NRGO Committee Meeting

STANDING COMMITTEE ON NATURAL RESOURCES AND GOVERNMENT OPERATIONS

COMITÉ PERMANENT DES RESSOURCES NATURELLES ET DES OPÉRATIONS GOUVERNEMENTALES

EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, February 19, 1998

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[English]

The Chairman (Mr. Brent St. Denis (Algoma—Manitoulin, Lib.)): I would like to call to order this February 17 meeting of the Standing Committee on Natural Resources and Government Operations.

We have the pleasure of having as our witness and guest today the Honourable Andy Mitchell, Secretary of State for Parks. He is here not because he is Secretary of State for Parks; he is here at our request because he chaired the natural resources committee in the last Parliament and led that committee though its study of rural Canada. They produced a report called Think Rural.

Inasmuch as part of the future business this committee has agreed to will include further study of rural issues, because it's a never-ending concern that we keep rural Canada in the mainstream of Canada and the country, it was in that vein that I asked Minister Mitchell to come as past chair to bring us, especially new members, up to speed on that report and its recommendations. We can question him on the rationale for different recommendations.

I will remind members that Minister Mitchell will not be answering questions related to the government's response to the report. That will be coming in the next few weeks. So you could look at this as a launch pad for our continuing study of rural Canada, which will continue throughout the spring.

With that, Andy, we would invite you to maybe speak for 15 or 20 minutes and then we'll open the floor to questions.

The Honourable Andy Mitchell (Secretary of State (Parks)): Thank you very much, Mr. Chairman.

I'm pleased to have an opportunity to come back to the committee and to talk a little bit about our report. I would be remiss if I didn't thank those members, some of whom are around the table today, who were part of that process for the work they did in putting that report together. I would also like to thank Ministers Goodale and McLellan, who were in involved when we originally did the report as the Minister of Agriculture and the Minister of Natural Resources at that time. Also, there was a considerable amount of staff work done for us, both from the clerks' department as well as from the research department. I see that Jean-Luc is here, who was involved in doing it as well and who has our thanks.

I look forward to having an opportunity this morning to talk a little bit about the report. I'm going to give a little bit of background on how we approached this issue and some of the things we came up with. And I should also thank this committee for readopting and asking for a response. It's nice to see your work come to some sort of fruition from the previous Parliament. So I thank the committee for that as well.

We had an opportunity in developing this report to hear from 117 different groups who provided oral testimony, and we had an additional 100 or so briefs that were provided to us. So we had a fair amount of interest expressed as we held hearings both here in Ottawa and.... I think one of the important decisions the committee took in doing the rural report was to travel into rural communities across Canada and talk to folks in particular communities. We tried to achieve a more or less geographic balance as we travelled from west to east and made our appearances in rural parts of Canada.

I guess to begin, I would answer the question as to why we did it. There were a number of reasons. There was a general consensus among committee members and I believe among parliamentarians generally, particularly those of us who do not come from large urban centres, that there was a need to highlight the whole issue of rural Canada and the whole issue of those challenges rural Canadians face that are somewhat different from what our urban counterparts may face.

As some of you may recall from the last Parliament, in the throne speech in 1996 the government made a commitment to examine and look at the issues of rural Canada. Many of the committee members wanted to have an opportunity to provide some substance to the process that had been outlined in the throne speech.

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One of the other issues that we wanted to make clear as a committee was that the issue of rural development was an inter-ministerial issue, in that it stretched across inter-ministerial boundaries. Although there were some ministers who may have been involved more than others—obviously the portfolios of the Minister of Agriculture and the Minister of Fisheries can be said to have a very large rural component—we wanted to make the emphasis that there was a rural aspect in most ministries.

If you have an opportunity to look at the list of witnesses from various departments, I think you'll see that many of those departments felt the need and in fact did come and provide testimony to give substance to our belief that this was a cross-ministerial issue.

I believe there was a general consensus at the time, and I think one that still exists, that parliamentarians as a whole, regardless of which side of the House they sat on, felt that the issue of rural Canada was an important one and needed to be discussed and highlighted.

