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EVIDENCE

[Recorded by Electronic Apparatus]

Thursday, November 28, 1996

.0908

[English]

The Chairman: At today's meeting we will be dealing with a clause-by-clause consideration of Bill C-38, the Farm Debt Mediation Act. I ask the officials to join us at the table.

You have an amendment package before you, ladies and gentlemen.

I've just been informed that there's a possibility of a vote towards the end of our allotted time for the room. This room is booked for another committee meeting at 11 a.m., which will be televised, so I would assume they will want the room in time for that. But if there's a vote, it appears as though we won't be here then anyway. So we will start with C-38 and see how far we get.

On clause 2 - Definitions

The Chairman: As I say, you have an amendment package before you, and we shall start with clause 2. There is an amendment before us. Is there a mover for that amendment? It is moved byMr. McKinnon.

Do any of the officials wish to speak on that amendment? Are there any questions or comments on the amendment to clause 2?

Mr. Hermanson (Kindersley - Lloydminster): Why was the individual not included before?

The Chairman: May I have clarification from the officials on the amendment to clause 2, please?

Ms Julie Mercantini (Senior Policy Development Officer, Adaptation Division, Department of Agriculture and Agri-Food Canada): Clause 2 previously restricted eligibility to Canadian citizens only. This apparently contravenes the NAFTA agreement, so that provision, the Canadian citizenship requirement, was taken out.

Mr. Hermanson: But that brings up an interesting question, because we've just been reviewing the NAFTA agreement with regard to the western grain transition payments program. Our understanding is that money does not have to be paid to Canadians outside Canada or to landowners outside Canada.

.0910

What is it about NAFTA that requires the advance payments to be paid to those landowners or individuals residing outside Canada? Where is that in NAFTA?

Ms Mercantini: The provision apparently is the...I don't recall the name of it.

Ms Diane Fillmore (Counsel, Legal Services, Department of Agriculture and Agri-Food): I think this applies under the investment chapter. But there is an exemption, which I must admit I've been trying to follow up, because it is also applicable to another bill I'm working on. A colleague of mine was handling this last week.

There is an exemption if something is considered in the subsidy category. But that wouldn't apply to this bill. So the advice we've been given for this bill is that the NAFTA requirements are such that they would require us to take out that limitation.

Mr. Hermanson: So this is seen as a subsidy, whereas the capital payments are -

Ms Fillmore: The other way around.

Mr. Hermanson: This is not seen as a subsidy?

Ms Fillmore: That's right.

Mr. Hermanson: Well, I don't think the payment under the western grain transition would have been seen as a subsidy; that was a capital payment. Would that be considered -

Ms Fillmore: I'm sorry, I can't...because I'm not in -

[Translation]

Mr. Chrétien (Frontenac): Although my English is not as good as Marc Toupin's, it seems to me the French translation of the amendment to Clause 2, on page 1, doesn't correspond to the English version at all. Could you explain that, Mr. Chairman?

[English]

The Chairman: The question raised by Mr. Chrétien on a point of clarification is why the second page of the package before us, the French version of the amendment, does not correspond, he says, to the English version.

[Translation]

Mr. Chrétien: Look at it; you'll see it's not the same thing at all.

[English]

The Chairman: Let me direct this to the officials. It doesn't even refer to the same lines, does it?

[Translation]

Mr. Landry (Lotbinière): It looks as though the French is missing.

[English]

The Chairman: Is this a different amendment?

[Translation]

Mr. Chrétien: This isn't right at all.

[English]

The Chairman: The French is missing in the first amendment. If the second amendment we have before us is another amendment, I say to the officials and the parliamentary secretary, there's no English to match it.

Mr. Hermanson: I think we had better adjourn, Mr. Chairman.

The Chairman: The clerk is saying that maybe they do the same thing, except they're referring to different lines in order to do so. In the French version we're referring to lines 11 to 24. That's on page 1 of the bill itself, but it's page 2 of the amendment pad.

I guess the question to the officials is whether pages 1 and 2 of that amendment package the committee members have before us do the same thing.

Diane.

Ms Fillmore: I'm looking at these for the first time. I think it's just because of the difference in the drafting in the French originally. It has already listed all those things that are now listed in English. All that's being removed is the portion that is NAFTA-inconsistent, the business about the Canadian citizen and permanent resident.

They do the same thing. It's just that the French and English are drafted separately, so you don't necessarily get parallel amendments, but the effect is the same.

.0915

The Chairman: Does that clarify it, Mr. Chrétien?

[Translation]

Mr. Landry: I don't understand.

Mr. Chrétien: It doesn't clarify it at all, as far as I'm concerned.

Mr. Landry: Nor I.

Mr. Chrétien: If you look at the English version, it says: "farmer" "agriculteur".

[English]

[Translation]

-and it continues down to "for commercial purposes".

[English]

The Chairman: Order. The interpreter is having a problem, as several people are speaking at once.

[Translation]

Mr. Chrétien: If you're having problems, it's not because of me, Mr. Chairman.

[English]

The Chairman: If I could ask Charles to....

[Translation]

Mr. Chrétien: Mr. Chairman, I understand that this is not a word-for-word translation, but it is important that it say the same thing in French and in English.

[English]

The Chairman: Julie, did you wish to make a comment?

[Translation]

Mrs. Mercantini: Mr. Chrétien, I would ask that you look at the bill. Under Clause 2, the first paragraph of the French version identifies all those persons that are eligible, namely:

In the French version, all of that is set out in the first paragraph, whereas in the English version, these same persons and groups are only identified in paragraphs (a) to (c). So, in the French version of the amendment, you only have to remove paragraphs (a), (b) and (c), which serve a purpose in the English version alone, where everything has been described separately.

That's the reason why the French and English versions of the amendment seem different. Does that help?

Mr. Chrétien: Give me 30 seconds.

[English]

The Chairman: Mr. Hermanson.

Mr. Hermanson: Mr. Chairman, if I understand Julie correctly, she's saying that we can just take out paragraphs (a), (b) and (c) on the French side, but leave them in on the English side. To me, that is getting far too -

The Chairman: No, Mr. Hermanson -

Mr. Hermanson: We already have paragraphs (a), (b) and (c) in both translations saying, ``a Canadian citizen'', ``a corporation'', ``a cooperative, partnership''. That's in the French translation as well, so I don't understand how these two amendments can be so different.

