Debates of Nov. 22nd, 2005

Supply

[Réal Lapierre, Bloc, Lévis—Bellechasse, QC]

Mr. Speaker, I would like to point out to my hon. colleague that I too represent a strongly agricultural riding and the bulk of its agricultural economy rests precisely on supply management. My riding is massively dominated by the dairy industry, and there are also many poultry and chick operations.

So we need look no further than our own areas. It is necessary that we continue to support this program, and it should even be tried by all of the developing countries. In fact, the supply management formula and its raison d'être starts with self-sufficiency. Setting quotas of self-sufficiency avoids our even having to think of flooding the market in other countries that may need our products, because our availabilities are very limited.

[Sébastien Gagnon, Bloc, Jonquière—Alma, QC]

Mr. Speaker, first I would like to congratulate my colleague on his fine speech. It covered the main concerns of the Bloc Québécois. I would like him to provide me with some clarification on the situation in the regions.

I myself have a number of farms in my riding. I actually live in an area where there is a lot of agriculture. The farming community has seen some rough times over the last few years. There was the mad cow crisis, which resulted in major financial losses for farmers after the embargo was imposed on the export of beef, and so forth.

The farmers in the region even met with leaders of this government who will be at the negotiating table. There are a number of signs that supply management might be dropped.

I would like my colleague to provide me with some information that might exist, either in his region or in Quebec, about this loss or at least this government back-down from protecting supply management.

[Réal Lapierre, Bloc, Lévis—Bellechasse, QC]

Mr. Speaker, in order to answer my colleague's question, I must mention what I heard a little while ago. The minister told us that when there is a negotiating process at the international level, certain difficulties can arise.

It must be recognized, though, that the main difficulty we will have to deal with, as Quebeckers and Canadians faced with any movement or relaxation in supply management, is that we will again be transplanting into our own backyard a difficulty that some other countries are already experiencing. I cannot see how a lessening of demand, in comparison with what is currently required to keep supply management as it is, could possibly have any other effect than to hurt us.

Our farmers have already been hurt enough by the mad cow problem. We must take the necessary action, especially in an area where we have the ability and the tools to control our production in an intelligent way, to ensure that we cannot be accused of flooding other markets. That is a winning approach. It is a winning approach that we can only recommend to all other countries, especially those that would like some day to be able to control their own farm production.

[Sébastien Gagnon, Bloc, Jonquière—Alma, QC]

Mr. Speaker, it is with great pleasure that I rise in the House to speak to the motion brought forward by the Bloc Québécois, which reads as follows:

That, in the opinion of the House, the government should give its negotiators a mandate during the negotiations at the World Trade Organization so that, at the end of the current round of negotiations, Canada obtains results that ensure that the supply management sectors are subject to no reduction in over-quota tariffs and no increase in tariff quotas, so that these sectors can continue to provide producers with a fair and equitable income.

As I was saying, it is with great pleasure that I rise to speak to this motion because it shows once again how much we, the members of the Bloc Québécois, care about agricultural producers and about the regions of Quebec. Indeed, one of our priorities is to defend full use of the land in Quebec so that our regions cease to disintegrate. This can be done through various means, including by addressing major issues such as this one and by protecting certain industries.

Allow me first of all to salute the work of the men and women who, day after day, by their work on the farm or in businesses, provide us with this produce, this high quality food that adorns our tables every day. These people work very hard. Farming is not an easy profession, because it keeps people busy on the job 24 hours a day, 365 days a year.

I know what I am talking about, as I had the good fortune—and I do say the good fortune—to work for six years on a farm in my home town of Métabetchouan.

I would also like to take this opportunity of congratulating these farmers who work on their farms every day, in addition to making us, as members and parliamentarians, aware of these major issues through their representations.

I would like to mention by name in this House the people whom I have had the good fortune to meet recently, who have once again made us aware of this issue of protecting supply management: Daniel Côté, Réjean Maltais and Yves Lapointe. Mr. Lapointe is a young man around the same age as myself. He is not naive. He has chosen to work, day after day, at this noble calling, even though he has grasped all its inherent demands in terms of work and commitment, particularly in the current context, despite the major crises of recent weeks and years.

The aim of their representation was to raise our awareness of this supply management protection system. Allow me, for the benefit of our listeners, to remind us what supply management consists of.

The lion’s share of farm incomes in Quebec are generated by supply managed sectors, especially the dairy industry. This system offers the dual advantage of generating decent incomes for our producers and not causing distortion in world markets. In fact, it deserves to be better known abroad and could even constitute one element of a response to the world farm crisis.

Here again it is essential that Ottawa believe in it, as Ottawa is the player that is responsible for the negotiations. It is basic.

I will also address the concern that exists on the part of these producers. Why? First of all, because my own region, and probably several regions in Quebec, have experienced ups and downs related to the declining economy.

Let me explain. In Saguenay-Lac-Saint-Jean, the softwood lumber industry has experienced serious problems. As we know, the Americans are imposing export duties which prevent us from exporting to our full potential to the United States: the countervailing duties. This region, which derives its living from three major sectors, lumber, aluminum and agriculture, has seen two of these industries hit hard: softwood lumber and specifically agriculture. As a result, people are right to worry about the problems to which they are exposed.

Let us look at the importance of agriculture in our region: there are 3,000 indirect jobs that depend on agriculture, meaning about 16,000 indirect jobs in this sector of activity. This is important for Saguenay-Lac-Saint-Jean: it represents some 12% of jobs.

It is interesting to see the producers who want to do more and who opt for other market openings, such as the cheese dairies and other agri-food sectors. We see a lot of vitality there. Yet this is not easy. These people need help in developing their farms. It is precisely through strong stands taken here, in this House, that these farmers can be given the confidence to engage in this industry and to pursue their activities with peace of mind.

But at present, that is not the case; they are worried, for all sorts of reasons. There are certain signs that are keeping them worried, and forcing them to take up this fight and intervene.

