Joe McGuire

[Supply, November 4th, 1999]

Mr. Speaker, if what the hon. member and the previous speaker were saying about the prairie farmer not making any money is true, then to reduce taxes when they are not making any money would be very silly.

What he should be doing is talking to his provincial counterparts from the prairie provinces. He should ask the provincial governments that have control over the taxation regime, which farmers are paying taxes to, to reduce those taxes.

[Supply, November 4th, 1999]

Mr. Speaker, we waited a little while to have some silly accusations made by the Reform Party and now we have them.

We just finished saying what international trade does for the prairie farmer and what kind of condition the prairie farmer would be in if we did not have trade and the member stands up and harps about high input taxes.

As of today, the federal government alone has put $1.1 billion into a native program. Trade and assistance from the government when it is needed is what is keeping farmers on the farm.

[Supply, November 4th, 1999]

Mr. Speaker, I will direct my remarks to the fourth paragraph of today's motion which reads in part:

That the government should take action to remedy its over-zealous and irresponsible pursuit of greater trade liberalization, which has caused extreme hardship for Canadian farmers,

This opposition motion takes the extremely misguided position that trade is bad for Canadian farmers; that it has caused, in other words, extreme hardship for our producers. It is that supposition that I would like to tackle during my time here today.

In fact, trade, rather than creating an extreme hardship, is the very cornerstone on which Canada's agricultural economy and the nation's economy overall has developed and thrived. We have an agriculture industry in the country that generated some $95 billion in domestic sales last year and over $22.5 billion in exports to markets around the world.

This is a record export performance. I might add that these sales were made in 1998, a year when financial markets were in chaos and commodity prices were driven down. However, because of our access to markets around the globe, Canada's agrifood industry was able to actually improve on its export performance of 1997, which, incidentally, was also a record-breaking year.

This export success obviously plays no small part in helping to build a strong agricultural industry, an industry that contributes more than 8% of the country's gross domestic product, an industry that provides jobs for nearly one in seven people, from the farmer in the field to the person in the processing plant, to the research scientist who is constantly looking for ways to improve our crops and develop new crops that the world will be glad to buy from us. It is also the industry which provides jobs for over one-half of Canada's young people entering the workforce for the first time.

Trade is good for our agricultural industry. We have a small population and we have a large agricultural output. We must trade in order to survive.

A recent analysis by Agriculture and Agri-Food Canada indicates that for every billion dollar increase in agrifood exports, net cash income on the farm can be expected to rise somewhere between $250 million to $310 million.

Some of my colleagues on the other side would argue that is not good enough. They seem to think that agricultural trade is only good if the benefits to the producer are dollar for dollar. In other words, a billion dollar increase in agricultural trade has to bring a billion dollars back to the primary producers or else we should just forget it and that we should forget trying to increase trade.

That is just silly. It is silly because that billion dollar increase will lead to something like $250 million or more of additional money in farmers' pockets. They can reinvest that money in their operations. They can use it to buy a new combine or to upgrade and expand their barns. When they do that, the benefits are passed on.

When a livestock producer decides to expand his capacity, he puts money into the hands of the local farm equipment dealer and his veterinarian. Maybe he will pay his grain-growing neighbour down the road to supply him with some additional feed. Pretty soon everybody is feeling the effects all because of trade.

Meanwhile, beyond the primary producer level, the benefits of that $1 billion increase in trade go to other players in the agrifood system. More and more of Canada's agrifood exports are value-added. Farmers' bulk products are processed and prepared for the direct-to-consumer market, a highly valuable market. This means some of that $1 billion in exports goes to food manufacturers, processors and transporters who also create jobs and economic growth for our country.

The benefits of trade are very clear and that is why the federal government does all it can to expand our trade opportunities. Since Canada started liberalizing trade with its partners around the world, our exports have exploded. In the last decade, as we have pursued freer trade with partners all over the globe, our exports to the world have more than doubled.

In North America alone, our exports have nearly quadrupled in the last 10 years, with more than $13 billion worth of agrifood products going to Mexico and the United States last year. If anyone thinks we would have made these kinds of gains without liberalization, they are dead wrong.

