House of Commons Hansard #6 of the 38th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was farmers.

Topics

Resumption of Debate on Address in ReplySpeech from the Throne

5:55 p.m.

The Acting Speaker (Mr. Proulx)

The question is on the amendment. Is it the pleasure of the House to adopt the amendment?

Resumption of Debate on Address in ReplySpeech from the Throne

5:55 p.m.

Some hon. members

Agreed.

Resumption of Debate on Address in ReplySpeech from the Throne

5:55 p.m.

Some hon. members

No.

Resumption of Debate on Address in ReplySpeech from the Throne

5:55 p.m.

The Acting Speaker (Mr. Proulx)

All those in favour of the amendment will please say yea.

Resumption of Debate on Address in ReplySpeech from the Throne

5:55 p.m.

Some hon. members

Yea.

Resumption of Debate on Address in ReplySpeech from the Throne

5:55 p.m.

The Acting Speaker (Mr. Proulx)

All those opposed will please say nay.

Resumption of Debate on Address in ReplySpeech from the Throne

5:55 p.m.

Some hon. members

Nay.

Resumption of Debate on Address in ReplySpeech from the Throne

5:55 p.m.

The Acting Speaker (Mr. Proulx)

In my opinion the nays have it.

And more than five members having risen:

Resumption of Debate on Address in ReplySpeech from the Throne

5:55 p.m.

The Acting Speaker (Mr. Proulx)

Pursuant to order made Tuesday, October 5, 2004, the recorded division stands deferred until Monday, October 18, 2004, at three o'clock.

Pursuant to orders made Thursday, October 7, 2004 and earlier today, the House in committee of the whole resumes consideration of Motion No. 2 under Government Orders.

I do now leave the chair for the House to go into committee of the whole.

(House in committee on Government Business No. 2, Mr. Proulx in the chair.)

The House resumed from October 7 consideration of Motion No. 2.

AgricultureGovernment Orders

6 p.m.

The Deputy Chair

When the committee arose on Thursday, October 7, 2004, the member for Stormont—Dundas—South Glengarry had five minutes for questions and comments.

AgricultureGovernment Orders

6 p.m.

Conservative

Gary Schellenberger Conservative Perth—Wellington, ON

Mr. Chair, the reality now is that we do not have an export market for live cattle. We need to start looking at the possibility of the domestic market being the only one we have for our live cattle. We should be encouraging the marketing and processing of box beef. It is a value added product, and we should be focussing on the development and assistance for this industry because we can export box beef. There is no quota on box beef.

It seems that since the beginning of the BSE crisis the government has targeted all its assistance programs with the beef producers in mind. It is important to help beef producers, for sure. In fact we must ensure to help all ruminant producers: live cattle, dairy, sheep, elk and bison. These people cannot be forgotten because they are in a real quandary. However, all we have had so far are band-aid solutions to a complex problem and it requires much more. So many are affected from so many areas that we need a much more broadly based strategy.

Regarding the CAIS program, my constituents are telling me there is a chronic problem with the program. They say that those who qualify for assistance often receive much less in compensation than they expect. It is a serious problem because it means people cannot pay the bills. People should be paid what they are told.

The CAIS program must be carefully looked at and strengthened.

Since the sale of Petro-Canada, billions have been promised to improve our position on the environment, but why not take some of the money and use it to develop the biodiesel industry? A tax credit for the use of biodiesel could be applied. Raw resources are plentiful: cull cattle and dead livestock, where no markets currently exist, minimal cuts and waste from our packing plants are a constant supply of product to produce biodiesel. This might just help lower greenhouse gas emissions and put the country on a more direct route to reaching the objectives of the Kyoto protocol.

As the price of oil tops $50 U.S. a barrel, why not spend some money to develop an alternative energy? Ethanol could also be one of these alternatives. Increased development of the ethanol industry would mean grain producers would have a market for the grain left over by decreasing numbers of cattle.

These suggestions would help make farming more viable and also help the environment.

