AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, May 13, 1999

• 0910

[English]

The Vice-Chairman (Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.)): Colleagues, before we get into the estimates and everything, I thought we would first deal with a number of motions that are in front of us. That then leaves us a lot of time to have questions on the estimates for our presenters who are here from the department.

I would like to deal with the two motions that were submitted by Madame Alarie. For the first one, I'll just read the end instead of the preamble:

I move that we support the request by considering the possibility of setting up a granting council to promote independent research in the field of agrifood.

Madame Alarie, do you want to explain your motion?

[Translation]

Ms. Hélène Alarie (Louis-Hébert, BQ): Good morning.

When we heard from representatives of the universities, this was one of their main requests, a very explicit request. The motion simply proposes that the possibility of creating a funding council be examined, and that we collectively consider the advantages that this might provide.

The agri-foods and food biotechnology area is generally becoming more important and increasingly specific. When the funding councils receive projects in this field and these projects are considered along with engineering projects, it is often difficult to measure their respective impact. Agri-foods and food biotechnology are a little bit like the poor relatives in these councils.

Therefore I propose that we support this request that they made and substantiated, and that the Agriculture Committee examine the feasibility of making a recommendation in this regard.

[English]

The Vice-Chairman (Mr. Murray Calder): Are there any comments?

Mr. McCormick.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Actually, I'm just thinking more of the explanation. I think I'll just defer my comments. I'm sure it's a very credible submission. Thank you, Mr. Chair.

The Vice-Chairman (Mr. Murray Calder): Okay. Well, if there are no comments—

Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): May I just ask a question?

The Vice-Chairman (Mr. Murray Calder): Sure, Mr. Hilstrom.

Mr. Howard Hilstrom: What's in place right now for granting? We're not duplicating here, are we, Madame Alarie?

[Translation]

Ms. Hélène Alarie: No. They recommended that we examine the possibility of moving the bio-foods sector from the general sciences council and creating a funding council for bio-foods, since bio-foods covers both a part of the fishery and all of agriculture.

Since there is a medical council, and a humanities and engineering council, they want the projects to be reviewed with greater precision and that this be done by a bio-foods council. We can see that biotechnologies and all the related aspects are a field that will be very important in the future. The idea would be to recognize the specificity of a very complex field.

[English]

Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Chairman, if I may, I have a question for Madame Alarie.

Have you had contact with the industry as to how they feel about having a granting council as opposed to how it is happening right now in the departments? Is industry supportive of this particular type of granting council?

[Translation]

Ms. Hélène Alarie: In fact, I have not consulted the industry. I listened to what the university deans recommended when they met with us last week.

I cannot speak for the other provinces. But sometimes there is a broad synergy between the industry, the agricultural faculties and veterinary medicine, and the many projects are carried out through partnerships. Therefore, the industry is already used to this type of partnership, and I think it would be favourable to this.

• 0915

[English]

The Vice-Chairman (Mr. Murray Calder): Mr. Proctor.

Mr. Richard Proctor (Palliser, NDP): Thank you very much, Mr. Chair.

I very much support this, and I just remind colleagues that when the heads of veterinary were here last week, my distinct recollection is that they said Canada was the only industrialized country in the world that doesn't have a council such as this. I support Madame Alarie. I think it's a good proposal that we have before us.

The Vice-Chairman (Mr. Murray Calder): Mr. McGuire, and then we'll call the question.

Mr. Joe McGuire (Egmont, Lib.): Mr. Chairman, in answer to Mr. Hilstrom's enquiry, I could provide some information on what's available if the committee so desires. The federal government funds university research through the federal granting councils. Agriculture and veterinary colleges are awarded federal funds from these granting councils. The National Science and Engineering Research Council provides these funds to universities, such as the agriculture and veterinary colleges across the country.

The status of this form of federal funding for universities is as follows. In the 1995 budget, funding was cut by 14%. In the 1998 budget, the moneys removed in these cuts—$71 million—were returned to NSERC and the universities. In the 1999 federal budget, a net increase of $33.5 million was provided for distribution to the universities. In addition to the above grants, an $800 million fund, the Canadian Foundation for Innovation fund, was set up to fund university infrastructure. In the 1999 federal budget, a further $200 million was given to the foundation.

We can always use more money in research, and if we can find the money I don't think the government would get any objections to increasing this amount or to having a special fund for agriculture research. It's a matter of getting the dollars.

The Vice-Chairman (Mr. Murray Calder): Madame Alarie, we'll finish up with you and then call the question.

[Translation]

Ms. Hélène Alarie: That's fine. I would like to complete Joe's intervention.

We are certainly not questioning the method of funding. The specificity is what may help us to better achieve our objectives in agriculture and agri-foods. The idea is to channel what is already coming in and to use it for very specific purposes, so as to have more immediate profits. That's it.

[English]

The Vice-Chairman (Mr. Murray Calder): Before we vote, I think, the bottom line here with the motion is that we're considering the possibility, so this, I find, is more of a fact-finding motion than anything else.

Are committee members in favour of the motion?

(Motion agreed to)

The Vice-Chairman (Mr. Murray Calder): Your second motion, Madame Alarie, is about WTO negotiations.

[Translation]

Ms. Hélène Alarie: As for the second motion, it is true that our committee has already completed its hearings on the WTO. The purpose for this motion is very simple. After the two days of meetings that we had here, in Ottawa, with various organizations to discuss the WTO negotiations, these people came to my office to tell me of a particular problem that they faced, and this must be faced by all cannery operators. This year, especially, they are having difficulty seeding their fields even if the producers are not using genetically modified seeds. Inspectors from the countries that are purchasing processed products are looking around the fields, to see whether there are other growers who have used genetically modified seeds. They are really facing a major problem. The people they are dealing with from the United States and Europe will not buy their products when there are genetically modified crops in the neighbouring fields. They cancel their contracts.

They wanted to make the Agricultural Committee aware of this fact, as well as of all the aspects of foreign trade that are affected by biotechnology.

Obviously, we have finished our hearings. Perhaps we could transfer this matter to another committee that could examine it. I have used this company, which operates in Quebec and New Brunswick, because I spoke with its representatives, but I could have chosen another. I have a feeling that this is also a problem in the West, for peas or other products. I don't know if it's up to us to examine this. That's it.

• 0920

[English]

The Vice-Chairman (Mr. Murray Calder): As a point of interest, I also sit on the subcommittee on international trade. The foreign affairs and international trade committee and the subcommittee are both dealing with this issue at present, so maybe, Madame Alarie, in the interests of the efficient use of time, one of your colleagues that sits on those committees could bring that motion forward.

Mr. Hilstrom, and then Mr. McCormick.

Mr. Howard Hilstrom: That's along the lines of what I was thinking, Mr. Chairman. If they were denied access to the government in putting their views across, I would say that maybe as a last resort we should take this up, but if they have already had access and if they will have access under another committee, I think that would be more appropriate.

Mr. Larry McCormick: Yes. I have nothing against having them here, but I'm sure there are going to be other groups. In fact, I sense that, and we've talked to some. So whether that's what is worked out now or not... As for our hearings being over here, I'm sure that we're going to be having a similar type of hearing here in the future, because, as negotiations start this fall, we're just at the start of what will probably be a long process—it certainly won't be a short one—so I'm sure there will be other windows of opportunity.

The Vice-Chairman (Mr. Murray Calder): Madame Alarie, would you be willing to withdraw this motion and have it submitted to the foreign affairs and international trade committee? If you have any problems, it can always come back to this committee.

