Debates of April 28th, 1994

Supply

[Charlie Penson, Reform, Peace River, AB]

Mr. Speaker, I certainly welcome this opportunity to speak on this very important issue of agriculture.

My family and I are actively involved in operating a 1,100 acre grain farm in northern Alberta and so agriculture is very near and dear to my heart. Agriculture is important to my riding of Peace River as well because it is a very large industry. No one has any doubt that agriculture is crucial to Canada.

Although Canadian farmers have been hard hit with a trade war that has lasted many years, in 1992 alone we still managed to export over $12 billion of agriculture commodities. Wheat and other cereals are our leading exports, with principal destinations being China, Korea and Japan. Live animals, meat and meat products are also important, with exports bound for the United States and Japan. Oilseeds, mostly canola, go mostly to Japan in raw form and to the United States in the form of processed oil.

In 1991 a total of 867,000 people resided on farms in Canada and total receipts from those farming operations came to $23 billion. We also know that agriculture has one of the highest spinoffs in terms of job creation.

Today we are being asked to condemn this government for its inaction with respect to the agriculture sector which is presently being confronted with the largest restructuring it has faced in the last 30 years.

Restructuring is something that agriculture and farmers are familiar with and has happened since Canada has been inhabited. My response to this question is yes, the government can do more. However, in the area of trade we have made a very good start even though it is only a start.

Canada is a trading nation. One out of every four jobs in this country can be linked to trade. Therefore we must push for trade liberalization both at home and abroad. This means moving beyond what has been negotiated at the first phase of GATT. We must work within the World Trade Organization to lower remaining trade barriers at a faster pace so that those sectors that have natural advantages can compete and win markets without the support of the treasuries of those countries.

We welcome the agricultural trade rules that GATT has brought us. Let us examine some of those rules.

Number one, overall tariffs on agriculture goods will be reduced by 36 per cent with a minimum reduction of 15 per cent for each specific product. Implementation will take place between 1995 and the year 2000 in six equal annual steps.

Number two, countries will be compelled to reduce internal support of their agricultural industries by up to 20 per cent over six years where such support has the effect of distorting trade. Countries will be committed to reducing export subsidy expenditures by 36 per cent and reducing the volume of subsidized exports by 21 per cent over the next six years.

Supply managed products will now be subject to tariff barriers instead of quota restrictions. It is true that the supply managed sectors need protection for a time to adjust to the free market conditions. I would think that 10 years should be quite enough time for that adjustment process to take place.

It was evident at the GATT negotiations that Canada had no support for article XI. The world has moved beyond that. We are

looking for liberalized trade throughout the world and Canada simply could not sustain any argument for article XI support.

My concern is that having set our tariffs for certain products at excessively high levels, we are inviting challenges from our trading partners. Let me give members a run through on a quick list. We have set our tariffs on eggs at 192 per cent; yogurt, 279 per cent; chicken, 280 per cent; milk, 283 per cent; ice cream, 326 per cent; and butter, 351 per cent.

I would like to elaborate a little on that last tariff. The domestic price of butter in the United States is $1.54 per kilogram. Once transportation and the 351 per cent tariff are added and the American dollar is converted to Canadian, that same kilogram of butter will cost $10.15 in Canada. That compares with the Canadian support price of $5.32.

The tariff makes American butter almost twice the price of Canadian butter. Is this not overkill? Is this not a reeling example of overtariffication? Obviously the tariff is way out of line. It is obvious we will not see any trade in butter for many years to come. Yes, let us help the supply managed sector move toward becoming a self-sustaining industry but let us be fair and not jeopardize the trading opportunities of those agriculture sectors that are competitive by suggesting blatantly high tariff rates for dairy and poultry products.

I suspect the true test of these high tariffs may come from our own Canadian consumers. Why should they stand for excessively high prices? Furthermore, high tariffs seem to be a contradiction to the spirit of the North American free trade agreement whose benefits Canadian consumers are eagerly awaiting.

I would like to talk a bit about the grain industry which I believe will see slow but steady improvement. Here we must push for a faster action to reduce overproduction, subsidies and import quotas worldwide. As an example, western durum wheat farmers are now facing restrictive import quotas from the Americans who accuse us of subsidizing our wheat exports.

The truth is that on four separate occasions a binational panel has dismissed these allegations by the United States. It is the American's own export enhancement program which encourages exports of Canadian wheat to other countries which is at fault. This program has left the Americans with shortages which Canadian wheat fills. Now American farmers are crying that Canadian grain has filled their terminals.

This is the exact type of program that has so devastated the agriculture industries in countries like Australia, Argentina and Canada that had the small treasuries and cannot back their farmers up to the degree that they do in Europe and the United States.

I believe governments must move quickly to free trade. Otherwise the initial optimism of the GATT signing will be lost. The big challenge for the new World Trade Organization which replaces the GATT in January will be to define what happens at the end of the first six years. I say that our goals should be to strive for a no subsidies, no trade barrier situation in a total time frame of 10 years.

Unfortunately there is no time to address other important issues in detail. I know that my colleagues here are going to be speaking about some of those issues, although I do want to touch on them briefly.

However, we have to have a responsive, deregulated transportation system in Canada. I also believe the Canadian Wheat Board should have a democratically elected board of governors and a system that is market driven.

Canadian farmers are hard working, proud people who would rather receive their income from the marketplace than from government subsidies. Our farmers offer the Canadian public a quality product and the security of a reasonably priced food. Canadian farmers have a worldwide reputation for supplying quality products.

What do farmers want from our government? They expect protection from unfair trade practices of our competitors. They want the protection of fair trade rules throughout the world. They want our government to push to reduce subsidies worldwide so that they can benefit from free trade. They want governments to live within their means which will lead to lower taxes and lower input costs. Finally, they want governments to reduce regulations and unnecessary programs.

I believe Canadian farmers can compete anywhere in the world, given a fair opportunity. I believe our Canadian farmers will adapt and prosper under the new trade environment. I believe they do not need more than 10 years to make these necessary adjustments.

[Vic Althouse, NDP, Mackenzie, SK]

Mr. Speaker, I enjoyed the hon. member's remarks but I have questions on two issues that he raised.

