Debates of June 7th, 2005

Supply Management

[Andy Mitchell, Liberal, Minister of Agriculture and Agri-Food]

Mr. Chair, the member mentioned his concern in terms of moisture challenges in some parts of Canada. I would also add, as I know the hon. member next to me would, that this has been a difficulty in Nova Scotia this spring as well. We should not forget that area either.

I have concerns about some of the hon. member's comments. Clearly the Liberal Party did not suddenly arrive at a conclusion to support supply management at a policy conference three months ago, as the Conservative Party did. The reality is that the Liberal Party has been supporting supply management and it has been supporting it well by the fact that it exists and thrives today and has for some 35 years. I do not think that this should be forgotten.

The hon. member is wrong when he says that we have traded away tariff reductions. The WTO negotiations have not concluded. In fact, during the framework agreement that was signed last July and which we were part of negotiating, we insisted on putting in there that we allow some flexibility in terms of how we move forward. The issue is not tariffs per se and the hon. member should know that. It is the issue of over-quota tariffs that we are dealing with here, not general tariff reductions, and that distinction is important. It is important to understand that distinction as we move forward.

The hon. member talked about the mini-ministerial. It is interesting to note that he did not mention the mini-ministerial that took place in Paris for which his party refused to pair with a minister so that people could attend. I do not know why he did not mention that; I think it had something to do with an attempt to bring down a government or something like that.

Let me talk about the bottom line here. I say this to the member, the former minister, in all sincerity. I know that he, like all hon. members here, feels passionately about agriculture and its importance. This has to be an issue that in many respects transcends political partisanship. We are all going to be partisan from time to time.

[An hon. member]

Especially over there.

[Andy Mitchell, Liberal, Parry Sound—Muskoka, ON]

I do not think people send us here with an expectation that we will not be partisan from time to time. That is why they send us here and we engage in these debates.

In terms of agriculture and general supply management in particular, I think it is important to understand that it is absolutely essential for all parties in the House to work together to achieve important results in the WTO negotiations. It is important for supply management. We have a number of folks from that industry here in the audience tonight and I am sure many are watching on TV. That is important for us to achieve.

There are also other broad issues in terms of those WTO negotiations that are important for agriculture in general. It is really going to be critical that members from all sides of the House work together to achieve those important results, because having a strong agricultural industry in this country is absolutely essential. Yes, it is important for rural Canada, but it is important for the nation as a whole.

Agriculture represents 8% of our gross domestic product. It is a large generator of wealth in this country. Regardless of whether one lives in the smallest of communities or the largest of cities, a viable agricultural industry is imperative. It is something that we have worked on as a government. We have had many successes in doing that and there are many challenges yet to be faced. Indeed, we will address them.

Let me stress for the hon. member the importance of working not in a non-partisan way, because we will be partisan from time to time, but in a way such that we achieve the important objective of sustaining a strong agricultural industry in this country.

[Vic Toews, Conservative, Provencher, MB]

Mr. Chair, I appreciate the member's comments. My concern is that I have heard those kinds of comments for quite a while now. Living in an agricultural area, my constituents have heard those kinds of comments: that we need to work together and that we need to be non-partisan. They understand that.

Generally speaking, I think that as members we do work in a non-partisan fashion, especially in committees. I am on the justice committee and we have been able to get some very important bills through the justice committee by working in a non-partisan fashion.

Unfortunately, when I tell my constituents about things that have been happening in the justice area, many of them of course want to know about farmers and what has happened for farmers, and quite frankly, they have not seen that kind of progress.

I am going to take the minister at his word that he is interested and working in a non-partisan fashion, but I think the time has come for the minister to demonstrate that he can actually produce results. I agree that on issues such as labelling it will help two or three per cent, but there need to be more substantive gains than that. It simply is not enough.

If the minister is actually looking for ideas, I know that my colleague, the agriculture critic, has made many suggestions, but they seem to fall on deaf ears. If the minister has a sleepless night, perhaps he could read the agriculture critic's comments and speeches. I am sure that will keep him going for a few hours in terms of positive suggestions. I mean that in all sincerity.

I want to thank the minister for being here tonight and for demonstrating that he is committed, verbally at least, to working together, but we want to see a little bit of action. Perhaps he should start by looking at some of the Conservative ideas. The Liberals have never been shy about stealing Conservative ideas when it promotes their political future, and quite frankly they should do it in terms of agriculture, even if it gets them a few more votes, if it helps our farmers.

[Wayne Easter, Liberal, Parliamentary Secretary to the Minister of Agriculture and Agri-Food (Rural Development)]

Mr. Chair, the member for Provencher talked about there being no action. I really find it interesting to listen to the members opposite here tonight. Maybe if they rub shoulders with the Liberals long enough they will have a conversion, because we are seeing a conversion here tonight. They are beginning to see the light in terms of supply management.

I do have to take issue with the member opposite in terms of what he called lack of action and moving away from the farm community. Would the member really agree with his own statement when the fact is that in 2003 we had record payments of $4.8 billion, between the federal and provincial governments, and $4.9 billion in 2004? We recognized the farm crisis out there. That is action: putting money in farmers' pockets. During that whole time we have consistently stood with the supply management industry and have done so for 35 years.

I am pleased to see tonight that they are at least coming along a little bit. I do not quite trust them yet, I will admit that, but at least we are seeing a little conversion from members opposite. Rubbing shoulders with us long enough, maybe they will see the light and eventually really support us. Maybe we could even get the leader of the party to support supply management. That would be something.

[Vic Toews, Conservative, Provencher, MB]

Mr. Chair, as much as I can stand here and say our leader does support supply management and he was crucial in putting together our party policy on that, I am not going to argue with the facts that the hon. member attempts to misrepresent.

