AGRI Committee Meeting

37th PARLIAMENT, 1st SESSION

Standing Committee on Agriculture and Agri-Food

COMMITTEE EVIDENCE

CONTENTS

Wednesday, February 6, 2002

Â

1220

The Chair (Mr. Charles Hubbard (Miramichi, Lib.))

Mr. Speller

The Chair

Mr. Vanclief

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1225

Â

1230

Â

1235

Â

1240

Â

1245

Â

1250

The Chair

Mr. David L. Anderson (Cypress Hills--Grasslands, Canadian Alliance)

Mr. Vanclief

Mr. Anderson (Cypress Hills--Grasslands)

Mr. Vanclief

Mr. Hilstrom

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1255

Mr. Vanclief

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1300

The Chair

Mrs. Suzanne Tremblay (Rimouski-Neigette-et-la Mitis, BQ)

Mr. Vanclief

Ms. Suzanne Tremblay

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1305

Mr. Vanclief

Mrs. Suzanne Tremblay

Mr. Vanclief

Ms. Suzanne Tremblay

Mr. Lyle Vanclief

The Chair

Mr. Lyle Vanclief

Mme Tremblay

The Chair

Mr. Calder

Mr. Vanclief

Mr. Calder

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1310

Mr. Vanclief

Mr. Calder

Mr. Vanclief

The Chair

Mr. Dick Proctor (Palliser, NDP)

Mr. Vanclief

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1315

Mr. Dick Proctor

Mr. Vanclief

Mr. Dick Proctor

The Chair

Mr. Vanclief

The Chair

Mrs. Rose-Marie Ur (Lambton--Kent--Middlesex, Lib.)

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1320

Mr. Vanclief

Mrs. Rose-Marie Ur

Mr. Vanclief

Mrs. Ur

Mr. Lyle Vanclief

Mrs. Rose-Marie Ur

Mr. Vanclief

The Chair

Mr. Rick Borotsik (Brandon--Souris, PC/DR)

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1325

Mr. Vanclief

Mr. Rick Borotsik

Mr. Vanclief

Mr. Rick Borotsik

Mr. Vanclief

Mr. Rick Borotsik

Mr. Vanclief

Mr. Rick Borotsik

Mr. Vanclief

Mr. Rick Borotsik

Mr. Vanclief

Mr. Rick Borotsik

Mr. Vanclief

Mr. Rick Borotsik

Mr. Vanclief

Mr. Rick Borotsik

The Chair

Mr. Paul Steckle (Huron--Bruce, Lib.)

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1330

Mr. Vanclief

Mr. Vanclief

Mr. Paul Steckle

Mr. Vanclief

The Chair

Mr. Hilstrom

Mr. Vanclief

Mr. Howard Hilstrom

The Chair

Mr. Easter

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1335

Mr. Vanclief

Mr. Easter

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1340

The Chair

Mr. Easter

The Chair

Mr. Marcel Gagnon (Champlain, BQ)

Mr. Vanclief

Mr.. Marcel Gagnon

Mr. Vanclief

The Chair

Mr. Mark Eyking (Sydney--Victoria, Lib.)

Mr. Vanclief

Mr. Mark Eyking

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1345

Mr. Vanclief

The Chair

Mr. Vanclief

The Chair

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CANADA

Standing Committee on Agriculture and Agri-Food

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NUMBER 042

l

1st SESSION

l

37th PARLIAMENT

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COMMITTEE EVIDENCE

Wednesday, February 6, 2002

[Recorded by Electronic Apparatus]

  (1220)  

[English]

    The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Pursuant to Standing Order 108(2), we'd like to welcome the Minister of Agriculture and Agri-Food to our meeting for a briefing session on the agricultural policy framework.

    In view of the importance of this meeting and the fact that many people in our agricultural communities across Canada would like to see and hear this presentation, the chair would welcome a motion that the meeting this morning be televised by CPAC.

    Mr. Speller.

    Mr. Bob Speller (Haldimand--Norfolk--Brant, Lib.): Mr. Chair, given the importance of this issue, I would move, seconded by my honourable friend Mr. Easter, that this be televised.

    The Chair: Is there debate? Are we comfortable with the proposal?

    (Motion agreed to)

    The Chair: Just while we get our apparatus in place here, I'll mention briefly that during the week of February 18, 2002, this committee will be holding hearings across western Canada, with meetings on February 18 in Brandon and Stonewall; on Tuesday, February 19 in Davidson and Swift Current; on February 20 in Vulcan and Grand Prairie; and on February 21 in British Columbia, in Kelowna and Kamloops.

    Welcome, Mr. Minister. We look forward to your presentation. As I mentioned a minute ago, this committee will be going across Canada during the months of February and March. We'll be in the western provinces the week of February 18, and I know as we meet with farm leaders that they certainly will be interested in your presentation this morning. We look forward to it and to a good briefing on your vision of the future of agriculture in this country.

    Mr. Minister.

    Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food, Lib.): I thank you very much, Chairman, and my colleagues around the table. I welcome the opportunity to come and spend some time with you this morning and to present to you a deck that will talk about some of the major issues in our whole agricultural industry out there today. In reference to the fact that your committee will be travelling considerably in the next number of weeks, I very much look forward to input from your committee as we go forward in this discussion.

    We know our industry has been under a number of challenges for the last number of years. It is dealing with mother nature and all of those other things the agri-food industry deals with. There has been considerable discussion over the last number of months and years, asking, can we not take a look at how we are doing things and how we can be more comprehensive, for example, in a number of key areas, some of which have not been as front and centre in the past as they are at this time?

    I welcome the opportunity to talk to you about the development of a new architecture for agricultural policy to ensure the sector's success in the 21st century.

    As outlined in the January 2001 Speech from the Throne, the Government of Canada committed to:

help Canada's agricultural sector move beyond crisis management, leading to more genuine diversification and value-added growth, new investments and employment, better land use, and high standards of environmental stewardship and food safety.

    Federal and provincial governments have been working together and consulting with industry to define a policy approach to do this. In June I met with my provincial and territorial colleagues, and we reached a unanimous agreement in principle on an action plan for an agricultural policy framework.The goal of this architecture for agriculture policy is to transform Canadian agriculture for the 21st century.

    We're talking here, as we all know so well, about a major sector of our economy, a sector that generates more than 8% of the gross domestic product, is the largest manufacturing sector in seven out of ten provinces in Canada, accounts for one in every seven jobs in Canada, and as well contributes between $5 billion and $7 billion annually to our trade surplus--and I remind everyone that's all the trade surplus, not only in agriculture and agrifood but in all goods and services that we as a country provide.

    For example, in 1998 the trade surplus due to the agriculture and agrifood industry represented a full one-third of Canada's total trade surplus.

    Farmers are the foundation of the sector. A large group of business-oriented farms produce the vast majority of our agricultural products and earn 96% of the total net farm income. These farmers have the potential to become 21st century leaders. Other Canadian farmers are working hard to stay in the sector, some with potential to become 21st century leaders as well, others facing very hard choices.

    In short, to realize the full potential of Canadian agriculture, we must help all farmers deal with the pressures shaping the future of this sector. Traditional risks from weather, disease, and global market fluctuations remain important, but these are not the only challenges ahead. International competition in commodity markets is intensifying. Moreover, some of our main competitors continue to heavily subsidize their industry, although the victory we secured at the World Trade Organization discussions in Doha gives us a powerful tool to help level the playing field.

    Canadians and global consumers are demanding more information about the safety and the quality of their food and how it is produced.

    After September 11 these concerns have moved to the top of the radar screen everywhere. Advances in science are creating opportunities for improvements in farm productivity and food safety and in environmental stewardship, and also creating opportunities for the development of new sources of revenue from innovative products.

    Agriculture is also rapidly becoming a knowledge-based industry more than ever before, and farmers increasingly need to pursue continuous learning. The unanimous agreement we reached with my provincial and territorial colleagues at Whitehorse this past June sets out a new architecture for agricultural policy to meet these emerging challenges head on. The Whitehorse agreement provides for an integrated framework built on common national goals. It obliges the government to report progress towards these goals to their citizens regularly and in a manner relevant to Canadians. It also recognizes the need for a stronger partnership among governments, the sector, and Canadians.

