AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, November 22, 2001

• 0905

[English]

The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Good morning, everyone. We'd like to call our meeting to order, pursuant to Standing Order 108(2).

Today we have a briefing session with Pulse Canada regarding Canada's pulse industry, and we'll have more members undoubtedly joining us shortly. I was just saying to our clerk that yesterday I met a member of the minister's staff, and she said she listens to our meetings each time on the radio. We are on 103.1 MHz, 103.5 MHz, and 103.9 MHz. Is there anyone who wants to give an advertisement? Maybe they can do that before we start.

Anyhow, welcome to Mr. Dauk and Mr. Minogue. With our meeting this morning we'll have a short presentation from you, followed by questions and discussion around the table. I'd ask you to keep your remarks to probably 10 to 15 minutes, and we have an hour in total. So welcome.

Germain, are you going to present?

Mr. Germain Dauk (Chair, Pulse Canada): Yes, I would like to start.

First of all, thank you for the opportunity to meet with you. It's a real honour and a privilege to be here.

I want to apologize to MP Speller and MP—

[Translation]

Mr. Marcel Gagnon (Champlain, BQ): Mr. Chairman, I apologize to our guests. Could we perhaps make an official complaint in order to get these devices to work some day?

[English]

The Chair: We have trouble here sometimes with our translation, with the electronics.

[Translation]

Mr. Marcel Gagnon: Yes, but perhaps a complaint should be filed to have them repaired. It happens every time.

[English]

[Technical Difficulty—Editor]

Mr. Germain Dauk: Again, I apologize to MP Speller and MP Calder, because they've heard us so often in the past. If you both can just turn off for a few minutes, that's fine.

Mr. Rick Borotsik (Brandon—Souris, PC/DR): They did that without being told.

Mr. Germain Dauk: I'd say the same thing to MP Anderson, who also understands the issues very well. Again, I apologize to these gentlemen.

I'll be very brief in my remarks and simply say that Pulse Canada is an organization that's made up of pulse growers, producers, and farmers in Alberta, Saskatchewan, Manitoba, and Ontario, and also the trade people, the people who process and sell the product.

Pulse Canada is an organization that attempts to develop export markets by working on market access issues—that is, lowering tariffs and quotas in other countries. Pulse Canada also does market development work by doing feeding trials and seminars in other countries. Just recently we've expanded our role into policy issues and also research, and it is the research that we would like to concentrate on today.

• 0910

I'll give you a few facts about the pulse industry. We are a growing industry. We are excited about our industry, and we're optimistic about agriculture in general but more specifically about pulse crops. For example, Canada is the number one exporter of lentils, peas, and chickpeas in the world, which is an amazing statistic, considering that four years ago we didn't grow any chickpeas.

Today we are the number one pulse exporter in the world. We could go into many reasons why this has happened, and why pulse crops are a great crop for Canada and why we have such an advantage. This growth is like a tower, and if a tower doesn't have a good base it's going to fall over. The base is the research. The tower will be held up only by doing research. It is because of the research and the need to do more that we are here today.

Joining me today is Lyle Minogue. Lyle is chair of Saskatchewan Pulse Growers, and he's also chair of the Pulse Canada research committee. I would like to turn this over to Lyle, who is a farmer from Lacadena, Saskatchewan. Lyle will talk a little bit about the research initiative.

Mr. Lyle Minogue (Chair, Saskatchewan Pulse Growers; Pulse Canada): Thank you very much, Germain.

I too would like to express my appreciation to this committee for taking the time to hear us here today. We come to Ottawa with a very specific mission. I'll give you a little more background on our Pulse Canada research initiative.

Pulse Canada research was established about a year ago because we felt there was a need to increase the research going into our industry. Many of you have heard me speak here before in Ottawa, saying that the pulse industry has not received much attention in the Government of Canada. It's a new, emerging industry that has come along so fast that the resources available to support it haven't increased in proportion.

So we established Pulse Canada research with the specific objective of making the best use of research dollars that would be available, of developing a long-term strategy for research so that we could try to increase the research initiatives in a meaningful and productive way to get the best possible advantage for our dollars spent. We've been very successful in that, I think, and we'll get into a little more detail about the research strategy itself later.

I would like to point out the reasons why the pulse industry has taken off as fast as it has, because it has implications for the areas of research that we have to expand upon.

I think the first advantage in the pulse industry is that we have a comparative advantage in yields. If you go to any other place in the world and look at the grain yields and look at the pulse yields, the grain yields will be much higher in other places in the world, but our pulse yields are roughly equal to or better than the yields in other places. I think if we could get all of the market barriers out of the way and all of the trade barriers, in the future Canada would tend to produce more pulse crops and less of the other grains because of our comparative advantage.

I'll mention some of the things that the pulse industry does for all Canadian citizens. First, pulse production reduces greenhouse gas emissions because it plays a part in reduced tillage by reducing the amount of tillage required. Another advantage is that pulse crops produce their own nitrogen so that you don't have to be using nitrogen fertilizers. Also, we get improved agronomic stability because we have a wide range of pulse crops that fit into other rotations. And if climatic factors go against one crop, they don't usually go against all crops, so it helps out in that way.

We have created a more stable marketing environment for Canadian farmers through a wider range of crops, so hopefully they'll always have a crop that will have some economic value. We've increased the farm incomes of Canadian farmers by giving a higher-value crop, plus the value that is contributed to the crops following pulse crops, where we tend to get higher yields and higher quality following our pulse crops.

We create a lot of jobs in Ontario and in western Canada in the processing and value added of these crops. In Saskatchewan alone, the number is 1,200 jobs in the processing industry. Other provinces have similar kinds of numbers, and those jobs tend to be in the rural areas, where we desperately need the jobs. We believe there's a great potential in the value-added industry, and we have only scratched the surface of that. We believe that five years from now, ten years from now, we should be talking about the constituent parts of those crops, such as starch, protein, and fibre, and some of the other industrial uses that may come from those products.

• 0915

When we look at the potential of this crop and the dramatic growth in the past, 20% annual growth for 10 years—and we believe that growth will continue—we believe there is a great potential for a good investment by the Canadian government in the form of research. And our research is totally inadequate at the moment. Research in the pulse industry has stayed relatively constant over that 10-year period.

I'll give you some examples. Our Canadian chickpea production is worth $500 million. We have one plant breeder to cover all of those classes in those two crops, and there are a lot of classes. That's half the time on lentils and half of the time on chickpeas. It's embarrassing when you get to other countries and tell them the kinds of resources we have in the plant breeding program.

Pathology work for all pulse crops is very limited, and as new crops there's very limited crop protection chemicals available for our use. The registration process has fallen behind and we need research to upgrade that.

In our research communities we tend to do most of our research on what we call “soft money” that's only available on one, two, or three-year programs. A lot of our research is five and ten-year in scope, and it's hard to get the programs going; it's hard to attract the good research people we need into our research community.

We feel that Canadians are lagging behind in the quality work that should go along with our production. It hurts me to go to other countries in the world and see our products being sold at a discount to those of other countries. An example would be green peas: you can go to markets in India and many countries and Canadian peas sell at a discount of $40 to $80 per tonne because of their bleaching and because of the way we're marketing them at the current moment.

We have a support program for research that is very low. We have put together a long-term strategy through the efforts of our new research coordinator, Holly Rask, who is here with us today. We have listed the things that we think are the bare minimum we would need to bring our industry up to speed in a research sense. The proposals we're suggesting, if achieved, would give us an investment of research that would be roughly two percent of what the industry sales would be, based on the current value of production today. That is not in excess of what any other industry receives and lower than what a lot of sections of agriculture receive.

We're not asking for the moon. We're asking to get up to a level close to what other sectors of our agricultural community get. Growers believe strongly in research. All our growers contribute half of one percent of all sales, which goes into a fund in each province and the provinces use that money for market development and research and other activities that we think are necessary to promote our industry.

Our message here in Ottawa this week is that we would like to see recognition by the Government of Canada of this emerging industry, which can offer benefits to all Canadians. We would like you to put some research dollars into our program to give it the kind of support the rest of the agricultural sectors have.

With that, I'll close my remarks so we can take questions.

Mr. Germain Dauk: Thank you, Lyle.

I'd like to add a couple of points. First of all, we have several of our people here. Pulse Canada has three meetings a year, and we usually have them in Winnipeg or Saskatoon. We promised Ontario that we'd come here and have a meeting here. We had a board meeting yesterday. With us today are some staff and some of the board. We have Larry Anderson from Ontario with us, and Dan Penner from Manitoba. And we have two staff members: our CEO, Gordon Bacon, and our research coordinator, Dr. Holly Rask. Did I miss anybody?

• 0920

The pulse industry, as Lyle described, is very vibrant. It's growing rapidly. We're not asking the federal government to support the industry; we are asking you, as the federal people, to be part of a team, and this team will carry pulses to even higher levels.

We have a vision. We've grown to over seven million acres now and over $1 billion worth of exports; our vision is that we will double that in the next five years. It's a very ambitious statement, and the only way we can achieve it is by having teamwork that includes the producers, government, and industry.

For example, in Saskatchewan last year, we would have spent approximately $2.5 million on research. That is grower money, farmers putting money into research. So we are one of the team only.

I'll open it up for questions or comments.

The Chair: Thanks, Germain.

David.

Mr. David Anderson (Cypress Hills—Grasslands, Canadian Alliance): I'd like to give you a little bit more opportunity, if you want to talk about your research proposal a bit.

I'm going to ask a couple of specific questions about what kind of money you want. What's your proposal? Have you broken down where you'd like to spend it, as far plant breeding, pathology, and disease are concerned? Do you have any market development money that you'd like to put into that? I'd like a little more detail on what you're talking about.

