AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, June 8, 1999

• 0850

[English]

The Chairman (Mr. John Harvard (Charleswood St. James—Assiniboia, Lib)): Members, we'll begin this meeting. We have only an hour, so we should get right down to work. We are continuing our discussions having to do with value added and the new generation of co-ops.

We have the pleasure today of hearing from the Minister of Natural Resources and the gentleman responsible for the Canadian Wheat Board. I'm speaking of Ralph Goodale. I understand that the minister will make some opening remarks, which I hope are not too long, and we'll get to questions as quickly as possible.

Good morning again. You can go right ahead, Ralph.

The Honourable Ralph E. Goodale (Minister of Natural Resources and Minister responsible for the Canadian Wheat Board): Good morning, Mr. Chairman and members of the committee. Thank you for inviting me to be here today.

The two gentlemen I have with me I am sure will be familiar to the committee: Howard Migie from Agriculture and Agri-Food Canada, and Earl Geddes from the Canadian Wheat Board.

I'm very pleased to have the opportunity to talk to you about the value-added sector in the agriculture and agrifood industry and particularly the grains industry.

In 1996 the world trade in agriculture and agrifood products was approximately $464 billion U.S. By 2005 it's expected to be as high as $745 billion U.S. In Asia and Latin America in particular populations are burgeoning, and right along with them is the number of increasingly sophisticated middle-class consumers who are looking for high-quality North American-style food products. Canada's agriculture and agrifood industry is capitalizing on opportunities like that by increasing investment in value-added processing, and these investments are, in fact, paying dividends. In 1996 for the first time Canada exported more processed food than it imported. In 1997 Canadian processed food and beverages were valued at more than $54 billion. That's an increase of more than 30% from a decade earlier.

As I'm sure you know, the Canadian Agri-food Marketing Council has set two targets for the year 2005: to capture 4% of the world's food trade, which would be up from the current 3.3%; and, even more importantly, to increase the proportion of Canada's value-added food exports to at least 60% of the total, up from the 1997 level of about 40% and last year's level of roughly half. Export trends over the last three years strongly suggest that these goals of the Canadian Agri-food Marketing Council are achievable.

The Government of Canada, including my colleague, the Minister of Agriculture and Agri-Food, is doing its part to support these goals in a number of ways: firstly, through ongoing export development and trade promotion activities, such as the Canadian agrifood trade service and missions led by the Prime Minister and Minister Vanclief, which raise Canada's profile with key or potential trading partners around the world; secondly, through support for research and development to ensure Canada remains at the forefront of crop development, agriculture and processing technology, biotechnology, soil and water sustainability, and so forth; thirdly, through the Canadian Food Inspection Agency, which safeguards Canada's reputation for safe and high quality food while it works with agrifood firms and provincial governments to try to cut red tape; fourthly, through trade pacts and agreements, such as the North American Free Trade Agreement, the World Trade Organization, bilateral deals, and ongoing discussions with other bilateral trading partners; and, finally, through the creation of a positive, macroeconomic environment accomplished over the last five years in part by the dramatic improvement in Canada's fiscal fundamentals.

Among the difficult decisions taken to eliminate distortions, improve efficiency, and encourage more prairie-based value added was bringing an end to the subsidy under the Western Grain Transportation Act, which had become unintentionally an impediment. Unsubsidized freight rates encourage the shipment of higher-value goods and, conversely, make it less desirable to ship only lower-value bulk commodities, particularly from those areas that are the farthest from port. There's no question that this change has been a major factor driving recent diversification in the value-added sector in western Canadian agriculture.

• 0855

As a result of all of this, there has been a strong upsurge in new investments in the prairie agrifood economy and a noticeable acceleration in livestock enterprises and the meat business, canola and specialty crops, the malt business, compressed hay, all forms of food processing, fine foods, brewing, nutraceuticals, new technologies such as cereal fractionalization and non-food developments such as oxygenated alternative fuels.

Preliminary statistics show that food and beverage processing shipments in Canada grew by 17% from 1993 to 1996 and that the prairie provinces led the nation by a considerable margin in terms of food processing growth. The food and beverage processing sector is the largest manufacturing sector in the prairie provinces and the third largest in British Columbia.

The province of Manitoba leads the way in value-added growth, with planned and actual investments over the last four years estimated at about $925 million. That was followed by Alberta with an estimated $750 million in investments and Saskatchewan with an estimated $161 million worth of investments. Livestock processing has dominated in Manitoba and Alberta, and Alberta has also seen a major increase in grain processing. In Saskatchewan most of the value-added investment has been in grain processing, including the expansion of canola crushing and wheat and oat milling.

Contrary to what some might allege, all of this value-added growth has not been restricted to products outside of the Canadian Wheat Board's domain. There has indeed been an increase in the processing activity in wheat and barley. Since 1990 malting barley processors have expanded their capacity by 50%, and over the past five years durum milling has increased by 20%. A firm called Prairie Flour Mills opened a $6 million flour mill last year in Manitoba. Other new wheat mills have been constructed to process Canadian Wheat Board grains in British Columbia and Alberta.

The level of investment activity in value added on the prairies in recent years indicates an increasingly attractive investment climate in western Canada. This is further confirmed by a recent KPMG study, with input from the Canada West Foundation, entitled “Renewal of Food Processing in Western Canada”, which cited eight key factors contributing to the restructuring and resurgence of food processing in western Canada, creating new jobs and growth on a broader and stronger foundation. The challenge for all of us, Mr. Chairman, is to ensure this diversification and expansion on the prairies becomes an enduring trend, that we keep a step ahead of the changes that are sweeping the world and that we don't get swept aside in the process.

The Canadian Wheat Board, as you heard last week from the representatives who appeared before you, does indeed support value-added processing. In fact the board has worked with various groups that are interested in pursuing new processing ventures and with the Canadian National Millers Association to explore ways to facilitate value added. However, the CWB must also maintain absolute fairness when dealing with Canadian farmers and processors. It must be very careful about discretionary decisions that may influence the relative competitiveness of Canadian processors and of course it must maintain the integrity of its pool accounts, ensuring that all farmers delivering into the grain pool share appropriately in market returns.

In amending the Canadian Wheat Board Act last year, the government's goals were, firstly, to make the corporate governance of the CWB more democratic by giving producers a greater and more direct say in determining the Canadian Wheat Board's direction; secondly, to strengthen the CWB's accountability to producers; and thirdly, to provide the Canadian Wheat Board with increased operational flexibility to help it respond to changing producer needs in a changing marketplace.

Under the new governance structure it's the board of directors, including ten directors—that is, a two-thirds majority who are directly elected by farmers—who are responsible for determining the strategic direction of the CWB, including its sales strategy. The federal government itself is not involved in dictating the CWB's sales policy nor in determining the prices at which grain is sold. That is up to the board, as it should be.

• 0900

The CWB's stated mission is to maximize returns to wheat and barley producers. At the same time, the Canadian Wheat Board has a long-running business relationship with domestic processors, and their interests are also taken into account.

The CWB is well aware of the fact that since 1991 domestic processors have been able to freely import wheat and barley from the United States. On the other hand, if Canadian processors were to get preferential treatment from the CWB, the United States would be very quick to cry foul, and you can be very certain of that. As a result, the Canadian Wheat Board has developed a transparent and competitive pricing system for sales to domestic processors to put Canadian millers on a level playing field vis-à-vis their U.S. competition as well as with each other.

With respect to the proper and fair treatment of new and different enterprises, like new generation co-ops, the CWB's directors are right now carefully considering how best to respond to some of the most recent ideas and innovations. It is properly within the authority of those directors—again with a two-thirds producer majority—to make the appropriate decisions. And I'm advised by the directors that they anticipate being able to respond with a decision with respect to new generation co-ops in the next number of weeks.

Thank you, Mr. Chairman.

The Chairman: Thank you, Mr. Minister. I think that's a good start leading into our first round of questioning.

I think we have about a good 45 minutes for questions, so we'll go directly to Mr. Hilstrom for seven minutes.

Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): Thank you, Mr. Chairman.

Welcome, Minister.

I have to make the basic comment that the speech you just gave was certainly fine for a Rotary Club, but I don't think it really deals with the basic issue here. And I certainly hope you're not intending that the government is taking credit for the value-added on the prairies one way or the other.

The issue today is marketing and farm assets. Lots of farmers have a million dollars in assets on their farms, either individual or corporate or whatever kinds of farms. Their objective is to maximize their return for their farm, and they have to be able to make the decision to do that, whether they do it through a cooperative or other ways.

I want to tell you right off the bat, you know Reform's position is that we want a voluntary Wheat Board so that farmers can have their choice how to maximize their returns themselves.

Of these cooperatives, a good example is Peak of the Market in Portage La Prairie, Manitoba. You're familiar with that. They're selling potatoes to Jamaica, cabbage to Russia, carrots to California. This is a group of farmers who got together and decided how to market their product, and that is vital.

You mentioned barley producers; most of them want to have either a voluntary association or to get right out of the Wheat Board, including the maltsters, who you referred to as value-dded.

Prairie Pasta, the basic issue here today, is just one example of these co-ops. Our position as a committee is certainly not to mediate or negotiate a deal between you. The issue here is bigger than that. You and the government have taken the position that you should literally dictate—and I'm using the word advisedly here—through the Canadian Wheat Board legislation that wheat producers will only market through that Canadian Wheat Board, and not be given the chance to value-add if they decide not to go through the Wheat Board.

So it seems that not only the government, but you personally are committed to this philosophy that government knows best, that government should dictate to agriculture, to farmers who are running a million-dollar business, how they should market their products. I'd like your comments on that. And I would like to know specifically why you will not give an exemption to Prairie Pasta Producers to set up their own farming co-op, specifically in durum wheat, to produce a value-added product at the least possible cost.

Mr. Ralph Goodale: Mr. Hilstrom, I think you've missed the whole point of the legislation in Bill C-4. Bill C-4 democratized the Canadian Wheat Board. It provided a new system of governance. It created a board of directors for the first time in history. Two-thirds of that board of directors is directly elected by farmers themselves, 10 of the 15. And the act explicitly says that all of the power and authority of the Canadian Wheat Board is vested in the hands of its directors. They are the ones who make the decisions.

Representations have been made to the directors concerning this novel innovation of new generation co-ops, and the Canadian Wheat Board's directors are considering—right at this very moment—what the appropriate response would be.

• 0905

What you're asking me to do is to pre-empt the deliberations of the board of directors and to issue a direction to the Canadian Wheat Board to pursue one particular course of action. I remember that in the debate in the House about this matter members of the opposition were highly critical of the power in the act for the government to issue directions to the Canadian Wheat Board. Now you're asking me to do in fact what you were critical of in the House on the other side of the coin.

Mr. Howard Hilstrom: Yes, Minister, I'll tell you exactly that—

Mr. Ralph Goodale: The fact of the matter is it is up to the directors to decide, and they will decide.

Mr. Howard Hilstrom: I'm asking you, Mr. Minister, if I have a farm—and I do have a farm—and I find that I can maximize the returns from my farm and fifty other farmers with me by having a value-added plant where I can market my durum, why in God's name should I not be allowed to do that? It's my wheat. Why in God's green earth should I not be allowed to market my own wheat, maximize my own returns, instead of having government, through legislation or the Canadian Wheat Board, dictate to me that I can't do that?

And you, as a minister, still appoint five people to that board, so don't say the government still doesn't have a good-sized control on that Wheat Board. If you can make the legislation setting up the Wheat Board, you can also tell the Wheat Board that they are to give an exemption for producers who want to manage their own farms and market their own farms and wheat.

