Bill C-29 (Historical)

An Act to increase the availability of agricultural loans and to repeal the Farm Improvement Loans Act

This enactment amends the Farm Improvement and Marketing Cooperatives Loans Act to provide financial support for farmers, including beginning farmers, and farm products marketing cooperatives, as well as to allow for intergenerational farm transfers through a loan guarantee program. It also allows for the adjustment, by regulation, of amounts and percentages set out in the Act. Finally, it repeals the Farm Improvement Loans Act.

Canadian Agricultural Loans Act

[John Baird, Conservative, Ottawa West—Nepean, ON]

moved that Bill C-29, An Act to increase the availability of agricultural loans and to repeal the Farm Improvement Loans Act, be read the second time and referred to a committee.

[Pierre Lemieux, Conservative, Parliamentary Secretary to the Minister of Agriculture]

Mr. Speaker, I am pleased to speak in support of the proposed amendments to the Farm Improvement and Marketing Cooperatives Loans Act. I am sure that my hon. colleagues will agree that they are solid, common sense measures and that the time has come to adopt them.

Important changes are taking place in the agricultural sector. The size of agricultural farms is increasing and it is becoming more difficult for a beginning farmer to obtain the funds required to set up a viable operation. About half of all farms, representing some $123 billion in assets, are run by farmers who are 55 and older.

What will happen when these farmers want to retire? A good number of them will do so in the next 15 years.

Over the next 15 years, Canadian farmers, operating almost 84,000 farms, are expected to retire. I say “expected” because we know some will work beyond the age of 70.

In any case, we are talking about a major intergenerational challenge for Canadian agriculture that is going to play out over the coming years, a challenge to attract young farmers to the business, a challenge to transfer family farms to the next generation, a challenge to renew and rejuvenate the Canadian agriculture and agrifood sector and to put it on a sound footing for generations to come.

We need to attract young people to a future in farming. Young farmers are the foundation of Canada's agriculture and agrifood sector. They enrich and strengthen communities across Canada through their hard work and innovative spirit. They exemplify the entrepreneurial spirit that is critical to our success in the years to come. As entrepreneurs, young farmers want a government that gives their farm businesses room to grow and the tools to capture new opportunities.

I want to talk about a young farm family that is part of the next generation. Robert and Erin Brunel farm with Rob's dad, Paul, in Ste. Rose, Manitoba. R.P. Brunel Inc. is a fourth-generation family farm that specializes in grain. The Brunels farm 3,000 acres. Rob and his wife, Erin, welcomed their first child, Myley, in to the family in mid-November. Rob would like to continue to expand the business and eventually take over the farm completely from his father.

The Brunels dream of a future in agriculture, but realizing that dream is much easier said than done. It is not uncommon for farms today to have assets of well over $1 million, a considerable amount for the next generation to finance. Rob says that there are programs to help young farmers out there, but he does not qualify for many of them and they are not targeted to his specific needs. He would like a program to help him proceed with his expansion plans and eventually finance the farm transfer.

Farmers like the Brunels are the future of the sector and we need programs that will help them capture that future. That is the objective of the proposed legislation we are discussing today.

For the past 20 years, the Farm Improvement and Marketing Cooperatives Loans Act, commonly known as FIMCLA, has helped farmers and farmer-owned co-operatives improve and develop their businesses through government loan guarantees. Guaranteed loans of up to $250,000 are available to farmers for up to 80% of the purchase price. The interest rate is capped. For co-operatives, the maximum loan is $3 million.

Over the years, FIMCLA has been a valuable financial tool for farmers, helping them improve their farming operations when other sources of funding are not available or priced too high to make them viable.

Federal programs to help beginning farmers enter the agricultural sector have a number of restrictions. The advance payments program, governed by the Agricultural Marketing Products Act, only provides short-term financing to new farmers. Provincial programs for beginning farmers vary a great deal in terms of the types of programs and the amount of assistance provided.

Support for agricultural cooperatives is also limited. Debt financing provided by credit institutions to cooperatives is insufficient and provincial programs present the same problem. There is no doubt that the rules are not fair.

Consequently, in 2005 the previous government announced that it intended to cancel the program. The industry did not see this as a solution, and neither does this government. That is why we have pledged not only to maintain FIMCLA, but to consult on how to make it more responsive to the needs of farmers today. Therefore, we did that.

We heard from young farmers across Canada, farmers like the Brunels, who talked about the need for support for both beginning farmers and farm transfers. We also heard from co-operatives that told us about the challenges they had in raising the equity they needed to help farmers participate in value-added ventures.

I want to linger a moment on the topic of co-operatives. There is no question farmer owned co-operatives are a way to move farmers further up the value chain. In fact, in my riding of Glengarry—Prescott—Russell there is a very important agricultural co-operative known as St-Albert Cheese. Some farmers like the co-op approach. In fact, I have met with some in my riding of Glengarry—Prescott—Russell.

Co-ops have a record of providing benefits to farmers, improving their competitiveness, pooling risk, coordinating marketing and retaining local wealth and promoting rural sustainability through local ownership and control.

For example, Agropur, a Quebec-based dairy co-op, is one of the top dairy companies in Canada. Agropur reported revenues of $2.3 billion and a surplus of over $120 million last year, and it is owned by farmers. Across Canada, some 1,200 agriculture co-operatives generate annual revenues of $13 billion and return over $200 million back to their farmer members.

Like the farmers they serve, co-ops are evolving to take advantage of opportunities in the bio economy, to meet new consumer demands and to find new sources of capital and specialized expertise. This is more challenging than ever, given the high capital requirements of ventures like these.

We listened and we acted. The result is what we have before us today.

Before coming up with the amendments proposed in this bill, Agriculture and Agri-Food Canada consulted widely with young farmers and financial institutions. According to stakeholders, changes to the Farm Improvement and Marketing Cooperatives Loans Act (FIMCLA) will be a great step forward.

The Canadian Young Farmers Forum is backing these recommendations. It has also insisted that the paperwork be simplified.

Accordingly, the Department of Agriculture and Agri-Food will devise an electronic loans system under the amended FIMCLA in order to reduce processing times for loan applications.

Under the legislation we are proposing, FIMCLA, or the Farm Improvement and Marketing Cooperatives Loans Act, would be opened up to beginning farmers, to family farm transfers, and to a wider range of agricultural co-operatives.

For beginning farmers, the loan limit would be increased from 80% to 90% of the purchase price. We are proposing an increase in loan limits to $500,000 for real property and $350,000 for all other loan purposes. Loan guarantees would now be available on farm transfers through shares of a corporation or interest in a partnership.

For co-operatives, this proposed legislation would respond to the co-op sector's needs by expanding eligibility requirements to include all agricultural co-operatives with a majority, 50% plus 1 of farm members. These measures respond to recent trends in co-op development by allowing non-farmer investment while at the same time retaining farmer control.

The proposed bill would also build in flexibility in the regulations so that loan limits can be changed as the need arises. We are not talking about just fine-tuning FIMCLA. We are talking about key improvements to the core program.

That is why we are proposing in the new bill that the program name be changed to the Canadian agricultural loans act. This is a better reflection of the proposed legislation's stronger national focus.

Opening up the program to beginning farmers, intergenerational farm transfers, and a broader range of agricultural co-operatives would create a national loan guarantee program that would support the entire agricultural community, and it would bring parity to the agricultural sector with other sectors of the economy which are entitled to benefit from small business financing programs.

This is a government that delivers for young farmers.

We have helped support family farm transfers by increasing the lifetime capital gains exemption from $500,000 to $750,000, the first increase in 20 years. To help farmers manage cashflow, we have doubled the amount of interest free money available through cash advance programs. This would make about $600 million per year available to agricultural producers. We have delivered stable, predictable and bankable support for farm families.

We are working with provinces and industry to design programs under the growing forward framework to secure a profitable and vibrant agricultural sector for the next generation. This government supports strong, young farmer associations such as the Canadian 4-H Council, Canadian Young Farmers Forum, and Canada's outstanding young farmers.

I would like to quote briefly Doug Spencer, a dairy farmer from Campbellford, Ontario, because he touches on an important issue in the farming community right at the moment:

At the moment, the highest priority for my wife and me is to know that the business we've built up will be taken care of by the next generation, and this plan will help see to that.

The proposed amendments to FIMCLA will help farm families like the Spencers keep the farm in the family and help the older generation retire with dignity. It is good news for beginning farmers, for retiring farmers, for farmer-owned co-operatives, and for the whole sector.

The bill would provide fairness and parity with other businesses, both for beginning farmers and for farm families looking to transfer the business to the next generation.

