Elwin Hermanson

[Transportation, June 18th, 1996]

Mr. Speaker, the minister of agriculture wants to sell 13,000 government hopper cars to producers. Individuals from the transport department have stated that the railways under the current operating agreement have right of first refusal which means they can match any offer put on the table and the railways own the hopper cars.

The SEO proposal has failed. The producer coalition is crumbling. Will either the Minister of Agriculture and Agri-Food or the Minister of Transport please make it crystal clear to any groups interested in buying the hopper cars that the railways clearly have the final say as to who purchases these cars?

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

Madam Speaker, I will speak for 10 minutes to Bill C-38, the farm debt mediation act. As the Parliamentary Secretary to the Minister of Agriculture and Agri-Food indicated in his remarks, which were similar to remarks he made to Bill C-34, my remarks could be similar as well.

I expect we will have ample time to review the bill in committee since it is being referred to committee prior to second reading and amendments could be considered. Like Bill C-34, we believe Bill C-38 could be approved after hearing witnesses and after having a longer look at the bill. We might be able to put the bill in an acceptable form should the government agree to the amendments.

This bill replaces the old Farm Debt Review Board Act with a mediation act. It is not an earth shattering measure. It will not change the farmscape a whole lot and is not terribly controversial. Similar to my comments regarding Bill C-34 which I suggested was a diversionary tactic, this bill could fall into the same category. Maybe we should call it a stalling tactic in this case.

These are desperate times for the Liberals in rural Canada. They have snubbed the concerns and values of the rural areas with their lack of legislation since taking office in October 1993. One has only to mention Bill C-68 to know very quickly that Liberals are not very popular in rural Canada. Bill C-68, the gun control bill, was an insult to rural Canada. The minister in effect said: "I do not trust you, rural Canada. I do not like your lifestyle and I think I should interfere with it". The Minister of Justice proved that he did not understand rural Canada and the members of the rural Liberal caucus are desperate for some legislation they can put forward in order to say that they are concerned about rural Canada.

Bill C-68 to rural Canada was like telling urbanites they could only buy a certain brand of car. It was like telling people they had to wear a certain style of clothes. This is middle ages stuff which certainly does not go over very well in rural Canada. Rural Canada is not very happy with this Liberal government. The Liberals are grasping at straws to appease some of the bad feelings they have created among the voters in the rural ridings right across the country.

Another piece of legislation this Liberal government thought was a tremendous priority and rushed it through a few weeks ago was Bill C-33. That also did not go over very well in rural Canada. That was the bill the Liberals claimed would prevent discrimination against gays and lesbians but which Reformers said was actually a stepping stone to special benefits for a group in society. We are justified in our criticism of that bill. Just the other day the human rights tribunal indicated that as a result of Bill C-33 spousal benefits were required by employers.

The Liberals say: "We have to counteract this criticism somehow. Let us bring in Bill C-38, a bill to bring in a mediation act to replace the Farm Debt Review Board Act".

There seems to be some unhappy Liberal members when I talk about Bill C-33 so maybe I should mention a couple of statistics. Recently an Angus Reid survey showed what is happening in rural Canada as far as the issue of spousal benefits is concerned. I was going to move on but they seem to want me to talk about this issue some more.

In Manitoba and Saskatchewan, 54 per cent of the people on the prairies, urban and rural-and I am sure it is even stronger in the rural parts of the provinces-are opposed to spousal benefits, and another 4 per cent are undecided. It is strong opposition. In Alberta it is even higher at 55 per cent opposed and 7 per cent undecided. It is a smaller minority that supported the actions of the Liberal government in Bill C-33.

In trying to heal the wounds, the Liberals have brought forward Bill C-34 and Bill C-38. They can talk about the wonderful things they will accomplish with these two pieces of legislation as they simmer on the back burner over the summer. Then we will get into studying them in the fall when we come back.

Why is farm debt a problem? And it is a problem. Farm debt has been a problem for quite some time. Let us look back to what the Farm Credit Corporation did a decade or two ago. It became the lender of last resort.