I do agree with myself, without being schizophrenic in any way, that the Liberal Party has unfortunately neglected farmers. The member says action is putting money in farmers' pockets. The only action we have seen from this government about putting money in people's pockets is their friends in the sponsorship scandal. There were millions of dollars put into pockets very quickly.

I agree that putting taxpayers' dollars into the farmers' pockets in these worthwhile causes is action. Unfortunately, my farmers have not seen very much of that money, certainly not in the amounts that the member is saying the government has handed out. Whether it is getting lost somewhere between Ottawa and the farm gate, I do not know. Maybe there is an advertising company somewhere in the middle that is scooping it up.

[Robert Thibault, Liberal, Parliamentary Secretary to the Minister of Health]

Mr. Chair, I am pleased to able to speak in debate about the government's commitment to our entire agrifood sector, including our supply managed producers and the length to which the government is going to defend their interests on the international stage.

To begin, I would like to remind the House about the ways in which this government has supported and defended our five supply managed industries.

As we all know, supply management is a uniquely Canadian agricultural commodity system. Created over three decades ago, it has offered real benefits to producers and consumers alike. It provides stability and prosperity to producers and processors, as well as higher quality, value-added food products for consumers.

Supply management has been the choice of dairy, poultry, and egg producers, and has been successful for these industries. This government firmly supports this choice and has repeatedly shown that it will defend the ability of producers to choose how to market their products.

Let us consider for a few minutes how this government has defended this choice for an orderly marketing system like supply management.

We know that other countries have tried to challenge elements of our supply management system through international dispute panels. In the mid-1990s, for example, the Government of Canada did everything it could to win a U.S. challenge to supply management in the NAFTA. Working extremely closely with the five supply managed industries and the provincial governments, this government successfully fought and won this case.

Similarly, this government launched a strong defence in a World Trade Organization dairy dispute in which the U.S. and New Zealand challenged some of the ways in which our dairy industry operates in export markets. This was a model of how the government continues to work so hard to defend our domestic policy choices, in close cooperation with industry and with provincial jurisdictions.

We also know that our supply management system is under pressure in the World Trade Organization's agriculture negotiations, but Canada is fighting back. Our negotiators, led by the Minister of International Trade and the Minister of Agriculture and Agri-Food, are using every possible opportunity to promote Canada's objectives. They are seeking a fair and equitable result for all of Canada's producers, one that levels the playing field on which they compete.

At the same time, our negotiators are strongly defending the ability of Canadian producers to choose how they market their products.

Looking further, we know that imports of various milk proteins have been on the rise in the past while. This trend has our dairy producers very concerned, given the centrality of the import control pillar in our supply management system.

Indeed, this is why the Dairy Farmers of Canada has called on this government to initiate GATT article XXVIII negotiations on their behalf. If successful, a GATT article XXVIII action would allow Canada to negotiate the creation of new tariff rate quotas on specified products. In this case, the products would include casein, caseinates, butteroil-sugar blends, and milk protein isolates, based on the Dairy Farmers of Canada's request.

I want to assure all members that the government has clearly and honestly discussed this request with the Dairy Farmers of Canada. The government has explained its view that this is not the best time to initiate an article XXVIII action, and I will speak more to the government's reasoning in a few minutes.

Through all these challenges to supply management, this government has acted and responded in the best interests of Canadian producers. As we all know, supply management is a critical element of our domestic agricultural policy, and something that must be supported and defended domestically and internationally.

But I also think that it is important to take time in this debate to recognize that the government's steadfast support for supply management by no means diminishes our support for other Canadian producers who are more outward-looking or export-oriented in focus.

We all know that Canada is a trading nation and the same is true for many of our agrifood producers. This reality means that the government must strategically reflect the needs of all producers to achieve Canada's overall objective on the international stage.

Once again, I would like to look at the government's effort in the World Trade Organization agriculture negotiations to demonstrate how Canada is doing just that.

In 1999 the government announced Canada's initial negotiating position for the WTO agriculture negotiations. The position was developed in close consultation with the provincial governments and the full range of agrifood stakeholders.

Canada's primary objective is to level the international playing field. Canada is seeking a big ambitious result in the negotiations through the elimination of export subsidies, substantial reductions in trade distorting subsidies and significant market access improvements for all agrifood products.

Achieving these objectives will go a long way toward removing the unfairly high levels of support and protection offered by just a small handful of countries. At the same time, Canada will continue to defend the ability of our producers to choose how to market their products.

Canadian producers support Canada's overall objectives. While they may have different views about how to achieve these objectives for specific issues, they agree that clearer, fairer and more equitable global trading rules are truly in all of their interests.

Since the WTO negotiations began in 2000, the government has been working extremely closely with all Canadian producers. The provincial governments and agri-food stakeholders have been kept fully engaged at each step of the way in the negotiations. Ministers and officials have been meeting extensively with stakeholders to listen to their perspectives on the issues under negotiation.

Likewise, they have strongly supported and facilitated the efforts of agri-food industry representatives to travel abroad and meet with foreign governments and their industry counterparts around the world to present their views on the agriculture negotiations.

For example, just a few weeks ago, over 65 representatives of our agri-food sector were in Geneva to take part in the WTO's annual public symposium. That kind of cooperation between producers, agricultural organizations and the Government of Canada not only builds trust and a strong relationship between Canadian interests at the WTO negotiations, it contributes to a strong Canadian position at those negotiations.

Yes, there is still a long way to go in the negotiations and there are very real challenges that Canada must face along the way. However I assure the House that Canada will continue to capitalize on our credibility and influence to keep fighting for positive results for all our producers.

As I had the opportunity to mention a few moments ago, I was very encouraged by the words of the Minister of Agriculture this evening in this debate indicating that he would not hesitate at the proper time to use article XXVIII should that be necessary. I think it is the proper thing to do and the responsible thing to do.

