Mr. Speaker, the member opposite just spoke of the budget inspiring hope in Canada and among Canadians. Heaven help us if he thinks that is what it is doing.
It is both unfortunate and undemocratic that the government is forcing debate on the entirety of Bill C-17, the budget implementation act. Bill C-17 is an omnibus bill. Essentially it addresses four major issues and lumps them under one bill. Therefore it could be difficult for members to vote totally in favour or against the bill as I believe that each issue merits its own debate.
Having said that, I will be discussing one portion of Bill C-17 which deals with grain transportation.
Bill C-17 would increase production and the government's share of freight rates under the Western Grain Transportation Act from 10 per cent to 15 per cent for crop years beginning on or after August 1, 1994.
A goal of the Reform Party is to change the way the agriculture industry is dealt with by the federal government. The movement of grain to export positions is highly regulated in Canada and that is an understatement, to say the least.
Since 1897 when the Crows Nest Pass agreement became law, the government has regulated and controlled grain freight rates. It fixed and set freight rates western farmers paid Canadian Pacific to move their grain to what is now Thunder Bay.
In the early 1920s legislation was passed expanding and extending the effect of the original rate set in 1897 to all shipping points on the prairies, to all railways and to additional destination points. In short, the legislative action in the 1920s was the most significant turning point in the history of the Crows Nest freight rates for grain.
It changed the system from one governed by a two-party agreement between the federal government and CPR to one by which Parliament unilaterally imposed a national policy by statute. The industry has been paying ever since because of government regulation.
During the 1960s railways began to absorb losses as the cost of shipping grain exceeded the revenue from fixed freight rates. As a result, the railways could not afford to make necessary investments in the grain rail system. The MacPherson royal commission on transport which reported in 1961 concluded that the Canadian railways were losing money on transporting grain at statutory or government set rates.
In 1982 consultations with farm groups were held on transportation policies led by Dr. Clay Gilson. As a result, he recommended payments be made to the railways initially but over a period years these payments would be phased to the producers until producers received 81 per cent of the benefit and the railways received 19 per cent.
One year later in 1993 the federal government's response to the transportation crisis was to enact the Western Grain Transportation Act. The WGTA provided for the continued regulation of freight rates and a subsidy based on the difference between what the producer paid to ship grain in 1982 and the actual cost of shipping grain in the same year.
In essence the WGTA increases the freight rates so that the railways would have enough revenue to maintain the grain transportation system. What about the farmers? What does the WGTA do for them? Government payments to the railways would defray the cost to farmers of moving grain but producers would pay an increasing portion of rail costs over time.
In the WGTA a system was born that has regulations regulating regulations. The previous federal government reduced the Crow benefit from last year of $720 million to $650 million in the current year. The Conservatives planned further 5 per cent reductions next year and the year after if Crow benefit payments were not changed to be paid to farmers instead of railways.
The current government dropped the Conservatives' conditions and instead is proposing a 15 per cent cut next crop year. That leaves the Crow benefit at about $614 million, a drop of $106 million in two years. That means producers are left holding the proverbial bag. They will be paying more for freight while at the same time putting up with big brother, the federal government and its stifling regulations.
I submit that the entire system is flawed, bordering on the absurd. The WGTA prevents farmers, shippers and railways from introducing savings into the system but at the same time with Crow benefit cuts farmers have to use a high cost system with less money to pay for it. The strangle hold that regulations have over grain shipping is squeezing the life out of many western producers. Farmers must put out more money for freight and severe regulations prevent them from using cost saving ways to collect and ship grain.
We are asking the government to consider introducing an entirely new piece of legislation to govern the way farmers move grain, a piece of legislation that is fair to the farmers and railways alike.
The WGTA promotes provincial offsetting programs, distorts domestic prices and promotes railway inefficiency. It is also a barrier to investment in the industry. It is clear that something needs to be done.
We advocate a trade distortion adjustment program to defend exporting producers against foreign subsidies on competing products. The program is all encompassing to the agriculture industry and would benefit producers by taking into account their individual needs.
The program would include an automatic triggering mechanism based on the historic volume of exported products. There would be no producer premiums and legislation would ensure timely payout to affected producers within this same market period.
It is important to vigorously support and defend Canada's food producers against the effects of matters over which they have little control such as foreign subsidies and trade distorting influences. What Canada needs is a viable market driven industry through the application of federal safety nets, programs that are production neutral, not commodity specific.
Canadian producers need to be able to transport their grain to foreign markets without barriers. The federal government is only chipping away at the WGTA, thereby passing further financial burden to the producers.
As the system now stands the backlog and confusion in grain movement are a direct result of the inability of government managed system to serve the agriculture industries. We need only look at the rail car shortage which is not only cutting into sales and costing farmers money but damaging relationships with important customers as well.
Canadian railways are not meeting their unload targets at Canadian ports as required by WGTA. More influence must be placed in the hands of those who have a legitimate stake in the industry, those who rely on the agriculture industry to make a living, namely the farmers. They are the producers and must have greater participation in how the industry operates.
The federal government is proposing to reduce its share of freight rates under the WGTA in the bill. By doing so the government is leaving farmers with the worst of both worlds, increased freight costs and a high cost, inefficient and inflexible system.
The federal government has a good opportunity to change the way things are done in the agriculture industry. Surely it can see that over regulation is crushing the hope of Canadian producers. We need a single program to protect our farmers, not a mix and match of of programs.
There has been some movement in this direction, judging from the recent meeting between the federal agriculture minister and his provincial counterparts.
The government is only justified to protect Canada's agriculture producers from international forces as other countries are continuing to generously subsidize their agriculture industry. I urge the government to continue negotiating the GATT in an attempt to get international subsidies down so subsidies in this country can go down accordingly.
We must work to make the agriculture industry more self-reliant, not only for today but for the future as well.