Agriculture Committee on April 26th, 2010

[Ravi Cheema]

What's happened to us in our farms is that we used to do about 100 acres of sprouts and about 50, or more than that, of cauliflower. We kept cutting it back because we could not find the labour. What eventually happened was that our marketers went to the States and our competition has our business now.

On a side note, a few months earlier we were negotiating prices for cauliflower. Our marketer and processor said to us, “It's going to be this much for a cauliflower: there's no negotiation or we're going to China.”

Last year, they started giving us cauliflower again, because a law was supposed to come in on labelling to show where the product was coming from. But since that's not there any more, or it's changed a bit, they've said, “Too bad.”

Partly this problem came about because back in the late nineties, when we could not get enough labour, the processors had to look around the world for where they could find another product. I guess they learned cheaper ways to get product in here. That's our loss and their gain, and it's getting used against us now.

On pesticides, down south they can use a lot of pesticides on strawberries. We were well known for our strawberries in the lower mainland, and now we're down from about 70-plus acres to 7 acres, just to keep a little fresh market going on.

They're allowed to spray stuff we're not allowed to spray, but they're allowed to bring it up here, which is not fair. Their berries used to taste like cardboard, but they taste pretty good now and they look pretty red and they're year round. So pesticides are an issue.

The cost of machinery is such that when you're buying a tractor, you may as well buy a Mercedes-Benz; it's similar. You can't just go with a two-wheel drive with the weather we have. Perhaps there could be some sort of government loan for young farmers, or incentives to get cheaper machinery.

[Kerry Froese]

I think something that's involving Canada, too, is the mentality of consumers and their want of cheaper food. I know that in other countries that produce a high quality standard of food, which we do in Canada as well, they're able to pass it on to their consumers. That's something we need to be able to educate our consumers better on, to show the standards that we have in Canada, to pass that on to our consumers. People are willing to pay for that food if they know the standards that we are attaining.

In my industry, I'm a supply managed commodity, and actually of our 13 B.C.-wide board members, only two are not in supply management.

So in terms of farming, young farmers really appreciate the stability of supply management. They know that it passes on to consumers that it's a good, high-quality product, and consumers know we have those standards. We're all fully inspected and we can pass that on.

Young farmers aren't going to invest millions of dollars in something they don't know is going to produce a return. Supply management provides that to them and it gives them stability.

[The Chair, Conservative, Larry Miller]

Mr. Cheema, maybe you could just highlight the rest. You can always enlarge on them at questioning, anyway.

[Ravi Cheema]

Okay.

While young farmers from farming families may be better educated in agriculture, we are finding that new farmers who are coming from other backgrounds, such as construction, trucking, or other businesses, have poor farming practices that lessen the quality of our overall product and saturate our markets and lower the value of our commodities.

That's all.

[The Chair, Conservative, Larry Miller]

Okay. Thank you very much.

We'll now move to Mr. Joe Sardinha from the B.C. Fruit Growers' Association. And thanks again for the apples.

[Joe Sardinha, President, British Columbia Fruit Growers' Association]

You're very welcome.

Thank you, and good morning.

First of all, I'd like to welcome all of you to Kelowna. If you were here yesterday, we had just a banner day. The weather was fantastic. Today you'll be visiting orchards that are on the verge of blooming. Cherries will be blooming and apples are certainly opening up. You hit the right time of the year. We're two weeks ahead of normal. We're ahead of last year's crop stage, so you'll get treated to blossoms.

I would like to say I was totally impressed by the young farmers that I helped recruit to the panel this morning. Nick is one of them here as well, of course, but David Dobernigg, David Machial, and Madeleine Van Roechoudt did an excellent job. You as committee members also asked some excellent and very pertinent questions, and I appreciate that. It does flow that information back and forth.

I have been a fruit grower; I'm into my 28th year in the business, and this is my tenth year of life with the B.C. Fruit Growers' Association. Currently I'm president of the association. I've seen a lot of changes in the industry, and certainly I had an opportunity for input in various capacities during that time.

My wife and I operate an orchard in Summerland. That's just south of here. It's a beautiful part of the valley as well. It's almost impossible to keep my 77-year-old father out of the orchard still. If it's in your blood, it's in your blood. Certainly we've had a father-son succession plan going there, in case you're interested.