The Chairman: The English amendment replaces line 8 all the way to line 20. The French amendment removes everything from line 11 to line 24 and replaces it with the amendment.

Mr. Hermanson: I - and probably Mr. Chrétien and Mr. Landry - would like to hear the French amendment translated into English, so I understand exactly what it's saying. I wouldn't doubt that they would like to hear the English amendment translated into French, because it certainly looks like apples and oranges.

[Translation]

The Chairman: Mr. Chrétien.

Mr. Chrétien: I fully support the suggestion made by my colleague in the Reform Party and I would address my request to Wayne Easter, who is Vice-Chairman, as am I.

Mr. McKinnon, I would also suggest that you encourage the members of your Quebec caucus - because you do have about 20 to participate in the Agriculture Committee's meetings.

.0920

The Bloc québécois has a duty to support Quebec in every possible way. In the agricultural sector, I know that Mr. Paradis, the Member for Brome - Missisquoi and Mr. Gagnon are ex officio members. There is also Mr. Mark Assad.

Mr. Hermanson: Mr. Gagnon?

Mr. Chrétien: Yes, Mr. Gagnon. He is an excellent representative of the Agriculture Committee, but he seems to want to have nothing to do with us.

[English]

Mr. Hermanson: He hasn't been to one meeting.

[Translation]

Mr. Chrétien: Mr. Chairman, I would suggest that you choose one member to read it in French and perhaps another member to read it in English. Would that be possible?

[English]

The Chairman: I would suggest that we read each amendment as amended, and I will read the English one, as I see it. If this amendment was adopted, the English one would read:

Would someone like to read the French version as it would be if this amendment was adopted?

[Translation]

Mrs. Mercantini: Yes, it would read as follows:

"agriculteur" Personne, coopérative, société de personnes ou autre association de personnes qui exploite une entreprise agricole à des fins commerciales et répond aux critères prévus par règlement.

Mr. Landry: We are deleting the rest?

The Chairman: Yes.

Mr. Chrétien: We are deleting "et est, selon le cas".

Mrs. Mercantini: Yes. We are deleting everything from line 11, which ends with "à des fins commerciales", down to line 24, at the bottom of the page.

Mr. Chrétien: So, we're deleting all of that as well.

Mrs. Mercantini: Yes.

[English]

The Chairman: I think some of the confusion is that a clause that's fairly lengthy in the original bill becomes very short, but there's a lot being removed in order to say the same thing.

Mr. Reed.

Mr. Reed (Halton - Peel): Can somebody clarify the words ``prescribed criteria'', please? What are prescribed criteria?

The Chairman: The word ``prescribe'' is in the English version.

Mr. Reed: It's in the English version, yes.

The Chairman: Diane.

Ms Fillmore: Normally when you have something prescribed, it means by regulation. So it means that if there is a wish to attach any additional criteria, those can be done by regulation. At the moment, I don't know whether there are none intended, but it does allow for that.

Mr. Reed: In other words, you're saying that the definition of ``farmer'' is dependent on the regulations?

Ms Fillmore: Only if there are in fact any intended at the moment. I've just been told by officials that none are intended at the moment. It just says ``any prescribed criteria''.

So if there's nothing in the regulations, then it would be limited to the definition. But you would have to check to see whether there's anything in the regulations, if in fact there are any prescribed criteria.

Mr. Reed: So it gives the government the power to say you are not a farmer.

Ms Fillmore: There would have to be specific, objective criteria. They couldn't do it on a case-by-case basis. It would have to be something that was put into a regulation, and you would have all the regular things that go with making a regulation, pre-publication, and that sort of thing. So they'd be objective criteria; they couldn't do it on a case-by-case basis.

The Chairman: Mr. Hermanson.

Mr. Hermanson: Mr. Chairman, I have a similar question. It looks to me like we're signing a blank cheque when we say ``that meets any prescribed criteria''. Groups of agricultural producers could be put on or taken off the list of those eligible for cash advances, at the whim of the Minister of Agriculture.

.0925

The definition, for instance, of hobby farmers suddenly could be 100 acres one year and it could be reduced to 10 acres of land the next year, or net income or gross income, whether they pay tax, or whether they were enrolled in crop insurance. There are 100 different ways you could slice that with this broadly interpreted phrase in here.

Ms Lois James (Manager, Adaptation Policy, Policy Branch, Department of Agriculture and Agri-Food): I believe that when this part on prescribed criteria was added, it was put in there so that if at some point in the future the definition of a farmer, as it is described here, were not inclusive enough, something else could be added by regulation.

I know some of you have raised some questions at the standing committee and have questioned what the definition of ``commercial'' really implies and whether at some point there is some interpretation that this definition may not be quite right, which could then be further prescribed and, in effect, broadened, or made more restrictive for that matter, if need be.

We presume the drafters have put it in there as sort of normal due course so that if, down the road, regulations were required it would allow that to happen. But we don't foresee, or are not aware of, anything right now being required in regulations to further define the definition of a farmer.

Mr. Hermanson: I guess I'm a little concerned that something that looks like a fairly major change to the bill would be added at clause-by-clause stage after all the witnesses have appeared, and I suspect there has been no consultation with the industry on a change of this magnitude.

We're responsible to make sure that good legislation is coming forward out of the House and committee is our only opportunity to look at this legislation. This looks to me like a bit more than just a technical amendment.

Ms Fillmore: There's no change in the prescribed criteria provision. It was already in there. All that's being removed are the references to Canadian citizenship and landed immigrant, or I guess the term now is permanent resident. It shows my age....

Mr. Hermanson: So the only change....

The Chairman: Mr. Hermanson, just to clarify, the words ``and meet any prescribed criteria'' were in the original clause in the bill that's been before everyone, and before all the witnesses, all along. Those words are just being moved to the end of the rewording of that clause. That's not something new in the bill. That's been there, before everybody, all along, including the committee and all the witnesses.

Mr. Hermanson: I'm sorry, I misunderstood that.

The Chairman: Okay.

