Mr. Speaker, I am pleased to speak on Bill C-26, legislation to amend the Canada Grain Act and the Agriculture and Agri-Food Administrative Monetary Penalties Act and to repeal the Grain Futures Act.
This legislation makes amendments to two acts and repeals a third. It is really a rather detailed and complex piece of legislation. In briefings from the minister of agriculture's staff we were told this bill is of a non-controversial and only housekeeping nature. But looking closely at it we found something very negative and unsavoury about the bill.
The bill will now go to committee and frankly if we do not see some changes at that stage our party will have no choice but to vote against the bill at third reading.
At the outset I seriously question whether this legislation is really what the special crops industry wants. The minister has provided us with some information that indicates a long period of consultation on this question, and in fact the consultations go way back to 1993 and straddled the last federal election.
One might well ask what has changed in the past five years, and we ask whether these old and dated assumptions are a true reflection of what farmers and the industry truly wants today.
Before I get to what we consider to be the major defects of Bill C-26 I will summarize the government's stated intent for the legislation. First, we were told these amendments to the Canada Grain Act are intended to set up a licensing system for those businesses that purchase special crops from farmers.
Second, the legislation would allow creation of an insurance plan for the special crops industry. Third, the bill would repeal the Grain Futures Act, allowing responsibility for regulating the Winnipeg Commodity Exchange to revert to the Manitoba Securities Commission. The exchange is now regulated by the Canadian Grain Commission.
Bill C-26 applies only to western Canada because it relates to the jurisdiction exercised by the Grain commission in administering the Canada Grain Act, which does not generally apply in eastern Canada. This legislation applies to special crops. These crops include beans, buckwheat, peas, corn, faba beans, lentils, mustard seed, safflower, soybeans and sunflower seed.
Special crops are of growing importance to farmers and to the economy of western Canada. The so-called grain wars of the 1980s are painful memories in the minds of many farmers. The United States and the European community used their immense treasuries to subsidize the production and sale of wheat and other major grains. This subsidization drove down world prices and drove thousands of western Canadian farmers off their land.
We believe that farmers responded very creatively to this situation. One way in which they did so was to diversify into peas, lentils, sunflower seeds and other special crops. We in the NDP caucus are most supportive of any measures that will enhance the ability of farmers to prosper from growing and marketing their special crops.
We also support measures that would put the entire special crops industry on a firmer financial footing. The government claims the legislation will do that but my caucus and I are not convinced that it will.
The questions that have to be asked are these. Does the legislation benefit farmers and the entire special crops industry? If there are benefits, what will they ultimately cost? The answers to these questions give us great cause for concern.
Bill C-26 is based on a number of premises. One of them is that the businesses which most often purchase special crops from farmers are small firms that are frequently not licensed. The reason posited for this is that the security required from special crops dealers in order to cover their payment obligation to producers has forced small companies to avoid taking out licences.
In turn, this puts the producers who sell to these companies at risk if a company goes bankrupt or cannot meet its payment. A further argument is that this uncertainty has limited the potential growth of the industry because it has prevented farmers from getting into special crop production in a bigger way. The larger elevator companies that buy grains like wheat and barley naturally are licensed by the Canadian Grain Commission. Of course this is important to Canada's reputation as a reliable supplier of high quality grain.
The grain commission has the power to ensure that these large companies are always in a position to meet their payments to farmers who sell to them. The commission also has the power to ask companies to secure bonds and can impose penalties on companies should they renege on these payments to farmers.
The argument is made that regulations which make sense for large grain companies are not appropriate for smaller companies that purchase special crops. For example, the government says that Bill C-26 would remove the onus on special crop dealers to post costly bonds against the possibility of their defaulting in payments to producers. It has been argued that this is difficult, if not impossible, for small companies to post large security bonds and that consequently many of them simply are not licensed.
Bill C-26 proposes a licensing system for these smaller companies. In return for their being licensed they would not have to post large security bonds. The legislation also allows the Canadian Grain Commission to impose penalties and fines on these smaller companies for violations of the Canada Grain Act.
The legislation allows the grain commission to be more flexible and less punitive in the way it treats smaller grain companies in the event that they contravene the Canada Grain Act.
The government says that a system of licensing developed specifically for the purchasers of special crops will encourage development of the industry. We in the NDP support the development of the industry but question whether the legislation will achieve that end.
A second and related component of the legislation is a program that will insure farmers against non-payment by the businesses buying their special crops. The government says that the program is voluntary but in actual fact it is not. It is here that we begin to have some serious problems and I would like to go into them in some detail.
