Debates of Feb. 13th, 1995

Agriculture And Agri-Food Administrative Monetary Penalties Act

[Murray Calder, Liberal, Wellington—Grey—Dufferin—Simcoe, ON]

Mr. Speaker, I listened to the hon. member for Calgary Northeast as well, in particular when he started talking about subsections 14(1) and 14(2) and the credible people who would sit on the tribunal. I listened to the hon. member across the room say many times that he would like to see credible people on the parole board. I have to agree with him; I would like to see that too.

However, what could be more credible than a person on this tribunal with extensive agricultural background and legal background? Maybe the hon. member could tell me who would be more credible than that.

[Art Hanger, Reform, Calgary Northeast, AB]

Mr. Speaker, let us look at the track record of both the parole board and the Immigration and Refugee Board. They are people who have been placed within the system and supposedly have qualified backgrounds.

Yet, what is happening? They are friends of ministers. They are friends of the Liberal Party. Prior they were friends of the Conservative Party. In some instances they were unqualified but were placed on that board. What is to prevent that from happening with this particular board by order in council appointments? Nothing.

[Ralph Goodale, Liberal, Minister of Agriculture and Agri-Food]

Mr. Speaker, from the comments made in the course of the debate today I take it there is recognition, given the process being established by the legislation, that there needs to be as a part of the process a tribunal to adjudicate upon disputes and alleged offences.

The whole purpose of establishing such a tribunal as a quasi-judicial body is to remove the adjudicative procedure from my office, which is a political office, and to put it in the hands of a body, an organization or a tribunal that can be at arm's length and not influenced by the day to day flow of political events. The whole reason for having a quasi-judicial tribunal assume that responsibility is to separate responsibility from any kind of appearance of political interference. I would think my hon. friends in the Reform Party would agree there ought to be that arm's length relationship and in fact that the functioning of this kind of tribunal should not be subject to day to day political considerations.

Finally, I would point out, as my friend from Prince Albert did earlier today, if there is a concern about a decision rendered by the adjudicative tribunal, it can in fact be appealed to the Federal Court of Canada.

[Art Hanger, Reform, Calgary Northeast, AB]

Mr. Speaker, I thank the minister for his clear explanation. It is not unlike, as I suspected, the quasi-judicial Immigration and Refugee Board which is fraught with all kinds of problems and a minister who is reluctant to step in when he should and steps in when he should not. The Federal Court, already backlogged when it sits with immigration cases, will now undoubtedly be backlogged even further with agricultural problems.

I suggest that the agricultural tribunal as proposed is going to be just as flawed as the Immigration and Refugee Board and the parole board.

[The Deputy Speaker]

Colleagues, the time is up unless there is a unanimous desire to continue. I take it there is not.

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

Is it the pleasure of the House to adopt the motion?

[Some hon. members]

Agreed.

[Some hon. members]

No.

[The Deputy Speaker]

All those in favour of the motion will please say yea.

[Some hon. members]

Yea.

[The Deputy Speaker]

All those opposed will please say nay.

[Some hon. members]

Nay.

[The Deputy Speaker]

In my opinion the yeas have it. I declare the motion carried.

(Bill read the second time and referred to a committee.)

Western Grain Transportation Act

[Ralph Goodale, Liberal, for Minister of Transport]

moved that Bill C-66, an act to amend the Western Grain Transportation Act, be read the second time and referred to a committee.

Mr. Speaker, on behalf of the government and in particular on behalf of my colleague the Minister of Transport, I am pleased to open debate on Bill C-66, an act to make certain short term amendments to the Western Grain Transportation Act, commonly known as the WGTA.

This bill deals with three specific changes to the current legislation. Two amendments address problems in the move-

ment of grain to port for export. The third removes the WGTA subsidy on shipments of wheat to Mexico and is intended to facilitate our continued access to a very important market for Canada in Latin America.

At the outset I should note that the amendments in Bill C-66 are no substitute and are not intended to be a substitute for the major reforms of the grain handling and transportation system which will be brought before this House later on in this session. Rather, this bill fulfils a commitment that the government has made to farm leaders and to the grains industry that we would deal with certain particular issues that have caused significant delays and other problems in Canada's grain transportation system, especially over the course of the last year or so.

Because it is essential procedurally that these amendments are in place before the beginning of the 1995-96 crop year in western Canada which begins on August 1, the government tabled the legislation which is now before us in December. We are urging its quick passage through the House so that the legislation can be in effect in time for the beginning of the next crop year.

On the broader reform issues, we will be moving forward with them just as soon as possible after the upcoming federal budget.

