Mr. Speaker, I am very glad to have the opportunity to participate in this discussion about the 1995 federal budget, particularly the impact of that budget upon agriculture and agri-food.
It goes without saying that I profoundly disagree with the conclusions that have been drawn so far in this debate by the member for Frontenac. I would suggest that his analysis is incomplete, entirely negative in its focus and, with the greatest respect, his analysis is wrong.
To support what are clearly his separatist objectives he seeks to sow the seeds of division in a narrow and partisan manner. He seeks to pit region against region, province against province and farmers against farmers. It is indeed sad to see this rather destructive approach, but coming from the Bloc Quebecois it is no surprise. Their objective is not to build this country up; their objective is to tear this country down. So I am not surprised by the motion today from the BQ.
What is perhaps surprising is the similarity in approach that is taken by the BQ and the NDP. Two weeks ago the NDP and the Bloc Quebecois joined together in a rather bizarre alliance in this House to block speedy passage of vital government legislation to restore services in the Canadian railway system. Until they recanted and belatedly changed their position, the NDP lent aid and comfort to the Bloc Quebecois in inflicting totally unnecessary damage upon the entire Canadian economy, particularly upon agriculture.
The work stoppage in the rail system could have been ended and full service could have been restored within perhaps no more than 48 hours. However, the Bloc made that impossible
and the NDP helped them in doing damage to Canada. The rail dispute lingered on for more than a week and the cost of that delay was very expensive.
In the Canadian grains industry alone, that one lost week represented a loss of revenue from grain sales in the order of $100 million, plus the delay caused by the Bloc Quebecois and the NDP damaged Canada's international reputation as a reliable agriculture and agri-food supplier to world markets. It is truly impossible to fathom why the NDP would give credibility to the Bloc by supporting the BQ in stalling the legislation to bring the work stoppage in the rail system to an end.
But the rail dispute is not the only example of a similarity between the NDP and the BQ. They also have similar approaches when it comes to an analysis of the federal budget, which is the subject of the motion today. Both of these parties, devoid of any national vision, without a serious commitment to Canada as a whole, resort to the small and petty politics of fostering regional divisions. Each of them in their own way try to make the case-the erroneous case-that their region has been unfairly treated and some other region has been given some unwarranted advantage.
The BQ claim unfairness toward Quebec and they attack western Canada. The NDP claim unfairness toward the west and they attack Quebec. Both of them are absolutely dead wrong.
The 1995 federal budget has in fact been very well received across this country, and significantly in all parts of this country, for three reasons. First, it launched a genuine and concerted attack against the horrendous problem of government debt and deficits. This budget is for real. It is not smoke and mirrors. It sets the government on a true and definitive course toward achieving our deficit reduction targets as promised in our 1993 red book platform. What we are doing in this budget is what we committed ourselves to do in the last election. We are bringing the annual deficit down below 3 per cent of gross domestic product over three fiscal years.
Consider the problem of debt that we inherited when we came to office in November 1993. The annual deficit at that time was running in excess of $40 billion a year. That was about 6 per cent of the country's gross domestic product. Think of this. The agriculture and agri-food sector of the Canadian economy, all included, amounts to about 8 per cent of our GDP. So the deficit, at about 6 per cent of GDP, was eroding three-quarters of the economic value of the entire agriculture and agri-food sector.
The total accumulated federal debt was running, when we came to office, at something in excess of $500 billion. Interest costs were approaching $45 billion or perhaps even $50 billion a year. That works out to $850 million every week, or $120 million every day just to pay the interest. In fact, if we were to add together all the net incomes of every single farmer in Canada for the next ten years, we would barely have enough money to pay the interest on the national debt for one year. That indicates the magnitude of the problem. The problem is huge, it is urgent, and in that last budget it demanded swift and decisive action.
We have acted. We have met and exceeded our deficit reduction requirements for 1993-94. We have met and exceeded our deficit reduction targets for 1994-95. We will continue to meet our objectives with respect to the deficit in 1995-96 and in 1996-97. We will bring the deficit down below 3 per cent of gross domestic product within three fiscal years, as we promised to do. Beginning in 1996, for the first time in a long time, Canada's debt-not just our deficit but our overall debt-to-GDP ratio-will also begin to come down.
