Mr. Speaker, it is my privilege and honour to be in the House today to address Bill C-57.
Just before I start my address I would like to make a couple of comments on the debate I have heard this morning. I have travelled quite a bit and I think culture is very important. I have never had the opportunity to meet a cow that speaks French or a chicken that speaks French or English. I have had different cultures fry bacon and eggs for me in the morning and I have always enjoyed them no matter with what type of vocabulary they were prepared.
I think this is something that sometimes overshadows the problems we really have. It is always important to me that we address the real issues and make sure those things that help us to survive or give us the opportunity to live in this country are not destroyed.
As we know, this bill implements Canada's full participation in the World Trade Organization. This is the result of our signing the Uruguay round agreement on the GATT in April this year.
The Uruguay round agreement was the largest and the most complex trade negotiation ever undertaken. The final package included more than 25 separate agreements. The nations that signed this agreement have made commitments to eliminate tariffs and other barriers to trade.
From Canada's standpoint this makes it necessary to amend at least 31 different statutes. Each country will have to amend its subsidy and support programs and its border control measures in order to harmonize them with an overall world standard.
Reductions will occur in the volume of subsidized exports.
These must be reduced by 21 per cent over a six-year period ending in the year 2001. Our country's expenditures on export subsidies must be reduced by 36 per cent over that same six-year period.
With a minimum reduction of 15 per cent for each commodity domestic support programs must also be reduced by 20 per cent over the six-year period. Regional development, research, environmental protection and farm income protection programs are exempt from this.
The system of quotas in supply management sectors will be replaced by tariffs that will be lowered an average of 36 per cent over the six years.
I must agree that supply management has very good protection under this tariffication program. I will generally limit my comments to the areas for which I am responsible as the Reform Party critic. They are the areas of agriculture, transportation and agriculture trade. These are truly areas where the nations that took part in this agreement have worked toward establishing a common set of rules to standardize their industries.
The Reform Party is very much pro free trade. We supported the free trade agreement with the United States and we support further extension of free trade in general through the NAFTA and the GATT.
With agreement on the Uruguay round I think we can look forward to more economic growth around the world. This will in turn lead to more investment and more jobs. About 50 per cent of Canadian farmers revenues are generated by exports. That means the agriculture sector will definitely benefit from increased access to foreign markets and from reductions in trade distorting subsidies in other countries which are the major reasons for low world grain prices.
The Reform Party supports several transportation reforms. The underlying principle on which we base our reforms is the belief that Canadian agriculture products should move to market by any expeditious mode, any route in any form or state of processing based exclusively on the principle of cost effectiveness and with the best interests of the consumer in mind.
This is one reason I have been a very strong supporter of the Hudson Bay Route Association in promoting the port of Churchill. When I look at the distance to Churchill and to the other ports I realize how much saving there is as far as rail line maintenance is concerned.
When I see statistics, and these are done by different investigations or task forces, that we could cut our costs of transportation by about $20 to $25 a tonne, I think it is not only cost effective but also environmentally friendly.
The other thing we have to realize is that we have a huge north in Manitoba where the native people depend on this type of transportation.
We should be striving to develop an atmosphere that provides for a viable, self-reliant market driven industry by creating an environment in which regional development is eliminated as a goal of transportation policy.
We support elimination of transportation subsidies but the funds should be redirected systematically to comprehensive safety net programs that are designed to defend Canada's food producers against matters over which they have little control.
We cannot eliminate transportation subsidies altogether without a definite long range plan to help the industry adjust accordingly. By reallocating the funds and paying them to farmers as part of a GATT-green program we can allow our economy to diversify and can give farmers the opportunity to take advantage of the market forces of the new international trading agreement.
One thing that was really impressive to me the other day when the former agriculture minister, Mr. Whelan, was a witness before the standing committee was how we have lost our secondary industries, our processors and are killing plants due to transportation problems and other types of subsidies.
It is of the utmost importance that we try to resolve that problem. Canada should endeavour to create a genuinely competitive transportation system. To achieve this end the deregulation of the railway system and the privatization of Canadian national rolling stock should be clearly defined goals.
I do not know what the answers are but when I looked at the speech that the transportation minister delivered the other day, seeing that the labour force is only 64 per cent as efficient on our rail lines as it is in the United States, I know that subsidies are not the only problem. When I also see the United States transports 66 per cent more freight per rail mile than we do, we also know there is another problem of moving the products in the most expeditious way.
In the area of grains, oilseeds and special crops, Canadian producers should benefit from a more stable trading environment. Greater opportunities for exports and hopefully international prices will increase over the six year transportation period. With the volumes of subsidized wheat exported from the United States and the European union expected to be reduced 40 per cent over the next six years, significant market shares should open up for Canadian farmers.
Once this agreement goes into effect, the United States will no longer be able to use section 22 against imports of Canadian wheat. I would note however that these trade agreements can mean little if the government does not have the fortitude to back them up. We have seen other GATT agreements and they have all been broken by the bigger trade partners. As Canadians that is one thing we have to be very concerned about.
