Debates of April 15th, 2005

Budget Implementation Act, 2005

[Ted Menzies, Conservative, Macleod, AB]

Mr. Speaker, I agree with the hon. member's comments in relation to the EI shortfall.

Kyoto is very near and dear to my heart and I am glad the hon. member raised it. In its present form, even though we do not actually seem to have a plan in place and although there was something announced the other day on whether or not it is actually a plan, it is definitely going to hurt the people in the riding that I represent.

The agricultural industry is going to be put at a tremendous disadvantage with this planned Kyoto implementation. The farmers in my riding have improved their farming practices. They have reduced emissions and increased carbon sequestration. They have put a lot of effort and expense into improving the environment. The Liberals do not seem to want to recognize that.

As producers, and I am a farmer myself, we are good stewards of the land and of the environment. We have done a lot to improve them and that is not being recognized. We have a system that is going to be top down driven if we are going to be buying hot air credits from other countries. We are going to be giving them the advantage that we have gained by voluntary measures.

I look at Australia and the improvements it has made in its environmental practices. It did not sign on to Kyoto. Kyoto is a flawed science that does not do anything to help the environment. It provides an environment to trade carbon credits and that is not beneficial to Canada.

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, I am pleased to address the budget today. The last overview that was given in response to a question from my colleague was an entree into the perspective on the budget that I would like to address.

In as much as I am the chairman of the environment and sustainable development committee, commenting on those aspects of the budget from an environmental perspective is probably very appropriate.

From time to time in the House the economic sustainability with respect to what we do is often drawn into question. It has often occurred to me that in the heat of partisanship we tend either to forget what the corporate memory is with respect to our economic advancement or we deliberately choose not to remember it.

In fairness, when we do reflect on Canada's economic position on a comparative basis in the world, it bears repeating that we have achieved, in a global context, a pretty remarkable and quite substantial fiscal success.

I would like to emphasize that in a world where even our provinces are struggling with fiscal deficits, Canada's record, in several consecutive budgets since the early nineties, has been to bring the deficit under control. In fact, in 1997 we eliminated the deficit. Among the G7 countries, Canada continues to have one of the most progressive and successful economic strategies, to the extent that we have one of the best job creation records with the creation of nearly three million jobs since 1997. For people watching their government struggle with economic pressures and issues in the global village, that in itself is a tremendous success.

Yes, we face huge challenges with respect to rural areas, in particular in our farming and agricultural communities, in our softwood lumber industry and in our cattle industry, but, generally speaking, living standards across our country are improving. When we look at those who are most affected, such as our first nations people, many aspects of the budget reach out and attempt to deal with those issues.

When one reflects on the stagflation and inflation cycles over the last 30 years, one cannot help but look at the economy in terms of its key indicators: the low rate of inflation and the stability within our interest rates and financial regime. These have contributed to the kind of confidence that people have, not only domestically but externally, entrepreneurs and those who are looking to invest capital, and are looking at Canadian opportunities. They have in fact voted with their confidence in sustaining that level of growth in the economy.

I think the budget attempts, which is what the Minister of the Environment said, to find the confluence of two important and fundamental phenomena. One emphasizes what Canadians truly feel in terms of the environmental legacy that they would like to pass on to future generations. All the indicators are, in terms of climate change and so on, that legacy is threatened and every poll has indicated that Canadians are very concerned.

The second phenomenon is the economic phenomenon, the value added that comes from the investment in new technologies, the recognition that globalization is changing a lot of things in terms of tariffs and barriers to commerce and capital. The Minister of the Environment has captured those two essential economic phenomena and has said that we have to combine the concept of sustainable development with a sustainable economy. He calls it the sustainable economy in the sense that we are not only creating a legacy for our environment but also value added in terms of our economy. Everything we do is an attempt to balance those two particular characteristics.

The other criteria that we attempt in this budget and in everything we do is to first invest in people. We want to know what capacity the people of Canada have to be entrepreneurial, to be creative, to add value to their own lives and, in turn, build a stronger Canada, to also invest in ideas and research and enable the commercialization of that research to add value to the Canadian economy.

The third criteria was to look at the regions. Canada really is, and has been throughout history, cognizant of regional needs. Whatever the budget does it should attempt to satisfy those regional needs, to maintain a fair and competitive tax system and to finally to make markets more efficient and more effective.

When we talk about the environment, we try to capture the stability of our economic past in this budget by attempting to maintain those five or six critical areas for investment in reinvigorating the Canadian dream.

When we come to the economy, the record has been quite clear in terms of the environment. Since the 1997-98 budget, the government, with the support of the opposition parties, has invested over $10 billion in areas related to adding value from an environmental perspective to the Canadian economy.

The 2005 budget delivers on some key commitments that have been in two or three red books or throne speeches. The budget delivers on the government's commitment to a green economy with a $5 billion package of measures over the next five years. It does this by addressing the issue of greenhouse gases and by recognizing that investing in environmental technologies will transform the economy and add jobs as we do it. It also recognizes that building on the tax measures that have been announced in the past will create a stronger investment climate and, in particular, in the area of renewable energies.

The whole concept of investing in public infrastructure, be it through cities or be it through the areas of the green funds through the Federation of Canadian Municipalities, cannot help but add value to the Canadian economy.

In terms of climate change, I just wanted to mention, in case it has been missed, if we look at the $1 billion with respect to the climate fund; the $250 million in the partnership fund that is reaching out to the provinces and regions, the cities and rural communities; the $225 million over five years for the retrofitting programs in residential and commercial homes and buildings; and the sustainable energy science and technology strategies, all of these form a comprehensive framework within which there will be investment and returns that will come back. Those returns cannot help but improve life for Canadians, make us more competitive and create a better environment for the future. I would hope that those elements of the budget would be supported by all members of the House

[Joy Smith, Conservative, Kildonan—St. Paul, MB]

Mr. Speaker, questions certainly come to mind after listening to what the member for York South—Weston said this morning in the House of Commons.

Bill C-43 is a bill that has some flaws in it. As we all know the Atlantic accord provisions could be passed in a day in the House if they were stand alone legislation.

I heard the member across the way say that he believed in people and in investing in people. The people in Newfoundland and Labrador and Nova Scotia have some big concerns at this point in time and the Atlantic accord could be free standing legislation.

Could the member tell me why all this was linked together? Why was the Atlantic accord linked to the bill at the present time, when the people from the east coast have such grave concerns about having the legislation passed, in view of the fact that the Kyoto measures are also linked to it and most members in the House do not agree with that part of the bill?

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, I am not experienced to the extent that others are in the House with respect to procedures. I can only infer, from the degree of support that had been in the House from all sides with respect to the Atlantic accord, that the government thought it would not be a hindrance and it would not fetter a bill on which there was so much agreement.

It would appear that the omnibus approach is being held back somewhat because while there is total agreement on the accord, the instrument appears to be the part that is contentious. I would hope that we would find some resolution to that.

It has been brought to my attention that we would be prepared to pass the budget today if we had unanimous support.

However, on the second point, we also, creatively, will find solutions to that particular issue. I think we have found a solution with respect to the second case that the member has mentioned and that is the proposal to take toxic out of the CEPA legislation and to incorporate that into the budget bill as it has been deemed to be a necessary instrument to the implementation of some of the funds that are mentioned.