So those are some of the reasons why we did it.

We held hearings, as I mentioned, both here in Ottawa and in the field across Canada. We heard from a large number of departments and agencies of those departments who were involved in rural Canada. We also heard what is commonly referred to as expert testimony from various groups and organizations that deal with rural Canada, groups from academia, from industry associations, from the environmental community, from first nations, etc. Then we had the opportunity when we actually travelled to hear from individual Canadians as well as from what I would call some locally based organizations about the issues of rural Canada.

Oftentimes we heard the same themes repeated wherever we were. We also heard some distinctive regional variations, depending on the part of the country we were in.

When we approached the study we actually asked ourselves seven very basic questions that we wanted to deal with as we examined the issue. I'll just briefly run through those.

First, we asked what are the specific impediments to rural development? What stands in our way? What do we need to address if we are going to move ahead on the issue of rural development?

The second question: What direct government action may be appropriate to sustain rural Canada?

Third, what can be done to encourage the development of business services in rural Canada?

Fourth, how can we encourage secondary industries? Obviously in rural Canada we have a primary industry base, whether it's natural resource harvesting in its broadest sense or tourism. We wanted to know how we could encourage the development of secondary industries.

Fifth, what could we do specifically to enhance natural resource harvesting in its broadest sense, whether it's agricultural, forestry, mineral, fisheries, whatever?

Sixth, what needs to be done to encourage or maintain value-adding of natural resources in rural Canada? Much of our discussion talked about a desire to not simply ship those harvested resources to some other centre but to value-add them in rural Canada and to have the economic development and job creation that would flow from that.

Seventh, how can we better develop support services for rural Canadians?

They were the basic seven questions we asked ourselves as we began the review. From that we came up with a number of principles that we felt should guide policy development in terms of rural Canada and we came up with some general recommendations.

In terms of some of the basic core principles, they are enunciated in the report, but I will take a moment just to go over them, because I believe they form a core part of the findings of the report.

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The first core principle was that urban Canadians need to be made aware of the significant economic contributions of rural Canada. One of the concerns we had as a committee and one of the concerns we heard from rural Canadians as we travelled was the fact that there was not a broad appreciation within the country of exactly the role the rural economy plays in the overall economy of the nation. There was a need to make that more clear and there was a need to ensure there was an appreciation among Canadians of that fact.

Secondly, as a principle we said that policies need to be implemented that will ensure access by rural Canadians to basic government services of equivalent quality to that of their urban counterparts. One of the concerns we heard was there needed to be the ability of Canadians in rural areas to access government services, that the decision to live in rural Canada should not penalize somebody from an opportunity to access those services. There was a recognition that it may have to be done differently to respect some of the different challenges, but that rural Canadians deserved and needed to have access equivalent to those who lived in urban centres.

Thirdly, quality access by rural Canadians to education, training, infrastructure, communications, capital research and development and other important tools is crucial for them to meet their economic development needs. We were recognizing that in order for rural Canada to move forward, access to these various components was absolutely essential.

Fourthly, the specific model for rural development should be the choice of the individuals in the local area and should ideally reflect a bottom-up community-based partnering approach. The committee rejected the idea that a senior level of government, federal or even for provincial for that matter, should design a rural development program, micro-design it, and then try to apply it across the country. Rather, rural development was a partnership, and the development of the specific actions that needed to take place were best developed at the local level and government's role was one of a partner and one of assistance.

The next principle was we did not feel the solution was necessarily the large expenditure of new funding, but rather we needed to take a different approach to the whole issue of rural development.

Finally, there needed to be emphasis by the federal government on enhanced communication of our policies and on information to individuals residing there. One of the things we discovered as we went around the country was that many people were not even aware of what was already in place, and there was a significant need to ensure that Canadians had an opportunity to understand exactly what was available to them. That was another one of the principles we put forward.

From that we enunciated in the report, as we deliberated it after our hearings, some general recommendations that I will take a moment to summarize, Mr. Chairman.