  (1225)  

    The action plan and the principles cover five elements: risk management, food safety and food quality, environment, renewal, and science and innovation. Working together in an integrated way, these elements will brand Canada as a world leader in food safety, innovation, and environmentally responsible production. Let's look briefly at each of these elements in turn, reviewing the key features that we could look at and we would like to see in a new architecture.

    When it comes to risk management, we currently have a patchwork of farm safety programs all aimed at the same basic risk, and that is farm income fluctuations. But these programs do not work well together. They don't, for example, cover important risks such as negative margins or interruption of business. Moreover, most of these programs require little contribution from farmers. Governments pay the vast majority of the costs. They also encourage cherry-picking by farmers. We have not established over the years clear rules for participation or how these programs should be used together. As a result, these programs tend to foster dependency on governments.

    There is another key issue we need to resolve in our existing safety net system. Our safety net policies are designed to stabilize income fluctuations. They are neither designed nor intended to meet the needs of farmers whose major problem is a chronically low level of income. Low-income farmers currently don't have any real alternative to existing safety nets, so they turn to these programs and demand that they be enriched to address their low-income situation.

    In effect, our safety nets are being pulled in two completely different directions. One is to act as a business tool to help farmers manage risk. Another direction is to act as a passive-income subsidy. We need to make a shift from the past approach of safety nets to a risk management approach that promotes adaptation to the future.

    Governments have long touted the benefits to farmers of innovation, diversification, and value-added production, but the reality is that our safety nets have done little to encourage many of these activities, and in many instances have actively discouraged them. For example, most of the programs fail to recognize actions that some farmers take to reduce their risk exposure.

    I want to move to an integrated risk management system with costs shared between farmers and governments. When setting premiums, we could look at all the activities of the farm business, not just a particular crop. We could take account of all efforts by the farmer to reduce his or her risk and continuously adapt and innovate the business. As a result, we could actively encourage risk management and growth.

    Turning to food safety and quality, food safety is essential to national security and to maintaining domestic and foreign markets. You have heard me say many times that our food has never been as safe as it is today, but there has never been as much concern about food safety as there is today. We have done a lot in the food safety area already, but the focus has been beyond the farm gate on food processing and distribution systems. Today we are seeing more and more situations that could be better addressed on the farm, and we need to turn our attention to on-farm improvements in the food safety continuum. Farmers recognize this.

    I would like you to listen for a moment to John Kolk, past chair of the Chicken Farmers of Canada, who says this:

  (1230)  

The public concerns started as far back as things like BSE, E. coli outbreaks, and things like what happened in Walkerton. So it is affecting farmers today. It's not good enough today to say we're nice guys, we grew up on a farm, and we care about you. We have to do more than that. We have to prove that what we're doing on the farm is good for the consumer.

    In addition, if we have a food safety incident, either from natural causes or terrorism, tracking and tracing systems that can trace the origin of the product right back to the farm that it came from will be critical.

    Right now, for example, discovery of a single diseased plant or animal could shut down all exports of that product from coast to coast.

    With sophisticated tracking and tracing, we could minimize the economic, health, and safety risks by quickly closing those regions to which the disease was traced, providing credible assurance that other regions were unaffected. So while it would be necessary to close down that part of Canada until the issue was fully resolved, the rest of the country could continue to export and remain viable.

    Some sectors have been moving forward with tracking and tracing systems already. For example, with the assistance of the Government of Canada, the cattle industry has begun implementing a mandatory national ID program to provide ear tags for all Canadian cattle. This program has just begun and gaps still remain, but it's an example of Canadian leadership on the important issue of tracking and tracing.

    Here's Gordon Mitchell of the Alberta Cattle Commission to comment on that:

I think the tag program has two major benefits. One is to the producer, in that we can very quickly identify those animals that may have become infected by a disease outbreak, and eradicate that disease because of our ability to very quickly and easily trace those animals back to the herd of origin and any farms they may have visited.

    Moving on to the environment, as agriculture has become more intensive, its impact on the environment has increased, in particular in areas such as water quality and greenhouse gas emissions. Citizens are growing more concerned about these impacts. Just listen to David Runnalls, president of the International Institute for Sustainable Development:

You know, it's interesting to note that every time anybody does any polling, it shows that Canadians actually care about agriculture a lot more than I think anybody suspected, but you also discover very rapidly that one of the reasons why they care about agriculture is that Canadians have twigged to the fact that farmers are responsible for a large chunk of our environmental resource base. So I think while the public is actually surprisingly supportive of agriculture, it's beginning to ask some quite searching questions about the environmental implications of farming.

    But we haven't been focusing on the linkage between agriculture and the environment, and thus our capacity to address this problem is lacking. Our scientific understanding is not as good as it should be; therefore, we need to expand the investments we're making.

    We don't really know the extent of the problems, and a better set of tools is required to evaluate the sector's impact on the environment. As well, farmers aren't equipped to make the necessary investments, which may be expensive.

    There's work going on across the country, but it has been piecemeal. Governments have responded on an issue-by-issue basis. As a result, we risk a patchwork of programs and priorities. This will not provide the industry with a consistent national approach, and we will lose the ability to brand Canada as an environmental leader in world markets.

    In addressing the issues of the provinces, territories, and industry, our approach will need to be focused on the federal role, including research and development, measuring and monitoring, information sharing, and tools for farmers; and where there is a clear link to federal priorities, targeted assistance for infrastructure on a cost-shared basis with other governments and with farmers.

    Turning to renewal, as I said earlier, agriculture is becoming more than ever a knowledge-intensive business. But we need to do more to ensure farmers are equipped for success into the future.

    Let's listen to Anne Forbes of the Canadian Farm Business Management Council:

  (1235)  

The difference in our industry today and in fact it's different from yesterday, is that it's the dynamics and the speed of the dynamics that are changing in our industry. So it's very important that we remain flexible and nimble, that we look out, and what we need in the skill area is a more sophisticated approach to business. So we will have to form alliances with other entities, perhaps even outside of our industry. Not only alliances, we will have to learn negotiation, because it's going to be our neck that will be on the bottom line. We will have to learn the art of developing relationships, and that will be the key to our industry.

    The renewal challenge is different for different demographic groups. Beginning farmers mostly require business knowledge, and technical skills, and access to capital to enter the sector with a solid foundation. Retiring farmers need assistance to ensure the effective intergenerational transfer or sale of their farms. Mid-career farmers may fall into two groups: one, those who would benefit from skills and training that will allow them to diversify their operations or grow, or those whose farms would still be non-viable even with help and who must have access to other options, with a view to remaining in agriculture.

    In consultation with provinces in the sector, the following I think are some of the principles that we are proposing under the renewal component of a new architecture. We would work with Human Resources Development Canada and this sector to develop a national view of the competencies required in agriculture, and we would use this shared view to develop skills programming, college curricula, and other training options, in cooperation with our provincial colleagues, educational institutes, and the sector.

    An expanded consultative service would provide farmers with advice, better business planning and options, and direct them to specialized support services. A key feature of this service is that it would be peer-based, as we know and have discovered clearly that farmers working with farmers is the most effective way to change behaviour.

    We would also want to provide training and living allowances for those farmers who choose to pursue learning opportunities off the farm. We want to be there for them as they work to improve their skills so that they can continue to farm, or pursue off-farm opportunities as the best option for themselves and their families.

    When it comes to science, we have focused on traditional issues; commodities, yields, and productivity. For example, a lot of research effort has been focused on wheat, a commodity whose price and share ofproduction has been declining since at least the 1950s.

    I want to make it clear that I am not suggesting that we stop this research, but I am suggesting that we reallocate research resources in the department to achieve a better balance between this and more future-oriented work, because we need to do both. I've had that suggested strongly by this committee.

    Moving forward, we are going to reorient our focus, for example, on the life sciences to improve food safety and environmental practices, and to develop new products and production processes, and to pursue new market opportunities.