[Translation]

Ms. Hélène Alarie: That's fine. No problem. Thank you.

[English]

(Motion withdrawn)

The Vice-Chairman (Mr. Murray Calder): Thank you very much.

Now, the last motion, from Mr. Borotsik.

Mr. Rick Borotsik: Mr. Chairman, this came out of the motion of the Reform Party at the last meeting. Notice was given to have the Minister responsible for the Canadian Wheat Board appear before this standing committee. There are some concerns with respect to value-added, particularly when it pertains to cereal crops in Canada and particularly those that are affected by the Canadian Wheat Board's policies. I would like to table this motion.

I have also been informed, Mr. Chairman—and maybe you can inform me as well—that there was some suggestion that maybe the minister would appear before this committee in conjunction with the Canadian Wheat Board and prairie pasta. If that's not the case, then, the motion will stand, and we'll just simply have the minister come forward and explain his beliefs and thoughts on the value-added processing in western Canada.

The Vice-Chairman (Mr. Murray Calder): I can give you some information, but Mr. Hilstrom has something to say right now.

Mr. Rick Borotsik: Please.

Mr. Howard Hilstrom: I think this motion should be before the committee and that it should be voted on in the affirmative. Things happen and minds can be changed, and I think it's important that as a committee we establish very clearly the importance of the Minister responsible for the Canadian Wheat Board being here. I think that even if he's willing to appear voluntarily—even this motion means voluntarily—it would be good protocol to issue this official invitation to the minister.

The Vice-Chairman (Mr. Murray Calder): Last night I had a chance to talk with the minister. I raised this issue with him. In fact, I have a tentative date on which he would be willing to appear in front of the committee—June 3. The time period would be from approximately 8.45 to 9.45. He would appear with the Canadian Wheat Board. Given that, if there's nothing else, we can pass this motion and that will be done. Perfect.

All in favour?

(Motion agreed to)

Mr. Rick Borotsik: I would put a notice of motion forward saying that we have the deputy chair being appointed the permanent chair of this committee.

Some hon. members: Oh, oh!

The Vice-Chairman (Mr. Murray Calder): Thank you for you support on this. I appreciate it very much.

Now, we have appearing in front of us, from the Department of Agriculture and Agri-Food, Brian Morrissey, Peter Fehr, and Tom Richardson.

Gentlemen, the floor is yours.

• 0925

[Translation]

Mr. Brian Morrissey (Assistant Deputy Minister, Research Branch, Department of Agriculture and Agri-food): Mr. Chairman, members of Parliament, ladies and gentlemen, on behalf of my colleagues I would like to thank you for giving us the opportunity to appear before your committee.

[English]

Mr. Chairman, it's a pleasure to appear before this committee. I'm the assistant deputy minister for the research branch of Agriculture and Agri-Food Canada and co-principal for the department's business line, “Innovating for a Sustainable Future”.

Mr. Chairman, with your permission, I'd like to ask my two colleagues if they'd introduce themselves.

Mr. Peter Fehr (Director, Ottawa Affairs, Prairie Farm Rehabilitation Administration, Department of Agriculture and Agri-Food): My name is Peter Fehr. I am representing the prairie farm rehabilitation administration today. Dr. Sonntag, who is the director general, is unfortunately out of the country on a mission to China. He would have liked to have been here, but it's somewhat difficult to be in two places at one time.

Mr. Tom Richardson (Acting Assistant Deputy Minister, Policy Branch, Department of Agriculture and Agri-food): I'm acting ADM of policy branch. Through our environmental bureau and through the sustainability activities of that group, policy branch does have a part of the business line that Brian has referred to

Dr. Brian Morrissey: Thank you, Tom and Peter.

Together, Mr. Chairman, through the policy branch's environment bureau, PFRA's 27 district and regional offices, and research branch's 18 research centres, we collectively support the agrifood sector's efforts to develop and produce competitive products and processes in an environmentally sustainable manner.

Business line planning was introduced to Agriculture and Agri-Food Canada two years ago. Since then, the department has been building interbranch management teams that cut across the traditional way of doing business. The focus, Mr. Chairman, is on results and on measuring performance for those results.

While the department is still refining our business line approach, the changes are reflected in our reports to Parliament. The information is being provided in what we hope is a form that's more easily understood and more useful to parliamentarians and the public. The business line approach is also, we believe, of more value to our clients and to our partners. By being more visible and establishing concrete performance targets and performance measurements, we're striving to be more accountable to them as well.

Under the “Innovating for a Sustainable Future” business line, we've identified key result areas, three things that we have to achieve well. These are areas in which we're committed to supporting the sector and having an impact.

The first key result area is innovation. This deals with new knowledge and new technologies aimed at helping keep the sector competitive and environmentally sustainable. Much of the traditional work of the research branch falls under this. It includes our core research programs for resources, crops, animals, food, and non-food products. It also includes the matching investment initiative, a funding mechanism that significantly increases overall investment in agrifood research. In the last fiscal year, we had over 950 collaborative R and D projects under the matching investment program.

The second key result area is sustainable resource use. Here, we aim to increase adoption and utilization of sustainable land and water management systems that also afford greater economic security to rural Canadians. It involves such programs as the community pasture program, the rural water development program, and the national soil and water conservation program. These are derived in partnership with provincial governments, adaptation councils, and producer organizations.

The third key result area, Mr. Chairman, is integrated policies and decision-making. The focus here is on integrating both environmental and economic considerations into the decision-making process, from the department, the sector, and the community right down to the individual.

• 0930

Of special importance under this key result area are the federal government's commitments under national and international agreements to incorporate standards for environmental sustainability into policies, programs, and activities. In each of these three key result areas, we're making commitments on what we intend to deliver as a business line.

I'd like to take this opportunity, Mr. Chairman, to highlight just a few. Under innovation, we're committing to deliver several new crop varieties that will give Canadian farmers important new cropping options. This year, for eastern Canada, we'll register a new soybean variety with a high protein content. Three varieties of soybean delivered by Agriculture and Agri-Food Canada already account for $100 million at the farm gate. The new variety I just mentioned will create even more market opportunity in Asia for Canadian soybean growers.

Next year, Mr. Chairman, we'll deliver a prairie spring wheat variety with significant resistance to fusarium head blight. As you know, fusarium losses now cost western Canada about $60 million annually.

Also under innovation, we'll increase spending on biotech research by about $17 million over the next three years as a result of the 1999 budget.

Under sustainable resource use, Mr. Chairman, the department will provide, this year, new sources of safe, reliable water to 3,000 rural Canadians on the prairies and to another 1,250 prairie enterprises. Also this year, we hope to develop and distribute guidelines for the aeration of surface water. This will lead to improved water quality in rural areas.

Under integrated policies and decision-making, this year we'll fully implement the department's biodiversity strategy. By the end of December, Mr. Chairman, through the agriculture and agrifood climate change table group working specifically on agriculture in relation to climate change, we'll help establish a sectoral strategy to respond to the Kyoto agreement on greenhouse gases.

In conclusion, Mr. Chairman, under the “Innovating for a Sustainable Future” business line, we're helping to ensure a more co-ordinated and department-wide approach, while helping to ensure, through the use of performance indicators, the accountability of the department to its clients and to Parliament.

[Translation]

Thank you, Mr. Chairman.

[English]

The Vice-Chairman (Mr. Murray Calder): Thank you, Mr. Morrissey.

That's the full presentation, then? Okay.