It supports the next generation of farmers and agricultural co-operatives. It gets rid of some of the red tape and paperwork to make the program more accessible and more flexible to all farmers.

Farmers in my riding of Glengarry—Prescott—Russell represent the strong and vibrant agricultural community. They are in favour of this type of legislation and of the increased access to credit that it affords them.

I highlight that we have introduced business risk management programs. We have invested in the agricultural sector and launched new initiatives to help our farmers across the country. The minister has been very busy, opening foreign markets once again to help our agricultural sector. We are taking real action to defend and promote the best interests of our farmers.

Farmers strongly support this bill and I invite members to support the changes we are proposing to the Farm Improvement and Marketing Cooperatives Loans Act.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I listened with interest to what the parliamentary secretary did not say, although we will be supporting this bill.

He used an example of a fourth generation farmer, where the bill will be helpful in terms of intergenerational transfers. That is true. It will help. However, the reality of today in the farming sector is that we are losing sixth generation farmers right across Canada, day after day, because of the inaction of the government. The government has a sound record of increasing farm debt. It has increased by a little over $5 billion under its watch.

Will the parliamentary secretary just answer these two simple questions? What is this bill really about? It is not about providing money to farmers. It is about providing debt. Who is guaranteed under this bill? Is it not the banking sector? There is a 95% guarantee to the banks. Is that not correct, parliamentary secretary? When is the government going to actually deal with what the problem really is, which is sustainable farm income?

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I want to recap some of the highlights of these wonderful initiatives for farmers. We are talking about taking the loan rate for beginning farmers from 80% to 90%, so that they can borrow up to 90% in order to allow for the transfer of farms among generations. This is good legislation for our farmers.

If we could just have the cooperation of my colleagues in the opposition, this bill could be moved through the House and implemented before the summer. This is exactly the kind of programming that our farmers are looking for. When I am in my riding, they talk about difficulty with access to credit. They have very real bills to pay. When they want to save their family farm and move it from an older generation to a younger generation, access to credit is a very real concern.

This is the type of legislation that they have been asking for. I have not even touched on co-operatives here. We have worked very closely with co-operatives and they want greater access to credit as well. That is what we are offering here. I would invite my colleague to support this legislation and its rapid implementation.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I want to point out that the Bloc Québécois plans to support this bill.

However, following the parliamentary secretary's speech, a few questions came to mind, especially when he said that young farmers all across Canada were consulted. He even referred to a young farmers' organization that fully supported this bill. I would remind the House that consultations did take place here and there across Canada. Consultations were held in Longueuil, Quebec, over the holidays from July 18 to August 11, 2006. I would like some clarification, however, from the parliamentary secretary. I looked carefully through the department's documents—and I have the consultation paper here—but I do not see the Fédération de la relève agricole du Québec anywhere among those invited to the consultation in Longueuil. If it was invited, it did not attend. One thing is certain: I spoke to the president of that federation last week, and he said he was not consulted. He even issued a press release on the matter, saying that the bill looked promising, but he would have liked to have been consulted.

How is it that this government can pride itself on doing a lot of consultation? If they did the same thing as with the “Product of Canada” label, the consultation was completely inconclusive. In fact, neither the Union des producteurs agricoles du Québec, nor the Coopérative fédérée, nor the Fédération de la relève agricole du Québec were included in that consultation in Longueuil. I would like the parliamentary secretary to give us some details about that so-called consultation. It appears that some people were missing.

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I would like to say that consultations are very important. We worked very hard as a government to consult extensively right across Canada. It is not always possible to hear from all the cooperatives or associations when we hold a consultation in a particular location, but our doors are certainly always open. I am always available to our farmers, our cooperatives and our associations, and the minister is as well, both here in Ottawa and across the country. Letters and other forms of communication are also very important.

We consulted extensively, and we are delivering the results today with our bill. I am very happy to have the support of the Bloc Québécois, because we will need the support of every party here to make sure that the bill is implemented as soon as possible.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, I want to thank the parliamentary secretary for his involvement around the country. As many of us know, he and the minister have been spending a fair bit of time talking to farmers on the back roads to find out what their issues are.

I have always found it interesting that the member for Malpeque is always so negative about farmers while this party quite honestly has done so much, from increasing the capital gains to the advance payment increases.

My question for the parliamentary secretary is this. There has been great support for the bill. We have talked to the Canadian Young Farmers Forum. However, when the parliamentary secretary has been crossing the country and talking to the ordinary farmers, has this been one of their priorities or is it just one of those other issues that they want to talk about?

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Mr. Speaker, my colleague raises an excellent point. Is this a priority for farmers? It certainly is a priority for farmers.

The future of farming is a huge concern for our farmers all across Canada. The member quite rightly pointed out that both the minister and I have been travelling across Canada meeting with farmers from all the different agricultural commodities to talk about the future of farming and the challenges they face today and the challenges that they will be facing in the future.

Many farmers operate family farms and they feel that their family farms are at risk. One of the challenges they face is the younger generation having access to enough capital in order acquire the family farm. This is exactly what this legislation is aimed at. We are talking about increasing loan limits from $250,000 to an aggregate of $500,000.

As I mentioned before, we want to increase the loan rate for beginning farmers from 80% to 90%. This makes a big difference. For example, if a farm operation has an inherent value of one million dollars, a new farmer under the legislation as it exists today would have to borrow up to $800,000. He would still have to come up $200,000 himself. However, once this legislation passes, he would only need to have $100,000. We are going to be halving the amount of money that he would have to put forward to acquire a farm from another family member.

Once again, the co-operatives play such an instrumental role in the health and vitality of our agricultural sector. We have worked with co-operatives and co-operatives want greater accessibility to this type of financial resource that we are presenting here today.

Therefore, once again, I urge my colleagues in the opposition parties to join with me in voting for the rapid acceleration of this proposed legislation through the House for the benefit of our farmers.

[Nathan Cullen, NDP, Skeena—Bulkley Valley, BC]

Mr. Speaker, I have a co-operative abattoir that is set up in my region. The experience that it has had over the last couple of years in setting up is that the federal government puts a lot of regulations in place but does not actually show up to support the cost that is incurred by those regulations.

I wonder if Bill C-29 would actually help address the shortfall in money that happens for a lot of these smaller abattoirs that are co-operatively run, farmer-owned, and assist them in getting the product out the door and help sustain our farming community?

[Pierre Lemieux, Conservative, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I would like to highlight that we want to see our agricultural co-operatives succeed. By putting in place measures like the ones that we are proposing today will help the co-operatives. It will help that sector of the agricultural community to thrive. Giving them more access to credit will only help them move forward.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I am indeed pleased to speak on Bill C-29. During my remarks, I hope to explain the benefits of Bill C-29 and why the Liberal Party will support a quick passage of this bill. We in fact are willing to pass it through all stages and get it to the Senate so that it can be dealt with quickly and kick into gear, because the bill has been very late coming.

However, it is also critically important for the Conservative government to actually bring forward immediate measures that would deal with the income loss problems of primary producers.

I will outline those areas and propose some solutions.

The reality is that the minister talks, as the parliamentary secretary did in his remarks, of putting farmers first. However, when we drill down into the minister's record, it is nothing but a record of failure. The bill, in its final analysis, would add to what the government has been most successful at doing; that is, increasing farm debt.

Since the Conservative government has taken office, farm debt has increased by $5.1 billion and now stands at $54 billion, four times higher than that of the United States' farmers.

Worse, in recent years, this debt has not been for new technologies or new investments, in the main, but much of it has been for primary producers borrowing more money or gaining advance payments program money loans in the hog and beef sector just for their very economic survival. In the agricultural industry in this country, some commodities are in serious trouble.

So let us be clear. While the bill would provide availability of credit to farmers, it is not designed only for the interests of the farming community. It is designed, in its final analysis, to guarantee the banks 95% protection on the money they have lent.

In fact, if we look at the Prime Minister's announcement, he states that he will bring forward new legislation to guarantee an estimated $1 billion in loans over the next five years to Canadian farm families and co-operatives.

So let us be clear. The Prime Minister did everything he could in the announcement to make it look like he was providing $1 billion. He is not providing $1 billion. It is loans that are coming from the lending community, and the Government of Canada, through this legislation, is guaranteeing the lenders 95% security on those moneys.

The real problem in the farm sector is price, stability of income; and that, the government fails to address. I want to be very clear on that. Adding debt, then, will just not do it. Farmers' real challenge is sustainable farm income, and I will come back to that serious issue in a moment.

Bill C-29, then, really is about amendments, as the parliamentary secretary said, and it would provide a new loan guarantee program for these areas. Farmers would be eligible for new loan limits of up to $500,000 for the purchase of real property, and $350,000 for all other loan purposes. New farmers and producers taking over the family farm would be eligible for loans. They are not currently eligible under the current legislation, and I think that is important for intergenerational transfer.