One is the deregulation of transportation which he has been advocating. I wonder what the arguments are in favour of doing that given our experience this past crop year in shipping into a deregulated market, namely the United States which is relatively deregulated in transport. Our hopper cars hauling wheat and durum into the United States have a turnaround time of something in the order of 40 days or more before they are dumped and returned in a deregulated system. In Canada under regulation the turnaround time is 13 to 15 days.

I wonder if he would comment on the advantages of deregulation given that experience. Would he also explain a little further why he was so critical of the proposed high tariffs on butter and dairy products between ourselves and the United States and

other countries. In reality most of the likely trade in dairy products will be between Canada and the United States.

Given the fact that it is impossible for us to export anything into the United States by way of dairy products, the reality is that its tariffs will be as high or higher than ours given that it has had a GATT waiver all these years on dairy products.

This is one of the reasons that Canada was very loathe to implement the GATT ruling that the U.S. got prior to these last negotiations forcing us to open our markets to its yogurt and ice cream. The facts of the situation are that if we had opened the border we could have bought ice cream and yogurt, put it in the freezer or fridge of our motorhome in order to go down to Arizona and hit the border only to find that we could not take those American products into the United States because it was absolutely illegal to take dairy products the other way.

I wonder if the member would tell us about deregulation and if he does not recognize that there may be some fairness to the high tariffs on dairy products.

[The Acting Speaker (Mr. Kilger)]

The member for Mackenzie has put his 14 years of experience to good use today and I would ask the member for Peace River to reply.

[Charlie Penson, Reform, Peace River, AB]

Mr. Speaker, I would like to thank the member for Mackenzie for those questions.

First of all I believe that deregulation in the transportation industry is necessary. We have to have a very practical solution to movement of products. They should move by whatever method is the cheapest form and they should move in whatever route is the most direct and cheapest.

I think when he talked about the hopper cars going into the United States and the turnaround time, part of the reason for that is the very regulated system we have with the crow rate where we have seen grain going as far out as Thunder Bay and then back into Saskatchewan and crossing the border. That does not make any sense at all.

I believe we have to look at practical solutions to problems so that Canadians can face the reality of the nineties and adapt to the new trade environment.

In terms of high tariffs and why I am critical of the high tariffs, I believe these tariffs are put in place as an adjustment process to let our industries adapt over a reasonable period of time from a system of supply management with a lot of regulation to free trade. I think that can be done fairly quickly. These tariffs are set probably high on both sides of the border, but that does not excuse either side.

It is in our interests when we have just signed a trade deal with the United States and Mexico that says we want to move to free trade among all three countries in a short period of time to phase these out very quickly.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Mr. Speaker, it is a privilege and a very great interest of mine to be involved in a discussion in this House on agricultural issues.

Coming from the riding of Kindersley-Lloydminster where most of us make our livelihood either directly or indirectly from agriculture, myself included, I feel it is a very important issue and I appreciate the chance to speak to it. I have chosen to address the problems that many farmers face in the marketing of their produce and the federal agency responsible for prairie grain marketing, the Canadian Wheat Board.

The Canadian Wheat Board should more appropriately be called the prairie wheat board, as its mandate limits the board's activity to the three prairie provinces and a small part of British Columbia in the Peace River area. There is a similar organization in Ontario called the Ontario Wheat Board. I find it is one of the best kept secrets across the prairies that in fact the Canadian Wheat Board is not a national board but a regional board. Many producers I am finding in my part of the world did not even realize there was an Ontario Wheat Board.

This Ontario Wheat Board is rather interesting. It was established in 1958 by a vote of Ontario wheat producers. It operates under the authority of the Ontario Farm Products Marketing Act. There are 18,000 wheat producers in Ontario and the Ontario board is run by 10 directors who are elected by the producers. The board operates on a one producer, one vote system. Each of the 10 directors represents a geographic district within the province. Each district elects one delegate to the annual meeting for each 250 producers within that district. The directors are then elected from among those delegates.

The Canadian Wheat Board on the other hand has 137,000 producers or permit book holders, compared with the 18,000 farmers who control the Ontario board. Many opponents of a producer control system claim that the government will not guarantee initial prices for a depoliticized organization like the Ontario Wheat Board.

However, the realities are that the initial payments are guaranteed for both the Canadian Wheat Board and the Ontario Wheat Board.

The wheat board act limits the Canadian Wheat Board's activities to wheat and barley grown for human consumption. The Ontario Wheat Board is mandated by statute to limit its activities to wheat production and marketing within the province of Ontario. This demonstrates that there are some differences and some similarities in the scope and the influence of a

producer directed organization compared with one which is government run.

The single biggest difference between the two is that the Ontario Wheat Board is democratic and the Canadian Wheat Board is run by a panel of three to five commissioners who are appointed by the governor in council. This means that the minister is usually the one who recommends the names.

The Canadian Wheat Board is a crown corporation and its commissioners are political appointees. Nevertheless, producers pay for all of the operations of the board through the amount subtracted from the final payments for the producer's grain. In fact, most agriculture marketing agencies, including those in the supply managed sector, include producers in the decision making and managerial process. The Canadian Wheat Board is the odd man out, being a top down, government run corporation.

Many farmers in western Canada are not happy with the actions of the Canadian Wheat Board and the way it is run. Far too much time and energy is spent in all places, from the courts to the coffee shops, trying to determine what the powers of the board should be, what commodities should be added or left out of the wheat board's mandate, should farmers be selling their grain on a contract basis or under the quota system or both, and in that case what proportion for each.

There is much discussion about the board's monopoly power versus the principle of marketing options. Perhaps one of the biggest irritants today is the wheat board's involvement in grain car allocation. My hon. colleague from Lisgar-Marquette discussed that situation from the aspect of the western grain transportation authority as well. There are many fingers in the pot here. It seems like the end result is that the service is not very good.

What sticks in the craw of so many producers is that these complex issues to which there are no easy solutions require solutions, but the producers have no substantial say as to how these problems are to be solved.