One of the specific changes in Bill C-66 will end the practice of backhauling, that is the so-called scenic route backhaul subsidy on U.S. bound grain which has been moving from the prairies to Thunder Bay and then back to either Fort Frances or Winnipeg before finally heading south toward its final destination.

This practice has arisen because the existing transportation subsidy in fact makes it cheaper for shippers to move their grain to Thunder Bay at subsdized rates before moving it to destinations in the United States at commercial rates, rather than moving it directly at commercial rates for the whole distance.

Using Winnipeg as a reference point, backtracking or backhauling increases the length of hauling grain by about 450 miles in the case of Canadian National Railways and about 860 miles in the case of Canadian Pacific railway. Obviously this practice is inefficient and has led to longer car cycle times and much less effective use of the grain car fleet. The WGTA was never intended to foster this kind of backhaul situation and everyone agrees that it must be terminated.

With the passage of Bill C-66 the amendment to end subsidized backhauling would take effect no later than August 1, 1995, that is, the beginning of the next crop year. It could be brought into force earlier by order of the governor in council if there is a consensus in the grains industry that an earlier implementation date would be desirable.

I must point out that the opinion of virtually all of the players in the industry I have spoken to with some exceptions is that the most convenient and expeditious date for the implementation of the change would be coincident with the beginning of the new crop year on August 1.

Another change included in Bill C-66 will implement a system of demurrage and storage charges on railcars carrying grain, other crops and products under the WGTA when they are in fact misused by shippers for storage purposes. This will be coupled with a despatch system to encourage the expeditious use of cars.

Demurrage refers to charges that are levied when a shipper does not load or unload a railcar, a ship or a truck within the specified free time at either the origin or the destination point of the railcar. Car storage is similar to demurrage but refers to excessive time that a car spends on railway property before being positioned for unloading. Despatch refers to benefits that a shipper can earn by loading or unloading a car in less time than that which is considered normal or reasonable in the circumstances.

Under this bill the railways would be able to implement demurrage and car storage charges for delays in loading and unloading. This measure would encourage faster turnaround in the use of railcars. This is obviously important in our grain transportation system which is stretched to the limit with no cars to spare.

This amendment would also come into force for the beginning of the next crop year, no later that August 1, 1995. Or again, it could be implemented earlier by an order in council.

On the flip side of the storage, demurrage and despatch for the use of railcars equation, we have to focus upon the issue of railway performance. The WGTA already provides for sanctions to be applied against the railways if they fall short in their obligations in grain transportation. That provision has been in the WGTA since the act was first enacted about 10 years ago. Therefore it is not necessary for us to amend the legislation to put in the law the provisions with respect to sanctions having to do with railway performance.

What has been missing in terms of enforcement of any such sanctions is a precise government regulation to give practical effect to what is already in the WGTA about railway performance. I am pleased to inform the House that the necessary research and analytical work has been done. The drafting work has been done pertaining to such a regulation. Such a regulation could be brought forward very quickly if one is needed in respect of railway performance. I mention this point just for the sake of balance.

If there are to be demurrage charges and storage charges in the system of despatch applying to the shippers in order to ensure that they conduct themselves properly in terms of the use of railcars and other aspects of the grain handling and transporta-

tion system, we must also point out there needs to be a corresponding system affecting the activities of the railways. Should a regulation be required, it will be brought forward quickly.

The two proposed amendments in Bill C-66 to which I have referred aimed at reducing inefficiencies in the grain transportation system have very widespread support from industry. They are a direct result of industry-government collaboration and consultations over the last number of months, a period which began in May 1994.

During the first half of 1993, all of the best brains in the grains industry in Canada were looking forward to the 1993-94 crop year as what everybody expected would be a fairly normal grain shipping season. Then it started to rain in the Mississippi valley. The colossal flooding that resulted was the worst in 300 years. It caused the United States to use up all available railway rolling stock, including that which would otherwise have been available for leasing, as was the normal practice, into Canada.

In addition to that shortage of railcars, our harvest in the 1993-94 crop year was complicated by very poor quality. Added to that was a severe winter which limited unloading at country elevators and slowed movement through the system. The winter season through the Rockies was particularly difficult.

The port of Vancouver was tied up for a short while in an industrial dispute and we were stuck with one big transportation backlog. At one point there was a backlog of 41 vessels on the west coast waiting for grain. This situation cost Canadian producers about $35 million in ship demurrage charges imposed by the ship operators who were waiting in the harbour.