However, keep in mind, the big issue on intergenerational transfer and why in my question earlier I talked about farms stopping at the sixth generation is not just access to credit. The fact of the matter is they cannot balance their balance sheets economically under the current pricing regime, and the government is absolutely nowhere to be found. We are losing some industries in this country.

As well, as the parliamentary secretary said, agriculture cooperatives, including now the ones with a majority of farmer members, 50% plus one, would be eligible for loans up to $3 million for the processing, distribution or marketing of farm products. But that is an important point in itself. It used to be that we had 100% farm members. Now we are dropping to 50% plus one. That tells us that there is a serious problem in rural Canada in that the assets are no longer there for the farmers themselves to provide the asset base and the stability for those cooperatives, and we have to go to others in the community. That is a sad commentary, because farmers themselves need to have the asset base and the net worth to be able to provide for cooperatives in this country, which is a good system. A new online system would improve the delivery of the program, and we certainly agree with that.

However, again, I must mention, the bill provides far more guarantees for banks than it does for farmers, which speaks to the government record in increasing farm debt. Farm debt has skyrocketed to over $55 billion today. The real challenge facing farmers is sustainable farm incomes. The Conservatives have a long list of broken promises with regard to support for farmers.

While we can support the changes in Bill C-29 to better reflect the size of today's farms, we should not let the Conservatives forget the list of Conservative failures to help improve farm income. They promised hundreds of millions of dollars and raised the hopes of farm families, but then consistently failed to deliver on those promises.

In March 2007, the Prime Minister himself announced $100 million per year to farm families to address rising “cost of production issues”. That plan was cancelled in the 2009 budget before it was ever implemented.

Also in 2007, the Prime Minister announced AgriInvest, a new savings program to help farmers manage business risks. The Prime Minister touted this initiative as “programming that is more predictable, bankable and better enables farmers to better respond to rising costs”. Two years later, it still has not been implemented. I remind the parliamentary secretary, because he used those words of predictability in his remarks, it only works if farmers have income that they can put into the investment and the government is failing to assist in terms of that level of income.

In November 2007, the minister committed $6 million to strengthen value-added processing in Atlantic Canada to help struggling beef and hog farmers there. Now, a year and a half later, this money has not been provided and we find out that it is also a loan, more lending, more credit, not income.

During the 2008 election campaign the Prime Minister committed $500 million over four years to create an agricultural flexibility program, to help farmers build flexible programs to meet their local needs, but once re-elected, the government broke its promise again and announced a program of less dollars that could not be used for flexible programming. In reality, it was only $190 million over five years and was not allowed to be used for RMP in Ontario or ASRA in Quebec.

In budget 2009, the Minister of Finance announced a new $50 million investment in processing capacity for livestock producers. Then, four months later, it changed into a loan program, far from what cattle farmers were led to believe.

By golly, Mr. Speaker, I almost forgot, do you remember when the previous minister announced the farm families options program, targeted to low-income farm families? After one year of a two-year commitment, it was cancelled in midstream.

That cancellation virtually robbed farm families of $246 million, money they had counted on. So much for the Conservative government putting farmers first. The fact of the matter is that what the Conservative government has done has increased debt and added to the farm community's financial instability.

Allow me to turn to some of the specific commodities, and I will make a few comments.

In P.E.I., the government's lack of action has caused, to a great extent, the loss of the hog industry. Roughly 80% of that industry has now gone in the last 18 months, and P.E.I. has lost its only hog slaughter plant. If the minister does not soon deal with assisting the regional issue of pork production and the one slaughter plant that remains in Atlantic Canada, then we could in fact lose the total regional industry. There are only four producers left in the province of Nova Scotia.

So I ask the minister to start to deal with the issue at the farm income level. There are several things that the minister could do. Certainly the minister has to come in with a major payment for the pork industry in this country, which is finding itself in financial distress, and nothing less than $1 billion in an ad hoc payment will save this industry.

The Canadian government must stand up for Canadian producers, must challenge the U.S. in terms of the country of origin legislation and ensure not more debt but that the cash is there to assist in the survival of this industry.

I would add a note of caution. If government does introduce an ad hoc payment, then it needs to be a total package. Number one, we need the ad hoc payment.

Number two, the severe economic hardship moneys that were advanced last year, which are now loans, were put in place not to provide income but to allow debt servicing so that farmers could maintain a credit line. Those severe economic hardship moneys must be extended out, not just using an ad hoc payment to pay off that debt, but that a new ad hoc payment can come in so that producers can use that for working capital they direly need.

As well, the beef industry is in serious trouble. Instead of dealing with the problems they have in that industry, the Government of Canada set up a system where they can acquire more debt. That is not what they need to do. I would suggest that what the government needs to do in this case is allow the current safety net program to work. First, eliminate the viability test; and second, allow producers the better of the Olympic or previous three years' average for reference margin calculations so that they can trigger the current program.

Regarding the current safety net program, if we remember back in the 2006 election, the Prime Minister said he was going to cancel the CAIS program. What did he do? He changed the name. In fact, the new AgriStability program is even worse than the old CAIS program in times of economic difficulty.

The suggestions I am putting forward for the beef and hog industries would allow the program to work for those industries. They cannot access the safety net programs now because the reference margins are not there. What I am proposing today is a simple solution so that the minister could allow the safety net programs to do what they were designed to do and allow hog and beef producers in my province of Prince Edward Island and across the country to be able to trigger a payment they direly need.

A similar situation exists actually in the potato and root crop industry in my own province of Prince Edward Island.

Last year, as the minister knows, there was a lot of weather damaged crop, which triggered the new agrirecovery program. The problem is that agrirecovery, although the government talks about it as a disaster program, does not work as a disaster program. The minister promised $12 million but only around $3 million was spent and that money was only allowed to be spent to assist in the costs of disposal of the crop, whether it was in the warehouse or in the field.

I have two neighbours in my home province of Prince Edward Island who are not planting this year because of the disaster caused by weather conditions. The government's program leaves them out in the cold and does not assist them. It costs $2,800 to $2,900 to grow an acre of crop. The agrirecovery program gave them $200 and it cost them $200 to dispose of the crop. That program is not working. What I would suggest to the government in that case is similar to what I suggested in terms of beef and hogs. The government should allow the agristability program to once again work. it should cut out that bad year and go back to the other years to get reference margins so that producers could at least trigger a payment.

I have two more points on the potato industry that I should make relative to Prince Edward Island. The government should not allow the disaster year to be counted in their production history. It is an event beyond producers' control. Weather crop loss is an act of nature. If it is kept simple and that year is not be counted in the production history, the producer would be more likely able to trigger a payment. The potato industry in P.E.I. and the other root crop industries really need a stay of default on the advance payment program so they can trigger that program again in order to have the working capital to put in a crop.

That is what is direly needed in this industry. Whether it is in hogs and beef, there are potential solutions. Credit is not the only thing that needs to be talked about. It is the same thing in the potato industry. Farmers need income and they need cash to do what needs to be done.

Again going to the record of failure, the government has been responsible for the loss of more slaughter capacity and value-added production in this industry than any other government in Canadian history. I will run through a list: two Maple Leaf Foods plants in Winnipeg and Saskatoon; two Olymel plants in Saint-Valérien-de-Milton and Saint-Simon-de-Bagot in Quebec; one Qualiporc Regroupement Coopératif plant in Les Cèdres, Quebec; and one Natural and Organic Food Group plant in Charlottetown, Prince Edward Island.

CanFax Packers directory reported that out of 33 federally inspected slaughterhouses in January 2006, only 26 plants remained in January 2009. Among those that closed down were Blue Mountain in British Columbia, Rancher's Beef in Alberta, Natural Valley Foods in Saskatchewan, Gencor Foods in Ontario and Abattoirs Zénon Billette in Quebec.

My point is that the record of the government is one of failure. While the bill today is needed in terms of advancing available credit, it ties into the record that the only thing the government has been successful at is increasing debt and as a result our industry is in trouble. The government must seriously address within days making sustainability a firm income sustainable and that way producers would be able to pay back the debt and not just get additional loans.

[Pierre Lemieux, Conservative, Parliamentary Secretary to the Minister of Agriculture]

Mr. Speaker, I listened to my colleague with close interest and what a confused speech. His opening position was that he supports our changes to FIMCLA, as he should. We are talking about increasing the amount of government-backed loans to farmers from $71 million to $292 million, which is great news for farmers. We are also talking about increasing access to capital for our co-operatives.

