[Recorded by Electronic Apparatus]
Monday, November 4, 1996
.0930 
[English]
The Chairman: Good morning, everybody. Welcome. I'd like to call this meeting to order.
Pursuant to Standing Order 108(2), the Standing Committee on Natural Resources is continuing its study on rural development. We're pleased to have the opportunity today to be in Amos to continue our examination by talking to local representatives in the communities.
This is the sixth meeting we are holding in this series. We'll be continuing on the rest of the week. The committee began its hearings last spring in Ottawa and had an opportunity to hear witnesses at the national level. We are now travelling to fill in some of the information we've heard from a national perspective with information from a local perspective. We want to hear about the specific challenges that are being faced in the various regions across the country.
I'm pleased to be here today. I'm pleased, Mr. Deshaies, that we're in your riding and having an opportunity to listen to your witnesses. Thank you very much for all of the work you've done for arranging this and in making sure we have a pleasant and effective day here. Thank you.
I call upon our first witness then, from UPA, Mr. Mongrain. I'll ask you, sir, to provide an opening statement. That will be followed by questions from the committee members.
[Translation]
Mr. Rosaire Mongrain (President, Abitibi-Témiscamingue Federation of the UPA): I didn't understand a thing, it was all in English.
Good morning, ladies and gentlemen. It is with great pleasure that I have accepted to bring you a message on behalf of agricultural producers on the federal government's role in developing agriculture in Quebec.
I am particularly gratified that the Standing Committee on Natural Resources is holding its hearing in the area where I live, where I carry out my production activities, the area whose economic and rural development is of particular concern to me.
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In this so-called outlying region of Quebec, natural resources, namely agriculture, forestry, mining and water, are to be found everywhere. In spite of its great wealth and its human resources, the region has not been successful in its economic development. Most of the companies exploiting the resources have their headquarters elsewhere, capital also comes from elsewhere and most of the time the profits are reinvested elsewhere.
This phenomenon does not apply in the case of agriculture. The owners of farm operations live in the country where they engage in farming. Their business activities also take place in the same economic environment. This also seems to apply to small and medium-sized processing companies that are in the process of development.
The activities of a farm operation generate six jobs, both direct and indirect. In the Abitibi-Témiscamingue area, this amounts to 1,900 jobs and a turnover of $66 million, in addition to 7,000 jobs and a turnover of $177 million in the regional agri-food sector.
We have by no means achieved our full agricultural potential. There are a number of factors influencing our development or underdevelopment in this field. The Canadian government has a great deal of influence over several of them, including research and development.
Everyone at the government, organization and business level, agrees that investment in research and development is essential to remain competitive both within Canada and in international markets. However, it is inconceivable for a farm operation to invest alone in this field. First of all, the return on capital investment does not cover the financial requirements of such an activity and the risk involved. Secondly, the results of such research must be shared with all other businesses, the survival of one being dependent on that of others. It is quite a different situation from pharmacology.
In a region such as ours, where agriculture has special characteristics and solutions, we receive money in dribs and drabs and research activity and the transfer of technology are extremely limited. However, in spite of the small resources, we have a number of achievements to our credit: the stack silo, the cold and solar cowshed, mole drainage, etc. We owe these achievements to the joint efforts of the Kapuskasing Experimental Farm, Agriculture and Agri-Food Canada and the Abitibi-Témiscamingue Agri-Food Research Council (CRAAT). Encouraging technological awareness, experimenting with what may be adaptable, implementing testing networks and discriminating the results, such is the original approach taken by CRAAT and its partners.
Without research and the transfer of technology, our region, with its fairly recent agricultural past, is doomed to underdevelopment. The government of Canada must invest in research and provide support for economic solutions such as those we have developed in our region.
Another area where the federal government can intervene with the provinces is in connection with meat packing seals. There are 11 seals in Canada. At a time when there's constant emphasis on the advantages of market globalization, only the "Canada seal of approval" allows for interprovincial trade in meat. This seal, designed for international trade, particularly with the United States, is so demanding that it does encourage the concentration of meat packing at the expense of both the regions and farm producers, to the detriment of market development in niches often occupied by SMEs.
In the agri-food sector, these SMEs most often develop in a rural setting. In this respect, Europe can serve us as an example.
At the present time a national committee is working on harmonizing these seals. This is not a recent concern. Pressure must be exercised to bring this work to a speedy and concrete conclusion.
Let me come back to the globalization of markets. During the recent GATT negotiations, the agricultural sector was included for the first time. There's no denying that this was necessary to deal with the problem of the excessive subsidization of grain exports. During those negotiations, and even today, our quota system is regularly called into question, in the case of milk, to give only one example. It's also claimed that consumers would benefit from the deregulation of this production.
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Let's take a few minutes to look at what is happening in the beef market. Beef production has never been regulated. In this sector of production, global markets have been in existence for a long time. Prices paid to producers have been fluctuating up and down and have never been good. At the present time they've reached their lowest level, and in the past three years have gone down $2.76 a pound carcass. Beef production operations are in such great financial difficulty that several of them will be unable to make it through this crisis. In spite of all this, there's been no perceptible difference for the consumer.
The law of the jungle in the commodities market is only to the advantage of the middleman between the producer and the consumer. And when there is no control, which is the case for beef among others, we often find ourselves faced with dumping. The federal government must do everything it can to protect and promote our collective marketing systems with their quotas and ensure, in the case of products for which there is no control mechanism, that those entering the country are not being sold at a dumping price.
Lastly, and inevitably, we must say a few words about the federal government's budget cutbacks. The farm community does realize that an effort must be made to put our public finances back on the right footing, whether in Quebec or in Canada. The farm and rural communities are willing to do their share, but the way in which the federal government is proceeding is seriously undermining our chances for recovery.
Let me give you a few statistics from an analysis done by the UPA of the Martin budget released in March 1995.
Between 1987-88 and 1996-97, the share of the federal budget allocated to agriculture went down from 3.5% to 1.2%. Between 1994-95 and 1997-98, agriculture has undergone cutbacks in the neighbourhood of 38%, when the average was 18.9% for federal departments. The term "disengagement" is very much of an understatement in these circumstances.
We must also understand the perverse effect of the removal of the Western grain transport subsidy which was a benefit to the region. For as long as the West has no choice but to develop animal production in order to consume its grains, our region, whose agriculture is based on animal raising, will be unable to compete with the West since we are unable to grow grain. Without massive intervention in land drainage, we can expect our agriculture to decline to the benefit of the West.
Is there any need to remind you that the GATT process is in effect and that Canada is among the OECD countries that provide the least amount of subsidies to agriculture, namely $81 US per hectare under cultivation, as compared to an average of $298 US for the OECD.
In conclusion, if your intention today is serious, if the government of Canada does sincerely wish to have rural Canada benefit from economic prosperity, it must stimulate and fund research and technology transfers in agriculture, harmonize meat packing seals, protect and promote quota systems for agricultural products, implement control measures to prevent dumping, review its method of applying budget cutbacks by measuring the consequences of particular choices on agriculture and the rural community, and at the same time ensure an equilibrium among the departments, and make an investment in drainage in an area such as ours.
Thank you once again for inviting us to appear. If you have any questions, I'd be happy to answer.
The Chairman: Thank you very much.
Mr. Deshaies.
Mr. Deshaies (Abitibi): Mr. Chairman, since most of the speakers are from my region and I'm quite familiar with most of the issues, I'd prefer to wait until the end and give more time to my colleagues.
The Chairman: Mr. Ringma.
Mr. Ringma (Nanaimo - Cowichan): The problem, Mr. Mongrain, is that on the one hand, people want control and on the other hand, they want government aid. I note that in the egg and dairy products market, which are well controlled, there are always counter arguments raised about there being too much control to the detriment of consumers.
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Even in the farm sector, we have had the Canadian Wheat Board in the West for decades now. Today we're hearing the same argument. Should the Canadian Wheat Board exercise control or should this power be removed? At the present time, in 1996, the answers vary. There are some people who are quite in favour of the control exercised by the Canadian Wheat Board whereas others say that we need more freedom. We want to do things our way.
I can understand your argument but I'd like you to clarify where exactly you would set the limit. Should the control be exercised by the federal government, the provincial government or by yourselves, or under some type of joint federal-provincial formula?
Mr. Mongrain: Let me take the example of the milk market. I'm more familiar with it since I've been involved in it for some time and I've also worked as the president of a union. If we look at world markets, we note that Canadian consumers do not pay any more for milk than elsewhere, they actually pay less, and producers receive a larger share of revenues.
In my view, the controls that have been implemented and the way in which this has been done has served everyone well so far. There have never been any controls in the beef market. We know that producers are in constant need of aid just to get by. In our particular case, because of our milk marketing system, we were able to get our proper share and make a living.
Our system has proved to be efficient and more advantageous for government since they are required to intervene less in milk production than in any other free production. If we're considering the possibility of exporting more, I don't think that Canadian milk producers would be opposed.
The way in which we've set up our quota system has enabled us to meet market demand. We've never put Canadians in a situation where they've had to go without the product. So up until now our system has proved to be a sound one.
The Chairman: Thank you.
[English]
Mrs. Cowling.
Mrs. Cowling (Dauphin - Swan River): Thank you, Mr. Chairman.
Having been the second vice-president of our mainstream farm organization in Manitoba and also the representative for western Canada to the Canadian Federation of Agriculture, I know and understand how important the UPA's role is in setting agricultural policy. So my questions are going to hinge on a federal perspective.
My first question is do you support a strong federal presence in agricultural programs? In your presentation you indicated a support - at least I felt that was what you were saying - for a strong federal presence in agricultural programs. I'm wondering if you could clarify that for the record. Do you support a strong federal presence within agricultural programs?
[Translation]
Mr. Mongrain: We must work together with the federal and provincial governments to come up with a farm program that is satisfactory to producers and one that they'll be able to live with.
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We are willing to feed the population of our country but producers must be given the chance to earn a decent living.
I mentioned that Canada was one of the countries that provided the least amount of subsidies to agriculture. I was not quoting figures out of the air but figures based on statistics we have. It's clear that the budget cuts made in the past few years to programs under GATT are hurting us. It would be easier for us to understand if it was the funding of marginal programs that was being slashed. We thought that these programs could have been maintained and even improved.
We support government intervention at the federal and provincial level when it is aimed at providing farm producers with a policy allowing them to earn a decent living.
[English]
Mrs. Cowling: Thank you.
My next question then leads to value added and diversification. I'm wondering if you think the federal government should be providing some sort of incentive so that value added can in fact happen in rural areas of the country.
[Translation]
Mr. Mongrain: I'd be tempted to answer yes, that it is certainly in the interest of everyone for us to have added value. In my opening comments I referred to Europe and I was thinking more particularly of certain areas of France we are somewhat familiar with, areas that have their own special characteristics and whose products have a significant added value. This makes it possible for the regions to undergo more development and provide the market with a somewhat distinctive product.
[English]
Mrs. Cowling: Just to follow up, what should the federal government be doing then to help value added? What would you ask this committee to send back to the federal government to help the value added and diversification to happen here?
[Translation]
Mr. Mongrain: It's a very difficult question. Governments should be able to become involved and support us with respect to added value. They could provide ad hoc grants covering a part of the expenses incurred by the FRAT group in relation to value added and the marketing of such products. Governments certainly do have a role to play in this area since no single promoter would be able to assume the expenses involved in adding value to a product and marketing it. If we want to develop the regions, we are going to have to give them this opportunity along with support. I don't know what precise form it would take but I'm sure that it would be necessary.
[English]
Mrs. Cowling: Thank you.
The Chairman: Mr. Reed.
Mr. Reed (Halton - Peel): Thank you, Mr. Chairman.
Mr. Mongrain, you mentioned the need for massive intervention in drainage. How big an area are we talking about?
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[Translation]
Mr. Mongrain: We're talking about approximately 37,000 hectares to be drained in the Abitibi-Témiscamingue area where there is practically no drainage being done. There is some in the Témiscamingue region but very little in Abitibi.
Our land has good potential with proper drainage. But as you probably know, poorly drained land is less productive because the nutritional elements are less acceptable to plants. So our yields are not as high and we are less competitive.
I mentioned that at the time when drainage programs were available, we were still in the process of clearing our land. When our region was in a position to begin underground drainage, the programs were no longer in existence. There weren't any more for the province although the remainder of the province did have time to benefit from them.
Ontario was also drained to a large extent through government assistance whereas we in the Abitibi-Témiscamingue region no longer had access to such programs when we were in a position to receive government assistance. That's why I think that the federal government should give us some help.
I mentioned that we were benefiting from the recently terminated Western grain subsidies. I imagine that producers in the West will turn to animal production to use up their grain in their own operation and have less transportation to pay. I can understand their point of view. However as far as we're concerned, we've always depended to some extent on Western grain being shipped in. It didn't cost as much because of the subsidy but now we've just lost it.
That's why we now need some assistance to adjust our farming practices so we can start growing grain. If our land were drained, we'd have an excellent yield. At the present time, there is hardly any land which is drained. It is a handicap and I think it's the responsibility of the government to give our farmers some help so that they can develop their land.
[English]
Mr. Reed: Has UPA looked at non-food agriculture production - that is, the production of fibre and so on instead of just concentrating specifically on food?
This year, for instance, the federal government passed legislation in the Senate and in the House of Commons that will allow the legal production of industrial hemp. Hemp, as you know, is a fibre crop and it is frost hardy, it can grow at latitudes that receive a certain amount of frost every month, etc. It appears that it is one of these non-food options that may turn out to be a very important crop in the immediate years to come. I wonder if UPA has considered any of those options for an area like this.
[Translation]
Mr. Mongrain: We have looked at some of these options. But I don't think that we have sufficient expertise to set out on such a course.
We're certainly open to any possibility available for the development of our region. I'm sure this is true for all those involved in the regional economy. Right now we are focusing on the possibilities that exist. If there are new ideas... We already gave some thought to cultivating canola. When I talk about drainage, I'm thinking of this type of crop.
.1000
But if you're talking about fibres, I think the possibility has been examined. Probably we didn't have enough reliable information to go on, but if there are opportunities available, we certainly won't turn them down. We are willing to look into any possibility that comes up for the development of our region.
[English]
Mr. Reed: I have one last question. You mentioned the need for the harmonization of seals. Could you explain in more detail how the present situation is affecting you?
[Translation]
Mr. Mongrain: The "Canada Approved" seals are expensive to administer. There are certain standards that have to be respected. We are not opposed to the standards, but the seals are expensive to administer. It's only the big companies that can afford to do so.
That is why all the small meat-packing plants we had were not able to survive. The bill was too high. If it is spread over a large number of heads of cattle, it works out to a small cost per head. The bill for small slaughterhouses, dealing with a small number of animals, is almost as high as for a large slaughterhouse. So the costs turned out to be prohibitive for the kind of plants we had here.
The "Quebec Approved" and probably the "Ontario Approved" seals - almost all of the provinces have them - don't cost as much, but they do not allow for the trade of meat outside provincial boundaries. If the "Canada Approved" seal authorized international trade, then it might make more sense to us. And if the "Quebec Approved" seal or any other provincial seal allowed for trade among provinces, SMEs wanting to develop in any particular region would not find themselves blocked.
[English]
The Chairman: I have one quick question. In other parts of the country one of the difficulties that has been described to us is the fact that our rural areas are becoming depopulated. Our young people are moving away to the cities and to larger centres. On the agricultural side, one of the reasons given for that is the inability for the intergenerational transfer of farms. In other words, the young people coming along cannot afford to take over the family farm. They don't have the necessary capital. They basically abandon them, and we see large landowners starting to accumulate a large number of farms. Is that a problem in this area? If it is, do you have any suggested solutions to it?
[Translation]
M. Mongrain: There's no doubt that farms today are not transferred the way they were 40 years ago. But it also points out that the reasons why we have such big farms are economic; that's what we need to make a living. Forty years ago when I started farming, an average farm had between 12 and 15 cows. Today, if I want to have a decent living with one of my children on the farm, we have to have 65 cows that must be milked in the morning and in the evening. If we didn't have that many, we wouldn't earn enough to live from farming.
That's why we've been driven to such extensive capitalization of our farms, and then it's difficult to sell them. I realize that in this way our rural regions are becoming depopulated. What we need are special programs to enable young people to buy back a farm. When a young person just out of school attempts to buy a farm worth $600,000 or $700,000, in normal conditions he will not get a loan from the finance company or credit institution he applies to. So, automatically our farms are broken up.
I don't have any solution for you today. All I can say is that we do have fears about this trend. We see how things are developing and we realize that we don't have a solution for the problem. We'll certainly have to come up with one because it is a serious problem. It's almost as if we are forcing young people to head to the city.
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But I don't have any solution. It'll be your job to come up with one.
The Chairman: Thank you.
Mr. Deshaies.
Mr. Deshaies: Mr. Mongrain, the subjects you raised are well known in the region. They are concrete problems. We know that lots of people have invested from out of their pockets to maintain the regional slaughterhouse. We tried to get the "Canada Approved" seal and it was difficult. We don't have enough production. There are other problems as well. Sometimes, farmers would send their animals to slaughter in Montreal because of transport problems.
At the present time, because of the free trade agreement, there is a limit to our exports of wood. We'll have to come up with ideas for other types of development and ways of increasing value added. Should the hog industry expand considering the problems it is experiencing in the south of the province? Hog exports bring lots of money to Canada. In this region, we have large tracts of fine land. Perhaps we could do with a bit of help to set up a hog industry and eliminate some of the problems occurring in the south, namely the spreading of liquid manure over large surfaces and the resulting pollution.
Do you think that the Témiscamingue area is ready to receive a large segment of this industry? And would we need some help to start it up?
Mr. Mongrain: I think that if some assistance were given to the starting up of hog production in this region, we would find room for it. Our countryside is certainly not as populated as the area around Saint-Hyacinthe, for example. As Bernard said, we do have room.
Furthermore, this is an area where we could grow grain. This is what we were saying when we were talking about underground drainage. A number of producers could cultivate grain crops and have them consumed directly on the farm. This would create jobs in our area and at the same time would diversify the economy.
Our regional economy is based on mining, forestry and to some extent on agriculture. Agriculture has a great potential that has never been developed. It's not only local promoters who can be involved, we should be able to mount some type of project with the governments. If it were possible to have assistance to develop certain types of production, I think there would be entrepreneurs able to make a go of it. We need government support to start new types of production in the region. The hog sector would be a new one for the Abitibi-Témiscamingue area.
[English]
The Chairman: Thank you very much, Mr. Mongrain. We very much appreciate you taking the time to provide us with testimony today. Thank you.
I'd like to call on our next witness to come forward. He is Mr. Harry McDougall, band chief and member of the Conseil de bande Abitibiwinni.
Welcome, Mr. McDougall. We'll ask you to make an opening statement and then we'll open it up for questions.
[Translation]
Chief Harry McDougall (Abitiwinni Band Council): Good morning. My name is Harry McDougall. I'd rather speak French since I'm more proficient in French which is my second language.
Pikogan is a small community some three kilometres north of Amos on highway 120, the road to James Bay. Eighty percent of the people in Pikogan speak Algonquin. French, English and Cree are also spoken.
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The municipality was set up in 1956 and the first houses were built in 1962. Thirty-five years later, Pikogan now has 120 single family dwellings as well as all the infrastructure and services.
Pikogan covers an area of 90.5 hectares, 60% of which is used for single family dwellings. Pikogan also signed a treaty referred to as Treaty no. 9. The numbered treaties go from Ontario to the West. However there was one group that was forgotten, the people in Pikogan. Previously they were called the Abitibi Dominion.
The treaty was signed in 1905 and came into effect around 1908. The present population of Pikogan is approximately 700, 450 of whom are permanent residents, the remaining 250 living off the reserve, most of them scattered throughout the Abitibi-Témiscamingue region.
According to the standards established for the population, our community would normally require a further 110 houses. There are 110 families waiting to come and live on the reserve but we cover quite a limited area. We don't even have 20 hectares left for residential construction.
Forty-eight percent of our population is under the age of 18. Sixty percent of the population is under the age of 30 and only 6% is over 50. So as you can see, we have a very young population.
Welfare recipients make up 42% of our members. We have a 26% unemployment rate and 32% work, according to the band council, which is the principal employer.
On the revenue side, for 1995, the band council spent $1,365,472 in wages for different jobs; $203,770 came from various allowances, for example under the James Bay Convention with the Cree and family allowances. Six hundred and fifty-six thousand dollars come from social assistance. This adds up to a total of $2,225,228. This money is spent outside of Pikogan since we do not have any infrastructure for commercial or industrial services.
In 1993-94, Pikogan began representations to have the reserve enlarged. For example, it addressed the federal government requesting enlargement of the residential area, and particularly space for economic development so as to attract future investors, particularly the Crees, who were asking us whether we had territory or land we were willing to lease. Other nations made the same request. When I use the term other nations, I include non-Aboriginals, namely the town of Amos, which is very nearby.