Another great disadvantage to the Canadian Wheat Board being an arm of the government is the way that new wheat prices or final payments or price changes are announced. It was common in years past for ministers of agriculture to play politics with the announcement of either price increases or decreases. Farmers were used as pawns, waiting for the right kind of announcement so that the minister could get as much political mileage or minimize the political fallout from grain price announcements.

We as Reformers have been quite clear on the direction of marketing reforms. It is paramount that the Canadian Wheat Board be democratised. It must be accountable to the producers it serves and producers must have the ability to change or update the mandate of the board when they feel their interests could be better served.

Producers must have control over how their grain is marketed. We must remember that it is after all their grain. If producers decide through a democratic process that the mandate of the board should be expanded to cover other grains and oilseeds then the act should be changed to respect the wishes of producers. If this is done they may choose to provide opting out provisions for niche markets. The purchase of grains on a cash or pool basis might be considered to improve current marketing arrangements. We would like to see the expansion of producer contracts if farmers so desire.

Once the board is democratised the decision will be up to producers to make, but we feel that the Canadian Wheat Board should maintain its responsibility for initial payment shortfalls. Government loan guarantees for export sales should also be continued for as long as other nations do the same.

We have a responsibility to recognize that change is required because present realities in the agriculture industry are different from when the Canadian Wheat Board was brought into existence.

My father was a pioneer. When he first delivered his wheat he had to hitch up a wagon and a team of horses and haul that wheat 26 miles to a small community called Waldeck, Saskatchewan. When he got there he did not know what the price was going to be. He did not know what the grade of that grain was going to be. There was a requirement for change in the way our products were marketed and we saw improvements to the system which enabled him to have some protection in the marketing of his product.

Today's situation is different with modern transportation and modern communications. In fact, we cannot maintain a system that was intended for 30, 40, 50 years ago. We must be prepared to look to new and innovative means of marketing our products.

We know from the Ontario example that a producer controlled system is possible. That particular organizational model may or may not fit on the prairies, but I feel that the principle of a producer directed process does. If we give farmers the chance to design, control and continually update their marketing system a much more effective, fair and cost efficient Canadian Wheat Board would result. As legislators we would give it the freedom to act.

In conclusion, I would like to express my appreciation for this time being allotted for a discussion of agriculture. The government seems to have put a very low priority on agricultural issues. On behalf of all the farmers of Kindersley-Lloydminster and all of Saskatchewan, I am grateful for the opportunity to try and solve some of the very important issues facing rural Canada.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, I am having difficulty sorting out where the hon. member is coming from relative to the Canadian Wheat Board. There is no question that this government showed leadership during the campaign and since the campaign.

I would quote out of the red book what we said on the Canadian Wheat Board and that is what we were elected on: "Canada's agri-food industry needs policies and programs such as supply management, the Canadian Wheat Board and stabilization programs to minimize the impact of market price fluctuations".

We ran on a campaign of strong support for the wheat board and we are continuing to show that. I recognize there is a debate taking place in the west. I have been inundated lately with petitions asking to strengthen the Canadian Wheat Board and expand its powers.

The member wants some components of the wheat board it seems, but not its all. I am wondering if he has anything to comment on in terms of the Canadian Wheat Board advisory committee. The Canadian Wheat Board advisory committee is the legitimate, elected producers who act in an advisory capacity to the wheat board. Clearly, during the last election eight of the eleven were very strong, orderly marketers.

I am wondering what the member's thoughts are relative to the Canadian Wheat Board advisory which is calling for us to maintain the powers of the wheat board, that it is the sole seller of export wheat and barley.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Mr. Speaker, I am happy to respond to the hon. member for Malpeque. I feel some affinity knowing that he also has provided for his livelihood. He also chews gum like I do and he forgets to do up his jacket like I do. I do feel some affinity for the hon. member.

I am also very happy to respond to his question because I think living in western Canada I am closer to some of the issues that he is talking about. I would like to just remind the hon. member that you cannot have it both ways. I know that his government was committed to a referendum or a producer vote of whether there should be a continental barley market. I favoured that when he favoured it. That was before the decision was made that there not be a continental barley market.

The hon. member and his government have changed their minds since the court ruling has been reversed. In fact, the continental barley market was ruled illegal. I have not changed my mind. Neither has my party. We still believe that producers should be in the driver's seat and make these decisions.

The hon. member on the other side is saying that as long as things are going the way my personal philosophy dictates, I am happy to put producers in the driver's seat. But as soon as my own views and the views of producers begin to differ, then I want to have control. I want to politicize this thing. I do not want to let go of the administrative control of the Canadian Wheat Board.

I am saying to the hon. member that he cannot have it both ways. You are either going to trust producers or you are not going to trust them.

I would also tell the hon. member that I spoke recently to an organization with which I know he is quite well acquainted, the local chapter of the National Farmers Union. We discussed the advisory council and it was of the same opinion as I am. In fact, this advisory board is a rather useless organization because it has no impact whatsoever as long as the wheat board is controlled by the Government of Canada and the political process rather than the producer, grassroots, bottom up process.

I thank the hon. member for his questions. I hope I have shed a little light on where we are coming from on this side of the House in trying to solve the problems of producers by trusting them rather than taking over the decision making process from them.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I am very pleased to have the opportunity to participate in this debate. I want to draw the attention of this House to the policy and initiatives of the government regarding an important sector of the Canadian economy. I am referring to the agricultural and agri-food industry. More specifically, I want to talk about the dairy, poultry and pork industries, for which quotas are in place.

Mr. Speaker, as the member representing the riding next to mine, I am sure you will agree on the importance of quotas in the agricultural sector.

The main objective of the Liberal government's agricultural policy is food security for Canadians and decent revenues for all our farmers. Supply management, which is a system put in place by a Liberal government almost a quarter of a century ago, confirms the merits and the success of this policy.

You all remember former Liberal minister Eugene Whelan. I know that the hon. member for Québec-Est knew him well, because I think that at one time he worked in his office. Mr. Whelan's daughter is now a member of this House and she also does a very good job of representing the interests of farmers, as do the hon. members for Haldimand-Norfolk and Prince Edward-Hastings, and also the minister of agriculture.