The government has had since May 20, 2003, to bring forward meaningful changes to agriculture and agriculture policy. If we procrastinate for another year, we could be here at the same time next year saying the same lines.

Let us hope the border will be open soon. At the same time we need to ask what the government is prepared to do that is a new initiative. Should we have new innovative ideas in our agriculture policy?

AgricultureGovernment Orders

6:05 p.m.

Conservative

Guy Lauzon Conservative Stormont—Dundas—South Glengarry, ON

Mr. Chair, yes, we should have some new innovative programs. As I mentioned in my maiden speech last Thursday, we have been consulting with the dairy farmers across Canada, and in the space of two week we have received more new fresh ideas on how to resolve this problem than we have in the last two years from the other side of the House.

AgricultureGovernment Orders

6:05 p.m.

Conservative

Belinda Stronach Conservative Newmarket—Aurora, ON

Mr. Speaker, I rise this evening to speak to an issue of grave concern and even business survival for many Canadians, but also one that affects all of us in every part of this country. I include my own riding of Newmarket--Aurora where there are few beef producers but many beef consumers.

The use of the term BSE in referring to one very specific disease does not capture the full impact and range of this crisis. This is a collapse in the trading system with our largest trading partner. It has caused great hardship for cattlemen and farmers in the first place, but also many others who make a living serving this proud and important industry. The meat processors, the truckers who move cattle, and the customs brokers are examples.

We cannot forget that the ranchers and the farmers are traders and exporters too. The impact on their livelihoods has been devastating. In one year alone since the Canada-U.S. border was slammed shut to Canadian cattle, beef and ruminants in May 2003, the industry has lost over $2 billion and the losses mount.

In the heartland of the cattle industry, Alberta, the figures are stark. Here the United States is the market for every single head of non-purebred cattle. Revenues fell immediately by 36% with the border closure. On average, 1,000 head of Alberta non-purebred cattle crossed the border each and every day before May 20, 2003, but that stopped overnight.

We know what is at stake, but what is the problem behind the closure of the border? There are various aspects.

In Canada we speak often and loosely of American protectionism. There are clearly protectionist pressures in the United States, most evident in parts of the Congress. Trade is a very politicized issue south of the border especially in an election year, but the United States as a country is not protectionist. There are other strong voices in support of free trade and the administration itself is not protectionist by policy.

To make progress on the border, we need to understand the complex politics of trade in the United States and be more careful about how we define the problem.

Ironically, one judge in one state, Montana, set in train the fiasco we have before us today. The threat is always there of renewed litigation by a small industry lobby group which is protectionist to the extreme. The strategy for reopening the border over the longer term must take into account this reality and include a legal dimension.

The cattle and beef industry is one of the most integrated sectors across the border. A head of cattle can move back and forth across the border several times in its lifetime in different phases of the supply chain. This is why the Canadian cattlemen and farmers have so many allies among their associates and friends south of the border, which makes the border closure so galling for them.

Business in general has been moving steadily toward greater cross-border integration regardless of what government does. The BSE crisis is defining the need for governments to catch up to business in terms of policy and regulation. I believe that this is one of the emerging challenges of the trade relationship.

The U.S. dimension of this crisis is even more important than the huge volume of lost trade might suggest. The country can spend money on developing new world markets and should in a smart, targeted way, but we must know that many of these markets will not open to our production while the United States remains closed, so there is a multiplier effect in the damage.

We need to convince the U.S. government to inoculate the cattle and beef industry from the ravages of rogue use of the ports to circumvent trade policy. Where is the government's strategy on doing this? We probably need a new and open-eyed look at the dispute settlement laws and mechanisms. Canada has suppressed this process. The Americans are preoccupied elsewhere and unlikely to show leadership in any aspect of the bilateral trading relationship, but history has shown that they will listen when presented with plans that also serve to advance their interests.

The border is held hostage to political will. The U.S. administration needs to know that it will have the political cover to confront legal challenges to free trade.