Mr. Lyle Minogue: Our overall proposal suggests that we take the funding of research from a level now of about $15 million up to about $25 million. In this proposal we're not suggesting that we would build a research institution for pulse breeding. We're suggesting that this would be what you might call a virtual centre. The concept would be that we would have a very minimal staff to coordinate the research and make sure that money is used effectively.

Each funding organization would continue to handle their own funds. They would not be writing cheques out to Pulse Canada and creating any bureaucracy. What we're doing is making sure that what the federal government would do fits in with what the provincial government would do, and fits in with the universities' work, the Canada Grains Council and CIGI, and all those groups.

I should mention that Pulse Canada Research has a board of directors that has a member from every funding institution involved in pulse research. From that we draw an executive committee of five people, of which I am the chairman, and then we do our work with a staff of one, who is Holly Rask, who I mentioned, who is here.

So the funding level of $25 million in total would be done in centres wherever it makes sense to do it. Quality work may be done in Ontario where there's already a base of expertise. Plant breeding may end up being in one of the existing federal research centres or in the Crop Development Centre. The agronomy work would be done in conjunction with other agronomy programs that are there but tie in the pulse sector with the agronomy. The quality work and the end use utilisation would go to those institutions that specialize in that sort of work. So you wouldn't see a great construction of facilities across the country. We would use existing institutions.

I should mention that in the Department of Agriculture here in Ottawa, it's my understanding that there is a restructuring going on that will lead to a more horizontal style of management, where they will have coordination of their programs along the lines that we're proposing. I think it may be an ideal opportunity to insert our needs into their restructuring so that the new structure can include a pulse section. The exact details of how they would work that into their system we'll have to leave up to the Agriculture and Agri-Food Canada officials.

If we want specific numbers on research and how many dollars in each area, we could bring Holly Rask into the discussion and she would have more numbers for us. But in ballpark terms, if we could achieve this world-class research program, it would require $10 million additional funding per year and a one-time cost of $22 million for infrastructure and equipment. But in reality it would probably take three years to put that into place, so we would spread the $22 million over one, two, and three years, and then $10 million per year ongoing from there on.

Mr. David Anderson: Okay. I see this as a good initiative. I think it's a real success story. We don't have a lot of those in western Canada right now, but this has been one, and I think it's a good place for the government members to lobby their finance department for.

• 0925

Mr. Germain Dauk: MP Anderson, if I could add one thing, the research plan that Lyle alluded to is not our plan, it's everybody's plan. It was developed by a series of meetings of pulse researchers from across Canada, culminating last Sunday, Monday, and Tuesday in Saskatoon, where 90 people met. Ninety pulse researchers from across Canada met to put the finishing touches on the plan. The plan is basically done, 95% completed. It needs a little more tweaking.

So it's everybody's plan. They looked at what we're doing, what the needs are, who should be doing it, what should be done, and over what time period.

Mr. David Anderson: A second area I know you have some concerns about is with registration of chemicals and those kinds of things. We're coming into a PMRA review here. Do you have any comments or concerns that you'd like to let us know about, about that and the situation with chemicals and pulses?

Mr. Lyle Minogue: I'm very concerned about the chemical situation. When we started some of our pulse crop production in past years, we would find a variety of crop somewhere in the world that we thought we could grow and brought it into Canada and grew it. Farmers tried all sorts of chemicals to see what worked, and there was some research done. You would get a large number of acres that were being seeded using these chemicals, and the companies would register the chemicals. We then had some registered chemicals for the crops.

That type of procedure is not acceptable in today's environment. People do not want farmers out experimenting with chemicals. So as we bring new crops into our production system and as we try to improve the protection and protection of the crops that we have, it's important that research is done properly and we get registration for the chemicals necessary for wheat control, disease control, and those sorts of things. That's really urgent. We have to really work on that in a hurry.

Mr. David Anderson: Do you see harmonization of chemicals interprovincially and internationally as one of the solutions to that?

Mr. Lyle Minogue: Yes. It acts as a trade barrier at the present time. We have crops that we can produce using registered chemicals, but the Americans might ban the export of our crops into their country because those chemicals aren't registered in the United States. That is a real concern as well.

It works both ways. They have chemicals that they can use but we can't.

Mr. David Anderson: I'll let somebody else ask questions, so that everybody gets a chance here.

The Chair: Marcel.

[Translation]

Mr. Marcel Gagnon: Thank you, Mr. Chairman.

I find this meeting extremely interesting, particularly because, in an ecological perspective, the crops that you are talking about are extremely friendly for our environment. I do have a couple of questions.

First of all, you mentioned several provinces where you are growing these crops, but you did not mention Quebec. Are these crops also produced in Quebec and are there people from Quebec who are members of your association?

Secondly, what is the potential market? You talked about a growing market. What are the expansion opportunities for the crops that you are producing?

[English]

Mr. Germain Dauk: If I could answer the first question, at our research meeting in Saskatoon this past Sunday, Monday, and Tuesday, we had several Quebec researchers. At present, Quebec is not part of Pulse Canada, as a province. However, it's a very small industry yet in Quebec. There are only a few thousand acres.

There is potential to expand that, and the people in Quebec, the researchers, are working with Pulse Canada to try some of the varieties used in western Canada and in Ontario. This is especially true in the bean industry. So at the present time, it's a very small industry in Quebec, but we have ties with Quebec researchers. Through those ties, the potential is such that we might have a larger industry in Quebec, at which time we would have much closer ties with Pulse Canada.

As far as the markets and the expanding ones are concerned, Lyle....

• 0930

Mr. Lyle Minogue: I believe there is tremendous potential to expand our markets. If you look at a crop like field peas, they're very easy to grow in Saskatchewan, Manitoba, and Alberta. I think the acres are very limited in eastern Canada—there may be potential there. But field peas have been sold in the traditional markets for edible peas in a number of countries, and into livestock feed markets. Because of their high energy and high protein, they are a very good livestock feed, particularly for hogs. The hog industry has been expanding in Canada, and we expect it to continue to expand, so that market will continue to develop.

There have been some additional market opportunities in peas in countries like India, where they will substitute split yellow peas for some of their higher-value crops like chickpeas, pigeon peas, beans, and so on, when they need additional foods. A lot of countries in south Asia are like that, where they eat a wide range of pulse crops and they tend to want the crops they can afford. So split yellow peas, I think, have tremendous potential all through the Asian area.

The feed markets in South America, Korea, China, Taiwan, and the Philippines hold unlimited potential. I have personally been on some of our export development missions, where we have introduced feed peas and done feeding trials. People there have no experience using peas, but when they run their computers and put the peas into the ration, there's tremendous opportunity, I think. The Chinese market alone, if we were to get into one province in China, would be an unbelievable market.

Then there are the opportunities we should be focusing harder on. They require research on the uses of starch in the pea, for example, in the newsprint industry. There's a little bit of that going on now. We believe there's potential in the ethanol industry. There may be uses for the fibre.

Then we can go to crops like lentils, which have good functional uses. They are good for their protein levels and folic acid. There are some very good nutritional characteristics of lentils that haven't been adequately explained to the public.

There's a trend for people to look for healthier foods, and lentils would fit into that. The flowers from peas, lentils, chickpeas and some of these crops could be used for people who have allergic reactions to gluten, for example, and other things like that. But these kinds of things require a lot of research and development.

The chickpea market probably has great potential. There are the large chickpeas that are sold into very high-value markets. If we can increase the size of our chickpeas a little more, we'll have a tremendous market opportunity—even as good as it is with the current kind of chickpeas we're producing. If we get into the smaller chickpeas and some our newer varieties that are out there, they will fit into the Asian market and can be sold as a food to people who can't afford the high-value products. They can be substituted into some of the other markets. So I think there's a big potential.

Mr. Germain Dauk: Could I add one more thing to your first question, sir? I want to give you an example of the national scope of this organization.

One of the Quebec researchers brought some seeds from Saskatchewan, namely pintium beans and cranberry beans, into Quebec. They are varieties produced by the Crop Development Centre, which is financed by the growers of Saskatchewan, Alberta, and Manitoba. They tried those beans in Quebec and they worked very well.

So I think this is a great example of national cooperation. That's the type of atmosphere we're trying to foster.

[Translation]

Mr. Marcel Gagnon: You are right in terms of examples of cooperation. I would like to make a small comment about something that would help us in Quebec. If your documents were translated in French, it would help us. I see that your document is translated in several languages, but you have forgotten French.

You talk for example about chickpeas and lentils. In Quebec, we have been eating the stuff for merely five years—in my own case, at least—and it seems that it is a growing market. Where do the chickpeas and the lentils that we eat come from? Are they grown locally or imported from abroad?

• 0935

[English]

Mr. Lyle Minogue: Are you referring to the seed?

[Translation]

Mr. Marcel Gagnon: I am talking about the product that we eat, that we buy in the stores.

[English]

Mr. Lyle Minogue: It is very embarrassing to go into a store in eastern Canada or Vancouver and see them eating lentils or chickpeas from Turkey. That's still happening because some of those people aren't aware that Canada is now the largest exporter in the world. I think that's changing, and there's a greater awareness of our products.

The other problem is we have a shortage of processors that will take our products and put them into one-kilogram or two-kilogram packages and get them ready to go into the stores in the form we want. That has to come with the further development of our industry. We have to get a continuous supply of a good-quality product. We're getting there now. I think the processing end will come, so you will be able to walk into a store and buy Canadian chickpea flour, split chickpeas, and that sort of thing.

To my knowledge, you cannot at this moment buy Canadian chickpea flour. You have to buy it imported from somewhere else. If it's produced, it's in very small quantities. We have to change that.

[Translation]

Mr. Marcel Gagnon: I would like to apologize and withdraw the remark that I have made. I was just given the information in French. I thank you very much for it.

The Chair: Thank you, Marcel.

[English]

Bob.