Mr. Ralph Goodale: So your position is that the government should pre-empt the board of directors and issue a direction on this issue.

Mr. Howard Hilstrom: Exactly. When farmers want to market their own way, yes, exactly. They should be allowed to market that, and you should dictate to the board that this is what they should do.

Mr. Ralph Goodale: Mr. Hilstrom, quite frankly, in the present circumstances, I am not prepared to pre-empt the democratic authority of the Canadian Wheat Board. The issues have been placed before the board of directors, and the directors are considering the appropriate response. Ten of those directors are duly elected by farmers. I realize your objective is the destruction of the Canadian Wheat Board, but that is not my objective. I will await the advice and the decision of the board of directors as they are duly mandated to respond to this issue.

The Chairman: Okay, thank you.

Mr. Howard Hilstrom: So you are telling me, Mr. Minister, that a given farmer will always get better returns for his farm if the government tells him that he should market through the Wheat Board than if he should market himself. I'll tell you right now that many wheat farmers say they want to market for themselves. What do you say to that?

Mr. Ralph Goodale: There are a significant number of farmers who hold that point of view. There are also—

Mr. Howard Hilstrom: And why shouldn't they be allowed to do it?

Mr. Ralph Goodale: There are also a significant number of farmers who hold the contrary point of view.

Mr. Howard Hilstrom: Yes, but why should the majority dictate to the minority that this is best for you? We're telling you this is the best for you. Why should that be?

Mr. Ralph Goodale: Mr. Hilstrom, the major change that's been made in the last year is the democratization of the Canadian Wheat Board. I think it's only fair to allow the directors—again, ten of whom are directly elected by farmers—to have the opportunity to consider this issue and to determine what the appropriate response will be. They're considering it right at this moment, quite literally as we speak. I think it's important for all of the factors to be on the table—not just one particular point of view, the one you have expressed, but also the other points of view.

Mr. Chairman, I might suggest that your committee, in considering this very important subject, may want to hear from other representatives who have different perspectives to bring to bear on what is a very complicated issue.

The Chairman: Like the millers, for example.

Mr. Ralph Goodale: That's one suggestion among many.

The Chairman: Madame Alarie.

[Translation]

Ms. Hélène Alarie (Louis-Hébert, BQ): Good morning, Mr. Minister. I usually do not intervene in western matters, but I liked your preamble, in which you spoke about nutraceuticals, diversification and value added. I would go so far as to say that in Quebec, we now have an “appellation contrôlée”. These are subjects of great concern to me. When we speak about the direct operations of the Canadian Wheat Board, I am not indifferent, but I do not feel concerned, even though we are all indirectly concerned.

My question, Minister, is not directly related to the Canadian Wheat Board, but to the general concerns you mentioned at the outset.

• 0910

I feel ill at ease with respect to the current international debate on Canadian policies. I wish to speak about biotechnology, genetically modified crops and product labelling. I find that we lack information and training. I am truly very worried and would like to have your comments on this.

[English]

Mr. Ralph Goodale: I think you have touched upon a very serious global issue. The advent of new science, such as biotechnology, has been an extremely important development in the agricultural sector. It has the potential to bring with it enormous benefits, in terms of lowering production costs, increasing productivity, and improving the quality of the agriculture and food products that are generated and made available for sale around the world. It also has ancillary benefits, in terms of reduced greenhouse gas emissions and a whole variety of important advantages.

At the same time, as you point out, there is an increasing debate around the world, particularly in some markets, focused on issues related to health and safety. We need to be able to demonstrate, not only to our Canadian consumers but to consumers of Canadian products worldwide, that we have within our agriculture and agrifood sector the sound science upon which these new technological developments are based, and the appropriate regulatory regime to ensure the absolute safety and security of the products we are producing and exporting. I think it will require in the future a more aggressive effort in terms of the things you referred to—information, training, and the necessary reassurances that our agricultural sector, including biotechnology, is based absolutely on sound and reliable science and there is the appropriate regulatory regime that provides the necessary consumer confidence.

As you know, my home province includes the city of Saskatoon and the University of Saskatchewan, which is a major global centre in terms of the advancement of biotechnology. There are other centres of agrifood biotechnology in Canada of great distinction, in Ontario, in Quebec, and elsewhere across the country. Biotechnology is important to Canadian agriculture.

I think it's a field of new science that we Canadians do particularly well, and we need to tell that story and to assure consumers worldwide that when they rely upon Canadian agriculture, Canadian science, and the Canadian regulatory system, they can do so with complete confidence and trust.

[Translation]

Ms. Hélène Alarie: I would simply like to add a small comment. We have learned a great deal, because the Committee has worked for a year on the subject, but my concern is that we do not feel the need or any urgency to act with respect to information and training. When I speak to colleagues about our apprehensions about biotechnology, they seem to assume we are against it, which is not at all the case, but we need to get past this barrier.

With what is going on in Belgium, which has nothing to do with biotechnology, a great deal of uncertainty can be seen to be developing in the perceptions of consumers around the world. I would like to see you promote the idea that rapid action is needed.

[English]

Mr. Ralph Goodale: Yes, we must be prompt in making sure that the very strong health and safety reputation of the Canadian food sector is absolutely maintained and very strongly promoted.

• 0915

As you know, the government has had a biotechnology strategy in place for a number of years. That strategy is now in the process of being renewed, looking to the future in terms of the developments that will come down the road. The last budget included a $55 million incremental investment in biotechnology within the Government of Canada.

At the same time, the Canadian Food Inspection Agency continues to do a superlative job of maintaining the food safety reputation of Canadian food producers. I hope it's not taken as being unkind or unfair to suggest that perhaps some of those European countries that are now experiencing difficulty could learn a lesson or two from the Canadian experience, particularly from an agency like the Canadian Food Inspection Agency, which does a very strong job in making sure that the kind of problem that has emerged in Europe is, to the maximum extent that it is within human capacity, avoided in Canada.

The Chairman: Thank you.

Just before I go to Mr. Calder, Mr. Minister, I think all of us around here support expanded value-added activity. It's sort of motherhood. And the Prairie Pasta Producers' proposal does come under that rubric of value added. Just to get a better understanding of the issue, there are other stakeholders involved. This is not just strictly what you might call a bilateral issue between the Wheat Board and Prairie Pasta. There are other farmers who may not be interested in a new generation co-op for whatever reason. I'm sure there are processors. I'm told there are even tax implications in this kind of proposal. Can you or Mr. Migie or Mr. Geddes give us a little better understanding of the scope of this issue, beyond just the Wheat Board and Prairie Pasta?

Mr. Ralph Goodale: There are a large number of dimensions to it, Mr. Chairman. As I mentioned in my remarks, there has been significant growth in value-added processing in the grain sector over the last number of years—the increased number of mills, the better utilization of existing capacity, the very large expansion with respect to the malting sector, and so forth. And there are a large number of players. Some of them are producer owned and directed; I suppose the largest historic example of that would be an organization like the Saskatchewan Wheat Pool, for example. Some of them are more in the corporate investor sector. It is important for all of this to be taken into account.

I think all of us would agree that the greater promotion of value added is a highly desirable objective. I think we would all agree that the greater stimulation of direct farmer participation in that is a highly desirable objective. It's important, though, to find a rational way in which all of this can fit together, remembering that these are competitive commercial enterprises and it would be important to make sure that the playing field among all of the competitors is fairly balanced and level.

We also have to bear in mind the trade implications in terms of cross-border trade. The Americans are quite fond of being critical of Canada in terms of our bulk exports into their markets. You can well imagine that they will be equally critical if they suspect that there is some kind of preferential consideration or what they would consider to be some form of hidden subsidization built into one particular processing enterprise—

Mr. Howard Hilstrom: I have a point of order, Mr. Chairman.

Mr. Ralph Goodale: —on the Canadian side that they would consider to be contrary to their interests.

Mr. Howard Hilstrom: Please. As the chairman, you have direct access to the minister, and I think that our time in this committee has to be used by the members who don't have access to ask the minister questions. I'd appreciate it if that were happening.

The Chairman: Well, I'm just trying to—

Mr. Howard Hilstrom: I know, but it takes a long time, and if we've got very few minutes to—

The Chairman: Mr. Calder.

• 0920

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thank you very much, Mr. Chairman.

Minister, last week it was a very interesting exercise that we went through. I'll give just a quick synopsis of what I heard. Because the pasta growers want to get into value added, I can see this falling into an export and a domestic type of situation, where they have a problem with the domestic. They want to establish a $120 million plant. They're going to employ 90 people, and they're going to have a payroll of $4.5 million. When I asked what the board thought of it, the pasta growers told us that four of the five appointed agreed with what they were trying to do, yet the elected didn't, or they had some reservations about it, which I found—

Mr. Ralph Goodale: That sort of puts the boots to Mr. Hilstrom's argument.

Mr. Murray Calder: Yes, to a certain extent it does. But I found it confusing in that situation. I also gave them an example of what we've done as chicken growers, for instance, within Ontario. I market within a very rigid marketing system, and I agree with it, yet we are still able, in Ontario, to put together a processing plant. We pay levies within. That's how our marketing board runs.

Quite frankly, I was curious about the fact that they're saying this and the board is saying the other. Now that we've got the two points, I thought maybe you could clarify it. Is the board in fact that rigid that it is not allowing farmers to get into value added? You're saying right now that you're going to look into this problem. Maybe you could go a little bit farther.

Mr. Ralph Goodale: Mr. Calder, first of all, I think a distinction has to be drawn between the chicken example and the grain example. In the case of the Canadian Wheat Board, it is not, of course, a supply management agency, whereas in the case of chicken, it is within the ambit of supply management. So the two are quite different.

Mr. Murray Calder: They're apples and oranges, yes. I agree.

Mr. Ralph Goodale: Now, in relation to the board and its ability to encourage value added, in Bill C-4, not only did we create the board of directors, provide for the election of two-thirds of the board of directors, and establish new lines of accountability directly to producers, we also introduced a number of flexibility tools, modern, market-based tools that would be available to the Canadian Wheat Board for the future. Those flexibility mechanisms may be of assistance to the Canadian Wheat Board in wrestling with this situation and finding the right response that will be encouraging and facilitative toward value added, and at the same time maintain the level playing field among various competitors and protect the integrity of the pool accounts.

The directors may indeed, within their new flexibility, be able to come up with a totally novel solution here. Obviously no one wants to stand in the way of value-added potential. The more we can successfully process our raw commodities within Canada and then sell, either to ourselves or on the export market, the value-added product, the better we all are, because it does bring investment, jobs, and growth. Some of the statistics in my remarks indicate to a very significant and encouraging extent that it's already happening.

The fundamental point here is that we have just very recently, by legislation through the Parliament of Canada, empowered the directors to take these decisions. And I think it would be entirely inappropriate for the Government of Canada to pre-empt that democratic process and dictate to the elected directors the kind of decision that they must make. It is up to the directors to take the decision, and they're the ones who are ultimately accountable to producers.

Mr. Murray Calder: I would agree with that, because to use Mr. Hilstrom's example about the majority dictating to the minority, if we followed his example the reverse would be true. You'd have a minority dictating to the majority as to how marketing should be done.

• 0925

I understand why things have to be rigid for the export, but it seems to me there is need here for flexibility for the domestic market. Obviously, if our growers are able to put together cooperatives with plans to put out value-added, I can see merit in that, and the board itself should be flexible in taking and addressing that.

