Debates of Nov. 30th, 1998

Royal Canadian Mint Act

[The Acting Speaker (Mr. McClelland)]

In my opinion the nays have it.

And more than five members having risen:

[The Acting Speaker (Mr. McClelland)]

Call in the members.

And the bells having rung:

[The Acting Speaker (Mr. McClelland)]

The recorded division on this motion stands deferred until Tuesday, December 1, 1998, at the end of government orders.

[Peter Adams, Liberal, Peterborough, ON]

Mr. Speaker, I suggest the House be suspended until 6.30 p.m.

[The Acting Speaker (Mr. McClelland)]

Is that agreed?

[Some hon. members]

Agreed.

(The sitting of the House was suspended at 6.24 p.m.)

The House resumed at 6.30 p.m.

[The Speaker]

Order, please. Pursuant to order made earlier this day, the House will now proceed to the consideration of a motion to adjourn the House for the purpose of discussing a specific and important matter requiring urgent consideration, namely the agriculture industry.

Agriculture

[Gerald Keddy, Progressive Conservative, South Shore, NS]

Mr. Speaker, I move:

That this House do now adjourn.

[The Speaker]

Before I call on the hon. member for South Shore, so that we all know what is transpiring, the length of speeches is 20 minutes. You may split the speeches in any way you want. Any speaker may split his or her allotted time. There will be four hours of debate.

[Gerald Keddy, Progressive Conservative, South Shore, NS]

Mr. Speaker, it is an honour and a privilege to rise in this House this evening and speak on the emergency debate on agriculture. Mr. Speaker, I would like to thank you for granting that debate last Friday.

I would like to split my time with our agriculture critic, the hon. member for Brandon—Souris.

I am certain everyone in this House is aware that there is an agriculture crisis in Canada. That crisis is very real and it is with us today. It has been with us for the last couple of years in the agriculture community and we expect it will be here tomorrow. It will take some resolve on the part of this government. It is going to take some resolve on the part of the minister of agriculture and some resolve on the part of the finance minister to find the means to attack this problem.

Several international factors have combined to threaten many parts of Canada's agriculture industry. The huge support payments of the European Community and the U.S. government's support to farmers combined with the Asian financial crisis have had a devastating effect on the Canadian agriculture community and the rural way of life across Canada.

In 1997 net farm income fell 55% nationally. In 1998 farm cash receipts in western Canada are down drastically. There is a crisis in the hog industry that is affecting every major hog producing province, provinces like Quebec, Manitoba and Ontario. To add to this problem, the agriculture industry in Nova Scotia is reeling from two years of drought that have coincided with significant cuts to government support programs.

Many in the agriculture industry feel that farm safety nets will not be strong enough to protect Canadian farmers from further drops in farm income.

Some statistics are worth repeating. I am sure before the evening is over, we will repeat this one several times. However, I will say it one more time because I want to stress the importance of this. In 1997 net farm income fell 55%. That is half the net farm income gone. It is impossible. It is a concept that most of us in small business have a very difficult time and a very difficult job to grasp. In 1998 farm cash receipts in western Canada are down again and there are concerns that the farm safety nets will not hold.

Canada ranked second last in the Organization for Economic Co-operation and Development for government assistance to farmers. Canada's producer subsidy equivalent is 2%. The United States is 16% and the European Union is 49%.

Our farmers do not have to take a back seat to anyone in the world. They can compete on a fair basis with any farmers anywhere in the world. However, when farmers and producers in the United States are getting a 16% subsidy and farmers and producers in the European Union are getting a 49% subsidy, it makes it very difficult for our farmers to compete on an even footing.

It is not sensible for anyone in this House to think the European Union will drop its subsidies in the short term or that the United States will drop its subsidies in the short term. The only sensible train of thought taken from that would be to support our farmers with the same type of subsidy in the same type of support the Americans are giving to their farmers and the same type of support the Europeans are giving to their farmers.

The Asian crisis has had a significant and dramatic effect on farm incomes. To combat the Asian crisis the United States recently announced an additional $6 billion in support bringing its total in excess of $14.5 billion U.S., which is $22.2 billion Canadian, for 1998 alone.

It goes on and on. Somehow we have to come to grips with the fact that the farm situation in Canada is in a meltdown. Thousands of farmers are facing bankruptcy and the NISA accounts simply do not have enough money to protect them. It is incumbent upon the Parliament of Canada to find some solution to this problem.

The Asian crisis has aggravated this problem. At the same time the European Union has aggressively pushed production over the last two years, despite falling wheat prices. The European Union is providing direct support for grain at $175 per acre of wheat grown. The EU is intervening to support the floor price of grain with intervention support prices of $205 Canadian per tonne. The EU export subsidies are $55 Canadian per tonne for wheat, $119 Canadian per tonne for barley and $137 Canadian per tonne for malt. A European farmer will not receive less than $5.58 per bushel. Our farmers are receiving somewhere in the range of 40 cents.

We have to recognize this as a major problem and a major affront to the Canadian economy. We have to come up with some type of support program to protect our farmers and to help them in situations like this.

Canada's prime farm safety net, the net income stabilization account, was developed by a Progressive Conservative government as a rainy day account whereby farmers in good years could put away up to 2% of their profits per year, which is not a huge amount of money, and have that amount matched by the federal and provincial governments. The income in the account could be drawn upon during poor years. Farmers have started to withdraw money from their NISA accounts. For a six-month period in 1998 withdrawals increased by 70%. There is currently $2.5 billion in the NISA account.

Other safety net measures include crop insurance and companion programs like advanced payments for crops. The federal government contributes $600 million and the provinces $400 million to the total safety net structure. That is not enough. It is inadequate.

Since 1993 federal and provincial government farm support has decreased by more than 60%. Farmers are looking for a long term commitment from the federal government for support in good times and bad. Economists have estimated that Canadian wheat farmers are receiving less than 40 cents a bushel in direct support from the Canadian government. How can we compete against countries that give $2.60 and countries that give up to $5.69? It cannot happen.

I would like to draw upon a few facts which will be on record for the House and for members of the other parties who I hope will be supporting the debate tonight.

The Progressive Conservative Party has had a very positive record for assisting Canadian agriculture during hard times. Between 1984-85 and 1988-89 crop and income insurance totalled $21.7 billion. We established a special Canadian grains program to offset the effects of low grain prices caused by the trade war between the European Union and the U.S. and $2 billion was paid out over two years. Between 1988 and 1993 $800 million was paid to Canadian farmers to offset losses from drought through the Canadian drought assistance program.

The PC party has stated that the federal surplus should be utilized in the following manner: one-third for debt reduction; one-third for tax relief; and one-third for government spending. The current farm income crisis makes it necessary to increase spending in this area.

Farmers need a long term commitment on farm safety nets. Currently the minister of agriculture is only negotiating a one-year extension with his provincial counterparts. Farmers need assurance of the government's ongoing commitment to a national farm safety net program. Farmers need a national program that is consistent from east to west and which is available to all producers. The assistance programs must be delivered equitably and fairly.

In the short time I have left, I would like to make a plea to the members of the Reform Party that they support this emergency debate and that they understand the crisis. Many of the members are from western Canada. They also understand that in the past we spoke as a party with a strong united voice for the producers of western Canada.

[Rick Borotsik, Progressive Conservative, Brandon—Souris, MB]

Mr. Speaker, I too would like to thank the Speaker of the House of Commons for allowing this emergency debate to take place this evening. I would like to thank my colleague from South Shore for putting forward the motion in my absence.

My colleagues recognize and I am sure the minister of agriculture and members of the government recognize that I spent last week talking and more importantly listening to producers across western Canada. Quite frankly, I have heard too many tales of horror over the last week to recount to this House but suffice to say, this issue is a crisis. It is an emergency. An emergency debate is very necessary in order to put the issue on the table.

On November 4 when the minister of agriculture met with the provincial ministers and agriculture leaders to discuss farm income support, he said that it was a discussion meeting, not a decision meeting. This past Thursday the minister was also supposed to meet with the cabinet's social and economic committee to finalize his proposal to combat the farm income crisis. Still there is no proposal. As of Friday the minister still did not have an agreement in principle on the apparent $2 billion bailout package as reported by CBC last Wednesday.

This week the minister is supposed to meet with cabinet yet again to try to convince his colleagues why they should support agriculture. Yet another meeting in the growing list of excuses is being used to put off making a decision on the farm income crisis. The government was even trying to make last minute attempts to put off tonight's debate. Yet another excuse for the government to put off serious discussions and deliberations.

The minister had an opportunity to show leadership on July 16 this year when he met with his provincial and territorial counterparts in Niagara-on-the-Lake to discuss the agricultural safety net program but refused to offer anything more than was under the current system.

Aside from that particular meeting this past summer, the minister has been aware of this issue since he was appointed by the Prime Minister to lead his department last year. This is an issue that should not be new to the minister or to anyone else in this House.

