Debates of April 4th, 1995

Supply

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

Mr. Speaker, I did not get a chance to listen to the first part of the hon. member's speech, but I did hear the last part where he was talking about supply management. He said that in his opinion supply management will be gone in a few short years.

One of the ministers who helped negotiate this is just leaving. I would like to know what the hon. member bases that assumption on, that in fact supply management is gone or is going to go, considering that I feel we had a very successful round of negotiations at the GATT and in fact supply management is very well protected, thank you very much.

Maybe the member can tell me what he bases that assumption on.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, I would be glad to answer the member's question.

I base this on three main points. The first point has been well made by the lawyer representing the dairy farmers of Canada in their push to keep American products out of the market. They of course are saying that GATT takes precedence over NAFTA with regard to supply management. The lawyer who is representing the Dairy Farmers of Canada has said: "Hey, guys, you had better be careful here. The Americans have a very good case that in fact NAFTA has precedence over GATT."

As this member will well know, this lawyer-who represents the Dairy Farmers of Canada, not the Americans-has said that this is a real concern and that we had better be prepared for the decision going in favour of NAFTA having precedence over GATT. If this happens then supply management as we know it is in jeopardy immediately.

The next major thing that threatens supply management as we know it is the NAFTA negotiations around letting Chile into the NAFTA family. Our Prime Minister and the President of the United States have said that within four years Chile will be part of the NAFTA family. When that happens, and as those negotiations take place, I believe Americans will demand that Canadian markets be opened up to their products in the supply-managed area. That is the second very real threat to supply management.

The third threat is the new GATT negotiations, which will take place starting in the year 2000. I believe those new negotiations will in fact lead to a rapid deceleration in tariffs protecting the supply-managed industry.

I do not like saying these things to supply-managed farmers because I know this is going to present a great difficulty and a real challenge for them, but I am not going to hide it. I am going to be very honest and open and say: "I believe this is what is going to happen. Take any time you have to prepare yourselves for this major change."

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, when the opposition chose to focus on agriculture on this opposition day and especially on the budget cuts, our intent was not to say that we have something against budget cuts when they are needed.

Canadians throughout the country, including Quebec of course, realize that we do not have any choice. With the economic situation being what it is thanks to the previous Liberal and Conservative governments, we have to cut.

But when the taxpayers are asked to tighten their belts, they want to know why and for what purpose.

As a member of the Bloc Quebecois representing a mainly rural riding, I know that our farmers and milk producers are wondering what would be the point of making such sacrifices. What does the government intend to do? What is the government aiming for when it cuts in my industry instead of somewhere else? Is the government trying to put our financial house in order so that we can all compete more efficiently against each other in Canada? Is the government making short-term cuts in order to help farmers in Quebec and Canada better compete on the world market in the medium term? Or has the government simply decided that to pay back our debt it has to cut spending wherever it can, since the important thing is to cut?

Under these circumstances, no one will agree to make such sacrifices.

I am sorry, Mr. Speaker, but I should have told you at the beginning of my speech that, starting with me, the speakers will be sharing their allotted time.

I was saying that the way the cuts are made seems unfair to us. In fact, the government announced the elimination of the $560 million annual subsidy known as the Crow rate and-others have pointed it out before me but I think it is worth repeating-that subsidy primarily benefited Western farmers through low grain transportation rates. However, to help farmers adapt to the change, the Minister of Finance will give them $1.6 billion as compensation for the loss in value of their land, $1 billion in loan guarantees to buy grain and $300 million over a five-year period to facilitate the transition.

These could be seen as satisfactory measures. We could say: "Good for them. The cuts will not harm them too much since they will get compensation". The problem is that when the Quebec producers compare their situation with that of others, they see that they are not treated fairly. Take milk producers. The Minister of Finance will reduce the subsidies to milk producers by 30 per cent over two years, which represents $70 million over a current budget of $300 million. There is no financial compensation to help Quebec producers absorb this major cut.

We show compassion for the Western farmers, we feel sorry for them and we give them compensation, but when we talk about Quebec farmers, we tell them: "You are used to suffering, you are tough, so we will not give you anything, it is your problem".

The government gives $2.2 billion in subsidies to Western farmers, the vast majority of whom will recover their losses, but it will not give a single penny in compensation for the cuts that will primarily affect Quebec farmers.

In the face of such flagrant favouritism, can we really talk about a fair and equitable budget? I do not think so. The impact of these inequitable measures could be very harmful for Quebec farmers.

The Fédération des producteurs de lait du Québec argues that with this generous compensation package, Western farmers will have no trouble competing with Quebec farmers, who will be struggling with the cuts. Is that what the government wants? This is the question I asked at the beginning.

Does the government want to give some farmers an advantage over other farmers in Canada? Does it want to specialize farm production? Does it want to specialize crops? If that is what it wants, it should say so. Maybe it would help farmers become more competitive. However, if all farmers specialize in the same production both in the west and in the east, then Canadian farmers will find themselves competing with each other.

This might work under different circumstances, for example after a victory in the Quebec referendum. Then it could become healthy competition and the same taxpayers would not be paying twice. Taxpayers in Quebec would pay to promote their own products and taxpayers in the rest of Canada would pay to promote their own products. Quebec is certainly capable of responding to this challenge. However, it is not willing to pay for the development of both its products and those of western producers. It is unfair and totally unacceptable.