These factors along with others led many of our grains and oilseeds customers overseas to question Canada's reputation as a reliable supplier in the marketplace. In China, Japan and Korea last spring I heard those complaints firsthand. Our customers were not happy.

To avoid any finger pointing, buck passing or stalling, I called all the major operational players in the system together for a face to face meeting. It was held on May 16 in Winnipeg. They were to work out practical solutions to alleviate the immediate backlog problem and to prevent, as much as humanly possible, that situation from happening again.

The issues were also studied by subcommittees of the House of Commons standing committees on transport and agriculture and agri-food. Joint hearings were held in the spring of 1994. Again I want to commend those subcommittees for their very good work and for the production of a useful report.

I discussed the report in detail with all the private sector players involved in our grain handling and transportation system at the meeting in Winnipeg on May 16 and thereafter. I am pleased to say that not quite all but virtually all of the recommendations that came forward from those subcommittees have now been implemented.

The amendments before the House today have the support of the group of industry and labour leaders who are now referred to as the May 16 group. I hope they also have the support of the House committees that studied these issues last year.

At my invitation, the May 16 group of farm and industry leaders continued to meet about every two months or so through 1994. They were to deal with the immediate issues of getting our grains and oilseeds to port and to do a little brainstorming about the future direction of the grains and oilseeds industry in Canada.

At one of the meetings of that May 16 group held in October there was general agreement that the two amendments I have mentioned so far in my remarks today should be in place for the 1995-96 crop year. This would allow time for grain marketers and shippers to adjust sales and supply programs accordingly and to get used to the changes that are coming.

In a perfect world I would have preferred an earlier implementation date. However, it was broadly agreed that implementation of these two amendments part way through a crop year would add to congestion problems and thus aggravate the very kind of situation we were trying to solve. Therefore, we have selected August 1, 1995 as the implementation date unless there is a prior consensus in the grains industry that we could move more quickly than that.

Today we are more than half way through delivery of the 1994-95 crop. I am happy to report that we have made very steady progress in dealing with our grain handling and transportation situation. We caught up on that 1994 backlog during the summer. So far in this crop year the situation has improved.

I remember in the late winter and early spring of 1994 reading the newspaper stories and seeing the clippings of the situation that was developing in terms of that backlog at the west coast. The clippings were not very positive. Today we see newspaper stories from the Regina Leader-Post on February 2 talking about how the grain trains are rolling.

Another story on February 2 in the Saskatoon Star-Phoenix : ``Grain cars are hopping''. This is a much more positive scenario in the winter heading toward the spring of 1995 than we saw a year ago.

As of the end of January, half way through the current crop year, our grain transportation system has shipped some 16

million tonnes of grain, with 10 million tonnes through the west coast and 6 million tonnes through Thunder Bay. In the movement going both east and west our performance this year is 43 per cent better than at the midway point in the previous crop year.

Even more important, our grain handling and transportation performance to date in 1994-95 is also 20 per cent better than the long term five-year average. So far, so good. However, we are by no means out of the woods yet. We have half of the crop year yet to go. No one can take anything for granted or rest on any laurels. For the balance of this year we are going to need full co-operation and flat out top performance from all of the players in the system to get the necessary volume of grain through our ports and into export position.

Bill C-66 also proposes to eliminate the WGTA subsidy on wheat shipments to Mexico. This is obviously a separate issue from the other two I have been discussing so far this afternoon.

Last April the Mexican government, concerned that subsidized wheat imports from both the United States and Canada were having an adverse effect on its domestic market, launched a countervailing duty investigation. Canada participated in the Mexican government's investigation in order to ensure that all of the relevant facts were brought forward.

For example, we wanted to ensure that our Mexican friends and customers were fully aware of the fundamental differences between Canadian programs and policies like the WGTA and the far more insidious and damaging American trade distortions caused by things like the U.S. export enhancement program.

Our move now in Bill C-66 is to eliminate the WGTA subsidy on wheat movements to Mexico. It is intended to help resolve this outstanding countervailing duty investigation in Mexico as far as Canada is concerned and help ensure continued access to that very important market for Canadian farmers.

In the 1993-94 crop year Canada exported 909,000 tonnes of wheat to Mexico. If a countervailing duty were imposed by Mexico the potential cost to Canadian wheat exporters of losing that market could be over $22 million a year. It is obviously very important that we work hard to alleviate the Mexican concern.

It is very important to note, though, that this is not a case of unilateral disarmament on the part of Canada. The United States has voluntarily agreed to withdraw its use of its export enhancement program on wheat exports to Mexico. In addition, in order to safeguard the Canadian position we retain the option of reinstating the WGTA subsidy by order in council if that should be necessary and appropriate at some future date. Payment of the subsidy would end whenever Bill C-66 is proclaimed.