Firstly, the report states clearly that rural Canada and rural Canadians are important to the future of our nation and those individuals and those communities need to be addressed by government.

Secondly, rural Canada in fact does have a separate economy, with values and traditions that are somewhat different from those of our urban counterparts. That is a reality of Canada today, and policy development should reflect that reality.

Thirdly, the federal government's challenge is to make rural Canada a full partner in Canadian society and to try to ensure that things like access to capital and to information and services is equivalent in rural and urban Canada.

Fourthly, although federal government macro-economic policies may be as valid in rural Canada as they are in urban Canada, the application of those policies must take into account the unique challenges faced by Canadians. These challenges include such things as distance from markets, low population density, abundance of natural resources. Essentially we were saying that although policies of government very well apply across the board, the application of those policies must reflect what actually is going on in rural Canada. The way you implement those policies should necessarily be different in a rural area from what it may be in an urban area.

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Fifthly, rural economic development ought to be a collective responsibility involving all levels of government, rural stakeholders and the business sector, and within this broad picture the federal government needs to play an active leadership role by facilitating the process of local economic development. And again we emphasize that it is best to leave rural communities to decide what types of specific programming and applications should apply in their particular areas.

From that, Mr. Chairman, a number of specific recommendations were made, which I won't go through, because I know you've all had an opportunity to read them. But there were some specific recommendations that were made, and they are contained in the report. There were 37 of them. My colleagues who were on the committee at the time worked very hard at putting these together. I can remember at the meeting when we first came here that list was somewhere around 55 or 60, and we tried to consolidate it a little bit. I would just point to only two that I think are critical, and they were in fact the first two. The first one is that we in fact need to have a rural policy in government, and it should include a vision for economic development. And secondly, federal programming should be proactively targeted for rural Canada.

I was pleased to see an announcement made by the Minister of Agriculture a couple of weeks ago about the whole issue of having a rural lens where there's a commitment being made that when policy is developed the needs of rural Canadians will in fact be proactively and specifically considered in the development of that policy.

I hope that gives you a little bit of an idea and a background of where we were coming from in developing this report. It took place over a fairly lengthy period of time. I believe that the members who were on the committee at that time and the staff who were involved deserve a lot of credit for the work they did.

Mr. Chairman, I am quite pleased to answer questions.

The Chairman: Thank you, Minister.

We'll open the floor to questions. If you don't have a copy with you, the clerk has copies of the recommendations. The minister will not answer questions on behalf of the government, but if there are questions about the recommendations and the context and the rationale behind them, I'm sure he would be pleased to answer them.

Mr. Gilmour, do you want to start us off?

Mr. Bill Gilmour (Nanaimo—Alberni, Ref.): Sure.

I appreciate your coming before the committee.

My riding, as are many around the table, is a rural riding. It takes about four hours to drive across it. It's a slab right across central Vancouver Island, with largely fishing, forestry, and some tourism. And yes, we certainly do feel in many cases that we are disadvantaged compared to people in Vancouver.

Without going into the government response, which we will hear later, are you getting a good feel? I mean, we've all been in committees where we've made our reports, and it's a nice report but it doesn't go anywhere. Are you getting a good feeling? Are you getting the flavour that this is an issue with the government and that it will be going ahead? I'm not trying to finesse anything out of what the government's position would be.

Mr. Andy Mitchell: Sure. I do believe that the issue remains an important one. I think the fact that this committee readopted it and asked the government for a response was a positive part of that process of ensuring that the issue remains an important one.

I think the announcement from the Minister of Agriculture with this term “a rural lens” is a positive one. And I believe that. I don't know what it was like out west during the campaign, but I know certainly in my area the issue of rural development was one that was actively discussed. So I believe that it is an issue that's on the table. I think it's an issue the government certainly takes seriously. And speaking from another perspective, I think it's an issue that we as parliamentarians who come from rural areas take seriously. I think that all of us who are members of Parliament from rural areas have an obligation to make sure this agenda remains front and centre.

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The Chairman: Thank you. Carmen Provenzano.