We could talk about hog farmers in Quebec who are also threatened by these cuts in subsidies. The compensation given to western farmers creates a distortion on agricultural markets that will be very costly to Quebec farmers. The 30 per cent cut in subsidies to industrial milk producers is particularly unfair because it so happens that Quebec dairy farmers produce over 47 per cent of Canadian industrial milk.

It always boils down to the same question: What is the purpose of asking Quebecers to make such a sacrifice? Quebec farmers account for 47 per cent of the total production and they are being asked, without any compensation, to keep producing and to remain profitable. Does the government really want to help the dairy industry in the medium and long term or does it want to encourage other provinces to compete with Quebec?

[An hon. member]

Good question.

[René Laurin, Bloc, Joliette, QC]

There is another aspect of this budget that we need to talk about as it relates to agriculture. Despite the fact that the federal government promised in the red book not to cut research and development spending, Mr. Martin's budget makes drastic cuts in R&D spending.

In the Department of Agriculture, as mentioned earlier by a previous speaker, research budgets will be reduced by 11 per

cent over the next three years. Seven research centres will be closed, two of them in Quebec. The closing-down of the centre in La Pocatière, for example, will eliminate 30 jobs and result in savings of $1.5 million and that of the farm in L'Assomption will eliminate 19 jobs and result in savings of $1.3 million.

Yet research is the most important ingredient in the creation of jobs, and the development of agriculture and animal production. What would you think of a farmer who has to reduce his costs and decides he is going to stop buying seeds? That will be a fine way to cut spending, but at the same time, it will cut all his income.

We are acting exactly the same way when we start cutting research and development. We keep producing with the same methods and they eventually become obsolete. We forget about the future and our products become less competitive because our production procedures are obsolete and we cannot lower our costs.

[An hon. member]

There is a lack of vision.

[René Laurin, Bloc, Joliette, QC]

That is all part of the planning problem I was talking about at the beginning of my remarks. That is what is lacking with this government. Cuts were made not because the government has a well thought-out plan, but because cuts had to be made.

To give you an example of the slash and burn policy of this government, let me deal once again with the closing-down of the farm in L'Assomption in my riding. A lot of research and development was being done there. They had new horticultural products ready for marketing. Those products would have been viable; a fine example of applied research. The whole farm was cut anyway.

The government put up a new farm building in L'Assomption at a cost of $3.5 million. It was inaugurated last fall. This year, it is being closed down and 19 employees are being sent home. What about the equipment there? They do not know yet what they will do with it. Is this the kind of planning we can expect from this government? Is this the way the government intends to deal with the most viable research and development resources in Quebec? If so, the Bloc Quebecois cannot stand and watch while Quebec farmers are being treated unfairly, as will be very well demonstrated by other Bloc speakers today.

This kind of situation cannot be tolerated and this is why we will speak loud and clear against that.

[Leon Benoit, Reform, Vegreville, AB]

Mr. Speaker, I heard the hon. member talk about a loss in jobs, particularly in the research area.

Everyone is concerned about losing jobs in research. We all know the importance of research. It is one of the top priorities Reform has targeted in our budget and in past documents dealing with the budget.

I agree with the Liberal philosophy with regard to research. I believe that at least what they say is the best approach to take regarding research. Research should be targeted better. There should be more partnerships developed with the private sector so taxpayers dollars are in with private business dollars to form partnerships to end some of the duplication in research and to spend the research dollars better. Private business needs to take a bigger role in targeting research so research is being done in the areas most likely to pay off well to business in terms of improvement. In this case we are talking about agriculture.

I agree with the Liberal philosophy presented with regard to research. I am concerned about the loss of jobs in research. We cannot afford to lose the research. There is room even in research to do a better job with the dollars we have.

While I agree with the member's concern about the loss of jobs, I ask the member for his comments on the loss of jobs that will result from the cuts the government has made not going far enough. In other words, there is no definite deficit target set in the budget. Because there is no definite target business will not have the atmosphere it needs to expand and or new businesses to be set up. As a result there will be fewer jobs in the future and certainly the jobs that could come-

[The Acting Speaker (Mr. Kilger)]

I will take a moment to express the Chair's dilemma.

We have a topic of great importance. Many members, on both sides of the House, from all parties, have already indicated they wanted to take part in this debate. If we are going to share our 20 minute speaking time, and break it down into two 10 minute periods, each followed by a 5 minute question and comment period, I would ask all the speakers from all parties to keep their questions simple, direct and short, so that the member who just delivered his or her speech can give a proper answer. Everybody should keep this in mind. And I hope that we can proceed in this fashion.

I give the floor to the hon. member for Joliette.

[René Laurin, Bloc, Joliette, QC]

Mr. Speaker, I will give a short answer if you can tell me how much time I have left. One minute. My answer will have to be short.

What I wanted to say when I spoke about the farm in L'Assomption as an example of the government's lack of planning is that a week before it was closed down, the employees did not know the experimental farm was to be closed down.

