[Recorded by Electronic Apparatus]
Tuesday, June 18, 1996
.1106 
[English]
The Chairman: We are pleased to continue the committee's study of natural resources and rural development.
We're very pleased today to have three very distinguished individuals with us: Mr. Fuller, a professor at the School for Rural Planning and Development at the University of Guelph;Mr. Richard Rounds, a director of the Rural Development Institute; and Mr. Stabler, chair of the Department of Agriculture at the University of Saskatchewan.
Welcome, gentlemen. What we'd like to do today - because I know we're going to have an interesting discussion with the members - is to ask each of you to make a brief opening statement for about ten minutes. We'd appreciate it if you could leave your brief, if you have one, with the committee. Then we're going to open it up for a round-table discussion with the various members.
I don't know who would like to go first. Mr. Stabler, would you?
Mr. Jack Stabler (Chair, Department of Agricultural Economics, University of Saskatchewan): That's fine. I have a few overheads that I'll present as I make my opening statement.
I'm going to speak quickly to the points that were outlined in the material that your secretary sent me as being some topics of interest to the committee. I'm going to illustrate this with Saskatchewan numbers, although similar kinds of numbers apply to all four of the western provinces and in a modified extent to other jurisdictions in Canada.
This is the picture most of us have of the rural economy: fewer farmers and bigger farms. Also on this overhead is another fact of life in rural North America: the rural population not involved in agriculture has, percentage-wise at least, become very large relative to the farm population.
Here's another picture that is pertinent to the rural world: commodity exports remain a very important component of the economy of western Canada and, again to a modified degree, of the economy in other parts of Canada.
This number, $11.5 billion, constitutes about 38% to 39% of Saskatchewan's gross domestic product. As I'll illustrate in a bit, when you take the service component of the economy into account, that number rises to nearly 50% of gross domestic product.
.1110
This view of the change in the structure of the economy that most of us are familiar with from the media shows the service sector growing dramatically, the commodity-producing sectors declining and other sectors treading water. While this picture is correct, it is also misleading.
The next overhead, which focuses upon occupations rather than industries, better illustrates what is going on in terms of restructuring. The first two lines of this overhead were included in the service industry on the last overhead. What this is telling us is that managerial, professional, scientific and high-tech service jobs in fact dominate the growth of the service industry. And what is identified as service on this overhead are the low-tech, low end of the service types of jobs that have been created over the past decade.
This diagram summarizes the importance of services that are going into export either directly or as embodied in the commodity exports and not picked up in the previous figures showing the value of commodity exports.
If you look at the two clumps of numbers, look at the two bars on the right-hand side of each of those clumps. On the left-hand side, the dark bar going down to a lighter bar indicates the percentage of total exports accounted for by commodities before you take service exports into account. The right-hand side indicates the growth in service exports when they are taken into account, and it's a very dramatic and typically unmeasured fact of economic life.
Of course, as less direct labour is used in commodity production people move away from the rural areas and into the cities, and this figure illustrates the reclassification of Saskatchewan's600 communities over the past 35 years. The names on the left are shorthand descriptions of what these communities do.
The population runs from about 190,000 in the top group with Saskatoon and Regina. It reads 12,000, 6,000, 3,000, 1,800, 300 as you move down that list, and as you can see the bottom has fallen out of that group. But at the same time, a large contingent of very strong communities has emerged in the top, many fewer but much stronger.
The next two overheads illustrate the spatial dimension of this community reclassification. This is the list of communities in the top four functional classifications in 1961. The black symbols illustrate 132 communities.
The next overhead shows the communities in the top four functional classifications in 1995. There are 29 communities, but note the spatial integrity of the reorganization. Each area of the province is still well served. There were gravel highways in 1961 that are four-lane paved highways in 1995 in many instances, and that are at least good two-lane paved highways in all other instances.
This rather drab-looking overhead tells an enormous story. Everyone's familiar with the concept of the income multiplier and this overhead gives us a measure of the income multiplier in each of the six tiers of the community system we just looked at.
Notice that when you compare the lowest multiplier of 1.09 with even the 1.34 for complete shopping centres in communities of about 5,000, the spin-off effect is five times larger in the intermediate-sized communities than it is in the smallest communities. So when a dollar is spent in rural Saskatchewan or Alberta or anywhere else, if it's spent in the small community it immediately goes to Saskatoon or Calgary or Toronto, whereas if it's spent in an intermediate-sized community it generates some income and employment before it leaves.
.1115
These communities play a very important role in the space economy. These are the labour markets around Saskatoon or Regina. In contrast to the labour markets shown on subsequent overheads, all of this space is characterized by growing population and an increase in the number of jobs.
This set of labour markets - there are 13 of them built around secondary communities - is characterized by population and job stability within the blue areas, but it is the community growth that is offsetting the rural loss. So in these places there is stability, but it is characterized by rural to urban drift of people and jobs.
This overhead shows that while there are still jobs that people commute to from rural space, the communities and rural areas are all losing, in this presentation.
The next overhead shows the set of labour market areas we've just seen. Brown represents growing, blue means stable, green means declining, and the unshaded portion means in freefall.
Finally, with the evolution of these labour markets, Saskatoon and Regina are gaining relative to all other space. The intermediate place is stable, while the rest is declining and losing. A projection to 2005 gives Saskatoon and Regina 53% to 54% of the population and jobs in the province. The other places are shown as losing 1% in the intermediate level, and 2% and 3% as you shift down.
That's a very brief introduction. I've hoped to illustrate the complex inter-relationship between the rural and urban economies. Many of the rural direct-to-production jobs have been eliminated, but at the same time the growth in service sector jobs, which does not appear in most calculations as supporting primary production, has been quite dramatic.
Many of the people who live in rural areas - now some 10% of the Saskatchewan labour force - commute to jobs in the urban spaces. That 10% of the total labour force means about 30% of the rural labour force.
Thank you very much.
The Chairman: Thank you very much. Mr. Fuller.
Mr. Tony Fuller (School for Rural Planning and Development, University of Guelph): Thank you. My presentation is quite focused. You have a handout of just two pages, which I'm going to read. I trust that this focused presentation will make a change from the general addressing of the list of items on your mandate.
I want to thank you for the opportunity to be here. After 26 years researching in Canada, it's gratifying to be able to come here to talk a little bit about the accumulation of that experience. As a co-founder of ARRG, now called CRRF, I want to endorse strongly the group's presentation on a whole rural policy for Canada, which was presented to you on May 28 in this document.
Given that this has already been put forward, and I endorse it very strongly as an individual researcher, I'm going to take a particular point of reference this morning.
In this period of spectacular change, the rural response has been highly varied, making rural areas across Canada more diverse than ever. The constellation of old and new stakeholders, new and old institutions, new and old labour markets and local conditions make it imperative to develop a whole rural policy that will promote sustainability, encourage diversity, and ensure equality of opportunity in the new rural economy.
.1120
I make no bones about the fact that the new rural economy is still largely founded on the natural resource sector and what remains of the staples economy. Nevertheless, the rural restructuring picture, generally speaking, will see continued growth of the natural resource sector, but the growth, as we have come to know it, will be jobless. So in terms of support for and interconnection with rural communities and other aspects of the rural economy, there are some questions about the future.
