Finance Committee on Oct. 5th, 2009

[The Chair, Conservative, James Rajotte]

I call to order the 47th meeting of the Standing Committee on Finance.

We are in Summerside, Prince Edward Island. It's lovely to be here. Thank you to all for coming this morning.

We have two panels today of an hour and a half each. We have seven organizations on the first panel. I'll list the organizations, and that's how we'll have each organization present, in that same order: the Child Care Advocacy Association of Canada, the Canadian Association of Student Financial Aid Administrators, the Federation of Canadian Municipalities, the New Brunswick Federation of Labour, the Canadian Manufacturers and Exporters for New Brunswick and Prince Edward Island, the Canadian Council of Archives, and the Prince Edward Island Federation of Agriculture.

We'll ask each of you to make an opening statement of no more than five minutes. Then we will go immediately to questions from members.

We'll start with the Child Care Advocacy Association of Canada, please.

[Jody Dallaire, Chairperson, Child Care Advocacy Association of Canada]

Good day. My name is Jody Dallaire. I will be making my presentation in both English and French.

Since committee members have received a copy of our submission, I won't get into the specifics. I will however, give you the highlights and conclude by saying a few words about new research findings that have just been published.

I want to thank you for the opportunity to present this morning. Members of our organization, mostly volunteers, have been presenting to the Standing Committee on Finance over the past 25 years. Personally, I have been presenting to members of this committee since 2001.

Every year we deliver a consistent message to government: investments in child care programs, if they are accountable, benefit children and their parents' labour force attachment and contribute to reducing poverty. This is in addition to the short-term economic stimulus provided by this investment.

This year our presentation focuses on two recommendations that go to the heart of the questions being examined by this committee. First, what federal tax and program spending measures are needed to ensure prosperity and a sustainable future for Canada? Second, what federal stimulus measures have been effective, and how might relatively ineffective measures be changed?

Regarding the first question, we recommend that the government commit in the 2010 budget to new transfer payments to the provinces and territories for child care services. We further recommend that these payments be conditional upon the government putting forward a plan, with measurable targets and timelines for improving access to quality, affordable child care services.

When it comes to the second question, effectiveness of investments, we recommend that the federal government use international agreed-upon child care service outcome measures of quality, availability of services, and affordability.

Canada has consistently finished last of all developed nations when it comes to these performance measures, as measured in reports released by the OECD, UNICEF, and Save the Children. Hence, our organization calls on the federal government to cease its misleading claims regarding current child care spending.

It is fundamentally incorrect to describe the $5.9 billion, primarily in the form of tax measures and unaccountable transfers, as annual federal funding for early learning and child care. More than $1.5 billion of this amount is in tax deductions for families with children, with no link to child care spending. More than $1.1 billion is in transfers to provinces and territories, which, again, have no child care spending provisions, as confirmed by Canada’s Auditor General.

The last chunk of the spending that the government takes credit for, approximately $2.5 billion, comes in the form of the so-called universal child care benefit. Again, this program has nothing specifically to do with child care. The federal government takes no responsibility for ensuring that child care services actually exist, leaving it to individual families to negotiate markets that have repeatedly failed to deliver the access, affordability, and quality that they require. As we now demand some public responsibility for the economy, we must also abandon this failed market approach to child care policy. We do not give people transportation allowances hoping that they will build transportation systems. It won't work for child care either.

In this last portion, I want to take the opportunity to highlight some of the most recent research that has come out.

Robert Fairholm, an economist with the Centre for Spatial Economics, recently released a report on workforce shortages. He found the following.

Child care services help to bolster the economy. Every dollar invested in child care services represents an additional $2.30 for the economy—in effect acting as a short-term economic stimulus. For example, an investment of $1 million in child care services generates $40 million, or 40% more than in other sectors, and four times as much as in the construction sector. Child care services pay for themselves, and then some. Every dollar invested in child care generates $2.54 in long-term economic spinoffs.

In short, child care services are a good investment. Research has also shown that these services stimulate the economy in the short term. Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We will now go to the Canadian Association of Student Financial Aid Administrators.