Mr. Carmen Provenzano (Sault Ste. Marie, Lib.): When we talk about rural Canada, I'm assuming that we're referring to all those parts of Canada that would not be contained within urban Canada. When we talk about those parts of Canada as being rural Canada, certainly there are large parts of rural Canada that are without organization of any kind.

I just wondered whether the committee looked into that aspect of it, the special problems—first of all the amount of land mass that is covered by unorganized areas and the special problems of those parts of rural Canada that lie in unorganized areas. Did we look at that? And if we did, do our policies address any specific problems that those parts of Canada face?

Mr. Andy Mitchell: Absolutely, Carmen. One of the major parts of our testimony was around definition. What the report brings forward is three different ways of looking at it: we looked at it from a geographical standpoint, we looked at it from a population density standpoint, and we looked at it from an economic standpoint, the types of different economies. The conclusion was, just as you say, that within rural Canada itself there is a significant diversity.

A rural area that surrounds Montreal, the Eastern Townships as an example, which is able to receive an economic outflow from Montreal in terms of tourism, is very different from an area in northeastern British Columbia, which is isolated from a large urban area. Or your area, northern Ontario, where there are large tracts of unorganized townships, is very different from an area like Muskoka, which is similar to the Eastern Townships, in that it's close to a large urban centre.

That's one of the reasons why the report stated that rural economic development needed to be tailored to individual communities and why it had to be a bottom-up approach. Because although the federal government could be there with a menu of support services and could be a champion, the idea that you could develop one solution that would work in all of rural Canada probably wasn't the route to go. That's why the bottom-up approach was the one the committee put forward.

Mr. Carmen Provenzano: Thank you.

The Chairman: Anything else, Carmen?

Mr. Carmen Provenzano: I'm thinking, Mr. Chairman, of one specific example, and I think it would be repeated across the country.

I watched over a period of years as business after business closed in the area north of my own riding in Sault Ste. Marie. The people who operated those businesses didn't know what to do. Since that area is without any sort of organization, let alone municipal organization, they don't have an entity to approach. Their problems are to be solved by themselves. It's worse than a local solution; it's a lonely one.

I have thought over the years that if there couldn't be municipal organizations as such, if there were some other kind of entity that could service these unorganized areas so that there would be some entity that could be approached, for example, just to let that entity know what the problems were, work with the entity on the solutions, some liaison between the governments.... There is no such thing. You have all of these people who are trying to do things quite separately. They don't act in concert; they don't have force of numbers.

I think the upshot in many cases is you see failure. You see economic initiatives that are doomed to fail. I think it would be just terrific if somehow we could address that problem and find some kind of a solution.

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Mr. Andy Mitchell: I agree with you.

It was interesting, Mr. Chairman, that as we travelled across the country we saw examples of different structures that were created to deal with different areas. We talked about the need to do that.

Part of that, and again the report addresses this, is the whole issue of communication: how we communicate within rural Canada and the types of technologies that need to be developed and the type of communication infrastructure that has to be there so that you do not have that situation of being alone and isolated.

The idea about cooperation between different levels of government.... The last recommendation, recommendation number 37, one the government will be responding to, is that there should be an annual meeting of federal and provincial rural ministers, which happens in many of the other portfolios, so that there can be some discussion about rural issues that overlap between federal and provincial jurisdictions and so there can be some of that coordinating approach.

The other thing is that there are a number of institutions we have on the federal side that the report suggests need to find a way to broaden their communications structure. If you have farm credit operating, it's got to have a way to get into the very smallest of communities. The Business Development Bank, the Canadian Tourism Commission, Community Futures, or regional development agencies have to be able to reach out into all areas they service, the very smallest as well.

The Chairman: Thank you. Is that okay, Carmen?

Mr. Carmen Provenzano: Thank you very much.

The Chairman: I think the point that strikes me is local leadership. Carmen was talking about parts of my riding near the Sault that are unorganized. You need local leaders, don't you?

Madame Girard-Bujold.