The next point is that rural does matter. The national government in a multi-tiered system must take responsibility for guiding such an outcome of rural restructuring by offering leadership and direction, and creating the conditions for discussion, new information-gathering and decision-making.
This probably cannot be done by conventional means. The new global and rural conditions require a novel and bold approach to facilitate an intelligent system that provides a whole picture. Such an approach must cut across the vertical sectors that administer and fragment rural areas. It requires a horizontal understanding of the whole rural system and the issues and opportunities that must be faced.
To move toward this goal, the central government needs to declare its intention of supporting rural Canada. Then, by establishing a mechanism for learning more about whole rural issues, it can ensure that the policy-making process is informed and rural economic development is promoted.
The mechanism for doing this - and this is just a speculative proposition to focus our thinking and create some discussion - is a rural policy institute. Establishing a rural policy institute would go a long way toward a visible expression of support for rural economic development in Canada. A carefully designed institute could provide the public and private sectors with new and vital information on rural issues and economic, social and environmental opportunities - and I stress, opportunities. It could create regional, national, and international forums for debate and consultation. It could bring together stakeholders in all the key sectors of the new rural economy to inform policy and promote sustainability.
This implies the next heading, which is linkage. Such an institute should be linked to the other key research and policy groups in Canada, including the interdepartmental committee on rural and remote Canada, the Rural Secretariat, the National Research Councils - SSHRC and NSERC - the National Task Force on Environment and Economy, the Canadian Council on Social Development, the sustainability unit in Manitoba, etc.
The national rural policy institute should draw upon and provide research leadership for rural units based in universities. Such units, like rural Canada itself, are often small and fragmented, and would benefit from interaction through direct coordinated efforts with central agencies.
The rural policy institute should provide a national network of interests in rural Canada that would reflect the reality of rural conditions today. Key members might include the resource industries, Canadian Federation of Agriculture, the Canadian Cooperative Association, as well as new groups such as the Canadian Farm Women's Network and groups like Rural Dignity. This is mixing advocacy groups and associations together with research.
The national rural policy institute should be financed jointly by public and private ventures that reflect the commitment of the state and the major institutions in civil society that support and benefit from rural Canada, for example the banks.
There is a range of financing and operating possibilities, but a very simple option would be for governments to provide perhaps 50% of the operating capital and for banks and resource industries to provide 50% of the research budget. A total of $1 million a year would provide for a small permanent unit based in a rural location - because it doesn't have lobbying needs and therefore doesn't necessarily need to be in Ottawa - with a research and seminar budget to involve as many rural stakeholders as possible. Three-year strategic research cycles would be recommended.
.1125
In summary, a national rural policy institute would take little to create, as the research and institutional base is already developed and established across Canada. What is needed is a coordinating unit that could stimulate new information generation that would be of value to academics and the research community, that would benefit rural Canadians and that would inform policy. Thank you.
The Chairman: Thank you, Mr. Fuller. Mr. Rounds.
Mr. Richard C. Rounds (Director, Rural Development Institute): You have my speaking notes, which I hope you have a chance to look through. I did two things: I made some general comments upfront and then addressed your issues sheet by number. If you have a particular interest amongst your issues and I don't get to it, that would be good for the question period. Most of my comments will relate to the prairie region and northern regions of western Canada, so please take them in that context.
I would first emphasize that there are very different rural Canadas, and that any search for a more or less universal policy will probably not be successful. The rural situations from coast to coast are so different that different policies will be required. Therefore, I would stress a regional if not even a subregional approach.
I've put one graphic on the screen for you to illustrate what's happened in rural Manitoba. This is similar to Jack's presentation, but these are percentage losses in numbers of bodies in rural areas in Manitoba in the last 30 years. The numbers are in the minus 40s, 50s and 60s, even as high as minus 64 to 70. That means that in many of these rural municipalities, two out of three people who lived there in 1961 no longer live there.
All the land is still farmed, so what it really boils down to is that agriculture cannot be a surrogate for rural. It's only one industry in the area, and as the number of farms and the number of people diminish, all the communities suffer because those are customers that have gone. That's a point I would make for the prairie region.
In Manitoba, if you look around the city of Winnipeg you see plus numbers as high as 194, 132, 98. That's the urban fringe, which is still called rural by many definitions, but it's a very different rural. Even within one province you may have to have different rural policy approaches.
A second point relates to what Tony was just talking about. The call for research and development is essential. Rural Canada, however, is not well served by a complete concentration on high-tech R and D because most rural industries, other than the major forestry and mining conglomerates, are low-tech small and medium enterprises. There is very little research and development going into that group of small and medium enterprises. They are not well served, and I think that's a real missing link for rural Canada.
Another missing link is what I call soft-side research. This is a natural resources committee, but you have to deal with the other committees like human resources development. The soft-side research is how people adjust to the changes that are taking place, both economic adjustment and social adjustment to change. The soft-side research is what will ultimately bring the whole rural policy together with the high-tech research.
The U.S. has a system of four regional rural institutes: one in Pennsylvania, one in Mississippi, one in Iowa and one in Oregon, which have served rural policy formation well. Tony has called for one rural institute. I would say that in Canada we already have the basis for regional institutes: one at Mount Allison, one at Guelph, one at Brandon and one at the University of Northern British Columbia. There is a structure there that could be very easily tied into, all of which could work on regional policy as opposed to just overall national policy. Big dollars may therefore not be involved. It may be a matter of helping along things that already exist and helping change the focus.
A third general comment is that I think everything in the north revolves around land ownership control disputes. There's a tremendous reluctance to invest in anything in the northern part of the prairie provinces and the territories, and it's really understandable given the insecurity with unsettled land claims. That drives or doesn't drive the economic engine of the north. It is something that must be addressed.
I'll go through a few of the issues until my time runs out.
.1130
The current economic conditions of boom or bust in the vulnerable single-industry towns is going to be difficult to offset because most of them were formed based on a single resource. That means other options are usually limited. The only way a policy issue might address that is at the trade level, the international trade level in particular, where you try to work out issues like Russia dumping all its nickel on the market a few years ago and driving prices down to nothing to try to get some immediate cash. That's where a federal policy might come in.
Beyond that, however, the industries themselves will determine markets and prices and the government will have only a minor say in that kind of thing, especially in a free trade policy.
The rest of rural western Canada is suffering what I call the remorseless working of things, and that's what's on the board. Farms get bigger and more competitive. NAFTA will drive that further. There are fewer farmers, probably doing better, producing more wealth for Canada. Urban Canada doesn't care whether there are 10,000 farmers or 100,000 farmers producing the wealth; they want the wealth to deal with. But it makes a big difference to the rural areas how many people are left out there producing that wealth. That's the difference.
That's the remorseless working of things. The more that goes, the fewer people. The population is aging tremendously. Many rural towns have as high as 40% senior citizens in them. That hurts the volunteer sector and the economic sector of the community, so it becomes long-term chronic as opposed to critical.
