Debates of June 17th, 1996

Agricultural Marketing Programs Act

[The Acting Speaker (Mrs. Ringuette-Maltais)]

Carried on division.

(Motion agreed to.)

On the Order: Government Orders:

June 17, 1996-The Minister of Agriculture and Agri-Food-Second reading and reference to the Standing Committee on Agriculture and Agri-Food of Bill C-38, an act to provide for mediation between insolvent farmers and their creditors, to amend the Agriculture and Agri-Food Administrative Monetary Penalties Act and to repeal the Farm Debt Review Act.

Farm Debt Mediation Act

[David Anderson, Liberal, for the Minister of Agriculture and Agri-Food]

Madam Speaker, I move:

That Bill C-38, an act to provide for mediation between insolvent farmers and their creditors, to amend the Agriculture and Agri-Food Administrative Monetary Penalties Act and to repeal the Farm Debt Review Act be referred forthwith to the Standing Committee on Agriculture and Agri-Food.

[Jerry Pickard, Liberal, Parliamentary Secretary to Minister of Agriculture and Agri-Food]

Madam Speaker, I am pleased to begin debate on the motion to refer Bill C-38, the farm debt mediation act, to the Standing Committee on Agriculture and Agri-Food prior to second reading.

The government promised to give MPs and parliamentary committees more influence. By sending bills to committee before second reading, something that was done very rarely in the past, we are delivering on that promise. This procedure gives committees a chance to make major amendments to bills. It also allows us to make doubly sure that no concern has been overlooked.

The Minister of Agriculture and Agri-Food has chosen to follow that route with this bill because he wants to ensure that stakeholders have every opportunity to be heard on this important piece of legislation.

As a former chair of the Standing Committee on Agriculture and Agri-Food I share with him the confidence that committee members will be able to make positive contributions to the farm debt mediation process through their deliberations and hearings.

The issue of farm debt is not a new one. It has been with us for a long time. Farmers must make significant investments in seed or stock, fertilizer or feed, machinery or buildings, long before they see a return on those investments. They are subject to the whims of nature and markets. When these turn bad farm debt can reach crisis proportions.

That is essentially what happened in the 1980s. High interest rates at the beginning of the decade diverted large amounts of cash for debt servicing while low returns on sales reduced inflows of cash. In addition, market values of many assets, especially land values, depreciated over the same period.

By the mid-1980s many farmers were in arrears on payments to their creditors. In response, the Farm Debt Review Act was proclaimed in 1986. That act established farm debt review boards in every province to provide impartial third party mediation between farmers and creditors.

In our 1993 agriculture platform we promised to strengthen the farm debt review process. This legislation will do just that. It will create a new farm debt mediation service to replace the farm debt review boards as they are phased out.

This new service will help farmers position themselves to better adapt to new income opportunities as well as helping those who are experiencing financial difficulties.

It has been designed around three major considerations. It should build on the existing services and not duplicate them. It should be administratively efficient. It should cost less than the existing farm debt review board process.

Funding for the new service will come from the $240 million Canadian adaptation and rural development fund announced in the 1995 budget to help the sector make a transition to a more efficient and competitive market economy.

This proposal was not drafted in an ivory tower by isolated bureaucrats. Agriculture and Agri-Food Canada consulted with representatives from major farm organizations, provincial departments of agriculture and lenders last summer. The department also held seven regional focus groups with farmers and farm management advisers.

The purpose of these consultations was to identify the elements of a new farm income review service and possible ways to deliver it. The department then drafted a program design reflecting what emerged from the consultations as the most important elements of the new service.

A national consultative review committee was set up with representatives from farm organizations, lenders and two provincial governments. The committee met last December to discuss the proposed program design and identify concerns and suggestions.

In January, the Farm Debt Review Boards and all provincial governments were invited to comment on the proposal. Based on the input received, the government is proposing the farm debt mediation service. The new farm debt mediation service will provide insolvent farmers the same benefits as the current Farm Debt Review Boards, that is a stay of proceedings, a review and mediation.

Essentially it will continue to allow them to undergo mediation and work out, with their creditors, a way to resolve their debts. One

change from the current procedure is that farmers and creditors would be able to appeal decisions on stays of proceedings to an appeal board.

The current Farm Debt Review Board members could be appointed to the new appeal board while qualified mediators would be selected through the regular government contracting process. Farm Debt Review Board members, who are currently mediators under the Farm Debt Review Board Act, could be put on the list of mediators under this new program. Mediators would act alone rather than in three-member panels as they do under the current act.

These changes and the limiting of the new proposed act to insolvent farmers could reduce the program costs by more than $1 million per year from an estimated $3.5 million in 1995-96 to $2.2 million per year.

The consultations also showed that farmers and farm organizations, provincial representatives and industry could support a consultation service that is not tied to a debt crisis. Such a farm consultation service would concentrate on financial assessments to help farmers who have cash flow problems and to identify income opportunities and reduce costs to develop more viable operations.

Depending on their particular situation, farmers could also be referred to provincial extension staff, other federal or provincial programs or the private sector as appropriate for other types of services.

Because referral to other services and programs will be a key component of the farm consultation service, it is important that delivery of this service be developed through further consultations with farm organizations and others such as lenders, Canadian farm business management program members and the provinces.

It would also be important to have an up to date inventory of services in every province. Delivery costs for the farm consultation service would be kept to a minimum. This service could be delivered by the farm debt mediation offices or it could be developed and delivered in co-operation with the provinces or other existing programs where appropriate. The service would provide assistance to help farmers look at other income opportunities for diversifying, expanding and creating value added enterprises and to develop farm plans.

I have just explained how the new farm debt mediation act would work. I would ask members of the House to approve the motion to refer this proposed legislation to committee now, prior to second reading.

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

Madam Speaker, my remarks in this debate at the second reading stage of Bill C-38 are essentially based on ethical and philosophical considerations as a result of my parliamentary obligations as agriculture and agri-food critic for the official opposition.

This statement may seem a bit obscure, but you will soon understand my point of view in light of the information I will give you.

Bill C-38 to provide for mediation between insolvent farmers and their creditors will provide an important legal base for resolving conflicts of a financial nature. This new act will repeal and replace the Farm Debt Review Act, making administrative procedures easier for farmers and providing for a more equitable settlement for creditors.

At first glance, we have to salute this initiative by the department which seems to show greater concern for all agricultural producers. Several agricultural groups, through their executive committees, have supported this piece of legislation. The Bloc Quebecois will probably do the same when Bill C-38 is sent to committee for clause by clause study.

There are, however, some apprehensions on the part of producers who will inevitably find themselves in financial difficulty some day. Bill C-38 will replace the Farm Debt Review Act, which gave producers having financial problems the opportunity to benefit from the economic expertise of the Department of Agriculture and Agri-Food in order to avoid even more serious problems. In other words, the department offered an indebtedness prevention service, as well as the technical tools and the support needed to recover from these difficult situations.

In this perspective, it looks like producers will benefit from a more complete support from the department, but only in cases where the producer will no longer be able to call the shots. In other words, the farmer using the provisions of Bill C-38 will be at the mercy of his creditors.

To put it another way, in order for a farmer to benefit from this new bill, he will, to all intents and purposes, have to have his neck in a noose. At that point, he will be at the end of the road, whereas before he could start to look at the possibilities before being in debt up to his ears.

This, then, is the ethical and philosophical dimension I was mentioning at the beginning of my speech. How can the government refuse, or at least limit, the recourse open to an individual faced with a potential crisis? It would perhaps be an idea to look more closely at this aspect of the bill, which on the whole is innovative and in line with the modern current that has characterized the agricultural sector in this country for a number of years now.

We know for a fact that the government's initiatives to reform this sector of agricultural legislation are part of a move to put its fiscal house in order.

In fact, this amendment will permit savings of a million dollars. This is a huge amount, given that in 1995-96 the government invested $3.2 million in this regard. One million over three million, or 33 per cent, represents a huge amount percentage- wise. For the size of the country, one million is not such a large amount, but still it is a beginning. It is a step in the right direction.

However, it is vital to ensure that this savings is not achieved at the expense of citizens in dire financial straits. For if that were the case, this measure would no longer be laudable or profitable. In fact, one may wonder if the social costs of this measure would not be greater than the resulting savings.

On another point, Bill C-38 calls for abolition of the offices responsible for mediating between the producer and his debtors, replacing them by a similar body of another organization. Looking at this in the precise terms of the bill, the mediator's responsibility would in future fall to a single individual appointed by a regional administrator, himself appointed by the department and responsible for implementation of the act at the regional level.

Needless to say, this alternative opens up the possibility of another ethical problem of considerable scope, relating to the appointment of a public servant responsible for default mediation, and leaves the door wide open to a sort of latent patronage. It is logical to assume that certain hiring criteria might be formulated so as to work around the requirements of the Public Service Employment Act.

In this connection, it is vital for there to be a public debate on the appointment of these administrators, so as to ensure that no advantage may be taken of the appointment. There must also be assurance that there will be a pool of mediators, to avoid the same people being used every time.

The same logic applies to the designation of the appeal committees, also to be set up by the minister. Without becoming totally paranoid, the official opposition is entitled to call for more details on these specific aspects of the bill. We support the principle according to which Bill C-38 will give more responsibility to producers in managing their own affairs, particularly since this legislative measure will have the effect of generating a million dollars worth of savings.

In closing, I would like to draw your attention to the way the mediator is appointed. Care would have to be taken to avoid repetition-and with this I shall close-of the often disgraceful actions taken in the Canada Employment Centres, particularly when it comes to appointing the chair and the members of an arbitration committee. Often people are appointed merely on the basis of their political opinions, people who have never been near a real live unemployed person.