The minister has had access to departmental information on the farm income situation for over a year. The minister has resources, yet the Government of Canada chose and chooses to do nothing.

It appears to be the policy of the Liberal government to wait until things are in crisis before it attempts to fix the problem, like it did with the helicopter contracts, the department of fisheries and the Canada pension plan, to name a few.

We would not be in this situation if the political will were there. It would appear it is not. As was mentioned earlier, do our competitors have political will?

It took the Americans a very short period of time to put another $6 billion into the pockets of their producers. The U.K. recently announced a $250 million program. I quote the minister of agriculture for Great Britain, Mr. Brown: “I know the industry has been going through a bad patch but I am confident it has a prosperous future. To get there it needs our support now and that is what I am providing”.

This was from the minister of agriculture in the U.K., our competitor in the world marketplace and certainly one which has the political will to put its money where it has to be spent, to the producers.

As we witnessed in October, our neighbours to the south announced a $6 billion package which, on top of the $8.25 billion package in the U.S. federal agriculture income reform act, makes $14 billion into American farmer pockets.

I will be perfectly clear. I am not, nor is the Progressive Conservative Party, suggesting that we match the United States in income support. It would be futile. We cannot compete with the U.S. or the European Union on the same cash level. It would also be futile to think Canada can convince the U.S. or the EU over the next week to reduce their producer support to Canadian levels. They simply would not. But something has to be done.

That is why a short term immediate cash injection is needed to prevent future destruction to the fundamentals of this Canadian industry. With the short term cash injection for this year we must also develop long term solutions. We must try to protect our industry with a two pronged approach, the short term cash injection for this year combined with a long term whole farm program that will not be countervailable by the U.S. in the next round of trade talks.

If we only provide a short term approach we will only have long term problems for our agricultural industry.

I would be remiss if I did not point out that I find it quite ironic that the agriculture minister repeatedly said that he would never resort to an ad hoc program yet that is exactly what we are dealing with right now in cabinet. I do not, nor does any member of the PC party, believe that ad hoc programs are what producers need but unfortunately the government has given the industry no other options after gutting the safety net program. We would not be in this position if the government had the foresight to replace a long term program when it eliminated the GRIP in 1995.

In 1995 the government decided to take short term gain for long term pain. Other provinces did not. Alberta has a FIDIP program, a revenue program, and Ontario has a market revenue insurance program which is similar to GRIP in style but was massaged so it dealt with any countervail problems.

When commodity prices were doing well and everything seemed great on the farm, why would people think they should put emphasis on farm safety programs? The problem with that kind of thinking is that more often than not good times do not last forever. Now we are in that situation. If we had strong federal leadership for the industry we would not be in this situation.

Progressive Conservative provincial governments are making efforts to bridge the gap in the current safety net crisis. On Friday the Alberta government pledged to increase interest free loans for producers to $50,000 from $15,000 for hog producers. Manitoba has offered share in support of a national program, and hot off the press, in Manitoba the agriculture minister, Mr. Harry Enns, has just indicated that he has asked the Manitoba Agricultural Credit Corporation to work with producers on case by case basis where appropriate to defer scheduled payments so that they can keep agriculture on the farm. P.E.I. also recently announced income support for its hog industry.

The time for meetings is over. The time for action is now. Producers are selling at a loss. According to StatsCan net farm incomes dropped 55% nationally between 1996 and 1997.

It was projected to drop another 35% in 1997-98. Next year it is only expected to be worse. This industry is expected to lose $170 million next year, the first negative income figure since the Great Depression.

Farmers cannot wait. They need our support and they need it now. We know there is a problem, now let us get on with it.

I remind the minister of agriculture of his own words on February 9, 1993 in this House: “I want to address this to the taxpayers who wonder why governments spend billions of dollars on agriculture. The taxpayer, like all of us in these recessionary times, finds it difficult to rationalize big expenses. Why do we continue to support agriculture? The answer is because it is worth our support. The cost for farm support is not cheap but Canadians should ask themselves where they want their food to come from. I believe they want it to come from Canada”. I agree with those comments. Let us do something.

I would like to be of assistance in this debate. I would like to make sure the minister of agriculture knows he has our support in the Progressive Conservative Party. I implore him to go to his cabinet colleagues to make sure this program is put into place before the end of the year, sooner than later, so my producers can come back to the land in the spring.

[Lyle Vanclief, Liberal, Minister of Agriculture and Agri-Food]

Mr. Speaker, I will split my time with my parliamentary secretary.

There is no question we are all aware and many more Canadians are aware this week and in the last number of days of the tremendous anxiety in the farm community in Canada today, particularly among those farmers who are involved in the hog and grain sectors.

I have spent my lifetime in the agriculture and agri-food industry. I know the situation that too many Canadian farmers are in today. I can tell the House in all sincerity that I have never worked harder on any issue than I have on this and will continue to do so. I appreciate the support of my colleagues in cabinet, my counterparts in the provinces, farmers themselves, the farm organizations, my colleagues on this side of the House and all members on this issue.

We need to come up with a program, some support and the most effective solution that we can to meet the needs of the agricultural community and the country as a whole.

I also thank all my colleagues in the House for continuing to bring this issue to the attention of all Canadians. Agriculture producers are hardworking people. They represent one of the pillars of our economy.

However, at times I think many Canadians who live in urban areas forget just how important the agricultural industry is. I thank the previous speaker for reading again into the House some comments I made along that line some years ago.

A motion like this can be very helpful in informing the public about the serious situation our farmers presently face. I am certainly well aware of the struggle of some producers and how serious that struggle is right now. I have certainly met with a lot of farmers, as I said, farm organizations, provincial colleagues and I could go on. I have been talking with them across the country from coast to coast a great deal over the last number of days and weeks.

I know how desperate too many producers are. They fear for their future and for their ability to provide for their families.

Beyond my concern about their personal circumstances, I am also very concerned about what this current situation will do to an industry that has been very robust, one that has taken calculated risks and has made a significant contribution to the economic growth of Canada in the past several years.

Let us not forget this industry is responsible for more than 8% of the gross domestic product. It has made a tremendous contribution to the restoration of the country's public finances. Our farmers have been very willing to take risks. We have all been the better for that. They jumped into the export markets feet first. That helped to fuel the growth of our national economy.

It concerns me that if producers feel they cannot count on us in their time need they will be less willing to take those risks in the future. Let me assure members that would have a negative impact on all of us. The federal and provincial governments have provided tools to help farmers manage the risks they have taken. We want those tools to be used.

At the same time I know in talking to farmers and provincial governments that these existing tools will not be enough to meet the needs of certain producers especially in the difficult times and circumstances right now. I am very concerned that we offer the necessary support to those producers over the short term so that efficient and productive farmers are not sacrificed because of global market conditions that are no fault of their own.

I know there are a number of members opposite who are pounding away on the need to do something immediately. I can tell members we are working as quickly as possible to do that. As everyone is aware, I have discussed this very thoroughly with my colleagues in cabinet. They understand the severity of the situation and are currently helping me to determine how best to act.

We have taken action to make sure farmers are able to use the tools already in place while we are mapping out the best course of action ahead. We put in place a process for interim withdrawal provisions so producers could call on their NISA accounts before the end of the tax year. We took measures to make sure producers are well aware of the advance payments for crops program to help deal with their cashflow issue at the present time.

Meanwhile I met with farm organizations and provincial representatives. We agreed to work together to look at short term options and accelerate the longer term review being carried out by the safety net advisory committee. Since then I have received the report of that committee. I have raised it with members of cabinet. We are continuing to put together the information we need to come up with a program that is effective and equitable and that does not undermine the investments we have already made.

I have also talked to input suppliers such as the Canadian Fertilizer Institute which I met with a little over a week ago. Last Friday I met with the Royal Bank. I will be meeting with other financial institutions to make sure they understand the situation our farmers are facing. I am taking every opportunity to encourage everyone who deals with farmers to act with compassion and to work with producers to manage the payment schedules in the best way possible during these tough times.

Tomorrow I plan to speak to representatives of the U.S. agricultural industry in Washington to try to convince them of the need to call a halt to the subsidy war that is again revving up. It is clear to me and I know to members on the opposite side that getting into another bidding war with the Europeans and the Americans like the one we had in the 1980s will only hurt everyone.

That is why even in the midst of the current income problems we need to continue working to formulate a strong position to go into the next round of the world trade negotiations. In the meantime I will be seeking the collaboration of provinces, the sector and my cabinet colleagues. With the support of the members opposite, I am putting all my energy into coming up with viable actions to help alleviate the burden on Canadian producers.

My caucus colleagues are sparing no efforts pointing out to me the necessity of addressing this issue. This government wants to do the best we can for our farmers. We are also aware of the need to best what we can do best for all Canadians. Supporting an industry as significant as agriculture is what is good for Canadians. There is absolutely no doubt in my mind. It is now a matter to determine what we can afford to do and how we can shape our assistance to make sure it helps those most in need. There is also a need to talk to the provincial ministers to work out some of the details. I am counting on the provinces to do their part. The bottom line is that the Canadian agriculture industry deserves the support of all of us in these difficult times.