Yes, the budget is strong medicine. Yes, it is tough. However, Canadians have supported it because they know it is necessary to deal with the horrific debt and deficit problem that this government inherited.
The second reason the budget has broad and general support is that it is fair and balanced. It tries very hard not to single out sectors or regions. The toughness in the budget is evenly distributed everywhere.
There are two kinds of measures in the budget to deal with the deficit. On the one hand we have reduced the overall level of government spending; on the other hand we have increased the level of government revenues. For every dollar raised in new revenues there are nearly $7 in spending reductions. That, of course, is consistent with what Canadians told us to do: focus on reducing spending.
When we add together the combined impact of all the budget measures, the spending cuts plus the revenue increases, and then analyse how that impact is distributed across the country, we find that in every region of Canada the budget's impact is closely in line with each region's share of the total population of Canada and each region's share of total federal government spending. The variations from region to region are only a few small percentage points, so there is a fair and balanced distribution of the burden.
With respect to agriculture, my department has not been singled out for any extra burden. In 1994-95 our budget was $2.1 billion. Over the next three years we will reduce that budget amount by $405 million, bringing it down at the end of the three-year period from $2.1 billion where it is today to $1.7 billion. That amounts to a cut of 19 per cent, and 19 per cent is exactly the average of all departmental spending reductions across the entire government. Most of the economic portfolios of government are reduced by an amount greater than 19 per cent. Most of the social portfolios of the government are reduced by an amount less than 19 per cent. Overall the full government average is 19 per cent. That is the reduction in the
Department of Agriculture and Agri-Food exactly on average. We have done our share in the crucial fight against the deficit, no more and no less.
There are some who argue that when transportation budget reductions affecting agriculture are added on top of the direct reductions in agriculture the percentage of all related spending cuts goes up above the 19 per cent average. This figuring is misleading. It ignores the transitional programming put in place by the budget to offset the impact of the transportation changes. When those transitional measures are added back into the equation over the next three years, as they must be to make a fair comparison, the impact on agriculture is on the average of that level of 19 per cent. Overall the balance is fair.
Within agriculture we have tried very hard to achieve internal balance as well. For example, in dealing with personnel costs we will be reducing our public service employee count by just over 2,000 positions. That is a reduction of 18 per cent, very close to the overall departmental spending reduction of 19 per cent.
The same can be said about our approach to different departmental spending programs. Take our income support programs for example. There are two major programs of that type within Agriculture and Agri-Food Canada. One is the dairy subsidy which is significant primarily in eastern Canada. The other is our farm safety net system which is significant primarily in western Canada. Both are being reduced by the same amount of 30 per cent. Again, there is fairness and balance, east and west, farm sector by farm sector and for agriculture overall in comparison to every other aspect of the economy.
This is the second major reason the budget has won general approval among the large majority of Canadians; that characteristic of fairness.
The third reason for budget support is we have coupled the hard reality of fewer government dollars everywhere for everything with a proactive agenda for renewal, restructuring and innovation to smooth the process of transition from the old economy to the new economy and to better position a sector like agriculture and agri-food to do better in every available marketplace in the world.
What I have heard so many times from farmers all over the country, whether in the east or the west, is they really do not want subsidies. What they want are fair market opportunities and decent prices from those markets from which to earn their living.
For this reason we are increasing our emphasis on market development and trade. Within our overall smaller budget a greater proportion than ever before will be directed toward gaining and keeping new and expanding markets. Similarly, with respect to research, the cutting edge of innovation to keep Canada ahead of the rest of the world, we have found a creative way to save precious tax dollars while increasing the overall Canadian investment in agricultural research and development.
We will achieve about $50 million in savings on research overhead and infrastructure over the course of the next three years or so. At the same time up to $70 million in both public and private funding will be injected into research through joint ventures with our private sector partners. We are doing this through a new initiative called the matching investment initiative for research in agriculture. It is a program that thus far, even though it is very new, has been received very well by the agricultural sector.
We will maintain Canada's renowned reputation for the best agricultural inspection system in the world but we will also save money. We will do that through a combination of cost reduction, cost avoidance and cost sharing together with the introduction of brand new technology and the elimination of unnecessary overlap and duplication among government departments and between different levels of government.
I am pleased to say that all my provincial counterparts are working very hard with me in the development of a national Canadian food inspection system to be top calibre, the best in the world and highly cost efficient.
