AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, November 27,2001

• 1231

[English]

The Chair (Mr. Charles Hubbard (Miramichi, Lib.)): Good afternoon, everyone.

On the order of the day, today we have the supplementary estimates (A) for the fiscal year ending March 31, 2002, with votes 1a, 5a, 10a, 25a, and 30a under Agriculture and Agri-Food, which were laid upon the table November 1, 2001. Today I refer these to the Standing Committee on Agriculture and Agri-Food with of course reference here to the Journals of the House of Commons.

Today we'd like to welcome Minister Vanclief and his staff to our meeting. We have one hour set aside for this. I know it's shorter than usual, but it was the only time we could fit the minister's appearance in with the committee.

Mr. Vanclief, we'd like to welcome you to our committee.

I may later ask Howard and the Bloc if we could have five-minute rounds rather than the eight, so we'll give.... Rick would probably want to ask a few questions near the end, and if we only have an hour, it might be difficult to get everyone in. So I would like to try to do that. Maybe you can answer that later, Howard, if we could stay with five rather than eight for you and the Bloc.

Welcome, Mr. Minister. Perhaps you can introduce the members of your staff. We'd like to have a short presentation in terms of....

The Honourable Lyle Vanclief (Minister of Agriculture and Agri-Food): Thank you very much, Mr. Chairman. It is a pleasure to be here this morning.

I'll introduce those up at this end of the table with me: Samy Watson, deputy minister; Diane Vincent, associate deputy minister; Bruce Deacon, who is assistant deputy minister of the corporate management branch; and Ron Doering, president of the Canadian Food Inspection Agency.

There are other officials in the room. If there are specific questions that need to be followed up on later, they will certainly be taking note and working with all of us to do that.

Mr. Chairman, I want to thank the committee for the opportunity to come here today to talk about the performance and prospects of the Canadian agriculture and agrifood sector; to outline our agricultural policy framework, our action plan to make Canada number one in agriculture and agrifood; and also to brief you for a minute or two on the recent WTO ministerial conference in Doha.

Mr. Chairman, I'm not going to take a lot of time, but we all know that the agriculture and agrifood industry is a prime driver of our economy. It's one that always faces an awful lot of challenges and opportunities because of international markets and international competition in many different ways. We're working with Mother Nature, with a natural resource, and certainly with a number of issues that are very difficult to control.

The industry ranks among the top three of our country's core industries. It generates a lot of wealth and prosperity. Nearly two million Canadians work somewhere in the agriculture and agrifood industry, and with domestic and export volume it's about a $130 billion industry. It is an incredibly important one, and I know all the members around the table recognize that. I think we all have to agree that these are impressive numbers and that we need to continue to take all the steps we can to ensure that this sector is well equipped to move forward both domestically and internationally in an ever-changing business climate.

• 1235

Last June, as you're all aware, the provincial and territorial ministers and I met in Whitehorse, and at that time we took the historic step of agreeing in principle to a national agricultural policy framework. It was a blueprint for an architecture to take our industry, the agriculture and agrifood system, into the future and was a proactive, futuristic, yet realistic approach to dealing with the realities we are facing today. In so doing, we wished to make Canada the world's number one supplier of top-quality and safe agrifood products produced in an environmentally sustainable manner.

Ministers came out of that summer meeting in Whitehorse with an unprecedented action plan they had agreed on unanimously, and it involved three key elements. The first, by no means a small issue, is to improve risk management through the safety net system we have for producers in Canada. Second, they agreed to strengthen food safety, beginning with on-farm food safety and going on to enhance the environmental performance of our industry. Another element is to create economic opportunity through research and innovation. Last but certainly not least, our goal is to provide for sectoral renewal, taking into account all the concerns and realities of the demographics and the skills and knowledge our industry and participants require, particularly in the primary sector.

This action plan is designed to brand Canada as number one in the world in terms of food safety, food quality, and environmental protection. We know that Canada is already recognized as a world leader in food inspection systems, thanks in great part to the Canadian Food Inspection Agency and its work, for example, in encouraging and implementing passive systems in federally registered plants.

To meet the increasingly rigorous demands of consumers—and certainly consumers drive every sector of our economy, but without question in agriculture they now drive it more than ever before—we need to build on our reputation as a supplier of safe food through a consistent policy of on-farm food safety. We need for example to have such things as tracking systems right through the food chain so consumers know who produced their food product, where it was produced, and how it was produced, because that is what they are demanding now.

Our action plan will help fine-tune and expand environmental management at the farm level. It will ensure our farmers are taking the necessary steps to safeguard soil, water, and air quality and biodiversity. It recognizes that agriculture and environment are two sides of the same coin.

We also want to meet the demands of consumers around the world for new products through science and innovation. Without question, innovation has contributed to our nation building from the time when Charles Saunders first developed Marquis wheat and helped open up the west. Innovation will certainly continue to drive and build on the prosperity of the agriculture and food industry into the future.

The action plan also recognizes that in order to compete head-on in the marketplace, our producers must have viable operations, so we will ensure the effectiveness of the current safety net systems to help improve farmers' ability to manage the risks that are so unique to farming. That review has been ongoing and will continue in cooperation with the provinces and the industry itself.

The action plan will also ensure that farmers have the tools that they need to make sound business decisions. That's why it includes a renewal component to ensure programs are in place to help farmers make these decisions and assess their individual operations if that is so required.

At Agriculture and Agri-food Canada the key components of this action plan are reflected in our business lines, which flow into three main strategic outcomes for Canadians. Those three main business lines are security of the food system, health of the environment, and innovation for growth. Why is the action plan needed now so urgently? As I mentioned, never before have Canadian producers had to deal with such a high level of consumer sophistication or such rapid technological change.