When you request the enlargement of a reserve, too many criteria are imposed, either by the federal government, or by the provincial and municipal governments, who also get involved here. Pikogan itself asks a lot of questions when other people need land, because it is too easy for the towns to access such land when they want to increase their area.
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We are encircled by the boundaries of the town of Amos. But where are the boundaries of Pikogan, our boundaries? They have not been set by us. They were established without our consent.
When we talk about economic development, that means first and foremost having access to a territory. There are millions and millions of dollars going out of our territory and we are not receiving any of that money. At least if we received a share of the profits made by forest or mining companies, the people concerned would be made aware of our position! We could then at least purchase surrounding land, but enlargement is very complicated and our resources are limited.
People then come and talk to us about partnership. We wonder what the term means for you. As far as we're concerned, the term means sharing resources, sharing land. I don't need to give a sermon on that subject, because we have been sharing our land for 400 years.
I have described Pikogan with its community weaknesses because these weaknesses constitute significant restrictions on our economic development. Consequently, the community will have to use its economic development strategy so as to minimize the adverse impact of such weaknesses.
There are titles of ownership on reserves. But like most communities in Quebec, the Abitibiwinni band holds no title of ownership over its land. Consequently, members are not able to acquire, on the reserve, titles of ownership which could be used as collateral when borrowing money. Therefore, Aboriginal developers have enormous difficulty in borrowing for business projects.
The lack of banking institutions on the reserves is a weakness in that the vast majority of personal, institutional and commercial financial transactions are conducted outside the community.
There are no economic or social spinoff benefits. The establishment of a banking service would in itself be a major step in improving community services.
There is also a shortage of equity. With the exception of Aboriginal developers, the community generally has a very small amount of personal savings which could be used for investment purposes. Therefore, there are many problems encountered with funding, and several projects have been postponed for that reason. The creation of a start-up fund would certainly help to resolve this problem.
There is also a shortage of businesses and services in the community, and as a result the residents have to obtain their supplies from outside the reserve, even for consumer goods such as food, clothes and gasoline. This situation leads to an outflow of capital and zero economic benefits.
As I mentioned earlier, there is also a shortage of commercial and industrial infrastructure, thus making it difficult for businesses to start up. There is a lack of organizations providing financial support. Unlike the situation in most large municipalities in Quebec, the Pikogan community has no financial support agency, such as economic development corporations or business self-help centres.
At present the community has only one person serving as an economic development officer, and his activities are relatively limited. The potential market is small. As the population and revenue of the community are relatively small, in-depth research will have to be conducted to identify economically feasible and viable business opportunities and projects which could meet the needs and expectations of the community.
There's also a lack of employment opportunities and skilled workers, such as electricians, mechanics and welders, because of the size of the village.
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I will conclude on that point. I would prefer to answer your questions rather than describe further the situation of the small community which I represent. Thank you for your attention.
The Chairman: Mr. Ringma.
Mr. Ringma: I think I have really understood your situation, as well as the shortages and problems faced by a young community such as yours.
In order to look in practical terms at the future, I would like to have more information. I know that you said you need more land, etc. But what percentage of people in the community wish to stay on a reserve and lead a traditional aboriginal life? That is my first question. What is the percentage and is it compatible with the land available to you?
Chief McDougall: About 10 percent of the people in our community follow traditional practices, going into the woods and living from trapping and hunting. But not all the community is in favour of the term "Indian reserve". That evokes the image of a ghetto. The population of Pikogan, which I represent here, would like to do away with the term "Indian reserve".
We would also like to have access to the territory on which we have lived and on which we live at present, to the natural resources being exploited by the mining and forest industries. As regards mining, since Pikogan was created, we have never been consulted. Even when Abitibi Dominion was set up, beaver reserves were established where people from our community have an exclusive right to hunt and trap. Beaver reserves were created in 1928, and their status has been amended 17 times without people from our community ever being consulted.
At present, they are defining the term "hunting", because of the economic benefits the province obtains from sport hunting. But very few people in our community still live from hunting and fishing. As I said, they represent about 10 percent of the population. Such activities tend to be practiced rather by people of Cree descendence, who also receive compensation from the James Bay Agreement.
Mr. Ringma: As we look to the future, in a perfect world you would have land in order to develop economically. You want to keep that land, but you want to abolish the term "reserve". You do not want to be limited to that land, but rather to be able to go anywhere. You want to enter into commercial undertakings, be it in mining or agriculture.
Chief McDougall: Most people in our community say that they do not like the term "Indian reserve", but it is the only term which, at present, guarantees to us our existing rights. The Indian Act, to give this one example, is like a watchdog which prevents us from being wiped off the map.
In our community we talk about the future. The band council in particular is focused on the future. Take the example of the people working with us. They are given three years to develop their skills in their particular area. We also do a lot to promote education, because of the potential number of jobs that could create for young people in the community. In fact, our population is very young.
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However, if we have no commercial or industrial infrastructure because of the lack of land, what will we do? Perhaps we will end up no different from other Quebeckers, or... That is what people don't want.
They no longer want to keep the term "Indian reserve" because we consider that it categorizes people, placing them in reserves strictly for Indians. I do not like the term "Indian reserve". I prefer "Aboriginal community". However, in the past, we were always ignored. You always put us in an Indian reserve. Many of our people, particularly the young, find this term very hurtful.
We are focused rather on the future. We are trying to open up the village and welcome people. If we had land, it would be possible to do so. Without land, we cannot do anything.
Mr. Ringma: Thank you.
[English]
The Chairman: Mr. Reed.
Mr. Reed: Thank you, Mr. Chairman.
I was very interested. You exposed us to the demographics of what is probably happening with aboriginal people all over Canada, and that is, the population is much younger that it has ever been. I was impressed by your encouragement towards education, because it would seem that the future for many of those young people will be to be able to have an education, to increase their ability to contribute, and so on.
What kind of encouragement do you provide now for young people to get an education, and indeed to get a higher education - to go on perhaps from secondary school into post-secondary education?
[Translation]
Chief McDougall: Given that our population is very young, we have developed various approaches. For example, the band council has a chief and the chief's counsellors. Exactly the same structure is followed with our young people. They have a youth committee which has a chief and people advising him. The band council sponsors them through education. Our activities are focused enormously on education, as we want to show young people that it is not by remaining in the community or on the Indian reserve that they will prepare their future.
We have to open up and look to the outside world, identify job opportunities outside and try to bring them into the community. Young people are very aware of that. They are very committed to the band council.
We also have a problem of language, because most young people of the present generation are hardly able to speak their mother tongue. They speak either French or English, and as a result in some cases, even mix up four or five languages within the same sentence.
Our community is made up of several other nations; Crees, Montagnais, etc. There are ten nations in Quebec and most come to our community to see how Pikogan has developed over the past ten years.
The band council considers that as there are many young people in our community, a major role has to be given to education. Young people have to be taught how to deal with the future, because they will have to take over subsequently.
[English]
Mr. Reed: You said that the unemployment rate was about 26%. Unemployment among young people across Canada is unacceptably high as well. Is part of the reason for the high unemployment rate due to the fact that there are so many young people they become part of the statistics, or is there another reason why the unemployment rate is so high?
.1030
[Translation]
Chief McDougall: The high unemployment rate in our community is due partly to certain requirements which have been imposed. To take just the construction industry as an example, it is always the same workers who have priority because they have followed courses in construction. They are therefore automatically eligible for the construction program, and young people are ignored. Therefore, because of the different rules governing unemployment, it is always the same people who return to work in the construction industry.
As there are no industries or businesses in our community, jobs are limited. As a result, 48% of our young people are unemployed because they have not received any training for the construction industry. Our major problems are due to unemployment regulations, such as section 25 which requires a certain number of periods of unemployment in order to be eligible for the program. Most young people do not have the necessary experience and are therefore ineligible.
[English]
Mr. Reed: Okay. You make a very good point.
You mentioned infrastructure and the lack of proper infrastructure. I wonder if you could provide some details as to what kind of infrastructure you feel is most in need.
[Translation]
Chief McDougall: It is, rather, commercial infrastructure and service companies. If we had more land, if we could obtain neighbouring land, we could invest money in the infrastructure and try to attract investors. They could come from the Cree communities, which are generally in Val-d'Or. Their offices are all there.
When they want to set up in a town, for example in Val-d'Or, the Cree make enquiries about the land available. They have often told us that if we had more land, they could come and settle in our community. We could help one another, in the area of jobs for example. As the service points for most Crees are in Val-d'Or, they have now moved to Oujé-Bougoumou, in Chibougamau.
If we had land, we could bring them into various areas, such as the food sector. Servinor Inc., among others, made that request to us. As we do not have land, we cannot bring in investors. The only infrastructures we have today are in the residential area. But we do not have any as regards commercial or service businesses.
[English]
Mr. Reed: Looking to the future on infrastructure, do you have any comment to make about electronic infrastructure? I'm referring to the things we call the information highway - those information roads that more and more people have access to, which allow someone even in their own home now to connect with information bases all over the world.
Farmers are the highest users now of the Internet. For instance, in Canada I think 20% of farmers are on the Internet because it's a very valuable tool to them, whereas with the rest of the population maybe about 8% are using it.
I wonder how you see the future in terms of that electronic infrastructure, for the benefit particularly of your young people.
.1035
[Translation]
Chief McDougall: At the last meeting of the Quebec and Labrador chiefs, we had a great deal of discussion about the structure of the Assembly of First Nations and we wondered why the ten nations don't combine all their services under the same roof in order to serve the communities of the various nations, through the information highway among others things, since most of them have access to it. For instance, there is already talk of equipping our students with the Internet here. Students often ask us what the Internet is. We have many computerized files to which the students have access, but in terms of the Internet, it's rather restricted.
Our students would like access to the Internet in order to communicate with other Aboriginal communities in Canada in the West and in the East, and not only in Quebec. They are interested in the economic development of these communities, a subject they are highly aware of.
Mr. Reed: Thank you very much.
[English]
The Chairman: Thank you, Mr. Reed.
Chief McDougall, I was interested in a couple of your comments regarding the ability to borrow money. You made reference to the fact that you're not allowed to pledge assets as security because you can't have title to them under the present laws, and that creates a difficulty when trying to finance something.
The Minister of Indian Affairs recently put out a suggestion that he was going to change the laws to allow title to be had and therefore assets to be pledged. Certain aboriginal leaders said that was a terrible thing to suggest and would just be setting up aboriginal communities to be taken advantage of by outside promoters, etc.
I was wondering, based on a comment that you made in your testimoney, would you support such legislative changes, or would you share some of those concerns that have been expressed?
[Translation]
Chief McDougall: I agree with most of the proposed amendments, but I have more hesitation with regard to lands and taxation. For instance, today, if we wanted to rent land in Pikogan to people who are not aboriginal, irreversible rights would apply, because the Indian Act states that aboriginals have no right to rent or sell their land except to a community. That's the point on which most of the chiefs are reticent. It's not in terms of land, but territory.
In Canada, most of the chiefs who've signed a treaty have been more reluctant regarding territory, perhaps because of the irreversible rights that apply. For example, we signed a treaty that grants one square mile per five-person family. To date, I have not obtained those lands.
.1040
We have about one-and-a-half lots on which 120 families live. I don't see why the federal government has not respected the treaty it has signed. It has completely ignored it and just shoved us together.
If I had that land today, I would agree to adopt an amendment to the Indian Act. We musn't forget that many of the clauses it contains are discriminatory. Many Aboriginal women married to non-Aboriginal men have reclaimed their rights. When we welcome non-Aboriginal people into our community, we cannot provide them with all the services because our subsidies are limited to people who are members of our community. We are the ones subjected to the burden of racism, which is often very frustrating. We would like to give services to non-Aboriginals, but we receive our subsidies strictly for the band.
[English]
The Chairman: Do any of the large resource-based employers in the area have proactive programs to hire aboriginals?
[Translation]
Chief McDougall: No. Most mining or forest industries require competency cards or construction cards and most of our people don't have access to them. The cards they have are only valid on the reserve and are not recognized on the outside.
[English]
The Chairman: Okay. Thank you.
Mr. Deshaies.
[Translation]
Mr. Deshaies: Communities often have budgets that are allocated for their specific needs. Naturally, these budgets are always very tight, like those of any community, including municipalities.
Recently, as part of a community development project, we submitted an application for a resource pooling project for the city of Amos and the Algonquin community. We would have hired a full-time employee responsible for maintaining contacts and developing tourism, a significant source of revenue for the future of our region, orientated particularly to foreign visitors who would like the pleasure of experiencing the wide open spaces. The aboriginals are one attraction, if I can put it that way, for these tourists. They have specific qualities and they know the environment. These visitors take pleasure in coming here to share this knowledge.
Our application was refused. It was suggested that we get the funds through our regular budget. We were even told that we had money for that purpose. The government was glad that we had formed partnerships. It said that everyone would invest money, after which it would do the same thing.
Mr. McDougall, in your opinion, what should be the government's contribution or commitment to such initiatives?
Chief McDougall: In the project you've just described, we had proposed the services of an Aboriginal person who had a degree in recreation and who had worked in various government sectors at the federal and provincial levels. We were hoping that the city of Amos would hire this person who could have worked in the area of tourism and organize Amerindian tournaments, which attract many communities and generate significant economic spinoffs for the city of Amos. We had emphasized this and had asked the city of Amos to form a partnership with us and the federal and provincial governments. Three levels of government wanted to go ahead with this project.
.1045
But as often happens in government, people told us that if the other level of government went ahead, they would come on board too. If the provincial government comes on board, the federal government will too. So both of them came on board. But then, Pikogan comes on board and if Pikogan does then Amos will too. That's always the case when you ask for money.
In the end, we got our budget, but after a long wait for the approval of the various sectors, among other things for the money we had identified. The person's stamps ran out and he was no longer able to participate in the program. The project fell through because of the unemployment program among other things. The gentleman in question was penalized because of that, and the project was suspended. He was the only candidate qualified for the project, since he had a certificate in recreation and tourism and had a lot of contacts. The project was suspended until 1997, when the unemployment criteria will be different. That is how this person will come on board again.
When we ask for budgets, we have to be patient. Aboriginal people are patient, but sometimes there are limits.
Mr. Deshaies: Thank you.
[English]
The Chairman: Thank you very much. We very much appreciate your taking the time to provide testimony and to provide a very important perspective to the committee.
I call on our next witness to come forward, Monsieur François Lemieux from Solidarité rurale. Welcome.
[Translation]
Mr. François Lemieux (President, Solidarité rurale): My name is François Lemieux and I'm the president of Solidarité rurale. I'm a milk producer and mayor of the rural municipality of Landrienne, and I'm also the deputy reeve of the Regional County Municipality of Abitibi.
I didn't prepare a brief, because I've presented many in other areas that I've been involved in and in the course of your work. You will certainly hear a great deal about the topic that I will discuss.
I would like to discuss government services and the presence of the government in rural communities.
You don't have to be a genius to understand that the devitalization of rural communities is not specific to Abitibi, or to Quebec: it's a phenomenon that is observed throughout Canada.
One of the things we've identified is that there are economic reasons for the devitalization of rural communities, but there is a difference. When we have industries that leave, that's part of the devitalization. When there is a decline in agriculture, that also brings about devitalization, but when the government leaves, that's something that's much harder to replace. You don't replace the government; you don't look for another government. Some call this betrayal; we cannot chose the government we want, but one of the phenomena of the devitalization of rural communities is that the government is leaving. The government is our leader, our chief.
When you look at the history of Canada and the development of this country, you see that there were policies for the development of our country, settlement of the land and collective enrichment.
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Certain commitments were made at that time. We can take the example of the railway which serves as a link for people who are encouraged to settle the land and exploit its wealth.
The government is a link. When you talk about the post office, it's not just a service. We're part of a large and unique country; the size of Canada is something unique. We developed a service that reflects the country we lived in, an efficient service.
There is talk about the efficiency of the Canada Post Corporation. At one point, it was my task to close rural post offices. I reread some of the history of the Canadian postal service and I found out some surprising facts. If you go back about 50 years - I don't want to be nostalgic - if you go back to the time of steam engines, you see that the post office was on the train. You mailed a letter in Montreal or Quebec City, and it was sorted on the train and delivered the same day.
Today, communications have evolved a great deal, but there are still some things that are surprising. I read the report of the House of Commons committee that examined the future of the Canada Post Corporation, which referred to shortening delivery times, which are two or three days. It should be known that it used to be better than that.
We also hear about - and I discussed this in all the briefs that I presented when the issue was closing post offices - the link that this created between people and the government. As was pointed out in the committee's report, the post office was often the only government presence.
Let me come back to what I said at the outset, to the effect that when the post office goes, it's the government that leaves. Moreover, the confidence of rural people should not be alienated, because this is mainly confidence in our future that can be transposed to the economy. Everything in our society is based on confidence. Anyone of us can go to a bank or financial institution to borrow money in order to build, to develop, to set up projects for the future and create wealth. All mortgages, all transactions, all loans are based on trust.
A banker would lend me money if I inspire confidence. Even if I respect the contract that I signed and I make my payments regularly, he can lose confidence in me if my wife throws me out, if I start to drink or if I hang around hotels. Of course, he will ask me to reimburse him. That's stated in all mortgage contracts.
When companies start to leave, as I said earlier, we can replace them or look for others. We can look for other ways to ensure our future. But when the government leaves, what is left? The federal government is involved in the area of communications such as the post office, railways, etc. What do we see in rural Canada? We have passed the stage of creating post offices.
What is the future of the post offices? I am very satisfied with the work done by this House of Commons committee, but this has not yet been translated into legislation. It is far from certain that is what will occur.
With regard to the railroads, I think that all municipalities, without exception, have experienced difficulties before they managed to speak to someone in charge of the railway. In our municipality, we have crossings and we have to communicate with those people. It's unbelievable. We call Senneterre, where the division chief is, and we get an answer from Toronto. Of course, we don't understand each other. Another time, we got an answer from Montreal. That's the way it is.
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I'm not a man who believes in miracles, but now, when I see a train go by, I tell my children: "That's a miracle." It is practically impossible to believe that a train can actually operate with such administrative problems. This is the kind of thing that undermines people's confidence in the future.
I would like to say a few words about telecommunications. What do we have in the regions? When the technology exploded, the government made a commitment to ensure that you could reach anyone, anywhere in this huge country. But you know, in the regions, sometimes we wonder if we even still exist. We know that other people don't know that we still exist. What is going on with broadcasting and radio? The Abitibi-Témiscamingue region has not suffered too much, because we never had government broadcasting in our region. But even so, the regions are gradually fading away. That's what's happening in all areas.
But we are not complaining about all government services. The government does provide some services. That is the reality. The government does maintain some sort of presence, but I wanted to come here and speak to you because I have some concerns. After all the briefs that I presented in the past, about post office closures, the railway, broadcasting, I am somewhat concerned, although I am satisfied with the report and the reason why such conclusions were arrived at.
The committee report on Canada Post says that we should keep post offices in order to promote national unity. That is a motherhood statement. We are all aware that Canada has a national unity problem. You just have to listen to the news. We all have our allegiances, on one side of the issue or the other.
But we must acknowledge that when the government offers services, does its work and meets its commitments, it is promoting itself. It's one way of making people feel that they belong to a country and to a community. But if that is the government's only goal, there is a threat. The threat is that Canada Post is supposed to be there to provide a service. It's true that a government service should bear witness to a government's excellence and should make people appreciate the government. That's normal, because the government is supposed to offer services, good services.
There have been many cuts in rural Canada, and sometimes we have had a hard time with them, particularly the post office closures and the cuts to the railway system. And at the same time as the services were being cut, Canada Post was sponsoring those sketches on Canadian history on the television. By the way, those sketches were very well done. We were told that operations had to be streamlined, and expenditures had to be cut, but at the same time, Canada Post was spending money on other things, things that had nothing to do with offering services. If they can provide good service everywhere, I completely agree that they should be promoting these services and they should encourage people to use them. But that's not the case. The service is rotten, there is no service.
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The post offices were shut down, and the savings that resulted from the cuts were used for other things. I have a hard time with that.
As for the railway line, I certainly can understand why the government was trying to privatize it at one time. I think it's because it was so badly run.
However, we are concerned about what happened after the deal. All the property along the line, all the rights of way, still had to be dealt with. And they haven't been dealt with. Many of these properties along the railway line are located in downtown areas. The regional municipality asked me to mention this problem, because it still hasn't been solved.
Over the years, many of these properties were leased to towns along the railway line. Arenas were built on this land, as well as many other facilities that would have taken up a lot of space in the downtown area. Now we learn that the owners of the railway line would very much like to have this land. We ask you not to agree to this blindly. Otherwise, you could create a great deal of uncertainty throughout the entire country.
If we want to revitalize the regions, if we want to be proud of the part of the country that we live in, we have to restore people's confidence. It's the only way. All the decisions that are being made, all the things that are not being done which make the future uncertain, are just going to continue to suck the life out of rural areas. Anyone who has any understanding of how a society operates realizes that no society can survive or prosper if there are two different classes. It's impossible. A society has to be based on a consensus. Everyone has to work together, and everyone has to know why they are there and what they have to do to reach the common goal.