It made some very foolish loans, loans it should not have made. It actually was the leader that got a lot of banks and credit unions pushed in that direction as well. It was making loans based on unreasonably high expectations in the farm sector.

Then the farm sector was hit with high interest rates of 19, 20, 21 up to 25 per cent interest rates plus falling farm commodity values which occurred during the 1980s. Suddenly a lot of farmers had lost their equity, had a high debt load and were not able to carry that load in their operation.

The Farm Credit Corporation took ownership of the land. The banks took title to the land. The Farm Debt Review Board was put in place to facilitate agreements between the lenders and the land owners to ease the pain that a lot of farm producers were going through when they were not able to make their payments to the Farm Credit Corporation and the other lenders.

The Farm Credit Corporation seems to be back in this business again of offering loans that perhaps it should not be offering. The minister has talked about expanding the role of the Farm Credit Corporation. Again we see land values escalating. We have to wonder if we will retrace the steps we took during the 1980s. This farm mediation act may have more impact in the future than we might wish to believe at the current time.

It is fine and good to look at bills like the farm mediation act as a way to facilitate some of the problems farmers find themselves in when they become cash strapped and unable to make their payments on loans they have taken out.

Let us look at the industry in broader terms and determine why farmers and other businesses get themselves into problems in Canada and we have bankruptcies, foreclosures and land going into receivership. It is because the cost of doing business in Canada is very high.

If the Liberal government would address that concern first before it replaces the Farm Debt Review Board Act with the farm mediation act it would be of far more benefit to producers who are feeling the cost-price squeeze than this piece of legislation which it is using to divert attention away from its lack of action.

Canadian farmers pay high taxes. The Liberal government has increased taxes and seems bent on maintaining a high cost of doing business in Canada. Farm inputs are high. The committee looked at farm inputs. It realized that some of the input costs are high because of the regulatory burden placed on farmers.

We recently had an ag-biotechnological conference in Saskatchewan where the premier of Saskatchewan said one of the high costs placed on that industry is that of high regulation. The pesticide registration act needs to be changed because of the regulatory burden passed on to consumers.

While Bill C-38 may be well and good to debate in the House, and I am sure we will when we come back in the fall, it is not the key critical area that will prevent farm debt from being a problem. It is the high cost of doing business in this country. It is high taxes and high regulations that are the problem.

The other concern we have with the bill is that we do not allow patronage as we saw in the form of patronage appointments to the Farm Debt Review Board. We want to make sure these mediators are appointed or chosen or based on their merit and their credibility rather than on the fact that they happen to hold a Liberal membership. I think that is extremely important.

We look forward to making improvements to the bill when it comes back in the fall.

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

Mr. Speaker, I am pleased to speak on behalf of the Reform caucus on the motion to refer Bill C-34 to committee prior to second reading. Bill C-34 is the Agriculture Marketing Programs Act. It is the replacement for several advance payment for crops acts that are currently on the books.

This process is new to this Parliament. We have had good experiences and bad experiences when we have referred bills to committee prior to second reading. I would hope this would be a good experience. I have the assurance of the chair of the agriculture committee that we will be allowed to hear witnesses on this bill prior to going through clause by clause. I would like to presume that the committee will give us adequate time to hear witnesses and debate the bill clause by clause.

Some chairmen have been rather autocratic and undemocratic but I have confidence that the chair of the agriculture committee will allow adequate input in this bill and if amendments are needed they will be given the due consideration they should have and perhaps receive the support of the committee to come back in an improved format.

It is obvious this is not the most controversial piece of legislation facing the House. The fact that the introductory speech by the government side was made by the parliamentary secretary to the minister rather than by the minister indicates this is not an earth shattering change in legislation that will impact on agriculture.

Rather than being controversial a better word for this bill may be that it is diversionary. It is trying to divert attention from some shortcomings of the minister of agriculture and his government on to ground that it is less controversial and may find broader support from the industry.