There appears to be a resolution to that. I tabled a report from committee that delineates why there is another way of doing it. I would suggest that once that goes through finance there will be no obstacle to approving the budget bill, at least not from that perspective.

[Guy Côté, Bloc, Portneuf, QC]

Mr. Speaker, the Liberal member made a point of stating that he sits on the environmental and sustainable development committee and of mentioning the plan to implement the Kyoto protocol.

However, the vast majority of observers agree on one point: the Liberals have been very generous with heavy greenhouse gas emitters. They also note that the plan presented by the Minister of the Environment is lacking crucial elements and that it took eight years before a plan was tabled to implement the Kyoto protocol.

The bill talks about expenses of about $10 million to implement the Kyoto protocol with a rather vague and incomplete plan.

What does the minister have to say about all the criticism surrounding the Kyoto protocol?

[Alan Tonks, Liberal, York South—Weston, ON]

Mr. Speaker, I appreciate the question, as obviously time did not allow me to bridge or link the climate action plan that was presented by the minister a few days ago and which will be the subject of ongoing consideration by the environment and sustainable development committee.

Let me say in relation to the issue of the large emitters, which was raised by the member, the large emitters have been reduced to 45 megatonnes. That is their target; there has been a huge amount done through the sustainable development and economically sustainable framework to evaluate what those reductions should be. There is a huge degree of buy-in from the large emitters. That means they will meet their targets and in fact they will continue to create jobs at the same time. We have achieved what the minister says is a sustainable economic approach.

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Mr. Speaker, it is a pleasure to rise on behalf of my constituents of Battlefords--Lloydminster and speak again to budget 2005.

Of course this is a bit of a stretch, in that the budget for 2004 is still sitting in the Senate. This is definitely a pre-election ploy. We have a budget coming down in the dying days of this Parliament, no doubt about it now. We hear the Prime Minister and some of the other ministers saying, “Oh, no, we are going to lose all of this if things happen”. But it really flies in the face of logic when we see that the budget for 2004 is still sitting in the Senate, which is controlled by Liberals at this point. There is no reason for it to languish there other than the fact that these guys campaign a lot better on promises than they campaign on reality, so I guess that is part of the reality bite over there.

The last member who spoke talked about balance, saying that the Liberals do certain things because they are trying to strike a balance. I guess there's a balance that they have never really been able to handle: political rhetoric and promises are one thing, but trying to balance that off with practical solutions never seems to collide in this place. They are always held far apart from each other. As I said, the Liberals campaign better on promises than they do on reality.

There was an interesting editorial in the Montreal Gazette , which says that the Prime Minister suggests that “a quick election must be avoided because his [minority] government has not accomplished anything yet...this might be a better reason to bring down his government than to sustain it”.

There was a huge, ambitious agenda, which is what the Prime Minister ran his leadership on and of course also last year's election, the throne speech and now the budget. There is all this ambition they talk about, but we are not seeing anything move ahead. We are seeing bill after bill introduced and get shovelled off to committee, which helps the Liberals control the committee agenda, but nothing ever really goes past the starting gate from this point and gets out there to the people.

Last year's promises have not been delivered. As I said, they are still tied up in the Senate. The ones that have been pushed through this place and are at committee are largely ignored at this point as committees get piled up with legislation that is coming forward. The stuff that did sneak through is either forgotten about or the promise is broken and it is not being delivered, so at best, that ambitious agenda started, stumbled and fell. It never did get going like everybody thought it would. The hype has not measured up to the reality in this case.

The Prime Minister was touted all through last year and he chased Mr. Chrétien until Mr. Chrétien caught him; there is no doubt in anybody's mind now. The hype was that he was the Liberal Party's biggest asset. I guess they got it half right, because everything is coming home to bite, and it is all tumbling down.

This house of cards cannot last. We are seeing some unprecedented things. There is more money than ever to play with in this budget. That means taxpayers are getting ripped a little too deeply. We are seeing a lot of time and energy tied up in the sponsorship fiasco, and rightly so. Justice Gomery is doing a tremendous job. Whatever it costs is not an issue with me and my constituents. We want to see the bottom of that barrel. We know whose face is going to be reflected back out of there, so let us keep on going with Justice Gomery. An election call is not going to stop him. He is on a roll. He has his witnesses lined up. He is ready to go.

The concern I have is that we will not see a report until November of next fall at the earliest, and judging from what these guys on the opposite benches do with reports from the Auditor General and different people who blow the whistle on them, those reports kind of get buried and sanitized and cleaned up. When the reports finally do see the light of day around this place, they are usually too late or there is so much whiteout on the pages that we cannot really tell what the person wanted to say in the first place.

We hear ridiculous arguments like “forensic reviews”. There is no such animal. I am not a high-priced accountant or lawyer or anything like that, but I have run a lot of businesses. There is just no such thing as a forensic review. The government is hiding behind this type of rhetoric.

There is a tremendous amount in this budget that sort of starts to go in the right direction, but these things either never got a plan or dollars attached. It is always, “Trust me. We are from the government. We are here to help. We will get it right. Give us five, six, seven or ten years out there and we will see some differences”.

We heard a lot of talk about what great things the government has done balancing the books, but nobody ever talks about--

[An hon. member]

Hear, hear!

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

The member is a little premature with the applause. Nobody ever talks about the extra $140 billion that went on the debt from 1993 until the government finally got things slowed down and turned around in 1997. The Liberals should look in the mirror. Some of the blemish is on them as well for those high deficit years and the high debt accumulation that we face in this country.

The Prime Minister stands in his place and tells everybody he has fixed health care for a generation. Then the other day he stood up and went off on a tangent. Even he does not believe that anymore. He knows it is not working, because the provinces are still scrambling to deliver health care to their people. In spite of what the Prime Minister says, in spite of that political rhetoric, it is not fixed for a generation. As it turns out, it is going to take a generation to fix it at the rate these guys are going.

The rhetoric and the actual solutions never quite balance off. That is part of the problem we see in this budget. We see the equalization formula coming under attack. In order to make this budget saleable, the Liberals have hooked in the Atlantic accord. Of course the other provinces, Ontario, Saskatchewan and even British Columbia, all these other provinces, are coming forward and saying, “Wait a minute, this thing is almost 50 years old”.

There are some 30 different formulas that make up the way they arrive at the numbers of who gets what. Non-renewable resources have to be taken out of the formula. It requires 10 provinces to agree; I think we are getting close to that. Everybody has some concern and the Liberals will not address it. The Prime Minister will not even sit down with his country cousin from Ontario and talk about it. He is saying that there are more substantive issues. In reality, there are not.

Money makes the world go around when it comes to governments. That is the lifeblood, that taxation system and the cashflow that erupts from it. What about when a province is not getting its fair share, as is the case in Saskatchewan? There is $1 billion a year for the last eight years that we have been watching, that we have not received and that we should have received under the formula that is a sidebar deal with the Atlantic accord.