Of course, the B.C. Fruit Growers' Association appreciates this opportunity to present to all of you today, certainly on the theme of young farmers and the future of farming in Canada. We need young farmers to enter the agricultural industry, to provide it with a future. Similarly, we need a vibrant and profitable agricultural sector to attract those same young farmers. Also of note, maintaining a high level of national food security depends on getting a new wave of young farmers.

We have seen four years of serious downturns in the industry in the Okanagan in terms of our revenue streams, four years out of the past six years. In fact, we realized cost of production in the 2006 and 2007 crop years. We were at the cost of production or thereabouts, but we've had four other years where we failed to hit that target.

Our current approach is to request financial help from the province to sustain our industry, and we are awaiting an answer from our provincial Minister of Agriculture, though he has ruled out a direct payment to growers.

Current government fiscal challenges are making it difficult to address this situation, let alone future challenges for farming. While there is much the government can do with minimal impact on agricultural budgets, investing in horticulture should be a top priority for government if healthy eating habits based on local production are to be successful.

Here in B.C. we continue to suffer from the lowest percentage or lowest ratio of agricultural program expenditures compared to agricultural GDP in the country, though New Brunswick is also in the race to the bottom. So we have that additional challenge of government not investing enough. This impacts our investment in agriculture and diminishes our future prospects. This is discouraging to both current and new farmers. How can the federal government turn this situation around? Perhaps some pressure on our province would help.

In terms of entry into our industry, many young farmers of course enter the agricultural sector because their parents operate or operated a farm. The other primary way new entrants come into the industry is the fact that they were employed as farm workers or managers at one time, and many of the growers in our industry who were farm workers and managers at one time first took on leasing property. So leasing is definitely very much conducted here and in the valley. Similarly, they eventually moved on to purchase property after having become experienced in the industry, and leasing still happens to this day. Many growers have long-term leases in our industry because we have a lot of absentee landowners as well.

How do we encourage young farmers and new entrants into the agricultural sector? The best way is to make agriculture economically attractive. Canada and B.C. do have many competitive advantages, and we need to remove various serious barriers or protect our farm sector from unfair competition. That was brought up this morning, I think very clearly.

We also need to build a positive, winning attitude that attracts the best performers. You have to have experience and horticultural knowledge on your side to get into this business and approach it successfully.

In recent B.C. Fruit Growers' Association activity, we have noticed the broad public appeal of producing locally grown product and promoting the healthfulness of fruits and vegetables. In the words of the Canadian Broadcasting Corporation, “Most top-performing countries have achieved better health outcomes through actions on the broader determinants of health such as environmental stewardship and health promotion...”. In the report, B.C. is identified for its ActNow program. B.C.'s internationally lauded ActNow program, which encourages citizens to exercise more and eat healthier food, is a particularly promising model of intergovernmental collaborations to develop health policy.

For those of you who haven't heard, we do have a provincial school fruit and vegetable nutrition program. It is a key investment for the Ministry of Health in this province. The province is having trouble addressing chronic health care costs, let alone the cost of promoting good nutrition. But we feel that the federal government could translate this into financial support for a national school fruit and vegetable nutrition program. It would achieve the following two goals: introduce our impressionable youth to healthy eating choices, and make our industry a positive contributor to health and therefore a more attractive industry to participate in for youth and new entrants. Furthermore, we would be mimicking what the U.S. already does in terms of approaching nutrition in the schools on a national basis.

The renewal program is something that has been talked about briefly this morning. The BCFGA and other apple-producing provinces, through the CHC, the Canadian Horticultural Council apple working group, have developed an AgriFlex proposal to renew our industry through strategic investment in replanting, integrated pest management, and researching and promoting best horticultural management practices. This program will benefit other provinces most, as B.C. has already had 15 years of a replant program, but it also recognizes the benefit of the renewal of the production base for tree fruits.

We encourage the support of this committee for our federal AgriFlex proposal. It has gone in, so maybe some of you could call up that information and see what our proposal is all about at another time.

[The Chair, Conservative, Larry Miller]

Okay.