We have to look at all our producers. I represent part of the Annapolis Valley. We have a multitude of producers, some in commodities who do not benefit from supply management and others in the supply management. We have seen production facilities close down because they could not compete with unfair imports that are subsidized and productions that are subsidized. It is important that the level playing field be there. I believe the producers in our country can compete with anyone anywhere under the same regulations, under the same rules and under the same support.

If we want to support our whole industry, we must encourage the minister to negotiate a level playing field. I understand from the minister and other ministers that perhaps using article XXVIII at this time would not benefit that process.

I take the minister at his word because I have known him for a long time and I know him to be an honest man and a man of integrity. What I would ask of the minister, as someone mentioned, is a line in the sand. I think it is important that producers understand under what conditions we may have to do that and what the milestones are.

[Peter Stoffer, NDP, Sackville—Eastern Shore, NS]

Mr. Chair, my colleague talked about the Annapolis Valley. I like to think the best valley in Nova Scotia is the Musquodoboit Valley, but that is another point.

Before I start with him, I just want to reiterate some of the concerns I have with my Conservative colleagues on their conversion to the road to Damascus. Their current leader, between 1993 and 1997, voted for every cut to agriculture that was brought forward by the Liberals, supported by the Reform Party at that time and the current leader at that time. The former leader of the Saskatchewan Party, Elwin Hermanson, voted for every cut to agriculture that the Liberals presented, supported at that time by the Reform Party. They cut the Crow rate. The grain elevator reductions and everything the Liberals brought through for cuts in agriculture was supported by the Reform Party.

In fact we do not have to go far back. In 1997, in their platform book they advocated further cuts to the agriculture department of Canada. That was not the NDP. That was the Reform Party and the Conservatives of today.

When their senior trade critic was the president of the Canadian Agri-Food Trade Alliance, he denounced, not in these words, but criticized supply management and did not want farmers to be protectionist. Now CAFTA is complaining that the Conservatives, like the Liberals, are too afraid of losing dairy votes to stand up to a strong market access position that promises to break down all trade barriers including Canadian high tariff protection for the dairy, poultry and egg industries. Are the Conservatives afraid of CAFTA or are they afraid of the National Farmers Union?

They now have the member for Cypress Hills--Grasslands who said in this House that the Wheat Board was engaged in illegal and corrupt activities. The Wheat Board is a debatable thing. I understand the Conservatives have their view and we in the NDP have ours, but if a member of the Conservative Party is going to say that the Wheat Board is engaging in illegal and corrupt activities, that member should have the courage to stand outside beyond the curtain of immunity and say that outside in the lobby. Otherwise, it is a bunch of bunk, which is what we get from the Conservatives a lot of time.

They stand and complain that the $4.6 billion deal that the NDP made with the Liberal government did not have agriculture in it. I have represented many farms in Musquodoboit Valley. I grew up in western Canada, as the member may know, or he does not care to listen , but the fact is that farmers care about the environment, they care about educating their students and they care about homelessness.

We are going to work on agriculture. If they give us time that will be there as well. However the reality is that every morning when we have breakfast we should be thanking the farmers who get up and do the hard work that they do. We know that farming is one of the most dangerous occupations in the world today and for it not to be supported in any way, shape or form by any member of Parliament of any party is disrespectful and disgraceful.

The Liberal Party has been in government since 1993. A few years ago, when we had a farm lobby attend the NDP caucus, I spoke to a 12 year old boy outside of Prince Albert. I asked him if he would be a farmer and he said, “Absolutely not”. I asked him how many kids in his class of 23 students will take up agriculture as a livelihood. He said none. Why the hell would anyone get involved in that industry today? That is a shame.

We have lost thousands and thousands of farm families across the country, very similar, as the member from Digby knows quite well, to how many fishing families we have lost throughout the country. The agricultural and the fishing aspects of our rural parts of Canada are under severe attack and it is time the government, along with all members of Parliament from all parties, understand the serious nature that these people are in. They work every day to feed us and we should be doing everything in our power to be looking after them.

My only question to my hon. colleague from the great Annapolis Valley is this. Will he now tell the minister that if he is thinking about article XXVIII, that he should not think anymore, that he should stand and tell the farmers who are watching this debate that he will indeed invoke article XXVIII in order to say to the WTO and the rest of the world that Canada is serious about protecting the interests of its farmers and its families?

[Robert Thibault, Liberal, West Nova, NS]

Mr. Chair, as you can see, the hon. member raises several important points with this simple question.

I do not know how to cover everything that he mentioned but I will start by saying that the best managed supply in this country might be the supporters of supply management within the Conservative Party. If it has managed to bring that into the party position I am very glad. I am glad that all parties support supply management within this country.

One of the elements in Bill C-48 is the question of foreign aid. I think foreign aid has a great benefit to our agriculture because we have to build the trading partners across the world, as well as the system, so we can benefit from that trade.

Finally, the member brings parallels between agriculture and fisheries and I think that is important at many levels. I know and the member knows that the fishery is at an all time high in Canada in terms of the amount of exports but not at an all time high with regard to the amount of jobs because with modernization there has been a change.

I see the same thing in agriculture. I see it in my riding. The dairy farms are buying quota from one another, like fishermen buy quota from one another. Dairy farms being a little bigger they need more cows to earn the money or build the capital assets they want for their families or for retirement. The Canadian Almanac has long since disappeared from the kitchen of the farms and the computer has replaced it. They are family farm businesses, small businesses run by small business people.

I regret that the 12 year old boy does not have the ambition to go into farming. I hope we have a next generation. As in fisheries, that is a challenge because the capital cost for the next generation to go into the business is very high.

On the international side there are parallels also. On the question of supply management, we manage the supply that is produced, the price at which it is produced and the distribution methods. It works quite well. In the fisheries we manage the quota but the quota is based on the stocks. The stocks are negotiated internationally and sometimes there are chances for abuse.

