Debates of May 17th, 1995

Canadian Dairy Commission Act

[Jean-Paul Marchand, Bloc, Québec-Est, QC]

Mr. Speaker, I too am very pleased to speak to Bill C-86, at the invitation of my colleague from Frontenac, not only because he has asked me to take part in this debate, but also because agriculture is a topic dear to my heart, although in my riding of Québec-Est there are no farms as such, just a few retired farmers.

It is of interest to me because I recognize the great importance of agriculture to the economic health of a country, and in Quebec we must do everything we can to maintain and strengthen the agricultural economy, and especially the all-important dairy sector. And in addition, because Bill C-86 is a good bill.

Finally, the Liberal government has tabled a good bill, something we do not often see. It is worth mentioning because the very great majority of bills it has tabled to date have been, if not terrible, certainly mediocre and second rate. Take the budget, for instance, which was probably one of the worst proposals ever tabled in this House, a budget in which everything was done to protect the rich in this country and make the poor poorer. One more example of their lack of vision and understanding. Take the Lobbyists Registration Act, another rotten piece of legislation. In fact, there are several bills that have been really disappointing, at a time when the public expected so much of this government. They have been very disappointing indeed.

However, Bill C-86 before the House today is a good bill, I must admit. And maybe it is a good bill because, basically, it was not so much the government as the farmers themselves that initiated this legislation. They were the ones to start the ball rolling. The farmers convinced the government to table this bill. They did everything they could to ensure that this proposal to pool resources and dairy production became a reality. I may add that Quebec farmers and dairy producers were largely instrumental in getting these proposals off the ground. They were actively involved in these plans for pooling dairy production. This is important. We are aware of that.

As was mentioned by other members, there was a problem with dairy production in Canada. Formerly, $3 per hectolitre was collected to subsidize exports of dairy products, mainly butter and powdered milk, which represented about $160 million.

The money was used to support the sales and distribution of these dairy products. Because of the new GATT and NAFTA agreements, Canada can no longer collect this money, because according to GATT and NAFTA, for various reasons this is perceived as money used to support unfair competition.

Canada is eliminating this $3 levy per hectolitre, as a result milk prices will go down. Moreover, milk production in the six eastern provinces, except Newfoundland, namely New Brunswick, Prince Edward Island, Nova Scotia, Quebec, Ontario, and Manitoba, which account for roughly 80 to 85 per cent of milk production in Canada, will be pooled and placed under the authority of one commission, with one price and one milk.

In the past, there was a difference between fluid milk or drinking milk and milk used in processing to make dairy products such as cottage cheese, butter, and powdered milk. From now on, there will be only one class of milk, one system and one price. All the quotas will be pooled, which means that all the provinces which currently have quotas will be able to retain them. Quebec, which accounts for 48 per cent of the total milk production, will keep the same production quotas, and so will Ontario and the other provinces.

This new commission, which hopefully will be able to get along with the provinces and operate as efficiently as possible, will have increased powers enabling it to deal with the export of milk based products. It would also be responsible for pricing and selling quotas, for instance. Provinces will be allowed to trade quotas.

However, we must admit that the main advantage of this new formula is that dairy production risks will be spread among dairy producers in eastern Canada, and that it will allow them to share the costs of managing the system. No doubt this will reduce the administration costs of the system, and we hope it does.

I will make the point, and it is a point that must be made: dairy production is very important to Quebec. In fact, the entire agri-food system is very important. For example, in 1993, Quebec exported over $1.5 billion worth of natural foodstuffs and, in 1994, it increased these exports by almost 5 per cent over the same period in the preceding year.

In 1989, for example, dairy products in Quebec represented 35 per cent of the province's total agricultural revenues and 38 per cent of Canada's dairy revenues.

The dairy industry in Quebec is beyond a doubt one of the largest industries and therefore it must be preserved and protected at all cost.

Bill C-86 will result in the economic integration of this whole sector, with milk production being consolidated under a new Canadian Dairy Commission. This is one way of protecting the common interests of all the provinces. Dairy producers are united in protecting themselves and this vital industry.

It must be said that the supply management system, particularly in the dairy sector, came under a lot of criticism in the past. The members of the Reform Party said it would be better to

eliminate the supply management system, because they prefer free competition.