Mr. Bob Speller (Haldimand—Norfolk—Brant, Lib.): I just want to say I appreciate the fact you've come here today. It is an opportunity not only in the west, but in Ontario also.

For our part, we've always recognized that research and development were key. We've already passed on your concerns to the Prime Minister and the Minister of Agriculture, and we'll continue to do that.

We talked to Ralph about it, and he is certainly aware of the problem. He's aware that more research dollars need to go into some of these areas. We have focused for too long on certain crops, and we need to rebalance that budget. I know they'll be looking at that.

The Chair: Rose-Marie.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): I too appreciated the presentation this morning.

I guess people went into growing pulse because of the wheat situation out west. That was the reason for diversifying and adding it to your wheat industry.

Mr. Lyle Minogue: We were growing wheat for 50 years in western Canada, and then started looking for alternatives. Probably some of the wild market swings encouraged that movement to look for alternatives to production.

Mrs. Rose-Marie Ur: On a cost return per acre, whether it be wheat or your crops, is it basically the same—input and profit?

Mr. Lyle Minogue: There's a wide range of crops we can grow in pulses. Some, like chickpeas, have very high cost, but the returns are correspondingly much higher. The important thing is that if you ask why farmers would suddenly switch to seven million acres of pulses, they're obviously making money at that.

It's not just because of the benefits you get when you grow the pulses. When you grow wheat following the pulse crop, you have less disease in your wheat, more nitrogen in the soil, and more productive soil, so you get a better yield of a higher-quality wheat, durum, or a number of other crops following the pulse crops.

So it's the combined impact on the whole rotation that is causing the switch, not just a one-time gain from the pulse crop.

Mr. Germain Dauk: Can I just add one thing to that? It's not necessarily a switch, in that if you go to MP Anderson's area, it has sort of revolutionized the way farming is done. In the past, many times in many areas there was half summer fallow and half wheat. Now the pulse crops are replacing summer fallow and not wheat. It's not a case of replacing one crop with another crop; it's really adding to the whole mix and making the area more economically and agronomically sustainable.

Mrs. Rose-Marie Ur: Why is the movement slower east of our western borders?

Mr. Lyle Minogue: Why is it slower in eastern Canada?

Mrs. Rose-Marie Ur: Yes.

Mr. Lyle Minogue: I think it's because you have some very high-value crops, like soybeans and corn, and a smaller acreage base, in total, to start with.

• 0940

With regard to the acreage in Quebec, that would be my answer there too. There's a much smaller potential acreage to work with in Quebec and a greater opportunity for vegetables and things that you can sell because of the large population here.

Mrs. Rose-Marie Ur: In your brief you had indicated that the industry is very susceptible to disease. Can you expand on that?

Mr. Lyle Minogue: Any time you grow a crop continuously in an area or at a greater frequency in an area, diseases tend to move into those crops. One solution is to find chemicals you can use to control those. We don't like that solution. The better solution is to develop disease-resistant varieties. Some of those already have been developed in Canada at the Crop Development Centre. In the peas, we bring in a lot of European pea varieties that have disease resistance. Our goal is to have better varieties for all of these crops so we don't have to use chemicals to control disease.

Mrs. Rose-Marie Ur: I'd also like to congratulate that researcher, who has done a yeoman's job on this.

Mr. Rick Borotsik: Speaking of that researcher, first of all, I have a couple questions on the research side of it.

You say one-half of one percent of the value of the crops has been going into the research from your producers themselves. Is that a check-off system, or is that voluntary? And how much money has been generated from that one-half of one percent?

Mr. Lyle Minogue: In the province of Saskatchewan our check-off system is a mandatory check-off system. It's half of one percent. We generate about $2.5 million. If you go to Alberta and Manitoba, the money is deducted but you do have the option to apply to have it rebated. I don't have the exact numbers for Manitoba. I believe in Alberta about two percent of the levy is deducted.

Dan Penner could give you the numbers.

Mr. Rick Borotsik: I'm sure he'll fill me in. Is it deducted from the dealers and then paid to the organization?

Mr. Lyle Minogue: The way the legislation works is the company buying the product deducts the levy and submits it to our organization.

Mr. Rick Borotsik: I can get the numbers from Dan, I'm sure, at our meeting.

You had mentioned that for one researcher through your organization, Pulse Canada, half of the time is spent on lentils and half of the time is spent on peas. Then you tell me that 90 pulse researchers met in Saskatoon. Of the 90, where do the other 89 come from?

Mr. Lyle Minogue: We had 90 people in Saskatoon; they weren't all researchers. We had probably 10 people from Agriculture and Agri-food Canada who were there, because they're part of the research strategy and want to know—

Mr. Rick Borotsik: Were there private sector researchers there?

Mr. Lyle Minogue: We don't have private sector researchers in our industry.

Mr. Rick Borotsik: That's interesting, and that's what I wanted to talk about. You talked about it from your research side, about the fact that obviously you're looking for plant breeding, chemical registration, disease resistance. I understand all of what the needs are. And by the way, I congratulate you: your industry is growing by leaps and bounds. Surely, there is an opportunity there from the private sector. Have you been working with the private sector, with the plant breeders themselves to look at their research in this?

Mr. Lyle Minogue: There isn't a lot of potential there. We do get varieties that come from Europe, because they develop pea varieties in Europe for their continent, and if some happen to work in Canada they bring them over here and sell them. The problem is that if a company is going to invest dollars in research, would they invest it in an industry in Saskatchewan where a few years ago we had almost no acres of pulses, or would they invest it in corn and soybeans, where there's...?

Mr. Rick Borotsik: Obviously you've grown by leaps and bounds. The potential is that there is going to be that market there.

That ties into another question I have. And think about this very carefully. You talked about the possibility of disease resistance in the new plant breeds. You've talked about perhaps too much folic acid, not enough, larger size, smaller size. What's your position on genetically modified organisms?

Mr. Lyle Minogue: We do not have any genetically altered pulses at the moment.

Mr. Rick Borotsik: You just talked about some opportunities that may well be genetic.

Mr. Lyle Minogue: There may be opportunities down the road. If it becomes acceptable by the public, in general, to use genetically altered crops for the benefit of the consumer, then we will pursue a pulse crop that will benefit the consumer. At the moment, we know that if we use GMO crops for the benefit of the chemical company or the farmer, our products won't be accepted. So we do not want to get into that.

• 0945

Mr. Rick Borotsik: That sounds like a policy that's been developed by the Wheat Board, but we won't get into that.

That segues into another issue: your marketing, wide ranges of marketing. You've done very well. You've entered into some export markets, obviously. You've increased your crops by double from the previous year. That's all private sector marketing. There are a lot of smaller dealers out there—and I have some in my area, by the way—who've done extremely well marketing into export markets. Do you see that as being a real potential for you with increased marketing?

Secondly, there was a problem at one time when I talked to your groups with respect to insurance with some of those smaller dealers. When the producer sold to a smaller dealer he sometimes got a better price but sometimes didn't get paid for it. That insurance, I understand, came into the mix. How is that working?

Mr. Lyle Minogue: That was what we call the SCRIP program. It was the special crops revenue insurance program. We were attempting to get a program established where a producer could voluntarily agree to pay likely about 0.3%. Part of that money would go to the Canadian Grains Commission for administration, and about 0.2% of the 0.3% would go to the Export Development Corporation to run an insurance fund.

That program never got off the ground. I think there were concerns that it would not be good in the public eye to have another levy introduced, even though it was voluntary. There was resistance from some of the companies that were already bonded under the other grains they were selling; they thought it wasn't to their advantage to have a program that was out there for the other groups.

Probably you people here in Ottawa would have better knowledge than I about why that program didn't go ahead, but at the moment we don't have that.

Regarding the marketing of our products, I should mention that all of our marketing is done by private companies. I think some 90 companies belong to the Canadian Special Crops Association, some of the biggest in the world, like Cargill and ADM Agri-Industries Ltd., and some of the very smallest, which are farmers selling it through a Quonset in their backyard. And it works very well for us.

Pulse Canada does market development work, and we do work to remove market access barriers, trade restrictions, that sort of thing, tariffs, but we never buy and sell products in Pulse Canada.

Mr. Germain Dauk: Could I just add one thing to the question, sir, with respect to private companies? If you were a private company, would you invest in the canola industry with seven million acres, or the pulse industry with seven million acres? They sound equal, but in fact they're not, simply because in the pulse industry that is broken down not only into four different crops, but also within that division there are many lentil classes, many chickpea classes.

So the private industry finds it difficult to find an area they can really lock into that will produce an economic return to them. Inherently, there's a problem.

Mr. Rick Borotsik: Are they doing research?

Mr. Germain Dauk: They are doing a small amount of research. We are constantly working with them.

Mr. Lyle Minogue: And now that we have said all that, I will point out that we are talking through our hat again.

It's been pointed out to me that we have been joined by John Thompson from Thompson Seeds, who is a plant breeder who works on beans in Saskatoon. And I apologize for that, because we know nothing about beans, because we have very few beans in Saskatchewan. Perhaps we could ask for a clarification from John on the....

The Chair: Thank you now, Rick; you're getting towards eight minutes there.

Murray?

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Yes, Rick, quit using my time up.

The Chair: There may be another round, so have patience.

Mr. Murray Calder: I want to go back to the research and development. I'd like your response on how the matching investment initiative is working. When we've been going across Canada with the task force we've heard in some areas that they think it's a great thing. And in some areas they're a little concerned, because basically the government is putting money into the industry and we get into some of these things like the terminator gene, for instance, which farmers have a little problem with.