We have to be strong in our negotiations and we have to be balanced. We know that sometimes we need to have some give and take. If we get there with a sledge hammer immediately, protecting one sector of the industry, which I would like to see because I have a lot of supply managed farms in my riding, we would risk the negotiations that will help the other side of the agricultural industry, which is the export side that wants a level playing field internationally.

It is not very easy for the Minister of Agriculture and Agri-Food nor for the Minister of International Trade. Some people suggested that the Minister of International Trade would have a problem in using article XXVIII, should it ever be done. The Minister of Agriculture who is from a rural area will understand the expression very well when I suggest to him that if the time comes for that, he should bring the Minister of International Trade behind the barn.

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

Mr. Chair, there is a lot of hot air going around this chamber about farming, especially from the NDP. I wonder if my colleagues in the NDP have ever driven a tractor, disked a field, packed a field or seeded it. I wonder if they know what a seed drill is or if they have birthed a calf.

I find it highly ironic that certain members of their caucus pontificate large about farming and farming needs, when many of them do not have farming backgrounds. The opposite is true in my caucus. Many of the members of the Conservative caucus have either grown up on farms or currently have farms.

It highly ironic that there is a lot of hot air coming out certain members from the NDP caucus, when they have no experience in agriculture.

[Tony Martin, NDP, Sault Ste. Marie, ON]

That is pretty arrogant of you to say we have no experience. I grew up on a farm.

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

Mr. Chair, the member who just spoke I do not think worked on a farm. Yet he seemed to think that he knew everything about farming.

I grew up working on a farm. I worked for a farmer by the name of Jack Gilchrist who was a good Liberal. He had the International Plowing Match on his farm in 1968.

We have a farm in Wellington county just a mile down the road from where I grew up. In my riding of Wellington—Halton Hills the first Herefords were introduced to Canada in the 1860s in Puslinch township. The first square bailer was used in Canada, the first Angus cattle were introduced. We have the world famous University of Guelph research farms in Arkell and the Elora research station.

However, farming, and by farming I mean traditional agricultural, is in real trouble in our country. When I was growing up, the bank barns were full, the fences were up and the livestock were in the barns. Every barn was full and every field was full.

Now when I drive through my riding, half the barns are either falling apart or have been torn down. The fences are falling apart. The family farm is literally dying. As a matter of fact, for the first time fields are fallow this spring. Cash crop farmers are not even putting their crops in certain cases. This is the first time I have ever seen that in my lifetime.

Corn is at approximately $2.80 a bushel. It costs more to produce corn than they are selling it for. Do not rely on me for this anecdotal information. The statistics bear it out.

Between 1993 and 2004 farm income fell 18% in real terms. Between 1994 and 2000 the population of our country rose 10%. The government's agriculture policy is not working. The number of farms in Ontario has declined 10% in the last 10 or 12 years. Farming is not working in this province.

The only thing that is working in traditional agriculture and the only thing protecting the family farm is supply management.

In Wellington county we have 26,000 dairy cows. We have about 500 dairy farms. This is industry works. There are no billion dollar bailouts. There is insulation from the severe shocks that we have seen in non-supply managed industries.

Why is the government selling out supply management? It has had 10 years to deal with the issues of butter oils being used to circumvent the rules. It has had 10 years to deal with the issue of over quotas. The government is using the over quota issue to sell out the supply management industry. The time has come for us to get the Liberal government to come clean on this. Liberals are selling out this industry by stealth, little by little, not in one fell swoop. Would the parliamentary secretary care to comment on that?

[Robert Thibault, Liberal, West Nova, NS]

Mr. Chair, first, it is unfair to say that because we are not farmers that we do not care about agriculture or about farmers.

I grew up next to a mixed farm. My family was in the mink business. I was never in mink farming. I was not in farming. My father was a school teacher. That does not make me a professor. The farmers in my riding educate me about agriculture.

I was very pleased when the minister came to my riding to meet with a group of farmers from all sectors of agriculture in my riding. It was not a public relations exercise, nothing was advertised in the media, nothing was said first. He sat with them for over two hours and heard their concerns and suggestions. He answered them very honestly about what he could do and could not do to assist.

He did not leave them with false promises and false hopes. He left the farmers very confident, as I am, that there was a minister of agriculture who was honestly doing his best to advance their cause and advance their industry so they could feed their families and invest in their families' futures.

There have been changes in the numbers of farms and in my riding also. There used to be a dairy in every little village. Now there are very few dairies. There is a cooperative that is run by the farmers. The last one I think owned by a family I think was Cook's Dairy out of Yarmouth. Incidentally, it produced the best milk in the country. Their logo used to be “You might be able to whip our cream, but you can't beat our milk”. I thought that was very good.

This has changed and the number of farms in the area have changed. The farms tend to be bigger businesses and less of them. This is unfortunate in a way, but it is a natural progression of the market.

What we have to ensure is that they survive and that there is a future for rural Canada and a future for the agricultural business.

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

Mr. Chair, I have to say from the outset that I am here by obligation. Do not get me wrong. It is not because my whip, my parliamentary leader or my party leader forced me to be here. Rather, it is an obligation because of the Liberal government's lack of results regarding supply management. This is why I insisted on taking part in this take note debate on supply management this evening.

As I have already said repeatedly whenever we talk about agriculture, I am myself the grandson of farmers, of dairy producers. My riding is adjacent to two large administrative regions. There are no less than 1,400 supply managed farms in the Centre-du-Québec region and about 760 in the Eastern Townships. It is very important for me and for producers back home that we can talk once again about supply management in a take note debate in the House.

So, if I am here by obligation, it is not because I do not want to or because I am forced to be here. It is because this issue has been dragging on and producers are again calling for help. The response to their call is disappointing to say the least.