Mr. Ralph Goodale: Let me invite Mr. Geddes to respond to that point. Mr. Geddes is a farmer from Manitoba who joined the Canadian Wheat Board a few years ago specifically for the purpose of promoting value-added opportunities. I would like him to comment.

Mr. W. Earl Geddes (Program Manager, Market Development, Sales and Market Development Division, Canadian Wheat Board): I would hate to have left the impression last week that the Canadian Wheat Board wouldn't allow a group of farmers to put together a processing co-op on the prairies. That's simply not the case. They're free to do that. There are a number of examples where that happens. Prairie Harvest, for example, did that. They set up a pasta plant in Edmonton. A number of other farm groups are doing the same thing across the prairies.

The issue the board of directors of the Canadian Wheat Board is struggling with is whether you can let a group of farmers operate outside of the Canadian Wheat Board system, which would be the same as allowing your chicken co-op to operate outside of supply management, which I don't believe it does.

Mr. Murray Calder: It can't.

The Chairman: Thank you.

Mr. Borotsik, you have five minutes.

Mr. Rick Borotsik (Brandon—Souris, PC): Thank you, Mr. Chairman.

First of all, welcome to the minister.

The Chairman: There is a point of order from Mr. Breitkreuz.

Mr. Garry Breitkreuz (Yorkton—Melville, Ref.): On a point of order on that, there is nobody standing between the chicken farmers and their plant. The Wheat Board is standing between the farmers and their plant. That's a big, big difference. Nobody is saying—

The Chairman: I don't think that's a point of order. However, do you want to answer that or not, Mr. Minister?

Mr. Rick Borotsik: I hope it's not on my time, Mr. Chairman.

The Chairman: No, I'm not taking it from your time. Go ahead, Mr. Borotsik.

Mr. Rick Borotsik: Okay. Would you please start the clock again, Mr. Chairman?

The Chairman: Don't worry.

Mr. Rick Borotsik: First of all, I'd like to welcome the minister here. You need not wait for an invitation, Mr. Minister. You can come before this committee at any time you request an opportunity to do so.

Rightfully, the minister has emphasized terms such as “autonomy” and “democratic process”. He said, in fact, referring to the board of directors, in a number of cases they are the ones who make the decisions; it's up to the directors to decide.

I'm led to believe that the inclusion-exclusion clause of Bill C-4, the technical section, 47.(1) in part 5 of chapter 17, in fact has not been proclaimed. That in fact still gives the minister the opportunity to include and exclude barley by regulation, which takes that totally out of the hands of the board of directors.

So on one hand, you're saying it is the responsibility of the board. On the other hand, what happened to producer control of the board when you, as the minister, still retain the power to include or exclude barley through regulation without having producer input?

Mr. Ralph Goodale: You're going to have to run that one by me again, because I—

Mr. Rick Borotsik: The inclusion-exclusion clause, subsection 47.(1), part 4, chapter 17 of Bill C-4, has not been proclaimed as part of the legislation. You therefore still have the authority, by regulation, to include or exclude barley, without the producer vote and without the board of directors giving you direction.

Mr. Ralph Goodale: I wonder, though, if you would consider that arbitrary action on the part of the minister to be consistent with the spirit of the legislation. We're going through the technical steps of bringing the various sections of the act into place. The whole process is just a few months old, and different sections of the act come into force at different points in time. But clearly, the intention of Parliament, and that specific section in particular, was to ensure that the ultimate mandate of the Canadian Wheat Board was in the hands of farmers—

Mr. Rick Borotsik: But it's not.

Mr. Ralph Goodale: —and less dominated by politics.

Mr. Rick Borotsik: Are you aware that you still have that power, Mr. Minister?

Mr. Ralph Goodale: I do until the section is proclaimed, but this is not directly relevant to the issue that's before us.

Mr. Rick Borotsik: It is, to a degree, because certainly you have talked about the autonomy and the openness of the directors.

Mr. Ralph Goodale: Yes.

Mr. Rick Borotsik: Quite frankly, that isn't the case at this point in time.

Saying that, then, when and if it's proclaimed—and I agree with you that there are technicalities we'll go through with the proclamation of this legislation—are you prepared to suggest that there should be a producer vote to include barley into the Canadian Wheat Board's mandate—open, honest democracy?

• 0930

Mr. Ralph Goodale: Are you saying to include or exclude?

Mr. Rick Borotsik: To include.

We have legal analysts right now who say they believe the barley would then have to be put to a producers vote in order for the Wheat Board to keep it under its mandate. So would you agree that it should go to a producer vote?

By the way, this is by value added of barley. It does have a direct bearing on what we're talking about right now.

Mr. Ralph Goodale: There was, of course, a specific vote not that long ago with respect to barley, and the results were about—

Mr. Rick Borotsik: That was prior to Bill C-4.

Mr. Ralph Goodale: But it was a very clear expression of producer opinion—

Mr. Rick Borotsik: Our legal representation tells us right now that in fact they believe the barley should go and has to go to a vote in order to have it put into the board's mandate.

Mr. Ralph Goodale: I would respectfully disagree with that legal opinion. However, if you do have such a legal analysis and would like me to consider it, I would be happy to see it—

Mr. Rick Borotsik: We will chat again outside of this meeting.

Mr. Ralph Goodale: —and I welcome your bringing it forward.

Mr. Rick Borotsik: I have one other question. And you're right, we're talking about value added with the pasta producers.

You had mentioned that Manitoba has $975 million worth of capital investment into value added. You also took some great pride in the fact that $6 million of that was from the flour mill that was just located in Elie. Six million dollars of $975 million is less than one half of one percent.

Does it not concern you that other non-board or non-controlled commodities have $970 million worth of capital put into value added and you have only $6 million in value-added capital? Doesn't it concern you that we have a commodity here in durum and wheat that is not keeping pace with the other open commodities on the open world market?

Mr. Ralph Goodale: I think it's important to note the broader statistics. You're comparing two particular numbers, but I think if you look at the broader statistics, about processing developments on the prairies over the last number of years, these too I mentioned in my remarks. A malting barley expansion in capacity of 50% over the course of the last seven or eight years, I believe all of it in western Canada, is pretty significant—

Mr. Rick Borotsik: That's 50% of what?

Mr. Ralph Goodale: —and in durum milling, 20%.

Mr. Rick Borotsik: That's 20% of what, Mr. Minister?

Mr. Ralph Goodale: It's 20% of its previous capacity.

Mr. Rick Borotsik: Exactly, but 20% of what? It's easy to say that there is a 100% increase of zero, but it's still zero. We still have to look at the numbers. You gave me the numbers.

Mr. Ralph Goodale: The Canadian malting barley capacity—

Mr. Rick Borotsik: Has increased by 50%.

Mr. Ralph Goodale: —has increased by 50% over the last seven or eight years, and all of that increase has been in western Canada.

The Chairman: We'll leave that for this round, thank you.

Mr. McCormick, do you have a question?

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Yes, I do. Thank you very much, Mr. Chair. I'm sorry I was late. I was at a rural event called “rural caucus.”

From the prairie pasta proposal that we heard last week, certainly I can see that there are different facets to the whole issue. I want to encourage you, Mr. Minister, along with your people, to cooperate and do everything you can, as I'm sure you will, with this group.

There are other groups of cooperatives and such types on the prairies. I was going to ask you what the tax implications are, and yet those tax implications must have been addressed with other groups. But I wonder about that.

I have one other question, about soya, which I think ties into CWB.

Mr. Ralph Goodale: With respect to the tax situation, quite frankly, I would need to defer here to Revenue Canada or the Department of Finance. Again, in your ongoing consideration of this, it might well be valuable for your committee to hear expert testimony on tax or other fiscal implications that may be applicable to say new generation co-ops or other kinds of innovations. That's really a subject that—

The Chairman: There are tax implications?

Mr. Ralph Goodale: I have been asked that question twice now, with reference to taxes, and quite frankly, rather than me commenting from a CWB perspective, it would be advisable for the committee to get that direct advice from tax experts, who can give you the very definitive answers as to whether or not there are tax implications, and if so, in whose favour.

• 0935

Mr. Larry McCormick: Thank you.

I was watching CBC last night and this morning. Rightly or wrongly, they've jumped on this issue versus soy products in baby food milk replacement. But it comes back to genetically modified food, and what we're going to hear from around the world, from other countries, about our GM foods and our GM seeds. It's like biotech; it's all part of the parcel. We've had biotech for a couple of thousand years, but a lot of people don't realize that.

I just want to ask you, Mr. Minister, to keep us very much abreast on what we're going to hear and what we hear from other countries in our trade. I'm sure they're using the same types of seeds in most cases, yet I can see the barriers they may throw up to GM food and the biotech seeds. I wonder if you have any comment on that.

Mr. Ralph Goodale: Earlier, and it may have been in that period of time when you were not yet in the committee, I had a question from Madam Alarie about this issue. I think it's quite significant that this issue has come up twice within a very short conversation, from different sides of the table. It indicates what I think is an appropriate degree of interest and concern on the part of members to make certain the immense value and potential of biotechnology and other types of scientific innovation can be fully utilized to the advantage of Canadian food producers and consumers, both within Canada and around the world.

We need to make sure our system is based on sound science. We need to make sure we have the appropriate regulatory regimes in place to protect the public interest. I believe Canada is a world leader, in terms of both the science and all of the oversight mechanisms that make sure that science is pursued properly, safely and in the public interest.

It will be vitally important for all of us who have an interest in agriculture and agrifood to make sure we constantly stay ahead of the wave, and wherever issues arise with respect to biotechnology, genetic modification and so forth, we in Canada have absolutely the best answers in the world. I believe we have them; we need to make sure we continue to have them.

The Chairman: Mr. Hoeppner.

Mr. Jake E. Hoeppner (Portage—Lisgar, Ref.): Thank you, Mr. Chairman.

If we go back to Bill C-4, which party refused to allow the preamble in the bill to mandate the Wheat Board to sell farmers' grain at the best price possible?

Mr. Ralph Goodale: Mr. Hoeppner, there was a great debate about whether—

Mr. Jake Hoeppner: What party was it? That's all I'm asking.

Mr. Ralph Goodale: —to have a preamble or not. The point is, the mandate of the board is described within various sections within the act itself. It was the considered view at the time that a preamble was unnecessary because of the other provisions that are already embedded in the Canadian Wheat Board Act.

Mr. Jake Hoeppner: Mr. Minister, you know very well that in the M-Jay decision the board used the only defence they had. They had no mandate to sell farmers' grain at the best price. Their only mandate was to market grain in an orderly fashion; that was the only defence the Wheat Board had.

Whenever I question you in the House about the crop practices between some farmers and the milling industry, you skate around it as if you were on very thin ice. What are we going to do about that?

Mr. Ralph Goodale: Not at all, Mr. Hoeppner, not at all.

Mr. Jake Hoeppner: As you know, I've written to you and suggested we should have a subcommittee to study the buybacks in all of western Canada before the Auditor General has a look at the books. Will you agree to that?

Mr. Ralph Goodale: Mr. Hoeppner, I'm not aware of the specific letter you are referring to. Could you elaborate a little further on what your suggestion is?

Mr. Jake Hoeppner: It's dated June 4.

Mr. Ralph Goodale: I don't believe I've received it yet.

Mr. Jake Hoeppner: But I do request that there be a subcommittee between the Senate and the agriculture committee to tour western Canada to look at the issue of the buybacks and the unfairness of them.

This was addressed in the M-Jay case, and I think it's important, if you want the board to survive, for that issue to be addressed, because farmers have lost confidence in that board.