We have a problem with that, because that really comes back to haunt the farmers, especially in Saskatchewan. The provincial government, rightly or wrongly, is not ponying up its share. It has some dollars in the wrong pigeonholes, there is no doubt about it, and that extra $1 billion probably would be tossed aside and put on some of its pet projects, like the potato fiasco that took place in that province. However, the reality is that Saskatchewan still has the right to that dollar. Then it is up to the province's electorate to decide whether they like what the government is doing or not.

The federal government, in its wisdom, likes to take on all that power and control it through the dispensation of money. In the budget itself Saskatchewan gets a bit of money for equalization through the treatment of the Crown leases: $6.5 million out of a $1 billion shortfall. That is an insult. As it turns out, Ottawa keeps the mine and Saskatchewan gets the shaft. That is what is happening. It is a little short of what has been promised or even what has been talked about.

I started talking about agriculture a minute ago. One of the major concerns I had with the original budget was that again agriculture was left out. There were a few dollars tossed around here and there, but most of those dollars went to the bureaucrats and different government programs. There was really nothing to the farm gate other than a cashflow promise to cow-calf guys, which does not start for over a year, not until 2006. Of course this is the year we are having trouble because the government's own safety net programs do not work. We are always destined to fail.

The Liberals are great at making big announcements. We heard one again a couple of weeks ago: another $1 billion. The consumers in the big cities ask how farmers can be hurting when they have been given another $1 billion. It sounds like a lot of money, but when we get past the smoke and do not look at the mirrors that the Liberals are setting up around there, less than 50¢ on each of those dollars will ever or could ever be delivered the way this particular program is set up. It is a separate sidebar deal outside of the CAIS system that was supposed to be the answer to every farm gate woe.

I guess that in doing this the Liberals are finally admitting that CAIS is not working. We cannot even get a cash advance out of that critter, so the government has come up with another way to try to trigger money out to the farm gate. The reality of that one is that delivery, as I said, is going to be about 50¢ on the dollar of what is announced, and it is going to get clawed back in any future payouts through CAIS. It negatively affects our reference margin, which holds us even more in abeyance in any further cashflow. It is another recipe for disaster.

Again, the government is great in the promises and the headlines are always wonderful, but reality never measures up. That is the balance that the Liberals always seem to miss. As we get closer and closer to an election, they have to start looking over their shoulders and saying, “We promised this. Where is the delivery?”

I am sure that this time around Canadians are going to hold these guys to account, not just for the Gomery inquiry and the sponsorship fiasco, but for every other little aspect that they promised and never really delivered on.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, I listened with great attention to the discourse of the hon. member, although there was a little factual inaccuracy in it. Maybe he could explain it better to the House. In other words, I am trying to give him a second chance.

The hon. member has complained about the fact that the Atlantic accord is in the budget bill, which is where it should be. However, what he has failed to indicate is that the government offered on two separate occasions to have a stand-alone bill and pass it right away, but the opposition refused.

Perhaps the hon. member across the way could explain to us whether this is simply a case of deathbed repentance on the part of Conservatives who think they can now pretend to care for Atlantic Canadians? Their now Leader of the Opposition made such disparaging remarks about Atlantic Canadians not that many years ago, remarks that all of us on this side of the House remember. He talked about the culture of welfare and things like that and criticized, wrongly, the proud people of Atlantic Canada. Is that the reason why the Leader of the Opposition may have inculcated these values in his colleagues?

Perhaps, by giving this additional chance to the hon. member, he can now explain the real reason. Is it this deathbed repentance to try to make Atlantic Canadians forget Conservative statements of the past and Conservative actions of not that long ago in relation to the bill?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Mr. Speaker, I thank the member for giving me that second chance. I am not sure the electorate of Glengarry—Prescott—Russell will be as kind to him this next election.

The hon. member has it completely backward. When he talked about being factual, it is the opposition that offered the Liberal government a couple of times that if it to hived that off from the budget bill, we would pass it in one day. He should go back and read the blues. The Leader of the Opposition stood in the House of Commons in question period and put that idea across to the Prime Minister and the Liberals refused to do it.

If the hon. member goes back and checks media clips in Newfoundland and Labrador, and my colleague from Newfoundland and Labrador is sitting right here, it is this party that led the charge at the federal level when the Prime Minister would not even talk to the premier, Danny Williams. We had calls from Premier Hamm in Nova Scotia saying that he needed us there to do it because he would not talk to them. We were happy to carry that load.

Going back further into the past, the now minister of public perks over there, who used to be from Nova Scotia and represented those people, parroted the words of the Leader of the Opposition. He talked about the dependency that the Liberals created in Atlantic Canada and then lived off that like scavengers on a dead cow. The minister opposite knows all about dead cows and the scavengers that can show up.

When we talk about the actual Atlantic accord, the hon. member has no lessons to give anybody.

[Derek Lee, Liberal, Scarborough—Rouge River, ON]

Mr. Speaker, the hon. member in his remarks painted a pretty bleak picture of things. I cannot believe my day to day life and the day to day life of Canadians is as bleak as all that and that everything is wrong with the picture.

When I look at the picture, I see historically low interest rates and unemployment rates and huge paydowns of our national debt. Our current account is in surplus. Our trade balance is in surplus. Our debt to GDP ratio is down under 50%. We have rising personal incomes. It is actually a very good picture.

There might be something good happening around the country that is not just political, from the very narrow political lens that he uses. Will the hon. member admit there are some good things happening economically in the country?

[Gerry Ritz, Conservative, Battlefords—Lloydminster, SK]

Mr. Speaker, I would laud Canadian taxpayers for bearing up under the burden that the government has heaped on them year after year.

Let us talk about the $50 billion farm debt. Let us talk about the $25 billion that the Prime Minister, as finance minister, carved out of the health and social transfers to provinces. Let us talk about the $40 billion that he ripped out of the EI fund to balance his books and fudge them. Let us talk about the $60 billion infrastructure deficit across the country at which they are throwing nickels and dimes.

We have the lowest productivity and the highest taxes of the G-7, and that member wants to say that is a record to laud. I would like to see him take that on the hustings.

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, the Bloc Québécois opposed the adoption of the budget presented in February, and it will also oppose its implementation act. Not only do we feel that the budget is unacceptable in terms of its content, but it is just as unacceptable in terms of what is not included in it. A number of people, the forgotten ones, are affected by this situation, and I will mention some of them.

The forgotten ones include, in particular, all Quebeckers. Indeed, no significant measure is taken to correct the fiscal imbalance.

Then there are those who do not have adequate housing and the homeless. There is no money for housing programs such as the RRAP, the residential rehabilitation assistance program, and SCPI, the supporting communities partnership initiative. This is unacceptable.

There is also nothing for workers and the unemployed. Seasonal workers asked that the number of hours required to qualify be reduced, and that more be done to deal with the gap than just resorting to transition measures. However, these workers did not find anything in this budget.

Vulnerable workers, young people and women wanted the government to completely eliminate the discriminatory 910 hour eligibility threshold for new entrants to the labour market, but they also did not find anything for them in this budget.

Workers and employers who wanted the government to immediately stop dipping into the employment insurance fund did not find anything in this budget.

Older workers who are affected by massive layoffs did not find anything in this budget regarding POWA, the program for older worker adjustment.