I cite the example of butter oils. The Ontario chemical ice cream industry wanted to stop using cream to make its ice cream, to reduce its production costs. It wanted to be able to buy an American blend of milk by-products and sugar, known as butter oil, as a raw material. Bowing to the industry lobby but abandoning Quebec dairy producers, the federal government decreed that these butter oils were not dairy products, thereby opening the border to these imports. The result was that in five years, between 1997 and 2002, imports soared 557%, representing a loss of a half billion dollars for Quebec’s dairy producers. That is a substantial loss of revenue.

A similar fiasco has also occurred with the importing of cheese sticks.

These are not our only concerns, concerns which the government has left hanging. I am referring here to a memorandum to cabinet which has galvanized the fears of producers, who felt betrayed. According to this memorandum, which dealt with the mandate for the WTO negotiations, Canada was prepared to get rid of supply management. That was the drift of certain of its comments. The secret document, made public by the Council of Canadians in September 2002, raised the ire of 10,000 Quebec producers of milk, poultry, hatching eggs and table eggs, four supply managed sectors.

Another concern has been raised by Mr. Steve Verheul, director of the International Trade Policy Directorate at Agriculture and Agri-Food Canada. Mr. Verheul spoke at a special general meeting of the UPA for Saguenay—Lac-Saint-Jean. His presentation was in no way reassuring to the diary and farm producers of that region, even though he seemed to be softening the blow of the coming WTO negotiations in saying that they would try to minimize the losses that Canada might incur in that forum.

What this government has to do is to stand up once and for all and make sure that in no case does it give in to any compromise on the supply management issue. It has the chance to do this, and this is crucial. In fact, in this sort of negotiation, when you lose something, it is lost for a long time. The government therefore has the opportunity to report for the negotiations, be firm in its demands and positions, and show leadership. That is what we in the Bloc Québécois want for the farmers, and what they themselves want.

Today, in this House, I ask this government not only to support the motion of the Bloc Québécois, but to move from words to action and ensure that the protection of supply management is maintained.

[Michael Chong, Conservative, Wellington—Halton Hills, ON]

Mr. Speaker, supply management is something that I support and with good reason. There are 500 dairy farms in Wellington County, the county within which I live in Ontario. They support thousands of people in related industries and provide a very good, high quality product of which we all can be rightfully proud.

I note with interest that despite the many detractors of supply management out there, over the course of the last year and a half, since I was elected in June 2004, I have not had one constituent, one consumer, complain to me about the price of milk, or eggs, or butter, or cheese, or complain about the price of chicken or turkeys. That is a very telling sign that the consumer is getting a very reasonably priced, high quality Canadian produced product. That is another reason I support supply management.

There are some concerns being raised in the community. I met with the Wellington dairy producers the other day. They highlighted concerns to me about the threat they perceive to be at the WTO trade talks and their fears about the over-quota tariffs being reduced to the point where the whole threat to supply management would be introduced because of lower tariffs allowing for the importation of milk, eggs, chickens and turkeys.

I wonder if my hon. colleague would comment on that. What would he see as the solution to the government's position at WTO? I know the Bloc is advocating that the government ensure that no reduction in over-quota tariffs are pursued, but what suggestions does he have as to what the government position should be at WTO regarding the non-supply managed part of the agriculture industry? In other words, how should Canada best pursue its trade objectives in terms of obtaining a level playing field for those farmers in non-supply managed industries?

In my neck of the woods, the farmers in non-supply managed sectors of agriculture are probably facing some of the worst financial circumstances that they have seen in a generation, if not in two or three generations. I note that the price of corn in Ontario is below the price of production. I think it is around $2.80 a bushel, which is quite a bit below the price of production. These farmers are suffering because of unfair subsidies and unfair tariffs in other jurisdictions like the U.S. and Europe.

I wonder what suggestions my hon. colleague has as to what position the government should pursue in order to obtain a level playing field for those farmers in non-supply managed sectors of agriculture.

[Sébastien Gagnon, Bloc, Jonquière—Alma, QC]

Mr. Speaker, I would like to salute my colleague and to thank him for his support for this motion.

First, in his question, he raised some concerns. I found an excerpt from a cabinet document that, at the time, confirmed farmers' fears that they were being betrayed.

Allow me to quote briefly from this document:

Negotiations involve compromise. Sectors of the economy benefiting from protection which shelters them from foreign competition will object to any change in the status quo, particularly if it comes during an economic downturn. Supply managed producers of eggs, poultry and dairy products, the textile and clothing industry, and certain service sectors will probably object to any changes that would lead to increased competition.

Here is what the government strategy was:

The government will recognize that multilateral trade negotiations require Canada to consent to certain measures to open up markets to its trading partners. The government is working in close collaboration with the sectors most likely to be affected in order to define the priorities and objectives for negotiations. A more thorough examination is also required of how to manage the ongoing transition to a more globally integrated economy and the related costs of adaptation. At the same time, we will emphasize the overall gains the new negotiations will bring for Canada's economy, businesses and consumers.

What this means is that the government is prepared to compromise, but it will try to make us pay the price in other ways.

My colleague asked what solutions we could ask the government to put in place. At least this motion reinforces Canada's position in this House. We are also asking the government to ensure that the supply managed sectors can continue to provide producers with a fair and equitable income. To this end, the motion says that supply managed products must be included on Canada's list of sensitive products and that Canada will accept no increase in tariff quotas. This means that there can be no increase in the percentage of supply managed products subject to free trade, which is about 5%. The motion furthers asks that Canada refuse to negotiate a reduction in tariffs imposed at the border for foreign supply managed agricultural products. These over-quota tariffs are those tariffs imposed on imports that exceed the 5% quotas.

Those were three ways of showing a certain degree of assertiveness. However, this system is way too fragile for us to start negotiating it and taking it apart. Therefore Canada's position must be firm.