Committee members, we have lost 25 minutes out of the front end of this already. So that everybody gets a chance to ask questions, I will ask, for the first-round questions, which would normally be at seven minutes, if I could have agreement that they will be five minutes instead of seven minutes. Then we'll just keep to a flat five minutes all the way through. Do I have agreement for that?

Some hon. members: Agreed.

The Vice-Chairman (Mr. Murray Calder): Mr. Hilstrom.

Mr. Howard Hilstrom: Thank you, Mr. Chairman.

The Vice-Chairman (Mr. Murray Calder): Do I have agreement that instead of seven minutes you have five minutes? Then everybody gets a chance to ask questions here. Is there agreement for that?

Mr. Howard Hilstrom: Absolutely, Mr. Chairman. The spirit of co-operation around here today is just what we asked for.

An hon. member: Here we go.

An hon. member: Put that on the record.

Some hon. members: Oh, oh!

Mr. Howard Hilstrom: Thanks, Mr. Chairman.

Certainly a more business-like approach to government services and research is what is required. In regard to the integrated approach and all that you're talking about, and in regard to the funding that's available for these different researches, like, as you mentioned, soybeans and a new variety of wheat, is it being done across the country in a regional fairness type of appropriation of moneys? Or is it done on a need basis, where you identify a problem like fusarium, for instance, which is a big problem? How are those research dollars put out?

Dr. Brian Morrissey: The core budget, Mr. Chairman, is allocated to each of the 18 laboratories that we have, which are distributed across the country. That money goes out at the beginning of a financial year.

• 0935

For example, Mr. Hilstrom, it would go out right now, and if, for example, there were moneys that looked like they would be unspent in one region of the country, we would do reallocations at about September. If it turned out that nature presented us with an issue like fusarium, for example, which is a case in Canada, or if mad cow disease happened to come in, we would move moneys to wherever they were needed at that time.

For example, some time back, I was speaking with my opposite number in the U.K. I was explaining to him how we decided what we invested money in, how we got advice ex ante on where we should spend. He said, “Brian, it's a pipe dream. Nature decides your priorities in the last analysis.” I didn't understand what he meant at the time, but I do now that we've seen fusarium—and I certainly do after mad cow disease. I think he was saying that now and in September we would allocate moneys, but if a crisis came up at any time we would have to move moneys very quickly.

Mr. Howard Hilstrom: Okay.

Could you describe a little more fully the implications of what is actually being put on to the rural communities, I guess, from these national and international standards and agreements that have been agreed to? Just what specifically are we being required to do as a result of those international agreements? Are there some specifics you could point to?

Dr. Brian Morrissey: The most obvious one that comes to mind, Mr. Hilstrom, is the Kyoto agreement that requires that Canada reduce its greenhouse gases by about 6% from, as I understand it, the 1992 levels, by about the year 2010 to the year 2012. That creates requirements. For example, in the agricultural community, we either adapt to the changes required in Kyoto or we make certain changes to our practice. For example, zero till, conservation till, would be a practice that would be useful in helping us meet our Kyoto standards.

Mr. Howard Hilstrom: Are the economic considerations, the economic impacts on farmers, built into all of this? I'm not talking about rural Canada here; this gets very confusing when you talk about rural Canada, because we have people in small towns who are making $80,000 to $100,000 a year and are considered rural Canadians, but we have the farmer next door who's getting these costs put on him for the Kyoto agreement and who is not netting near that much. Is that economic impact built into your considerations on this Kyoto agreement on the climate change issues?

Dr. Brian Morrissey: Tom, if you have any thoughts on these, feel free to step in.

Mr. Tom Richardson: Mr. Chairman, in response to that question, in regard to the climate change process, there is an agricultural table. All the players are there, like the fertilizer industry, the research branch... At this stage of that process, the main focus is in understanding where greenhouse gases come from, like some of the new information on, for example, nitrous oxide, which wasn't so well understood a few years ago.

As that process goes through and you take all the tables, all the industries, there will be a process whereby you try to focus on what the activities are that you can change and modify at the lowest cost. In other words, we don't want to try to force something to happen that will have a tremendous negative economic impact. As that process goes through over the next couple of years, we will be getting to what the economic consequences are if, for example, you had to make some major change in the fertilizer industry versus, say, the transportation sector or the oil and gas sector or whatever.

That will happen, and at some point I would think it would be a good idea for the committee to hear about some of the analysis that's going on here.

I think, Brian, that it's a very good example of where we tried to integrate the research effort, of trying to move towards the economic impact of that kind of change.

The Vice-Chairman (Mr. Murray Calder): Is that it?

Okay, Madame Alarie.

[Translation]

Ms. Hélène Alarie: Good morning, gentlemen.

In March 1997, we finalized the Green Plan, which was very effective and which provided a good impetus, not to say good results when it was implemented. Page 19 of the Estimates deals with innovating for a sustainable future. It states that our priority is to support the industry to be competitive in an environmentally sustainable manner.

Table 4.6, on page 34, shows that contributions in support of the National Soil and Water Conservation Program will end at the end of the current fiscal year.

• 0940

For 1998-99, $1.1 million had been forecast. The estimates for 1999-2000, near the bottom of page 34 in the English version, show $1.7 million and nothing for the year 2000-2001. Can you explain this to me? This looks like a paradox to me. On the one hand, we're saying that the objective is sustainable development and competitiveness in an environmentally sustainable manner, and on the other hand, this money is being allocated to support the industry. Some programs have disappeared. Can you explain this to me?

[English]

Mr. Peter Fehr: Mr. Chairman, as Madame has clearly identified, there are no planned expenditures in that category for the year 2000-01. The ones that are listed for 1999-2000 are the completion of the national saltwater conservation program, which was funded under the CARD 1 initiative. The CARD 1 initiative was the Canadian adaptation in rural development fund, which was approved for a four-year period that comes to an end this year. Currently the department is looking at the priorities for the ongoing commitments under CARD, and environmental sustainability is one of the priorities that has been identified.

At this stage, the process has not been completed as to where the funding will actually be allocated. Perhaps Tom would like to add a little bit more on that given that the CARD fund is part of the policy branch initiative.

Mr. Tom Richardson: Yes, Mr. Chairman, as Peter has said, the minister has announced the next four years of CARD, and environmental sustainability is a priority; I expect that over the next year we will see an elaboration of where the money would be going. As we all know, a lot of the funds for CARD do go through adaptation councils. There is a process whereby those industry councils are also involved in setting the priorities for where the funds go. I think that as we go on through the year there will be greater clarification about priorities for the coming years.

[Translation]

Ms. Hélène Alarie: Mr. Chairman, since no expenditures are planned, can we conclude that no money will be allocated? In other words, can the committee consider the approaches to be adopted in the area of sustainable development? Adaptation councils are fine, but this year, in the amounts that have been given to Quebec, because of the calculation rules, which, I admit, are sometimes in our favour, we went from $40 million to $26 million for the next three years.

We had a development plan, including an agro-environmental plan for each farm, which was unique in North America. It's very easy when we know what happens on a farm. When we know the physical characteristics, the inputs, and the sources of contamination, it is easy to manage the water and soil. That's how it starts. But there are funding cuts, and I don't think that this corresponds to sustainable development. If we wish to intervene, it may be in the fields of soil and water conservation, where we have a major long- term interest.

Mr. Brian Morrissey: In spite of the changes to this budget item, I can tell the committee that in the Research Branch budget, which is approximately $250 million per year, the share allocated for soil and natural resources has increased by about 10%. This share has increased by approximately 20% in the last ten years. I can also tell you that we pay more attention to the sustainable aspect of investments.