Six months before closing down, a new building worth $3,5 million was opened with a ribbon-cutting ceremony. Now, the annual operating budget was only about $1,3 million. The farm did not cost a lot to operate, but it was very productive and yielded very interesting results. In fact, it was just about to sign agreements with the private sector, but this was ignored, because cuts had to be made. I would not be surprised to hear that the real target was the farm at Saint-Jean-sur-Richelieu, and that it has not been hit because closing down the military college was already quite enough.

Thus, the government did not want to add the experimental farm at Saint-Jean to the list, so it chose two others elsewhere, thinking that everybody would be satisfied and that they were free to cut. That, Mr. Speaker, is what we want to denounce.

[Réjean Lefebvre, Bloc, Champlain, QC]

Mr. Speaker, I am pleased to speak to the opposition motion introduced by my colleague, the member for Frontenac. In Quebec, since the general assembly on the rural sector in February 1991 and following the summit on agriculture in June 1992, we have seen the rural and agri-food sectors begin to join forces with the common goal of gaining a share in new markets. This was the expression used by the then president of the Union des producteurs agricoles, Jacques Proulx, and I use it today because it describes so well the vision which drives our agri-food sector.

The stakeholders in Quebec want to regain local markets and gain access to international ones. In this respect, one of the approaches that the agri-food system favoured at the summit held in Trois-Rivières consists in stepping up research, development and technology transfer, which are part of the strategy to gain a share in new markets. With Mr. Martin's budget, the Liberal government made cuts in research and development, which led to the closing of two research centres in Quebec, the La Pocatière and L'Assomption centres.

Once again, the federal government makes cuts unilaterally without taking into account the consensus of those most concerned. Quebec's agri-food sector is trying to adapt to the challenges it is facing at the end of this century and it will need all the help it can get. Research centres are a valuable tool.

Quebec's milk producers relied on research and development results from different sources in order to increase their herd's productivity, and they were very successful in doing so. As proof of this, Quebec's dairy herds are among the most productive in Canada and rank well at the international level.

This is a good example of Quebec's producers taking results of research and development and incorporating them into their day-to-day operations. The whole rural community benefits from the research and development, which in turn ensures the community's survival.

On another connection, I would like to draw my colleagues' attention to the budgetary cuts made at the Food Production and Inspection Branch concerning the application of Agriculture Canada's activity plan. Since April 1, 1995, slaughterhouses recognized by the government have had to pay part of the cost of food inspections. These businesses must, as a prerequisite to their certification, conform to Canadian standards on the design of slaughtering and storage installations and, subsequently, to standards on the maintenance of sanitation.

Consequently, these are important investments, particularly for small businesses in rural communities which cannot take advantage of the economies of scale and the proximity of a sufficiently large market. Imposing charges for meat inspection is detrimental to small slaughterhouses. Moreover, it will penalize rural municipalities where these businesses are located. The government says it wants to create jobs, but adopts measures which jeopardize jobs. As an example, in my riding, there are two businesses which will have to clear this new hurdle, or close their doors. Some fifty jobs could disappear.

In a recent letter that I received on that issue, the Minister of Agriculture said that he was in favour of talks and cooperation with national sectoral stakeholders so that they could find some options relating to cost sharing, programs restructuring and changes in service delivery.

Should the minister not have waited to find solutions, in cooperation with stakeholders, before applying a tarification? And how will he consider the duplication of inspection services, particularly between the Quebec Department of Agriculture and Agriculture Canada?

At the États généraux du monde rural, Quebec stakeholders as a whole wanted a shift of political powers from the top to the bottom. The minister could take advantage of this people's willingness to put an end to the duplication in this sector and to guarantee Quebecers that they will only have to fund one inspection service and that it will be non- partisan because administered entirely by the government.

Since my riding is made up of agricultural and forest areas, I would like to deal with the impact of the federal withdrawal from the funding of operations in private woodlots. In the Champlain riding alone, private woodlots harvesting provides direct and indirect jobs to several hundreds of people. Also, several municipal governments collect property taxes through developments and value added to private woodlots.

In 1992-93, in Quebec, the federal funding of private woodlots generated $71 million in profits for businesses and operators, $30 million in salaries and $12 million in taxes going back

to the government. So, we can consider that the government's involvement in private woodlots is an investment.

For each million dollars invested in private woodlots, between 40 and 50 jobs are created, whereas the national infrastructure program only generated the equivalent of 10 job-years for each million dollars invested.

The Bloc Quebecois is asking for a transfer to the provinces of federal funds and related responsibilities, which should better serve the interests of forest producers and workers.

In conclusion, I urge the federal government to put an end to the duplication of services and to give back the powers and the budgets to provinces that were able to get organized and to establish equivalent services that better respond to the people's concerns and needs.

[Yves Rocheleau, Bloc, Trois-Rivières, QC]

Mr. Speaker, I wish to congratulate my colleague and neighbour of the riding of Champlain for the excellent speech he made on agriculture. He raised a point in which I have a particular interest and it is inspection. I have heard about that issue and the situation is worse than what I was told.

I would like to hear his comments, especially on the issue of impartiality that he raised. Are we to understand that inspection costs which were paid for impartially by the government in the public interest will from now on be paid for by producers, thereby placing the inspectors under the control of producers? If so, they will be at the mercy of people acting both as judge and as jury.

Does it mean that the public interest in that area will from now on be threatened by privatization which is expanding and perhaps being implemented drastically?

