Mr. Speaker, it is my privilege to be here today to speak to the proposed amendments to the Canada Grain Act. The government puts a high priority on this legislation because farmers have asked for it and we agree that it is high time that this act was brought into the 21st century.
Commitment to producers is shown in our improvement to the Canadian Grain Commission's mandate. In the past, because it includes the phrase “in the interests of grain producers”, it has from time to time resulted in differing interpretations of what that means. Based on the recommendations from both the COMPAS group and the Standing Committee on Agriculture and Agri-Food, 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 to regulate grain handling. Part one is undertaken in the interest of all Canadians, but in the interests of producers we felt that we needed to make sure they were specifically recognized. Therefore, part two will establish that the Canadian Grain Commission shall specifically protect producers' interests with respect to a few things.
The first is with respect to deliveries to elevators and grain dealers, the second is with respect to access to binding CGC determination of grades and dockage, and the third is the allocation of producer cars. We have made changes and improvements to the mandate in order to address the concerns we have heard from the industry across Canada.
The Canadian grain sector stands out as a success story among the considerable accomplishments of Canadian agriculture over the last 100 years. Due to the tremendous work of our producers, Canadian wheat, barley and other grains are known by our customers all over the world for their unequalled consistency, cleanliness and quality.
On a yearly basis, farmers earn about $10 billion from grain production in this country. That money helps to keep the economy of Canada running, both urban and rural. It sustains employment through the grain production chain, from farm input suppliers to elevators, to people who transport the grain and to processors. These dollars support our rural communities, which contribute so much to Canada's economy.
To put it in more concrete terms, it is Canadian grain growers who sustain our health and well-being. They are the people who put bread every day on our tables.
This government has taken concrete action in support of the vital agricultural sector in our economy. The minister has always talked about putting farmers first, and he has done that.
Almost three years ago, one of our first acts as a new government was in the interest of grain producers. We accelerated the grains and oilseeds payment program. It was my privilege and pleasure at that time to work with the opposition parties in the House to get that bill through. We worked on it with all the other parties and were able to get quick passage of that bill and those changes.
We are investing more than $2 billion in the development of biofuels to open up new markets for our grain and oilseed producers, to create new jobs for our rural communities and to create a better environment for Canadians. We have given producers a chance to participate in those programs. These dollars have helped with the planning of new biofuel projects across Canada and will help build biofuel and biodiesel plants.
We have improved cash advance programming by doubling the interest-free portion for producers. We are helping the transfer of family farms to young farmers by boosting the capital gains exemption. At the WTO agriculture negotiations, we remain committed to pursuing an outcome that benefits Canada's entire agriculture sector.
Many of us are working to open up our grain marketing structures in order to provide choice for producers. New marketing opportunities will help Canada get through the current economic uncertainty and come out stronger than ever.
As well, we need to move forward on stable, bankable programs. These programs will also help farmers weather the storm and continue to drive the Canadian economy. That is what the goal of the Growing Forward framework is all about: making Canadian agriculture more stable in the present, and then building a strong agricultural sector for the future.
We are working with the provinces and territories to finalize the suite of non-business risk management programs that will be offered in each province. Our goal is to implement those programs before April 1, and we are making good progress on that front.
In terms of business risk management programs, we find them to be a key part of Growing Forward. In the budget delivered in January, we took steps to ensure that Canada and its agricultural industry emerge stronger than ever from the current economic crisis.
I would like to talk about a couple of the things that were in that budget. We announced a $500-million agricultural flexibility plan aimed at helping farmers with regional market challenges and opportunities. These funds will help farmers cope with the cost-of-production pressures, promote innovation, and ensure environmental sustainability.
We also set $50 million aside to strengthen our slaughter and meat processing capacity. That is to aid slaughter plants other than the big ones that we see in the country.
We set $1 billion aside for a community adjustment fund aimed at helping rural communities adopt and adapt to economic challenges.
I would like to talk a little about Bill C-13, the bill that is before us today, and about our commitment to grain producers. The amendments that the government is proposing to the Canada Grain Act and the Canadian Grain Commission are evidence of our commitment to grain producers. I already mentioned the mandate that specifically speaks to the interests of grain producers. Canada's quality assurance system for grain provides a key competitive advantage for our farmers. The amendments that we are proposing will build on that advantage.
When our global customers choose Canadian grain for processing, they count on consistent quality and cleanliness with every delivery. The world-class reputation that our Canadian grains enjoy around the globe has been earned.
First and foremost it has been earned through the hard work of our farmers. Grain handling companies, research scientists, and the Canadian Grain Commission have certainly played a role in building that golden reputation. Our edge in the marketplace is all about quality. Much of the responsibility for quality resides with the Canadian Grain Commission and the quality assurance system that it administers under the Canada Grain Act. That is why this act and the changes that we are making to it are so important.
The grain industry is changing, and the legislative tools required to keep the industry competitive need to change along with it. The Canada Grain Act has not been amended substantially in almost 40 years, so it is time now for us to take a look at that act and make the changes that are relevant to farmers across the country.
