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House of Commons Hansard #148 of the 36th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was farmers.

Topics

Government Response To PetitionsRoutine Proceedings

10:05 a.m.

Peterborough Ontario

Liberal

Peter Adams LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, pursuant to Standing Order 36(8), I have the honour to table, in both official languages, the government's response to seven petitions.

Committees Of The HouseRoutine Proceedings

10:05 a.m.

Liberal

Charles Hubbard Liberal Miramichi, NB

Mr. Speaker, I have the honour to present, in both official languages, the fourth report of the Standing Committee on Fisheries and Oceans.

In accordance with Standing Order 108(2), the committee undertook a study of fisheries issues throughout the west coast of Canada.

Pursuant to Standing Order 109, the committee requests a comprehensive response to this report within 150 days.

Issue Of Ceremonial Statements Of Service ActRoutine Proceedings

10:05 a.m.

Liberal

Réginald Bélair Liberal Timmins—James Bay, ON

moved for leave to introduce Bill C-453, an act to regulate the issue of ceremonial statements of service and recognition of duty.

Mr. Speaker, having been involved for some 20 years in federal politics, I have, on many occasions, encountered veterans who were not wounded in any conflict that Canada was involved in and therefore have nothing to show in terms of a card. On the other hand, those who were wounded are carrying a health card which they cherish.

Therefore, today I am proud to introduce this bill proposing a certificate of service and duty to all war veterans and civilian groups who served in support of the armed forces in such organizations as the Red Cross and the Merchant Seamen, as well as United Nations peacekeeping units.

This certificate will recognize and honour their significant participation in any armed conflict or war in which Canada took part. They are all responsible for the freedom we enjoy today.

Over the years, I have on numerous occasions met veterans who had nothing to show for their participation in world conflicts. I am therefore extremely pleased to introduce this bill today, which will enable them to carry in their wallets a mark of recognition by the Government of Canada.

(Motions deemed adopted, bill read the first time and printed)

PetitionsRoutine Proceedings

10:05 a.m.

Reform

Jim Abbott Reform Kootenay—Columbia, BC

Mr. Speaker, I have three sets of petitions to present. The first petition is signed by 59 Canadians who are concerned about the Copyright Board and the recent decision of the Copyright Board concerning commercial television royalties which will retroactively reduce the royalties of Canadian music creators and adopt the American practice of enforcing individual music composers to negotiate directly with large broadcasting corporations.

The petitioners are requesting that parliament strongly affirm this commitment: That the Minister of Industry immediately appoint a judge to chair the Copyright Board in respect of parliament's intent that the board be competent and objective as a quasi-judicial tribunal.

PetitionsRoutine Proceedings

10:05 a.m.

Reform

Jim Abbott Reform Kootenay—Columbia, BC

Mr. Speaker, the second set of petitions concerns marriage and contains 325 signatures. The petitioners stated that the majority of Canadians understand the concept of marriage as being only the voluntary union of a single, that is, unmarried male and a single, that is, unmarried female. The petitioners pray that parliament will enact Bill C-225, an act to amend the Marriage Act and the Interpretation Act.

PetitionsRoutine Proceedings

10:10 a.m.

Reform

Jim Abbott Reform Kootenay—Columbia, BC

Mr. Speaker, the third petition is a gathering of four separate petitions, all on the same issue, containing a total of 1,060 signatures.

The petition pertains to the work of the Reform Party and others who are trying to bring in the philosophy of zero tolerance relative to drunk driving. The petitioners state that victims of the crime of impaired driving must be given the highest priority, as reflected by their impact statements, and that in cases of impaired driving causing death or injury sentencing must reflect the severity of the crime.

It is my pleasure to present this petition on behalf of 1,060 signatories in memory of Norm and Shawna.

PetitionsRoutine Proceedings

10:10 a.m.

Liberal

Raymond Lavigne Liberal Verdun—Saint-Henri, QC

Mr. Speaker, I have the honour to table, in both official languages, at the request of the Comité des citoyens pour le monorail, a petition signed by over 6,200 of my constituents. They are asking the government not to transfer the infrastructure of the Champlain Bridge to the Quebec Government until the latter issues a total ban on its automobile, bus and truck traffic.

The petitioners are calling for a monorail project to the downtown area, which will use the bridge structure without any noise or other pollution.

I am totally in agreement with this petition.

PetitionsRoutine Proceedings

10:10 a.m.