• 1240

On the global front, producers have also witnessed massive change. No longer are they simply competing over the fenceline, they are now competing over the date line. Only a structured, targeted, made-in-Canada agrifood system will help farmers and give them the tools to meet and beat the competition abroad. World-leading food safety and environmental safeguards, for example, will help us brand our products as “Canada Brand”, evoking in the minds of consumers both domestically and internationally the image of safe, high-quality, and nutritious food. That in turn will help our agrifood exporters reap a richer harvest in the field of international trade because trade, environment, and food safety are all critical to ensuring a competitive sector.

That message came out loud and clear as well when I met again with my provincial and territorial colleagues in Toronto six weeks ago. There we agreed on the steps needed to take our Whitehorse agreement into the international arena. In particular, we recognized the need for a level international playing field. Now, as everyone knows, a major step in that direction was achieved less than two weeks ago at the WTO ministerial conference in Doha, where Canada plus 141 other countries agreed to launch a broad-based round of negotiations, one that brings us closer and gives us the opportunity to negotiate in that direction, towards realizing a fair and more market-oriented agricultural trading system.

The result as we negotiate and go in that direction will be a win-win situation for both developed and developing countries and in those developing countries who cannot at the present time, many of them, afford to buy their way into world export markets. Trade, environment, and food safety issues, which are our national action plan cornerstones, were top-of-mind at Doha. The world trading community, including the United States, is now realizing just how key these cornerstones are to competitiveness. As a leader in food safety and environmental standards, Canada will be a benchmark for the world.

The Doha ministerial declaration is an ambitious and comprehensive one, calling for the three pillars we wanted to maintain and ensure in the agricultural portion of the text: one, the reduction of, with a view to phasing out, agricultural export subsidies; two, substantial improvements in trade-distorting domestic support; and three, substantial improvements in market access. These are the objectives Canada has been pursuing in the negotiations, and now with the acceptance of the ministerial text the real work has just begun.

Now we need to negotiate the details to turn all that into a reality, but we must remember that those negotiations involve 141 other countries—actually, within a couple of weeks, 143, because China and Chinese Taipei will become members in the next few days. We set a timeline for the completion of the negotiations, namely that they be wrapped up by January 2005, along with the broader negotiations launched at Doha, so there are milestones along the way to ensure the process and to push us to stay on track.

We recognized that, as I said, these negotiations won't be easy, with powerful interests around the table, but with Doha we have made a good start. Remember, we didn't have that start in Seattle. Backed by a comprehensive agricultural policy framework here at home and a freer trading environment abroad, our innovative agrifood industry can and will be, I am confident, number one in the world.

Mr. Chairman, I would like to ask Bruce Deacon, the assistant deputy minister in the corporate management branch, just in a very brief statement—as I know we're here to also talk about the supplementary estimates—to explain them to all of us. I know I've had explained to me a number of times what the main estimates are and what happens with supplementary estimates. So, Bruce, if you could, take a couple of minutes on that and explain it to all of us, please.

Mr. Bruce Deacon (Assistant Deputy Minister, Corporate Management Branch, Department of Agriculture and Agri-Food): Thank you.

• 1245

Supplementary estimates are one of the key steps in developing the overall budget and complement the main estimates. The annually based budget for the department is established when Parliament approves the main estimates. These are tabled in February and then subsequently approved in early summer.

All subsequent changes to the main estimates are then approved by Parliament through supplementary estimates. These are tabled halfway through the year, in the fall, and again just before the close of the fiscal year in the spring. They may include changes to the main estimates resulting from cabinet decisions or from legislation. The supplementary estimates are presented on an aggregated basis and include major initiatives such as an increment of $500 million approved for farm financial programs last year as well as routine housekeeping issues such as transfers among departments.

The total annual budget for the department is the sum of the main estimates and the supplementary estimates. This is what is reported in the public accounts and is the basis for the departmental performance report, which is tabled in Parliament in early fall for the previous fiscal year.

Thank you.

The Chair: Thank you.

Are there any questions on that?

Mr. Lyle Vanclief: I'll leave it to the committee members.

The Chair: Howard, would you like to lead off?

Mr. Howard Hilstrom (Selkirk—Interlake, Canadian Alliance): The trade talks are probably one of the biggest issues that are coming up for us, but they're so far down the road that we won't deal with those here too much. We can only hope that your government doesn't do what your government did in 1993, when it made changes that weren't in keeping with what farmers in this country wanted. I refer specifically to negotiating away article XI and protection for supply management at that time, and we'll see whether or not your negotiating position changes this time as opposed to what the government's position is going into the talks.

With regard to your five-year plan, for the environmental issues we had Ducks Unlimited come in with the conservation cover initiative program. Did your department, your deputy minister or anyone else, have discussions with DU prior to them coming to the committee with that initiative? Is it part of your environmental plan to include DU as part of the plan?

Mr. Lyle Vanclief: Yes, Howard. Discussions have taken place to get to real specifics on what the result of that would be. Ducks Unlimited has shown, and I think they said it to this committee very clearly, that they want to participate in a number of ways we can address environmental issues, land use, for example.

Not only are we looking at ways of doing that through Agriculture and Agri-food Canada, but so am I, with the Minister of Natural Resources, Ralph Goodale, looking at areas—let's call it green cover or whatever the case might happen to be. If you've spoken to me about the Ducks Unlimited presentation, you'll know that we are happy that these kinds of partnerships can be formed for leverage to help further the goal we all have in the environmental areas.

Mr. Howard Hilstrom: We're really interested in looking at it, but I don't think that we as farmers want to see Ducks Unlimited on our land titles as having the easement or whatever. If it's the federal or provincial government, that's one thing, but we certainly don't want a private American corporation to have their easements on our land titles if we agree to participate in the program.