[Shelley Clayton, Past President, Canadian Association of Student Financial Aid Administrators]

Thank you.

The Canadian Association of Student Financial Aid Administrators, or CASFAA, thanks the House Standing Committee on Finance for this opportunity to contribute to the pre-budget consultations.

I may add that this is my first time presenting, and our first presentation in a while, so I guess I'll ask you to be lenient with your questions.

CASFAA is a national association representing financial aid administrators at Canadian colleges and universities. Our members administer a large spectrum of student financial assistance programs, including government-sponsored loans, student aid, Canada student loans, various provincial assistance programs, institutional scholarships, bursaries, and work study.

Students, governments, student loan service agencies, and our respective institutions count on our members’ expertise to deliver these complex programs efficiently and effectively, ensuring the academic success of our students. We also provide budgeting and financial counselling assistance to students.

A primary objective of our association is to advocate on behalf of Canadian students. Because of our roles, we are uniquely placed within educational institutions to directly witness not only the successes of the Canada student loan program, of which there have been many, but also the gaps that seriously compromise the academic potential of a great number of students. We've identified three major issues that we'd like to address in this brief.

The first is the widening gap between student need and the availability of government student assistance, which is commonly referred to as “unmet need”. Resources from education tax measures could be redirected to assist students both in entry and in persistence in post-secondary education.

Second is the need for student in-study resources to be exempted. Students should be permitted to seek alternative sources to replace these expected contributions through institutionally administered needs-based programs. Financial resources and those of the students’ parents or partner, if applicable, will be used to calculate the amount that you will be expected to contribute towards your education.

Third is the need for career development skills to assist students in meeting the constantly changing needs of the labour market, to increase their potential employability upon graduation, and to achieve their aspirations and participate in the community. The establishment of a national work-study program will help students with access to skills, services, and contacts through and beyond school to help them with their chosen career paths.

For the sake of continuing, I will not repeat the questions, but CASFAA has specific hopes and recommends that the federal government review its education-related tax credits and give serious consideration to redirecting a portion of the funding towards means-tested programs that support high-need and under-represented groups. These redirected resources could then be utilized to develop programs to assist in the persistence and retention of under-represented populations such as students with disabilities, aboriginal students, and first-generation students. Additionally, these redirected resources could be used to increase the weekly lifetime limits to allow for the completion of graduate and doctoral programs.

I just may address the point that in the graduate and doctoral programs, the lifetime limit for a regular student is 340 weeks. For students with disabilities, it's 520 weeks. So at the master's and graduate levels, you will see that they will reach the limits fairly quickly.

We were very pleased to see in the 2008 budget the relaxation of the spousal contribution, the new Canada student grant program for low- and middle-income students, and the proposed repayment assistance plan, but we believe more needs to be done. We need to have students in our system who have traditionally been under-represented in post-secondary studies.

Government has spent increasingly on student assistance through fiscal measures introduced in the tax system, such as scholarship and bursary exemptions, credits for tuition fees, and an allowance for each month of full-time enrolment, such as contributions to the registered education savings plans. These tax credits are distributed almost entirely without regard to financial need, disproportionately benefiting families with higher incomes. They do little to represent high-need students and under-represented groups;

CASFAA recommends that the CSLP in-study work exemption be increased to $100 per week from $50 per week. All need-based awards administered by post-secondary institutions are exempted from the CSLP needs assessment calculation. If we as institutions determine that these are high-need students, they don't need to have those resources clawed back.

As for a national work-study program, CASFAA recommends that a federal student work-study program be implemented. In addition to contributing necessary financial support, these programs also provide valuable career-related work experience.

In a recent Millennium Research article, Anne Motte and Saul Schwartz documented that between 41% of the male population and 52% of the female population will work. So this program definitely will work within our existing population.

We want the work study program to have a number of characteristics. We want it to be designed to accommodate a student's academic schedule. We want it to be situated on or near an institution’s campus. We also want a portion of the assistance provided to be targeted toward groups who are under-represented in post-secondary education. While a federal subsidy may not be possible, perhaps a public and corporate tax credit option could be explored to provide incentives for organizations to take advantage of this opportunity.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll now go to the FCM, please.