Mr. Speaker, I will be splitting my time with the member for Ottawa—Vanier.

We have been trying to increase our exports to the emerging markets of the Asia-Pacific countries as well. Now, because of what happened in some financial markets in the last year or so and because of some phenomenally good harvests around the world, I admit some of these Asian markets have dropped off a bit. However, we have made gains and we have a foothold in those markets now. As they evolve, we will be able to take advantage of the foothold and build on it.

We would not have made these gains without making efforts to liberalize trade. We free up trade by working with our partners and various associations like the Asia-Pacific Economic Co-operation forum, APEC, or WTO, or NAFTA. We build freer and fairer trade when we put more dollars into producers' products and into rural businesses at home.

Because of our efforts on the trade front, Canada has made progress in a number of areas over the last year or two. We have worked with the European Union to get them to modify their grain import regime and reduce the duties on some grades of Canadian durum wheat.

We have gained access to the Japanese market for our tomatoes by working with officials there to get them to reduce their extremely time consuming approval process which required that each and every tomato variety had to be tested separately for pest risk.

We were successful in persuading Thai officials to reduce their tariffs on canola meal and alfalfa products earlier this year, opening a sizeable market for Canadian feed exports.

As a result of our efforts in Korea, the Korean government announced earlier this year that its applied tariff on canola would be reduced from 15% to 10%.

In Indonesia, agriculture tariffs were reduced to a maximum of 5% on all food products.

In the Philippines, sanitary import protocols were maintained or updated to ensure we had continued market access for Canadian pork, beef, poultry and other agricultural items like bovine embryos.

Canada also gained access to the Vietnam market for grain and fertilizers.

All this is trade progress that leads to a stronger agrifood industry here in Canada.

No, trade liberalization is not the cause of Canadian farmers' problems. On the contrary, trade is the answer. On average, across the country, about half of farm gate income comes from trade. On the prairies, trade is responsible for the majority of producer income.

Members should think for a moment about what would have happened to our prairie provinces if they had no international markets where they could sell their wheat and canola and beef. They would not be better off. Far from it. It is international trade that sustains our agricultural regions and the Government of Canada is working to improve our trade opportunities all the time. We are doing it by mounting trade missions, by finding ways to build partnerships and alliances around the world and by working with like-minded countries to get better, fairer and more enforceable trade rules that will assist our producers.

We want to increase trade, not reduce it. We are working with our producers, our processors and our counterparts in governments at other levels to ensure we reap the benefits.

[Supply, November 4th, 1999]

Mr. Speaker, I wonder if the hon. member who just spoke would respond to a suggestion that Quebec, instead of being at WTO meetings in Seattle, might take the lead within Canada to reduce the trade barriers within the provinces.

We are told that there is freer trade with Canada and the rest of the world than there is between the provinces within Canada.

Maybe the member could turn his line to that and maybe Quebec could take a leading role in reducing trade barriers within our own country.

[Division No. 52, November 2nd, 1999]

Madam Speaker, I would like to confine my discussion tonight to the question that was asked on October 19. I know a lot of things have happened since then to which the member for Palliser has alluded.

We are also concerned. I know he is very concerned about farmers in his home province of Saskatchewan. That concern is shared by the government. The government understands that we need a national approach. We are looking to all shareholders to work together to decide on the best course of action.

The Government of Canada and the Minister of Agriculture and Agri-Food want to work in partnership with all provincial governments to address the income situation facing farmers in Canada.

The minister of agriculture continues to work with concerned farmer organizations and is listening to their advice on program design issues for existing programs as well as for the long term direction of safety nets.

The government has programs in place that have helped and continue to help farmers across Canada and particularly those on the prairies. The NISA and AIDA programs put money in the hands of farmers who are in need. For example, in Saskatchewan 55,900 producers have about $1.1 billion in their NISA accounts. To date, over 12,300 producers in Saskatchewan have withdrawn $113 million from NISA this year. Agriculture and Agri-Food Canada estimates that AIDA will provide approximately $170 million in Saskatchewan for the first year of the program. Across Canada we have been providing this kind of support.