Mr. Lyle Vanclief: No. I understand that, so that's why the discussions...they've shown their interest in doing something and helping.

Mr. Howard Hilstrom: The biggest issue facing farmers right now is of course farm safety nets. Reg Dyck from the Starbuck area near Winnipeg says that he's been farming since 1973, and it's probably been his worst year for net income. Craig and Hank Riese from the Selkirk area say their “grain-growing operation has suffered through one its worst years in more than two decades”. Grain-growing is the biggest part of the family's income.

You indicated that you were going to examine the safety nets and how they are working. You said that to me in the House of Commons and publicly to the media. How is your assessment coming along? Do you feel that the safety net programs are working, taking into account these kinds of statements, which I'm sure you've heard from others? Also, consider the fact that in Manitoba and Saskatchewan, where the programs are administered by the federal government, we are only receiving an average of about $9,000 in payments, while in provinces where the program is administered by the province their average is about $20,000. Can you tell us whether these safety net programs are working or not?

• 1250

Mr. Lyle Vanclief: I'm going to be very candid, Howard: they are working, but they aren't working as well as they should, or they could. When I talk to individual people and different organizations, they'll say they want a crop insurance type of program but it needs to be improved; that they like NISA, but there need to be some changes to NISA; that CFIP has served some people very well, or AIDA, and it hasn't served others very well. But then they'll say something like the spring cash advance has been very useful, and the advance payment for crops in the fall has been very useful. So that's why we are working with the provinces and the industry to take a look at the safety net envelope, and seeing how we can manage that safety net envelope and the investment we have there to do a better job.

Mr. Howard Hilstrom: New farmers are the ones who are hurt the most, and there are a couple of things that would specifically help them. Under NISA, for instance, you could have the handling and transportation charges being allowable expenses, and you could also allow for the farmer's portion that's deposited into the NISA account to be withdrawn first, before the government's contribution. Because many of these farmers are working off-farm to keep their farm going, and when they take that government portion out of course it's taxed on top of their other income. So would you commit to doing those two things, or looking at committing to doing them?

Mr. Lyle Vanclief: Both of those things have been looked at before. Obviously the results that you're requesting have not been achieved. We have to recognize, in terms of the last one, that half of the money in there is government money, and when government puts money in they like to sometimes get some taxes back on it.

I understand what you mean by off-farm income, but usually the reason why people draw that money out is because their income was down, so their tax rate would be lower on that money than it might have otherwise been if it were a higher-income year. But we need to look at all of these things in that area. I do want to stress that there's no question that there are individual producers out there for a number of reasons, some of them because—and I don't want to pick on them—they maybe made a business choice not to participate in some risk management packages or programs that are available. Others did, and it didn't serve them as well as they would like. As you've heard me say before, there's nothing that beats a good crop and a good price.

In Manitoba, for example, the realized net farm income in the year 2000 was $259 million. The realized net farm income in Manitoba this year overall was $638 million, and the average since 1996 is $299 million, so it's well more than double this year. Program payments in Manitoba this year are at $355 million. Were they distributed the way they should have been, or could have been? Were they as effective? That's why I say we have to look at these programs and the moneys we have available for them and see if they are as effective as they could be and whether we are making the best use of those dollars we can.

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

The Chair: Thank you, Howard.

Madame Tremblay.

[Translation]

Mrs. Suzanne Tremblay (Rimouski-Neigette-et-la Mitis, BQ): Thank you, Mr. Chairman. Good afternoon, Minister. Good afternoon, ladies and gentlemen.

The Government of Canada funded 14 scientists to make a detailed study on food products.

[English]

Mr. Lyle Vanclief: I can barely hear the interpreter.

[Translation]

Mrs. Suzanne Tremblay: Mr. Chairman,

[English]

I'm going to take this opportunity to say that we should ask that all these technical things be fixed, because there's a problem in many rooms.

• 1255

[Translation]

You are saying that the Canadian government funded 14 scientists to make a detailed study on GMO. In the final version of the November 21, 2001 government response entitled Action Plan of the Government of Canada in Response to the Royal Society of Canada Expert Panel Report, we counted as many as 48 commitments concerning studies and committees, and everything must be tabled apparently—hopefully it is in your office—by the end of May 2002.

However, there are not many concrete actions. According to the legend, usually, when we do not know what to do we create committees and ask for studies to be made. Yet, in agriculture, we have known for a long time what should be done.

Among other things, on page 29 of your document, you talk about a tracking system which others also call traceability. As far as I am concerned, I would like to know what the real intentions of the government are regarding traceability. Is the letter you, the four ministers, had signed and sent to the health committee part of one of the 48 commitments? Is there a genuine political will to act? If yes, how much is there in the budget to take action on these things? We are a little tired of good words and great promises" I want to know how much new money there is for this.

[English]

Mr. Lyle Vanclief: Madame Tremblay, I can't give you a specific answer because I don't think the specific dollars to do a specific job are allocated as such in the departmental budget, but it comes into things that have to be done, and as issues come forward you address them.

The Royal Society was asked to do this review of the capability of the government and what they saw the government was like. They could foresee what the government was going to have to deal with in terms of biotechnology, etc.—and GMO would certainly be one of the results of biotechnology—and they have made those recommendations to the government.

You have seen the response. That report came out I believe last Friday afternoon—and I'll ask Ron Doering to comment on that—and we were part of that. So now that all fits into the whole challenge we have as far as the task the health committee is going to undertake, specifically in regard to the labelling of genetically modified. But I have to stress the importance, and I agree with you, of traceability.