NDP

John Solomon NDP Regina—Lumsden—Lake Centre, SK

Mr. Speaker, it is my pleasure, pursuant to Standing Order 36, to present a petition on behalf of Canadians who are very concerned about the multilateral agreement on investment. They are worried that this agreement, if signed, will hamper our sovereignty and will limit the social programs that we have.

Obviously they are very concerned that Donald Johnston of the OECD, who is the Canadian heading up that organization, is trying to get this agreement signed on behalf of very large multinational corporations which will negatively affect Canadians.

They are skeptical of the assurances that the MAI is dead and, therefore, are asking parliament, if the MAI is resurrected, to not sign as a country.

PetitionsRoutine Proceedings

10:10 a.m.

Reform

Allan Kerpan Reform Blackstrap, SK

Mr. Speaker, I have the honour this morning to present a number of petitions to the House dealing with two different subjects.

The first petition, which has many names on it from people in my riding and from right across our province of Saskatchewan, calls upon the Parliament of Canada to provide relief by not implementing a tax on health benefits.

PetitionsRoutine Proceedings

10:10 a.m.

Reform

Allan Kerpan Reform Blackstrap, SK

Mr. Speaker, the second petition is signed by a large number of people in my riding and others who call upon the government to join with the provincial governments to make national highway system upgrading possible.

Questions On The Order PaperRoutine Proceedings

November 3rd, 1998 / 10:10 a.m.

Peterborough Ontario

Liberal

Peter Adams LiberalParliamentary Secretary to Leader of the Government in the House of Commons

Mr. Speaker, I would ask that all questions be allowed to stand.

Questions On The Order PaperRoutine Proceedings

10:10 a.m.

The Deputy Speaker

Is it agreed?

Questions On The Order PaperRoutine Proceedings

10:10 a.m.

Some hon. members

Agreed.

SupplyGovernment Orders

10:10 a.m.

Reform

Garry Breitkreuz Reform Yorkton—Melville, SK

moved:

That, in the opinion of this House, the government should move immediately to defend the interests of Canadian farmers from the unfair subsidies and unfair trading practices by foreign countries, which have changed the problem of stagnant farm incomes to a full-blown farm income crisis, and in the event no immediate progress is made on this front, introduce emergency measures to provide tax relief, lower input costs, reduce user fees and address the inadequacies of the farm safety-net programs.

Mr. Speaker, I will be splitting my time with the Leader of the Official Opposition. Reformers will be splitting their time throughout the day.

I will begin by reading some headlines as they have been appearing in the papers out west. Since the minister of agriculture has been denying there is a farm income crisis, I can only surmise he is only reading the newspapers from Toronto.

Here is what the newspapers are saying. From the Calgary Herald on October 31, “Outlook cloudy for agriculture sector”. From the Regina Leader Post on October 30, “Farm crunch looms”. From Agri-Week on October 26, “No government aid for farm income crunch”. From the Winnipeg Free Press on October 30, “Farmers turn up heat on Ottawa as farm income plummets”. From the Saskatoon Star Phoenix on October 22, “Subsidy wars killing farmers”. From the Western Producer on October 22, “Net farm income needs attention” and “Prairie pools demand feds respond to farm crisis”.

Need I go on? Do the Liberals read the papers outside Toronto? Apparently not. The minister of agriculture has been responding to opposition questions about the farm income crisis since September 24 and has yet to acknowledge there is a real problem. On September 24 the minister said:

The disaster relief program and the farm safety net program for Canadian farmers are already in place.

On October 28 the minister repeated his mantra by saying:

We have one of the strongest safety nets in the world.

On behalf of thousands of farmers in Canada, if Canada has one of the strongest safety net systems in the world, why are we having a farm income crisis? Why are so many farmers in trouble? I ask the minister to acknowledge at least that NISA is totally inadequate in helping farmers compete with unfair foreign subsidies.

I want the minister of agriculture to listen to the words of just one of the many farmers coming into my office and phoning me. I spoke to this gentleman last week. He has been farming for 33 years. Here are his own words:

I feel so terrible. I can't even put money on the offering plate Sunday morning. I'm probably worth more than most people in Canada—I farm seven quarters, fifty head of beef cattle, I got seventy bushels of barley and 35 of wheat per acre. An average calf crop. Productivity is good, but prices aren't. I haven't replaced my equipment in seven years and it wasn't new then. I'm repairing and patching but I can't anymore. Farming is not like other businesses—we don't want to make a lot of money, but we can't keep going, and we have no alternatives. We have no alternatives! Farmers have something to offer the country—it's being eroded—it's not just dollars and cents. It's a sin that raw food has no value in exchange for goods and services. Why does our nation have a different view from the Europeans on this?