Up until now, all we have had is uncertainty. No one is sure that the future will be rosier. There are no signs of a better future, but it is quite possible. When we now look at Canadian history, we have to recognize that we came very close to the break-up of the country. I think we can say that. We are all adults, and this isn't the first time this has happened in Canada.
Just think of Confederation and the construction of the railway. Remember that at the time, Quebec did not want to leave. Rather, it was the other provinces that wanted to go. We're talking about 100 years of history. We had to live with these commitments, which had been made one way or another!
Today, we must not forget these commitments, because they gave people confidence in the future, the confidence to build and expand this country.
This is the message that I wanted to give you. I did not bring you a brief, because I wanted to tell you all this orally so that you could clearly see how we feel about these issues.
Uncertainty about the future hinders the development of a country. And when I talk about uncertainty, I'm not talking about political uncertainty, because no matter what country you may live in, you don't always know what government you are going to get. It is the people around you who give you certainty about the future. Myself, I feel confident about the future because of my neighbours, my land, my personal knowledge, my family. I feel certain that if ever I have problems, or if ever I take sick, I won't have to worry, because people will be there to help me.
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That's the way a country or a society has to be. Nowadays, people are creating divisions between those who live in the country and the rest of the population. That's not what building a country together is all about. That is my message to you. Thank you very much for your attention.
[English]
The Chairman: Thank you, Mr. Lemieux.
Mr. Ringma.
[Translation]
Mr. Ringma: Thank you, Mr. Lemieux.
You are talking only about the federal government, isn't that so?
Mr. Lemieux: Yes, but I would say much the same thing if I were speaking about another level of government.
Mr. Ringma: For at least 40 years, the federal government has been gaining more and more power. Our debt is now up to 600 billion dollars. That is why the government has to cut its programs.
Now, in your view, exactly what can be done in areas such as ports or transportation, or any other federal area of jurisdiction? In my view, there are no measures to improve things. There has to be some communication between people like you and the government so that the government can see that there may be waste here or there, but that progress must be made.
Mr. Lemieux: True, there is waste, but that's not the entire problem. It's true that the government has an enormous deficit, and it's true that each citizen of this country has to help pay off the debt.
I agree with you, but changing the government every four years is not the solution. We can solve our problems together, but creating two, three or four different classes is certainly not going to solve them. All citizens, all those living in the country certainly agree that if there is some way of saving some money somewhere, of course we should do it.
Canada Post is a corporation that follows the user-pay principle. In principle, mail service should not cost the government money. When I send something through the mail, I pay for it; it's not something I pay for through my taxes.
Government services have to reflect the size of the country. If the country were very small, if it were the size of Prince Edward Island, our postal service certainly would be different. But given the size and the isolation of our country, we must have effective postal service so that we can bring people together.
Canada's problems did not occur overnight. Canada certainly must have had financial problems 100 years ago.
.1110
But today, we have a huge financial problem. What are we going to do to solve it? After all, our country is rich. After all, we are educated people. After all, the literacy level in Canada is fairly high.
We do have means to communicate, and we can talk to one another; we do have telephones at home. According to some statistics that I came across, only 10% of the earth's inhabitants have a telephone at home. They probably included the Indians of the Amazon in those figures, but it is a reality in our part of the world. We have roads, and we have all kinds of technology, but we aren't using them.
Some people say that we don't have any money. The way I see it, the banks are full of money. They have pots of money, but we just can't get at it. No one has confidence in our projects, for all kinds of reasons. We have lost our ability to work together, we have lost some of our inventiveness, our day-to-day inventiveness. Canada Post is one example of this.
When I was young, we sent Christmas cards to our neighbours who lived perhaps a quarter of a mile away. We put the cards in the letter box with a stamp, and the fellow who picked up the mail didn't take the letter to the post office; he took out his pen, he checked off the stamp and put the letter in the neighbour's mailbox along his way. Of course, that was illegal, but we've lost these ways of working smart, working together. People no longer understand that we have responsibilities in society.
Why can't we create wealth when we have all the tools we need to do so and we live in a rich country? We are not living in the desert, but there are all sorts of constraints, all sorts of laws, and everything takes time.
My friend Harry, who was here a few moments ago, said that you have to get permission from the municipal government, the provincial government, the federal government and from the inspector. People no longer have confidence in the future. Where are we going?
When the government pulls up stakes, it's like your father leaving, it's as if you're being abandoned. It's kind of like being on a plane, and you see the pilot go by with a parachute. He tells you: "There's no problem, stay in your seat." Once he's jumped out, even if the stewardess tries to tell you that nothing's wrong, you certainly can see that there is a problem.
That explains a large part of our financial problems. We have lost that aspect. That is my view. I cannot tell you that I have the solutions and that all these problems will be solved. One thing is characteristic of our generation: we think that we cannot do anything without money. That is not true.
I am the mayor of a small municipality, and we have done a lot more without money than we have with money. We have sort of lost that, and it is unfortunate.
Was Canada built with money? No, it was built with heart, by people who were not very educated, and who were not very rich. They built a great country in a short time, with little money.
When you consider that, you can see a partial solution to our problem, but the fact remains that the government, as a State and leader, must show us that it is on our side. What has happened with the post offices and the railway has left a bitter taste in my mouth. We had to fight our government. It was a distant, absent and contemptuous adversary; it was far removed, and inaccessible. That is not right.
I am part of this country, and my government is my government. As long as I am a working member of that club, it must stand by my side. We are moving away from that. That is what I had to say.
.1115
[English]
The Chairman: Mrs. Cowling.
Mrs. Cowling: Thank you, Mr. Chairman.
I have certainly enjoyed your presentation, Mr. Lemieux.
As we travel across this vast country, we find out how big it in fact is. One of the issues raised in areas of the country that feel isolated from the rest of the world is that we should start to build our infrastructure so that we can link those rural communities with large urban centres. What are your thoughts on that?
I also want to ask you a question about attitude and how we make people feel good about assisting in developing our country. Somehow or other we've gotten away from that. We tend to take extreme positions on a country that is very good to live in. How do we change that attitude as a government to enhance and build on the infrastructure of rural Canada, keeping in mind the very human element attached to that?
Mr. Lemieux: Building a country is not just - The government of a country can't just leave, can't just go away. We have to have a link together. I believe that's the only way we can be sure there is a future.
When a company goes away, there are reasons: no more forest, no more minerals, or the market is down. But when the government goes away, who will believe there is still a future?
What is the role of a government? The role of a government is to keep certain pledges. This country was not developed in an unorganized way. It was developed according to certain plans. There was the railroad. There was mutual agreement between provinces to make things better, to make it a better place to live, to have something in common. That's the way it was built.
What is happening today in rural Canada? What is happening, of course, like everywhere else, like in every city in Canada, is that the economy is down. In capitalist countries, things like that happen. Sure the economy is down in rural Canada, just like everywhere else, but the government is going away. What banker will lend money to a place when even the government won't stay? When you're creating two classes of population, how can we possibly work in the same direction? It cannot be. We cannot do things that way.
If we are living in the same country, if this country was developed according to a plan, if this country was developed to form a society, everyone is important. I'm a farmer; I should be important. The doctor should be important because when he heals my ailments I'll be able to give him some food. That's the way we build a country. But there's a whole part of all the regions - not only of people but of territory - where the government is absent, and not only absent but going away. You cannot believe in the future. Even if I persist in believing that there is a future, I'll never be able to convince anybody else. I won't be able to convince my banker. I won't be able to convince my children. I'll grow old and I'll grow old alone. I won't be able to convince a doctor to come here. That's part of the problem. We're definitely not part of the same society in rural Canada.
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Just one more thing. When we're talking about television and radio, I'm the mayor of my little town. When there's a fire in Montreal, I know about it before I know about a fire in town, because it's on the television. When there's a fire in town, the chief has to wait until the fire is out before calling me.
The Chairman: I'm going to ask a brief question, and I'll ask for a brief reply. I'll let Bernard wrap it up because we're slipping into another witness's -
Mr. Reed: I have another question.
The Chairman: We're kind of pressed for time. I'll let you ask a question if the witness agrees to provide a short answer. I'll ask my question first and then I'll switch it over.
You made a comment about Canada Post and you suggested that Canada Post is a cost-recovery type of entity. I pay 45¢ for a stamp and so does a person in Montreal. That brings up a very important philosophical question. This 45¢ stamp to deliver a letter from one part of Montreal to another part, or from Montreal to Quebec City - maybe the cost of doing that is only 20¢. You pay the same price for a stamp to send a letter from Amos to Sept-Isles, and it's a lot more expensive to transport that letter. There is an increased cost in providing that service in rural Canada. When you have the same price for a stamp in Montreal as you do in Amos, essentially you're having urban Canada subsidize, to a certain extent, the same service in rural Canada. Do you believe that's appropriate?
Mr. Lemieux: I am so happy you asked that question. What do you think the whole region of Abitibi-Timiskaming is worth to the city of Montreal? What do you think all of rural Canada is worth to urban Canada? We're part of one society. Yes, it's true that in that particular thing urban Canada is subsidizing rural Canada, but look what it's worth, that land.
The Chairman: And one I happen to agree with as well.
Mr. Reed: Mr. Lemieux, I want to thank you and tell you that you're not just a mayor or a farmer, you're also a philosopher who has brought focus to our committee. I feel very much encouraged and inspired by what you've said, because you've allowed us to look at the work we're doing from a new perspective.
In the last throne speech the government made reference to rural Canada, and that's really why we're here. We recognize the challenges and difficulties you have so eloquently pointed out to us. We're trying to get some handle on it so that we can bring back recommendations to help solve them. Most of us come from rural Canada and we know the separation between urban Canada and rural Canada. Wherever it is in this country, it doesn't make any difference.
My wife taught school in an urban setting, but I live on a farm. The pupils she taught were within two kilometres of dairy farms and didn't know where milk came from. This separation has been going on, in our area, for three generations. Part of our work is to try to heal that and bring that together.
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I just wanted to say thank you. You've inspired all of us.
The Chairman: Thank you very much. Merci.
[Translation]
Mr. Deshaies.
Mr. Deshaies: To confirm what you said, there does not necessarily have to be CN offices or large post offices in the region, but perhaps we need communication to have high quality services provided at the same cost, or for less. You really start to wonder when a letter is sent from Amos to Val-d'Or to be sorted and then back to Amos two days later.
That is what I've retained from your comments, which are always well presented. François is more than a mayor; he is someone who is very involved. He has made some excellent comments and I hope that what the committee will remember is that the regions need communication tools, so that there is someone at the end of the line to answer their call. Whether it be by modem, via the Internet, by phone or by smoke signals, someone will have to respond to them so that they can feel confident about the future. Thank you, François.
[English]
The Chairman: Thank you very much. We very much appreciate it and we add our words to what Mr. Reed had to say. Thank you.
Let's call on our next witnesses now: from the Association des prospecteurs du Québec,Mr. Gratien Gélinas. We would ask you to do your presentation and then we'll turn it over to the committee to ask questions.
[Translation]
Mr. Gratien Gélinas (Director General, Association des prospecteurs du Québec): Good morning. My name is Gratien Gélinas and I am the Director General of the Association des prospecteurs du Québec. I will make a short ten-minute presentation and I will be available to answer your questions for the remaining 20 minutes.
I am going to start by telling you what our association does, in the context of mining development. Then, I will talk briefly about the impact of the mining industry and exploration on regional economies. I will conclude with some suggestions to ensure that the mining industry can play an even more significant role in regional economic development in Quebec and Canada based on the proposals that we will make to the various levels of government.
First of all, I would like to thank the committee for giving us the opportunity to present our brief.
Our association's mission is to develop and defend mine exploration in Quebec. It represents all people, businesses and organizations working in mine exploration in Quebec. Its objective is to ensure that Quebec's fiscal, environmental and land access rules are among the most competitive in the world.
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I would like to briefly go over the various phases of mining development. Our association is primarily involved in the first phase, exploration, or in other words the work that leads to the discovery of an indicator or a deposit. When we obtain concrete results, we must assess the deposit's physical characteristics: tonnage, grade, etc. If the results are positive, we move on to the development phase, which involves building the infrastructure and obtaining the funding necessary to put the deposit into production. Obviously, production is always linked to a permanent exploration campaign to ensure the deposit has a maximum life span.
Now, site restoration is a mandatory phase of mineral development. When a mine is depleted, the site must be restored to the way it was before the mine was put in production.
I'm going to give you some characteristics of the mining industry, because it is important to set the stage for the various recommendations I will make later on.
The mining industry has been dealing with globalization for several years. For the mining industry, this is nothing new. Mining companies in Canada and Quebec are active throughout the world, and our expertise is recognized.
It is also important to note that the Abitibi-Témiscamingue mining region is not in competition with Northern Ontario, for example, or New Brunswick or Manitoba. Mining regions in Canada, wherever they are, are in competition with other mining regions in the world. That is the reality. So we don't necessarily compete with ourselves, but with other countries throughout the world.
People generally know that Canada is an important mining region, but what the general public doesn't know is that perhaps 80 or 90 per cent of land in Canada has not been fully explored and many mines have yet to be discovered.
As for the economic impact of mine exploitation in Canada, it represents 4 per cent of GDP, 16 per cent of all exports, and 2.5 per cent of our jobs. You have data on the value of production, but it is important to remember that 115 municipalities depend on mining in Canada.
I think prospects are encouraging. Twenty-one new mines opened in 1995, and another 24 or 25 are slated to open in the next few years, which is very encouraging. Of course some will close because of natural depletion, but there will be more new mines than closures. So prospects for the medium term are excellent.
This represents 17,500 direct jobs and 35,000 indirect jobs for Quebec. Once again, what is encouraging is that production is expected to grow for the next 10 or 15 years. The mining industry is present in all regions of Quebec. The following table briefly covers mining in the various regions in Quebec. There are mines in every region. Of course the biggest ones are in Abitibi-Témiscamingue, on the North Shore and in Northern Quebec. Northern Quebec starts at the 49th parallel. So the mines in Matagami, Selbaie and Chibougamau are in Northern Quebec. There are also mines in the Gaspé Peninsula and in the Eastern Townships. There are jobs in Montreal. There are a lot in the Lanaudière region, in Montérégie, near Montreal, in St. Hyacinthe and Sorel. A lot of economic activity is linked to the mining industry in these regions which are close to Montreal, near a large centre. People do not know that mining activity in the regions, whether it be in Abitibi, the North Shore, Chibougamau or Northern Quebec, is also important economically for large regions like Montreal and Quebec.
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I'd like to talk about Quebec. For the Raglan project, which is a new mine opening in New Quebec, the transhipment of the ore will be done in Quebec, as well as the building of the plant, which will be transported by boat and truck to Raglan, in Ungava Bay. All of that will be built in the Quebec region.
So it will have an impact on the region. Even if the people who manage the project are at Falconbridge, in Rouyn-Noranda, and the mine is located in the Ungava Bay, the Raglan project will generate significant economic spinoffs for Quebec City. I do not think that anyone in Quebec City thinks he is part of a mining region, and people living in Quebec City do not know that the mining industry plays an important role in their economy.
As for the impact of exploration, it is clear - you have to tell it like it is - that mine exploration is not in itself an economic development activity. I consider it a little like research and development in that what counts are results. When research is conducted and the discoveries are positive, the economic impact is felt later. It's more or less the same in the case of exploration.
Nevertheless, it is important to point out that exploration in Canada reached $765 million in 1995; it will be close to $900 million in 1996. That represents 1,500 jobs per year. Various studies have been conducted by different departments and sectors. It is difficult to obtain the exact number of people linked to mining exploration, because people work in the forest, and because these are often short-term projects. It was established that each time a million dollars is spent on exploration in Canada, regardless of the region, it creates between 18 and 20 jobs per year. Spending a million dollars requires 19 person-years.
Exploration obviously result in new discoveries, but it also opens up new areas, which is very important. I'm thinking for example of Selbaie, north of Abitibi, and of Casa Berardi. There were no roads to Selbaie. When a mine was discovered, a road was built.
So that opens the area to other activities, namely forestry, tourism, hunting and fishing. So there are important spinoffs in other sectors.
This brings me to the recommendations of the Association des prospecteurs to ensure that the mining industry, in its exploration and development activities, will have an even more significant impact on regional economic development.
We saw fit to use the word "region" in our brief rather than "rural area", because it corresponds more closely to our experience. We talk about mining regions and statistical data by region.
As regards access to land, the Association would like the fiscal, environmental and land access rules to be maintained, or even improved.
As regards taxation in the mining sector, it must remain competitive. This is a message for the Minister of Finance. There's a document that was published in April 1996 entitled: "Canada's Mining Industry: A Global Perspective". It was prepared by the Department of Natural Resources. It compared taxation in the mining sector in the various Canadian provinces with that of other countries. I find that relevant. It has to continue to be done.
Often there are missions, corporations, new producing countries, and developing countries that come to Quebec, and to Canada to see our specialists and examine our mining taxation and legislation. They come as it were to copy it. Their objective is to improve it to be more competitive in terms of taxation, for example.
The federal Department of Finance and the Department of Finance in each province with a mining industry must always be on the lookout to ensure that our tax rules remain competitive, notably with respect to development.
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The comparisons contained a very fair assessment of our mining taxation. When you take a project with a rate of return of 10% on the investment, for example, taxation in most Canadian provinces and at the federal level is generally most competitive. When the estimated rates of return are roughly 25%, for example, we are less competitive. So that stimulates the production of certain deposits. If a 25% return were taxed the same as a 10% return, there would perhaps be projects that wouldn't be put into production. I think that it is an excellent approach that must not be changed.
As for exploration, I will refer to the report that your committee prepared in December 1994. It contained different recommendations. There were two concerning flow-through shares, including one which covered spreading the work over 12 months, which was announced last spring by Mr. Paul Martin, the Minister of Finance, in his budget. This news was very well received and very much appreciated by the mining and exploration industries.
Your document contained another recommendation, which was to retain the nil adjusted cost base for flow-through shares, as is currently the case in Quebec, so that an investor does not pay tax, namely when he sells, even at a loss. So that is a recommendation.
Now let's talk about better harmonization among the various processes for environmental assessment. Let me give you an example. The mining industry in Quebec is subject to the federal and provincial environmental assessment processes.
For example, there are eligibility criteria for base metal projects. For copper, the minimum tonnage for being subject to the criteria of the two levels of government is 7,000 tons per day. However, for a gold bearing mineral deposit, or a gold mine, the provincial level is 7,000 tons per day and the federal level is 2,000 tons per day. Is there a way to better harmonize this? I think that it would be normal for the mining industry, in any given territory, to be subject to the same rules. That would simplify things.
I would not go so far as to say who must do it. I think that the two levels of government should see to it that there is only one process and that the rules are the same.
Another very important concern for the mining industry is access to land. As I mentioned at the beginning, roughly 90% of Canadian and Quebec territory has not been fully explored, but there must be access to the land.
We all know that there are a lot of projects to create parks, ecological reserves, etc. The mining industry does not challenge that, but it often happens that mining activity is banned in certain areas without there being proper assessment of the geological and mining potential of the area.
When plans are made to ban mining activity in certain areas, it would be good and even necessary to do a better geological assessment.
Take the example of the Hemlo mine in Ontario. Perhaps many of you know it. Before the mine was discovered, the area was recognized as not being very good for mining, but the biggest gold mine in Canada was discovered there.
Recently, Voisey Bay, in Labrador, was an area where there was not much mining. Ten years ago, if someone had decided to make it a reserve and to ban mining in the area, I don't think many people would have protested, because we did not know its potential. An area such as that could have been excluded from mining for 50 or 100 years without it being well known.
We think that there is a way to harmonize mining activities with the activities of others using the land. This approach is essential to the future of regional economic development. The mining industry is important and it has shown in recent years that it can be accountable environmentally and that there is a way to harmonize its activities with those of other occupants of the land.
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Now, there is a very important point. Once again, this is in keeping with one of the recommendations of the committee's report. It is maintaining, increasing and acquiring geoscientific knowledge of these areas. The Canada-Quebec Subsidiary Agreement on Mineral Development will expire in 1998, but I think that all the money has been spent. Part of the money allocated to the Quebec Department of Natural Resources is set aside for mapping, and therefore the acquisition of geoscientific knowledge.
It is very important to continue to acquire this knowledge. Again that goes back to one of the recommendations of your report. Better knowledge of the area allows for more diversified economic activity. There are areas about which little or nothing is known. Just because there are well-established mining regions like Abitibi or Northern Ontario does not mean that we should stop trying to obtain geoscientific knowledge.
Often, these areas are developed when primary substances are mined, such as nickel around Sudbury, and gold, copper, and base metal in Abitibi. However, in Abitibi, the industrial mineral potential was not well assessed. In the North, emphasis was made on base metals, but other substances were left out. Throughout the territory, there are a lot of substances that could be mined in the regions by regional entrepreneurs.