    Here is Mordechai Rozanksi, president of the University of Guelph:

These are very exciting times for agriculture and agrifood, because the life sciences are opening up new possibilities in that entire sector, and the more we learn about the science of living things, the more we can apply that knowledge to create new products out of basic agricultural commodities, and this can include renewable fuels, such as ethanol, plants that can produce new medicines, even bacteria that can remediate hazardous waste. The potential list is frankly endless and so are the potential benefits. These can include our health, our safety, our environment,and our economy, nationally and internationally. The point is that Canadian agriculture can be at the heart of this new life science revolution.

    All elements of the framework I have been talking about are interconnected. To be successful, our farmers must have access to the right tools to ensure that they can meet demands in the areas of food safety and environment, to ensure that they are equipped to grow and diversify and can obtain access to options and skills development through renewal programming, and to take advantage of opportunities offered by science.

  (1240)  

    At the same time, we will overhaul our risk management approach to act as a driver and accelerate action in these areas, ensuring that those who act are rewarded. Together, these tools and the risk management regime that encourages their use will accelerate the implementation of the new agricultural policy framework, and take us to our vision of being the world leader and branding Canada.

    By taking coordinated action on all five elements we would fundamentally redefine farming, so that in five years there would be, for example, environmental management planning and actions on all farms; on-farm food safety systems in place; and field-to-fork tracking of Canadian food products.

    Risk management would be an everyday part of doing business for farmers. Farmers would have the support they need to make informed choices, and assistance to follow through. Continuous learning would keep farmers on top of the latest scientific, risk management, strategic planning, and technical advances, and all of these together would help Canada capture markets.

    Science would be applied to new priorities and to create new opportunities in the sector. With this new type of architecture in place, we would have a very powerful tool to use on the world stage. In a more fractured international market, we would create a strong Canada brand as a world leader in food safety, innovation, and environmentally responsible production, for example. This brand will help us grow existing and new markets.

    In the post-Seattle world, where civil society is a lot more active, Canada would be taking action on food safety and environmental issues in a nationally consistent way.

    In a trade environment where developing countries increasingly feel shut out and technical issues are rising in importance, we would be in a excellent position to provide new development tools and to build alliances that move our international agenda forward.

    Let's listen to John Olmstead, a very successful agricultural entrepreneur from Ontario who's already applying advances in food safety and environmental stewardship to capture premium markets--and to, as well, make a lot of money:

Also into the future, we're going to need to create some market niche. We need to package ourselves as Canadian individual companies or as a Canadian group where we can go and provide products that are not only food safe but that can be displayed by a customer that is more and more re-connected to the farm gate in a way that we can take advantage of some opportunities that this will generate.

    If we don't invest in this new architecture, we won't capture any of these benefits. I can tell you clearly, many other jurisdictions are starting to move in this direction. Scotland, the European Union, the United States, Australia, and New Zealand--all of these countries are working to develop integrated approaches to all of the issues that we've been talking about today, but Canada is the first to develop an integrated national framework to move forward.

    Implementing this new architecture will also be an important victory for the agricultural sector. The industry has been very supportive of this new direction. A news release issued by the Canadian Federation of Agriculture following the June Whitehorse meetings stated, and I will quote, that this agreement “is key in moving the industry to an economically, socially and environmentally sustainable agriculture”.

    In the same news release, CFA president Bob Friesen emphasized, and I quote again, “The CFA is committed to facilitate this ongoing process with government and industry in moving this sector beyond this important first step.”

    This new architecture will also secure a victory for Canadians' quality of life by delivering on important throne speech priorities. We will move beyond crisis management in agriculture, but that is not all. We will also deliver on major improvements in: environment; science and innovation; skills and learning; population health and safety; rural development; and a strong federation. We need to capitalize the momentum to date, and build on it.

    At the Whitehorse meeting, my provincial colleagues and I unanimously agreed to move forward with a new architecture to make Canada the world leader in food safety, innovation, and environment. We are consulting and working with the sector on this new approach, as well as with a cross-section of interests--academics, public policy experts, and environmental and consumer groups. But I can tell you, colleagues, a lot of work remains with the provinces and the sector to turn this agreement into reality.

  (1245)  

    The December budget demonstrated the federal government's commitment to providing its share of funding for the new agricultural policy framework. This commitment will allow us to move forward, in partnership with the provinces and territories, the sector, and all Canadians, to develop and implement a forward-looking, integrated, and financially sustainable approach to the agricultural policy for the 21st century.

    I will describe for you my next steps in moving forward with this new architecture.

    First, at Whitehorse we established the broad outlines of a new policy framework. You all saw those. They were all sent to your offices and they were quite public. We have spent our time since then getting a little bit more specific.

    At a recent meeting of ministers in Toronto, we identified common goals for each area, which will serve as the basis for continuing to move forward in our work.

    So all that's happened to date, colleagues--and I know there's a lot of discussion out there--is that the principles were agreed to, and in June and two weeks ago in Toronto, ministers agreed to the types of goals that should be considered in developing those principles.

    For example, on the environment, a draft goal with respect to water might be to reduced agricultural risk to water quality by increasing the proportion of farmland that carries a low risk of contaminating water from nutrients, pathogens, and pesticides.

    On food safety, one of the goals could be increased confidence in the safety of food produced in Canada.

    We will continue to consult with the industry, legislatures, yourselves being legislators, and Canadians more broadly, over the next months, to discuss these new directions for an agricultural policy. These efforts will include workshops with the entire agricultural production chain, commodity by commodity; consultations with a cross-section of interests across the country; and a website with provincial and territorial links to provide information on the new policy framework.

    While we have a firm vision and direction for the future of the sector, how we get there and the specific path we take are very much up for discussion and dialogue. I want to repeat that: How we get there and the specific path we take are very much up for discussion and dialogue and must be determined by working with industry, consumers, and a broad cross-section of Canadians. We do not have all the answers; we probably do not even have all the questions. So I will be looking to your committee to play an integral role in helping to ensure that we undertake a thorough and inclusive consultation process.

    I will also continue to work with the provinces and the Yukon on detailed agreements, and I will be meeting with those ministers again in April to advance the discussion.

    At the Toronto meeting of ministers in January, we mapped out the steps necessary in the coming months to ensure that at our annual meeting this June we will be in a position to move forward with a formal umbrella accord, not with all the specifics--hear what I said--but an umbrella accord that will help start to shape Canada's long-term agricultural policy.

    If I can leave you with one more thought as you go out with your meetings across the country, I would stress to you the importance of taking, in those discussions, a comprehensive long-term approach to the future of agriculture in Canada.

    Thank you, Mr. Chair.

  (1250)  

    The Chair: Thank you, Mr. Minister.

    With that music, I think Howard was looking to see if you might have a dancing tune on there, but I guess not.

    We do have limited time, so some of you may want to share your time rather than looking at a full number of minutes for each particular member.

    David, you're going to start then with the Alliance questions?

    Mr. David L. Anderson (Cypress Hills--Grasslands, Canadian Alliance): Yes, and I'll share my time with Howard.

    The Chair: Thank you.

    Mr. David Anderson: I guess the more I hear about this plan, the more concerned I get. I don't think you realize how far behind producers you are already. The only thing that's going to take five years about this plan is its development.

    So I want to ask one question, and that is, has any new or additional money been committed to this five-year plan, and if so, how much?

    Mr. Lyle Vanclief: The amount of money has not specifically been allocated to this plan. The commitment in the budget was an extremely strong one, probably the strongest commitment to agriculture in a budget in many years. The final decision on the amount of money is one that will be determined as we go through the process, with the dialogue and the discussion of how the principles and the goals can be attained.

    Mr. David Anderson: You've been trying to get out of funding the assistance programs for a couple of years. I know NISA's been a real pain to the government, but you have to come to this with some new money. You can't get out of this and leave farmers...

    You mentioned a number of things that are going to cost more money. Farmers are not equipped to make expensive investments. Are you going to put in there that retiring farmers need assistance, mid-age farmers need training programs, and you need to get others off the farm? You can't come to this plan and say we don't have any money for it.

    Mr. Lyle Vanclief: I didn't say that. I just said there would be new money.

    I also want to point out that even though the programs there now don't work well together, this year program payments to Canadian farmers are some of the highest ever, at $3.8 billion.

    Mr. Howard Hilstrom (Selkirk--Interlake, Canadian Alliance): Thank you, Mr. Chairman.