As I said before, with anything we have to have something that's meaningful, credible, and enforceable. And in my opening comments I commented that consumers want to know, but we have to be able to tell them with some authority and some assurance and peace of mind that if there's tracing and if there's labelling, it's not misleading to them.

I'll ask Ron Doering to make a couple of comments on that area as well.

Mr. Ron Doering (President, Canadian Food Inspection Agency): I have two comments, Madame. First, on the question of finances, it doesn't appear in this year's estimate, but it certainly did, as you may recall, in last year's, where the Government of Canada, in its wisdom, devoted significant new resources to assist on the biotech regulation. Health Canada got some money. We in the Canadian Food Inspection Agency got an additional $10 million a year to help us hire people, more scientists, to do more work on this important file. So certainly last year we got these resources and we've taken significant steps to hire quite a few more people in the biotech regulation field.

On the broader matter of the Royal Society report, an action plan was tabled on Friday. Many of these things take time, and it's a shared jurisdiction, but the government has quite a significant action plan set out there for all.

[Translation]

Mrs. Suzanne Tremblay: You say that $10 million were allotted to that, it seems, in last year's estimates. In what proportion are those $10 million allotted to the promotion of GMO, to the defence of GMO or, on the contrary, to the labelling of GMO, and to ensure that consumers know what they are eating?

• 1300

[English]

Mr. Ron Doering: Actually, on the issue of labelling, that's now being referred to the Standing Committee on Health. We're looking forward to working with them on that.

The $10 million last year wasn't just for last year. It was an ongoing permanent addition to our A-base for biotech regulation, Madame.

[Translation]

Mrs. Suzanne Tremblay: Okay. In another connection, Mr. Minister, the many Quebec farmers I talked to are somewhat concerned about the way you acted at the WTO in the past. It looks as if you rushed to implement quickly the WTO agreements while it is well known that the Americans and the European Union continue to fund agriculture, to subsidize agriculture to a large extent. Canada tried to withdraw as much as possible from these things using all these WTO agreements as an excuse. What happened in Doha is a matter of concern to people. It is a matter of concern to producers because we are concerned that the government would want once again to be the first and to take the leadership of the marathon to get first on the finish line by being the first to implement the agreements at the risk of not leaving enough time to farmers to adjust to the new decisions which will be made.

Can you make today a serious commitment that the Canadian government is going to take the defence of supply management in the face of all opposition and that you will never give up on this issue? Are you able to make today this commitment to the farmers of Canada?

[English]

Mr. Lyle Vanclief: We made it very clear in the consultations that took place with the industries, including the dairy, egg, and poultry industries, that marketing decisions for those products will be made in Canada. I think we've demonstrated very clearly that, as the Prime Minister said, we're 1,000% behind supply management. Supply management has evolved in the last number of years and continues to evolve.

As we know, the way in which the export of dairy products from Canada is done has been adjusted in the last number of months, and the industry has led that in cooperation with the provincial and the federal government. We will find out the results of the appeal of when we were ruled against on that in the very near future. I believe it's next Monday, probably.

I'm extremely confident of a strong future for supply management. We have demonstrated and can demonstrate very clearly to consumers—I think I've said it before this committee before—that if you look at the cost of a shopping basket full of varying dairy products in Canada and you take it to equal currency over the last many years, it's at least 30% cheaper than the same basket of dairy products in the United States. We have the security of a fair return to risk in management and capital, and the primary producers as well as a strong processing sector. It's a very good economic buy, if I can put it that way, for Canadian consumers. And those products have gone up in cost to the Canadian consumer at a slower rate than the cost of living. The system has served everyone very well, and we will defend it fully.

[Translation]

The Chair: Thank you, Rose-Marie.

[English]

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

Mr. Minister, I appreciate you appearing before our committee.

In your opening remarks you said we're dealing with consumer sophistication, and I agree with you on that. Unfortunately, the comsumer sophistication is subsidized through our primary producers, and that's where my concern lies.

We're constantly, as we should be, moving forward in our agriculture community, but the cost is always to the primary producer. It's great to have our wonderful export markets, because we certainly are an exporting nation, but we have to figure our primary producers into this cost factor. They've been living off their assets, which are depleting faster and faster.

• 1305

I read an article from OFA stating that the Province of Ontario had come up with a safety net program. I don't know what the safety net program is, but in that article it wanted the federal government to step up to the table. Are you aware of what they have finally come together with in Ontario, asking us to join them at the table?

Mr. Lyle Vanclief: I read the press release the provincial minister put out last Tuesday morning, and quite frankly—I'll be candid—it was a nothing press release. It was just talking about what they've been doing in the past. They have been talking for the last number of months about a “made-in-Ontario program”, whatever that is. I'm not aware of how explicit they were on that. But their press release last week was, in my view, and when we looked at it, more of the same of what they've done in the past.

We have worked with them in the past to help put their programs in place, and I'll pledge that we are doing that. I know we're doing that right now. I'm reasonably optimistic that we will be able to continue to support them in the ways we have in the past, with of course them getting their share of companion program money, etc. I understand we have supported some programs and have worked with them in the past, and we're striving to do that in the future.

Mrs. Rose-Marie Ur: Could you let the committee know the status of the CFIP program—the dollars available or left over or what's happening with those dollars in that program?

Mr. Lyle Vanclief: Even though we extended the deadline for the CFIP program by an extra two weeks, I believe close to 40% of the applications came in after the original deadline, and of course they are being processed at the present time.

Doug Hedley could tell me that we're still well on line with dealing with them.... Is it 60 days or 90 days? I think it's 90 days from when they come in. We're on line with them being dealt with within 90 days of coming in. At this time I don't know whether all of the CFIP allocation that's there will be used, but I'm working very hard.