[Lynn Myers, Liberal, Kitchener—Conestoga, ON]

Mr. Speaker, I will be sharing my time with the hon. member for Saint-Léonard—Saint-Michel.

I am pleased to rise in the chamber today to speak to this motion on supply management. Agriculture in general is an always important topic that requires our attention. The basic necessities of life and well-being should remain at the highest level of importance for government. Being able to feed our people should always be a primary responsibility.

In that vein, we as a government and as a Parliament have the responsibility to ensure that our agricultural producers, all of them, have the tools they need to farm and supply the market with quality and wholesome foods at a reasonable price while getting a return from the market that covers their costs of production.

In Canada, we have been able to achieve this in the dairy, poultry and egg industries through supply management, a fair agricultural model. Canada's dairy, poultry and egg industries contribute $12.3 billion to the Canadian GDP. They generate $6.8 billion in farm cash receipts, sustain more than $39 billion of economic activity and employ more than 215,000 Canadians throughout the country.

Whether we represent a rural riding, an urban riding or a cross-section of both, ensuring that producer concerns are heard and acted on is the responsibility of all members of Parliament. That is why in 2003 I started the Liberal dairy caucus as a vehicle to ensure that producer concerns on issues such as labelling and use of dairy terms, dairy product standards and import controls were heard by the innermost levels of the federal government.

It is also why at the start of this Parliament I introduced Bill C-264, an act for the recognition and promotion of agricultural supply management. The purpose of the bill is to establish and implement the Government of Canada's policy respecting agricultural supply management. Simply put, it is intended to recognize and promote supply management and ensure that supply management is preserved in Canada.

I was also very pleased earlier this year when the Liberal Party of Canada passed a resolution at the national biennial reaffirming our party's long-time support for supply management. It also called on the Government of Canada to “recognize and reflect formally in agriculture and trade initiatives the three pillars of supply management” and “defend and promote supply management, the Canadian Wheat Board and all single-desk selling during negotiations at the WTO”.

This brings me to why we are discussing this important issue today. Next month, the sixth ministerial is taking place in Hong Kong. While it is not expected that full modalities will be achieved, decisions could still be taken that could jeopardize Canadian producers' choice of domestic marketing systems.

The WTO negotiations have reached a level where specific proposals have been tabled by the most influential members. These proposals are not in the interests of supply management.

The Canadian government needs to go to the negotiations with the strongest negotiating mandate possible. We support the objectives of the Doha round, but we cannot put Canadian agriculture on the table when no other country is willing to do the same.

The proposals currently being discussed would result in Canada having to reduce our over-quota tariffs and increase access to the Canadian market for imported dairy, poultry and egg products. The loss of Canadian market and the loss of price stability will compromise Canadian farmers' ability to receive a fair return from the marketplace. This is simply unacceptable.

Canada's strategy to seek the creation of a fair and equitable trading environment is not supported by the most dominant and most trade-distorting WTO members, the United States and the European Union. It is clear that the Government of Canada must take a strong stand in WTO negotiations on agriculture.

A recent study prepared by trade expert Peter Clark for the Dairy Farmers of Canada suggests that the current WTO agricultural negotiating framework will not ease the imbalances among the participating countries. The EU and the U.S. have bought flexibility to reduce their over-quota tariffs by providing huge amounts of domestic support to their farmers.

For example, the new study demonstrates that U.S. dairy farmers had access to $13.8 billion U.S. in direct and indirect support in 2003, meaning they can get about 40% of their income from federal, state and local government subsidies. These subsidies effectively limit access to the U.S. market. The U.S. advocates tariff cuts because it can limit access while trying to increase U.S. exports to other markets.

Our dairy, poultry and egg producers are demanding this as our negotiating position because, first of all, cuts in over-quota tariffs will eliminate farmers' ability to predict the level of imports coming into Canada. In turn, farmers will be unable to match supply with demand and thereby ensure that there are enough domestically grown products to meet the needs of Canadians from coast to coast. Farmers and consumers alike deserve stability. We cannot allow any cuts in over-quota tariffs.

Second, farmers negotiate fair prices for their food based on what it costs to produce it. The income farmers receive is made without relying on taxpayers' dollars, unlike in the United States and the European Union, where farmers are subsidized to a staggering degree. We cannot limit the ability of dairy, poultry and egg producers to receive a fair price from the marketplace.

Next, we cannot accept a cut in our over-quota tariffs nor can we offer more access for our dairy, poultry and egg sectors. Canada is already giving more access for dairy, poultry and eggs than the U.S. or the EU.

Canada offers import access to about 4% of the market for dairy products, 5% for eggs and turkeys, 7.5% for chicken, and 21% for hatching eggs. In contrast, the U.S. currently offers 2.75% access for dairy products and the EU offers only 0.5% for poultry. If we cannot achieve an equitable minimal market access of 5% in all countries, then we should not allow any increase in market access commitments in Canadian dairy, poultry and eggs.

This Parliament owes it to Canadian farmers to think beyond our own interests and send a strong message to the governments of the other 147 WTO members that we are for, first and foremost, a fair and equitable rules-based trading environment. Second, and very important, we are for achieving a level playing field with real market access that is fair and equitable across the board. Finally, and equally important, we are for recognizing that we all have areas that are more sensitive and we need the ability to offer some protection to those areas, but in an equitable way for all our member countries.

By way of conclusion, I note that this is a very important debate today. This is a very important motion in support of supply management across this great country of ours. It is something that all parliamentarians should take heed of, should note and should defend to the nth degree. It is something that we owe our farmers and our producers. It is something that we owe our rural communities. It is something we owe all consumers by way of choice in terms of having a solid and good supply managed system in place.

It is something that all parliamentarians and indeed all Canadians should support and actually feel quite good about, because it is a system that has worked well in the past. It is a system that we must defend and preserve. It is a system that we must carry forward into the future because a lot of communities and this country's economy depend on a strong supply managed system.