We know that a multinational like Noranda or Placer Dome would not be interested in extracting peat moss in Saint-Eugène-de-Guigues. We are starting to understand the potential for peat moss in this region. Perhaps entrepreneurs from the Témiscamingue region could extract the substance, but again they have to know that it exists and it has to be characterized. That's why acquiring geoscientific knowledge must continue. In your report you recommended a replacement program. I won't go into any detail.
What is also important when obtaining geoscientific knowledge is generally involving regional stakeholders. I'll tell you how it works in Quebec. Each year in the spring, the Department of Natural Resources meets with industry. Together they priorize the regions they want to study. You have all recently heard about the discovery at Lac Volant, on the North Shore. It was an important discovery because it's a new area. Last year and two years ago, when the department consulted with industry, in Quebec, people said that the department should work in the greater region of Lac Manitou. They thought there was mineral potential there, but they did not know the region. The department decided to focus on those regions following discussions with industry.
The people from the regions should also be invited to these consultations. That would be interesting. I'll use the example of Abitibi-Témiscamingue that I know well. In the spring, when the department consulted industry to determine which regions it should give priority to geoscientific work, the people involved in developing the region participated in the consultations. The governments and the department must have the budgets to do this. We're not talking about hundreds of millions of dollars. The end of the Canada-Quebec agreement on mineral development is of concern for the mining regions.
Here is our recommendation regarding infrastructure: a replacement program would allow for the construction or development of infrastructure linked to the mining industry. For us, there is one basic rule. Mining projects must first of all be profitable in themselves. Take the example of the Troïlus project, a gold mine that is being developed north of Chibougamau. The mine is profitable.
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Of course, if the government had not contributed to helping build the road or to bringing in electricity, the project would not have been profitable. The government must continue its involvement in developing these infrastructures.
It is difficult to say that a certain amount will be set aside each year. Decisions must be based on the quality of the projects. Troïlus showed it was profitable and there infrastructures were built that opened up the territory to other activities, forestry, etc.
Here is another recommendation: when various levels of government intervene, they should pay more attention to regional needs. We believe the best people to train a labour force to meet the needs of various industries in those regions are those from there. Here is a somewhat peculiar example. Right now, the unemployment rate in Abitibi-Témiscamingue is 10 per cent, but there is a shortage of skilled labourers in the mining sector. That is a problem. It doesn't make sense.
The Regional Development Council of Abitibi-Témiscamingue has worked hard so that manpower training better meets industry's needs. I don't want to go into detail, but I think regions should develop areas of specialization for manpower training depending on their specific needs. Obviously, Abitibi is a good place to train workers for the mining sector, but we certainly are not qualified to train workers for the fisheries. Some regions are perfect for that. A mining region like ours is very capable of manpower training. The same goes for research and development.
Val-d'Or is a mining region and it is important that research centres be located in those places where there is that particular economic activity. A research centre on mining could be located in a major centre, but for practical purposes, and to meet industry's needs, it should be in one of the regions.
In closing, I would just like to repeat what I said. Mining could play a larger part in regional economic development, both in Quebec and Canada. The regions should try to do more with what they have. The industry is perhaps not doing enough advertising and does not adequately promote the potential of those living in those regions. I think a lot more can be done with our natural resources, while maintaining the principles of sustainable development. It is possible to achieve both.
We therefore recommend a competitive tax structure, environmental rules and access to the territory that will allow us to be competitive, a better understanding of the area, and government support for infrastructures. The bottom line is that a project must be cost-effective. We are not talking about subsidies or direct financial assistance for doomed projects to turn around. That merely produces lame ducks.
The projects must be viable and then there should be assistance for infrastructure development to carry out the project. The various levels of government should provide assistance to the regions so that they can meet their needs based on their specific requirements. Thank you.
The Chairman: Thank you very much.
Mr. Ringma.
Mr. Ringma: Thank you, Mr. Gélinas. I have the feeling you could also be the spokesperson for your industry in British Columbia and Saskatchewan, at the same time as Quebec.
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Is it true that there aren't any real differences? If there are any, what are they?
Mr. Gélinas: As I said at the outset, competition in the mining industry comes from other mining regions in the world. Mining companies operating in Quebec also do so in British Columbia, Manitoba, Newfoundland and New Brunswick. Companies with a mission say: "I am a mining company that produces base metals, copper, zinc." They look at the entire Canadian and North American territory, if not the entire planet, and ask themselves which are the best places for cost-effective mining. They ask themselves: "What are the current tax and environmental rules in those territories?" They look at all those factors and choose the most promising territory, the one that seems most attractive on all counts.
That is why the rules of the game are about the same in British Columbia, Quebec or elsewhere.
Mr. Ringma: I am not very familiar with this industry, but I have the feeling that finally, after years of being at a virtual standstill, you are doing something to improve the situation for your industry.
Mr. Gélinas: Yes.
Mr. Ringma: Canada has so much potential that we should take advantage of what we have.
Mr. Gélinas: Yes.
Mr. Ringma: In your conclusion, you spoke about a competitive tax structure. By that you mean that the taxation rates must not destroy the mining sector. What other recommendations should we follow to develop this industry?
Mr. Gélinas: All parts of Canada already have the necessary tools to make the mining sector competitive, while at the same time developing the regions. I think we should work with what we already have and do some fine-tuning, as the saying goes.
In the medium and long term, the biggest concern for the mining sector is perhaps land access. A few years ago, there was a very interesting project, the Windy Craggy project in British Columbia. A mining firm had developed it and when the time came to start production, they couldn't go ahead. The British Columbia government declared that the territory was a park - I don't know the details - and the firm could not do any mining there.
From that, Canada got the reputation of being a country that was not as open as it once was to mining. Our industry would like the situation to be made very clear. It would be a matter of saying that if you can explore a given region, you can also mine there.
Everyone knows that exploring has little environmental impact. If, for ecological or other reasons, someone says a territory should not be developed, as was the case with Windy Craggy, exploration of that territory should not be allowed.
Thousands, if not millions of dollars had been spent and years of work had been put into studying the deposit. Once all the facts had been gathered, the conclusion was that developing the mine could be a profitable enterprise, but they were told: "No, that will not work. Developing the mine will have too much impact on the environment, and you cannot go ahead." That is perhaps the greatest danger.
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Things must be made clear: if the territory can be explored, if a deposit is discovered, it can be developed. That is one of our concerns.
Of course, you also have to take the Aboriginals into consideration, since they have land claims, but I am sure that if a mining company wanted to operate in the Laurentians or the Eastern Townships, the residents of those areas would be as curious and concerned about the impact mining could have as would be Aboriginals in more isolated areas. So the industry must always do its share, must be willing to contact stakeholders, but on the other hand, the various levels of government should have clear environmental rules, albeit strict, but competitive.
Canada's environmental protection rules are among the strictest in the world, as they should be. Those rules are often used as models. Developing countries without mining laws or environmental laws take ours and enforce them. So that is a good sign. As I was saying, our tax structure should be fine-tuned and our environmental rules should be harmonized. As for financing, there are still a number of small changes to be made to flow-through shares. Finally, it should be made clear that in Canada, if you are allowed to do exploratory work, you are also allowed to mine.
I am very optimistic about the future of the entire mining industry in Canada, Quebec and the regions, but we must increase our knowledge of geoscience.
I know this is off-topic, but one of the most positive aspects of Canada is...
[English]
The Chairman: I'm going to have to ask you to wrap up your answer because I have to get to another questioner.
[Translation]
Mr. Gélinas: Canada is perhaps the best country in the world for knowing its territory. In Canada, all the information is available. In other countries, each individual company will often keep the information to itself. That is a major point.
[English]
The Chairman: Thank you. Mrs. Cowling.
Mrs. Cowling: My question is with respect to the centres of excellence that you mentioned in your presentation. You mentioned there should be centres of excellence for regional areas of this country. I'm wondering what the criteria of those centres of excellence should be, and should the criteria be developing a climate for economic growth and jobs? We've found in many areas of rural Canada that there are a number of jobs available. However, the skills are not there for those jobs. Should that be part of the criteria?
[Translation]
Mr. Gélinas: Yes, that should be one of the criteria. That is already happening in Abitibi. There is high unemployment, but a shortage of skilled workers. The interesting thing is that the regions are currently trying to harmonize manpower training. For example, there is vocational development, but there is no link with college graduates, and colleges do not necessarily have any ties with universities.
Our industry would like the various levels of manpower training to be more harmonized so that at any given time, a student enrolled in a vocational course who wants to continue his training at a college does not have to start back at square one.
There must also be more training to meet specific needs. Let me give you another example. Our geologists, who are university educated, have excellent geological knowledge, but unfortunately, lack project management skills. They do geology and are very good, but they are not used to mining exploration.
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For example, they are not familiar with the Mining Act. They should know that if they give a drilling contract to a firm, they must contact the surface rights owner to tell him there will be work done on his land. How do you manage all those things? A geologist is good in geology, but not necessarily used to exploratory work.
In mining regions such as Abitibi, people could be trained to meet very specific needs, and complete their training. That does not necessarily mean doing another bachelor's degree, but a few months, or a few weeks full-time to complete the training. It is important to get some agreement on that.
[English]
Mrs. Cowling: Just a very quick follow-up. Should the funding for that training be a partnership between federal and provincial and the private sector or the municipal level? Where should the funding come from?
[Translation]
Mr. Gélinas: I do not know. I am not familiar enough with all the different rules governing manpower training. What proportion of the money comes from the provincial government, or from the federal government? I do not know. I am not very familiar with that. So, I unfortunately cannot answer your question. However, I do think the industry could contribute more. I gave you the example of training to meet specific needs. It could be on-the-job training. That way, businesses could contribute.
The mining sector could also find skilled workers to provide some training. Businesses and various departments have experts who could provide training. Those people do not have to be full-time teachers. There are excellent people in the industry who could include training as part of their job; they could also benefit from it. There could be additional input, not necessarily financial, but through those types of initiatives. I cannot give you any better answer than that because I do not know all the details.
The Chairman: Thank you.
Mr. Deshaies.
Mr. Deshaies: I would like to thank Mr. Gélinas for coming and tell him that the Natural Resources Committee will be tabling another report on the environment. It may respond to some of the concerns you raised today. Mining is important everywhere in Canada. I am sure everyone will recognize that changes must be made in this sector, which the Natural Resources Committee has spent a great deal of time studying. I believe industry representatives are well aware of that. It is also important that we did hear from so many of them.
I saw investments being made over the years. I hope there was some return on them. Perhaps a clear signal was sent, and the Department of Natural Resources did a tremendous amount of work. In our report, we can say that just because the mining sector needs only some fine-tuning does not mean it is less important than others. It must play a major role. There are still some small things to be done. Thank you.
Mr. Gélinas: I would like to make one last comment. It is often said that the mining industry does not really need regional support. For instance, if we woke up tomorrow morning and all of Quebec's gold mines were closed, I don't think the price of gold would drop, but things would be tough in Abitibi. One must pay particular attention to regions that produce substances that do not have any impact on global production and maximize their competitiveness so that they can compete internationally.
It is an international game, but Canada is known as the world's greatest expert, both for mining exploration and development.
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We can be proud of that. If we can use our expertise to primarily benefit regions, we will be well placed to forge ahead. Thank you.
[English]
The Chairman: Thank you very much, Mr. Gélinas, for your testimony. We very much appreciate you taking the time and the energy to be here today. Thank you.
We now stand adjourned until 1:05 p.m.
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The Chairman: I would like to call the meeting back into session and to call upon our next witness, Mr. Talbot, from the Association forestière de l'Abitibi-Témiscamingue. Welcome.
[Translation]
Mr. Normand Talbot (President, Association forestière de l'Abitibi-Témiscamingue): Good afternoon.
[English]
The Chairman: We would ask you to make an opening statement and then the committee members will ask questions of you.
[Translation]
Mr. Talbot: My name is Normand Talbot and I am president of the Association forestière de l'Abitibi-Témiscamingue.
We are a non-profit organization whose main mission is to provide education on protecting our forests and our environment, mostly in schools, but also for the public at large. We have an educational forestry centre and we organize symposiums and conventions on current issues. The theme of our latest symposium, last week-end, was "Sharing Our Forests".
I would first like to say that we had very little time to organize our presentation. It coincided with organizing our convention last week-end. Our association has approximately 450 members. I would also like to make a clarification. When people spoke about rural areas, I thought they meant parishes, and not northern cities such as Amos or Rouyn. I didn't think I was including you in that, but I was told that you think of Amos as being a rural community. I point that out because in my document, I refer to cities, and by those I mean Amos, Val-d'Or or Rouyn, and not Quebec City, Montreal and Trois-Rivières.
Abitibi-Témiscamingue is a relatively young region compared to the rest of the province of Quebec, since most rural parishes are barely 75 years old. A few parishes in Témiscamingue celebrated their 100th anniversary. Most rural parishes were started during the Great Depression in the 30s. The idea was to get families out of the large cities in the hope that they could become more independent through farming, or at least be able to survive. It was hoped that with a few cows, pigs, chickens, gardens and wild fruit, families would be spared the need to resort to the direct assistance they would have required had they stayed in large cities.
The government stepped in to help. Some building material was provided. Four hundred dollars was granted for manpower. Twenty dollars was given to purchase a cow, a horse and some chickens. There were also grants for land clearing, ploughing and farm start-up.
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Mine discoveries in the 40s and 50s (Val-d'Or, Malartic and Rouyn) and in the 60s (Matagami, Joutel and Chibougamau) as well as the building of the Quévillon pulp and paper mill, were major factors but led to desertification of parishes and put an end to the colonization era for many families.
We used to make the comparison between a standard salary in industry and dairy pay, as we used to call it. Dairy pay was the money you earned from selling cream and milk. In those days, there wasn't any marketing of potatoes and vegetables, which were produced solely for family subsistence. The only real income came from selling milk and cream, which was commonly referred to as dairy pay.
Towards the sixties, the closure of small country towns and parishes combined with a relocation program led to the desertification of rural areas. Closures of churches, schools, nursing stations and post offices ensued; railway stations were closed, as were general stores, small sawmills, farming co-operatives, parish halls, etc. Families were uprooted and seniors were sent to institutions in big cities.
In many of the remaining parishes, there is no longer any community or social life, which is also partly the government's fault. This quick overview of the history of rural communities over the past 40 years gives a partial explanation of the statement in the discussion paper, which reads as follows:
- Rural areas have a much higher proportion of chronic unemployed than urban areas and, by
comparison, the lower levels of qualification and education of rural dwellers continue to pose a
problem. Also, the communications and transportation infrastructure is generally lacking, and
it is difficult to get capital.
As I said earlier, given the short amount of time we had, I was going to focus solely on that agreement. My recommendations will therefore be only on the forestry sector, since I have very little knowledge of other areas.
Research and development: A firm and continued commitment to forestry research and an effective technological transfer of results are major assets when developing private forests. We therefore think the program "Trials, experiments and technological transfer for forestry" should be maintained. Perhaps the sole focus should be on developing private lots and blocks of lots by municipalities and small forests. It would be good to have a technological transfer program to implement forestry research results as quickly and efficiently as possible, as well as a research program for further forestry development.
Right now, the only regional forestry development being done is one cubic metre per hectare per year, whereas our clay soils, which are very rich, could easily produce four cubic metres per hectare per year if they were improved even slightly.
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It would be good if the Université du Québec in Abitibi-Témiscamingue received funds for forestry research on rural forests and if researchers and technologists were encouraged to transfer technology. That is a shortcoming. Forestry research is done mostly on large forests. There is too little research being done on small forests.
There should be projects to improve the utilization and multi-resource exploitation of our forests.
The Association forestière de l'Abitibi-Témiscamingue should be authorized to organize symposiums and conferences on research results and technological transfer, and funds should be provided for that purpose.
Training and development: If rural dwellers are to take charge of forestry development, there must be some manpower training. Rapid technological development reduces the demand for skills, especially when those skills are based on highly mechanized forestry machinery found in those regions. Here, you have forestry equipment for major forestry development. Forestry equipment is a technology that is difficult to use on small forests.
Training should focus on the use of miniaturized machinery and, to some extent, on the use of traditional practices, namely small machinery, and in some cases, horses, chain saws, etc.
Technological and vocational training institutions must, whenever necessary, review their training programs to ensure that they are meeting the needs of the targeted clientele.
The municipalities and the regional county municipalities should work with their teaching institutions to make their training needs known. Government funds should be allotted to a five-year program.
Infrastructures: In order to implement and carry out a good forest management plan, you need to build permanent highway infrastructures so that you can have access to the wood lots. Municipalities should have access to the infrastructure program.
Because the Abitibi region is far away from markets and seaports, it is at a disadvantage when it markets its goods because transportation costs are high. The infrastructure program should result in the development of a highway network that will make Abitibi accessible by road trains.
Financing: Dependable and, more especially, easily accessible financing is required to carry out any forest resource development project in a rural area. It would therefore be both reasonable and equitable to be able to expect a fair return from forest resource-related taxes. Financial institutions should guarantee start-up financing for businesses; we must create budgets for a forestry fund; we must encourage, through interest-free loans, business start-ups; new businesses must be given a tax holiday for the first five years; we must provide businesses in rural areas with venture capital so that they can get started or expand. Thank you.
[English]
The Chairman: Thank you very much, Mr. Talbot.
Mr. Ringma.
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[Translation]
Mr. Ringma: Mr. Talbot, when you refer to research and development, I would imagine that you are referring more specifically to the growth and nutritional requirements of trees. Or are you also including mechanical or technological development for tree harvesting or that type of thing?
I come from British Columbia where they are still researching harvesting methods. But the more they work in this area, the fewer jobs there are in the forestry sector. More jobs have been created on the industrial side, in the area of machine manufacturing, etc. I would therefore like to know whether or not you are focusing on research.
Mr. Talbot: In my presentation, I talked about the problem related to our inventory of mechanized machinery. Manufacturing companies are always trying to develop heavy machinery. Such machinery is a lot quicker and uses less labour. However, such machinery is used to log large forest areas.
However, this machinery cannot be used in small areas or in private wood lots nor can it be used for specific procedures, such as commercial thinning.
Generally speaking, this heavy machinery is not suited for the trees grown on forest farms. One or two commercial thinnings must be done before the final cut, and, generally speaking, the machinery is used for the total cut the first year.
As far as research and development are concerned, we must look at developing smaller machinery, such as the type used in Europe, so that we will be able to work on small areas.
We must also go back to the traditional methods, using chain-saws, perhaps even horses or small machinery. This is very labour-intensive, and research and development must focus on developing machinery and forest management practices designed for the small areas.
As for research and development in the area of tree growth, if we allow nature to take its course by carrying out regeneration cutting of if we practice reforestation, the forest will produce a cubic meter per hectare every year.
We would like to see research projects that will enable us to carry out more intensive silviculture procedures resulting in the forest growing four times more quickly than it currently does. This can be done through fertilization, improved harvesting methods, commercial thinnings, rapid growth species. In some cases, this can be done through fertilization, ground preparation or ramial wood methods which are starting to be carried out on a small scale.
Mr. Ringma: Thank you very much. You have already answered my second question. You are only talking about forestry research, about effective technological transfer in private woodlot development. Why can't we have what they have in Europe? I lived in Europe for a while, and I observed that they had woodlots of 10 hectares or less where they do everything. So I will encourage you to head in this direction. Thank you.
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Mr. Talbot: My brief focused on the private forests because, as I see it, this is the rural area. This is why I excluded the large Crown forests that are being logged today.
[English]
The Chairman: Mrs. Cowling.
Mrs. Cowling: Thank you, Mr. Chairman.
My question relates directly to forest management techniques and private lands and private forests. I want to raise a question about the human infrastructure, about the people and about young people. I'm wondering what's happening on the private lands and within the private forests with keeping young people in rural communities and about the whole aspect of jobs for those young people.
[Translation]
Mr. Talbot: Generally speaking, the young people are taking over the jobs in the region here. The father or the uncle has a fleet of machinery, a tree feller and a skidder and a son, or even the daughter, takes over from the father in forest harvesting activities. It is mainly young people who work in silviculture, reforestation, pre-commercial thinning using strippers and plantation management. These activities take place over a short period of time. Reforestation takes two or three weeks or a month and clearing or plantation management goes on from May to October, until the snow starts to fall.
This work is very physically demanding, particularly when working with machines such as strippers or chain saws. You really earn your keep, because you have to learn how to put up with heat and black flies. A lot of people get discouraged.
Generally speaking, the staff that retires is not replaced because of the modernization going on in the factories. Very few young people are given an opportunity to work in the factories; a certain percentage do find jobs replacing retirees, but I don't have the statistics. However, in a rural setting, the people who are used to working on farms, to doing more physically demanding jobs than the city dwellers are the ones who are going to be replacing agricultural workers. With the intra-municipal woodlot development project, there will be a lot of job opportunities for young people in this sector. This is why we are saying that we must provide training that teaches people how to use the traditional small machinery, such as chain saws, cable skidders, etc.