What I've done in my general comments is compare the boom or bust, where it's feast or famine in the single resource-based towns. If you look at the prairies as agriculture only, which has been the general view, that agriculture is a surrogate for rural, this long-term thing is just like aging, where it kind of creeps up on you. It's not critical, so the reaction isn't immediate like it would be in a boom-or-bust situation. Very different policies are needed there.
Skipping down to item four, adding value to primary commodities, Canadian-owned industries perform much better in value-added, especially in the rural areas. A recent Insights On from StatsCan that I'm sure is available to you very clearly shows that. Foreign-owned industries are often tied up with related party networks, meaning affiliates and other nations, where the value added is already developed elsewhere, and the Canadian-based segments are designed to supply the raw materials. I don't know how that translates down into policy in a free trade environment, but I would guess some kind of encouragement for Canadian-owned industries is probably the way to go to be most effective in rural areas.
On the human resources side, the brain drain in rural areas continues. This leaves a labour force with poor skills to supply the small and medium-sized enterprises, even at low-tech levels. There are areas in Manitoba where 60% of the people never graduated from high school, and half of those never went beyond grade seven. It's pretty hard to tie them into the high-tech world without a lot of training.
Transportation and communication infrastructure is often seen as a panacea. Infrastructure alone is not the answer and has solved few long-term problems in rural areas - all of the highways, the gasification, the telecommunications, and this process is still going on.
It's kind of a situation where you don't know what to do, because if you don't put it in, it's going to probably increase this; if you do put it in, it's probably not going to stop it. But infrastructure can't be looked at as the sole answer. I think it has to be very carefully designed.
I would tie it to incentives. Instead of gasifying every town in Manitoba, I would gasify the communities that are willing to put up an industry based on natural gas. Then the government gives them the resource, and they're already committed to it.
What we're doing now is putting in infrastructure on the basis of the ballgame movie: build it and they will come. Well, it hasn't worked, so we have to take a very careful look at that.
On access to capital, I gave you a brief two-page summary of a major research project that the institute I work with is doing right now. It's in a very draft form. We're going out and asking rural people who have money to invest what drives their investment decisions. You might read through that.
Basically, the RRSP option is crucial. Government can look at one thing, which is project eligibility criteria. Most rural projects do not qualify, and maybe some changes can be made there. The other thing to look at is local control policies in investment that would qualify as RRSPs.
In general, rural citizens are not terribly entrepreneurial; they want low-risk investments. Rural enterprises are high-risk enterprises, so it's a bad combination. A policy might address that at some level.
I think that's probably all my time, Mr. Chairman.
.1135
The Chairman: Thank you, Mr. Rounds.
We'll go around with a series of questions. There's also some additional information on some of these sheets, if the members want to explore that as well.
[Translation]
Mr. Canuel.
Mr. Canuel (Matapédia - Matane): Academics come to meet us from time to time, and I thank them. You are thinkers and you contemplate the real world from up above, if I may say so.
Things don't quite work that way, in the field. Several academics from other provinces - I digress briefly before coming to the subject - came to tell us, in Quebec, that they loved us a lot. However, when it comes to presenting their papers in French, they don't do it, which I deplore a little. Of course, you don't have the time to do it, even if Canada is a bilingual country. That being said, I still thank you for coming here, because you bring us good perspectives.
I heard a great many academics make the autopsy of rural areas. They have been telling us for 30 or 40 years how things are. We know it. Personally, I know it.
What we know at least, is what solution to bring forward to the rural community to give them hope. You know it as well as I do. You talked about the Western provinces. You made long research on these territories, and rightly so.
You know very well that in Quebec the situation is not any better, and that rural areas are being depopulated. The young people do not come back. There is no hope for those young people. There is a whole generation who is leaving and they won't come back. This is not because these young people don't want to come back but because they don't have the opportunity.
I represent the constituency of Matapédia - Matane, which is not very far from the Gaspe Peninsula and Rimouski, almost in between. The young people wonder how they would do to have a profitable activity, even if they had money to start with, and even if there was an institute such as the one you mentioned earlier. I think that it may be a good solution.
It is true that there may be a lack of money. Then, even if we had money, for example in the case where some parents would transfer their farm to their children, some of those young people wouldn't want it because of the social context. To marry at 24 and to get committed to work six days a week when they see their friends work three or four days or live on welfare... There is there a whole society phenomenon which runs deeper than the money problem.
However, it is true that there is also a money problem. When you mentioned earlier that we had to force banks to do something, I applauded you. I am completely in favour of this option. When they make profits, they have to redistribute them a little, particularly in the rural world. It is too easy to redistribute them in the cities, because we know very well that when they lend money to a specific company, it is give and take.
Everyone invites us, and particularly academics, to assume responsibility for ourselves. You're right to give us this advice. But after some 20 years devoted to rural and regional development, I invite you in turn to tell us how to take responsibility for ourselves. I emphasize the "how".
I recognize that there is no magical solution, but there must be nonetheless some way to motivate people to stay in their area of the country. They have the desire to do so but something is lacking.
Formerly, there was a social fabric; there was a post office, a church, a credit union, a butter making facility, etc. All this made a whole, and people were happy.
Nowadays, even the services provided by the Federal, like the post offices, have become counters. When there are no services left, you go elsewhere, of course. I would like you to tell us what will happen within five years in communities like mine, Matapédia - Matane.
There are people in the Université du Québec à Rimouski who are also doing some research and development. Someone gave me a list of them earlier. But I would say that this research flies too high. Perhaps, it is not close enough to the field.
.1140
When I meet academics like you, I often say: "If you loose your salary tomorrow as well as your pension fund, come to my place in the country. You may have to work long hours. A year later, even you may want to move". Some experienced that. It is not easy.
As you have the time to think and are paid to do so, would you tell me how concretely, in the field, in a small village of 300, we can interest young people. I repeat that the money issue is very important but it seems to me that in order to find a solution which could be permanent, something else would be needed. I would like to hear you say so. Thank you.
[English]
Mr. Fuller: What you ask is a very profound, serious, and problematic question for which, of course, there's no simple or known answer. The community of rural scholars in Canada has searched far and wide for at least a partial answer to the question of retaining young people in rural areas and providing what used to be referred to in Canada as the stay option.
My response in part is that the first step has already been taken by the throne speech mention, which re-evaluates and puts front and centre rural Canada as an integral component of this society. It's the first time this has been mentioned in this way. That's the first step. We have to signal to rural Canadians that their lives and their towns and their communities are important and that the federal government, at least, is concerned about their welfare and their future.
So that's the very first statement and it's why I've promoted the idea of a national rural policy institute or some such vehicle, which would also be a visible, high-profile unit, to continue to support this expression of interest in rural Canadians. For far too long all the signals to rural young people have been that the jobs, the high life, the future, and the opportunities lie in our cities. We have a declared urban, industrial policy since the Second World War in Canada. This is the first time I've seen anything that relates to rural being important.
Now I would hope this committee can find some ways to support this and to put into place some further mechanisms and institutions, which won't cost the taxpayers lots of money but will take advantage of all those people who are interested in the future of rural Canada.
For example, I teach young people rural planning and development in Canadian terms. These people receive no encouragement that rural Canada matters. They are being trained to go into rural areas with no sense of security, no sense that there is any research future, no sense of an overarching, caring mechanism for what they are going to do. It would be immensely important for me as a professor schooling 25 graduate students a year at the Master's level if there were some way to say that rural matters to our government, that our government cares and is trying to find solutions to the questions you raise.