[Basil Stewart, President, Federation of Canadian Municipalities]

Thank you, Mr. Chair and members of the committee.

Our CEO, Brock Carlton, will be saying a few words in French as well.

It is a privilege to be here today to share the important role that municipalities play across Canada and the role that the FCM plays in representing these cities and communities on national issues. The FCM is a very large organization and represents about 90% of the Canadian population.

Some of our key points are included in our written submission as well.

As governments fight the recession and turn stimulus dollars into new jobs, we must also start planning for the post-recession world. Together we must ensure that Canada comes out of the economic crisis stronger. This won't be easy.

While there are signs of a global recovery, no one knows how fast or how complete the recovery will be. After the decade of record-setting surpluses, federal and provincial governments will confront a new wave of budget deficits. The problems we faced before the recession, from homelessness to climate change, will remain, but with fewer resources to solve them. How do we position Canada to succeed? How do we put the economy on the road to growth while minimizing the burden to taxpayers?

Strong, vibrant cities and communities are essential to the answer. Cities and communities provide the public infrastructure services that attract and retain skilled workers, employers, and investors. Canada cannot compete or maintain its quality of life without healthy cities and communities.

Mr. Carlton.

[Brock Carlton, Chief Executive Officer, Federation of Canadian Municipalities]

For decades, our cities and communities have lacked the resources to live up to their full potential as partners in building a better Canada. Municipal governments are impeded by an outdated tax system that leaves them with only 8¢ of every tax dollar collected in Canada. They have had to delay infrastructure repairs and as a result, they are today grappling with an infrastructure deficit of $123 billion.

By working together, the federal government and the municipalities have made some progress. This has come about as a result of recent investments, such as the GST refund, the Gas Tax Fund, the Building Canada Fund, as well as funding for public transit, affordable housing, a cost-shared recovery plan and support for police services.

[Basil Stewart]

As we enter the post-recession period and the federal government begins dealing with the deficit, it would be wrong to repeat the mistakes of the nineties, when federal and provincial governments pushed deficits off the balance sheets and onto the streets of cities and communities. The damage done to Canada's cities is still evident, with rusting bridges, crumbling roads, crowded buses, and aging recreational facilities.

Meanwhile, rural Canada is grappling with its growing economic challenges. Farming, forestry, fishing, and natural resources together account for over 50% of our national exports, but rural communities are missing out on the prosperity they do so much to create. They need a stronger voice at the federal cabinet table.

Our submission provides five specific recommendations to guide the next federal budget and to work with municipalities to fight climate change, provide affordable housing, support local police, and build a sustainable vision for rural Canada. Index the federal gas tax fund against inflation; maintain core program spending to help eliminate the municipal infrastructure deficit; avoid off-loading and arrange cost-sharing for water systems; upgrade federal policing; develop a long-term objective, including a national transit strategy, and coordinate a plan for affordable housing; work with other orders of government on areas of neutral concern, such as the environment and the north; and appoint a champion on rural issues.

All of these recommendations begin and end with a commitment to move the country forward and protect our cities and communities from spending cuts and off-loading. By working in partnership, all orders of government can achieve lasting results that include safe, healthy, and economically viable cities and communities.

We thank you for your time.

Again, as I mentioned, FCM is a very large organization, representing 90% of the Canadian population, with close to 2,000 members from across the country.

Thank you, Mr. Chairman.

[The Chair, Conservative, James Rajotte]

Thank you very much, Mayor Stewart.

We'll now move on to the New Brunswick Federation of Labour, please.

[Michel Boudreau, President, New Brunswick Federation of Labour]

Thank you, Mr. Chair, members of the committee.

The New Brunswick Federation of Labour is asking for action on three fronts: pensions, employment insurance and jobs.

First of all, we are calling for the doubling of benefits under the Canadian Pension Plan within seven years. This responsibility can no longer be left solely to businesses and employees because the population is aging. The federal government must help workers, the public and businesses. If pension benefits were doubled, everyone would benefit and poverty among our seniors would be greatly alleviated.