I trust that the mediator will have a better idea of what a producer is, what indebtedness is.

[Elwin Hermanson, Reform, Kindersley—Lloydminster, SK]

Madam Speaker, I will speak for 10 minutes to Bill C-38, the farm debt mediation act. As the Parliamentary Secretary to the Minister of Agriculture and Agri-Food indicated in his remarks, which were similar to remarks he made to Bill C-34, my remarks could be similar as well.

I expect we will have ample time to review the bill in committee since it is being referred to committee prior to second reading and amendments could be considered. Like Bill C-34, we believe Bill C-38 could be approved after hearing witnesses and after having a longer look at the bill. We might be able to put the bill in an acceptable form should the government agree to the amendments.

This bill replaces the old Farm Debt Review Board Act with a mediation act. It is not an earth shattering measure. It will not change the farmscape a whole lot and is not terribly controversial. Similar to my comments regarding Bill C-34 which I suggested was a diversionary tactic, this bill could fall into the same category. Maybe we should call it a stalling tactic in this case.

These are desperate times for the Liberals in rural Canada. They have snubbed the concerns and values of the rural areas with their lack of legislation since taking office in October 1993. One has only to mention Bill C-68 to know very quickly that Liberals are not very popular in rural Canada. Bill C-68, the gun control bill, was an insult to rural Canada. The minister in effect said: "I do not trust you, rural Canada. I do not like your lifestyle and I think I should interfere with it". The Minister of Justice proved that he did not understand rural Canada and the members of the rural Liberal caucus are desperate for some legislation they can put forward in order to say that they are concerned about rural Canada.

Bill C-68 to rural Canada was like telling urbanites they could only buy a certain brand of car. It was like telling people they had to wear a certain style of clothes. This is middle ages stuff which certainly does not go over very well in rural Canada. Rural Canada is not very happy with this Liberal government. The Liberals are grasping at straws to appease some of the bad feelings they have created among the voters in the rural ridings right across the country.

Another piece of legislation this Liberal government thought was a tremendous priority and rushed it through a few weeks ago was Bill C-33. That also did not go over very well in rural Canada. That was the bill the Liberals claimed would prevent discrimination against gays and lesbians but which Reformers said was actually a stepping stone to special benefits for a group in society. We are justified in our criticism of that bill. Just the other day the human rights tribunal indicated that as a result of Bill C-33 spousal benefits were required by employers.

The Liberals say: "We have to counteract this criticism somehow. Let us bring in Bill C-38, a bill to bring in a mediation act to replace the Farm Debt Review Board Act".

There seems to be some unhappy Liberal members when I talk about Bill C-33 so maybe I should mention a couple of statistics. Recently an Angus Reid survey showed what is happening in rural Canada as far as the issue of spousal benefits is concerned. I was going to move on but they seem to want me to talk about this issue some more.

In Manitoba and Saskatchewan, 54 per cent of the people on the prairies, urban and rural-and I am sure it is even stronger in the rural parts of the provinces-are opposed to spousal benefits, and another 4 per cent are undecided. It is strong opposition. In Alberta it is even higher at 55 per cent opposed and 7 per cent undecided. It is a smaller minority that supported the actions of the Liberal government in Bill C-33.

In trying to heal the wounds, the Liberals have brought forward Bill C-34 and Bill C-38. They can talk about the wonderful things they will accomplish with these two pieces of legislation as they simmer on the back burner over the summer. Then we will get into studying them in the fall when we come back.

Why is farm debt a problem? And it is a problem. Farm debt has been a problem for quite some time. Let us look back to what the Farm Credit Corporation did a decade or two ago. It became the lender of last resort.

It made some very foolish loans, loans it should not have made. It actually was the leader that got a lot of banks and credit unions pushed in that direction as well. It was making loans based on unreasonably high expectations in the farm sector.

Then the farm sector was hit with high interest rates of 19, 20, 21 up to 25 per cent interest rates plus falling farm commodity values which occurred during the 1980s. Suddenly a lot of farmers had lost their equity, had a high debt load and were not able to carry that load in their operation.

The Farm Credit Corporation took ownership of the land. The banks took title to the land. The Farm Debt Review Board was put in place to facilitate agreements between the lenders and the land owners to ease the pain that a lot of farm producers were going through when they were not able to make their payments to the Farm Credit Corporation and the other lenders.

The Farm Credit Corporation seems to be back in this business again of offering loans that perhaps it should not be offering. The minister has talked about expanding the role of the Farm Credit Corporation. Again we see land values escalating. We have to wonder if we will retrace the steps we took during the 1980s. This farm mediation act may have more impact in the future than we might wish to believe at the current time.

It is fine and good to look at bills like the farm mediation act as a way to facilitate some of the problems farmers find themselves in when they become cash strapped and unable to make their payments on loans they have taken out.

Let us look at the industry in broader terms and determine why farmers and other businesses get themselves into problems in Canada and we have bankruptcies, foreclosures and land going into receivership. It is because the cost of doing business in Canada is very high.

If the Liberal government would address that concern first before it replaces the Farm Debt Review Board Act with the farm mediation act it would be of far more benefit to producers who are feeling the cost-price squeeze than this piece of legislation which it is using to divert attention away from its lack of action.

Canadian farmers pay high taxes. The Liberal government has increased taxes and seems bent on maintaining a high cost of doing business in Canada. Farm inputs are high. The committee looked at farm inputs. It realized that some of the input costs are high because of the regulatory burden placed on farmers.

We recently had an ag-biotechnological conference in Saskatchewan where the premier of Saskatchewan said one of the high costs placed on that industry is that of high regulation. The pesticide registration act needs to be changed because of the regulatory burden passed on to consumers.

While Bill C-38 may be well and good to debate in the House, and I am sure we will when we come back in the fall, it is not the key critical area that will prevent farm debt from being a problem. It is the high cost of doing business in this country. It is high taxes and high regulations that are the problem.

The other concern we have with the bill is that we do not allow patronage as we saw in the form of patronage appointments to the Farm Debt Review Board. We want to make sure these mediators are appointed or chosen or based on their merit and their credibility rather than on the fact that they happen to hold a Liberal membership. I think that is extremely important.

We look forward to making improvements to the bill when it comes back in the fall.

[Marlene Cowling, Liberal, Parliamentary Secretary to Minister of Natural Resources]

Madam Speaker, I am more than pleased to have the opportunity today to speak on a very important piece of legislation for farm families, Bill C-38, the farm debt mediation act.

This new legislation will replace the current Farm Debt Review Act with a new farm debt and mediation process. This is another example of how the Liberal government is putting the needs of rural Canada, of farm families and farmers first. It is one of a long list of initiatives we are undertaking to improve the system to better serve the agricultural sector.

This new act addresses the problems that farmers have identified over the years with the Farm Debt Review Board system. It goes a long way to improving the farmer's position in insolvency proceedings.

The Farm Debt Review Act first came into being 10 years ago in response to debt problems in the farm sector at that time. It established farm debt review boards in every province to provide third party mediation between farmers and their creditors.

With the passage of this new act, the Farm Debt Review Board would be replaced by a new broader based farm income review service. This new service will help farmers position themselves to better adapt to new income opportunities to help those farmers who may experience financial difficulties related to either income or debt servicing ability.

This is a proactive approach. We are setting up a system to help farmers before difficulties become debt load problems with creditors. We are giving farmers more options and better opportunities to make their operations viable and stay on to do what they do best, to farm, to produce high quality food and to feed the world.

The government developed the concept for this new service to compliment the other positive initiatives we have taken in the areas of agriculture and agri-food.

This legislation is the result of cross-Canada consultations with farmers and their creditors as well as provincial governments. It is therefore not surprising that there is widespread support for the initiatives of the Minister of Agriculture and Agri-Food.

In keeping with the Liberal government's strong record of consulting with Canadians, we are proposing to refer the act to the standing committee before second reading to give farmers every opportunity to add their input.

The best solutions are found through consultation and co-operation. That is exactly what the government is doing with farmers for farmers. This new service is designed to be an integral part of an overall package of adaptation initiatives aimed at helping the sector adapt and take advantage of opportunities to build a strong rural Canada.

The service will be funded out of the Canadian adaptation and rural development fund which was announced in the 1995 budget to help the sector make the transition to a more efficient and competitive market economy.

The new legislation retains the stay of proceedings, review and mediation but now puts the mediation aspect into legislation. By placing mediation within the act, farmers are assured of an impartial mediation process and that the mediator is not advising the farmer or negotiating on behalf of the farmer or the creditor.

Further, farmers will not have the opportunity to appeal decisions regarding the granting, extension and termination of stays of proceedings which do not exist under the existing act.

By setting up an appeal process and a formal appeal board, the Liberal government is giving farmers a further recourse. In keeping with the government's commitment to reduce cost of government and to save taxpayer dollars, this new service would be less costly to administer with the current Farm Debt Review Board.

Since it is less administratively cumbersome, there would be better opportunities to reduce duplication and to work within provincial mediation services. There would be two components of the new farm income review service, a debt mediation service and a farm consultation service not tied to a debt crisis.

The new debt mediation service would also be based on a single mediator model rather than the current three-person panel. There would no longer be farm debt review boards and mediators would not be appointed by the minister.

We are depoliticizing the process to the benefit of farmers. These changes would reduce the program cost by more than $1 million per year.

The other component of the new farm income review service, the farm consultation service, would provide financial consultation to farmers facing emerging problems or when farm families are looking for opportunities.

The service would be preventive in nature and would provide advice on cash flow problems as well as helping farmers look at options for diversification, expansion, downsizing and restructuring their operations.

The bill will help farmers better manage their economic future and will help increase the overall prosperity of our agricultural sector and of our rural communities.