Our government must contribute by helping to build political constituencies in the United States in support of our cattlemen and farmers. It needs to take the lead in coordinating with the provinces to use local and regional cross-border groupings to consolidate support. It needs to assure Canadians that no stone is left unturned in building support throughout the U.S. economy and society.

The Minister for International Trade and his colleagues should be in the United States, in the states where most support exists for free cattle trade, building alliances to allow Washington to better confront the political pressures of protectionism.

In the interest of openness, the government should publish a record of its interventions with American authorities at all levels to show ranchers and farmers, truck drivers and all Canadians just how active they are in pressing for a solution.

I appreciated the opportunity to speak to this important national trade issue this evening.

AgricultureGovernment Orders

6:10 p.m.

Malpeque P.E.I.

Liberal

Wayne Easter LiberalParliamentary Secretary to the Minister of Agriculture and Agri-Food (Rural Development)

Mr. Chair, I congratulate the member on her election to the House.

The member talked about the integration of the industry. In fact, there is no industry that is more integrated with the United States than the beef industry. We talked about this the other night in terms of cattle moving down into feedlots, back up into Canada and so on. It is a very integrated industry.

I think the member also agrees with what her leader said the other night, that the real problem is the stoppage at the border.

I was intrigued by what the member said about changing the dispute settlement laws. Many members of the House have talked about this issue previously.

We have to find a quick resolution when there are issues with the United States. We have had the softwood lumber issue, fisheries issues in my area and we now have the BSE issue. Clearly the science is on our side in terms of opening the border. Contrary to what the hon. member said, there has been an endless number of cabinet ministers going to the United States. There have been delegations of members of Parliament, cabinet ministers and our ambassador, all of whom have been working hard on the issue. As yet there has been no resolution because, as the member said, it has been politicized.

I am wondering what the member has in mind in terms of quick response or dispute settlement changes in the laws which the House could have the benefit of as we go down the road to find a quicker resolution to these issues.

AgricultureGovernment Orders

October 12th, 2004 / 6:15 p.m.

Conservative

Belinda Stronach Conservative Newmarket—Aurora, ON

Mr. Speaker, the member is right. Obviously there has not been a resolution, as he mentioned, on BSE and softwood lumber.

NAFTA should be reviewed. There should be a better framework of fairness to take a look at whether we can come up with a quicker dispute settlement mechanism. It should not be allowed to completely devastate an industry. There must be a framework of fairness developed.

Our government could be doing more under chapter 20, in particular exploring consequences under chapter 7, when last summer the international standards organization, the OIE, the Office international des épizooties, ruled that there was no risk of Canadian beef. That should be explored but it has not been. Chapter 11 refers to fair and equitable treatment. The government should explore that as well. I do not think the government has done enough.

AgricultureGovernment Orders

6:15 p.m.

Malpeque P.E.I.

Liberal

Wayne Easter LiberalParliamentary Secretary to the Minister of Agriculture and Agri-Food (Rural Development)

Mr. Chair, as you are well aware, this is a continuation of the take note debate last Thursday night which went for five hours.

Upon reviewing last Thursday's Hansard I believe all of us really did not explain to the rest of the world, beyond farmers themselves, what this industry is all about and how the U.S. border being closed has completely devastated our industry even though science dictates that the border should be open. I want to try to put a bit of a face on that dilemma.

The reason I want to take this approach is that in the House the opposition tends to attack the government. That is its right. Even the odd time we do need to be tuned up. However on this issue, I do believe that sometimes the rhetoric can get in the way of the industry understanding what the government has tried to do for producers and the industry.

I want to start off by talking about how important this industry is in terms of cash receipts. The sale of cattle and calves in 2002 generated $7.7 billion, which accounted for 21% of total cash receipts. As a result of the discovery of BSE in May 2003, sales of cattle and calves dropped to about $5.2 billion in 2003. That is basically the beef industry, but beyond that there are other industries that are affected. The dairy industry has had a loss of sales of cull cows and lower prices for cull cattle. In fact, they cannot even get rid of them. An animal dropped in price from somewhere around $900 to $200. There is the sheep industry, the deer industry and there are others.