I consider it an honour to represent Canadian farmers and I take that responsibility very seriously. I can pledge to this House and to the farmers across this country that I will do everything in my power to make sure farmers get the support they need.

[Joe McGuire, Liberal, Parliamentary Secretary to Minister of Agriculture and Agri-Food]

Mr. Speaker, it is a pleasure for me to take part in this debate tonight.

I think before we go any further we should put on the record what the fifth party and the official opposition said just a few short months ago about the future they saw for agriculture in this country. I am going to quote directly from the platform of the Progressive Conservative Party, the fifth party.

I quote directly from the platform. It states “In cases such as agriculture and transportation—”

[Some hon. members]

Oh, oh.

[The Deputy Speaker]

Order, please. It is very difficult for the Chair to hear the hon. member. Obviously his remarks have provoked something of an uproar, but I am unable to tell. I would appreciate it if we could have a little order so that the Chair is able to hear the debate. The Chair is very interested in this debate too.

[Joe McGuire, Liberal, Egmont, PE]

Mr. Speaker, I think I have touched a very sore spot. I am quoting from their very own platform of 1997. I want to put on the record just what is in that platform.

It states:

In cases such as agriculture and transportation, there is significant overlap between the provinces and the federal governments, with substantial duplication of services as a result. In the case of the environment, there are four federal departments responsible for elements of our environment. By merging the Departments of Agriculture and Agri-Food, Environment, Natural Resources and Fisheries and Oceans into a Department of Sustainable Development, we can ensure proper priority is placed on the inter-generational responsibilities we all bear for the preservation of our environment, while at the same time finding the savings we need to meet our other main objectives.

In that regard they were going to cut the department of agriculture, which was going to be a savings of $608 million.

They go on to say:

We intend to reform this Department with a view to aligning its objectives more closely with those of the large and well-funded provincial ministries of agriculture.

I am not sure what the provincial ministers are saying about this today.

They go on to say:

Consistent with the trend in recent multilateral trade negotiations, we will be moving to reduce and eventually eliminate farm subsidy programs.

They were going to eliminate them all.

They continue:

Consistent with our commitment to freer markets, we will also accelerate the five year phase out in dairy subsidies.

The relationship between this Department and the private sector will also be changed. For example, we will broaden the scope for the transfer of research and development activities to the private sector. In exchange, we will be looking to increase cost-recovery for food inspection and regulatory oversight.

I know this is very difficult for them to accept after the initial speech in which they were asking the government to come out with both long term and short term subsidies to help farmers, which we are taking very seriously.

I will summarize what they would have done if they were sitting on this side of the House. Number one, the Department of Agriculture and Agri-Food would have disappeared. The budget would have been cut by $608 million or 40%.

Research and development activities would have been transferred to the private sector. Cost recovery for food inspection and regulatory oversight would have been increased. The dairy subsidy would have been phased out in three years, not five, without any compensation to dairy farmers, and farm subsidy programs would have been reduced and eliminated.

This platform is very similar to the Reform platform. They were going to put agriculture under a department for sustainable development. They did not foresee in the foreseeable future that farming might take a tumble.

Our government and our minister are working toward both a long term and a short term solution to the problems farmers are experiencing today.

The system, as a whole, is a good system. However, the minister has also clearly said that he recognizes the current downturn might prove too deep and too difficult for some producers to manage using what is currently in place.

Some farmers may not have enough in their NISA accounts to see them through 1999. That may be because they are new to the business or because they have had a couple of bad years due to circumstances outside their control. For whatever reason, they have not been able to save enough in their NISA accounts. We want to be able to assist those farmers.

We also want to design a program that will not undermine the system we have. In other words, we want to make sure that we design something which encourages farmers to use NISA in the way it was intended, but also provide a system to those most in need.

The National Safety Net Advisory Committee has examined disaster programs that are in place in British Columbia, Alberta and Prince Edward Island. It has recommended that a program based on the design of these programs, but with some modifications, be implemented at the national level.

The committee wants the program to be income-based and generally available to ensure it meets our trade obligations and cannot be successfully challenged. Such a whole farm approach is essential for this program to be effective and to succeed. I say that because some hon. members may either be nostalgic for the days of huge Tory-style payouts or may be confusing the committee's recommendations with such an approach.

The program viewed by the safety net committee would be a so-called green program, one that treats all farms fairly and does not discriminate against any commodity. That will be welcome news to farmers across the country.

The Minister of Agriculture and Agri-Food has said that he and his provincial counterparts are looking at this design very carefully. Such a proposal is in line with the results of a meeting held with the Minister of Agriculture and Agri-Food and his provincial counterparts in Niagara-on-the-Lake in July of this year.

I began my speech by asking where the solutions to the farm income situation were going to come from. They are not going to come from the PC platform or the Reform Party platform.

NISA and its companion funds provide a partial answer. I am confident that the ongoing work of the Minister of Agriculture and Agri-Food and the cabinet, in partnership with farmers and provincial governments, will give us the other parts.

[Preston Manning, Reform, Leader of the Opposition]

Mr. Speaker, I rise to participate in this emergency debate on the income crisis in agriculture, which is of concern not only to our farm people, but to all of us in this House.

I will be splitting my time with the official opposition agriculture critic, the member for Selkirk—Interlake.

Surely the issue here is not whether there is an income crisis in agriculture. This fact was clearly established during the supply day debate on November 3 in this House when the official opposition urged the government to move immediately to defend the interests of Canadian farmers from unfair subsidies and unfair treatment by foreign countries which have changed the problem of stagnant farm incomes to a full blown farm income crisis.

Tonight, therefore, I would like to focus on two questions. First, why is it taking the government so long to act? Second, will the government provide a real solution or simply a band-aid?

Over a year ago Statistics Canada and Agriculture Canada predicted that realized net farm income would fall by 46% Canada-wide. The government did not react at that time to that prediction in a substantive way. Earlier this year Agriculture Canada predicted another 30% drop in net farm income, but there was still no substantive long range or short range reaction from the government. May I suggest that this has become part of a pattern with this government. It is slow to act, period.

For example, for years it was known that the cod fish stocks off the Atlantic coast and now the salmon fish stocks off the west coast have been declining in absolute terms. The government expresses alarm. The government does studies. The government wrings its hands. But the government never acts until there is a full blown crisis and even then it usually acts with band-aids.

The House, therefore, calls upon the government to act with speed on the agriculture income crisis, but also asks why the government always has to wait until an emergency is upon it to do something substantive.

The question is, will the government provide band-aids or real long term solutions? The government may talk about emergency aid of $450 million this year and another $450 million next year, as has been rumoured in the press. The government may put forward a non-contributory, non-commodity specific plan which would make up part of the shortfall if farmers' gross margins fall below some percentage of a five year average, as has been suggested; essentially a revenue insurance program without the premiums. But our concern is that Canadian agriculture needs more than band-aid solutions. It needs real, long term solutions.

As the official opposition repeatedly pointed out in debate on the supply day motion earlier this month, these long term solutions involve two elements. First, a more aggressive strategy to reduce, through political pressure and international trade negotiations, the subsidies paid to American and European farmers. This country has done its part to lower agricultural subsidies and it expects and should insist that its trading partners do likewise.

We suggest a two-stage strategy: a special effort to resolve our trade differences with the Americans first through NAFTA and then a co-operative joint effort on behalf of Canada and the United States to attack European subsidies, which are really at the root of this problem.

Second, and this is the main point I want to make—it is the reason I am in this debate—what the agricultural sector needs is what every Canadian needs, what every family needs, what every sector needs, particularly those sectors experiencing reduced incomes, and that is broad based, substantive tax relief.

What has been the fiscal policy of Liberal and Tory governments in this country for over 30 years? If it moves, tax it. If it continues to move, tax it more. And if it stops moving, subsidize it.

I have in my hand a table from Statistics Canada titled “Income Tax Paid by Canadian Farmers 1993-96”. It shows a total paid over those four years of $4.2 billion, about $1 billion per year, $2.75 billion of which went to the federal government.

I would like to see this done by the agriculture department. It should be part of its presentation to finance and cabinet. There should be a calculation of all the taxes paid by individuals, families and companies in the agriculture sector on inputs from sales taxes on consumer goods and equipment to taxes on fuel and fertilizer. For example, we know that in 1997 alone Canadian farmers spent $2.037 billion on fertilizer. Of that total, 15% was taxed. That is $306 million in taxes on one input item, in one year alone, that the government took from farmers.

My point is that this government plays a shell game with taxes and subsidies. It takes with one hand and it gives with the other. But the taking is always greater than the giving.