There is more optimism in the agriculture sector than I have ever seen. That optimism is the result of the positive policies the government is putting place like new legislation to help farmers.

I saw this optimism this past weekend when I had the pleasure of attending a centennial farm celebration for the Dalgeish family in Grandview. Four generations of the Dalgeish family have toiled

for long hours in very difficult conditions through the dirty thirties, through searing heat and bitter cold, through droughts and floods, through strong markets and world price wars. They have persevered and worked the same farm for 100 years, and that is certainly something worth celebrating. I am a third generation farmer and I know how important it is to ensure the farming tradition continues.

I am pleased to be part of a government that is putting in proactive farmer initiative policies for long term survival and prosperity of family farms, policies to ensure we have many more centennial farms to celebrate.

I have always been and I continue to be an ambassador for rural Canada, an ambassador for rural economic development. Never in Canadian history has the future of rural Canada looked so bright, and this is at least in part due to the very positive action the government has taken to enhance the agricultural sector. The government is putting in place the foundations needed to take rural Canada, farmers, into the 21st century. For this reason I wholeheartedly support the bill.

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

Madam Speaker, I would like right off to say hello to a friend of in North Bay, Ontario, named Jean Tanguay. He is perhaps watching, and I wanted not only to indicate his presence, but also to tell him that I cannot right now talk about francophone issues or the problems faced by francophones in Ontario, but am rising to speak to an agricultural issue, Bill C-38.

It is in fact the Farm Debt Mediation Act. I am delighted to see that the Farm Debt Review Act is being spruced up. As you will recall, this act was passed in 1986, ten years ago, when an exceptionally high number of farm families were forced to give up farming, because they could not meet their debt obligations.

Debt review offices were set up in each province at the time. The aim of Bill C-38 is to facilitate mediation between insolvent farmers and their creditors. It is also to amend the Agriculture and Agri-Food Administrative Monetary Penalties Act. Bill C-38 repeals and replaces the Farm Debt Review Act and provides initially for a review of the financial situation of an insolvent farmer and subsequently for financial arrangements with creditors, hence the importance of mediation, and, as appropriate, the suspension of the creditors' right to take proceedings against a farmer in serious difficulties.

Bill C-38 also provides for the Agriculture and Agri-Food Administrative Monetary Penalties Act to apply in the case of contravention.

My party, the Bloc Quebecois, supports the objectives of Bill C-38 in general terms. It is not a controversial bill. It appears to respond satisfactorily to the concerns of farmers, with the exception of financial institutions.

This bill is the result of extensive consultations involving all stakeholders, which showed that despite the need to maintain the stay of proceedings clause and to keep on helping through mediation, changes could be made to improve efficiency and lower costs.

When we look closely at the proposed bill, we find that farmers in financial trouble will no longer qualify. They used to under section 20 of the Farm Debt Review Act.

Now, the way I see it, there will be only two categories of farmers who will qualify. First, commercial farmers, second, insolvent farmers, that is farmers who can no longer meet their obligations when they come due or those whose property, if sold, is not sufficient to pay off all their debts.

Bill C-38, as it now stands, tightens up eligibility criteria. Under those conditions, we must wonder what would happen to farmers in financial trouble. Would they have to wait to be insolvent to qualify for help? I will point out that this is a rather strange kind of medicine. Personally I would choose to help farmers put their financial house in order before they become insolvent. Even though it might be a little late to act, better late than never. We must act while there is still time. This is the reason why I am asking the government to do something so that farmers in trouble might also get some respect from the government.

We are told that the new service will be less costly and cumbersome. However, this is one of the particular aspects of Bill C-38 which bother me. Another one is the entrenchment of mediation in the legislation. Under the Farm Debt Review Act, there was a certain amount of mediation, of course. However, with Bill C-38, mediation will be an integral part of the legislation and will ensure a fair process since the mediator will be the mediator. In other words, the mediator will not be in a position to give advice either to the farmer or to his creditors. His title says so. He must remain a mediator.

Another aspect of this bill which bothers me is the power of the minister to designate administrators, as it is stated in clause 4(a). Let me explain. Bill C-38 abolishes regional offices created by order in council since services will now be rendered by regional administrators responsible for the enforcement of the Farm Debt Mediation Act. These administrators will be appointed according to the Public Service Employment Act.

What bothers me is that the minister will have the power to designate individuals who are not public servants under the terms of the Public Service Employment Act if these persons meet the requirements set by the minister. Are we to understand that some of these regional administrators will be appointed in accordance with criteria determined by the minister? If such is the case, I believe we should debate that point. If the minister can designate administra-

tors in accordance with criteria different from those set out in the Public Service Employment Act, how can we be sure the present minister, or an eventual successor, will not use that clause for partisan purposes?

As far as the choice of mediators is concerned, we just learned that they will be chosen through a bidding process and that a large pool of mediators will be established. There again, we can legitimately question the process for the choice of one or all mediators. Given the actions of this government in several instances, we have every reason to ask if there will be patronage involved. This government is clearly too prone to patronage. At one point, there even was a Tory member and minister, the member for Joliette, the Hon. Roch LaSalle, who said that patronage was a normal part of politics.

This has been shown to be true in many instances. It is not only the case with Pearson airport, but also with Expressvu and others. This government indulges in a lot of patronage, particularly in the contracting out of public works. There is a lot of patronage there, and I daresay I would not want it to extend to agriculture, which is such an important sector for the future of many people. I believe the government, through its minister, must convince and reassure us that this will not happen.

Furthermore, we should pay attention to the standards to be applied to the salary of both regional administrators and mediators. On another level, the program administrator will be able to designate an expert to do the financial assessment or an expert to develop options to be considered in the course of the mediation.

Once again, what are the criteria for the selection of these experts? We are told the government could leave it up to the farmer, by giving him the resources necessary, to hire of the expert or the financial counsellor of his choice. What are the criteria or the requirements? You know, when we say "could", this does not necessarily mean it is an inalienable right.

Moreover, there are the twenty or so members who will at some point sit on the appeal committee. Once again, they would be appointed by the minister. We are told they would come from the farming community as much as possible. Again, this is perhaps only lip service, without any serious guarantee, I believe.

[Jake Hoeppner, Reform, Lisgar—Marquette, MB]

Madam Speaker, it is a pleasure to make a few comments on Bill C-38, the debt mediation act.

When I think back, only twice in history have farmers had to use this type of vehicle to stay solvent. The one vehicle I can barely remember as a child was called the debt adjustment board, something the government implemented shortly after the great depression.

The debt adjustment board was designed to keep farmers on the land. It gave them a chance to restructure. It took the clout of creditors away. They could not foreclose for a certain amount of time. It gave farmers a chance to get back on their feet.

Bill C-38, the farm debt mediation act, is probably a quick end to ending the misery of a farmer already in financial problems. The 120-day period of grace for a farmer with serious financial problems is not even a glimpse of hope.

When we look at the Canadian Wheat Board taking at least a year and six months to sell grain and to pay out final payments, how is a farmer supposed to reorganize his financial house in 120 days or a third of the crop year?

We have to look back at what created this big problem. I have heard many kind comments about the present Liberal government. I wish the past Liberal governments of the seventies and early eighties had been just as kind. They were the governments that allowed inflation to creep up to 15 per cent and 18 per cent, and interest rates up to 24 per cent. Bankers, accountants and financial planners told farmers they had to specialize and to redesign their farming operations so that they milked 100 cows instead of 25 cows and raised 10 pigs and some chickens. They had all the answers for farmers. They were supposed to have a better livelihood.

All of a sudden in 1981-82 when the crunch really hit interest rates rose to 24 per cent and it was only people like Mr. Gordon Sinclair who said there was no crisis or debt problem. Those people raked in huge profits and farmers suffered. They could not dig themselves out of their debt load.

If it had not been for the Conservatives coming through in 1986 with a number of huge payments to farmers, there probably would not be a farmer left in western Canada today. If it were not for FSAM I and FSAM II which doled out billions of dollars, not millions, farmers would not have survived to this point.

Because the Conservatives organized the debt review board which helped a lot of farmers to restructure, the kind Liberal government is now trying to say that it will get the few guys still left in misery out in a hurry; in 120 days it will be over for them. I do not see the kindness from the government I have been hearing about tonight.

Why should a farmer who has suffered for 10 years have the final bell rung? Why should he be told in another 120 days the game will be over? Is that the nice, compassionate government we see in the House? Or, is it just another way of more or less getting into the type of farming system we see in communist countries?

It bothers me when I have heard financial advisers and planners tell us for 10 years what we have to do and suddenly in the middle of the course they pull the plug and say we have to do something else.

I wonder why farmers are put in jail or are fined thousands of dollars for trying to market their grain at a better price. I cannot see the kindness of the Liberal government.

I will read a couple of words of a writer in the Glenboro Gazette in the centre of my riding: ``I don't care if you think the wheat board is a gift from God. If they are not held accountable they are going to go on filling their own pockets with the hard earned dollars of the farmer. And no government official deserves to live a better life than the people that elected him or her''.

If that is the case, why not give farmers in financial problems a million dollar pension plan like the one members in the House are getting? That is the way to solve their problems. It would be a lot easier to farm from there on. The people who were elected to the House are now telling them the game will be over in 120 days. That does not seem to be a kind and rational solution.

I will read a few lines from another article: "Illegal grain exports earned farmers $302,000". Two farmers who sold their own grain earned an $302,000. The Liberals are trying to tell me that the marketing system they think is more or less a godsend or a gift is keeping these farmers on the land. It is throwing them off. The $302,000 would pay a lot of debt.