I want to expand on that. In Thursday's discussion the member for Cumberland—Colchester—Musquodoboit Valley on the opposition side said that part of the frustration of being an Atlantic Canadian and going through the BSE crisis was that most people think it is an Alberta issue or a western Canadian issue. He went on to talk about farmers in his riding. I agree that it is a Canada-wide problem. Yes, in terms of total economy and the size of the industry, Alberta is much more affected.

What we often forget about or what often is not stated is that at the end of every beef operation, whether it is large or small, or all the other industries affected by BSE, there is a farmer and a farm family. They are affected by this. In terms of their situation, the impact is much the same, and that is total devastation. I want to give a couple examples.

Last fall in my office I met with an individual from just over the other side of the Ottawa River. He is a part time beef producer who actually works on the Hill. He was going back to the bank and was wondering what to do in the situation. He was going back for the third mortgage increase, at $20,000 a shot. The bank was putting on the pressure. It did not see the value on the books. That individual was facing marriage problems and financial stress problems as a result of BSE. The picture I want to paint is that the individual was suffering substantially because of the border being closed.

There is another example of a beef producer in Prince Edward Island who last year lost $360,000. The bank came to him this spring and wanted more equity in terms of his operation. The asked him to put on an additional mortgage of a quarter of a million dollars. That was in order to protect itself in terms of its asset base as a lending institution.

What would we do in that situation? This individual is about 56 years old, has been working in the farming industry all his life and he has had to make a decision whether to take on an additional $250,000 worth of debt or throw his life's work away by selling out and losing his life's work. He did acquire the extra debt but he is now feeling the pressure of finance.

My point is to try and explain the impact on the individuals and their families. We need all Canadians on side on this issue and to understand why it is so important that the Government of Canada continues to support the industry.

It goes beyond that. I think Canadian consumers were with us last year. When the beef industry encouraged them to go out and buy more product they did. In fact, consumption went up and we do have some of the safest beef products in the world.

I want to give an example at that level as well. An individual producer came to me on the weekend and said that he had sold eight cattle on September 24. Seven of those were triple A cattle, some of the best cattle that could be shipped. One was a double A. The prices he received for those cattle ranged from $1.29 to $1.33.

What I want to say to consumers is that when they go into their grocery store they should ask their grocer why producers are not getting a greater share of the price of the steak they are buying. Those questions need to be asked. We need to know why there is not a greater share of the returns to the beef industry going back to the primary producer.

I do not want to spend all my time talking to that end. The opposition has failed to make this point so I will have to ask the question. What has the Government of Canada been doing to support this industry?

If we go back and look at the record we will find that the minister explained that fairly well on Thursday night. I want to review a couple of points. Immediately the Canadian Food Inspection Agency went out there and it did its job in a regulatory way.

The minister, the previous minister, other ministers of the crown and in fact the Canada-U.S. parliamentary association made every effort to get the border open with the Americans. As I indicated, parliamentary delegations have been down there.

A number of programs have been introduced and I think we should review those: the BSE recovery program which targeted $520 million and $465 million has gone out; the cull animal program of $120 million and $110 million has gone out; the transition industry support, $930 million and $568 million has gone out, and the rest will be out I am told by October.

On September 10 the minister talked about repositioning the industry with a program of $488 million and, as he mentioned the other night, it is to go to four areas: first, to continue to pressure the United States in terms of them opening the border; second, to expand our slaughter capacity with assistance to the processing industry and to the small and medium slaughter industry to try to expand that slaughter capacity within Canada.; third, to bring normalcy back to the market through the fed cattle set aside and the feeder set aside programs; and fourth, to look at new markets as a country.

Right now the minister and a member from the opposite side are overseas trying to establish and inform others on our beef industry, its safety, the quality of our product, the kind of genetics that we have in those cattle and that they should be buying those products in their country. The minister is looking at Japan, Korea, China and Hong Kong.