For example, there is the Minister of International Trade, who rejected the demand of dairy producers, who had given the federal government until May 25—this is very recent—to invoke article XXVIII before the WTO. I have with me a newspaper called La Terre de chez nous , which is read by many people in the region and all across Quebec. I want to read a short excerpt. This is from an article published on Thursday, June 2, 2005. It reads as follows:

The federal Minister of International Trade is afraid he might jeopardize supply management if he takes the measures that dairy producers want him to take to end the uncontrolled trade of milk derivatives.

The Quebec federation of dairy producers is hardly enthused by the minister's timidity.

This is from the producers themselves. They are very concerned by the lack of firmness of two ministers, namely the Minister of International Trade and the Minister of Agriculture and Agri-Food, regarding supply management.

According to that newspaper, the Minister of International Trade is afraid to upset his allies, even though the latter do not hesitate to challenge our supply management system to protect their own agriculture industry. As for us, we are always afraid. We have that holier than thou attitude. This is what is happening with this issue.

The minister is sending dairy product manufacturers a very damaging message, namely that they can continue to use the derivatives currently used in dairy products. These include butteroils, about which a lot was said this evening, caseins, and protein isolates. I will not list them all. These byproducts are exempt from any tariff control. Such ingredients literally replace milk in products such as ice cream, yogourt and cheese.

I come from a major cheese producing region. Just think of Lactantia or Fromage Côté, recently acquired by Saputo. We have large businesses, as well as smaller ones producing cheese more like a cottage industry. The producers end up with tons of unsold milk powder because of the increasing use of milk byproducts.

Like the other 74 federal MPs from Quebec, I received a bag of milk powder, which I took to the Minister of Agriculture and Agri-Food on April 27, with several of my colleagues from the Bloc Québécois. The minister was not in his office, but we were let in anyway, which was already something. We were able to leave our bags of milk powder.

Obviously, this was a symbolic gesture, both on the part of the farm producers who brought the bags to our offices and on our part when we took them to the minister's office. It may have been symbolic, but it reflected the crisis faced by our dairy producers, who are increasingly worried.

For example, dairy producers in Quebec are losing $70 million annually—across Canada losses total $175 million—because of imported milk byproducts. These are revealing numbers. They are pretty impressive. These same producers lost 50% of the ice cream market, just because of the use of butteroil. It can only get worse, if the Liberal government keeps sitting on its hands. It is also important to know that imports are on the rise. We are talking about $2 million a month. This is definitely not a passing phenomenon, far from it.

These milk byproducts are coming from countries, mostly in the European Union, which massively subsidize their farm production and exports. As we know, our producers do not receive any such subsidies. I call that unfair competition, plain and simple.

In addition, consumers do not even benefit. If, at least, consumers paid less for one kind of ice cream because of certain products in it, it might be said that consumers were the winners. it would be unfortunate for farm producers, but there would be one winner at least. But that is not even the case.

The processors are the only winners. The ingredients cost less, it is true, than the real milk products. However, the cost of ice cream made with butteroil, for example, rose at the same rate as that of the good ice cream made with milk or cream only.

I encourage consumers to read labels carefully when they buy dairy products. If you see the word “milk” or “cream”, you have a high quality dairy product and you are helping dairy producers in your region, regardless of where you live in Canada. When you read the label, you will sometimes see the words “modified milk ingredients”. These are magic words appearing on the labels of cheese, yogurt and ice cream. This shows that substitute products were used. These products come from the European Union and the United States.

I encourage consumers to make enlightened choices. If you want to help farm producers, buy products made with milk and cream. You will be helping people here. The government can also help them, and that is what is lacking.

The future of the supply management system is in peril. The Liberal government, as I mentioned earlier, remains nervous about the course of action to take. However, I remind it that it supported a motion by the Bloc Québécois, Motion M-163, which I had the pleasure of speaking to on April 15 in order to defend supply management. This motion called on the federal government to make no concessions in present and future WTO negotiations that would weaken the system. The motion was passed unanimously in this House. Perhaps the government should be reminded.

The Government of Quebec has also called on the federal government to do what is necessary to remedy the situation by preventing substitute products from circumventing tariff controls.

The supply management system is not complicated. It provides a minimum salary to producers by avoiding distortion in world market prices. There is consensus on it in Quebec. Ottawa has never been vigorous enough in its defence in international negotiations.

Consider, for example, what happened in Cancun in 2003. We almost lost supply management. African nations ultimately rallied around Canada in order to save supply management. We were very concerned at the time. We can go back even further. We were also very concerned in Marrakesh in 1994, because the government gave up article XI of the GATT. This article provided some protection, but I will not go into detail. One thing is clear, however. We had not listened to producers, 40,000 of whom had come here to Parliament Hill two years earlier in 1992 in order to ask the government to save supply management.

I do not know if other major protests are needed, such as those held recently where bags of skim milk powder were distributed and then passed on to the minister. If we need 40,000 of our dairy producers again, I will be happy to tell them there will be another major protest, in order to make this government think.

The only remaining protection is article XXVIII of the GATT, which the Minister of International Trade refuses to invoke. I read this earlier in a June 2 article in La Terre de chez nous .

Who will defend the industry if the ministers of International Trade and Agriculture and Agri-foods refuse to do so? Unfortunately, the Bloc Québécois is unable to sit at the WTO negotiating table. So, we are defending it here, along with the other opposition parties, of course. Sometimes this works, because we did succeed in unanimously passing Motion M-163. Also, the Liberal Party and some of its members are making interesting speeches. However, there is often a big difference between what people say and what they do.

As far as we are concerned, Quebec would be best placed to do this. However, we will have to become a nation in order to have a seat at the WTO. All in good time. Obviously not everyone agrees, but the situation requires immediate action. And right now, it is up to Canada to defend supply management. We respect this for now, but the time has come to step up to the plate and take action.

I will close by saying that if the government truly wants to defend supply management, it must immediately invoke article XXVIII of the GATT, before the WTO, in order to introduce new tariff quotas and maintain these imports at current levels up to a maximum of 10%. This must be done. Thank you for your attention.

