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House of Commons Hansard #38 of the 39th Parliament, 1st Session. (The original version is on Parliament's site.) The word of the day was crime.

Topics

Canada Post CorporationOral Questions

3 p.m.

Pontiac Québec

Conservative

Lawrence Cannon ConservativeMinister of Transport

Mr. Speaker, the members of Parliament and ministers from the Quebec City area did fulfill their election promises by thoroughly reviewing and examining the closure issue.

I am very proud of the work accomplished by my colleagues from the Quebec City area. They have, in fact, obtained from Canada Post that no employee or manager will lose their jobs and that the quality of mail delivery in that area will be improved. All our members from Quebec are pleased with the assurances that have been obtained.

Regional Economic DevelopmentOral Questions

3 p.m.

Bloc

Michel Guimond Bloc Montmorency—Charlevoix—Haute-Côte-Nord, QC

Mr. Speaker, the Quebec government just made an offer to Groupe Le Massif, in Petite-Rivière-Saint-François, for its tourist recreation development project in Charlevoix. The promoter, Daniel Gauthier, has given himself until June 30, 2006, to meet all of the conditions necessary to complete his $230 million project, which should create more than 600 permanent jobs. One of those conditions is financial support from the federal government.

With less than 20 days until his deadline, will the government finally state its intentions with regard to this file?

Regional Economic DevelopmentOral Questions

3 p.m.

Jonquière—Alma Québec

Conservative

Jean-Pierre Blackburn ConservativeMinister of Labour and Minister of the Economic Development Agency of Canada for the Regions of Quebec

Mr. Speaker, indeed, this is an important file. We have indicated to Mr. Gauthier, the project promoter, our interest in supporting it.

However, we cannot always give away sums of money just like that, as much as we would like to. Economic Development Canada has rules that I must follow.

Nevertheless, in the next few hours, we will make a formal offer to the promoter. We hope that he will consider it, bearing in mind the budget constraints facing us, as well as the criteria concerning regional economic development and the infrastructure program.

House of CommonsRoutine Proceedings

3 p.m.

Liberal

The Speaker Liberal Peter Milliken

I have the honour to table the Strategic Outlook for the 39th Parliament, dealing with House of Commons administration.

I also have the honour to lay upon the table the House of Commons report to Canadians for 2006.

Government Response to PetitionsRoutine Proceedings

3 p.m.

Regina—Lumsden—Lake Centre Saskatchewan

Conservative

Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform

Mr. Speaker, pursuant to Standing Order 36(8) I have the honour to table, in both official languages, the government's response to eight petitions.

Citizenship and ImmigrationCommittees of the HouseRoutine Proceedings

3:05 p.m.

Conservative

Norman Doyle Conservative St. John's East, NL

Mr. Speaker, I have the honour to present, in both official languages, the second report of the Standing Committee on Citizenship and Immigration on the main estimates for the fiscal year ending March 31, 2007.

Transport, Infrastructure and CommunitiesCommittees of the HouseRoutine Proceedings

3:05 p.m.

Conservative

Merv Tweed Conservative Brandon—Souris, MB

Mr. Speaker, I have the honour to table, in both official languages, the first report of the Standing Committee on Transport, Infrastructure and Communities.

In accordance with its order of reference, on Monday, May 1, your committee has considered Bill C-3, An Act respecting International Bridges and Tunnels and making a consequential amendment to another act, and agreed, on Thursday, June 8 ,to report it with amendments.

Industry, Science and TechnologyCommittees of the HouseRoutine Proceedings

3:05 p.m.

Conservative

James Rajotte Conservative Edmonton—Leduc, AB

Mr. Speaker, I have the honour to present, in both official languages, the first report of the Standing Committee on Industry, Science and Technology in relation to the Investment Canada review of the Xstrata/Falconbridge merger proposal

National Hockey Day ActRoutine Proceedings

3:05 p.m.

Liberal

Joe McGuire Liberal Egmont, PE

moved for leave to introduce Bill C-321, An Act respecting a National Hockey Day.

Mr. Speaker, it is my pleasure to introduce in the House an act entitled “An Act respecting a National Hockey Day”, which is seconded by the member for Cape Breton—Canso.

I would also like to take this opportunity to congratulate Salmon River, Nova Scotia for winning the Kraft Hockeyville contest last night. It was a very interesting exercise that the Kraft Hockeyville went through. I think most Canadians were very pleased with it, particularly those communities that participated in the contest. It demonstrated the great commitment Canada has to the game of hockey.

The act respecting a day of recognition for hockey, which would be celebrated on the third Friday in February, would designate a day of recognition to commemorate the sport of ice hockey. This day would also strengthen women's and children's involvement in the sport, encourage the participation of citizens and their communities and provide for a stronger identity shared on a national level.

The idea for a national hockey day grew out of the Hockeyville contest and came from the village of O'Leary, which managed to make it to the last five communities in the contest. I wish to congratulate it for their idea.