Members can see that when the NISA withdrawals are combined with the AIDA payments, the government is helping farmers through these difficult times.

[Division No. 45, October 26th, 1999]

Madam Speaker, I know the hon. member has been very persistent in his questioning on this topic. It is a very important topic for his province and for all farming communities across Canada.

The government understands the root cause of the financial problems facing some farmers. The causes are worldwide low prices for some commodities and recent adverse weather here in Canada.

The low prices have been aggravated by the use of trade distorting support by some of our trading partners. The Minister of Agriculture and Agri-food is working very hard on the international front to demonstrate that this continued action will undermine efforts toward agricultural trade reform.

The figures I have are figures for Canada. They are not figures for the four provinces alone. As of October 21, 1999 claims totalling $220 million have been paid out. This represents an average payment of $14,034 per farmer. Currently the AIDA administration is processing approximately 1,200 applications per week. Farmers continue to have access to the NISA program and the government continues to put money in producers' NISA accounts, with more than $126 million already contributed this year. More than 135,000 farmers have some $2.7 billion in accounts. That is a substantial reserve to draw on.

We have taken appropriate measures to deal quickly with the results of adverse weather and the low prices for some commodities and we are laying the groundwork to ensure that our trading partners enter the WTO negotiations with a commitment to meaningful changes. Along with our work with provincial governments to strengthen our long term safety net system, we are providing Canadian farmers with the short and long term support they need.

[Supply, October 25th, 1999]

Mr. Speaker, everybody recognizes that the reason we are in this jam right now and probably into the next year or so, is the low commodity prices experienced especially by the western grain farmer and people who export agricultural products. That is something we have to face as a country. It is not something that is faced just by the federal government or by the producers, but it is also faced by the provincial governments.

By working together we are addressing the situation. Through our combined efforts we will be there for the farmer in his hour of need.

[Supply, October 25th, 1999]

Mr. Speaker, those comments come from a member of the fourth party who is from Saskatchewan and whose NDP government has been very tight in supporting its farmers within its own provincial boundaries. For him to sit back and criticize the efforts we are putting in through the federal treasury to support his farmers in Saskatchewan leaves much to be desired.

We are putting in $600 million every year in safety nets and $900 million in the AIDA program. We are looking at adjustments to that program so we can free up more money for the farmers. I would say that we are coming through for the farmers of Canada.

That type of comment coming from a member from Saskatchewan leaves a great deal to be desired.

[Supply, October 25th, 1999]

Mr. Speaker, maybe the hon. member for Lakeland was listening to the speech. I made specific reference to the efforts Canada is making through the World Trade Organization to reduce subsidies.

In the world at large, Canada is not a great big player. We are not a powerful player in the international agricultural field. We have to design and push with all our might to have a rules based system of trade so Canada can compete equally with other more powerful nations like the United States and the European common market. We cannot afford to match them dollar for dollar in the subsidy game. We are not in that game. I believe the Reform Party agrees that we cannot do that.

I know the Reform Party's situation in regard to agriculture and agricultural assistance is evolving, the same as our AIDA program is evolving. If we work together we will come up with a very good solid basis for a safety net program in Canada.

[Supply, October 25th, 1999]

Mr. Speaker, I congratulate the member for Broadview—Greenwood for his contribution this evening to this very important debate.

I welcome the opportunity to discuss the concerns surrounding the level of farm income this year. I share with farmers and members of the House their concern over the difficult realities a number of farmers are facing.

I want my colleagues across the floor to understand, as I believe they do but I want to remind them, how closely the minister of agriculture and the government have worked with producers and with other levels of government to put in place an effective system of safety nets to protect farmers and their income. That is something that does not come across in what hon. members are reading in the papers and seeing on television. Too many people want to make this a federal government problem when in fact it is everyone's problem. The government has been working with all the players to balance all the interests and develop solutions that are acceptable to all the partners.