It reminds me a little of the scene where some person is going to eat a cookie on his plate and the shyster sitting beside him points to something either real or imaginary out the window and says: "Did you see that over there?" Of course, when the potential consumer of the cookie looks out the window, the shyster grabs the cookie and quickly eats it.

I believe the minister of agriculture is trying to divert some attention away from some problems he has by bringing forward legislation that is not of primary importance to the industry.

Some might ask what are some of the issues that are being avoided? In a debate like this it would be appropriate to bring those forward at this time. Perhaps the bill we should be debating, rather than referring this to committee, is a bill to amend the Canadian Wheat Board Act. There is far more interest, certainly on the prairies, in reforming the Canadian Wheat Board Act than in reforming an Advance Payments for Crops Act such as what Bill C-34 is doing.

One just has to look at what is happening in the prairies where normally law-abiding farmers are taking wheat and barley across the U.S. border without the permits they are asked to have by the Canadians Wheat Board. One may ask: "Why is this happening?" It is not because the Advance Payments for Crops Act is not adequately working under the Canadian Wheat Board. There have been some changes to the act depending on which administration has been in power over the past few years.

Year in and year out there have been advance payments for crops on the books, yet farmers are still trying to move their products south into the United States without using a Canadian Wheat Board permit. We might want to ask: Why is that? Perhaps we need to make amendments to the Canadian Wheat Board Act which would alleviate some of this tension and alleviate the seizure of property by customs officials and the RCMP.

Why is this happening? Why is this not the priority of the Liberal government? Why is this not the issue we are debating rather than Bill C-34? Why are homes being invaded by customs agents and the RCMP? Maybe this is a serious situation and we should be

looking at it but of course, the minister is in no hurry to look at the situation.

The Canadian Wheat Board sponsored a conference in Saskatoon to try to stimulate diversification and the value added concept. It came up with a wonderful scheme of putting $10 million forward to help farmers diversify by implementing new business plans. Again it was a diversionary tactic, like Bill C-34, to get away from the real issue which is the fact that the government does not have a business plan. In the meantime, markets are being missed and producers are being miffed.

Instead of debating Bill C-34 perhaps we should have been looking at the reform of supply management. That might be an issue which is front and centre with a lot more producers than the issues which are dealt with under Bill C-34.

The Liberal government opposed NAFTA prior to the election. It actually goes all the way back to the 1988 election. Liberals said that NAFTA was a terrible deal and should not be signed. The Liberals said that if they ever got into power they would certainly fix NAFTA in a big hurry. That was their number one priority, a priority far greater than tinkering around with the advance payments act.

The Liberals finally got into power in 1993, but they totally forgot their promise to change NAFTA. They did not even go back to the table to renegotiate NAFTA like they said they would. Instead they went to the GATT table and broke another promise. They did away with article XI of GATT. They indicated to the supply managed industry that they would not do that but they did it anyway. The supply managed industries are wondering whether Bill C-34 might be a diversionary tactic to get producers' eyes off some of the problems and uncertainties facing the supply managed industry.

The Liberals even failed when they signed the GATT agreement to table an addendum to GATT indicating what their position was on the tariffs which had been agreed to as they regarded NAFTA. It certainly looks like a bit of a slip-up to me.

Now we have a U.S. challenge to our tariffs under NAFTA which is going before a dispute settlement panel. We expect the results to be tabled sometime in August. That is a far more important issue to producers. They would like to see the government acting on that rather than on this issue.

The Crow buy-out and some of its problems are far more of a concern to the industry than is Bill C-34.

If Bill C-34 is passed in its current form, it will be another Liberal broken promise. I have in my hand a letter from the Prime Minister. It was written when he was Leader of the Opposition and is dated September 8, 1993. The letter is to the Ontario corn producers. He talks about the advance payments for crops act and the changes which his government, if elected, would bring forward.