    It's my understanding that time is running out on the safety nets and they're supposed to be in place until January 1, 2003. In any event, no matter what the timeframe is, I don't think we're going to see Quebec agree to less of a program than they have now, and as a result they walked out of the last meeting. The other provinces will be quite happy to have the support the farmers in Quebec get. So that's an ongoing issue.

    Virtually everything you described is contained in current government programs and industry initiatives. One of the biggest problems is that various government ministries have a very negative impact on the farmer's bottom line when they do a poor job, and a conflicting job, with each other. If governments performed efficiently and effectively, we would raise the income of farmers very dramatically.

    I'll give you just a few quick examples. They're not just in agriculture, but in other ministries. One of the suggestions has been that every farmer, no matter how big or small, would have a proportional direct support if you simply removed the excise tax on fuels.

    The Pest Management Regulatory Agency, which comes under health, is a living disaster. We're getting presentations constantly on that. What a mess it is. No matter what you do, if they don't do their job in health your program isn't going to help farmers very much.

    We have the Canadian Wheat Board. You talk about the declining price of wheat and the value of it. You're still forcing every farmer into marketing through the Wheat Board. Let them have a break and do what is best for themselves.

    Grain transportation is in the news virtually every day. If that were changed, hundreds of millions of dollars could be attributed to the farmers.

    We have an issue with federal parks. Heritage is involved in possibly ruining farmers' incomes big-time. At the Riding Mountain National Park there's TB. It's my understanding--I've seen reports--that if there's one more case of TB outbreak in cattle herds in that area, all of Canada may lose its tuberculosis-free accreditation. If that happens... Well, you know what the problem is there.

    This whole government condemnation is what I'm putting forward. We see trade issues with the United States on wheat, cattle, and dairy. Where are they on trade?

    On the GMO issue, if we go ahead and have mandatory labelling before the United States, we'll have a gigantic trade issue. Every one of these plans you're putting forward will be down the tube because we trade so heavily, as you pointed out, Mr. Minister, with their government.

    We have Minister Andy Mitchell going around making investments here and there on stewardship of land. You're doing the same thing on environmental issues. You have different departments doing the same thing. Where's the coordination?

    On infrastructure, you're saying the farmer, the province, and the federal government have to put the money in. I'm telling you that the farmer is already putting his money in through taxes to those municipalities, that provincial government, and that federal government, so don't go asking the farmer for more money for infrastructure. But I know there's more than just roads and that.

    In the short time we have, Mr. Minister--and maybe I haven't given you much time to reply--

    Mr. Lyle Vanclief: My guess is that your time has run out.

    Mr. Howard Hilstrom: --I'm pointing out quite clearly something that you can take back to your cabinet and tell them very clearly: “You other departments, in heritage, trade, and health, you're screwing up our ag program for our farmers. You get your job done, and there'll be billions of dollars moving to those farmers without another safety net program put forward.”

    Thank you, Mr. Chairman.

  (1255)  

    Mr. Lyle Vanclief: Mr. Chairman, I don't think the whole meeting is long enough to comment on all Mr. Hilstrom's comments.

    I just want to make a few points of clarification. The Province of Quebec did not walk out of the meeting two weeks ago. They did not sign the communiqué, but they made it very clear in the meeting that they agreed with the direction on which we agreed in June. They agreed unanimously in June with the principles and still do. They wish to and gave me the assurance that they will continue in that discussion as we go forward. I don't want to leave the impression that they walked out of the meeting, because they definitely did not.

    There's no question, Howard, that it is a complicated situation. If you listen to a number of comments I made in the presentation today, yes, the Department of the Environment is involved, HRDC is involved, and the Department of Health is involved. Within the last hour, for example, as to the PMRA, I had a discussion with the new Minister of Health. We will be sitting down in the very near future to talk about--hopefully once and for all--addressing the situation we have of our producers not having as much access to pest management products as their competition. They should have products that can do a much better job, say health-wise, safety-wise, economic-wise, etc.

    Taxes? Canadian farmers, yes, they pay land taxes to the municipality, but they do not pay any direct federal taxes on, for example, fertilizers, pesticides, or machinery. All the GST the farmers pay is refunded to them. The only federal tax farmers pay is 4¢ a litre on diesel fuel and 10¢ on gasoline, but as we know, you'd be hard-pressed to find many farmers in western Canada who have a gas pickup truck; they're mostly diesel-fuel.

    I'm not saying that 4¢ a litre isn't meaningful, but a few years ago I did talk to a farmer in Ontario who put his whole crop in, on an average that year...it was zero tillage, it was new management practice. He put his whole crop in...included, he said, in fuelling his diesel pickup truck, for one litre per acre. Now, 4¢ per acre is meaningful, but I don't.... He went on to say that, yes, he'd like to have that 4¢ back, but he didn't think the 4¢ was going to either make him or break him.

    But it is complicated. That's why I pointed out in my comments, Mr. Chairman, that this is a whole integrated thing; there's no specific, one thing. Risk management is important. All these others are factors we have to take into consideration now, too. Whether we like them or not, as an industry we have to address them. We as provincial and federal governments have to help the industry address them so they can be proactive. What we do must be comprehensive to address the realities we have out there as an industry, the realities and the opportunities.

·  (1300)  

    The Chair: Thank you, Mr. Minister.

    Madame Tremblay.

[Translation]

    Mrs. Suzanne Tremblay (Rimouski-Neigette-et-la Mitis, BQ): Mr. Chairman, my colleague Marcel and I would like to start by apologizing for arriving late. Our caucus went on longer than expected.

    Mr. Minister, I do not really know how to raise this matter with you, but I think that for starters, I want to thank you. I want to thank you for giving us a golden opportunity, on the eve of an election in Quebec, to show our fellow citizens once again just how detrimental it is for Quebec to remain in the Canadian confederation, which has become extremely centralized, with ministers who think that they are right about everything and , who, in Whitehorse, succeeded in ousting Quebec from a consensus. That is quite a feat,  Minister. You had reached a consensus and you succeeded in excluding Quebec, when Quebec is currently the Canadian province that is doing the best from an agricultural perspective.

    We are a distinct society. Your prime minister said it. He even had us vote on a motion in the House on that. Your eyes are closed. You are ignoring what is happening in Quebec and you are refusing to use the Quebec model to improve agriculture in Canada. With your proposal, you are going to draw Quebec into the same misery that my colleagues have been denouncing since I have been a member of the agriculture committee.

    So in a calm tone this time, I want to thank you for giving us yet another opportunity to prepare a bloody good election campaign in Quebec. We will tell people just how pleased you were to leave us out. Perhaps you are going to bend over backwards again to show us how much you love us, but this time, the third time, we will be less inclined to believe you. We will be less inclined to believe you, because we see more and more clearly what is happening between referendums.

    Quite frankly, Mr. Minister, I do not have much to say about this business, except to tell you that in Quebec we are a bit discouraged. The minister said that in his communiqué: he left Toronto discouraged.

    The Quebec government will continue to develop the components of its agricultural policy in partnership with producers in Quebec and not with officials, who sit in offices and who think they know how farms work. That is your problem. You are not in tune with farmers in Canada, not aware enough of their needs.

    I do not know what you have to say about that, but I truly wanted to thank you.

[English]

    Mr. Lyle Vanclief: Madame Tremblay, I suggest that you go back and read the presentation.

    Mrs. Suzanne Tremblay: I already read it.

    Mr. Lyle Vanclief: As I said in there so often, this needs to be developed in consultation with the primary producers, the processors, and everyone. They're all involved in the industry, whether you like it or not.

    I see very clearly, from your point of view, you just made a very strong separatist speech. I believe in a federation, and I will work towards that. I will work towards national goals. Quite frankly, Quebec in some areas is leading the way in terms of their approach to environment, their approach to food safety. I think Quebec has something to bring to the table, and they have said they will bring that to the table.

    If an individual province wants to go above and beyond what is done, as a national...so that every farmer, from a national perspective, is working towards the same goal. As far as supplying the domestic market and the export market we have, that's the direction I'm going in, and where I think we should go as a nation.

    But you have different views. You have the liberty to express those, and you have.