• 0940

I was very sorry that neither you nor the agriculture minister were available for the Saturday night rally in Saskatchewan. You would have heard a very definite demand that if prairie pasta isn't given an exemption, the Wheat Board will be dead. Farmers are fed up with having these types of things taken out of their hands. They can make an extra dollar and they want the right to do it. To change the board to a voluntary board needs legislation, and you have to present it. It cannot be done by the directors.

Mr. Ralph Goodale: Mr. Hoeppner, there are several things in your comments. In terms of your letter and your suggestion for a study with respect to the buybacks, obviously I'll respond to you when I receive the letter.

Mr. Jake Hoeppner: It's on your desk.

Mr. Ralph Goodale: I'm sure it's on its way as we speak.

Broadly, I would make the comment that the buyback arrangement does seem to be rather badly misunderstood in some quarters, as if in some way the board is capturing something and taking it away from farmers. In fact the converse is exactly the case. I think some effort to better describe how that system works could be a useful initiative.

With respect to the prairie pasta situation and the idea of a new generation co-op pursuing a new line of innovation, obviously, as I said earlier, we all want to foster every reasonable means by which value added can be encouraged. The directors are wrestling with that issue right now—how on the one hand they play their appropriate role, in terms of the agrifood, value-added side of the equation, and at the same time maintain the level playing field of all the various competitors, both the new players and the well-established players, and the competitors on both sides of the border.

In terms of your comments about the meeting that was held in Regina last Saturday evening, quite frankly to the best of my knowledge—and I've checked the records in all my offices—there does not appear to be any record of me having been invited to that meeting.

Mr. Jake Hoeppner: No, but the agriculture minister—

Mr. Ralph Goodale: I don't know whether he was invited or not. I only know what comes into my own office and it's my understanding there was no invitation. I did hear about it through the media—

Mr. Jake Hoeppner: It's probably in the mail.

Mr. Ralph Goodale: —in the last number of days. By that time I had made commitments to my own constituents in the rural part of my riding, where we were talking about such things as the flooding conditions in southeastern Saskatchewan and other difficulties the farmers are having.

The Chairman: Members, we have only about three or four minutes left and the minister has to go to a cabinet meeting. I'll allow one short question from the parliamentary secretary and we'll finish with Mr. Breitkreuz.

Mr. Joe McGuire (Egmont, Lib.): Thank you, Mr. Chair.

I have a question for Mr. Geddes. In the minister's presentation he mentioned how supportive he was of value added since the demise of the Crow rate, and what the impact of losing the Crow has had on the economy of western Canada.

Your board has always been export-oriented over the years. What new policies are you developing, as far as looking at value added, outside your traditional modes of behaviour there? Are you looking at not just this one pasta case but other things the board sees as creating jobs in the prairie provinces, as result of producing grain and wheat?

The Chairman: Mr. Geddes.

Mr. Earl Geddes: In response to the question, first of all the board is not solely export-oriented. Our single largest customers are the Canadian domestic milling industry and the Canadian domestic malt and barley industry. They buy more wheat, malt and barley from Canadian farmers than any other destination.

In the last five years we've changed a number of polices to accommodate specific processing operations. Agri-Partners International in Red Deer, Alberta, is a new flour mill, gluten extraction plant, and ethanol plant all in one operation. It created a real headache, I guess, for policy-makers at the board. How do you price fairly to this operation, so you treat them equal to any other processor of a similar end product?

• 0945

We've created policy that allows individual farm families to process all of the grain they produce on their farm in their own facility, if they wish to, and sell it anywhere in Canada, without going through the Wheat Board.

We've created what we call a non-human consumption pricing policy for end uses, such as fibre and starch. Processors of those kinds of products don't pay the milling wheat premium when they process them. Rosthern in Saskatchewan is a perfect example of the kind of processing plant that's being considered right now.

We've done a lot of work trying to align organic marketing, so organic marketers can work together to capture premiums, rather than being bid off against one another in their processing operations. So we've done a number of different things, and intend to keep the domestic industry our single largest customer.

The Chairman: We have about three minutes, and we'll finish with Mr. Breitkreuz.

Mr. Garry Breitkreuz: Thank you, Mr. Chairman.

Mr. Minister, you made the comment that nobody wants to stand in the way. Well, my farmers are saying get out of the way. You used words like “democratization” very loosely. You know the Liberals rammed Bill C-4 through the House, and the amendments proposed by Reform were not even considered, although they were supported by over 80% of farmers. So democratization is used very loosely in the context in which you use it.

You know very well that the mandate of the board is not to promote value-added industry. The very numbers you related in your introduction indicate there's a huge problem in your own province of Saskatchewan. Saskatchewan grows the most grain and probably has the strongest agricultural base, yet it has the least value-added processing. Farmers are experiencing very difficult times and their hands are being tied at this very moment.

I have to make a correction to what you said. You indicated that the flour mills and so on were very similar to what we have with the prairie pasta plant. They are not the same. The prairie pasta plant wants farmers to be part of the value added, so that's very different from the flour mills.

If the board blocks farmers' full access to value-added revenues, it won't be maximizing returns for farmers. In light of what I've said about Saskatchewan and its situation, I think the key question you have to answer is why northern tier states have a higher degree of value-added processing than western Canada.

The Chairman: Your answer will end this, Mr. Minister.

Mr. Ralph Goodale: The short answer to the last assertion by Mr. Breitkreuz is that those northern tier states do not have a higher level of value added.

The larger preamble to Mr. Breitkreuz's statement could provoke a very long answer on my part, Mr. Chairman. Let me just say I obviously don't accept the premises that are built into the assertions. I do want to comment on his remarks about the level of value-added in Saskatchewan over the last five to seven years, compared to what has happened in Manitoba or Alberta.

Obviously, Saskatchewan is lagging behind. That has to do with a variety of factors that have chronically plagued the agricultural sector within Saskatchewan. It is a very legitimate question why there has been this surge in Manitoba and Alberta and a lesser improvement in Saskatchewan. That discrepancy is an area that demands serious attention. I think it's significant to note that federal policies across all three provinces are the same. There may well be some provincial deviations that are particularly at the root of that problem.

The Chairman: Thank you, Mr. Minister. I appreciate your taking this time to share with us your views on this particular matter. I'm sure we'll continue discussing value added, one way or the other. As I said earlier, I think all of us around here believe this is something that should be expanded and we should go forward with it in the years to come.

• 0950

Mr. Ralph Goodale: I have one parting comment. I know time is short in terms of further sitting days for the House and the committee in the period immediately ahead, and that this also corresponds with the period during which the Canadian Wheat Board's directors will want to be in a position to respond to the current proposals that are there from the new generation co-op.

While I'm sure the Canadian Wheat Board has been listening very carefully to the deliberations this committee has gone through, if you're not in a position to publish a formal report, given the very tight time constraints under which you're operating, it might be useful for you to try to capture the sense of the discussion you have had on this topic and informally convey that to the chairman and the chief executive officer of the Canadian Wheat Board so that the directors, in making the important decision they have to make, will be at the very least informed of the views this committee brings to bear on the situation.

I repeat, it is a decision for the directors democratically to take, but I think it might be useful for them to know what you as a committee have been talking about over the last number of weeks on the matter of value added, so that they can take your deliberations into account when they make the decision they have to make.

The Chairman: I see nothing wrong with that. What we do here is in the public domain, and if that can contribute to the discussion, so much the better.

Thanks again, Mr. Minister.

Mr. Ralph Goodale: It was a pleasure. Thank you.

The Chairman: We're breaking for five minutes only. This particular section of the meeting is over.

• 0952

• 0959

The Chairman: Members, I'd ask you to take your seats, please. We'll resume our meeting of this morning.

• 1000

We're going to be changing our tune a bit, going from value added to hearing an update with regard to the Rural Secretariat and the Canadian Rural Partnership. We have the pleasure of hearing from Lynden Johnson, who is the executive director of the Rural Secretariat. With him is Stephen Bigras, the manager, and Kevin Doyle. I understand that Mr. Johnson has about a seven-minute presentation, and then we'll get to questions.

Good morning and welcome. You can go right ahead.

Mr. Lynden Johnson (Executive Director, Rural Secretariat): Thank you very much, Mr. Chairman.

My colleague Kevin Doyle is manager of federal policy integration of the Canadian Rural Partnership, and Mr. Stephen Bigras is the manager of the pilot projects program.

I would like to thank the committee for giving us the opportunity to talk about recent developments of the Canadian Rural Partnership, or the CRP, as we refer to it.

This meeting is very timely. It comes less than a month after a significant milestone in the CRP. On May 14 Minister Vanclief, along with Secretary of State Mitchell, announced the federal framework for action in rural Canada, the second phase of the pilot projects initiative, and the national rural conference, which will be held April 28 to 30, 2000, in Magog and Orford, Quebec.

Before I get into the details behind that announcement, I would like to give you a quick overview of the mandate of the Rural Secretariat. While the secretariat is based in Agriculture and Agri-Food Canada, it acts as the focal point for the federal government's horizontal approach to issues and concerns facing rural Canada. We work with 26 departments and agencies through the interdepartmental working group on rural, or the IWG, as we call it, and through rural teams composed mostly of federal officials in the provinces and territories. Our key role is to provide a coordinating mechanism so that these partners can bring a focused approach to rural issues. We do this by providing support to the IWG and the rural teams. The Rural Secretariat ensures that information is shared among the partners so that each knows what the others are doing.

We conduct and support research and analysis of economic and social issues affecting rural Canada, and we promote the use of the rural lens. In this approach we share the work and the decision-making across the federal government.

Another key role right now is to provide leadership to the IWG and the rural teams as they develop specific actions around the 11 priority areas identified in the framework for action, which I'll get to in a moment.

In the first year of the CRP three of our main activities were the rural dialogue, the pilot projects initiative, and the application of the rural lens. It was through the rural dialogue that we developed the federal framework for action in rural Canada. The framework is the approach the federal government is taking to respond to the issues and concerns rural Canadians raised in the rural dialogue, and it will guide the actions of the federal government for the next three years of the CRP. It is a direct result of the participation of almost 7,000 rural Canadians in the dialogue last year. The framework includes the government's vision for rural Canada, a vision that flows from what rural Canadians have said. It also includes 11 priority areas rural Canadians identified, which make up a key part of the framework, and it outlines what the federal government wants to achieve and how we intend to work with rural Canadians.

The core of the framework is the federal government's vision for rural Canada. Our vision is of a rural Canada made up of vibrant communities and a sustainable resource base contributing to our national identity and prosperity. It is rural citizens making informed decisions about their own future, and it is rural Canadians sharing the benefits of the global knowledge-based economy and taking full advantage of opportunities for personal and sustainable community development.

Another key element of the framework are our objectives. What is it we hope to achieve? To answer that question we need to go back to the dialogue, back to what rural Canadians told us they want us to do. They want us to work with them, not just for them. Together we will build a rural Canada in which citizens have access to the tools, information, and skills they need so that they can make informed decisions that take full advantage of opportunities for personal and community development. We'll work with them so that they can access the science and technology, the infrastructure, and the services in order to be full partners in the knowledge-based economy. Working together we will build a rural Canada where citizens can maintain and enhance their quality of life and where sustainable and diversified communities contribute significantly to the national economy. Finally, we want all Canadians to recognize the values and strengths rural Canada contributes to our national prosperity and identity.

To show rural Canadians how we are following through on the CRP, the framework for action also calls for the minister coordinating rural affairs to present an annual report to Parliament. We expect to have a preliminary report this fall.