(Motions deemed adopted, bill read the first time and printed)

National DefenceCommittees of the HouseRoutine Proceedings

June 12th, 2006 / 3:05 p.m.

Regina—Lumsden—Lake Centre Saskatchewan

Conservative

Tom Lukiwski ConservativeParliamentary Secretary to the Leader of the Government in the House of Commons and Minister for Democratic Reform

Mr. Speaker, there have been consultations and I think you would find unanimous consent for the following motion. I move:

That in relation to its study on the Canadian Forces in Afghanistan, members of the Standing Committee on National Defence be authorized to travel to National Defence Headquarters in Ottawa, on June 15, from 3:30 p.m. to 5:30 p.m., and that the necessary staff do accompany the committee members.

National DefenceCommittees of the HouseRoutine Proceedings

3:10 p.m.

Liberal

The Speaker Liberal Peter Milliken

The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?

National DefenceCommittees of the HouseRoutine Proceedings

3:10 p.m.

Some hon. members

Agreed.

National DefenceCommittees of the HouseRoutine Proceedings

3:10 p.m.

Liberal

The Speaker Liberal Peter Milliken

(Motion agreed to)

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

3:10 p.m.

Bloc

André Bellavance Bloc Richmond—Arthabaska, QC

Mr. Speaker, I thank my colleague from Joliette for supporting this motion, which is asking the government that the first report of the Standing Committee on Agriculture and Agri-Food, presented on Thursday, June 8, 2006, be concurred in.

As usual, the Bloc Québécois is standing up for Quebec's milk producers. We have been working for a long time on the issue of milk protein imports. In committee, my colleague from the Bloc Québécois and myself decided to give priority to this motion regarding milk protein imports from various places, particularly Europe and New Zealand. These imports cause serious market distortions in Quebec and in Canada to the detriment of milk producers.

I want to thank my colleagues from the Liberal Party and the NDP who voted in favour of this motion. As a result, the committee adopted a very specific and very clear motion regarding milk protein.

I will read to the House the committee recommendations on this issue:

1. That, since all the parties support supply management, the government take immediate action to strengthen import control measures, which are crucial to supply management, by limiting the importation of milk protein concentrates and any product specifically designed to circumvent the supply management rules. 2. That the government adopt regulations that would classify all milk protein concentrates, regardless of their protein content, under tariff line 0404, or a tariff quota to be negotiated. 3. That the government invoke Article XXVIII of the GATT where necessary in order to cap imports of milk protein concentrates by immediately launching negotiations with its trade partners and by amending its tariff schedule through a legislative measure adopted by Parliament.

That is what was requested by the Standing Committee on Agriculture and Agri-Food. As I said, the vote was split. Unfortunately, the government in power, the Conservative government, through its members on the committee, refused to protect the interests of dairy producers in Canada and Quebec. I hope that the Conservatives will correct that today, since I expect they will be able to participate in this debate.

I would like to give a brief historical overview of the milk protein concentrate issue. Since 1994 and the Uruguay round, Canada has consistently tried to limit the importation of milk proteins. Negotiations were underway at the WTO. Milk protein concentrates were classified under tariff line 0404. So far, so good.

In 1996, Canada successfully defended its position before the NAFTA panel as well. The problem arose shortly after, when the Canada Border Services Agency classified one milk protein concentrate, known in more technical terms as PROMILK 872B, under line 3502, which is tariff free. That made a huge difference, because the manufacturers of this milk protein could then export it without any tariff being applied. This meant that processors could take advantage of low prices to use more and more of this milk protein.

Obviously, milk protein imports rose in the wake of this decision by the Canada Border Services Agency. I have always said that the decision was a mistake. In 2003, the agency reviewed its classification and admitted that there was a problem and that it had been a mistake to classify that protein under tariff line 3502. PROMILK 872B was reclassified under line 0404. That had been Canada's intention all along, except during the brief time when the decision was made to change the classification.

Of course, the company that manufactures the protein contested the reclassification. The Canadian International Trade Tribunal decided in the manufacturer's favour, and the decision was upheld in January by the Federal Court.

We could lay down our arms and give up the fight, because a court ruled following the decision by the Canadian International Trade Tribunal. Milk protein would then be able to enter Canada and Quebec without problem and without tariff. But this would seriously threaten the whole supply management system. I will come back to this in a moment.

We know that 40% of farm income in Quebec comes from supply-managed industries. That is why it is so important for the Bloc Québécois and all my colleagues to protect the supply management system.

Canada lost a right it had negotiated at the WTO and always defended. What should we do at a time like that? We should stand up and make a decision. If we have the political will to defend our farmers, we will simply classify milk proteins under the proper tariff line. That is how a responsible government should act. This was not done, but it must and can be done. That is the beauty of it, and that is why we are making this motion.

