1983-10-21

STATEMENTS PURSUANT TO S.O. 21


Mr. Gaston Gourde (Levis):: Madam Speaker, the situation at Davie Shipbuilding in Lauzon is a very difficult one at the present time. This major employer in the Quebec City region, ranking second behind the Quebec Civil Service, may be facing a very serious situation by the end of 1984, when construction on the CN Marine ferry will be terminated, because the shipyard does not seem to have any new projects on its order books.
When the contract for the frigates was awarded on June 29 of this year, the plan was that as a compensatory measure, Davie would be asked to proceed with refitting of the Tribal destroyers, for a project that was then estimated at $650 million.
I therefore urge the Government to proceed as soon as possible with the studies and preparations required to carry out this major contract. I also urge the Government of Quebec to show some favouritism towards Davie Shipyards and to stop playing games. It is a fact that P.Q. politicians in the Quebec City area have criticized the federal Government's measures with respect to Davie Shipyards, while they are not as eager to admit that the Government of Quebec, which, through the Societe generate de financement, owns Marine Industries Ltd. in Sorel, is supporting this shipyard on the outskirts of Montreal.
Finally, Madam Speaker, I urge the owners, the unions, the federal Government and the Government of Quebec to take action to save Davie Shipyards.


GOVERNMENT EXPENDITURES
Mr. Gordon Taylor (Bow River):: Madam Speaker, now hear this! Senator Michael Pitfield has opened "Pandora's Liberal Box" and told the nation the secret he held so closely with the Prime Minister (Mr. Trudeau) for 25 years-the Liberals have been "throwing money" at their problems.
Thousands of Canadians have wondered why our deficit was increasing year by year. The Liberals have been throwing money at every problem that confronted them. With their own money? Of course not; with the people's money. Listen to what Senator Pitfield said in Toronto the other day, and I quote:
We have been solving governmental problems by throwing money at them.
The Liberals have been buying their way into office. When a Liberal MP became a problem, the Prime Minister and Michael Pitfield "threw money" at him and sent him on a trip with all expenses paid.
Was there a problem with the Prime Minister's secretary in his office? The Prime Minister and Michael Pitfield "threw money" at her and she studied French for a year at public expense in the Riveria.
Did Senator Pitfield himself become a problem to the Prime Minister? I guess so, because the Prime Minister "threw money" at him and sent him to the Senate with a pension for life.
Millions of people exist on UIC and welfare. Businesses have been forced into bankruptcy through National Energy Program taxes. No matter, the Liberals had to get the money somewhere to "throw money" at their problems. What a pity!


THE UKRAINE
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, this weekend marks the fiftieth anniversary of the great famine in the Soviet Ukraine. The forced famine, as it was known, resulted in between six million and ten million Ukranian peasants dying of starvation, starvation brought about by the inhuman policies of Joseph Stalin's regime. In spite of many offerings of assistance, the aid was rejected. Malcolm Mug-geridge, who was there at the time, wrote the following:
-the fields are covered with weeds and the people, swollen from hunger, are awaiting inevitable death. In talking to these miserable people you will find out how many have died from hunger and how many were executed by the Soviet

October 21, 1983
government or deported because they have hidden a little wheat in order to satisfy their hunger.
In the name of humanity we remember the victims, and vow that an ongoing vigilance will never allow this to recur in a world which is undoubtedly a world of some considerable danger.


FISHERIES
Mr. Alexandre Cyr (Gaspe):: Madam Speaker, the fishing industry plays a major part in the economy of the Gaspe peninsula, since 55 per cent of fish landings are made up of catches by fishermen in the riding of Gaspe and most fish processing plants are also in that riding. The Minister of Fisheries and Oceans (Mr. De Bane) has submitted a restructuration plan for Pecheurs-Unis du Quebec, with the three following objectives: to ensure that Pecheurs-Unis du Quebec or its successor will continue to be economically viable; to develop a fair restructuration process, bearing in mind both the economic and social impact; to promote the development of Quebec's marine fisheries in co-operation with the Atlantic fisheries. The directors of Pecheurs-Unis have agreed with the plan to set up a new company to administer the fishing industry in Quebec. Members of fishermen's co-operatives in Riviere-au-Renard, Newport and Saint-Maurice de I'Echouerie have expressed their agreement with the decision to accept the offer made by the Government of Canada, and the co-operative in Cloridorme will be doing so within a few hours.
On behalf of Quebec fishermen and processing plant workers, I urge the Government of Quebec to co-operate with the Government of Canada, in order to save Quebec's fishing industry from disaster, by setting up a new company administered by the people concerned and the financial institutions.