[Translation]

    Ms. Suzanne Tremblay: It is not simply a matter of having different views. You arrived in Whitehorse saying: “We are going to be flexible”. You went to Toronto and the flexibility was gone: “We are going to be coast to coast to coast ”. It doesn't work that way.

    If you have travelled across Canada, as I think you have, you surely realized that agricultural conditions are very different from one province to the other, and in the territories as well. I do not think that farming in Nunavut is the same as it is in Prince Edward Island.

    You cannot lack flexibility. You have been criticized for your lack of flexibility. If you show up thinking, as always, that you have the solution, that you know what is good for us... That is your problem: you spend too much time thinking about what is good for us and you don't listen to what people say would be good for them. That is your tragedy. Once again, you are going to try and trick all Canadian men and women with your pseudo-policies, your broad objectives that will never see the light of day, because you don't provide the dough with them.

·  (1305)  

[English]

    Mr. Lyle Vanclief: Mr. Chairman, I'd like to remind Madame Tremblay that the subject of flexibility was discussed at the fed-prov meeting a couple of weeks ago. If you go back and look at the five principles that all ministers, including the one from the Quebec, agreed to unanimously at Whitehorse--

    Mrs. Suzanne Tremblay: In June.

    Mr. Lyle Vanclief: In June, that's right; that's when the Whitehorse meeting was.

    The first one of those principles includes flexibility on how we develop and move forward in the future. That is recognized in the communiqué. I believe it's the last words, but I don't have it in front of me. It's the last little short sentence, in the second or third paragraph of the communiqué. All ministers agreed to put that in there.

    All I can do is remind Madame Tremblay that when Quebec asked that it be in there, and repeated, we put it in there, and they still refused to sign the communiqué.

[Translation]

    Ms. Suzanne Tremblay: I have the minister's note here. It says:

Mr. Arseneau is astonished at the federal government's refusal to be flexible in implementing its agricultural policy and modify its programs so as to take into account the consensus reached in Quebec.

    Could anything be clearer? Do not try to tell me that Quebec will be going along with your scheme; that is totally false. Rather, we will remind our people that it is time to leave. It is getting more and more urgent.

[English]

    Mr. Lyle Vanclief: Mr. Chairman, I think it's evident that we're getting awfully close to election season.

    The Chair: Thank you, Mr. Minister.

    I just asked our clerk whether or not they've called an election in Quebec, but apparently it hasn't been announced.

    Madame Tremblay, are you announcing an election?

    Mr. Lyle Vanclief: It must be imminent.

    Some hon. members: Oh, oh!

[Translation]

    Ms. Suzanne Tremblay: No. I am not announcing anything, except that this will give us time to do our work while awaiting the next election, which might only be held in 2003.

[English]

    The Chair: Merci, Madame Tremblay.

    Mr. Calder.

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

    This is a very interesting vision that you're putting forward. I would like to focus on two questions right off the bat.

    In health and safety and environment, the PMRA right now is an organization that is forcing our farmers to use technology that is sometimes anywhere from 14 to 20 years out of date because we can't get the new sprays when we should be getting them. I'm wondering what your opinion is on the new framework of us taking a look at an ombudsperson under the Auditor General's office to deal with problems with the PMRA internally. It's something that was adopted in the United States last year, and I think it's something we should take a look at here. I'd like your opinion.

    Mr. Lyle Vanclief: When I comment on these types of things, Mr. Calder, people say I've already got my mind made up. And when I say these are things that have to be taken into consideration, people ask, what are we going to do? So it's a bit of a catch-22. I just said it to Mr. Hilstrom, I say it before this committee every time I come here, I think, and I say it publicly.

    Within 24 hours of Minister McLellan being appointed Minister of Health, I told her I wanted to sit down with her and discuss the problems and the opportunities that we have to take advantage of as far as the registration of pest management products in Canada, for all the reasons you just stated.

    There's better products, and I stated them, so I won't take the time to repeat them again. We need to find out how we can do that, and do it better and, at the same time, be in such a way that we can say to Canadians, and all of those for whom we produce food, domestically or otherwise, that we have confidence in the safety of the use of those products as well.

    Mr. Murray Calder: I've also had the experience of being out on the Prime Minister's task force for sustainable agriculture in the future, and in one plate here that shows the pie cut up, we basically looked at and dealt with this. What I see right now with quality assurance programs that are coming out for food safety and so on, and that probably are going to be implemented anywhere from three to four years down the road, is that currently in agriculture we have 2% of the population, 0.5%, producing 80% of the food, and you're saying 96% of the income here. There is that middle piece. And I see you're saying here low sales of 100,000 farms, high sales of 80,000 farms, 260,000 farms in Canada, and probably your hobby figure is 80,000.

    How much of these low-sale farms are going to be left once this is implemented? How much more of the 2% is going to transfer out of agriculture, do you see?

·  (1310)  

    Mr. Lyle Vanclief: I am confident that if we do the renewal process right, and we work with them in risk management with a better risk management package, to do the types of things our safety net packages are doing now, and more--as I said in my comments, a bit more of them... This is a reversal of what some people have accused both provincial and federal governments of for a long time, that they're trying to get people out of agriculture.

    The renewal process to help them assess their situation, to help give them more skills, more training, more management, and help them work with the realities of the capital resources, financial resources that they have, in my view, is going in the right direction to help those people stay in the agricultural industry and, as I think you're primarily referring to, in the primary production sector of the industry.

    Mr. Murray Calder: That's right, because the problem I see right now... I'll cite the case of Maple Leaf Foods within the pork industry. It's basically vertically integrating that, and the general population right now is quite concerned about these large hog farms and everything. What can we do as a government to maybe put the brakes on that? Because I see it as a detriment to this centrepiece within agriculture.

    Mr. Lyle Vanclief: I'll comment first on the environmental issue that you raised, Mr. Calder.

    There is no question that both the provinces and the federal government have to work with the industry and with the consumer to find better ways to make sure that we do not mistreat the environment, the air, the water, the biodiversity, etc. But when it comes down to a private individual, as a business decision, wanting to make a business decision with somebody else in the sector, I don't think it's a role of government to say you shouldn't do that.

    I had contracts to grow processing vegetables, and if I couldn't get a contract I didn't grow processing vegetables, plain and simple, because there was a buyer and I was a seller. That type of thing still happens.

    I mean, you're in the poultry industry. You have buyers.

    The Chair: Thank you, Mr. Calder.

    We're going now to Mr. Proctor.

    Mr. Dick Proctor (Palliser, NDP): Thanks very much, Mr. Chair.

    Mr. Minister, you end your paper by encouraging all of us to take a long-term approach, and yet lots of farmers will tell us, as politicians, if we don't deal with their short-term crisis, there's no long-term approach for them or their neighbours.

    In the paper that apparently was discussed in Toronto, there's reference made to the high amount of foreign subsidies over the past 20 years, especially as it impacts on grain and oilseeds. If I understand correctly, we're talking about perhaps a cost of as much as $1 a bushel to farmers.

    The United States of course is talking out of both sides of its mouth, as usual. It says something in Doha about a commitment to reducing subsidies, and then comes back to the United States and says they will sign on to the $170-billion additional aid package over the next 10 years.

    We're years away from any kind of a WTO agreement that might reduce foreign subsidies. What do we do? How does your plan address what we do in the short term for our farmers, particularly in grains and oilseeds?

    Mr. Lyle Vanclief: Mr. Proctor, what we have to do is work in a comprehensive way to help our producers mitigate the results being caused.

    Maybe I could ask, just quickly, if Simon could put up the slide that shows what has happened, for example, in real-world wheat prices from 1970 to 1998 to 2000. We can see on the screen, folks, that no matter what has happened, if you look at that line, that's the reality of what's happening. We see there's a general decline in wheat prices.

    In the next chart you will see the work that has been done to show why that has taken place. A big chunk of that decline, 47%, is because the demand for the product has decreased. World supply has gone up 26%. When you have a dropping supply and an increasing demand, that definitely forces the price down. And there are the calculations of what subsidies the contributions...