My colleague for Richelieu pointed out that it was not a good idea to eliminate the supply management system. On the contrary, if we compare our system with the American one, we see that we are well off with our own. My colleague for Richelieu drew attention to an article by Claude Rivard, president of the Fédération des producteurs de lait, in which Mr. Rivard quotes two editorials in Hoard's Dairymen , which is apparently the Bible of American farmers.

The two editorials in this "Bible" noted that dairy producers had lost production value, in that an increasingly large part of the market had been taken over by wholesalers, food chains and supermarkets, to the detriment of farm producers. In other words, dairy producers in the United States have lost money. They have become poorer, they have suffered the highs and the lows of an insufficiently controlled market.

The editorial in Hoard's Dairymen recommended that the United States develop a system like Canada's, that is, a system in which supply can be adjusted to suit demand. It pointed out that the supply management system in Canada is highly efficient. We know it is.

We know that dairy production is volatile because production can be easily increased. Without a system to adjust production to supply, prices would vary significantly. Therefore the supply management system is a good one. It is better than the one in the United States and warrants keeping.

Bill C-86 does just that: it makes dairy producers feel safer, more secure about this system being maintained, now that they have pooled their resources. This strengthens this branch of the industry and gives some indication of what lies ahead for them. This bill clearly shows that, contrary to the fears raised by certain individuals about quotas going down in value, the supply management system disappearing or this entire sector declining in the coming years, the system will be maintained, and I might add, even after Quebec has become sovereign.

We must conclude from this bill that, even after Quebec has become sovereign, the supply management system will almost certainly be maintained. That is normal since, as we know, this bill was developed in response to international agreements such as NAFTA and GATT. It is an attempt to adjust to these agreements, which will be maintained after Quebec has become sovereign.

We know that Quebec as well as Canada will accept the requirements of both NAFTA and GATT, according to which there should be no unfair competition and no new tariff barriers or other barriers like those currently encountered.

Again, this is very reassuring to dairy producers since all dairy producers, from Nova Scotia to Manitoba, are now together in the same system. It will certainly be to their advantage to stick together, not only because this is an excellent system, a system that will maintain reasonable levels of production and income for them, but also because it keeps American producers at bay.

If this system were to disappear tomorrow or be rejected all of a sudden, then we would obviously have to compete with the Americans, and our dairy producers might have a hard time staying in business, in spite of the fact that they may offer higher quality products than the Americans.

This threat from the U.S. would be quite worrisome for producers, be they in Manitoba, Quebec or Nova Scotia, if they did not stick together, if they did not join in this pooling system. We can even predict that if Manitoba or Ontario decided to opt out of the pooling system after Quebec achieves sovereignty, this would create problems not only for that province and for Quebec but also for all the other provinces. The whole system could collapse, when it is beneficial to all dairy farmers in all six provinces.

It would therefore be illogical, even irrational, and certainly economically harmful to bring down the system being set up under Bill C-86. This system is beneficial to all dairy farmers and will be maintained after Quebec achieves sovereignty.

Quebec must achieve sovereignty, and it is in the farmers' interests to acknowledge that this will be good for the country as a whole because Quebec will want to repatriate the powers it needs in other sectors. However, dairy farmers in Quebec will be allowed to maintain this pooling system, which is beneficial to them and to their counterparts in other provinces. Upon achieving sovereignty, Quebec will be able to uphold the agreements in this sector and those that will be negotiated in other sectors.

In fact, some economists published a report yesterday that explained that because of GATT and NAFTA, similar economically sound administrative agreements in other sectors will be maintained and will continue to exist.

Once again, we have people saying that the end is near, that new borders will arise, that there will be customs check points between Quebec and Ontario. This is all purely hypothetical and just a lot of scaremongering. We know that even Europe has simple administrative systems that would work in Canada, between Quebec and Canada, and would not prevent free circulation of goods and services or alter generally beneficial agreements that exist now, like the pooling system to be implemented by Bill C-86.

All this will continue. There is no reason to believe it would not, and the same applies to other sectors. There is every indication that this is what will happen. In fact, farmers know

that the federal system here in Ottawa constitutes the greatest single threat to the agricultural sector. We have said this so often it has become a-

[An hon. member]

A truism.

[Jean-Paul Marchand, Bloc, Québec-Est, QC]

-a truism that Quebec has been treated unfairly by the federal government. This has been going on for years. If Quebec really received its fair share, it would have had as much as $800 million annually. Quebec got a raw deal under the federal system. In fact, one of the threats to the dairy system, for instance, is BST.

