Mr. Speaker, at the time of the federal budget in 1995 we indicated certain staged reductions in the dairy subsidy that would take place during the current fiscal year and the next fiscal year.
We also indicated that we would consult with the dairy industry across Canada, particularly in provinces like Quebec and Ontario where the dairy industry is concentrated, to discuss the future of the dairy subsidy beyond the initial two years that were dealt with in the budget last year.
Those consultations took place very extensively. They involved me, my parliamentary secretary, my departmental officials, the Canadian Dairy Commission and a broad cross-section of representatives in the Canadian dairy sector.
We raised very clearly the fiscal difficulty the government was facing. We indicated the dairy subsidy would not be sustainable for the long term. We sought their advice in terms of how best to handle the dairy subsidy in those circumstances. A wide variety of options was discussed in terms of how this situation could be managed. The dairy industry very clearly indicated that while it would prefer to retain its subsidy, faced with the fiscal reality of the country to deal with this issue it would recommend the phase out approach that we have implemented.