Secondly, we would like the Guaranteed Income Supplement to be increased to a level that would immediately eliminate poverty among the elderly. I think everyone here is in favour of eliminating poverty. No one wants his or her mother or father to live out their years in poverty.

Lastly, we are calling for a uniform entrance requirement of 360 hours of work across the country for EI entitlement, for benefits to be increased by 55% to 60% and for longer benefits of 50 weeks in all regions.

With respect to job creation, I would like to draw your attention to the brief of the Child Care Advocacy Association of Canada and the comments of Ms. Judy Dallaire about child care services. We fully agree with her position. Public child care services need to be properly funded across Canada.

Our economy is struggling and we are in the throes of a recession. However, we need to invest significantly more in the public child care system, as the spokesperson for the Federation of Canadian Municipalities noted.

I would like to talk a bit more about the Canada Pension Plan. The reason we are asking for CPP benefits to be increased is simple: only one in five private sector workers will receive a pension and only 40% of Canadian workers have a private pension plan.

On the employment front, there is no question that the federal government must provide assistance to the fishery and forestry sector in Atlantic Canada. The government has helped the auto industry in Ontario, and so too in the Maritimes, in New Brunswick, must it lend assistance to the manufacturing, forestry and fishery sectors.

In conclusion, let me emphasize that jobs created in the public sector must remain in the public sector. The New Brunswick Federation of Labour is opposed to public-private, or P3, partnerships. This is not the course of action to follow. The government needs to invest money in the public sector to create good jobs.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you for your presentation.

We'll go now to the Canadian Manufacturers & Exporters, please.

[David Plante, Vice-President, Canadian Manufacturers & Exporters - New Brunswick and Prince Edward Island]

Good morning. Welcome to P.E.I.

I'll be making a few introductory comments before asking the chair of our task group, Allison Walker, to make a more detailed presentation.

CME has been front and centre on tax-related issues both at the provincial and the national level, and perhaps at no time in the past three generations has government involvement in our economy been more important to ensure a sustainable and competitive economy.

Witnesses at these hearings were asked to focus on two questions. First, we were asked to provide comment with regard to the effectiveness of measures that had been put in place in the last federal budget. The CME has undertaken to poll our members across the country to determine the impact of these measures at the plant floor.

These results will be provided to the committee later this month by our national representatives. However, anecdotal evidence suggests that, in this area at least, manufacturers are facing some real challenges ahead. In general, order books have shortened considerably and the rising loonie has made selling into these stagnant markets that much more difficult. Hence, there is a need for government to enhance or at least improve stimulative measures that have already been put in place.

With that, I'll Mr. Walker to address the committee.

[Allison Walker, Chair, Tax Group, Canadian Manufacturers & Exporters - New Brunswick and Prince Edward Island]

Good morning.

Just for background, I am a CA who has practised in taxation for medium and large businesses for about twenty years.

When we were looking at the two questions, we wanted to look at recommendations--we've come up with three, dealing with two specific areas--that were practical and effective.

The first area is with respect to credit cost and availability. There are still significant problems in Canada in terms of the availability of credit and the cost of credit to businesses. What has happened by the Bank of Canada's easing of credit is that basically the banks have sucked up the difference. They have taken all of the difference in rates--if anything, rates are higher--and they've jacked up fees. Some of our members are facing fees that are three and four times what they were just a year ago.

Our first recommendation deals with how to deal with these issues. We need to have someone else with available capital to come to the market. We're suggesting that we need to entice more leasing companies back. Within the last year, most of them have actually left the market. Only one has come back, and they've come back with high rates. They're extremely selective about who they will lease to.

So that's the first area. You'll see in our paper that we're suggesting that there are tax-motivated ways to entice leasing companies to come back through accelerated capital cost loans. We just need to get them back into the market in the short term. We know there's lots of capital out there. There's lots of cash. They're just not bringing it back to the people who need to borrow it.

In the same vein of credit cost and availability, our next recommendation is with respect to the amount of tax credits that manufacturers specifically have. We have a huge amount of investment tax credits that we've earned; we just can't use them. No one will lend you money if you have tax credits. You can't cash them out. As one of the CME members pointed out, tax credits are largely useless during a recession.

