Jerry Pickard

[Farm Debt Mediation Act, June 17th, 1996]

Madam Speaker, I am pleased to begin debate on the motion to refer Bill C-38, the farm debt mediation act, to the Standing Committee on Agriculture and Agri-Food prior to second reading.

The government promised to give MPs and parliamentary committees more influence. By sending bills to committee before second reading, something that was done very rarely in the past, we are delivering on that promise. This procedure gives committees a chance to make major amendments to bills. It also allows us to make doubly sure that no concern has been overlooked.

The Minister of Agriculture and Agri-Food has chosen to follow that route with this bill because he wants to ensure that stakeholders have every opportunity to be heard on this important piece of legislation.

As a former chair of the Standing Committee on Agriculture and Agri-Food I share with him the confidence that committee members will be able to make positive contributions to the farm debt mediation process through their deliberations and hearings.

The issue of farm debt is not a new one. It has been with us for a long time. Farmers must make significant investments in seed or stock, fertilizer or feed, machinery or buildings, long before they see a return on those investments. They are subject to the whims of nature and markets. When these turn bad farm debt can reach crisis proportions.

That is essentially what happened in the 1980s. High interest rates at the beginning of the decade diverted large amounts of cash for debt servicing while low returns on sales reduced inflows of cash. In addition, market values of many assets, especially land values, depreciated over the same period.

By the mid-1980s many farmers were in arrears on payments to their creditors. In response, the Farm Debt Review Act was proclaimed in 1986. That act established farm debt review boards in every province to provide impartial third party mediation between farmers and creditors.

In our 1993 agriculture platform we promised to strengthen the farm debt review process. This legislation will do just that. It will create a new farm debt mediation service to replace the farm debt review boards as they are phased out.

This new service will help farmers position themselves to better adapt to new income opportunities as well as helping those who are experiencing financial difficulties.

It has been designed around three major considerations. It should build on the existing services and not duplicate them. It should be administratively efficient. It should cost less than the existing farm debt review board process.

Funding for the new service will come from the $240 million Canadian adaptation and rural development fund announced in the 1995 budget to help the sector make a transition to a more efficient and competitive market economy.

This proposal was not drafted in an ivory tower by isolated bureaucrats. Agriculture and Agri-Food Canada consulted with representatives from major farm organizations, provincial departments of agriculture and lenders last summer. The department also held seven regional focus groups with farmers and farm management advisers.

The purpose of these consultations was to identify the elements of a new farm income review service and possible ways to deliver it. The department then drafted a program design reflecting what emerged from the consultations as the most important elements of the new service.

A national consultative review committee was set up with representatives from farm organizations, lenders and two provincial governments. The committee met last December to discuss the proposed program design and identify concerns and suggestions.

In January, the Farm Debt Review Boards and all provincial governments were invited to comment on the proposal. Based on the input received, the government is proposing the farm debt mediation service. The new farm debt mediation service will provide insolvent farmers the same benefits as the current Farm Debt Review Boards, that is a stay of proceedings, a review and mediation.

Essentially it will continue to allow them to undergo mediation and work out, with their creditors, a way to resolve their debts. One

change from the current procedure is that farmers and creditors would be able to appeal decisions on stays of proceedings to an appeal board.

The current Farm Debt Review Board members could be appointed to the new appeal board while qualified mediators would be selected through the regular government contracting process. Farm Debt Review Board members, who are currently mediators under the Farm Debt Review Board Act, could be put on the list of mediators under this new program. Mediators would act alone rather than in three-member panels as they do under the current act.

These changes and the limiting of the new proposed act to insolvent farmers could reduce the program costs by more than $1 million per year from an estimated $3.5 million in 1995-96 to $2.2 million per year.

The consultations also showed that farmers and farm organizations, provincial representatives and industry could support a consultation service that is not tied to a debt crisis. Such a farm consultation service would concentrate on financial assessments to help farmers who have cash flow problems and to identify income opportunities and reduce costs to develop more viable operations.

Depending on their particular situation, farmers could also be referred to provincial extension staff, other federal or provincial programs or the private sector as appropriate for other types of services.

Because referral to other services and programs will be a key component of the farm consultation service, it is important that delivery of this service be developed through further consultations with farm organizations and others such as lenders, Canadian farm business management program members and the provinces.