[Joe Sardinha]

I'll make a quick comment on labour. The SAWP, seasonal agricultural worker program, is very important, and we have asked the federal government to continue to support those programs. Labour is a very important component in our industry.

I do have a few comments here on trade and international competition. Tree fruit products are generally freely traded, which can have its pros and cons. There are also the minimum phytosanitary requirements that do not impede trade in apples and cherries except for exports to countries such as Japan. This trade sometimes introduces new invasive pests and diseases to the tree fruit industry. We would like to see more effort directed to inspection at point of entry, especially for those areas of the world that are not at the same level of integrated pest management as ourselves.

Furthermore, a national plant health strategy has been promised but not delivered or developed.

I'll make a few comments on the Pest Management Regulatory Agency. We've made great strides with the AAFC's Pest Management Centre, and the PMRA has made great strides in working in harmony and collaboration with the IR-4 project in the United States to get simultaneous pesticide registrations. However, we are still lagging behind and we feel that it is high time that Canada fully integrated its registration system with the U.S. This may also help curb the huge discrepancy in pesticide prices between Canada and the U.S.--as much as 30% to 40% is quite common--especially at a time when the Canadian dollar is at par and we are still looking at these huge differences.

I would also like to point out that in terms of labour, we have all heard of the cost of production. B.C. farmers and Canadian farmers are always facing higher costs of production. Labour is one area. In fact, in the U.S. as much as 60% to 70% of the labour in some sectors is actually illegal foreign labour. These workers are mistreated. They are paid low wages and sometimes also they do not even receive wages compared to the farm work that they have completed. Therefore, we see this as an impediment and we are in direct competition with an economic system based on abuse of its labour force, which is another competitive advantage--or disadvantage, as we call it--that they may have.

The final trade issue we would like to raise with the committee is the level of government subsidies in other nations. In particular, there's the U.S. Farm Bill, which governs tens of billions of dollars in spending and includes everything from land stewardship, public in-school nutrition, biofuel, institutional procurement programs, export and agricultural research programs. The current $289 billion Farm Bill was enacted in 2008 and is going to be replaced, probably with something very similar, in 2012.

Canada has decided not to play the subsidy game and compete with the U.S. Farm Bill. This places our industry, our producers, and our young farmers at a competitive disadvantage such that the Doha Round of WTO negotiations will not rectify the current situation. If we cannot compete with the U.S. Farm Bill, then perhaps Canada needs to expand the list of sensitive products to other sectors and allow broader access to orderly marketing powers.

I thank you for your time and the opportunity to present today.

[The Chair, Conservative, Larry Miller]

Thank you.

We will now move to Mr. Butler.

Everybody that has a written submission will get a chance to do that. We'd like as much time for questions and we could certainly enlarge on some of the points.

Five minutes, Mr. Butler.

[Robert Butler, Executive Director, BC Potato & Vegetable Growers Association]

Thank you. I appreciate being here.

I did have a written submission, which you probably have received by now. I won't deal with the whole thing; I'll just touch on it quickly.

I'm not a farmer. I'm not a young farmer, obviously, but I'm not a farmer at all. I'm just here on the behalf of the potato association.

We're located throughout the province: Fraser Valley, Pemberton, the Kootenays, the Okanagan, the Cariboo, and Vancouver Island. We have 70-plus members, and we're a shrinking organization. We're shrinking because of difficult farming practices today.

I have no statistical charts included in this presentation. I think you have enough of that, given from the earlier presenters.

It's somewhat unique in B.C. that we have only a small portion of land available for farming and we achieve high productivity from that small percentage of land. That land, of course, is expensive--we've heard that--and prices get higher every year. There is a lot of land speculation in this province from offshore and internal speculators, who have money to buy land for purposes that we've already heard about. We are part of that problem because the field crops that we grow mean that we have a lot of land.

We have open-field farming and we have closed-environment farming, which would be the chicken houses and the greenhouses, etc. Of course, some of these are better in terms of attracting young people who are young, highly educated, and technically knowledgeable. There's a lot of that going on.

Today's potato farming and vegetable farming are high-tech for the most part, because you're using the most advanced equipment and the most advanced chemicals and pesticides that you need to use for products, but we're not attracting people. We can't attract people because our costs are exceeding our ability to pay.