On another aspect of it, I was looking at your sheet here, and the research and development with canola, as you said, would be a matter of researching just one crop. When you start doing pulse you'd be doing research in dry peas, lentils, dry beans, chickpeas, all the way through this. I know you have one researcher for chickpeas. When that individual is on holidays during the summer you have no researcher for chickpeas. So how would we address that? Because you're going to have to be doing research in any number here, whereas in canola, using that as a comparison, you'd only need one researcher doing research in canola.

• 0950

Mr. Lyle Minogue: Perhaps I could talk first to the MII example; that's a good one you brought up. MII says that you can go and get research done at a federal research institution, and whatever money you put in, you get a matching contribution from the federal government.

A few years ago there were research cuts in Agriculture Canada. They decided to cut back and focus on what they call their “centres of excellence”, which were things like wheat and canola. But there are no lentil programs and no chickpea programs in the federal system, so we cannot get MII for those programs. That's a classic example.

If you go all the way through the Agriculture Canada system, whenever something comes up there is not the proper recognition and the linkages to bring our industry into those discussions. A classic example would be a meeting that's coming up on Monday or Tuesday with the Canada Grains Council. There are briefing notes being prepared to go to a speech being given at that section, and there was no request for information from the special crops and pulse section.

I think it says that we have to review all the Agriculture Canada programs to reflect not only the crop mix we have today, but also the crop mix that we think we should have two years from now, five years from now, ten years from now. There has been too much emphasis on basing research needs and other needs on historical production. And programs that say we need matching funding from producers will always tie us to the past.

If you take an example of a new crop that may have more value in the future than any we're now growing—and I don't know what that could be, but suppose it were coriander or caraway—there are no producer groups and no revenue base to come in and ask for matching funding and MII, or any other program. If you use a system that requires matching funding all the time, we will always be tied to the old crops we grew 20 years ago.

Mr. Murray Calder: What about with the multiple research that I was talking about here too? How can we get in to solve that problem? As an add-on to that, where are the organic people with you? Are they into lentils too, and if so, how are they moving forward?

Mr. Lyle Minogue: I know there are organic farmers who grow pulse crops. I'm sure they have some research needs as well. We don't have a specific group in our Saskatchewan Pulse Growers or in Pulse Canada that represents organic. I can't speak for them. I would assume they have an association of their own, where they're asking for research on a wide range of crops, but I can't speak to the organic.

Mr. Murray Calder: Okay, that's fine.

The Chair: Thanks, Murray.

David, do you have something more to add?

Mr. David Anderson: On the organic, I know that people grow them. My brother-in-law has been growing organic lentils for years, but there are so many problems with some of those crops with disease, without being able to use fungicides and chemicals and that kind of thing.

One of the reasons I'm wondering if private companies haven't had to do their research is because up until now they've had it fairly easy. They've been bringing in new varieties and introducing a lot of new varieties that they've been able to find in other places in the world. As we get a little more focused with varieties, I wonder if you're going to see them having to do some of that work as well.

Mr. Lyle Minogue: I don't think it's correct to say that it's been easy to find other varieties and bring them in. We bring in the odd variety that happens to work, but it doesn't work very well.

You would be aware of the problems with our chickpeas in southern Saskatchewan. When it rains we have outbreaks of ascochyta. I think this year, with 1.2 million acres seeded, it would mean an average of two applications of a chemical called Bravo. The total cost would be $40 an acre on 1.2 million acres, which is $48 million that we've spent in Saskatchewan alone on chickpeas. Imagine if we had invested $1 million a year for 10 years prior to this what we could have saved. And that's not to mention the losses of the grade loss and the yield loss and the people who are afraid to seed them because they don't want to run into those problems.

The varieties are hard to find. We find varieties in the southern hemisphere and we bring them up here, but they're what they call “indeterminate”. They don't know when to quit growing, so they don't ripen in the fall. We have a few varieties that come out of the U.S. The European peas work fairly well. I think we have better luck with bringing in other varieties from the United States. But we really don't have very good varieties.

• 0955

I would guess that—and again you would have to talk to the private sector—the problem has been with a wide range of classes and a limited number of acres relative to some of the major crops in the world. This means we don't tend to attract large amounts of research money.

Mr. David Anderson: Problems in transportation rather. We have a system now in western Canada, in particular, that's geared to unit trains pretty well and to the terminals. Do you have any comments on transportation problems, some of the solutions, and some of the problems that you see in there?

Mr. Lyle Minogue: Do you have another hour?

The Chair: You've had your two minutes. I'm going to go to Marcel now.

[Translation]

Mr. Marcel Gagnon: Thank you, Mr. Chairman. I have a couple of small questions that I will ask quickly. Since we only have two minutes, I will do so at once.

I find today's meeting extremely interesting. You have mentioned that in Quebec, the opportunities are not as great because of corn growing. If I understood correctly, it means that corn is more profitable and that farmers choose to grow corn. I would like you to correct me if that is not the case.

Secondly, have you had meetings with the Quebec Minister of Agriculture and with the Union des producteurs agricoles du Québec? It seems to me that this is an ecological and extremely interesting way of diversifying our production.

[English]

Mr. Lyle Minogue: I guess I made the reference to limited opportunity in Quebec, intending to mean that if you take the total cultivated acres that would be suitable for production of pulses, it would be much smaller than the acres we're talking about in other places.

I have to admit that I don't know much about your production in Quebec, other than what I see when I drive through on the roads. I see a lot of crops that look to me as if they're more highly valuable than anything that we would be able to achieve in growing peas on the huge fields in Saskatchewan with mechanized equipment and so on.

I must admit we haven't talked to the Quebec Minister of Agriculture about this, but mainly because it has been so hard to keep up with our expansion. When we look at the 15,000 acres—I think that was the number last year in Quebec—we have to solve some of our other problems first before we start trying to expand into that small an area.

Mr. Germain Dauk: I'd like to make just one point about the organics in that. By definition, organic farmers do not use synthetic fertilizer. On our farm we grow about 1,000 acres of pulses. We use no fertilizer the year we grow the pulse crop—none at all. In the year following a pulse crop we only add a small amount of fertilizer, because there's residual. So pulse crops fit in very nicely with organic farming, because they supply fertilizer in a natural, organic way.

The Chair: Thanks, Marcel.

Briefly, Rick.

Mr. Rick Borotsik: I have two very quick questions.

First, rather than $10 million, we have some great agricultural research facilities. One in my riding actually does some great work on barley. Some in Saskatoon do great work in swine. Would it be to your interest in Pulse Canada to have the federal government embrace the research themselves into the pulse crops and use some of their facilities and some of their researchers in that area?

Mr. Lyle Minogue: We definitely want to use some of the existing facilities, and they would agree with that. I don't want to leave the impression that we're here saying stop research in other areas and put it all in pulses. I believe that we made a grave mistake when we cut back research a few years ago in Canada.

Mr. Rick Borotsik: Canada could be a part of a solution.

Mr. Lyle Minogue: Definitely.

Mr. Rick Borotsik: They could take this step forward.

The last question I have—and I'm going to just divert a little bit, so please bear with me—is there's another issue we're dealing with right now, and that's species at risk. You're producers in western Canada. Do you believe that with the species at risk there's an issue with compensation to producers? Do you feel there should be compensatory legislation put in place for producers, if in fact they're asked to provide habitat for species at risk?

Mr. Lyle Minogue: I must admit I'm not familiar with the debate concerning species at risk.

Mr. Germain Dauk: I would only say this. I think, in general, farmers like ourselves are becoming much more aware and much more cognizant of the importance of protecting the environment and species. As such, I don't think we have as many concerns as we might have had in the past about legislation. On the other hand, we can see that depending on how you interpret the legislation, it could put us at some risk. To be honest, Rick, at this point I'm not as well versed in it as I should be.

• 1000

Mr. Rick Borotsik: You will be soon, believe me, because there is no compensation if the government should wish to take some of your properties.

Mr. Germain Dauk: We focus so much on these other things that it has been a side issue.

Mr. Rick Borotsik: So has GMO.

Thank you. I appreciate your comments. I know we have Saskatchewan coming up later; maybe they can answer that.

The Chair: If there are no further....

I'm not sure, Rick, that the statement you just made is correct. I did sit yesterday briefly on the environment committee, and the word “may” is in there, and certainly the word is not “no”. Maybe you should speak to your people on that—that the government “may”....

With that, we'd like to thank the witnesses for coming this morning. We'll take a very short break for five minutes, and then we'll hear from the second group from Saskatchewan.

Thank you for coming. It certainly was informative. And for many of us who at one time weren't sure what pulse really was, we're glad to know what pulse stands for. Germain and Lyle, thank you.

• 1002

• 1008

The Chair: We'll call our meeting back to order again, pursuant to Standing Order 108(2).

We'd like to welcome to our meeting Mr. Terry Hildebrandt and Ms. Cecilia Oliver from the Agricultural Producers Association of Saskatchewan. As we said before, we'll have a short presentation followed by some questions from members.

Apparently there has been a revision of your submission, which the clerk has, but we will not be circulating that until it's translated. Members may find they get a revised copy later on. The reason for that is of course we like to have it in both official languages.

Mr. Hildebrandt and Ms. Oliver, welcome. I'm not sure who is to present; in any case, the floor is yours.

Mr. Terry Hildebrandt (President, Agricultural Producers Association of Saskatchewan Inc.): Thank you very much.

Good morning, ladies and gentlemen. We certainly appreciate this opportunity to visit with you this morning, especially given the short notice in which it was set up. Unfortunately, our office has forwarded an incomplete.... It hasn't been revised. There was a fuller version of the program. The clerk has promised that she will get it to you as soon as possible. So we ask that you bear with us.

We're here representing the Agricultural Producers Association of Saskatchewan, a new general farm organization that we're putting together in the province on the basis of RM borders and the membership within that voting to join. We're trying to get one elected person from each RM, so that we get a good thorough representation from across the province. Just quickly, to date we have a third of that in place, which is strategically placed very nicely throughout the province. We have representation from all over the province. It's been less than a year, and we're quite pleased with it.