    One more, just quickly. Here's where we have other stiff competition. These are oilseeds. This chart will show, for example, on the left-hand side, Brazil and soybeans. They have 5% to 10% government support. With that, there's their cost of production. At the top is their land cost, and the rest is their non-land cost. Even with that low level of support, they have increased their production 37%.

    The next one is Argentina, with zero to 2% support. But you see the competition--and I see this coming out of the United States now finally, too. A lot of what has happened in the United States with their subsidies, and in the European Union--and there's some press that I'd circulate today, Mr. Chairman, if you want, out of the United Kingdom as well--is that much of those subsidies are being capitalized in the cost of production.

    Our real stiff competition is that even our non-land costs, in the United States and Canada, when you look at... There's where our competition is, and the type of competition. So we have to find ways to mitigate that and to brand our Canadian products.

·  (1315)  

    Mr. Dick Proctor: I have just one other question. On the wheat information, you said in your brief that wheat prices have been declining since at least the 1950s. Why, then, are the Monsantos of the world and all the other chemical companies spending gazillions of dollars on developing strains of genetically modified wheat, if your analysis or the department's analysis is correct?

    Mr. Lyle Vanclief: I can't speak on behalf of those developing wheat varieties, but it's still a major crop in the world. The reality is, that's what has happened with the price.

    It's still a major crop in the world. The world is not going to stop using wheat. So if I'm in the business of wheat breeding, or whatever it is, whether I'm Monsanto or whatever, a business decision is that I likely want to have a piece of that market, whatever that market is.

    Mr. Dick Proctor: Finally, Mr. Minister, obviously from your paper, the passive-income subsidy is a road that you're not taking. I just want to understand what will happen this year--for example, what programs are in place if we have the drought that many people are talking about, not only on the prairies but also in Ontario and Atlantic Canada? Put your thinking cap on and tell us, if this program that you've outlined today were in place in five years, how would mother nature or an adverse drought impact on agriculture?

    The Chair: Mr. Proctor, I have to interject. You're over five minutes. Maybe we can come back to it, but I'll have to go to Rose-Marie.

    Mrs. Ur.

    Mr. Lyle Vanclief: I do want to respond to it.

    The Chair: Let's see if someone else asks it, Mr. Minister.

    Mrs. Rose-Marie Ur (Lambton--Kent--Middlesex, Lib.): I'm actually going to be travelling in the same vein as Dick, so perhaps you'll answer Dick's question in answer to mine, Mr. Minister. I thank you for coming before the committee.

    My real concern here today is we need to bridge from today, because if we don't have that bridge, we're going to lose a lot in the moat for the tomorrow part of this vision.

    It was a very eloquent presentation. It was warm and fuzzy. I can tell you, my farmers back home tonight will all be on redial again, because there isn't sufficient... I realize you have to present the overall perspective, but as I see it, what you've agreed to last June--the five integrated elements of food safety and quality, environment, science, sectoral renewal, and risk management--are all costing factors again for our primary producers. And they have always toed the line. I can`t say our Canadian producers are the best... and they are; they are second to none. But we're constantly going back.

    As was stated earlier, there are more environmental concerns, and it's always coming out of agriculture. We need to ensure that other departments are going to put their foot forward here as well.

    As you're well aware, our grains and oilseeds farmers have suffered drastically this year. Yes, you say the patchwork safety net program has not worked for them, but I'm a little worried that this new vision of “one size fits all” has not worked in other avenues, and I don't know how this “one size” factor will work in the safety net program. I guess I'll have to critique it when I'm able to see it.

    But the fact is, this report you gave to the ag ministers in January, the 173-page report--and I have been reading different reports on it--said it didn't have the answers for modifying the existing safety nets so they will be better able to carry farmers through the arrival of the new plan. So here, even with that report, there wasn't sufficient... And I have to plead ignorance, because I've not seen that report--maybe you can let us know when we may see it--on how it's going to be beneficial to our primary producers. Because it is mostly grains and oilseeds that are suffering.

    If you can, then, Mr. Minister, perhaps you would quickly answer those questions.

·  (1320)  

    Mr. Lyle Vanclief: Thank you very much, Mrs. Ur.

    First of all, if I had come here and had it all laid out, you'd have said, “Why didn't you take us into consideration in the discussion?”

    Mrs. Rose-Marie Ur: I hope you do.

    Mr. Lyle Vanclief: I have said that here, clearly. You people are going out with the committee. There's a task force that Mr. Speller has been leading as well that will be reporting to the Prime Minister, and there will be consultation all the way across.

    I didn't come here with the answers. I came here with a paper suggesting a lot of things we needed to consider. For example, the safety nets we've had before have come from around this table. Crop insurance is a good program, but it needs to be fixed. NISA is a good program, but it needs to be changed. CFIP doesn't work for everybody.

    I'm convinced that if we put our thinking caps on, we can take those resources, for example, and do all the types of things those programs are doing and more to give our individual primary producers more insurance, and assurance that they have insurance. And that's the work we need to do.

    Mrs. Rose-Marie Ur: I can appreciate that, Mr. Minister, but we have had our thinking caps on. We've brought good information forth to the minister's department, and at times I really am wondering if we are being listened to, because our primary producers...You can make numbers do whatever you want. When you say they have $13,000 to live off in a year, that's what they've made. I can tell you, I think I'd have a little bit of difficulty living off $13,000, and probably many people around this table would.

    It's not just the fact of the agricultural community. It cycles off into our small rural areas where the business is, and to the schools and to our health issues. It's not just the dollars in the pockets of the farmers; it's the whole community.

    Mr. Lyle Vanclief: That's true, but Mrs. Ur, if we hadn't been listening, we would be sitting here saying “Nothing needs to be looked at, nothing needs to be changed, we'll just continue in the way we have gone”. What I'm saying is we are still sitting around the table after many years talking about the same problems we were talking about years ago. What I have said and the provincial ministers have said is, let's put all the realities up on the wall across the room--the safety nets we have, the challenges we have, the opportunities we have--and stand back and look at them, and see if we can't do all those things and more, but particularly, do them better.

    The reality is, it's been working for some people; it hasn't worked for others.

    Mrs. Rose-Marie Ur: But time is running out.

    Mr. Lyle Vanclief: Time is running out, but I repeat, I was not going to come here today... we have not developed how it could be. All we have developed are the principles and the goals--and I outlined some of those today--in some of the areas that need to be addressed. Now, if you feel that those are the wrong goals, get back to us and say so.

    The Chair: Thank you, Mrs. Ur.

    Now to Rick of the PC/DR.

    Mr. Rick Borotsik (Brandon--Souris, PC/DR): Thank you, Mr. Chairman.

    Thank you, Mr. Minister, for being here. I'll try to be succinct in my questions, and I know you'll be succinct in your answers.

    My comments echo Mrs. Ur's. It was a warm and fuzzy bureaucratic presentation, and I thought at the music we were supposed to stand up and salute. But there's a reality here, and the reality is that we have competitors in agriculture. We have competitors in the United States, and we have competitors in Europe. We have right now sitting in the Senate a U.S. farm bill that's gone through the House and that identifies a huge subsidy to the American agricultural producer. We have to compete against that.

    I have three questions. First of all, what have you done, Mr. Minister, to articulate any interventions on my farmers' behalf to the Secretary of Agriculture in the United States, saying that this is not condonable by our agriculture?

    Second, I'm told that this farm bill may well, even through Bush's administration, look at the possibility of a subsidy for specialty crops, which have been a really good cash crop for my producers. If they start diddling with specialty crops, then we've lost a lot of our cash flow.

    So perhaps you could you answer those two, and I have two other brief questions after that.

·  (1325)  

    Mr. Lyle Vanclief: I was, I think, the first minister of agriculture, or one of the first, to meet with Ann Veneman after she was appointed about a year ago. I've had a number of discussions with her and spent a considerable amount of time on this discussion, for example bilaterally and otherwise in Doha. I spoke to her about some issues on the phone last week, and the arrangements have been made for me this week to speak to her on this again.

    We will continue that pressure there, pointing out to them what they themselves are now pointing out, and what I said publicly is that they need to walk in Washington their talk in Geneva.

    Mr. Rick Borotsik: Their proposals right now are for a payment level of 85% of their base. Are you prepared to even go to the WTO with respect to their 85% base?

