moved that Bill C-227, an act to amend the Income Tax Act (income deferral from forced destruction of livestock or natural disaster), be read the second time and referred to a committee.
Mr. Speaker, it is a pleasure to present my private members' bill. It would appear it is the last private members' bill of this spring session of parliament.
It is actually quite a simple issue. It is an attempt to correct a strange anomaly in the Income Tax Act. I would have real trouble understanding how any members of this House could reasonably object to it.
Certainly in recent years Canadians across this country have suffered devastating emotional, psychological and financial impacts of natural disasters with huge costs and losses of both property and peace of mind.
Farmers who are individuals with the most intimate professional and personal ties to the land oftentimes compose the group that is most severely affected by these natural disasters. Over the past three years, farmers across the country have suffered serious losses due to the disastrous flooding of major river systems.
Extensive national media coverage familiarized most Canadians with the Saguenay flood in Quebec and the Red River flood in Manitoba. However, fewer Canadians were aware of the flooding that took place in northern Alberta and certainly in my riding.
During these periods of flooding my constituency office was bombarded with calls from distressed farmers in dire need of assistance. Many have been forced to sell their cattle as they were unable to feed them due to destruction of their feed crops. These same constituents were concerned that they would be unable to make ends meet that year let alone make enough headway to be back on their feet by the following year. The constituents' calls I received are what gave rise to this bill being discussed here today.
This bill would allow farmers to defer for one year all income from the sale or destruction of livestock given that the sale was necessitated by a shortage of feed due to a natural disaster. This bill would also allow farmers to defer income from compensation they receive from Agriculture Canada in the case of forced destruction of livestock because of infectious disease such as anthrax. This deferment of income tax would lessen the immediate financial burden on farmers, giving them time to repair damage to their farms or to rebuild their stock of farm animals.
Unfortunately Bill C-227 is non-votable. However, I am hoping that the discussion today will raise awareness in this House of the positive changes that could and should be made to aid those farmers adversely affected by natural occurrences beyond their control.
Through this bill I am not asking that the government introduce an entirely new element to the Income Tax Act. Currently the act does allow for deferment of income from the sale of livestock but for some curious reason only in the event of drought.
This bill simply aims to remove the inequity by extending that same consideration to all farmers forced to sell or destroy livestock due to natural disasters, infection or disease. Therefore acceptance of the principles of this bill would simply mean recognition of the need to close the gaps in existing legislation.
Frankly, I am appalled that such gaps were allowed to exist in the first place. Surely if insufficient moisture preventing the growth of crops to feed livestock is sufficient reason to defer income from the sale of the animals, then excessive moisture that destroys the crops needed to feed the animals is also sufficient reason to defer income from the sale of animals.
In both cases the farmers are forced to sell their livestock because of natural occurrences beyond their control. In one case the natural occurrence is drought, while in the other it is flooding. In both cases the farmers would benefit from income tax deferral which would give them time to recover from whatever disaster has occurred.
In addition to the many phone calls I received both during and after the northern Alberta floods, I also received an abundance of letters. One letter written by a constituent on behalf of the farmers in the Kinuso area detailed the financial minefield faced by farmers on flooded lands. This constituent described their situation as a vicious circle of high cost and low returns.
During the northern Alberta floods the vicious circle went something like this. Excessive moisture due to heavy rains and excessive flooding drastically reduced the amount of hay that farmers were able to bale and what they were able to bale was in very poor condition. If any crop was harvested at all or if any hay was baled, it was only enough to supplement the feed that had to be brought in from elsewhere.
At the time farmers were faced with exorbitantly high prices for feed because of the shortage of feed in the area and unusually low prices for cattle simply because there was an excess of cattle forced onto the market by the forced sell off. The constituent's letter describes the situation as a triple whammy: no local feed, high prices for imported feed and very low cattle prices.
Many farmers were faced with a situation in which they could not afford to feed their livestock, but if they sold it, they would receive such low prices that they would not be able to replace their livestock for the same price at a later date. Of course, a substantial amount of that income that they received from the sale of livestock would then be claimed by the tax man, leaving them even less to replace the cattle with in another year after the natural disaster had passed.