BST is a major threat, and this is very disturbing. The fact that they want to introduce BST in Canada is very disturbing indeed. I think it is totally unacceptable, and all dairy producers should be up in arms, and consumers as well. Introducing BST in milk, in this pure product, is almost sacrilege.

This is all very disturbing. I think Quebec is well advised to get out of the federal system because the system is falling apart and heavily in debt. Canada has been warned twice during the past three years. The International Monetary Fund warned Canada it would have to turn its economy around because it was teetering on the brink. It seems our public finances are out of control. It is like a ship sinking in the middle of the ocean, and people who think the federal system is here to stay should remember the Titanic .

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I listened with great interest to the hon. member for Québec-Est. He often performs eloquently on agricultural issues. However he speaks of a fairy world in which we can have our cake and eat it too.

The member talked about the fear of the American market system and protecting his own people, the farmers of Quebec, from the American marketing system. The uniqueness of that is that America is a nation state. We are not talking about Canada being a group of 10 nation states; we are talking about Canada being a federalist state. Perhaps the member has not studied economic history, but sovereign states basically take care of their own people first. The concept is the welfare of the people who live within that country.

The GATT negotiation is a way of playing baseball. We are to play a game and these are the rules. Each team is trying to win. Each team is trying to be effective. It is an illusion to have a pooling system, keep all the good things and have a sovereign state. To argue that we are going to keep the good and do away with the bad is not how it works in reality. It has not worked in any country. Sovereign nations will take care of their own people first.

Farmers in Quebec are the highest per capita income earners of all farmers in Canada. How could the member argue that they have been taken advantage of or that they are at a great disadvantage in the federal system when they are the best off economically of all farmers in the country?

[Jean-Paul Marchand, Bloc, Québec-Est, QC]

Mr. Speaker, it is obvious that Quebec farmers are disadvantaged. It has been written all over federal budgets for years. We had proof of that again recently. We are reducing subsidies to milk producers in Quebec by 30 per cent. That affects Quebec. It certainly affects Ontario as well. However it is a known fact that Quebec has never got its share of federal dollars in terms of agriculture. It has received much less than its share. There is no doubt about it.

If agriculture in Quebec is strong and well developed it is because we have good farmers. It is not at all due to the federal government. We would have had a stronger agriculture sector if the federal government had acted fairly with Quebec farmers.

It is not a fairy world to speak about the GATT and free trade. It is obvious that the GATT and free trade with the United States have rules. They set ways that commercial interests can trade functions. We know as well that the understanding and trade relations which exist now, today, tomorrow and every day before Quebec sovereignty will continue afterward because that is one of the principles of the GATT. Economic relationships will not disappear overnight.

My hon. colleague is the one who is dreaming when he thinks that the GATT has no weight. It is quite the contrary. The negotiations have weight. The structure that will be put in place by Bill C-86 will be respected by all other trade bodies, whether it be the GATT or anything else.

I am not dreaming at all. We are not speaking of any kind of fairy world when we say the agreements that were taken or will be taken now will continue after Quebec sovereignty. It is entirely logical and entirely reasonable. Farmers today are undertaking the agreements in a very economic, reasonable and logical way. There is nothing emotional involved. It is in their best interest and it will be in their best interest after sovereignty.

The milk producers of Manitoba and the milk producers of Ontario are not interested in United States milk producers competing with Canada or Quebec. The same reasoning is applicable elsewhere, like in Quebec and in every other province. They are not interested in having U.S. competitors coming into Canada. Besides, free trade does not allow it at the moment. GATT does not allow it either. It will not allow it after sovereignty. These agreements go beyond Quebec sovereignty. These are international agreements.

The minute Quebec becomes sovereign, it will belong to GATT. There is no reason to even deny that Quebec will belong to GATT. We are living in a civilized world here. We are living in a civilized world where people respect each other and respect agreements that are signed in a reasonable way. Some people are less civilized than others, certainly. Some people also see problems where there are no. problems. They create fear but there are no foundations to those fears.

[The Deputy Speaker]

Resuming debate. With apologies for not recognizing him earlier, the hon. member for Medicine Hat.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, no apology is necessary. The mistake was at our end but nevertheless it is a pleasure to rise to address Bill C-86.

Talking specifically to the bill, this is an act to amend the Canadian Dairy Commission Act. The purpose of the bill is to amend the act to provide for the replacement of the existing system of levies with a system of pooling market returns from different classes of milk. The idea of this bill is to bring that levy system into alignment with Canada's international trade agreements.