I do not know whether I've answered your question.
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[English]
Mrs. Cowling: Yes.
I have one more question and it's with respect to traditional training and traditional practices. I'm wondering what you would recommend to this committee with respect to the funding of the training. Should it be industry-driven or should there be a federal presence?
[Translation]
Mr. Talbot: I'm not sufficiently familiar with the role played by the federal or provincial governments in providing money to educational institutions and colleges for training young people in forest development and harvesting. We need programs that will allow a young person who wants to go into reforestation or any other type of work to integrate the forestry sector.
Obviously, he will not be making any money the first few days; after a week, he will have used all of his money to pay for transportation, food and the rental of his saw. The forestry worker needs financial support during the time he will need to put his technical training to work and develop muscles and work habits.
He needs to earn a salary during the first weeks. Otherwise, he will get discouraged or the logging contractor will hire someone who can perform better. Logging contractors are often responsible for transporting workers to the job site and feeding them. Furthermore, the employers are terribly afraid of work accidents.
If a worker could earn $150 the first week and $90 the second week, so that after two months, he would be at the zero mark and his improved performance would be able to make up for the shortfall, there would be less discouragement. He works really hard the first day, and the day after, it feels as though he's being asked to run a marathon without having trained for several weeks. I don't think that there would be many people at the starting gate the next morning.
The Chairman: Thank you.
Mr. Deshaies.
Mr. Deshaies: On the week-end, Mr. Talbot chaired an annual seminar on the forestry industry. Several topics were covered, but the theme was "A Forest to Share". The band chief Mr. McDougall also talked about land to share and about the philosophy of using scattered lots, namely private forests, in order to create jobs. This is a very good idea.
Obviously, if we want to create jobs - and this is an objective of every government - we have to provide the means, the technological research required for mandatory training programs, otherwise individuals will be handicapped because of work accidents, etc. We also need financing. This would be a good avenue.
I would like to thank Mr. Talbot for appearing and I apologize for not sticking specifically to the topic of "rurality", which in Quebec involves regional development. Despite this error, I think that he did a good job in speaking about a very specific subject that the governments should examine.
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[English]
The Chairman: Thank you. Thank you very much, Mr. Talbot, for taking the time to provide testimony. We very much appreciate you doing that, particularly in view of how busy you were this past weekend. Thank you very much. We really appreciate it.
Mr. Talbot: Thank you very much. Good luck for your commission.
The Chairman: Thank you.
I'd like to call on our next witnesses, from the Chamber of Commerce of Val d'Or. Welcome. I'd ask you to introduce yourselves and then provide an opening statement. Then we'll go to questions from the committee.
[Translation]
Ms Nicole Brien (Director General, Val-d'Or Chamber of Commerce):Mr. Deschambault, the chairman of the Chamber of Commerce will read the statement and, if need be, I will provide additional comments.
Mr. Daniel Deschambault (Chairman, Val-d'Or Chamber of Commerce): Ladies and gentlemen, good afternoon, I would like to thank the committee for giving the Val-d'Or Chamber of Commerce a brief opportunity to express its concerns and expectations as regards the presence of the federal government in economic development in our region.
As you know, Abitibi-Témiscamingue, and more particularly the RMC of Vallée-de-l'Or, is rich in natural resources such as mines, forests, tourism and agriculture. This wealth has enabled us to develop this wonderful region and to provide its citizens with a high quality of life. Over the past few years, however, this quality of life has been diminished by the actions taken by governments, which are focusing on budgets without appearing to consult or analyze the impact of such measures on the people.
Economic development in rural areas requires policies that allow for greater flexibility in legal and bureaucratic regulations. I will give you two important examples that apply to our regions.
First of all, in the mid-80s, the government adopted a law to promote mining development, and here we are talking about flow-through shares which are still in effect today, but which have considerably less impact than they once did.
Because of these initiatives, we were able to develop deposits and mining expertise which we are currently exporting. The expertise that we were able to achieve because of these flow-through shares is now being exported. We are currently exporting our expertise to South America and even to Africa, enabling us to compete on the international market and to even compete with the Australians.
However, the government has decided to reduce this incentive despite the benefits and the economic spinoffs that it produced. So, in the 1980s, we had flow-through shares. There was a great deal of excitement in Abitibi-Témiscamingue, particularly in the Val-d'Or region. The government decided to reduce this benefit to the detriment of the region. The government of course adopted a very rigid law on flow-through share policy which allowed expenditure before February 28, so that deductions would be eligible for income tax purposes. This law was very rigid and indirectly put a halt to the principle of flow-through shares. The government was not able to change this law, although studies showed that it was to the government's advantage to continue in this direction.
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The Chamber of Commerce is recommending that there be other flow-through share type incentives in the mining sector. The economic spinoffs were good and there may very well be others.
We are recommending that these incentives be broadened to include forestry and perhaps even agriculture, which would enable us to develop our resources, to enhance our quality of life and even export our resources, our wealth and our expertise.
Economic development in rural areas depends on the accessibility of its means of transportation. We would like to discuss the increase in airline rates. Since deregulation, namely, since 1988, these rates have increased more than 90%.
Since the Abitibi region is a border region of the main centres, the businessmen and businesswomen and other individuals who develop it must use the means of transportation which provide the most benefits in terms of costs and time.
Since deregulation, the volume of passengers has decreased dramatically. I will provide you with some statistics on the volume of airline passengers in Val-d'Or. Prior to 1990, between 100,000 to 110,000 passengers boarded flights. Now this figure is sitting somewhere between 70,000 to 75,000 passengers.
Therefore, there has been a drop of approximately 30%, and one of the main factors has been deregulation followed by an increase in the price of plane tickets. I will give you an example. I have to go to Montreal on Wednesday. A Val-d'Or - Montreal ticket costs $510. You can fly to Europe for less than that.
The cost of tickets becomes a recruiting criteria for our professionals. Unlike major centres, there's a scarcity of professionals in Abitibi-Témiscamingue. Let me give you the example of medical recruiting. Professionals have families in the Montreal region, and when we talk to them about how much it costs to bring these people here or to visit them it becomes an important criterion in their decision-making.
Indirectly, this may undermine our standard of living. I will give you some other examples, such as the increased cost of plane tickets sold by the main airlines, the vacation rate. We have noticed that in the regions, generally speaking, $134 per plane ticket finances the vacationers and we are not talking about vacationers travelling inside Canada but rather those who travel outside the country.
We tell people to take the cheapest plane and go to spend our money in the warm countries, in Europe, and the regions are the one that foot the bill to the tune of $134 per plane ticket. For the Abitibi-Témiscamingue region, we're talking about several million dollars.
Instead of paying $500 for a ticket, I would prefer to pay $350, which would lead to greater economic activity, more wealth in terms of professionals and a better quality of life. I would therefore ask the government to legislate or to intercede on our behalf so that the airline companies will review their rate policies.
I can give you another example that pertains to the cost of plane tickets. There are these wonderful bonus point programs, the Air Miles, the gifts. This all costs something. It is not true that this is free. The regions are paying for these programs.
Obviously, people living in large centres do not have any problems travelling from the region to a major centre, because they leave directly from Montreal, Toronto or Vancouver. We, who are developing the main centres by exporting resources, are the ones who have to go and do business in Montreal and Toronto.
Right now there is one Abitibi-Toronto airline for the mining sector. We have to leave the region in order to do business and we pay a very high price. We always pay a very high price. We think that the government is not listening to our problems. We have already done our homework. We have already made our representations and the government has turned a deaf ear to us.
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We are therefore asking the government to review the rate regulations in order to improve the situation of the regions in this regard.
I would also like to discuss the importance of regional government. On the one hand, the federal government seems to want to keep rural development, and on the other hand it is withdrawing from the regions. How can it continue to keep a watch on the regions and their economic development if there are no longer any public servants in the region? There is no more head for the eyes to be able to watch the region.
Since the announcement of various budget cuts, the regions are literally having the departments stolen from them for the benefit of the large urban centres. And yet, it is the regions that have the natural resources that feed the major centres in finished and semi-finished products. We are having our assets taken away.
Let's take the example of the issues that the Chamber of Commerce dealt with in the past two or three years, when Environment Canada was well established in Val-d'Or. We had excellent services that benefited the entire region, even Northern Ontario and the Far North of Quebec. Overnight, this was canned. Excuse the expression. The public servants were leaving and going elsewhere to open centres along the St. Lawrence Seaway, including three in Montreal, Mirabel and Rimouski. There was nothing left in the regions, not even on the North Shore of the St-Lawrence River. There was no consultation. We made representations, but the matter was already settled.
Moreover, overnight, the Canada Mortgage and Housing Corporation no longer belonged to the region; it had all been sent to Hull. Federal public servants were leaving the area. Yet, this was an important element. We still have houses here that are under the jurisdiction of the Canada Mortgage and Housing Corporation. We often have to call them at our own expense, or travel there to make representations, because the 1-800 line is 1-800-wait. Very often, it's quicker to take the other line, but this is always at the regions' expense. I'm sorry, but we have quite a heavy fiscal burden, and the regions are supporting that fiscal burden and the weight of government decisions.
Another important issue, the last one, is that of the human resource centre. I will give the floor to Ms Brien because this issue came up before my mandate at the Chamber of Commerce and she is much more familiar with all the subtleties that the government used in order to reduce staff and harm the development of the region both directly and indirectly. Ms Brien.
Ms Brien: This is an issue on which I was working in co-operation with Mr. Deshaies. It's a recent issue, it is not settled yet and it is still highly visible. We will take a few minutes to discuss it and show you to what extent government intervention in this regard does not take into account in any way, shape or form the geographic and demographic reality of our region.
I don't know if anyone has described Abitibi-Témiscamingue in the course of this day. It's a large region that is more or less set up in two poles: Témiscamingue and Abitibi. The federal ridings are in fact representative of these two poles. Each of them has equivalent demographic poles. The only distinction between the Abitibi pole and Témiscamingue are the roads that make Rouyn-Noranda a central city. But other than this road phenomenon, the poles are equivalent in demographic terms.
When the federal government decided to create Canadian human resources centres, it reduced the staff of all the employment centres throughout the region for the benefit of one major centre in Rouyn-Noranda.
The principle is not a bad one in itself because certain regions may indeed see some advantage in this. But Abitibi-Témiscamingue is not like all other regions. This is how we see that these are "wall-to-wall" measures; they are standardized. We tried everything to have this centralization of services in Rouyn take into account the geographic reality of Abitibi-Témiscamingue.
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We asked the minister at the time, Mr. Axworthy, to recognize a Canadian centre for the Abitibi-Témiscamingue region, but to distribute the staff and services between the two development poles, two poles that are very representative of the reality of the region.
We mobilized a support movement that was largely positive if we judge by the number of letters of support received, more than 50. Only one city withdrew from the debate, even though it was not opposed: that was Rouyn-Noranda which was the recipient of the project. We were really turned away by the senior officials in place who told us that as long as we didn't have the support of Rouyn-Noranda, we would not have gathered regional consensus.
That was somewhat unfortunate, but it was a very nice and polite way to tell us that regardless of what we did, it would have no impact. That's what came out of it. Regardless of the reaction of people in the regions regarding the services provided to them, the game plan was already determined, the die had been cast and the public simply had to swallow it.
I may sound somewhat radical, but in fact, we were stuck with the results. Virtually no one was receptive to what we were trying to have them recognize. This is our geographic reality. We're not asking for a second human resource centre, but we are asking that it be designed in accordance with the geographic reality of Abitibi-Témiscamingue.
The issue is still open. The minister has changed, but nothing else has. Last week, we saw about 20 public servants leave. Since I sit on the arbitration commission of the employment centre, I can give you the example of the file of a Val-d'Or recipient which we needed to see and for which we were asked to come back in three weeks because the file is now in Rouyn. Are we becoming a banana republic? I don't know, but whatever the case, we must be aware that this is a front-line service.
That may be why organizations such as the Chamber of Commerce scream loudest when front-line services are affected since it is important that these be of a high quality. There are millions invested in this department. Perhaps it would be a good idea to take a look at the specific needs of the regions.
That summarizes the issue of human resources. If there are any door on which we haven't knocked often enough, please tell us. Tell us if there's anything that can be done.
Mr. Deschambault: Another issue that may have a significant impact on our region in the short and medium term is free trade. In its vision of free trade, the American government set rules regulating softwood lumber quotas. In fact, it is the Americans who set the rules of the game. I wonder what the federal government has done or will do concerning softwood lumber. Its action will have a direct impact on our regions. I don't believe we were consulted and it seems that the decisions were taken in Ottawa even though the stakes also involved Ontario and British Columbia. I fear that when it's the regions' turn, even in Abitibi-Témiscamingue, we will pay the price for this so-called free trade.
That is the end of our presentation and the statement of our expectations. We expect an awful lot from the government. I'm well aware that not all our demands can be satisfied, otherwise the deficit would double or triple. I understand that the government has fiscal concerns, but before it makes a decision or chooses one solution or another, it must consult the regions because generally speaking, the regions pay for government policy. And yet, when I look at my T4, I note that a large part of my income goes to the federal government and I would like to have a direct return on the amount I invested in that government.
Thank you for your co-operation and your attention.
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Mr. Ringma: I would first like to ask a question about the elimination of politicians or a change in the system. I know that in this system, the parliamentary committee will table a report in the House in the spring. Perhaps you will have been listened to, perhaps not. We have three levels of government, namely federal, provincial and municipal.
You are very well aware of what you need and of the path to be taken, but you're not being listened to; that's the problem. In my opinion, that's inherent in the system. You have potential direct contact with Mr. Deshaies, which may be an advantage. He might leave an impression with the government, but that's not adequate.
What can we all do together? I'm sure that everyone around this table sympathizes with what you're saying and feels the same sympathy for witnesses in Alberta or New Brunswick. But the system is defective. Politicians can and will do exactly what they want for political reasons rather than for economic reasons or for the welfare of the entire country. Therefore, there are problems with this system. I'm asking you, as a local citizen, what you're doing to improve the situation without starting a revolution.
Mr. Deschambault: We can't change the government structure and the political structure overnight. However, a politician should stick to politics and not interfere in economic matters. When you mix politics and the economy, things become irrational and the best decisions are certainly not made that way.
Ms Brien: I would like to add something to what Mr. Ringma said, when he referred to almost inventing a political insecticide. I'm not sure that that's really where the problem lies. Our politicians are listening to us, but can they do anything with what we tell them? That's another matter. Generally speaking, politicians are very nice and well-intentioned people, but somewhere along the way, their ability to get anything done is very limited.
If there is one subject I would call into question if the federal government really wants to have a restructuring or a reform, it would be the power given to public servants. There are major issues at stake to which our politicians must adjust, and perhaps a bit too much. I'm not sure that our politicians are leading us that much. That's one message.
Mr. Ringma: Thank you.
[English]
The Chairman: Mr. Reed.
Mr. Reed: I would like to talk about the issue of free trade and softwood lumber particularly. I'm not an expert on it, but I do realize that in any situation where you are interacting with another country, you are always faced with the issue of push and pull that goes on constantly.
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In the case of our dealings with the United States on softwood lumber and on agricultural products such as pork and milk, we have been taken on a number of occasions to the tribunal designed to resolve these issues between the two countries. On each occasion Canada has won the argument. They won the argument on pork. They won the initial argument on softwood lumber. They've won the issue on dairy products so far. But we also know that with the United States being the trader that it is and having the approach to business that it does, we will always be faced with challenges from there.
I have to say in defence of the ministry that negotiated the last softwood lumber deal that it was done with the acceptance by the United States that there would be a five-year period of relative peace between the two countries on that issue.
I suppose what I'm trying to get at is that always on these issues, as difficult as they are - and sometimes they have a local impact - there is always a trade-off. I would ask that one consider what the outcome would have been if there were no free trade deal, if there had been no NAFTA. The United States, moving into the very protectionist mode it is in at the present time, could have curtailed most of our exports of softwood lumber to that country.
So we're always faced with this and it's always in motion. I don't think it will ever be resolved, because Canada as a country relies on trade almost more than any other country in the world. The United States, being this huge giant on the other side, has a great deal of power that it could exert if we did not have some kind of agreement and some means of resolving the disputes that arise.
We're very sympathetic to this issue of softwood lumber, believe me. But I would hesitate to think what the result would have been if an agreement had not been in place at all.
[Translation]
Mr. Deschambault: I don't have a crystal ball that can indicate what the impact would have been if we had or didn't have free trade. We have to leave with free trade as it stands. My remarks about softwood lumber referred to the fact that, a few years ago, forestry companies were spending money to export softwood lumber. Then they won their case and were entitled to refunds. We thought the issue was settled when, a few years later, the American government came back with the notion of softwood lumber quotas.
We had previously consented to a settlement, and two or three years later, we're back to the same system. What's going on? Did the federal government do its homework? The other issue which I was discussing with Mr. Ringma concerning the insurance between the economy and politics concerned the establishment of quotas.
The three main poles were British Columbia, Ontario and Quebec. Strong political pressure was brought to bear on the distribution of quotas. Normally, Quebec and Ontario should have come out winners in this exchange rather than British Columbia, as was the case. Ontario and Quebec had shown their mettle in terms of productivity and development compared to British Columbia. And yet, British Columbia is the one that came out on top.
This situation leads me to believe that politics played the decisive role here not the economy.
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I could give a very specific example regarding quotas. It's been confirmed to me that the annual quota that we were waiting for from month to month has just been disclosed.
One of our companies here in Abitibi has a full yard because it has already exceeded its quota. It was waiting for its quota. Instead of making a profit in the order of $100,000 in a quarter, it has sustained losses of $10,000. This situation leads to major economic uncertainty for this company and for its banker.
The big companies and multinationals may not have a problem with this because they can do value added and circumvent the process very elegantly. But on a smaller scale, for other local companies - and here I'm talking about companies in my region - there may be a rather major impact on their economy.
[English]
Mr. Reed: We're very sympathetic to that.
The Chairman: Mrs. Cowling.
Mrs. Cowling: I want to come back to something you mentioned in your presentation with respect to consultation. I want to assure you that the Government of Canada, with the process we're going through right now with rural economic development...this was in response to the throne speech in which the Prime Minister clearly indicated a commitment to the economic renewal of rural Canada. That's what the process is about.
Canada has been proclaimed for three years in succession as the best country in the world in which to live. At least in part, that is because of rural Canadians.
I would like to ask you some questions about rural Canada and what we should be doing as a government to make rural Canada a much better place to live. Should it be through infrastructure? Should it be through value added? Could you give us some comments on that, please?
[Translation]
Mr. Deschambault: I think that the federal government should redistribute its wealth in terms of knowledge, public service and bureaucracy to the regions, where natural resource development takes place.
It is important to bring research centres or other government services towards the regions if they are currently located in major centres like Montreal, Ottawa and Toronto. It is very difficult to listen or to maintain better communications with the regions.
There would certainly be advantages for both sides if these resources were transferred to the regions, where the natural resources are developed.
[English]
Mrs. Cowling: Should there be tax incentives or something to help move that process forward? What should we be doing to help it along?
[Translation]
Mr. Deschambault: I think that tax incentives could be one element, but in light of what we've experienced, by the very nature, such incentives seem to come and go. They usually don't have a very long shelf life.
I think we need political will that recognizes that Abitibi-Témiscamingue has expertise in mining and that decides to develop the mines in that region rather than in Ottawa, Montreal or Toronto. The same is true for other sectors, be it agriculture or forestry. The point is not to tell multinational or large corporations that they can benefit from tax incentives to conduct research in Abitibi in mines and that they will be given an additional money. Yes, it may seem like a good idea to do so, but expertise remains even in the public service, government scientists keep a pied-à-terre in Ottawa or in another major centre.
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People have to be moved and brought closer to research projects such as CANMET, which is an example in Val-d'Or. That showed political will. It's much closer to the mining economy than if development was done in Ottawa. It could be done in other economic sectors such as agriculture, forestry, etc.
There has to be a political decision, the political will to change things, not just tax incentives.
[English]
The Chairman: I have a couple of quick questions to do with comments about federal support. I want to explore something in this region and try to relate it to some other regions, particularly since as the Chamber of Commerce your concern is obviously with the business community.
Does the Business Development Bank of Canada operate in this area and does it assist your members?
[Translation]
Mr. Deschambault: Yes. The Business Development Bank of Canada has offices in Rouyn-Noranda. I'm a chartered accountant for a national firm and some of my clients do business with the Business Development Bank of Canada in various areas.
The Business Development Bank of Canada is a bank, and like other banks, it assumes a certain financial risk. It has a certain banking niche. In some cases, it is very accessible and in others less so. It's a question of the performance of its investment portfolio. I think it manages its affairs the same way as any other bank and that's perfectly all right, but it has a local presence.