[Réjean Lefebvre, Bloc, Champlain, QC]

Mr. Speaker, I thank my colleague and neighbour of Trois-Rivières. There are cases in my riding that I would like to quote as examples. I refer to small packing plants with between 15 and 25 employees. In the past, the costs of monitoring sanitation of premises and wholesomeness of food were paid for by the government. The last Liberal budget imposed that extra monetary burden on small packing plants. I believe that small plants cannot compete with larger plants and this is an inequity in the federal budget.

[Jean-Guy Chrétien, Bloc, Frontenac, QC]

Mr. Speaker, I really wanted to take part in this debate because, as you know, my colleague, the hon. member for Champlain, sits on the Standing Committee on Agriculture. In the past, he has always demonstrated a keen interest in agriculture.

However, I would like to hear his comments on the issue of research and development. As he mentioned, unfortunately for the province of Quebec, two research stations will be closed, one at L'Assomption and the other at La Pocatière.

I remember the day I was sitting on a committee on agriculture with the hon. Eugene Whelan, as a guest witness. You must have known him very well, since he has made a significant contribution in this area. He used to say to us: "Each dollar we invest in agriculture has a $7 return."

I would ask the hon. member for Champlain whether he would agree with the hon. Eugene Whelan and, if so, how he can justify the cuts the Liberal government has made in agricultural R & D?

[Réjean Lefebvre, Bloc, Champlain, QC]

I want to thank my colleague from Frontenac for his question.

We know that all the farmers in Quebec really need research and development activities.

I have here a research and development federal strategy report. Each year, the federal government invests almost $6 billion in research and development, not including the tax credits which account for $1 billion each year. Almost 60 per cent of the federal contribution to research and development, excluding the tax credits, are invested in domestic research done by federal laboratories, which include all the departments. The rest is broken down as follows: industry receives $977 million; universities, $960 million; foreign researchers, $286 million; and others, $210 million.

On the whole, federal spending in research and development benefits Ontario. In 1990-91, Ontario received 53 per cent of the federal spending, while Quebec got 19.5 per cent. Yet, Quebec's industrial structure does not warrant such small investments by the federal government.

[Denis Paradis, Liberal, Brome—Missisquoi, QC]

Mr. Speaker, I would like to mention that I will be sharing my time with the hon. member for Durham.

I rise today to participate in this debate on the motion of the hon. member for Frontenac which was no doubt prompted by the hon. member for Saint-Hyacinthe-Bagot. For these two members, agriculture is to Quebec what federalism is for the Bloc. They understand nothing about it, they simply do not believe in it, they are blocked.

The budget was tabled in February and the reaction was good on every front. If we want our country to continue onward and if we want to maintain all the services we are so attached to, we must put our financial house in order. Mr. Martin's budget does just that. It is focused on reduced expenses, not on tax increases. For each additional tax dollar, expenses are reduced by $7. We are striving for healthier finances by trying first to ensure growth and create jobs. Some very difficult decisions had to be made and this government had the courage to make them. This is what responsible government is all about.

Good common sense prevails now, at least on the Liberal side. We have chosen to head towards better control of the deficit and we are on the right track. We made some tough choices in order to save our social programs, our social security and our standard of living.

The impact of the 1995 budget will be no greater for Quebec's agricultural sector than for any other province or sector. I would like to adopt a slightly different approach here and explain what exactly is the importance of Quebec's agricultural sector within the Canadian agricultural and agri-food sector as a whole.

The latest data on agriculture in Quebec are very impressive and show a very dynamic, sustainable and promising sector. For example, the agri-food industry generates 5 per cent of the Quebec GDP and 4 per cent of all the jobs in Quebec, which is approximately 130 000 direct jobs.

The most important primary industry in Quebec is the agricultural and agri-food sector. It is first among the manufacturing industries.

As for the data comparing Quebec to the rest of Canada, the province of Quebec is doing very well. In fact, the Quebec agri-food industry accounts for 22.4 per cent of Canadian agri-food GDP and 25 per cent of manufacturing shipments. Moreover, 19 per cent of agricultural revenues, 37 per cent of the milk produced in Canada, including 47 per cent of industrial milk, also come from Quebec's agricultural sector.

If we add to these figures the fact that 33 per cent of Canadian exports of pork and 9.6 per cent of total Canadian exports are also from Quebec, it is obvious the province of Quebec has a very prominent place in the agricultural and agri-food industry in Canada.

Within the Department of Agriculture and Agri-food, it is a well-known fact that the success of the agricultural sector is due mainly to the efforts made by all the stakeholders.

However, no one can deny the contribution made by Agriculture and Agri-food Canada in many initiatives aimed at, first, ensuring the viability of agriculture and the prosperity of the agri-food industry; second, ensuring long-term financial security; third, promoting growth and diversification, as well as employment in the rural areas; fourth, ensuring the viability of the resources and protecting the environment; and fifth, maintaining a supply of top-quality wholesome foods.

It is to be noted, among other things, that the interests of the Quebec agri-food industry were very well represented by Agriculture and Agri-food Canada in international trade and in the discussions on the Canada-U.S. Free Trade Agreement or NAFTA which followed and the GATT. Moreover, Quebec producers and processors have already begun to take advantage of the numerous opportunities and things should develop faster in this era of market globalization.