Mr. Brooks says the loss could have been bigger because some of the barley graded as feed sold as malt barley. What is happening? Do we have a Canadian Grain Commission that does not know how to grade grain? Why do the Liberals not restructure the Canadian Grain Commission so we can at least have grain graded properly?

It seems strange where the kindness I have heard about this evening is coming from and going. It further amazes me when I read: "Rebel farmers' plight against wheat board may not yet be over". Mr. Sawatzky won his case. The judge said that there was no breaking of the law and that the Customs Act had not been violated. The kind Liberal government will take him for another ride.

A wheat board counsellor said: "An appeal is necessary because the order in council wouldn't apply to anyone charged before the loophole was closed. There are a significant number of charges still out there". Why not fix those farmers, those poor farmers the Liberal government is going to give another 120 days to end it all? It seems to me the kindness I have heard about this afternoon is probably the kindness of putting them out of misery. The quicker the better. It is selective Liberal justice.

When I look at a number of bills in the House they remind me of a flock of sheep. When a flock of sheep becomes discontented it runs around in the pasture looking for a better spot to graze. The sheep are not quite sure whether they should stop to graze or whether they should break out of the pasture and maybe get into an alfalfa field and kill themselves. This is what these bills seem to do.

The Liberals are not really sure how they should handle it, but they are running around in the pasture trying to divert attention so that if they find a hole in the fence to get through nobody will notice. Eventually they will probably overeat, bloat and die. That is how I see the last two bills the Liberals have introduced.

Every year it astounds me when I see the statistics and there are fewer farmers, not more. It is said that if government helps the farmer once, he can survive; if it helps him the second time, he is in big trouble; but if it helps him the third time, he is finished for sure.

I wonder what the third bill will be. We have seen two here today. Probably the other one is that whenever a farmer grows a bushel of wheat, he should not have any control over it at all. He should not even be able to market it to the cattle producers or the hog producers. Maybe the government should take that away too, like it used to be.

We have to start realizing that farmers are some of the best managers in the world, but the government still insists that it knows better and that it can help them. The only thing it can help them with is emptying their pocketbooks. After that has happened, usually then there are problems and the government gives them another kick in the butt and says: "Here it is, 120 days and the game is over".

Maybe we should have another bill or something to complement these bills. Then we could do it all in one swipe. Bills C-34 and C-38 are doing a good job. The kindness of the Liberals will be well remembered into the future, as was the kindness of the Liberals in the 1970s and 1980s. Those days will be remembered as long as history stands: 24 per cent interest and inflation at 18 to 20 per cent.

I appreciated the opportunity to speak on this bill. It has been a pleasure. I can see the Liberals were listening from the expressions on their faces. They paid attention.

[Wayne Easter, Liberal, Malpeque, PE]

Mr. Speaker, before speaking on Bill C-38 I have to respond to a couple of remarks made by the last speaker.

The Reform Party continues to use every opportunity it can to attack the Canadian Wheat Board. It does so using selective facts. I want to underline those selective facts.

Let me say that if one stacks up the record of the Canadian Wheat Board, the orderly marketing system versus the open marketing system, the Canadian Wheat Board over the past 20 years has shone every year. When one takes all the facts and looks over the years, it will be found that the Canadian Wheat Board has maximized returns back to producers like no other agency anywhere in the world.

I want the member to recognize that. I know it is hard for him to admit he is wrong on that point, but eventually he will have to. We will debate the issue at committee and I hope we can clear up his mind on that matter.

I am pleased to have the opportunity to speak on Bill C-38 which will repeal the Farm Debt Review Act and introduce a new act to facilitate financial arrangements between insolvent farmers and their creditors.

Let me suggest up front, and I agree with my colleague from Lisgar-Marquette on this point, it is a sad commentary that we need such acts as the farm debt mediation act that will help insolvent farmers gain a settlement with their creditors. It implies that there are financial difficulties on the farms at times, and there certainly are.

Some are caused by management difficulties and many others are caused by problems unrelated to the primary producer's ability to manage. It may be international monetary flows. It may be global prices in terms of commodities. It may be rapidly changing interest rates. Many of us, myself included, who are in the farm community have faced those kinds of times in the past.

In debating this bill this evening thus far, very little has been said about the extreme trauma farm families go through when they face insolvency. I raise this point because the reason, in part, to change the act is that there are far fewer hard financial cases coming forward to the Farm Debt Review Board today than there were 10 or 12 years ago, which is a good thing. When we deal with this issue, because times are a little better now, we in this House tend to deal with things in the abstract. Being in farm financial difficulty is very hard to explain. It is something people cannot understand unless they have experienced it.

For each farm family that is involved in a serious farm financial crisis, it is very troublesome and difficult for them, for the man, his wife and their children, in terms of the loss of pride and in many cases in terms of losing their heritage, in terms of loss of faith in oneself, even though it may not have been a management problem. It might have been an international marketing problem or some such thing that has put these people into financial difficulty. It is extremely painful and troublesome. There have been many suicides in the past in the farm community as a result of the farm crisis.

Whatever we do with this bill, we have to ensure that the bottom line is that we protect those farmers, those families and those rural communities that find themselves in financial distress. We have to ensure there are ways and means within this bill to protect the human aspect beyond the dollars and cents from the difficulties caused by the financial problems.

Eleven years ago, as president of the National Farmers Union, I led a farm finance lobby to lobby on this very issue on this very Hill. Yes, we asked for more power. We asked for an appeal process. We went far beyond where this bill takes us. But this bill does move us a step in a positive direction by putting in legislation some of the powers and by establishing an appeal process where formal appeals can be made.

I said earlier that we must strive to ensure that farm returns continue to surpass farm expenses. In all the other legislative matters we pursue in this House we must ensure that marketing agencies, supply management, the Canadian Wheat Board remain strong to ensure that the government through its agencies is working the best it can to maximize prices and returns to producers from the marketplace.

I mentioned that the government cannot knuckle under to a few law breakers who are trying to violate the laws of the land in terms of surpassing the Canadian Wheat Board. We cannot knuckle under to the few Reformers who are speaking out against the good marketing institutions we have in this land.

Allow me to move to Bill C-38 itself. I agree with the general thrust of the bill. I certainly am in favour of this bill moving to committee to be debated further. Many of the points in the bill were outlined in the Liberal Party document "Food Security for Canadians and a Fair Return for Canadian Farmers" in which we talked about the commitments we would make with respect to farm debt review boards.

The original and current role of the Farm Debt Review Board was outlined in the most recent Agriculture and Agri-Food Canada estimates on page 99. It said: "Farm debt review boards were established in 1986 in each province to ensure that farmers in financial difficulty or actually facing a farm foreclosure are afforded an impartial third party review of individual farm circumstances". That is important.

As my colleague from Dauphin-Swan River said earlier, this bill moves us toward focusing on farmers in insolvent situations. It applies through legislation an impartial administrator and opens up an appeal process.

On initial examination of the bill, the provisions would appear to limit rather than to expand access to the farm debt review process. I have concerns about that and I will be talking about this at committee.

One question which should be addressed is that according to the estimates for the department on page 99, since 1986 there have been 24,000 applications to the Farm Debt Review Board. The two sections applied under were section 16, farmers in financial difficulty, and section 20, insolvent farmers.

How many of these would have been excluded from the process had the insolvency rule applied since the inception of the Farm Debt Review Board? According to Agriculture Canada officials, approximately one-half of the applications under the former act were made for insolvency and the other half under the provisions of financial difficulty.

However, some of those in financial difficulty were found to be insolvent. The point is that perhaps one-third of the applications to the Farm Debt Review Board would never have qualified given that they were not insolvent. I maintain that the fact they were able to go before the Farm Debt Review Board and get mediation services and assistance is why many of them were able to keep their farms and are on the land today.

The bottom line as we debate Bill C-38 is it is important to remember that other things have to come into play as well. I believe we have to re-examine-

[The Deputy Speaker]

The hon. member's time has expired.

[The Deputy Speaker]

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

[Some hon. members]

Agreed.

[Some hon. members]

On division.

[The Deputy Speaker]

I declare the motion carried on division.

(Motion agreed to and bill referred to a committee.)

York Factory First Nation Flooded Land Act

[David Anderson, Liberal, for Minister of Indian Affairs and Northern Development]

moved that Bill C-39, an act respecting the York Factory First Nation and the settlement of matters arising from an agreement relating to the flooding of land, be read the second time and referred to a committee.

[Elijah Harper, Liberal, Churchill, MB]

Mr. Speaker, I rise to address the House on Bill C-39, the York Factory First Nation flooded land act.

Hon. colleagues will remember back in June 1994 when this House gave second reading to Bill C-36, the Split Lake Cree First Nation Flooded Land Act. The flooded lands acts are part of my constituency in the riding of Churchill. The bill before us, the York Factory First Nation flooded land act, is very similar to Bill C-36, the Split Lake Cree Flooded Land Act which we passed in 1994.

The objective is to enact certain elements of the implementation agreement that has been negotiated with the York Factory First Nation to fulfil obligations under the Northern Flood Agreement. In order to put this bill into perspective I would like to quickly remind hon. members about the circumstances that have led us to this proposed legislation.

In December 1997 the Northern Flood Agreement was signed by Canada, the province of Manitoba, Manitoba Hydro and the Northern Flood Committee who was acting on behalf of the five Manitoba First Nations: the Split Lake Cree, Nelson House, York Factory, Norway House and Cross Lake First Nations.

The purpose of this agreement was to address the adverse impact of hydro-related projects on the Churchill and Nelson Rivers that resulted in the flooding of almost 12,000 acres of reserve land in northern Manitoba.

This project also flooded more than 525,000 acres of non-reserve land, much of which was traditionally used by the five First Nations for hunting and trapping. The affected waterways were also used as a source of drinking water, for recreational pursuits, for food and commercial fishing, and for transportation.