[English]
The Chairman: Do the Community Futures development corporations operate in this area? Small loans, $75,000 and under -
[Translation]
Mr. Deschambault: Yes, the CFDCs are very visible and have many assets. In Amos, they have good assets and in Senneterre they have very large assets. They are very involved in the community and I think that they will expand significantly.
Given the limit of $75,000 per loan per business, it would be to their advantage to increase the value of their loans by having a kind of joint venture with the CFDCs and by taking greater risks. That might improve some projects because often, the traditional bank will not finance them because of the risk. The effect of this would be to improve the economic development of the region.
The FORD (Q), the Federal Office of Regional Development (Quebec), like other government agencies, is undergoing or will undergo various budget cuts. Still, the Office is very active in the region. If I'm not mistaken, in Val-d'Or, it will be the only federal office. I think it's important to maintain it.
Several minor cuts will occur very soon, but I think that it's involvement is highly significant and it would be unfortunate or disadvantageous for the region if this office left for regions such as Ottawa and Montreal. It would limit its scope of intervention in the region and would also limit its understanding of the region. I think it's important that it be located in Val-d'Or. That's all that will be left. So we at least hope to keep it so that it is really close to the investors and the various projects in the region.
[English]
The Chairman: The Chamber of Commerce of Val-d'Or is offering a perspective that I support, because I believe in the importance of the federal government's involvement in rural development. I feel strongly about that. But I must say, your testimony as a chamber of commerce is at variance with chambers of commerce we often hear in other parts of the country. Often their position is that as a business community, they feel there should be little or no government involvement, if we could reach that state.
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It is interesting to see your organization take a very different, or somewhat different, perspective on the importance of federal, and I would expect provincial, involvement in the regions.
[Translation]
Mr. Deschambault: Yes, our position is much more regional, much more local, because I think it's important to have links with our governments on various points, compared to the Montreal Chamber of Commerce, which is already directly linked to the government. Therefore, communications appear very fast. It's not that important that it be there. A door is already opened to them.
Let us take for example airline fares. I'd like to get back to that. There was a consensus among all the regions to form a common front to demand the lowering of fares and the intervention of the government on this issue. Montreal has no interest in being part of the common front. It was even a thorn in their side. We did not get the direct support of the Quebec Chamber of Commerce or of the Montreal Chamber of Commerce.
Mrs. Brien: In fact, Mr. Deschambault wants to explain that there has been a coalition of regional chambers of commerce, and this is very representative of what is happening in other political arenas. The regions have a vision that is clearly different from that of the major centres, and that's also true in the Chamber of Commerce movement.
Up until very recently, we still saw different positions taken by the chambers of commerce in Quebec and Canada on major national issues, for the simple reason that in the regions, we do not experience the same reality as the major cities.
Airline fares may be the best example. If you would like to have the study, we could send it to you. It's a pan-Canadian study that demonstrates that it is all regions of Canada that subsidize plane tickets for vacationing passengers that travel outside Canada. When you look at this equation, the millions of dollars this represents is incredible.
However, I can assure you that given the interests involved, it is quite obvious that we have not managed to obtain the support of the major power lobbies. That's unfortunate, but it's a fact. Perhaps it's at that level that the government could support some decisions if it was necessary to have objective and constructive intervention.
[English]
The Chairman: I certainly agree with the airline tickets. My wife and I can fly to London, England, for what it costs me to fly to Sudbury return. So we have exactly the same problem in northern Ontario.
Mr. Deshaies.
[Translation]
Mr. Deshaies: Thank you for coming, Mr. Deschambault and Ms Brien. I will give the floor to my colleagues, because I'm very familiar with my region. I hope they will learn about our needs.
One element comes up often. I think that François Lemieux referred to it also. He talked about communications, when we try to fight for rural post offices, when we try to reach someone at CN. As he said, how can we find anything, how can there be some feeling of security when we can't reach anyone anymore and that no one is responsible? Naturally, I'm trying to underscore an important passage from each intervener.
Was the point of your intervention to obtain some access to communications with decision-makers? That may be what the regions want in order to make our representations and end up with something that is good for our region.
Mr. Deschambault: I think that it goes further than a simple communication's link. We can advocate a communication's link, but if people don't travel to see the reality in the regions, that becomes a problem.
I can give you a concrete example that I experienced with federal officials at the Department of Revenue. When comes time to amortize an expenditure or not, they've never seen a piece of forestry equipment.
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Therefore, they have no interest in knowing whether it will be an expenditure or an amortization. That's a very simple example. If the departmental officials never travel to the region or do not introduce a process for seeing the regions other than that of their offices, we will always have the same communication problems, even if some 1-800 lines are freed up on the telephone network.
Mr. Deshaies: Therefore, you should try to forget about the 1-800 lines and have some kind of presence on site. In the regions, that's what is expected.
Mr. Deschambault: I think that a local presence is important according to the sphere of activity of each region. Here we talk about mines and forests. Therefore, the department responsible for mines and forests should at least have some presence on site, on our territory. Instead of having to pack our bags to go to Ottawa in order to make representations, the opposite should occur.
[English]
The Chairman: Thank you very much. We appreciate the time you took to provide your testimony.
Our next witness is from the Regional Tourist Association. Mr. Laliberté, welcome. I'd ask you to make an opening statment before we turn it over to the committee for questions.
[Translation]
Mr. Louis Laliberté (Director General, Association touristique régionale): My name is Louis Laliberté. As you know, I'm the Director General of the Association touristique régionale de l'Abitibi-Témiscamingue. I'm going to paint you a picture of the tourism industry as a new tool for rural development in the Abitibi-Témiscamingue region.
Abitibi-Témiscamingue is the youngest of our regions and its history is closely linked to the development of its natural resources. Forests, mines, agriculture, used to be the backbone of our economy. While these three industries continue to play a very important role today, a new one has come up on the horizon. You will understand, of course that I'm referring to the tourism industry.
The Abitibi-Témiscamingue region has recently designed a strategic development plan for its tourism industry. With your permission, I would like to summarize this plan and indicate how we became convinced that the tourism industry is one avenue for diversifying our economy that is not only an interesting one, but also promising for the region. In appendix to the copy of the brief that I've tabled, you will find an abridged version of our development plan.
When we completed the diagnosis of the industry, we noted that tourism is an activity that is emerging in our region. This is made clear by three problems, among other things the fact that the design of the regional tourism product remains unfinished. Even though the region has natural attractions that are worthy of interest for tourism, this raw material is not organized or presented in a form that a tourist can consume.
This first observation alone opened the door to a whole series of possibilities, since the main trends in world tourism force us to recognize the constant growth of demand for experiences related to nature and the discovery of wide-open spaces.
There's also a second major significant trend, namely the desire for authentic contact with the place visited. Therefore, these two trends, linked to the industry diagnosis, allowed us to determine the main areas of development of our industry in the following way: nature, culture, activity. On that basis, five tourism products were identified: outfitting operation, adventure, snowmobiling, events and, lastly, touring.
Since time is quickly running out, Mr. Chairman, I will now make the connection with your committee examination.
Abitibi-Témiscamingue is covering a territory 116,500 square kilometres and some 100,000 lakes and rivers, with a population of 155,000 people. These statistics, which are also our reality and our history, put us in a particularly advantageous position to respond to the demand for nature destinations and wide open spaces.
Lastly, our capacity for hospitality and authentic contact has been proven time and again. This means that for the regional tourism industry, all the things that we call the natural resource sector are of crucial importance.
I wouldn't be telling you anything new if I said that without our forests and lakes, there would be no hunting and fishing, and certainly no outfitting operations. However, if I were to tell you that without the mining industry, the forest industry and the agri-food industry, there would be no touring, no visits of mines and forests, no industrial visits, no tourism sites such as the Cité de l'or or farm visits, etc, what would you say?
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This Mr. Chairman, reveals the importance of natural resources for the regional tourism industry. It does not simply come from trees, but also from transformation and the history of that transformation. What we have to say does not go against the development and exploration of natural resources in the region. Instead, we believe that it completes the development and exploitation of these resources.
In concrete terms, a developing regional tourism industry stimulates rural communities and helps them take charge of their affairs by establishing tourism projects that concern them and which they have the ability to build and manage. The tourism industry is not cyclical. It has the capacity to develop products for the four seasons of the year. Training in the tourism industry is not expensive, and the outlay necessary to start up projects is relatively modest.
On the whole, the situation may seem to you rather rosy, but there are still obstacles to be overcome. For the tourism industry to fully play its role and help bring about healthy diversification of the rural economy, two major points must be taken into consideration.
First, it is important that rural promoters can have access to capital in order to see their projects come to light. Right now, lack of knowledge about the tourism industry makes the financial market sceptical and fearful about tourism projects.
Lastly, and this can never be repeated often enough, it is essential that we ensure an acceptable degree of development of human resources in order to equip promoters and give them every chance of success. Any action that will allow us to overcome these difficulties, or which may create conditions that are favourable to overcoming them, would certainly be a step in the right direction.
Mr. Chairman, thank you for allowing us to present our case. We will of course be pleased to answer your questions.
[English]
The Chairman: Thank you.
Mr. Ringma.
[Translation]
Mr. Ringma: Thank you, Mr. Laliberté.
Canada's wide open spaces are increasingly attractive for people from other countries. Be they from Germany or Japan, they are really attracted by what we have and what we consider natural.
In your sector, do you get overseas tourists, and if not, why not? Is this the fault of the federal or provincial governments? What has to be done to encourage these activities?
Mr. Laliberté: To give you a thumbnail sketch of visiting tourists in the region, 95% come from the province of Quebec, some 8% from Canada and of course a small percentage from various countries. Apart from the United States, the overseas tourists that come to our region are mainly from France.
Interestingly enough, you mentioned Germany and Japan and both of these markets were identified by the Canadian Tourism Commission as markets we should focus on. And once again there might be a slight schism here because, in our area, Germany is not a priority nor is Japan.
To give you an example and to complete my percentage figures, 1% of our tourists come from France. A number of people have remarked that there is an increasing number of French tourists. Everyone is quite pleased about this and we're certainly ready to accommodate larger numbers.
On the other hand, we haven't yet started working on markets like Germany or Japan. We intend to concentrate on markets that are closer geographically and which we already serve to some extent. Let me tell you what these different markets are, in order of priority.
First of all, there's Quebec; next, Ontario since we're very close to the Ontario boundary; then comes the United States, particularly States like Ohio and Pennsylvania and fourth would be France.
You can see that Germany and Japan do not come into the picture. It isn't because we don't think that they're attractive markets but because of the fairly recent history of the region and the small amount of capital available means that we are not always able to market our products to these companies where costs are quite high. We receive the Canadian Tourism Commission newsletters and we are in contact with our colleagues from the other regions. It costs a lot of money to be at the table with the CTC and not everyone can afford to be a member.
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In some of the other regions intervening parties like Intrawest may be able to afford the $50,000, $75,000 or $100,000 required but in our case, $100,000 amounts to the total annual promotion budget for the region for all geographical markets and products.
So you can see that there is a discrepancy between what we can actually do and what would be required to play in the big league. We're not yet there in terms of experience or financial capability.
Does that answer your question?
Mr. Ringma: Yes.
I see you have a sign welcoming caribou and moose hunters. I suppose that does attract some people. In my area in British Columbia there is a small village by the highway no longer visited by tourists. They decided to do something to attract this clientele. They put up mural paintings all over, it's something that took years and was done with next to no money. They did such a good job that they started attracting attention and now it's become a year long tourist attraction for people from all over. It's only later on that they started getting support from the provincial government, I think and perhaps a bit from the federal. It was entirely their own initiative.
I think that you have a lot in your favour, not only caribou and moose but open space, fresh air, and clean water without chlorine. That's a lot! You certainly have something to go on. And if the governments are able to provide help, I hope they'll do so. But you certainly have a basis on which to build your industry.
[English]
The Chairman: Mr. Reed.
Mr. Reed: Thank you, Mr. Chairman.
You made a most interesting comment in your opening statement about the compatibility of tourism, mining, agriculture, forestry - the activities that are historic in the area. I would like you some day to take your message to all of us in government, because one of the challenges we have is to convince citizens, especially urban citizens, that they can be compatible, that to enjoy the open spaces you don't have to be necessarily a total preservationist. So I thank you for those comments. They are very well taken.
You obviously are working on a limited budget and have had to make priorities as to your target markets. Do you approach the provincial government or the Government of Canada for help in order to, for instance, take your message through their publications to other parts of the world? Do you do that?
Mr. Laliberté: Yes, sir, we do. We work in conjunction with both the provincial and federal level of government. We try as much as possible to be inside the brochures or whatever to convey our message. It is not always easy, though, because as far as they're concerned, we have a really pointu, or small, message. We're a small part of the country, if you will, whereas their brochures will give Canada at a glance, or Quebec at a glance, at large. It's hard for us to say we have wide-open spaces when people in the northeastern or northwestern parts of Ontario could say the same thing. What's the difference?
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So you're trying to convey that message and make your little advantages get through, but it's not always easy.
To come back to what you talked about in terms of the forestry and mining industry, you'll notice I didn't say it was always easy. But, yes, it can be done.
Mr. Reed: Of course. But the fact that you take a pragmatic approach to it means you're finding ways in which it can be complementary, and you can work together.
Mr. Laliberté: Actually, we stumbled on it. People were saying, I'd sure like to go down and see a mine; I've never been down there. A lot of people started thinking about this, saying, why not? If we don't ask, we'll never get an answer.
So it all started from there. I must say, it's been a long process. I do think for once this region is ahead of a lot of regions inside Quebec, and inside Canada as well.
Mr. Reed: Have most of the industries supported you?
Mr. Laliberté: I talked in my mémoire about a project called Cité de l'or in Val d'Or, or city of gold, if you will, where a tourist can go 264 feet below the ground to visit what used to be a gold mine that was in production up until 1985.
In terms of the financial aspects of that project, the government level was involved, of course, but the mining industry also was involved in financing the project. They said, well, it's good for us, because we do have a past, we do have a history, and we can say good things about the mining industry, just as we can say good things about the forestry industry as well.
Mr. Reed: I don't want to belabour the subject, but I think this is one of the means of getting over this barrier between the rural and urban Canada. The subject was brought up earlier that we now have perhaps the third generation of urban people who have been away from agriculture, away from the agrarian lifestyle. Their children have, with very few exceptions, virtually lost any concept of country. To them it is a myth, based on mythology.
You'll hear the term in Ontario of ``old-growth forest'', and the concept of a farmer wearing overalls and a straw hat, chewing on a piece of grass. That is still the mythology there. We have a great challenge to break that mythology, because only when we break it will there be acceptance and understanding of how important mining is, how important forestry is, and so on, and to get rid of that.
So I think you're on the right track.
Mr. Laliberté: But there is a danger, sir, in what you've just said. I'd like to echoMr. Deschambault, who was here before me, when he said we have the knowledge and the know-how, to do it. What we are starting to see happen in and around big cities is the re-creation of a farmer, re-creation of big spaces, supposedly because people won't do the distance, it's more convenient and what not, and hey, let's face it, the mass is there.
Yeah, right. We can find all kinds of excuses. So I do see that danger.
I follow your point of view. As Mr. Deschambault said, it comes back to this region. We do have the expertise. We don't have to recreate it, we have it for real.
Mr. Reed: You have it all. Thank you.
The Chairman: Mr. Laliberté, is the snowmobile industry in this part of Quebec active? Is it something you're building your tourism industry on?
Mr. Laliberté: Yes, it is. We have over 3,000 kilometres of snowmobile trails within the region, and that basically makes us the single biggest such region in the province of Quebec. We also have the highest amount per capita of snowmobilers in the province of Quebec as well, with9,000 members belonging to 12 clubs. I've been with the regional tourism board for two years now, and two years ago it wasn't the same picture. We've been working as a region on the snowmobile market for four years and it's tremendous; this industry has grown by leaps and bounds.
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Each winter we are blessed with good winter conditions - lots of snow, and it stays a bit longer. So let's use it; it's one of our strong points.
Each winter we see more and more people from the United States, from Ontario, from the province of Quebec, and indeed a lot people from France who have never been on what they call a snow scooter - un scooteur des neiges is what they call it - and it's their first time on the machine, and they love it. In a few years we'll be hard-pressed to know which season is the best tourist season, summer or winter. I'd like to see that anyway.
The Chairman: Have you received federal and/or provincial help in creating or maintaining your trail infrastructure?
Mr. Laliberté: The way the trail infrastructure is maintained is when snowmobilers obtain their snowmobile licences there is a royalty or a fee that is picked up by the provincial government and given back to the provincial snowmobilers association, which in turn passes it down to the clubs, according to amount of kilometres of trail they have to maintain.
What you have to realize, Mr. Chairman, is that those 3,000 kilometres of trails in the region are maintained because of people doing it on their own time. They're not paid to do that; they just do it because they love it. But yes, there is a little money that comes back to those clubs to help with the purchasing of the machinery, the cost of maintaining, but it does not - I stress that word ``not'' - cover the expenses. For instance they might get something like $55 or $57 annually per kilometre of trail, when in fact it costs about $300 to maintain for the season, so there's a big gap.
The Chairman: Do you find that your tourist operators in this area have difficulty accessing capital?
Mr. Laliberté: Yes, they do, and I mentioned it in the mémoire because it's a kind of a spin-off from the old industry that we used to have. People in the financial market here within the region, and I used the word ``financial market at large'', are fairly able to judge a project that is based in forestry and mining or in agro-alimentaire, for instance, but when it comes to a tourism project they are kind of baffled because they don't know the tourist industry in the region.
We are trying hard to make this young industry known, and make it become the fourth leg of the table, if you will. It's not always easy, though, and we could sure use a lot of help from the federal government as far as getting the information around, helping with stats or economic information, and allowing that to flow down to the financial market at large. I'm sure the same thing applies throughout Canada - there's a need to make sure that people in the financial market know what the tourism industry is and that they can have confidence in it; it's an industry that works.
The Chairman: One last question. Is the Canadian Tourism Commission of any value to you here in this region?
Mr. Laliberté: It's remote. It's a good source of information; there is a wealth of information there. Unfortunately, about 80% to 85% of it does not apply to us, for two main reasons. Their concerns are not our concerns. When I sift through all the documentation - and I've been receiving it for a while now - I've noticed that it stresses a lot of the problems that western Canada has, but not a whole lot of the problems that we have here in the province of Quebec or that I have heard the east of the country has.
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That's one thing, but it boils down basically to the market as well. I talked about the German market. I talked about the Japanese market. The German market is not a market for us because, let's face it - and there's nothing political about the statements I will make - Germans don't speak French, they speak English. So when they choose their destination in Canada, they would rather go to a place where people do talk English, whereas people in France would rather choose a destination where people speak French, which is only normal.
But when you get to the national level, when there's a province that says ``We'd like to go and work on France, not that we couldn't care less about Germany, but Germany is less attractive to us'', and there are nine other provinces saying ``Germany is interesting to us'', you kind of get shuffled to the side. Again, I don't want to make any kind of political statement; it's just a practical statement, that that's the truth, and that's a fact. So as far we are concerned as a region, the CTC is nice, and it's very interesting.
The second point is it costs too much money to go. We can't play with those people. I mean, when you're called Intrawest, like I said, you can put $75,000 or $100,000 in the pot and say ``We'll go with that promotion, guys.'' There is nobody here in the region who can do that.
The Chairman: That's a point well taken. I would just suggest though that's a problem through all of rural Canada, being big enough players to play with the CTC.
Mr. Deshaies.
[Translation]
Mr. Deshaies: I'm glad that you talked about integrating tourism with industry. Someone mentioned to me recently in connection with the forest industry, that Mr. Olivier's sawmill in Villemontel may be the only one still working on the old mechanized system and it's still in operation. We could arrange tours.
Could you tell me what specific tool could make up for the funding which is not available for our region?
Mr. Laliberté: We haven't really examined that question. It would amount to asking the Government of Canada, in spite of the population represented by Quebec, to take on a more comprehensive role in relation to the nine other provinces - at the present time, most of the documentation and the work done in the different markets take into account their situation.
Aside from the question of money, we are asking the Canadian government to make more room for us, whether it be on the Internet or other marketing tools like CD-Rom, brochures and other advertising material because we do constitute a distinct market and don't work in the same way.
It may be a stop-gab measure but it would at least be a beginning, Mr. Deshaies.
Mr. Deshaies: Thank you.
Mr. Ringma: Tell me, are you on the Internet?
Mr. Laliberté: Yes, we already have a site and we're working on the second generation, that is our second site.
[English]
The Chairman: Thank you very much, Mr. Laliberté. We very much appreciate your testimony.
I would like to call on our next witnesses, from the Regional Development Council of Abitibi-Témiscamingue, André Brunet. Welcome. I'd ask you to make an opening statement and then we'll turn it over for questions.
[Translation]
Mr. André Brunet (President, Regional Development Council of Abitibi-Témiscamingue): Thank you.