[Translation]

Mr. Chrétien: Would someone be good enough to read the final English version?

[English]

The Chairman: Clause 2 would read:

[Translation]

Mr. Chrétien: Thank you, Mr. Chairman. Just to be absolutely certain, I would like to get some clarification regarding bills we refer back to the House of Commons. Once they have been passed, which version takes precedence, the French version or the English version, or are they considered to be equivalent?

[English]

The Chairman: Both.

[Translation]

Mr. Chrétien: Both? Thank you.

[English]

The Chairman: Are there any further questions or comments?

These are both the same version, one in English and one in French, of an amendment to clause 2.

Amendment agreed to

Clause 2 as amended agreed to

.0930

On clause 3 - Binding on Her Majesty

The Chairman: I see no amendments for clause 3. Shall clause 3 carry?

Members had better speak up, because nobody's saying anything other than those who put up their hands. So when I ask for a clause to carry, don't sit there and not say anything.

Mr. Hermanson.

Mr. Hermanson: This act is binding on the provinces. Under what authority does this act bind the provinces?

It says:

Ms Fillmore: If it's something within the area of federal competence, it can still bind the province. It is fairly standard in legislation to put in the provision that it binds both Canada and the provinces. The federal competence seems to deal with things for insolvency and bankruptcy, so that's an area of exclusive federal jurisdiction.

Mr. Hermanson: It would have no financial impact on the provinces' treasuries?

Ms Fillmore: No. They might be affected by a stay.

Mr. Hermanson: Right, because it could be a provincial lending institution.

Ms Fillmore: Exactly.

Mr. Hermanson: That's the only -

Ms Fillmore: Yes.

Clause 3 agreed to

On clause 4 - Appointment

The Chairman: There's an amendment before us on clause 4. Is there someone who wishes to move that amendment?

Mr. Hermanson: Mr. Chairman, I would move that Bill C-38, in clause 4, be amended by replacing lines 5 to 7 on page 3 with the following:

The rationale, Mr. Chairman, is that subclause 4(1) authorizes the automatic appointment of the existing general managers as administrators under the new act. Subclause 4(2) authorizes the minister to also appoint new administrators who are not currently general managers.

Our amendment would allow the Standing Committee on Agriculture to review any new appointments of administrators. This, again, gives MPs a greater role in scrutinizing what the department does and how effective and fair-minded the debt mediation process becomes. The parliamentary committee has a chance to review Order in Council appointments as a result of this amendment.

Again, it helps the Liberals to keep the red book promises, on which we're always trying to help you out, Mr. Chairman.

The Chairman: Mr. McKinnon.

Mr. McKinnon (Brandon - Souris): I have a question for the officials. Are there other opportunities to do what Mr. Hermanson is suggesting in his amendment, without having it in the bill?

Mr. Jerry Pickard (Parliamentary Secretary to the Minister of Agriculture and Agri-Food): This committee always has the opportunity to review any legislation and look at any issues with regard to agriculture.

I believe this amendment is really saying the minister can't make any appointments or do things without this committee's approval, which restricts the minister from making any action or taking any corrective measures. It would just bog down the system so terribly that I don't see how we could proceed.

[Translation]

The Chairman: Mr. Chrétien.

Mr. Chrétien: Mr. Pickard, I would like you to take three minutes to explain to me how the government intends to appoint administrators under Bill C-38 once it has been passed into law. Who do you intend to consult?

The Minister doesn't know many people in Saint-Hyacinthe, Saint-Georges-de-Beauce or the Gaspé. So, whom will he be consulting before he appoints Mrs. X or Mr. Y?

.0935

[English]

Mr. Pickard: We'll go back to Julie for an explanation on the process. We're really talking about the process of how people become eligible, who becomes eligible, and how they end up being appointed.

Ms Mercantini: Maybe first I could explain a little about our current Farm Debt Review Act. The general managers of the Farm Debt Review Act are employees of the federal government. They are public servants employed under the Public Service Employment Act.

Like any other federal government position, there's a statement of qualifications. Individuals who are currently in the public service have to meet these basic qualifications. Then there is a competition, and whoever is the most successful individual would be given the position.

Subclause 4(1) is saying that under this new act, the administrators of the new service would also be employees of the federal government under the Public Service Employment Act. They would be hired in the same way and following the same rules and guidelines as any other public servant holding a position in the federal government, administering a federal act or federal program.

[Translation]

Mr. Chrétien: Are you saying that Mrs. Turcotte, in Saint-Adrien-d'Irlande, in our riding, who currently serves on the Farm Debt Review Board, went through a competition and was appointed by the Conservatives to replace a Liberal who held the position? You're saying she is a public servant?

Mrs. Mercantini: It's possible. The person you are referring to...

Mr. Chrétien: Yes, there is someone in Saint-Adrien-d'Irlande, whom I know, and who is currently a member of the Farm Debt Review Board, unless she has been removed from her duties since. She was appointed by the Conservatives. She was extremely competent. I would like to know if the same process will be used. You are saying she had to go through a competition, meaning that the job was publicized in local newspapers, and so forth.

Mrs. Mercantini: Well, I don't know the person you are referring to, because I am not involved in actual management of that program, but I imagine she was appointed by Order in Council. Under this new legislation, no one will be appointed by Order in Council. At the present time, in addition to those people appointed by Order in Council, we have administrators who are part of the public service and whom we refer to as managers.

Mr. Chrétien: So, there won't be any experts representing the different agricultural sectors, who have seen a sheep before, for instance, and who are capable of suggesting changes to farmers and are also excellent administrators.

Mrs. Mercantini: No, there will be such people - in other words people who not only have expertise in the field but are used to dealing with administrative problems, except that these people will no longer be appointed by Order in Council. There will still be managers employed by the Public Service. The people who previously were appointed by Order in Council had expertise in agriculture and finance and could develop plans and options. We will still have people with those same skills, except that they will no longer be appointed by Order in Council. They will be hired on contract. Those positions will be advertised, as well as the basic qualifications for the job, which would include knowledge of the agricultural sector. People will have an opportunity to apply, and those that qualify will be put on a list.