In short, there are many things related to this budget that are unacceptable to Quebec. As for what is in it, we feel that it is very sad. This government campaigned on a so-called social program but it is governing conservatively, in both senses of the word, and it presented a budget that does not in any way meet Quebeckers' needs.

The federal government has also increased Canada's fiscal imbalance through the cuts that it has been making since 1993 in transfer payments to Quebec and the provinces. This imbalance has grown so much that it is literally stifling Quebec and the provinces.

The result of this is that the federal government has financial means that exceed its needs, while the provinces are in the opposite situation. The federal government continues to hypocritically deny the existence of such an imbalance. It was merely forced to talk about “financial pressures” in the budget. The Bloc Québécois will continue to demand that the federal government recognize the fiscal imbalance and deal with it.

Despite recommendations by the Standing Committee on Human Resources, Skills Development, Social Development and the Status of Persons with Disabilities, calling for a more comprehensive reform of employment insurance, there are no improvements that could be applied immediately, except for the mention of a possible $300 million measure, which is hardly enough for seasonal workers. In addition, the 2005 budget prevents any actual improvements to the EI program because the main objective in changing the fund is to eliminate the annual surplus.

As for the plan for implementing the Kyoto protocol, it gives major polluters carte blanche. The budget confirms the choice already expressed by the federal government of a voluntary approach to the Kyoto protocol, which will not lead to the achievement of the objectives for the reduction of greenhouse gases and will place the financial burden on the taxpayers rather than the major polluters.

The absence of tax measures in the transport sector will not help Quebec to improve its greenhouse gas reduction record. These measures are not appropriate to Quebec, which has done its fair share in reducing greenhouse gas emissions.

Instead of the polluter pay principle, this government has implemented polluter paid measures. While Quebec has set up Hydro-Québec at its own expense, the federal government is proposing to finance the major fossil fuel consumers to help them meet the Kyoto protocol objectives. In so doing, it is asking Quebeckers to subsidize the environmental irresponsibility of Ontario and Alberta.

When it comes to social housing, the federal government has completely ignored the repeated demands by the Bloc Québécois that reflect the social consensus in Quebec, where needs are great. In the meantime, it is investing in sectors such as the military, which is not a priority to Quebeckers. I will come back to this.

As for correctional officers, in appendix 8, the budget proposes changes to the Income Tax Act. In his budgetary statement, the minister proposes increasing the maximum pension benefit accrual rate to 2.33% for RPPs, registered pension plans, and benefit limits to 2% for public safety related professions.

There are special rules on pension benefits for individuals working in a public safety occupation. Under the income tax regulations, a public safety occupation means the occupation of a firefighter, police officer, commercial airline pilot or air traffic controller. This year, corrections officer was added.

These regulations authorize individuals in a public safety occupation to retire five years earlier than other RPP, registered pension plan, contributors, without any reduction in benefits, because it is standard practice for members of these occupations, whose role is to ensure public safety, to take early retirement.

In extending this measure to all public safety occupations, including corrections officers, the government is finally recognizing that those ensuring our safety face disadvantages compared to other workers. They have demanding jobs. In fact, unlike in other occupations, stress increases with experience and, as a result, these workers must retire earlier.

In passing, the case of corrections officers is patently absurd. They have been bargaining for more than three years with Treasury Board and have been without a collective agreement since June 2002. Their specific demands have been systematically turned down, including recently. We wonder, then, how the government can agree in principle with its budget and, at the same time, refuse the demands of corrections officers.

The budget provides an additional $12.8 billion over five years for national defence. This is the most significant increase—equal to 46%—over a five-year period in the past 20 years. The government is using this money to expand the Canadian Forces by 5,000 regular force personnel and 3,000 reservists. Over $2.5 billion will allow for the acquisition of helicopters and utility aircraft, trucks for the army and specialized facilities. Some $3.8 billion will fund capital and other projects to support new roles for the military to be identified in the upcoming defence policy statement. Some $1 billion over five years will support key national security initiatives. The defence budget has already been increased by 48% since fiscal year 1996-97. In 2009-10, the defence budget will increase a further 46%, for a total increase over 1996-97 of 116%.

The government lacks consistency, confirming in its budget that a defence policy has to be in place before any new funding is allocated.

The Bloc Québécois has been asking for quite a while that, before any new money is invested in that area, Canada develop a strong, structured defence policy approved by the government.

With respect to the aerospace policy, once again, there is a big hole. This budget does not contain any measures benefiting the aerospace industry in Quebec. In fact, this government has no aerospace policy. The federal government is holding off from implementing an aerospace policy and providing assistance that would allow businesses to develop new aircraft, like Bombardier's aircraft for instance, in Quebec.

While the federal government is investing $200 million in the renovation of GM Canada's plants in Ontario, the aerospace industry in Quebec and Canada is still waiting for a real support policy. The aerospace industry accounts for $2.1 billion annually in tax revenues for Ottawa.

Last fall, the Bloc Québécois presented its own aerospace policy. This policy is designed to stimulate investment in research and development, finance export sales and support the growth of SMBs supplying the giant aerospace companies. We encourage the federal government to cut and paste our aerospace policy.

The concentration of the aerospace industry in the Montreal area, and the south shore in particular, is such that the École nationale d'aéronautique of Édouard Montpetit College was established and has been developing in Saint-Hubert. Saint-Hubert is also home to the École nationale d'aérotechnique, which is located next to the Canadian Space Agency and the Saint-Hubert airport. This is the only school in North America offering training in French, English and Spanish in the design, production and repair of all aircraft components.

That is not all that makes Quebec unique in the field of aeronautics, but it is one more reason for Quebec to be to the aerospace industry what Ontario is to the automotive industry.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I thank my colleague for her renewed demonstration that this budget is completely unacceptable for Quebeckers. She has shown once more that the Bloc Québécois is the party that really stands for the interests of Quebec.

One point that got my attention in her remarks concerns correctional officers. She said that the minister proposed to increase to 2.33% the maximum pension accrual rate in registered pension plans. The hon. member explained that very clearly. This is the 2% rate in defined benefit RPPs for public security occupations. This is good news.

Could the hon. member tell us why this proposal is in the budget and the government did not implement it? We cannot figure out what is going on, and correctional officers cannot either. We would like to understand what is going on. Would my colleague care to comment?

[Carole Lavallée, Bloc, Saint-Bruno—Saint-Hubert, QC]

Mr. Speaker, this is an excellent question. Indeed, correctional officers always find themselves in altogether weird situations. As I said earlier, they have been wanting to renegotiate their collective agreement for three years. They have been without an agreement for three years and they cannot find a representative within the Treasury Board who would enable them to sit down and engage in serious negotiations.

Suddenly, in this budget, in annex 8, there is some good news for them. Indeed, there is something that they had not exactly requested, namely an increase from 2% to 2.33% of the maximum pension benefits accumulation rate. They had not asked for that at all. It is a fact that they wanted a pension scheme which would be more acceptable and would correspond more to the specific nature of their work. They have a very difficult job. In fact, studies have demonstrated that stress increases with experience.