As I close, let me remake two points. First, the amendments contained in Bill C-66 are short term measures flowing from the circumstances experienced last year in the Canadian grain handling and transportation system. They have broad support from farm organizations and industry leaders. They are intended to take effect at the beginning of the next crop year or earlier if possible and reasonable. I hope the House will deal with them promptly and positively.

However, the important but relatively minor changes proposed in Bill C-66 will not be sufficient in themselves to fix everything that ails our grain handling and transportation system today. Broader reforms are necessary for four very strong reasons.

First, we must deal with the harsh reality of fiscal limitations and the battle against debt and deficits. Second, we must comply with the requirements of the new GATT agreement with respect to the disciplines that apply on trade distorting export subsidies. Third, we need to unlock new grain handling and transportation efficiencies, leading to a lower cost and faster system overall. Fourth, we need to foster greater agricultural diversification and a trend toward more value added processing and further processing.

To accomplish these objectives and to lay the foundation for the needed broader reforms, the Minister of Transport and I have been conducting two sets of comprehensive consultations with all of the players in the Canadian grain handling and transportation system over the last number of months.

For my part I have been concentrating on the issue of how the so-called Crow benefit under the WGTA can best be paid to western farmers themselves rather than indirectly through the railways.

For his part, the Minister of Transport has been focusing in his consultations on a broad range of transportation efficiency issues. In the next short while we will bring these two sets of inputs together in one set of comprehensive and inter-related grain transportation reforms. These will obviously go substantially beyond the short term measures that are put forward in Bill C-66.

While I am sure members will be anxious to debate Bill C-66 in great detail, I hope that will just whet their appetite for the larger debate that is to come a few weeks down the road.

My second and last point is to express my thanks to all of the farm leaders, farm organizations and grains industry representatives that have been intensely involved over the past several months in all of the various consultative processes I have referred to today. They have been involved since May 16 last year in the work that has led up to Bill C-66. The group of people who worked very hard at the May 16 meeting and in a series of meetings since that original encounter deserve a lot of credit for bridging their gaps and differences and working

constructively together to arrive at practical solutions to keep the grain moving and never mind the fights over turf.

The process that will lead to the broader reforms with respect to the WGTA that I just referred to has also been a process in which consultation has been extremely important. In that process with respect to the broader reforms very close to 100 different individuals, groups, organizations, private firms and levels of government have been involved in the consultative effort. They have worked very hard and very conscientiously to bring forward the best possible advice to address what all of us in this House know are some very thorny issues in terms of western transportation policy.

To all of those who have participated in this consultative process in the House of Commons committees that were involved, in the May 16 group as it evolved over the course of 1994 and most recently those who have been involved in the broader consultations about the future of the WGTA, on my own behalf and I am sure on behalf of the Minister of Transport and the government I want them to know that their efforts are very much appreciated.

[Jean Landry, Bloc, Lotbinière, QC]

Mr. Speaker, it is my pleasure to rise and speak on behalf of the official opposition regarding Bill C-66. This bill to amend the Western Grain Transportation Act, Bill C-66, has two main objectives.

The first is to implement measures to make rail shipments under the Western Grain Transportation Act, the WGTA, more efficient, in order to avoid the grain transport problems that a lack of railway cars caused last year. The problem was, in fact, that the railway cars were being rotated too slowly. The second is to eliminate subsidies on wheat movements to Mexico, which is on the brink of taking retaliatory measures against Canada.

I doubt that Canada will meet these objectives. First of all, the bill's scope is too limited and it is far from certain that it will be sufficient to prevent a situation such as that which arose last year regarding the lack of railway cars. We must also ask ourselves why the federal government has tabled this bill containing urgent measures. Does the government intend, in the near future, to table a much more substantial bill to substantially amend the WGTA? The draft bill on major reforms to the WGTA has been around for more than a year.

The WGTA has had a destabilizing and unhealthy effect on rail transport. Its effect has been to considerably distort the rail market. Take for example the subsidy of over $550 million that rail carriers receive for shipping western grain. This subsidy was distributed among all the rail carriers in addition to the very profitable network in the west, while a large part of the secondary network is in the east, and remains in a deficit position. It is understandable, under such conditions, that pressure by rail carriers to rationalize their network is strongest in the east.

In addition, the government considers preserving the rail network used to transport western grain an issue of national interest. In fact, the federal government has imposed a moratorium on abandonment of railway lines used to transport western grain. Many of these lines are nevertheless under-used and the western rail network has never really been rationalized.