The flooding had an enormous impact on these communities. It has robbed many families of their traditional livelihoods and caused many people to leave their communities in search of work and a better way of life elsewhere. It resulted in the loss of homes and personal property. In total, about 9,000 First Nations people were directly affected by the flooding.

The Northern Flood Agreement was intended to address the problems caused by the flooding, to compensate the five First Nations for loss of land and the negative impact on their livelihoods. The agreement identified financial compensation, community infrastructure programs, land and other benefits that will be provided to the affected parties.

Hon. members will recall from the debate on Bill C-36 that the Northern Flood Agreement did not live up to its promises. The agreement is vaguely worded and did not anticipate all issues that have since arisen. It did not set out the roles and responsibilities of the parties as clearly as we would have liked. As a result, little or no progress was made in implementing many elements of the agreement.

As the implementation process broke down, the affected Manitoba First Nations turned to the dispute resolution mechanism set out in the Northern Flood Agreement. Over time, more than 170 claims

were submitted for arbitration. Like many other elements of the agreement, this process turned out to be both inefficient and costly for all parties.

An important breakthrough was achieved in July 1990, when the four parties to the Northern Flood Agreement negotiated the proposed basis of settlement as a means of addressing outstanding claims and obligations. This proposed basis of settlement is now finding a foundation for negotiating implementation agreements with the individual First Nations.

One such agreement was signed with the Split Lake Cree First Nations in 1992, and is now being implemented. The settlement agreement provides for financial compensation, increases socioeconomic opportunities for the Split Lake Cree and releases Canada for all matters being dealt with under this agreement.

Implementation agreements have now been completed with two additional communities. After ratification by the community late last year the York Factory First Nation implementation agreement was signed in January. I am pleased to report that these negotiations are proceeding with the two remaining First Nations affected by flooding, Norway House and Cross Lake.

Bill C-39 will not enact an implementation agreement with York Factory. The agreement has its own legal force and the parties have already begun to implement them. However, as was the case with Split Lake, legislation is needed to execute certain provisions of the agreement. This is the purpose of Bill C-39.

This bill is virtually identical to Bill C-40. Nevertheless it is important that separate legislation be passed to demonstrate positive closure of this heated issue in each community. Because of difficulties in implementing the Northern Flood Agreement, the passing of band specific legislation will be viewed as a significant achievement by members of each community.

As I indicated a moment ago, Bill C-39 and Bill C-40 will enact certain elements of the Nelson House and York Factory implementation agreements. Specifically these bills will achieve four objectives. First, they will ensure that any lands provided to these First Nations in fee simple title will not become special reserves under section 36 of the Indian Act.

The removal of section 36 application means that the York Factory First Nation-as is the case with the Split Lake Cree First Nation-will be able to sell their fee simple lands, develop them, take out mortgages, and address property taxes pursuant to the arrangements with the province. In effect, they can use and control these lands as they see fit within the parameters of the provincial land regime.

Fee simple ownership will also protect the interests of the province by placing the land under the provincial land regime. It will reduce the administrative burden on the Department of Indian Affairs because it will not be responsible for managing these lands as it is for reserve lands.

Second, this bill will provide that moneys owed under the York Factory implementation agreement are not payable to the crown and therefore will not be administered as Indian moneys under the Indian Act. Instead the moneys will be paid to and administered by First Nations trusts at the discretion of the York Factory First Nation.

This is a very important provision. It will give the affected bands much greater control over these moneys than they would have under the Indian Act. This in turn removes a potential source of friction between the bands and the Department of Indian Affairs over how the money should be managed.

From the government's perspective this provision will further reduce the department's administrative burden. The First Nation will have more immediate access to these funds to address their own priorities. Nevertheless there will be important controls in the form of trust provisions set out in provincial law.

Third, this bill will provide that certain types of claims can continue to be made under the Northern Flood Agreement. However, if the applicable implementation agreement also provides for the matter to be settled or adjudicated, the provisions of the band specific implementation agreement will take precedence over the Northern Flood Agreement process which I noted earlier is costly and inefficient.

This proposed bill will enable Canada to use the Manitoba arbitration act when dealing with any dispute between the parties submitted to arbitration under the terms of the Northern Flood Agreement. Currently Canada is the only party to the agreement that does not have access to these arbitration mechanisms.

I want to assure hon. members that the proposed act will not establish a new program or provide new benefits to First Nations people. It does not include any commitments by the Government of Canada that do not already exist under the implementation agreements themselves. We are simply fulfilling commitments made by government to aboriginal people which is something we said we would do in the red book and which we have been progressively doing for the past two and a half years.

I am pleased that this agreement, and particularly the elements we are proposing to execute through legislation, will take us further down the path toward self-government. Bill C-39 will empower First Nations' leaders and the compensation provisions of the

implementation agreements will provide the means by which community conditions can be improved.

The provisions for fee simple ownership of land and to place compensation moneys under First Nations control are both important steps to ward increased self-reliance and self-government.

Under this approach, the First Nations' leaders will be accountable to their own members for spending, investment and land management decisions. This is a significant move away from the Indian Act and toward self-government, one that I wholeheartedly support.

In terms of improving community conditions, we need only look at the Split Lake Cree First Nation, which has been implementing its settlement agreement since 1992, to see examples of positive progress.

First and foremost, the agreement has put to rest a divisive issue in the community. As well, Split Lake now has the ability to manage water flows, which means that community members are better equipped and able to pursue their traditional lifestyles.

Through the Tataskweyak Trust, the Split Lake Cree First Nation is using its compensation money wisely and for the benefit of its members. This money is being used for socioeconomic development, to support resource harvesting, to compensate members for certain types of losses as a result of the flooding, to build remedial works and much more.

Chief Norman Flett, who negotiated the Split Lake settlement agreement, appeared before the Standing Committee on Aboriginal Affairs and Northern Development during the committee's review of Bill C-36. At that time, he told the committee that the implementation agreement had given his First Nation a huge lift in trying to improve community conditions.

His comments were echoed by John Peter Mayham, another witness from split Lake, who told the standing committee:

The money and the benefits we receive from our settlement are mainly used to build the community. We are reinvesting the dollars in the community. Before, 60 per cent of the income on a reserve went off reserve. That's why we're trying to capture our own money from the reserve and invest it inside the community-we're encouraging individual band members to go into their own economic development, their own businesses.

The benefits of the settlement agreement are visible throughout the Split Lake Cree community. Settlement moneys have already been used to build an arena, housing units and a mini-mall. Programs have been established related to business development, trapping, culture and recreation.

In the case of the business development program, any band member, whether living on reserve or off reserve, can apply for funding.

When Mr. Mayhem appeared before the standing committee, he reported that the band was exploring major joint ventures with outside construction companies. For example, a $2.7 million Manitoba Hydro contract was entered into as a joint venture between Split Lake Construction Company and Comstock Canada Company Ltd. Another $640,000 Manitoba Hydro contract was awarded to Split Lake Construction Company.

The Split Lake First Nation has also become one of the major shareholders of a company that manages capital projects for First Nations in several provinces. I am particularly impressed by an initiative of the Tataskweyak Environmental Agency, which has also been established by the Split Lake Cree First Nation. The agency's water quality monitoring program is so successful that the individuals responsible for the program have been invited to many other communities to provide information and guidance on water monitoring.

As parties to the implementation agreements, the province of Manitoba and Manitoba Hydro support Bill C-39. In fact, the provincial government is now in the process of drafting companion legislation to this bill, as required by the implementation agreements. The provincial legislation will further protect the interests of the bands.

This bill was developed in close consultation with the affected First Nations. Meetings were held only last month involving Canada, the province of Manitoba, Manitoba Hydro and the York Factory First Nations to discuss the proposed act.

Minor revisions have been made to address First Nation's concerns. I want to assure hon. members these acts will in no way affect the other three Northern Flood Agreement bands, including the two that have not yet signed settlement agreements, Cross Lake and Norway House.

I want to make it perfectly clear that the proposed act is not necessary to execute the implementation agreement with the York Factory First Nation. However, the act is necessary if we are to move away from the expensive and frustrating process of the Northern Flood Agreement.

It is necessary if we are to give the First Nation control over their compensation money and fee simple lands. It is necessary if we are to continue to move away from the paternalistic Indian Act and toward increased self-sufficiency, self-reliance and self-government.

By giving its approval to Bill C-36 several months ago, the House has already endorsed the government's approach to resolving outstanding issues related to the Northern Flood Agreement. I therefore urge my hon. colleagues to join me in supporting this legislation which will achieve the same positive objectives in other

affected communities. I support the bill and thank you, Mr. Speaker, for letting me comment.

[Claude Bachand, Bloc, Saint-Jean, QC]

Mr. Speaker, I am pleased to rise today to speak to Bill C-39. We are, in fact, treading familiar grounds, as a bill concerning Split Lake, which was passed by this House over a year ago, contained more or less the same provisions.

York Factory is one of five Cree communities covered by the agreement under consideration today. We are therefore in familiar territory.

As is my habit, I did a little research this afternoon because I like looking at things in context, rather than jumping straight into something that is very arid. I read about the customs and the people in that location, how long they have been there, and so on. I discovered that some 200 years ago, when the first Europeans arrived, they referred to the Cree as the "Cristinos". I do not know whether my hon. colleague from Churchill already knows any of this, but that was what they were called in those days. It appears that, over time, the "Cristinos" became the Cree.

Let us say that these people have claimed an extremely large territory that I will be happy to describe for you. It could even be argued-as they do, probably with good reason-that the First Nations have occupied this territory for the past 15,000 years. They have been there for a very long time indeed. As I said, this territory is huge, extending from the east side of James Bay to all the rivers in the north leading to James Bay, to the northernmost point of Lake Winnipeg.