• 1005

One of the ways we are working with rural Canadians is through the pilot projects initiative. Last year Minister Vanclief approved 68 projects, for a total of $3.8 million. This funding from the CRP allowed project proponents to lever an additional $10 million from other partners.

There have been some questions raised about how projects are selected, so I would like to take a couple of minutes to go over the process with you. First of all, all proponents send their proposals to the Rural Secretariat. We then pass these on to the rural teams, which have been set up in every province and two territories. The rural teams do a preliminary analysis and prioritize the projects, which are then forwarded to a selection advisory committee. This committee provides an independent rural perspective in recommending pilot projects to be funded, and, finally, these recommendations are given to the minister for approval.

The selection advisory committee is made up of rural citizens and stakeholder representatives from various sectors and regions. They are chosen to represent a cross-section of rural Canada: agriculture, forestry, mining, aboriginal communities, municipal officials, rural stakeholder groups, and so on. Last year there were ten members on the committee. We expect that some of them may stay on this year. We have also asked the IWG and rural team members to suggest new candidates who are knowledgeable and experienced and who match the ethnic, linguistic, and regional diversity of rural Canada.

On the pilot projects and the CRP in general, we're learning as we go along. As a result of feedback we received last year, we have changed the guidelines in order to make the application process clearer and easier to follow and to reflect the priorities identified through the rural dialogue. For 1999-2000 and for each of the next two years $3 million is available for pilot projects.

I would also like to comment on the application of the rural lens. The objective of applying the rural lens is to ensure that as policies, programs, and services are being developed by federal departments and agencies, their impact on rural Canadians is considered. It is a way of viewing issues through the eyes of rural Canadians. The current role of the Rural Secretariat is to work with government department officials in applying the rural lens. In the longer term our objective is to see that the rural lens is applied as a regular part of the policy and program development process.

The rural dialogue is also continuing this year. Rural Canadians continue to participate in the on-line discussion group. A number of the rural teams are holding regional activities, and next spring we will hold a national rural conference and trade show. The purpose of the conference is to showcase Canada's rural development efforts into the new millennium, and you will be hearing more about this conference as it gets closer.

With that, I would like to close my remarks, Mr. Chairman, and answer your questions.

The Chairman: Thank you, Mr. Johnson.

I'm sure members have plenty of questions. We'll start with Mr. Hilstrom for seven minutes.

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

Certainly we're pleased that you're here today, and I think any investment in rural Canada is good. It helps development and that sort of thing.

I have a couple of comments. In your backgrounder you said you put in $3.8 million and lever another $10 million. You recognize that there's only one person you're levering that money out of and that's the taxpayer. Do you agree with that? With this levering it sounds as if there's new money or private money coming in or something. It's all government money, and it's tax money whether it's a local government or otherwise, isn't it?

Mr. Lynden Johnson: The approximately $10 million of levered money is partly in kind from local communities. It's some investment from other levels of government, and it's from the private sector. So I don't think it is just all Canadian tax money.

Mr. Howard Hilstrom: Okay. I just wanted to clarify that, because in the backgrounder it says that it's provincial departments, agencies, as well as local government. It doesn't say anything about that.

This Canadian Rural Partnership and the federal framework is not directed specifically at agriculture. You're appearing before the agriculture committee today, but your purpose here is just to kind of brief us as to how this affects primary producers and farmers. If a farmer were to ask me what the Canadian Rural Partnership was doing for him as a primary producer, what would you say to him?

Mr. Lynden Johnson: As I mentioned in my opening remarks, this cuts across all sectors and multiple jurisdictions when it comes to rural development. It's not just focused on any one sector. But more particularly, to answer your question of what is it doing for the primary producer, I think the main point we heard from our dialogue last year is that there are many single-industry-dependent regions and communities, and one of the priority areas out of the eleven is to try to approach a greater economic diversification in those single-industry regions, so that for the primary producer we can strengthen the communities around them. I believe your discussion earlier this morning was on value-added processing. That will then allow for the ups and downs and the swings that unfortunately the primary producer encounters.

• 1010

Mr. Howard Hilstrom: So you come under WED, then?

Mr. Lynden Johnson: WED is one of our partners. It's one of the 26 federal departments and agencies that participate on this file.

Mr. Howard Hilstrom: I guess you're not with WED, so maybe you can't answer, but is that not WED's mandate—to have economic diversification in western Canada, for instance? I believe there's one for eastern Canada also. Is this not just a duplication of their efforts?

Mr. Lynden Johnson: No, not at all. As I said earlier, it's a partnership. Western Economic Diversification, the Atlantic Canada Opportunities Agency, and Développement économique Canada in Quebec are all partners of this. We avoid the duplication by each of the partners bringing to bear its mandate and its focus. There are other areas of economic diversification in various portfolios, such as DIAND and so on, and aboriginal. This is Canada, through Industry Canada.

Mr. Howard Hilstrom: Okay. What's your biggest success so far?

Mr. Lynden Johnson: I think getting the focus of the rural dialogue, getting the results, and having the contribution of some 7,000 Canadians last year in shaping this framework for action are, I would have to say, some of the major achievements so far.

Mr. Howard Hilstrom: I agree. That's a heck of a good start there, but how long has this been going on?

Mr. Lynden Johnson: It's been a process over about the last three years, as we've slowly built the partnership of collaboration across departments and agencies and developed the various tools that help all of our partners to bring a focus to improving rural development.

Mr. Howard Hilstrom: So there hasn't really been any single entity that you can point to that is a result of your efforts to diversify a given town or rural area's economy, a specific incident?

Mr. Lynden Johnson: I think the major achievement probably was the major focus in the last budget on rural health. I think that in large part—although attribution is a difficult issue—is a result of the work and the focus that the various departments have put on addressing issues in rural Canada. I think rural health is a major accomplishment.

Mr. Howard Hilstrom: Okay. But is that not just duplication of Manitoba health, where I come from? You're into provincial jurisdiction here, again. That's crazy. If that's your major initiative so far, I think you're way off track. I think you should leave the provincial health.... I think the federal government should fund health and do it the way they do, by giving money to the provinces through transfers. They shouldn't have another area of government that's promoting health initiatives.

Do you think that is the right area for you to be working in?

Mr. Lynden Johnson: It's not the only area we're working in. The way we're doing it is across departments—

Mr. Howard Hilstrom: No, but is that the area? Do you think you should be working in health? I'm sorry to interrupt, Mr. Johnson, but this is really important. Do you think that you, in rural adaptation, should be working in the area of health?

Mr. Lynden Johnson: I believe what rural Canadians told us was that all levels of government should be working together to provide the best service we can. The application area in rural health that is particularly useful is to use the technology to overcome distant barriers. I think the technology, its application, and the basic infrastructure is definitely a responsibility of the federal government. Collaboration is definitely the way rural Canadians have told us to work.

Mr. Howard Hilstrom: The problem is that resources are limited in this country. We only have so much money, and the last thing we need is a duplication in the federal government itself, and then duplication of what the provincial government is doing. I'll tell you, you can't do your job without hiring administrators, executives, clerks, computer equipment, and all this kind of stuff, and that's just a straight duplication of what the health services in Allan Rock's ministry and Eric Stefanson's ministry in Manitoba are doing with health. So how can you justify that duplication, other than because people say they want good health out in rural Canada?

Mr. Lynden Johnson: I would just comment that I'm not aware there is duplication.

Mr. Howard Hilstrom: I pass, Mr. Chairman.

The Chairman: Thank you.

Mr. Desrochers.

[Translation]

Mr. Odina Desrochers (Lotbinière, BQ): First of all, I support the comments made by my colleague from the Reform Party, because I was at the consultation from 2 to 4 October 1998 as an observer, not a participant.

I would like to ask a few questions about the consultation process. You say that you consulted various departments in an attempt to establish a rural development policy. Were provincial representatives in attendance? In my view, when we speak of a partnership and rural development, the first persons who ought to be consulted are the provincial representatives. At your meeting from 2 to 4 October 1998, were official representatives from each of the provinces of Canada in attendance?

• 1015

[English]

Mr. Lynden Johnson: It's my recollection that each province at our invitation did send a representative to that workshop. In fact there was one minister responsible for rural development who attended himself.

[Translation]

Mr. Odina Desrochers: The Minister of Rural Development from which province? I did not see him. If you saw him, you were luckier than I was.

[English]

Mr. Lynden Johnson: From Prince Edward Island, Minister Don MacKinnon was in attendance at all the workshops.

[Translation]

Mr. Odina Desrochers: Did you hear their comments or were they there only as spectators, with all the decisions already made concerning the imposition of your rural development policy?

[English]

Mr. Lynden Johnson: In order to answer your question I'm going to have to go into a little bit of the process, if the chair will allow me to do that.

Thank you.

Yes, we did take time to have some discussions with the provincial representatives there. All of the various government representatives at that national workshop, whether they were from the municipal, provincial, or federal level, were primarily there as listeners.

It was really a workshop to bring together representative rural Canadians from throughout this great land to examine and validate the issues we had heard all through the preceding months of the dialogue from the 33 formal workshops we had held across Canada and from the over almost 2,000 workbooks that individual organizations, communities, and individuals had sent to us. We did not go there with a draft policy. We did not go there with options. We went there to listen, to validate, and to determine what the key priorities were. So we did a lot of listening, and that's what rural Canadians really respected. Out of the results of that national workshop, we formulated, based on what we heard, the framework for action.

[Translation]

Mr. Odina Desrochers: How can you explain that, in the rural development policy, nothing is said anywhere about harmonizing with the provinces, and that partnership with other departments is mentioned, but not with other provinces?

Did you consult the provinces after formulating your rural development policy or is it another way of selling the maple leaf everywhere in Canada without consulting the provinces?

[English]

Mr. Lynden Johnson: We're continuing to work in collaboration and in partnership with all levels of government. We've continued to have open discussion with the provinces. In fact I think almost all of the provinces in one way or another are members of our rural teams in each province and territory.

[Translation]

Mr. Odina Desrochers: Did you consult and attempt to establish a genuine rural development policy in cooperation with the provinces? For example, did you consult the new minister for the regions, Mr. Jean-Pierre Jolivet, or did you only consult public servants?

[English]

Mr. Lynden Johnson: As this is a federal policy, we did not take it for formal discussion or consultation with the other ministers. It was developed in consultation with a broad range of rural Canadians, representing all levels of government as well as individual communities and organizations.

[Translation]

Mr. Odina Desrochers: I ask you the question once again. Will your rural development policy be established in harmony with the provinces or are you simply developing a policy that will then be imposed on the provinces? We need to know the position of the Canadian government and the direction it intends to take in the coming years.

[English]

Mr. Lynden Johnson: I think from reading the framework for action you can determine yourself the way in which to proceed with this. We want to do it in collaboration, a partnership, respecting where the provinces obviously have the major responsibility. We want to do that in collaboration. We will not be imposing this on anyone. What we are indicating in our commitment to rural Canadians through this framework is this is the way in which we want to proceed to respond to their issues. We want to do it in partnership with everyone who wants to partner with us.

[Translation]

Mr. Odina Desrochers: How can you say, as you were telling my Reform colleague, that your greatest success was to create a situation in which there was duplication in health? How can you say that this was done in harmony with the provinces when you were encroaching an area that is one of strictly provincial jurisdiction?

[English]

Mr. Lynden Johnson: Mr. Chairman, I think what I said earlier on was that I felt our greatest success to date was putting forward this framework for action. One of the examples of it—and there was a major announcement on it this past year—was the commitment by the federal government to health, and that includes increasing the transfer payments as well as a focus on working in partnership to extend assistance into rural communities.