From the viewpoint of privatizing CN, and given the mounting competitive pressures on the Canadian rail network, it is imperative and urgent that such a rationalization take place. It must, however, be carried out on the entire network of both national carriers.

Rationalizing the eastern network would only undermine the competitiveness of western carriers which would be stuck with an inefficient network. This is why the Bloc Quebecois has proposed a motion to lift the moratorium on the abandonment of western rail lines. Perhaps I may repeat it here.

To allow for fair and effective restructuring of the Canadian railway system and to ensure that our national railway carriers will be competitive in the future, the House urges the government to proceed with the following:

Cancel the order in council concerning the moratorium on abandonment of railway lines used for grain transportation in western Canada.

Revise the Western Grain Transportation Act and procedures for allocating grain transportation subsidies, so as to avoid distortion on the railway transportation market. It is the opinion of this House that allowing the railway transportation sector to operate on a more commercial basis would be beneficial for Canada.

Ensure that the criteria used by the National Transportation Agency to determine the merits of applications by railway companies to abandon railway lines are applied uniformly across Canada and to the entire railway network.

We make this request because the criteria used by the federal government to allow the abandonment of railway lines are extremely narrow and show a lack of vision with respect to transportation.

This government takes a dollars and cents approach to a sector that is crucial to economic development, especially in the regions. For instance, when reviewing applications for abandonment, it fails to consider the economic impact of operating a railway line. It is only concerned about the commercial viability of the line for the carrier. It is clear that negative economic impact of the abandonment of certain lines in Canada has been

more significant than the operating losses incurred by the carriers.

We realize that the railway network of Canada's two major railway carriers must be restructured if they are to be viable once again and able to compete with other carriers. Unless our railway carriers increase their productivity, they will not have the resources to update equipment and maintain a first class network.

However, the railways are vital to the national interest, and the government cannot afford to dismantle certain lines if it means losing major economic spin-offs. It is essential that the government take into account all possible economic repercussions when considering the application to abandon a railway line. Unfortunately, the financial vision of the federal government and its Department of Transport is simply too short-sighted to provide us with a modern and efficient intermodal transport system.

A sovereign Quebec would be better able to establish an effective intermodal transport policy reflecting the real needs of its people, as it would have control over all modes of transport. In particular, it would be in a better position to understand regional transport problems. We have no objection to the federal government withdrawing from the transport sector but it should do so completely by transferring regulatory powers and without destroying existing facilities simply because of financial considerations.

Let us take the example of the Chibougamau-Chapais-Chambord line in the Lac-Saint-Jean region. Many thousands of jobs are at stake in the softwood lumber, mineral, newsprint, pulp and precision cutting sectors. Eliminating train service, with or without transfer to a railhead in the Lac-Saint-Jean region, would have dramatic repercussions for 10 out of 15 businesses without a transfer and would affect profitability and result in eventual closure for 12 of them with or without a transfer.

In Abitibi, diverting all rail traffic to the road system would generate additional revenues of $830,000 the first year for the Quebec government, while the federal government's tax revenues would go down by $510,000 a year over the same period. On the other hand, increased road use in the Abitibi region would cost at least an extra $4.8 million a year.

As we can see, a traffic shift from rail to road would result in major cost increases especially since the local road system is in pitiful shape.

In spite of Transport Canada's efforts, roads, the bearing capacity of which is not even known, continue to wear down. Increased road traffic would not only make the road surface grind away faster, but it could jeopardize the road base in a very short time.

The government will indeed have to look at several issues in developing the future national rail transportation policy that Transport Canada had promised for this year. Unfortunately, nothing in the bill before us today addresses these substantive issues.

All this bill does is eliminate backtracking from Thunder Bay and impose storage charges on cars used for in-transit grain storage.

Bill C-66 makes only minor changes to the Western Grain Transportation Act, changes that will only marginally improve rail transportation in Western Canada.

Eliminating this practice of backtracking, where it was often most cost-effective for the shipper to ship Prairie grain to Thunder Bay and have it backtrack as far west as Winnipeg than shipping it directly to the United States at commercial rates, will save an estimated $4 million.

This amount, released by the Department of Agriculture and Agri-Food, will be used, however, to reduce average freight rates, that is to say the price paid by producers to ship wheat and barley.

No cuts will be made before the budget is tabled. The government is careful not to make any major or significant changes, changes which are nonetheless essential if we want to have an efficient transportation system.