I am the first one to admit that I do not know a tremendous amount about milk production. I am certainly a milk consumer. I go to the 7-Eleven and buy milk. I put it on my cereal and am happy to drink it, but I have only milked a cow once in my life. Apparently it is all in the wrists, but I had very little luck with that.

I will speak a little on the idea of trade. I will also talk a little from my perspective as somebody who comes from a rural constituency about the obvious need to be sensitive to the farm community and the agricultural community while at the same time recognizing the realities out there.

Certainly the reality today in this country and around the world is that we are moving more and more toward free trade. My hon. friend from Québec-Est has just spoken at length about how Quebec is a sovereign country, and if it should ever become a sovereign country, heaven forbid, how it would somehow turn the tide against free trade or be a hold out to free trade. It would protect itself from free trade as though free trade were like a cafeteria where you could pick and choose the agreements you wanted to make.

Of course, that is unrealistic. It took around 100 countries to get a GATT agreement. I remind my hon. friend from Québec-Est and my friends in the Bloc that coming up in the year 2000, which is not very far away now, we are going to see another round of negotiations where undoubtedly tariffs will continue to fall. More and more pressure will be put on Canada and countries like ours that have supply management systems. We are eventually going to have to open up.

I also point out to my hon. friend that under the NAFTA agreement and certainly under any new NAFTA agreements that would come as a result of allowing countries like Chile and other Latin American countries in, we are going to have to see things open up.

Although I am somewhat sympathetic and I have heard from my friends about how supply management has served Quebec well in the past, particularly individual farmers, I can completely understand how important agriculture is to a province and to a country. It does not only produce agricultural commodities but it also produces a lifestyle. It produces income and people with fine character. That is very important and I believe in that.

We are doing people a disservice if we are not straight with them, if we do not tell them what the reality is. The reality is free trade is coming our way and the best thing we can do now is to begin to make adjustments so that we can survive in that free trade environment.

Yesterday I watched on television as members of the Bloc and members of the government debated back and forth about whether or not Quebec was going to stay in Canada, what it would be like if it was outside of Canada and so on.

People must remember that there is a third option. We do not have to settle for status quo federalism, which not only the people in Quebec are upset about, but also the people in the west. The people in my constituency of Medicine Hat are very upset with it.

We do not have to settle for sovereignty. In fact, I understand my Bloc friends are moving away from sovereignty. Pretty soon, who knows, maybe they will be committed federalists the way they are moving around here.

[An hon. member]

They voted for the pension.

[Monte Solberg, Reform, Medicine Hat, AB]

They did vote for the MP pension. That is notable. They are quite happy to take those Canadian dollars when it comes to pension plans.

There is a third option. It is important for dairy farmers in Quebec and all over the country to note that. Because only when we consider the third option can we make the argument that Canadian dairy farmers can still have a viable industry down the road. They need not fear the American juggernaut because there are ways to make dairy farmers in Canada competitive so they can not only survive, but can thrive in the free market environment.

Let me talk for a moment about that third option. Canadians have been telling us that one of the biggest issues of concern to them is the debt and the deficit. The government has taken some baby steps to deal with that but those steps will not be adequate. The reason that should be a concern to dairy farmers and anybody who is in business is that with every day that goes by, we go another $90 million to $100 million in the hole. Eventual-

ly we have to pay interest on that. Of course taxes have to go up to keep paying the interest on the debt and deficit. Every second that goes by we go in the hole another $1,036. It is $90 million to $100 million a day. Now our total debt is $551 billion and climbing.

One thing that must happen in order to make dairy farmers around the country competitive is we have to balance the budget. We have asked the government over and over again to the point where some people have become weary of it, but it is an important issue. We have asked the government to tell us when it will balance the budget. It has refused to do that. By refusing to do that it sends a very negative message which also hurts dairy farmers and anybody who is in business. The government sends a message to the markets that it is not prepared to deal with the problem seriously. Thus we have high interest rates which again penalize particularly people in the agriculture industry.

Before Canadian agriculture can be competitive with farmers around the world, we have to get those interest rates down. Right now there is an approximate 3 per cent differential with the United States. That is a huge competitive advantage for the United States. We have to beat that down.

If we can get a hold on the deficit and the debt we will slay two dragons. We will slay the dragon of high interest rates and the dragon of high taxes, which make it very difficult to do business in the country and compete internationally.