However, he then went on for the next 20 minutes with a litany of complaints and negative comments. We are trying to provide increased access to credit for farmers so they can buy the next generation of farms and keep the farms in the family, and he comes up with this wild theory that we are doing this for the credit of the banks. Who would believe that? It is certainly not the farmers with whom we consulted.

Can my colleague not just admit that this is good legislation for our farmers? Will he not just stand in his place and say that this is good and he is for it?

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, as I said in the beginning, we will support this legislation but the policy of the government is anything but good. It needs to be put it into context.

I asked the parliamentary secretary a question previously and I will ask him again. I may even get an opportunity before we are done to ask him a third time. Will he just stand in his place and admit that what Bill C-29 would do is guarantee the lending community, on the additional billion dollars of credit availability, that it is backed up at 95% to the lenders? Will he just stand in his place and admit that this bill is for the protection of the banks? If we are going to protect farmers in this country, we should protect and add to sustainable farm income. The government has failed to do that.

I had to go through a litany because there is no government in Canadian history with such a dismal record, a record of failure that fails to deliver income to producers. The bottom line is that it has increased the debt of farmers by $5 billion and we have lost 3,500 farmers a year. Can the parliamentary secretary stand and say he is proud of that? I would hope not.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, in his speech the member for Malpeque raised a problem, or at least a concern, regarding the potential excessive debt of those who will obtain new loan guaranties, particularly new farmers.

Earlier, I was asking the Parliamentary Secretary to the Minister of Agriculture about the famous consultation paper that I have here. I mentioned that several groups of young farmers unfortunately were not consulted before amendments were proposed to this law.

However, some participants [among those consulted] said there is a need to ensure beginning producers [the next generation of farmers] do not overextend themselves financially by using the program, which they said may occur if it encourages beginning producers to borrow larger amounts than they can manage to pay back. In the end, participants agreed on the need to support beginning producers and the importance of minimizing road blocks to participation in the industry...

To date, the government has not established a real policy to help the agricultural sector as a whole. It has presented certain ideas that may be of interest but it has not shown the real political will to help the next generation of farmers or farmers in general. Does the member for Malpeque believe that we run the risk of having farmers take on excessive debt, which would lead to other problems?

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, it is a sad commentary on the government when its consultation process leaves out some of the most important players in the industry. The government claims that its bill was designed for intergenerational transfer and for bringing young farmers into the industry but, as is usual, its consultation process leaves much to be desired.

The government is well-known in a wide range of circles for consulting with its friends. We saw that with the Canadian Wheat Board where it did not consult with the general population. It forgot that there is a government for all Canadians. It thinks it can govern basically for the right wing.

The member's question is a valid one and it is one of our concerns. We do not believe that just providing more credit and establishing more debt will bring young people into the industry. Farmers need to have income stability and some security in the future that they will be able to pay the bills, earn an income and provide for their family and the community. In other words, there needs to be economic prosperity at the farm gate level in rural Canadian and that is where the government has seriously failed to address the problem.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, when we talk about the need to support farmers of all ages, what are my colleague's views on the government's conduct with respect to the Canadian Wheat Board?

The Canadian Wheat Board is an important institution not only for the farming communities in the region I represent, but also because of the traffic it brings to the Port of Churchill.

Grave concern has been expressed to me by members of the Canadian Wheat Board and farmers in my area who depend on the Wheat Board for the important work it does. I would like to hear his thoughts on this as well.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

We want an unbiased opinion.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I will gladly answer that question. I can hear calls from members on the government benches, as if that is not a legitimate question. It is a very legitimate question because the Canadian Wheat Board, as a marketing institution, goes to the very core of assisting farmers in maximizing their returns in the international marketplace.

Between the two ministers of agriculture under the Conservative government, instead of addressing the farm income and sustainable income issues of all farmers across Canada, they spent a phenomenal amount of time doing nothing but attacking the Canadian Wheat Board, which provides income stability. The government was stopped twice in the courts. We have had several resolutions in the House to try to stop the government but the Prime Minister ignored them, which is his way.

In the last Canadian Wheat Board director elections, farmers sent the government a clear message by electing 80% of those directors as pro-single desk sellers. In other words, they supported the Canadian Wheat Board. The Government of Canada has been found wanting in its attack on the Wheat Board. We on this side of the House strongly support it.

[Bev Shipley, Conservative, Lambton—Kent—Middlesex, ON]

Mr. Speaker, the member talked about farming and debt but I wonder if he has looked at the financial situation of Canadian farmers in 2009.

Rather than just talking about debt, it is more important to talk about debt to asset ratio, which has risen over the last 10 years by three-quarters of 1%. All of us have incurred debt over the last number of years but inflation and the cost of living has driven some of that.

I wonder if the member has ever looked at the debt to asset ratio which is really the important factor in terms of assessing the debt of farmers.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, yes, I have. We are talking about how figures can be misleading when we look at them year over year. We have to look at net farm income.

Net worth on paper does not mean much if people cannot put food on the table. If I were to put it on a graph, net income in this country has continually been going down and down. We have lost 3,500 farmers per year. The hog and beef industries are in serious trouble. Potato and carrot producers on Prince Edward Island are in trouble. At the end of the day, they need net returns that are in the black. That is what they need if we are going to have economic prosperity.

I would ask the member to think about that and encourage his government to deal with farm income, not just add debt to the pile.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, it is my pleasure to take part in the debate on Bill C-29 to amend the Farm Improvement and Marketing Cooperatives Loans Act.

The Bloc Québécois supports this bill. However, even though the government members might not be happy about this, we will raise some concerns and issues that could have been resolved through this legislation or other programs. Some questions must be asked. Nevertheless, this bill does include some positive elements, and we do not intend to stand in the government's way, because we would like this bill to move forward quickly.

That being said, I want to point out that the government does not seem to learn from experience. As I have said before, this government is all about marketing. It makes wonderful promises and big announcements in perfectly planned settings, but afterward it becomes clear that the government is trying to force something on us and that the promises look different on paper.

For example, just before the most recent budget was tabled, the Minister of Agriculture and Agri-Food made a big to-do about finally bringing in a truly flexible program. As we all know, the Canadian Federation of Agriculture had proposed a program called AgriFlex.

The minister said that he would invest $500 million in the program, just as the producers wanted. The program that turned up in the budget had nothing to do with what producers wanted, and risk management was left out. Also, instead of $500 million over four years, the government promised $500 million over five years.

The worst part is that the provinces do not have the flexibility they need to implement their own programs. In other words, the provinces do not have the flexibility they need to funnel that money into the programs that they have already set up. As it turns out, the announcement was not so wonderful after all.

There is also the issue of the “Product of Canada” label. Earlier, I talked about the consultations that were announced with great fanfare by the government on every issue. The principle is the same. The Standing Committee on Agriculture and Agri-Food discussed changing the totally obsolete rule for “Product of Canada” labels. I am going to explain this rule, even though it is very well known. Under that rule a food product could be labelled a “Product of Canada”, provided that at least 51% of its total cost was Canadian.

That aberration was obvious when we would see the “Product of Canada” label on a jar of olives, because the jar, the lid and the liquid were Canadian, but the olives obviously could not have come from Canada or Quebec. We have yet to see olives grow in any part of Canada, whether it is Prince Edward Island, Vancouver, Quebec or Ontario. Therefore, the legislation had to be amended, so that consumers would know that they were buying a food product that was really produced here, that really came from here.

So, the committee's consultations were going well, until the Prime Minister and the Minister of Agriculture and Agri-Food announced, on a farm located in the pastoral setting that I described earlier, that they were changing the regulations on “Product of Canada” labelling, and that this issue would be settled.

As for us, we had not even finished our work, we were still consulting people. Thus, they proposed a standard that Conservative members on the committee had never told us about, namely the 98% rule for obtaining the “Product of Canada” label. This has the reverse effect of the infamous 51% of the total cost rule. Before, anything could be called a “Product of Canada”, but now it is nearly impossible for a product to get that label. It seems that the government has not learned from its mistakes.

The member for Malpeque also referred to the options program, which had also been announced with great fanfare. The idea was to help the neediest agricultural producers but now, two years later, we realize that the program is not working very well and is not really adequate.

As we said before, it is hard to be against this. Helping the poorest farmers is not necessarily a bad thing, but it is not at all what farmers wanted. The government decided to drop the program simply because it was not working. Insofar as consultations are concerned, I wonder where the government went in order to realize that these changes were not wanted. It sure laid an egg with this program, which no longer exists.

The purpose of Bill C-29 is to increase the availability of loans to help farmers get established or to develop and improve their farms, including through the processing, distribution and marketing of farm products. We will therefore vote for this bill. The government will make loans more available by providing loan guarantees at designated financial institutions.