The government, in cooperation with all the members of Parliament, can make a decision today that milk proteins will simply be classified under the tariff line they have always come under, except during the brief time when the Border Services Agency made that mistake, as I said earlier. Other countries do this. The Americans, correctly, do not hesitate to limit milk protein imports. Canada can follow suit. There are solutions. I mentioned them when I listed the recommendations we made in the Standing Committee on Agriculture and Agri-Food.

It is rather unfortunate, but milk and cream are being replaced more and more by milk proteins in cheese, yogurt and ice cream. How can this be remedied? Simple political will could allow this motion to be adopted. Clearly, this would be the first action to take. Besides, this is what Agriculture and Agri-food Canada officials who appeared before the committee have said. The government can take action to limit milk protein imports, if it wants to. Nothing is stopping it. The government has the right and the duty to control milk protein concentrate imports and has several options in terms of how to do so. Those options are indicated in the motion, as I said a few moments ago.

Pursuant to section 13 of the Customs Tariff, the minister can in fact modify the list of tariff provisions to change the tariff item number. Our interpretation is that of the Fédération des producteurs de lait du Québec who say that this could be modified simply via regulation, namely, a government decision that does not even require the support of Parliament. Others say that legislation must be passed. Not everyone agrees on which action to take. However, if that were the case, there would be no problem and I would like to assure the government of the Bloc Québécois' support. If the government were to decide to use that channel to modify this tariff line, all 51 Bloc Québécois members would agree, with no problem.

The government could also have recourse to article XXVIII of the GATT to negotiate a tariff rate quota with its trade partners. Canada would reserve the right to add tariff rate quotas, even in cases of failed negotiations with its partners. Has article XXVIII ever been used? Yes, by several countries. In the agriculture sector, the most recent example that comes to mind is the European Union, in 2002, concerning wheat and barley. At that time, European Union countries simply decided to protect their wheat and barley producers, which they successfully managed to do.

Article XXVIII of the GATT can be used, but there are consequences. Once negotiations with our trading partners have taken place under this article, we accept a 10% increase in imports. Therefore, it is not necessarily the first option we should resort to. We would prefer a government decision through regulation to prohibit or at least limit milk protein imports. Still, if necessary, we should not hesitate to use article XXVIII of the GATT. It is meant to be used for that purpose and it is totally consistent with WTO rules. We are not inventing anything by using this article; we are simply protecting what we have.

Our failure to do anything would obviously have serious consequences. Supply management is threatened. That is what I wanted to talk to you about earlier. There are three pillars to supply management: setting prices, limiting production through quotas and, of course, limiting imports. Therefore, if we weaken one of these pillars—let us take imports for example since that is what we are discussing here—we are compromising the whole supply management system in Quebec and in Canada.

Milk protein imports might replace over 25% of protein contained in milk that is produced here. That is what will happen if we do not act fast, if this government does not have the political will to protect what we have. The more milk protein we import, the more worthless milk powder will be produced, since processors will continue to use milk fat.

This huge quantity of milk powder is impossible to manage. Obviously, all this will cause a collapse in the price structure.

Furthermore, each tonne of milk protein concentrate replaces 2.6 tonnes of milk powder.

Imports cost $235 million in 2005. This is an increase of $60 million over 2004. We are talking about no less than $5 million a month. That is what it cost milk producers in Canada.

In Quebec, they are talking about a loss of revenue of $70 million. We can imagine what that represents in the dairy products sector, a loss of revenue of $70 million.

As I was saying, we estimate that, if the government goes on doing nothing in this file, milk producers will be facing serious economic consequences of some $500 million a year.

Supply management enables producers to make a fair income from the market without subsidies. During negotiations at the WTO, lots of countries have suggested or supposed for a long time that Canada is subsidizing its milk, poultry and egg producers, because of the supply management system in place. That is totally wrong.

Up to now, Canadian governments have always defended the system, but they are hesitating a little more now. All we have to do is look at the questions being put in the House to the Minister of Agriculture and Agri-Food since the beginning of the session, to realize what serious concerns there are. We need only think back to the arrival in Montreal, barely a few days ago, of the Director-General of the WTO, Pascal Lamy. He said that Canada should make concessions on its supply management system so that negotiations could conclude. The whole burden of proof, the whole weight is now on Canada’s shoulders. I think that is a lot to bear, when more than 150 countries belong to the WTO. I think that the other countries also have a lot of concessions to make before being able to ask us to disrupt our supply management system.

Also, in addition to avoiding subsidies, the system benefits consumers. They are provided with a basket of quality products that are among the least expensive in the world. A survey, which I can quote here and which has been done 18 times since 1997, shows that dairy products cost 16% less here on average than in the U.S. This system must absolutely be protected.

Speaking of consumers, one may wonder if they are paying less, given that imports of low-cost milk proteins are coming into the country. Unfortunately, the answer is no; consumers are not even benefiting from this.