Partnership has been the hallmark of farm safety net policy over the last half decade. In December 1994, after a year of consultations with farm groups, the minister of agriculture and agri-food of the day achieved a national consensus for a new Canadian farm safety net system, one that is income based and established on the whole farm principle, a system predicated on balancing the needs of all regions and all sectors.

Partnerships yield results and our safety net system is proof of that. Working together, producers and governments developed one of the most predictable, effective and reliable systems of farm income protection in the world, and this system is still evolving. Contributions to both design and funding come from farmers themselves, from the federal government and from all the provincial governments.

Improvements are being sought on an ongoing basis. Unfortunately, today's market conditions are one of the driving forces behind the effort to improve safety net programming. However, Canadian farmers have a solid foundation on which to build and the federal government is continuing to work with them through the national safety net advisory committee to develop these improvements.

Currently farmers in the country have a safety net system made up of crop insurance, the net income stabilization account or NISA and specific provincial initiatives. As things stand now, the Government of Canada invests $60 million each and every year to these programs with the provinces spending an additional $400 million.

The NISA account and federal-provincial crop insurance are designed to help farmers deal with normal market risks and weather. NISA is a voluntary program designed to help producers achieve stable incomes over the long term. It provides producers with the opportunity to deposit money annually into their income stabilization account and receive matching government contributions so their account grows. In lower income years producers are expected to bring their incomes up by making withdrawals from the funds they set aside in previous high income years.

Currently there are 105,000 Canadian producers with a total of $1.2 billion available in their NISA accounts. They can withdraw that money at any time. Up until October 14, 24,000 Canadian producers had withdrawn $261 million. These funds are helping many farm families weather the current market downturns.

The existing safety net system was designed to deal with the normal cyclical risks that markets and mother nature present but the minister of agriculture has recognized that what has been happening over the past year and a half has been exceptional. All the cycles essentially bottomed out at the same time and a number of other factors came together to make the situation even worse. Many farmers' revenues plummeted as prices fell from the highs of the mid-nineties to dramatic lows.

That is why the Government of Canada responded with the AIDA program. It was developed in consultation with industry and the provinces. It is providing $1.5 billion with 60% coming from the federal government and 40% coming from the provincial governments. This money has been paid out over two years to help farmers through an income crisis.

In announcing AIDA in December 1998 the Minister of Agriculture and Agri-Food said:

The objective is to target the farmers in Canada who, I am confident, will succeed in the long term but need help now, due to circumstances beyond their control.

The AIDA program builds on NISA, crop insurance and other existing risk management mechanisms. It was designed to meet the green criteria of the WTO agreement on agriculture.

Because of our international commitments and obligations, I do not believe answers can be found by stepping back 10 years into the past with a repeat of ineffective, inequitable and unaffordable subsidies. Such measures cannot be financially sustained nor are they suited to an agri-food sector that is very dependent on the world marketplace.

Instead the government will continue to defend the interests of Canadian farmers in the international trade arena. We will use the upcoming world trade negotiations to work toward removing trade distorting subsidies so our farmers can compete on a level playing field in the global trading system.

Agriculture and Agri-Food Canada has a long history of working with farmers and the agri-food industry to achieve those things which make our industry thrive. Despite recent challenges, our sector as a whole is remarkably strong. Our existing safety nets and now AIDA will help ensure it stays that way.

That said, the Government of Canada understands that the current programs can be improved upon. We are currently in the process of considering additional modifications to the AIDA program for the 1999 tax year. We are setting out the parameters for the long term safety net options for the future. All changes to AIDA and/or the development of any long term safety net options will be done in consultation and in partnership with the provinces, with the minister's national safety nets advisory committee and also with farm organizations.

Canadian producers have faced adversity before and have come through it, thanks to their own strength and innovation and thanks also to the efforts of all governments working together.

The ability of the agriculture and food industry to overcome the current challenge rests on the strength and stability of its foundation at home. Over the past year we have been working hard to provide that stable foundation by improving the existing safety net system and by developing new tools like AIDA. That work continues.