And what about the four research centres established in Quebec for the benefit of the Canadian agricultural community, the natural resource conservation programs and the participation of Agriculture and Agri-food Canada in initiatives aimed at reducing nonpoint source pollution, like Vision 2000.

I would like to remind members in the House that since joining the cabinet the current agriculture minister has always worked in close partnership with provinces, the private sector, educational institutions, farmers associations, processing sectors and Canadian producers as a whole.

Co-operation and consultation will continue. The agricultural sector will continue growing very rapidly in Quebec and in Canada. Constituents from Brome-Missisquoi are proud to have elected a Liberal member of Parliament who is ready to act in the interests of all farm producers, from Brome-Missisquoi as well as elsewhere. They chose to go with the dynamism, the transparency and the consultation I offered them as opposed to the consistent blocking by the Bloc. Only a flexible federalism will allow us to continue developing in a secure environment within Canada.

Dairy farmers, hog producers, grain producers, apple growers and others, the whole processing industry are and will go on experiencing great changes in the vast world of international trade.

Instead of griping, instead of blocking the interests of the farmers, let us help them.

[Jean-Guy Chrétien, Bloc, Frontenac, QC]

Mr. Speaker, I may remind you once again that in October 1993, Quebecers and Canadians opted for a change, but especially Quebecers.

Before 1984, there were 74 Liberal members in this House, similar to the member I just heard. Today, Mr. Speaker, there are at least 53 members of the Bloc Quebecois who are prepared to rise in this House to condemn inequities. During the last election campaign to which the hon. member referred earlier, I followed him around for a few days, but he was always hidden away, while I was around his riding. I often went to L'Encan Lafaille et Fils.

I suggest the hon. member go and talk to the farmers next Monday, at L'Encan Lafaille in Coaticook, and ask them what they think of the Martin budget on agriculture. This guy does not have a clue about what is going on. He should go and talk to the UPA on Bourque Boulevard, just outside his riding, near Magog, and find out what the UPA in Sherbrooke has to say about the

Martin budget, especially the cuts in the dairy sector. He should read La terre de chez nous and find out what the farmers think about his government, and he will realize they are not very happy.

Why not talk to the farmers he did not meet during the election campaign, because he refused to have a debate? He does not talk about it, he tries to evade the issue, and when Quebec was represented by 74 members, 74 sheep, this attitude did a lot of damage. In concluding, I suggest the hon. member go to Bourque Boulevard. Next Monday, and if he does not know how to get there, I will go with him, he should go to L'Encan Lafaille, to talk to the farmers. Then he might realize what is really going on.

It is all very well to have a bunch of lawyers, but a bunch of farmers defended by farmers is even better. So I would urge the former president of the Quebec Bar Association to take a stand in favour of agriculture.

[Denis Paradis, Liberal, Brome—Missisquoi, QC]

Mr. Speaker, as concerns going out into the field, I remind my hon. colleague that I have just returned from an electoral campaign during which I met a lot of farmers in Brome-Missisquoi. Afterwards I also met farmers from other regions. I thank the farmers from Brome-Missisquoi for having voted Liberal in the last election. I feel very grateful for the confidence they placed in their humble servant. I thank them sincerely.

I want to go back over the issue of research and development that the official opposition mentioned a few minutes ago. Several Bloc members mentioned R & D in relation to this debate. It would be a good idea to check if the Quebec Minister of Agriculture, a good friend of theirs from their PQ head office, heard what the Bloc members said. In fact, this provincial minister just tabled a budget in the Quebec National Assembly. In the tabled documents, it is mentioned, under "Education, Research and Development", that funding in this area will drop from $45 million to $41 million. They are cutting $4 million from research and development.

The Bloc's friends in the head office cut funding for research and development by $4 million. We should at the very least send forthwith a copy of Bloc's remarks about research and development to their head office as well as to the Quebec Minister of Agriculture.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I have had some experience with farming. This time of year we would normally be out on the land cultivating. Most of the farmers in Durham are doing just that. I sometimes wonder if they are not better off than I am sitting in the House.

In my riding of Durham one in five jobs is food related; 2.8 per cent of provincial milk production is from farmers in Durham. Our grain sales are over $10.5 million. We have won worldwide acclaim for livestock and crops. One can see farming is no strange animal to the people of Durham.

One million, eight-hundred thousand Canadians are engaged in the vocation of agriculture. It accounts for 8 per cent of gross domestic product and 15 per cent of the Canadian workforce, clearly a very important industry.

Agriculture is a shared jurisdiction and there are some very good reasons for that. This has occurred from the time of Confederation and continues today. One thing we have in common is we all must eat. Clearly it is very important to produce our agricultural products efficiently, to transport them effectively and to continue Canada's excellent reputation in the export of agricultural products.

I will discuss quickly how in some ways Quebec benefits by this shared jurisdiction. The argument laid out today is that somehow the agricultural sector of Quebec has been subsidizing some other aspect of agriculture within the country.

In 1990, Quebec-these are total government spending and taxation figures-received $35.1 billion in federal government spending. It paid $24.5 billion in taxes. Clearly there is no subsidization process here. This is just a trick with numbers taking one aspect of that spending and taxation system and expanding it to make a big argument.

