Mr. Speaker, I am pleased to speak to Bill C-227, an act to amend the Income Tax Act regarding income deferral for farmers who must sell or destroy livestock in the case of a natural disaster.
I congratulate the member for Athabasca for taking the time to investigate the Income Tax Act and to isolate some of the problems that farmers encounter when natural disasters occur.
In congratulating him I certainly would not want to agree with him about his comments and would want to disassociate myself with the comments he made about the Canadian Wheat Board. If he wanted to refer to the Crowsnest Pass freight rate agreement and the dissolution of the Crow benefit a few years ago, he would be on firmer ground and enjoy more support from this caucus.
This bill would allow farmers to defer income for 12 months if they have to sell off livestock or destroy livestock because of a natural disaster. This would give the farmer time to rebuild his or her livestock once that natural disaster was over.
Furthermore, in a case where Agriculture Canada orders livestock to be destroyed, any taxation on compensation would not be included in the farmer's taxes for a 12 month period. Again, this would give the farmer time to rebuild once the disease had been eradicated.
In the bill before us, Bill C-227, the hon. member is referring specifically to the aftermath of a flood in the Lesser Slave Lake area, but the bill would clearly apply to other areas where natural disaster has occurred. We think of the Red River flood, the Saguenay flood and the ice storms in eastern Ontario and Quebec of last winter.
The disaster financial assistance arrangements have been in place for some time. I believe they have been in place for 28 years. The program provides assistance when disaster strikes. It works, accordingly, that the federal government may be requested by a provincial government to help out financially. This assistance is provided through the disaster financial assistance arrangements and the payments help those governments to meet the basic costs involved.
This financial assistance arrangement has been in place, as I say, for almost three decades and is administered under guidelines ensuring that federal financial assistance is provided in a fair and equitable way across Canada. The amount of this federal compensation is determined by a formula based on provincial population and other criteria.
With reference to the ice storm of 1998, despite the existence of the arrangements under DFAA, problems did occur. I know that we received calls and letters from the Canadian Federation of Agriculture following that severe ice storm and we were told that the provisions of the DFAA applied to some situations but not to others.
The federation told me that federal and provincial legislation covered capital losses but not the loss of income. For example, if a farmer had to throw out milk because the truck could not get to the yard to pick it up, he or she was compensated. On the other hand, trees in a farm orchard which were injured or stressed from the storm meant that the farmer was not compensated for lost productivity resulting from that.
In addition, there were problems with the definition of farmer for purposes of compensation. Many people who are forced to work off farm to support their operations were then considered to be hobby farmers and not eligible for assistance under the DFAA, although I think eventually there was an exception made for farmers affected by the ice storm and so-called hobby farmers were included back in January and February.
We know that off farm work has become the exception, not the rule, and that farmers work to subsidize their operations.
There is a need for a more detailed look at the DFAA as it relates to the loss of income and who is eligible for compensation. I know that the bill of the hon. member for Athabasca relates to the Income Tax Act, but what we are talking about is a measure of protection for the income of farmers.
Any discussion of protecting farm income must also take into account the government's lack of support for the agriculture and agri-food sector. The support has declined drastically throughout this decade. It stood at $6 billion in 1991 and it had been reduced to less than $2 billion by 1997, a decline of $4 billion, and this year's budget confirmed even further cuts.
Farmers and other rural dwellers have sacrificed enormously in the fight against the deficit. One might well ask what the agriculture minister is doing to represent the interests of rural Canadians at the cabinet table. We believe the government is doing too little rather than too much to support farmers facing difficult circumstances.
I want to refer briefly to an opposed vote in the supplementary estimates printed recently in the Order and Notice Papers. I would have liked to have spoken to this the other day, but time allocation did not permit it, so I will make reference to it now.
It involves the member for Prince George—Peace River, who was opposed to the federal department of agriculture spending $13.8 million on crop reinsurance for Saskatchewan. I want to go through this because I think it was perhaps a shortsighted, mean spirited approach. I just want to give a little bit of history to back up the point.
In the 1980s the provincial Conservative government of Saskatchewan set up a number of farm insurance programs.
Members will recall that there was a serious drought in Saskatchewan at that time and indeed some action was needed. Ottawa got involved. It was probably one of those late night phone calls between then Premier Devine and then Prime Minister Mulroney. In any event, they hastily devised ad hoc programs and carried so much debt that they drove the cost of farmers' premiums through the roof.
Following the 1991 provincial election in Saskatchewan, the incoming government moved to remedy the situation. The federal and provincial governments both wrote off a portion of the debt in these programs to put them on a sound financial footing.
Saskatchewan made a payment to do away with the debt and Ottawa did the same. As I understand it, the money involved in this vote is to be used for that purpose, namely, to retire a debt that was driving premiums not only up for farmers but out of sight.
Therefore, I cannot understand why the member for Prince George—Peace River would want to prevent this money from going to Saskatchewan farmers and I am sure the farmers in that province would not understand it either. I notice in passing that the member for Prince George—Peace River has asked the minister of agriculture on several occasions over this session to provide assistance to farmers in the Peace River area where crops had been lost due to rain and flooding.
I too have spoken out in this House, urging the minister of agriculture to do more to help the farmers in Peace River. So I am disappointed that the Reform Party member who wants assistance for Peace River farmers would ask that Ottawa turn its back on farmers in Saskatchewan. It seems to me that it is yet another example of that party picking and choosing who it is going to support and who it is not. I am sure this will not go unnoticed by farmers in my province.
In conclusion, I congratulate the hon. member for Athabasca for his private member's bill and assure him of my support for it.