[Translation]

Ms. Jocelyne Girard-Bujold (Jonquière, BQ): I would like to know if there is a section in your report on rural telephone service. You know that right now the increase in long distance rates really affects small municipalities and penalizes them more than large centres. They have to incur additional costs in order to have access to appropriate long distance services. Does your report touch upon that? If so, have you suggested means to remedy the situation and allow easier telephone access outside their territory?

[English]

Mr. Andy Mitchell: Absolutely. One of the issues that was discussed specifically was telephone service. It was discussed by the Canadian Federation of Agriculture, who spoke to that issue as a proponent. As well, Bell Canada provided testimony to us on the specific area. Bell of course serves both Quebec and Ontario.

One of the issues in there was the fact that we lacked some basic telecommunications infrastructure in our rural areas. There are areas in Quebec and in Ontario that are broadly unserviced altogether. There is simply no service there. I know for some of our colleagues who came from the city, to mention to them that there were actually places in Canada where you still couldn't get telephone service, many of them were shocked to hear that.

Even areas that do have it, we have analogue switches still and not digital switching. This means that all of the modern telecommunications services that we've come to expect in the city are not available in rural areas. Large sections of Quebec and Ontario only have party line service; they don't have single line service. That means that many of the tools we would use for business are not available. You can't use a fax or an answering machine or a computer if you have a party line. That was a concern that was brought forward.

We also made the issue—and this was an important issue, which addresses your issue of cost—that the cost of upgrading that infrastructure should be borne by the entire network, not simply by rural subscribers. There is an obligation and a responsibility on behalf of those companies who are servicing those areas to have their network upgraded.

I was pleased to see Bell Canada put a proposal forward that would see those kinds of upgrades that we were talking about take place over the next few years. They are already duplicating what has been done in other parts of Canada. I was pleased to see that Bell did that.

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The issue you're raising was one we heard consistently as we went into rural areas, particularly the communities we went to in Quebec and in Ontario and the witnesses from Quebec and Ontario who brought that up.

[Translation]

Ms. Jocelyne Girard-Bujold: You know that a few weeks ago, Bell Canada announced a rate increase and that the company anticipates another increase next year. People in those areas are the hardest hit. Although Bell Canada says it will have to change its phone lines in order to increase their capacity, those people are penalized and don't get anything out of it right now. I would like to know if your committee will make a recommendation in order to make the government, Bell Canada and the CRTC aware of the problem and to have the CRTC put a stop to that rate increase that affects small rural communities.

[English]

Mr. Andy Mitchell: There are, in fact, some recommendations—I'm looking for the number in the report—that address that specifically. When we're completed, Mr. Chairman, I'll point out what the specific numbers are in here, because I don't have that readily available. But we did address the issue specifically.

The Chairman: Our committee could make that.

[Translation]

Ms. Jocelyne Girard-Bujold: It is very very urgent.

[English]

The Chairman: Do you have anything else?

[Translation]

Ms. Jocelyne Girard-Bujold: In recommendation number 2, you say that a federal program subsidizes access to the Internet for small rural municipalities. Does this have to do in part with recommendation number 2? Will that speed things up, is the situation getting better and do many rural communities have access to the Internet right now?

[English]

Mr. Andy Mitchell: The Community Access program, which was launched in 1995 or 1996, was in fact enhanced in 1997. There were additional dollars committed to it. And I think the objective of the Community Access program now is that every rural community of 500 or more will eventually be able to participate in this program. It is a commitment. And in the testimony that was provided at the time by Industry Canada, it is a priority for them to ensure that our rural communities do have access to the information network.

[Translation]

Ms. Jocelyne Girard-Bujold: How many rural communities have access to it right now? Have you widened that access? What is the percentage of those which already have access to the Internet?

[English]

Mr. Andy Mitchell: I don't have that information right now. The testimony we received from Industry Canada had that figure at that time, but I know it would have been substantially increased. I would, through the chairman, suggest that perhaps you could ask Industry Canada to give you their updated figures, because more and more are being added every few months.

The Chairman: We can check for you, Jocelyne. I refer you to page 26 in the French version of the report, which deals with part of your question.