I applaud all of those members of Parliament who are speaking on this important initiative today. I applaud everyone who is in support of supply management, because it is a good system. It is worth promoting, defending and carrying forward.

[Bev Oda, Conservative, Clarington—Scugog—Uxbridge, ON]

Mr. Speaker, I thank the hon. member for articulating the situation very clearly and also for his sentiments about how important the agriculture industry is to Canada, particularly how important those agricultural producers are who provide Canada with safe, good quality food. We want to maintain that.

I know that our turkey, chicken, egg and dairy farmers are a key part of keeping Canada's food products safe. The products are of great quality. In fact, the quality and the safety of our food are the best in the world. We have to continue to ensure that we do this in Canada, and we can do this here in Canada.

We have to also ensure that we have a sustainable agricultural sector. Right now we are discussing the WTO negotiations that are about to be undertaken. We have heard about the impact that a reduction in over-quota tariffs or an increase in the tariff quotas would have on our farmers.

I have had meetings with many of the farmers in Durham, but even prior to that, I note that these are my neighbours. In fact, dairy cows trespass on my lawn occasionally. These are the people I meet at the grocery store. I want to make sure the House understands that I have heard from every sector of the supply management farmers.

I would like to ask the member if he could help us by giving us a little more reflection on this. I spoke about my neighbours. I have actually lived beside a dairy farm for about 10 years, which unfortunately coincides with the decade or more than this government has been in power. I have seen the agricultural community get further and further into reduced incomes, struggles and challenges.

I would like to ask the member how we can make sure that the supply management approach to our industry is maintained. The member is quite right when he says that this is not a subsidy. This is a way to ensure that we have good quality and safe food at an affordable price for Canadians, yet there seems to be a perception among other countries that are against supply management that it is a subsidy. It is not a subsidy. We have to maintain it. We have to ensure that we have strong representation in Hong Kong to ensure that we have the continuation of supply management in this country.

Could the member explain why the government is unable to correct the perception that supply management is a subsidy program when it is not?

[Lynn Myers, Liberal, Kitchener—Conestoga, ON]

Mr. Speaker, the hon. member opposite raises a couple of very good points, primarily and first of all the notion that in this great world of ours we have a supply managed system in Canada that has excellent quality and safety and also has the ability to make sure that people get quality and safety of food at a reasonable price, as does our whole food system, for that matter. I think that is worth highlighting.

As the member points out, I too think we need to make sure that at the next negotiations we take a very tough position in support of supply management. I think that is paramount.

With respect to her direct question about changing perceptions, it seems to me that it is important in a debate like this one today in the House, and also elsewhere where we can make those kinds of inroads, to tell farmers, producers, the agricultural community and consumers, for that matter, that we are standing firm with them in this very important sector. Supply management is something that we hold dear. We will continue to protect and promote it. We should all be part of that in terms of making it happen.

I see this as a non-partisan issue, quite frankly, in the sense that we have to stand by our farm people. I still live on the family farm and I feel strongly about that. I think it is important to maintain those kinds of links and that kind of initiative, which supports not only farmers in general and their families but the supply managed system in particular.

I think back, for example, to Eugene Whelan, who sat in the House for many years. He was the agriculture minister who started this whole process of supply management and in fact was one of the pioneers in enabling this system to be put into place in a very meaningful way. We cannot let that legacy fall by the wayside. We have to stand firm on it. We will stand firm on it and we will continue to promote supply management as the good system that it is.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, I also appreciate the opportunity I have been give today to participate in the discussion on global farm income and to describe some of the steps that this government has taken to support our agricultural producers.

Specifically, I would like to address the issue of the World Trade Organization negotiations on agriculture and highlight the efforts by the Minister of Agriculture and Agri-food and the Minister of International Trade to establish equitable rules of the game for international markets, rules that will allow our farmers—already among the most productive on the planet—to compete more equitably and effectively in international markets.

Achieving the expected results in the World Trade Organization negotiations is absolutely vital to ensuring the future prosperity of our agricultural sector and, in fact, to ensuring the prosperity of the entire country.

Every year, agriculture contributes between $5 billion and $7 billion to the nation’s trade balance and represents some 10% of our annual trade surplus. In 2004, we exported more than $26 billion worth of agrifood products to over 180 countries.

The agriculture and agrifood sector represents approximately 8% of Canada's gross domestic product and one out of every eight jobs in the country. There can be no doubt that this industry is absolutely essential to the economic well-being of Canada.

In addition, the members of this industry have performed strongly during a difficult economic period. Although farm incomes are declining, Canadian agricultural products are internationally recognized for their superior quality. In fact, Canada is the world’s third-ranking exporter of agrifood products—convincing confirmation of the high esteem in which Canadian agricultural products are held.

Nonetheless, to derive maximum benefit from this reputation, to be able to compete in international markets and also to allow our producers to continue to earn their living in their chosen career, we must ensure that all the nations on the planet play by the same clear, enforceable rules.

Canada has attempted, in the current round of negotiations on the Doha agenda, to encourage the creation of a trading system that will allow all countries, irrespective of their relative political or economic power, to compete equitably in compliance with rules that are accepted by all.

Now, as we are coming up on an important milestone in the current round of negotiations for the Doha agenda, that is, the ministerial conference in Hong Kong, we are focusing even more on the attainment of those objectives. These negotiations are our best opportunity to work with other countries to develop an level playing field by eliminating tariff barriers that until now have limited the ability of Canadian producers to compete fairly in international markets.

Since the very beginning of the negotiations, we have had our sights set on three specific objectives that should make the level playing field possible. Canada's objectives consist first in eliminating all export subsidies for all products; second in substantially reducing domestic support that distorts trade; and third and last, in significantly improving access to foreign markets for all our products.