I share this with the House of Commons because this farmer expressed better than I the real pressures farmers are feeling on a daily basis. It takes a special kind of person to be a farmer. It is not an easy life. They only want to make a living. The minister should come with me to the restaurants in my riding and listen or take some of the calls I get into my office.

No matter how one calculates farm income, total net income or net cash income or realized net income, farm incomes have been flat on the prairies for at least 20 years. These farmers have managed to survive year by year in spite of stagnant incomes, but they are in no position to withstand a real income crisis such as we are experiencing today.

The indications of the crisis are varied. It is taking its toll on farmers. Record numbers of Saskatchewan farmers are calling the farm stress line this year. In September the stress line received 147 calls. The program co-ordinator for the line said:

There's been twice as many calls in September compared to other months. The hope is going. If you don't have hope you don't have much to look forward to. You can only struggle for so long.

Last Friday the Debt Mediation Service said that inquiries for help were already up 22% over last year in Saskatchewan and Manitoba. It estimates that 600 producers will use its service this year alone. These are real people behind the statistics that the minister of agriculture is ignoring. These are not the only people the minister is ignoring.

The Canadian Federation of Agriculture says farm income is likely to drop by more than 40% this year, due largely to the collapse of the Asian market. Wheat prices have fallen by more than 40% over the last 12 months while another hard hit sector, hog farming, has seen a price decline of 28%. Meanwhile total federal funding for agriculture sits at $670 million, down from $2.5 billion a decade ago.

Saskatchewan agriculture minister Eric Upshall said:

We have about a 10% subsidy according to the OECD analysis, the U.S. has roughly 30% and the Europeans are at 36 to 37%. So there's a tremendous difference. We're caught in the squeeze. We've been the good guys on the block. We've cut our subsidy.

The world market has been hit from two sides. On the one hand there is a huge grain crop this year made larger because heavily subsidized European farmers decided to produce more wheat. On the other hand the booming Asian market is one big bust.

According to Statistics Canada, Canadian farm cash receipts in the first half of 1998 were 5.1% lower than the same period last year. In Saskatchewan they dropped 8.9% and 12.5% in some areas of Manitoba, blamed largely on a decline in wheat prices brought about by record world-wide production and dampened demand.

Canadian wheat, barley and livestock revenues were all down during the first six months of the year. Some Saskatchewan hog producers say that they are losing between $30 and $40 on every hog they sell. They are asking the province for a bailout.

The price of finished cattle, animals that have been fattened at the feedlot, is dismal as well. Saskatchewan farmers will likely see their realized net cash income less depreciation drop by more than 60% this year to less than $300 million. Meanwhile there has been no dropoff in freight rates or the cost of chemicals, fertilizer and farm machinery. There has been no dropoff in fuel and debt servicing.

From 1995 to 1997 gross operating expenses for Saskatchewan farmers have risen from $3.9 billion to $4.36 billion according to the province. The total debt held by farmers has risen from $4.48 billion in 1993 to $5.11 billion in 1997. Last year farm debt jumped 7% alone.

Finally last week Agri-Week reported:

Never before have prices of almost every major commodity class been down at the same time. This is the first time that the agricultural economy has been on its own through the down phase of an economic cycle.

The prairie pools are calling for an elimination of foreign subsidies, a reduction or elimination of cost recovery programs which the pools say cost farmers $138 million in 1998, and the development of a national disaster assistance program. Why is the minister not listening?

What can we conclude from all this? Our farmers could compete if only our government had not mismanaged affairs so badly. Our tax burden makes input costs for farmers very high. Some have estimated that for some items the farmer must purchase the input costs may be almost 50% tax.

The responsibility for the mismanagement of the agricultural portfolio rests squarely on the shoulders of the government and the last two ministers of agriculture. If the Liberal government and the bureaucrats were doing their job, agriculture would not be in this crisis. With the big bucks that are being poured into the department of agriculture bureaucracy, they should have been on top of this situation and had it solved before it became a crisis. Other countries did.

We live in a wonderful country. We all enjoy high quality food and a high standard of living. Farmers have contributed a great deal to it. We should hang our heads in shame for the little regard we have for them and the value they are to us.