If the government had followed the advice of the official opposition and farmers across this country and substantially reduced taxes on this sector over the last five years, I would suggest that the balances in the net income stabilization accounts would have been much higher, the savings of farmers would have been much higher and farmers would have been in a much better position to withstand the downturn in commodity prices than they are today.

What is the position of the official opposition on the emergency aid package which the government intends to bring forward? It is hard to say because nothing was brought forward tonight. We want to study the details when they are brought forward and cost them out.

Basically our position is this: if the finance minister will clearly declare that the forthcoming budget will contain broad based tax relief for all Canadians, including the agricultural sector, then the official opposition would be prepared to support a temporary aid package as part of that long term solution. We would also insist that temporary aid be presented as compensation for demonstrable injury done to our producers by foreign subsidies so that it is seen as an anti-subsidy measure.

On the other hand, if all the government has to offer is a band-aid without offering these long term solutions, we will declare that band-aid insufficient and continue to fight for the long term solutions upon which the future prosperity of Canadian agriculture truly rests.

[Howard Hilstrom, Reform, Selkirk—Interlake, MB]

Mr. Speaker, I certainly will participate in the debate tonight. This issue is of utmost importance to many people in my riding and across the country.

The debate tonight has already been held in the House in that Reform had a supply day motion where the whole farm income issue was debated. In essence we are going over again the very thing that Reform initiated a couple of weeks ago.

At the agriculture committee once again a Reform motion required the committee to hold hearings and come up with a report along with recommendations to the minister. That will be delivered on December 7 for the benefit of the agriculture minister.

While the debate is important in that we want to talk about it as much as possible and get all the facts out, the fact is that the Conservatives under their new leader, Mr. Joe Clark, are once again three steps behind the issue.

As noted by the hon. member for Calgary Southwest, the current Liberal government knew at least a year ago that this crisis was on our doorstep. It continued to ignore farmers until pictures of dead pigs and bankrupt farmers on the nightly news forced it to think of something. Without the Reform Party's action in committee and in the House of Commons, I wonder if this issue would be as far down the road as it is today. This crisis is real. It is national in scope and will not be over soon. This fallen income was forecast by Statistics Canada and Agriculture Canada some time ago.

Why did the Liberals fail to take action? The question has been asked before but it must be asked again. If a drop in income this severe was forecast for any other major industry such as the auto sector, would the government have failed to act or not reacted as it could have?

Our producers must have more than just a temporary band-aid. They need a long term solution. In arriving at this solution the Minister of Agriculture and Agri-Food and the Minister responsible for the Canadian Wheat Board did not attend the Saskatchewan Wheat Pool meetings two weeks ago. There were farmers there, primarily producers who had stories to tell about the income crisis facing Saskatchewan. After the tough questions at the United Grain Growers annual meeting I suppose the minister was a bit hesitant to attend another farmer rally. However I believe that the junior minister for agriculture from the government did attend.

How can the government claim to understand the problem or develop real solutions to the problems if it does not even take the time to listen to producers in addition to industry representatives? How can the government claim to care about farmers when even rural ministers cannot drag themselves out of Ottawa?

I would like to talk about a farm rally that happened in Neilburg, Saskatchewan. All politicians and all the general public were invited to attend the rally to talk about the income crisis. There were no federal Liberals there. There were no federal NDP there. There were no federal Conservatives at this open public meeting.

Over 500 concerned producers organized a meeting and invited everyone. They were not only talking about income but a serious drought that hit a larger portion of Alberta and Saskatchewan. These are real people who are facing the destruction of their livelihoods. The minister of agriculture from Saskatchewan took time to attend. Once again federal representation, with the exception of two members of the Reform Party, was totally missing.

Reform attended both the Saskatchewan Wheat Pool meetings and the Neilburg rally in order to get direct input from the farmers concerned. It is because Reform has been listening to farmers that we have been pressuring the government to take action since the opening of parliament.

Unfortunately the government has not been listening, which is why we are in the middle of an emergency debate. Why did the Liberals delay the hearings of the agriculture committee by a month? Why has the government done little to implement Reform's November 3 supply day motion.

Farmers need more than handouts. At these meetings farmers told me over and over again that they needed help today. They cannot keep coming back to the government every few years. Government must create the conditions that will allow them to survive and prosper without a federal cheque.

On this list are also marketing problems that are endemic across western Canada in the way we market wheat and barley. Many grain companies and farmers have innovative ideas about how to market grains and are restricted from doing so because of the Canadian Wheat Board. It is a sad to read the papers every day of farmers being fined tens of thousands of dollars in lots of cases and some even going to jail for marketing their own grain.

This feedback has been the basis of Reform's plan to get us out of the emergency we are in. However, it must be part of a larger package. The broader package must address two key root causes of the current farm income crisis: international causes and domestic causes.

International action is required. We must have free and fair trade abroad. This means our government must take strong action to reduce foreign subsidies. For example, the European Union subsidies on wheat production are 773% above Canadian subsidies while the U.S. wheat subsidies are 480% above Canadian subsidies. Our farmers cannot wait until the end of the next WTO talks to have these subsidies fall.

We see who is going to Europe to talk about these subsidies. A large number of senators are going over to Europe at a cost $107,750. These unelected people will come back and have very little, if anything, to say. They certainly will not have any impact on Europeans. The agriculture minister and trade minister should be going there. At least they are elected. If their actions do nothing to help farmers, they can be thrown out in the next election.

Many people have suggested that we enter bilateral negotiations with the U.S. to develop North American opposition to the high EU subsidies. Unfortunately the Liberals have made no attempt to initiate these types of negotiations. Our government must ensure that our trading partners live up to agreements that have already been signed. The European Union is still stopping our beef and our canola exports into those countries. Trade tribunals have ruled against the Europeans in this regard but they continue to take that action and our government seems unable to do anything about it.

On September 16 the governor of South Dakota began stopping Canadian agriculture exports. South Dakota had given the trade minister a two week warning and yet the border remained closed until the first week of October. The government claimed that this dispute was due to election hype, but this was not true because we see the trade disputes continuing. North Dakota farmers have indicated that they will once again blockade the border on December 6. Where is the action to make sure that this does not happen?

Farmers who are facing some of the lowest commodity prices in recent years cannot afford to have their income problems compounded by an incompetent trade minister.

I will talk for a few minutes about the domestic action that is required. A short term disaster assistance plan has to be related to actual harm created by the trade subsidies of other countries. Farmers not only need lower subsidies abroad. They must have lower taxes at home.

The hon. member for Calgary Southwest outlined three specific areas in which the government could reduce its burden on producers. These were to suspend the user fees of the Department of Agriculture of $138 million per year, suspend federal 4 cent per litre excise tax on farm fuel, and suspend taxes on farm input such as fertilizer. Federal taxes account for about 15% of the retail cost of fertilizers.

By suspending its tax grab in these areas it would give farmers about $500 million. The rumours of how much aid will be put forward by the federal government are right in that neighbourhood. We would not have this problem if only tax reform was put forward by the government. The government is contemplating giving farmers emergency aid while at the same time taking more than $500 million directly out of their pockets. This does not seem to make sense to a reasonable person.

Reform's plan could be implemented today. Other proposals will take time to implement and some of our producers will be lost in the wait. Unlike ad hoc payments, Reform's plan for targeted reduction on the cost of government will have lasting effects on the viability of agriculture. Our plan will allow producers to compete in the global agriculture environment without interference from the federal government.

Reform's plan to reduce the cost of government will not only immediately benefit agricultural producers. It will also immediately benefit the industries that support our producers. Our plan will have an immediate benefit to the economy of the entire Canadian agriculture and agrifood sector.

Above all, I absolutely insist and demand that the government not institute any program which the Americans will feel has to be countervailed due to interpretations of the World Trade Organization rules and NAFTA. If the government takes that kind of action the hurt in the agriculture area, particularly in the area of hogs and cattle, will be at least 1,000 times more than what it is today.

In encouraging the government to look at this crisis I also caution it not to do anything that will destroy what is left of the economy in western Canada.

[Hélène Alarie, Bloc, Louis-Hébert, QC]

Mr. Speaker, I feel a great deal of responsibility and emotion in rising to speak in this emergency debate on the income crisis in agriculture.

This crisis resembles the one in the early 1980s, when the government was providing three times as much income security as it does currently. At that time, the figure was $3.5 billion, while now it is only $727 million. Something needs to be done urgently, therefore.

There is urgency because farm incomes have dropped 20% to 40%, and for certain types of operation, up to 70%. There is urgency because, to give one example, the sales price of pork is half what it costs to produce it. So what is there left for the producers?

In November 1997, hogs were selling at $168 per hundredweight, while last Friday it was $67 per hundredweight. Grain prices are going the same way.

We are therefore calling for an emergency plan to assist farmers, who have seen their average price go down by 70% this year.

