Mr. Speaker, as I listened to the debate preceding my speech on Bill C-57, I am almost tempted to change it and make a few remarks with regard to a separate Quebec and what would happen to supply management as it now exists in the province of Quebec.
Needless to say, I would briefly say that the hon. member for Rosemont is circumventing the issue and is not prepared to deal very frankly with his constituents and the people of Quebec as to what would happen if there were a separate Quebec trying to deal in trade issues with the rest of Canada.
The purpose of my address this morning to the House is to speak to Bill C-57. I want to speak to it more directly as it affects grain transportation in western Canada. This bill will very directly affect the lives of my constituents in Kindersley-Lloydminster. On balance this bill will have a very positive effect on the farming industry and I fully understand the need for this piece of legislation.
I have some concerns about some of the things that are not in the bill and the fact that in many areas more should have been done. It is essential that this World Trade Organization agreement be implemented to move the combatants in the international trade war in the direction of trade, peace and sanity.
This large, three-inch thick bill represents the successful completion of the Uruguay round of the GATT and this agreement is the largest, most complex and most comprehensive trade negotiation ever undertaken. The major agreement for Canada is the introduction of a common set of rules to govern trade in agricultural products.
This bill has the effect of causing changes in 31 existing statutes to bring Canada's internal trade distortions in line with international regulations. I will concentrate my remarks today on the changes to the Western Grain Transportation Act and the impact they will have on the agricultural industry, particularly the Canadian Wheat Board region of Canada.
Unfortunately this legislation makes only the minimum possible changes to the WGTA in order for it to comply with the new GATT and World Trade Organization rules. I believe we must continue to work toward a complete overhaul of the WGTA to make it relevant to today's realities. I am discouraged that the
Liberals are making only minor changes only because they have been forced to.
The WGTA was enacted in 1983 and it is recognized that the requirements for agricultural transportation have changed. Farmer productivity was up and is up. Farms were bigger and crop yields were growing rapidly.
The minor changes to the grain transportation system found in this bill fail to recognize that the changes in the industry since 1983 have continued the pre-WGTA trend. It has become clear that the international community views the current grain transportation system as a direct subsidy.
Bill C-57 makes very few changes to the act ensuring technical compliance with international rules at present. However, this is minimum compliance and will come back to haunt us for two reasons. The fact is that as the schedule of GATT regulations come into force we will have to continue to make changes to our transportation system.
Rather than a real overhaul of the system to prepare Canadian agriculture for the 21st century, the Liberals would rather make a series of small changes with an eye to preserve as much as possible of the past.
The second reason why making only minor changes to the WGTA is inadvisable is that these changes will create some inequities and biases between Canada's grain handling ports.
The Lakehead port at Thunder Bay gets singled out in the subsidy regulations from the other main terminals in Vancouver, Churchill and Prince Rupert. Historically Thunder Bay has been favoured over western ports and this entrenchment of special status will only deepen farmers' resentment of the system.
Legislators have always defended this action with assumptions that it is cheaper to ship grain east through Thunder Bay than to go to the west coast.
However, a 1992 study by the National Transportation Agency revealed that it actually cost on average $1.04 more per tonne to ship east. It would appear that even in the face of this evidence, the special treatment continues. The St. Lawrence Seaway is sinking in debt and burdened with growing costs and shrinking traffic. Those in the industry are concerned that the changes to the Crow rate will spell the end for the seaway.
Rather than make the necessary transportation reforms to help the ailing waterway, it seems the government has decided to play politics with agricultural transportation policy.
The introduction of this bill provides an excellent opportunity to completely overhaul the WGTA. The grain transportation issue has been studied to death. It is clear that farmers are calling for a much improved system. I realize this government prefers studies to action but there have already been so many studies on this issue that there are no more studies that are conceivable.
I really have to question the reasoning behind creating a two tier system for grain transportation, one for Thunder Bay and one for everyone else. Under the new regulations for Vancouver, Churchill and Prince Rupert ports there will be a cap on the amount of grain that can receive the WGTA subsidy.
More specifically this cap takes the following form: one, the volume of subsidized exports must be reduced from 1993 levels by 21 per cent over a six year period; two, the level of total expenditures on export subsidies must be reduced over a six year period by 36 per cent within a minimum of 15 per cent for each specific commodity; three, over that six year period the level of domestic support programs must be reduced by 20 per cent.
Regional development, research, environmental protection and farm income protection programs are exempt. In the area of market access all measures other than tariff duties must be replaced by tariffs and lowered by an average of 36 per cent over the six years.
After the cap is exceeded 100 per cent of the transportation subsidy will be paid by the shipper who will then pass that cost on to the producers. There will be none of these caps for grain moved through the Thunder Bay terminal. Very interesting. This encourages gross distortions like shipping grain to Thunder Bay and then back out west before export just so it can qualify for the WGTA subsidy.
It is no wonder our competitors have reservations about our system. It might look as though this is a way of subsidizing Canada Steamship Lines and the other lake freighter companies, some which may affect the business interests of the Minister of Finance.
Although changing the way the WGTA operates will create some administrative difficulty, the common rules that our international competitors now use are of net benefit to Canadian farmers. Compliance may have some drawbacks for the administrators but it is clearly in the best interests of farmers.
As I said before these changes that the government is making are generally good but it would have been much better to completely overhaul the transportation system.