Can I be successful with the Minister of Finance and others as to whether, if all of the money isn't used for that program, it can be maintained, or is a rollover possible? I can tell you I had that discussion with the Minister of Finance within the last hour—again. We will continue to pressure to have that happen, so that it's available.

Mrs. Rose-Marie Ur: I would hope also when you had that discussion you brought up market revenue in Ontario as well.

Hon. Lyle Vanclief: Yes, I did.

Mrs. Rose-Marie Ur: That's good to hear. I'll make sure my farmers back home understand that.

Also, you stated in your opening remarks about the tool box. Farmers have their tool box, but they need their tools to go into the tool box. Their biggest tool for the tool box is a safety net program. How close are we getting to some kind of action where all sectors of agriculture will be addressed? Because when the numbers get out in the paper that things are doing wonderful, I can tell you the phones start ringing off the hook, because things aren't wonderful. My riding can't be the only not wonderful place in the world for farmers. There must be more areas covered than that.

It's imperative that we structure something that will cover all sectors of our agricultural community. How close is the committee to coming forth with the program?

Mr. Lyle Vanclief: We're in the process of examining those. As I said earlier, we have a number of programs—I'll use an agricultural term—that can be cherry-picked. If you want to participate in NISA, you can participate in NISA. If you don't want to, you don't have to. If you want to participate in crop insurance, you don't have to, and other programs like that.

One of the gentlemen who drove the combine all the way to Ottawa a year ago stopped in my riding on his second trip and said he didn't take advantage of the $20,000 interest-free cash advance. I asked him how he could justify coming to Ottawa looking for more money when he didn't take advantage of $20,000 interest-free the year before, and we raised it to $50,000. I don't know whether he used it this year or not. That's a decision he would have to make. I found that one hard to believe when he said $20,000 wasn't meaningful. Well, when I farmed, $1,000 was meaningful. I think $20,000 interest-free is meaningful too.

• 1310

We need to take these programs and look at them. I'll just think out loud. Can we put some of these programs into a package that serves better? Maybe we need to consider some situation where people just can't be in and out. Maybe they need to commit for a longer period of time. We're searching for ways, and we need to all search for ways, that can give individual producers better insurance and assurance at the same time as what they have as a support system that's there.

Again, it won't be as good as a good year and a good crop and good prices, etc., but can we have...?

The Chair: Thanks. I'm going to have to move over to Dick here, because we have to keep the five-minute rule as best we can. I wouldn't want Rick to be cut off at the end.

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

Speaking of places where things aren't wonderful, a recent letter from a Saskatchewan producer says:

The human side of agriculture is being ignored by Ottawa. Business is at the centre of their attention. The attitudes and ignorance from the government have a serious effect on cash-strapped, drought-stricken farmers. It's made to appear we're to blame for our own demise. Do we create the weather? Do we take away the Crow and give blank cheques to the railways? Did we sacrifice ourselves to the WTO? Poor government policy programs such as AIDA and CFIP and attitude have become major stressors in our lives.

How do you respond to that level of criticism, which certainly we hear on a regular basis?

Mr. Lyle Vanclief: Dick, I hear it as well, but let me go back to the comments I made to Howard.

We do have a safety net package there—a safety net package this year whose program payments across Canada this year will approach $4 billion. This is the highest it has been in many years. In Saskatchewan alone, program payments are over $1 billion—over a quarter of the program payments. These are payments through crop insurance. It's only, for example, making assessment of how much NISA that has been triggered will be taken out. Because we know, for example, that the 2000 business year triggered $1.2 billion of money that farmers could take out of NISA. They only took out—the last time I looked—about $250 million. So there is more there.

It stresses again, and I agree with you, that the programs are not always working for everybody. We need to see how we can do a better job with the programs we have.

Mr. Dick Proctor: I have a follow-up question on that. You said earlier today that it's not working as well as it could. You just reiterated that. No one will probably be more surprised than you if there is significantly more money in the budget on December 10 or December 11 for agriculture. So my concern is that you can design the best safety net programs in the world, but if there are not sufficient funds in those programs, it really doesn't matter, because we're not going to be able to get that money out to people. Do you think, in your own mind, that with the current money available and well-designed programs that there is money there? Because I'm not at all confident that's....

Mr. Lyle Vanclief: The safety net envelope that we have right now, just to help pay premiums and that type of thing, is $1.1 billion a year. As we have been reminded before, there may even be some of that left over, because CFIP may not draw, may not take the full allocation to CFIP. So what I'm saying is that we need to take a look and see whether we can use the money there to target it better to those who need it.

Some of it is going out now. For example, it was interesting that the provinces and the industry last year wanted ad hoc money. We received $500 million federally and $330 million provincially, and the provinces were saying that there were individual farmers who needed a lot of help. The provinces were given the distribution of that money. Guess what most of the provinces did? They sent a cheque to everybody—including the province you come from, Dick. They sent a cheque to everybody based on—I'll be simplistic—pretty well the size of their operation. Therefore, those who might not have needed it got a cheque and those who needed it didn't get a cheque. Do we not have to look at that kind of system? Is that doing the best job we can? Can we fix it? I don't know, but I sure hope so.

Mr. Dick Proctor: You mentioned earlier in your opening remarks, Mr. Minister, that we're going to take all the steps we can to move forward in a business climate. Now, corridor conversation around Ottawa, I would submit, has a notion that Saskatchewan hasn't been as innovative as other provinces in adapting to the new realities. I certainly don't agree with that, but I hear it on a regular basis.

• 1315

Mr. Lyle Vanclief: Neither do I.