As I said, in the early seventies, the Liberal government of the time put in place regulated marketing programs for the dairy, poultry and pork industries. This system is based on two basic principles: domestic production quotas and, of course, efficient control over imports to protect the quotas.

Supply management stabilized farmers' revenues, and ensured the supply of top quality and healthy food products to Canadians, while also providing an important regional economic development tool.

For the benefit of opposition members I would like to mention again the considerable accomplishments of this government regarding supply management. Less than six weeks after being elected, the government had already negotiated an agreement under GATT which is acceptable to the agricultural sector, and which ensures that supply management will enable us to meet the challenges ahead and take advantage of the opportunities provided by GATT. This is what we call effective and concerted action.

I would like to quote from an article written by Mr. Pierre Glaude and published in the December 20, 1993 issue of Agricom, a newspaper in my riding: "The goal is the same", said the new chairman of the Union des producteurs agricoles du Québec, Mr. Laurent Pellerin, "only the means to reach it have changed. The organization is trying to reassure its members. Under the new GATT agreement, supply management programs will be maintained through tariffs".

In other words, contrary to what some members opposite have said, the spokespersons for the Quebec agricultural community consider that the measures taken by our government were successful in protecting our quotas.

Not only in Quebec do farmers and their representatives make such statements. In my riding, people agree. Representatives of the farm industry maintain that the new tariffs will protect our quota systems.

This may be the best argument I could use to show how much Canadian farmers still have confidence in our quota system and why members opposite should not try to undermine that. The confidence of our farmers is what enables us to maintain the value of our quotas. Quotas have increased in value since the GATT accord was signed. What does this tell us? It tells us that the agricultural community is confident and takes position that supply management will be around for a long time. After all, people do not buy quotas, and certainly not on credit, when they expect these quotas be phased out very shortly. The agricultural community believes, as we do, that quotas will be around for a long time and will be protected by the new tariffs negotiated with other countries.

Speaking of tariffs, I have here, as I mentioned it this morning, a list of the tariffs tabled by our government at GATT, and I want to point out that the United States raised no objections to these tariffs. We must have tabled hundreds of pages of agricultural tariffs in Marrakesh, but no objections were raised by the United States. In the dairy sector, tariffs of around 300 per cent were mentioned, and I disagree with the way the Reform Party Member calculated the price of those tariffs. In any case, these tariffs will be reduced by 15 per cent over a period of six years, not 15 per cent annually but 15 per cent over six years.

In the Liberal red book, and especially in the policy paper on agriculture, the government was committed to staunchly defending our supply management programs at the GATT negotiations. That is what the Liberal government did, and it succeeded. It managed to obtain a tariff system under which we will be able to maintain our marketing boards and supply management and everything that entails. As a result, the impact of fluctuating prices will be kept to a minimum and farmers as well as food processors will be guaranteed a decent income.

During the Uruguay round, the Liberal government did everything it could to defend Canada's supply management system. We should remember that the position of the Canadian government during the weeks leading up to the GATT agreement was established in consultation with the agricultural sector. Furthermore, the minister of agriculture worked very hard with colleagues and senior officials to ensure that all sectors in Canada's agriculture industry would not only survive GATT but also be able to take advantage of the opportunities provided in the GATT agreement.

Earlier, the Official Opposition's finance critic said that everyone in the agriculture industry had lost at GATT, but nothing could be further from the truth. The agricultural industry made major gains at GATT, and all members opposite know that perfectly well. They know about the US farm bill which dates back to 1985 and which the United States used to subsidize its agricultural industry and thus harm our exports.

Some US $70 billion were paid out during the first five years of this American farm program, and we know that the purpose of this program was to take away part of the market share held by other countries, especially countries in the southern hemisphere, but of course Canada was also affected by the U.S. Farm Bill, though it was not the main target. The United States wanted to react against overproduction and the fact that other countries, after the crisis in Afghanistan, had tried to sell wheat and other products to the Soviet Union and thus take over part of the so-called traditional market share of the Americans.

The members opposite know this, just as they know that our farmers could no longer continue receiving large farm subsidies, given the major losses experienced in the sector. Some members opposite even admitted as much a while ago. That is why the government had to work with other countries for the good of the entire agricultural community.

First, it had to work to strengthen the laws governing supply management. As we know, there were problems with some of these laws. You may recall the incident with ice cream and yogurt, following the adoption in 1988 of the free trade agreement, which moreover was endorsed by the current Leader of the Opposition. Hon. members will also recall that the FTA led us to lose our case with respect to quotas on ice cream and yogurt. These were restored with the GATT agreement.

With respect to the grains sector, some of the subsidies from other countries have been reduced, thereby allowing us to market our products. New markets have been found for Canadian products. Our ministers have worked hard and so has the parliamentary secretary. The agricultural sector has been well treated by our government and we have just begun our work. We have only been in office for six months and we have already accomplished a great deal. And we will accomplish even more in the future.

[Jean-Paul Marchand, Bloc, Québec-Est, QC]

Mr. Speaker, I sometimes wonder if the hon. member who just spoke is really from Glengarry-Prescott-Russell and not an extra-terrestrial being from the moon, because it is abundantly clear from his remarks that he does not understand what effect the GATT Agreement had. And he does not seem to believe the farmers, as if they had not figured out what happened with GATT.

For example, to say that quota values had increased following the signing of the agreement, or that the quota system will be in place for a very long time, that is ridiculous. Especially since farmers are aware that the quota system is under attack due to tariffs and they may not be confident in what has happened, as witnessed by the Ontario chicken producers. Why did they increase their production by 30 per cent if not as a clear indication of their lack of confidence in the system? They know how the market works.

You have to do more than tell farmers that all is well, that everything is perfect in Canada, to make things work. Farmers understand very well what is going on. It is the hon. member for Glengarry-Prescott-Russell who, sadly, does not understand.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, the hon. member opposite tells us that quotas will not survive. For 1995, the tariff for fluid milk is 283.8 per cent minimum and, by the year 2000, it will be 241 per cent minimum. Does the hon. member mean to say that these tariffs are too low? If so, how can he be so out of touch with the agricultural community?