It would also be important to have an up to date inventory of services in every province. Delivery costs for the farm consultation service would be kept to a minimum. This service could be delivered by the farm debt mediation offices or it could be developed and delivered in co-operation with the provinces or other existing programs where appropriate. The service would provide assistance to help farmers look at other income opportunities for diversifying, expanding and creating value added enterprises and to develop farm plans.

I have just explained how the new farm debt mediation act would work. I would ask members of the House to approve the motion to refer this proposed legislation to committee now, prior to second reading.

[Agricultural Marketing Programs Act, June 17th, 1996]

Mr. Speaker, I am pleased to begin debate on the motion to refer Bill C-34, the agricultural marketing programs act, to committee before second reading.

The Minister of Agriculture and Agri-Food has asked the House to approve this procedure because he wants the committee to ensure that all members with any interest in this legislation have opportunity to be heard.

During the 1993 election campaign we made commitments to give MPs greater influence in the legislative process. By moving to proceed directly to committee on this bill, we are following through on those commitments.

Even though we consulted extensively across the country with this bill, we are following this procedure to make sure no thoughts or concepts are overlooked.

The objective of Bill C-34 is to provide a common legislative base for financial marketing programs in agriculture and to reinstate provisions for interest free cash advances.

Currently, the efficient and orderly marketing of agricultural commodities is supported and encouraged through four acts, one of which is the Prairie Grain Advance Payments Act, developed to assist producers marketing Canadian Wheat Board crops, wheat and barley by providing them with cash flow soon after harvest when marketing bottlenecks often occur.

Second is the Advance Payments for Crops Act, which is to assist producers who market all storable crops other than Canadian Wheat Board wheat and barley. Third is the Agriculture Products Co-operative Marketing Act, designed to encourage producers to process their products co-operatively. Fourth is the Agricultural Products Board Act, used to facilitate intergovernment sales and to purchase products from domestic markets to be sold at a later date when the market is not under pressure.

These acts were all developed at different times. They reflect the domestic, North American and world markets and marketing systems which were in existence when they were created. Although these different acts have served farmers well, many farmers and farm groups have found it confusing to have four different pieces of legislation.

They have also expressed concern that the present legislation does not treat all producers equally. For these reasons the government is proposing to replace the four acts by one new piece of legislation called the agricultural marketing programs act.

This legislation is the end result of extensive consultations throughout the sectors. The federal government consulted more than 80 producer groups directly for their input on Agriculture and Agri-food Canada's financial programs. We also asked over 160 producer groups and other organizations including provincial governments to review a summary report from the consultation process and give us their comments.

The proposed act takes into account as many of the suggestions expressed by producers as possible. It has received widespread support among the producer groups.

The new legislation responds to the needs of producers. It will treat all commodity groups and all regions of the country alike. At the same time, the new act is flexible enough to meet the needs of producers who operate under different and diverse marketing systems throughout the country.

Another important point is that the new act will tighten administrative controls, thereby reducing administrative costs. It will also eliminate inconsistencies and inequities between the two previous advance payment programs. This new act is thus in line with the government's commitment to increase budgetary efficiency and get the structure of government right.

This new act also fulfils the promise we made in the last federal election campaign and repeated in the February 1995 budget to introduce a statutory interest free advance program to replace the current cash flow enhancement program which expires next year.

I emphasize that the program will be statutory. It will eliminate the uncertainty that cash strapped producers faced in the past while waiting for government to announce whether interest free cash advances would be temporarily granted.

Like any other industry that operates in a competitive environment, farmers need to sell their products in order to pay their bills. Cash flow problems sometimes force them to sell their crops and products right after harvest when prices are not generally favourable.

The new act will provide cash advances to farmers, allowing them to sell their products not necessarily at harvest but at a later time. This allows producers to sell their output when prices are better instead of dumping the products on the market at the same time, a practices which depresses the prices.

The agriculture marketing programs act will avail cash advances up to $250,000 to qualified producers. With the first $50,000 interest free, the balance will be lent a preferential rate, generally less than the prime rate.

The new legislation will also benefit co-operatives. The pooling provisions will be maintained in the new act but will be streamlined to encourage more producers to market co-operatively and to get into the value added processing so they can increase their revenues.

The pooling provisions establish an anticipated selling price for the pooled product and offer a price guarantee of up to 80 per cent of that price. This will help co-operatives avoid serious losses in the event of a significant, unexpected downturn in prices. The price guarantee will also allow co-operatives to negotiate larger loans with lower interest rates from financial institutions.