Interesting discoveries were made there. Anthropologists and archaeologists have found, among other things, pottery at least 1,000 years old, created by these people's ancestors. I mentioned earlier that the Cree claim to have been living on this land for nearly 15,000 years now. At the time of European contact 200 years ago, there were more than 15,000 Cree Indians here, who spoke Cree; today there are still 11,000 Cree in five communities who still use the Cree language.

As for their culture and their art, which are still alive today, several pieces of embroidery were found, especially pieces made with moose and reindeer hair. Artefacts from that time were found and today still, the mark of their art is recognizable. Just by looking at Cree art and clothing, you can see how important embroidery was and still is in their culture.

I have also found how Europeans described the Cree at the time. Two hundred years ago, the Cree were said to be a dashing people, with elegance, great people skills and a way with words. These features were easy to recognize in Mr. Coon-Come and other Cree leaders from Manitoba, with whom I have regular contact. It is clear that these people are born diplomats who proudly speak up for their culture and the people they represent. They are indeed very eloquent.

All you have to do to convince yourself is to listen to Mr. Coon-Come speak Cree, because that is the tradition at these kinds of meetings: they speak together in their mother tongue at first. I am always dazzled by how rich the Cree language is. We will be listening to what they are saying through the voice of an interpreter and, now and them, we will take off our earpiece, just for the pleasure of hearing this rich language. It is always very nice to see these people speak their own language at first.

After these few words of introduction, allow me to move on. I do not wish to get into the bill per se right away, because this is not a very complicated bill, with its seven or eight clauses. I am more interested in what drives this bill.

In the case of this bill, as with the one on Split Lake, we had to look at what is called the Northern Flood Agreement. This agreement was reached in 1977. It was signed a bit hurriedly, because Hydro Manitoba had started the project seven years earlier. At some point, someone thought: "Maybe we should reach an agreement with the aboriginals who are claiming these reserves and who live close to the huge project going on".

So, the Northern Flood Agreement was signed in 1977 by a few parties, namely the Department of Indian Affairs, the Province of Manitoba and the Northern Flood Committee. At the time, the five aboriginal communities had appointed a group to represent them and to speak on their behalf. These communities were Split Lake, which has already reached the agreement regarding which a bill was passed here. Now, it is the turn of York Factory, to be followed a little later on this evening by Nelson House. I imagine the other two communities, Norway House and Cross Lake, are negotiating and have not yet reached an agreement.

So, after signing the agreement in 1977, Hydro Manitoba quickly flooded 11,861 acres of land, or almost 10 per cent of the claimed Cree territory. Environmental studies showed that this measure had a rather disastrous impact on the traditional aboriginal land, including the land used for trapping and hunting.

Let us not forget that we are dealing here with a mentality different from ours, particularly mine. Indeed, I come from an urban setting and, while I enjoy canoeing on the Richelieu River, I am not interested in hunting and fishing as a way of life. The federal government stopped the funding in May, an action that undermined the solidarity that existed between natives and the five communities against the federal government. Obviously, with the demise of the committee, things started to fall apart, and communities began negotiating on an individual basis. But on the aborigi-

nals' side, it must be understood that this is a way of life and an important tradition for them. I have often said that what probably matters most now in our society is a happy marriage between modern life and aboriginal tradition.

So a major portion of their traditional hunting, trapping and fishing activities was destroyed. All along, there were attempts to remedy that with all kinds of committees, but in the end what I will describe to you is not very pretty picture either because you have to see how the government proceeded.

The government proceeded by looking at the main harmful impacts. It looked for a means of arbitration to do it. What was provided for initially in the convention was a form of consensus; it is traditional, among aboriginal people, to try to attain one's goals by consensus. By setting up an arbitration mechanism to decide on all the harmful impacts-which were not even defined as I will explain later on-we ended up with conflict instead of consensus. That was a very bad move.

It must be realized that once a convention is concluded, there should be some current implementation. The aboriginals were relying on the Northern Flood Committee which was looked on as a precursor to bring aboriginal nations together to face up to giants like Manitoba Hydro, the Manitoba government and the Department of Indian Affairs.

So the Northern Flood Committee, in a sense, had an enforcement role for all aspects of the convention. Since there was now someone to ensure the day to day enforcement of the convention, it was quickly realized how important funding was. That is where things started to go wrong. I inform you that the Northern Flood Committee was disbanded in May.

The government managed a breakthrough by slowly isolating the communities. Split Lake was the first to sign, not without a few skirmishes with other communities around these megaprojects. The Indian affairs committee summoned communities who told us they did not like the Split Lake agreement, and that the megaprojects would have an impact on them as well as on the Split Lake community, and that signing the agreement had broken up the five communities' coalition.

The funding ended on April 1st, and the solidarity was undermined. I am not the only one making these allegations. Someone was asked to make a program review as part of the task force on program review. That individual said:

"Internal DIAND reports indicate that from 1977 to 1983 NFA bands received $10,000 per capita in benefits while other Manitoba bands received $26,000 per capita".

The second quotation is much more important.

"If one wanted to emasculate the terms of the agreement and deny the benefits of it to those entitled, all one would have to do is see that the NFC, the Northern Flood Committee, does not function by denying it operating funding or expertise".

By and large, that is what happened. The funding was simply stopped, solidarity disappeared and the communities were trapped into negotiating on an individual basis, with the result we know today.

Let me turn now to the scope and impact of the hydro development project. It is a major project. James Bay, in Quebec, is often talked about because it supposedly devastated the landscape, and disturbed the Cree traditional way of life. I do not deny those problems, but there is always something subjective in such an assessment.

One thing is certain, the Manitoba Northern Flood Agreement project has had major environmental impacts. Concerning river diversions, Hydro Manitoba has diverted up to 90 per cent of the Churchill River into the Nelson. Why? Because the power stations along the Nelson River needed a higher water rate. So the Churchill River was diverted into the Nelson River and that had an impact on Lake Winnipeg.

Extensive work was done in that area. It is understandable that this caused a disruption for the native peoples. The department itself recognizes the adverse effects of this project. As I said earlier, 2,134 square kilometres of land where 10,000 Treaty Crees lived were flooded and some commercial and recreational zones deteriorated.

I talked a little while ago about the hunting and trapping territories. Thanks to their hunting and trapping activities, these people had developed commercial zones that were disrupted by the diversion I have just told you about.

There was a decrease in the quality and quantity of fish, including higher mercury contamination. Of course, when rivers like these are diverted, huge surfaces have to be flooded, bringing out the mercury. And then the food chain becomes more and more contaminated.

Drinking water is contaminated. I will come back to this a little later on. You will see that an extensive infrastructure was needed to stop this drinking water contamination.

There was less and less wildlife to hunt and trap. I think I was very clear on that.

It became more risky to travel by boat because of the lower water level.

It became more risky to travel in wintertime, since it was now impossible to predict how safe the ice was because of the abnormal water levels.

You see, natives who have been living there for 15,000 years know these rivers. They know exactly how to travel in the summertime and the wintertime, by canoe or on foot, on these waterways.

In the wintertime, there is a danger that the ice will melt or that their usual ice bridges will no longer be safe. This was even recognized by the department. These were the department's words, not just mine.

Therefore, through the Northern Flood Agreement, Canada recognized its responsibilities. In fact, you know that section 35 recognizes a certain number of rights, and also authorizes a provincial body to take or to use Indian lands with the consent of the governor in council and under the conditions he sets down.

Therefore, with the bill before us and the Split Lake bill, it was the responsibility of the federal government to act in this manner.

In addition, the Government of Canada undertook to play an active role in implementing measures to ensure the viability of the communities affected. In this regard, I will describe to you a bit later the basis on which the government proceeded. I think that there were certain problems of application on the part of the government as far as any benefit to these communities was concerned.

There was also a great deal of ambiguity in the provisions of the Northern Flood Agreement. What happened was totally bizarre. An agreement was signed, and then, some six years later, given the difficulty of application, it was decided to ask for a legal analysis. A legal analysis six years after the signing of an agreement is almost inexplicable. Furthermore, they hired legal experts to explain the different percentages of responsibility of each of the levels involved. The agreement itself contains close to a hundred pages, and is backed up by interpretation documents of close to two hundred pages which were more or less applied.

Among other things, what is said about the water supply is far from accurate. Reference is made to Canada's obligation to provide a continuous supply of drinking water, and Manitoba Hydro's obligation to bear 50 per cent of the costs.

There is nothing whatsoever about payment schedules, finishing projects, or routing the water. As we speak, Canada has footed the entire bill and Manitoba Hydro has not yet coughed up a single cent. So there are certain problems of application.

The Canadian taxpayers are paying for Manitoba's infrastructures. I must tell you, moreover, that Quebec did not do it this way. Hydro-Québec's commitments concerning James Bay were respected to the letter. Representations were even made to the federal government for it to pay its fair share in Quebec, because there have been several points of dispute recently, including the education of James Bay Cree children. In that case it was the Government of Canada which was defaulting on payments to the Government of Quebec, whereas this time it is the Government of Manitoba which is defaulting on payments to Canada.

So Manitoba Hydro gave nothing and we are even told further down that there was no expiry date to the agreement as such. It is therefore taken for granted that the agreement will come to an end once the five communities have signed. It is nevertheless strange that almost 20 years later, since the agreement was signed in 1977, the relevant legislation is still not completed and there is still no deadline for the Northern Flood Agreement.

