Madam Speaker, I am happy to join my colleagues in the debate on Bill C-86, an act to amend the Canadian Dairy Commission Act and to add my support to this important initiative.
Dairy farmers of Canada as well as producers in my home province of Prince Edward Island are very anxious to see the bill passed prior to the end of June so that the legislative requirements laid out in the act are in place prior to August 1.
The P.E.I. milk marketing board held a number of public meetings on the proposals outlined in the act and had strong producer support. However I underline the important point that producers in my province do not want to see this as the first step in moving toward a national quota exchange. It is important to have the quota distributed throughout the country and not drawn basically into Quebec and Ontario through quota pricing practices. I underline that as a concern.
The bill provides Canada's dairy sector with the ways and means to successfully face demanding new market realities. As well the amendments are very much in line with the government's fiscal goal of getting the deficit under control.
The new milk pricing and pooling system will not require any additional resources from government reserves. It will not entail any contingent liability on the part of the federal government or involve any reallocations from within the Canadian Dairy Commission's current operating funds.
As my colleagues before me have noted, the principal amendments to the act provide the commission with the legal administrative authority to work co-operatively with provincial milk marketing authorities to calculate the average national price level for the milk classes whose returns will be pooled, to obtain the returns from sale to processors through the provinces and then to redistribute the returns to producers through provincial authorities on an equitable basis under the terms of a formal federal-provincial agreement.
The other amendments contained in Bill C-86 are even less complicated. They are necessary to add clarity to the act to ensure compatibility and consistency with provincial authorities and legislation, to enable proper and efficient banking procedures and administration of producer money, and to strengthen the enforcement provisions of the act.
Through Bill C-86 a provincial milk marketing board is specifically defined to add clarity to the act and to ensure consistency with similar provisions contained in the dairy products marketing regulations. The new industry pooling system for milk marketing returns will be carried out through arrangements agreed upon by the Canadian dairy commission and the provincial milk marketing authorities.
An amendment has also been included for clarity to ensure that there is no misinterpretation of the fact that the regulations made under the CDC act do not take precedence in terms of the authorities provided to the commission under the act.
The provisions contained in any legislated act always take precedence over any regulations made pursuant to the act. That is an important point. Other amendments provided by Bill C-86 enable the commission to recover pool administration costs from the pool, to establish a special bank account to deal solely with the producer moneys entering and leaving the pool through the provincial authorities, and to permit the CDC to establish a line of credit to ensure continuity of producer payments. These are important principles to ensure that we meet our GATT obligations and that we are not using government moneys to fulfil these procedures.
Under pooling arrangements the Canadian dairy commission will simply be administering a pool of producer moneys on behalf of producers. If necessary, any borrowing costs would be undertaken on a short term basis only to ensure timeliness of payments as moneys enter and leave the pool. Any such borrowings would be subject to prior approval by the Minister of Finance and be totally funded by producers.
Bill C-86 also enables the CDC to continue its long standing practice of returning any excess fees or levy funds rightfully owed back to producers. The amount of in quota production per producer can only be estimated at the beginning of each dairy year. The amount of actual production is not known until the end of the year.
While no penalties are charged for under producing milk, under the supply management system over quota production is exported and levies are charged on these amounts to cover export costs and other related CDC program costs. The same type of situation may well occur under the pooling system as average national prices will be calculated at the beginning of a certain period and may differ when the marketing costs are finally determined. Again, no additional government funds are involved.
The last amendment contained in Bill C-86 strengthens the enforcement provisions of the CDC act. Given the attorney general conducts all litigation for the commission and has the power to seek injunctive relief in its own name the new provision will ensure the same relief is available if litigation is commenced by or against the commission in the name of the CDC.
Again I urge my fellow members to fully support Bill C-86. Such approval will demonstrate clear recognition of the importance of Canada's dairy sector and the continuation of the supply management system and its benefits to not only producers but to all Canadians. This is a model we should be encouraging other countries to adopt and these amendment will go a long way in terms of making it compatible with GATT agreements.