• 0945

In this regard, we have produced a summary of ten years of study on soil conditions. This document comprises everything that we ourselves have learned through our research and everything that was funded under the Green Plan. We wanted this to be available in one document before the people who had done all this work retired. This was done and shared with the sector. I can distribute this document, if you wish, Mr. Chairman.

We also have another component, which deals with the health of our air, if I can use this term. It's fortunate that we have placed the results of ten years of research in one document, because it is a background document that will be used to determine actions to implement the Kyoto Agreement. This document has just been published. I can share it with the committee. If you wish copies, I could send them in English and French to the committee members.

Thank you, Mr. Chairman.

[English]

The Vice-Chairman (Mr. Murray Calder): I think that would be great.

Mr. Steckle.

Mr. Paul Steckle (Huron—Bruce, Lib.): Thank you, gentlemen, for appearing this morning. Because you raised the topic of the community pasture program in your comments about sustainable resource use, I'm just wondering, related to a question from a constituent, about the old ARDA program, which was initiated sometime in the 1970s, I believe. Do we have large acreages left in this program or have most of those been disposed of through private ownership now? What is the status of that community pasture program?

Mr. Peter Fehr: Thank you, Mr. Chairman. The community pasture program is in fact alive and is operating very well. We have approximately 2 million acres under community pasture programs in Manitoba and Saskatchewan, with one community pasture in Alberta, which is on the National Defence Suffield Range. The program is still operating very viably and is not decreasing.

Mr. Paul Steckle: What about in Ontario?

Mr. Peter Fehr: From PFRA, there are no community pasture programs outside out of the prairies. Under the act, we operate only in the prairie provinces.

An hon. member: The prairies are always getting favours.

Mr. Paul Steckle: We're using terms these days like renewability, sustainability. My concern is one particular area among many, one particular focused area, and that is water. You've mentioned water a number of times. You've mentioned the effort in the west in the prairies where you've brought safe, reliable water to some rural communities. Can you elaborate on that?

Perhaps you might also want to comment here. How seriously are we looking at the resource? Obviously this is something we Canadians have taken for granted for many years. It's during times like those we're experiencing now that we realize how important water is. I'm wondering how we can bring some sort of sense, of feeling, to this, so that there is the assurance that this is indeed one of the priorities of this government.

Mr. Peter Fehr: Yes, as you have well noted, water is extremely important. Again, in western Canada through the PFRA, one of our primary areas of operation is in water supply.

However, across Canada, the jurisdiction for water falls in two different departments. Environment Canada has responsibility for surface water quality and Natural Resources Canada has responsibility for groundwater quality. We are doing some co-operative work with these two agencies in ensuring that the quality of water is maintained. We are also doing some work on further investigating where the sources of water are that could be used for domestic and industrial uses. Most of that activity currently is focused on the prairies, although we do have an MOU with Natural Resources Canada to investigate this across Canada at some time, given the resources—if the resources become available. Water clearly is very important and we put a lot of emphasis on it.

• 0950

Mr. Paul Steckle: Would you elaborate on what program it is and how you made it available? Where did you find this source of clean, potable water for this example in the prairies?

Mr. Peter Fehr: In PFRA we have had a rural water development program going on probably since about 1936 or 1937. This program is aimed at assisting clients to find and distribute reliable water supplies for domestic use and for livestock and, in small rural communities, for value-added processing and so on.

It's a program that provides both technical assistance and financial assistance and, in recent years, more technical assistance than financial assistance. The amount of financial assistance that we provide for actual development of the infrastructure has gone done considerably over the years. We tend to spend more of our efforts in assisting communities in locating the water supplies, in what the problems are with water quality, and in how best to protect what water they have. It's a contribution program in which we spend approximately $5 million per year in the prairie provinces and B.C.'s Peace region to assist clients in finding water, developing the water supply, and distributing it to clients.

The Vice-Chairman (Mr. Murray Calder): Sorry, Paul, time's up.

Mr. Proctor.

Mr. Richard Proctor: Thank you very much, Mr. Chair.

I have a more basic line of questions. I wonder if somebody could give me a definition of business line planning. How does it differ from what the department did prior to 1997?

Dr. Brian Morrissey: I could have a go, Mr. Chairman. My sense is that ever since the Glassco Commission in 1968 there's been an effort to move expenditure reporting, budget reporting, in government away from line items, which were how many coveralls we bought, how many cars we bought, and the probity of spending, and toward outputs, toward what results you got for the money. Up to maybe two years ago, we had tended to identify what we did under things like “research branch”, where the output was seen as pieces of research, or the “environmental office”, where the output was seen as pieces of business in the environment.

We were asked about two years ago to try to reduce the number of headings under which we reported to Parliament and group them into things that might be more meaningful to Parliament than a branch name, such as “innovation”, meaning new technology or producing new knowledge, “marketing”, such as gaining access to new markets and keeping those markets open between GATT rounds, and “rural”, such as doing sustainable things in the rural community.

The fourth one that was brought forward is one that you would not see in the business community as a business line where they use the term; it was “management” and good managerial practice. They would have seen that as an overhead category and they would have built it into the end results. It really was very like the business approach, whereby companies will cost out what they're spending their budget on by their product lines or by their business lines.

We in government are trying to use the same system to say, here are our business lines or here are our product lines, and here's the amount of money that Parliament is giving us for these. Hopefully we can identify results to be achieved and be held accountable for them.

Mr. Richard Proctor: But if I look at the estimates for 1999-2000, I don't think I can find the money that's been allocated, for example, for the agriculture income disaster assistance plan this year. That's the major increase in moneys for this department. Your response...

Dr. Brian Morrissey: Do you want to have a go at that one, Tom?

While Tom's looking, perhaps I could make a comment. My sense is that your comment is well taken. When I read the estimates now, I'm looking for the research branch that I know or I'm looking for the policy branch that I know, and they're no longer in there as such. So in trying to roll up the existing organizational boxes and the existing budgets into a smaller number, my sense is that we've gained something in that we have a smaller number of variables to deal with, but we've lost something in the sense that headings that we're familiar with may have disappeared.

• 0955

Mr. Richard Proctor: The other point that's related to this is that only gross program expenditures seem to be presented for the business line, so it's not possible to find out where the revenues that are credited to the vote have been distributed. I wonder if you'd comment on that.

Dr. Brian Morrissey: I can speak about the revenues that come into research, which is probably a fair proportion of the revenues. It's about $4 million a year. In the past, they used to go back to consolidated revenues, as you know, back to the crown. Right now, I would say, in about 90% of the cases they go back to the research centres that produced that revenue. So if Winnipeg produces a new variety of wheat, Winnipeg would get whatever royalties come back from it.

The reason for doing that was to motivate people. In the past, it was pretty demotivating: the more profit you made, the more you lost, because it went back to the crown. Nowadays, if they take the trouble, for example, to patent something or to get plant breeder's rights on it in order to protect the moneys and get them back, the person who takes the trouble to protect it actually gets it back. While it's not a great sum of money, it's really quite motivating.

Another example I could use is one at, I believe, Swift Current and Lethbridge. In the past, they would have paid thousands of dollars to knock down an old building. But when they were allowed to keep the revenues, they came in on their own time, took the buildings down, and set the windows and boards aside, which were auctioned off and raised a significant sum of money that remained within that research centre to buy a piece of equipment or to do whatever they wanted with it. It's that kind of motivation that I think has been quite useful.

The Vice-Chairman (Mr. Murray Calder): Thank you.

Mr. Borotsik.

Mr. Rick Borotsik: Thank you, Mr. Chairman.