Quebec benefits in many other ways. In the GATT negotiation our government argued very strongly and very effectively to protect our supply managed industries. High tariff walls will prevent a quick reduction in commodity prices in Canada. All farmers in Canada have benefited but certainly the people in Durham, a large dairy farming area, have expressed their appreciation for what the Government of Canada did for them. I am sure Quebec dairy farmers feel similarly.

When the supply management system was established in Canada, of the industrial milk quota, Quebec had 48 per cent of the industrial milk production. That is what is owned currently by Quebec farmers.

In research and development, and we have touched very briefly on that subject, I have an interesting quote from the member for Quebec East, the agricultural critic of the Bloc: "There is no doubt that with regard to research Quebec is not unfairly treated at agriculture Canada". Clearly even the Bloc has recognized it is not unfairly treated within our federation.

The federal government spends approximately $360 million in Quebec in the area of agriculture. Quebec's agricultural production which it sells within the country is three times

greater than what it exports. Clearly Canada is a major market for Quebec produce. Over one-third of the total production of Quebec agriculture is sold within Canada. Much more of that is consumed within the province. Canada is a major consumer of Quebec products.

The federal government today has 1,400 employees engaged in Quebec assisting with agriculture. By reducing subsidies, and I believe this is the essence of the motion before us, we will increase flexibility within the agricultural sector.

This is what the members of the Bloc have been arguing for over the last year; reduce grain subsidies, reduce transportation subsidies to the west. That is what we have done. The Bloc today should be rejoicing rather than having motions of this type complaining about the fact that it has happened now.

By reducing subsidies we are giving farmers the ability to be more innovative, to produce value added crops in Canada. Why do we ship raw materials all over the world while other people ship us finished goods? This is something Quebec and western farmers, indeed all farmers in Canada, have to address.

The farmers in my riding have not complained about the 30 per cent reduction in the subsidies for industrial milk production. They do not like it but they understand it and they are less concerned about it. When the budget came down they told me to make sure the negotiated stand by the government for them under GATT is maintained.

In 1993 Quebec's agri-food industry reached $1.2 billion, 9 per cent of the total Canadian market proceeds. In the last 12 years Quebec farm income has risen 67 per cent. Quebec farmers have the highest per capita income of all farmers in Canada. Here they are complaining about agriculture. It seems odd to me.

Let us get back to discussing co-operative federalism and why this is a shared jurisdiction. The report by the Government of Quebec only last year showed that the two levels of government work well together. This was its concluding remarks. Overlap and duplication are minimal, estimated to be less than 1 per cent of combined federal-provincial spending.

In July 1994 the federal and provincial agriculture ministers reaffirmed their commitment to work together to ensure that agricultural exports in Canada will reach $2 billion by the year 2000. Canada at one time had 3.5 per cent of the entire global agricultural trade. This has slipped over the last two years. This joint federal and provincial task force has reset those goals to take Canada back into the area of 3.5 per cent of global agricultural trade. A federal-provincial development council has been established in order to reach these goals.

This creates one single window of opportunity so that all aspects of agriculture in Canada will be able to market their programs internationally. Indeed the federal government has donated and committed 50 full time federal employees to attempt to penetrate 150 foreign markets throughout the world.

In summary, by continuing to co-operate federally and provincially to solve the problems of agriculture, to work on our research budgets, hopefully not meaner, but leaner and more effectively, will make Canada a world leader in agricultural product marketing. It will also make for a more efficient industry within our borders.

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

Mr. Speaker, in his speech, the hon. member mentioned one item which I find very relevant. He wondered why we are so dependent on imports and why some regions in Canada are not self-sufficient.

In this regard, he shares the view of the Canadian Sheep Foundation which claims: "The Canadian government is abandoning without any reason a production in full expansion". How can the hon. member explain his government's decision to discontinue its research and development assistance to an industry whose self-sufficiency, throughout Canada, has gone from 23 to 45 per cent since 1976? Why are we informing the sheep industry that we are abandoning our research and development efforts, that we intend to rely even more, if possible, on imports?

How can the minister justify such a decision? We are not talking about protecting the Quebec market only, but about the conclusions of the Canadian Sheep Foundation, which is astounded by the decision.

My other question to the hon. member relates to shared jurisdiction. How can he explain that, in La Pocatière, where an agricultural technology institute run by the Quebec government and a federally-funded experimental farm are located, we are closing the farm without even informing the Quebec government, without proposing any other use for the buildings? Is that not another example of the major negative impact of shared jurisdictions such as the one that exists in agriculture?

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I thank the hon. member for his question regarding the closure of one of these facilities.

Of course it has been necessary to rationalize research facilities throughout Canada. This is not just in agriculture. It deals with industry. It deals with technology. In all kinds of aspects we have had to wonder whether we need bricks and mortars in different parts of the country.

Technology and research do not necessarily need a building. I notice that much of our technology can be done out of people's houses these days. Whether we have bricks and mortars in Quebec or bricks and mortars in Manitoba is somewhat irrelevant to say the least. I note also that the agricultural facility here

in Ottawa is downsizing. In fact, a lot of its facilities have been transferred to the province of Quebec.

The member has an interest in lambs and sheep but I must confess that I am not competent to discuss this matter. I would suggest that there is possibly a degree of rationalizing. Clearly we cannot be competitive in all agricultural products; we must pick those areas in which we can excel.