Furthermore, there has been many flaws in the implementation of the agreement as such. I raised earlier the issue of consensus versus conflict. It is easy to be full of good intentions at the outset and say that a consensus will be reached. The five communities agree with Manitoba Hydro. They speed things up a bit for the signature of the agreement because they know that work started seven years earlier. They say a consensus will be reached, they sign and there is consensus. Later, they find themselves in arbitration with 150 complaints. We can see, as I have said earlier, that consensus has been replaced by conflict. I believe this was not the intent at the outset but unfortunately the agreement was signed rather haphazardly and many problems ensued.

You cannot even say that problems are resolved today as I will show later when dealing with environmental impacts. People still have to deal with the environmental impacts. There has been numerous allegations of non compliance with the agreement. The issue of damages due to mercury contamination was not specific enough so they decided to quarrel about costs, who should pay, who is responsible and who should do the environmental follow-up. There are also no environmental monitoring mechanisms and reports. There are shortcomings as regards the provision of drinking water and a lack of commitment to corrective measures.

Therefore, even with the contribution of legal experts and legal studies, we are still wondering who is responsible for it, and the problems remain. Furthermore, Canada issued five complaints against Manitoba and Manitoba hydro. Earlier I mentioned the figure of $88 million, which was invested in a system to provide drinking water. The total bill in 1984-and I return to 1984-was $160 million. So the Canadian government has $160 million in claims against Manitoba. I mentioned the figure of $80 million earlier, but the Government of Canada has put a lot more money in this project. In the end, the taxpayers of Canada paid for the people of Manitoba.

Naturally, the auditor general also criticized a number of things I think I ought to raise here. A number of problems arise from the fact that there was no acceptable implementation plan. Among other things, the agreement should have concerned slightly more strategic issues, that is, the priorities and time frames for its implementation. There is nothing like this in the Northern Flood Agreement. Agreements were therefore signed without time frames or priorities. So people began in one place, did not finish and carried on somewhere else. Since there was no time frame, there was no rush. There were certain problems in implementing the agreement. With no implementation plan, problems started to surface.

As for the sources of funding for the various commitments, of course, in the terms of the agreement there were commitments by Canada, by Hydro Manitoba, the Government of Manitoba, the aboriginal people, but there was not enough put down in writing. As a result, there is now a free-for-all involving the various parties to the agreement, and people are coming up against difficulties because no one wants to pay the bills.

The parties did not put in place an appropriate monitoring mechanism, or implementation evaluation criteria or procedure for that matter. So, we ended up with relatively serious problems, that the auditor general condemned on several occasions. He also indicated that there were deficiencies in terms of monitoring as well. There were environmental monitoring groups, among others, checking and looking at the impacts on the environment.

This impact could be seen but, as you know, this type of megaproject requires a rigorously monitored environmental process so we can detect problems that are not necessarily apparent at first sight. There have been many problems in that regard. We realized that a federal interdepartmental committee had been put in place and that various federal departments could consult one another, but that no specific follow-up was provided for.

As for the burden of proof, the parties recognize that the lands, activities and lifestyles of the people living on these reserves may continue to be adversely affected. Manitoba Hydro was responsible for this jurisdiction. Manitoba Hydro has since refused to assume any responsibility, arguing that, because there is no definition of "harmful effects", it did not have to pay for the effects that could be considered harmful.

But these harmful effects can be seen. I made a few comments about this earlier. There is the effect of mercury contaminating the food chain. All this led to enormous problems.

I must keep a few arguments in reserve as Bill C-40 will be before us in a few minutes. Bill C-40 is very similar to the bill now under consideration. These two bills deal with two neighbouring communities. Tonight's bill applies to York Factory, and Bill C-40 to Nelson House.

I do not want to go on and on about the agreement as such, but I would like to refer back to it during debate on Bill C-40. There are questions relating to the Northern Flood Agreement that must be raised. It is very easy to draft a bill with eight clauses. However, as the official opposition, we must say that certain things continue to be questionable. The fact that agreements are being reached with the five communities does not mean our homework is done. There are still many things that need to be corrected.

The York Factory bill provides that land currently in fee must not become reserves under section 35 of the Indian Act. I will tell you about it in other speeches, but for each acre used, four are given back. Based on my information, the process is not yet completed, but we must make sure this land is not turned into Indian reserves.

The bill also provides that the amounts paid will not be paid to the crown as stated in the Indian Act, but to an aboriginal trust. We fully agree with that. I remember making a speech on Split Lake and saying that the aboriginals were not people living on some southern islands. This was in response to what a Reform Party member had said. Personally, I believe aboriginal people are quite capable of being responsible for a trust.

When these people gain financial independence, they develop their own businesses and they certainly do not need the authorization of the Department of Indian Affairs to build a house or a school. It is incredible to see what happens on a reserve when aboriginal people become financially independent.

Last summer, I visited a reserve called Les Escoumins, in Quebec. Its people developed a beautiful hotel complex on the shores of the St. Lawrence River. During the summer, it is packed with tourists. There are also several outfitting operations. In my opinion, with this money, they are developing one of the most beautiful reserves in Quebec. They are even ready to expand and to purchase private land.

Once financially self-sufficient and no longer subject to the Indian Act, natives can manage on their own with remarkable results.

Under this bill, Canada can also use the Manitoba Arbitration Act to settle all disputes. I was unable to study the issue further. I imagine the Manitoba Arbitration Act must be a model for arbitration. If York Factory and the government agree to ask Manitoba to act as a mediator, under the Manitoba Arbitration Act, the situation must be appropriate and the work done by this agency properly evaluated.

I conclude on this, because I will have to come back later-as will my hon. colleague, I guess-on Bill C-40. The Bloc Quebecois members will vote in favour, even if they know that the agreement was ratified by the York Factory representatives last December, I think. It was ratified recently. We must pass the enacting law. Since everything has been concluded to the satisfaction of both parties, York Factory and the federal government, the Bloc Quebecois will vote for Bill C-39.

[Bill Gilmour, Reform, Comox—Alberni, BC]

Mr. Speaker, I will be presenting the Reform position on Bill C-39, the York Factory flooded land act and Bill C-40, the Nelson House flooded land act, on behalf of my colleague, the member for North Island-Powell River.

We are here today to debate the second and third in a series of five bills dealing with reserve land that belongs to five First Nations in northern Manitoba which were flooded in the 1970s.

In June 1994 we debated the first bill in this series, Bill C-36, the Split Lake Cree First Nation Flooded Land Act. Bill C-36 was an enlightened agreement dealing with outstanding native grievances and it received support from the Reform Party. Bills C-39 and C-40, while dealing with similar subject matter, are unique to the York Factory and Nelson House First Nations and require some comment.

In the 1970s hydro related projects on the Nelson and Churchill rivers, along with the Lake Winnipeg regulations project, flooded almost 4,800 hectares of reserve land belonging to the five First Nations in northern Manitoba. In addition, more than 208,000 hectares of non-reserve land traditionally used by First Nations members for hunting and trapping were also flooded.

To address the impact of flooding, the Manitoba Northern Flood Agreement was signed by Canada, Manitoba, Manitoba Hydro and the northern flood committee made up of the five Manitoba First Nations: the Split Lake Cree, Nelson House, York Factory, Norway House and Cross Lake First Nations. The agreement included financial compensation, community infrastructure programs and new land acquisition.

Over the intervening years, implementation of the northern flood agreement broke down because the roles and responsibilities of the parties were not clearly defined and the agreement did not anticipate the complexities of concluding such agreements. In 1990 the parties to the northern flood agreement negotiated a proposed basis of settlement. This provided the foundation for negotiating implementation agreements with the five individual native bands.

Allow me to deal with the objectives of Bills C-39 and C-40 which are before us. They are identical in scope and focus but not in compensation. The bills contain four basic elements which my colleagues have touched on.

The first element is to provide that fee simple lands are not subject to becoming special reserves under sections 35 and 36 of the Indian Act.

The second element is to provide that moneys allowed under the York Factory implementation act and the Nelson House implementation act are now payable to the crown as Indian moneys as defined in section 35(4) of the Indian Act, but are administered by a First Nations trust.

The third element is to provide that the claims which may be made under either the northern flood agreement, the York Factory implementation agreement or the Nelson House implementation agreement be administered according to the terms of the applicable implementation agreement.

The fourth element is to enable Canada to utilize the Manitoba Arbitration Act when dealing with any dispute between the parties submitted to arbitration under the terms of the York Factory implementation agreement or the Nelson House implementation agreement.

Both bills are comprehensive and limit federal liability to their normal fiduciary responsibility. Ongoing or unanticipated future liability is placed upon the project proponent, Manitoba Hydro. Essentially the Government of Canada should never have signed such a loose agreement back in 1977 to cover these flooded lands and then foisted it on to the five affected bands.

However, we now have enlightened legislation before us and it is time to move on as we did on Bill C-36, the Split Lake Cree First Nation, and as we will probably do in a year or two with the two remaining flooded land bills dealing with the Cross Lake and Norway House First Nations.

One very comprehensive element of these bills is that settlement moneys will be administered by a trust company to guarantee accountability. To compensate these two First Nations for loss of reserve land, the federal government will contribute approximately six and one-quarter million dollars to the York Factory First Nation and about fifteen and one-quarter million dollars to the Nelson House First Nation.

Both the Government of Manitoba and Manitoba Hydro will make additional contributions of land and money. The province of Manitoba is particularly satisfied with the agreements. In conversations with the ministers and officials, my colleague from North Island-Powell River is satisfied that the deals are fair and just and that the five First Nations have been patient and realistic in their negotiations.

Bill C-39 and Bill C-40 will allow fee simple lands to be held by the respective native corporations outside the normal encumbrances of the Indian Act. The fee simple lands are subject to property taxation and any business originating from these lands is also taxable. Allowing these lands to be used for economic development purposes is both enlightening and allows for new independence of these First Nations.