Over and above the market price, there are the rules of international trade to consider, as well as the support the European Union has given to export subsidies, not to mention direct support given to farmers. The U.S.A. has made a direct injection of $6 billion to producers. This breaks down into $2.6 billion in disaster relief and the rest is connected to low market prices. And that is not the end of it.

At a meeting in Montreal as part of the upcoming WTO negotiations, both the Americans and the Europeans expressed a desire to continue supporting their farmers. We must act now with all urgency and fairness for the 1998 production and in the future, depending on the state of the crisis.

What are the effects of this crisis? There are direct effects and there are secondary effects. The direct effects are the abandonment of farms, the agricultural crisis, which very often leads to a family crisis, the move of people from the country to the city and human tragedy on the scale of the suffering experienced on the farm.

Farm producers see a long way ahead. They have a sense of continuity. Theirs is a vocation, a way of life. Agricultural products are not like preserves, set aside until the prices rise.

Then there are the adverse effects. The two most important ones are the direct attack on rural life and the loss of expertise. The attack on rural life is straightforward. When the countryside is emptied, the community loses its structure. As to the loss of expertise, there are actual cases where people realize that destructuring the agricultural community leads to a loss of knowledge that it took years to acquire and that is hard to replace.

We heard an example of adverse effect last week, when the representatives of the Canadian canola association appeared before the agriculture committee and stated that a number of farmers wanted to produce canola because prices were good.

What are the disadvantages? First, there is a drop in productivity, because some producers will not be familiar with this method—this is to be expected from those just starting out—because this does not work everywhere, and rotation may be less successful if not done properly.

A second disadvantage is that, if supply increases, prices go down. So what was a good crop becomes an average crop because the market is flooded. There is also an increase in disease because of greater crop concentration. Nobody is a winner.

The solution is several hundreds of millions of dollars in direct assistance based on farmers' needs. This is what we are calling “operation bail-out”. There are other things that can be done, however.

Speaking of other things, I think of the Canadian Pork Council's food bank idea. This does not get a lot of attention, but it should, because there are food shortages, for instance in Central America after Hurricane Mitch, in Russia, with an economic crisis threatening to spill over into adjoining countries, and in North Korea, which is in the throes of a famine. But all these countries, whatever their religion and customs, eat pork.

What led up to the crisis we are now experiencing? It came about not because of overproduction, but because of a lack of money among some of our clients, notably Asia and Russia. We must therefore not panic and cut back on production, or we will no longer be competitive.

Why stockpile when part of the world does not have enough to eat? Canada should get going and create a food bank. The United States took this step this year, contributing 50,000 tonnes of pork, and we could follow suit, with 10,000 tonnes of pork.

This is therefore not a chronic supply and demand problem because, if our clients had the money, demand would still be going up.

Finally, I would like to speak about Quebec's problem, which is different from that of the other provinces. The Quebec pork industry generates close to $4 billion in economic spinoffs annually and creates some 30,000 direct and indirect jobs, particularly in the regions. All hogs sold are slaughtered, and therefore undergo primary processing, in Quebec, rather than flooding abattoirs in the United States.

Producers participate in the farm income stabilization insurance program, which makes up the difference between the cost of production and market prices. For instance, if the present cost of production is $140 per 100 kilos and the market price is $67, the difference between $67 and $140 will be paid by the farm income stabilization insurance program.

In good years, when the price of pork is $225, obviously nobody receives any compensation payments from this program. It is a bank for when times are bad. Obviously, we did not expect times to be as bad as they are right now.

In this program, one third of the costs are paid by the producers themselves and the money the federal government puts into the net income stabilization account in other provinces goes directly, in our case, into the farm income stabilization insurance program. This is a major difference with the practice in other provinces.

The Government of Quebec has just put $30 million into the farm income stabilization insurance program to shore up the income of pork producers. It therefore expects to receive its fair share in the present crisis and to have that share cover the 1998 losses and any other losses as long as the crisis continues.

Quebec's farming sector is now undergoing a crisis of confidence. We were unfortunate, not to say unlucky, in the outcome of the scrapie crisis, and feel we did not receive our fair share of the compensation due us. I also resent some recent intrusions by the Minister of Agriculture and Agri-Food in our jurisdiction.

I am thinking of the meeting held here in Ottawa, when a meeting was being held in Montreal with the same leaders as part of the WTO negotiations. The same thing is going to happen again this week during the meeting of the Union des producteurs agricoles, and tomorrow, for the visit in Washington, the fourth and fifth parties have been invited, but not the third. This leaves us bitter, worried and anxious, and this is the place to say so.

The meeting of the Union des producteurs agricoles, which consists of all representatives of farmers in Quebec, and is therefore the only organization representing them, has as its theme next week “Growing the future together”. How can we think about the future, when our farmers are unable to make a living in the present?

In conclusion, whatever the federal government's new plan is, it should take into account the Government of Quebec's initiative, and the particular nature of Quebec's farm safety net income program. The Bloc Quebecois will be opposed to the soon-to-be-announced emergency plan if it penalizes Quebec's producers, particularly our hog producers, in any way.

Our political party will also be opposed if the federal government favours one region over another in the kind of assistance it plans to provide. By this I mean that, by providing greater assistance for live hog producers than for producers of processed pork, the federal government would be favouring Ontario, which exports live hogs, over Quebec, which exports processed pork.

Whatever the outcome in Quebec today, the Bloc Quebecois will be very vigilant. A speedy response to this crisis is necessary.

In order to take into account the special character of Quebec and the fact that the government has already taken specific action to assist affected hog producers, various solutions could be considered, one of which might simply be to compensate the Government of Quebec for the assistance it decides to give hog producers.

[Alexa McDonough, NDP, Halifax, NS]

Mr. Speaker, I am very pleased to have the opportunity to participate in the debate this evening and to share my time with my colleague, the member for Regina—Lumsden—Lake Centre. He was the first member of the House to begin calling for an emergency debate on the crisis faced by our farm families and our farm communities.

Our caucus ever since has been calling for swift action by the government. It is very regrettable that we do not yet see signs that the federal Liberal government recognizes the severity of this crisis nor the urgency that is required to move swiftly to address the tragedy that is unfolding. Let us be clear that the magnitude of this crisis is surpassed in this century only by the Great Depression of the dirty thirties.

We have been trying to get the government to recognize that it must act before more lives are devastated, before more lifelong investments are jeopardized and more livelihoods destroyed. Regrettably farmers and their families are still waiting for that swift action.

Low international commodity prices for agriculture products, particularly grain and hogs, and the tailspin in Asian markets have put the livelihoods of tens of thousands of Canadian farmers at risk. Nowhere is it clearer than on our farms today that globalization rules crafted to meet the demands of the mega corporations to make mega profits will never serve ordinary hardworking farm families. We must ensure that increased globalization is accompanied by increased safeguards at the international level.

However, proposals to rein in speculators in money and commodities and to bring humanity to international economies cannot be put in place overnight. A Tobin tax on international speculation will not help our farmers today. Promises of more rational international economic management will not provide relief tomorrow. As I said in the House last week, we cannot feed pigs with promises and we cannot grow grain in such uncertain ground.

Canadian farmers face a crisis now. It is not good enough for Liberals to do as little as possible as late as possible. Nor is it helpful for the Reform Party in its usual Pavlovian fashion to pretend that lower taxes offer a solution to this crisis because they do not. And to howl long and loud about international subsidies will not solve the crisis either.

These farm families need urgent assistance and they need it now. They need quick and decisive action. Neither the government nor the official opposition seems to understand that. Or if they do, they apparently are not willing to respond with the urgent measures that are so desperately needed.

Make no mistake. This is a crisis. In 1998 farm income in Saskatchewan will decline by nearly one-half a billion dollars. That is over a 70% decline in income. In Manitoba it will decline by more than a quarter of a billion dollars, $300 million. In Prince Edward Island incomes will be 33% lower than the 1993-97 average.

Since 1995 wheat prices at the farm gate have dropped 40%. Hog prices have dropped 60% from 1997 levels. In my home province of Nova Scotia almost $50 million will be required to make up for lost revenues. The lost farm income in Manitoba and Saskatchewan alone is equal to all of the losses in this January's ice storm.

What is the cost of waiting? What is the cost of the Liberal approach of waiting until the last minute to pay as little as possible to our farm families in distress?

First, it means fewer family farms and more agribusiness. If trends continue, there will be 7,500 fewer farms in Manitoba in less than 10 years. Fewer family farms spells disaster for the small businesses that depend on the strong local farm economy. And fewer farm families means greater strains on our rural infrastructure, more school and hospital closures, reduced services and destruction of a way of life.

Second, the Liberal delay means that thousands of farms that can be viable if they are helped to weather this storm will not be around when the snow melts. They will not be able to afford the seed, the feed or the fertilizers they need to survive into next year.

Inside and outside this House the member for Palliser and other NDP members have been warning the minister since last March of the mounting farm crisis. In October, New Democrats proposed an emergency program to match recently announced U.S. assistance. In response to our questions, the minister simply boasted that Americans envy our farm support programs and that his government was studying the problem.