Mr. Chrétien: Mr. Chairman, I don't want to dwell on this, but I think this discussion is useful to all Committee members. Is it possible - for instance in the Greater Gaspé Region of Quebec - that we might no longer have a member from that region on the board and that someone from the Ottawa or Montreal regional office would be commuting - in other words, going down to the Gaspé to deal with particular problems, going back to Montreal or Ottawa, then returning to the Gaspé three or four days later?

.0940

Right now, we have people just about everywhere, in practically every region.

Mrs. Mercantini: Our goal is to have experts and mediators all across the province. There will be one public service manager in Montreal, I believe.

[English]

The Chairman: You're interchanging the words ``manager'' and ``administrator''. Are they one and the same person?

Ms Mercantini: Yes.

The Chairman: Okay. So we're referring to the word ``administrator'' in the bill. I think we should clarify that there will be an administrator - correct me if I'm wrong - who will get the job in the same way, under the Public Service Employment Act, as any public service employee. Then the job of that administrator will be to contract out to individuals, firms, or whatever.

If it's a dairy farmer who needs assistance in Monsieur Chrétien's riding, they will have people out in the country who are specialists in dairy, to whom they can contract the job to consult with the dairy farmer in Monsieur Chrétien's riding.

If it's a cash crop grain farmer, there will be consultants they can contract who have applied to do the work on behalf of the administrator, who are specialists in cash crop farming, for example.

I think we have some confusion in interchanging the words ``administrator'' and ``manager''. But the administrator is not a Governor in Council appointment. It's a job in the public service, applied for by competition, and that's how the administrator is chosen.

Maybe Julie has more comments. Does that clarify it, Monsieur Chrétien?

[Translation]

Mr. Chrétien: Yes, it does. However, I would like to take a couple of minutes to comment on Mr. Hermanson's proposed amendment.

Unlike Jerry, I believe our workload in the House of Commons would increase if we had to approve the appointment of new managers or new administrators, as the Chairman has just explained. At the same time, I think it would strengthen the role of the Chairman and make our work in Committee more meaningful, since the latter would have greater powers. The Committee would no longer just be a place where you park a dozen Members of Parliament for seven or eight hours a week with instructions to be good.

Yesterday, we did propose amendments. Mr. Hermanson was lucky in that he managed, with great difficulty, to get an amendment to the preamble through. As I recall, that amendment passed by a margin of four to three. I think it's time we reassessed our role as members of the Agriculture Committee, to ensure that we are not simply yes-men.

Speaking for myself, I am not shy about expressing my feelings, but I cannot always say the same about my colleagues opposite, who seem to be there for the sole purpose of serving the party in power. So, I would invite my friends opposite to make an effort and demonstrate their courage once a week by moving amendments, so that our Committee would give the appearance of being an effective committee, unlike the Senate. So, I intend to support you, Mr. Hermanson.

[English]

Mr. Reed: Mr. Chairman, I would like to get back to the parliamentary secretary's comments and reinforce what he has said regarding ministerial responsibility.

Imagine a situation where the minister is asked to be accountable in the House -

Mr. Hermanson: Wonderful.

Mr. Reed: - and he stands up and says, well, I couldn't do this, Mr. Speaker, because the committee refused it.

Mr. Hermanson: That would be great; that's what we need in this -

Mr. Reed: That's chaos.

Mr. Hermanson: It is not.

Mr. Reed: Chaos.

.0945

[Translation]

Mr. Chrétien: It wouldn't be major chaos.

[English]

The Chairman: Mr. Easter.

Mr. Easter (Malpeque): Mr. Chairman, I think the point I was going to raise has already been settled in the discussion between yourself and the witnesses. I think there was some confusion on the part of Mr. Chrétien about the individual he was talking about. It was likely a chair, rather than an administrator, of the Farm Debt Review Board, was it not?

The Chairman: It's under the present system.

Mr. Easter: Was it? This changes the system.

The Chairman: Mr. Hermanson.

Mr. Hermanson: I have a question. I understand that anyone who is hired under subclause 4(1) is hired under the power of the Public Service Employment Act. But under subclause 4(2), are those people employed under the public service act or can they be employed as well through an Order in Council?

Ms James: Part of the intent of having subclause 4(2) is that, as you may be aware, in both the provinces of Saskatchewan and Manitoba there is provincial legislation dealing specifically with farm debt. This subclause has been put in there to be forward-looking in case, at some point in the future, there is a desire for the two programs to come closer together and at that time even look at the possibility of perhaps some sort of joint sharing of administration.

That's really the intent of that clause. It's not to look at Order in Council appointments of outside individuals, but it's really to look for some closer working cooperation between provincial and federal legislation, possibly in the future or somewhere down the road, on the delivery of....

Mr. Hermanson: That's good, but it still doesn't answer my question. With this clause, can the minister appoint administrators by Order in Council? I guess that's what I want to know. That's exactly what I want to know.

Ms James: Yes, presumably so, because if the person is not appointed under the Public Service Employment Act, they would have to be appointed by Order in Council.

Mr. Hermanson: Now, just to further what Mr. Chrétien said, I don't always agree with the separatists - particularly on the issue of separatism - but I do agree with Mr. Chrétien's description of how effective the committees have been.

I keep bringing up these amendments, which the Liberals shoot down. They say that the minister shouldn't be accountable to this committee and shouldn't be accountable to Parliament. But in their red book the Liberals have said:

They say we'd be given a greater control over expenditures, there would be lots of free votes, and then:

We're not seeing that. Oh, yes, the committees can look at these appointments. But there have not been changes in the mechanism of how these committees work to require us to review these Order in Council appointments. We're trying to do that, but it's not happening.

Further down the red book says:

Now, we know that Penny Collenette's job is to appoint Liberals to all these boards and commissions. That's her job. She just appointed someone to the FCC, a Liberal lawyer from Humboldt, a Liberal riding. Her name is Mrs. Scott. She's a known Liberal. She was appointed to that position just because of her political affiliation.

We're trying to prevent that and stop that type of corruption.

The Chairman: Mr. Easter.

Mr. Easter: Mr. Chairman, clause 4 in fact meets what the red book says on that point by the words:

Mr. Hermanson: It's the same thing as the Conservatives did.