I can return to the example of one of the great battles of the Bloc Québécois, on butter oils in ice cream. Imports of butter oils used in making ice cream rose 557% between 1997 and 2002. That cost Quebec milk producers alone more than half a billion dollars. That is not negligible and the government of the time did nothing to prevent these butter oil imports which were coming mainly from the United States, as opposed to milk proteins which came mainly from Europe.

All you need to do is go to the supermarket to buy good ice cream and carefully read the label to find out the ingredients. If the ice cream is made with modified milk ingredients, it is sacrificing the taste of real ice cream, which should be made with cream. There are still a few Quebec companies, such as Laiterie de Coaticook and Laiterie Lamothe et Frères, that make excellent ice cream with cream, but this is unfortunately no longer the case with most of the ice cream we find in our grocery stores.

The irony in all this is that the ice cream made by Laiterie Coaticook or Laiterie Lamothe et Frères is not more expensive than the ice cream made with modified milk ingredients. On the other hand, the other day in the grocery store I saw that a big multinational has decided to play the marketing card and offer an ice cream made with real cream. In addition to real cream, it contains modified milk ingredients, but the cream is there. This was indicated on the ice cream carton, but believe it or not, this ice cream costs a lot more than the other ice creams. That represents added value for this multinational, which uses it for marketing purposes; in reality, we could quite easily make all of our ice cream with good cream. Obviously, our dairy producers and consumers would be the winners if this happened.

Consumers are increasingly conscious of the issues.

On the butter oil issue, we did a lot of awareness raising with dairy producers.

I know that, just about all over Quebec, dairy producers have recently been going to grocery stores handing out leaflets to tell people what they could find in dairy products such as cheese, yogurt and ice cream. People are increasingly aware, and they are reading labels more and more.

The only thing is that, as I was saying earlier, in marketing matters, there is always some arrangement that can be made, some way of getting around the way things are done, particularly the way a product is presented. When that happens, people can sometimes become a little confused about ingredients. But still, they are increasingly aware of what is happening, even on the international level.

I just recently read a news release, dated June 12, about the Canadian dairy, poultry and egg sectors. These are the people who are part of supply management in Canada. The release refers to a survey Léger Marketing was recently asked to do.

This survey shows that:

—85% of Canadians agree that the federal government should support the supply management approach in the dairy, poultry and egg sectors. —98% feel that it is important to ensure Canadians have a stable supply of foods produced in Canada; 95% of respondents agree that family farms are an important part of the economy for rural communities; and 83% agree that supply management is a better approach than taxpayer-funded subsidies to ensuring an adequate quality of life for agricultural producers.

These numbers are interesting. They show that people are becoming more aware of how our system works.

Again from the news release:

The Canadian dairy, poultry and egg industries bring in approximately $7 billion in agricultural revenues, generate $39 billion worth of economic activity and provide jobs for several hundred thousand Canadians throughout the country.

These are very interesting statistics. As I said earlier, this is a very recent news release dated June 12, which is today. That is the consumers' perspective.

The milk protein importation issue has also generated a lot of support for dairy producers in Quebec and Canada. In April 2005, Quebec's National Assembly adopted a motion to support Quebec dairy producers in their struggle for adequate controls over the importation of dairy ingredients. The motion received unanimous consent from the National Assembly. A few months ago, I read in the newspaper, La Terre de chez nous, that Quebec's Minister of Agriculture was asking the federal government to act on this issue.

In May of that year, dairy producers gave bags of powdered milk to the Prime Minister of the day. Members of the Bloc Québécois, myself included, also took bags of milk to the Minister of Agriculture's office. People even built a wall of bags of milk in Montreal. These symbolic actions sent the message that bags of powdered milk had become worthless because of growing milk protein imports.

At the time, people wanted to use Article XXVIII of the GATT to limit milk protein imports. This issue has been dogging us for some time. Last January's Canadian International Trade Tribunal decision has made this urgency an emergency.

Other support includes that provided by 63 dairy processors. Finally, 75% of Quebec's processors, including the Agropur cooperative which processes over half the milk, support the milk producers' efforts. My colleague from Abitibi—Témiscamingue gave me a letter from the Amos cooperative, a processor in that region. I would like to quote from the letter. I will explain to a certain extent why even processors are supporting dairy producers in this situation:

—we hereby wish to inform you that the cooperative unreservedly supports the cause of our producers who, at present, are fighting to re-establish a tariff that would have our processors use, first and foremost, protein produced locally.

Given that this directly affects farm income and, consequently, the purchasing power of our major customers, you will understand that we in turn, as input suppliers, are suffering from the effects of this practice.

That is very explicit. I hope that Parliament will carefully consider this matter. We must absolutely protect our supply management system. As mentioned earlier, one of the pillars of supply management is limiting imports. That is what the government is being asked to do today.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

3:30 p.m.