    Mr. Lyle Vanclief: The way they do it in the United States, quite frankly... I have very close friends who are farmers in the state of Illinois, and they don't even know how calculations are made.

    Mr. Rick Borotsik: Okay, what about--

    Mr. Lyle Vanclief: I'm not at liberty... or I'm not sufficiently aware of how all their things are made.

    Mr. Rick Borotsik: Well, I guess we should be, because that's what we're competing against--specialty crops. If they start using subsidies for specialty crops, are you prepared to go to the wall on that?

    Mr. Lyle Vanclief: We will make sure that what they do, they do within the international trade rules.

    Mr. Rick Borotsik: You said, and I quote:

I want to move to an integrated risk management system with costs shared between farmers and governments. When setting premiums, we would look at all the activities of the farm business, not just a particular crop.

    Does that not remind you of the GRIP program of 1995, and if it does remind you of that, why did your government get rid of it in 1995 and not try to make it better at that point in time?

    Mr. Lyle Vanclief: If you think it's a GRIP program, you should be flattered, Mr. Borotsik, because you wanted the government to go in that direction.

    Mr. Rick Borotsik: Why did you destroy it in 1995?

    Mr. Lyle Vanclief: We've gone through that before. There are a lot of reasons it was changed. Some of them were provincial, some of them were federal, but there was--

    Mr. Rick Borotsik: Does this remind you of the GRIP-- “farmers' contributions”?

    Mr. Lyle Vanclief: When I was farming, the GRIP wasn't there, it was gone, so I was not a participant as a producer in GRIP. In my understanding of GRIP, unless you were a participant--and even if you were--it was difficult to understand and use. That's why in some provinces it worked and in other provinces it didn't.

    Mr. Rick Borotsik: As to the last question of Mr. Proctor's, we have the potential for a huge drought in western Canada for the second and possibly third year in some areas. These programs don't satisfy any of the producers' requirements at that time. What do you have in place right now, hypothetically looking at that.

    Mr. Lyle Vanclief: What we have for this year, Mr. Borotsik, is what we had last year. You're saying they don't work. So what I'm saying here is that we need to get into a discussion of what we can do to make it better for those individuals.

    I'm back to what I said a minute ago. If you say that CFIP doesn't work, if you say that NISA needs some changes, and if you say that crop insurance doesn't work, what do you have... about standing back with no conclusions drawn other than the fact that we're still talking about the same challenges in that area we've had for 15 years? What do you have against standing back and saying, okay, let's take a look at this and see if we can't do a better job?

    Mr. Rick Borotsik: How about a natural disaster program that's developed specifically to deal with natural disasters such as drought, ice storms, floods, and things of that nature?

    The Chair: Thank you.

    Mr. Steckle, Paul.

    Mr. Paul Steckle (Huron--Bruce, Lib.): Thank you, Mr. Minister, for coming this morning.

    If we look at page three of your briefing book this morning, we find some numbers worth applauding. When I came here in 1993, we were exporting about $13 billion worth of agriculture product. Now we're at $23 billion, so we've increased that by $10 billion; yet within the agriculture sector, farmers per se have probably never been in a sadder state than they are in right now.

    I had two young gentlemen come to me at a recent farm meeting. They asked me what I thought their future would be in agriculture. I couldn't give them a definition, other than perhaps moving to Brazil--and that wasn't very good advice, I didn't think. These people have come to believe that basically there is no future for agriculture, and that is not what I want to tell these people. They begin to wonder whether some of the people in the department even know which set of tires goes down the furrow when they're plowing the field. They have lost confidence in the government's ability to deal with farmers' problems.

    Obviously, we need to commend you for the futuristic outlook on agriculture in terms of where we need to look, but I think we need to look at the interim. If I were a young farmer and I were to look at this document this morning and listen to the presentation, I would have to ask what a beginning farmer has to take from this configuration of agriculture for the future. What does it offer to me as I go to my banker on Monday morning and present my case to him for money to begin a farming operation, as I look forward to securing myself a future in agriculture? What can I give my banker?

    And this is what we have to start looking at, or we are not going to have those beginning farmers asking the question, “What can I do in agriculture, and what future is there for me and my family in agriculture for the future?”

·  (1330)  

    Mr. Lyle Vanclief: Until this is developed, Mr. Steckle--and that's the process we're in, the process this committee will have a role in as well--you have the same as we've had before. You're saying the young farmers aren't happy with this, so we therefore have an obligation, a challenge to make it better.

     And if we're going to say we're not happy with what we have, and we don't want to do anything else, I don't think we're being responsible. So let's get on with it and talk about it with everybody and see if we can't...

    Now, there are limited resources. The producer has limited resources, the province has limited resources, and so does the federal government. But we know, for example, in addressing some of the concerns Mr. Hilstrom had about environmental issues,that we have to be there with the producer. We know that. But the producers know that they need to as well. They will make those decisions, and some of them have already. Some producers are light-years ahead of others, in all due respect to everyone. It may be because they have better management skills or better access to resources in order to do it, whether that's financial resources, soil resources, physical structures on their operation, or whatever.

    There's no “one size fits all”--we know that--but there need to be national goals and there needs to be a national approach, as I say, so we can work with the industry in addressing all of these issues. If we think we can... and I'm not really flogging them, but as Mr. Calder mentioned, we cannot ignore the concerns out there. Mrs. Ur said our farmers are doing a good job. I go back to the issue of how our food has never been as safe as it is today, but the consumer is still out there concerned about food safety.

    So we had better darn well demonstrate what we are doing and what we're going to continue to do in order to assure our consumers, both here and abroad, that the safety is there, that we've branded Canada so that, when they think of food, they think Canadian because they know what they're getting.

    Mr. Paul Steckle: Canadian farmers have always delivered at the request of the consumer, but farmers are price takers, not price makers, and there has to come a time when society says it's prepared to pay the farmers for their food. And if we don't pay them for their food, we're not going to have farmers producing farm commodities in this country.

    Mr. Lyle Vanclief: I just want to say, Mr. Chairman, that these changes don't happen overnight. Two or three members have said that whatever happens here is not going to happen at the stroke of midnight some night. It can't. There has to be a transition in here. And whatever is done and however it is done in the future, this transition has to take place over a period of time.

    The Chair: Thank you, Mr. Minister.

    We're rotating from one side to the other.

    Howard, we're back to your party; very briefly, if you could.

    Mr. Howard Hilstrom: Mr. Minister, you said that things don't happen overnight. The reason that none of us in this room, or farmers across this country, believe you, and have no faith in this, is that your government has had nine years, since 1993, to fix these very problems that we're talking about here today.

    You said you didn't come with the answers; that's fine. You said let's do it better. I've mentioned to you the departments of this government that are causing a problem for farmers by not doing their job properly--number one, agriculture; the health minister; the trade minister; the transportation minister; the environment minister; the fisheries and oceans minister, affecting drainage throughout this country by saying no drainage because of fish habitat; the revenue minister, who could do things; and the finance minister, who has things mixed up.

    My question to you is, will you take what you're hearing here today straight to the cabinet table and ask the Prime Minister to please get these ministries in order? Because that will add billions of dollars to farmers' pockets.

    Will you go to the cabinet on behalf of farmers?

    Mr. Lyle Vanclief: I've already been there and had those discussions and made those types of comments at the cabinet table and with individual ministers, and I will continue to do so.

    Mr. Howard Hilstrom: Thank you.

    The Chair: Thank you, Howard.

    Mr. Easter now.

    Mr. Wayne Easter (Malpeque, Lib.): Thank you, Mr. Chairman.

    Welcome, Minister, and Deputy and Associate Deputy.

    Mr. Minister, I don't disagree with the long-term objectives of the paper but I do have some really severe problems with the starting point. I have some concerns with some of the assumptions that I believe have been made in the paper and some of those assumptions certainly go to the renewal. It's good to have retraining and so on, but there seems to be an assumption coming out of the department that farmers are in the bind they're in because of their own management, or whatever. And I think that's a wrong assumption.