• 1010

You will find the Agriculture Producers Association very proactive to come to these kinds of tables with solutions, or at least producer-driven proposals that we would hope to be able to work on with government in creating policy that affects us. We feel, at least in Saskatchewan, we have for too long not had participation when policy has been directed our way.

Saying that, I'll get right into the START proposal. Unfortunately, I'll be reading from this other draft that you'll be getting.

START provides producers and governments with a framework, within a long-term program, that can be developed and will encourage stabilization, diversification, transition between enterprises, value-added activity, environmental protection, and food safety while positively impacting net farm incomes in Canada.

START is set out in a three-phase program. Phase one deals with some problems with grains and oilseeds and is not relevant this morning to this particular discussion. We want to zero in on phase two.

Phase two is designed to maintain existing green space or move marginal land out of annual crop production into permanent cover programs that will deliver environmental benefits to Canadian society. In return, landowners or operators would receive an environmental rent from this land and the wildlife on it. This stewardship would have more than aesthetic value because of the benefits of clean air, clean water, carbon sequestering, and safer food production.

The other unique aspect of START, which we believe is unique among all the programs out there, is that in Phase II you also will revitalize the rural economy through what we call the agricultural diversification bonds. The literature that was sent to you will discuss these bonds, but I also want to develop the environmental aspect of our program.

What these bonds accomplish would occur on land that is converted to this permanent cover under the START program. They would be there in the second through the fifth years on the land that is green. A fifty-dollar-an-acre bond would issue for each of those four years—or $200 over the four years. The bonds could be turned into cash only if the producer shows diversification or value added.

START will not simply remove land from production but will create jobs as well as service industry and producer-controlled agricultural value added. These agricultural diversification bonds will provide the seed money to accomplish this. We believe—to the best of APAS's knowledge, anyway—the START proposal is the only initiative that deals with environmental issues and uses them as a springboard to revitalize rural communities.

I want to make note here that some of you will be aware Keystone Agricultural Producers of Manitoba have a similar “alternate land use service”, as it's called, and we have been meeting with them to put the two programs together. There's a lot of commonality there and a lot of the same issues, so we'll be working on them.

But what this introduces is an environmental rent to producers and landowners for the benefits we provide to society such as cleaning air, filtering water, and so on. We are suggesting here, ladies and gentlemen, that we have more to offer than the food we produce or the livestock we raise. If we are filtering water and sequestering carbon—and we have been for a number of years, all our lives—maybe if it's a benefit to society, society in a long-term view of sustainability of the environment should look at paying a benefit or a reimbursement to producers.

Our environmental rent would be set, on these new lands that we've taken out of annual production and put into permanent cover of grass or trees, at $25 an acre—as an environmental rent for the good it does for society. I want you to know this is a working policy where we toy with the aspect of how to retrofit it for existing green. Should it also be on existing green?

Cecilia and I this morning, we believe, represent the biggest environmental group of people in the world, and that is producers. In Saskatchewan—I can't speak for other provinces—we probably have 10% to 15% of our land in green now that is filtering water and so on. We've been paying the taxes on it and cleaning the air and have had no benefit. Just how we do the mechanics of retrofitting it is uncertain, but we're certainly promoting taking marginal lands out of annual production and putting them into a more permanent green—an environmental rent.

• 1015

The lands we do that on also would then be eligible for the bonds. This is what we feel is specific to our program. When we talk to the minister about it, what is intriguing is not only are we improving agronomics in some areas towards more green, but it is a springboard, as I mentioned earlier, to actually creating some value added in the community.

These bonds would be a bankable bond on this land, for years two, three, four, and five, that a producer could then use as collateral, if you will, for further equity or moneys to do this value added.

The intriguing part here is there's actually no money spent until a job is created. The producer creates value added, be it on his or her farm, or in value-added ventures of a community's, through new generation co-ops, or share-holding, or however. They actually create the value, the job; then the bond is redeemable for the cash. This is very intriguing. My statement is that to our knowledge this is the only program that takes an environmentally driven plan but uses it further, to springboard value-added activities.

We feel very strongly, ladies and gentlemen, that primary producers—the raw material producers—have to have an ownership in value added. We feel that's the only sustainable way to allow a producer to take his or her raw material and have ownership up the value-added chain. It's the most sustainable because the person who owns the value added also supplies the product for it.

We have, and the clerk will get to you, a cost analysis of what these bonds can do—provide return on investment. We feel if any capital is put into transition or diversification or value added, it's critical that primary producers have a piece of that capital, be it for on-farm expansion or, as I said, for aspects of community development.

I want to quickly wrap up here. In conclusion—I think we would be remiss, Cecile and I, if we didn't take this opportunity to discuss this with you; I know you're aware of some other programs along these lines—we had the opportunity as a board of directors a month ago to hear the presentation of Dr. Gray from Ducks Unlimited that I know you people have heard. We would be remiss if we didn't address it a little bit.

I want to start with a statement that says we are not convinced there has been enough consultation with producers in the development of this program. Other than that, I want to put it in question form. I would leave it as a question for you—for all of us—to answer. The question would be: Should we as Canadians be concerned with who has the control of our land and our water when we allow these NGO conservation easements?

I want to give you an example, because it's right close to home. In my RM, Ducks Unlimited bought their first quarter of land in June of this year. They paid $14,000 more than the marketplace was offering the elderly lady for it. Two weeks ago, when I got home, this particular land was for tender in the local paper. I phoned them and said “What's the deal? You buy it in June, and now it's for sale?” They said “I guess we appreciated we wouldn't be able to get much more land in your RM, so we're looking to sell it again.” I asked if there would be a conservation easement. Yes, there would be a conservation easement on it. I said “You paid more than the marketplace would allow in June. Would you be prepared to sell it for a lesser price?” “Yes, we would probably have to appreciate we wouldn't get our money back.”

With a conservation easement on it—by a non-governmental organization, now—it was explained to me you can't change the way the land is farmed. About 80 acres are broken on it; the rest is grass and sloughs and trees. You can farm it the way it's been farmed; you can graze it or hay it, but you can't turn over an acre of grass, and you can't turn over a tree, and so on and so forth.

Now, that's a conservation easement on that quarter. I ask again, is there concern, if they start putting these all over the province, about who has control? I think there has to be a compromise. Should there be a concern about the proprietary aspect, the lifetime aspect? Can we today sit and make decisions for a hundred years down the line?

• 1020

We had a very nice presentation by a professor the other night on biomass cellulose ethanol from trees, from grass, and from wheat straw. Can we say, for example, should we not be compromising? If we need riparian zones, can the tree areas of those riparian zones not be put in rows that are alternately threshable for the biomass for ethanol, a cleaner-burning fuel, a cleaner air fuel, and so on and so forth?

We really have concerns, and we ask the question on this lifetime conservation easement. Can we read the future? Will we maybe need every square inch to grow energy and food fifty years from now?

I hope you appreciate, in our presentation, that as producers we are looking at the long-term environment. We are, and we know we have to. It's a question we've done by our practices, even in the past, of zero till and so on. So we are on that page. But our question is about the control, the control of the land that we own in this country, that we own in Saskatchewan.

The third thing I would suggest is the economics. In Mr. Gray's presentation, at least to us, he talks about the added economics of tourism, of hunting and so on. These things are fine, but he does not mention the economics being displaced already by agriculture. He mentions nothing about, even in the low prices of wheat and so on today, the roughly $25,000 a quarter that goes into the economic chain every year. He doesn't counter that. Simply put, we really worry about the long-term easements by non-governmental organizations.

So I hope you see, in this proposal, that we appreciate and that we have a vision and certainly a concern for long-term environment and safe food. I also hope you can see that we have a common-sense compromise in our program, one that maintains existing green, one that will enhance and encourage more where it may be a better fit, but also one that creates value-added motion, value-added industry, jobs in our communities. It revitalizes.

The depopulation in Saskatchewan is outrageous. The chair asked what kind of population we have as primary producers in Saskatchewan. It's just about a daily question to give you a correct answer—certainly a yearly question—as our youth have no incentive to stay with 65% or so in grains and oilseeds, as you may appreciate, and that is the one in trouble.

So we see room for value-added, be it in livestock, be it in ethanol, be it in pulse crops. The gentlemen before us have done a wonderful job in diversifying and creating that, and we do a wonderful job of cleaning and our own marketing. But there's a whole lot of room yet for more processing, be it splitting the peas or packages and so on and so forth. We have room for livestock, we have room for slaughterhouses, also in Saskatchewan. We use, again, the environmental theory to springboard value-added with our START proposal.

We certainly thank you for this opportunity to come in. I apologize that the proper document I'm speaking from isn't in front of you, and we will certainly try to correct that. It has been a wonderful opportunity for us to be here today, and we'll certainly entertain any questions we can.

Mr. Bob Speller: Are there any extra copies of that document?

Ms. Cecilia Oliver (Director, Agricultural Producers Association of Saskatchewan Inc.): Yes.

Mr. Bob Speller: Do you have them all up there?

Ms. Cecilia Oliver: Yes.

Mr. Bob Speller: Do you have any others?

Ms. Cecilia Oliver: We gave 20 to her.

A voice: It's not translated.

Ms. Cecilia Oliver: It's not translated.

The Chair: Just to clarify this, if you want to leave ten copies back there in the corner, people can pick them up.

Mr. Terry Hildebrandt: We've left our extra copies with the clerk.

The Chair: David, would you like to lead off the questions?

Mr. David Anderson: Sure.

I guess I have two questions here. I'd begin by asking if you can tell us what is the total cost of phase two of your proposals? I understand there are three sections to it, but what are you suggesting this would cost per year?