Yesterday the first feeder set aside program was opened up by the reverse auction approach. That program should now be up and running.

The bottom line is that the government is standing by this industry and doing everything in its power to support the industry. We are willing to listen to constructive criticism and to look at novel ideas to improve our programming and assist this industry in its time of need.

AgricultureGovernment Orders

6:25 p.m.

Conservative

Rona Ambrose Conservative Edmonton—Spruce Grove, AB

Mr. Chair, as the hon. member said, we need to increase the capacity to slaughter and pack livestock in our country so there is more reliability for the agriculture industry.

In my riding of Edmonton—Spruce Grove, a former member of the House, Stan Schellenberger, is spearheading an initiative called Ranchers Own. This initiative aims to provide farmers with a stake in a facility so they own it and will have a reliable facility and a fair price.

Ranchers Own is also using state of the art technology to ensure that it is able to process meat as efficiently as possible. Ranchers Own is also targeting niche markets to capture parts of the marketplace that larger packing facilities have no interest in so that if and when the border is open Ranchers Own will still be viable to process meat.

My question is about start-up initiatives. What is the government doing to ensure that start-ups are built to last so that when the border opens those facilities will not find themselves out of business?

AgricultureGovernment Orders

6:25 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

Mr. Chair, there is also an initiative in my own riding of Malpeque for all of Atlantic Canada. A new slaughter plant has been built on the co-op principle. To ensure supply to that particular plant should the border eventually open, each producer has shares by way of purchasing a hook. In that way the plant is basically assured that it will be supplied with product.

That particular operation is also looking at being the cutting edge of traceability to try to establish, right from the hoof to the plate, where the animal came from, what its genetics were and what farm it may have come from, which ties in to food safety and food quality. It also ties into niche markets as mentioned by the hon. member.

The details of that program are still being worked on but it is basically a loan loss reserve program which the Government of Canada would, to a great extent, backstop with financial institutions those businesses, those entrepreneurs and those individuals who are willing to take the risk in terms of increasing slaughter capacity. That is a fairly good move on the government's part.

AgricultureGovernment Orders

6:30 p.m.

Conservative

Monte Solberg Conservative Medicine Hat, AB

Mr. Chair, my question has to do with something the parliamentary secretary just mentioned. He mentioned that there were programs in place to increase slaughter capacity but that is not where the government's job ends. It is not enough to just announce a program.

I know of an entrepreneur who recently contacted the department to find out about this $38 million backstop so he could go to the bank with the details and let it know what he wanted done. He discovered that it would be two to three months before the forms to apply for the program would be ready. That is unacceptable.

I would argue, and I think the parliamentary secretary would agree with me, that it is not enough for the government to just announce the program and say that its job is done. When will the government do something to ensure that we actually have some slaughter capacity now?

AgricultureGovernment Orders

6:30 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

Mr. Chair, the fact is that the government has been doing something. As I indicated at the announcement on September 10, we want to ensure that the program will work and will do its job in the best interests of the industry. The minister has had fairly major consultations with the Canadian Cattlemen's Association and others across the country in the design of that program.

I would agree with the member opposite on one point. All effort has to be made with haste to get that program up and running. When we do get it up and running, we have to make sure it is up and running correctly and that we are not jeopardizing taxpayers' money or jeopardizing an entrepreneur or a cooperative or the investment by a group of individuals in the industry. We want to make sure the design is right so that we target results at the end of the day and have a secure business that can return some profitability to those individuals and can work in the interests of the livestock industry as well.

AgricultureGovernment Orders

6:30 p.m.

Conservative

Kevin Sorenson Conservative Crowfoot, AB

Mr. Chairman, in one of the lines that the parliamentary secretary just gave he said that the government needs to respond in haste with a program. We have had 18 months, since May 23, of this carrot being dangled in front of those who would start these kinds of programs or projects and also in front of the producers who are waiting for some help.

I would suggest that the government has had ample opportunity to design a program, to stand in front of the camera and say that the program is here and $66 million is here but we do not have the application forms here. It will take at least 12 months to get some of these packing plants up and running.