The new act will also deal effectively with compliance problems experienced under the Prairie Grain Advance Payment Act.

In recent years, the act has experienced a significant rate of defaults. Although an effective inspection campaign has greatly reduced the default rate, producers have asked the federal government to find a permanent solution to this problem so that they can have confidence that all other producers are complying with the law.

The new act will reduce the number of defaults and thus restore producer confidence. The bill stipulates that producers who default will have to pay all reasonable costs of collecting that default. In addition, producers will pay interest on the default advance from the date the advance was issued until it is completely paid. Finally, they will not be able to get another advance under any other permit book or any other business organization until previous advances and any other defaults are fully repaid.

It is only fair to the majority of producers who fulfil their commitments that these procedures be tightened up. In fact, many of these measures have already been implemented administratively and have produced positive results. Defaults have dropped from $64 million in the 1993-94 crop year to under $10 million in the 1994-95 crop year.

With the implementation of this bill, defaults will be kept at acceptable levels through legislative rather than administrative means. This will result in significant savings to the taxpayer.

Since the majority of these changes in the Agricultural Marketing Programs Act are directed at the reduction of defaults, processors who participate in the program will probably not notice any changes compared to the Advance Payments for Crop Act or the Prairie Grain Advance Payments Act, programs of the last few years.

In conclusion, I believe this new legislation represents real progress for our farmers who get a more stable operating environment and progress for our taxpayers who get a more effective use of their tax dollars.

[Canadian Wheat Board, June 14th, 1996]

Mr. Speaker, at the present time I think it is inappropriate to comment on what is happening with western grain transportation.

We have a grains panel in place which will report at the end of this month. My colleague well knows the commission will come back with recommendations on what should be happening.

[Agriculture, May 31st, 1996]

Mr. Speaker, the Canadian adaptation and rural development fund was announced in the 1995 budget. It really is an excellent example of how the federal government and industry are working together.

The federal government is taking a new approach to the whole problem of working with industry. We are encouraging it to appoint stakeholders in a common way to decide how those rural adaptation dollars will be used in order to benefit the industry.

The Agriculture Adaptation Council, a non-profit coalition of 47 groups in Ontario, has established a fund and is working to make certain Ontario establishes positive movements for adaptation.

Quebec is doing the same thing with two very prominent agricultural groups in Quebec. They have already received funding as well.

[Financial Administration Act, May 17th, 1996]

Mr. Speaker, it is my pleasure to address the House as we resume debate on Motion 166.

This motion was introduced by the member for St. Albert. As the House will recall the proposed motion calls for an amendment to the Financial Administration Act. This amendment would require all departments and agencies to present to the House action plans.

These action plans would set out planned activities and timeframes for acting on corrective actions required by the auditor general's reports.

We have had time since the debate began in March to consider what was said. Today it is important that we recognize that the member for St. Albert, the mover of this motion, put it forward in the pursuit of good governance. It is the spirit of this motion which I applaud. It is something on which we all agree.

The pursuit of good governance and accountability were substantive themes. They are the reasons why we have to make certain that all dollars are spent properly. I say substantively because it is easy to sidetrack certain things, look at debates in the House, finger point and so on. However, when I see an honest and open debate on issues as important as getting government right it makes me proud as a Canadian to serve this House, proud to serve people.

Today we have the opportunity to continue the debate and refocus our thoughts on this motion. I would like to pick up on some of the points that were raised on March 21 when it was last discussed and refocus the discussion on what we are really talking about: accountability and good government.

Sometimes it is easy to forget all of the key checkpoints in our loop as we currently have it existing. I will try to revisit some of the elements of this circle while we consider this motion.

The auditor general is an officer of Parliament. He is not a civil servant. He does not work for the government. The auditor general's job is to call attention to anything that he considers to be of significance about the workings of the government. He provides us with an independent assessment of how things are working. He takes his job very seriously. The auditor general is committed to making a difference for the Canadian people by promoting in all his work for Parliament, answerable, honest and productive government.

As members will recall, the auditor general has tabled three reports this year. In total, he audits about 200 organizations each year. In his part III of the estimates, he points out that he audits departments and agencies, crown corporations and other organizations from large ones such as the Governments of the Yukon and the Northwest Territories to small organizations such as the Army Benevolent Fund. Canadian taxpayers collectively pay about $50 million each year for this service.