Also, perhaps you could be very specific about the differences between your program and Ducks Unlimited. They've been to our committee and made their presentation, so if you can give us some details on the differences between those two programs—you've done some of that already—that would maybe help us out.

Mr. Terry Hildebrandt: I'll take the second part of your question and then Cecilia will do the math on it.

I think the specific difference is that we take the conservation or the cover programs one step further, where their program comes in and it somewhat kills infrastructure. You retain your tax base on that land, but it stops there.

• 1025

In a province where there's room for value-added, let's take it one more step. We want to rationalize. We feel there are some areas of our province that could do better growing from other sources of agriculture. There's some rationalization, but the control stays in the community and in the ownership of the land. It doesn't stop with the long-term rent or the easement. It can go on and value-add, actually.

Cecilia will answer the first part.

Ms. Cecilia Oliver: Our estimate is the agriculture diversification bonds will cost $100 million per year in Saskatchewan alone, for a total cost of $1 billion over the ten-year period. We believe this is an investment in Canada. We expect the large community value-added projects—for instance ethanol, feed lots, and hog barns—will create about 17,000 jobs in Saskatchewan. The diversification and value added will create another 23,500, jobs for a total of 40,500 jobs.

We've calculated the government taxation on the jobs, as well as on corporate taxes. We believe there will be a return of $353 million for each $100 million spent. We think this is actually an investment where Canada can recuperate. We expect the environmental rent on the ceded portion will amount to about $75 million a year. I guess the cost is $175 million per year.

Mr. David Anderson: I come from a depopulated area that is the southwest corner of the province, and I have a question about the 20% set-aside. How do you see it preventing further depopulation? I can see farmers setting it aside and then renting the rest of the land out to younger guys, or whatever. We're already seeing it as an opportunity to get out, rather than an opportunity to invest. Do you have any comments?

Mr. Terry Hildebrandt: Encouragement in our program is in the set-aside acres. There's an encouragement to put it into perennial grass or trees. To reap the full benefits of the program or the bond, you actually have to create value-added motion within the community, rather than deplete it. You have to create the job if you want the bond.

We're somewhat capital-shy in Saskatchewan overall. Again, we've been in grains and oil seeds for a big portion of what we produce. It hasn't been in the glory channel. The capital situation is somewhat in short supply there.

I'm sorry I failed to mention phase three of the program that gets into the larger capital. We've been working with Agrivision. I don't know if some of you are aware of Dr. Red Williams and Agrivision. We see it as phase three, the larger portion. We're trying to tie our bond portion to it, to enable primary producers to play in the game and not farm out. We feel it's the sustainable way.

We are also looking at other ways to be able to get the bond. As we travel through the province, if you go to the northeast, in a lot of the areas, rather than the land-based tie, they have gone dehydration and so on. A lot of this sort of thing is done. We are working on other ways to tie the bond to get any capital to primary producers to be part of value-added situations.

One of the shortfalls we will have in Saskatchewan, if we talk about the livestock side and room for feeding, we do export a million calves a year out of the province out of a 1.2 million production. We can't maintain it. Our cow numbers will have to increase. It will be one of the stipulations on how fast we can grow this. By having to increase livestock in this way, we feel a lot of the land, the hay, etc., can then be used, as long as you're increasing or developing the particular sector.

It's our hope. It's a real hard fit in every corner of a big province. It's our hope, to get the full value out of the program with the bonds, that actual jobs will be created for our youth in rural communities, rather than a continuation of depopulation.

Mr. David Anderson: Do you believe farmers must be compensated if their land is confiscated by the government?

• 1030

Mr. Terry Hildebrandt: I don't understand.

Mr. David Anderson: In the species at risk bill going through right now, the government has consistently refused to make compensation a mandatory part of the bill. In fact, yesterday they voted down one of our amendments that would have required it. As a producer, it's a major concern of mine. It's a concern of the producers around me. What is your position?

Mr. Terry Hildebrandt: Yes, absolutely. We've taken that stand exactly.

As primary producers, I think we're safe in saying we represent the largest environmental group in Canada. A lot of the agronomic practices to which we've changed in the past have enhanced the grounds for endangered species. We are the stewards of the land. It includes the birds, trees, and water. We take the stand that there's no consultation with producers.

Mr. David Anderson: My concern is that farmers, who have improved their farming practices so much over the last twenty years, are getting absolutely no recognition at all. In fact, in much of the environmental legislation we see coming out of the urban base we're blamed for things, instead of being praised for having been part of the solution, which I really believe we are.

I'll pass it over to one of the other members.

The Chair: Thanks, David.

Marcel.

[Translation]

Mr. Marcel Gagnon: Thank you, Mr. Chairman.

What I find interesting in the two parts of this mornings's session is that we can feel that there is a movement toward a more ecological agriculture. Personally, I find this part quite interesting.

You talked about putting aside some percentage of arable lands for a while and at the same time you talked about value added. Is this in order to regenerate the lands? Are you thinking, for example, in terms of tree planting of some other development that would be environmentally beneficial for the land?

I will draw a connection with Ducks Unlimited because you have raised the issue. Is Ducks Unlimited proposing to redevelop some lands that would be considered marginal for agriculture? Did I understand correctly?

[English]

Mr. Terry Hildebrandt: Yes, it is, to answer the second part first.

There are around 10 million acres in Saskatchewan under crop insurance for annual production of a lower class that perhaps would have a better fit raising a different source of food, be it livestock, ethanol, or another thing.

We have to add to it, though. When the classifications were put in place for the agronomic practices of our agriculture, from when the land was classified to date, you have to appreciate we can't take the lower classes and do a whale of a job producing food with different agronomic practices. It would be somewhat of a rationalization. There are some areas that shouldn't be in annual grains production.

I think you'll find it across the province. It's a voluntary program. If a producer doesn't see the economics in it, the producer doesn't have to play in it.

In my area, it is a higher class of land. On the east side of Saskatchewan, we've had more rainfall. Our water table is up. It's as suited for raising cows as any part of the province. It may not necessarily be the low-productive land. It could be a higher class of land, but maybe one with lower sloughs.

I think the revitalization of the earth is important. Maybe even of more importance is the revitalization of the people to have the ways and means of bringing our population back. Our average age for producing in Saskatchewan is about 59 years old. I believe in Quebec it is about 42 years old or something.

We have a large infrastructure because of our size and no population. We have a million people in total. If we are to carry this infrastructure and keep it going, we have to get more people carrying the load.

• 1035

[Translation]

Mr. Marcel Gagnon: In fact, the diversification that you are proposing would yield significant job creation in rural communities and would also ensure an influx of new blood. That is why you are asking the government to contribute in terms of a system for leasing these lands. An annual allocation would be given.

I know that in Europe, a similar experiment is being conducted presently. They are paying part of the agricultural production of farms that must remain in the agricultural landscape to preserve the environment, but that would not be productive if used for large scale farming. Are you talking about that kind of program?

[English]

Mr. Terry Hildebrandt: We appreciate that in other countries they are paying their way in terms of the environment more than providing a particular commodity subsidy. What we're saying, sir, is that in Saskatchewan in particular—although this can be adopted, with changes, elsewhere in Canada where and if it fits—when we see the need and the room for value-added and job creation in food production, we should take the same environmental incentives we're using to look after long-term sustainability of the environment and then take them one more step as a compromise, if you will, to springboard the value-added we feel we have room for in Saskatchewan.

[Translation]

Mr. Marcel Gagnon: You're talking about Saskatchewan. Could such a program be implemented in the other provinces? I always come back to Quebec. Do you know whether we could do something similar in Quebec? Could the Union des producteurs agricoles du Québec be interested in a similar program?

[English]

Mr. Terry Hildebrandt: We have sent this program to the UPA and to all the general farm organizations across Canada. I'll just update a little. We are considering joining the CFA, which would put us in with UPA. We haven't discussed it one-on-one with the people of Quebec, nor have we had any feedback from them. We have, as I noted in my presentation, been dealing with the KAP people, Keystone Agricultural Producers from Manitoba, who have a similar program—insofar as the environmental portion is concerned, anyway.

The ADB portion, or the bonds for value-added we'd take...they're looking at that and so on. Time permitting, we might have been down here together on this.

But certainly if and where it fits, I think probably—and correct me if I am wrong—Quebec is as value-added or a different situation. There may be some room, but within the realm of the CFA we would be in direct contact with the UPA. As to us and Manitoba, if we were to join, we would certainly be looking at using the CFA to promote this kind of thing, and then it would go to every province so they could take a look.

The Chair: Thank you, Marcel. I thought you were going to bring up all those tree farms you have in Quebec. Their owners might look for $50 an acre.

Murray, do you have something?

Mr. Murray Calder: Yes.

I want to go back to this strategy Ducks Unlimited is using, this conservation easement. Tell me if I am wrong, but the tactic is that they're going to pay $10,000 more than market value for the property. They get the conservation easement, and then they flip the property back out again. They wouldn't get the conservation easement any other way than that. How long does this conservation easement last?

Ms. Cecilia Oliver: It's forever, so that is our major concern, that there's no limit on this. Presently Ducks owns about a quarter-million acres in Saskatchewan. Using the $10,000 you were just talking about and that $30 million they had mentioned, they could more than triple their acreage in Saskatchewan in the first year. That takes them to a million acres. They'll add three-quarters of a million acres on to it using that cheaper way of obtaining the easements.

• 1040

Right now Saskatchewan is desperate for cash. There are a lot of people who wouldn't blink an eye at taking $10,000 for each quarter and turning it over. But is this good for the generations coming up? We must be a little cautious about who we're allowing to have this.

Mr. Murray Calder: I'm not sure about Saskatchewan, but here in Ontario it'd be probably through the Municipal Act because of your registry of property and the attached encumbrances. That's something I wasn't aware of, and we'll have it on the record now to make sure.