The Americans did more than study. They acted at the first sign of trouble. Meanwhile our agriculture minister has not yet convinced his colleagues of the urgency of the crisis. It is shameful and a national disgrace that a government that boasts a $10.5 billion surplus has neither the humanity nor the competence to address this crisis.

Since the United States implemented its program of relief, what have we had from this federal Liberal government? Sixty more days of inaction. Sixty more days of bankruptcy. Sixty more days of foreclosures. Sixty more days of stress and crippling uncertainty for our farm families.

In Saskatchewan alone requests for farm debt mediation and consultation services have increased 76%. Meanwhile Reformers advocate tax cuts for fertilizer and farm implements as the remedy. Talk about an eyedropper in an ocean. A few hundred dollars in tax relief from reduced sales taxes is not going to make up for the $60 lost in each and every hog produced or compensate for more than a 70% reduction in farm income.

Reform talks about unfair subsidies. Our farmers are in this crisis partly because the Liberal government blindly and foolishly followed Reform proposals to cut $600 million in farm support. In fact, the Liberals driven by Reform mean-spiritedness cut nearly $2 billion in support. They went further than the Reform Party advocated in the way of cuts, which is why we are in this mess today.

While Europeans and Americans were carefully and steadily reducing subsidies in line with the WTO guidelines by 25% over five years, Canada chose to reduce subsidies by over 60% for crops. Cancelling the Crow benefit alone meant an annual loss of $700 million to prairie farmers.

Reform's leader said he was not convinced of the need for an emergency income program. He should open his eyes and unplug his ears. Listen to farmers across this country who see their livelihood threatened by an international crisis not of their own making and a government that has slashed agricultural support far beyond that of our competitors and far beyond WTO requirements.

People's lives are at stake. They need assistance, not Reform members shaking their fists at international subsidies.

What should the government do to restore hope to Canadian farmers? Let me outline a four point plan that must be implemented immediately.

First, a program of emergency income assistance, at least $700 million, that matches the aid provided to U.S. farmers. Second, in conjunction with the banks, a moratorium on farm foreclosures. Third, improved debt management provisions for farm families and the businesses that depend on them. Finally, we must ensure that food is not destroyed, not ploughed under, not slaughtered and left to rot in this crisis. This is food that could be used to feed hungry people in crisis at home and abroad. We should make sure that we take this humanitarian approach.

This has to be a national program to meet the needs of all Canada's farmers. The national government must take the leadership and the lion's share of the responsibility, leaving room to be sure for supplementary programming from the provinces.

In closing, I want to say that agriculture is one of the most hopeful and visionary of all occupations. More than an occupation, it is a calling.

Each year a new spring gives renewed optimism for the future. Better weather, better crops, better prices. We must ensure that this coming spring is one of hope. If we fail, it will be instead a spring of despair. We can make it a spring of hope, but we must act quickly and we must act now.

[John Solomon, NDP, Regina—Lumsden—Lake Centre, SK]

Mr. Speaker, I am very pleased to participate in the debate this evening.

I was the member of parliament who on October 5 called for an emergency debate on the looming farm crisis. My colleague the member for Palliser had been raising this issue in the House of Commons for weeks prior to that. We see the looming crisis now upon us and I want to share a few reasons for that.

We have seen in Saskatchewan the net farm income to farmers decline by 70% in 1998 over 1997. We have seen the price of hogs basically collapse in the last four or five months. They are decreased in value in terms of selling price by 60%, although at the supermarket the price of pork is still the same. There must be some kind of a gouging in the middle. Maybe the government could look at that. Certainly the consumers are not getting any benefit of this crash in the price of hogs, nor are the farmers. I am sure it is some of the larger corporations that subsidize and donate to the Liberal and Reform parties.

We have had a number of signals from Saskatchewan and other parts of western Canada.

Donette Elder is a farmer at Fillmore who operates a farm distress hotline. She told me that in her 15 years involved in this operation, it has never been as busy as it has been this year. The Saskatchewan government has a group which handles stress calls from farmers as well. The numbers are way up. There is a farm debt mediation services and farm consultation services organization in Saskatchewan that deals with farmers who are in financial distress with respect to their land. They deal with farmers before it gets to the foreclosure situation. Their business unfortunately is up 72% over last year. To date, 371 farmers have asked for mediation services with respect to their financial condition which is an increase of 155 farms over last year.

I have been in my constituency and other parts of the country. I have been in Tugaske and Lumsden and Craik and Nokomis and Brownlee. I met with hundreds of farmers. I never got to Neilberg for the big rally. It is a little distance from my constituency. I was in Ottawa at that time. I know that Saskatchewan minister of agriculture Eric Upshall was there and represented the NDP very well.

Farmers from Tugaske and other places are telling me that they are in big trouble. Craik is a very small town, actually a village, with a number of larger farms around the community. There were 22 producers who could not pay their chemical bill as of November 1 from the last crop year. Should an alarm bell not go off in terms of what is happening? This is some of the finest farmland in Saskatchewan with very high production and very high yield.

We have seen the fertilizer costs go up 57% from 1992 to 1997. We have seen farm chemicals increase 63% over that same period. We have seen $130 million extra in cost recovery, for example the privatization of the meat inspection facilities, that have gone on the farmers' backs. We have seen the biggest problem that farms and in particular grain producers and wheat producers are facing which is the loss of the Crow benefit.

I went to the Council of Europe in Strasbourg, France. I happen to have a community in my riding called Strasbourg. I went to Strasbourg, France in 1995 to speak at the Council of Europe. I went there as a delegate from this parliament. I had an opportunity to meet with the 38 European countries that are members of the Council of Europe. They meet quarterly and discuss issues such as agriculture.

I met with the agriculture committee in 1995 I asked all the MPs from the 38 European and eastern European countries what they were doing to address the farm subsidy issue in their countries. I told them that the Liberal Government of Canada was eliminating the Crow benefit, which was a subsidy, because of the WTO requirements. I said “We have eliminated our Crow benefit which is about a $700 million benefit a year to our grain producers which is guaranteed in legislation. We are eliminating that in order to have good competition. What are you going to do about it?”

They said “We have five years under WTO to address the subsidy issue, not to solve it but to address it. If you think after five years we are going to sacrifice our farmers for the U.S.A., you are crazy. We will never do that”. Three years later after we have gutted the Crow benefit, the European Community and the U.S.A. are providing not the same but higher subsidies than three years ago. Meanwhile we have abandoned our farmers.

We can only draw one of two conclusions from this. Did the Liberal government get suckered on this negotiation and deliberately betray Canada's farmers, or did it deliberately do it, knowing that it did not really care to support farmers in our country? I sense it was both. The Liberals do not really like farmers in western Canada because farmers do not seem to vote for every Liberal candidate who runs. That is negligence on behalf of the government. I would ask the government to consider that.

The final word I got was from a gentleman by the name of John Germs. He is the president of the Saskatchewan pork producers. He wrote to me saying hog farmers in Saskatchewan and other parts of the country are suicidal because of the loss on their hog farms. That is a very serious issue.

We should have long term solutions and short term solutions. I am proposing five items for short term solutions.

We need to provide some disaster relief for farmers as soon as possible. Some say $700 million. The NDP says $700 million is a start. It is a good number for grain and pork producers.

We should accelerate or advance the date for the final payments on wheat and barley to provide cash to farmers in a quicker way.

If NISA is used, and I am not advocating that it be used, but if it is used it should be provided to farmers as quickly as possible without the red tape that is required to get it. They should only be allowed to use the tax free portion so they do not have to pay taxes held on their NISA accounts.

The Government of Canada should deal with the input costs I have referred to. We have a lot of farmers who do not have a lot of bank debt in comparison to the farm crisis in the 1980s but they do have more credit with suppliers such as fertilizer companies, chemical companies, grain companies and machinery companies.

The government would do well to take my advice to pursue the issue of gasoline and diesel fuel price fixing in Saskatchewan. The farmers are being hammered on that input cost alone and it should do something with it.

I think the agriculture minister has already said this, that the government will deal with the financial institutions and work in a co-operative and collective way to ensure that our farmers are not taken advantage of by the institutions.

There are two long term solutions. We should address the issue of the subsidies that the EU provides its farmers and the U.S. provides its farmers. If they do not comply within a period of time, let us say 12 months, then maybe we should be looking at reinstating some kind of competitive agricultural program to support our farmers.

There is another issue I want to raise in terms of long term. When the Crow benefit was depleted, the deregulation of railroads occurred at the same time. Farmers' transportation costs doubled and in some cases tripled as a result of the deregulation and the Crow benefit being taken away.

We have a serious situation with respect to the agriculture economy. We have very solid recommendations from the NDP to the Government of Canada to follow these issues to the end and make sure that our farmers do have some sort of protection.