They were thus very happy to see this measure, which will enable them to retire faster, something they really need. So, faced with a statement like that in the budget, the Union of Correctional Officers tried to get in touch with people in the Treasury Board to explain this measure to them and to negotiate it. By the way, I did not mention it earlier, but it is retroactive to January 1, 2005. That is some good news!

There is some reason why somebody sat down at a some point and wrote this provision into the budget. They said to themselves: it is clear, they really want to give us something and they have understood our line of argumentation. They want to sit down to negotiate with the Treasury Board. They want to make a reality of that promise that is in the budget, but they can find nobody to do so. This is utterly unacceptable and I think that somebody in the Treasury Board may possibly wake up and return their calls to actually negotiate what is provided for in the budget.

[Don Boudria, Liberal, Glengarry—Prescott—Russell, ON]

Mr. Speaker, it is a pleasure for me to take part in this debate on the implementation bill relating to the excellent budget the Minister of Finance tabled some time ago.

It is important for us to review all of the good measures in the budget. That might take a while, since it is chock full of good news for Canadians.

We have, for instance, made some major commitments to Canadians on key social and economic priorities. We respect those commitments, as the Liberal Party has always respected its commitments. We keep our word and, of course, we keep our promises to Canadians—and we are known for that—by continuing to ensure good financial management and balanced budgets, reducing the debt, achieving savings as a result of a careful examination of our spending, and improving the efficiency of our operations and service delivery.

This alone is evidence of the commitment of our government. To give one example, the members across the way were just saying that the Liberal Party had not, in their opinion, administered public funds as well as the Conservatives would have. We have memories of the Conservative administration and the sad events of that period. For years I sat on what is now their side of this House. What do we remember about the Mazankowski and Wilson budgets, and the budgets of all those Conservative ministers?

First, there was always a deficit. Second, even the deficit forecast was wrong, because the deficit at the end of the year was always worse than predicted. Hon. members will recall the total lack of discipline in the government of that day. There was no sense whatsoever of the common good. Things were never right at year's end. People were in despair. Interest rates and unemployment rates were high, and I am sure people have not forgotten that. They finally got rid of the Conservatives in 1993,12 years ago. It is my opinion that Canadians still do not want to go back to a government like the one they had then, with its total ignorance of how to administer public funds.

On our side, we are going through a period of prosperity since our party came into office. Thanks to the wisdom of the former prime minister, of the current Prime Minister, when he was the finance minister, and of other finance ministers who succeeded him, we have managed to put our fiscal house in order. This must be said, because it is very important.

I am not saying this because we, the Liberals, want to brag; this is not how I do things. However, it is important for Canadians to know that we now have low interest rates, which are at historic levels. Why? This is simple. The government, which was itself the biggest client of financial markets, no longer borrows money. It has not borrowed money in seven years.

In the history of our country, one Prime Minister's regime, under Brian Mulroney's regime actually, accumulated more debt than the entire history of this great nation put together. Have we forgotten that some $200 billion of debt was accumulated under one Conservative Prime Minister? That is a very sad legacy and we have been fixing it ever since.

We have been repairing things, making them better, and reducing the debt. The debt to GDP ratio has gone down considerably. We have repaid accumulated debt. We have enabled the country to prosper and grow. That is what we have been doing and there is more to do in the future. We intend to continue delivering good governance for Canadians.

The hon. members across were asking earlier why the government did not split up the budget into three or four portions, so that they could vote and cherry-pick. They would split up the budget, so they could vote and pass the part they liked and vote against, and presumably defeat, the part of the budget that they did not like. One has to be a Conservative to understand this and I am not very good at that and you, Mr. Speaker, being non-partisan, probably cannot do it very well either. But I guess for the folks across the way they can reason that way.

They want the budget to be split in different pieces. They then will have the liberty of cherry-picking, so that they will not offend anyone by voting against part of the budget. They will please their constituencies that will like the parts that they vote in favour of. It does not work that way. This is real life here in Ottawa.

It is important to point out that we have, of course, provided aid measures for agriculture in the budget. Agriculture has suffered a lot and is still suffering. Yesterday, I met with a group of farmers in my office, here in Parliament. They explained to me, for example, how much they appreciated the recent measures. The billion dollars in surplus that the Minister of Agriculture has just announced to us is welcome. In spite of this, agriculture is still suffering.

A little later today, we will have another debate on supply management. I am very anxious to speak about this and to offer my support to this agricultural sector, which is faring better than other sectors, but which is suffering, particularly dairy producers when it comes to cull cows.

Thus, a lot of work has been done to support the Canadian economy, to provide sound management and to manage taxpayers' money effectively. This budget is yet another illustration of this. However, I can tell you that there is still work to do. With a good Liberal governance that we will continue to have for a long time, we will continue, of course, to manage the public finances effectively.

The House resumed from November 23, 2004 consideration of the motion.

World Trade Organization

[Rob Moore, Conservative, Fundy, NB]

Mr. Speaker, I am pleased to rise today to speak to the motion. As a new member of Parliament, I have had the opportunity to travel around my riding and meet with farmers from different agricultural sectors. One thing they have in common right now is that agriculture has been hard hit.

We know what we have seen as a focus of late. We have seen how taxpayer money in the past has been squandered in such an irresponsible fashion, and perhaps illegal fashion, when hard-working families and farmers, those in the agricultural sectors, have seen very little support for an industry currently in crisis.

Farmers need our support now more than ever. Strong leadership is needed on the agricultural files. I would suggest that is exactly what has been lacking from the government.

I met informally with a group of farmers in my riding, representing the different agricultural sectors. They shared with me how Liberal inaction and lack of leadership had hurt them and their families. We spoke about the grand announcement of programs and billions of dollars announced, or perhaps re-announced. We spoke about the millions of dollars thrown about here and there and how often times they were perplexed because none of that money reached them on their farms. Perhaps it is because the forms they need to access those funds have been so terrifically complicated that one must hire a lawyer or an accountant to find out what exactly they have to do to qualify. In many cases the programs that are out there are not enough and farmers do not qualify. In the end, they are left in a desperate situation.

I spoke to many farmers who have lost their farms as of late and many who have considered getting out of the family farm, Many have children, who wanted to follow in the footsteps of their parents, are now questioning whether that is a viable reality.

We talked about plunging beef prices. We talked about a lack of slaughter capacity. We talked about the new budget and in particular the news for Atlantic Canada about the closure of research centres in Atlantic Canada. That is terrible news. We are a vast country and every region has unique needs. These Atlantic centres were providing research that was applicable in that area. To announce something like that in a budget is just another kick when so many are down.

I am please to say that the Conservative Party has been listening to farmers and we are working hard to ensure that they have a better future.

I was pleased to attend and participate in our Conservative Party of Canada's first policy convention this past March. This was an opportunity for Conservatives from coast to coast to put forward policies for our party as we headed into the future. Due to the great importance of agriculture to our country, agricultural issues were at the forefront of our meetings.

Under the leadership from our agricultural critic, the member for Haldimand—Norfolk, our party passed strong resolutions to support Canadian farmers.

Agriculture plays a very important role in my riding of Fundy Royal. In fact over 50% of New Brunswick's dairy production comes from my riding alone. Therefore, I was pleased particularly with our party's strong support for industries under the protection of supply management.