Let me tell you what André Chabot, the president of the Franco-Ontarian Farmers' Union, had to say. I referred earlier to what the leaders of the Quebec agricultural community had said. I will now address the situation in Ontario. The hon. member for Québec-Est is a Franco-Ontario, just like me. Mr. Chabot's letter reads: "Canadian farmers agree that Canadian supply management systems are in no way threatened by the new GATT rules. Some even see this as an improvement over the situation under article XI". Certainly a Franco-Ontarian like my chum across the way can understand that.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Mr. Speaker, politics is a funny business. If the hon. member for Glengarry-Prescott-Russell were sitting in the opposition, I am sure his comments would be very similar to those of the hon. member from the Bloc who has been speaking on agricultural issues. It seems like the government has quite a different view now of what has happened with regard to the GATT negotiations it was involved in.

I tell the hon. member and the House that Reform reviewed the GATT situation two years ago. The same sources should have been available to the hon. member. It became very clear that article XI would become indefensible. We were quite frank and honest in admitting that.

At the same time hon. members on the other side had not done a reality check. They were trying to tell supply managed industries that article XI was safe and could be preserved, and that they would be the agent that would preserve article XI. Reform on the other hand said it was obvious that article XI would be gone and that tariffs would have to be put in its place.

Because of that attitude supply managed industries undertook a very expensive advertising campaign involving millions of dollars to try to speak to political parties and politicians and to encourage them to take a strong position in defence of article XI which was a hopeless cause. I would hope some members on the other side would apologize for that action because these dollars were hard earned and should not have been spent on useless advertising campaigns.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I will not apologize for standing up for dairy farmers in my riding. It is not that article XI was indefensible. The member has it wrong. That is not what happened. If he thinks that is what happened he is mistaken.

I say to the hon. member and all hon. members that article XI was clearly defensible. It was a very good system. We gradually lost the supporters we had among other nations. That does not mean the system was bad, but we ended up on the very last day with 115 to 1. We were the only country that still wanted it. That does not mean it was bad. It was still good. We were trading with other nations and 115 of them were saying that it was no longer there.

It is like the National Hockey League deciding that every team except one is to disband. We could wish the league to exist but if it only had one team it would no longer be there. That is easy for anyone in the House to understand, particularly after last night's debate.

[Bob Speller, Liberal, Haldimand—Norfolk, ON]

Mr. Speaker, I say to the hon. member that I too will not apologize for standing up for supply managed commodities and for standing up for farmers in my constituency. I do not need to apologize.

I was one who stood more than any member in the House and fought for supply management. I know what I told my constituents during election time. I made no promises that I could save supply management. I told them, though, that I would fight damned hard for it. That is what we did in this party.

I am proud of the Minister of Agriculture and Agri-Food. The Minister for International Trade with whom I have had differences on this matter in the past stood up in Geneva and told the world. Unfortunately, as my colleague from Glengarry-Prescott- Russell said, in the end we could not do it.

It is easy for the Reformers. They spend half their time in the agriculture committee-and Mr. Hoeppner over there will know he is not one of them-crapping on supply management.

[The Acting Speaker (Mr. Kilger)]

Order. I know members on both sides of the House feel very strongly, but I think a moment ago the member was probably wanting to identify the member for Lisgar-Marquette.

[Bob Speller, Liberal, Haldimand—Norfolk, ON]

Mr. Speaker, I was looking for his name. He is the same guy within that party who has been unfortunately knocking supply management. It is easy to say now, after the fact: "We knew, we knew", but it would have been better to have that party support us on this when the Americans were fighting us. They were saying: "Your party over there doesn't want the wheat board, doesn't want any of these subsidies. Members from Alberta don't want subsidies". We kept arguing that supply management was not a subsidy.

On the issue of subsidies I want to look at what Agriculture and Agri-Food Canada spends province by province. These members from Alberta keep saying: "We can do it ourselves". It is funny how much agricultural spending actually goes into the province of Alberta. In 1993 figures the amount was $536,315,000. That was well over the percentage of farmers that they have. If I were as provincial as some members in the House pretend to be and if I were just fighting for the province of Ontario instead of for the country, I would argue that Ontario with about 25 per cent of the farmers in the country is not getting its fair share. However I understand some of the problems we have in western Canada so I will not do that.

In my speech today I want to talk about a few issues, one of which is trade. Many of the problems we are having in agriculture today and many of the problems the Reform Party has in its own ridings are because of actions brought by other countries. In a lot of cases it is the United States against Canada. I feel they are very unfair actions.

If we are talking about the wheat issue, Mickey Kantor, the international trade person in the United States, said before the Senate committee last week that Canada was taking advantage of a window of opportunity that had been created. The reason the window of opportunity was created was frankly because of something called export enhancement that the United States uses. It is a two-price system which, by the way, we would like to have in this country. However the Reformers fought us against it and we do not have it now. It is a two-price system that has been responsible for wheat going out of the country.

As a result Canadian producers have been shipping wheat and have shown U.S. millers that we have high quality wheat that is graded and will do exactly what it says it will do. As a result U.S. millers have said: "I like that better. I know and I am guaranteed, because of the Canadian system of distributing wheat, that I will get that wheat and it will do what it says it will do".

The U.S. has been complaining that some actions we take with regard to wheat in western Canada and its shipment were unfair subsidies. That is not the case. The U.S. International Trade Commission found in 1990 that transportation subsidies were not a factor in the competitiveness of Canadian wheat. The U.S. General Accounting Office found in 1992 that there was no evidence of unfair wheat board practices. Again in 1992 in a unanimous decision of a binational panel, including a former U.S. Attorney General and former Chief Justice Dickson, found fault with the U.S. contentions.

However the panel recommended that an audit be done, which results were released last month some time. That report found that 102 of the 105 durum wheat contracts between 1989 and 1992 were fully in compliance with the provisions of the free trade agreement. Clearly the U.S. has no strong position on this matter.