We're suggesting a short-term measure that would allow members, under strict criteria, to cash those out and return the credits back to the federal government in exchange for receiving funds. The conditions perhaps would be something like this: if I agree to invest $10 million into my plant, I could take $5 million, for example, of my tax credits and turn them back to the government; after I've demonstrated that I've invested the $10 million, I could get $5 million back through my tax return.

Again, this is not going to cost the government any money at all in the long term. These are credits that have already been granted and are sitting there just unutilized. That would allow us to take that $5 million and go to lenders. We would have our portion and we could borrow the balance. Having no funds today, or very little ability, we can't borrow. So that's the second specific recommendation.

The second area where we have some suggestions is to improve a current program, the scientific research and experimental development program. It's a great program. It's one of the best in the world--on paper. The problem is that it doesn't work very well. It's very bureaucratic. It takes an extremely long period of time to get any dollars. We have members who wait up to four and five years from filing their tax returns before they hear back. The process is extremely bureaucratic. It's inconsistent across Canada. Specifically in Atlantic Canada, where we operate, we have a lot of problems of consistency with the rest of the country. We've run into staff who are not very well trained.

We just believe this program has such great potential; it truly should be the incentive that it was designed to be to reward innovation and reinvestment.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much.

We'll go now to the Canadian Council of Archives.

[Fred Farrell, Past Chair, Canadian Council of Archives]

Thank you. Good morning.

I'm always hesitant to speak in such forums when I see the gravity of the issues that each of the other presenters is addressing here today, but experience in my day job at the Provincial Archives of New Brunswick tells me that each group present today relies on research and information and eventually will turn to archives to solve their long-term information needs. One of them here actually has already done that.

I also note that several members of the committee are associate members of the heritage committee and the privacy and access to information committee, also of very important concern to archives.

Having archival resources accessible when needed makes many aspects of the federal government work more efficiently. In some cases, it's the only way to make the goals of the federal government attainable. I note in the presentation just three of these, two of them that have been going on for a while now. They are Agent Orange, which is an issue in New Brunswick currently; the residential schools issue, which has been a huge weight on the archival community across Canada; and of course, in the near future, sovereignty in the Arctic.

Similarly, a lot of entities the federal government gives money to need archives to achieve what they've told the federal government they are going to do. If this information isn't readily accessible, that pretty much eliminates the success of their initiative.

In an information age, access to information is essential. Efficient information is cost-effective and does not happen without planning and investment. Archives across the country pay for the infrastructure and day-to-day costs of the documentary heritage of this country, but without assistance from the federal government, much of that information will be buried for decades or not saved at all.

Archives, or our documentary heritage, are facing significant challenges today. We are in this situation today because sponsors of archives have been slow to recognize the integral role archives play in the information age. The Department of Canadian Heritage has never seriously understood archives to be part of its mandate, and as they were for municipalities, the budget cuts of the 1990s have been devastating to the archival world.

The next decade will be even worse: skewed demographics of the profession, the inevitable attempt of the federal government to redress the current budget deficits, and the avalanche of electronic records.

The Canadian Council of Archives recommends that the federal government invigorate its efforts to ensure Canada’s documentary heritage is accessible in the age of electronic information by increasing the budget of the national archives development program to $5 million per year for access and preservation activities and, by so doing, recognize information as an important infrastructure of the 21st century.

Second, the council recommends that the federal government exempt Library and Archives Canada from the strategic program review process, as it is counterproductive for an organization that's instrumental in the success of so many other federal programs and initiatives and currently does not have the resources to meet its existing federally established mandate. These sorts of across-the-board reviews--or cuts--impact organizations that are in survival mode now.

Third, the council recommends that the federal government invest $2 million per year through the Canadian Council of Archives for the digitization and dissemination of Canada’s documentary heritage to ensure that the necessary documentary heritage is available across the country to make the celebration of Canada’s 150th anniversary of Confederation a meaningful event that brings Canadians closer to their individual and collective history.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much.

The last presenters will be from the Prince Edward Island Federation of Agriculture.

[Ernie Mutch, President, Prince Edward Island Federation of Agriculture]

Thank you, Mr. Chairman. It's a pleasure to be here today.