Mr. Dick Proctor: I want to talk about pulse crops, because as you know, pulse crops are very important in the province of Saskatchewan. There's a huge percentage of peas, lentils, and chickpeas. The pulse folks say there's simply not enough money being placed into research and innovation, research and development, in that area to keep them going, and if they don't get an injection of funds, the Americans will overtake us in a big hurry.

Mr. Lyle Vanclief: I don't agree with those who make the statement that Saskatchewan is not adapting. Saskatchewan has a different climatic situation and soil-type situation, and it may not be as easy to adapt to some types of diversification as in other areas of the country.

I commend Saskatchewan producers, for example, for what's happening in pulse; for the distribution of crops; and for the increase in the livestock industry—rather than trucking product out of the province, walking it off as livestock. Value-adding it is important.

I've met a number of times with the pulse industry, and I can tell you we are realigning. The deputy is working and has the realigning of investment in research in Canada well on the way, if not virtually complete. Not that research, for example, in wheat isn't important, but I think it's important we keep it in proportion. If new crops come along and we tell producers they should take a look at other opportunities and diversify, then we need to diversify in doing our research, too. I admit that. But we're going to be doing more. More dollars have been allocated, for example, to pulse research.

The Chair: Thank you, Mr. Minister.

Rick.

Mr. Rick Laliberte (Churchill River, Lib.): Thank you, Mr. Chair.

Mr. Minister, I just wanted to raise the issue of the whole national policy—

Mr. Howard Hilstrom: On a point of order, Mr. Chairman, is our rotation not to go to Mr. Borotsik next, and then to the Liberals? I believe that's our rotation for this committee.

The Chair: The clerk can clarify this, but we went back and forth across the way. We've always done it. Is that not what the ministers like?

Mr. Howard Hilstrom: I think we should do it the right way this time.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): We're just wasting time.

The Chair: Just a moment. She will check. But I'm sure a motion was made. Do you want to leave that on the table?

Rick, would you continue then, please?

Mr. Rick Laliberte: I just wondered, on a national policy perspective, are there alarm bells ringing, or is your ministry or somebody else looking at the issue of concentrated ownership of retail food distribution? There have been moves in the industry toward amalgamations that are impacting on this industry. Has any concern been raised with your ministry, or is another ministry looking at the issue of the concentrated ownership of retail food distribution?

Mr. Lyle Vanclief: That falls under the jurisdiction of the Minister of Industry. From time to time we have raised that with them, that there's concern—as in any business—over the number of buyers out there for the agricultural product, the effect they can have, and the pressures they can use if they so desire to influence buying patterns and powers.

Mr. Rick Laliberte: Okay.

The Chair: Thanks, Rick.

And now the other Rick.

Mr. Rick Borotsik (Brandon—Souris, PC/DR): Thank you, Mr. Chair.

Mr. Minister, thank you for being here.

I just have to do a little bit of a self-promotion commercial for Manitoba as well. As with Saskatchewan, Manitoba has diversified quite substantially into livestock production, potato production, but we recognize that the major problems we have in agriculture are associated with grains and oilseeds. I know you know that as well.

You just indicated there were $4 billion that went into program spending in the year 2001-02, this past fiscal year. That's both federal and provincial dollars I assume, Mr. Minister, not just simply federal dollars.

Mr. Lyle Vanclief: Yes.

Mr. Rick Borotsik: We know we've experienced a severe drought, particularly in western Canada, but also across the country. We spent $4 billion last year for support programs. We know there are going to be additional requirements next year.

• 1320

Have you talked to the finance minister, not only about a rollover, but about additional funds that may well go into the drought problem we've had this past year?

Mr. Lyle Vanclief: Mr. Borotsik, as I said earlier, I've talked to the prime minister about, hopefully, a rollover of any funds that aren't used this year, that aren't triggered out this year. I've expressed to the prime minister the need to improve the situation for the longer term as we go forward, that there are interim problems that will be there. But as far as a commitment is concerned, I have no commitment.

Mr. Rick Borotsik: Do you know if the CFIP dollars that are budgeted for the next fiscal year are sufficient to cover the problems in the drought-related areas?

Mr. Lyle Vanclief: Well, the CFIP dollars that are there this year may not all be triggered.

Mr. Rick Borotsik: I have another question.

Crop insurance has come up quite often in meetings I've had over the last little while. Most everybody I talk to says crop insurance isn't sufficient, particularly in Manitoba. And I know Saskatchewan has some severe problems with crop insurance the way the program is moulded right now.

It seems when producers go to the province, they always say it's a federal problem. When they come to the feds, it's always a provincial problem. Is there in your safety net program outlook right now an effort to improve the crop insurance program? It could be a very good program, given the proper model.

Mr. Lyle Vanclief: Yes, there are a couple of ways you can look at improving it. You can look at improving the individual program or programs on an individual basis, and maybe still allow people to cherry-pick, if I can use that term. Or, as I said earlier, maybe what we need to do is look at a total package, a combination of a number of things that give the producer more insurance and more assurance as far as their support is concerned.

Mr. Rick Borotsik: A cost-of-production program?

Mr. Lyle Vanclief: No, I didn't say a cost-of-production program.

Mr. Rick Borotsik: I'm just asking.

Mr. Lyle Vanclief: I know.

Mr. Rick Borotsik: There's one other thing—I don't have a lot of time. This goes back to another comment, and it's outside of the estimates.

In the last Parliament there was a suggestion there be a joint parliamentary committee struck between agriculture and health to look at the GMO issue. That died. Now, through you, the Minister of Industry, the Minister for International Trade, and I believe the Minister of Health have indicated that health is going to be the driving force. We around this table believe agriculture has a major part to play with respect to GMOs and mandatory labelling. How, Mr. Minister, can you make sure agriculture has a seat at that table, rather than having it be simply a health committee?