The Bloc Québécois wants to remind the House that farmers often find themselves in a precarious situation as a result of the decline in farm income, the economic crisis and all the various problems that have affected agriculture. The government should not use this bill, however, as an excuse for not taking other measures that should be implemented to help various agricultural sectors deal with the crisis facing them.

We are also concerned about the latitude the government has given itself by retaining the right to change the process and criteria by regulation. If the minister is given broad discretionary powers, we may be left with terms and conditions that make particular programs available in theory but the minister has the power to block it all. I will provide examples later if time permits.

The amendments to the current act will ensure that beginning farmers—the next generation therefore—are included in the definition of a farmer, and that is a good thing. The amendments will also extend eligibility to farm product cooperatives whose members are at least 50% + 1 farmers, instead of requiring all members to be farmers, as was previously the case. In addition, the bill increases the availability of loans by including in the definition of a lender other designated organizations.

The bill also amends the current legislation regarding the percentage of a lender’s loss that can be reimbursed for loans to farmers that are guaranteed by the government. This provision provides compensation of as much as 95% of the losses suffered, unless a lesser percentage has been fixed by the regulations. This is an example of the minister’s discretionary power. It is the same in clause 4(2)(c), where the government reserves the right to add various kinds of livestock to the program or eliminate them from it.

The bill also makes it possible to use the loan to buy land and not just new land, as was previously the case. This small but important adjustment makes it possible to use the loan to buy shares in a corporation or membership in a cooperative and allows for intergenerational farm transfers, instead of limiting it to the purchase of new farm land.

As for the famous consultations with stakeholders, I saw the document the government released. It is available on the Agriculture and Agri-Food Canada website. The government did hold consultations across Canada. In Quebec, they took place in Longueuil. To my great surprise, the Union des producteurs agricoles du Québec, the Coop fédérée and the Fédération de la relève agricole du Québec were not present at this consultation.

This makes me wonder whether the government was truly committed to consulting the people directly affected by such measures. Many people from the banks were present. Earlier, the member for Malpeque explained that rather than being designed to really help young farmers and producers, the bill was designed to help the banks and guarantee the credit they would then give to producers and young farmers.

I also spoke to Frédéric Marcoux, the president of the Fédération de la relève agricole du Québec who said he was nonetheless “enthusiastic about the political will to support beginning farmers, which the federal government eventually affirms”.

It is important to quote the federation's press release, which says:

However the Federation regrets that the young farmers were not previously consulted and would like to know more into details the ins and outs of the program, before giving a more precise opinion...the loan insurance problem is not the main difficulty for the youth who wish to start in agriculture.

The federation president stated:

“It would be good to involve us much more in the thinking process engaged by the federal government, a preliminary diagnosis of the situation of the establishment in agriculture in Canada would be a good basis to then propose suitable and efficient measures.”

We can see that young people are very aware of what they need and want and that they did not feel at all involved in the government's decision to introduce such a measure. They did not feel that they had been listened to. The Minister of State for Agriculture is a member from Quebec, and every time questions are put to him, he answers that he is listening carefully and that he is very open. I have rarely seen a minister with such large ears. But I think that he is not listening to the same people we are. What we are wondering is: whom is he listening to? Whom is he consulting?

Earlier I referred to the example of the “Product of Canada” label. That is a perfect example. One might wonder where the minister was, or where the Prime Minister was. Where were those individuals when everyone agreed that 98% was completely unacceptable? Yet the minister says he is listening. It appears he did not listen to the Fédération de la relève agricole du Québec, since it was not even invited to the famous consultation that took place in Longueuil.

In Canada, I found only one location, Newfoundland, where young farmers were in fact represented. I must admit, somewhere in Canada, one person spoke on behalf of young farmers. That was in Newfoundland. Everywhere else, there was not one representative of young farmers in attendance at those consultations. That is simply not enough.

As for the positive aspects, the Canadian Federation of Agriculture, whose new president is Laurent Pellerin, commended these measures, which will give farmers a boost. Mr. Pellerin said that young farmers and cooperatives are a vital part of the agriculture sector, and that the proposed changes could be helpful in that regard.

The Fédération de la relève agricole du Québec also pointed out that Quebec is losing more than one farm per day and that the problem must be addressed through fiscal measures, in order to preserve existing farms and keep them from going under. It said that the government must take these factors into consideration if it wants to help young farmers and that, more than ever, the problems facing the next generation of farmers must be at the heart of Agriculture and Agri-Food Canada’s concerns.

Unfortunately, young farmers gave their opinion after the fact. It would have been better if the government had heard from young farmers before Bill C-29 was drafted.

We are talking about consultations and listening to stakeholders. It is no surprise that the Bloc Québécois is always ahead in Quebec. The reason is simple: we really go out and meet people, and hear what they have to say. That is what we did with young farmers.

In January 2005, the Bloc Québécois organized a conference called “Vers un transfert de fermes gagnant”. The Union des producteurs agricoles took part, as well as the Bloc québécois and the Syndicat de la relève agricole de la Côte-du-Sud. The conclusion we reached was that several tax measures could be taken to help the next generation of farmers. If the government is really serious about helping the next generation and establishing winning conditions, if I may use that term, to ensure that the farm sector survives, it should listen to the proposals that came out of our 2005 conference.

That is not all the Bloc did. On several occasions, it put forward motions proposing these ideas. I managed in committee to have them included in the recommendations made in various files in order to ensure that the government knew that some very effective measures could be taken.

In order to make it more attractive to transfer farms rather than dismantle them, the Bloc Québécois suggested in particular that the capital gains deduction on agricultural property should be increased from $500,000 to $1 million. A change was made and the amount is now $750,000, although this could be increased to $1 million solely in the case of transactions which result in the farm being maintained.

We also suggested the government should extend the rollover provision to other transfers beyond parent–child. We said it should be extended to other immediate family members less than 40 years of age. It could be brothers, sisters, nephews, nieces, grandparents, grandchildren, and so forth. It is good for farms to stay in the immediate family, but we should not prevent them from being transferred outside the parent–child relationship. It would be very easy to expand this and make it easier to hand down farm assets.

We also proposed a farm transfer savings plan that would enable farmers to accumulate a non-taxable retirement fund. Governments could also contribute, as they do in the case of the education savings plan. This contribution would be conditional on the farm being preserved after the transfer.

We also suggested that the government make the home buyers' plan more flexible to allow young farmers to obtain, in whole or in part, a larger portion of a residence owned by a corporation and to use their RRSP to acquire an agricultural business. Currently, the home buyers' plan, also known as the HBP, allows individuals to use their RRSP to purchase a residence. The next generation of farmers has asked us to propose two measures to make the home buyers' plan more flexible so that they can acquire a farm, not just a residence, for the purpose of becoming a co-owner of the family farm, not just a homeowner.

This proposal comes directly from those representing the next generation, those who know what they need. After plenty of proper consultation, we think that the government could easily implement these measures. It would have been nice if some parties other than the Bloc Québécois had made similar proposals during the election campaign.

We also proposed that the federal government transfer a recurring envelope of funds to the Government of Quebec to encourage young people to take up farming. For example, the Government of Quebec could extend access to the start-up subsidy, improve interest rate protection and raise eligibility limits, introduce a start-up subsidy for young people starting up in agriculture part time and gradually moving into full time, and create a single-window approach to match farms with no succession and young aspiring farmers without farms.

These were the ideas that came out of a tour by the Bloc Québécois concerning land use. My colleague for Haute-Gaspésie—La Mitis—Matane—Matapédia, who is present, participated in this tour of Quebec. It is obvious that if we do not foster and support agricultural succession, farms in many regions will disappear. We have already provided some statistics. The member for Malpeque and I spoke about this. A number of farms cease operations every day in Quebec and Canada. We have to be proactive if we do not want farmers to disappear. These measures, which are loan guarantees, will be welcomed by some sectors.

Just last week we heard pork producers say that they are being affected by H1N1 even though we know very well that this flu is transmitted from human to human. They have not yet put their problems behind them and this type of program will not help.

This program also will not help potato farmers in Saint-Amable who are still fighting the golden nematode, which struck in 2006. They still do not have a long-term plan for alternative crops.

Therefore, there remains work to be done. I invite the government to reread what I just said about measures to help the next generation of farmers. It might really give a little bit of help to those who need it.

[Pierre Lemieux, Conservative, Parliamentary Secretary to the Minister of Agriculture]

Mr. Speaker, I would like to thank my colleague and his party for supporting this bill, which is very important to our farmers. I can assure my colleague that our bill will benefit farmers.

