Madam Speaker, I am glad to have the opportunity to comment on the Official Opposition's motion denouncing the government for giving Western farmers an unfair advantage over their Eastern counterparts.
The facts do not support the motion. They show that each individual, each region and each sector contributes its fair share, no more and no less, to reducing the deficit.
The 1995 Budget contained fair and balanced measures to address circumstances that differ from one region and sector of the country to another. It is worth mentioning that our reform of the WGTA is consistent with the position adopted by the Quebec coalition in December 1994.
Generally speaking, the government is eliminating its transportation subsidy programs, including the WGTA in the West, feed freight assistance in BC and Central and Eastern Canada, as well as various transportation subsidies in the Maritimes. What we are looking at is not a proposal to draw a parallel between the East and the West, but rather a principle to be implemented nationwide.
However, where we have eliminated transportation subsidies, we are providing assistance to those who are hit the hardest, be they in the East or the West.
As the hon. members know, the Western grain transportation subsidy will be abolished as of August 1, 1995.
In the adjustment measures it has offered, the government took into account the potential impact of the elimination of this 96-year old commitment toward the Western grain industry. The prairie farmland owners will get an initial payment of $1.6 billion in relation to capital, which is equivalent to three more years of the annual subsidy of $560 million.
In the budget he brought forward, the Minister of Finance made it clear that this ex gratia payment to prairie farmland owners was to offset the potential impact of the WGTA reform on the land values. This is not a gift from above nor a regional development subsidy.
The financial aid granted is not excessive and does not provide undue benefits to Western farmers. However, it will help grain producers adjust to changes. The GATT Agreement established certain disciplinary rules for export subsidies, but the prairie grain producers still have to compete with subsidized wheat exports.
The dairy subsidy is to be reduced by 30 per cent over a two year period, but the government remains committed to maintaining our national supply management system.
This system is one of the major benefits of federalism and it gives a reasonable income to efficient producers both in the east and the west.
Dairy farmers do not get a compensation package because their subsidies, contrary to the WGTA subsidies, have not been eliminated. But we are looking for ways to improve the dairy industry competitiveness. Consultations will take place with dairy farmers on the future of their subsidies.
We have been considering for 25 years the pros and cons of a reform of western grain transportation subsidies. So, we understand very well the reasons behind such a change. The solution we found with the industry takes into consideration the new circumstances of world trade, our fiscal situation and the need to be more sensitive to market forces.
This kind of dialogue did not take place in the dairy industry. We do not advocate any particular reform, but we think the time has come for us to determine with farmers and other players the best way to support the competitiveness of the dairy industry. We intend to initiate discussions this year.
The minister has announced that his parliamentary secretary, the hon. member for Prince Edward-Hastings, will hold consultations with the industry on the way we should use the large amount of money still available.
Cuts in agricultural spending take into account the improved financial outlook for the agricultural industry, the new discipline imposed by the new general agreement on international subsidies and the difficult fiscal situation of the government.
Interestingly enough, while the official opposition condemns us because we allegedly make deeper cuts in eastern Canada than in western Canada, others accuse us of doing just the opposite. Critics take the elimination of the WGTA subsidies out of context and ignore the $1.6 billion compensation payment. The official opposition does the same with the 30 per cent reduction in the milk subsidies and forgets about factors that will cushion the impact of that reduction and the government's commitment to the national supply management system.
The 19 per cent cut in the agriculture department budget is exactly the same as the average reduction in all federal departments. In other words, the budget cuts at Agriculture and Agri-Food Canada represent about 4 per cent of the total cuts of $7.2 billion proposed in the federal programs review. The fact that the AAC expenses represent approximately 4 per cent of the total federal expenses is not a coincidence.
We had some difficult choices to make given the critical situation of the debt and the deficit. All the budgetary changes reflect the need to materialize the government's vision of the agri-food sector in Canada and the need not to let the deficit jeopardize our future.
Our vision is based on financial security and the vitality and viability of that sector. Only a continuing and sustainable growth of the rural regions and the urban areas will make this materialization possible. This government's priority is to implement the necessary framework to help that sector find new markets, create jobs and ensure its own development.
An investment in the agri-food sector is an investment in growth for all regions of Canada-whether from the East, the West, the North or the South.