The letter reads: "In May we announced that we would bring back the interest free cash advance program by statute and we would make it a working capital program by providing half of the maximum $50,000 available to producers after seeding in the spring and the remainder in the fall". That is not in the bill. I have looked through the bill and it is not there. It is all after harvest, after the crops are in the bin. There is no provision for half of the advance payment to be made after seeding.

If the bill is passed in its current form, it will be yet another Liberal broken promise. Perhaps the Liberals will bring forward an amendment because of this oversight or perhaps they had no intention of keeping that promise. However, I suggest they look at it. I also suggest they should get their priorities straight as far as the industry is concerned.

[Questions On The Order Paper, June 17th, 1996]

Mr. Speaker, my Question No. 9 to which I requested a reply within 45 days has been sitting on the Order Paper since September 1994.

I spoke with the parliamentary secretary to the government House leader who indicated a few days ago that there were only four government departments remaining that have not come forth with a reply. I wonder if the government might indicate which four departments are so slow in responding with an answer to my question.

[Agriculture, June 17th, 1996]

Mr. Speaker, as we approach the parliamentary summer recess it would seem an appropriate time to evaluate the Liberal government's record over the past three years.

Broken promises permeate the pages of the red book and can be proven false by the actions of ministers and their departments.

The minister of agriculture is among the worst. He said he would keep article XI of the GATT. He signed it into oblivion. He said he would keep the Crow benefit. He scrapped it three months later. He said the Crow payment cheques would be out in January. It is the middle of June and thousands are not yet processed. He said he would implement a whole farm income stabilization plan. He could not get provincial agreement. He said he would support a plebiscite on continental barley marketing. He did not do it and he will not even respect a plebiscite on barley and wheat marketing recently held in Alberta. The minister typifies the cynical irony: "I am from the government and I am here to help you".

For years farmers have said: "Do the opposite to what the government tells you to do". It seems that this, too, is the motto of the minister of agriculture who has not done anything he said he would do.

[Criminal Code, June 17th, 1996]

Mr. Speaker, I appreciated hearing the member for Calgary Northeast discuss Bill C-45. He spent considerable time talking about repeal of section 745 of the Criminal Code.

He also mentioned a meeting in Hamilton where people had gathered to discuss crime. I sense, as does he, that a lot of Canadians are not happy with the slowness of the current government to reform the criminal justice system.

It must be confusing for Canadians. Does the member think Canadians understand the funny signals they are actually getting from this House? When we voted on a private member's bill to repeal that part of the Criminal Code several Liberal members voted in favour of it. That legislation was moving along very quickly.

Suddenly we have another piece of legislation, also from the government side, this time from the minister, which would not repeal that section of the Criminal Code, but would categorize murderers into multiple murderers versus single murderers. It almost says that some types of murder are not as reprehensible as other types of murder.

I know the hon. member is out talking to the public about justice issues. What kind of signals are Canadians getting? Do they understand what is happening here in the House? Are they confused? What are they saying about the legislation brought down by the justice minister versus the private member's bill from the government side which actually calls for the repeal of that section of the Criminal Code?

[Canadian Wheat Board Act, June 11th, 1996]

Madam Speaker, I thank the hon. member for Lisgar-Marquette for introducing Bill C-212, an act to amend the Canadian Wheat Board Act. It would require the board to be audited annually by the auditor general.

I am sure members are aware that the Canadian Wheat Board is a marketing board whose primary responsibility is to serve the producers whose products it sells. In fact, the producers have no way of knowing how well the board is performing. The only people who have any indication of the performance record of the board is its internal auditing firm and the minister of agriculture, who may or may not choose to reveal that information to the producers the board serves.

The hon. member for Lisgar-Marquette has talked about the need to open up the books of the Canadian Wheat Board to the auditor general so that he can report to Parliament and thereby report back to the producers that the board serves. I agree with the hon. member.

The member for Frontenac suggested that a performance evaluation would also be a wise undertaking by the auditor general. Perhaps that could be done on occasion as well as the annual audit of the books of the Canadian Wheat Board.