Earlier, my colleague made some comments about the consultations. He mentioned that two organizations had not been involved. I would like to say here in this House that we conducted extensive consultations across Canada. I have a five-page list of individuals, organizations, associations and agencies that took part in the consultations. There comes a time for action, and our government is taking action. It is not like it was with the Liberals. The Liberals held big meetings and endless consultations, but did not take action. As a government, we are taking action, and we are seeing the results this morning: a viable bill that will help our farmers.

I would like to ask my colleague a question. He knows two organizations that were not involved in the consultations. Has he gotten in touch with them to ask them to contact us about attending meetings? Has he gotten in touch with them by email or otherwise? Our doors are always open.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, the Parliamentary Secretary to the Minister of Agriculture seems to think that I am going to do the government's work and start calling people to tell them that a consultation process is going on, and that they should take part in it. The government must do its homework and ensure that those who are directly affected by measures are indeed consulted. If these people could not go to Longueuil on that day, for whatever reason, surely it would have been possible for an Agriculture and Agri-Food Canada official to meet with them, or to telephone them if necessary. At the very least, someone from the Fédération de la relève agricole du Québec should have been involved. As I said, I have the same five-page document to which the parliamentary secretary referred, and which mentions that a number of people were consulted. I never denied that; in fact I said it myself. However, among those who appeared in Longueuil were many bank people and Quebec government officials, but no one from the Union des producteurs agricoles du Québec, the Coopérative fédérée, or the Fédération de la relève agricole du Québec. These are all people who should have been consulted.

I want to tell the parliamentary secretary that, despite his claim to this effect, consulting is not his government's forte. Let us take the federal budget, for example. The Union des producteurs agricoles reacted by saying that this budget completely missed the mark, that it did not meet the needs of Quebec producers at all. This means that, if consultations did take place, then the government did not listen to people. Conversely, if there were no consultations, there should have been, so as to meet at least some of the agricultural producers' needs in that budget. Either way, there is something wrong.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I enjoyed the remarks by the member for Richmond—Arthabaska and how he spelled out some of the reality around this bill.

In asking him a question, I want to take issue with the rewriting of history the parliamentary secretary tried to do by attacking the previous Liberal government. The fact of the matter is the previous Liberal government provided actual cash in the BSE crisis, some $520 million. For the BSE recovery program, there was $200 million. For the cull animal program, there was $680 million. There was money for the transitional industry support program, the fed cattle set aside program, the feeder cattle set aside program and many more. My point is when there was a call for action, the previous government was there but all the Conservative government can do is provide loans.

In a statement on December 21, 2005, the Prime Minister promised that the new program would properly address “the cost of production, market revenue and inventory evaluation”. Has the Prime Minister come up with a cost of production program or was that just further information from the Conservative side and the Prime Minister?

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I thank the member for Malpeque for his question.

It has been proven that the election promises of the Conservatives were just that: election promises. In many areas, including agriculture, people were disappointed time and again. Earlier, we listed some of those disappointments. We did not mention them all, but we raised a number of issues. We realize that, ultimately, this government does a lot of window dressing and marketing. It is true that at the beginning of its first mandate, it was able to make people believe that, unlike others, it would make good on its promises.

However, as far as I am concerned, changing the Canadian Agricultural Income Stabilization program, or CAIS program, into the AgriRecovery, AgriStability, AgriInvest and some other programs was the same as getting four quarters for a dollar. I think that when the member for Malpeque was the parliamentary secretary to the Minister of Agriculture, he already agreed that the CAIS program needed to be changed. Even though it was a Liberal government that put this initiative in place, they knew that it was not working and that it was seriously flawed. Unfortunately, it is now very clear that the changes made have not helped the agricultural sector.

[Carol Hughes, NDP, Algoma—Manitoulin—Kapuskasing, ON]

Mr. Speaker, I would like to congratulate my colleague on his speech. I agree that this bill is a step in the right direction, but I also share his concerns about whether the government will really follow through on its promises.

There are a lot of farms in my riding, and farmers are frustrated by the fact that the Conservative government is not paying attention to them, nor doing anything to help them. The previous government, the Liberal government, was just as bad. This government has to decide to help farmers by giving them access to credit and loans because it is refusing to use such tools to help our forestry industries survive. I would like to ask my colleague if he really believes that, once this bill passes, the government will advance funds without delay for a number of other measures to help farmers.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I would like to thank my colleague from the NDP for her question. Her comment is on target.

I was asked by La Terre de Chez Nous, a newspaper distributed in rural communities throughout Quebec, about precisely this measure. I said what the member has said. Can we believe, regardless of what this government announces and intends to do, that it will really deliver the goods?

As I said just now in answer to the question from the member from Malpeque, it is hard to feel any assurance that all of this is going to be put in place the right way and that producers will truly be able to benefit from it. We hope so. That is why I said there are good measures in this bill and we will support it being passed as quickly as possible. We will be very vigilant, however. I would ask all my colleagues in the House to do the same, as things move ahead, to make sure that we do not end up with measures like the ones announced by the Minister of Agriculture and Agri-food before the budget when he proposed the AgriFlex program.

We all expected that it would be what the Canadian Federation of Agriculture and other farmers across Quebec and Canada had asked for: flexible programs for the provinces. But when we were presented with the budget, we saw that this was not at all what was being asked for. There were no income security support measures, and so it in no way met the expectations of agricultural producers. That is why I always say the devil is in the details, and I also say the government should have held more consultations, even though it says it made every effort and consulted a lot of people. In fact a news release was put out by the president of the Fédération de la relève agricole du Québec stating that he would have liked to be consulted.

How can it be that he was not consulted, given that many of these measures affect young farmers, the farmers of tomorrow? I have found one association in all of Canada that was consulted and that spoke for young farmers. I have a lot of questions about the government’s effectiveness when it comes to holding a genuine consultation. It is all very well to consult the banks, because they are affected by measures like these, but it was really essential to invite people who speak for young farmers.

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, I am pleased to speak to this critical issue to farmers. It is also a critical issue to consumers of those farm products, because without farmers clearly we would be at a loss. There are not too many of us who can provide for ourselves when it comes to food substance.

As much as the bill looks at increasing debt and doubles the amount of available credit from $250,000 to $500,000 for individual farmers, as my hon. colleague from the Bloc has pointed out, at least in Quebec, they did not talk to young farmers' associations.

Across this country, the age of farmers is on the increase. Parents quite often give their children advice. Unfortunately in a lot of cases, the parents in farm families are advising their children against getting into the farm business, to not be as foolish as they were. They are not just working on the farm to try to make it viable, the subsidy that farmers give to their farm is the off-farm job they have to perform to keep their farm.

There are not too many of us who would have a second job just to keep the first job. Farmers who are passionate about being farmers are willing to subsidize their own farm by getting a second job. We hope this credit program will not drive them into getting a third job just to pay the debt.

As we look at debt loads for farmers, it is quite telling. Where were the debt loads 10, 20, 30 years ago? In 1972, the debt to income ratio was 2:1. It went to 23:1 between 2004 and 2005, which is significant. within that timeframe were the 1980s, where we saw interest rates of 18% to 22%, for those who remember it. I certainly remember it all too well, as I had to remortgage the family home when interest rates were 18% to 22%. What that meant as far as paying down the principal of the mortgage was about a penny a week.

Farmers got caught in that trap. To them it was not about paying a penny a week against the principal on the family home and farm, there were farm foreclosures across this country. Farms were lost, and farmers were driven off the land. In some cases these were farms that had been in a family for generations.

The problem with debt is that it can be an asset to a business. We should make no mistake about it, farms are small and medium size businesses, and sometimes they are very large enterprises, depending on the size of the farm. Debt is an instrument to be used as part of working the farm in the sense of what needs to be done. Most farmers have debt, whether it is for buying seeds or buying equipment, doing that capitalization.

We see the increase in debt clearly continuing from the seventies all the way through to this century. If that continues, the farmer may be caught in a period of high interest rates. The interest rates do not have to be as high as they were when I was a young person, at 18% to 22%; they simply have to move away from where they are now. The margins are so razor thin for farmers, if the debt ratio were to increase slightly, or the interest rates were to bump up by 4%, 5% or 6%, farmers would be in one heck of a lot of trouble. We, as a society, would be in even more trouble.

The bill has assets that New Democrats are willing to support to get to committee so we can do an investigation and work on the legislation. However, it does not have all the assets we need to see as a comprehensive policy for farmers across this country.

As my colleague mentioned, the vast majority of us lined up to get into the Senate courtyard last week when the pork producers were here to show our solidarity with pork producers, to show Canadians that pork is safe to consume. In fact, Canadian pork is the best pork, not only in this country or on this continent but around the world.