That is the option Reform is offering. It is one that the federal government certainly has not talked about. Of course, our Bloc friends would just as soon be out of the country so they have not really offered any constructive ideas for dealing with the debt and the deficit.

While we are on the subject, Reform has also talked about the need to pass language and cultural issues down to the provinces. That would solve a lot of concerns people in Quebec have about confederation and federalism as it is today. We are sensitive to the fact they wish to preserve their language and culture. Reform agrees with that. We believe there can be a way of accommodating the desire of provinces to have control over language and culture in a large country such as Canada where there are many different interests.

There are many other things we could talk about and many other arguments we could make for our vision of federalism. I hope those two address specifically some of the concerns that Quebec dairy farmers would have about competing more in a free trade environment.

One thing that is going to be happening in the near future and which the government has talked about is the need to expand the NAFTA.

The talk is that Chile will become involved very quickly in NAFTA. When that happens there are many people who suspect that the Americans will argue for more of an opening up of some of the protection we now provide for supply management. If that happens, if government is committed to expanding the NAFTA agreement as it says it is, there must be some accommodation to some of our trading partners to open these things up. Frankly, I would be surprised if the government denied that it was going to have to open things up a little bit more.

Setting that aside for a moment, we have already talked a bit about the GATT agreement which will be renegotiated in a few years time and undoubtedly tariffs will be coming down more. Given that reality, I say to my Bloc friends across the way that they are doing the dairy farmers in their own province a great disservice by telling them, leading them on and making them think that there is some way we can preserve the status quo. Well there is no way.

The best example of that, which my friend from Kindersley-Lloydminster pointed to earlier on, is what happened when the government made changes to the WGTA. People out west are saying: "Yes, WGTA is coming to an end. We do not have a problem with that, but it would be nice if we could have had a little notice. It would have been nice if we could have made some of the changes that we needed to make to the transportation system so that we could compete in that free market environment".

On the one hand, we are moving away from the free market environment by dumping the WGTA, which is fine, but on the other hand, the transportation system is still not responsive to a free market environment. Unfortunately, in the next year or so at least and probably three years, farmers in the west are going to be caught in that situation. That is unfair and really reflects poor planning on behalf of the government. It hurts people. I believe many farmers in the west may have to go out of business because of that very poor planning on behalf of the government.

Let us not repeat that mistake now by permitting dairy farmers across the country to think that somehow we can hold on to the status quo. The fact is that free trade is coming.

As I mentioned at the beginning of my comments, I do not know a lot about the production of milk but I do know a little bit about the consumption of it. I want to address some of the comments the member for Québec-Est made with respect to how this benefits dairy farmers.

I remind my hon. friend that there has to be a balance here. Consumers need to be considered when we talk about these things. When my friend talks about how dairy farmers in the United States are suffering and this that and the other thing, he should know that consumers are benefiting by the fact that there

is that competition. If anyone doubts that, they need only cross the border and look at the difference in the price of cheese, butter or milk compared to Canadian prices.

I do not think the difference in those prices has to be the difference in profit margin between Canada and the U.S. If we could get our act together by getting our own input costs down, I think our own dairy people can be extremely productive and profitable. However, the key is for us to deal with that debt and deficit.

When consumers have more money in their pockets by virtue of lower prices for things like milk, butter and cheese, they can also buy more of them. However, when they are very expensive because supply management builds in what I think we would regard as some inefficiencies, then people are a little bit more squeezed when it comes to buying groceries and they just cannot buy the same quantities they would be able to buy otherwise. That is something I would like my friend from Québec-Est to consider.

I talked a little bit about the debt and the deficit and the need to offer a third option. One of the things that came up yesterday in debate between the Liberals and the Bloc was the whole idea of the status quo federalism versus separation.

One of the things happening lately with the Bloc Quebecois and the Parti Quebecois is they have been sending out signs that they are moving more toward the idea of sovereignty association and who knows what now. There has been a lot of talk about their having all kinds of internal problems and about some people being perhaps more committed to federalism than they would like us to believe.

We would like to offer a chance to our friends in the Bloc Quebecois to take the extra step, come a little closer and consider Reform's vision of a decentralized Canada in which provinces will have their rights respected under the Constitution, in which we absolutely and completely support their rights to make some of the decisions that affect their well-being but on the other hand still allow them to remain part of one country and have more control of some of the things important to them in terms of international trade by virtue of the fact that they are part of one big country. They are not tiny countries among 150 in the world. They are part of Canada. Canada carries tremendous weight by virtue of its reputation and its size in terms of its economy.

