Meanwhile, the government has no plans for real tax reform. It will raise the corporate tax rate by 12.5 per cent or 1/8, but I used to teach math, and 1/8 of what is not much in any case barely adds up. So what it really means for the big corporations is that there will be an increase from 0.2 to 0.225 per cent of corporate capital in excess of $10 million. Let me tell you that a lot of people in my riding would be delighted to have that rate applied to their personal income tax.
That being said, as the official opposition critic for agriculture and being a farmer myself, I was particularly surprised and, in fact, appalled at the inequity of the budgetary measures concerning agriculture. Last week, the Minister of Agriculture said to anyone who would listen that his government would treat all Canada's regions on the same footing, and he said quite seriously that no agricultural sectors would be more equal than
others. Now we must face the fact that the government is saying one thing but doing another.
In this budget, the finance minister cuts the agriculture department's budget by 19 per cent, or one fifth. During a time of cutbacks, it is accepted that everyone has to do his share, but what really hurts is the way the cuts are distributed. It is one thing for agriculture to be hard hit, but quite another if it is unfairly affected. The injustice from one region to the next is simply absurd.
In short, to make up for eliminating the Crow's Nest rate for Western grain transportation, the government will give grain growers $2.9 billion. But dairy producers in Quebec will see their federal subsidies cut by 30 per cent over two years. That amounts to a $32 million cut without any compensation whatsoever.
The message is clear but unacceptable: the deficit is being tackled on the backs of Quebec and Ontario dairy producers. It can even be said that if the target price for milk were increased because of these cuts, the increase would be borne by consumers and processing industries. It is tantamount to a consumption tax.
Certain cuts are inevitable, I must agree. The agriculture minister was telling me last week that so much had been said about the Crow's Nest rate over the last 25 years. Even in the opinion of farmers and people involved in grain transportation and processing, there were serious shortcomings in the Western grain transportation system, such as the detour to Thunder Bay to be eligible for the subsidy.
For ages people have seen the waste and inefficiency in grain transportation. And the saga has continued since the Liberal Party sitting opposite us took office. They have consulted, gone around in circles, did some fancy footwork in the House and tried to arrive at a consensus with the people in the community. Nothing has worked.
The Minister of Finance finally decided to discontinue the transportation subsidy under the WGTA. To compensate Western grain producers for this loss, the finance minister announced a number of interim measures. For example, owners of agricultural land, in the Prairies only of course, will receive a single, non-taxable lump sum payment of $1.6 billion.
Add to this the $300 million, 5 year program to help producers adapt to the WGTA. On top of this, export credit guarantees totalling one billion dollars are being offered to help producers sell their grain and other foodstuffs. The sum of these three programs is $2.9 billion. The federal government will invest close to $3 billion to compensate grain producers in the three western provinces.
And just listen to how clear and praiseworthy the agriculture minister's goals are. First, to cut costs; second-listen up all of you producers in Quebec-to encourage farmers in the West to diversify; third, to encourage them to get involved in value-added activities. In contrast, dairy producers miss out. The Minister of Finance decided to reduce the subsidies for industrial milk producers by 30 per cent. How terrible.
For all intents and purposes, Quebec accounts for close to 50 per cent of Canada's industrial milk production, so do not kid yourselves or try to tell me that Quebec producers will not be harder hit than those elsewhere. In this case, the federal government is not offering any compensation. In Quebec alone, this cut will mean close to $32 million in losses. The Minister of Finance was off target when he reduced dairy subsidies by 30 per cent over the next two years.
The more than 12,000 industrial milk producers in Quebec will see a 15 per cent drop in their current subsidy of $1.50 per kilogram of milk fat in 1995 and another 15 per cent drop in 1996. For a farmer who produces 10,000 kilograms of fat, which is the average production in Quebec, that will translate into an income loss of $2,250 this year and of almost the same amount next year. That is over $4,000 in losses.
The government will compensate these farmers by reviewing the future of subsidies in collaboration with the provinces and the industry. It is all well and good to talk about it, but that is not going to put bread and butter on the table. Contrary to the cuts in the West, the dairy sector cuts will not be implemented in tandem with any transitional measures. Talk about a double standard.
If we examine this question more closely, we realize that, over the long term, this measure is even more disastrous for dairy producers than it appears. With the new international figures, all sectors are going to have to adjust. In the case of sectors with quotas, like dairy production, these changes are practically already in effect. This coming July, quotas will be replaced by tariffs.
I would like to digress a moment on the subject of tariffs. You no doubt know that the United States decided it wanted to test the tariffs adopted last year, in December 1993 that is, by the 120 members of the WTO at the Uruguay round of the GATT talks. Today, they are being contested. I am really looking forward to seeing how vigorously the government will protest, just how far it will go to defend the tariff structure for dairy products, eggs and poultry.
The tariffs themselves will gradually disappear. Instead of anticipating costs and investing to provide support for dairy producers wanting to develop new niches in the market or become more competitive in order to face the music once tariff barriers relax, what do they do? They cut, they cut and they cut some more.
A dairy producer friend of mine, whom I will identify, I am sure it would please him,-Laurent Saint-Laurent-told me, when he acquired his parents' farm in 1971, that subsidies represented 25 per cent of his income. Today, they represent barely 6 per cent.
However, in the West, farmers are being compensated for the loss of subsidies by being allowed to diversify their economy so they can then compete with agriculture in Eastern Canada, which receives absolutely no financial assistance from the federal government.
They are exaggerating by cutting a number of subsidies. Western producers wanting to get into beef or pork or wanting to compete with dairy producers will therefore be able to do so with federal money. If this is what fair treatment for everyone means, I would hate to see what unfair treatment means in this country.