SupplyGovernment Orders

10:25 a.m.

NDP

Lorne Nystrom NDP Qu'Appelle, SK

Mr. Speaker, I join today with my colleagues in the House in saying that what we are facing in agriculture is a real emergency.

In my province of Saskatchewan the statistics show that in 1997 net farm income has dropped by 84%. People are suffering because of that. This is no surprise. If your income, Mr. Speaker, was to drop by 84% you would be in the House probably asking for an emergency injection of cash because you cannot survive when your income goes down by 84%.

This is compounded by the fact the United States about two weeks ago passed a farm bill in Congress to subsidize its farmers by $6 billion. There are subsidies in the European market of approximately $200 a tonne for wheat. Because of that our farmers are caught in a terrible cost price squeeze.

Recently the Saskatchewan legislature passed a motion, I believe it was unanimously, calling for an emergency farm package. We are dealing with a situation where there is to be a small surplus next year. The House should look at investing part of that surplus into an emergency farm package for farmers so that they can survive. In the meantime it would also stimulate the economy by creating jobs.

Does my colleague who just sat down agree that we need an emergency injection of cash, an emergency aid program of several hundreds of millions of dollars, so that farmers, particularly grain farmers, can survive?

I once again remind the House and the minister of agriculture that net farm income in Saskatchewan has dropped by 84%. That affects everybody in our province and everybody right across the country. When the farmer is worse off the small towns are worse off, the cities are worse off, the unemployment rate goes up, and people stop spending money. There is a cyclical effect which affects absolutely everyone.

I hope the Reform Party will join with us today in calling for an emergency farm package of several hundred million dollars to inject some cash into the pockets of farmers within the next few months to seed their crops next spring and so they can survive.

SupplyGovernment Orders

10:25 a.m.

Reform

Garry Breitkreuz Reform Yorkton—Melville, SK

Mr. Speaker, I appreciate the support that I am getting with regard to the motion we have put forward.

I reiterate what I said in my speech in case people missed it. First we have to acknowledge that there is a crisis. The minister has yet to do that. We cannot begin to solve the problem if we do not first acknowledge that there is a crisis. That is where we should begin. If we are to solve that crisis we have to go to the root of the problem.

Farmers know the root of the problem. For us to sit in the House and try to dictate what the solution is to the farmers in Saskatchewan, Manitoba, Alberta, Nova Scotia, Ontario or wherever a crisis is being experienced, will not work. The bureaucrats here have mucked it up so badly that they will not do a better job, in my estimation, if we continue along this way.

I saw statistics a short time ago where if we took the salaries of all the bureaucrats—there is one bureaucrat for every 5.7 farmers and they do not work for peanuts—and divided it among farmers, we would probably not have a crisis.

We have to look at the big picture. We have to look at what farmers are telling us. If the solution comes from Ottawa it will distort the market even more. We need to have the solution coming from farmers. We have to do it soon. The crisis is here. We have to address it right now. That is where we begin.

SupplyGovernment Orders

10:25 a.m.

Calgary Southwest Alberta

Reform

Preston Manning ReformLeader of the Opposition

Mr. Speaker, I represent an urban riding, Calgary Southwest. To the best of my knowledge all my constituents are in the habit of eating three times a day. Thus all of them, as indeed all of us, have a vested interest in the financial health of the agricultural sector, which is the subject of the motion before the House.

I believe I am now the only party leader in the House who was actually raised on a farm. I urge the other leaders to join in this debate in recognition of the importance of agriculture to us all.

The first purpose of the motion before the House is to draw the attention of the House and the media to what my colleague from Saskatchewan has rightfully called the farm income crisis.

Some of my other colleagues will describe the nature and extent of this crisis by reference to its impact on particular producers and their families in rural ridings. But the basic facts are clear, some of which have already been cited. Farm income is likely to drop by more than 40% this year as grain, beef and pork producers all face declining prices. This is in addition to a steep price decline last year.

Wheat prices have fallen more than 40% over the last 12 months while hog farmers have seen a price decline of 28%. On a provincial basis, to cite only two examples, the realized net farm income of Saskatchewan farmers is expected to drop by more than 60% this year to less than $300 million, and Prince Edward Island's realized net farm income for 1998 is expected to be 87% less than the 1992-1996 average.