• 1020

[Translation]

Mr. Odina Desrochers: Thank you. I will in any event consult my Quebec colleague, because I do not think he has quite the same vision of rural development.

[English]

The Chairman: Thank you, Mr. Desrochers.

Just to help me and perhaps help the committee as well, Mr. Johnson, Mr. Hilstrom mentioned a duplication between what you do and let's say the Department of Health in the province of Manitoba, where both of us come from. I didn't hear a duplication, but he did. So let me ask something so that perhaps you have an opportunity to clarify.

Maybe you can give a real life example, but let's say for example that the Manitoba government, which is responsible for the delivery of health service, decided to provide some dental service in a rural area of the province, let's say a roving dental service, and it came to your attention as the head of the Rural Secretariat. I would assume, and this is where the question of duplication would come in, that it would not be your intention as a Rural Secretariat to duplicate the provision of that dental service to an agricultural or rural area of the province.

What would you like to do as a Rural Secretariat to either embellish or enhance that particular service? How would you interface so that anything you do would be not a duplication of the service provided by the province of Manitoba but purely, let's say, a complement to it?

Mr. Lynden Johnson: Thank you, Mr. Chairman.

The best way I can answer that is to say that first of all the Rural Secretariat is not in the business of providing the programs and services of provincial, federal, or municipal departments or agencies. We are a facilitator, a coordinator. We are a leader. What we try to ensure as much as we can is that there is no overlap or duplication between what our colleagues in other federal departments and agencies are doing with that of their provincial counterparts.

The only what you'd call programmer service we provide is we manage the pilot projects initiative, which in fact is a partnership initiative unto itself. So I do not see the duplication, because we do not provide the service. We are not in that business. We are a policy shop. One way to try to describe it is we promote collaboration across various jurisdictions and various sectoral interests and various federal players.

The Chairman: Okay, thank you.

Mr. Murray.

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

Mr. Johnson, I want to assure you that I very much want to be positive about this program, but I'm having some problems here finding something substantial to grasp. You've just mentioned that you're not in the business of delivery and it's up to other departments. But when I look, for example, in the backgrounder at what you want to achieve, I can see that the community access program in the industry department has had an impact on my riding of Lanark—Carleton. That's about the only success I can see on this list.

I want to ask you to reply to the question I was going to ask originally, because you actually replied to it when you were answering Mr. Hilstrom. I'll just caution you when you're putting out a press release such as the May 14 press release, in which the last line, a quote from the minister, says:

The Canadian Rural Partnership has been very successful. It's helped people in rural communities take advantage of new economic development and employment opportunities and has gone a long way toward making rural Canada an even better place to live.

What I sense from what you've been saying to us is that there's been a lot of talking, a lot of listening, a lot of consultation—dialogue seems to be a popular word—a lot of people involved. So I'll come down to brass tacks here. When I look at rural priorities, I went through this list in the backgrounder trying to find out how this could relate to my riding, looking for where can I relate this to Lanark County. One of the points listed is “Strengthen economic diversification in rural Canada through more targeted assistance”. Does that mean if someone in Lanark County, which is in an area of the country that has no regional development agencies, were to ask for some targeted economic assistance they would be helped through some program as a result of this agenda?

Mr. Lynden Johnson: What I'm hoping, sir, is that the various federal government departments, services, agencies, activities, etc., could be brought together to bear in such a way as to address what those key issues might be in that area, that region.

• 1025

You mentioned, in Lanark County, the community access program. We're relatively new with the funding we've been participating in and contributing in this past year in the pilot projects. I have an example of one I would use to describe the kinds of things we're doing. This is a partnership project with the Strait East Nova Community Enterprise Network in Nova Scotia. The results of this may be attributable, may be useful, and may be replicated in other communities. It's an information-technology-driven organization providing educational opportunities, training, and technical support to businesses and citizens in the strait region. It's a partnership between the school board and various regional development authorities. In the last winter this group employed 12 CAP site managers, who provided technical support and training to community members, becoming the most connected people in their communities. They also developed valuable skills that led 70% of them into full-time jobs in the information technologies sector.

That's the type of economic diversification that is possible, regardless of distance, if you have the right technology and the right learning experience. And this is the kind of very successful initiative that was the result of part of the sponsorship funding, support funding, that we got through the Canadian Rural Partnership pilot projects.

Mr. Ian Murray: With respect, we started working on this in Lanark County five or six years ago. Lanark County is a model for the whole country and has done beyond what you just described in terms of this technological development. I'm happy for those people down east, but again it looks like there's a link with ACOA. We have no such link here. In southern Ontario there's nowhere to apply for help. So as someone who deals often with economic development people in my riding who are looking for government help, there's really nowhere to point them when we in what is referred to as southern Ontario are looking for some assistance.

I'm not trying to be overly critical. I support this whole idea of looking at government programs through a rural lens, if you will. This was something that in our own Liberal caucus was a major issue for a long time, and I'm pleased to see that the government has listened to that concern. But I'd like to be able, at the end of the day, to look at some way in which I can apply this to my riding. Even in terms of the pilot projects, I'm a little concerned about the short timeframe, the July 15, 1999 application deadline. I assume, though, as this is a multi-year program, that there will be other deadlines for other projects. I have a comment on that, and that's how I'll finish up my question.

If some of these opportunities became apparent to other people in the rural part of my riding, and I'll do my best to keep them aware of that, will they have other opportunities after this year to apply for other projects?

Mr. Lynden Johnson: Mr. Chairman, I've two quick responses to that. Number one, the July 15 deadline is coming on us, but most of the people have been well aware of that deadline this year. In future years—there are two successive years after that—it will be March 31, and we'll be doing everything we can to promote that deadline.

My colleague Stephen has just brought to my attention—and I apologized for this earlier on because I don't know all the 68 pilot projects—that there is this Canadian Rural Partnership that has provided $100,000 for the electronic tools for rural partnerships projects, which will see the Lanark communications network develop and test a common Internet-based platform that promotes rural partnering at two levels. There is actually one in your constituency now, and we're hoping it will enhance the diversification opportunities in that community.

Mr. Ian Murray: I was not aware of that, and I thank you for mentioning it.

The problem I'm having now is that this whole kind of high-tech approach we've taken quite successfully in Lanark County is leading others in the rural area to say all we're doing is supporting high tech, and they're asking if there is something that can be done for others in a more rural project. That's just a comment. I'm still very proud of what they've managed to achieve with that project.

Thanks, Mr. Chairman.

The Chairman: Mr. Borotsik.

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

Mr. Johnson, I'm still trying to get my head around the reason for being for the Rural Secretariat. If I make some comments don't take them personally, please.

I am a strong supporter and proponent of rural Canada and I appreciate the fact that there is a need, a very great need, for understanding. The dialogue obviously has brought some of that need forward. But I still see this as tokenism, quite frankly, with the department that has been developed, the Rural Secretariat. One of the two areas you attach yourself to is the dialogue, and that's fair ball: 7,000 people talking is good. But if you can develop the problems, solutions have to come out of that. I haven't seen any of that.

• 1030

The other area you attach yourself to as being the raison d'être is the 68 pilot projects. I've gone through the list, and quite frankly, Mr. Johnson, there are literally dozens of agencies, organizations, and groups that could facilitate any of those 68 projects you have on your books right now. So please don't take this the wrong way, but with respect, I see this simply as tokenism. I want to get into some deeper issues here.

As the Rural Secretariat, you say you want to facilitate, bring together and collaborate with the other departments of the government. I think that's very positive, but I haven't seen any of that happen, quite frankly. There are areas of concern in rural Canada, such as customs services—we'll get into that one—RCMP policing services, and health care delivery. You seem to be very happy to take credit for all of the increased transfer payments in health care, but quite frankly, Mr. Johnson, I don't think you had a great part to play in that.

These are areas that have to be considered when decisions on change in direction are made by the federal government. I see you and your department as playing a very important part in bringing forward the ramifications of those policy changes, and that hasn't happened from your department. Do you see yourself heading in that direction? Let me give you an example. Perhaps you should take the blinders off and look at how we can help rural Canada. Maybe there's a taxation issue here you should be analysing and putting forward. Perhaps there should be a rural allowance, like the northern living allowance. Have you ever considered anything like that, or do you have to be asked to do that?

You talk about infrastructure and transportation—absolutely. The rural dialogue told you, Mr. Johnson, transportation was a very important issue in rural Canada. Should you be bringing forward policies from your department saying we have to rectify that problem, when there should be some taxation problems or issues? Maybe we should increase, through government delivery programs, rail or road transportation. Rural Canada is a big issue. I agree it is an important issue, but I don't see any of that proactivity.

On my last point—and I would like you to answer some of those comments—I asked you and your department to do an analysis of Customs Canada and some of the changes they're making with automated customs. I'm not saying they're bad; I just want to know how they're going to affect rural Canada. You came back with a two and a half page letter that quite frankly could have been written by Customs Canada or Revenue Canada. It could have been written by them because I got the same answers from them. I didn't seen any in-depth analysis on how this may well affect some of those rural communities. Can you expand on that?

Quite frankly, I think it's window dressing for your projects and your dialogues. I want to get into the guts of the issue. Have you really developed any strategy for the guts of those issues?

Boy, I really got on my soap box, didn't I?

Mr. Lynden Johnson: I'll try to respond to those questions, based on the notes I took down. Starting at the beginning, you said from your take on these pilot projects that anyone could do them. They are partnership pilot projects. The basic criteria was that the funding from the Canadian Rural Partnerships would go into funding a component of the project that was not eligible for funding from any other existing federal or provincial initiative. So that may correct that viewpoint at least.

I don't think I said we were taking credit. I think the issue of attribution is extremely difficult. As we bring a greater focus to bear on considering what the impacts of policies and programs are going to be in rural Canada, it is something like turning the ship around a bit. I think it's fair to say that every department, including Agriculture and Agri-Food Canada, works very focused on its clientele.

We are asking departments, through the application of the rural lands and in the policy analysis they conduct themselves, to consider the impact, beyond the immediate clientele, on the surrounding communities.

With respect to tax policy changes and northern allowances and so on, we have had continuing discussions with the finance department, as a member of our interdepartmental working group. As we've identified key issues, we've asked the departments that have the lead responsibilities to conduct the analyses of those issues.

On customs services, we do not do the analyses ourselves in-house of the responsibilities of other departments and agencies. That's the means by which we avoid what some of you may consider to be overlap and duplication. That would be overlap and duplication if we were to start conducting and competing in analytical processes internally. We work with the analysts in other departments to make sure they are conducting a full range, a broad analytical base, of the issue. In the response I believe we sent you a few weeks ago was the result of our discussions with our colleagues at Revenue Canada.

• 1035

The Chairman: Thank you.

Mr. McCormick.

Mr. Larry McCormick: Yes, thank you very much, Mr. Chair.

It was good to hear it mentioned at any time—the economy and rural Canada, and the money that's put into rural Canada by the government. I'm certainly very happy that we do have the Office of Western Economic Diversification in western Canada. I'm happy we have the ACOA in Atlantic Canada. I'm happy we have FedNor for northern Ontario. But I'll tell you—and I've sure told a lot of ministers—I'm not happy that we don't have the same playing field in southern and eastern Ontario.

You know, we mentioned health care. I heard that mentioned by my colleague from Quebec. I just want to make a couple of comments on that. Certainly there is a role for the federal government in health. There always has been one in research funding, food safety, surveillance, health promotion, regulation, and that sort of thing. A lot of that comes under.... There's quite an overlap between Agriculture and Agri-Food Canada and Health Canada.