As a matter of fact, at our policy convention we passed a resolution specifically on supply/management which I would like to read. It states:

The Conservative Party of Canada believes it is in the best interest of Canada and Canadian agriculture that the industries under the protection of supply management remain viable. A Conservative government will support the goal of supply management to deliver a high quality product to consumers for a fair price with a reasonable return to the producer.

Further to that, we also passed a resolution that forms our party's guiding principles when dealing with agricultural issues, forms the foundation for how we deal with agriculture in the future. I will read from that also:

The Conservative Party views the agriculture industry to be a key strategic economic sector of Canada. We recognize that various regions of Canada and sectors of the industry hold competitive advantages in agricultural production. National agricultural policy will reflect our belief that one size does not fit all.

Agriculture policy must be developed only in consultation with the agricultural producers. Our farmers today are business operators and to dictate policy which might have an adverse effect on this business community would have negative consequences and go against Conservative Party principles. Balancing financial responsibility with support programs that actually work is a major priority of this party.

As can be seen, one fundamental difference between our party and others is the high value we place on Canadian agriculture. We put farmers first when we deal on the international stage and when we deal with domestic support for agricultural communities. It is for that reason that the principles I read form part of our policy of going into the future.

Canada's agricultural sectors are as diverse as Canada itself. I believe our policy reflects that. It is in light of that diversity that we proposed to the Bloc, who moved this motion we are debating today, a friendly amendment to the motion we are now debating. Our friendly amendment read:

That in the opinion of this House, in the current World Trade Organization negotiations, the government should seek an agreement that strengthens the international marketing position of Canada's agricultural exporters while at the same time does not weaken the supply management system and collective marketing strategies.

Unfortunately, the Bloc have chosen not to support our amendment.

For the record, the Conservative Party of Canada and myself fully support supply management. Our policy reflects this support. In fact, both our leader and our agricultural critic are on the record as supporting the three pillars of supply management. Our party supports as well the 90% of Canadian and the 66%, I might add, of Quebec producers who are not under supply management.

Therefore, our amendment seeks protection for supply management and also seeks the enhancement of agricultural exports that is so needed by many sectors in our country.

We know that no one agricultural sector wants to profit at the expense of another and our friendly amendment to this motion reflects that reality.

I am pleased to speak to this motion brought forward by the Bloc and I also wish to call on the government to honour the commitments it has made to Canadian producers and to negotiate in good faith at the World Trade Organization.

Too often our farmers are let down by a Liberal government that will not negotiate in their best interest on the international stage and on agricultural issues. We need to look no further than the current BSE crisis which is also having a tremendous impact on many sectors of agriculture across the country in every region, including sectors under supply management.

The Liberals have failed time and time again to negotiate an open border with our largest trading partner and we know that Canada's farmers have suffered greatly for that failure. We have also seen Liberals pit one agricultural sector against another in international negotiations.

All sectors of agriculture in the country deserve our support. I am pleased to be part of a caucus that is determined and committed to supporting and defending all Canadian farmers.

The Conservative Party will continue to support Canada's farmers. We will continue to stand by dairy, poultry and egg producers. Unlike our current government, a Conservative government will protect Canada's farmers in international negotiations.

All Canadians deserve nothing less than a government that will always act in their best interest. I look forward to working with all members of this House to see that interests of our farmers are defended in international negotiations.

[Pierre Paquette, Bloc, Joliette, QC]

Mr. Speaker, I am very pleased to speak to the motion introduced by my colleague from Montcalm. In fact, I want to congratulate the sponsor of this motion, my colleague from Châteauguay—Saint-Constant, for introducing the first Bloc Québécois motion since Parliament resumed. This shows how important the supply management system is to us.

Allow me to reread the motion, to our friends from the Conservative Party especially, to show the extent to which it responds to their concerns and to indicate why they should be able to vote in favour of it.

That, in the opinion of the House, in the current World Trade Organization negotiations, the government should not agree to any concession that would weaken collective marketing strategies or the supply management system.

It is very clear that this motion defends the supply management system, not to the detriment of other agricultural sectors, but as a complement to their needs, in particular the need for a reduction in the subsidies given by the U.S. and Europe to their agricultural exports. Our motion absolutely does not go against the needs of all the agricultural sectors in Canada and Quebec.

The supply management system covers five sectors: two in poultry, two in eggs, and one in dairy. It is a way of ensuring a fair income for farmers, and we know how much difficulty they have been through in recent years, in the cattle and grain sectors in particular. Supply management ensures a fair income, even though the Canadian Dairy Commission is asking for a substantial increase in the price of milk.

It also ensures a constant supply to processors. Therefore it is also in the interest of processors to have this system in place because it assures them a constant, dependable supply.

It ensures high-quality products at a very good price for consumers.

For a system to ensure fair income, quality products and consistent supply, it has to be supported by three pillars, which are, of course, interdependent. We cannot weaken one and hope to maintain the supply management system. These three pillars have to be solid.

The first pillar corresponds to production planning. Product supply has to correspond as closely as possible to the estimated domestic demand. That is the first pillar and it is extremely important.

The second pillar consists of a pricing mechanism that ensures a fair income without government subsidies. This is very important. I would remind our Conservative friends that the supply management system is in no way dependent upon government assistance. This is truly in line with the spirit of the World Trade Organization's agreements. This is, of course, a system that feeds the domestic market.

The third pillar deals with import control, now taken care of by tariffs. Relatively high tariffs will indeed be imposed to prevent the importation of products that would compete with our national products.

We all understand that if this pillar, corresponding to imports, is weakened, the whole system falls down because supply exceeds demand. This brings prices down, the revenues are not fair anymore and the whole system crumbles.

That is, unfortunately, what is happening now because of the Liberal government's lax attitude. I am not the one who says this: Mr. Groleau, the president of the Fédération Québecoise du lait, says:

This is huge. If we do not do anything, all Canadian milk production will disappear. There has to be an end to the federal government's lax attitude. Does it intend to abandon the dairy sector as it did the textile industry?

We can feel that people are very concerned and rightly so. We have let foreign competitors get around the WTO's rules and Canadian regulations as well.

As I mentioned earlier, this failure to control imports is jeopardizing the overall viability of the supply management system.

Butter oil is often used as an example—my colleague from Châteauguay—Saint-Constant referred to it during oral questions. This product is used essentially to make ice cream and, to a great extent, has replaced cream and fats. Apparently, 50% of all ice cream is now made using this butter oil.

The current Minister for International Trade, like his predecessor, is refusing to put this product, made mostly from milk by-products and essentially used to make ice cream, on the list of commodities subject to quota, which means that they are increasingly entering our market and competing with our dairy products.

For example, since 1996, butter oil imports have increased by 324%. This is not negligible; in fact, it is very significant. As a result, dairy producers have suffered losses totalling $52 million. Significant damage has already been done.

We are asking the minister, then, to add butter oil to the list of commodities subject to quota; it would be relatively easy for him to do this. However, we cannot stop there. New technologies are also creating products that separate milk into by-products, thereby creating new products that are not regulated or that are poorly regulated in Canada.

Milk contains lactose, proteins and fats. Now, new technologies separate milk into by-products—not covered by our regulations—for import to Canada. When we signed these agreements, these technologies did not exist.