I suggest that if the prices or incomes in any other industrial or commercial sector such as the auto sector were to drop by 30% or 60% or 87% we would immediately recognize and acknowledge a crisis. That is what this motion now calls on the government to do with respect to agriculture.

The second purpose of this motion is to urge the government to respond to this crisis with more than empty words and assurances that what it has been doing is good enough. We are all familiar with the government's standard excuse for non action, the tiresome argument that the general slowdown in the Canadian economy and the particular income crisis in agriculture is all due to factors beyond the government's control.

The official opposition takes a different and more proactive approach. We divide the causes of our current economic difficulties into two categories. One category identifies factors beyond our control which we ought to monitor like the Asian downturn and the worldwide downturn in commodity prices. But the other category includes factors contributing to the economic downturn and the crisis in certain sectors which are within our control and which we can and should be doing something about. It is to this category of factors that we draw the attention of the House and the government.

The slowdown in the Canadian economy in general and the farm income crisis in particular is aided and abetted by high debt and taxation levels at home and by the slowness of the Liberal government to attack domestic and external barriers to trade. Every Canadian producer, including every Canadian agricultural producer, has a domestic monkey on his back that negatively affects his ability to compete internationally. That monkey is the excessive levels of taxation in this country.

In the case of agricultural producers the tax component of input costs, in particular fuel and fertilizer, reduces disposable farm income year after year. Broad based and immediate reduction of taxes including taxes masquerading as user fees is therefore one measure the government should employ to deal immediately with the farm income crisis.

If the federal government had followed the fiscal plan first advocated by Reform which called for a balanced budget early in the 1990s and tax relief and debt reduction immediately thereafter, the disposable income and savings of agricultural producers for the last five years would have been significantly higher than they are today, thereby putting them in a much better position to withstand the current downturn in commodity prices. In other words, the best income support program is not some government safety net after the fact but tax policies that leave more dollars in the pockets of Canadian producers and consumers to start with. How many income crises will it take for this government to learn that lesson?

Second, every Canadian agricultural producer has another monkey on his back in the form of unfair subsidies and unfair trading practices by foreign countries.

In Canada's case the most damaging of these foreign monkeys has been the excessive agricultural subsidies paid to European Union and American farmers, subsidy levels in the order of 30% to 37%, and recent attempts by several U.S. states to blockade shipments of Canadian livestock and grain in complete violation of the spirit and the letter of the free trade agreement.

As everyone in this House knows, the Liberal Party of Canada has a checkered record with respect to both subsidies and free trade. Throughout the 20th century Liberal administrations have instituted far more subsidies than they have removed, which makes them very poor champions of subsidy reduction on the international stage. Because it bitterly fought the Canada-U.S. Free Trade Agreement in 1988 and even promised at one time to revoke it, Liberal Party protestations against violations of that agreement are treated with extreme scepticism in Washington.

That is why this motion calls for more vigorous action by this government to defend Canadian farmers from unfair subsidies and unfair trading practices by foreign countries.

I have one final observation. When we ask Canadian farmers to evaluate this government's performance on agriculture more and more of them are responding by saying it is like what it has done to their taxes and health care. What they mean by that is mismanagement, mismanagement that is leading to a lower standard of living.

Many Canadians will be judging the government's ability to respond to the general economic slowdown by how it responds to the immediate income crisis in agriculture. That is why this debate is so important. If the government cannot respond more quickly, more positively and decisively to the downturn in one sector, the agriculture sector, who will believe that it is capable of responding quickly, positively and decisively to the general economic downturn which the finance minister himself is predicting?

If the government wants to restore some measure of confidence in its ability to manage economic crises other than by resorting to denials, excuses and diversions, let it respond positively to the motion before the House. I urge hon. members to support the motion.

SupplyGovernment Orders

10:35 a.m.

Prince Edward—Hastings Ontario

Liberal

Lyle Vanclief LiberalMinister of Agriculture and Agri-Food

Mr. Speaker, I would like to pose a couple of questions for clarification to the Leader of the Opposition.

In his comments a minute ago he accused the Liberal government of giving a lot of subsidies to farmers in Canada. I am just wondering if what he is saying now is that he feels we should do more. I will address how I think we can assist farmers in the future but I want to ask him if he would square that. He contradicted himself fairly severely.

I wonder if he would comment about the fact that in the lead-up to the last election his party said it would take $640 million out of a number of ministries and another $690 million out of regional agricultural support. If we add the two together it comes to a sizeable number, about 80% of the agriculture and agri-food budget, which includes the funding of $600 million a year at the present time to agricultural support to Canadian farmers. I wonder how the hon. member thought he could remove that much money, add more subsidies and do it with only 15% of the agriculture budget we have now.