When they did the presentation in front of us, Rose-Marie made the point that they're backed by U.S. funding.

Ms. Cecilia Oliver: Definitely. That's a point, actually. Absolutely. We're concerned about the long-term control of our water and our land.

Mrs. Rose-Marie Ur: It's the back door approach.

Mr. Murray Calder: The back door approach, that's exactly it.

Ms. Cecilia Oliver: The easements say not true or under....

Mr. Murray Calder: As to your bond idea, bonds have value, and I'm just wondering what type of value would be attached to these bonds that deal with the land you're looking at taking out of production?

The other aspect would be that say five years down the road the problems we're experiencing right now with commodities reverse, and the United States has a drought like the one they had in 1993 or a flood like the one they had in 1994. All of a sudden they're short, and commodity prices go back up. What's to stop the farmer at that point from saying, “Well, because commodity prices are so good, I want to put this marginal land back into production”?

Mr. Terry Hildebrandt: First of all, the program is set over ten years. The bonds are applicable on this set-down land for years two, three, four, and five, and then of course there's anything set down in what we would call the sixth year. I don't know how active the program would be the first year, but if there were any land set down in the sixth year, you would need the remaining four years to put the bonds on, so we're looking at a ten-year program. We are limiting it somewhat and are probably going to cap the amount of land you can put into this, Murray. What we've been saying all along here is that we're not disadvantaging any form of agriculture.

Again with respect to the Ducks Unlimited program and these lifetime easements, who can say that in ten years we won't need every inch of land growing every bit of food possible or whatever? This would not disable that. We would still have control as Canadian owners of that land, and it could be turned over. I know as well as anyone here that this can change very quickly, so we're no disabling it. We're trying to build a rounder agriculture because we're a little lopsided, with all our eggs in one basket in grain. When it falls, it falls.

We want to try to get it so we have control of the root through some value-added, be it processing, ethanol, or whatever. Then you ride out the storms, if you will, a little better than by having all your eggs in one basket. I don't think it will ever hurt to be in that position.

I'm thinking of the next generation, who can have a sounder environment to work in rather than how it is now. If you're lucky and born right, you hit the peaks and you've done it. If not, you haven't, so we want to round out the agriculture arena a little more for the next generation, and I think the value-added we have room for will do that. But it will not totally cripple...within a matter of months you can be back in greens production or whatever if that's the case.

That's where the lifetime easements.... I ask the question again, are we prepared to sign that kind of stuff away through foreign ownership? That's the question we place, and the concern. We have concerns as the landowners.

The Chair: Rick?

Mr. Rick Borotsik: I'll ask this very quickly. Just to the Agricultural Producers Association of Saskatchewan, as I said earlier, I'm glad you're here, because Sinclair Harrison does a great job, but they do have a different focus. You also said that you wanted one member from each RM in the province of Saskatchewan. You have a thousand RMs in Saskatchewan. How many people do you expect to have on your board of directors?

• 1045

Mr. Terry Hildebrandt: We have 297 RMs. We want one elected person representing the people from each one of those 297 and then a board of directors structure out of that.

Mr. Rick Borotsik: That would be your membership, then, one from each RM, to make 297?

Ms. Cecilia Oliver: We'd have one elected representative for each, and then we have six districts. We want two representatives from each district elected out of that group of representatives. That makes 12. Add two vice-presidents and a president and there are 15 in total on our board.

Mr. Rick Borotsik: Thank you. That was just for my own clarification.

As to what you've talked about today with your program, I just have a couple of questions first. I assume you're talking about this funding coming totally from the federal government. Have you talked at all about a provincial contribution?

Mr. Terry Hildebrandt: We see the majority of it as federal dollars, and it goes somewhat right back to the throne speech and some of the directions they're planning to go, such as safer food and transition. We've set it up that way. We're trying to keep one hand on the steering of how it goes rather than being run over. As to how it would be divided federally and provincially, I think it would be have to split. We'd also look at more departments than just Agriculture—perhaps Environment Canada.

Mr. Rick Borotsik: I'm getting to that. What you're talking about is not new. It's called multi-functionality, which is the term that's being used in Europe at the present time. It's a contribution of society to the environment, to the ecological aspects of it, and to the species habitat; there are a dozen things you can wrap into this multi-functionality. This is not new, and you're saying that society should be paying a cost for that and that society should be taxed, obviously, at the federal level.

I'll just touch on something David said. Just over the last couple of days it's been shown that society, through the federal government, has decided that there should not even be any compensation paid for species at risk habitat. If there's a species at risk on your farm, you are responsible for it, not society. How can you honestly think that there's $100 million there from the government when in fact they're not even looking at any compensation for species at risk costs?

Mr. Terry Hildebrandt: I don't quite know how to get into this. I guess it would be fair—

Mr. Rick Borotsik: That's the reality. You're talking about $100 million and multi-functionality right now. They're saying there's no money if you have to put up land for species at risk. How do you see that...? The sales job is horrendous. Now, I'm not saying what you're doing is wrong. I'm saying that there's a reality here. Please talk to me about the reality.

Ms. Cecilia Oliver: Under the Kyoto agreement, if that were going through, perhaps industry could help fund the carbon sequestration that we can do with our trees and our grasses. That would be one area, I suppose. We all know that clean air and clean water are important issues. I find it hard to believe that society doesn't think they're worth funding.

Also, as to species at risk, we have a real problem with the idea that they think producers will voluntarily give up portions of their land to protect the species at risk. There has to be an incentive rather than a regulation, or else your—

Mr. Rick Borotsik: The Americans have seen that this hasn't really worked.

I have a question about the bonds. It's a rather intriguing method of set-aside and payment schedule. First of all, your example says 200 acres. Is there any limit to that per producer?

Ms. Cecilia Oliver: We will have to have a limit.

Mr. Rick Borotsik: Yes, but you don't know what it is. Now, in saying that, would you be able to get a number of producers to come together with the bonds for a value-added process of some sort? For example, one little guy with $40,000 can't do a lot, but ten guys with $40,000 have enough capital do to something. Is that what you're anticipating?

Mr. Terry Hildebrandt: We see that most of the value-added would probably have to be through economy-of-scale community ventures, Rick. Although we are addressing some of it towards on-farm expansion, be it of cows, a next step of backgrounding, or whatever. I think we're at the realization that a lot of it will have to be in community ventures, where again, this would be seen as seed money or so on to—

Mr. Rick Borotsik: The last question I have is just to confirm what Murray touched on. This is effectively a short-term program. It's six years for a producer. If I were a producer, I could set aside 200 acres for six years, and in the seventh year I could then put it back into production—five years, but you say six because of the last four, ya-da ya-da ya-da. But I could effectively, after five years, put my land back into production for whatever purpose I wanted to. Could you see an extension of that for the second program if there's a 10-year program? Say I'm a producer, then could I do it two times for $80,000 instead of just the $40,000?

Mr. Terry Hildebrandt: I just want to clarify one thing. We're not suggesting taking the land out of production.

• 1050

Mr. Rick Borotsik: I know.

Mr. Terry Hildebrandt: We're suggesting possibly putting it into a different or a more applicable form of production.

Mr. Rick Borotsik: Basically, you could get two programs then out of the ten-year period?

Mr. Terry Hildebrandt: We'd set it up as a ten-year program.

We feel that what will be the participation in the first year.... You may not get in until the second year. So then at 20%, five years, you could have your whole farm in if we leave the cap like that. This may be an option, because there again we've learned from our American friends not to do it all at once because it kills infrastructure. But if it's done over five years and the promotion is to value-add all those five years or create jobs in the community, it may be sounder. We may have to cap it.

As you can appreciate, it's a draft; the mechanics of this thing have to be worked out. The principle of springboarding environmental stewardship plans into value-added areas is the one we're trying....

To address your first question, if they won't spend money here.... I hope it's no secret that where we come from we feel we have to change the priority of the government toward food production somewhat—and maybe environment. I thought it might have been a lesser sell to encourage society about environment benefits, but certainly on the economics and importance of food production we have a big sell and priority change before we get that. Your reality might stay in place, but I do think it's possible.

The Chair: Thanks, Rick.

David, do you have a comment?

Mr. David Anderson: Yes.

I'm all for value-added. You've mentioned it several times today. It sounds like you're fully on board with it. Can you tell me at what point you expect to—and where you see that we can begin to—value-add to our biggest product, which is wheat?

Mr. Terry Hildebrandt: It is our biggest product, Rick, and it may not have to be in the future.

I'll give you an example. We may be looking at breeding programs for wheat to breed a long straw and a short head if its biomass becomes important enough for making cleaner-burning energy. If I can refer to Saskatchewan again, we have these kinds of masses and this kind of space, and the cheap land base to get into this kind of production.

And as far as wheat, today we're relatively into ethanols and cutting freights and things. There's some value there. But because we have to export as much as we do, until this changes in a big way, we may have to.... As your area has diversified as much as it can into pulses, we may have to keep looking at it.

If they don't want to buy food and they want to buy energy, let's grow energy. In this presentation we had the other day—and there are different theories on this—they claimed we will not be able to access enough fossil energy for the demand within 15 years. We have to start looking at a different way, an annual production of biomass for a cleaner-burning energy.

You don't think about these little things, but if your annual production takes out a certain number of carbon sinks, and then you turn what was produced into ethanol and put it back in, because your annual production takes it out, you zero out—you complete the circle. Now, what is the importance of this? What is the value to society to implement those kinds of programs?

Ms. Cecilia Oliver: May I expand on this ethanol issue?

We did some examples of some cases here. To bring in ethanol to the degree we're talking about would use up 34% of the wheat grown here in Saskatchewan.