Attaining these objectives and creating fair rules will provide real benefits for our producers. For example, the elimination of export subsidies, which is a longstanding Canadian objective, would allow Canadian exporter to compete more fairly and more effectively in international markets. This is especially true for the grain and red meat industries, which have to compete against subsidized European producers.

Significant measures to reduce and harmonize domestic supports that distort trade—that is, the countries that subsidize the most would make the biggest reductions—could go a very long way toward establishing fair rules and would benefit Canadian producers, who have to deal with European subsidies for grain and red meat and American subsidies for grain and oilseeds.

Moreover, an ambitious harmonization formula for tariff reductions should give Canadian exporters better access to key industrialized and developing countries, especially for products like beef, pork, oilseeds and special crops, as well as for various processed goods.

At the same time, Canada continues to defend the right of Canadian producers to make up their own minds as to the best way to market their products, including the use of structured marketing systems like the supply management system and the Canadian Wheat Board.

We are making every effort to present our ideas as the best way of achieving a level playing field for international trade, which our producers need to be able to compete fairly in international markets.

I would like to point out that these actions are not intended to benefit our agriculture industry alone. The health and prosperity of our entire economy are directly dependent on our ability to compete effectively in a context of increasing globalization.

The Government of Canada has made these negotiations a priority, and Canada plays a very important role in the international negotiation process. We are working with many countries to present our ideas as the best way of establishing fair rules for the world trade system.

Canada is known for its propensity for presenting practical, credible ideas that facilitate negotiations. Many important Canadian concepts have been incorporated into draft agreements, along with proposals from other countries in the WTO. We intend to continue working very hard to achieve our objectives in close consultation with provincial and territorial governments and industry representatives.

In addition to our efforts during these especially long and difficult negotiations to finally arrive at fair, equitable rules for our farmers, I would like to remind the House of the major achievements of the Canada agriculture and food international program, also known as the CAFI program.

It is a key part of Canada's international strategy, which was specifically put in place to support our agriculture and agri-food sector by facilitating the development of long term international strategies.

We will be able to ensure, therefore, that this sector is well placed to succeed on the largest markets and to respond to both the increase in consumer demand and any increased competitiveness on international markets.

The CAFI program provides matching funds for every dollar invested by the industry in support of activities that enhance Canada's reputation as a world leader in safe, high quality agricultural and agri-food products, beverages and seafood in order to respond to the constantly changing demands of international markets.

In promoting its own ideas on international trade, the Government of Canada tries to enhance the profitability of farmers and farm families all across the country.

Similarly, by being more successful on the international level, that is to say, by improving the recognition of its brands, facilitating market access, and eliminating technical barriers to trade, Canada ensures that its agricultural and agri-food sector will continue to grow and prosper. This will translate in turn into a stronger national economy that benefits all Canadians.

We will do everything in our power to ensure that this proud Canadian tradition continues, for both our current generation of farmers and the generations to come.

[Gerald Keddy, Conservative, South Shore—St. Margaret's, NS]

Mr. Speaker, I listened to the comments of the hon. member and those of member who spoke before him. I found them a bit confusing quite frankly.

I did not get from his comments whether the present government supports supply management. It was the government at the table for much of the Uruguay round of the WTO in 1994. It was there again in 2001-02 at Doha. It agreed ahead of time, as near as I can understand, for a 10% reduction in supply managed dairy, poultry, turkey and eggs in Canada. It was ahead of the time of the Hong Kong round.

I would like to have a clear understanding of whether the government supports supply management. I am not getting a clear understanding on that.

Supply management has worked well in Canada. It has worked extremely well in the province of Quebec. Supply managed farms are doing extremely well. There are over 500 supply managed farms in the province of Nova Scotia that contribute about $180 million to the economy of Nova Scotia. In no way, shape or form would we want to see any of this sector of the economy threatened. A 10% reduction is roughly $18 million to the economy of the province that I have the great honour to represent.

If we read the language clearly, it would seem to me that the government has agreed, going into Hong Kong and coming out of Doha, to reduce supply management in Canada by 10% across the board. Therefore, I would like a clear answer on whether the government supports supply management.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, as chair of the finance committee, we just finished touring across Canada. We met people from out west and out east. Many people have asked that Canada support and continue to support supply management.

Therefore, I do not think there is any dispute as to whether we support supply management, and I do not think that is the issue. I do not think I have to tell the hon. member that Canada is an exporting country. The idea is we are going into a round of talks of negotiations so Canada can continue to be a successful exporting country, not just in certain areas but in all areas.

In agriculture we are having problems in certain areas. We see it in pork and beef. There are certain areas of alfalfa. We met with some of the people out west. A lot of industries are having problems exporting their products because of subsidies. The European countries, especially, and the Americans are subsidizing their farming and agricultural communities. Therefore, I do not see that there is any issue with supply management.

Again, Canada is a trading nation. If we do not step up and show leadership in these areas, we have to be in the end ready to negotiate. We cannot negotiate from a position of weakness.

The debate is not on the supply management issue. It is on other issues.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, it has been my experience, as an observer of these things, that Canada's stance, going into these WTO negotiations, has been hopeless in representing the interests of Canadian producers, at least in my prairie region.

I have heard it said that Canada's negotiating stance going into these things is on its knees. It does not come from a position of strength. It is the European Union and the U.S. that dictate the direction that these negotiations take.

We have heard from my colleague, the hon. member for Burnaby—New Westminster. He said that he had spoken to a chief Canadian negotiator, who will represent us at this round. In this one segment the Americans are looking for 1% and we are at 11%. However, the negotiator tried to assure our member not to worry. He said that Canada would carve off somewhere in the middle. In other words, Canada will go into a round knowing that it will probably have its share chipped away or eroded by 5% or 6%, but we should be pleased because it will not yield the entire thing. This is before the bargaining even starts.

I am a former union negotiator. If I represented my people in that way, I would be out on my ear. It seems like we are trading the family cow for three beans, none of which ever seem to sprout for us. It is just a bad deal.