The pork producers were saying that they do not want another loan. The president of the Ontario Pork Producers Association said to me quite clearly, and I had been at an engagement with him not long ago, that he does not want another loan. He has had enough loans to keep him in business until the end of his days, plus some. He said that he needed some money, that he needed cash was how he put it. As a friend of mine used to tell me, cash is king. In this case, he needs cash and his producers and the producers across this country also need that cash. They do not need additional debt.

There is not a farmer across this country who does not have debt. If we ask young farmers to take on debt, we are just emulating what we have asked young people to do with their education, which is to take on debt. We have seen the success of that. We have young folks who are bankrupt before they get to their 30th birthday. I have never seen that before in my lifetime. When I was a young man, I never saw young people go into bankruptcy just because they went to university.

Heaven forbid that we should tell young farmers that this is a great career, they are anxious to get at it, then we put them into debt and bankrupt them in 10 years. That will not do anything for farmers, and it will not do anything for this country. We need to make sure when we actually provide programs to young farmers and to existing farmers who are on the farm today that indeed we are supportive of them.

The farmers are saying they already subsidize their farms. It is called off-job farming. It is amazing to me how they can still do that. But we have seen casualties. My hon. colleague from Malpeque has quoted statistics numerous times in committee and here in the House about the number of farms we see going out of business in this country. If they were other enterprises, we would call that a crisis, but because they are farms, it seems to get lost.

It seems that if it happens to the farm community, it is assumed that someone else will farm that land. I can tell the House that in my riding there is a lot of fallow land, and it is not because the farmer let it go to fallow this year; it is because there is no one there to produce the land anymore.

We have watched different places close, such as CanGro, which my hon. colleague from Malpeque mentioned. CanGro was a processing plant in St. David's, just outside of my riding on the Niagara Peninsula. It was the last canning factory east of the Rocky Mountains. It took in a great deal of the tender fruit, especially pears and peaches, from the Niagara region. With the closure of that plant just over a year ago, those farmers who were growing clingstone peaches no longer have a market.

However, there is a market for peaches in this country. Canned peaches now do not come from St. David's, Ontario; they come from China. For those who happen to be growing peaches in the Niagara Peninsula, it is pretty tough to pick those peaches, send them over to China and expect them to be canned and sent back. Those farmers are pulling their trees out.

What do they do next? They can get another loan, but they do not have a crop to pay the last loan, so they get another loan with no income. How do they encourage their young folks to take over the family farm when the young people look around and all they see is a field where those peaches once grew?

There are some folks who are trying to be creative in marketing some different things. In fact one farmer's spouse said she was going to get back in the canning business because she does not believe the majority of Ontarians know how to can products anymore. She is probably right. She is going to start up a small business, teaching folks like me and my kids how to can. So they are going to keep their peach farm.

That is an innovative idea. Only farmers could come up with those innovative ideas. They are truly the most innovative group of small business people across this land. They really want to work, and they want to work with us. We have to find a way to work with them, a way that is different from the programs we have been handing to them for the last 30 or 40 years, because clearly they have not all worked. There was some short-term relief in some of them and a bit longer-term relief in others, but we have never fixed the problem to make sure they are viable.

There are many, many reasons as to why that viability does not exist today. Some talk about international markets; some talk about the local markets. But clearly there is a disconnect between what the consumer pays at the grocery store and what the farmers receive at the end, which is basically a pittance compared to what has been taken through the system. We see too many of them going out of business because they do not make enough money at it anymore. Some are so beat up and so worn out that they get to a stage where they simply say that enough is enough.

Too often we hear people say, “Your equity is in your farm. Do not worry about it. You can sell it when you get older.”

If farmers have a viable farm in the greenbelt in Ontario, they need to keep it that way because it is the only thing they can sell it as. The problem is if they do not have any young people who want to take up farming or someone who wants to amalgamate the farm into their farm, they are stuck with a farm that is useless because they cannot sell it. All they are doing is holding it. Who are they holding it for, if it is not for the next generation or for neighbours? They might not want to lose any more money because they have already lost money or take on more debt. Farmers have built up equity through 40 years of sweat and toil on the lands to help feed Canadians. Now there is no return for those farmers, and that is a shame.

We talk about how we could help farmers. We talk to them about buying local. A couple of things happen when we buy local. Quite often we do it at the farmers' market, but we do not see any support for the farmers' markets across the country. Even though the Canadian Federation of Agriculture has asked for that support, it has not seen it yet. This would be one way to ensure our local producers could get to the farmers' market so they could make some additional money and become, hopefully, viable from a financial perspective.

However, the other side of it is the national grocery chains. Quite often there is no place for local products. There is no placement on the shelf, as they call it in the trade. Because of the numbers of outsourced products, the quantities they can bring in and the way they can control them, they get pride of place. Even though local producers have that ability to produce the quantities, we still do not get pride of place. Sometimes we do not get any place at all. It depends sometimes on the local market itself or whether the local supermarket wants to do it.

I know my hon. colleague from Malpeque knows this when it comes to potatoes. I listened to a potato producer in Ontario who said producers sold their potatoes locally only after they had travelled 300 kilometres away and 300 kilometres back. I do not quite understand that. Here is a potato producer, planting potatoes down the street from where he wants to sell them, harvesting them, bagging them, shipping them away, only to ship them back to the same place he is going to sell them. Tell me the rationale to that. Could the government explain why we need to do this? It does not make any sense. It is one thing for potatoes to come from P.E.I. to Ontario. That is a different thing. Those things do not make sense. We need to find a way to make sense for agriculture producers. They are asking for that. They are not asking for a great deal. They are simply saying they need to make things make sense for them as farmers and for us as consumers.

My colleagues have talked about how we know things are made in Canada. I know my colleague from St. Catharines has done this with his wine tasting, but I would like to survey the folks in here and ask them this. When it comes to the wines the Niagara Peninsula, do they know what “cellared” means? What does VQA mean? If we look at a cellared product, it says “cellared in Canada”. Does that mean it is a Canadian product? Are those grapes harvested, picked, pressed and put into a bottle here in Canada? The answer is no.

The grape that goes into that bottle of wine called “cellared in Canada” primarily comes from about three different places: Chile, Australia and sometimes South Africa. They are not coming from the Niagara Peninsula, or the Okanagan, or down by Pelee Island in southern Ontario. If we truly want to buy a Canadian bottle of wine from the Niagara Peninsula, with grapes grown in the Niagara Peninsula, to support those producers, those owners of those vineyards, then we need to buy VQA, Vintners Quality Alliance, which means 100% of that grape in that bottle is from Canada, not from somewhere else.

We need to ensure those things change. Canadian consumers want to find a way to protect the producer, to buy from the producer. They just do not have the ability sometimes because they do not have the knowledge. We cloud over labelling so consumers think they may have bought a bottle of wine that has been produced in Ontario, by a vineyard that they can see as they go through the Niagara Peninsula. When we tell them it is not Canadian, they are indignant. They do not believe it has come from somewhere else. They drove to that winery in the Niagara Peninsula and bought the wine directly from it. That might be so, but the juice came from somewhere else.

I talked to the president of the Ontario Grape Growers Marketing Board, Debbie Zimmerman. She brought out a bottle of cellared wine, put it on the desk and then asked me a question about it. Fortunately, I knew the difference between the two. I have a few friends who work in the industry.

The label on the one bottle had the 2010 Olympics on it. We have a cellared bottle of wine with the Canadian Olympic logo on it. That suggests to everybody that not only is it a Canadian wine, but it is also in support of the Canadian Olympics. However, it turns out, it was not.

That is a sad epitaph to what really is happening to farms across this nation. We have to find ways to support them, which we are not doing.

We talk about the credit programs, and there have been many of them over the years. My colleagues on the other side, who have been here longer than I and who have worked on the agriculture committee, have seen them come and go. In fact, some from the other side used to complain about it. Some who are now on this side used to come out with those programs and say that they were not any good. Now we have vice versa. It is funny how shoes change feet sometimes.

Ultimately it is about all of us wanting to help the farm community and those farmers. I do not think any members in the House would say that they do not want to help farmers. In fact, I do not think people on the street would say that they did not want to help farmers. The difficulty is, how do we do it?

Without a comprehensive policy, we will simply come out with band-aids. This becomes one of them. Band-aids can be good, as they help stem the flow of blood for the moment. However, ultimately they get saturated and they start to seep again, and we see other problems.

We need a comprehensive agricultural policy that addresses the needs of farmers in the broader sense, not just in the one-off sense of getting them some additional available credit, albeit needed. We need to ensure farms are not only viable right from the time they are taken over, but attractive to young people who go into farming as well.