The Reform Party has touched on a couple of issues I want to respond to. Many people tell me that the Reform Party has lost touch with the bread and butter issues that first sent it to Ottawa. In the House of Commons on November 3 I asked the Leader of the Opposition whether under the circumstances with respect to the farm income crisis he would support an emergency disaster program, a relief program for farmers. He stood in this House and said he would not support any kind of cash supports for farmers in terms of the emergency.

The Reform member for Selkirk—Interlake, the agriculture critic went to the Saskatchewan Wheat Pool meeting a week ago last Friday where I spoke as well. Farmers pleaded to both of us to support an emergency program. The Reform agriculture critic said no that they were going to have tax cuts and if they ever make any income it is taxable and they will do all sorts of positive things.

To set the record straight, the Reform Party is not a friend of the farmers. On the contrary, I think it is a friend of the chemical and oil companies because the Leader of the Opposition worked for the oil companies for many years. They fund his party and they decide what policies the Reform Party will undertake and support in the House.

People in this country are telling me more and more that the Reform MPs are letting ideology get in the way of common sense. Farmer after farmer, business person after business person, housewife after housewife, every person I speak to in Saskatchewan tells me the Reform Party has lost touch. That is a very serious condition, in particular when we are trying to defend and support an agricultural sector that is under attack not only by the European Community and the U.S. but by the Reform Party inside our own country.

[John Harvard, Liberal, Charleswood—Assiniboine, MB]

Mr. Speaker, I will be sharing my time with the distinguished member for Hastings—Frontenac—Lennox and Addington.

Earlier this evening I listened with interest to the remarks of the hon. Minister of Agriculture and Agri-Food. His 25 years of experience as a farmer show that he truly understands the extent of the problem some Canadian farmers are currently experiencing. Like Canadian farmers, I am very pleased and reassured to see the minister is on top of the situation and that he is acting on it. He is doing everything in his power, everything he can, to tackle this issue. He has kept everyone in the House well informed of the situation. He has had ongoing discussions with industry, the financial community, the provinces, his cabinet colleagues and the members of the House to encourage all of us to work with him in putting forward concrete solutions to this very real problem.

We all agree that the agriculture and agri-food sector is crucial to the Canadian economy. It is one of Canada's top five industries and it is Canada's third largest employer. None of us can afford to let it go down the drain. We all agree that what Canadian farmers need right now is some type of assistance to help them deal with the situation on a short term basis. They need a program to keep their businesses going in a very severe unprecedented downturn.

That is where the whole discussion about a combination of programs comes into place. The minister and cabinet are working to develop the right mix, the right combination of programs, including the use of the present system of safety nets and the creation of a national disaster program.

We all agree our plan of action must not only deal with the short term, which this government is doing under the direction of the Minister of Agriculture and Agri-Food, but we must also focus on longer term effective solutions. As markets around the world gain strength, and we know they will, Canadian farmers must be in a position to capitalize on that economic renewal.

Our record performance of the last four or five years will come back. It will come back because we have a highly competitive industry and even in the face of the current market downturns we are doing what we need to do to get ready for the future. The perfect example of that is the ongoing consultation with the Canadian industry to put together a strong negotiating position for the upcoming round of negotiations at the World Trade Organization.

As chairman of the Standing Committee on Agriculture and Agri-Food, I can say that organizations within the industry from one end of the country to the other appreciate that we have invited them to give us their input on the kind of negotiating position we should strike for the beginning of the WTO negotiations a little more than a year from now.

These negotiations represent an important opportunity for Canada to maintain and extend its competitive advantage. The talks represent a unique chance to continue what we started over four years ago when we signed on to the WTO agreement at the end of the Uruguay round. That round brought some semblance of order, some rules to world trade in food and agricultural products.

However, the current farm income troubles have a lot to do with poor world market conditions, conditions that have been worsened by the protectionist mood in some parts of the U.S. and by the EU's continued use of subsidies.

Canadian farmers are justifiably worried about what might be around the corner. I want to reassure them that this government is doing everything in its power to dissuade the EU and the United States from falling into another trade subsidy war. We are absolutely committed to continue working on this front.

Members heard the minister say he will continue to talk on a bilateral basis with leaders of the United States and Europe. We also intend to fully use the next WTO round to put an end to the big powers' trade distorting tactics.

Subsidies especially hurt smaller and medium size countries like Canada. They are a detriment to a strong and healthy global agricultural economy. Canada will be pushing hard in these negotiations for a multilateral commitment to phase out agricultural export subsidies once and for all. Such subsidies were banned for industrial products in the mid-1950s.

Surely after half a century it is time to rid the agricultural sector of this most aggressive and unfair form of government support. Producers in one country should not have to compete against the treasury of another.

Whether wheat growers in Saskatchewan, Argentina or in the United States, farmers are a vital and valued part of society. No matter who we are or where we are from, we all have the same goals of strong agricultural economies, prosperous rural communities and a decent standard of living for those who work the land.

Over the next year the Minister of Agriculture and Agri-Food will continue to consult with industry groups to craft a solid, unified negotiating position that takes into account the full spectrum of interest within our diverse agriculture and agri-food sector.

This round of talks is one further essential tool in our long term strategy for the sector. As members know, these sorts of negotiations take time. They are very much our long term approach.

This government has heard the industry's call for a disaster program to deal with the immediate very serious income shortfalls and we intend to take short term action as well as action over the longer term.

I conclude on one extremely important point the Minister of Agriculture and Agri-Food has made over and over again since the farm income ordeal began.

Our long term and short term strategies must first and foremost be complementary. One cannot hurt the other. One cannot take precedence over the other. Our solution to this extraordinary situation must be what we call WTO green.

Canada cannot afford to open the door to any further countervailing actions from its competitors. That is why the government, including the Minister of Agriculture and Agri-Food and the Minister for International Trade, is working very hard to ensure that whatever we do will be ultimately helpful and will not hurt our producers or taxpayers by generating retaliatory trade actions.

I remind members the hog industry is one that has lost a lot of money to countervailing actions in the past and none of us wants to see that again.

That is why the government is taking the necessary time to design the very best possible program, a program that meets the needs of farmers and all Canadians and programs that are WTO green so that the money ends up in the pockets of farmers.

[Larry McCormick, Liberal, Hastings—Frontenac—Lennox And Addington, ON]

Mr. Speaker, I appreciate the opportunity to speak on the emergency debate on farm income.

I am very glad that our Standing Committee on Agriculture and Agri-Food has been listening to witnesses from almost all commodity groups across the country for several weeks.

Because this crisis is very real we want to work with all involved to assist our farmers.

The Minister of Agriculture and Agri-Food has spoken with passion and conviction about the serious situation in farm income. I know his commitment to deal with this problem is sincere and his response reflects the nature of the challenge.

Demand for key agricultural products in Asia and Russia has been drastically reduced as the buying power of consumers has shrunk. The link between the global financial crisis and farm income in Canada is not a matter for debate.

Combine this with the simultaneous cyclical price downturns in grains, hogs and cattle and pockets of poor production in some areas and we get a situation in which many producers are seeing a pretty significant reduction in income this year, in fact a drastic reduction.

There may be some members who would argue the answer to these problems is insulation from the global economy, but that reflects their simplistic view of the world rather than compassion for those affected by this crisis. Offering complaints cannot be equated with offering solutions and what people need are workable solutions.

Talk of removing Canada from global markets, international trade and the need to export makes great rhetoric but will not make one iota of difference to the financial security of men and women working on Canadian farms. Neither will bland complaints about not getting everything we want or when we want it from trade negotiations.

Let us do our farmers justice by eliminating the rhetoric and instead working together to offer practical responses to a complicated problem.

The responsibility of governing demands that we offer the pragmatic and not the dramatic. As this government has done in the past, we will continue to work with farmers and provincial governments to put programs in place that are equitable and available to all in need, no matter what province they live in.

We will also work with these same partners to develop a strong, united and compelling position for international trade negotiations. In bringing forth long term and short term responses to this serious situation, we are committed to both collaboration and co-operation.

Canadian farmers have a right to expect such an approach to this problem. There is no room for theatrics or one-upmanship given the nature and the magnitude of the problem.

Our most recent farm income figures, and let me underline that these figures were developed with the provinces, show that at the national level overall net farm income is down 4% from the average over the last five years and down 20% from 1997.

Of course that aggregate number hides the problems we know exist. Some parts of the country are suffering worse than others and depending on the commodity, some producers are practically unaffected while others are hurting very severely.

We know there are serious problems in the hog and grain sectors. The majority of hog producers are in Quebec, Ontario and Manitoba and yet Atlantic Canada has significant hog production and so these areas have been affected.

The majority of grain farmers are in Saskatchewan, Manitoba and Alberta. There are grain farmers in parts of Ontario. There are wheat farmers in my riding. Meanwhile we must not forget that we have other producers who experienced serious droughts and even outbreaks of disease such as scrapie. This is the full context of the farm income situation and we must recognize all the forces at work. Doing this will help to bring sense to the numbers.