We encourage our friends to consider this when they are talking about international trade. Obviously when we have more trade in the world because of a larger economy we will be able to make better agreements. We encourage our friends in the Bloc to think about that as well.

Any time the government brings forward legislation which brings rules and regulations in line with international agreements it is a step in the right direction. There are still some provinces concerned about the bill. We respect that.

I encourage the government and members of the Bloc Quebecois to continue to move toward agreements that recognize the reality that we must have free trade. It is where everyone is heading.

[Alex Shepherd, Liberal, Durham, ON]

Mr. Speaker, I listened with interest to the hon. member.

He talked about competition. He envied the American agricultural system and its milk producers. In Canada milk producers are better compensated than their American counterparts.

Even so, the top 10 per cent of dairy producers only receive about 5 per cent return on their invested capital. Clearly from a business operation Canadian farmers are far from being wealthy. The hon. member is speaking about emulating a system that will make Canadian farmers far poorer than that.

It is interesting that we have had both the Bloc and Reform members on their feet today speaking about the same system. They are talking about decentralizing, weakening the federal system.

The NAFTA and the GATT have already weakened the federal government's ability to exercise economic policy within our borders. By decentralizing even further and allocating more powers to the provinces there is a point at which there would be nothing left. That is what both of these parties basically want to do. I am very happy to belong to the governing party which understands the need for national standards and national policy.

We are debating a pooling agreement which draws to our attention the importance of a federal system with provinces and the federal government setting national standards, in this case for the pooling of milk.

It has the possibility of being downloaded to the provinces by certain authorities. At the same time it is establishing national standards. I believe some of my colleagues in the Reform Party would do the reverse. They would have each province make its own agricultural policy as it affected them.

I would like the hon. member to address whether they are in favour of a supply managed system Canada or an American free market system with lower incomes to farmers than in the Canadian system.

[Monte Solberg, Reform, Medicine Hat, AB]

Mr. Speaker, the hon. member has asked the wrong question. He asked if we are in favour of supply management as if that is a long term option. The hon. member should be

completely up front with his own constituents, the people of his province and the people of Quebec. He must know that although the government fought against NAFTA it has signed on to it. It said it did not really believe in the whole thing but it has signed on to it. He must know supply management as it exists today is not a long term option.

We are moving toward free trade so there is no point in pining in some sentimental way for the way things used to be 20 years ago. Tariffs are dropping every year. Ultimately we will see a situation, since the government signed the agreement, in which dairy producers will have to compete more on a premarket basis.

Let us not complain about the way things are and how they used to be. Instead, let us get ourselves ready. The best way to do that is to get rid of the taxes. The hon. member talked about the American system. The one thing I admire about the United States is it has been able to hold its taxes down which gives it a tremendous trade advantage.

We will be in the hole $32 billion this year. By the end of the government's term it will be over $100 billion. The Liberals are adding to it when they reap huge rewards through their MP pensions, but that is another debate.

The point is we have to get a handle on the debt and deficit so we can get the taxes down so dairy producers and all business people will be competitive. Let us not be sentimental about the past. The past is past. Let the dead bury the dead; let us get on with the future and start making the changes we have to make in order to be competitive.

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

Mr. Speaker, I see that the Liberals are anxiously waiting for my comments. I hope I will not disappoint them.

I am very pleased to take part in this debate for two specific reasons. First, there is the importance of agriculture for the economy of my riding and my region of Estrie, the Eastern Townships. However, I also want to discuss certain arguments raised during this debate on Bill C-86, particularly this idea that, according to our federalist colleagues, once Quebec becomes sovereign, it would be impossible to preserve any form of agreement between Quebec and the rest of Canada.

First, I want to point out that the Eastern Toownships, where I come from, and particularly the riding of Mégantic-Compton-Stanstead, which I represent here, produce 2.6 million hectolitres of milk every year. This translates into net annual revenues of over $130 million for producers.

Dairy producers in the riding of Mégantic-Compton-Stanstead alone provide 1.2 million hectolitres of milk per year, which amounts to more than $60 million in net revenues. Roughly 50 per cent of the milk produced in the Eastern Townships comes from the riding of Mégantic-Compton-Stanstead. Although I did not make an in depth study of the location of producers in my riding, I would say that three quarters of the production comes from the Coaticook region, which is known, not only locally, but throughout Quebec and even Canada, as the top milk producing region.