My name is André Brunet and I am the mayor of this fine town. I am also the president of the Regional Development Council of Abitibi-Témiscamingue and I've just come back from the Montreal Summit on the Economy and Employment last week where I chaired a committee on the regions and municipalities.
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So I still have a clear recollection of this Quebec wide consultation, which has perhaps given me a slightly different perspective. I have received so much information over this period but of course I've modified my views on the development of the economy and employment in the regions of Quebec.
It should be remembered that as early as the 1970s Canada was significantly influenced by a report commissioned by Mr. Trudeau, the Higgins-Martin-Raynauld report. This report still continues to exercise a profound influence on the economic development of Canada. What was the position taken by the Higgings-Martin-Raynauld report? There was the theory of the large concentric circle, the need to develop the main great poles in Canada and the rest was supposed to follow.
That was the theory at the time and we're still dealing with its effects in forcing the development of the major growth centres in Canada, namely the big cities, and I can tell you that the rest did not necessarily follow.
Another great theory of the 1970s was the principle of equal development, that is an attempt to give all the regions of Canada the same opportunity to set up similar mechanisms and methods for intervention. This was a very social-democrat phase of our society and the trend was to try and ensure equal opportunities for everyone. This was a time when the Department of Regional Economic Expansion was created and over the years it became the FRDO(Q). The principle was that the same type of action was to be taken everywhere so that Canada as a whole could develop.
In my view, these two main theories which have held on from the 1970s until the present day, must be reexamined to determine whether a different approach should be taken to development. This is a challenge we are faced with. I'd like to present to your committee some of my thoughts on how we should go about stimulating development in the future, particularly in rural areas.
I would say that local initiatives are the wave of the future. As you know, the various regions are quite distinct, in the West they are largely agricultural, in the East there is the fishery and in areas like ours, we have forestry, mining and some farming.
In these different regions there are leaders and there are also people with lots of ideas and ways of going about development and this standardized way of proceeding has had an adverse effect on people. A program was set out with funding available, and instructions on how to go about engaging in development. If you didn't go along with this rigid process, you were not taken into account, you were out of the picture. So this often had the effect of discouraging entrepreneurs.
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New initiatives were often discouraged because of rigid procedures; if we absolutely have to have boxed mentality, let's try to be a bit more flexible so that programs can be adjusted to individuals. But if we are able to do without these particular programs, I think that we would be able to free up a lot of creative ideas and new ways of going about things.
If the government still wants to invest money in development, there is no point in putting this money into programs and standardized procedures from coast to coast, the money would be better used in developing tools. These tools can be made available to individuals in their efforts to create a new economy.
Technology is undergoing tremendous change. We now have an opening onto the world. Wherever you happen to be, if you're hooked up to the information highway, you're connected with the rest of the world.
Let me give you an example to illustrate this. Near Rouyn, in a small municipality of 200 inhabitants, in a basement of a house is an information highway server containing advertisements for all the restaurants in Paris.
In other words, there is a business in Paris that collects menus from all the restaurants in the city. Restaurants pay a certain amount of money to be included in this server and the server can be accessed in a small municipality of 200 people, 40 kilometres south of Rouyn.
The server is in the basement of a house but people travelling on the information highway have no idea of this. They feel like they're in Paris when they get on to this server but in actual fact they're in a small municipality 40 kilometres south of Rouyn.
So if you're connected to the information highway, you're right in the heart of things. This of course is going to change the economy. For over a hundred years we have had an economy based on paper and because of this paper exchange, people have had to be in close proximity.
Today it's a matter of sending around digits of zero and one. You can be anywhere in the world and exchange this information. This has far-reaching implications. So people must be given the tools they require and allowed to take their own initiatives and develop the economy in their own way.
Regions have often been considered as suppliers of natural resources. That is not the only function of the regions. There is more to the regions than natural resources.
Here in Amos we have a fairly new business made up of about 20 computer engineers known as Syst-M. This company has been responsible for the automation of the sawmills.
Their expertise is so widely recognized throughout the world that their last contract was for the automation of a sawmill in Japan. When people in Amos are carrying out the automation of plants in Japan, it shows that we have gone far beyond the stage of exporting lumber. We are able to export knowledge and expertise as well.
Stop portraying the regions, rural areas, as producing only raw materials; the people there also have imagination, creativity, and are able to export other things.
People should be allowed to take initiative, and be provided with the necessary tools. Look for a moment at what is happening at the present time in New Brunswick. New Brunswick is no longer involved only in fisheries and agriculture; when anyone from Vancouver or Saint. John's, Newfoundland, calls Eaton's or Simpson's the call is answered in New Brunswick. People don't realize that. That is reality. These people have become the centre of the world, because they have managed to establish a position for themselves with this new technology.
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There are no small villages, no small municipalities or anywhere else in the world now isolated from the information highway, where communication is based on zero and one.
Stop portraying the regions as being just providers of natural resources; give them the tools they need to carry out significant development and free them from this kind of national model. You'll see that these regions will become the source of major economic development.
You talk a lot about agriculture and tools. We had difficulty in developing agriculture here in Abitibi. There was a Canadian agricultural research centre in Kapuskasing studying northern agriculture. Seen from Ottawa, the Kapuskasing research centre might perhaps have seemed insignificant, but it had its largest impact on changes in agriculture.
Go around Abitibi and you will see that the whole agricultural sector has benefited from the research conducted at that centre. There is not one farm today not operating in accordance with the major principles established by the research centre. The centre was the source of creativity and extraordinary inventions and innovations in the world of agriculture. Along the highways, you can now see almost everywhere harvests placed in white, green and other plastic bags. Where does all that come from? It comes from the research centre which developed it. The whole system for feeding animals comes from that research centre.
When the research centre was closed, the world of agriculture as a whole stopped developing. I think that this is an important tool. If you have any money left, please put it in that kind of activity. Don't shut down research centres which helped a whole area of the economy to develop.
When we talk about tools, we may also be talking about new funding. I don't know if the prospect of an election will help to find new funds, but if there is money available, please invest it in tools. The information highway is one such tool; when you're talking about new technology, you are talking about research centres. I have just given examples of the very considerable influence of this research centre. I would point out to you that in Abitibi-Témiscamingue, specifically at the Université du Québec in the region, there are research centres on forestry and mining where, with very little money, important discoveries were made which had a major influence on those two industries.
If the government wants to help, it should let people take the initiative and provide them with the research tools needed for new projects.
The research centre of the Université du Québec to which I referred works in the real world. We are not talking here about people who are out of touch, rather people who are in contact with the world of forestry and mining. Their research is focused on the reality of the people in the region. I would mention here all the discoveries made on environmental issues. Their work is a mine of information for exporting technology around the world. There are countries which have to be cleaned up at the present time, and this research centre of the Université du Québec in Abitibi-Témiscamingue offers new ways of dealing with pollution. Abitibi could export this knowledge around the world. As you can see, the regions can also export their knowledge and expertise.
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The problem is that with this move towards productivity or hyperproductivity, we are always faced with global competition.
When people chose to live in isolated areas such as ours, or other regions of Quebec or Canada, it is because they want to. I can tell you that I would never go to live in a major city, because I have a better quality of life here.
We are inevitably in competition with the rest of the world, and we recognize that fact. Wages in the countries with which we compete are 30 times lower than ours. Therefore we will have to invest 30 times more intelligence in the products we manufacture. That's all.
We must not try to produce 30 times more, but rather to manufacture products with 30 times more intelligence than is the case in countries where the wages are 30 times lower than ours. That is how we will deal with the challenge.
If we take the approach that we must produce 30 times more because the people in these countries are paid 30 times less than we are, we will not resolve the problem. In terms of the quality of life, the situation will be disastrous, and I believe that people living in the regions consider their quality of life to be an important factor.
As I travel around the province, people whom I meet ask me when I'm coming to Montreal or to Quebec City. Never! You have nothing to offer which would attract me to go there. Nothing would get me to go and work in Montreal or Quebec City. I like my region. I like to live here. Go and see the people living in the regions and ask them the same question. They don't want to move to Montreal or to other major centres. They don't want the major centres to move into their area either. They want to be able to develop an economy here which will contribute to growth in Canada, but where they will be able to retain their quality of life.
I was looking at your proposals. Some things have already been done and we must respect what has been established.
Things have been established over the years, through the people living in these areas, the laws and by-laws adopted, and the work we have done. It's important to respect the approach taken rather than trying to invent new ones.
Take the example of the CFDCs. You have to pull out the red flags and put them on the letterheads; we manage with that. When someone from the federal government turns up, we bring out the flags; after he has left, we put them away. As you can understand, there are tools which have been established; so try to work with the existing tools rather than creating new ones.
That is the danger with structures. Whenever someone thinks of something new, a structure is created. There are already people there. The CFDC is managed by local staff who are familiar with the problems. If you have to do anything different or new, add it to what is already been done. We should make the ball of wool already there bigger rather than remaking balls of wool. The situation would be much better.
This is one of the criticisms often made: new ideas are proposed, new work will be created. Try to manage with what is available. I think that we have made the present structures effective.
The regions have also developed approaches in conflict with the systems. It would be pleasant to be able to do things in accordance with such systems.
We recently developed a plan known as SOLIDE with the Solidarity Fund of Quebec workers. I don't know if you are familiar with this concept which exists in Quebec.
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This plan comprises the funds in which major institutions and the municipalities invest. The money is used to invest in small businesses located in small municipalities. This funding is known under the general name of SOLIDE.
These are therefore municipal, provincial and private funds, and we have a specialized fund, in Amos. The CFDC is the place where we can meet bankers, accountants and other people providing funding, and because the federal government invested in the CFDCs, the plan SOLIDE is being entrusted to the CFDC.
So you can see that we are a little "far out" here in the regions. That is because we are trying to be efficient. We decided that we would not begin to create heavy structures in order to manage funds. As there are not many others, we decided to invest the money where it would be most effective.
If you look at the situation, you could take us to court any day; the things we are doing are completely unlawful, but that's the care in the regions. The regions must sometimes act unlawfully in order to be effective. If you can't help us, at least don't hurt us.
Try to respect what people have established and the way they do things. Instead of passing legislation from the top down, try to look at what there is at the bottom. See what people want and legislate accordingly.
That is basically the message I wanted to convey to you today. It does not necessarily correspond to the brief of the RDC, but I think it clearly reflects my view of what economic development should be in the regions, in rural communities.
There is a lot of intelligence and a lot of resourcefulness in the regions; the people there don't wait for anyone else or for major centres before taking action. They act because they feel that it is important to do so.
In your paper you mention the need to convince urban Canada that there are good people living in rural communities.
Don't try to do that! We will lose another 10 precious years of our life trying to prove that. That's not what we are asking you to do. If you want to convince someone of the value of the people living in rural communities, spend your money first trying to convince senior officials that there are worthwhile people in rural Canada. It is not necessarily urban Canada which is a problem for us.
Thank you very much.
[English]
The Acting Chairman (Mr. Reed): Thank you very much, Mr. Brunet. I'm going to open up the questioning to the committee. I do have a thought that I would like to inject a little later myself.
Mr. Ringma.
[Translation]
Mr. Ringma: Mr. Brunet, I must say that I am impressed and agree completely with what you said. I travelled almost two years ago with the House of Commons Committee on Welfare. We visited places such as Lévis and Rivière-du-Loup.
When talking about welfare, the people we met asked to have the controls from Ottawa and Quebec City removed and to be free to act, because they could do more with less. I see that you are proposing exactly the same argument here and I agree, particularly when you talk about the tools available today which were not available 10 years ago.
You are clearly going in the right direction. Therefore, let us talk a little about the tools. I agree that the federal government, and even the provincial government, must encourage exports of technology and expertise which can be developed in specific areas. Be it in forestry, mining or some other sector, it is here that the expertise is being developed.
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I would like to talk about the tools which the government provides to build the infrastructure or where more money can be invested. Why do that and encourage export of technology? Could you comment on that?
Mr. Brunet: You referred to the information highway. At present, everything related to communications is very competitive. There are cable distribution companies, telephone companies and soon satellites will be involved. In that regard, there has been freeing up of means of communication and the government, through the authorization of the CRTC, has opened up systems, thus enabling regions such as ours be on the information highway, because everyone wants to have us, that is satellites, cable distribution companies or telephone companies.
I therefore consider that it is desirable to allow the private sector to play its role. The government should not necessarily get involved in the area of communications.
I made a statement two weeks ago before the provincial committee looking into the information highway. I said that, when deciding whether or not to provide assistance to the regions, you have to respect them for what they are. We should not consider national criteria when deciding whether to provide assistance for the production of server systems. I would like to give you an example to illustrate what I mean.
In the case of the information highway, there is a $50 million fund in Quebec. Money is therefore made available to help people wishing to contribute to the information highway. To obtain such assistance, a research centre wishing to set up a server system must have at least five researchers. This is a small division written in small print at the bottom of the page. The only research centres in Quebec with five or more researchers are all in Montreal. Therefore research centres of a kind in Abitibi, where there are two or three researchers, are not eligible. Once again, through an insignificant condition included at the bottom of the page, it has been decided that henceforth only major centres can provide content to server systems.
This is an example of cybercolonialism. With this policy, the regions cannot provide information to the information highway, and once again information will be sought only in the major centres.
A lot of high tech research is being done in the regions, but with small conditions of this kind they are being prevented from expressing what they are doing. We have a research centre here in Abitibi studying back problems. There are three researchers working with two french colleagues, one of whom is in Marseilles and the other at the University of Grenoble, who have developed something recognized around the world, but they cannot apply for assistance because the centre is not large enough. They have been told to link up with a Montreal firm if they wish to make an application.
As you can see, here also a cybercolonial approach is being taken to the information highway. So you can see why there is a concern to address regional demands from a regional viewpoint, rather than that of a major centre. In the regions, the rules are different but that does not mean that the results are not useful.
Mr. Ringma: Thank you.
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[English]
The Acting Chairman (Mr. Reed): Mrs. Cowling.
Mrs. Cowling: Thank you, Mr. Chairman.
We have travelled from Yellowknife right across the west and are now here in your home town. One of the things we heard over and over again was that we should have a regional vision. So your remarks are certainly consistent with what we've heard as we've crossed the country.
I want to come back to giving people the tools and that sort of local initiative. When we submit our report to the House of Commons, I'm wondering what the priority would be, coming from your perspective, with respect to those tools. You mentioned research and development. Is that a priority for a local initiative?
[Translation]
Mr. Brunet: Research and development represent the future. If you look at the impact which the northern agriculture research centre has had, it is not commensurate with the money spent there. They have transformed agriculture as a whole.
Therefore, when investment decisions have to be made on the basis of the money remaining, it is preferable to invest wisely. The research centre is an example of this. Investment should be made on the basis of future impact.
Money has to be given to young people. If we want to continue to make products requiring 30 times more imagination than perspiration, we have to move into market niches where we can produce goods and services 30 times more innovative than those of our competitors. There is no doubt that that requires research and development. R & D are therefore a basic tool.
Research must be made the base of economic development. Look at what other countries around the world are doing. Look especially at what is being done in Japan in the area of research and development. We understand how much they have achieved when we look at the work they have invested in research. It is an important tool.
I also wanted to point out that not all research centres are in Montreal, Toronto or Ottawa. There are also research centres in Northern Ontario. In the view of the government, it was perhaps a small research centre but if you realized the impact it had! Within the broader Canadian context, the researchers in Abitibi are perhaps small but if only you were aware of the discoveries they are making, for example in the mining environment! I fail to see how research an development on the mining environment could be conducted in Toronto.
When research is conducted on the mining environment in Abitibi-Témiscamingue, the researchers are right on the spot. It is here in Abitibi-Témiscamingue that the largest deposits of mine tailings are located. If research is conducted specifically on that, it is not only to resolve the problems of Abitibi but also to be able to develop expertise which will be exported around the world. It can be used to solve problems in China, in the United States or the former Soviet Union. There are countries asking for such environmental assistance.
Research is really essential here if we are to export products containing 30 times more imagination than those of our competitors where the wages are 30 times lower than here. Research and development are therefore fundamental tools. There are other tools also.
I said earlier that if you had funding available, it should not be invested in programs. Please stop putting money into programs. Make the money available to the regions and ask them what they intend to do with it. Ask them to do what they want to do, but don't ask them to work on programs parachuted from somewhere else where someone thought they were a good idea.
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It is therefore desirable to give any money to the regions, to talk with the people concerned and help according to the priorities established. Those are the tools which will enable the regions to develop.
[English]
Mrs. Cowling: Thank you.
The Acting Chairman (Mr. Reed): Thank you, Mrs. Cowling. Mr. Deshaies.
[Translation]
Mr. Deshaies: I have had the pleasure of hearing André on a number of occasions. He surprises me every time. He reveals to me interesting facets of his personality, and I learn a great deal about my own region. As we know, André is very involved and I would like to thank him for agreeing, after working very intensively for almost a month on the Quebec Economic Summit, to appear here and as usual making a very good presentation. Thank you, André.
[English]
The Acting Chairman (Mr. Reed): I would just like to make an observation if I could. I've sat with this standing committee since I was elected. I sit on another standing committee. Both of them have taken a hard look at rural development. If I might be so bold as to observe, I think we are in the middle of a revolution that's based on the advent of the microchip. Mr. Brunet, when you talk about the tools, using the tools that are available, the tools all seem to revolve around the microchip or the semi-conductor. It's something we probably couldn't have considered ten years ago.
I've just been long enough in the political game, since 1975, to remember when my office operated with a typewriter and carbon paper and onion skin. That wasn't very long ago. I think I'm personally developing a new appreciation of just where we are and what the opportunities are for our future.
I thank you very much for your comments, your worship. I appreciate the contribution you've made here today. Thank you.
[Translation]
Mr. Brunet: Thank you for taking the time to listen to the regions.
[English]
The Acting Chairman (Mr. Reed): Our next witness is from the Chamber of Commerce of Amos, Patrice Maltais.
The normal procedure here is that we would ask you as a witness to deliver your opening statement and then we will move on to questions from members of the committee. The floor is yours, sir. Welcome.
[Translation]
Mr. Patrice Maltais (Chair, Chambre of Commerce of the Amos Region): Thank you very much, Mr. Chairman. Ladies and gentlemen, I will begin by reading my presentation.
In areas with a low population density such as Abitibi-Témiscamingue, rural development requires the development of natural resources. As you know, our regions is responsible for 99% of the gold, 95% of the zinc and 70% of the copper produced in Quebec. Natural resources have been exploited to the point of exhaustion, sometimes without any adequate policies being established to protect them.
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Abitibi has been in existence for a relatively short time, approximately 75 years. The people living in our region are from all over the province, both urban and rural areas. In fact, the provincial government encouraged our parents and grandparents to settle here by promising a better life, better economic prospects and the possibility of acquiring property and land they could develop.
The land, forests and mines in the Abitibi region have in fact been worked and developed since 1910. The first and all subsequent settlers were assisted and encouraged by settlement agencies. The first was created in Ottawa in 1884 by the Lands Division Department of Colonization. In 1930, further agricultural plans and a mining boom contributed to the development of the industrial and urban axis. As a result of the mining crisis of 1948, the federal government adopted emergency legislation on assistance to gold mines, and mining development moved north, to Matagami and Joutel. Some towns were directly created by government, such as Cadillac and Malartic.
In the forest industry, so much wood has been cut that people now realize that the forest are an exhaustible resource. The government is putting more and more money into silviculture and reforestation.
The following point should be made: as regards both settlement and also forestry and mining, the various levels of government have contributed to primary, but not sustainable development. The people affected were ignored after being given initial funding. In researching and developing these resources, our governments have not focused on sustainable development.
Furthermore, starting in 1912, the transcontinental train linked Moncton, New Brunswick, to Winnipeg, Manitoba, going through northern Quebec and Ontario.
Is it necessary to mention that our region is as big as France? Adequate transportation services are essential to our development. Furthermore, the region possesses eskers, which provide us with our "blue gold", water. Research in this area has hardly scraped the surface.
The resource constituted by the human capital of these land clearers and developers has hardly been used. In our region, there is currently a level of poverty, drug addiction, dependence on social assistance, in the form of welfare or unemployment insurance, affecting approximately 35 per cent of the population. Mental diseases are hitting very high levels. The next generation does not see any hope of being able to play a role or finding a job, activities which contribute to human dignity.
As time goes on, we can see that we have been ignored by the politicians. Our population is ageing, human resources are not being renewed and no incentives have been established to encourage young people to return to the area, except for a few isolated examples as is the case here in Amos, with the program Place aux jeunes.
People don't talk any longer about development, but rather about decline. That is where state interventionism has led us in a region like Abitibi, a policy opposed to control of the region by the region, for the region, and with people from the region.
The problem is the following: As regards mining and forestry, we are a region where these resources are extracted. There are too few plants processing and manufacturing finished products. In this area, the principle of return to the region has not been implemented. For years, the province and the area have been largely dependent on the extraction of resources from the ground, and inadequate incentives have been provided to process the raw materials in the region. Furthermore, the major decision-making centres are concentrated in Montreal and Toronto.