Unfortunately, the federal government is pretending that this problem does not exist either. I want to quote Mr. Groleau again. He said:

We are asking [the federal government] to accept its responsibilities and stop the bleeding, in keeping with its commitments to producers. This situation is costing dairy producers millions of dollars and in no way benefits consumers.

By allowing these dairy products to enter separately, we are weakening, perhaps even permanently, the supply management system.

Members will recall that when the Marrakesh accord was being negotiated, as I mentioned, this problem did not exist at the technological level. Import controls were thus replaced by tariff rate quotas. We must now find a way to seal off this weak spot in supply management and to find ways to regulate things more adequately.

As you know, article 28 of the GATT allows the establishment of quota systems on certain tariff lines. What is requested by the industry is to use that section in order to be able to modify the tariff schedule so as to cover by tariff quotas all food preparaions having a milk content of at least 10%.

We would then be in a position to close the gap that has opened up over the last few years, which causes extremely large losses for milk producers especially—I am using the example of milk, essentially. We are looking at $170 million in losses in 2004 and, for Quebec alone, $70 million. The whole future of the supply management system is at stake.

As I mentioned, this is not to the detriment of the other agricultural sectors nor of our work against the subsidization of agricultural exports. In this context, if my colleague for Montcalm is agreed, I would like to amend our motion by adding after the word “system” the following:

“and should also seek an agreement establishing fair and equitable rules that foster the international competitiveness of agricultural exporters in Quebec and Canada.”

I think that, in this way, we can assuage the concerns raised by some speakers from the Conservative Party.

So, if my colleague is in agreement, I would amend the Bloc Québécois motion in the way I have just proposed.

[The Deputy Speaker]

Does the member for Montcalm agree that his motion be amended?

[Roger Gaudet, Bloc, Montcalm, QC]

Mr. Speaker, I agree.

[The Deputy Speaker]

The debate is now on the amendment.

The hon. Parliamentary Secretary to the Minister of Justice has the floor.

[Paul MacKlin, Liberal, Parliamentary Secretary to the Minister of Justice and Attorney General of Canada]

Mr. Speaker, it is a pleasure for me to have this opportunity to debate something that in my earlier days meant a lot to me, at least in the practical sense, because I was born and raised on a dairy farm, and today I realize the importance of all the complexities that go along with the process of protecting that dairy farm and the interests of the farmers in our communities.

Today I want to say that when we talk about our country's history as we look at trade, Canada has played what I would call a unique and constructive role in international affairs. Multilateralism has been a hallmark of our foreign policy and it has defined our reputation as a country that works in partnership with others to achieve goals that benefit people all around the world.

Likewise, when we talk of the multilateralism that has defined Canada's trade policy since the creation of the GATT before World War II, our trade policy has been built on the long-standing belief that Canadians prosper from secure access to foreign markets.

Secure access offers Canadians a more stable and predictable business environment and a more level playing field for our producers. Equally important is the recognition that Canadians need clear and enforceable rules and effective dispute settlement mechanisms to ensure that power politics do not impair the way our agrifood products are traded around the world.

Canada has consistently worked in partnership with many different countries to build a global trading system in which all countries, regardless of their political or economic power in the world, can compete on a level international playing field governed by multilaterally agreed upon rules.

This is why the WTO agricultural negotiations are so critical for Canada as a whole and for the agrifood business in particular. The negotiations offer us the best opportunity to work hand in hand with other countries to achieve greater market opportunities and to level the playing field for addressing foreign subsidies and tariff barriers that hinder our ability to compete fairly in foreign markets.

Since the negotiations began almost six years ago, Canada has been working in partnership with many countries to move the negotiations forward. As has been the case many times before in international relations, Canada has played a very effective broker role between divergent points of view, building on our current alliances and forging new ones.

It should be no surprise that this approach has been very successful for Canada. Many of our ideas and approaches have been reflected in negotiating texts to date and, most important, the framework that the WTO members reached in July.

The framework agreement will guide the next stage of the agricultural negotiations. As the framework was being negotiated in July, Canada's negotiating team met with the other WTO members, developed and developing countries alike, to promote our views. They worked day and night, leaving no stone unturned, as one would say, to advance Canada's objectives and to work toward a framework in the interest of the entire agrifood sector, including the five supply managed industries and the Canadian Wheat Board.

The framework clearly points the way toward a more level international playing field and moves in the direction of clearer and fairer rules that can address some of the existing inequities facing Canadian producers. The framework provides scope for Canada to continue pursuing our negotiating objectives and reflects many of the key ideas that Canada has been putting forward since the negotiations began.

I am proud to say that this government has been working in close partnership with our domestic partners, the provincial governments and the whole range of agrifood stakeholders over the course of these negotiations. Even before the negotiations began in the year 2000, the government consulted extensively with the provincial governments and the entire agrifood sector to develop Canada's initial negotiating position.

Because of this close partnership, our negotiating position has enabled Canada to put forward strong and credible ideas and approaches throughout the negotiations. I would like to applaud both Minister Peterson and Minister Mitchell for the amount of time and energy they and their officials have devoted to working with the stakeholders over the course of these negotiations, for these negotiations are not easy.

With the agricultural framework that we now have in place, Canada can continue to work toward achieving our negotiating objectives. It is true that Canada will continue to face pressure on our domestic sensitivities. When we talk about domestic sensitivities, we are specifically looking at such areas as our supply managed industries. We are ready and Canada will continue to work closely with the stakeholders to achieve a positive outcome for the entire agrifood sector.

The government is fully committed to continuing to work closely with our stakeholders, including the five supply managed industries and the Canadian Wheat Board, as negotiations progress. We will continue to aggressively pursue these objectives as set out for the negotiations and developed with the provinces and Canadians across this country.

We will continue to strongly press Canada's positions in the negotiations because all of our producers need a rules based trading system in which to do business and a level playing field in which to compete fairly and effectively.

This government will continue to defend the ability of our producers to choose how to market their products, including through the orderly marketing structures like supply management and the Canadian Wheat Board.

We welcome the momentum that the July package provided to the negotiations. We were glad to see that the July package integrated many of the key Canadian ideas. There is much hard work to be done this year if we are to move the negotiations forward to a successful sixth ministerial conference in Hong Kong, China, in December of this year.

We need to make every effort to advance the trade interests of our agrifood sector by working with other countries to move the negotiations forward in ways that not only advance our objectives but help meet the needs of the producers from countries around the world, especially those from developing countries. We need to continue to work together with our domestic partners to support Canadian agriculture, which depends heavily on exports, a predictable trading system, supply management, and the Canadian Wheat Board.

Coming from an agricultural background, I can certainly confirm the importance of the supply managed system as it relates to the dairy industry. So many in my community depend on the certainty of that business being there for them next week and next year, producing quality products at competitive pricing for all our citizens of this country.

At a recent policy convention of my party, a resolution that was raised by my own constituency brought forward the need for strong support for this particular supply managed industry. It was adopted virtually unanimously as a resolution of the party.

All of these factors speak to the importance that our communities give to supply managed industries and the need for the support of these industries within our country. We believe in supply managed systems. We believe they have been good for this country.