[Wayne Easter, Liberal, Parliamentary Secretary to the Minister of Agriculture and Agri-Food (Rural Development)]

Madam Chair, I am pleased to see the member for the Bloc this evening. I am glad he is supportive of the Canadian national supply management system, which has done so much for the province of Quebec.

Supply management alone for the province grosses $2.277 billion, so it is a major economic driver in the province of Quebec, and we know that producers are strongly supportive of it.

I find it remarkably strange why the party opposite, though, wants to continue to talk about separation when the whole system itself is based on a national system of supply management, which is so productive for Quebec producers.

My question really relates to the point the member made on article XXVIII. I do not know whether the member heard the minister speak earlier. The Minister of Agriculture certainly has not ruled out article XXVIII. He said clearly that we have to look at utilizing that article strategically. We do not want to use it in a way as to jeopardize the benefit to the total industry as a whole, including beef producers in Quebec, potato producers in Quebec, and producers of other commodities.

Would the member not agree that it is important to not just use threats but to be strategic in terms of how we use the various tools that are available to us in our talks at the World Trade Organization?

I do not think he would be suggesting that we utilize article XXVIII too soon so as really to jeopardize our total position at the talks. I would hope that would not be his position.

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

Madam Chair, I know we must not comment on the presence or absence of members of this House, but I am pleased that the parliamentary secretary to the minister and the minister himself have heard my speech.

What I said is a reflection of what I have heard from the agricultural and dairy producers in my region. The parliamentary secretary has just said that we must not be too hasty, that care must be taken with article XXVIII and we must be careful not to do just anything. I can understand that certain strategies need to be adopted. Can he nevertheless understand on his side that the agricultural producers who come under the supply management system have been begging for help for ages? He is well placed to realize that all manner of awful problems have been cropping up. Agriculture is in crisis at this time.

What we are asking this government to do is to use a protective measure that all countries can use. Article XXVIII can be used right now to face up to the WTO. That is what the agricultural producers are calling for. I do not see why we need to wait. These people are begging for help. Action must be taken now.

The parliamentary secretary has said that the Minister of Agriculture and Agri-Food said he did not exclude the possibility of recourse to XXVIII. As far as I am concerned, things are not going either far enough or fast enough.

Returning to the article I have been holding in my hand from the start, from the June 2, 2005 La Terre de chez nous , which bears the title “Milk ingredient imports—Canada will not invoke article XXVIII”, that is the crux of the matter. What we are asking the minister is to invoke article XXVIII, it is as simple as that.

In an independent Quebec, the supply management system would be far better defended than at present. In Quebec we hold it dear to our hearts. Such is not the case for the Liberal government. We have proof of that in the examples it gives us. People are still on a tightrope; the supply management system is still fragile.

[Diane Finley, Conservative, Haldimand—Norfolk, ON]

Madam Chair, I understand the hon. member is supporting the supply management system, just as we do. I would just have one question to put to him.

Would the hon. member recommend that the minister leave the negotiating table if the supply management system were threatened?

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

Madam Chair, we would have to ask the minister if that would be doable and profitable under those circumstances.

I certainly do not believe that leaving the negotiating table at a time when the supply management system is threatened is a good approach. Who will defend the supply management system, if the minister has left the table? We have to be present but firm. The same is true of members of Parliament; we have to be present in the House. If I am not in my seat, I cannot speak on behalf of the dairy producers in my region.

My position is just the opposite of what the hon. member suggested. The minister has to be at the table. Both the Minister of International Trade and the Minister of Agriculture and Agri-Food have to be firm in these negotiations.This does not mean flouting WTO rules. It means using those means available to us to defend our supply management system and our agriculture. The supply management system does not benefit only Quebec, it also benefits the other provinces across Canada.

I do not understand why the ministers are so timid, when they have a tool to negotiate. We gave up article XI of the GATT in 1994; now is not the time to give up those tools we have left. By applying article XXVIII, the farm producers' wishes could be met, and our system would truly be defended.

[Tony Martin, NDP, Sault Ste. Marie, ON]

Madam Chair, I just wanted to say to the member from Quebec that I appreciate his position on supply management, and over the time that I have been here, many of his colleagues have stood and defended supply management. I also appreciate his anxiety around the minister's reluctance to use article XXVIII.

We know that our American neighbours, for example, never fail to take an opportunity to call on any article to defend their industry. I know that on the softwood lumber file, for example, even when they lose, they call the article again and again, because they feel so strongly about defending their industry.

I would like to ask the member if he could give me some sense of the impact on farming in Quebec if in fact this goes ahead and this article is not used by the minister.

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

Madam Chair, I thank the hon. member for his relevant question and for supporting supply management.

As I said earlier, the use of milk substitutes alone results in an annual shortfall of $70 million for Quebec dairy producers, and of $175 million for Canadian producers. This is a very concrete, current and unfortunate impact.

The hon. member gave a good example, namely the softwood lumber issue, regarding which some countries, that is the United States, do not hesitate to apply protectionist measures to protect their industry. Of course, in the case of softwood lumber, we and just about everyone else, including American consumers, think that the United States used what could be termed as delaying tactics. It is possible to apply some measures without completely closing the borders.

Back home, we just witnessed something very sad. A furniture manufacturing plant just shut down. Over a period of a few months, 175 workers have lost their jobs. As we know, the furniture and textile industries are two sectors that are experiencing problems and for which it would be possible to apply some protectionist measures to protect them from the Asian competition, without totally closing our markets.

Therefore, I do not see why, in the agriculture sector, which is faring a lot better than some others, we would not use the measures available to us to protect our supply management system.

[Paul Steckle, Liberal, Huron—Bruce, ON]

Madam Chair, it is a pleasure for me to take part in this important debate about supply management tonight.