Bill C-39 and Bill C-40 enable the individual band members to appeal under the Manitoba Arbitration Act if unsatisfied with their own band decisions which affect them. Naturally these agreements have received band ratification. The province of Manitoba is comfortable with these agreements and is promoting them.

As my colleague from North Island-Powell River said in his concluding remarks in second reading debate on Bill C-36, we are dealing with legitimate outstanding grievances. Bill C-39 and Bill C-40 are mirror images of Bill C-36, which passed a year ago, in scope and intent. Consequently, the Reform Party supports them. There are some finer points which may be clarified and elaborated on. However, this will best be done in committee.

[The Deputy Speaker]

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker]

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

[Some hon. members]

Agreed.

[The Deputy Speaker]

I declare the motion carried. Accordingly, the bill is referred to the Standing Committee on Aboriginal Affairs and Northern Development.

(Motion agreed to, bill read the second time and referred to a committee.)

Nelson House First Nation Flooded Land Act

[Jane Stewart, Liberal, for Minister of Indian Affairs and Northern Development]

moved that Bill C-40, an act respecting the Nelson House First Nation and the settlement of matters arising from an agreement relating to the flooding of land, be read the second time and referred to a committee.

[Robert Bertrand, Liberal, Pontiac—Gatineau—Labelle, QC]

Mr. Speaker, I am pleased to address the House on Bill C-40, the Nelson House First Nation flooded land act which is almost identical to Bill C-39 and to which my colleague from Churchill spoke so eloquently a few moments ago.

By voting in favour of Bill C-40 we can address the longstanding and contentious issue of implementing the northern flood agreements for the Nelson House First Nation. In turn, the community can begin to build for the future instead of constantly working to have past wrongs corrected.

The hydroelectric plants on the Churchill and Nelson rivers are important projects that have brought many economic benefits to the province. Unfortunately they have also had a significant and lasting impact on the lifestyle and livelihood of thousands of First Nations people in northern Manitoba.

The flooding caused by the diversion projects deprived many aboriginal communities of their traditional fishing, gathering, hunting and trapping areas. The flooding also disrupted or destroyed traditional water transportation routes and shoreline access points.

In many cases personal property and community infrastructure were damaged or destroyed. At the same time the bands received few jobs or other benefits from the hydro projects. The northern flood agreement was a well intentioned undertaking to resolve the many problems and grievances of people living in the affected First Nations communities. It contained provisions for cash compensation, land management, resource development, community infrastructure, navigation and so on.

Unfortunately, for various reasons the northern flood agreement did not meet expectations. That is why the parties undertook to negotiate band specific implementation agreements. That is why we have these two bills before us today. It is time to address these matters on behalf of the Nelson House First Nation which is asking only that Canada, Manitoba and Manitoba Hydro live up to their northern flood agreement commitments.

The Government of Canada has a clear obligation, as do the other parties to the northern flood agreement, to help the communities to cope with the impact of the flooding. We are endeavouring through the implementation agreement and this legislation to ensure that those obligations will be dealt with once and for all in a manner that respects the letter and spirit of the agreement.

It is clear the purpose of the proposed act is not to enforce the Nelson House implementation agreement. The purpose is to exempt certain aspects of the agreements from provisions of the Indian Act relating to land and Indian moneys, provisions that have the potential to impede implementation of the agreements as intended. We are all well aware the Indian Act is an outdated piece of legislation. This act will give the Nelson House First Nation the opportunity to escape some of its burdensome provisions.

The proposed act will also allow Canada to use the Manitoba Arbitration Act in relation to the northern flood agreement. Finally, it will ensure that certain types of claims can still be made against Manitoba Hydro and that the adjudication process set out in the implementation agreements will take precedence over the process set out in the northern flood agreement.

Great care has been taken to ensure that the proposed act is not prejudicial to the other northern flood agreement First Nations. In fact Bill C-40 has been drafted in such a way as to preclude it from affecting any First Nations except the one named in this bill. We are not, and I must emphasize this point, undermining the northern flood agreement. We are simply establishing implementation processes that will better achieve the intended results of this agreement.

I also want to stress that the negotiation of band specific implementation agreements has been completely optional. All three First Nations that have implementation agreements, as well as the two that are currently involved in negotiations, have the option of continuing to implement the northern flood agreement without these agreements.

These First Nations are satisfied, as is the government, that this new approach offers the best chance for success. Although there will always be some opposition to change, the prevailing mood in the affected communities appears to be in favour of moving forward quickly and effectively. These commitments have waited long enough. Hon. members should be aware that community consultation meetings were held in both the Nelson House and York Factory First Nations throughout the respective negotiations. The consultation process was an integral part of the implementation agreements. The leaders of these two First Nations were also consulted on the content of these bills. They support the bills and are eager to see the House proceed as quickly as possible.

It is worth noting that virtually all of Canada's obligations under the Northern Flood Agreements have been fulfilled. The implementation agreement signed with Nelson House earlier this year provides for a final release regarding Canada's obligations.

A good part of Canada's responsibility under the agreement was to ensure that the five reserve communities have a continuous supply of potable water. This has required an investment of more than $88 million by the government. Today I am pleased to report that all houses in both the York Factory and Nelson House communities are served with potable water.

Canada has also met its obligation under the Northern Flood Agreement, supporting the development of comprehensive community development plans contributing to the Nevanun Economic Development Corporation and sponsoring the five-year federal ecological monitoring program.

The outstanding obligations under the Northern Flood Agreement are primarily shared by Manitoba in terms of providing land to the affected First Nations and Manitoba Hydro with respect to restitution for the adverse effects of the hydroelectric project. Further action by these parties is provided for under the band's specific implementation agreements.

For example, Manitoba Hydro will continue to be liable for personal injury and death caused by or attributable to the project. As well, the utility will be responsible for safe operation of the water regime in the Nelson House and York Factory communities.

In regard to the latter obligation, Manitoba Hydro is required to provide written forecasts of the anticipated static water level for the current and succeeding month, complete with details on anticipated changes and the estimated amount of change. These monthly forecasts must also be broadcast by Manitoba Hydro over a radio station that provides service to these communities.

For its part, the province of Manitoba is required to provide provincial crown land to the First Nations to replace their flooded lands.

Approximately 53,000 acres will be set aside for the use and benefit of the Nelson House First Nation under the terms of its implementation agreement. Much of this land will be added to the First Nation's existing reserves. In fact, the Department of Indian Affairs and Northern Development has already initiated the additions to reserve process to effect the transfer of these lands. However, as has been mentioned, some lands will also be held in fee simple title.

The First Nation will establish a corporation to hold its fee simple lands on behalf of the band. The corporation will issue one common share which will be held by the chief of the band in trust for all members. The chief is required to sign the declaration and acceptance of trust.

Under the terms of the implementation agreement, fee simple lands can be sold by the band subject to certain requirements. For example, a public meeting must be held to explain any transaction and to make decisions about the disposition of proceeds. The fee simple lands will be subject to property taxes at the discretion of the province of Manitoba.

The implementation agreement will also provide the Nelson House First Nation with fair and reasonable financial compensation. Nelson House will receive a federal contribution of $15.25 million. The province of Manitoba and Manitoba Hydro, through a combination of cash, bonds and forgivable loans, will contribute the remainder of the package which will total over $65 million for Nelson House. These funds will be paid out over several years. They are to be used for a wide range of purposes, including

socioeconomic development, resource harvesting, compensation and remedial works. They will in no way affect the First Nations normal programming.

When past expenditures are taken into account, it might appear that Canada is providing the largest share in implementing the Northern Flood Agreement. However, other obligations in the implementation agreements, such as an enhanced land package by Manitoba, the continued responsibilities of Manitoba Hydro for personal injury and death, and an obligation to provide additional compensation if the established water regime is exceeded, are significant and have not been costed.

Each First Nation will establish a trust fund to hold and manage the compensation moneys. I want to assure hon. members that these trusts will be administered according to generally accepted accounting principles and provincial trust laws.

The trust provisions of the implementation agreements have been carefully drafted to satisfy the immediate compensation concerns of people who have suffered as a result of the hydroelectric project while ensuring that moneys will be available to meet the needs of future generations.

Hon. members should also be aware that the implementation agreements give off-reserve members access to compensation through these trust funds.

The Nelson House and the York Factory First Nations will continue to provide the Department of Indian Affairs and Northern Development with audited financial statements on an annual basis. As well, the trust indenture, which is a companion document to each implementation agreement, requires that an annual report of the respective trust's business be provided to all parties.

I would like to take a moment to update hon. members on the status of negotiations with the two remaining Northern Flood Agreement First Nations: Cross Lake and Norway House.

In the case of Cross Lake, a memorandum of understanding was signed in December 1993, followed by the signing of an interim implementation agreement in June of 1994. Formal negotiations between the First Nation, Manitoba, Manitoba Hydro and Canada were in abeyance during much of 1995 pending development of a realistic work plan and budget consistent with the federal mandate. I am pleased to report that preliminary discussions resumed on a four-party basis earlier this year.

A memorandum of understanding and an agreement in principle have also been signed with the Norway House First Nation. In December 1995 a group of Norway House members sought and received an injunction to suspend negotiations. However, this injunction was vacated in early 1996 and discussions have since resumed with Norway House.

Returning to the business at hand, this bill is clearly in the best interests of the Nelson House First Nation. It is also in the best interests of Canada and Canadian taxpayers.

The proposed act will not impose additional obligations on Canada, but rather will ensure that the government lives up to commitments which have been made to the First Nations.

I urge my hon. colleagues to recognize the many benefits of this short and simple act and to support it at second reading so that it can proceed quickly through the House.