That's what it comes down to. That's the bottom line. We just cannot sell. We are competing against some monolithic suppliers out of the U.S. and other areas that simply dictate the pricing on the international commodity market. The buyers today at the stores simply tell you what they're going to pay you. That's based upon the lowest price they can achieve elsewhere, not here.

That price does not cover our cost. That particular issue applies to almost every commodity within B.C. today, other than supply-managed groups. That's the issue, the bottom line.

The age of farmers is up. We know that. I think the average age is roughly 55 in Canada today. I'm not necessarily as concerned about that as I am about the ability to bring people in. I think that age 55 is a really nebulous figure we're chasing. We're saying that we need to get young farmers in, but you have to remember that we just heard from someone here who said that his dad still owns the operation and is still the chief farmer, so he's probably pushing 65 or more. The offspring are coming in, and they're probably 40-plus by the time they actually get to take control of the farm.

It's happening. It's not happening at a younger age, but you do have a lot of younger high-tech people now in the business. They're there working, but we can't continue to bring more in simply because we're not recovering enough money to pay for this kind of thing.

We don't necessarily view aging as a crisis for farming, but more of an active transition brought about by a healthy population as it ages. When healthier older farmers work longer and fewer farms are available, opportunity is reduced for young people, including those outside of farming who can't afford to buy in anyway. There's no means to enter the business unless they can find ways to cover the cost. That's what it comes down to.

There are fewer farms today, but we produce more food today. We've become very efficient over the last 40 to 50 years. Many who do not view farming as a viable business have completely retired and sold their farms to--in a lot of cases--other farmers, who have consolidated in the belief that the consolidation will improve their overall profitability, but they're still finding it difficult.

We've seen this happen throughout the grain industry in Canada, which I spent 35 years in, and I understand that the issue on the prairies has not changed much from what it was years ago.

I think the supply-managed farms have done better in terms of attracting young people, because they can cover their costs to some extent. It's difficult to get into that business today because of the land cost--and I understand that--or the quota cost if it's dairy or that sort of thing. Nonetheless, it can attract young people in. They have some opportunity, and it's getting to be very high-tech.

Field crops are suffering and suffering badly, and that's really what it comes down to today. Field crops are in deep trouble. You've heard this from some of the young farmers today. I was listening to some of your earlier sessions, and the people at this table today have indicated the same thing. So it's really a problem of getting net income, covering your labour costs, covering your field costs, etc., and that's just not available.

I think we really have an issue when it comes down to trying to compete with the crops that are coming in here from the international marketplace. I think the question in many of our minds today is that we don't know if the standards under which we have to put crops out—and they're good standards, they're high standards, and we're meeting them—are on the products that we bring in.

I live in Delta, and I've had people ask me “Why do we not grow more vegetables in Delta? We used to grow a lot at one time.” I say, “Do you see these trains coming in from Roberts Bank? Well, they're bringing in a lot of frozen products from overseas today.” It's one of the reasons for the lesser fields of cauliflower, the lesser fields of broccoli, and those types of things. This is an issue today. We are getting a lot of foods in that come from overseas, and we just cannot compete with these products. But we don't even know what the standards are for those products. We don't know if they meet the standards that we have to maintain. There is a cost for us in meeting those standards, and we can't cover that cost.

I'm going to keep harping on that issue: we cannot cover our costs. That is just the bottom line of this whole issue today. It's just not available to us, and it doesn't matter what we do.

Thank you.

[The Chair, Conservative, Larry Miller]

We'll now go to Mr. Duhaime for five minutes.

[Keith Duhaime, As an Individual]

Thank you, Mr. Chairperson.

Agriculture within the central Okanagan is at a bit of a critical crossroads right now. We've heard from a number of other speakers here. I would concur and attest to everything you've heard from them so far.

The landscape is highly fractured here, with over 95% of it being individual parcels under 10 acres. The average farmer, as we've heard referenced, was 57 years of age as of 2006. Industry surveys have identified that as many as two-thirds of the farmer population may be retiring in the next five years or so.

At the same time, the Okanagan is an attractive place for retirees. This creates a lot of competition for our land base, especially for things like rural residences. It makes farmland prohibitively expensive for new entrants, especially in traditional areas like tree fruit production. The net end is that we are very much facing a perilous situation here.

