Madam Speaker, the government is eliminating dairy subsidy gradually at the dairy industry's request so as to avoid any disruptions.
The dairy industry is continually improving its efficiency and competitiveness so consumers can expect that dairy products will continue to represent good value in the future as they have in the past.
The Canadian Dairy Commission has been instrumental through its pricing policies in maintaining fair returns for efficient dairy producers and ensuring a continuous supply of high quality dairy products for consumers are affordable prices. I am confident that the dairy sector will be able to adapt to the changes in the subsidy that remain to be implemented because they will be gradual and foreseeable.
Comparing support for agriculture between countries is best done by looking at producer subsidy equivalents, PSE. The PSE measures how much farm revenue results from policy transfers counting both expenditures by government and support created by market regulations. The PSEs are estimated consistently for all OECD countries.
In 1996 the PSE for Canada for all agriculture was 22 per cent and for the dairy sector it was 57 per cent. In the United States the PSE for all agricultural products was considerably lower at 16 per cent and for the U.S. dairy sector it was lower also at 48 per cent.
Expenditures for agriculture overall in Canada are expected to decline over the next few years. Spending on income support especially for subsectors other than dairy, poultry and eggs is declining, but the spending is also being shifted from passive price or income support toward the development of transitional assistance. In the United States spending is targeted less on adjustment and more on plain income transfers.
The Canadian government's resolve to cut back on spending overall, not only in agriculture, has helped to create an economic environment that is conducive to investment and development. Interest rates are lower in Canada than in the U.S. Agriculture benefits for Canada are very positive.