When the farmers were taxed on the pittance they received for the sale of their livestock, the additional financial burden of taxation was unbearable to many.
All farmers are affected by natural disasters but it is the young farmers who are financially destroyed. Unlike the more established farmers, they do not have something to fall back on. Oftentimes they have invested all that they have into a small farming business, only to see it swept away by some merciless flood.
Immediately taxing these young farmers on their income from the forced sale of livestock is unduly harsh when they do not have a financial safety net to fall back on. The immediate spike of income that is generated through the forced sale of livestock in many cases makes the same young farmers ineligible for existing safety nets that are there for financial disasters.
The principles of this bill would be especially helpful to those farmers who are just beginning and who are desperately struggling to make ends meet.
I am hopeful that all members of this House will see the value of this bill, although I am uncertain of the response from the opposite side of the House, given their horrendous track record in regard to meeting western farmers' needs.
If any other economic group in this country were to suffer the level of discrimination that the western Canadian farmers have had to suffer over the last number of decades in this country, there would simply be blood in the streets. That may be a harsh statement, but that is not an exaggeration. One only has to look back in Canadian history to the Winnipeg strike or some of the protests by the aboriginal community. When other groups found themselves backed into a corner, they took drastic action to right that wrong.
When one looks at the record, the western Canadian farmers certainly have suffered some real injustices in this country. If we look back at the Crow rate, the subsidized freight rate that was introduced in this country, it was not to help the western Canadian farmers, but to help the central Canadian feedlot operators to move feed grain from the plains of western Canada to southern Ontario to feed cattle. At the same time, the western Canadian farmers had to simply turn around and pay the full rate for manufactured goods returning west from central Ontario. If that is not discrimination I do not know what is.
We can think of many other examples. We have been debating the issue of the Canadian Wheat Board in this House for some months. It was not created to benefit the western Canadian farmer. It was created originally to produce wheat to ship to Britain to help the war effort. Western Canadian farmers were again asked to contribute billions of dollars to the war effort, more than what the manufacturing workers of central Canada were asked to contribute. I could go on and on with different examples where that discrimination exists.
In recognition of the unfairness of some of these things the government could move quickly to deal with this issue and bring some fairness. I am not terribly optimistic that will happen. In conjunction with the issue of the flooding in northern Alberta I asked this House through private member's Motion No. 11 to provide the same kind of disaster relief for the farmers whose property and farms were destroyed in the flooding simply to give those farmers the same level of disaster relief that farmers in Ontario and Quebec were granted because of the ice storm and the flooding. I think the reaction from the other side of the House was an insult. A simple request for some fairness and equality was simply turned down without even a moment's consideration.
My motion would have guaranteed that the part time farmers who intended to become full time farmers but who were forced to seek off farm employment to build farm equity financial assistance in the event of a natural disaster. It is unfortunate that after the motion was debated, the government quickly and with very little thoughtful consideration voted it down.
I experienced additional disappointment earlier this year when I received a phone call from a constituent who was faced with extreme financial hardship and simply felt he had no place to turn. Through no fault of his own because of heavy flooding and heavy rains over the last couple of years in our part of northern Alberta this farmer had been forced to go two consecutive years without being able to harvest a crop. This put the farmer in real financial hardship. He was unable to meet his commitment to the Farm Credit Corporation.
One would think that under those circumstances a crown corporation like the Farm Credit Corporation could show this individual some compassion and some consideration. But no, that was not possible. It simply evicted this man and his family and they were out on the street. It is the height of cruelty in such a situation to treat him like that after he had faced that kind of hardship and psychological bombardment while at the same time not two miles away, Alberta Pacific Pulp Mill was unable to meet its obligations under a contract with the Alberta government and it turned around and negotiated a settlement to forgive some $250 million worth of interest on the debt.
Surely if this government can afford things like the $1.5 billion subsidized loan to China to buy Candu reactors or the several hundred million dollars in farm aid to Indonesia, it should certainly be able to show some compassion for these western Canadian farmers who through no fault of their own have found themselves in financial trouble. It simply does not happen.
This individual not only lost his farm but his home. He was dealt with very callously by representatives of the Farm Credit Corporation. In spite of appeals I made to the minister and to farm credit head offices, they had no time to look at the situation.