The government is motivated by fear, the fear of a debate on the principle behind this issue. It is not only deplorable but also worrisome that the government not attempt to rectify a situation that could have a major negative impact on the Canadian transportation network and the Canadian economy. That is why we have presented a motion to force the Liberal government to act as soon as possible on this.

Over a year ago, on January 24, 1994, the Grain Transportation Agency made recommendations to expedite the streamlining of sidings. The information I am providing you comes from these recommendations.

First of all, regarding the Crow rate, the report suggests paying the subsidy to western grain producers and not to the railway companies, a position that is garnering increasing support. However, this is a form of assistance to western economic diversification that would be acceptable if the transition period is a reasonable one-the report mentions four years-and if after the transition period, the subsidy is transferred to an income support account to which all Canadian and Quebec producers would have access. That is, in fact, the position taken by the Quebec coalition on western grain transportation.

To speed up the restructuring process, the agency suggests expanding the definition of class 1 lines-those that can take loads of up to 220,000 pounds or whose shipments are not in excess of 500 tonnes of grain per mile, with the restriction that this would apply only to lines from where grain shipments

originate. This would exclude the CN line linking the Port of Churchill to the network. However, the agency recommends that the government assess the future of the silo in Churchill and its role with respect to grain exports. At the present time, class 1 lines extend over nearly 1,000 miles or 17 per cent of the 6,060 miles of grain branch lines, and carry 4 per cent of the total shipments.

Second, the report suggests allowing the inclusion in class 1 of lines judged to be no longer viable, where the cost of maintenance or renovation would be prohibitive. Assessments would be done by independent inspectors. Third, the report suggests immediately eliminating protection orders concerning unused lines, which may or may not be grain transportation branch lines. Fourth, it suggests setting the time limit for evaluating applications for operating alternative services at thirty days from the date of receipt of the application.

Many other recommendations could have been added to this bill which, I repeat, only deals with the most important issues.

Let us turn now to the second main objective of Bill C-66, the elimination of subsidies for Canadian wheat exports to Mexico. The government is taking this step because the Mexican government is preparing to impose countervailing duties on Canadian exports.

We know that the United States has not used its subsidy program-the Export Enhancement Program-for exports to Mexico since March 1994. Mexico is now asking Canada to follow suit. Yet American subsidies exist in other forms. Such subsidies may not be known as direct export subsidies, but they nevertheless give rise to unfair competition with Canadian exports.

I would like to know why this aspect is so strikingly absent from the bill to amend the Western Grain Transportation Act. Agriculture and Agri-Food Canada has provided the following explanation in a background paper: "An investigation of countervailing duties applicable to Canadian and American wheat exports has changed wheat exports to Mexico. The United States has eliminated sums paid under the Export Enhancement Program for wheat exported to the United States, and Canada has proposed to refrain from applying subsidized rates in accordance with the Western Grain Transportation Act for wheat exported to Mexico.

Eliminating the subsidies applicable for wheat exported to Mexico will help achieve compliance with the maximum volumes stipulated in the GATT provision on subsidies and exports, for the category of wheat and wheat flour. This will allow us, the department asserts, to meet the goals of the North American Free Trade Agreement in respect of the gradual elimination of export subsidies by member countries. By changing its exports to Mexico, Canada will ensure continued access to this important market".

I would die laughing if I were American and, indeed, Americans often die laughing at our expense. In 1994, the United States imposed a ceiling on Canadian wheat exports. This measure was intended to control Canadian exports which had reached record highs. The Bloc Quebecois denounced this measure, given that Canada was not guilty of anything in the matter of the wheat, since it had dropped the export subsidy for grain destined for the United States. The Canadian government agreed to the ceiling set by the United States, deeming it an acceptable compromise and less expensive for grain producers than the American countervailing duties.

Since then, a study group has been set up to look at the question and to evaluate domestic subsidies in Canada and the United States. The results of the study will, I hope, mean a return to fairer trading rules. However, we do not believe that Canada is equal to the task in these bilateral negotiations with the United States on agricultural trade. Canada bows and scrapes, even when it has an airtight case. As we can see, this defeatist attitude is now having disastrous results for our trade with Mexico.

We are concerned about western grain producers who now will have to compete directly with American wheat exports to Mexico, knowing full well that they are receiving assistance from within. The Canadian government should have included this point in its discussions with Mexico. No, instead, Canada keeps quiet, says nothing and drops its export subsidy without hesitation.