There was an performance analysis of the Canadian Wheat Board done by its auditors, Deloitte & Touche. This was instituted in 1992. Perhaps some would argue that we do not need to have the auditor general look at the efficiencies of the Canadian Wheat Board because its auditors are doing it.

The problem is that this report should have been presented to the minister of agriculture. If it was, the minister did not make the report public. It either gathered dust at the Canadian Wheat Board or the Privy Council. It was never released to farmers or the Canadian public. It became a secret document which contained much good information and was only recently unveiled to the public when copies were made available to me and other concerned people.

Does this report contain some top secret, classified information? Not at all. It contains information on the performance of the board, how well it is serving producers, whether or not it is doing a good job. Certainly the auditor general could perform such an evaluation on a regular basis and that would serve Canadians and farmers in the prairie region very well.

Let us look at the internal performance audit done by Deloitte & Touche of the Canadian Wheat Board. It discovered many areas of significant deficiency. This was all hushed up, kept secret. Farmers were not aware of the audit and the results.

On page 18 of the Deloitte & Touche performance evaluation, it states that there is no evidence of an ongoing formal corporate strategic plan or process. That is quite an allegation.

We asked the chief commissioner of the Canadian Wheat Board, Mr. Hehn, about that. He said: "Oh, well, we have dealt with all the concerns that were raised by the Deloitte & Touche audit. They have all been looked after". How do we know? It is all secret. It is all kept under wraps.

As far as the corporate structure of the board is concerned, it has not changed. There are still five commissioners appointed by the Privy Council, probably under the direction of the minister of agriculture or whoever pulls the minister's chain. Currently there are three commissioners running the board; one retired some time ago and another one recently stepped down because he could not agree with some things the board was doing. So presently three commissioners who were appointed by the minister of agriculture are running the Canadian Wheat Board and keeping everything secret.

The chief commissioner of the board said that they have adequately handled all the recommendations in the Deloitte & Touche audit. He has yet to convince me that he can answer the charge that there is no evidence of an ongoing formal corporate strategic plan or process, as was the criticism on page 18.

I quote again from page 19 of the report, regarding operational management and planning:

Departmental planning resulting in annual operational plans generally does not exist. Some departmental area plans have been submitted to the board with no feedback or approval. Budgeting and forecasting of expenses do not exist. This includes administrative expenses (excluding salaries) and annual operating expenditures (storage, interest and demurrage, etc) representing annual expenditures of approximately $200 million.

This is not small change. The board or senior management approves most or all of the administrative expenditures, individually, as incurred. That is what happens when the operation does not have a public audit. It is inefficient and there is no way of determining whether a problem has been rectified if one has been identified.

With respect to accountability, page 20 of the report reads:

Specific performance targets or expectations are not set and communicated for the senior operating management team or for senior managers. Senior management job descriptions are out of date, incomplete or non-existent. There is no formal performance appraisal process for senior management which reinforces accountability for meeting objectives.

At page 21 of the report there is a rather strong indictment of the structure of the Canadian Wheat Board. It reads:

The structure as designed (1930s) with five equal Commissioners and more than six direct or indirect reports does not promote efficient and effective delivery and accountability for the 1990s.

As members know, the corporate structure of the Canadian Wheat Board is still the same. That problem has not been rectified. It is still a 1930s model which does not serve western grain farmers well in the 1990s.

That was corporate governance. Now I will turn, in the Deloitte & Touche audit, to finance and accounting management. Regarding corporate planning and budgeting, at page 67 it reads:

A formal budgeting process does not exist for the Finance and Accounting expenditures department. There is no overall responsibility assigned to Finance for establishing and administering a corporate budgeting process. Salary expenditures are approved at the beginning of the year.

Obviously the hon. member for Lisgar-Marquette has very good reason to bring forward a private member's bill which would call for an annual audit of the Canadian Wheat Board by the auditor general. There has been no budgeting. There has been no accountability. There has been no responsibility assigned to finance for establishing and administering a corporate budgeting process. This is serious stuff.