[Translation]

Ms. Jocelyne Girard-Bujold: I have another question. May I ask it as well?

[English]

The Chairman: Sure, go ahead.

[Translation]

Ms. Jocelyne Girard-Bujold: Recommendation 24 reads as follows:

Following further improvement in the federal government's fiscal position, consideration should be given to (a) reducing payroll taxes for businesses with annual revenue of less than $200,000; and (b) increasing to $300,000 the earnings limit for reduced corporate income tax rates for qualifying businesses.

Mr. Martin will bring down the budget next week. Did you take any steps to obtain such a thing from Minister Martin?

[English]

Mr. Andy Mitchell: I'm going to let Mr. Martin speak for himself on Tuesday.

To speak to the recommendation, much of the testimony we received in all parts of the country was that the small-business sector was an integral part of rural communities. In fact, in some communities in some parts of the country that was the whole economy; there was not the large employer in particularly rural communities.

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As we heard testimony from local chambers of commerce and economic development officers, as well as some national testimony, there was a desire expressed that we, as a government, should move as quickly as we could to create a fiscal climate that would help small businesses be more successful. Through that testimony, the committee arrived at that particular recommendation as one of the ways—an important way—in which that could be achieved. I suspect that the response to that will be contained in the government response you will be receiving in the not too distant future.

[Translation]

Ms. Jocelyne Girard-Bujold: No, I'm not asking you if Mr. Martin will do it. I'm asking you if you have taken additional steps regarding this recommendation. I think that this is the most important recommendation in your report. Agencies and businesses need a hand as well, especially in rural areas. It's all I'm asking you. I don't want to have Mr. Martin's views.

[English]

Mr. Andy Mitchell: I can assure you, as the former chairman of this committee and as a member of Parliament from rural Canada, that I stand behind all those recommendations. I have been a strong advocate for rural Canada. My colleagues are under no illusions about my interests and objectives in terms of enhancing rural Canada.

The Chairman: Mr. Cullen, please.

Mr. Roy Cullen (Etobicoke North, Lib.): Thank you, Minister, for coming here today.

I'm an urban MP, but I think as urban MPs we need to continue to remind ourselves how the economic activity and the life of cities is largely derived from our natural resource sector. If you look at banking, finance, insurance—whatever it is—a lot of what goes on in cities is based on an economic activity that goes on in rural Canada.

I have a question. I think it's no secret that this committee would like to build on this Think Rural report. The challenge is, how do we do that in a productive way that doesn't cause overlap and duplication?

Minister, perhaps with the benefit of hindsight but also with the benefit of your thinking at the time, were there areas that, given more time, you feel could have been explored in more detail? Within the context of today's public policy environment, I'm thinking one example is greenhouse gases. That's just one sort of more contemporary policy issue. Are there areas that in your opinion we could productively explore, building on that report?

Mr. Andy Mitchell: There were some specific models we had seen when we did our travels. Although we referenced them in the report, we certainly didn't have the time to do some detailed examination of those models and to see how they could perhaps be applied in other parts of the country.

I know that Reg was up there as well with us when we were up in Fort McMurray and we saw the kinds of cooperative efforts that were made between the energy companies there and the first nations and the community itself. That was a particular model. I know we had some testimony when we were down in Cape Breton about some of the models that we had seen there.

I think that the idea of examining how some of those models could be used in other locations, or some of the components of those models.... If we had had more time to examine that, I think it would have been worth while. I think the whole issue of examining the role of partnering between government and business is an important one.

The third one is how we enhance or empower people to work on these items. You'll see there is a recommendation in there talking about the volunteer tax credit. The whole issue of how we empower local folks to become involved in that was an area that I think could be further explored.

Mr. Roy Cullen: Minister, when you talk about models and structure, is that in the context of economic development in rural Canada? Can I read that into it?

Mr. Andy Mitchell: Yes.

Mr. Roy Cullen: Or is it broader than that?