In clause 7 of the bill the government decrees that all special crops producers must pay an insurance levy on all crops sold to licensed dealers. Farmers have to pay this levy. Whether or not they want to participate in the insurance program they have to pay this check off at source. They have no choice about this.
The government calls this a voluntary insurance program, but it is anything but voluntary if it is a mandatory contribution at the front end. In fact it amounts to sort of a negative option billing plan in actual fact, the same kind of plan that outraged Canadians when cable television companies tried to implement this a few years back.
Farmers will have to provide notice at the beginning of the crop year if they do not want to belong to this insurance plan. Even if they give that notice in writing farmers still have to pay the insurance levy at the front end. It is only at the end of the crop year and after doing a lot of paperwork and legal wrangling that farmers would get their money back.
As I understand it, they will not receive interest on the money being held by the government that they paid at the front end and have to wait to be refunded at the back end. This type of negative option billing is simply unacceptable to farmers.
Our agriculture critic is already getting calls of protest from farmers who are beginning to twig to how the plan is really unfolding. We are not satisfied that these measures are really what the industry wants or needs. Certainly it is not what the farmers who have been coming forward want or need.
Bill C-4 proposes a check-off on grain deliveries to pay for a wheat board contingency fund. The proposed fund is extremely unpopular with farmers. They cannot afford the check-off. They do not see the need for it. They do not want to pay for it. Now the same government is proposing yet another check-off, compounding and piggybacking the other check-offs farmers pay. This time it is for special crops.
All this is in addition to the millions of dollars being collected by government from farmers in the name of cost recovery. Farmers are paying twice for the increasing number of services they need: once through their taxes and again through cost recovery. These are some of the problems we see with these measures.
Our caucus urges the minister to scrap his plans for this negative option insurance plan in the special crops industry. I will read with great alarm some material from the minister's office dated November 7, 1997. Page 4 of that document reads “The insurance plan could serve as a model for standard crops in the future and could lead to a producer funded insurance system for all crops produced in western Canada”.
Rather than listening to the opposition to the plan, the minister seems to feel it is some kind of model or prototype he would like to expand from special crops to standard crops in the future. This is seriously alarming to our caucus.
We sincerely hope the minister is not planning to extend his special crops insurance plan to all grains in western Canada. Surely he cannot be so out of touch that he would propose an entirely producer funded and negative option insurance program on all grains. If the minister attempts to do this we suggest that he will face an out and out revolt by farmers.
Bill C-26 repeals the Grain Futures Act which clears the way for the Manitoba Securities Commission to assume responsibility for regulating the Winnipeg Commodity Exchange. The exchange wants to trade commodities other than grains and wants the regulatory system to reflect this reality.
This is a logical request. It is time for the province of Manitoba to be given power to regulate the exchange rather than have it done by the Canadian Grain Commission as the case has been. We support this part of the legislation but it is unfortunately bundled with a larger legislative package that we cannot accept in its present form.
When he introduced Bill C-26 last December the minister said that it would provide a boon to rural economic development. I do not believe that a negative option insurance program will create rural economic development. Nothing in the arguments put forward by the government to date has altered that point of view on our part.
Let us look beyond the bill and ask what the government is doing to promote rural Canada. We need to look no further than the budget that was introduced in the House on February 24. The budget speech was entirely silent on agriculture. It is significant to note that the minister spoke for 90 minutes and did not once utter the word agriculture. I find that very revealing. In a 275 page budget document which was tabled as he spoke there were a mere 16 lines about rural Canada. Most of that space was devoted to reminding us that the minister had provided additional money to the Farm Credit Corporation, not this year but last year.
The only current agricultural spending mentioned in the budget speech is $20 million spread over five years throughout several government departments. The federal government spending in support of the agriculture and agri-food sector has declined drastically throughout this decade. This year's budget confirms even further cuts.
The Liberals are dismantling rural Canada, closing post offices and allowing the railways to double freight rates on grain and to tear up their branchlines. They have forgotten rural Canadians.
One might ask what the minister of agriculture has been doing to represent the interests of rural Canadians at the cabinet table. The answer would appear to be not very much. Now he is promoting a negative option insurance plan as a project for rural development. Not only that. He is saying he might extend such a plan to cover all grains grown and marketed in western Canada.
In all of this the minister is trying to pass Bill C-26 off as a mere housekeeping bill. It is much more than that. Unless there are significant changes to the bill we will work against it and we will vote against it.