We look back to the wheat pact this government not only agreed to with the U.S. but imposed on itself. We see an example of where we were within our rights under the free trade agreement but were bullied away. Article 705.5 of the Canada-U.S. free trade agreement states clearly that the cross border grain shipments can be restricted only if they increase significantly as
a result of a substantial change in either country's support programs for the grain in question. That was not the case last year.
Increases in wheat and durum to the U.S. last year were the result of an increased demand in the U.S. resulting from many factors. There was definitely no increase in Canadian support programs. This government agreed to surrender anyway. Mere days after this wheat pact occurred we saw the United States sign a wheat deal with Algeria with what had been a major Canadian market, export enhancement durum. The disturbing influence of the United States export enhancement program always allows it to distort grain markets.
If the Canadian government had not buckled under the U.S. pressure, its senators, congressmen and farmers would soon have realized how detrimental the export enhancement program really was. Canadian farmers would only have recouped a small percentage of damage done by the U.S. unfair trade practices.
Hopefully we will see it align its harmful subsidy program under the terms of this agreement. I would point out that although this was a bilateral dispute, there are provisions in the new rules for GATT that would force the United States to prove Canada was unfairly subsidizing exports.
Hopefully this provision will be helpful in avoiding the capitulation that we have seen in the past from our government. This was brought home again last week when the United States department of agriculture began to require that Canadian wheat farmers who export into the U.S. have end user certificates. This despite the fact that the wheat pact signed with the U.S. included a peace clause that stipulated that Canada would be free from further restrictions or harassment for 12 months.
It is just another example of how trade agreements are useless if the government seems either unable or disinterested in standing up for the rights of its citizens. A partner in a trade agreement cannot be allowed to be a bully. If this is allowed, the agreement will fall apart sooner or later.
All that Canadian farmers really want is a level playing field. They know they can compete and be the best in the world at producing, but they cannot be expected to continue to be at a disadvantage in trading situations. With a fair set of trade rules that apply equally to all countries across the board, we can achieve that level playing field.
Before these changes can take effect there will have to be major changes to the Western Grain Transportation Act. Any government policy that favours export shipments is deemed as an export subsidy by the GATT. Canada has maintained that the Western Grain Transportation Act provides internal support to farmers, but some countries, including the United States, insist that it provides export assistance.
Recent studies confirm that it will be viewed as an export subsidy by the GATT. This point emphasizes that the shortest route to an export port is the best route. Under the agreement there will be two systems governing WGTA subsidy restrictions; one will be for grain shipped through Vancouver, Prince Rupert or Churchill. This is specifically export grain that is subject to an export reduction subsidy under the GATT.
The second system is for grain shipped through Thunder Bay or Armstrong. This is deemed as grain for export or for domestic use, and therefore the transportation payments for grain movements under the WGTA can be considered either an export subsidy or domestic support, depending on which shipping route is used.
This clause seems to me to set up a recipe for a tremendous amount of conflict and disagreement. It can only be a detrimental clause in this agreement and will probably cause a lot of hard feelings, not just between producers but also between shippers in the different regions.
WGTA payments on grain that travels through the west ports are contingent on that grain being exported. The GATT was notified that these payments were export subsidies and will be subject to the reduction commitment of 36 per cent for export subsidies and also the 21 per cent reduction in the volume. WGTA payments on grain shipped through Thunder Bay have been notified to the GATT as green domestic support.
I do not know how we can resolve that issue. I think it will be challenged and history will tell us that it is improper and we will have to address it.
According to the GATT text the total Western Grain Transportation program is an amber domestic support program, while the portion related to grain movement to the west coast and Churchill is considered an export subsidy. Canada will have to make according changes to address the export subsidy provisions of the GATT.
The challenge for Canada is to make the WGTA GATT-green. The Reform Party had addressed this problem very well with a trade distortion program that we recommended for WGTA during the election campaign. It was well received. I think the government will sooner or later have to realize that this type of program is the only one that will really be fair and beneficial to western farmers.
Since the GATT requires a change in the WGTA subsidy payment method from paying the railways to paying directly to farmers, it is likely the only method that would comply with GATT requirements.
This is another area where the Liberal government will have to be tremendously diligent and innovative. It has to find a way to pay that subsidy out so that it does not distort the value of land, it does not distort taxation to municipalities because we could be find a number of different real problems.
As I stated, under GATT countries have agreed to reduce their export subsidies by 36 per cent. There are several questions that arise in this bill. I know that farmers in my riding will have a number of concerns.
For example, what safeguards are there for farmers that the railways will be obligated to move grain to other ports? Also, what safeguards do we have that our rail cars will not be going to the United States?
Last year was a disaster for grain transportation. One of the main factors was that the railways decided to chase business in the United States. With the longer car turnaround cycle, this took needed grain cars out of the picture and caused serious ramifications. What assurance do we have that this will not be repeated?
There are also reports that the railways do not have enough engines. I would like to know if anyone has looked especially at this problem. We have the rail cars but we do not have the engines to pull them. That does not give us a very effective transportation system.