With each report, members of this House, the media and citizens alike focus their attention on the performance of the government. They listen to the auditor general. They question the government and, as a consequence, the government is highly motivated to respond to the concerns raised in each of the reports. There exists, as a fellow member aptly described it, a circle of accountability.

Each department and agency has the opportunity to respond to the comments made by the auditor general directly in the published report. This is the first opportunity the government has to indicate what it will do to respond to the auditor general's concerns and findings.

Daily question period provides an opportunity for members to question ministers further about the operations of government. As members will have noted from May 7 when the auditor general tabled his latest report, question period can become an important forum for challenging the government on the points raised through the auditor general's reports. Canadians, through their representatives, call government to account for its activities and can and do ask what will be done to remedy any shortcomings.

The auditor general follows up every two years on his recommendations. He measures the progress that the government has made in responding to his concerns. He reports his findings in his annual report. This reflects the diligence of his office.

During our debate of March 21, one of the members suggested that Motion 166 would legitimize the auditor general's work. The work of the auditor general is valuable in every respect and is very much respected in this House. I cannot imagine why a member felt that the reports of the auditor general somehow needed to be legitimized. I am sure that the member was not suggesting that we collectively pay $50 million for something that requires a motion like this to legitimize its existence. The auditor general has the full confidence of Canadians. His reports do not need to be legitimized.

In his part III of the estimates, the auditor general noted that he had followed up 572 of his 786 recommendations made between 1989 and 1993. His review indicated that 23 per cent of his recommendations had been fully implemented, and that satisfactory progress was being made on an additional 41 per cent of the cases. Keeping in mind that a number of recommendations were rendered no longer relevant, these findings mean that a significant percentage of the auditor general's work is acted on in a significant, timely, satisfactory manner.

As a member said, it is important that we have some production out of criticism. I think the numbers more than adequately speak for themselves. The numbers are a testament to the legitimacy of the auditor general. They are also a testament to the effort that the department and agencies put into ensuring problems pointed out by the auditor general are properly addressed.

The number of recommendations implemented is not a sufficient indicator of the success of this office. One must look at the individual success stories. The auditor general can and does in part III of the estimates offer plenty of examples to show how government has successfully acted to follow up on opportunities he has identified for improvement.

One of the auditor general's priority areas in recent years has been revenue collection. In his 1996-97 part III of the estimates, he outlines several areas where Revenue Canada was responsible and responded well to his suggestions. This is one of many examples.

As the member for St. Albert, the mover of this motion, can attest, the Standing Committee on Public Accounts also plays a key role in the circle of accountability. The committee is chaired by a member of the official opposition. One of its more important jobs is to review the findings of the auditor general's report with departmental officials. I would like to publicly commend the efforts of the Standing Committee on Public Accounts.

As the mover of this motion can attest, it is a very busy team. As a result of the hearings, I believe the committee presented to the House 15 reports in 1995. Each report, based on the findings of the auditor general, called for and received a formal response from the government. Follow-up as careful and extensive as this should not be underestimated.

The Standing Committee on Public Accounts does not have the time to call all departments and agencies mentioned in the auditor general's reports. This does not mean we let the departments off the hook. Each summer the committee contacts each and every department that was not called to testify and requests an update on actions taken. If it not satisfied with the progress achieved, the committee may call the department at a later date.

I hope I have provided an adequate snapshot of the explicit points in the current circle of accountability as it relates to auditor general's reports. The circle exists. It is well defined and working well.

We must ask ourselves how much value this motion is to the circle. Will the proposed legislation simply be adding further process, which is something we must avoid? This is where I would like to pick up on the other theme that ran through our last debate on this motion, the pursuit of good government.

On March 7 the government released its progress report-

[Canadian Wheat Board, May 13th, 1996]

Mr. Speaker, it is very clear that the minister has acted. He put together a panel to study the grain issues in this country and he is making certain that every voice is heard. He is making certain that this grain panel has the opportunity to report back to the government before action is taken.

It is proper when a panel or a group is put in place to give it time for its consultations and to listen to its recommendations.

[Canadian Wheat Board, May 13th, 1996]

Mr. Speaker, I thank my colleague for the question.

The export of Canadian grain still remains a federal legislative responsibility. It is not proper for a province to take on unilaterally a decision which would affect grain farmers right across the prairies, which would affect their livelihood.