As the government goes into the Hong Kong round, this is Canada's bargaining stance, “Please, leave us with some of our integrity as Canadian producers. Please EU, don't take it all”. Is that our bargaining stance?

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, this is obviously a responsibility of the government to take leadership. I do not think we need any lessons from the opposition on how to negotiate. Canada is well known for being an international leader in trading. We trade in every single industry that this country manufactures and produces. Name it and we are producers. Now you are going to tell us how to negotiate? I do not know whom you have been talking with. I have just said that we have been touring the country. This is a non-partisan--

[The Acting Speaker (Mr. Marcel Proulx)]

I would remind the hon. member to speak through the Chair, please.

[Massimo Pacetti, Liberal, Saint-Léonard—Saint-Michel, QC]

Mr. Speaker, maybe the hon. member was speaking to somebody from his riding, I am not sure. I understand he is from an urban riding. I am from an urban riding. We consulted with Canadians from coast to coast to coast, as we say. They have told us we are doing a good job, but let us open up the export markets so that we remain competitive against European countries and the Americans. That is it and that is all.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I will be sharing my time with the hon. member for Drummond.

From the time I was elected in June 2004, supply management has been an extremely important file to me. I want to thank the Union des producteurs agricoles in my riding of Abitibi—Témiscamingue, which met with me on numerous occasions. We have discussed this somewhat complex issue. This has been, however, an opportunity to learn a little bit more. In fact, it is above all an opportunity to learn about the essential work being done by farmers in regions such as my own, not only in the Témiscamingue region, but also in Abitibi, in terms of milk and other products produced.

As others said earlier today, there are five products under supply management: table eggs, hatching eggs, milk, turkeys and chickens. I want, above all, to provide some important figures.

In Canada, supply managed farm cash receipts represent $6.7 billion or 20% of total farm cash receipts. Annual sales of added value products are $14.8 billion. There are nearly 75,100 on-farm jobs; 47,900 agriculture-related jobs; and 91,400 jobs in the processing sector, for a grand total of 214,400 jobs. One in five jobs in Canada is in the food industry.

In Quebec, supply managed farm cash receipts are $2.3 billion. There are 16,171 producers; 32,940 direct jobs and 36,584 indirect jobs, for a total of some 69,000 jobs. This is what supply management represents in Quebec. It is huge. This is 40% of total farm cash receipts in Quebec, and supply management exists in 16 regions in Quebec, including mine, Abitibi—Témiscamingue.

I want to make it clear that this is an extremely important issue. Supply management is based on three major pillars. First, production is limited by a quota system to ensure that it covers all domestic demand, without causing overproduction which might lead to a price collapse.

Second, as production is limited to needs, prices are regulated to avoid excessive fluctuations, ensuring producers a relatively stable price for their products.

Third, to keep supply and demand in balance, the borders are closed through the imposition of high duties on the importing of poultry, eggs and dairy products. That way imports do not disrupt the balance.

These three pillars are essential. If one of them takes a hit, the system collapses. That is what we want to avoid with this opposition day. We want to remind the government of the importance of these three pillars.

I do not want to get the figures wrong, but I will repeat them. They have been provided to us by the Union des producteurs agricoles. These figures, which are for all of Quebec, could be made proportional to my region. There are 32,940 direct farm jobs and 36,584 indirect jobs, for a total of some 69,000 jobs which partake of and depend on supply management.

This represents 40% of all farm activity.

As the member for Abitibi—Témiscamingue, since I knew that our opposition day would be dealing with supply management, I held a meeting last week with certain producers and representatives of the Union des producteurs agricoles. They told me that if supply management were to be sacrificed on the altar of the World Trade Organization tomorrow morning, that would signal the end for at least 80% of the farms in Abitibi-Témiscamingue.

For the dairy, poultry and turkey producers, it would be the end. This region is not on the doorstep of Montreal or the big centres. For them, the disappearance of the quotas is catastrophic. For us, for Abitibi—Témiscamingue, dairy and the four other supply managed products make up an essential sector. Supply management must continue.

There is one point which is not clear, and about which we are apprehensive. I would have liked the government to talk to us about this a little. In summer 2004, the members of the WTO concluded an agreement in principle on agriculture. The elements of this agreement in principle are being negotiated as we speak.

It is true that we are told that supply management will not be abolished under this agreement. We believe the WTO. Despite the general commitment to further liberalizing trade in agricultural products, raising quotas, and reducing tariffs, countries preserve the right to protect a certain number of sensitive products. That is what the debate will be about in Hong Kong, and that is what we will insist on, because supply management is in danger of being weakened under this agreement.

The government's strategy for defending it must be reviewed. First, it will only be possible to protect sensitive products—we are speaking obviously about the supply managed products mentioned earlier—if trade in agricultural products in general is liberalized more than it was before the agreement.

Second, even for these sensitive products, market access will have to be substantially improved. This is not clear. We obviously want controls. We must ensure that supply management is not imperilled for any reason. The security of many farmers depends on it. In my riding of Abitibi—Témiscamingue, it is clear that if supply management disappeared tomorrow morning, much of my region would also disappear. The problem is that our farmers cannot compete with what would enter Canada from countries like New Zealand, Australia or even the United States.

I will finish, therefore, by asking the entire House to pass the motion introduced today by the Bloc Québécois because the government has to know that it must negotiate properly and must not make any concessions when it comes time to negotiate in Hong Kong over the next few weeks.

[Yvon Lévesque, Bloc, Nunavik—Eeyou, QC]

Mr. Speaker, I congratulate my colleague from Abitibi—Témiscamingue on his presentation. I would like to remind him, as well as the previous speaker across the way, of a few things, before asking my question.