[Translation]
Mr. Canuel: You may well speak about an institute, here in the Natural Resources sector, we have cut 60 % of the budget. We were doing something very beautiful in forestry in Eastern Quebec. We have just been cut six millions dollars a year. This means that the government doesn't believe in it. And if the government doesn't believe in it, you will almost preach in the wilderness.
.1145
There must be a will on a part of the government. Where it doesn't exist, it is no use to put great principles forward. We have to make this government aware that there are opportunities for those young people but that some help will also be necessary. I was saying that help is not everything, and it is true, because there must be an underlying attitude. But one thing remains: help is necessary, particularly for young people. What will result from the establishment of an institute without any help?
[English]
Mr. Stabler: I think the way to approach the question is to look at the context in which the rural evolution is taking place. All our production processes are high tech. They're going to become more high tech. The overheads that show commodity exports could just as well have been labelled ``technology exports''.
No production processes are based upon the manual labour that created the communities of300 people, 50 or 75 or 100 years ago. There aren't going to be in the future, either.
The way to look at this is to ask which of the regional communities that serve the role the home town once served are capable of housing rural activity and try to match those up. Places of 5,000 population and up, if they're well situated, will fall into this category. That is the best way to sustain as much in rural Canada as is possible to sustain in a free trade environment in which technology is driving our production processes and in which there are not going to be any more government budget surpluses. The 300-community towns may, by happenstance, be saved by a resource development or a tourist development, one or two out of hundreds, but as a group, they're gone.
The Chairman: Mr. Rounds.
Mr. Rounds: I'd look at this a little differently. First of all, the biggest problem I see with the young people - and I deal with them regularly; I'm talking about high school kids and lower - is the negative attitudes imparted to them by their parents, who haven't done anything but gripe about the rural economy their entire lives. So when you ask how we can instil hope in youth, I think we have to get the parents to understand they do that. It's not something you can do from the top.
The way this has been approached has been to go to the grass roots. Traditional rural development has been top-down for decades, driven by federal-provincial governments. There was very little involvement at the municipal level. The offloading of these responsibilities that is occurring now because of the fiscal restraints you mentioned is saying ``it works if you do it, so you do it''. But the financial resources are not put there to help the process to any great extent, because we also tell them they have to raise the money.
Secondly, you're dealing with a group of rural people who haven't played this game before. We expect them to be entrepreneurial when they have never been asked to do that. So human resource training is missing there.
When I go into every rural community in the prairies now - and almost all of them have a round table on economic development - I almost never see young people at the table. The communities must be told to get the kids involved when they're young. Then they can develop their own hope within that.
The truth of the matter is that the major driving federal policies are going to be trade agreements. That's the level at which you work internationally, and that's a federal responsibility. These are urban-based things. The rural economy, if anything, is going to have to look at working within itself to generate the economy there. Then the major industries, such as agriculture, forestry, and mining, will be in the top-tier, NAFTA-type trade things. But in the rest of the rural economy most of the jobs you're talking about for young people are going to have to be regionally developed.
I agree with Jack that just as small farms had to go first, small communities will go first. We have to develop viable regional centres to keep young people within the region as opposed to within a given place within it.
The Chairman: Mr. Stinson.
Mr. Stinson (Okanagan - Shuswap): I have a number of questions, pretty well for anybody. My first one is how much effect do interprovincial trade barriers have on rural development, particularly in the farming areas, with the taking away of the Crow rate and such things? How much effect did that have on the farming communities?
Also, being from a background of ranching and farming for many years, I know nature itself plays a big part in some of the hazards we face when we go out there. Take water, for example. How much of a part does lack of water play in whether or not people are going to go ahead with any kind of a development in the rural areas? There are also many phases of government overlap in rules and regulations when you go ahead and decide to make an investment in areas, especially in the rural area where your population basis is not quite the same if you were going to go into Toronto and you know you can't compete when you get into the rural areas. There's also that problem.
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I would like to touch briefly on the part about setting up the institutes. I don't know really if I'm sold on that idea of it being a federal responsibility or if it should be a provincial responsibility, because every province has different problems when it comes to rural development. Our terrain is quite different, say, between northern Ontario and the flat lands of Saskatchewan.
We know we will have to become very competitive on the world market in order to compete. This will create many more problems as we come more on stream, as we go into this. So taxes I know are going to also help form your opinion about where you want to go into this market. I know it's quite extensive, but I would like to get answers on some of these questions in order to get an idea of what interference you think the federal government is doing basically that maybe they shouldn't be doing and we should step out of, or where we could give a hand in a different way from what we have been doing. I think this is a way of life we can't afford to lose.
The Chairman: Gentlemen, maybe you'd all like to take a stab at that.
Mr. Stabler.
Mr. Stabler: You raise so many points. Maybe I'll respond to some of them. I suppose really if you look at it, one of the biggest impediments to rural development occasioned by federal policies has to do with the monetary policy. The high interest rates that are necessary because of the debt that has been accumulated inadvertently or unintentionally inhibit rural development, which often tends to be capital intensive, and the higher the interest rate the less profitable capital-intensive activities are.
I would say that probably the single best stimulus to the rural economy would be to bring the debt under control and get the interest rate down. That would be far more useful than any tinkering at the margin.
The Chairman: Mr. Rounds.
Mr. Rounds: The interprovincial trade barriers are quite serious, depending on the industry you're dealing with. We did a study on value-added industry opportunities and barriers, and most industries, most industry people, especially in food processing, said interprovincial are more problematic than international barriers. It would be more difficult for Manitoba to trade with Saskatchewan than it is with Minnesota, in many cases.
One area where you might get after that from a federal point of view is that you have for instance federal and provincial meat inspection differences, which create all kinds of havoc. You can create a perogy in Manitoba and sell it in Saskatchewan if it has cheese in it, but if it has any meat in at all you can't because of the different... You talk about niche markets, small and medium enterprises niche market serving. Your niche markets are extremely limited by that kind of restriction.
You'll find a great debate on the prairies, about 50-50 I believe, on whether we should have federal marketing boards for commodities. Depending on which audience you speak to, you'll get shot no matter what you say. So it's up in the air as to what is best there. That would be something the federal government might be able to look at.
Mr. Stinson: We hear lots of talk, and it's always a fear thing thrown out there, about our trading in water commodities. I've always been quite open to the possibility that maybe we were looking at the wrong thing here. Maybe if we could put some water down in the prairies it might help. If we look along those lines in regard to the farming end of it, is water a problem down there? I'd like your opinion on this.
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Mr. Stabler: The truth of the matter is that most irrigation projects never repay the capital invested in the projects in the first place. They've been built for a variety of reasons, and one of the side effects has been irrigated agriculture. Once they're built, of course, then irrigated agriculture finds a market. But if you are looking for a return on investment, irrigated agriculture is not a place to put your money.
Mr. Rounds: Water itself is probably more valuable than the commodities that people grow by irrigating.
The Chairman: Mr. Fuller.
Mr. Fuller: I have one comment. I'll leave the interprovincial question.