Conservative

James Bezan Conservative Selkirk—Interlake, MB

Mr. Speaker, I want to thank my colleague from the Bloc, the agriculture critic, for his intervention today in bringing forward the motion from the agriculture committee.

The Government of Canada, the Conservative Party of Canada, fully supports our dairy farmers. There is no question that they have gone through some tough times with BSE and from the increase of the amount of imports that have been coming in through real protein concentrates. Instead of imports coming through as fluid milk, which is what was in our original trade agreements, we now have a more difficult situation. We have a number of derivative products from milk flowing into the country, which is no doubt upsetting the balance in the way we manage our supply managed industries.

We have a problem and we recognize that. Our concern is the timing. I talked about this at the agriculture committee. We have a problem with timing in bringing forward this motion. Right now, invoking an article 28 under the GATT really would be an irritant at this delicate stage of the negotiations we are in at the World Trade Organization.

There is no doubt that we have to be at the table through these WTO negotiations, as our Minister of Agriculture has said numerous times, to represent our supply managed industries, whether it is milk producers or poultry producers. We have to be there defending their interests at the table. I fear that if we were to come forward with an article 28 we may irritate our trading partners exponentially, which would make it more difficult for us to do a good job of protecting supply management in the current discussions at the WTO.

I want to ask my colleague from the Bloc if he would care to comment on this whole issue of timing, of dealing with this sensitive issue and trying to get the most out of the WTO for our producers, proceeding and making the appropriate changes under the new WTO agreement that hopefully is coming forth, and then providing the tariffication we require to protect supply management.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

3:30 p.m.

Bloc

André Bellavance Bloc Richmond—Arthabaska, QC

Mr. Speaker, I thank my colleague for his remarks and his question.

I was already aware that he thought the timing for introducing this kind of motion was bad. His colleagues in the Conservative Party said the same thing at the Standing Committee on Agriculture and Agri-Food.

The reason I have done it is that I think exactly the opposite. In my opinion, this is very good timing, because the situation is urgent. We are asking the government to fix a situation that has persisted since an error was made by the Border Services Agency. Before that, since 1994 at the Uruguay Round, Canada had always defended the idea that imports of milk proteins could be limited.

We would fix this situation by passing this motion today. The more time goes by, the more imports we allow in, and the more difficult it will be to reach an agreement with trading partners and to limit imports of milk proteins, particularly if we are using article XXVIII of the GATT. We have to act immediately. There absolutely has to be the political will.

The witnesses who appeared before the Standing Committee on Agriculture and Agri-Food argued that if the political will existed, a government could protect its interests. That is what we are asking for today. There is a serious risk that the entire supply management system will be undermined. I have given examples that show this quite clearly. That is why now is the time to introduce a motion of this nature, so that our milk producers will ultimately be able to get back the situation that had existed since 1994.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

3:35 p.m.

Liberal

Wayne Easter Liberal Malpeque, PE

Mr. Speaker, I am pleased with the remarks by the member for Richmond—Arthabaska, but I am concerned about what the member for Selkirk—Interlake had to say. He leaves the impression that as a representative of the governing party he is more concerned about the irritants toward other countries than he is toward the very substantial irritant to our supply management system and how that in fact is undermining the supply management system.

The member spoke a bit about the balanced position that Canada has at the negotiations in terms of supporting our export oriented commodities and also in supporting our supply management system and allowing it the vehicle, under WTO, to operate.

My question for the member is about the fact that there seems to be a view held by some of the exporters and some in the industry that through our supply management system we do not allow imports. In fact, we do. We allow substantial imports. I just wanted to mention that. The fact is that right now Canada imports, under dairy, 6% of the market, 5% in terms of the eggs and turkey industry, 7.5% in terms of chicken, and 21% in terms of hatching eggs. The United States, on the other hand, which everybody believes is a free trader, allows only 2.75% access for dairy.

Therefore, we are in fact working within the rules in allowing imports, and if other countries would allow even 5% imports, it would really open up the market for cheese, by about 77.5% worldwide. We are doing our part within the supply management industry.

As for my question, with these milk proteins, what is happening is that industry is importing in other ways, getting above and beyond the 6% of market and having an impact on our dairy industry. I wonder what the member's thoughts are on that.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

3:35 p.m.

Bloc

André Bellavance Bloc Richmond—Arthabaska, QC

Mr. Speaker, I thank the member very much for his remarks. I also thank him for the support he has expressed, both in committee and here in the House, today. I invite all his colleagues and our colleagues in this Parliament to be here when it comes time to vote, at the end of the afternoon, so that we can pass this motion to protect our milk producers.

The member mentioned a fact that is often ignored when we are talking about the dangers of restoring the situation, so as not to offend or inconvenience our trading partners. What my colleague from Malpeque has just said is entirely true.