Furthermore, I read with my own eyes that the bill would allow the Canadian government to reinstate, if necessary, the subsidy on exports to Mexico. Public servants specified that it would be possible to do that if, for example, the United States decided to reinstate its export enhancement subsidies on shipments to Mexico. This logic is surprising: Can we be sure that Mexico will resort to "fair" countervailing duties, both against Canada and against the United States? Have there been negotiations on this issue?

I invite the government to table as quickly as possible its more substantial bill, since one does exist-correct me if I am wrong. I find it hard to believe that the government hatched Bill C-66, which has a very limited scope, whereas a draft bill on a major reform of the WGTA has been around for a year.

It is true that the government, which is getting a lot of pressure from the west, the east and various interest groups affected by the WGTA, is in a difficult political situation, but is that a reason for tabling a bill that falls far short of remedying the situation? Is that a reason for giving in to the United States

and Mexico? That, nevertheless, will be the outcome of Bill C-66.

[Jake Hoeppner, Reform, Lisgar—Marquette, MB]

Mr. Speaker, I was kind of blind-sided here today. I did not realize Bill C-66 was coming up for debate so I have been-

[Ralph Goodale, Liberal, Regina—Wascana, SK]

I hope you will do better than the last one.

[Jake Hoeppner, Reform, Lisgar—Marquette, MB]

I will sure throw some junk at you if nothing else, hon. minister. I will take some time.

[The Deputy Speaker]

During this session of Parliament all the Speakers have been asked to make doubly certain that members put their comments through the Chair only, not because we are not going to sleep if you do not but it is because we are trying to avoid exchanges and tempers getting aroused across the floor. Therefore, I would ask the hon. member and all hon. members to please put their remarks through the Chair. If they are going to say the word "you" they must be referring to whoever is in the chair.

[Jake Hoeppner, Reform, Lisgar—Marquette, MB]

Mr. Speaker, through you I will say to the minister that I will probably throw some junk, some garbage or maybe dockage, whatever you call it in the farm industry, because I was really surprised at some of the comments that I heard here today when I see how well we have done in this transportation system with this backtracking issue.

I would like to read what Mr. Ted Allen said to the standing committee on agriculture on our grain handling system on November 29, 1994: "We measure performance in this country against our transportation constraints. We say how much better we are doing because we had an abysmal year, so we do quite a bit better than in a really poor year. We never measure our performance against what the opportunity was and how close to maximizing the opportunity we came, which every other marketer I know of does".

Why have we not taken the opportunities when the subcommittee on transportation a year ago said to stop the backtracking, it is costing us millions and millions of dollars? Every member on that subcommittee said now. Every member on the agriculture committee said now. This is a violation of the Western Grain Transportation Act. This was a loophole that the grain companies and the railways found. We could not stop it.

It has cost us $15 million since last July 31 for this backtracking. Not only the backtracking has been the cost but the car allocation. We have failed to meet commitments again and again.

I will read another comment that Mr. Allen made. This was last year in November: "Yesterday I was talking to an elevator manager from Hargrave, Manitoba, who happened to be in my office. He was telling me that he has 25 orders for cars that he was supposed to have received a long time ago. The other day he finally got three of them". That is performance. I cannot imagine how much better we can get if that is the way we are running our railway system.

When I looked at the log book today from Vancouver for last October, November and December and saw that a ship sat there for 27 days waiting for grain to be loaded, I think we have room for improvement. It does not seem to me that if we made 40 per cent improvement in the last six, seven or eight months why these ships are waiting that long. We want to congratulate each other when we do make improvements but let us not overdo it. We could become very complacent in this House.

The other thing I would like to address is the Mexican issue. I was not aware that there was a trade action against us until we were briefed by the agriculture people the other day on Bill C-66.

I asked why we are stopping backtracking to Mexico. Are we shipping grain to Mexico? I thought this was a backtracking bill. They said: "There could be a few loads going in that direction. We will have to find out. We do not know". That is how knowledgeable the people were who briefed us on this.

After a few phone calls I finally found out that Mexico had a trade sanction against us for shipping subsidized wheat to it; not just to us, also to the Americans.

If the members will read the Canada-U.S. free trade agreement they will start to realize that the Americans promised not to dump EEP wheat into our markets, of which Mexico is one. That is where the problem started. That is why there was a trade sanction against us.

If this government is trying to tell us that Mexico can take action against us with a trade sanction, I want to ask under what kind of clout or under what kind of conditions it can do that.

Mexico has a trade surplus of almost $3 billion with Canada. Where in the heavens can a trading partner tell me that I am not trading fairly when I import four times as much as it takes from us?