Mr. Andy Mitchell: Well it certainly includes economic development, but I'm talking about that in the broadest possible sense. I think that's true. There are social issues that need to be dealt with and should be dealt with in the whole idea. The educational side.... In the broadest context, education is part of economic development. Some of these models talked about that as well.

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Mr. Roy Cullen: I don't want to put you on the spot, but as chair of the committee that wrote this report, are there areas this committee should push harder on, where it needs to be re-emphasized or underscored?

Mr. Andy Mitchell: I guess the specific answer to that you will be able to determine once you see the response itself.

I think if I were to say something on that it would be that we continue to make the point that rural Canada is a distinct entity and its economy in fact has a lot of differences from the economy you would find in urban areas, and government needs to understand those differences and to act on those differences. Putting it in a broad context, I think that's the point that needs to be made.

As issues come up—and there are issues that will be here on our table six months from now that we may not even be cognizant of today—that mindset or that context has to be maintained, so that somebody asks the question, if a policy is being considered or we're debating something in the House: how does that work in rural Canada; what are the specific concerns out there in rural Canada? I think that's what we we've got to do. And we have to make sure that the policy-makers, whether they're provincial or federal, whatever department, keep that front and centre in their minds. I think that's a key thing that needs to happen.

Mr. Roy Cullen: Thank you.

The Chairman: Thank you, Mr. Cullen. Do I see other questions? Yes, Mr. Bélair.

Mr. Réginald Bélair (Timmins—James Bay, Lib.): Thank you, Mr. Chairman.

We were together when we toured the western part of Canada in trying to assess the situation as far as rural areas are concerned. One common denominator has always been the fact that as soon as we talk about rural we also talk about the lack of investments because of distances that need to be travelled to export our products to the larger urban centres.

My question to the Secretary of State would be whether he would be in favour of targeting rural areas with some very specific subsidies on transportation of goods manufactured in those rural areas.

Mr. Andy Mitchell: What we said in the report was that there needed to be government attention paid to transportation in rural areas. We talked about the need to upgrade our highways; we talked about rail transportation; we talked about air transportation. Anybody who comes from a rural area knows how difficult air transportation and the cost of air transportation can be out of those rural areas, and the recommendation to the government is that it in fact be addressed.

Now I will, as the chairman mentioned, leave it to my colleagues who have direct responsibility to come up with a response, but clearly the report said that the issue of transportation infrastructure in rural areas was critical. Because if you can't get your goods to the market competitively, you're going to have difficulty in your economy. That was one of the clear points the report made.

Mr. Réginald Bélair: Would it be advisable for any company investing in rural Canada to get some form of tax break to compensate for what you have just said?

Mr. Andy Mitchell: Obviously that would be one of the ways of going about doing it. I haven't had an opportunity to look at all the ramifications and all the considerations that would have to be looked at in that respect, so I'm not in a position to say whether that would be the best way to do it or not.

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What is important, though, is that we do in fact collectively as a government deal with the issue of transportation in rural areas. I don't know if giving a subsidy to somebody who wants to invest in rural transportation is the best way. There is a recommendation in the report that does address that, saying we should look at tax incentives for people who are interested in investing in short-line railways and those types of things. I'm sure that's under consideration as part of the response to the report.

[Translation]

Mr. Réginald Bélair: I have one last question Mr. Chairman. I would like to follow up on Ms. Girard-Bujold's questions. Should we use money that has already been earmarked for regional development programs in order to make sure that everyone living in a rural area will have access to the Internet through the phone lines? One must not forget, Mr. Chairman, that at this very moment there still are in my riding four-party lines. It is difficult to believe that it still exists in 1998, but there are many of those. Four customers share the same line, or sometimes two lines. Should we use the money allocated to regional development programs to provide service to subscribers living in very remote areas?

[English]

Mr. Andy Mitchell: Obviously I think that's got to be on the plate of any of the regional development agencies, whether it's FORD-Q or whether it's FedNor or whatever it may be.

One of the things we said clearly in the report is there is a big obligation on the private sector, in our case in Ontario and Quebec on Bell Canada. They've had an opportunity to operate in our urban areas, and they can't just cherry-pick; they can't just say they'll do lots of work in our urban areas, where it can be done easily, and make a good return very quickly and ignore our rural areas.