On average, in all supply managed industries, we already accept 5% imports from WTO member countries. As for the other countries, their markets are more or less open. I am talking mainly about the countries of Europe—the European Union—and the United States, whose markets are 2.5% open. And so when Pascal Lamy, Director General of the WTO, or when those countries tell us that supply management is a problem and we have to make compromises, my answer is that when the European Union and the United States open their markets to the level that ours is open—which is, on average, 5%, as I said—then we can sit down at a table and talk, and negotiate. Right now, we are not at that point.

We are only asking the other countries, the European Union countries and the United States, to reduce their subsidies, and they make a big deal about it. We know that the Doha Round has gone on for quite some time. As we speak, the Doha Round was actually supposed to have ended, but that is far from being the case. Negotiations are continuing, because the Americans, in particular, are kind of circumventing the process. Instead of reducing their subsidies, they would like to put them in different coloured boxes, so they can conceal the fact that they are subsidizing their agricultural production heavily.

As a result, when that is done, when the other countries agree to what we have already agreed to, we will be able to sit down and talk with them.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

3:40 p.m.

Bloc

Paul Crête Bloc Montmagny—L'Islet—Kamouraska—Rivière-du-Loup, QC

Mr. Speaker, I would like to congratulate my colleague from Richmond—Arthabaska on his vigilance. Last fall, it was a Bloc motion that stopped the other half of the government from dropping supply management. The motion was passed right here. Since it was an election period, the Liberals and Conservatives had to do the same as we did. It was the Bloc that raised the issue then, and today it is still the Bloc Québécois that is bringing back this motion.

I want my hon. colleague to answer the following. It is astonishing that the Conservative government, which claims to defend the agricultural community, is ultimately taking a position that is contrary to Quebec and Canadian agriculture. How can that be? This seems unacceptable to me.

I congratulate the member on having raised this issue in the House. I hope that we will adopt a position in the House that will force the Conservative government to get a grip on itself, this government that is sacrificing the farming community.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

3:40 p.m.

Bloc

André Bellavance Bloc Richmond—Arthabaska, QC

Mr. Speaker, I want to thank my hon. colleague. I know that he has the interests of the farmers in his riding and throughout Quebec at heart. That is why the Bloc Québécois took action.

During the election campaign—or during certain question periods—our opponents in the government said that the Bloc Québécois has never done anything for agriculture. I do not blow my cool very often, but I did during one question period when a Conservative member from Quebec said that the Bloc Québécois could not do anything.

The supply management motion that my colleague is talking about was tabled in the House last November by the Bloc Québécois. It enabled supply management to survive, no less. The reason is simple: Canada’s chief negotiator, Mr. Steve Verheul, feels bound by this motion. That bugs and annoys him, but one thing is sure: the farmers of Quebec and Canada—I met some in Toronto from New Brunswick—thanked the Bloc Québécois for its good work.

The Bloc defends the interests of Quebec, but when that helps other farmers too, we are happy to do so. I would have a hard time understanding how the party in power, which voted for that motion, could vote against the motion tabled today in the House.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

3:40 p.m.

Lotbinière—Chutes-de-la-Chaudière Québec

Conservative

Jacques Gourde ConservativeParliamentary Secretary to the Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board

Mr. Speaker, I am pleased to be able to speak to this motion in the House of Commons.

I would like to begin by reiterating the words of the Minister of Agriculture and Agri-Food, who has emphasized the firm and unflagging support of the present government for supply management.

The system has served milk producers and processors well for many years and will continue to do so.

That is the crux of the matter, that is, support for supply management and the best approach to take in this connection.

Defending supply management represents a priority for this government. Why? Because supply management is an appropriate and efficient approach to take in agricultural production.

Not only does supply management enable producers to get a fair return on the market, but it is also ensures reliable quality and supply for consumers. Supply management is also a means of providing everyone in the value chain with a means of enabling them to collaborate and make shared gains.

It has been shown over the years that supply management makes it possible to achieve set goals. Of course it has evolved and been reinforced over time so as to support the interests of producers and consumers.

Supply management was the choice of milk, poultry and egg producers, and I can affirm that it is also the choice that Canada will firmly continue to support.

Let us look now at the action we have taken.

The present government is fully aware of the concerns of Canada’s milk producers concerning imports of milk protein concentrates. This is why the issue is one of the government’s big priorities.

The government has taken action to ensure that imports of milk concentrates containing up to 85% protein are subject to tariff quotas.

As for concentrates containing over 85% protein, we are keeping a very close watch on the situation. To date nothing indicates that there will be a rise in imports in this category.

In addition, the present government firmly believes that this question must be followed up in a spirit of collaboration, not of confrontation.

This is why the minister has invited sector leaders to form a task force in which all industry stakeholders can get together and consider not only specific questions concerning milk protein concentrates, but also long-term prospects with a view to boosting growth in the dairy sector.

The issues and challenges facing the dairy industry in Canada cannot be dealt with unless producers and processors work in close cooperation.