I congratulate the Minister of Agriculture and Agri-Food for the tough stands he has taken. Over the years I stood in the House and watched the previous government negotiate with the Americans. I always felt that somehow we were doing something wrong in this country. I always felt as a farmer that somehow Canadian farmers were not being fairly represented by their government. I was very pleased at the GATT, with the stand the minister took in Geneva, and with some of the tough stands he has taken in terms of putting Canada's agriculture position forward very strongly.

I want to go back to the Bloc Quebecois now and the member for Québec-Est, a very good member of the standing committee who represents the views of his party well on the issue. I take exception to the fact that he is denouncing the government for lack of action in the agriculture sector. He sat around that table with us in the agriculture committee, as well as Bloc members, I might add, who add to the sense of the committee; it worked very well. In recent weeks we have looked at some of the stuff Agriculture Canada is doing. As one on the other side of the House who criticized some of the actions of Agriculture Canada, I recognized over the past little while that in fact a lot of those actions have changed substantially. They have changed substantially because the government has changed. We have given a new direction to Agriculture Canada. That direction can be found in the red book. It outlines clearly the direction we want to take agriculture into the next century.

Looking at the money Agriculture Canada is spending in Quebec-and the hon. member asked for this information-$371,723,000 have gone into the province of Quebec. According to the chart, Quebec ranks behind only Saskatchewan, Alberta, and a bit behind Ontario in this regard. Obviously with the problems they are having in western Canada with respect to wheat prices we can understand why a lot of this money has gone there.

I really do take exception to the hon. member's contention that we have not done anything. Frankly it has been six months. I do not want to use that as an excuse, but we have made some significant changes in those areas that particularly affect agriculture. I have mentioned some of those in trade and the good work the minister of agriculture is doing in standing up for trade. I also want to talk about some of the stuff we have been doing in rural development.

I come from small town Ontario, as you do, Mr. Speaker. What we have found to be happening over the past few years, especially in an area like mine that has been hit hard because of certain commodities grown there, namely tobacco. In small town Ontario unemployment rates have been rising. There has been a loss of business in stores and other areas that help farming communities. We are finding a bit of a drifting because there are no jobs, with a lot of small town people moving to the cities.

I was very pleased when the Minister of Agriculture and Agri-Food came forward with a plan to deal with rural development. He indicated very clearly that rural development was a top priority. This means rural development not only in Ontario and Quebec but in the west also where small towns are literally closing up in some places.

There is no huge pot of dollars; there is not a lot of money in this promise. Frankly there is not the money there. Instead of money the minister plans-and we had the department before the committee today-to organize those parts of government that are specifically directing their efforts toward helping small towns and infrastructures. We are co-ordinating the machinery of government.

It really is a grassroots participation. That is the final point I want to make. The government and the minister have taken a lot of time talking to ordinary Canadians, talking to ordinary farmers. The development of the small town initiative, the rural initiative, will be through the communities themselves.

That is one of the things I am proud of. We have done very well to make sure that before we make any decisions Canadians are consulted and that the views of farmers are heard. We will continue to do that.

[Jean-Paul Marchand, Bloc, Québec-Est, QC]

Mr. Speaker, the member for Haldimand-Norfolk is an excellent chairman of the agriculture committee. He does an excellent job.

However today there are three points I would like briefly to correct or bring to his attention. Basically the discussion today is about the lack of leadership in government regarding agriculture. What he said would indicate even more the lack of leadership with respect to agriculture in government. For example, he mentioned rural development, which is of course extremely important, saying how the government minister indicated that it was his top priority but he did not put any money in it. What sort of top priority is that when you say it is really very important and you do not put any money in it?

Another example is trade. He mentioned that there are many initiatives with regard to trade. Of course, the minister has gone to China to sell wheat. However, in the negotiations that are going on with the United States right now there is a problem that was created by the Americans by their export enhancement program and other issues. Of course Canada profited from this situation. Of course Canada profited from free trade with the United States, but why suddenly is Canada giving in to American pressure and putting a cap on durum wheat to the United States? It is lack of leadership.

Another example, again in dealing with trade with the United States, which really is a big item, is instead of dealing sector by sector so that we get the maximum for our bucks for Canada we put it all in one lump package. This is what the minister of agriculture is trying to deal with the United States, instead of dealing sector by sector so that he would get the maximum for his bucks. Lack of leadership. The examples were given by the MP for Haldimand-Norfolk who is a very good president of the agriculture committee.

[Bob Speller, Liberal, Haldimand—Norfolk, ON]

Mr. Speaker, maybe that is one of the differences between this party and the party of the hon. member for Québec-Est. We feel that within government if we are going to

make changes that really directly affect Canadians, in this case farmers, changes that will work in their best interest, that throwing a pot of money at them is not going to solve the problem.

We think that by taking the money we have there and spending it more wisely and making sure that money is not directed for overhead or administration but is directed into the hands of Canadians is probably the better approach.

In terms of his question on the cap on wheat, I am sorry I missed the announcement. I have not heard that there was an announcement on a cap on wheat. In fact if the hon. member might be more honest with it he will know that in fact there is not a cap on wheat yet. However, there is a question of whether or not we should negotiate a settlement.

If anyone in this House thinks that world trade is fair they do not have a clue on how the world trade system works. In fact it is not a fair system. Canada represents a very small percentage of trade done in the world. In relative terms it is important to us in terms of our gross domestic product and its importance to Canada but we are a small country. To suggest that we could stand at a table one on one with the Americans, they do not have to play fair, frankly.

The former Minister of Agriculture, Mr. Whelan, who used to sit in this House used to constantly say: "The Americans never agreed to a GATT decision because they didn't have to". It is not a fair decision. One of the points that the minister was making to them was this. He said very clearly and he said it in this House a number times that we are not prepared to trade one part of the country off against another part of the country. We are not prepared to trade one sector of this country off against another sector of the country.

In fact, if you remember both the comments by the Prime Minister and the Minister for International Trade, they were not prepared to deal with this in one lump sum. They were going to go sector by sector by sector. We feel we have a strong position. We feel that the Americans will in the end give in on this because they have to and because they are wrong. We are prepared to stand forth and fight on behalf of Canadian farmers to make sure that point of view is put forward.