I am very pleased to stand here today and say I support supply managed industry, in particular of course because of my background in the dairy industry, and I want to see it flourish.

[André Bellavance, Bloc, Richmond—Arthabaska, QC]

Mr. Speaker, I too want to thank my colleague from Montcalm and my colleague from Châteauguay—Saint-Constant for bringing forth again an issue that is so important, especially for me.

As you surely know, this is not the first time that I rise in this House to speak to this issue that affects my riding. There are about 1,400 supply managed farms in the Centre-du-Québec region and about 760 in the Estrie region. These are the two regions that border my riding of Richmond—Arthabaska.

In the Arthabaska RCM, there are 397 dairy, poultry and egg farms. There are 137 supply managed farms in the Val-Saint-François RCM and 90 in the Asbestos RCM. All this to say that this is an important issue in my area. We hope that the government and the other parties in the House will feel the same and support Motion M-163.

A good part of my local platform—and I was the only candidate in my riding to have one—dealt with agriculture, and much of that addressed supply management.

We met with SM5 people during the election campaign and everyone was quick to sign the SM5, with the exception of the Liberal candidate, who took some persuading but eventually did so also. It must be kept in mind, moreover, that all party leaders here now signed it during the 2004 election campaign.

Members of all parties, Conservatives, NDP and Liberals—no need to add the Bloc Québécois, since our leader is well informed on this—need to remember that commitment that they signed on during the 2004 election campaign. We hope that they will respect that commitment by supporting Motion M-163.

In my platform, I pointed out the vital importance of agriculture to my riding. For example, the Arthabaska RCM is the top-ranking milk and cattle producer in Quebec. We are renowned for the quality of our dairy production and a number of exceptional cheeses are made in our region. I am sure my colleague from Châteauguay—Saint-Constant will back me up on that, being a connoisseur of goat's milk and other types of cheeses.

In recent months, agricultural producers have been in trouble, not only as far as mad cow is concerned, but also supply management and access to markets. These are all matters of concern to people in the agricultural community, not just in my area, but throughout Quebec and even in the rest of Canada.

Much of what is produced in my region is governed by supply management, milk, chicken and eggs for example. In fact, dairy products account for 50% of the entire agricultural production of central Quebec, so supply management is vital to these farmers.

So that hon. members will have a proper understanding of what this is all about, I will just give a quick overview of supply management. It has three basic components: limiting production through a quota system, regulating prices, and maintaining the balance between supply and demand by keeping the borders closed through the imposition of high import duties on poultry, eggs and dairy products.

I should make it clear that it is essential that the three elements co-exist; if one falls, the whole system crumbles. This is what we have been fearing for some time. In 2003, we nearly ran into difficulty at Cancun. We did have problems, but fortunately the supply management system survived. It is, however, still in a precarious position.

The benefits of the supply management system are twofold in that it provides a decent income to our producers, while not creating distortions on world markets. As I said a moment ago, the federal Liberals have been claiming for years to support supply management. However, whenever that system was challenged, the government continued to undermine it.

Earlier, my eminent colleague, the hon. member for Joliette, referred to butter oil. Therefore, I will not elaborate, but I will say that this is just one example. There is also the example of cheese sticks, regarding which the member for Joliette also made representations, at the time, to the former Minister of International Trade, who is now the Minister of Foreign Affairs. This was an endless saga, as is the case whenever the government yields to lobbies that leave Quebec dairy producers to fend for themselves, as was the case then.

As regards butter oil, I want to point out that the federal government decided that this type of oil was not a dairy product, thus opening the border to imports. Over a five year period, between 1997 and 2002, these imports increased by 557%. This is no joke. It represents a loss of half a billion dollars for Quebec dairy producers.

I read the papers this morning, as every member of Parliament should, and I saw that this issue is still being reported today, April 15, 2005, in the daily La Presse :

—Quebec dairy producers...want to slow down the massive entry into Canada of dairy ingredients that come primarily from European countries.

These milk substitutes are increasingly replacing milk and cream in the manufacture, among other products, of cheese and ice cream. According to the president of the Fédération des producteurs de lait du Québec, Marcel Groleau, this substitution results in an annual loss of $70 million for Quebec milk producers.

The federation received the support of Quebec's agriculture minister, Yvon Vallières, who is also the MLA for Richmond, in my riding. He recognized that import controls on butter oil blends can be easily bypassed by importing a product containing 40% butter oil and 51% sugar. Here is what Minister Vallières said on this subject, and I quote:

This product is imported duty free into Canada, but if the dairy content was 1% higher, a 212% duty would apply.

We defend supply management in Quebec, but we expect the federal government to do the same, which, unfortunately, is not the case. This is the reason why we are debating Motion M-163 in the House today. We hope that, when it is time to vote, members will understand why we brought forward this motion.

All this information regarding the Fédération des producteurs de lait du Québec found its way into the paper today because that organization held its annual general meeting yesterday and the day before. You can be sure that supply management was discussed at that meeting.

In conclusion, producers have asked the Canadian government to use the rules provided in trade agreements to restrict imports of these ingredients into the country. They have done so by invoking section 28 in particular of the WTO agreement that deals with this. In invoking this section, Canada could establish new tariff quotas that would make it possible to maintain these imports at the current level and to increase them by a maximum of 10%. In the press release of the Fédération des producteurs de lait du Québec, its president, Mr. Marcel Groleau, says:

We are asking the Canadian government to use the right that the WTO has granted it and to immediately invoke section 28 to limit the damage. As a champion of supply management, it must do so without delay. This is urgent!

It is not I who is saying this, it is the president of the Fédération des producteurs de lait du Québec himself who says so, and I think that he knows quite a lot about the issue.

He concluded by saying, “It must put an end to the erosion before irreparable damage is done”.

I think we just heard someone who, having worked for so long in this sector, knows what he is talking about. We would like the government to pay urgent heed to this call.

I also dug out a very interesting study on the matter. It found that the dairy supply management system in Canada is a good model that needs to be maintained. While the World Trade Organization agriculture negotiations are threatening the foundation of this system, the study shows that the system benefits farmers just as much as consumers and the government. The study was conducted by Daniel Mercier-Gouin, director of Groupe de recherche en économie et politique agricole, GREPA, and professor of agri-food economics and consumer sciences at Laval.

In his study, Mr. Gouin makes four observations. I will list them. First, he observes that the prices paid to Canadian farmers for milk are stable and higher than the prices paid in the other countries in the study. Second, he observes that the favourable and stable prices paid to Canadian dairy farmers do not necessarily mean an increase in the price of milk for the consumer. On the contrary, the three countries with supply management, Canada, France and the Netherlands, saw the lowest increases in consumer prices between 1981 and 2002, the period under review.

Third, the researcher points out that the countries heading toward deregulation of their dairy economy—New Zealand and Australia—are those where consumer prices have increased the most. They are also seeing an increase in the aggregate margin of dairy processing and distribution.

Fourth, in conclusion he shows that the incomes of Canadian farmers are better protected and that Canada is one of the countries with the lowest government subsidies.

If other studies are needed, others exist. However, I think this is quite conclusive. I invite all the parties to vote in favour of Motion M-163.