I am not saying that is not true for lambs and sheep, but I suspect there are only so many industries within the agricultural sector in which we can effectively compete. This area has a lot of competition from Australia and New Zealand. I would have to study how efficient our industry is relative to theirs to answer the question properly.

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

Mr. Speaker, I would like to advise you right off that I will be splitting my speaking time with the hon. member for Shefford.

I am using this opportunity to speak on this agricultural day to draw attention to a highly questionable decision taken by the federal government in its recent budget.

On budget night, it was announced that the experimental farm at La Pocatière would be closing. As it is located in my riding, it is clear I find the closure unacceptable and will prevent it from happening. What surprised me most was the justification given for the closure in the Department of Agriculture's estimates. According to the estimates for the agriculture department, the facility is being closed because sheep and lamb are low priority products. I would like to prove otherwise to this House.

In my region, the agri-food development strategy was made a priority for the entire regional county municipality of Kamouraska. The lower St. Lawrence regional co-operation and development council incorporated it as one of its priorities as well. Up to this point, you might argue that this is normal, as it is a matter of regional interest. However, even the Canadian Sheep Federation together with the Fédération des producteurs d'agneau et de mouton du Québec feel that the Government of Canada is abandoning without justification a type of production that is in full development.

Why do we say this? Are these empty words, or are they based on some reality? My research indicates that, between 1976 and 1992, we increased our rate of self-sufficiency in Canada from 23 per cent to 45 per cent. In other words, during these years, sheep production took on a larger role in the economy and contributed to Canadians' wealth. More than that. Between 1971 and 1991, the herd increased by 8.7 per cent. In Quebec, between 1971 and 1991, the number of animals grew from 88,000 to 121,000-an increase of 37 per cent.

Therefore when the Minister of Agriculture says that this is a low priority product, I am hard pressed to find justification for his position, since both production and consumption have substantially increased. The market is expanding as a result of significant levels of immigration in Quebec and Canada. Indeed, for many cultural communities, lamb is part of their culture and part of their traditional food.

Then why cut in this area? We must understand how important research and development are for any industry. The dairy industry in Quebec, Ontario and Canada was not built on nothing. Research was done to make animals more productive, to improve milk quality and to manufacture better secondary products.

As for lamb and sheep, we were in the process of doing the same. I am going to give you some examples of research projects which were being carried out at the experimental farm in La Pocatière, so that you can understand that what is done there is not harebrained research, but something very concrete, which was going to help the industry.

For example, the farm is working on enriching the diet of ewes with three lambs instead of two, because this means an increase in productivity. This is very concrete. This is something which lowers production costs and would allow the industry to compete with New Zealand and Australia on world markets.

Then, there are studies on regulation of the reproductive cycle. Software for flock management is even being developed. Computers are now used in this agricultural sector, as well as in many others. It seems important to me that such research be carried out. Refusing an industry like sheep production the research advantages given to other sectors is like telling producers who invested in that area that they might as well quit.

Here is another example. The experimental farm was studying the use of canola oil-cake as a feed for sheep. For those who may not know it, canola oil-cake is what is left after the oil has been extracted from canola. This kind of research benefits westerners, because sheep farming is becoming more popular in western Canada, and also benefits eastern Canada because canola is produced there. It has nationwide applications and would cost less than some other feeds currently on the market.

These research projects are concrete examples. They are examples proving that that particular farm had a country-wide mandate to support sheep farmers. The federal government closed this facility because it considers sheep as a low-priority product. Was that decision reasonable in today's context where

farmers are being asked to diversify and to be ready to respond to changing markets?

Considering that sheep farming is the most ecological kind of farming and that it permits farmers to use land which can be used in no other way, was closing Canada's only research centre on sheep farming, the experimental farm at La Pocatière, a logical decision?

I think that the decision was a major blunder, and each budget probably contains one. The Bloc never said that Canada's budget should not be cut, we are simply making suggestions regarding where to cut. But cutting research and development funding for an industry that is progressing is like robbing Peter to pay Paul, and it will probably backfire on us.

We are inclined to call it another example of Canadian federalism. The least competitive sheep producers will inevitably have to call on stabilization programs more often. That will put more pressure on the Government of Quebec. We find this kind of decision unacceptable and we target it in the first part of our motion when we state that we "denounce the government for reducing the general budget of the Department of Agriculture by 19 per cent".

If the 19 per cent was cut from sectors which did not jeopardize future production, we could have seen what kind of impact the cuts would have had. But how can a government claim to place a high priority on job creation yet cut over 400 research and development jobs in Canada's farming sector-30 of which were located at La Pocatière, in the Kamouraska region-and systematically cut high paying jobs which stimulate economic development?

After cutting 30 jobs in agricultural research, biology, technology, unskilled labour, how can they justify announcing that 25 jobs were created in another sector the following week? This decision appears to be some kind of a nonsense.

I think I know the basic reasons for the choice. They gave experimental farms specialized mandates, for example, sheep farming at La Pocatière. They invested around $7 million there over the past few years. They rebuilt a sheep barn that had burned down. Then they suddenly decide to close the facility. Because only one experimental farm had this mandate, the others do not really feel that they are affected. They began to sever the strong ties between this farm and the local economy.