First of all, I should say that the PFRA has an excellent reputation in western Canada.

It's known, Paul, for its water programs and certainly for its pasture program, as well as a number of things. I wish Bernie were here so I could say that and he would know that I'm not just totally mad at him all the time.

There are a couple of points I'd like to talk about. In your presentation, you talked about the new wheat variety that's going to be fusarium resistant. PFRA has been known for and respected for supporting agriculture and the agricultural community. A number of provinces out west have asked to register a fungicide called Folicure with the PFRA. It has been refused that registration even though it is allowed in the United States. You said in your presentation that it's a $60 million loss annually in western Canada. It's growing: my number is $70 million and it's going to increase.

The PMRA being the supporter of agriculture that it is, have you made any interventions? Have you made any presentations? It's nice to be able to develop this variety, and I really congratulate you, but we're looking at a $70 million loss this year—and it's increasing. Has the PFRA done any interventions with the PMRA to try to help western Canadian farmers with this right now?

Dr. Brian Morrissey: If you'll bear with me, Mr. Chairman, I'll make a comment on that even though it's outside my domain. It's the Food Inspection Agency that formally registered pesticides before they were transferred over to Health Canada.

Mr. Rick Borotsik: We know that.

Dr. Brian Morrissey: In fact, Tom, you may have a comment.

I worked in the agency before coming to the research branch, so my sense of it is that in many cases the information generated to support a registration is generated in the United States, or if it's not generated in the United States, it may be generated in a country like Switzerland and is submitted to the United States in the first period of time. Quite often, our market isn't big enough for them to get into—

Mr. Rick Borotsik: Please, Mr. Chairman, I only have five minutes so I want to jump in here. I know all of that. My point is that there has been a request by provincial ministers of agriculture to get a temporary registration. My question simply is, has the PFRA been proactive in this and suggested that maybe we should get a temporary registration to help save $60 million in the west?

Mr. Peter Fehr: The direct short answer to that, Rick, is no, we have not, nor have we been approached, to my knowledge, by any organizations to that—

Mr. Rick Borotsik: Okay. That's why I'm asking the question. It's not necessarily something to be reactive to; it's something to be proactive to. We're talking about $70 million here, and I think PFRA should, in fact, be a little more proactive in that aspect of it. I don't mean to be antagonistic. As I said at the outset, I think you do a fairly reasonable job.

I have two other very quick questions. One is with respect to Kyoto. Again, you're putting together the impact on agriculture. On that, have you used as a variable the carbon sink that I hear about so often? Agriculture should have a credit given to them for the carbon sink; and therefore it should... it must not be impacted to the extent that other industries perhaps will be.

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Dr. Brian Morrissey: Mr. Chairman, we in Canada raised the potential for carbon sink in agriculture. We have freed up time for the director at the Swift Current station so that he could go to the international meetings to try to put facts on the table which would support not just forestry, which are large plants and are already recognized—

Mr. Rick Borotsik: Mr. Morrissey, then, what you're saying is that you're proactive in that aspect of it—

Dr. Brian Morrissey: Proactive in that—

Mr. Rick Borotsik: —but you haven't been proactive in the fusarium side.

An hon. member: Yes.

Dr. Brian Morrissey: No, no—

Mr. Rick Borotsik: But you have been proactive in the—

Dr. Brian Morrissey: No, no, I wouldn't buy that.

Mr. Rick Borotsik: You may not.

Some hon. members: Oh, oh!

Dr. Brian Morrissey: No, Mr. Chairman. Fusarium is one of the examples where we moved resources very quickly because the minister and the industry said this is a priority, so breed for us a variety that has natural resistance—

Mr. Rick Borotsik: And in the meantime we could have something that would protect us, however...

Do I have more time, Mr. Chairman?

The Vice-Chairman (Mr. Murray Calder): One more question.

Mr. Rick Borotsik: Thank you.

How closely does the PFRA work with the Rural Secretariat? We had the Rural Secretariat here before us and, quite frankly, I was very disappointed in the types of programs they're developing, a lot of them in western Canada. Is there liaising between the PFRA and the Rural Secretariat? If so, how? If so, can you tell me how you can improve upon the activities of the Rural Secretariat with the impacts of certain things on rural Canada?

Mr. Peter Fehr: Yes, Mr. Chairman. PFRA is involved with the Rural Secretariat in each of the three western provinces and in British Columbia. We have a representative of PFRA on the Rural Secretariat rural teams that are established in each of the provinces. Our input and activities in that area are to educate, if you like, the other members of the rural team—who are from federal government departments other than agriculture—on the activities PFRA does in rural Canada which directly benefit rural Canadians.

Our input is largely to raise the level of awareness within the federal community in the prairie provinces about what PFRA actually does in rural Canada that directly contributes to, if you like, the rural way of life. That will be our ongoing focus: to try to raise that level of awareness with the Rural Secretariat.

The Vice-Chairman (Mr. Murray Calder): Excuse me, but you're out of time.

Mr. Rick Borotsik: Okay.

Put my name on the list, Georges.

The Vice-Chairman (Mr. Murray Calder): In fact, Rick, you might want to write this on your calendar. On May 27, we'll have the Canadian Food Inspection Agency here from 9 o'clock until 11 o'clock. They'll be doing the estimates, so you could follow that along in that line of questioning.

Mr. McCormick.

Mr. Larry McCormick: Thank you, Mr. Chair.

Thank you, gentlemen, for being here.

I'm sure that in the next few years, as in the last very few, we'll have an even greater demand for water in western Canada, as we do in most parts. Thinking about the prairies, as we all work towards value-added products and that, I'm just wondering—and I know I should know this—who does the quality control testing of the water supplies that we have now, those above ground and those below ground, the reserves.

Mr. Peter Fehr: Normally, water quality testing of that nature would be done by provincial environment departments. This is an area that falls under provincial jurisdiction.

Mr. Larry McCormick: You would follow those testings, because as you explore and get companies and groups to access the water that's below the surface... In most parts of North America, even in the driest areas, there are huge reserves of water beneath the surface. In the prairies, how does the groundwater purity stand up? How does it test in areas of intensive agricultural activity? I'm referring to areas in which there has been a lot of grain growing, maybe, and perhaps not every other year of summerfallowing.

Mr. Peter Fehr: On the quality of water as it relates to agriculture practices, generally speaking, we have not found any major impacts. There are, however, pockets, hot spots, if you like, where we have intensive agriculture, particularly in livestock production—more so than in crop production—where we are noticing some impact on groundwater qualities, particularly in nitrate levels.

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But overall, I think, the general consensus is that the impact has not been dramatic. That isn't to say that we need not be vigilant. We should be, because the potential is there. Perhaps I'll let Dr. Morrissey expand a bit on this, because they're very much involved in water quality as well.

Dr. Brian Morrissey: We're in the final stages of preparing a sister document to the two that are circulating, Mr. Chairman, a document on health of our water. Because the sustainable end, the stewardship end, is becoming an issue of public interest, what we're trying to do with these documents is to get all the parties who have facts to agree on what the facts are and get them out between two covers before it becomes controversial.

For example, you'll notice that The Health of our Soil was only signed off on by us, and we felt we didn't get the same credibility as if we Environment Canada had also signed off on it. The Health of Our Air has been signed off on the fly page by both Agriculture Canada and Environment Canada.