SupplyGovernment Orders

10:35 a.m.

Reform

Preston Manning Reform Calgary Southwest, AB

Mr. Speaker, I thank the minister for his questions. Let me deal with them in the order in which he raised them.

First, my general point was that in the 20th century the record of the Liberal government has been to grant far more subsidies than to grant subsidy relief. The minister can check that out and go through all the subsidies. I am not talking only about agriculture. I am talking about the Liberal government's general record in subsidization. Yes, there has been some removal of subsidies in the agriculture sector in the last number of years. But the overall record of the government has been to resort to subsidies time and time again. My point is that when it is a government with a reputation for subsidization it makes it a poor advocate for subsidy reduction in other countries because they simply point to the government's record and say “you guys are great people to talk”.

The second point with respect to this subsidy question is by leaving NISA, the net income stabilization account, as the primary farm support program we would think the government would be more interested in increasing net incomes during the times when prices are good. If we are to rely on a NISA type program it is stronger when prices are low if we leave more dollars in the pockets of consumers when prices are high. Net income stabilization works better if we leave more income in people's pockets during the boom time. That is why I hope minister would be an advocate of tax relief with the finance minister because that would make the one program he is relying on work better.

The second point the minister made is typical of the questions and reactions of Liberal ministers, half the story. The minister referred to our proposals for reductions in some government spending, including reductions in his department. What he forgot to mention was the tax relief that those reductions when added up across all the departments made possible. Yes, we advocated reductions in some of the overhead spending of the agriculture department, but the net effect to doing that over five years was to deliver $20 billion in tax relief to Canadians, including significant tax relief to Canadian farmers, tax relief greater in its aggregate than any reduction to agriculture.

I suggest the minister read both sides of what we are talking about, the pain of reduction but the benefit of tax relief. We end up with a net benefit and a net benefit to Canadian farmers.

SupplyGovernment Orders

10:40 a.m.

NDP

John Solomon NDP Regina—Lumsden—Lake Centre, SK

Mr. Speaker, I went to the Council of Europe, an organization which meets quarterly in Europe. It is members of parliament from all European and eastern European countries. They have a number of committees which discuss the various issues, including economics and agriculture.

I asked the agriculture committee about three years ago what it was planning on doing with subsidizing agriculture in its countries. This was the year when the Liberal government eliminated the Crow benefit to Canada farmers. The Crow benefit was a transportation rate, a subsidy which provided producers with an opportunity to sell their products to market under the old Crow benefit.

It was eliminated by the government because it said WTO warrants the elimination of this subsidy. So it is gone. It has been gone for three years.

The Europeans told me they would never sacrifice their farmers for the U.S.A. with respect to subsidies. They also told me they have five years under WTO to address the subsidy issues. We are three years down the road and subsidies in Europe are as high as they have ever been, rightly or wrongly. We have in our country abandoned our farmers. We have no national agriculture policy.

Because the Americans and the Europeans have not sacrificed their farmers by eliminating subsidies, would the Leader of the Opposition support subsidies for our farmers now in view of the fact that there is a crisis in our farm communities?

SupplyGovernment Orders

10:40 a.m.

Reform

Preston Manning Reform Calgary Southwest, AB

Mr. Speaker, I know the instinctive gut reaction of the NDP to any economic crisis is to yell for a subsidy. We are open to listening to the arguments members are putting for emergency aid.

I suggest that the long term strategy of the government should be to do what we can to reduce and eliminate those subsidies by our big competitors, particularly with respect to the United States. I suggest three things that are more practical than anything I have heard from this side of the House or that.

First, the government should use that dispute settling mechanism more actively and quickly. This crisis was seen coming. It took six weeks to activate that mechanism and it should not do that.

Second, the government should move more actively to lobby U.S. consumer interests. Our allies in this fight with the U.S. are American consumer interests gouged by the U.S. subsidization programs and protectionism as much as our farmers.

Third, get into this European-American dialogue which is going to put great pressure on reduction of European subsidies. Those are three things that can be done on a proactive side to reduce and eliminate the subsidies.

SupplyGovernment Orders

10:45 a.m.