Mr. Easter: It's to no account.

Mr. Hermanson: What's the difference between what the Conservatives were doing...?

Mr. Easter: It's to take it out of that political patronage realm and base it on qualifications.

The Chairman: Mr. Calder.

Mr. Hermanson: It's not happening.

Mr. Calder (Wellington - Grey - Dufferin - Simcoe): Mr. Chairman, in all fairness toMr. Hermanson, this is a bit of bull, because the guy I ran against in the 1993 election is now the President of the CBC, Perrin Beatty.

So it kind of flies in your face, Elwin.

.0950

Mr. Hermanson: That's the same thing the Conservatives did. They would appoint the odd NDP or Liberal just to blunt the criticism, while they appointed 1,000 of their own friends. That's an old political trick. It's nonsense.

The Chairman: Any further discussion on the...?

Mr. Hermanson: The Conservatives appointed Ed Broadbent to the Centre...whatever.

The Chairman: Order, please.

Is there any further discussion on the amendment to clause 4?

[Translation]

Mr. Chrétien: On a point of order, Mr. Chairman. Mr. Culbert voted twice. He voted in favour, and then against.

[English]

The Chairman: No, he didn't.

Okay, I'll call it again.

Amendment negatived

Clause 4 agreed to on division

Clause 5 agreed to

On clause 6 - Farmer must be insolvent

The Chairman: There's an amendment before us for clause 6.

Mr. Easter.

Mr. Easter: Mr. Chairman, in the package there are three amendments. I want some response from the officials.

I have amendments in the package - amendments 4, 5 and 20. What I'm trying to do through these amendments, and it's difficult because the farm consultation service is not named, is ensure that there is a review of the farm consultation service and that if Treasury Board imposes further cutbacks in one fashion or another, the farm consultation service couldn't just be cut forthwith. I think amendment 20 accommodates what I want to do -

The Chairman: Are you speaking to an amendment to clause 6?

Mr. Easter: Yes.

The Chairman: You talked about amendment 20.

Mr. Easter: They're all interrelated, Mr. Chairman. What I would like to do is withdraw amendments 4 and 5 and be left with amendment 20.

The Chairman: Okay. So at the present time you're speaking to the amendment on page 4.

Mr. Easter: I'm speaking to the amendment on page 4, which I haven't moved yet because I would like to withdraw those two.

To the officials, what are the implications of the amendments on pages 4 and 5? Do they create any problems with respect to the act?

Let me come at it again. My intention is to ensure that the farm consultation service is not left out in the cold should there be cutbacks in the future, because it's not specifically named in the act. It's sidelined to the act. Under the old Farm Debt Review Act, it was there. In fact, it may be the most important of the two services.

My question to the officials, and I assume they went through the amendments - the amendments on pages 4 and 5 probably are not required to accommodate what I want to do. It can be accommodated under the amendment on page 20. Can you comment on that?

Ms James: I just saw the amendments this morning, so we haven't had a chance to review and discuss them.

But looking at the amendment you're proposing to clause 6 of the bill, that would significantly change the definition of a farmer and what is described in the current act as insolvency. Paragraphs 6(a), (b) and (c) currently describe our definition of insolvency and therefore who is eligible.

Your proposed amendment to paragraphs 6(a) and (b) would be a significant change because it would broaden the definition of insolvency - in other words, who is eligible under the act for financial difficulty, and it would not define what financial difficulty would be in great detail.

.0955

I'm not sure if Diane has something to add to that.

Ms Fillmore: Not really. It is just extending what was in the authority.

Mr. Easter: Mr. Chairman, based on that I'm going to withdraw the amendments on pages4 and 5.

The Chairman: So you're not moving them.

Mr. Easter: I'm not moving them.

The Chairman: So there is no amendment before us for clause 6.

Clauses 6 to 8 inclusive agreed to

On clause 9 - Financial review

The Chairman: There is an amendment before us on clause 9, which is number 5 in the package. Mr. Easter, I gather from your comment a minute ago that you do not wish to move that, so there are no amendments before for clause 9.

Clause 9 agreed to

On clause 10 - Appointment of mediator

The Chairman: There is a government amendment before us on clause 10. Is there a mover for that amendment?

Moved by Mr. Reed.

Are there any comments from the parliamentary secretary or the officials on that amendment?

Mr. Pickard: Yes, Mr. Chairman. When we were talking about the current clause, the problem was distribution of confidential financial records. The question came forth from several witnesses and members of this committee, that there was a problem for any person who may have that distribution to minor or major creditors being secured or unsecured creditors.

We also thought this was probably burdensome on the whole structure, and as a result the amendment is put forth to restrict the distribution of farmers' financial reports to creditors who are participating in the mediation process. So it's to limit that distribution of financial information.

The Chairman: Mr. Chrétien.

[Translation]

Mr. Chrétien: I would like to use a concrete example. If I were experiencing financial difficulties and had 20 creditors, who would receive a copy of the mediation report?

[English]

Mr. Pickard: In this case it would be those creditors who are involved in the direct process of mediation. There may be 20 creditors, but the mediation process may go through touching four or five of the major creditors who hold most of the debt and most of the consequences in this case. As a result, the distribution would not go to the 20; it would go to the four or five who are actually participating in the process.

[Translation]

Mr. Chrétien: So, the unsecured creditors and minor creditors who did not hold most of the debt, even if they were secured creditors, would not receive a copy of the report?

[English]

Mr. Pickard: In certain cases the small creditors may be quite unimportant to the whole process. If the major credit scenario is that four people control 95% of the debt, we have to try to work out that scenario with the four people. By distributing that information to everyone, you would probably find a problem in the community where this farmer has no opportunity to continue on a structured business. Many witnesses who came forward said that distributing this too widely will hamper the farmer's ability to reestablish credit and keep on the move, even though the major part of the credit operation has been resolved through mediation.

[Translation]

Mr. Chrétien: Thank you, Mr. Pickard.

[English]

The Chairman: Mr. Easter.

Mr. Easter: To further clarify, Mr. Chairman, this does accommodate what quite a number of witnesses were saying. In my experience, if unsecured creditors get a notice, they're going for a judgment in order to protect themselves, and it jeopardizes the ability to get a settlement. So this amendment accommodates what quite a number of witnesses said, which is that it wouldn't be widespread.