Statistics Canada says that out of a $37 billion trade surplus that we have with the U.S. we dwindle that down by $20 billion with other countries like Australia and New Zealand which bring in boneless beef by the thousands of pounds. Our farmers are going bankrupt.

Is this the way our government is trading? Is this how we get trade actions against us? It sure seems like good business to me. No wonder we are going bankrupt.

The trade surplus it has with us is $2.77 billion in total products. It could be other than agriculture. These are Statistics Canada figures that I am using. If they are not correct maybe we can get rid of Statistics Canada.

It is time Reform starts throwing a few of these figures around. When I see Australia with a trade surplus of $181 million wanting to bring in more boneless beef, and I see New Zealand with a $126 million trade surplus wanting to bring in more beef, where do we finally go with our beef? Where do we finally get the jobs that we were promised in that nice little red book? We have to start milling our wheat, we have to start milling our pasta, we have to start doing something.

As a farmer I know that if I continually buy more than I sell I am going to have a big problem. This is what has happened to this country. It is not just interest rates. If we take $20 billion trade deficits and borrow that at 8 per cent, just figure that out.

[Ralph Goodale, Liberal, Regina—Wascana, SK]

We have a trade surplus, what is the problem?

[Jake Hoeppner, Reform, Lisgar—Marquette, MB]

With Mexico? I would like to see it. We have a trade deficit. Mexico has its trade surplus. I am afraid that the Liberals are completely lost in the dust and they have even lost the field. They are somewhere in the neighbour's. When they cannot take Statistics Canada figures and read them that shows what is happening. Something is wrong.

I will give the hon. minister a minute to look at that and see whether my eyes are that bad or whether I am that old that I cannot see what a surplus or a deficit is. While he is looking at that, I would like to talk about another item, the Churchill issue.

This is what Mr. Allen said about a boatload of grain to Mexico. Tell me whether we are giving it a bad deal or not. We had a 25-tonne vessel going to Mexico in November 1994. The Mexicans bought number three red wheat. We loaded 9,000 tonnes of number one red, 5,000 tonnes of number two red and the balance, which was less than half the cargo, was number three red which they bought. I would sure like to throw a trade action against the partner that gives me number one wheat instead of number three.

Where does the trading sense of this government come in? It amazes me that these things go on and we sit idly and say everything is good in this country, we are only $540 billion in debt, so why not a few hundred billion more?

I look at Bill C-66 and look at three little clauses that took a lawyer a whole year to draw up, that has cost us $50 billion in backtracking costs, delayed cars for I do not know how many days. We are behind in canola shipments months and we are still doing a great job? Why do we not pat each other on the back?

I went up to Churchill last July. I wanted to see how efficiently the agriculture department was running everything. I was there the last day in July. There was a ship coming in that wanted to load 40,000 tonnes of grain and there were 4,000 tonnes in that whole terminal, five million bushels. That is performance?

We have ships sitting for three weeks waiting to pick up grain out of Churchill, of all places, where nobody wants to buy grain from. That is performance and I am supposed to be quiet here and sit silently by and let these things go on and pat hon. members across the way on the back?

I am sorry, hon. members, I was elected to start things moving in this House. I hope I can accomplish that. I hear giggles and I hear screams. They must be listening so I must be accomplishing something. We will have to paint these ships a faded red so that they will start getting a little more action into their process and loaded a little faster.

I went over to Robert's Bank when I was in Vancouver and I saw a 150,000 tonne coal ship loaded within a day. Then I saw what the consequences were. That company paid the terminal $5,000 to load that ship within the three-day limit. We wait 27 days to load a ship with grain. We have a tremendous system going for us. I cannot comprehend the amount of stress, disappointment and disillusionment in the farm community with this kind of system.

For 10 years now the WGTA has held the railway system and the grain companies hostage so that the system cannot be revamped. The Minister of Transport said the United States railway system is 64 per cent more efficient as far as labour is concerned. Are we doing a tremendous job in Canada? When are we going to face the facts? When are we going to take charge of these problems and do something?

[Ralph Goodale, Liberal, Regina—Wascana, SK]

What about the freight rates?

[Jake Hoeppner, Reform, Lisgar—Marquette, MB]

I do not know what the freight rate is. But I can tell the member what the handling charges are. If I ship a bushel of grain from my point to Seattle, compared to my point to Vancouver I will save $16.50 per tonne. If 20 million tonnes are shipped out of Canada that is $320 million that came out of the pockets of farmers, just in the elevator system. That is without the transportation system.

Someone tell me why farmers need subsidies. It is because somebody is pulling it out of their pocket faster than they can put it back in. That is not going to last forever.