Those of us who live on Prince Edward Island think we live on one of the world's great islands, and a lot of people who visit us each year think so as well, and they come for the beauty of the landscape as well as the beaches. But our landscape is changing drastically here, and that's a real concern for those of us who are involved in agriculture on Prince Edward Island.

The foundation of this presentation to the parliamentary Standing Committee on Finance lies in the fact that Canada’s maritime provinces have lost more of their livestock infrastructure and resource base and have suffered a greater economic devastation in these two than any other region in this country. Coupled with the fact that agriculture, particularly in P.E.I., plays a higher percentage role in the provincial GDP than it does in any province in Canada and has one of the highest dependencies on inter-commodity relationships, this event has devastating implications to the economic, social, and rural fabric of the region.

There are three issues we want to discuss today, and those are Atlantic livestock and grains, research, and energy.

Recently the federal government announced a buy-out program for the hog industry in Canada. As of now, P.E.I. has lost over 50% of its hog herd and, with this national initiative, stands to lose the rest of its breeding stock as the federal program is rolled out. The Atlantic region does not contribute to the over-supply of red meat in Canada, because as of now we probably produce only of about 10% of what we actually consume. Atlantic Canada cannot afford to allow its red meat or any other food source to centralize in other geographical regions of the country. It has already lost its self-sufficiency in many respects, but the repercussions of total dependence on imports are far-reaching in an environment of increasing vulnerability in the world market.

Both feed grains and livestock are well positioned to capitalize on the opportunity for regional cooperation to reduce input costs, to operate greener, and to reduce the carbon footprint through the commercial model of “buy local”. We will require federal assistance through a recognition of the need for a regional funding program. Work is already under way to identify and document the fundamentals of what this project would look like, and though financial figures as yet are not finalized, the potential components and the related costs of this package are as indicated below.

We will require single-desk buying and selling of maritime-grown feed grains utilized in maritime-grown hogs and cattle. Pricing will provide both a sustainable return for grain growers and a viable price pool for feed stocks for maritime hog and cattle producers that allow them to be competitive in their cost of production with counterparts in geographic trading regions. Because there is no policy, maritime grains are often sold out of the region while feed grains are at the same time being trucked into the region.

Mike is going to talk to the research and energy.

[Mike Nabuurs, Executive Director, Prince Edward Island Federation of Agriculture]

I'm going to touch on a couple of things that will complement the red meat issue that Ernie has already expanded on here this morning.

The first of those is the need for expanded funding in the research area for agriculture in Prince Edward Island and the Maritimes. We are trying to diversify and expand our crops further from potatoes and more into grains and oilseeds. There has been a reduction in research in agriculture in those areas, especially in Prince Edward Island. It will be very important to return to previous levels or to expand on existing levels of research so that we can solve some of the issues that our crop sector is facing.

Grains in particular were in the news recently, with milling wheat on Prince Edward Island. We have an expanding milling wheat sector, but we need to have crops that are able to be grown in our specific climate, and we need to ensure that the processes and the research are in place so that we can continue to expand our milling wheat sector. It has tremendous potential. So research is one area, of course, where we need expanded funding, and we have a recommendation in our document.

The second area is energy. Electricity rates in Prince Edward Island are the highest in Canada, if not in North America. Our farmers are at a huge disadvantage because of those energy input costs. I don't need to tell anyone how much it costs to fill up your car with fuel. Those energy costs, of course, are all being handled by our farmers and put our farmers at a huge disadvantage. We need money so that farmers can access and implement on-farm energy projects to reduce their carbon footprint and to perhaps try to find ways to increase revenue on their farms by producing alternative energies. So research in that area and funding so that farmers can implement those projects on their farms are key.

We just touched on three very small things, very important things, however, and there would be many more if we had more time.

Thank you.

[The Chair, Conservative, James Rajotte]

Thank you very much for your presentation.

We'll now go to questions from our members. We'll start with Wayne Easter, for a seven-minute round.

[Wayne Easter, Liberal, Malpeque, PE]

Thank you, Chair.

I certainly welcome all the witnesses.