Currently the WGTA legislates that the Crow benefit is to be paid to the railroads. There has been an ongoing debate in farm circles about the advisability of the pay the producer model for transport assistance. There are those who have argued that it would be much more effective and efficient to pay the Crow subsidy directly to farmers and then have those producers pay for the full cost of shipping a product to export.
Reformers have argued that the best way to encourage efficiency in the system and to ensure that our agricultural industry is GATT green is to undertake a complete overhaul and consolidation of government agricultural support. We have argued that
WGTA spending should be included in a new trade distortion adjustment program available to farmers caught under siege in the trade war between the U.S.A. and Europe. Our trade distortion program could be harmonized with the phase down export subsidies of our trading competitors, particularly the U.S.A. with its EEP program. We could target producers who are caught in the crossfire of the trade war.
This trade distortion adjustment program appears to meet all the GATT conditions for fair trade. It is publicly funded. It is not commodity specific. It does not provide artificial price support to producers. Not only would this kind of reform comply with all of the GATT and WTO regulations, it would also provide the Canadian industry with a more efficient system. A consolidated support system would provide farmers with a more cost effective agricultural plan that is more responsive to an ever changing environment.
A thorough reform of the grain transportation system would have to correct the many problems within the current WGTA. The current system encourages inefficiencies like the backhauling of carloads of grain from Thunder Bay which I mentioned earlier. In many cases the same grain is shipped from Winnipeg to the lakehead and then back again. Not only is this gross waste but it is being done in part with taxpayers' money. Unfortunately the minister of agriculture is delaying the action he promised to rectify this absurd practice forced on us by the WGTA.
Canada probably has the most inefficient hopper car allocation system in the world. No doubt the Soviet Union had one which was worse but it sort of went out of business. There are far too many different players with their fingers in the car pool. Everyone in the industry, the producers, the grain companies, the Canadian Wheat Board, the grain transportation agency and the railroads have cars going every which way and no one has the overall control to allocate and co-ordinate grain cars in the Canadian Wheat Board region.
One possible solution to that problem is to at least consider privatizing the railway's rolling stock. Economic incentives matter and it is unlikely that someone whose livelihood depends on the efficient movement of hopper cars would continue the current practice of bunching up idle cars at one end of the line while grain is waiting at the other. Neither would they let them sit for weeks at the end of sidings, either full or empty.
In the small community of Kyle in my constituency quite often the railroad sends the cars down to the community. If they would just work for 15 more minutes they could spot all those cars and they would be filled that day and hauled out of the community back on their way to export. In fact, because of the regulatory system we have those cars cannot be spotted until the train sits for eight hours. The cars are then spotted after that period of time. This does not happen all the time but does occur quite often. The crew then leaves Kyle leaving the empty cars behind. The cars could have been filled during that eight hour period but some of the regulations would have to be changed.
The other day a train arrived in the small community of Beechy in my constituency. Because of a mixup in orders several cars left the community empty. There was no procedure whereby those cars could be allocated from one company to another that had the right grain and could fill the orders at that time.
There is another incident I would like to raise. A friend of mine travels quite frequently between Calgary and my constituency. He kept driving by the same cars which were sitting on a siding in Hanna, Alberta. He was curious so he wrote down the serial numbers of the first and last cars sitting on the siding to make sure it was the same group of hopper cars sitting there. Several months later when he drove by the same hopper cars were sitting on the same siding, not rolling, not serving the purpose for which taxpayers' money went toward in buying those cars. The system has to change.
The current system has no incentives for efficient performance in shipping grain. Perhaps more important, there are no penalties for inefficient performance. All of the players in this system are not adequately encouraged to make the system work beyond their own small involvement in the whole process.
The current system is inflexible and tends to reflect the agriculture production of yesterday. Our transportation system should serve the agriculture economy of today and have a very watchful eye on the future. The inflexibility of the WGTA, both of today and after the minor changes enacted by this bill, stifles that evolution.
Farmers of today have diversified and are now growing canola, lentils, peas, mustard and canary seed, to name just a few of the newer farm commodities. Currently our transportation system is not adequately equipped for this diversity and is therefore not serving the needs of Canadian farmers.
Also, the current system hinders innovation in transportation solutions. For instance, many private operators have offered to take over the branch lines which the CN and CP can no longer afford to run. These entrepreneurs have usually been blocked at every step by the government, crown corporations and other quasi-governmental agencies. I cannot imagine why the government would hinder any proposal that would provide a service to Canadian farmers which it cannot provide.
In short, the Canadian grain transportation industry needs a complete overhaul to bring it into the 1990s and prepare it for the next century. This bill makes a few long overdue adjustments to the system, but again only the minimum was done to ensure compliance with GATT.
I cannot oppose this bill because the ratification of the GATT agreement through this World Trade Organization bill is absolutely essential if we are to effectively participate in the wide areas of trade and export.
I challenge the government to do more than tinker with the WGTA. In fact, I challenge this government to break down the dozens of interprovincial trade barriers which prove that our country is functioning less efficiently within our borders than we are prepared to function with our trading partners through this new World Trade Organization agreement. I challenge our government to bring agriculture support mechanisms into the 21st century. I challenge the ministers of trade and agriculture to follow up Bill C-57 with a complete and very necessary reform package.