The four points of the program that has come out are contingent on the fact that there be more capacity.

If we do not see enough increase in capacity by October 2005 or January 2006, we will have a glut again. The holdback calves that will have been held back and should have been slaughtered in May or June will be held till October or some even later into January. Instead of 700,000 over fat cattle coming on the market, we will have 1.2 million or 1.3 million over fat cattle coming on to the market.

I would encourage the parliamentary secretary, with that sense of urgency that he talks about, to urge the government to do everything it can to clear the way so that these new start-up projects can get quick access. The banks have the security, because right now when these individuals go to the banks, the banks are backing away because of the government's failure.

In my comment I would simply urge the parliamentary secretary to push for more than what we have. There is nothing in here about tax incentives and nothing in here about those who are taking the big risks. All it is, is a low loss reserve to the banks.

AgricultureGovernment Orders

6:35 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

Mr. Chair, a loan loss reserve to the banks is actually quite a step forward. The minister made it very clear in his September 10 announcement that we were taking a somewhat different approach. We would not just stand back and live in the hope that the border would open and problems would be solved.

We believe that we have to build a Canadian industry, to expand our Canadian industry and get into more slaughter capacity. As was stated on Thursday night, with the various set aside programs in place in conjunction with the industry, we are trying to bring some normalcy back to the marketplace.

Slaughter capacity is in fact ramping up. We want it to ramp up and we put in place a program that we think will assist in doing that. We have put in place the set aside program so that when there is normalcy in the market, prices will come up and producers will receive better prices in the marketplace.

I would encourage members opposite, as I mentioned in my speech, that we also need to be talking about the other side of the equation, which is that right now, out of the packing industry and the grocery store chains, the farmer is not getting a fair share of that consumer dollar. I would ask them to look at that end of it as well.

AgricultureGovernment Orders

6:35 p.m.

Conservative

James Bezan Conservative Selkirk—Interlake, MB

Mr. Chair, I just want to follow up on the comment by the parliamentary secretary about how much this has cost the industry. He tried to paint the picture.

From my own personal experience as a cattle producer and from talking to friends and fellow producers in my area, I know that the losses on the farm at the primary producer level have been in that $300 to $400 per head loss. In my case it was over $43,000. The amount of money that I was able to get through support programs, which is also in comparison to other people in my area, was only around $45 a head. It is nothing compared to the financial stress and loss that the industry is going through right now. We have to look at why programs are not working and why the money is not getting to the producers.

The industry asked for a cash advance. I want to know why our government decided to go ahead and do a cash advance through the CAIS program when most producers, myself included, do not believe the program is a viable program, one that will be there in the long term and one that will provide the mechanisms to get the money out of the system.

I want to know why the government did not look at a different way to deliver money. Money flowed a lot easier through some of the other programs. CAISP is administratively burdensome. It is very long in the process and producers are still waiting on 2003 money, never mind having an advance on 2004. If the government really wants constructive criticism, the CAIS program is a key case in point. The government needs to take a hard look at other ways it can deliver cash advances.

AgricultureGovernment Orders

6:35 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

Mr. Chair, the issue of the CAISP advance came up at the meeting of provincial ministers of agriculture and their deputy ministers along with the federal minister and deputy just two or three weeks ago. That has been seriously looked at. There is a recognition that the CAISP was designed to work in normal boom and bust cycles and level out the income levels in that way.

This is anything but normal. It was not envisioned that this would happen. Bringing forward a kind of advance on the CAISP is seriously being considered and was talked about extensively at the meeting. We want to make the CAISP work as well as it possibly can for the livestock industries as well as it does for others.

The bottom line principle behind that program by the Government of Canada was to bring it in and other programs so that at the end of the day the primary producers would have fair and reasonable incomes in their operations. That was the intent of the design. We will continually look at ensuring that the objective is being met and making improvements. We want to see some cash in the hip pockets of producers so that they can continue in one of the most important industries in this country and one of the backbones of the rural economy.