In a period of time when we want to downsize government, get the debt under control, put more responsibility in the hands of local and regional authorities, agencies and the people - and we would support that wholeheartedly - it therefore seems a contradiction to call for a national guiding mechanism for research, discussion and debate. I think that the regional agencies, regional institutes, are already in place, more or less. Like many rural areas, they are relatively small; they serve their region and know about their region very well, but there isn't an overarching guiding integrating place where all the information, ideas and experience gets pooled and discussed and hopefully turned into positive opportunities for development across the country. I don't feel that one is taking away anything from the move to decentralize to downsize and reach the people more effectively. I think those mechanisms in the last five years have come into place more and more, although not fully yet.
When we started in 1987-89 as a group of researchers, when my two colleagues and those in the audience came together, there was hardly anything in rural Canada to take a look at the local economy, or the economic situation, or social consequences of restructuring or anything else. Many of those institutions have come into place, locally and regionally.
What we lack is leadership from this level, the national leadership, and an ability to speak with other nations about the issues they have discovered or are looking at. For example, the rural youth issue is a major issue in both the United States and in Europe. We need to be hearing from them. How does a small rural institute dialogue with major institutes in Europe without some facilitation, some way of supporting that interaction? That's what I'm getting at.
The Chairman: A brief follow-up, Mr. Stinson.
Mr. Stinson: The reason I mentioned this is that in British Columbia, where I'm from, the government started out a few years ago setting in what were called green spaces, where you could farm, where you could develop and where you couldn't. Unfortunately, it was taken out of the regions' hands. We have many places out there that could be developed, but because they're locked in - and I'm talking about hillsides that grow nothing but rock and mosquitoes - you definitely can't farm it or anything else. They're locked into that so they cannot be taken out and developed until you go through a long process of trying to get this out. It concerns me if we want to take it away from the regional areas and put it into government's hands, what government can do.
Thank you.
The Chairman: Mr. Wood.
Mr. Wood (Nipissing): Mr. Chairman, I think Mr. Stabler has entered this from his point of view. I would like to find out the other two gentlemen's point of view, especially Mr. Fuller, who says he's been in the business a long time and has probably done a great job.
I wondered, Mr. Fuller, what can the federal government do best to help stimulate the rural economy? Would you say it would be tax incentives or infrastructure improvements or reducing the regulatory burden? We're going to be at this for a while, and I wondered whether you thought the committee should focus its efforts on one particular area.
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Mr. Rounds: There have been a lot of training programs. I've talked recently with your human resource development people in the prairie regions. They don't think the training programs are functioning very well, so there's been a massive change in that.
First of all, they've gone to community control as opposed to a bureaucratic control of those training programs. They're now leaning towards general education as opposed to training, because the job market is very flexible. We hear things like everybody is going to have five jobs in a lifetime now instead of the one we have had traditionally in our generation. That being so, a general educational level is more functional for rural people to be able to stay and find something to do.
That may be one approach. I agree with what Jack said as well, that the interest rates and stuff really retard investments, but from the human resource point of view, general education... This is not the kids. The kids are graduating from high school and leaving; that's the brain drain. This is the adult population that has stayed, that never had a good formal education, that can use the modern technology they need.
Mr. Fuller: Well, it's another imponderable question.
I also have a comment, however, on the job training experience to this point, both in North America and in Europe. The job training success stories are limited for rural areas in particular.
What would seem to be important is to have confidence in the observation that small business starts - and I mean businesses in the range of fewer than five employees - are much more prolific than large infrastructural types of employment opportunities, which are short-term and can't be sustained. If we include the word sustainability, then smaller business starts seem to have a longer life and are more sustainable. They're also quite naturalistic and don't require a large amount of capital.
So I think one of the lessons for rural futures is to mobilize our resources in such a way that small business is an acceptable and positive prospect for small towns with relatively small economies. We're not going to be able to wave the wand from here with multi-million-dollar infrastructural type initiatives or job training type initiatives that will have lots and lots of pay-off. We must be content with small-scale pay-off at the local level, which in the long run is likely to be much more sustainable because it didn't get started on soft dollars or money that would be taken away and so forth.
Here the attitudes of all of us, the policymakers, the academics, the banks, etc., have to change. The banks are not much interested in small credit loans and even our own development banks in rural areas aren't very interested in small business starts.
There's a lot of information coming from northern Europe, from the Scandinavian countries, which, let's face it, are similar to our own in the fact that they have a major seasonal variation to contend with in sustaining their economies.
There's lots and lots of population turnaround, which means people going back to rural areas. I don't believe it's all coming out of rural areas. It may be in the areas that have been described to you this morning in western Canada, I'm not sure, but in other parts of Canada there's a sufficient number of people moving back to rural areas. They're not moving back because the roads are good. They're moving back because the schools are positive and there are lots of different things they can do. They're moving back for lifestyle reasons.
In general, many of them start small businesses that are entrepreneurial and then they create jobs for other people in the local community. That's much more sustainable than trying to find a single solution at the top level of one major initiative that is going to have a major pay-off. Happily it would be a major political pay-off, but it's just very unlikely.
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Mr. Wood: Mr. Rounds, do you see that happening? You were talking about the young people you meet and talk to. Do you see what Mr. Fuller was saying was happening around the Brandon area, where you're from in Manitoba?
Mr. Rounds: Not strongly.
I wanted to follow up on that.
Mr. Wood: I know you did.
Mr. Rounds: One extremely important thing we haven't talked about that you could do is put in federal-provincial agreements everywhere on the rural development side, the economic development side...coordinate the federal-provincial levels on all of their services. There's a lot of overlap, duplication, confusion and, to be quite honest, turf wars and competition among these groups.
The Chairman: It's hard to believe.
Mr. Rounds: That's why when you do a review of Community Futures, which was done, about half of them work very well and half of them don't. Where the half of them don't, it's usually because the provincial one is stronger for some reason and does work.
If you were to coordinate the federal-provincial levels and put in a component that is totally missing in the rural area, which is marketing... The Incos and the pools don't need marketing assistance. They have dealt with their deals for years. But there is no marketing assistance for small and medium enterprises in rural areas.
They say go find a niche. But what does a niche mean to somebody in rural Saskatchewan? It's a small market, but they can't find that small market by themselves. That would be a very useful thing.
In other words, if Community Futures and the provincial groups got together and coordinated efforts and added a marketer, just that single component would really help the situation.
Mr. Wood: I have one question for Mr. Stabler. I was a little concerned about your stats. You had one from 1984, and I didn't see any update. In a lot of cases you're doing 1991 figures on the labour force, the farms, and things like that. I just wonder if there is not any more up-to-date material than that from 1991. Surely things have changed. We're into 1995. Four or five years have passed.
How accurate are those figures you're giving us? We'd like to know because there's a possibility we could be doing some travelling later on, and we're going to be going into western Canada. Have they changed significantly from 1991?
Mr. Stabler: There were two questions being raised here. One is the availability of comprehensive data. This comes from the census. These are special tabulations, incidentally. They don't come from the material that StatsCan routinely makes public. In creating those overheads, we probably spent $50,000 on special tabulations from StatsCan.