For The Health of Our Water, the reason it's taking a little longer is that a lot of other agencies, as Peter said, actually have the data, so we're collecting it from them. We have it all collected now and it has gone out to about 20 of the parties of interest who gave us data, in order to have them “ground-truth” it. Eventually, when we get it out in the street, maybe in August of this year, we'll have a set of facts about the sustainable end of agriculture—soil, water, and air—that I think will be as incontestable as you can get.

Mr. Larry McCormick: I thank you and congratulate you for your work there, because with the concentration of animal production facilities... and, of course, as great as they are in Canada and in, for example, Manitoba, they're nothing compared to what the Americans are doing—thank goodness. When I hear of a man by the name of Tyson who is building a million-sow operation in the desert northeast of L.A., in northeastern California, it's pretty scary.

I also just want to mention another thing that bothers me when I hear a person who is listened to by a few million people in California and who is always saying, you know how our animals use more than their fair share of water... and of course then we turn around and then you don't eat meat... I'm a great fan of all commodities and certainly support agrifood, but I visit California, where most of us get our vegetables from, and I think those vegetables also soak up a bit of water.

All of this information that you're accumulating for us is so very important.

I'll just pass my time on for now, Mr. Chairman.

The Vice-Chairman (Mr. Murray Calder): Thank you very much.

Mr. Hilstrom.

Mr. Howard Hilstrom: Thank you, Mr. Chairman.

In regard to the research in grain crops, into diversification and new crops, I think it has been well shown over the last 55 years that the research into wheat and barley, etc., has been pretty extensive. In that same 55-year time span, the federal government, through the Canadian Wheat Board, has emphasized that kind of research for western Canada and we're now paying the price for not having diversified into other crops at an earlier point.

Ontario, for example, managed to diversify into a ton of different types of crops—and high-value crops. Western Canada was starting with canola and finally got on the bandwagon a little. Now we see a lot of diversification, where farmers are growing anything but wheat—unless they have to. Is there a special emphasis to develop new crops that are suited to the prairies? For instance, peas have been brought on and now we're finally into potatoes and this sort of thing. Is there an emphasis for western Canada in that regard?

Dr. Brian Morrissey: Yes. There's a quite specific emphasis, Mr. Chairman, to try to diversify a crop base in western Canada, for two reasons: one, for economic sustainability and, two, for environmental sustainability, particularly as you get into the southern prairies where it's drier and it's a little tougher to get rotations.

For example, we've been working with a partner in the west to convert brassica juncea into a canola crop so that it could be a rotation on the edges of the Palliser triangle. It would give us two advantages, Mr. Chairman. One advantage would be in years where in the northern prairies you might not have a good canola crop; we would have continuity of supply. So we would keep our markets in Japan because you might have a good crop in the hotter, drier prairies, the southern prairies. Second, you also get a rotational crop that protects your soil and breaks your disease cycles and so on.

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Mr. Howard Hilstrom: The idea of the natural competitive advantage of a given area to grow given types of crops and to have the capability to expand the diversity of those crops is exactly what's needed. If I, in Manitoba, can diversify and grow crops other than wheat, then the less volume of wheat that I put out, the more there is for the Palliser triangle to put out—where they can grow it well. This is what's been wrong with the whole development of crops in western Canada to this point, so I'm really pleased to see this being done.

In regard to this research, these joint investment things into the research, this comes up all the time: who owns the patent? What percentage do they own? Who decides... If private industry puts in half the value, do they get half the patent? Could you just describe how the royalties accrue back to... Is there an official policy in the federal government that we could look at in regard to how these agreements are set up?

Dr. Brian Morrissey: There's a document on the matching investment program, and we could get that down to you, but the underlying principle is that it's a contractual relationship between Mr. Hilstrom, the private person, and the research branch as an agent of the crown. The ownership of the intellectual property is negotiated in that contract based on who takes the risk and who puts in money. So you could own it or we could own it or we could share it on a continuum, depending on how early you come in and on how much money you put in.

Mr. Howard Hilstrom: What farmers seem to really want is that the things are developed with the federal government money be seeds that are available for use by all farmers, seeing as how... and to be able to re-use it without having to keep paying for it. Has that ever come out of these agreements?

Dr. Brian Morrissey: My sense is that the seeds that came out of government labs were never free. We distributed them through an agent like, for example, SeCAN. They were always sold. There was always a cost factor associated with that. The comment, I guess, that's underlying the current situation is that if we take private money, then we have given up some crown rights. In other words, they can't be completely free. The private sector gets something in return for the money they've put in. But I think what's key to it is that we're now getting money and research outputs that solve Canadian problems, which we would not be able to get or do if we did them by ourselves.

Let me just give you one figure. We should have, if you look at the estimates, a little over 2,000 full-time people working in our laboratories on research for this country. We did a survey in July of last year—admittedly a peak point when the summer season was on—and we had 4,500 people working in the labs. That's almost double the number of hands doing research for Canada. In return for getting those people in, we've had to concede some rights.

Mr. Howard Hilstrom: Mr. Morrissey—

The Vice-Chairman (Mr. Murray Calder): Sorry, Howard, you've run out of time.

Mr. Murray.

Mr. Ian Murray (Lanark—Carleton, Lib.): Thanks, Mr. Chairman.

I'd like to ask a question of Mr. Morrissey, head of the research branch. It's about the future of the Central Experimental Farm in Ottawa. I was wondering if Mr. Morrissey could bring us up to date on what's being done there in terms of research right now and also on what you see in the future for the Central Experimental Farm.

Dr. Brian Morrissey: May we divide the farm into two portions, Mr. Chairman? There is the Central Experimental Farm, the main downtown farm, which is on Carling Avenue, and there is also the greenbelt farm, which is out in Nepean, just opposite the Nepean Sportsplex.

In the 1995 budget, we in effect shut down pretty well all of our operations out at the greenbelt farm and lost about 350 people there. There is an arrangement with those lands. Legally, the first right on them if we declare them surplus to our needs—and we will declare them surplus, or pretty well most of them—is that they go for $1 to the National Capital Commission.

We have, in effect, turned them over to the National Capital Commission and we're negotiating details on how they'll take them over. They'd like to get some money in addition to getting the lands, but legally they have first right. They get those lands first. The minister's instruction to me is that those lands stay in the public domain, so my sense is that the National Capital Commission will take them and that if they don't the lands will stay in the public domain. That is my instruction at this point in time. We likely will keep a little of that land because we need it ourselves, but right now it looks like the bulk of it will go to the National Capital Commission.

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The Central Experimental Farm proper, downtown on Carling Avenue, will continue to be our Central Experimental Farm for this part of the country. The work that we're doing on corn, on small grains for Eastern Canada, on biosystematics—classifying insects so we can identify the weeds and fungi and so on—will all remain centralized on that Central Experimental Farm.

Mr. Ian Murray: Okay. So looking at the long term, you expect that it will remain as important as it is today and as it has been in the past.

Dr. Brian Morrissey: Yes.

Mr. Ian Murray: Okay. Thanks.

The Vice-Chairman (Mr. Murray Calder): Madame Alarie.

[Translation]

Ms. Hélène Alarie: My first comment will follow on what my colleague, Mr. Proctor said: I have looked at last year's and this year's Estimates; and there are 11 tables less. I don't think that the Estimates are a work of philosophy. This is something that we need. It is a tool to help us conduct our analyses. With fewer tables, it becomes a puzzle. We are no longer able to make the analyses that we previously could. This is my comment.

Now for my question. It's like an obsession. I come back to this at each committee sitting. I am even going to get back to it in the autumn. It deals with the Rural Secretariat for Quebec. I can't talk about the other provinces, but I can tell you what I know.