As other speakers have addressed the importance of the supply management system and the government's commitment to the entire agrifood sector, I would like particularly to focus on the efforts this government has made to promote a successful outcome at the WTO Doha negotiations, which hold out the promise of a more level playing field for our producers and exporters.

Above all, the WTO is a tool for domestic prosperity, ensuring that our exporters have secure access to markets around the world, a stable and predictable business environment, and a level playing field for our producers.

The WTO has also ensured that our importers can source product from the most efficient sources in the world, providing cheaper inputs that boost productivity and provide better choices for consumers.

The WTO sets the rules for global trade. These multilateral trade rules underpin Canada's commercial relations with the WTO's 147 other members.

It is through the WTO that Canada seeks to secure and expand access to both our established trading partners, such as the U.S., the EU, and Japan, as well as to emerging markets of the developing world, such as China, Brazil, and India.

The WTO also helps Canada manage disputes with the U.S. and our other global trading partners on the basis of rules and not simply on the basis of power.

In short, the WTO ensures the openness of the world to Canada.

As a medium-sized trade-dependent nation, Canada knows the importance of clear and enforceable rules and effective dispute settlement mechanisms to ensure that power politics do not impair the way agrifood products are traded around the world.

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

It is our belief that the WTO negotiations represent the best opportunity to deliver real economic benefits for growth and development to both developed and developing countries. This is why Canada remains committed to aggressively pursuing an ambitious and balanced outcome to the current round of WTO negotiations. This is also why Canada's international policy statement, “A Role of Pride and Influence in the World”, recognizes that a successful outcome to the current round of WTO negotiations under the Doha development agenda would be a significant boost to Canada's international commerce strategy and to the development prospects of most WTO members.

I would like to take a few moments now to explain what Canada is seeking in an ambitious outcome to the Doha negotiations, one that is in the interests of all Canadians.

We are seeking to level the playing field upon which Canadian agrifood producers and processors compete; improve market access for goods and services providers to developed and developing countries; strengthen trade rules on antidumping, countervail duties, and subsidies; facilitate trade by cutting red tape at the border; and better integrate developing countries into the world trading system.

The WTO agricultural negotiations are critical for Canada as a whole and for the agrifood sector in particular because these negotiations offer us the best opportunity to work with other countries to level the playing field by addressing foreign subsidies and tariff barriers that hinder our ability to compete fairly in foreign markets.

Before the agriculture negotiations began in 2000, the government consulted extensively with provincial governments and the entire agrifood sector to develop Canada's negotiating objectives. Canada's primary objective is to level the playing field. More specifically, we are seeking the elimination of export subsidies as quickly as possible, substantial reductions of trade-distorting domestic support, and real and significant market access improvements for all agriculture and agrifood products.

Our negotiating position has enabled Canada to put forward strong, credible ideas and approaches throughout the negotiation.

I am proud to say that Canada is a very effective, active, and influential player in these negotiations. Our negotiators have been working with a wide range of countries, developed and developing, to put forward creative and practical approaches that advance our objectives across all areas of these negotiations.

Canada has been playing a very effective broker role between divergent points of view, building on our current alliances and forging new ones. 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, in the framework agreement that WTO members reached in July 2004.

The framework agreement continues to guide the negotiations. It clearly points the way toward a more level international playing field, and moves in the direction of righting some of the imbalances that have faced our producers since the Uruguay round. 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.

As the framework was being negotiated in July 2004, Canada's negotiating team left no stone unturned to advance our negotiating objectives and to work toward a framework in the interests of the entire agri-food sector, including the five supply managed industries and the Canadian Wheat Board.

I would like to applaud the Minister of International Trade and the Minister of Agriculture and Agri-Food for the amount of time and energy they and their officials have devoted to working with stakeholders over the course of these negotiations.

With the framework that we now have in place, Canada can continue to work toward achieving our negotiating objectives that were developed in close consultation with the provinces and a full range of agri-food stakeholders. It is true that Canada will continue to face growing pressure on our domestic sensitivities, but we are ready. Canada will continue to consult closely with our stakeholders to achieve a positive outcome for the entire agri-food sector.

The government needs to continue to strongly press Canada's position in these negotiations: that all of our producers need a rules based trading system in which to do business; that our producers need a level playing field in which to compete fairly and effectively; that Canada will continue to defend the right of producers to choose how to market their products, including through orderly marketing structures like supply management and the Canadian Wheat Board; and that the Canadian Wheat Board is a fair trader, as clearly upheld by a WTO panel and appellate body in August 2004.

We welcomed the momentum the July 2004 package provided to the negotiations. We were pleased to see that the July package integrated many Canadian ideas. While negotiations continue to build in intensity and momentum, there remains much hard work to be done if we are to move the negotiations forward toward a successful sixth WTO ministerial conference in Hong Kong, China, December 13 to 18, 2005. Canada will be at the forefront of these efforts.

We need to make every effort to advance the interests of our agri-food sector. We need to continue to support Canadian agriculture which depends heavily on exports, a predictable trading system, supply management and the Canadian Wheat Board.

As a trading nation with almost 40% of our GDP depending on trade, a predictable multilateral trading system is vital to Canada's interests. Therefore, Canada must be in a position to engage in the negotiations and exert influence in order to ensure our interests are articulated and achieved in all aspects of the negotiations.

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

Madam Chair, I appreciate the opportunity to intervene in this important debate tonight. I want to thank the hon. member opposite for chairing our agriculture committee and for the most part the non-partisan work. We do important work at that committee.

It is unfortunate in tonight's debate that there have been some angry meanspirited comments about politics on such an important issue. Here we are again having a take note debate on an agricultural issue. As a farmer, as someone who gleaned part of my earnings from the supply management industry as a cattle buyer and livestock exporter, it is unfortunate that we are discussing the future of supply management and the economic injury it is facing now.I thought the supply management industry was our safest bastion in agriculture.