[Translation]

Mr. Odina Desrochers: [Editor's Note: Inaudible]

[English]

Mr. Larry McCormick: Each one of you members will be getting a workbook very soon from Health Canada, so we'll be able to have forms in our ridings across this country to get more input from people. Our rural caucus had a lot of input into that. You know, the rural facet in health care is very important, because the occupational risks are greater in rural Canada and there are a lot of needs.

I think the biggest fault that I probably have on the Rural Secretariat is the fact that there's not enough money. I think the projects that were approved that year were good. There's real need in many communities across this country, and I think you have to look at each region, whatever size that is, individually to see what resources you have to work with to develop that area.

I think some of the good part of this is that it brings the local people.... They can make the application for some money. There is not enough money available and not enough people are able to access it. But I think the fact that there are local representatives here working with other people to provide more than just money, to provide information and knowledge, and to partner with them.... I will be continually supporting the fact that I would like to see our government put forth a little more money than just the few dollars we got in the budget a couple of years ago for a five-year plan. I hope we don't have to wait for the end of the five years to get more than the total $20 million.

Will the next round of applications that go in...are they distributed somewhat across the country? If everyone from Ontario applied, what would happen? Is there some effort made to share this program across this great country?

Mr. Stephen Bigras (Manager, Rural Secretariat): There is no set formula to share the amount of money. There have been a number of provinces that are very active in applying to the Canadian Rural Partnership pilot project, such as Ontario, Quebec, B.C., and Saskatchewan. But the selection advisory committee tries to distribute the funding as evenly as possible throughout the provinces and territories, making sure there is no one who runs away with the lion's share of the funds.

Mr. Larry McCormick: Mr. Chair, Mr. Johnson mentioned the rural lens and the fact that we have the rural lens for the future for policy and legislation, and I'm glad to hear that. I want to share the fact I'm sure all of us are working to have the rural lens for the present and into the future. It's good to see the government recognize that. The fact is that 30% of Canadians do live in rural Canada. Many of them are close enough to the urban centres that they are not affected too much by the rural part, the remote part, but there are many people in rural Canada falling through the cracks, whether it's in health care or in some other access.

• 1040

I mean, our policy for Canadians is not always fair. I think we often have a two-tier policy toward rural and urban. It could be because ministers quite often happen to come from urban centres. That's why I find myself, Mr. Chair, on the streets of Canada more telling people of the importance of the opposition. That's why we have a good opposition, and I'm proud to say that, because the opposition are working for the same people I am, Mr. Chair.

Is my time up?

The Chairman: Yes, your time is up. Thank you.

Mr. Hoeppner.

Mr. Jake Hoeppner: Boy, I like those last words.

Gentlemen, I'll be more positive. I think you are doing a tremendous job for one reason; that is, that you really mirror the inefficiencies and lack of productivity of other government agencies. Because if it takes an organization like you to coordinate and communicate between these guys, God, there's something wrong somewhere.

I would suggest one project for you, and if you can accomplish it, I will recommend a wage increase for you, a real bonus. That is to convince my honourable friends on the other side and the Canadian Wheat Board that we have to have an exemption for the pasta producers, because if we don't, we will lose $125 million of investment, plus jobs that are going to go to North Dakota or Montana. So there's your challenge. I'll stick to my word and give you an increase if you can accomplish that.

The Chairman: You don't have to answer that, Mr. Johnson.

Mr. Howard Hilstrom: Mr. Chairman, I'll continue on from Mr. Hoeppner here. That was his basic thing. I'll just finish off his time and then take my name off the list for the future.

Certainly, Mr. Johnson.... Let's see, where will I start here? First of all, is your personal salary with the government public information or not?

Mr. Lynden Johnson: It's my understanding that it is, yes.

Mr. Howard Hilstrom: Okay, what's that salary then, as the executive officer? If it's public, I'll find out later, unless you want to say it now.

Mr. Lynden Johnson: My current classification, as closely as I can respond, as far as I know, is at the executive level two, and it's about $100,000 a year right now.

Mr. Howard Hilstrom: Okay, thank you very much.

I have the utmost respect for my honourable friends on the other side here. Mr. Steckle is one of the most independent backbenchers that government has had, or probably will have in the future. I have all of these gentlemen here—Larry, and all of them—standing up for their areas, standing up for the government, and whatever. But when I look at this press release of yours as one part of government.... Oh, and Mrs. Ur certainly has rural Canada's best interests at heart, and certainly the chicken man on the end also does.

However, when I look at this press release, and when I see what is happening—and I'll stick by my words about duplication—it is becoming.... I might as well say it, on behalf of every MP in this room probably, that what we have here on the go with this whole Canadian Rural Partnership program.... It's becoming really obvious that all we have here is the government's propaganda machine run amok. I'm being totally serious about that, because the things you're talking about here are being done by department after department. And when you say there's no duplication, there's massive duplication any time you add bureaucrat on top of bureaucrat, and the costs just go out of sight. I certainly don't support more money going to this. I think more money for development should go to the departments themselves and they should carry out their responsibilities.

Mr. Larry McCormick: I have a point of order, Mr. Chair. I'm sorry, Mr. Chair. Twenty-five million dollars additional money was sent to western Canada with western diversification in the last few weeks. That's good. There's nothing like that in some parts of this country, and I think there have to be other programs available.

The Chairman: I don't think that's a point of order.

Mr. Howard Hilstrom: My last comment.... And this isn't really being fair to Mr. Johnson, Mr. Bigras, and Mr. Doyle, because they're hired to do a job, and I'm sure they're doing the best job they can on this issue. The main issue on this is whether this is the best way for the government to be delivering services to rural Canada.

• 1045

It's the considered opinion of myself and many others that this is not a good way. When we look at the press releases that come out, any reasonable person would say that's just communication, really; it's just promoting the government, which is fine and dandy, but I think there are cheaper ways to promote the good job the government is doing than setting up a whole department to spend in excess of $20 million of taxpayers' money, when you take in the municipality's money, the provincial government's money, the federal money. I think it's just poor spending.

You can comment on that if you want, but it's just a statement.

Mr. Lynden Johnson: What I think we're trying to achieve through this horizontal file is what rural Canadians told us we need to do, which is to improve our cooperation and our collaboration across federal departments and agencies and with other levels of government. They want the tools to determine their own future. We're trying to determine what those tools should be.

The Chairman: Mrs. Ur.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): Thank you, Mr. Chair.

In that vein, and in your briefing material today, rural Canadians want the federal government to keep them informed of its actions on the rural file. That's what you were told. Well, guess what. We're rural MPs, and that's what we've been told all along too. So whether it's duplication or not, I don't know, but I can say probably the 301 members of Parliament are out there working for the constituents, especially those with rural concerns. I have a large rural riding.

In the same vein as came from across the way, my question is what is it costing us to administer the $3 million in funding for this project? What does it cost to put that $3 million out to rural Canada? If you don't have that information, maybe you can provide that to the committee.

One of the gentlemen—Mr. Bigras, I believe—said there's no set formula. Is that the same thing as saying there are no set rules on this project? Which province is supporting this Rural Secretariat the most?

Mr. Lynden Johnson: With respect to the funding to support the $3.8 million, I would say that it's in the order of about $200,000 through direct salaries and costs to administer that.

Mrs. Rose-Marie Ur: Okay, and which province or provinces, if you can give two or three, are really on top of this particular project?

Mr. Lynden Johnson: From the perspective of the rural teams in each of the provinces, some are more advanced than others, and it's really hard to choose one versus another. I think they're all extremely active in supporting this.

Mrs. Rose-Marie Ur: Who has the most dollars, then?

Mr. Lynden Johnson: Right now, out of the total funding that went through, based on the projects last year—I'll check that for you right now—I think there's an even distribution between Quebec, very close to Ontario and Saskatchewan, and British Columbia, and that will be rebalanced this year.

Mrs. Rose-Marie Ur: Once someone submits an application and goes through all the criteria and stuff, how long does that project take to be either accepted or denied?

Mr. Lynden Johnson: As we work with them and prioritize—and the rural teams will be working continuously with the project proponents—we're hoping we'll have it done within about 60 days. The nature of the timing on this is directly related to the number of partners that have to come on board. So quite frequently the nod of support, if you want to call it that, from our program will allow that project proponent to go to other partners as well. So sometimes there is some back and forth with the project.

Mrs. Rose-Marie Ur: What have we achieved through the Rural Secretariat as to the health care, supporting doctors in rural remote areas, rural parts of Canada?

Mr. Lynden Johnson: This is not something I would personally take responsibility for, but with the creation of an office for rural health in Health Canada, they have the responsibility and the leadership under Minister Rock to carry out those responsibilities.

There are other ministers—

Mrs. Rose-Marie Ur: But surely they should know that without you having to tell them. We've been telling them that.

Mr. Lynden Johnson: Yes.

Mrs. Rose-Marie Ur: So I don't understand why we need someone else. With no disrespect to you or to the organization, we're already saying that.

All we see is development and assessing, but eventually we have to have vision and action.

Mr. Lynden Johnson: That's right.

Mrs. Rose-Marie Ur: We've been dialoguing so long that people are getting very frustrated.

Mr. Lynden Johnson: I'm not too sure which points to respond to here, but I can try to take a couple of the key ones, if I could, please.

Mrs. Rose-Marie Ur: Sure.

Mr. Lynden Johnson: With respect to your latter point, yes, people are quite weary. They suffer from what they would call “consultation fatigue”. But at the same time, they say it's the approach that has been taken quite frequently. Individual departments will go out on an individual basis sometimes in a period of time very close to each other and hit the same communities with different issues. So we're trying to plan that type of consultation better.

• 1050

The other thing we did through the rural dialogue is we reached out beyond normal organizations or sectoral groups that might sometimes be invited to participate and got down to the rural citizen, to the community level.

One of the things they told us very bluntly was that they see their elected members as being their first point integral to government policy. Then they said they would need the support from federal bureaucrats, from policy-makers, and so on, to work with them in the development of that. So no one is trying to usurp anyone.

With respect to rural health, the wellness of communities quite frequently in itself will determine the future of those communities, which I'm sure you have seen yourself.

Mrs. Rose-Marie Ur: Being a health professional, yes.

Mr. Lynden Johnson: Exactly. Thank you.

Through the RCMP's community policing programs, through the programs that are offered and available from Status of Women Canada...there is a whole range of interest by other parties than just Health Canada. Our work in the Rural Secretariat is to bring those various organizations together so that they take a collective, holistic approach to the issue.

Mrs. Rose-Marie Ur: When I read through the priority areas—just to mention a few, improve access to federal government programs, improve access to financial resources, provide more targeted opportunity, strengthen rural community capacity-building, leadership—those are all warm and fuzzy things, but there's nothing concrete here. Those are things we've heard and heard. It's much the same as saying we'll do another report. There aren't any real guts in this to say that this is what we're going to look at, that this is where the money should go. It doesn't seem to have anything substantive to offer.

You're there every day working at this. Surely you can see that this is rather open-ended and not targeted to really be of benefit.

Mr. Lynden Johnson: I'd like to respond to that by saying I agree with what you're saying. Rather than assume that we knew what the issues were, what we had to do first was validate what those issues were, and we found out that there were different issues in different communities and different regions across Canada. What we have now is the basis on which we can ask departments and agencies to come together to develop strategic plans as to how they are going to address those issues in the various regions. That's where the regional agencies, for example, are going to be able to work collaboratively with some of their key partners: we know this is an issue of priority in our region; let's work together to determine how we can address that issue.