When I read paragraph 5.1 of the document, I agree entirely with the objectives. I think it is great that a number of departments and agencies are working together and that there are Federal Rural Teams to review projects. I also think that it is just fine to review projects with a "rural lens". Where things fall apart is when you talk about testing new approaches to community development issues and concerns through "pilot projects". I have carefully analyzed the pilot projects that were implemented in Quebec. There has been a whole series of them in partnership with federal or provincial agencies. I have no problem with this. Partnerships are just great.

But there are many others that have been criticized, not only by me, but also by movements such as Solidarité rurale, a movement that represents farmers and people in rural communities, and the UPA. At the beginning, I was crying alone in the wilderness, but I am no longer alone. There are so many urgent needs that we cannot waste money on silly projects.

These include projects for rural communities in Longueuil, Saint-Hubert, Brossard and Saint-Lambert. I have lived in Saint- Lambert, and I know that these are towns. They are not at all rural communities. There is not even a greenbelt in those communities. There is over a million people.

Could you explain why these were called rural communities? It's beyond me.

There is a taxi cooperative project in Montmagny County. There are already taxis. It is a town with 45,000 inhabitants. There is already an organization. This only causes trouble in the community.

I could tell you of seven or eight similar projects. There is one in the Prime Minister's riding, where a nurse is being paid to take people to see a doctor. The Prime Minister does not live in a hamlet. He lives in an area where there are structures.

This is very dangerous, because there are many requests. For example, in Abitibi-Témiscamingue, there is a project for underground drainage, and it needs money. This would be a sustainable, solid partnership that no one would criticize.

I don't know where all of this is going to lead, but I find it unfortunate money is being taken from the community and is being spread around in what looks a lot like political patronage. This is how it is being interpreted. It's been a long time since we've seen something like this.

This is my comment, you can be sure that I am going to get back to this.

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[English]

Mr. Tom Richardson: Mr. Chairman, as the member said, she has focused on this before. I would recall for the committee that the minister did answer this question a week ago. I just remind the committee that there was $20 million allocated over four years for rural initiatives and, for the first year, I believe, it was about $3.9 million. Over 200 projects were proposed. As the minister said, there was an independent committee of people from rural communities across Canada. That committee took a look at those projects independently of the minister, independently of the government, and they decided, I believe, on some 63 or 68.

As for the question of what rural is, I believe the minister did address that a bit. It's sometimes a challenge. There is rural, there is “far rural”, and there is “near rural”. There are questions there for sure, and I think that as the Rural Secretariat goes on and as we try to better understand what we mean by that, maybe things will be clearer to all of us as to how we look at that.

I just want to reassure the committee that the process for selection of those projects was an independent process, and I can reaffirm what the minister said last week.

The Vice-Chairman (Mr. Murray Calder): Thank you very much.

Mr. Steckle.

Mr. Paul Steckle: We're constantly looking at finding new ways to develop better and to produce better. If it weren't for the genetically modified grains and all kinds of products that we're growing today, we wouldn't be able to feed the world into the future. Biotechnology has played a big role in this. We support that; Canada has been a leader in that area.

But here you mention the new variety of soybeans that has been developed and the potential for that in Asia. Given the resistance of the European markets to some of the technologies that we've applied here in Canada, do we have the assurance that Asia is going to be accepting of these products or are we going to find the same kind of resistance?

Has your department, in looking at the future negotiations as we enter WTO, been looking at how we can break some of these walls of resistance that have been built up against some of these technologies? It's fine to develop it, but we can't just develop it for ourselves. We need to be expanding into these markets, and I applaud you for that, but have we done the research? Do we know that they're ready to accept them? Have we developed the arguments for accepting those kinds of things—I guess that's where I'm coming from—so that we are ready to face the future and are prepared to meet those demands in the market?

Dr. Brian Morrissey: Mr. Chairman, perhaps I could make a few comments and then Tom or Peter could add some comments if they have any.

Firs, my sense is that Canada is in a fortunate position because our options are open. We have allowed ourselves to develop transgenic crops and we have allowed ourselves to continue to traditionally develop crops, so that whichever way the world market goes, this country has the skills, the laboratories, and the varieties out there to meet the market demands.

The second part of the question, as I understood it, was about whether we can ensure that the Asian markets will accept them. My sense is that we can't ensure that sovereign countries do other than what they want. However, what I think we can ensure is that since these countries have signed up under the GATT that they would allow free movement of goods and services across their borders except where there's a threat to animal health, crop health, or human health... If, for example, they were to stop these crops going into these countries because they didn't like them or because they had an economic impact—as distinct from a reason of health—then we could take them to GATT, get corrective action, or get a compensatory payment.

In terms of whether we have our arguments lined up, my sense is yes, we have, but I think that stronger than having the arguments are the teeth in GATT, which, for example, on the beef issue in Europe, can require compensatory payments.

The Vice-Chairman (Mr. Murray Calder): Thank you.

Rose-Marie, because Paul still has some time left here, you pick that up.

Then we have a half-hour bell, so I'm going to try to get us finished by 10.40 or just a little after that, and the questioners will be Borotsik, Proctor and Hilstrom.

• 1025

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): I have just a quick question. In the last page of your presentation, Mr. Morrissey, under sustainable resources, you said that the department will provide, this year, new sources of safe, reliable water to 3,000 rural Canadians on the prairies and to another 1,250 prairie enterprises.

How do new sources of safe water come about? The reason I ask that question is that in Ontario several members have had concerns brought to them regarding drainage moving from the Ministry of Natural Resources down to our conservation people. Are you able to do that within your own parameters or do you have to get permission from DFO? How do you bring this about?

Mr. Peter Fehr: The development of the safe water supplies that you see shown here will be pipeline distribution of water from a secure water supply. The water supply could be a deep well or it could be a surface body of water. The water will be distributed to communities and individual producers by a pipeline, so there will be no surface contamination of the water conveyance.

In terms of ensuring that it's a safe water supply, we would do our testing and have the water checked to make sure that there are no sources of contamination for the supply, prior to the distribution. Where needed, particularly in communities, the water would be a treated water supply. So we don't need—

The Vice-Chairman (Mr. Murray Calder): One more short question, and we need a short answer.

Mrs. Rose-Marie Ur: For the 1,250 prairie enterprises, is that irrigation? What is that?

Mr. Peter Fehr: No. That would be to communities that have applied for water assistance and are also looking at providing that water to enterprises within their boundaries. They could be value-added processing enterprises, whatever enterprises...

The Vice-Chairman (Mr. Murray Calder): Mr. Borotsik.

Mr. Rick Borotsik: Thank you.

Very quickly, I have a couple of questions. Back to the Rural Secretariat, I brought it up initially and I have to continue along the same lines as my good friend, Madame Alarie. What actually is the relationship between PFRA and the Rural Secretariat? Is there a relationship that's been outlined in the department?

Mr. Peter Fehr: The Rural Secretariat, although it is housed within the Department of Agriculture, is a cross-government initiative. It is not just an Agriculture and Agri-food Canada initiative.

Mr. Rick Borotsik: Yes, Peter, but it is a cross-department initiative only when one of the other departments asks it to be. That's one of the bugaboos I have about the department. Is there a relationship with PFRA and the Rural Secretariat at all? Do you get involved in it at all, when asked, or do you get involved on a proactive basis?

Mr. Peter Fehr: We are involved as part of the each of the rural teams in the prairie provinces.

Mr. Rick Borotsik: Okay. Right. Good answer, Peter.