Looking at these problems regionally we see that in Prince Edward Island, Saskatchewan and Manitoba the situation is particularly serious. Realized net farm income is forecast to be down 40% this year in P.E.I. and Manitoba while in Saskatchewan farm income could fall almost 70% relative to the previous five year average. Unfortunately our current forecast also predicts that those who are having trouble this year are not likely to see improvements next year.

I know there are a great many people in communities from coast to coast facing hardship and who are looking to the Government of Canada for relief and assistance. There are other pressing issues that demand the attention of the federal government. It is not one or the other. We must find a way to do the best we can for all these people.

The farm income situation is not one that the government will retreat from any more than it will retreat in the face of any other challenge. We want to fix this problem as quickly as possible in order to bring some sense of calm back to the sector that has become increasingly desperate in recent days.

Moving forward, not backward, requires partnership between the levels of government. That principle was established in previous events. As with the ice storm earlier this year, the federal government will pay its share. The provinces can count on that.

In designing our immediate response to the farm income situation, we will shoulder our load. Clearly provincial governments in affected areas will also have a load to bear, and that is unavoidable. The challenge is to design a response that divides the load and best serves the public interest. Again this is a sincere and pragmatic approach and reflects the responsibility of government.

There is never a place for adversarial relationships between federal and provincial governments. In the current situation this is especially true. The Minister of Agriculture and Agri-Food has made it clear that he wants to work with the provinces in addressing this situation. Farm organizations and both levels of government are now working on solutions that address conditions in the affected regions to meet the needs of those most affected.

The minister has also emphasized the need for open communications and a transparent process to let people know what is happening. Solutions will come from this hard work. Effective programs will be produced by this approach. Will it be flashy? No. Will it be a total cure? I think not. There are no quick, easy or total solutions.

Workable and meaningful solutions do not have to be flashy or miraculous in order to make a difference. Making a difference is part of governing. The Government of Canada is committed to making a difference in the farm income situation.

[Garry Breitkreuz, Reform, Yorkton—Melville, SK]

Mr. Speaker, I have a one hour speech but you are not going to give me an hour. I prepared a lot of my speech in advance because I knew this debate was coming. I will lay aside my speech, if I do not have this hour, and I will be sharing my time.

I am not here to score cheap political points as some of the other political parties. I was to describe the farming situation. Instead this evening I will read to the House, describe to the House and give the House some of the comments farmers have made directly to me.

I will start with a letter from Bill Lozinski that I received last week. I am hoping the government will listen because the people I will tell the House about today are real people and they need to be heard. This is what Mr. Lozinski had to say:

Dear Mr. Breitkreuz,

I do not feel guilty or ashamed to be paid fairly for what I produce. The unfairness in today's agriculture situation is unbelievable.

One bushel of wheat will produce approximately 125 loaves of bread which amounts to $250 (give or take a dollar or two)—

That is if they are bought in a grocery store. He went on to say that farmers get $2.50 of that amount. Out of the $250 that it cost people to buy the bread, he says farmers get $2.50. He continued:

—and it costs us $75-$100 an acre to produce it. (fuel, fertilizer, chemical and seed). I'm not even mentioning the cost of machinery.

Let me stop here for a minute. I used his calculations. Does the House know that from one acre a farmer can produce 3,750 loaves of bread? That is how much these farmers are producing and he said that they are not getting anything for it. Yet the people of Canada are benefiting. Let me continue with his letter:

When farmers have money, the economy thrives. I once read that one dollar in a farmer's hand is multiplied 15 times because it is put into the economy in so many different ways.

We are not a burden on the taxpayers. We subsidize every person who buys groceries. The cheap food policy is killing rural Canada. When the price of food goes up in the store, farmers never see an increase in commodity prices. In fact, it's going backward. We are making a lot less.

(The price of a bushel of wheat in 1929 was $2.65 a bushel).

We can compare that to around $2.50 or $3.00 today. Things have not changed but everyone knows what has happened to costs. Let me get back to his letter. It is very interesting. It went on to state:

My brother-in-law lived in Switzerland for the last three years. Their grocery bill was about 50% of their gross income. A pound of hamburger was $15. A half a loaf of bread was $3.50. A turkey was $85. (Not even a good one, according to my sister-in-law). Their farmers receive an outstanding price for their commodities. I'm sure you have heard the stories of $12 for a bushel of wheat. Well, the truth is they make a lot more. Their farms are small and they have a lot of them. They are more numerous than most farm families here.

I cannot read all of his letter so I will go to the end of it:

A strong and diverse rural economy is in everyone's best interest. It is not a question of can we afford $50 an acre to offset the low commodity prices. We cannot afford not to.

That is the point. At $50 an acre we cannot afford not to have that. He continued:

Thank you, Mr. Breitkreuz, for your efforts. You can't even imagine how important this issue is today and will become in the future. Affordable food is the single most important thing in all our lives. Let's make sure it doesn't become the thing that kills us in the long run.

Let us listen to what he has to say. I especially address that to the people in the cities who are listening today.

I have spent a lot of time and effort finding out what farmers in my riding have to say in this regard. I have received over 1,000 replies in the last week alone on this issue. In the last few hours I have attempted to summarize what these people have to say.

Is there a farm crisis? Ninety-two per cent of the people who contacted my office, a mix of farmers and non-farmers, say that there is a crisis. About 70% of the people who have been contacting my office are farmers. Eighty-seven per cent of those who contacted my office said that it was affecting them directly.

Another question they responded to was what is causing this. Quite a large percentage said that what was hurting them was that input costs were too high. The second thing they emphasized in regard to what is really hurting them is the grain prices that are too low. Those two factors were the key factors causing this crisis.

How is this manifested? They cannot pay their bills. They are forced to get off farm jobs, which is creating a lot of stress for them. Businesses are complaining that farmers are not spending money in the communities around the farms and incomes have dropped substantially. That is what I am hearing from the people in my riding as I try to summarize all the responses in this regard.

Another thing I have been asking a lot of the people is whether NISA and crop insurance is good enough. This shocked me. Ninety per cent of the people who responded to my office said NISA and crop insurance were not enough to address this problem. I hope the government is listening, because it is not Reform or me who is saying this. This is what the farmers are telling me.

What are the solutions? Where are we to go on this? Approximately 50% of the people are saying they need some emergency help right now. A good percentage are saying they need help in transportation. Another thing they emphasize is that they need tax reductions. Almost half of them are saying they need some form of tax reduction.

I was quite surprised at the next one. There are very few who say they need to be able to borrow more money. They do not see that as an answer. There is also quite a large percentage that says user fees must be stopped because they are killing them. I guess everyone knows there is about $138 million in that.

If there is to be some emergency aid, one of the things I asked them was how they would like it to be distributed. I think this is important so I hope the government is listening. Over 50%, the vast majority, feel that it should be a per acre or livestock production specific. They feel that would be the fairest way for the government to address this issue.

NISA did not score very high. Less than 5% said that if we improve NISA it will somehow help. About 10% of the people said that we needed a guaranteed price for our grain. By and large they felt that a per acre payout of some kind or some livestock specific production was needed.

I have also gone ahead and summarized a lot of comments. Members have to realize that when one gets a 1,000 letters and responses coming into a riding on this issue it is very difficult to have everybody's opinion tabled in the House of Commons. I will quickly summarize them.

Most farmers said that NISA was useless. The ones who have money in it are wondering why they should be forced to take their money out during these tough times as they are using it for their retirement. The other farmers who are really struggling have said they have either withdrawn all their funds already or have very little money in their accounts and it will not make any difference in keeping their farm operation alive.

Farmers have said that NISA needs to be improved. Contributions could be increased from the federal government and the penalties would not be so high for those who withdraw their funds at the wrong times of the year.

Another group of comments come from business people. They are concerned about a farm aid package. Business people feel that it is tough for them as well. They say times are tough. Businesses are not getting any handouts from government, so why should farmers get these handouts when times are tough? These business people also say that if the farm economy fails so will their business. From that point subsidies are seen as not being so bad.

Most farmers see the solution to a farm aid package on a per acre in production basis. Farmers want to be sure however the money does not go to landlords but goes to the person who is renting the land and using it to produce a crop. As for the production set aside, farmers think there would have to be some type of formula developed for each livestock producer and that it would have to be tied to their cost of production.

In conclusion, some farmers are talking about the absurd prices for inputs: fertilizers, seed and chemicals. They say there needs to be some type of a cap on these costs. A tax reduction would help eliminate some of these but producers respond by saying that chemical companies will not lower their prices. They will increase their profit margin.

I have another 50 minutes in my speech. I will conclude by saying I hope the government will talk to me. I have been talking to farmers one on one. I have received over 1,000 responses. I would ask the government to please be open. I would like to work co-operatively with it in addressing the issue.