Unfortunately, I think the average age of farmers is somewhere in the mid-50s. That is not really where we want to see farmers. We want to see that age decline by 10, 15, 20 years, so young folks coming out of agricultural colleges will get into the farm business. Ultimately we are looking to see that happen.

We are pleased the government has brought this forward. It is an enhancement of a previous program, but it needs work. The New Democrats on the agriculture committee are willing to help make that work. We are willing to ensure that our farmers will get the support they need.

Make no mistake, we are also looking at a comprehensive policy that deals with the needs of farmers, not just the immediate but the long-term needs as well. It is in our interest to ensure that happens. Ultimately, if we do not, I will end up trying to find that old rusty hoe I have somewhere in the garage and will have to start digging and competing with the rabbits to try to grow carrots.

If that does not work, I will be looking for somebody else to do it for me. In that case, I will be working for that person on a farm field somewhere. Ultimately, without farmers doing the things they do, we are in real peril. If we allow ourselves to be hostage to those who import the food to us or those exporting nations, if we rely on staple products because we are no longer doing it, then we are going to be in trouble. We do trade. We do not necessarily grow oranges here, so we import them.

At some point in time someone is going to tell us that there is not enough for us. We have seen that already. Some exporting nations have said that they have had a drought or a bad crop year so they have had to keep their products internally.

If we do not grow our own because we have not supported our farmers and have allowed them to disappear, shame on us. It is incumbent upon all of us to ensure that we protect farmers, that we listen to them and bring forward programs that look at farming in a comprehensive way. We need to ensure that agriculture is sustainable throughout the country. We need to ensure that farmers can sustain themselves into the next century.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I enjoyed the remarks by the member for Welland. He started off by mentioning the fact that the president of Ontario Pork Producers' Marketing Board said that he had enough debt. Given the figures that the Library of Parliament provided to me this weekend, in 2006-07 the average debt of hog farms in Canada increased by 22%. That is the advance payment program loans the government provided, which has really put them in a further hole. The debt went up nearly as bad in 2007-08.

I take it from the member's remarks that he is zeroing in on the fact that the government is failing to develop a comprehensive policy for farmers in total, and I agree. Earlier I asked the parliamentary secretary this question. While providing availability of credit to farmers, is the real purpose of the bill to guarantee a return to the banks? The loans are guaranteed at 95%.

Does the member for Welland agree with my premise that this is really a bill that provides guarantees to the banks, establishes further the record of the Government of Canada as increasing debt and ignores sustaining farm incomes?

Does he agree with that and what is his position relative to guaranteeing the banks' security while leaving the farmers out in pure thing air?

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, the last thing the New Democrats want is for the banks to become more profitable at the expense of farmers.

The New Democrats are on the side of farmers and always have been. In fact, we have a history of being on the side of farmers. It goes back quite a number of years to the CCF. I will not recant the history because I am sure most members of the House know it. We are indeed a party of the prairies and we are indeed a party for farmers, and we are very proud of that.

[An hon. member]

Do you have any members on the prairies?

[Malcolm Allen, NDP, Welland, ON]

Yes, we do as a matter of fact.

In any case, let me turn to the issue of debt and quote statistics from the United States, which show that debt to income ratios in the United States was 2.9:1 between 2004 and 2005 versus the statistic that I gave earlier for Canada, which was 23:1. We should think about that in terms of what type of income one has left over when one's debt ratio is that low.

What have we been doing that is so significantly different than our counterparts in the United States when it comes to our farm programs, where their debt to income ratio is so significantly lower than ours? It is clear that the higher the debt one has, the more it consumes one's income.

That means farmers cannot invest in R and D, innovation and equipment or buy additional agricultural land when the need arises and when it is there for them to do. They perhaps cannot put more food on their own tables. Perhaps they cannot even send their kids to university. They do not have enough money because they are paying the debt. That is a crime against our farmers.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I want to congratulate my colleague on his excellent speech. He is newly elected to Parliament and therefore a new member of the Standing Committee on Agriculture and Agri-Food. I want to say that his contributions there have been very helpful. He has really good ideas and I am happy to sit on this committee with him.

He had some really good things to say as well in his speech, especially when he said that measures like the loan guarantees in the program that Bill C-29 would provide are little more than a band-aid solution when what we need is a real agricultural policy. People are entitled to that, not necessarily in this bill, but in general. How is it possible that since this government came to power in 2006, there has been a total absence of any agricultural vision or policy to help farmers?

My colleague knows, of course, that Ontario and Quebec grain producers have joined forces to promote a program designed by and for them and implemented by the Canadian Federation of Agriculture. This is the AgriFlex program I mentioned earlier.

Can my colleague explain why the government did not simply look at what is in this kind of program, advocated by the grain producers of Ontario and Quebec, instead of trying to complicate things, because the government always says why make things easy when they could be made hard? The producers have their own income support program, but they would like the federal funding for agriculture to go directly to the provinces, which can then adapt the federal programs to their own needs and the needs of their producers.

Why did the Conservatives promise this in the election campaign? Why did they promise it just before the budget and then table a document that made a total hash of what the farmers had presented?

Can my colleague explain what the government was doing here?

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, I said earlier that we need a comprehensive policy. My colleague from British Columbia Southern Interior has been on a food for thought tour for about eight months which will be completed when he finally reaches the east coast some time later in the summer.

We will actually look at having a comprehensive policy for agriculture and food for the first time across this country. We have never had one. All we have had are stop-gap measures. Our response to a crisis is to put a band-aid on it, and when there is another crisis, we get another band-aid out, and on it goes. It is similar to the old story of the boy using his finger to plug a hole in a dike. After using all of one's fingers and thumbs, if there is still a leak and one is a nimble person, one could use one's toes, but ultimately, if the dike is not fixed, it will forever spring a leak.

That is what we see in agriculture. Farmers are telling us there is a problem with the system. It is not about individual producers. It is not about sectors, whether it be red meat, oil seeds or horticulture. Farmers are saying there is a problem with the entire system and there needs to be a policy. We need to talk about how to fix it. Ultimately, we need to fix it so we can go forward. We cannot go forward with a haphazard policy that fixes one thing today and ignores another thing tomorrow until there is another crisis.

It is in all of our interests for all of us to come together and finally establish an agriculture policy for the entire country. It would be the best thing for Canadians and consumers, but more important, it would be the best thing for our farmers now and in the future.

[Niki Ashton, NDP, Churchill, MB]

Mr. Speaker, I particularly appreciated the attention my hon. colleague paid to what young farmers are dealing with. I took note of his reference in terms of the increased debt that young people in Canada face today.

Only this morning I had a chance to meet with student leaders from McGill University who spoke very clearly about the pressures student debt puts on them today. It is very much the same story with young farmers, many of whom have decided to follow other paths because they can no longer make ends meet. This is extremely problematic for an industry that is very much at the core of who we are as Canadians.

I would like to ask my fellow colleague what his thoughts are about the supports that are needed in this industry in order to support young farmers, people who have spent their lives making this industry a reality and, as a result, benefits that could be provided to this industry that would be to the advantage of all Canadians.

[Malcolm Allen, NDP, Welland, ON]

Mr. Speaker, I had the pleasure of being in the Simcoe and Delhi area not long ago. Although it was a pleasure to be there, it was an unfortunate situation because of the buyout program for the tobacco farmers in that area.

One can debate the merits of whether we should grow tobacco or not, but for those farmers it was clearly the end of an era. When I talked to some of the farmers, especially those who were a little bit older and had been in the business for a long time, they were not talking about themselves exiting that industry. They were talking about young farmers who were going to be exiting at a point in their lives when they had taken on the maximum debt load and were now seeing no income whatsoever. All they had basically was $1.05 a pound to buy back the program. They were wondering what to do next.

In fact, a few of those young farmers asked me what I thought they should farm next. I live in the country, but as I have told many friends, I just grow big trees. They grow all by themselves. I have a managed wood lot, so the trees just grow. I do not know how they grow. They just grow. The farmers were asking me what to do next. I had no idea what product a young farmer should get into farming next. They were at a point in their lives when they truly did not know.

We need a comprehensive policy that talks about agriculture and does not force young folks on the farm to start out so far in debt that they are going to be bankrupt by the time they are 35. That would be unconscionable.

[The Acting Speaker, Conservative, Barry Devolin]

Is the House ready for the question?

[Some hon. members]

Question.

[The Acting Speaker, Conservative, Barry Devolin]

The question is on the motion. Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[The Acting Speaker, Conservative, Barry Devolin]

I declare the motion carried. Accordingly, the bill stands referred to the Standing Committee on Agriculture and Agri-Food.

(Motion agreed to, bill read the second time and referred to a committee)