We have also recycled some of our budgetary savings into a series of adaptation and rural development funds to assist in some of the necessary sectoral changes that must be made in the wake of the budget and to take advantage of future economic opportunities.
We have such a fund to help deal with the changes to be made in the feed freight assistance program. The Secretary of State for Agriculture and Agri-Food is now leading a consultation process to define the parameters for how that fund can best be used in those feed deficient regions of the country which have heretofore benefited from the feed freight assistance program.
As another example, within our overall spending envelope for farm safety nets there is scope for a series of innovation and adaptation funds to be established depending on the priorities and preferences of different agricultural sectors and the provinces.
This notion of an innovation or adaptation fund has been offered as old safety net schemes like the national tripartite stabilization program are phased out and as new safety net plans are developed, as is now the case in Saskatchewan.
In this direction with respect to the dairy program, apart from the subsidy reductions in parallel with safety net reductions elsewhere, we offered in the budget to undertake consultations with the Canadian dairy industry to develop the very best possible uses in future for the remaining subsidy moneys to enhance the industry's competitiveness. I know a lot of thought
is now being given to this suggestion by the dairy industry representatives in the country, including those in Quebec.
Another example of adaptation and innovation is with respect to a series of subsidy programs previously known as the Atlantic and maritime freight rate subsidy measures which will be discontinued as a result of the budget, but there will be transitional measures put in place with respect to those programs as well. That is under the purview of my colleague, the Minister of Transport.
In addition to all these issue specific funding initiatives, we have provided for a general $60 million per year adaptation and rural development fund for Canadian agriculture over all. It will be used to enhance access to pools of developmental capital, to enhance human resources in rural Canada, to enhance farm safety, to enhance rural innovation and infrastructure and to offset some of the regional implications of transportation reform.
Let me deal briefly with that aspect of the opposition motion today which refers to western grain transportation reform. Here as well there is a program being put in place to ease the transition away from 98 years of subsidization. These transition measures are temporary, as all adjustment measures are. However, they are also specifically within the parameters of acceptability as defined by the Quebec coalition on western grain transportation. It is interesting that the member from Frontenac earlier today failed to observe that fact which indicates consistency across the country on the basis of certain principles.
The benefit from transportation reform for western Canada comes not from any form of ongoing subsidization because the subsidy will be ended. The western benefit comes from a new freight rate regime that eliminates discrimination in its structure against higher valued production, value added processing, diversification and economic growth.
The prime difference between our approach in the government and that of Bloc members is that, as we have heard today so far in the debate, they have a tendency to cling to the past. They seem to be rather intimidated by the future. I do not think, from what I have seen in my many encounters over the last 17 months as minister of agriculture, that intimidated point of view is representative of Quebecers.
I have just returned from a sales mission, a trade mission with Canadian agriculture and agri-food representatives throughout South America. We visited Chile, Argentina and Brazil. Included in my delegation of private sector representatives was a broad cross section of agricultural representatives from Quebec. They were among the most outgoing, the most vigorous, the most aggressive in looking for new opportunities and broadening horizons, pursuing the future with great optimism and vigour. They did not seem to have this kind of negativism reflected in the remarks delivered today by the Bloc Quebecois.
For example, they were talking about the opportunities for the pork industry. They were not worried about any kind of transportation reform in western Canada. They were not worried about one region winning at the expense of another or one region losing because of something happening in another region of the country. What they were looking at together with their Canadian colleagues from across the country was broadening horizons, more markets, more trade opportunities, all of us selling more and doing better in the markets of the world rather than worrying about one group gaining at the expense of another.
If we have that kind of negative, inward looking defeatist attitude, we will probably end up being defeated. The secret for Canada's future is to broaden our horizons, to look outward, to take on the world with the confidence that we as Canadians have in agriculture and agri-food the very best products in the world to sell.
We have the most productive and efficient farmers in the world producing those products. We have a vital and vibrant processing sector. We have the capacity to excel in international trade and marketing and we do not have to worry about one market getting smaller because another is getting bigger. We must expand markets everywhere. We will all do much better in that new trading environment of the future.
That is the optimism we need to have. With that kind of attitude Canadians, all of us, within Quebec and outside, can take on the world and we will win.