Each year, the beautiful city of Coaticook holds its dairy festival. This event is an opportunity to fully recognize the importance of that industry in my region and in my riding. It is also an opportunity for our fellow citizens to celebrate, to meet, and basically to enjoy the fruits of their labour. This is one of the reasons why I really wanted to take part in this debate.

I said a moment ago that I wanted to focus more on the relations between states, or to put it another way, between economic partners in the Canadian economic union, rather than on the actual substance of Bill C-86. My colleague from Frontenac, the Bloc Quebecois agriculture critic, has brilliantly, as always, explained why the Bloc Quebecois supported this bill.

He is very familiar with the subject, with all aspects of the bill, and was able to substantiate his arguments, unlike the Liberal members opposite, of course, and our colleagues in the Reform Party, who would like to see a system of free enterprise, with no constraints whatsoever, a sort of no holds barred capitalism really, such as we had a number of years ago, and such as can still be found in some parts of the United States.

Often our Liberal and Reform colleagues, and the member for Kingston and the Islands is a good example, use the word "separation" when speaking about the sovereignty of Quebec.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

That is what it is.

[Maurice Bernier, Bloc, Mégantic—Compton—Stanstead, QC]

The Liberal party, the Liberal government, which is using our taxes to conduct all sorts of opinion polls, saw that using the word "separation" worked to their advantage, because it struck fear into the hearts of Quebecers, and could lead to a "no" in the referendum.

When people look more closely at what sovereignists are saying, when they take the time to really listen to what they have to say, they see right away that the sovereignist message is one of openness, of self-confidence.

To put it briefly, what sovereignists want is for us to be able to look after our own affairs in Quebec, to be able to make our own decisions about the kind of society we wish to build, the kind of

society we wish to live in, and to be able to determine, on the basis of our needs, our interests and our values, what we want to share with our neighbours and with which of our neighbours we want to do business. That is what Quebec sovereignty would mean.

Let me give you a few examples. During Canada's 1988 election campaign on free trade, one of the strongest proponents of the free trade agreement with the U.S. was Bernard Landry, who is now Quebec's Deputy Premier.

I would say that he spoke up in just about every forum. He was then a staunch ally of the Conservative Party, arguing that it was necessary, not only preferable but essential, for the economy of Quebec and Canada as a whole to expand our markets and sell more products to the Americans, the U.S. being our closest neighbour.

This was acknowledged by then Prime Minister Mulroney, who, on several occasions, used the example given by Bernard Landry to say what a decisive role it played in that election campaign. Well, Mr. Landry is a convinced and convincing sovereignist, an active politician who, for more than 30 years-without adding years to his real age-, has been defending this theory with brilliance and eloquence.

A few days ago, at a fundraiser for the Parti Quebecois in Montreal, the Premier of Quebec, Mr. Parizeau, told business people, and I quote: "We may be a small country in terms of population, but we are successful, fulfilled and wealthier". Mr. Parizeau did not give any examples, but he could have mentioned Norway, Sweden, Finland and Switzerland, small countries whose populations are roughly the same as Quebec's. Mr. Parizeau went on to say, "We may have a small population and still be a prosperous, wealthy society, on one basic condition: that we have access to large markets without ever giving up our identity".

That is what was said by the Premier of Quebec, Mr. Parizeau, whom our Liberal friends call a separatist. In fact, Mr. Parizeau said this: "What I personally want for my people, my nation, is for us to decide to take our collective future into our own hands and decide what we want to share with others". Like all sovereignists, he acknowledged the need to have as open a market as possible.

In that sense, Quebec sets a fine example with this Bill C-86 before us, since it was based on the Quebec model that the agreement was entered into by all the provinces, and I repeat the provinces, because all the federal government has to do is pass legislation in the House of Commons recognizing this de facto situation. It is a good thing that the federal government is not involved; it would only make matters worse.

So, based on the Quebec model, it is possible to enter into agreements with our Canadian, American and international partners, as it is recognized that this kind of decision must arise from mutual interests and have something in it for everyone involved.

I want to stress that Bill C-86 is an excellent example. Six provinces have already approved the agreement, while three others still have reservations. We are letting them think it over. That is what co-operation is about. That is what I call openness. Why impose one's views on everyone else? Give people a chance to change their mind. We have to be open to the world. That is what Quebec sovereignty means.

In the minutes remaining, I would like to address government intervention and its negative impact on the economy in general, and the agricultural industry in particular, seeing that the debate is on agriculture.