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At first sight, there are shortcomings in terms of policy regarding the research, development and management of natural resources.
There are also shortcomings in technological research and development concerning natural resources. As a result, it is difficult to address the challenge of market globalization.
As regards human capital, apart from what has been developed historically, it is obvious that there have been too few policies focusing on research, development and specialized institutions.
In fact, the number of government offices has been reduced and our region has been twinned with centres which have very little in common with us. Furthermore, there is a lack of consistency between the various forms of development, that is economic, social and human development. The human capital has been under-utilized, research and development on natural and other resources has been under-appreciated, the human capital in these regions has a low education level, and the next generation is leaving.
As regards the use of capital, there has been insufficient regional assistance enabling such capital to be used for the regions, by the regions and with the regions. As a result, the economic outlook appears gloomy. Consequently, there is competition rather than co-operation and consultation between the regions.
Major projects have ignored the presence of the regions, and transportation networks, communications, headquarters, offices and research are focused in urban areas. The people providing funding ignore the regions and show no confidence in them because of our low population density and limited budgets.
Rather than strengthening or reducing public transportation, there is no medium-term policy on railways, air freight or highway transportation. What is the most serious is that the federal government is not involved, not to say invisible, in the regions. It has withdrawn and it is simply concentrating its resources in Rouyn, Montreal or elsewhere, instead of maintaining a presence in the regions. The offices of the mines, the RCMP, Customs and Excise, Canada Post, and Human Resource Development are being closed, merged or just simply reduced.
Conclusion and possible solutions: A board should be created for the natural resources of each rural region. This board would be responsible for research and development centres promoting intra-regional cooperation.
You have an example of this below, the natural resources board of Abitibi-Témiscamingue. As you can see, we have four main locations, Val-d'Or, Rouyn, La Sarre and Amos. Val-d'Or is focused largely on the forestry sector, Rouyn-Noranda on mining, La Sarre on agriculture and water. The purpose of the research and development centre would be the development of this rich resource, water. Investments would be needed to create water basins and channel our great rivers to the South, so as to provide those communities with water in about 20 years.
This board would obtain from the federal government a $300 million regional fund for five years, a venture capital fund administered by the regions, for the regions and with people from the regions. This board would become a one-stop centre for administering all money invested in the region.
The mining and forestry industries would be obliged to contribute to the capitalization of this regional fund; banks and investment institutions would have to re-invest part of the savings made by people in the region; the profits of the banks would be taxed; regional economic task forces would be created to promote our resources and productive capacity; adequate and appropriate transportation systems would have to be established to maintain and develop the regions and our natural resources; the possibility of a partnership with the private sector in the development of transportation systems would have to be studied.
In this consultation process, both levels of government, provincial and federal must work together on proposing further ways of promoting rural development, while ensuring that they avoid overlapping and investing in development without consulting the communities concerned.
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Thank you very much.
[English]
The Chairman: Thank you very much, Mr. Maltais.
Mr. Ringma.
[Translation]
Mr. Ringma: Mr. Maltais, your recommendations are very clear. I hope that the government will listen to them. I wonder whether you were here when Mr. Brunet made his presentation. What you said is certainly different, but I do find that the two presentations complement each other to some degree.
Do you agree with Mr. Brunet?
Mr. Maltais: I fully agree with Mr. Brunet.
Mr. Ringma: I see that you are working in the same direction. That is all. Thank you.
Mr. Maltais: Thank you.
[English]
The Chairman: Mrs. Cowling.
Mrs. Cowling: Thank you, Mr. Chairman.
I want to ask a question with respect to value added and diversification. What's happening in this area with respect to that and what should this committee be recommending to the federal government to help move value added and diversification along?
[Translation]
Mr. Maltais: Your question is very relevant. When people talked to me about value added, I ask myself what else that contributes to a region.
We have heard a number of witnesses talking about mining and forestry. In the regions, the major value-added we have is water. I would like to talk about water because it is an area with which I am very familiar.
As you know, within about 20 years, which is not a long way away, our friends to the south of us, the United States, will not have enough water because their ground water level is very low. Here, we have everything we need. We have water and even too much. As a manager with Hydro-Quebec, I know that we have a lot of water. Water is the value-added of our region.
In order to help us, the federal government could consider the projects we have developed concerning water, which are on the table, and provide us with what we don't have, particularly money.
Water is the future. We have worked the forests and the mines, and we know that water is the future. I don't think I can go any farther in my answer today, and I apologize for that. I will probably be able to give you a more complete answer soon.
[English]
Mrs. Cowling: Thank you.
The Chairman: I have a couple of questions to ask here on your brief. The first one might be a problem with translation. If you go to your page that set out your conclusions, you have taxer le projet de banque. Does that mean to tax the profits of the bank? Is that what you're saying? I'm not sure I follow what you mean by taxing the projects of the bank.
[Translation]
Mr. Maltais: As far as taxing bank profits goes, it must be said that the banks are very rich. They make millions and millions of dollars in profit. It is actually our money and that of companies, and we say that there should be a tax on bank profits and that these amounts should be sent out to the regions. We have the National Bank and Scotia Bank that could be kept in the regions.
We are at a disadvantage in the regions, because it is very difficult for us to invest or to start up an SME. There is no doubt that this is easier in major cities such as Montreal or Ottawa.
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If there were to be a tax on bank profits, which would remain in our region, Abitibi, we would be able to set up projects and get things going. Does that answer your question?
[English]
The Chairman: Yes, it is taxed; so I have that clear. You're suggesting the natural resource companies that operate in the area should have to put something into a development fund. If I'm reading it correctly, I think that's what you're suggesting.
We've heard that in other parts of the country as well. Are you suggesting a sort of stumpage fee or something like that? In other words, should it be based on the volume of business they do or should it be based on the profits they make, the amount they have to put back into the local economy?
[Translation]
Mr. Maltais: I think it should be a percentage of their profits and that the money should stay here in the regions. If a company makes money in a region, some of it should be earmarked for development purposes.
It often happens that companies take our raw materials from the soil or forest and develop them here, while they reinvest their profit elsewhere. Companies are not reinvesting in our regions. There have been many companies such as the Normick Perron which came to this area and subsequently closed down. No royalties were paid back into the region.
I would therefore like to suggest that the mining and forest sectors be required to pay some of their profits into a fund and thereby invest in the region, rather than investing in Africa or Zaire.
[English]
The Chairman: I understand where you're coming at with that. One concern I might have - and I throw this out for discussion - is that if you have a company that is thinking of making an investment, if they're looking at this area for an investment and if you have as a requirement that they'll have to return x amount of their profit back to the local community or set a trust fund up in advance as part of the condition of coming here but another area doesn't have the same requirement, then the effect of that would be that the company thinking of the investment would choose to go elsewhere rather than to come to this region.
How would you ensure something like that wouldn't start to occur?
[Translation]
Mr. Maltais: I can answer your question in part. A forestry company comes to invest here for the good reason that we have wood there. There is no wood in Montreal. I don't think there is any danger that the company would go elsewhere if we in Abitibi were to tell the company from the outset that it will be required to contribute for $4, $5 or $25 million to a fund.
We have the mines, the soil and the forest these companies need. There is wood in Abitibi. There is no wood in Montreal or Ottawa. Of course, there could be some competition from the Gaspé Peninsula, Matapedia and the Outaouais Region. I think we have to take some risks.
[English]
The Chairman: In closing I just want to say that I think the concept that those people who are earning a profit from a particular area should be expected to invest back in the area is a very valid point of view. How one would accomplish that in the best way is something open for discussion. But I think the concept you're putting forward is a valuable one and I do appreciate you bringing it up.
[Translation]
Mr. Deshais: It is true that people living in regions, not only Abitibi-Témiscamingue, have seen large companies take the best of their trees and mines and then disappear. When these companies are located in the region, everything goes well, but once they sell and leave, the second or third generation find there is no work.
I asked Patrice to speak to you somewhat at the last minute, because he does represent the community of Amos. So I would like to thank him for taking the trouble to prepare his statement.
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I notice that in his comments he often mentioned communications problems. We know that in banks in the South, there is a great deal of money from the savings of previous generations, whereas we in the regions are having trouble financing our development projects. We know that the banks have a lot of money. Even Mr. Bérard, at the Sommet québécois, was saying that there was money and that we could be given some loans, but the regions should not go to bank managers who are there only to answer the telephone, and not to make decisions. The suggestion here, as was the case with all our other witnesses, is that people in the regions should have a hot line to use to deal directly with decision-makers when they want to ask for something.
I don't know whether Patrice is the last speaker, but I would like to reemphasize the point that regions particularly need communications tools and decision-making tools. Mr. Brunet said that people in the regions can do certain things, but they don't want to beg for money. Patrice has just said that the money is there and can be developed. So let's give the regions the tools they need and let them take charge of things, so that the government does not always have to provide grants. That is the message our region wanted to convey to you today. I hope we will get some results.
Mr. Maltais: Thank you very much.
[English]
The Chairman: Thank you very much for providing your testimony and also your very specific recommendations. The committee very much appreciates it. Thank you.
I'd like to call on our last witness today, Lucie Blais, who's a counsellor for the Municipality of Sullivan and who has been very patient all day.
[Translation]
Ms Lucie Blais (Councillor, Municipality of Sullivan, individual appearance): Good afternoon. I'm appearing before you as an ordinary citizen, but I would like to say that I've always been concerned about the social and economic development of my fellow citizens.
As other previous witnesses have said, we in our region feel that the government is progressively withdrawing. I prepared a few brief notes, and I would like to apologize for not writing them out or having a brief. I would like to describe for you what I have seen and heard and what is going on in the community.
First of all, I would like to congratulate the Natural Resources Committee. Because of your work over the last two years, the federal government has finally listened to the problems of the mining sector, and in the 1996 budget, at last agreed to have mining work spread over a 12-month period.
I am speaking to you from my experience and my environment. The things I will share with you would not necessarily appear in a written text. In my view, the rule laid down by the Minister of Finance that money was to be spent before the 28 of February was a waste. It was a waste of money because people who buy flow-through shares do so before December 31, because they don't want to pay income tax on the money, or because they want to try to avoid paying it. The time we have to do the work is very short because of the climate in our region, and I imagine the same is true of 125 or 150 other mining towns.
In the course of my work, I have seen young people leave school to go and work in the mining sector. They simply drop out. Because of the income they could earn, and because they thought they could work longer, they went into debt in order to buy new cars. But when the work stopped because of the weather, they became dependent on the government and all taxpayers, because they started collecting unemployment insurance. They were actually seasonal workers.
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Because of your work, the Department of Finance understood the importance of the 12-month period. Rather than paying 8 months of unemployment insurance benefits, perhaps two or four will be paid during the winter.
I agree 100% with the government's position and with the reforms, but they must be carried out carefully, not merely with a view to the deficit and debt, but also with a view to human problems because these reforms will cause people problems.
In Quebec and in our region, there has been talk about manpower training. I couldn't agree more with those who say that education must be closer to the needs of regions and companies. That does not mean that we have to overthrow everything we have in place, but we do have some concern about this.
I've read a great deal of material, and I think the Canadian government is talking about trying to do some on-the-job training, and this was mentioned as well at the recent economic and social summit in Quebec City as well. I'm wondering why our governments did not take steps earlier to imitate what has been done in Germany, where there is some training in school and some practical training as well. This would enable our young people to gain the qualifications required to meet the needs of business.
The mines and forests could be good places to do some practical training. I would also ask the committee to recommend that the CANMET research centre be kept here in our region. I was not here when Jules Arsenault made his presentation this morning, but I know that the mining sector wants proper training for mine engineers in order to meet its manpower requirements.
Our governments should look closely at this area. We are not saying that McGill or Laval should be closed down, but there could be some partnerships established in the area of adult training. A friend of mine who works in the mining sector recommended this to me, and I don't remember whether Mr. Gratien Gélinas included it in his brief. We are asking that access to natural resources on Crown lands be maintained, and so on, and that there be fewer regulations and the harmonization of efforts in all provinces, including Quebec.
The Val-d'Or Chamber of Commerce presented a description of the federal presence in our region - I should mention that I made notes of what I wanted to say to you while I was listening to the others. As regards natural resources, I would mention that there used to be a forestry engineer here at the Forestry Canada Office. He is no longer here. Despite certain efforts, he left for economic reasons.
I would like to tell the committee members that the forestry engineer we had here cost the government $20,000. It was an exchange with the Federal Office of Regional Development. The forestry engineer is now in Quebec City, in a large centre, even though the forest is here, and in the Lac-Saint-Jean region. In the long term, and I look forward to seeing the results next year - this decision will have cost the government extra money, rather than saving $20,000.
In addition, there is a rumour that CN might disappear from the region. The privatization of CN is a concern for people in rural and outlying regions. I know that some committees will be working very hard to ensure that passenger transportation is extended.
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But passenger transportation is not my real concern. CN carries passengers as far as Senneterre. As has been done in other regions, we could work with the hotel industry and set up another transportation service to bring people to Amos, La Sarre or Rouyn. In fact, it takes quite a long time to transport passengers from Montreal to Senneterre. If a train were to go even further north, it would take even longer.
I trust committee members are as concerned as I am about rail freight transportation, or at least about maintaining the service. This would result in lower costs for infrastructure, roads, and so on later on. If you are not familiar with the mining region here, before you take your plane, look at what we call here the "muck trucks". They are quite heavy and they damage our roads. It might be better to invest in maintaining the tracks.
I won't talk about the airport and the cost of tickets. My colleague from the Quebec City Chamber of Commerce spoke about that.
Nicole Brien, a co-worker, spoke about the human resources office. I find it unacceptable that a government that is supposed to be in touch with people, did not listen to what people in the region had to say about this.
As far as the program goes, I must say that I did not have an opportunity to read the document you sent us. As a person who has worked very hard on community projects in the Abitibi-Témiscamingue region, I find this sad, and perhaps I should say to the Human Resources Development Minister that there are no longer any programs available to community projets. Some politicians, the private sector or taxpayers may find this very controversial. Community workers provide front-line services and they are often paid the minimum wage. These people play a very useful role in society.
The Canadian Jobs Strategy no longer exists. Programs for community groups have been discontinued. Community groups used to offer training for people entering the labour force. It was not a conventional sort of school that gave out diplomas. It was rather a school that helped people get into the labour force for the first time or to get back into it. The government should look at this idea, particularly in the case of regions like ours throughout the country.
The Chairman: Mr. Ringma.
Mr. Ringma: You have touched on many subjects, including training, education, manpower, and so on.
Given that education is a provincial responsibility under our Constitution, but that the federal government is involved in this area as in many others, I agree with what you said. We need a common sense program, something practical for people, similar to the programs that exist in Europe.
But given all the levels and organizations involved in this area, what would you suggest we do to solve these problems?
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Ms Blais: First, I think the federal government should remain involved to some extent in the area of education, while taking the time to listen to what the regions require. Quebeckers are still part of the population of Canada. As far as manpower mobility goes, I think we should have some standards, similar to those set out in the Canada Health Act. I was opposed to block funding, to transfer payments, because I think it is disturbing to give some provinces too many responsibilities. There could be too great a disparity among the provinces. That will not make for a united Canada.
Mr. Ringma: Thank you.
[English]
The Chairman: Mr. Reed.
Mr. Reed: Thank you, Mr. Chairman.
I want to pick up on your comment about manpower training. I have a problem in the riding I serve, because I'm short of people. I have a deficiency of people with manual skills. If you are an aircraft-quality machinist, a boiler-quality welder or a toolmaker in the riding of Halton - Peel, you can get a job any time. I've done some investigating as to why this problem exists, and I have come to two observations about it. I think both of them have some validity, and I don't know whether one is more important than the other.
One centres around the population and its view about the dignity of work. In the area where I live, there are a lot of people who have immigrated from Europe, for instance, who worked hard all their lives and have done well. Some of them own construction companies now. Some of them are still working and so on. There's a reluctance on their part to encourage their children to develop manual skills. I'm not trying to blame it all on immigration. Those of us who are four or five generations in this country have done it ourselves. We have encouraged our children to take arts courses or become lawyers or something else, and have downgraded our attitude toward that kind of work.
The other problem - and I may be wrong in terms of Quebec - is that the unions somehow have felt that they own the prerogative for apprenticeship training, that it's their property. So those are the two problems.
What happened in Ontario was that when community colleges were established, part of their responsibility was to teach the basics of manual skills. Over the years, however, those courses have been dropped. They've been done away with. Now the community colleges realize there's a problem and they're trying to enter into partnerships with industry to bring this back. Is there a parallel situation here?
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Ms Blais: I'll give you my own feeling. It's not based on research that I did.
When you want to apply for a job to pick up garbage, you need to have a secondary five. I know a little boy about 25 years old - I'm a grandmother - who cannot read or write a cheque, because his girlfriend is doing it. That's in 1996. That boy can do anything with his hands to a motor. He's a mechanic, diesel and regular, and he cannot get a job because he doesn't have any papers. I'll bet you any company in Val d'Or or in this region, or in your region - he could go to work there. He has the skill to work but has no papers.
When you talk about unions, we're turning around with papers. Unions like construction - I know lots of boys who can work with a hammer or a screwdriver. They can work with that. Do we need to go to university to get a job?
That's why I say training close to the industry, because maybe in the industry when they find a boy 15 or 16 years old, he's no good at school, he wants to be manual - maybe it's worth putting some time on him. Give him an allocation. It's not giving them a welfare cheque. Give him an allocation to learn the job. In the moyen term, we might have people with some skills to answer what the company needs.
Yes, we need to have some professionals. But like your example of immigrants who have big houses now and don't want their children to work in manual things - The media, in all the government language - we always pick a high-tech job, a high-tech thing. High-tech this and high-tech that, but it's not what puts bread and butter on the table. We have to give dignity to the people.
Mr. Reed: Thank you for that.
Do I have time to make one fast comment about rail transit?
The Chairman: A fast comment.
Mr. Reed: One of the experiences we've had in Ontario with the closure of rail lines has been the limited creation of short-line railroads. By and large, they have been very successful. What seems to have happened is that those lines were closed because the market was was perceived to be declining, but when the short-line operator picked up the line, they were able not only to restore the tonnage that was being hauled, but increase it quite remarkably, just by positive marketing.
In terms of the future of rail across the country, are there not some positive possibilities that present themselves?
Ms Blais: I think there should be some possibility. When they say we want to privatize, do we have to sell to the outside, or can we sell those things to employees who know the track and the conditions? If they own the thing, the whole community will profit from that, because they need jobs too. They have to have a job, right?
Mr. Reed: Thank you.
The Chairman: Mr. Deshaies.
Ms Blais: Just before -
[Translation]
You asked Ms Brien what we should change in our governments, and she answered that we should change the government officials. I'm sure you will understand, because you are all politicians. It is true that our public servants in their ivory towers in Ottawa, Quebec City or other provincial capitals are very far from the regions. They are an obstacle to the changes that should occur throughout the country.
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Ms Deshaies: I'm not familiar with all the issues you raised, but I do know about some of them. With respect to non-profit organizations, which would have trouble using the provisions of section 25, the problem was raised with the regional director. The social groups in this area provide services that cost almost nothing, because all the workers live on very low salaries and there is a great deal of volunteer work and community money. These groups do very important work in the region.
In the past, the federal government collected taxes, but it promised to redistribute the money for regional development. We should remember this.
Ms Blais has been very involved with the United Way. That is why she is close to the people in this area. I would also like to add something to what Mr. Reed was mentioning. With respect to CN in our region, there is a short-line railway that the employees now manage. Traffic has increased almost five-fold.
The problem is not that the short-line railway does not make money. However, the employees are wondering where the money goes. Will at least some of it be kept for maintaining our tracks, so that in five or ten years, rail services will still be able to function? Of course, they will say that they will leave us the railway, but the tracks are all in poor repair.
In fact, the Department of Transport required that the tracks on the Senneterre-Rouyn line be repaired, because the train could not go over 20 or 25 miles an hour because it was too dangerous. So you can imagine the type of conditions we have to deal with when the economic life of the region is based on transporting heavy commodities such as ore and wood. So our rail transportation service is very important.
It is important that there be a five-year plan to ensure that profits are put back into the region so that our tracks can be maintained. This would create some jobs as well.
The employees have made many concessions. CN's problem was that some employees were very expensive. People think that CN employees are well paid, but they have to work crazy hours to earn their wages. Employees are prepared to create jobs by establishing more reasonable schedules, but they also want some money spent on improving track safety, so that the trains can travel at least 50 miles an hour. Fifty miles an hour is not very fast. That is why we have no passenger train, it is too slow.
So I would like to thank you for your comments, Ms Blais. I hope that in its report, the committee will take the needs of our region into account. Thank you.
[English]
The Chairman: On behalf of the whole committee, I thank you and compliment you for your patience in sitting through the hearing all day. I appreciate that, and I know the other committee members do too. Thank you.
We stand adjourned until tomorrow at 9:30 a.m.