This is my question for my colleague. Is it correct that, until the signature of the Marrakesh accord, Canada imposed import quotas for products subject to supply management under article XI of the GATT? This was the article that allowed a country to limit access to its market. Does he also recall that the presence, on February 21, 1992, of 40,000 farmers on Parliament Hill calling upon this government not to touch the article XI quotas? Does he recall as well the commitment by those same Liberals to never sign the accord if it called for the elimination of article XI. The Liberals were elected in 1993, and a year later they were signing an agreement that did away with article XI.

Since then, the result of its elimination has been to make supply management less stable. The Liberals were elected in 1993, and since then they have been working on a bill to decrease controls still further. We have heard the member across the floor refer to a previous speaker who was from an urban riding. He commented that his party did not need any lectures from anyone. Can we assume that this government has the capacity to negotiate? Can we trust its promises and its speeches? That is what I am asking my colleague.

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I thank my colleague from Abitibi—Baie-James—Nunavik—Eeyou for his question. It will enable me to point out that we do in fact have a number of restrictions, which is why we have this opposition day in order to make it very clear to those who are going to be negotiating on behalf of Canada that Quebec is, unfortunately, still part of Canada and thus our demands need to be taken into account. Supply management is an essential part of Quebec's agricultural base. It is absolutely vital that the negotiators not fold under pressure, because the survival of our agriculture depends on it.

I agree with what my colleague has said. We must, clearly, be careful because the government has already gone to other forums with the avowed intention of making no concessions, and has caved in anyway. I am in favour of strengthening Canada's position. That is the reason for an opposition day today on this subject.

[Louise Thibault, Bloc, Rimouski—Témiscouata, QC]

Mr. Speaker, I thank my hon. colleague for his speech. I must say that I could have made practically the same speech. The reality is absolutely identical for farm producers in our region, who are under supply management, and they have the same demands. Just last week, I too met with producers and representatives from the UPA, who were extremely concerned about the situation.

The question I would like to ask of my colleague has to do with the fact that, just a few days ago, the Canadian negotiator appointed by the government met with representatives from the UPA and various sectors under supply management. He said something to the effect that changes were to be expected. I have tuned in to a number of radio shows on this topic. When we are told to expect changes and losses, when fundamental changes are announced, how concerned should we be? What does my hon. colleague think of the mandate the negotiator was given by the federal government to give something up?

[Marc Lemay, Bloc, Abitibi—Témiscamingue, QC]

Mr. Speaker, I thank my hon. colleague for her question.

There has indeed been a real uproar in all the regions of Quebec. I want to thank the UPA federations in all the regions of Quebec, who are very sensitive to this issue. The regional federations are doing a wonderful job of mobilizing federal MPs like me. I will never thank them enough for having keep us as informed as they have of what was happening on this issue.

We are very aware and sensitized, and things did happen. Obviously, as soon as the negotiator hints at possible give and take, suggesting that something might have to be given up, everyone gets scared. If any changes to supply management as it currently exists were to be made, that would really be a very serious problem for agriculture.

Nevertheless, the agreement signed in July 2004 could be maintained through the explicit recognition of sensitive products set out in articles 31 to 34, the recognition of the principles of fairness and balance, consistency and flexibility discussed in articles 3 through 35 and, finally, the ability to use various combinations to improve access to market.

Things can be done, but it is critical not to give in on supply management.

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, I want to thank my colleague from Abitibi—Témiscamingue for sharing his time with me and I commend him on his excellent speech.

I am speaking to this motion because agriculture is a significant link in the economic life of the riding I represent. In the Centre-du-Québec region, 1,400 farms are subject to supply management. Of the 853 farms in the Drummond area, 236 dairy farms are subject to supply management as are 38 in the poultry and eggs sector.

What is supply management? It is a management model, which under the surveillance and regulation of the Régie des marchés agricoles du Québec helps keep production levels balanced for certain types of farm products in order to prevent the surpluses or shortages that can cause serious price fluctuations. In my region, dairy, poultry and egg production are affected by this system.

We learn that this model will again be disputed at the upcoming World Trade Organization meeting next month in Hong Kong. I want to remind the government that if it is as sensitive as it would have farmers believe, then it should respect the motion passed yesterday by the majority of parliamentarians in this House and call an election at the beginning of next year. Then we could all support our farming representatives at the WTO instead of being in the heat of an election campaign. It is up to the government to decide.

At the WTO negotiation tables the Canadian system is highly criticized and the Government of Canada seems inclined to give in to foreign pressure. A cabinet document obtained by the Bloc in spring 2003, indicates that Ottawa is prepared to drop supply management if this concession allows it to get a significant decrease in farm subsidies in other countries and better access to their market. Grain producers in the west would benefit from such a position, but it would cause the ruin of farming in Quebec, which is why our farmers are so deeply concerned. In fact, several demonstrations have been held on this over the past few weeks.

The Bloc Québécois vigorously defends supply management. Supply management is a model that has produced results. I, too, share the opinion of the regional president of the Quebec Union of Agricultural Producers, André Fortin, who recently lauded the effectiveness of the system, saying that “the principle of supply management has enabled family farms in Quebec to survive. It ensures that consumers pay a fair price for their products and that producers get a fair share”. Supply management is a major tool for the economic vitality of our industry, and it is cost-effective.

The Bloc motion proposes that, first of all, supply managed sectors be able to continue to provide producers with a fair and equitable income. In that regard, the motion affirms that products from supply managed sectors are on the Canadian list of sensitive products.

Second, the Bloc proposes that Canada accept no increase in tariff quotas, or in other words that the proportion of the market for supply managed products open to free trade, that is approximately 5%, must not be increased.

Third, the Bloc proposes that Canada refuse to negotiate a decrease in border tariffs for foreign supply managed agricultural products entering Canada.

Finally, the motion calls for results. It is not enough for the government to say in this House that it supports supply management. It has to adopt a strategy to defend supply management and promote it effectively abroad.

If the federal government respects the four requests made in this motion, supply management may be fully preserved. With the WTO meeting approaching, farmers are worried.