Mr. Lyle Vanclief: The request to the chair of the committee on health was that the committee in those discussions have members from all four of those ministries at the table.

Mr. Rick Borotsik: That's perfect.

Mr. Lyle Vanclief: The pressure now is to make sure they do that. I know they're going to have hearings. I can't recall in the response whether they said that was how they were going to do it, but that was the request signed by all four ministers.

Mr. Rick Borotsik: Minister of Agriculture, there's another piece of legislation—the species at risk legislation—that is very important to my producers and ranchers in western Canada.

There was an amendment that went forward that would have suggested total compensation for any acreages that would be required for habitat under species at risk legislation. That was defeated—in fact, all the members of your government voted against it. As the Minister of Agriculture, do you believe there should be a compensatory clause in that legislation that would compensate farmers and ranchers for species at risk requirements?

Mr. Lyle Vanclief: I don't think there should be an automatic compensation package to anyone, but if I understand the legislation.... Maybe some of you understand it better than I do, but I have expressed very clearly to the Ministry of the Environment that there should be a method of full consideration of compensation under certain conditions, and those conditions should be outlined.

Mr. Rick Borotsik: And I hear you say “full compensation”, because that is not part of the legislation as it is now—

Mr. Lyle Vanclief: I'm just telling you I've expressed my views, and so have all the rest of you, clearly. It will have to develop from here.

Mr. Rick Borotsik: Thank you.

The Chair: Thank you.

Murray.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Yes, Mr. Chair.

Minister, when you were in Qatar, who went over with you? Are the opposition parties in concert with you when you're over there?

• 1325

Mr. Lyle Vanclief: There were eight members of Parliament, Murray, in total. Pierre Pettigrew and I, a member of the Bloc, a member of the NDP, a member of the.... I'm not criticizing, but a member of the Conservative Party had agreed to go but for some reason was not able to make it at the end or chose not to go. We have to understand that there were some people who were not looking forward to going to that part of the world at this time. I can't speak on behalf of the Alliance Party. There were one, two, three. Our chairman, the chairman of your committee, was there. We had a number of industry people there as well.

Mr. Murray Calder: One of the things that concerns me, as a poultry operator in my other life.... Was there a Canadian Alliance MP there?

Mr. Howard Hilstrom: Two of them.

Mr. Murray Calder: Two?

Mr. Howard Hilstrom: Deepak Obhrai.

Mr. Murray Calder: Deepak was there?

Mr. Lyle Vanclief: Deepak. I'm sorry; you're right. My apologies, Howard. Deepak was there. I was trying to picture everybody there. There were eight. My apologies. Deepak and John Duncan, yes.

Mr. Howard Hilstrom: What's the point?

Mr. Murray Calder: That's interesting, because this is what I wanted to bring out here, the fact that Deepak Obhrai was over there. Do those opposition MPs have access to go and talk to the people who are representing the other countries?

Mr. Lyle Vanclief: They were at liberty. I believe there were parliamentary meetings between parliamentarians of the different countries. I was not involved in that.

We had a Canadian delegation briefing every morning. I think three of the four main days, if not all the days, I briefed all of those involved in agriculture, myself and/or my officials. Then each evening at seven o'clock, the complete Canadian delegation and the members of Parliament were at those. Not every member was at every briefing, but every member had the opportunity to be there, and they all had input. I don't think there was one of them from any party who didn't have input into those discussions. They participated.

Mr. Murray Calder: There is a newspaper article that was in The Western Producer on June 28, 2001. It was an article done by Barry Wilson, wherein Deepak Obhrai made this statement:

Canadian Alliance's world trade talks critic says Canada should go to the next negotiating round prepared to concede that supply management cannot be sustained indefinitely and be ready to negotiate a transitional period for tariff reductions.

Was he saying that to the other countries?

Mr. Lyle Vanclief: I don't know. I was not part of the meetings he had with other parliamentarians, so I can't speak on his behalf. But we went into the negotiations, Murray, with our initial negotiating position, which we as a government stuck with and will stick with. We will fight it all the way through. As far as supply management is concerned, as I said earlier, we have said clearly that domestic marketing decisions will be made in Canada.

Again, to the Alliance members, I want to apologize. The names of those two gentlemen didn't come right to me at that time, but they were there. There were eight MPs there: two ministers and six or seven MPs in total.

The Chair: Thank you, Murray.

Mr. Howard Hilstrom: I'd like to ask another question here, and then we'll share five minutes.

Mr. Minister, in 1995, when your Liberal government signed that Uruguay Round of trade agreements, did your government negotiate away article XI? Is supply management now in a position of having to negotiate a reduction in tariff and TRQs as a result of that Uruguay Round? Are you not in that position in this round right now?

Mr. Lyle Vanclief: The experience of this government was that in 1993, when we went over for the last few days, the conclusion, of the Uruguay Round.... I don't like to pick on anybody else, but I can tell you there was only one country out of just over a hundred countries that supported article XI, and that was Canada. I'll use an agricultural term: the previous government had pretty well sold the farm in terms of the fight on that and had not been able to maintain article XI as it previously was, either through their best efforts or not. I don't know; I wasn't there.

• 1330

What was put in place was an extremely high level of tariff protection, as high as 300% on TRQs. There has been some evolving in those over the years. I'm not naïve enough to think other countries will not take a run at that level of tariff protection in the future, as we will take a run at export subsidies in the United States, the level of domestic subsidies in the United States and the European Union, etc. That's negotiation.

Mr. Howard Hilstrom: The Conservative government of that day, prior to 1993, sold the farm, but it was the Liberal government that delivered the keys and the title over to the other countries with regard to supply management. That is our concern about it. What's going to be done this time?