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The Chairman: Mr. Hermanson.

Mr. Hermanson: With this change, will the people who are involved in the mediation process and the way they are notified be the same as is currently happening under the Farm Debt Review Act, or are there still differences as to who is invited to participate in the mediation process?

Mr. Pickard: I don't see a major change in the mediation process, but I do see a similar degree that was placed in the current process. If you will recall, those people who chaired the farm debt review boards came forward. They had great concern about how detrimental it is to have those financial statements circulated too broadly. So the practice at present is not to circulate it broadly, but to circulate it among the active participants. We're going back to that process to make sure it's straight, yes.

Mr. Hermanson: That was my question. So it would be the same environment as under the old Farm Debt Review Act.

Mr. Pickard: That's correct.

Mr. Hermanson: Thank you.

The Chairman: Any further questions?

Amendment agreed to [See Minutes of Proceedings]

Clause 10 as amended agreed to

Clauses 11 to 14 inclusive agreed to

On clause 15 - Appeal Boards

The Chairman: I see an amendment for clause 15. Is there a mover for that amendment?

Mr. Hermanson: I move that Bill C-38 in clause 15 be amended by a) replacing line 21 on page 9 with the following:

(a) an administrator appointed or designated under this Act;

(b) a mediator or an expert whose services have been retained under subsection 4(4); or

(c) a person who is in a conflict of interest relative to the appeal procedure referred to in this section.

Mr. Chairman, we support the concept of appeal boards. That's a safety valve that is required, but they are patronage appointments with no provision for parliamentary review. I've given my speech on that and I feel very strongly about it.

Our amendment would require that the Standing Committee on Agriculture give approval to the minister's appointments to the appeal boards. It would also make it clear that appeal board members do not have any other role in the farm debt mediation process, in order to ensure impartiality.

If you're serious about bringing in some accountability and ending the parade of patronage we've seen in filling these appointments to appeal boards and such, this is one way to accomplish that, and it's the only way I know of in our parliamentary system where we can effectively scrutinize appointments to these boards.

As an added comment, you're in power now but you won't be in power forever, so we might as well clean up the mess now. It will be a feather in your cap if you help us clean it up now. Otherwise, it will just have to be done down the road and you guys will be party to continued patronage and the continued cynicism of Canadians toward this whole process.

The Chairman: Mr. Easter and Mr. Hermanson, before I go to Mr. Chrétien, just a point of clarification for my personal information. Your amendment, if I understand it.... We know that appeal boards are appointed on individual cases. To go back to an example of a few minutes ago, an appeal board on a dairy situation should probably be people who are somewhat familiar with the dairy industry or that sector of the agricultural industry. Your amendment here would mean that every one of those appeal boards would have to come before the standing committee for approval.

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Mr. Hermanson: People who are eligible to serve on appeal boards should be scrutinized by this committee.

The Chairman: Okay. Mr. Chrétien.

[Translation]

Mr. Chrétien: I would like to get some clarification from Mr. Hermanson. If I can try to summarize what you said - please correct me if I'm wrong - the members of these appeal boards should be people who have had no involvement whatsoever in the farm debt review process. There must be no connection, as my colleague from Lotbinière so rightly pointed out. We have to seek people who are completely new to this particular activity, but at the same time have expertise in maple syrup production, say, and are able to distinguish between a maple tree and a white birch.

[English]

Mr. Hermanson: Am I supposed to respond...?

The Chairman: Mr. Easter has a comment, then Mr. Culbert, and then I'll come back.

Mr. Hermanson: Mr. Chairman, I think his question was to me.

The Chairman: There will be more to come. You can keep track.

Mr. Easter: I'm trying to figure out if there is a cost to this system that Mr. Hermanson is trying to propose. If you're looking at Americanizing the Canadian system, to me that means you would be bringing x number of candidates before the agriculture committee to interrogate them on whether you would approve them. Is that what your amendment is implying or suggesting? Because there is a tremendous cost to that.

The Chairman: Mr. Culbert, then Mr. Hermanson.

Mr. Culbert (Carleton - Charlotte): Mr. Chairman, as clarification for our witnesses or the parliamentary secretary, just as a process with regard to appeals.... To use the analogy that our chair used, if it's something to do with the dairy industry, for example, how far in advance would that concern with regard to the dairy industry be made? Would it be done several months in advance, or would it be done when the occasion arose in that particular case?

The Chairman: I'll ask Mr. Hermanson to reply to the first two, and then the officials can reply to Mr. Culbert.

Mr. Hermanson: Thank you, Mr. Chairman.

My understanding of how these appeal board prospects are selected.... We certainly don't wait for someone to appeal and then suddenly the government says we have to find members to serve on an appeal board. Those people are identified long before the cases come up. The honourable members on the other side know that. We're not suddenly going out and having to find some appeal board members. There is a pool to draw from.

Mr. Chrétien, when you're selecting an appeal board to review a case, they need some knowledge of that industry. They may not have to be participants in that industry, but they need to have a knowledge of that industry. So knowledge and impartiality are required.

Mr. Easter, you asked whether there is a cost. Yes, there's a cost, but there's a cost to patronage and to those who are not qualified to carry out the review. We've seen it where patronage appointments were made to the parole board. Liberal campaign workers of Mr. Anderson, I believe it was, lost cases and drug dealers were put back out on the streets to peddle their products and destroy more lives.

We could see farms destroyed if we don't have competent people on this appeal board. We can see the whole process lose credibility. That's a tremendous cost, a far greater cost than the cost of a little scrutiny at the front end to make sure the pool of people who would serve on an appeal board are qualified and are there because they're good, not because they're Liberals or Conservatives - or Reformers, for that matter.

.1010

The Chairman: Do the officials wish to respond to Mr. Culbert?

Mr. Pickard: The appeal board very clearly is a board that is going to be structured so that there would be people who are expert in the field. They would be in place, because we're not looking at a long extension of time. If we're going through an appeal, we can't leave somebody in the lurch until we go out and find some people for the appeal and come back in. They have to be readily available.

