Thank you, Mr. Bellavance. I'll try to cover as much of that as I can in my allotted time.
On the APP retroactive penalties, we've done as much as we can to mitigate that. Again by process and by legislation, we're forced to have a penalty situation in play to help drive repayment. Having said that, the penalty in this case is a quarter of one per cent. When I was at the hog producers' reception last night, I had a number of people come forward to me and thank me for keeping the penalties that low. It's sort of unprecedented to do that.
We're hopeful that no one gets into that situation, but if they do, we've reduced as much as we possibly can and still stay within the legal guidelines that we're under. A quarter of one per cent is the penalty.
On income security, you called it.... That would be the complete business risk management suite of programs, including Growing Forward and so on, the five-year program that we're about halfway through right now on the initial situation. That's a shared jurisdiction between the provincial and federal governments, as you well know, at 60-40.
There is some flexibility on the Growing Forward side. We do have national standards on the business risk side. Now, some provinces have seen fit to top that up or bring in a companion program, as is their right. We're always concerned about countervailability when you start to talk about specific sectors, specific herds, and so on like that.
We have done as much as we can in the shared jurisdiction, working with the provinces and territories within the parameters that are there for today's existing AgriStability and AgriRecovery, all of that, and we have made some significant changes.
Also, I'll tie in a further question. You talked about AgriStability being no different from what we had in 2005. I would argue that it is. We have much better coverage on negative margins, which was one of the problems people had. The rate of mistake was higher; we now have a much more targeted.... There are very few clawbacks in regard to what we saw under the old CAIS program. We are also able to offer advances on projected program moneys that were not there. We've done as much as we can to make it “farm gate friendly”, to make it bankable and predictable.
Can more be done? Absolutely. It comes down to fiscal capacity. It takes six of the provinces and territories with 50%-plus of the farm gate receipts to make changes. We've had ongoing discussions as to what we should do and how we should make some of these changes. There has never been a consensus to move forward.
Having said that, we've adapted and have backstopped under AgriStability now our supply-managed sector, which was never included under the old programming. If there is a case of avian influenza in the barn and it's cleaned out, we have now the capacity to replace their stock under the Health of Animals Act and different acts like that, as well as their business line with AgriStability. They're receiving coverage now that was never there in 2005; that's a whole new sector. There are other products that have been added and so on.
So I think we have made some significant changes to what was available in 2005. We're in the beginning of discussions on the next generation, the next five years that will start after this is done--in 2012 I think it is, John, isn't it?
Rita, I guess you would know.
Those discussions are well under way. The first and foremost thing is that we make sure representatives from every industry are at the table in regard to that. It's 2013, John corrects me. We're doing as much as we can to make sure these are bankable, predictable, and driven by industry.
On the trans-Pacific partnership, the Asian situation you're talking about, we have no idea if we'll be allowed to participate. At this juncture, the Americans have said they don't want us involved. Japan has said if they're going to be a part of it, they want Canada involved. So if we decide we want to take part, we have Japan as an ally. We have a number of other countries as allies too.
I guess what kept us out of the initial discussions on the TPP was that of the roughly 420 million people in that trading area, we already have negotiations and deals with 350 million of them, so is there a benefit to moving forward? We're not against trade and we're not against expanding the regions we deal with, but we can certainly do it in other ways as well.
As you noted, we've just begun discussions with India on a free trade agreement, which is a tremendous opportunity for Canada that would far supplant anything that TPP could do for us. But we want to make sure that Canada and all of our industry have access to every market they potentially could.
When it comes to supply management, this government has stood firm. Supply management has been on the table at the beginning of every discussion, at every bilateral. We've always been very successful in protecting our supply-managed system.
It's gotten to the point where I've had discussions with my American counterpart about how it works and the successful way it's handled here in Canada. Their dairy is in terrible shape down there. Last fall, they had to vote through some $350 million American. Also, the European Union had to vote through $450 million euros to backstop their dairy. In Canada we have a system that stands on its own. They look at that with envy. They recognize the validity of the system. We've always been able to make those arguments in every free trade agreement. At every table I sit at around the world, we talk about the success of our supply-managed system.
That has led to a tremendous call globally for the genetics coming out of our supply-managed system, because we've been able to develop the best with that solid bottom line for a number of years. We'll continue to be there for them.