Their next shot will be an abbreviated form based on 1986. There are other data sources, but there's no comprehensive data source like that produced by Statistics Canada.
What I've tried to show in those overheads are trends that are pervasive and long term. If you project a trajectory to today, you won't miss it by a whole lot. Of those 600 communities we talked about, I've probably been in 300 of them over the last five years...and 100 factories and 50 farms and so forth. I don't see a change from the trajectory that those numbers show.
I'd like to comment on a couple of other points my colleagues raised. The reverse migration that Tony mentioned is occurring, of course, but it's very selective. It's going into towns that are medium-sized. They're not going into small communities, by and large. They're going into communities where, as he says, the school system has something to commend itself on. You also have adequate infrastructure in other regards.
A place that has some natural physical attractiveness, of course, is far preferable to a remote community on the shield or a little hamlet out in the middle of 50 million acres of wheat. So it's very selective. It is occurring, but it's certainly not going to have an impact on the trend, as that involves all communities.
Also, I'd like to comment on capital availability. First, I don't think there's a shortage of funds available for investment in rural or urban Canada. Secondly, a lot of loans get turned down in rural Canada, and quite so. There are a lot of reasons for that. Typically, the enterprises are often very risky, and the people who want to borrow the money very often come with no equity of their own they can put up. They very often come with an incoherent business plan. If you were sitting on the board of a bank, you would be very irresponsible to approve those loans.
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What may be required, as Dick was mentioning, is an upgrading of the education of those who come with these ill-prepared business plans, and maybe even some specific help in preparing the business plans.
When you actually look at who's creating the new factories in the rural economy... In Saskatchewan 50% of the new manufacturing firms created over the last 10 years have been created outside of Saskatoon and Regina. About 90% of those factories have been created by people who've worked for 10, 15, or 20 years in Ontario, Alberta, British Columbia and in the United States, Japan and China, or somewhere else. They decide they want to go back to Nipawin and create for themselves a way to live there. So they bring back really good expertise. They also bring back some money to put into the equity of that plant. They have absolutely no trouble getting loans from banks, credit unions and whoever else has funds available.
The Chairman: Mrs. Cowling.
Mrs. Cowling (Dauphin - Swan River): Thank you, Mr. Chairman.
Because we do believe we will be travelling, hopefully, this fall, my first question relates to education and youth. I don't know if we have a list of participants at this point, but when you talk about the fact that young people are never at the table, what would you recommend to this committee? Are there groups of young people out there? Should we be going into the schools in rural Canada to listen to these young people?
Perhaps I might go to the map, Mr. Chairman, because I think for the benefit of my colleagues and for the witnesses I should show you exactly what has happened. I hope we can go into that area, because we have the national forest capital there.
This is my riding of Dauphin - Swan River. It's up here. What has happened to that riding is I am going to inherit two larger urban centres. This somewhat changes the focus of the people I'm going to be addressing. So my question to the witnesses is how we can best service those people in those areas that we're not going to be able to service because we're inheriting larger urban centres. That not only pertains to myself, but it also pertains to the service sector out there.
My riding takes up probably over half the province of Manitoba. It's a large geographical riding. It takes me eight and a half hours to go from one corner of that riding to the other corner. It will now take me over ten to twelve hours to service that.
I think this question is extremely important because it clearly demonstrates what is happening to rural Canada. And it's happening right in that particular riding.
You might want to expand on that, Dick, with the minus-60 and minus-40 population base. How do we revitalize this and provide some sustainability in that particular part of the country?
Mr. Rounds: I really wish I had that answer, Marlene, but I don't. I think it's almost like triage in a war, where you just have to sort through. Jack has already told you a lot of them are gone. You have to stop the bleeding first. To me, that means we have to stabilize those populations where they are now. We can't even look for a reversal. We have to stabilize first.
The difficulty that's coming there is in the restructuring in everything else, including government. There was decentralization in Manitoba seven years ago. With the downsizing there is now recentralization, and it's all going right back to Winnipeg. School districts are redistricting, hospital districts are redistricting.
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When you look at rural communities, they're not just farmers. They're teachers, they're nurses, they're government people and business people.
I think government, if it's going to have to downsize, has to be very cautious about where it does that and where it recentralizes. That's a role where you may have some control. In other words, if you have a choice between keeping a job rural and putting it back urban, even if it's a little less efficient, although the Internet should do a lot to offset that, modern telecommunications - it's always preached but it's not always practised - that may be one way you can start stabilizing those populations.
I don't have the overall answer, because there are only two things you could really do to reverse rural Canada in the west. You could pass a law that no farmer could farm more than 300 hectares and you could pass a law that nobody can move. I'm serious.
Mrs. Cowling: My other question was on young people. What recommendation would you make? Is there a group of young people out there we should be listening to and bringing forward to this committee?
Mr. Rounds: General education is not the answer. In other words, putting something into the high school at a social studies level is not the answer.
There are some answers out there. There's a really good case study out of the state of Iowa where several small communities that had credit unions made a shadow board of high school kids. It's not a lecture, it's a program where they set up a credit union board with young people. They gave them x thousands of dollars to start summer businesses for student employment. In other words, it was just a little mirror of the credit union itself. It taught them entrepreneurism. It taught them responsibility. They had to make good loans. They had to set up the criteria. That works.
There's another thing, the junior achievement type of program, where students in the high school actually form teams and compete with other high schools in fictitious games of investment. That's very popular and growing. Two years ago there were seven of those in Manitoba. This year there were 67 rural junior achievement programs.
Things like those are more important than a ``you should really like it out here and stay here'' approach. In other words, one should really work with the young people.
The Chairman: Mr. Fuller.
Mr. Fuller: I have a comment on the youth issue, and it relates to the earlier questions. It's based on a hunch. I'm out on a limb with my colleagues here, because research is not supposed to go on hunches. It stems from two sources of information. One is that I'm on the local round table for the environment and the economy, and we do have three school children on that and they're very active. Then I have a student just back from Sweden who has looked at the Agenda 21 communities in one very large county. His first observation about these Agenda 21 committees in small towns in central and northern Sweden is that the energy and the steering of them are largely coming from young people.
If we put that together to form the hunch that environmental things perhaps appeal to young people more than they do to working adults and the local municipal fathers, who see it as sometimes a bit of a problem to accommodate the environmental controls and environmental sorts of things... But young people are very enthusiastic about saving the planet and so forth. There are some very interesting programs in place in different parts of the world, things that specifically target young people to get them involved in environmental clean-up or environmental education and to be the force and energy in small communities to get things done around environmental goods, which can actually be goods-producing - not just a matter of cleaning the river and doing those dog-work things but actually getting into the environmental business side of things, with their engineering skills and their practical skills.
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Rural people, rural youth, are often very highly practical. Everybody on the male side wants to drive a big rig and so forth. If this could be driven through environmental goods manufacturing, local manufacturing, small-scale manufacturing, with capital for young people, then in the future that might be a growth area and one way to interest and bring larger numbers of young people to take a responsible role in their communities.
The Chairman: Thank you very much.
Mrs. Cowling: I have one more question and it's with respect to value added in rural areas of the country.