As well, they very clearly cannot be part of the other process. They have to be independent of the other process. As a result, they should be expert, independent of the process that has gone on through mediation or consultation, and standing ready to deal with the appeal as readily as possible.

The Chairman: Mr. Reed.

Mr. Reed: Mr. Chairman, I don't want to...but Mr. Hermanson should realize that the parole board is the wrong board to select. According to my information - and I've talked to some senior people on the parole board - they do go before a selection panel of referees.

The Chairman: Are there any further comments on the amendment to clause 15 that is now before the committee?

Last time, I had to take the vote twice for somebody else's benefit. Would you like me to take it again?

Mr. Hermanson: Can I get a recorded vote, Mr. Chairman?

The Chairman: Okay. We'll have a recorded vote.

Amendment negatived: nays 6; yeas 3

Clause 15 agreed to on division

On clause 16 - Administrator to appoint guardian

The Chairman: There is an amendment before us for clause 16. Is there a mover for the amendment?

[Translation]

Mr. Chrétien: Yes, Mr. Chairman. In order to improve the legislation we are considering this morning, I would move that Bill C-38, in Clause 16, be amended by replacing lines 1 to 14 on page 10 with the following:

"16. (1) Where the administrator issues a stay of proceedings under paragraph 7(1)(b), the administrator shall forthwith appoint one of the following persons as guardian of the farmer's assets:

(a) the farmer, where the farmer is qualified to be the guardian;

(b) any other qualified person nominated by any secured creditor or secured creditors listed in the application, where the farmer is not qualified to be the guardian; or

(c) any other qualified person chosen by the administrator, where neither paragraph (a) nor paragraph (b) applies."

Mr. Chairman, this amendment aims to improve the provision dealing with guardianship of farm assets.

Of course, as we discussed during our many Committee meetings with witnesses, the best guardian is the farmer himself. However, it does happen that the farmer is not qualified to be the guardian or refuses to do so for one reason or another. If that happens, we are making provision here for another arrangement that involves the assistance of creditors, probably the major creditors. As you said earlier, Jerry, in most cases, two or four creditors may hold between 95 and 98 per cent of the debt. If that is the case, someone could be chosen from the list of guardians suggested by the creditors.

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[English]

The Chairman: Thank you, Mr. Chrétien.

Mr. Easter.

Mr. Easter: Mr. Chairman, I agree with the intent of Mr. Chrétien's motion. I agree as well that quite a number of witnesses were concerned about this. But really, there are two amendments in the amendment file that accommodate Mr. Chrétien's intent here, and I would prefer to go with the government amendment, which is the next one.

So I'm suggesting that this be defeated and we move with the government amendment, the very next one, which has perhaps a little better wording.

The Chairman: Mr. Hermanson.

Mr. Hermanson: I'd like to ask Mr. Chrétien if he has reviewed the government amendment and compared it with his own amendment. I'd like to know which amendment he prefers.

Another question I have for both Mr. Chrétien and our officials is, who will make the decision as to whether or not the farmer is qualified? Is it clear enough in here that it's the administrator? What if there's a disagreement between the farmer and the administrator as to whether or not the farmer's qualified to be the guardian? How do we sort this out? Does this dispute go to an appeal board or does the administrator have autocratic powers to make that decision?

[Translation]

Mr. Chrétien: Mr. Hermanson, I think the best guardian of your farm would be yourself. That is why I think you should be given priority, because a farmer in difficulty who requests the protection or assistance of the agency does not automatically have to lose his farm. In most cases, he can make changes and keep his farm.

If we're talking about my herd of dairy cows, for example, it doesn't make much sense to go and ask Wayne Easter to do my work every day, to look after my cows and milk them, if I am supposed to just sit there and watch him. I'm sure he wouldn't do as good a job as I would, because cows require different care, depending on where you live. I'm sure Wayne is very good at looking after his own herd of cows in Prince Edward Island, in the beautiful riding of Malpèque, but on my farm, he would certainly not manage as well, at least at the beginning. And since this guardianship is not supposed to last for an extensive period of time, it would be preferable to have the farmer act as guardian.

As to whether or not I reviewed the wording of the government amendment, I must admit I did not compare the two. If it is better than mine, I will humbly accept that. According to Wayne, the wording of the government amendment is better. If it is in fact better, and it says the same thing, I am perfectly willing to withdraw my amendment and support the government amendment. That is not a problem.

But before I do that, I would like to ask my colleague Wayne, who has extensive expertise in agriculture, having been the president of a national union for a number of years, to explain the content of the amendment he is moving. Then we will be able to talk as equals.

[English]

The Chairman: Mr. Chrétien, I have to agree with you. I think you could milk your cows better than Mr. Easter could, because I don't think Mr. Easter speaks French and your cows probably would understand only French. But I do know Mr. Easter's studying French, so in the future, if you need him to milk your cows, he may very well be able to do that.

Mr. Culbert: Mr. Chairman, I suggest we have a contest to settle this.

The Chairman: On a more serious note, just so the members know, the bells started ringing at 10:07 a.m., according to what I have.

Mr. Reed: There are 17 minutes left.

The Chairman: Okay. Let's deal with the amendments to clause 16 and then adjourn.

Are there any further comments on the Bloc Québécois amendment to clause 16?

Mr. Chrétien, you have a point of order.

[Translation]

Mr. Chrétien: I asked a question earlier and I would like to get an answer. I think Wayne could probably answer it, since he has said that the government amendment is better than mine, because it is worded better. However, I would like him to explain that to me.

.1020

I could then withdraw my own amendment, particularly if his enhances my own by giving priority to farmers as guardians of farm assets.

[English]

The Chairman: Mr. Easter, do you wish to comment?

Mr. Easter: I do, Mr. Chairman.

The intent, Mr. Chrétien, is basically the same, but the wording of the government amendment is just a matter of flowing with the wording that's already there in the legislation, probably by the same legal drafters who drafted the bill in the first place. It just flows better; that's all. There's really no difference in the intent or the end result, as I see it. The government amendment just seems to flow better.

A voice: It's more wordy.

Mr. Easter: We're a wordy bunch.

The Chairman: Mr. Hermanson.