To that end, the executives of the Dairy Farmers of Canada and the Dairy Processors Association of Canada have accepted the minister’s invitation. They have undertaken discussions for the purpose of developing a joint position for answering those questions and getting the dairy industry growing again.

The minister assigned the following tasks to the working group: develop a strategy to promote growth in the industry; develop joint positions relating to standards for the use of milk and milk ingredients; address the questions of price setting and profitability; and determine how the industry and the government can combine their efforts to draw up plans that will enable them to meet other challenges in future, including the repercussions that the WTO negotiations may have.

The best way to solve these problems and many others is for producers and processors to work together.

There is no doubt that considerable pressure is being brought to bear on the dairy industry in Canada at present. Processors have concerns about the stagnant or declining market for dairy products, their capacity to develop new products and technologies that will help to develop markets.

Producers’ concerns focus on questions like the recent quota reductions, the size of the skimmed milk surplus and the associated costs, the erosion of domestic markets under the effects of imports of certain dairy products, and the pressure that Canada is currently under in the WTO negotiations.

As well, producers and processors are concerned about the continuing decline in milk consumption and about problems caused by prices and profitability. Milk protein concentrates are only one of the many difficulties that the industry is facing at present.

The best way to deal with problems in the industry, in the interests of both parties, is to sit down at the same table and find realistic solutions. This is by far the most desirable approach, because it allows us to find solutions that suit both parties. It is preferable to settle our domestic differences this way rather than to take the issue of concentrates to the WTO.

The government is well aware that the industry recommends invoking article XXVIII of the GATT, so that the government could impose a tariff quota on milk protein concentrates with a protein concentration higher than 85%. That approach would have serious repercussions that we must weigh very carefully. I will explain why.

First, invoking XXVIII could be negative in terms of Canada’s ability to pursue its broad trade objectives at the WTO. We are at a delicate point in the Doha Round negotiations right now. In other words, from a strategic point of view, this is not the time to initiate that kind of process.

The government is of the opinion that Canada can better defend itself and support the interests of dairy producers and, in fact, the interests of the entire Canadian agriculture sector, by preserving its credibility and its influence in the negotiations.

Some major member countries of the WTO have warned Canada against invoking article XXVIII at this stage of the negotiations, that is, that it could seriously undermine our credibility and influence.

If the industry presents a united front and works to achieve a common objective, it will be able to meet the shared challenges more effectively. To do that, we will continue to work closely with the industry, in order to resolve the question of milk protein concentrates. More generally, we are also planning to pursue consultations with the supply managed industries regarding Canada’s participation in the WTO agriculture negotiations.

The WTO agriculture negotiations have reached a delicate point in Geneva. The government is continuing to work closely with supply managed industries and with all industries, as the negotiations progress.

I know that the supply managed bodies have taken an active part in the process, and I would point out that their firm commitment to this is greatly appreciated.

This kind of joint effort is important for Canada, and it is also important that the other WTO member countries see it.

The Minister of Agriculture and Agri-Food continues to work closely with all stakeholders in the agri-food sector, including the sectors under supply management, and is exchanging information and analyses on the main issues in order to flesh out Canada’s negotiation strategy.

I want to assure you that this close working relationship will be maintained as the negotiations proceed.

Canada is a firm believer in the merit of the WTO process. We are confident in the process and our negotiating team has our unreserved support. We believe that, through the WTO, we can make the rules of the game fairer at the international level by eliminating export subsidies, substantially reducing trade-distorting domestic support measures, and greatly improving access to foreign markets.

We are determined to defend our interests and obtain the best possible results at the WTO for the entire Canadian agricultural sector.

At the same time, there is no question that the key issues essential to supply management are under substantial pressure at the WTO negotiations.

We must keep in mind that the other 148 member countries of the WTO are prepared to accept at least some tariff reduction and some increase in tariff quotas for all sensitive products.

We have expended a good deal of effort defending the elements we consider important to our supply management system, but we are under enormous pressure and no other country supports our position. Whatever the case, we will continue to vigorously defend our interests. We must also dismiss any idea of abandoning or simply withdrawing from the WTO process.

Canada will not be withdrawing from the negotiations, as the Minister has clearly indicated. We have to sit down at the table to negotiate an agreement that is beneficial for our export-dependent sectors and to defend our supply-managed sectors.

The second reason I am opposed to the use of article XXVIII of GATT at the WTO is that it would not be effective in putting an end to imports of protein concentrates from the United States and Mexico. Those imports would in fact be authorized under NAFTA, and we fear that they will continue. However they would no longer be coming from overseas, but from our neighbours to the south.

At least two major plants in the United States are manufacturing protein concentrates. These could easily fill the void created by the absence of imports from New Zealand and Europe.