I believe that part of the mandate could have been maintained in this area. Nowadays, there are numerous stakeholders, and I will name a few who are not members of the Bloc Quebecois, and may not even be known separatists or sovereignists. I will give you an example. Officials from the La Pocatière agricultural technology institute, where the farm is located, Laval University, the Quebec sheep breeders' association, the two national federations I mentioned earlier, the Quebec agriculture department, all these stakeholders are asking the minister to meet with them so that they can explain to him why they think he is making a mistake and why he has to change his mind.

I hope that the agriculture minister will have enough sense to listen to their arguments and to look for solutions allowing research and development in the sheep industry to continue and to expand, so as to provide support for producers and keep one of the oldest farming areas in Canada going, with a flourishing experimental farm in La Pocatière as its bet for a prosperous future.

[Jean-Guy Chrétien, Bloc, Frontenac, QC]

Mr. Speaker, it is clear from the remarks of my colleague for Kamouraska-Rivière-du-Loup that La Pocatière is in his riding.

Let me remind you again that agricultural research and development is vital. It is the key to success. It makes the difference between a country where there is food self-sufficiency and a third world country that continually has to import food to feed its people.

My main reason for my interest in sheep is the DLS breed. Some researchers, particularly researchers from La Pocatière in conjunction with their colleagues from Lennoxville, in the vicinity of my hon. colleague's riding of Mégantic-Compton-Stanstead, and my own riding of Frontenac, succeeded in genetically producing a new breed of sheep which will leave its marks on the future of sheep breeding in Quebec and Canada.

What is even more disappointing for the hon. member for Kamouraska-Rivière-du-Loup is, of course, the fact that, after a fire at the experimental farm, the federal government, typically lacking in vision, spent nearly $7 million to repair and rebuild buildings used among other things for sheep breeding. Now, in this budget devoid of comprehensive view, it is announcing the closure of this research station which, incidentally, was the oldest in Canada and Quebec.

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

Mr. Speaker, I welcome the opportunity provided by the comments the hon. member for Frontenac just made to lay stress on how illogical this decision was. A few years ago, the federation of purebred sheep breeders made a decision on where its artificial breeding centre would be located. They chose the experimental farm with a mandate for ovine breeding in Canada, namely La Pocatière. They decided to locate their insemination unit in La Pocatière, so that there would be a direct link between researchers and the industry, which would promote efficiency.

New breed development was just mentioned. This is precisely the type of work you can expect any experimental farm involved in production to perform to develop more productive breeds, groups of animals or individual animals. All kinds of research can be conducted on sheep to ensure they can compete and will enable us to break into the New Zealand market from which we are currently importing. No one here can tell me today that it makes more financial sense in the long term for Quebecers and

Canadians to keep importing sheep from New Zealand when we have been working for 20 years towards self-sufficiency.

Now that we are halfway there, the federal government is taking the wind out of our sails, without any consultations. No one had heard about any such plan before budget night. The industry is raising up against this plan and asking the minister to reconsider his decision, meet with the survival committee to ensure that sheep production will be allowed to continue with adequate research and development assistance and that the experimental farm in La Pocatière can remain in operation.

[Jean H. Leroux, Bloc, Shefford, QC]

Mr. Speaker, agriculture is still the basis of the rural economy in Quebec and the rest of Canada. In Quebec, almost 50 per cent of farmers' income comes from supply-managed products such as milk, eggs, chicken and turkey. Industrial milk accounts for 27 per cent of agricultural production in Quebec. Farmers and dairy producers in my riding, whether they live in Marieville, Saint-Césaire, Roxton Falls or Béthanie, are worried.

Under Canada's current supply management system for industrial milk, which was established in 1990, Quebec farmers receive almost 48 per cent of Canadian industrial milk quotas. Forty-six per cent of this milk is sold in the other Canadian provinces, for a total value of $400 million at the farm level and $1 billion on the market. In Quebec, some 2,900 dairy farmers are involved in industrial milk production, while processing translates into some 4,000 regular full-time jobs. This shows how important this sector is to us.

Under the federal budget tabled by the Minister of Finance in February, industrial milk producers in Quebec will lose 30 per cent of their income over two years. This means that industrial milk producers will see their income drop by 15 per cent the first year and another 15 per cent the following year.

How can this budget measure not involve heavy financial sacrifices for farmers and rural communities in Quebec and Canada? How can the rural structure not suffer radical changes? Rural realities are in stark contrast to Liberal government policies favouring the development of new markets and income security for farmers. Paradoxically, according to the federal Liberal government, these budget measures are aimed not only at stabilizing producers' prices and income in light of global trends, but mainly at reducing farmers' dependency on government.

The reality is that the agri-food industry in Quebec and Canada does not carry much weight in international negotiations on market access. In other words, the federal government would rather sacrifice a whole sector of its economy in order to preserve other comparative economic advantages it has managed to negotiate with the U.S. and other industrialized countries. I understand this cold and purely economic strategy, whereby the men and women who make these products are mere statistics. The only thing that counts is the dollar figure on their production.

However, there is a world of difference between understanding something and accepting it. I cannot accept the fact that farmers, whether in Quebec or elsewhere, are victims of the system. I cannot understand why financial speculators now have the upper hand, at the expense of those who have been feeding us for generations.