I'm of the firm belief that if you're going to be operating in urban areas and having those business opportunities you should be making the kinds of investments in the rural areas that are appropriate. The report clearly calls on those types of telecommunications companies to be making those kinds of investments in rural areas.

[Translation]

Mr. Réginald Bélair: Thank you.

[English]

The Chairman: Thank you, Mr. Bélair.

Seeing as there are no more questions, I might just indulge in a few questions of my own. But I'll first just remind members that last year I think all members received a document that probably came out of Agriculture and Agri-Food but on behalf of all departments involved with rural Canada: At Work in Rural Communities. If you don't have one, we can probably arrange to get that for you.

Andy, I would just ask a few questions in our final few minutes with you. It sort of follows up on something Carmen was talking about. It occurs to me we have some relatively small cities that are not near say Toronto, Montreal, or Vancouver, and which in their own way are rural. In some ways Sault Ste. Marie is a modern border city, but in some respects it has a rural nature to it. Was there any difficulty experienced by your committee in distinguishing and drawing the line between what is rural and what is urban? I can see that's a continuum where there's no line drawn in the sand.

Mr. Andy Mitchell: There really isn't a firm line. That's why, rather than coming up with one definition, we used a number of definitions to apply. A community may fall within rural in all three ways of splitting it up and in some other instances only one. For instance, from a geographic standpoint Sault Ste. Marie would probably be seen as a rural area. If you were looking simply at geography, it would show the Sault in a rural area. With population density, it probably wouldn't fall under that definition. But on the economic definition it would probably fall as a rural type community.

It depends. Some areas fall under certain definitions, others would fall under all of them, and some would not meet any of them. For instance, Vancouver would not be by any stretch of the definition, whereas probably Elliot Lake would fall under all three.

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The Chairman: I think sometimes maybe some communities suffer for falling between the cracks. I think that's something you obviously addressed in your committee and maybe something we should pay attention to.

I think some of you saw a CBC story in early February on the out-migration from rural Canada numbering in the tens of thousands, maybe hundreds of thousands per annum.

If there's anything that last Parliament's committee did and what I hope we can do on this committee, apart from looking at policies and making recommendations, it is just to maintain the attention of our urban friends and neighbours as to the importance of rural Canada. It's so easy to be forgotten because we're not in the middle of communication centres and we're spread out, but we're very important to this country.

A question in the same vein as the small cities embedded in rural areas is the natural resources committee was careful in its recommendations not to touch too much on agriculture, because there is a standing committee that deals with agriculture issues. Do you feel that this committee in continuing a rural study can continue to look at the natural resource sector and more or less separate out agricultural issues, leaving that appropriately to other committees?

Mr. Andy Mitchell: That would certainly be one approach, to do that. Another approach may be to hold joint hearings. You may want to discuss that with agriculture. There are some issues in rural areas that are specifically agriculturally driven, and certainly the agricultural committee would have to be involved in that or should be involved in that. Whether they would want to do it jointly with this committee or whether they would want to do it separately I guess is something you can work out. There are some specific agricultural issues that deal with rural Canada, but for the most part we dealt, as you can see from the report, with NRCAN issues.

The Chairman: On behalf of all of the members here, Mr. Minister, we appreciate the time you've taken to be with us this morning. On our behalf I might reserve the right to invite you back sometime or to seek your advice, based on your past experience.

I see our committee—and we did discuss this at our business meeting—institutionalizing every spring some time out in rural Canada so that Canadians will continue to see that parliamentarians of all parties are interested in rural Canada and want to maintain that very important connection. We will be working towards spending some time on the road in April or May. And over the period of years I can see this committee getting to all corners of this country. We know that your report could never answer all the questions, and neither could any work we do answer all the questions, but it's a process of getting us to continual improvement.

With that, thank you very much, and we'll adjourn this meeting.

Mr. Andy Mitchell: Thank you, and thank you to the committee members.