We tend to build on the fringes of urban centres. I'm wondering what your thoughts are on value added being where the source is and close to water and that type of thing. What are your thoughts? Should we be doing it closer to the urban centre or should it be right in the rural centre itself? What are the benefits, and how would you think that out?
Mr. Rounds: I'll take a part stab at that. The value-added study we did taught me things I'd never thought I'd learn: that you can ship a live cow from Manitoba to Edmonton, slaughter it, cut it in half, freeze it and ship it back cheaper than you can kill it in Manitoba. Transportation is almost a nil cost within that entire process now.
To answer your question, the only advantage to keeping it rural is to keep the jobs rural. There's probably no real natural advantage in most of these processing plants to be rural over urban. There are some exceptions, potatoes at Carberry. It's a very heavy product that's grown right there, so you might as well process it right there.
As you noticed, all the value-added opportunities in pork disappeared last week when Schneiders put a plant of 300 people smack dab in downtown Winnipeg again. That virtually eliminated it. But that's where the industry is. Eighty-five percent of value-added agrifood processing in Manitoba is inside Winnipeg. It has been and probably always will be.
If there's a high-value, heavy product that needs to be processed near source or needs a particular resource like water, then you might get the rural value added. Otherwise, it's going to stay urban where it is in Canada now.
The Chairman: Mr. Reed.
Mr. Reed (Halton - Peel): Thank you, Mr. Chairman.
My colleague, Bob Wood, mentioned Tony Fuller's long-time involvement in this subject we're dealing with. I think, Tony, the last time you and I communicated with each other, neither one of us wore glasses and we probably both had more hair. I welcome you. It's very refreshing to know that you're bringing a tremendous wealth of experience here, as I know our other witnesses are.
The things that have jumped out at me in the last while since we have been looking at this are the words ``education'' and ``infrastructure'', and today the word ``entrepreneurship'' comes into the thing.
Education and infrastructure at this particular time seem to me to be very much intertwined, yet the communication infrastructure in some parts of Canada is still so weak that rural Canada cannot connect and cannot get on the Internet and so on. So those possibilities for remote education are still not available to rural Canadians. I really feel that is a serious weakness.
The obvious concern has been expressed that those people who are left in an emptying part of rural Canada were products of a time when lower technology served them reasonably well, but now we are moving into an era when the educational and skills requirements are much higher. Of course we're always wrestling with this problem of who falls into the cracks in this process. The new economy is serving people with advanced skills and so on. Many people who have come out of the old economy will not find work in the future. This concerns me.
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In terms of entrepreneurship, if you're between the ages of about 25 and 40 you were taught, at least in Ontario, in a school system that placed no value on entrepreneurship. You were taught by a bunch of socialists. I have a family to prove it. They had to teach themselves or go on to advanced studies to learn entrepreneurship so that they could do what they're doing now.
I don't know what the situation is in secondary school in Ontario now. I've been away from it for quite a while and so have my children. I hope very much that this has changed, but it created a large hole so that the desire to be self-sufficient and self-employed was to a large extent missing. Perhaps that's one of the things we have to address.
Mr. Stinson brought up the regulatory process. Anybody who has not been directly involved in interfacing with government in an entrepreneurial way might not be sensitive to the regulatory process and what it does. But in parts of this country it is the most inhibiting single factor, especially where we have entrepreneurial possibilities that are environmentally sustainable. They're good stuff.
Investment up until recently has tended to become more and more centralized, and I'm thinking of utilities supplying electric power, for instance. In parts of rural Canada there are still a lot of places where that investment can be diversified into rural Canada, but it was discouraged and now continues to be discouraged by a regulatory process that is smothering, to say the least. I speak from personal experience.
I've unloaded a bit here. Is there any kind of formula we can look at, containing some of these points and concerns, that would allow us to...? Tony, maybe your rural policy institute idea is one of those things. But where can they be identified, and where can we as a government hopefully provide some leadership in physically dealing with them?
Mr. Rounds: Regulation is a can of worms. When the public interest is served, you really have a responsibility to regulate to protect the resource, the sustainability aspect of it. The competitiveness of international trade drives companies to short-term profits and short-term projections, which is totally against that. You really have to be careful if you try to deregulate the public trust, the public good you're dealing with. That's when you have to regulate.
When you do deregulate, dangers are involved. Telecommunications is one of the classic examples, where companies other than the provincially-owned ones, telephone companies as an example, were allowed to compete on long-distance. That's the lucrative part of the market. But if they got 25% of the long-distance market, they weren't required to pick up 20% of the high-cost local service. They just took the gravy and left all the junk to the local utility, which now has to jack up rural rates to be competitive. Yet some of these big international companies don't have a single employee outside the city of Winnipeg in my province, not one.
You see, that's where deregulation really hurts the rural areas selectively. Why? So that the urban areas can be more competitive in international marketing. There's a policy of deregulation that everybody says they like, except they don't see its impact in the rural areas.
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Mr. Reed: I wonder if what I'm hearing is that regulation and deregulation should be looked on less generally and more specifically, more site-specifically.
Mr. Rounds: That's exactly what you're hearing, because for example the interprovincial trade barriers are regulations, and they should be removed. There's no reason to keep them.
Mr. Reed: Right.
Mr. Rounds: Like I said, there are examples where they're good, where they're bad, when they're indifferent, where they're selective and where their impact is rural versus urban. I think you're right; I hate the whole concept of generalizing, saying ``deregulation is wonderful'', just as much as I hate the idea that everything has to be regulated. I think you really have to be specific.
The Chairman: Mr. Fuller, do you have a comment on that?
Mr. Fuller: Yes. Just more of the same, really. It fits in with my work as a professor in rural planning. Planning itself has become confounding, often, in terms of rural development. There are so many small regulatory constraints for generating business on farms or in the rural areas, in rural municipalities. For small rural municipalities that's their main instrument of power, to exercise regulatory control over one or two things. It really is a difficult issue. In this climate where rural development initiatives are legion, there are lots and lots of different ideas that people actually have, but they inevitably run into a bunch of regulations sooner or later.
I've dealt with developing rural tourism in small towns. You can't have a bed and breakfast on your farm for insurance purposes, for zoning purposes, for health reasons. You have to have 15 different inspections just to get a bed and breakfast set up on your farm, whereas in Europe, as long as it's safe and sound and somebody comes to sort of check it over once - one person does the whole ticket for a gîte in France - then you're on your way. There is some really vibrant rural enterprise based on farm tourism. That's just one little example I've run into.
Dealing with senior citizens... The health and other regulations around getting small service for seniors is stultifying for small entrepreneurs or even NGOs, voluntary groups who just want to do something to improve the environment for their seniors, and so on and so forth.
It tends to be at the local level that these regulations are applied. They're moribund. They're from the past. They were put in place for good reason somewhere in the past - to protect farm land or whatever, to protect people - but they end up in terms of entrepreneurialism being very awkward and very difficult. I think a thorough examination of this at the local level, with some good cases of how one can maintain equity and care of the population and the public good, as Richard has pointed out, would allow further innovation with the resources we have.
You can't use a barn, for example, for a workshop, legally. People do, until something goes wrong. There are all sorts of constraints, whereas if you go to any barn in a European country, they're an asset. People are buying farms because they've got a nice big barn already sitting there that they can turn into a workshop of some sort or a teahouse or one of these sorts of things. It's unthinkable in parts of our rural environment to do that sort of thing.