Mr. Hermanson: My question really wasn't answered. I don't believe Mr. Chrétien answered it, and I was particularly wanting the officials to answer the question of who decides whether or not the farmer is qualified to be a guardian. It's very important.

The Chairman: Mr. Pickard.

Mr. Pickard: In 95% of the cases now, if the farmer applies to be the guardian, the farmer is appointed as guardian. I see no change in that, outside the fact that there is a question at times - very seldom, but there is a question at times - of where the creditor may feel very uncomfortable under certain circumstances.

I think you are aware that there may be circumstances where irrational things have happened in the past and the creditor may be very nervous about the farmer being the guardian, for various reasons.

If the creditor then objects to the farmer being the guardian, the administrator is required to appoint a neutral guardian to help the farmer.

So yes, it's clear in the legislation that the farmer would have first priority, but if there were circumstances that the creditor was very concerned about - and those could exist - there is that flexibility of the guardian to appoint someone else to help the farmer.

Mr. Hermanson: What you're saying, then, is if the creditor wishes, the creditor really has the power to force the administrator to appoint someone to be a guardian, other than the farmer.

Mr. Pickard: That's correct.

Mr. Hermanson: That's what you're saying. The creditor has that power.

Mr. Pickard: That's correct.

I might give the similar scenario the other way. It's very important to understand both sides of this. If the creditor asks for someone and the farmer objects, a neutral party is required.

Mr. Hermanson: If the creditor asks for what?

Mr. Pickard: If the creditor asks for a certain guardian to be appointed and the farmer objects to that guardian being appointed, the creditor's guardian will not be appointed. The administrator is bound not to appoint that guardian either.

Mr. Hermanson: What happens when they can't come to an agreement on who the guardian will be?

Mr. Pickard: Then it's the administrator's decision.

Mr. Hermanson: He has the authority to do that?

Mr. Pickard: Yes.

Mr. Hermanson: To select a guardian?

Mr. Pickard: That's correct.

The Chairman: I have a point of clarification on who makes the decision. Maybe the officials can help me here.

In clause 16 it says, ``the administrator shall forthwith appoint''. So the administrator makes the appointment, but it's based on the conditions of the rest of the clause, which are self-explanatory as to who they might be.

Mr. Pickard: That is correct.

The Chairman: Mr. Chrétien, you had a comment.

[Translation]

Mr. Chrétien: I would like to get an answer from one of the three officials. Those figures are certainly accurate, and I don't doubt Jerry's word, but I am surprised to hear him say that in 95 per cent of cases, farmers act as guardians. I doubt very much that these figures were just thrown out for effect; they must be accurate, because the figure given was 95 per cent, not 93.

With respect to the remaining 5 per cent, why is it not the farmer who acts as guardian? Is it because of burn-out? Is it because he doesn't want to? Or is it because he is in the hospital?

[English]

Mr. Pickard: I think each one would be a specific case where the farmer wanted extra help to deal with it, but I'll go back to, I guess, two areas. We can go back and talk, and we'll go back to the officials as well.

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If you recall, the testimony that came in from the farm debt review boards made it very clear that in most cases the farmer was the guardian, but specific cases might be optional. The farmer may not feel competent. The farmer may not be ready or able to carry it out for various reasons.

The Chairman: Lois, I'll call you by the right name this time. My apologies for before.

Ms James: That's okay. I've been called worse.

The Chairman: You should sit at this end of the table.

Some hon. members: Oh, oh!

Ms James: In regard to your question around what some of the reasons are, as Mr. Pickard mentioned, every case is specific in their different reasons, but what frequently occurs when a farmer is insolvent and the situation has broken down to such a state that there has been a notice of intent to foreclose moved on the individual is this. Quite often - or on occasion, at least - the level of trust between the creditor or creditors and the farmer has reached such a state that the creditor is saying, ``No, I just don't have that level of trust in there to have the farmer as the guardian of his own assets''.

As we said, it's not a large percentage of the cases. It's in rare cases. But in those extreme cases, this has been one of the major reasons for appointing an independent third party.

In the same case, the farmer quite often does not have the same level of trust in some of his creditors, so he questions whether the creditor or an appointee of the creditor should be the guardian either. That's the reason for the third person, the independent person.

The Chairman: Go ahead.

[Translation]

Mr. Chrétien: I suppose that by the end, the creditors don't trust the farmer because they're afraid he is going to make off with, sell or hide property belonging to creditors or other people.

[English]

Ms James: That has happened on occasion, yes. It's not frequent, but on occasion it has happened, and this is what we're dealing with here - those few extreme cases.

The Chairman: If I could help clarify, that is covered by ``the administrator shall forthwith''. The administrator would have to make a judgment call, in consultation with the farmer and the creditors, when appointing the guardian.

Ms James: That's correct, yes.

The Chairman: Mr. Easter, you have a point of clarification.

We only have about two minutes, folks. We're going to come back to this bill next week, unfortunately. If you want to deal with it now, fine, but I'm not rushing it.

Mr. Easter.

Mr. Easter: In the discussion, the impression may have been left by you, Mr. Pickard, that the creditor has the final say if the creditor doesn't want the guardian. I don't believe that is correct. The administrator could overrule the creditor's dislike for a farmer being the guardian, could he not? I know of other instances, though not under this bill, where the creditor did not want the farmer to stay on the farm, but he stayed there under the current act.

Mr. Pickard: Certainly your description is accurate. The problem, as Lois pointed out, is if there's an extreme case, there needs to be some protection for the assets. That's really a loophole that I don't think anybody raised, and I wanted to make sure everyone knew that loophole did exist there.

The Chairman: Members, I'm going to adjourn the meeting so we can get to the vote.

Mr. Hermanson: I have a point of order. I'll be very brief.

Actually I like the Bloc's amendment here better than the government amendment, because it puts the farmer first as to who should be the guardian, whereas the Liberal one puts the creditor first. Can the government and Mr. Chrétien get together and perhaps we can get the right amendment put forward?

The Chairman: Well, both amendments are there.

I'm going to adjourn the meeting now. We will reconvene the full committee next Tuesday morning, but I remind the steering committee to meet immediately after the vote in room 307. Thank you.

The meeting is adjourned

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