Prince Edward—Hastings Ontario

Liberal

Lyle Vanclief LiberalMinister of Agriculture and Agri-Food

Mr. Speaker, I welcome the opportunity to discuss the concerns that are being debated here today on the very serious situation of farm income for this year. I remind members that every time I have stood in the House in the last number of weeks to discuss this matter and answer questions, I have fully recognized the unfortunate situation of the farmers. I share with the farmers and members of the House their concerns over the difficulties of many of Canada's farmers today.

Today I hope to leave hon. members with a fuller appreciation of the situation which is without question a complex one. I know that they read the newspapers. And yes, I read the newspapers. Yes, I hear what is being said on TV. I want to show how closely the provincial governments, producer organizations and the federal government have worked over the last decade to put in place a pretty good system of safety nets to protect farm income.

With that I will say that there is no absolutely perfect safety net system in our lives, whether it be personal, or business or in government. That is why it was discussed at the federal-provincial ministers meeting this summer. That is why we have moved forward even faster. We saw what was coming with the financial situation of too many Canadian farmers this year. We moved forward and fast tracked the process of review of Canada's safety net system.

We have taken a pragmatic approach and will continue with a strategic approach to fiscal challenges across the country. As a result, Canada's economic fundamentals are sound and should we not all be thankful. As Canadians we are better able to address the worldwide financial situation than most other countries.

Canadian farmers have made a big contribution to that. They have made a big contribution in putting the federal books back in the black. That was the first step we had to take. We have recognized that as a result of the contributions from farmers and all Canadians we are all reaping the benefits of lower interest rates and low inflation. That certainly has an effect.

We are all aware that global markets are going through a period of incredible turmoil. This has affected the income of farmers. We plan to continue on the course we have charted for the future. We will continue to target our resources, to reduce taxes as we have in the past, to pay down public debt, to invest in the knowledge of our people and to safeguard and improve our health care system. All of these, including addressing the unfortunate situation of many Canadian farmers today, have to be our priorities.

There is no question that farm producers are dealing with the fallout from fluctuations in foreign markets. For example, in Asia and Russia less buying power translates into much lower sales of our food exports. It is higher with grain and lower with dairy products, but I remind the House and everybody watching that on average 48% or 49% of the farm gate income comes to Canada and those producers. We are in the export business. We have a tremendous ability to produce. We have to export the products or drastically cut our production, eat the products here at home and hope that nobody wants to compete with supplying that market. That is not the way to go. We have to work with the industry, and we do, to find the markets where the products can be sold at a profitable level or at the best price attainable at that time.

As we know, many prices are set by the world. All that is happening in the world translates into lower sales of food exports. It is affecting the income of many of our farmers. Combined with this is the reality of a cyclical downturn in prices for some commodities which always happens in agriculture. There are pockets of poor production in a country this size. There are not going to be top yields in every hectare or portion of the country every year. It means some farmers will have significant reductions in their income this year.

I stress that this situation is not universal. Not all regions or sectors are affected to the same degree. At the national level, recent numbers indicate that without question farmers will see a decrease in their income compared to the average over the last five years. I stress that is not the same in all regions and all sectors.

In particular the situation in Manitoba and Saskatchewan is severe because of the low prices for hogs, cattle and grains. We are all concerned about what lies ahead next year for these producers. Nobody is more concerned than I am.

I have said a number of times that I have asked all the farm leaders to come to Ottawa tomorrow. I am pleased that all the provincial ministers of agriculture will be here to discuss the nature and extent of the difficulties.

Our forecast was done in conjunction with all the provinces. When the final, most accurate numbers do become available, which are numbers that have been put together with the co-operation and agreement of the provinces, I will remind members that some of the numbers they have been stating in the last half hour in this House are incorrect. I hope they will look at those numbers when they become available.

I am not diminishing that there are some very severe areas. These forecasts will indicate what the market price picture is in affected areas. We have to also be aware that it may worsen in 1999.

That is the bad news. The other news is that because of the unfortunate reality that many farmers, including myself, went through in the 1980s, farmers are better prepared. They are not necessarily totally and fully prepared. That does not always happen as much as it should or as we would like to see, but they are better prepared for this cyclical downturn we are in at the present time. They have had a number of years of pretty good prices.

Farmers are very smart business people and many of them have been able to put their money to good use. They have looked at their balance sheets, have seized new ways of doing business, have learned to manage their operations better, have worked hard to get their costs down, have increased their productivity and have invested in new technology when the money was available so they could be prepared for the reality that is in agriculture. I hate that reality but it is there. I farmed for 25 years. Some years were better than others. Some commodities were better than others in some of those years but it goes up and down.