There are opportunities, however, for new entrants. At the same time that agriculture within the central Okanagan faces challenges, it's also being presented with some opportunities. The same demographic, the retirees that I referred to earlier, that bears the chalice of succession also possesses often highly disposable incomes and tastes to match, including a taste for fine food and beverages. We only have to look at the wine industry here to see an example of that.

A shift in global supply and demand for fine food and beverage products is also creating opportunities for other local entrepreneurs. I could take you to a little cheese operation at the end of Lakeshore Road here that produces artisan goat cheese, as an example. Burgeoning upper and middle classes in newly developed economies mean that traditional supplies are being diverted to other places. I remember there was an article a year or so ago, where the major importer of fine scotches to Canada was telling all the liquor control boards that we weren't going to get the supplies we used to get in the past because there were better markets in Asia.

Trends in popular culture, such as the 100-mile diet and the “flow of food” movement, are also contributing to these opportunities. Okanagan chefs greatly desire the opportunity to have more fine food products such as premium cheeses, charcuterie, etc. The question is, how can we assist our youth in taking advantage of these opportunities?

Working with local government here as I do, I run a program in which we're basically trying to implement a strategy built on four pillars to help accomplish that. It's not going to answer all the problems that people like Christine or Joe have alluded to, but it will certainly create some opportunities.

One is the need for education. I think Christine was speaking to this. That is, we need to work with our local colleges and universities here in terms of beefing up opportunities.

Another is the creation of an incubation facility—I'll talk to that in a second—where new farmers can get a leg-up or a start, rather than having to necessarily depend on a handout as it's sometimes perceived.

Another thing we're hoping to engage in is foreign direct investment. It's an opportunity to bring in farmers and entrepreneurs from overseas who could provide some new skill sets and renew some of the industry. We saw this somewhat with the wine industry 25 years ago, when foreign vintners and foreign culturists were brought in to help with the new varieties of grapes that were part of the replanting program at the time.

Finally, facilitating some kind of a program that would assure consumers of local quality...and there is quality there, as you can see with the BQA here, or the IGP in Quebec, which I'll talk to in a second.

We're already seeing some success in our discussions with other levels of government. Just last week the Province of B.C. and the local government were able to get to a point to announce that the historic Fintry estate can be used potentially as an incubator farm. It's hoped this will be modelled much after the FarmStart program in Guelph, Ontario, which is highly successful in starting to turn out new farmers. We're also seeing where the FarmStart program is now engaging new Canadians as well. That speaks to our foreign direct investment interests.

The question now is how can federal agencies and the federal government engage in helping to facilitate some of that?

I've already had some discussion with Farm Credit Canada. They're very interested in seeing some replication of the FarmStart program here. They have an interest in lending money to people who have some kind of a track record already and can take their businesses forward.

On a related note, I am dismayed somewhat that at this point in time there is a question with respect to renewed funding for the Canadian Farm Business Management Council. For business training, that is one of the key resources in Canada, in terms of extension materials. I'm hoping that the federal government can step up to the plate and do something there.

With respect to the development of the foreign direct investment program, we look forward to any support and assistance the federal government can provide in helping us in that endeavour, in getting new farmers, new ideas, and particularly new skill sets into this country.

Finally, I would strongly recommend and encourage that the federal government and its agencies take and follow the lead of the Province of Quebec in their development of the Conseil des appellations réservées et des termes valorisants. That's the equivalent of the French appellation control or the Italian denomination control system. Young farmers who are going to engage in these initiatives are making considerable investments and taking considerable risks financially, personally, and otherwise. If they're going to take on the task of developing these skill sets and making those investments, they deserve the respect of having some protection for those products. Also, likewise, on the consumer side, the consumers are looking for that quality assurance as well.

In closing, I would like to thank the chair and the members of the standing committee for providing me with the opportunity to provide witness today.

Thank you.

[The Chair, Conservative, Larry Miller]

Thank you very much.

Because of timing here--we had a lot of witnesses at this session--I'm going to limit the rounds to five minutes. I'd ask the members, in order to stick to the time, to please make their questions as brief as possible. I know it's hard sometimes.