Farm families are currently facing a lot of stress. The BSE crisis is hurting our livestock producers, including the dairy sector. The grain industry has experienced some very difficult growing and harvesting over the last couple of years. There are depressed commodity prices because of international trade injury. It is unfortunate that we find ourselves here today discussing the supply management commodities and the injuries faced there, not just because of BSE but because of some of the unfortunate competition being faced domestically from other products. We are also talking about the competition that is going to possibly take place because of negotiations happening at the WTO.

I can appreciate the difficult situation for the government in negotiating the new round and trying to get the best deal possible for all Canadian producers. It is important that we get a position that does not trade off one industry against the other. I do not think there is a single agriculture producer in the country who wants to see one sector disadvantaged because of another sector that we have in domestic production.

I want to find out from the hon. member, the chairman of the Standing Committee on Agriculture and Agri-Food, exactly what tools are available to us to protect supply management. More and more products are coming in under derivatives as combination food products. They are slipping in underneath the tariff rate quotas that are in place to protect the industry. The TRQs of course are in place to protect all our agricultural commodities, and other industries as well, but under the current levels that we have negotiated, definitely we are seeing losses. We have already been talking about caseins and caseinates and some of the other products, the butter oils and blends. How are we going to protect the industry so that we do not see a complete erosion of the domestic market for our supply management industries?

[Paul Steckle, Liberal, Huron—Bruce, ON]

Madam Chair, I want to thank my hon. colleague for the great work he does in our committee along with his other colleagues from other parties as well. We work very well together. Because of the non-partisan kind of work we do, we have been able to achieve a great number of things.

My hon. colleague asked what tools we have. The greatest tool we have is the tool of educating people in what supply management is all about. If Canada has failed in any area, it has probably been in this area. Perhaps some of that fault lies with the sectors of the supply management communities by basically not having explained it to our friends.

As was recently mentioned, we met with our New Zealand counterparts and those people did not understand. They thought supply management was an arm of government, that somehow supply management was a great plan of government that allowed us to function in that way. That is not the case. The belief that there are huge subsidy dollars going into the supply management sector is another fallacy.

A lot needs to be done. For those partners that we have at WTO, and there are 147 other countries involved in this partnership, we should not, as has been already mentioned, be trading one sector against another.

Tonight we have talked a great deal about article XXVIII. It should be pointed out for all who are listening and watching the debate this evening that article XXVIII is only wished by the groups supporting supply management in the dairy sector. Those in other sectors of the SM5 do not support article XXVIII being used at this time.

We have to be very careful that not only do we trade other aspects of agriculture, but that we also not trade one aspect of the supply management sector against the other. There is very great danger in that as well.

The greatest tool we have is education. I was at the round in Cancun, where I saw in our own Canadian delegation of about 150 people, on one side of the room the group representing the trading groups, the grains and oilseeds, and on the other side of the room the supply management sector. It was a very divided group. It was divided not only in terms of where they sat in the room where the discussions were going on, but they were divided in their opinion of what we should be doing at the round.

We have a lot of educating to do. If we clearly understood and if people in other parts of the world and our other partners understood in the round what this is all about, that this is the fairest way, basically we could have a lot more countries supporting us in our efforts to achieve what we want at the WTO.

[Joe Comartin, NDP, Windsor—Tecumseh, ON]

Madam Chair, I was a bit taken aback by the last comments by my colleague on the Liberal side when he said we cannot trade off one against the other. Is it not in fact exactly what Canada is doing at this point?

He in effect said that it is okay for the dairy sector to lose 50% of the ice cream business in this country, to have significant drops, large percentage drops, in the cheese sector and the yogourt sector. Those are going. In fact they are increasing in percentage losses that we are suffering right now.

When he said that we should not be pitting one side against the other, I think that is exactly what the government is doing. The Liberals' decision is not to use article XXVIII, which is there to protect. The United States has used it, Russia has used it and any number of countries have used it to protect sectors within their agriculture sectors.

We are prepared to say that maybe the grain and oilseeds want something else. They are not losing anything in this decision. By not invoking article XXVIII, we are in effect sacrificing the dairy industry in this country, or at least a big chunk of it.

It is ongoing. The member was on Parliament Hill a month ago. He heard the dairy farmers. He heard their plea for assistance from the government. Where are we? Why are we not helping them? Why was the choice made to say, “Sorry, we are prepared to sacrifice you”? The Minister of Agriculture or the Minister of International Trade did not say that to them, but that seems to be the reality at this point. I would like to know why the decision was made to not support that sector and to not go to bat for it.

[Paul Steckle, Liberal, Huron—Bruce, ON]

Madam Chair, the question is a fair one. Obviously the answer that I am going to give is probably one that he may or may not believe or may not want to understand totally, and I am not sure that I understand all the implications of the invoking of article XXVIII, but I must say this.

He made reference to the Americans and other countries using article XXVIII. It is there for a purpose, just as article XI was. Article XI was lost. The argument is being made that because we lost on article XI we may also lose on this one and therefore we should use article XXVIII before we lose it. It is not a case of losing it, and I am not talking about trading off one aspect of supply management against the other. I am simply saying there are those communities in the supply managed sector that do not want article XXVIII invoked because they realize there could be consequences.

If we shut the door totally to negotiations for the supply managed sector because at this juncture of the negotiations we have invoked article XXVIII prematurely, then we have in fact sold out all of supply management. That is not what we want to do. I think the judgment is being made that if in fact we find we need to invoke article XXVIII at a later time, then we will do that. We have the assurances of the minister.

I realize that this is perhaps not a real consolation to some people, but I will tell members that if we use article XXVIII at this particular juncture and it ends up that, as we had feared, we lose the ability for further negotiation on behalf of supply management, I am sure none of the other supply managed sectors would come forward to thank the dairy sector, nor would they thank us as a government. I am sure the opposition--