On behalf of the four MPs on Prince Edward Island, I'd certainly like to welcome the committee to Summerside. This is the riding of the Minister of Fisheries and Oceans, but I'm sure she would welcome you here as well. We just wish you had brought some sunny weather with you, as we do not need this rain.

I'm not a regular member of this committee, but in any event, as I sit here listening to the presentations, I can't help but think that the country has moved from a surplus position to a structural deficit position and I would think that pretty well every presentation has had a request for substantial dollars.

Here's my question for most witnesses. How do you suggest that this committee, in terms of its work, prioritize the need for federal dollars? Because I really do seriously think we have to wake up and smell the roses: we are going to be in difficulty over the next few years, with a very substantial deficit. How do we maintain very important social programs, which were mentioned at the beginning, as well as economic stimulus programs and programs for the agricultural sector that really are the foundation of keeping that industry alive? That's one question for people to think about.

While you're doing that, I'll ask the Federation of Agriculture a question. You mentioned the Atlantic region livestock and grains strategy, and I agree with you on that. In this region now, we are a deficit area in beef, hogs, and grains, yet the national approach to programming could end up sucking at least some of our hog producers out of the industy.

We're running into a problem here. We have one beef plant and one federally inspected hog plant, which is in Nova Scotia. If we lose any more production we're going to lose our plant capacity as well, because they won't have enough supply. How do you develop that regional policy under the kind of approach we have in Canada, that national policy thrust?

Ernie or Mike, what has to be done in order to get there? That is a different tack than what we've traditionally had in Canada.

[Mike Nabuurs]

Thank you, Wayne, for the question.

There has to be a genuine effort to recognize that one size does not fit all, but I think that's what's going on at the national level. With regard to the most recent example, which Ernie mentioned in terms of the hog program that's been announced, that hog support program will likely provide some benefit to larger western Canada producers. The fact of the matter is that many producers of significant size are western Canadian hog producers. We have a very, very small number of farms that would come close to the size of some of the farms of western Canada. The program that has been announced was announced to try to reduce hog supply. Oversupply is certainly one of the issues that have to be addressed, but the Maritimes do not contribute to that problem.

AgriFlex is a new program that's been announced federally and is supposed to help address the regional differences in agriculture across the country. If there is a real and genuine interest in recognizing those differences, then the other national programs that are announced have to recognize those regional differences as well.

We received some commitments at the federal level recently that the federal government wants to work with us to sustain our red meat sector, so to help us sustain our hog sector here, we need some regional differences in the program that's just been announced. I think that's the missing piece. If there is a real and genuine willingness to make that happen, then those programs can be tweaked so that they work well for all regions of Canada, so that it's not just a blanket approach.

If we really are committed to the buy locally campaign, if we're committed to environmental sustainability, and if we're committed to not being completely reliant on imports for our foods, then there has to be a genuine effort put forward to make sure there is regional recognition in these programs when they are announced across the country.

I don't know if that answers your question, Wayne.

[Wayne Easter, Liberal, Malpeque, PE]

It does to a certain point, but having been in government and having been a minister, I guess to get to a regional policy approach one of the problems you run into is being up against provincial jurisdictions. So in this regard for the region, for the various provincial governments within the region, is there a willingness on their part to come together and agree to get this done? Because that's the only way it'll get done. It's going to have to be like a region, and in order to put the pressure on the federal government and for the federal government to in fact do it, there's going to have to be agreement or at least some sense of going in that direction at the regional level.

[The Chair, Conservative, James Rajotte]

There are about thirty seconds, if you want to respond.

[Mike Nabuurs]

Just quickly, the four Atlantic ministers of agriculture did recently sign an MOU that they want to work together. It's a nice document and it says a lot of nice things, but we need some action--some real action and some real cooperation. And I agree with you that too often farmers get caught in the middle between provincial and federal policy and who's going to do what and who's going to take action first. There has to be a genuine commitment on both parts to make that happen, and if that MOU, which has been signed by all four ministers, is worth the paper it's written on, then we have to get to work at it.

[The Chair, Conservative, James Rajotte]

Thank you, Mr. Easter.

Mr. Dufour, for seven minutes.