My other question, Mr. Chairman, has to do with the CEPA. Again, PFRA, as I say, has a good reputation out there in western Canada. CEPA, the environmental protection act, is coming forward right now. Have you had any input into that? Can you give me your department's position on “virtual elimination”, which is a relatively interesting term within the CEPA document right now? Are you familiar with it? Have you had any feedback with respect to virtual elimination?

Mr. Peter Fehr: No, I'm not familiar with it so I wouldn't be able to comment on it. I do know that the department has had input into CEPA, but that's been through our environment bureau. Maybe Tom—

Mr. Rick Borotsik: So PFRA has not been asked for their opinions at all.

Mr. Peter Fehr: From the department perspective, yes, but not directly by CEPA.

Mr. Rick Borotsik: No. I'm talking department now... This is a piece of legislation that is ultimately going to affect agriculture and you are ultimately supportive of agriculture.

Mr. Peter Fehr: Right.

Mr. Rick Borotsik: Do you have any concerns? If so, have you brought forward any of those concerns to your department?

Mr. Peter Fehr: Yes, we have. We have been asked to comment on it and we have provided concerns about CEPA.

Mr. Rick Borotsik: Okay. We're getting somewhere here, Peter.

Mr. Peter Fehr: Yes. Unfortunately—

Mr. Rick Borotsik: What are your concerns?

Mr. Peter Fehr: —I can't answer that directly, Mr. Borotsik, but I can certainly provide you with our concerns if you would like.

Mr. Rick Borotsik: We should chat.

Mr. Peter Fehr: Yes. We should chat. Thank you.

Mr. Rick Borotsik: Thank you.

The Vice-Chairman (Mr. Murray Calder): Mr. Morrissey, it sounds like you have a comment on that.

Dr. Brian Morrissey: We have presented a point of view to the agency on CEPA, proactively. We didn't wait to be asked for it.

Mr. Rick Borotsik: Thank you!

The Vice-Chairman (Mr. Murray Calder): In fact, Mr. Borotsik, just listening to what you brought up here, we have about three or four committee meetings left before we break for the summer, and I think it might be a very good idea to take a look at having the Rural Secretariat here.

Mr. Rick Borotsik: I'd love that.

• 1030

The Vice-Chairman (Mr. Murray Calder): Okay. I'll make the recommendation to the chairman.

Mr. Rick Borotsik: Maybe a little bit more, Mr. Chairman, if you could, than just simply trying to rationalize the projects that they have approved... Maybe there is something else deeper within the Rural Secretariat that would be more—

The Vice-Chairman (Mr. Murray Calder): We can always bring that out if and when we have the Rural Secretariat appear in front of the committee.

Mr. Proctor.

Mr. Richard Proctor: Thank you.

Mr. Morrissey, a few minutes ago you mentioned the beef hormone issue in Europe, and of course today is the deadline, and I just wondered whether the agriculture and agrifood department had any update. I noted the other day that the Europeans said they had some new evidence to indicate that the hormone was cancer-causing. Have you looked at that study? Is there any analysis that has been done? Where are we on the issue?

Dr. Brian Morrissey: No, I have no recent information on it.

Mr. Richard Proctor: Today is the deadline for them to respond to the WTO. Is it your assumption that we will be going ahead and placing trade barriers or seeking financial compensation for the continuation of the ban?

Dr. Brian Morrissey: I would have no knowledge of it, other than what I read in the papers.

Mr. Richard Proctor: Okay. Thanks.

Dr. Brian Morrissey: I'm not being clever. I'm just not involved in it directly.

Mr. Richard Proctor: No, that's okay.

The Vice-Chairman (Mr. Murray Calder): Mr. Hilstrom.

Mr. Howard Hilstrom: Thank you, Mr. Chairman.

Mr. Proctor's question irritates me to no end, because it leaves this cancer-causing suggestion in regard to this beef growth hormone thing, which is pure bunk. The fact of the matter is that the Europeans want to pay Canada and the United States over... instead of allowing our beef in there, and that came out in yesterday's news media. That's quite clear. There is no cancer-causing problem with it, other than like there is with any other product. If you drink a ton of water, it's going to have a negative effect on your health. I would just clarify that.

In regard to the funding, when you guys go back to your departments for funding, don't ever let them sell you on there not being enough money in this government for all the research that we need done. Yesterday we learned that we had Bubbles Galore, that pornographic movie, funded for $55,000. I could find you half a billion dollars in funding for research. We don't have to totally rely on private industry to get into doing the research for agriculture that we Canadians should be doing.

With respect to the Rural Secretariat and that whole CARD thing, this has come up several times. The suggestion of trying to find doctors for northern Manitoba was brought up, and I share the concern of all the other members on this side of the opposition.

What needs to be done? Farmers are under the belief... I'm talking about farmers who file an income and expense statement for Revenue Canada. I'm talking about the farming sector. They're under the belief that this $20 million, this money is for farming, for rural... The communication that your departments have to do is to separate this out into the fact that for the farming sector, those who file income and expense statements, only a portion, whatever portion it is, only 10%, of this money is going to that sector. The rest is going to “rural”, and Madame Alarie is making a 100% point there. We're being deceived into believing that something is being done for farmers when it isn't. I think that communication has to be better set out.

I should give you one last comment on that, I guess, as to what you think of that.

Mr. Tom Richardson: I think, Mr. Chairman, that the member is making the point that the Rural Secretariat is meant for people in rural Canada, both farmers and non-farmers, and perhaps because programs like CARD and our research programs and PFRA tend to be more focused on the agriculture sector, that we should be... Probably in that sense the emphasis should be that the Rural Secretariat is focused on the rural community and not specifically on agriculture. I think that's the way we see it. I guess maybe it shouldn't be understood that the Rural Secretariat is simply focused on agriculture, because rural Canada is everything from fishing, lumbering, and mining to many other activities, and we're trying to address all of those areas of rural Canada.

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Mr. Howard Hilstrom: I have one last question on PFRA. We had a hog manure research program. I believe it was funded to the tune of about $500,000 for the Interlake in Manitoba. They started last year. How are the results of that research going to be reported so that we in the public can find out about it? Will we see it in a report someplace? How will that be done? Will the results be given a dollar valuation as to how wisely that $500,000 was spent?

Mr. Peter Fehr: I can answer that. The results certainly will be made public. As you indicated, they just started the project about a year or a year and a half ago, so it will take a little of time. The results certainly will be made public. In terms of evaluation, it is part of both the CARD program and the other source of funding for that, the CAIP program. There is an evaluation framework set up and it will be evaluated at the end to see how efficiently and effectively the funding was spent.

Mr. Howard Hilstrom: Thank you, Mr. Chair.

The Vice-Chairman (Mr. Murray Calder): Committee, we're right on time. I have one little announcement to make here. Barry Wilson, one of our reporters here, is going to have a little bit of a shindig for Eugene Whelan. It is being held to honour him on a very remarkable career on Parliament Hill, which I agree with. I've handed out the notice to you, and the phone numbers are there. As Barry says, there are few places in the world as pleasant on a gentle June evening as the beautiful Gatineau Hills—sounds like a heck of a party.

Mr. Rick Borotsik: My question is, Mr. Chair, is he having Manitoba beef and Manitoba pork?

The Vice-Chairman (Mr. Murray Calder): I think you'd have to phone Barry to ask him about that—or talk to him right now.

An hon. member: Does he want a donation?

Some hon. members: Oh, oh!

The Vice-Chairman (Mr. Murray Calder): Thank you very much, committee.

Thank you very much, gentlemen, for your very valuable information.

We now have a vote.