Mrs. Rose-Marie Ur: Mr. Chairman, could we request that information, as to the differences in the various communities, so that we can see how different problems are outlined in the different parts of the regions? I think it would be valuable for this committee to see just what the differences are.

Thank you.

The Chairman: I consider it done.

Mr. Johnson, should we consider it done?

Mr. Lynden Johnson: Yes, absolutely. We will do that.

If I could go back to either a question or an observation that was made that there are no rules, that's not correct. There are criteria. We've modified the criteria. We're trying to be as flexible as we can on the rural partnership criteria because that's what rural citizens told us they need. But there are rules; there's no question about that at all.

The Chairman: Thank you.

We're going to go over by about five minutes. Mr. Borotsik and Mr. Steckle are next, and that's it.

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

Mr. Johnson, as I understand it, your function is that of a facilitator, so to speak, not only between rural Canadians, but obviously departments within the federal government. I'd like to get a handle on how your department would react.

Let's take, for example, the RCMP. We recognize that there's a change right now in the delivery of RCMP services. Most rural communities in this country have the RCMP provide their policing service. I'm sure in your dialogue one of the issues that came out front and centre was safety and security in rural areas. I would be surprised if that wasn't one of the areas. So now we have the RCMP going holus-bolus and changing their whole program of service delivery.

Did they invite you in to have input from the Rural Secretariat, or do you proactively go to them and ask if they have looked at how this is going to affect rural areas in their policing service? Or do you just stand back and wait until somebody else brings you in or asks questions about it, how to analyse what's going on with the RCMP? This is a legitimate question, because I don't know how you get involved in that.

Mr. Lynden Johnson: The quick answer is that through our interdepartmental working group, all members, 26 departments and agencies, including the RCMP, are asked to bring their policy issues, as they're evolving them, to the table.

Mr. Rick Borotsik: Has that happened in this case?

Mr. Lynden Johnson: That has happened in the case of community policing. They have come to the interdepartmental working group. They've said “This is the approach we're taking. It's a forum where you can get response from 26 departments and agencies at the same time.” That is working with a number of departments.

• 1055

Mr. Rick Borotsik: Did you also at that time get responses from the people it's affecting?

Mr. Lynden Johnson: They have their own consultation dialogue process they are managing, in collaboration with the rural teams in each of the provinces. So we bring—

Mr. Rick Borotsik: I guess that's where we deviate then because I don't think their communication system was set up terribly well to communicate what they were doing to the communities. That's where I have some difficulty.

Would you not be the responsible agency to say “Hey, whoa, guys. What you're doing may well be right, I have no argument with that, but you're not communicating that properly to the communities you're affecting.” Would that not be a responsibility of yours?

Mr. Lynden Johnson: We do that on a regular basis, where we are made aware of these issues. There is a forum like the interdepartmental working group through the rural teams in each province and territory, so everyone is encouraged to bring those issues forward. The chair and our own regional advisers in each province work continuously with other departments and agencies to say “We've been hearing this. Is it right? How do you respond?” So we're trying to broaden the base of the ministry.

Mr. Rick Borotsik: I see that function as being much more proactive and certainly much better for the rural communities than even your 68 projects that have been approved. Again, no disrespect, but that seems to be something tangible you can grab on to and say “Aren't we wonderful? Look, we've done 68 projects.” But the intangibles are probably more important when you're dealing with service delivery.

I go back to customs. We have a really serious problem with communications out there with customs. Did you and your organization, in analysing it, talk to the commercial operators, the retail operators, the tourism operators, any of the people affected in those areas? Did you and your department talk about or analyse any of that, or did you just simply go to Customs Canada and say “Oh, by the way, what are you doing?” They tell you, you say that's fine, and everybody's fat, dumb, and happy.

Mr. Lynden Johnson: Before I answer the last one, there's one project here I think you might be interested in. It's a drug abuse resistance education program that the RCMP announced yesterday. It is a direct result of the kind of partnership and work we're doing with various policing agencies through the CRP and with local communities. So I think that is a tangible product.

It's early in the day on many of these projects, and I think you will start to see the results over the next few months. They are quite tangible.

With respect to customs, we met with people both locally in Manitoba and here in Ottawa to go through with them and discuss the approach they had taken, in terms of consulting with communities in the analyses we were doing. As a result of those discussions, we felt they were considering and planned to continue to consider the various perspectives of all of those who will be impacted.

Mr. Rick Borotsik: Thank you.

The Chairman: Mr. Steckle.

Mr. Paul Steckle (Huron—Bruce, Lib.): Mr. Johnson, I want to preface my remarks with a few comments.

When I entered politics at the local level 25 years ago, there was a disparity of information between rural and urban areas. Now, 25 years later, we're another generation removed from the farm. You're addressing a group of people this morning where at least six of us are either on the farm or have just left the farm. It's the only committee you will find on Parliament Hill with that many rural people so directly related to agriculture or the rural community. We're now, from the time I began, another generation removed from that. Many of the people here are now two, three, and four generations removed from agriculture.

I really feel that the biggest job you have.... I believe there is a real need for a secretariat. We're perhaps very short on specifics this morning but very long on generalities. If I were to give you some direction, I would think we need better communications. Of course we're talking about communications every time we meet. In every committee we're talking about communicating our message to the people.

On the AIDA program we've just put out, there are Canadians today who we'd consider our neighbours, but they're really not agriculturally minded or informed because they really think money is being given to bail out people who have mismanaged their operations.

I think we need to do a real selling job in terms of agriculture. We now have our exports up to $22 billion. Farmers are worse off today than they were ten years ago. So really, what are we communicating to Canadians? We've done a great job selling, but at what price? It's been at the expense of agriculture, when 2.5% of the people today are directly involved. To me there's a lot more to this whole Rural Secretariat than simply policing. All of these things are services all of us require. But when people move into my area, it's because we have policies such as—I have some difficulty—principles to guide our action.

Rural Canadians should determine their own future. Then we go a little further down and see that rural development is a responsibility to be shared among governments and with rural Canadians. Which is it? In rural Canada today when there's a noise problem or an odour problem, it's the farmer's fault. It always has to be corrected at the farmer's expense.

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You can't have it both ways. We have a pollution problem because we overfertilize or overchemicalize, but very little is said about urban Toronto. What would Mel Lastman know about fertilizer and chemicalizing? I'm going to tell you that there are probably more chemicals running into Lake Ontario from the city of Toronto than from any given equal acreage of farmland surrounding the city of Toronto, which also borders on Lake Ontario.

I know I'm being very general, but I'm saying that you have a big job to do. I think there's a place for the Rural Secretariat. I don't know where you begin but, obviously, as Canadians we need help in communicating the message that we are there providing good, safe, affordable food for the tables of every Canadian in this country, rather than that we're out there polluting and creating odours people don't like. They like moving into my area because it's close to Lake Huron. It's a beautiful place, but they don't like the smell. But their bacon comes from that particular farm.

So those are my comments. Perhaps you might like to respond to that. That's my general statement to this meeting this morning.

Mr. Lynden Johnson: Thank you.

Mr. Chairman, my own roots are very similar to that, coming from farming in eastern Saskatchewan. I think I can still relate to it, although it has been more than a week or two since I left.

One of the eleven priorities rural Canadians told us to pay attention to is in the attachment that was handed out to you today, and I will quote from it: “to promote rural Canada as a place to live, work, and raise a family, recognizing the value of rural Canada to the identity and well-being of the nation”.

They themselves told us in spades, we don't want to be trodden on and we don't want to be sacrificed for the rest of Canada. We want to be recognized and respected and to have equal opportunity. That's what we're trying to do through management of this horizontal file and through the framework for action, which has recently been announced.

The Chairman: Thank you, Mr. Steckle.

I don't want members to go away, because I think Mr. Hilstrom has something to say that he says will take only a couple of minutes.

Mr. Johnson, let me just finish this discussion on the Rural Secretariat with these few words. I think what you've heard from so many of the members of the committee today is a real passion and caring for rural Canada. A lot of the members come from rural Canada, and they feel strongly about their roots, their communities, and the people they serve.

In my final comments I don't want to sound as constructively critical as my colleagues have. I would offer these few words and this tack: that if there is criticism of the Rural Secretariat, founded or unfounded at the moment, perhaps it's because you are rather new on the block. I think you're just three years old, something like that. It does take a little while for the new chap on the block to assert himself and to establish some kind of reputation.

Also, I think if you are underappreciated at the moment, it's because your service, at least at this point, is a bit abstract. Mrs. Ur used the word “concrete”, and in politics and in democracy one of the most difficult things is not having something that is concrete or physical to point to. If you were providing the kind of service that in effect said you've built that bridge and that building and provided this particular program and it has a concrete form to it, people might relate better to it. Your service is somewhat different, and perhaps a little more difficult to understand.

I would welcome your service, and I would say that without a Rural Secretariat and a rural lens through which programs and plans can be put, the converse of that would be to expect each department—and you mentioned 26—to have its own rural expertise. If the Department of National Defence were to propose something outside of an urban area, it would have to have a rural secretariat of its own within the defence department. The same would apply for Revenue, Agriculture, Industry, and so on. It seems to me that it makes sense to have one particular service that has an understanding of rural Canada's sensibilities, desires, and dreams. I would hope you would do that. As I listen to you, I'm sure that's what you want. I'm not too sure you're there yet, but then you're only three years old.

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So I wish you well. I can understand how difficult it's going to be for you, at least in these early years, to be appreciated, even if you are doing your work well. But I would hope that at some point you'll become so well established that in anything any department of government does it will think of the Rural Secretariat, and they will have, in whatever they propose, an understanding of what you're all about and the kinds of things you can bring to the table before ultimately a decision is made.

Anyway, that's what I would say. Thank you for coming, and I'm sure we'll have you back.

Mr. Lynden Johnson: Thank you very much.

The Chairman: I'll let you go, Mr. Johnson.

Mr. Hilstrom, you have the floor for whatever you want.

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

I was wondering when we were going to get together as a steering committee again and decide on what we were going to be doing. Inviting the Canadian Rural Partnership people here was fine and dandy for now, but how much more should we do with it? Because if they're successful in their promotion of rural Canada as a good place for non-farmers to live, that's going to drive up land values like crazy and make it harder for agriculture to go ahead.

I was wondering if we could have a steering committee to decide whether or not to invite them back. I think Ms. Ur was suggesting we maybe should, or something. I missed the last one.

The second issue is whether or not there should be a committee report to go forward to the Canadian Wheat Board. I would suggest in that case, Mr. Chairman, that the committee would put forward a report and the opposition parties would end up putting forward a minority report. I would suggest about this issue that we guarantee they be provided a copy of the minutes of our meeting and then they can judge for themselves what information came out and save us writing a report.

The Chairman: I think that's going to be done. I've spoken to the researcher and I've spoken to the clerk, and my understanding is that the record of our discussions will be made available on the Internet. So if the Wheat Board, or anybody, wants to have that information, it will be on the Internet.

Mr. Howard Hilstrom: There's one last thing, this video of southeastern Saskatchewan and Manitoba, of the wet conditions there. Do we want to have the committee get together for half an hour on Thursday or something and view that and discuss anything in regard to the conditions down there as to whether or not we should have any presentations on that or anything? That's a steering committee thing too.

The Chairman: I don't know whether we can deal with that now. We're working on very tight timelines, Mr. Hilstrom. Let's just close this meeting for now and let's see where Parliament takes us over the next couple of days.

This meeting is adjourned. Thank you.