Furthermore, we know that the commissioners' salaries have been kept secret. It has been leaked that they have extremely high salaries. We also know that they have a very cushy benefit package. We were astonished to find out that their severance package is around a quarter of a million dollars. Farmers' dollars are going to finance the commissioners and the farmers had no idea that such a plan existed for the commissioners of the Canadian Wheat Board. We need an audit to be done by the auditor general to expose these things.

Regarding the board's strategy and business direction, on page 78 of the audit it reads:

A formal corporate strategy does not exist for review and input to an MISD (Management Information Services Division) strategy. No formal assessment of business needs or direction was conducted as part of ISP project. Some information is known about the direction of the business but has not been used to evaluate the current system.

Page 78 continues under the heading "Identify Issues and Operations" by stating:

Information systems issues and opportunities were identified but were not based on an assessment of the current systems. As such, any opportunities with the current systems have been overlooked.

I have talked about corporate governance. I have talked about finance and accounting management and about strategy. I would like to go on to talk about the sales and marketing of the Canadian Wheat Board.

On page 31 of the Deloitte & Touche audit it states that no formal strategic marketing plan exists. This is the Canadian Wheat Board. It is supposed to be marketing farmers' grain. The internal audit said that no formal strategic marketing plan exists and this report was put on the shelf and kept away from the eyes of the producers whom the board is to serve.

Under the heading "Marketing Organization" on page 32 the report reads:

The marketing function lacks focus and co-ordination due to a lack of direction from a corporate governance point of view, the absence of an effective marketing plan, and separated departments within the organizational structure.

At page 35 the report reads:

Agents emphasize that relationships with the CWB are not sound/positive business relationships. Accredited export agents indicated that they are not being utilized as effectively as they might be in sales opportunities in niche markets and geographic markets where CWB market knowledge is limited and resources limited.

We are now getting into performance evaluation. I will conclude with the following point. The report on transportation states: "Several costs associated with transportation in grain movement

are primarily influenced by Canadian Wheat Board operations. However, there are no budgets or standards of performance for these such as storage and demurrage costs". We are talking about the sale of hopper cars in western Canada and whether they should be sold to the producers or to the railroads and who should allocate the cars.

If we would have had a proper evaluation of the Canadian Wheat Board by the auditor general it would have helped us to make wiser decisions about those cars. However, we have had that information kept from us and it has hurt the industry. It has increased the mistrust of farmers in the Canadian Wheat Board. Certainly this bill would solve that problem.

[Canadian Wheat Board, June 11th, 1996]

Mr. Speaker, the minister must not have heard my question. I was talking about some roadblocks and he got off on another topic all together.

His department has announced a magic scheme to encourage value added processing on the prairies by offering to help the agriculture sector create business plans. Well, it is the minister who needs the business plan.

Prairie farmers have to buy their own grain back at Minneapolis spot prices in order to sell to millers and maltsters down the road.

Why does the minister not force the Canadian Wheat Board to use its own forecasted final prices as the basis for grain sales to local markets, or better yet, let producers sell outside the board to millers?

[Canadian Wheat Board, June 11th, 1996]

Mr. Speaker, the Canadian Wheat Board is currently holding a conference in Saskatoon on adding value to prairie cereal grains. The potential for value added products for grain is great, but in reality the Canadian Wheat Board continues to kill value added by making farmers go through the costly and time consuming exercise of buying back their grain from the board to sell to processors.

Will the Minister of Agriculture and Agri-Food quit stalling and make changes now to the Canadian Wheat Board that will remove the roadblocks to establishing more milling, malting and other value added processing across the prairies, creating real jobs and real economic growth?

[Agriculture, June 5th, 1996]

Will the minister recognize the Americans will eventually gain access to our markets? For the benefit of the industry, knowing that freer trade will be forced upon them, will the minister have a plan to reach his export targets by allowing the supply managed industries to access U.S. markets?