Mr. Speaker, I rise today to address Bill C-86, the act to amend the Dairy Commission Act.
This bill is significant because it provides for the replacement of the existing system of levies with a system of pooling market returns from the different classes of milk. The government claims the move to a pooling system will maintain equity among producers and will be consistent with Canada's international trade agreements, NAFTA and GATT.
Changes are needed to allow supply management to continue while meeting the requirement of our agreements. For this reason my colleagues and I can support the stated purpose of the legislation.
We have talked to dairy farmers and others in the industry and they have said they feel the legislation is necessary to allow supply management to continue under GATT and NAFTA. For this reason we can at least support the intent of the legislation.
We do have some major concern with clause 2, which affects clause 9 of the Dairy Commission Act. This bill extends the powers of the Canadian Dairy Commission and could possibly diminish the authority given to the provinces under the original act. Therefore to guard against this possible erosion, my colleague from Vegreville has proposed an amendment which will affect clause 9 of the Dairy Commission Act.
There is a problem in supply management in maintaining the status quo. With respect to supply management, change is inevitable. We have already seen change and nothing stands still in the face of time and advancement. Dairy farmers will be forced to compete more and more with American farmers and the odds are change will come sooner than the Liberal government is prepared to admit.
I am not saying this is what I want, but this is what reality tells us. The rules are changing and dairy farmers will need transition time in order to adapt to more open trade in the future. This bill will allow the supply managed system to continue for some time but there are nagging doubts as to the longevity of the current system if we do not consider changes.
Members of the Canadian Dairy Commission claim this bill properly reflects the changes affecting dairy farmers, but what the bill actually does is maintain the status quo for now. Given that a change to supply management is inevitable, there will be a problem over the long run.
The message the government has been presenting along with the legislation concerns us. I want to speak briefly about a concern with Bill C-86 from the discussions we have had with the minister of agriculture, the parliamentary secretary to the minister, some farm groups and some dairy farmers we have had the opportunity to meet with.
The legislation will allow supply management in the dairy industry to continue in a form quite similar to the present system. This does not mean supply management will continue in this form forever. Several trade issues may lead to more direct competition from the U.S. by allowing more access to dairy products from the Americans.
Before I begin discussing trade issues which could have a substantial impact on our present supply management system, I will make one thing very clear to the House. I am not talking about these issues because I want to see the demise of supply management or because Reform wants to see the demise of supply management. We are discussing these issues because they could have a dramatic impact on the dairy industry, and this discussion will provide an important service to the dairy farmers and others in the industry. Just because change will be difficult and is not wanted does not mean it should not be discussed.
Reformers have had enough courage to talk about probable change while the minister and the parliamentary secretary and even leaders of the dairy organizations publicly pretend the present system will exist indefinitely. This sends a dangerous message to dairy farmers that they can be protected against further competition, particularly from the American dairy farmers. This was the message the previous Conservative government gave to dairy farmers. It said article XI of GATT will not be touched under the new arrangements it was negotiating, and several Liberals echoed that. The NDP said it would not let anybody stand in the way of article XI. None of them could carry out that promise because it was not feasible.
I want to talk about why some change is inevitable and why it may be sooner than later. NAFTA began as an agreement between Canada and the United States. The deal is already being expanded now to include Chile and other countries. The world is forming into international trade blocks and we cannot be
certain that our supply managed industries will be totally isolated from new arrangements being negotiated.
What must the government do? It must acknowledge there is a high probability of more access for American dairy products, therefore a move to more competition. The government must help ease diary farmers' legitimate fears that Americans will not compete fairly unless they are forced to through tough action by the Canadian government
We need a government that stands up for our producers and will not be bowled over by the Americans. We need to make the commitment to our dairy farmers that our government will stand with them.
We must start working toward levelling the playing field between Canada and the U.S. before more competition occurs. Now is the time to set the rules for the new economy. We should not go into this blindfolded and not prepared to deal with the inevitable consequences of relaxed trading agreements with our trading partners.
We must recognize there are different concerns about change to the supply management system among different groups of dairy farmers. They are not homogeneous. Each group must be listened to and asked for recommendations on how to deal with problems which will result from the move to competition for more imported products.
My colleague from Vegreville has put forward an amendment to the bill before us today in report stage. We have spoken to dairy producers and many in the west have expressed concern with certain aspects of the bill. Clause 2 of Bill C-86 extends the powers of the Canadian Dairy Commission which could possibly limit authority of the provinces. That is a concern. The proposed amendments appear to give the CDC very wide new powers. They appear to include much wider powers than would be needed to address the reduction of export subsidies and the provision for national pooling of milk returns. Though delegated administrative functions, the amendments do not necessarily reflect the stated objectives of the CDC to delegate all these powers to provincial boards by way of agreement.
Therefore to prevent this from taking place the motion put forward would make the proposed new statutory powers of the CDC subject to agreement from the province or the board. I think that is very important. I hope hon. members can see the merits of this motion and that they will support it.
My colleagues and I are supporting the legislation despite the fact we feel it is not always sending the right message to supply managed farmers. However, we cannot argue with what the industry and the majority of farmers want.
When change does come we will have to take into account older dairy producers who are close to retirement who want to hold their quota and make sure things stay the same while they are still in the industry, and younger producers who may have borrowed money and bought quota at high prices. Their equity is tied up in their share of the quota. We need to consider consumers, those who consume the products dairy farmers so adequately supply.