Mr. Lyle Vanclief: It might have been the Liberal government, but a 300% tariff is a pretty high protection wall.

Mr. Howard Hilstrom: I would just pass on to David for one question to use up our five minutes.

Mr. Chairman, I resent Mr. Calder's innuendo there. I would like to say also that I was at the talks in Seattle, and I was not included in any meaningful discussions or negotiations with any other country. I did get a briefing from time to time from the minister and other people there, but we were not involved in any meaningful way in those trade talks. I would doubt that any opposition member is involved in any meaningful way now either.

The Chair: I don't want to get involved in an issue that the minister didn't come here to discuss, but in any case, I can assure all members of the committee that in all meetings, the various members of Parliament who were in Doha met together. We developed bilateral meetings with a significant number of countries, and we're at liberty to discuss with any country some of the issues that affected the agriculture communities in each of our areas.

I won't take that time from you, David, but I wanted to put that on the record. Thank you.

Mr. David Anderson (Cypress Hills—Grasslands, Canadian Alliance): I wanted to start with a compliment. I don't know if I should do that now, but I just wanted to compliment the CFIA on the later work in particular with the chronic wasting disease in the elk. I know with the producers it took a while to get going, but they were happy with the extra work doing the trace-outs and the lab work. So we'll give credit where credit is due on that.

I have some concerns about our national agriculture policy framework and the five things we're headed into there. In some ways, I really don't see that they're in farmers' best interests. We've talked about the first one, improving the safety nets. You continue to use that $4 billion figure when in fact the federal government puts in just over $1 billion in aide. I really get sick and tired of seeing that $4 billion figure used again and again when it isn't accurate. Your contribution is around $1 billion.

Crop insurance is not working, which is why a third of the producers are not taking it out. It does not work. It covers 40% to 50% of the costs that they need covered. That's why when you come to Saskatchewan and tell them they should take it, you don't get a lot of sympathy from that perspective.

On the food safety issue, as far as traceability and those kinds of things are concerned, I think the farmers are ahead of you. They're trying to develop an identity preserved system and they're moving to specialty crops and those kinds of things, but we're sitting with a transportation system, particularly in western Canada, that's 25 years behind the times. We've just moved to a system that can handle huge amounts of bulk product at a time that we're being asked to go to identity preserved and specialty crops. I think as agriculture people, you need to take some initiative in encouraging the transport department to change some of those regulations.

As for environmental performance, I think farmers continually get blamed for their environmental performance. From my experience, over 20 years, they've improved 1,000%. Farmers are some of the most responsible people out there right now. We saw a nice brochure come out from your department, mostly talking about all the things you've done for farmers. It might be good to put some time and energy into convincing the public that farmers are actually good environmental stewards, because they are.

In terms of innovation, I think we need money for research there in particular. Paul's people were down and you met with them as well, but they do need money for research. They've developed an industry and had a great deal of success on their own. They don't need government interfering with them, but they do need some money in terms of innovation. So look at that, please.

The next issue is sectoral renewal. I don't think getting farmers out of the business is what we'd call sectoral renewal. When you're talking to some of these non-governmental agencies like Ducks Unlimited and some of the nature conservancies, we don't need them taking farmers' land away from them and removing it from production forever. That's not going to renew the sector. It may protect a small area.

• 1335

I see this thing as being very expensive for farmers, with tons of regulations. It looks like it came from the city. There's little profit for them. You talked about the Ontario government having a nothing program, and I would really argue that for producers, in a lot of ways this national initiative is that as well.

The Chair: We have a little problem with time. You took the full five minutes between you and Howard there, David.

In answering that, would you also give your concluding remarks? We are about five minutes over the hour. We'll give you five minutes.

Mr. Lyle Vanclief: I just want to clarify the record. I didn't say the Ontario program was a nothing program; I said I saw nothing new from what they were doing before. It's a continuation of what they were doing before, and we've agreed to work with them, as we have in the past.

David, I want to correct you on renewal. The renewal aspect, as we see it in the agriculture policy framework, is not to take people out of farming; it's to help people stay in farming, to help them improve their skills and their management, to help them assess their situation in terms of the use of the financial resources and the hard resources they have, for management training, and those kinds of things. The way we see it, from our experience—and I think you'll agree—the best way to do that is a peer-based system. Farmers will learn best from other successful farmers in order to work with them in those types of things.

I talked earlier about the dollars to support the pulse, as far as research is concerned. Environment performance and food safety are important issues, issues we cannot ignore. I'm not saying producers aren't doing a good enough job, but they themselves will tell you that overall we need to do an even better job. When we talk to the consumers out there, whether they're domestic or international, they want to know and have assurance that we have a system in place for monitoring all of this and doing the best job we can.

Just look at the concern that's being raised in a number of areas over larger hog farm operations. We have to address that, and we have to work with the industry and the public to address that. Certainly reports that came out, environmental commissioners.... I forget what they were. When they say to the Canadian public out there that there's enough livestock manure in Ontario and Quebec for the equivalent of 100 million people, then we in the agriculture industry have to address that by explaining what is being done with it or how we are working with the industry to do that.

So all of these are necessary. There's no simple, quick answer to them. They will take investment.

I will close, Mr. Chairman, by saying that we need to take a look at the whole approach out there in a futuristic way. We've plugged a lot of holes in the past, and that's important, but in doing that we also have to look at how we can be proactive and hopefully prevent the continuation of some of the crises that we've had to manage in the past.

The Chair: Mr. Minister, thank you for coming. I don't think I've heard any mention of the fact that the supplementary estimates were very high this year, some $664 million, which I am sure most members of this committee would applaud. Hopefully, our agriculture community and farmers will appreciate the efforts that you and the department have made.

With that, we'll adjourn our meeting.