The other risk, if Canada decided simply to stop these imports from all its trading partners, would probably take the form of a trade challenge from the United States. We all know how much the Americans like our supply management system. Not only might they challenge on this particular issue, but they could also take advantage of the opportunity to re-start old battles that we already won. This could mean greater risk for the entire supply managed sector. That is why the minister has advised us to play it safe.

In conclusion, I would like to add that the government is convinced that the best solution is for the working group to get together and formulate what will be needed to help strengthen the supply management system and dairy sector of the future to ensure a healthier, more stable agricultural sector.

We are confident that the working group will come up with practical solutions that will make it possible to avoid the risks and dangers to which we would expose ourselves if we took this issue to the WTO.

The best solutions to these challenges will be those that dairy producers and processors come up with together. The working group is exactly the right body to find solutions that are acceptable to all parties.

We will be very happy to learn the results of their work in the near future.

Finally, the essence of supply management, historically as well as under current conditions, is in the cooperation of all the links in the value chain, especially producers and processors, who work together to provide consumers with quality products.

It is thanks to this spirit of cooperation that supply management works well. In my view, the working group will be imbued with this same spirit in its formulation of realistic solutions that serve the interests of all the stakeholders in this sector.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

3:55 p.m.

Bloc

André Bellavance Bloc Richmond—Arthabaska, QC

Mr. Speaker, the problem with the speech of the member we have just heard, who is also the Parliamentary Secretary to the Minister of Agriculture and Agri-Food, is that he affirms on one hand that his government wishes to defend the supply management system, and on the other he says that nothing needs to be done regarding milk protein imports.

He also talks about contradiction. I do not see any contradiction between the ministerial decision to set up a consultation between milk processors and milk producers, and WTO negotiations, the possible government political will to use Article XXVIII of the GATT or proceeding by regulatory means to limit milk imports. All that can be done at the same time. But the member sees a contradiction in that.

So my question is as follows: why does he see a contradiction between the minister’s request to milk producers and processors to sit down together—a quite proper and praiseworthy initiative—and his government’s willingness to take action? I would also like him to tell us if he will vote in favour of today's motion by the Bloc Québécois. When this motion was submitted to the Standing Committee on Agriculture and Agri-Food, he voted against it. This was a big surprise to Quebec’s milk producers, since he himself is a farmer. Some citizens in his own riding even telephoned me to ask what their member had done. Since he is also the Parliamentary Secretary to the Minister of Agriculture and Agri-Food, those people thought it was a mistake.

So I would like him to remedy the situation today and to state before these farm producers, these milk producers, all those in Quebec, and those in Canada therefore that he was mistaken and that he truly intends to defend the interests of milk producers in Quebec. This is a member for Quebec. We do not expect anything less from him.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

3:55 p.m.

Conservative

Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC

Mr. Speaker, in my remarks I explained why it was important not to invoke article XXVIII, since it would no doubt be ineffective in the short term.

I thank the member for his question, but I am convinced that the farmers and milk producers in my riding are well aware of the problem and the very delicate situation at the WTO at present. As my dear friend from Richmond—Arthabaska said, the milk producers in my riding are very worried and have shared their concerns with me. They have a very good understanding of the situation at present.

Of course, the Bloc Québécois could help us by toning down their motion. If we have problems at the WTO, I hope that the Bloc Québécois will bear the responsibility for what could happen at the WTO.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

3:55 p.m.

Liberal

Paul Steckle Liberal Huron—Bruce, ON

Mr. Speaker, this is a timely debate on a timely motion, certainly one that has a lot of farmers sitting on the edge of their seats as they anticipate the outcome at the WTO. We are constantly hearing the same refrain that we must not enter into this territory because we might somehow jeopardize the ongoing talks.

It is incumbent upon the government to act on behalf of these farmers. The supply managed sector in this country, both the dairy and the poultry sectors, have been very cooperative in allowing their product into this country, as the hon. member for Malpeque has already stated. If this product were allowed into other foreign countries, we would hear a great deal of unnecessary argument put forward for not allowing us this debate today.

How do we find the balance between what we want for the supply managed sector? We know what happened with butter and the impact it had on the manufacturing of ice cream in this country, and now we have milk protein supplements and their impact on other dairy products.

How are we going to mesh this difference between what CAFTA wants, what the trade alliance people of this country want, and what the supply managed sector wants? Who is going to win? How do we manage to find a common ground where both of these areas can be winners when this is all said and done? We are looking for long term benefits for farmers in this country, not short term benefits.

Agriculture and Agri-FoodCommittees of the HouseRoutine Proceedings

4 p.m.

Conservative

Jacques Gourde Conservative Lotbinière—Chutes-de-la-Chaudière, QC

Mr. Speaker, I thank my colleague for his excellent question. Negotiations are still under way at the WTO, and we cannot negotiate publicly at present. His question is a legitimate one, and I think that our negotiators will work under the best possible conditions to defend supply management and achieve the best balance for Canadian producers.