Over the last several weeks the panel we have set up looking at the grain question has had opportunity listen to the concerns of every province, including Alberta, and to the problems of all the producers. It is coming out with a report in June.

We will look at the report. We are certainly concerned about the whole issue of grain across the country.

[Agriculture, April 17th, 1996]

Mr. Speaker, I am pleased to have the opportunity to respond to Motion No. 176 on behalf of the government.

The hon. member for Kindersley-Lloydminister moved:

That this House support the creation of an environment in which agricultural producers make their own decisions as to how their products are marketed.

It is not clear from the wording of the motion exactly which commodities or marketing systems he is referring to. However, through his comments now and through his statements in the past we can assume it is wheat and barley he is targeting in western Canada.

The debate over the Canadian Wheat Board and current grain marketing systems has been going on for many years, with a wide range of opinions from status quo to the abolition of the board. Some are saying farmers are better off dealing with the single desk of the Canadian Wheat Board while others say farmers would benefit from being able to market their grain when and where they want.

The assumption that dual market and Canadian Wheat Board could co-exist has not been proven. The board says dual marketing cannot work because it must make an initial payment. If initial payments are too low compared with spot price, it will not get any wheat or barley. If the payments are too high, farmers will try to deliver all of their product to the board.

Furthermore, the free trade agreement and NAFTA both rule out re-establishing single desk marketing after an experiment with dual marketing unless United States interests are not hurt.

As the Minister of Agriculture and Agri-Food has said, you cannot put Humpty-Dumpty back together again. If we move off on an experiment the Reform Party is suggesting, we may endanger the marketing system throughout the rest of history in Canada.

Those who favour dual marketing want the wheat board to behave like a grain company. The Canadian Wheat Board cannot be a grain company like any other. It is a marketing agency. It does not buy grain from farmers, it sells grain on their behalf. It does not make a profit. All the revenues from sales are returned to the producers. If markets fall, the board does not take the loss, farmers do.

There have also been public demonstrations against both options. In general, the demonstrators have been shouting at each other, not trying to persuade each other of the rightness of their views.

What has been missing from the discussion is a thoughtful, face to face, factual examination of the issues. There has been a lot more heat than light spread on the issue. There have been calls for the federal government to hold a plebiscite. The problem with that option is that complex questions on marketing structures or compatibility of different systems is difficult to address with a simple yes or no that a plebiscite would only allow them to say.

For example, while an Alberta plebiscite produced a vote in favour of dual marketing, many producers said they would have voted differently if it meant the end of the Canadian Wheat Board.

It must be recognized that making significant changes to a marketing system to accommodate the wishes of one group of individuals may damage the financial returns and continued operation of a preferred marketing choice of the majority of farmers.

To help focus this debate, last July the minister put a grain marketing panel in place to look at all facets of grain marketing in Canada. That panel has now completed its town hall meetings and formal hearings and is now preparing its written report. One of my colleagues will have more to say on this subject later in the debate. This process is providing grain farmers, industry and other stakeholders an opportunity to participate in a number of grassroots discussions. I believe this is far more productive than passing a vaguely worded motion on this decision.

In a previous debate in the House the hon. member complained that producers had no say. He also made that complaint today, that producers have no say in how solutions would be reached in this problem. The grain marketing panel has given them that input. It has also allowed other interested parties to be heard.

He appeared before the panel on March 18. I was at the panel the day he appeared. Usually people take part in a process only if they believe it is valid. I congratulate the hon. member for recognizing the minister has the right to appoint a panel and explain his viewpoints at the table.

I wonder why the member is not prepared to wait for the panel presentation when it makes its report. To pass this motion would be to repudiate the grain marketing panel before it is finished its work.

I urge my fellow colleagues and members of the House not to support this motion. Instead they should allow the grain marketing panel to complete its hearings and produce its report. Then the Minister of Agriculture and Agri-Food will be able to make a decision on the future of grain marketing. Then we can all be

confident in the knowledge that producers have spoken and have been heard.

[Borrowing Authority Act, 1996-97, March 21st, 1996]

That is great planning.

[Canadian Wheat Board, March 5th, 1996]

Mr. Speaker, I thank my colleague for the question.

The minister has looked at this very carefully. At this time he is having round table discussions with people right across the country. He is trying to look at that problem with industry, government and all people in the area combined to come up with a reasonable suggestion. The minister is looking at this and will report back to the House when he has plans in place.