Could the government let them down?

We know that the United States, Europe and Australia, in particular, are pushing for these barriers to be eliminated. That would allow foreign products, some of them heavily subsidized by governments, to take over our markets. The agricultural industry is afraid that such measures will mean the end of small family farms.

Former Quebec premier Pierre-Marc Johnson, who is acting as a special advisor for the coalition defending the interests of Quebec producers, believes that “reducing these tariffs would have a devastating effect on the future of our farms. It would have an impact on society as a whole, not just on farmers”.

A similar message was conveyed by the president of the Union of Agricultural Producers, Laurent Pellerin, who contends that acting on the demands of several WTO members would a dangerous move.

In the name of eliminating trade barriers, several members of the WTO would like to put an end to supply managed production in countries where it exists. These free-traders also hope to reduce the customs tariffs that currently protect many products. Laurent Pellerin opposes that idea, arguing that “it will jeopardize the food self-sufficiency of Quebec and Canada. Consumers could also become dependent on foreign products, but would not get the lowest prices, even though those products are sold more cheaply on world markets”.

Producers from the Mauricie and Centre-du-Québec regions formed a coalition for a fair agricultural model, GO5, and are asking the federal government to maintain current supply management policies for certain farm products in Canada.

The coalition is fighting for the maintenance of these policies, which allow us to regulate prices based on producers expenses, and to control imports that are likely to compete with Canadian products. According to producers, abolishing these supply management policies would result in the closure of many farms in the region, without providing any benefit to consumers.

Because of these increasing concerns, and because of the government's timidity in making decisions, the Bloc Québécois did not want to take any chances. It is proposing a stronger motion, not just to protect supply management, but to define the mandate of Canadian negotiators, as they are preparing for the meeting of the World Trade Organization, in Hong Kong, where the opening of borders to farm products will be discussed.

The benefits of supply management are undisputed. In this regard, the editor of Le Devoir came to the following conclusion:

Because of the higher costs generated by maintaining reasonable size farms in a rigorous climate such as ours, the supply management system adequately meets our needs, while ensuring decent revenues to producers. To accept to abolish this system and replace it with a free trade initiative would result in thousands of farms being abandoned, and in thousands of others being consolidated under large size operations, and we would all lose. Nothing justifies such a dismantlement of the agricultural sector, which is already very affected by anarchic modernism, and the hog industry is a sad example of that.

The Bloc Québécois' motion reflects the change of approach made by WTO member countries which, in July 2004, signed a framework agreement recognizing the exceptional nature of agriculture as it relates to trade, and allowing for the protection of certain sensitive products.

The Government of Canada must give its negotiators the mandate to defend at all costs supply managed products in Canada, including milk, poultry and eggs, so that they can benefit from this exemption from now on. The numerous benefits they provide have everything to do with our unique nature and the values we hold dear in Quebec: feeding local consumers with local, fairly priced quality products, while guaranteeing a fair income for farmers and maintaining human size farms.

It is a matter of ensuring our food security. It is also about the socio-economic vitality of our agricultural industry. It is essential that the federal government, which alone has a spot at the negotiating table, take a firm stand. Supply management is not negotiable.

[James Bezan, Conservative, Selkirk—Interlake, MB]

Mr. Speaker, I wish to thank my hon. colleague from the Bloc for her intervention in today's debate. It is a very important debate about how important agriculture is in Canada.

All parties in the House have reiterated time and time again that we are committed to the supply managed sector, that we want to support and strengthen our dairy industry, egg industry, chicken and turkey industries, and ensure that those industries remain viable for a long, long time.

The one problem I have with the motion is that it is forgetting about the rest of the agriculture industry. About 90% of agriculture in Canada is based upon free trade. It is based upon industries like grain and oilseed producers, hog farmers, cow-calf operators, feedlot operators and ranchers right across this country.

Some 60% of farmers in Quebec depend upon non-supply managed commodities like grains and oilseeds. I would like to ask the hon. member from the Bloc, is she prepared to take a look at a negotiating stance that also supports those producers who so desperately need a strong position to be taken by the government in the negotiations in Hong Kong that are coming up in December?

[Pauline Picard, Bloc, Drummond, QC]

Mr. Speaker, Quebec farmers are concerned because supply management is extremely important to them. Quebec provides 40% of all milk sold in Canada. It is important and essential to us.

Our concern stems from the fact that the minister has refused to say clearly whether he intends to protect supply management. It is absolutely essential that there be a clear mandate to do so. We are quite concerned by the minister's mixed signals, which are making our producers quite apprehensive. If supply management is not protected, all our values are in jeopardy, and a number of family farms might go under.

That is why today's motion, in which we are asking the federal government to respect the four demands therein, could help reassure us that supply management could be maintained in its entirety.

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I wish to thank the hon. member from the Bloc for raising those concerns. Once again, this is a very important debate we are holding today, simply because the Liberal government has failed to recognize how important and how fundamental agriculture is to Canada's economy.

Having said that, I still have concerns with the motion. Certainly, I support supply management. I will be one of the proponents if our ministers actually dare to show up in Hong Kong. I will be there with the minister supporting supply management. You can be assured that I will be there speaking on behalf of farmers, Mr. Speaker.

The motion, I fear, will tie the hands of our negotiators. In my estimation, it is too restrictive. Let me give an example. Whenever I buy a piece of farm equipment or a car, I do not offer the highest dollar I am likely to pay for it. In my estimation, the motion will tie the hands of our negotiators. They have no room to make an offer, knowing that will probably not be the bottom line. It concerns me greatly that our negotiators do not have a little latitude in the difference between their beginning offers and where we hope to end up.

We certainly hope that supply management will be protected, but we also need to recognize, as the members from the Bloc have confirmed, that there are other sectors of agriculture that have to be recognized as well.

The question I would like to pose to the hon. member is, how confident is she that our ministers will do their job and actually show up at the WTO?