Mr. Valeriote, you have five minutes.

[Frank Valeriote, Liberal, Guelph, ON]

I have to tell you that while the weather is wonderful out here, the message is frightening. I anticipated it, based on what we've heard for the past year and half in our other study on competitiveness in the industry. It's now to the point where I'm alarmed, very alarmed.

It was said this morning by David Machial that it will be an inevitable decline if things don't change. I don't think these individual changes we're talking about are going to amount to more than kind of band-aid solutions to things. I may be wrong, and if I'm wrong, tell me, I'm glad to hear it, because I don't come from the farm. I come from the city of Guelph. I live in an urban area.

I also read from Christine's comments, “The relative stability in the dairy, egg and poultry sectors brought about by supply management has had the very direct [effect] of having many young men and women choosing to be directly involved in family farm businesses. The BCAC appreciates that supply management is not going to be the solution for most other sectors”; they're not supply managed.

There's a lot of aversion to going that direction in certain industries, and I understand that, but it seems that free trade hasn't really been a solution. In fact, it's hurt us just as it hurt the manufacturing industry in which we lost a lot of jobs to overseas. Now we're losing our farm opportunities to overseas.

What's the big solution? We could make some changes to the succession planning. We might harmonize regulations between the United States and Canada, as Bev Shipley's bill is attempting to do, so that we'd be competing a little more fairly with them. You indicated that they're allowed to use pesticides and other things that we can't use here.

Is going all the way to supply management a solution? Do any of you see that as a solution? Or do some of you have an absolute aversion to that? We have to have that talk.

Could I hear from any of you who feel strongly about it either way?

[Kerry Froese]

I think supply management is more than just managing your supply. It also involves the tariff rates that allow products to come into the country, and those tie into the quality of the product that would be coming in. That's something that could be adapted to other commodities more easily than having just the full supply management model. If the tariff rates were high enough so that the lower standard products didn't come over our borders, we could compete with them. That's something that could definitely be adapted.

[Frank Valeriote, Liberal, Guelph, ON]

So we have to step up and get in the game just as the Americans are, and put our tariffs up if we have to, notwithstanding the possible repercussions of being challenged at the WTO or whatever.

[Kerry Froese]

Absolutely.

[Frank Valeriote, Liberal, Guelph, ON]

All right.

Does anybody else have an answer to that?

Yes, go ahead.

[Stan Van Keulen]

Supply management is a good thing. One of the things supply management does is that it gives you predictability. It also sends discipline through all sectors of the economy of that industry when it comes to the primary producer to the retailer.

I'll give you an example of what's taking place in the dairy industry in the United States right now. The price of milk to the producer has probably fallen by 50%, or a considerable amount. It has gotten to the point now, for the last two or three years, in the land of the free and the ones who preach economic freedom, the attorney general's department is now involved in doing a review like a standing committee does, like what you are doing, to find out why that has not been translated to the consumer.

A lot of it has to do with the responsibility of the processing sector as well as the retail sector on the consolidation of those particular sectors. The power they wield at the moment is tremendous.

The Competition Tribunal here has let a lot of things happen in the last 10 or 15 years that I've been involved in this industry, and I think you should take note of that. But the concentration of power of the marketing chain is just tremendous, and supply management gives us at least the opportunity to somewhat control that.

[The Chair, Conservative, Larry Miller]

Did somebody else want to comment on that?

Go ahead, Ms. Dendy. You have 20 seconds.

[Christine Dendy]

Thank you.

I'd also add that supply management is certainly not a panacea. It works very well and much better than non-supply management for certain sectors, where you can have a little more control over the environment of your growing conditions and some of the inputs, but certainly supply management has its own problems.

For non-supply management crops, or crops that don't have supply management now, we also have issues of a lot more differences in varieties, qualities, grades, and standards, and a lot more exports and imports of different varieties. I wouldn't say there's only one type of egg or one type of milk, but there certainly are a lot fewer than there are types of apples.

On your comment that the power the highly unified marketing now holds is tremendous, just think of a variety like an Ambrosia--which I hope you're all eating. It's a lovely new apple, bred in B.C. A few years ago it was earning the growers 50¢ a pound on average. This year, for apples in general, the average that fruit growers will be getting is 12¢ a pound. There's no change in price at retail. There's something going on in between the farmer and the retailer. The farmer is getting less and the consumer doesn't see any difference in the price.