The farmers have taken advantage of this. They have used a lot of tools that the provincial and federal governments have helped them to put in place. They have diversified their operations and have been paying closer attention to market signals. They have been making decisions on growing what they know they can market and not trying to market what they like to grow. We know that and they know that. They have to look at the market and use their crystal ball the best they can.

I do not want to underestimate or not give enough credit to farmers. They deserve a pile of credit for the tough decisions they have made over the last decade. They have used their wisdom and most important their foresight after the disaster of 1980s. In doing so, on average the net farm worth in Canada is significantly higher than it was. Assets have reached historical highs and debt to equity ratio has been declining since 1991.

Many small farmers have sources of income outside the operation of their farm. This certainly helps. People will say that should not have to happen and I agree with them fully. However, I say to opposition members everywhere that it does not matter what business one goes into today, because of the overhead in starting up a business or however the finances are, many people need to address having other sources of income.

As I said, I farmed for 25 years. My wife taught school for a few of those years. My wife worked off the farm for a number of those years. One thing farmers know, is that it is a risky business. It is a business that is always at the mercy of global markets and mother nature. Unfortunately, that is not going to change.

What has changed is the way we deal with that. We have a number of tools in place. We are reviewing how they are being used and how they can be used. Each year the federal government has put $600 million into the safety net package. The provincial governments have put in another $400 million. We have crop insurance, companion programs and the NISA. As has been said, our safety net advisory committee is looking at how we use those and how we can maybe put in place a national disaster program in order to assist those farmers who need it right now.

There has been a lot of talk about this issue. I will leave no stone unturned as we go forward. I look forward to the contribution of members across the way. I know collectively we can turn every stone possible in order to assist those farmers who are suffering at the present time.

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10:55 a.m.

Calgary Southwest Alberta

Reform

Preston Manning ReformLeader of the Opposition

Mr. Speaker, I have just one question for the minister.

In the minister's remarks there was not one single reference to tax relief as a possible tool for dealing with this problem. I wonder why that is. The government has a surplus, so at least tax relief is a live option; it is not something that is academic. The federal government is one of the greatest imposers of taxes on agriculture that there is, so it is not as if it is not in the taxation game.

The NISA program is a net income dependent program. If the minister would calculate what the amount of the NISA might have been if there had been five years of tax relief prior to this particular period, surely he would see that that program would be stronger than it is.

Why does the minister not, for the sake of his producers, become an advocate of tax relief as at least one of the measures that would have helped this situation and still could help?

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10:55 a.m.

Liberal

Lyle Vanclief Liberal Prince Edward—Hastings, ON

Mr. Speaker, I remind the Leader of the Opposition to go back and read Hansard because I specifically stated that we are continuing to target resources, reducing taxes, paying down public debt and investing in the knowledge of people and safeguarding and improving our health care system. If I am not mistaken, a number of those are goals of the official opposition as well.

With reference to the NISA, when there is a safety net put in place there is always the challenge of distribution. Some producers made a business decision not to take part in the NISA. Some people said it was a decision that they could not take part in the NISA as beginning farmers or whatever their reasons might have happened to be.

Let us look at the size of the NISA in Canada, its value, the total amount of money available. I have repeatedly said that we are looking at how we can do other things, use other resources, how our producers can use all of the tools presently available in the toolbox. Let us compare the value of the NISA to the United States industry which is between eight and nine times the size of ours. Eight to nine times $2.5 billion would mean that our NISA funds are equivalent to over $20 billion relative to the United States. That is a considerable sum of money.

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10:55 a.m.

NDP

Dick Proctor NDP Palliser, SK

Mr. Speaker, as an aside, I am very appreciative, as I think all members of the House would be, to see the Minister of Agriculture and Agri-Food here for this very important debate. I know we are sometimes out of order when we try to say who is not in the House, but I think we are probably in order when we recognize that people do take the time to come and listen to the debate. I want to say very sincerely that I appreciate that.

I listened attentively to the minister and I noted that he did not make any reference to cost recovery. We have seen that rise dramatically in recent years. I think Canadian farmers are paying something in the order of $134 million per year in cost recovery. This apparently is a decision to reduce the debt and deficit situation. It is not a countervail against the WTO or GATT. I would like the minister to comment on that and see whether we could do something to bring some of those costs down.