The Chairman: Thank you, Mr. Fuller.
Mr. Bélair.
Mr. Bélair (Cochrane - Superior): Thank you, Mr. Chairman. I do not have time to listen to the comments or to the answers to the questions I would have had, but through you, Mr. Chairman, may I ask that the two questions I have be answered in writing for you to distribute afterwards?
The Chairman: Do you mean you have to leave, Mr. Bélair?
Mr. Bélair: Yes. I have another meeting at one o'clock, and I would like to swallow a sandwich between now and then.
The Chairman: Okay. Put your questions on the record.
Mr. Bélair: Yes, okay.
First, given that we are dealing with academics and intellectuals, I would like to have their comments, thoughts and reflections on the impact of the devolution of powers. We are all aware that on Thursday and Friday there will be a first ministerial conference where six different powers that have been shared between the federal and the provincial governments will be handed over to the provinces, and just about all of them are of a rural nature - forestry, mining, social housing, environment. They all have an impact on rural Canada, so I would really like to have their thoughts on that.
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The second one, and Mr. Rounds alluded to it very briefly, has to do with reinstilling pride into rural Canadians, in the sense that there should be some tool provided not only for the marketing of the goods and the products that are being produced in rural Canada, but to make urban people aware of the extreme value of our production.
Just a few examples: pulp and paper, the paper we write on, is all produced in rural Canada; it's not produced in Winnipeg and in Toronto. Softwood lumber, all the metals that come out of the mines - it's those things that...
There is an education process that should be done. I would like to have the witnesses' thoughts and comments on how the federal government could be instrumental in reinstilling that pride into rural Canadians and making the other ones understand our contribution and value to this country.
Thank you.
The Chairman: Gentlemen, if you are able to make some sort of written submission onMr. Bélair's points, I'm sure the committee would appreciate that.
I know I have a couple of questions to wrap up, but first, Mr. Stinson, did you have a brief follow-up question you wanted to ask?
Mr. Stinson: Yes, just a brief follow-up question.
Being from a rural area, and knowing what's going on in B.C., and it was just touched on briefly here, lack of land tenure in regard to rural development has a big impact on anybody going ahead in the rural areas, so I presume it has to be a problem everywhere else.
Mr. Rounds: In the northern Manitoba and northern Saskatchewan areas where there are unsettled land claims it's stopping everything, from further mining exploration to forestry. There are some real confrontations coming because a lot of land was allocated before things got feisty, and they're being blocked from cutting, so they're threatening the future of that industry. And in tourism, there are people with millions of dollars who want to develop northern fishing lodges and are just afraid to put that $1 million or $2 million in there and not know who the owner is going to be two years from now. In other words, is their lease any good on that crown land - that's the issue, and it touches every facet of economic development.
Mr. Stinson: We're having problems right in our own area, with tourists saying they will not travel in the area because they don't know if they're going to get caught behind the road blockades, or what's going to happen. We've had all kinds of situations arise out in my area, and it is definitely impacting upon the business people there.
The Chairman: Thank you.
I've got a couple of comments and a question. Some of the testimony we've heard from other groups before this committee - and building a little bit along some of your opening comments - was that we should be looking at the possibility of having a senior cabinet position, a cabinet minister responsible for rural development, that can cut horizontally across departmental lines and marshal resources specifically for rural Canada. Do you see any validity in that suggestion, or dangers, or whatever?
I'll ask Mr. Rounds to start, and ask the other two as well.
Mr. Rounds: Many years ago I was one of the people who strongly advocated the Rural Secretariat, which now exists. I think I probably would have preferred it as independent rather than sectoral, but that may be what you're talking about right now.
Yes, I see an advantage to that. As in the example I just gave you about the telephone system differentially impacting the rural, a kind of policy screen needs to be there, so that with everything that comes before Parliament somebody is there asking what its rural impacts are. Rural members are in a great minority, so somebody has to be there saying wait a minute; it looks good here, but here is what's going to happen. So yes, I would support that.
The Chairman: Mr. Stabler.
Mr. Stabler: I support the idea, but I have some caveats. If there is to be a senior cabinet position, it should in no way be associated with Agriculture Canada or any of its subsidiaries like PFRA, etc., because their focus simply will not broaden to take into account what is meant by ``rural'' as apart from, or in addition to, agriculture.
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There is also the problem, of course, of creating a new position and a new department, or whatever. The experience of the Department of Regional Economic Expansion, for example, is illustrative of a bureaucracy parachuted into the midst of bureaucracies that have their supporters and contacts, and so forth. The creation of the position does not ensure its success.
The Chairman: Mr. Fuller.
Mr. Fuller: I would wholeheartedly endorse that proposition because it would require an intelligent system being created that would look potentially something like an institute, but largely to support Richard Rounds' main point, which is that every time a policy issue arises to change circumstances in Canada generally - and somebody has to be raising the question - what impact will this have on single-industry towns or resource communities, or whatever?
There has to be some mechanism for that question to be systematically asked and answered. It's no good asking the question if nobody has any information on which a decision can be made. The position needs support with an intelligence-generating unit of it as well, in my view.
The Chairman: Thank you, Mr. Fuller.
I want to describe four themes I've heard in listening to the testimony and the questions and answers. I'd ask the witnesses to speak up if you don't agree with any of those themes or if you think there's a major one missing.
If I understood it correctly, what's being suggested to us is that as a government we have to make sure we have our macro-economics right, such things as interest rates, debt control, and expenditure control. We need to increase markets through better and enhanced trade agreements. We need to maintain the critical masses in rural Canada through regional centres as opposed to perhaps the smallest individual communities. And we need to do research to allow communities to be able to self-develop.
Are there some additional themes, or are those themes it?
Mrs. Cowling: Young people.
The Chairman: Okay, add that. We need to energize young people into the process.
Are there additional themes, or do those five themes seem to hit it?
Mr. Rounds: The only one I would add, which might be in there somewhere, would be the fallacy of continuing a sectoral approach only.
The concept of the whole rural policy is not ungraspable; it can be done. We've already mentioned it. Entrepreneurism, education, human resource development - those are all part of the whole rural policy. If you approach it just from agriculture, forestry, mining, or fisheries, then you're going to have policies that favour those sectors, which, like I say, for successful agriculture could very well be a self-defeating rural policy.
The Chairman: Are there other comments? Mr. Fuller.
Mr. Fuller: I was hoping you might include the responsibility of the government demonstrating its leadership in whole rural policy.
The Chairman: So away from sectoral, take a whole rural policy, with the federal government taking a lead role in that.
Mr. Fuller: Yes.
The Chairman: Mr. Stabler.
Mr. Stabler: I think you've summarized very nicely the discussion as I've heard it.
The Chairman: Okay, thank you very much.
That will bring an end to our hearings. I'd like to thank you gentlemen very, very much. We appreciate your effort, your advice and your testimony. I think it has moved this committee's work forward substantially. Again, many thanks on behalf of the committee.
We stand adjourned until tomorrow at 3:30 p.m. Thank you.