The marketplace has evolved. We all understand that. We have a major new customer for grains in the form of the biofuels industry, which has been supported by initiatives put in place by this government.
We have quality management systems that allow amounts of grain with specific qualities wanted by buyers to be kept separate throughout the handling system. That is a huge change from the system that we have had in the past, which has been just a huge bulk handling system. We have new initiatives in place for farmers who want to be able to deliver smaller amounts of grain with specific qualities to their customers.
We have niche marketing. We have processing that is going on in grains across Canada. We also have a broader range of crops in Canada that we need to consider.
In the mid-1990s the reform of the Western Grain Transportation Act triggered a wholesale diversification in western Canada as producers opted to market their grain through livestock or switch to other crops such as oilseed, pulse crops or horticultural crops. In my area, it meant a substantive change; we had probably 80% or 90% grain growing, and now I think we are probably below 50%. Across the prairies, about one-third of the crop land is now growing wheat, and two-thirds are other crops, which we were not growing 20 years ago.
Still we need an act that is relevant to the present and to the future, so I would like to speak to the specific amendments that we are proposing for the Canada Grain Act. These amendments are to help keep our producers competitive by improving the regulatory environment for Canada's grain sector.
The proposed changes to the Canada Grain Act and the Canadian Grain Commission will help the grain sector meet the challenges of a more competitive and market-oriented sector for the 21st century. By removing unnecessary mandatory costs from the grain handling system, the bill works to build a lower cost, more effective and innovative grain sector for our producers.
We are modernizing the regulatory environment. As all costs in the system eventually work their way to farmers, this will result in a less costly system for farmers.
The amendments that we made just did not come out of thin air. They reflect the direction of both the COMPAS report and the good work that was done by the Standing Committee on Agriculture and Agri-Food. Both reports reflect extensive consultations that were held with the sector in preparing them. The fact is that this package is built on many of those recommendations, and particularly on the standing committee recommendations. In short, these amendments speak to the will and to the needs of the Canadian grain industry.
I would like to speak specifically about three or four of the changes that we are suggesting.
First, we are suggesting that inward inspection and weighing of grains no longer be mandatory in western Canada. There is no reason to require something that is not necessary, particularly when the cost comes out of the bottom line of farmers and the grain industry.
Currently when farmers deliver gain to the elevator it is graded, the grade is agreed to by the farmers, and then they unload their grain. This will not change. However, currently the Grain Commission is also required to inspect and weight each railcar or truck lot of western grain that is handled by licensed terminal elevators.
The industry has been calling for change in this area for some years now, because mandatory inspections impose costs and are not essential to ensure grain quality. Bill C-13 moves to make inward inspection and weighing no longer mandatory. Instead, shippers of grain will be able to request an inspection at their discretion when they feel that the benefit justifies the cost. Elevators will also be required to allow access to private inspectors when an inspection is requested, and that is a crucial availability that farmers need to maintain.
The Canadian Grain Commission would also be authorized to provide grade arbitration if the parties to a transaction request it. This means that if there is a dispute about a grade, the Canadian Grain Commission would be able to impartially determine the grade.
I want to be clear. This does not mean that grain would go through the system without inspection. Outward inspection would still be required when grain is loaded onto vessels for export, and export vessel shipments would continue to require certification by the CGC, based on inspection and weighing by CGC personnel.
With the bill in place, our customers will be assured that they can continue to have confidence in Canada's grain quality assurance system.
To summarize, the Canadian Grain Commission would continue to regulate the grain handling system for the benefit of producers. It would continue to license grain handlers and dealers. It would continue to require them to have proper grading and weighing equipment and to properly document their purchases. It would also require them to continue to ensure that producers have access to grade arbitration by the Canadian Grain Commission.
The bill would actually enhance farmers' protection by extending Canadian Grain Commission grade and dockage arbitration to farmers delivering to process elevators and grain dealers. Currently, if a producer disagrees with the grade or dockage received for a grain delivery at a licensed elevator, he can ask the CGC to determine the grade and dockage and make a binding decision, but he does not have that same opportunity with regard to other facilities or to grain dealers. The bill proposes to extend this service to deliveries to all licensed grain handlers, including process elevators and grain dealers. Farmers have never had this protection before.
Second, the bill proposes that the Grain Commission would get out of the business of collecting and holding security deposits from licensed elevators and grain dealers under the producer payment security program. The present program has a cost: it ties up working capital that then has no return. The ultimate bill lands in the farmer's mailbox.
The present system has holes in it. We all know that there are some notable failures in which producers found out the security systems do not guarantee that they would be paid. These amendments mean that the field would be open for farmers and farm organizations to develop alternative approaches to producer payment security. In fact, the government has been assisting farm organizations in their efforts to find the appropriate alternative mechanisms for themselves.
Through the private sector risk management partnership program, the government is helping the Canadian Federation of Agriculture to study alternatives. We understand and we know that there are concerns across the country with regard to these proposals, and we are certainly more than willing to work with the opposition at committee to make the changes that may be necessary in this area.
In addition—