I shall refer to an article published in La terre de chez nous , which, I should point out to our colleagues opposite, is not the Bloc's official newspaper. It really belongs to the agricultural community and provides farmers with information on what is happening in their region and elsewhere in the industry.

In the latest edition of La terre de chez nous , for the week of May 11 to 17, 1995, editor in chief Claude Lafleur quoted an example of inconsistent and harmful interference on the part of the federal government based on the implementation of the finance minister's budget that we have been debating in this House these the past few months. What example is that? I urge my Liberal colleagues to pay close attention to what Mr. Lafleur said, as it contradicts what their little red book says.

What did Mr. Lafleur say? The president of La terre de chez nous told the agricultural industry that it should expect the worst from the finance minister's budget, adding that it was a real Pandora's box, that new harmful effects were discovered every day, and that it would probably never end, unless, of course, Quebec decided to assume full authority.

Mr. Lafleur also had this to say: "Indeed, this is not the last of the bad news coming from the Martin budget. For example, the federal government just announced that it was withdrawing from the agricultural employment services program". That comment was made in reference to the red book. The Liberals were elected under false pretenses in 1993, when they campaigned with their red book and insisted on the importance of creating jobs.

But what are they doing now that they are in office? They axe agricultural employment services, a successful program which has been in place for over 20 years. During the last year, the minister-whom I once called the minister of human resources impoverishment, but whose title really is Minister of Human Resources Development-asked the UPA to reach an agreement with his department to ensure the maintenance of these agricul-

tural employment services, which provide farmers with a qualified manpower when they need it.

Only a few months ago, the minister said: "We have an agreement with the UPA in Quebec to keep these services going". Then in the Martin budget, the government decides to axe this program. It will be cut by 20 per cent in 1995-96, 40 per cent in 1996-97 and dropped altogether in 1997-98. This example does not come from the Bloc Quebecois or the separatist Minister of Agriculture in Quebec but from the editor in chief of La Terre de chez nous , Claude Lafleur, whose integrity is well known and whose objective approach to the issues can certainly not be faulted by our Liberal friends.

That is a very real example of the Liberal government's negative impact on agriculture. I will conclude, Mr. Speaker, since you are signalling I have only two minutes left. I would like to ask for more time, but I know it is no use trying since I would not get unanimous consent. So I will simply ask them to come back next time, and maybe some day they will understand.

In concluding, I would like to comment on what was said by the hon. member for Medicine Hat who expressed so well and so consistently the Reform Party's position on trade between regions and between countries. Reform Party members want to see a return to a genuinely free market without government constraints. The hon. member for Medicine Hat said that, if we want a more open market, which is what sovereignists want as well, as I said earlier, we cannot have a supply management system.

I simply want to say the hon. member is mistaken. Supply management is a way to deal with domestic problems. Its role is not to regulate international trade or trade between regions. So we can have a supply management system, and still open our borders to international trade.

The House resumed, from May 16, 1995, consideration of the motion that Bill C-319, an act to amend the Canada Elections Act (reimbursement of election expenses), be read the second time and referred to a committee.

Canada Elections Act

[The Deputy Speaker]

It being 5.30 p.m., pursuant to the order adopted on Tuesday, May 16, 1995, the House will now proceed to the taking of the deferred division on the motion by Mr. McClelland at second reading of Bill C-319.

Call in the members.

Before the taking of the vote:

[The Deputy Speaker]

The division will be taken row by row, starting with the mover and then proceeding with those in favour of the motion to the back of the Chamber. Then those in favour of the motion on the other side of the House will do the same.

Those opposed will then be recorded in the same order.

The House divided on the motion, which was agreed to on the following division:

[The Deputy Speaker]

I declare the motion carried.

[Peter Milliken, Liberal, Kingston and the Islands, ON]

Mr. Speaker, I think you will find unanimous consent in the House to revert to Government Orders for the purpose of disposing of Bill C-86, which was under debate before the interruption. I think there is consent in the House to complete that bill right now without further debate.

[The Deputy Speaker]

Is there unanimous consent?

[Some hon. members]

Agreed.

The House resumed consideration of the motion that Bill C-86, an act to amend the Canadian Dairy Commission Act, be read the second time and referred to a committee.

Canadian Dairy Commission Act

[The Deputy Speaker]

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

[Some hon. members]

Agreed.

[An hon. member]

On division.