers to choose how to market their products, including through orderly marketing structures such as the CWB.

The whole of the agrifood sector and of the Canadian economy stand to gain from these negotiations. We are seeking prosperity for Canadians through secure access to markets around the world and we are seeking a stable and predictable business environment and a level playing field that will allow Canada's grain industry to leverage its competitive strengths to the maximum.

I am confident that the amendments to the Canada Grain Act and to the Canada Transportation Act which we are introducing today support those goals. That is why I support it and urge other members of the House to do the same.

[Mauril Bélanger, Liberal, for the Minister of Agriculture and Agri-Food]

moved that Bill C-40, an act to amend the Canada Grain Act and the Canada Transportation Act, be read the second time and referred to a committee.

Business of the House

[Tony Valeri, Liberal, Leader of the Government in the House of Commons]

Mr. Speaker, this afternoon we will continue with the opposition day.

On Friday, we will return to Bill C-43, the budget bill. If it is completed, we will proceed with Bill C-40, respecting the WTO.

The first item of business on Monday will be Bill C-40. If necessary, we would then return to the budget bill, which contains all the initiatives that I know Canadians support from coast to coast to coast, like the Atlantic accord, the new deal for cities, and the increase in payments to seniors through OAS.

We will then return to the second reading debate of Bill C-38, the marriage bill, which will be the first item on Tuesday. When that business is completed, we will return to departmental bills: Bill C-23, Bill C-22, Bill C-26 and Bill C-9.

Next Wednesday shall be an allotted day.

Canada Grain Act

[Andy Mitchell, Liberal, Minister of Agriculture and Agri-Food]

moved for leave to introduce Bill C-40, an act to amend the Canada Grain Act and the Canada Transportation Act.

(Motions deemed adopted, bill read the first time and printed)