Supply management is not necessarily something that would be easy to move apples into.

[The Chair, Conservative, Larry Miller]

Mr. Bellavance, five minutes.

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

Mr. DeBoer, I related to you right away, if I may say so, because you are a dairy producer and a cranberry grower. I represent a region where we have a huge amount of dairy production. I do not know if you know the places where cranberries are grown, but I can tell you that there a lot of cranberry growers in Saint-Louis-de-Bedford, which is located in my constituency. This is actually where production in Quebec started some years ago.

You brought up a very important point on land transfers. You discussed changing the rules to allow other transfers, not just from parents to children. I agree with the change you are suggesting. I would like to tell you that the idea was proposed by the Bloc Québécois five years ago at a conference that brought together the next generation of Quebec agriculture. The topic was specifically on what to do to encourage the new generation and the focus was on what the federal government could do to encourage land transfers. Before the last election, committee members toured Canada again. I decided to advocate for those proposals that appeared in one of our reports.

The federal government is dealing with those proposals. Changes have been made, especially in the amount eligible for the capital gains deduction. The amount went from $500,000 to $750,000. Perhaps it could go to a million dollars. Things change slowly, but maybe, if we keep hammering away...

I would like to hear your views about the possibility that the transfer rule could equally well apply to other members of the family. What if there were nephews and nieces ready to take over, for example? Of course, quite strict criteria would have to be maintained, making sure that it was intended for people 40 years old or under. The farm, of course, would have to continue in operation. I would like to hear your views on that and to know whether you have any other solutions for us.

[Clarence DeBoer]

We've given this a lot of thought. When you mentioned moving the capital gains exemption to $1 million, it wouldn't really do a whole lot for some of us as farmers, because we are in urban areas, where the inflation of land prices has far exceeded that amount and has become a major challenge for us. These family farms have been in families for generations.

We're not trying to escape paying the capital gain on the land. If you should decide to sell the farm, or if our family members decide to sell the farm down the road, they will be faced with paying the capital gains exemption. But we want to be able to give them the opportunity to roll the family farm from our generation to the next generation, which we can do from parent to son or daughter, but not from one sibling to another.

Coming here today, we are hearing quite often now that it is becoming more and more challenging for young farmers to actually get started. Our concern right now is dealing with the family issue, but another step or thought for the future may be to look at it within a broader spectrum, particularly for young farmers who want to get into farming and have an opportunity to do so, or who have a link with an existing farmer, a dairy farmer or whomever. The government could maybe encourage or entice those farmers into selling to a young farmer who has a long-range plan and a commitment to farming, by either reducing that capital gains tax or eliminating it altogether, making it attractive for the farmer who currently owns the farm to move the farm towards the other side.

We really didn't want to get into that, because we know that with government, sometimes when you bring too many issues to the table it complicates things, and we wanted to stay on track with the family issue. I say this because in Stan's case and in my case, as a dairy and cranberry farmer, the capital of the quota, the capital of the land, and all of those things have just soared through the roof, as you are well aware. For us to continue these family farms under these current tax rates... In the event of my brother passing away, his estate is willed over to our children. But the tax bill for us was almost $2.5 million before we bought the last piece of land. That is a significant amount of money.

As we said earlier, farm gate values bear no relationship to the pressures we have been facing from the urban community. It doesn't matter whether you are a dairy producer, a vegetable producer, or an orchard grower—who have the same problem here in the Okanagan—it impacts everybody.

Although the individuals who spoke before you said that doing a number of different things might not be the answer, we still think you do have to look at a number of different issues. You cannot solve a problem with a broad brush and just do one thing.

We have young people out there today, the next generation, who do want to farm. They've picked up two or three generations of information as the families have developed their businesses, and we would hate to see that lost because they can no longer afford to take the family farm over. In our case we are somewhat lucky because we have multiple parcels, but if you didn't have those, you couldn't transfer the land or sell something to pay something off. That farm would be dissolved. It would be over.

[The Chair, Conservative, Larry Miller]

Mr. Atamanenko, for five minutes.