Mr. David Anderson: I find this very interesting, because the wheat going into ethanol doesn't come under the board's purview, which is why we have the freedom to do this. You mentioned our exports, but the board was bragging after last crop year that our domestic market is now our biggest market—and it was last year—in terms of one single customer.

I just find it interesting that again we cannot process this product. It goes to another area of the country to be processed, while we sit in Saskatchewan growing the raw product, shipping it out—paying 30% to 40% of our income to freight it out of there—and at this point we have not yet made the decision that we want to process the product that we are the best at growing.

I'm all in favour of ethanol. It could be the salvation simply because we don't have to market it the way it has been marketed in the past.

Ms. Cecilia Oliver: I'm sure you're referring to the pasta plants and things such as those, are you?

Mr. David Anderson: Oh, sure, all kinds of things.

Ms. Cecilia Oliver: There's a problem with the buy-back system, and we have to address it.

Mr. David Anderson: You know I was riding with my wife last summer—and I've mentioned this to other people—and I was saying how we can't have processing plants in every small town. She was looking at a candy package and she asked me what the second ingredient in red licorice was. When I said I didn't know she told me it was flour. And then I thought we can have processing plants to make speciality items in lots of those smaller communities.

• 1055

So when you talk value-added, we need to have those kinds of things.

The Chair: Thanks, David.

Rose-Marie, I'm sorry I didn't give you five.

Mrs. Rose-Marie Ur: I'll give you five too. Thanks, Mr. Chair.

I appreciate your presentation. It's a very interesting concept, to say the least. Will these bonds have an effect on the value of land? Will this change the value of property?

Ms. Cecilia Oliver: Any time agriculture becomes more profitable, land value should go up, I would think; it would be logical. Is that...?

Mrs. Rose-Marie Ur: Okay. And how well has this been received by the banking community and the FCC? Have they been part of this process in its development, or have they been consulted? Do they view this as a positive element to the agricultural part of...?

Ms. Cecilia Oliver: The bonds we're proposing for these large community ventures will only represent 20% of the project. The other 80% will have to come from other sources, probably the banks, or savings, RSPs or whatever.

Mrs. Rose-Marie Ur: Is it accepted by FCC? Do they see this as a positive element because they're changing their format as to how they're doling out the dollars to the farming community? Do they see this as a positive element in the...?

Mr. Terry Hildebrandt: We haven't had a chance to discuss it with them, madam, to be quite honest. We have been to the chamber of commerce and so on, and we haven't taken it up with the banking community to this date, simply because we just haven't made it to this step yet. We are a new organization and with just a skeleton staff.

Mrs. Rose-Marie Ur: Rick addressed one of my questions earlier. At the end of the four years or five years, whichever year you're looking at, is it quite okay for a farmer to go back into full production?

Ms. Cecilia Oliver: We could have it set up either way. It could be set up so that farmers were committed to keeping their land out of production for a certain period of time and they'd have to sign something to this effect. We haven't addressed this yet, but it could possibly be for the full ten years.

Mrs. Rose-Marie Ur: Have the Grain Growers of Canada been part of your consultation on this particular bonding?

Ms. Cecilia Oliver: We're going to their meeting tomorrow.

Mrs. Rose-Marie Ur: Okay, that's good. Some of my colleagues and I will actually meet with them a little later on. Maybe this can be a topic of discussion.

Mr. Terry Hildebrandt: We haven't consulted with them at all. We've sent the program to them.

Furthermore, on your other question of whether it can be continued or can go back, we would certainly hope that with the more well-rounded approach we're trying to build, at the end of ten years this value-added process will be self-supporting. We feel we can use a bond, or call it capital, call it a grant or whatever, to get this motion going. We have the room for this in western Canada and perhaps in other areas of Canada. Hopefully these value-added processes will be stand-alone within that time. It's what we're trying to do.

Obviously grains and oilseeds are not stand-alone at this point in time. I don't know what will have to be changed to make them this way. We would hope this value-added motion would be stand-alone in that time and with a fair percentage of it producer-owned.

Ms. Cecilia Oliver: Our case provides an additional answer to this question. We farm about 3,200 acres. If we were setting aside a portion of this we would likely fence it and put in dugouts and run sheep or something on it. And once we've done that we're less likely to want to take it out again, if you understand what I am saying, because once a grain producer has converted to livestock, it's very costly to come back into grain. Your combines and tractors and things are very expensive.

This is where our particular farm fits in. There is a high cost to renewing our combines and tractors. If we start running them over fewer acres they last longer. That's one reason people will be less apt to switch back and forth. It's really expensive to go back into grains after you've converted.

• 1100

Mrs. Rose-Marie Ur: Would this lend itself to a more agressive multinational farming agenda?

Ms. Cecilia Oliver: It would, but the farmland securities are granting exemptions to a large number of enterprises—Ducks Unlimited would be one. They've been granting it there and they are the largest landowners. We do have restrictions. It's 320 acres right now.

The Chair: Thanks, Rose.

Marcel, you had one question.

[Translation]

Mr. Marcel Gagnon: Mr. Chairman, I will take the floor only once to ask three questions? Is that all right?

The Chair: Yes.

Mr. Marcel Gagnon: I would like to know first of all whether there is any risk that this could be challenged before the WTO and that your program could be considered a disguised subsidy.

Secondly, have you explored the possibility of incorporating the suggestions that you have made within the various farm programs, at both the provincial and federal levels?

Rose-Marie talked about American funding. Was she talking about Ducks Unlimited when she said something about American subsidies?

[English]

Ms. Cecilia Oliver: Yes.

[Translation]

Mr. Marcel Gagnon: Yes? Thank you.

[English]

Mr. Terry Hildebrandt: In answer to the risk situation and the WTO talks, upon discussing this with both levels of government....

We've had the opportunity upon invitation to take this to a federal-provincial working committee looking into the capital needs for Saskatchewan. Alberta and Manitoba were there as well, but at different viewings. In our travels, no government officials at any level have seen a problem within the WTO agreements. They fully understand the bond procedure and what we're trying to do in value-adding. This appreciation would have researched it pretty well to know whether there is....

My understanding roughly is that as long as you're increasing something.... If you were now going to get a bond on some grass to bale it and sell hay in a market of existing livestock, it would be a problem, perhaps; but if you're looking at increasing these numbers.... And there may again have to be mechanics where that hay can only be used by the person who grew it, where the bond is applicable for the expansion, and that can be in a community feedlot or whatever.

We may have to have the mechanics so it can't simply be sown to hay, harvested, and sold. But if the pretext is that it's used for a value-added process by the person who grew it, none of the officials we've asked seem to have a problem with this.

I'll have you repeat the federal-provincial question.

[Translation]

Mr. Marcel Gagnon: I would like to know whether your project could be integrated into the existing programs within your province, at the provincial or federal level.

[English]

Mr. Terry Hildebrandt: In our province—and I'll set this clear—we see the program as a strategic plan for change, and not a safety net.

We have in Saskatchewan no companion programs as such. We have small grass incentives set-aside, and now there are some rumours of a family-farm opportunities situation that hasn't been announced yet. But in our province there's no real program for what we'd call transition. We would separate this from the safety net packages in place federally and provincially and again spread it out perhaps beyond agriculture into environment departments, industry departments, and so on and so forth.

The Chair: Thank you, Marcel.

Mr. Murray Calder: Before we break here, I have a point of order that just came up in the conversation here.

• 1105

We had a meeting of the rural caucus weeks ago with David Anderson on endangered species. It was my understanding then that they would be looking at a compensation package to be attached to that. In the questioning we had this morning, it seems there isn't going to be a compensation package attached to that.

Because it definitely affects agriculture and this bill, maybe we should have Mr. Anderson come in front of the committee here as soon as possible, to deal with this issue of compensation.

The Chair: I'm not sure. I'm a little bit confused about this, because you refer to a party's caucus and not to our committee.

We have witnesses here, and I would like to first of all excuse them. Members may want to stay for a minute afterwards, but I'd like to conclude with our witnesses first, if that's acceptable.

In any case, we'd like to thank you for coming. It's a very complex issue, and I think you're involved, as Rick says, in a hard sell, because many provinces have land that's in transition. I know Saskatchewan has a lot of land that could be in transition, but we're looking at the cost. Speaking just personally, it looks to be very extensive. In fact, 200 acres there would be a $40,000 investment by some level of government into that transition period.

I'm not sure if I should say it to encourage you or discourage you. In other provinces, for example, I mentioned to Marcel, maybe it could be with trees. Some farmers in some areas with marginal land are converting it into growing Christmas trees and other forms of operations.

Here in Ontario we have a lot of marginal land, and it could be a very costly venture for our government, or any level of government, to get involved in. Even as caretakers, for example, in my own province, where we have a lot of people with land under trees, we're involved with an environmental business. Should they be compensated? It's difficult to come to a conclusion, where governments could be involved to a great extent in paying people to have land.

With that, I would like to thank you for coming. It certainly has opened up some areas of thought for us, but it's going to be difficult for us as a committee to digest this, get into it, and try to promote it.

Marcel says he has a tiny point, because Quebec has a fantastic acreage. Even our native communities have fantastic acreages across this country.

Marcel—if it's only 30 seconds, otherwise....

[Translation]

Mr. Marcel Gagnon: I would simply like to tell you that from my point of view, your concerns are very real. What I like in the programs that are proposed to us this morning is that we can feel that there is something of a shift toward environmental protection. We would need to be more concerned with the protection of the environment and we would need more programs such as this one. Hopefully, in the future, we will find the means to give out moneys not only for people to stop destroying the environment, but also for recovery and improvement. From my point of view, this should become a government priority.

[English]

The Chair: Thank you, Marcel.

Thank you to the witnesses.

We'll adjourn the meeting. Maybe then, Murray, we can discuss that, just as members of the committee.

Mr. Murray Calder: Sure.

The Chair: With that, we'll adjourn our meeting.