    I was on farms 20 years ago in western Canada, and recent times as well, but in those days those farmers were really, really doing well. I remember debates taking place out there and representatives from the departments--and I could name them--who were telling the farm community at the time “Just do away with the Crow rate and wheat prices are going to be $12 a bushel”. Well, it never came to pass. Some of those people were doing what the department and governments across this land encouraged them to do.

    Now we find ourselves in the position, as Rose-Marie said, where these farmers have a net income.... The reality is that we've got absolutely impossibly low farm net income. Do you realize, it's a net income of $13,700? We have to deal with that equation.

    Yes, I'm a member of this government, but the question, Mr. Minister, is this: Is the Government of Canada and is the nation as a whole willing to stand by our producers?

    There's a problem in the grains industry, there's an international grains war. Look over the last decade in Canada. Canadian agriculture's support per capita has declined by close to 40%. We're 45% below the OECD average now. The EU, on the other hand, is 5% below the OECD average, and the United States, 14%. I know you've worked at this and I know you've worked hard at it, but we have to get a commitment from the country as a whole, at the starting point, to put our producers in a position where they can at least have as much financial stability as some of the rest around the world. Then we can go on to all these other things you're talking about.

    What can you do in that regard? I don't see that happening in moving from safety nets to risk management. We have to first deal with the problem of farm income. How are we going to do it?

·  (1335)  

    Mr. Lyle Vanclief: Mr. Easter, you make some very valid points. But what we've been doing, in your own words, hasn't been working.

    I'll ask Simon to put up the one with the charts. Here's an example of what's been happening with our safety nets in the past.

    The chart on the left was done for the province of Manitoba. It's the top 20% of grain and oilseed producers in Manitoba. You can see the blue line in there. That's what the farmers had from their business. The yellow line is what the safety nets have given to them in the last number of years, from 1996 all the way up.

    The average payments in safety nets to those producers was $11,000. They had $71,000 built up in their NISA.

    On the right, you have 20% of the least profitable farms in the same province. It wouldn't matter which province. That was the province that was there. You can see the yellow there is what they got from safety nets as well--program payments--an average of $36,600. And even in 1996 and 1997, colleagues, when grain prices were pretty good in western Canada, no one on that right side had an income for themselves and for their family.

    So what I'm saying is, what we've been doing hasn't worked. Are we just going to say let's do more of the same when it isn't working?

    Mr. Wayne Easter: That's not what we're saying, to do more of the same, but your charts have in fact just made my point. The reason that situation is there is that others around the world are subsidizing come hell or high water.

    We have to, as a country.... I mean, you made great arguments in your charts earlier--what we're doing in food safety, etc. Canadian farmers are part of the economic foundation of this country--

·  (1340)  

    The Chair: Mr. Easter, I'm going to have to cut you off.

    Mr. Wayne Easter: --and the country as a whole, as a government, has to support farmers.

    The Chair: Order.

    Mr. Easter, you've had your time. You've made your speech.

    Mr. Wayne Easter: I didn't make a speech, I asked a question.

    The Chair: As a former president of the NFU, he's quite accustomed to making speeches.

    Marcel.

[Translation]

    Mr. Marcel Gagnon (Champlain, BQ): Thank you, Mr. Chairman.

    There is talk about making Canada into a level playing field. Some say that all provinces must have the same conditions, but the problem is that instead of levelling things to the highest common denominator, instead of taking a province's best practices and applying them to the others, it seems that the levelling is geared to the lowest common denominator.

    There is much talk about Canada's image. Of course, we could award medals to graphic artists for their excellent work: they present a good image. But if we look at this image, the real policies seem to be very far from the image we're attempting to create of ourselves. Let me take the following example. In December, if I remember correctly, or in late November, we heard the Commissioner for Environment and Sustainable Development, who monitors the Department of Agriculture's commitments to protect the environment. Ms. Gélinas, if memory serves, came to tell us that at the rate we are acting to protect shorelines, and the speed with which agricultural land is sliding into the Great Lakes, including Lake Ontario, and the speed of the work that is currently being done to protect the shorelines, the situation will only be stabilized in 90 years.

    I see that your new architecture includes the environment, science, innovation and so forth. Can we trust that the future will be an improvement over the past, both in image and reality?

[English]

    Mr. Lyle Vanclief: Well, Mr. Chairman, in terms of the comments that have just been made about environment, we know that a review of the environmental situations and agriculture in some of the provinces, and maybe nationally, has been made. I'm proud of what farmers have done, but it has also pointed out that we need to pay attention to this.

    How long will it take? If we say everything we're doing now is fine, as I've heard to some extent around this table, it will take a long time. But it's a factor we need to address. It's not the only factor, but it's a factor we have to address, and we have to do it in an integrated way.

    The principles and goals of the Whitehorse agreement, which all ministers agreed to unanimously, are where you have to start. If you don't have principles and goals, it's pretty tough to talk about how you're going to get there and what you're going to develop in order to get there.

[Translation]

    Mr.. Marcel Gagnon: I imagine, Mr. Chairman, that in order to say that things have not been done, we must have had previous objectives that were simply not reached.

    Will this new design for agriculture in Canada provide the necessary means? Will the necessary funds be committed? Will there be any political will to reach the objectives?

[English]

    Mr. Lyle Vanclief: Yes, we will--in answer to what he said.

    The Chair: Very quickly, please, Mr. Eyking. As a young farmer, we only give him a short time at the end here.

    Mr. Mark Eyking (Sydney--Victoria, Lib.): I was just wondering why we didn't have anything to eat here at lunchtime.

    Some hon. members: Hear, hear!

    Mr. Mark Eyking: Maybe next time we could have some egg sandwiches.

    Mr. Lyle Vanclief: I'm against it at the committee, Mr. Eyking. You'll have to address that to the chairman.

    Mr. Mark Eyking: I'm going to make a comment more than a question. You visited our farm over the summer. Two parts of our farm are almost totally different: one is supply management, and one is totally on a free market system. I often talk with my brothers around the kitchen table about the difference. With security, supply management, you can make plans. With the other one, things are changing all the time. I think we have to try to achieve... The two brothers should have equal opportunity. They should have the same stability in agriculture. I think that's something we have to achieve.

    I'm pretty excited about this new vision, and I hope to see it come to fruition in the next few years.

    Those are my comments.

·  (1345)  

    Mr. Lyle Vanclief: There's no question, Mark, that the stability in supply management is what every farmer would like to have. That's why we have said very clearly--and we will fight at the WTO--that the decisions in those areas are domestic decisions, marketing decisions, and they will be made in Canada. That is the goal and the aim we have to take, because that kind of stability is not in the other sectors of our production out there. Can we get that in the very same way we got it in supply management? I doubt it. I don't think we're going to go to supply management in wheat, soybeans, cabbage, or whatever the case might happen to be. But can we work with the industry and with the provinces and the producers to get a more stable approach to the realities of today?

    The Chair: Mr. Minister, just to clarify, we have a lot of perceptions of what environment means: what we smell, what we endure in terms of being around a given setting. But for the visual aspect of the environment... We talk in this presentation about a lot of farmers getting out of farming. Is it a concern that as you drive in the countryside, you'll see abandoned buildings, you'll see rundown fields, you'll see a very unpleasant environment in terms of what the rural area will look like? Has that been considered in terms of the presentation of this committee?

    Mr. Lyle Vanclief: Those are factors that have been talked about, yes. There's no question that some of that land, some of those buildings.... In some cases technology has moved on, and those buildings are no longer applicable to today's technology. In some cases, they return even under the best management because of the soil conditions, climatic conditions, or whatever the case might be. It might mean that the economics aren't there.

    I know in my own county there is land that isn't farmed that used to be farmed. I can tell you that it was many years ago, back in the barley days, as they're referred to. In some cases there's a whole amount of six inches of soil on top of limestone rock.

    Climatic conditions have changed and a lot of other things have changed. We do need to address the goals for water, soil, air, and biodiversity, because they are factors we have to deal with.

    The Chair: With that, Mr. Minister, we'd like to thank you for coming before our committee today. We certainly could spend a lot of time discussing this. It is a good intervention in terms of our visit across the country. I'm sure members will have at least an opening format for it.

    With that, we'll adjourn our meeting. Thank you. Sorry about not having lunch, but it's difficult to eat when you're on CPAC.