[René Canuel, Bloc, Matapédia—Matane, QC]

Mr. Speaker, Bloc members are very concerned with rural issues, especially agriculture. I could not say the same about the members opposite. My Bloc colleagues have succeeded in demonstrating the inequality among the provinces and the federal government's lack of action on Quebec's behalf.

In particular, I will try to describe the situation that exists in some rural ridings of the Gaspé Peninsula, where I am from, and the lower St. Lawrence region. In the lower St. Lawrence region, as in most rural areas of the country, agriculture should play a very important role in regional development. There are 400,000 hectares under cultivation, over 260 agricultural enterprises, and sales in the order of $190 million a year.

Our dairy products alone bring in 75 per cent of farm income and account for more than 50 per cent of agricultural enterprises. We also have 16,000 head of meat cattle, 20,000 sheep, and 30,000 pigs.

This translates into more than 7,500 permanent jobs and thousands of seasonal jobs. Forty-eight per cent of the workforce are under 40 years old.

Despite this profile, figures available for the Matépédia Valley alone show that between 1981 and 1991, farmlands declined by 22 per cent. In the same period, the number of farms fell from 420 to 285, a decrease of 32 per cent. The main cause of this reduction is the same as in other sectors.

Our regions produce raw materials for major centres, which process them before selling them back to us. When are we going to understand that, in order to grow, resource rich regions must equip themselves with the infrastructure they need to process and market their raw materials? It is much more important to us than a few sidewalks and a little road paving.

Processing and marketing also mean jobs, which we do not have unfortunately. Processing creates economic activities that give confidence to people and encourage them to start their own businesses.

We, for example, have the potential to develop beef production. But Quebec, unfortunately, is still behind in this area. Our cattle farmers must export their production outside the region without processing it. They even export calves at lesser cost without being able to finish them on site.

Over 100 valley producers have decided to spend more than $160,000 of their own money to build a slaughterhouse so they can process in their own region the animals they breed. Can you believe it, Mr. Speaker?

That is a laudable initiative from the farmers themselves. Such an enterprising attitude must be encouraged.

In my region people got together and are now ready to act.

After a wide ranging consultation with those concerned, the regional co-operation and development council targeted five bio-food development priorities: processing and upgrading bio-food products; diversifying crops; consolidating produc-

tion; developing human resources; developing and marketing regional products.

The people of Matane, Mont-Joli, the Matapedia Valley and our regions know what they need to develop and know how to succeed.

Centralized decisions and programs that apply unchanged throughout the country are surely not the way for the government to boost agriculture in our region. On the contrary, decisions must be decentralized. Programs must be decentralized and adapted to regional realities. Trust the men and women who actually produce what people in the cities need to live. Economic development takes place in the field, not in the offices of senior bureaucrats.

I will give you a demonstration of this unhealthy incoherence, which is demoralizing for the farmers in my region. In March 1995, the federal-provincial agreement which included a testing and experimentation component will end. This program is the most visible of those from the federal government. With the funds it provided, this program helped farmers launch productive activities with significant benefits for our region. Ending this program will really hurt us and I say to the Minister of Regional Development that he must take a stand as soon as possible on extending it.

The regions must be given the wherewithal to do what they decided to do to deal with technological change and changing markets. To overlook the resource regions is to overlook what we are: human beings who need to feed ourselves and live in a healthy environment so that we can develop properly.

Another point that I want to raise immediately is transportation subsidies. Most of them cause unhealthy competition between the regions. They pay transportation companies to send unfinished products to urban centres, instead of encouraging local processing and helping people develop.

This shows the government's neglect. By wanting to centralize everything, it hinders development. By wanting to centralize everything, it makes people dependent. By wanting to centralize everything, it kills any initiative from local people.

When you know that, for almost a decade now, Western Canada has been receiving ten times more than Quebec from the federal government, you can ask yourself some questions. I want agricultural producers from my region and all of Quebec to get what they are entitled to, nothing more but nothing less.

Quebec farmers are striving to reach food self-sufficiency. To that end, they have decided to: first, consolidate and develop their potential; second, make full use again of agricultural land; third, process their products themselves, to the extent possible.

These people, who generate over $4 million in annual revenues, have the right to be considered job creators and major contractors, like any multinational company which finances the old political parties.

It is not because we live in rural areas that we cannot benefit from collective prosperity or that we should be overlooked by a system which favours big business.

Producers from the lower St. Lawrence are entitled to the same support as others. They need that help to consolidate their business, transform their products and make a profit with the added value. They have the right to hope to expand as they deem appropriate. They need help to be able to do so.

I will end with this. When game became scarce, man turned to agriculture for survival, and nothing has since replaced the food obtained from that activity. This is why rural regions such as ours need help.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I appreciate what the hon. member said, when he explained some of the problems of the farmers in his riding which is in such a beautiful part of the country.

I have a question for the hon. member opposite. If we forget the partisan comments which are of course part of the parliamentary routine, and part of our job, I think he must admit that for the past 20 or 30 years, Canadian agriculture has enjoyed unprecedented growth.

I am sure he also realizes that for instance in Quebec and Ontario, in my own riding, which is right on the border with Quebec, we see outstanding farm operations which exist thanks to the system introduced by Mr. Whelan, the former boss of his colleague from Québec-Est, other Liberal agriculture ministers and, of course, by ministers of other political formations as well.

Does the hon. member acknowledge the tremendous progress which has been made in the agricultural industry, in terms of the use of technology on the farm, the standard of living of our farmers, and especially in supply managed sectors and other sectors? And will he at least, with his usual eloquence, acknowledge the excellent job done by the former boss of the hon. member for Québec-Est?

[René Canuel, Bloc, Matapédia—Matane, QC]

Mr. Speaker, I certainly agree that a number of things have been done, but it is also true that many, many farms have disappeared.

To expand, some farmers bought big farms adjoining their own land. They modernized their operations and they used technology, of course, but I say this is not necessarily a good thing for rural communities. In a parish of 3,000 souls, if there are now only four farmers when they used to be 40, this is not necessarily a good thing. It may be the modern way of doing things and perhaps this is inevitable. That means rural communities will gradually disappear.

If they do, small towns will disappear as well. Anyone who is familiar with our part of the country will notice that, starting at Mont-Joli, it is very hard to keep rural communities alive, because most farmers have left the area, and although dairy production has increased or remained stable, people are not there any more. I think agriculture should be compatible with rural communities, and I have no answers right now, although there must be a solution and we must find it. I am sure that, when we become a sovereign nation, we will find it more readily.

[The Acting Speaker (Mr. Kilger)]

Pursuant to Standing Order 38, it is my duty to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Lévis-Manpower Training; the hon. member for Brome-Missisquoi-Hyundai Plant in Bromont; the hon. member for Regina-Lumsden-Trade; the hon. member for Hochelaga-Maisonneuve-Military Industries; the hon. member for Matapédia-Matane-Unemployment Insurance Reform.

Resuming debate, the honourable member for Kamouraska-Rivière-du-Loup.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Mr. Speaker, I am pleased to speak today during the first day of debate in this House on agriculture. We will have to remember that the official opposition is responsible for this first day of the 35th Parliament devoted to the subject of agriculture.

[Some hon. members]

Hear, hear.

[An hon. member]

We have the hon. member for Québec-Est to thank for this.

[Paul Crête, Bloc, Kamouraska—Rivière-Du-Loup, QC]

Indeed, the originator of the motion is the member for Québec-Est. In the past, he worked for a former Minister of Agriculture, Mr. Whelan, but he came to realize during this time, and probably because of his experiences, that Quebec had no future in Canada, particularly where agriculture was concerned. Moreover, you will recall that this Minister of Agriculture had the good fortune of being sprayed with milk by Quebec farmers because he could not grasp what they were trying to tell him. The only way they could get their message across to him was by spraying him in the face with milk.

On a more serious note, let them say what they will about sales and milk production figures of all other sectors. The fact of the matter is that rural communities are dying. The population of our villages has been declining for a number of years. When it has come to the point at which villages such as Saint-Paul-de-la-Croix in my riding have taken to advertising in the newspapers to attract families that may be willing to settle in a rural community, we know that we need to make some fundamental changes to the way we approach rural development and agriculture.

Right now in Eastern Quebec we can see dairy trucks go by, heading for Montreal, and that milk comes back in the form of processed cheese. That is the sort of thing we would like to be able to change so there could be a future in primary and secondary processing in our region. The fact that our communities are small does not mean that we do not have expertise in the various agricultural productions.

My riding has been the home of Canada's biggest milk producers for a long time.

Fresh lamb is another area. It should be noted that interestingly, 30 per cent of the fresh lamb consumed in Quebec is processed in our region.

Also, farmers in Eastern Quebec, and my riding in particular, have adapted successfully to changes in the agricultural industry. The UPA may be confident in the future, but this does not mean that all government's actions automatically have its blessing. Their confidence comes from knowing that with their skills and the ideas they have come up with, they will be able to ride out this time of fundamental change brought about by GATT.

A great deal of work was done in Quebec to prepare for the future and make sure agriculture had the place it deserved in Quebec in the 21st century. Take for example the "États généraux du monde rural" and the Trois-Rivières summit where a consensus was reached on the efforts required to ensure the prosperity of the Quebec agricultural industry for the future.

I hope that the government will take that into account in planning its next move and that it will make sure the interests of the Quebec agricultural community do not get lost in the sea of Canadian and Western interests. Care should be taken not to let the durum exports issue adversely affect advocacy for farmers in Eastern Canada, and Quebec in particular.

When the Bélanger-Campeau Commission held hearings in the Lower St. Lawrence region, the Minister of Foreign Affairs who was the Liberal Party representative on the commission at the time, had argued that, should Quebec become a sovereign state, we would lose any control we may have had on our milk quotas. Since then, current world events have caught up with the hon. member-who is now Minister of Foreign Affairs-and quotas will be less prominent. Belonging to the Canadian Federation may not be that beneficial for Quebec farm producers after all. A more profitable approach is to make sure we are able to sell our products abroad, and for that, we need programs to promote processing.

We must also learn from the past. In agriculture, we went from a period when many regions could be self-sufficient by processing and selling their products locally to a new era when, in the

name of productivity, natural resources are sent outside the producing regions, creating unemployment. Something can be done to bring processing back to the regions, thus enabling more people to live with dignity.

I would like to point out one of the abnormalities inherent in the Canadian system. In lamb production, Canada, under pressure from the United States, reviewed the way it treats sick animals. Before, especially in the case of pure-bred lambs, we used to slaughter all sick animals. We have now decided that moderately sick lambs would not be killed but quarantined. This can be appropriate for owners of very large herds like those in the West, for whom quarantining a small part of their herd is not a major problem.

However, in Quebec, where herds are much smaller, this type of action is inappropriate. In my riding, for example, it pushed a producer to the brink of bankruptcy. We had to intervene many times to make the bureaucracy understand the situation. Unfortunately, we have not yet managed to change the regulations, the new practice adopted under U.S. pressure.

That is one example where implementing a practice across Canada can harm the economy of one of Canada's regions.

The other point that I would like to bring to the attention of the House is support for exports. Much is being done to help people who are long established, but there is not much room for new exporters. For example, young people who would like to export top-quality maple syrup do not easily find the government program that could help them.

In agriculture, it is very complicated to find which program applies to which crop since agriculture has always been a shared federal-provincial jurisdiction; this does not make it easy for those who want to be involved in agriculture.

In another area, the federal government is acting contrary to the fine principles it has put forward, namely by cutting the funding for regional agricultural fairs. While they say they want to give regional agriculture a chance, this year they are cutting the budgets for the 55 regional agricultural fairs in Quebec by 15 per cent and next year they want to cut them out completely, which will eliminate these regional agricultural fairs that promote high-quality livestock.

I think that such an example proves the government's lack of leadership in agriculture. They just say the right words; what they do is in fact contrary to the decisions that should be made. Instead of encouraging agriculture, they are making drastic cuts that will hurt agriculture instead of helping it to develop.