VIA RAIL


Mr. Bob Corbett (Fundy-Royal):: Madam Speaker, passenger rail service in Atlantic Canada has been less than satisfactory since two well-utilized lines were abruptly abandoned 23 months ago. Since then neither New Brunswickers nor other Maritimers have experienced the improved, cost-efficient service, or seen the new equipment the former Minister of Transport, the current Minister of State for External Relations (Mr. Pepin), advised us the sacrifices were being made for at that time.
[DOT] (mo)
Instead, many communities are left without public transportation, schedules are chaotic, trains are overbooked, obliging passengers to stand cheek-to-cheek and cheek-to-cheek, and the LRCs, promised to be in operation by the summer of 1983, proved to be another promise shattered.
1 urge the Minister to use every resource available to him to reinstate the popular, time and economically efficient and respected Atlantic Limited in an effort to reverse the tawdry and disgraceful service New Brunswickers have endured for the past two years. Forcing passengers to travel backwards before travelling forward, at greater expense and less convenience, does not forge a dynamic rail service.
The decision to terminate one of Canada's most popular lines is indicative of the irresponsibility of the Government in making this decision, and shows a general lack of compassion for and appreciation of the basic needs of Atlantic Canadians. Sadly, it is compatible with many other of its decisions adversely affecting the region.



PUBLIC WORKS


Mr. Rod Murphy (Churchill):: Madam Speaker, I rise today to speak on the same topic as the Hon. Member for Bow River (Mr. Taylor). Canadians are tired of the ever-growing examples of how Government officials have been both negligent and extravagant when it comes to spending somebody else's money.
In the case of Stornoway, the rent-free accommodation of the Leader of the Official Opposition, in the last seven years the residents of that house spent $25,000 in 1976, $25,000 in 1979, $35,000 in 1980, and the latest tenant, the new Leader of the Conservative Party (Mr. Mulroney), has found it necessary to spend $50,000 of taxpayers' dollars on a splash or two of paint.
This latest example of living high at the public trough raises a number of questions. First, to justify the expenditure of $50,000, did the Leader of the Conservative Party sign a long-term lease for Stornoway? Second, what political party does a leader belong to when he acts like a Liberal, lives like a Liberal, and spends other people's money like a Liberal?
Finally, with the Prime Minister's power as the custodian of the national treasury, can Canadians afford to move this free spender from Stornoway to 24 Sussex?


Some Hon. Members:: No way.


Mr. Nielsen:: It would save money.
October 21, 1983



PROVINCIAL AFFAIRS


Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam
Speaker, the Winnipeg Free Press and Statistics Canada have confirmed that Manitoba has the lowest rate of job creation in Canada. Because of the NDP job fund, in actuality the number of jobs created is 8,000 less than reported, meaning a percentage increase of a near worthless .88 per cent. John Bulloch, the President of the Canadian Federation of Independent Business, has reported that the Manitoba NDP Government is the most anti-business regime in Canada, and it clings to the lame philosophy that only it can solve all the problems and that only it can breathe new life into its sick economy. Bulloch states the NDP seems blind to the fact that its policies are doing just the opposite.
Unemployment is up 50 per cent, with 46,000 people out of work. Inflation has soared. Taxes have increased over $225 million. The annual projected deficit is $435 million. The NDP deficit this year is greater than the combined four-year deficits of the previous Conservative Government. To top it off, the Winnipeg Free Press reports that, under the NDP Government, Manitoba has the worst record of job creation in Canada. Manitoba under the NDP Government has become the "Dogpatch" of Canada.



BROADCASTING


Mr. Arnold Malone (Crowfoot):: Madam Speaker, the House of Commons is gripped in the vise of an historical debate over changes to the Crow rate. That debate is of enormous economic and historical importance. This is an issue of deep-rooted differences, but one that impacts on industrial central Canada just as much as on western farmers. It is a major national issue, yet our national media have failed miserably at understanding and explaining the issue.
Last night CTV news won the award for gross incompetence. After a difficult day in the House of Commons in which the Crow rate legislation was the central issue, the news coverage was inadequate in time and content, and bland in delivery.
While our nation is struggling with an issue that contributes $6 billion annually to our balance of payments, more than any other single commodity, the issue tends to be viewed as a western one rather than as a national one, largely because the national media and central Canada are synonymous. We should not be surprised by this. The head office for CBC radio is in Ottawa; the head office for CBC TV is in Ottawa; the head office for Global TV is in Toronto; the head office for CTV is in Toronto; the head office for Maclean's magazine is
Oral Questions
in Toronto, and the head office for CP wire service is in Toronto. The media are in central Canada.
It is unfortunate and dangerous that our national media are centralized to the extent that they are incapable of understanding and explaining national issues whose origins are in the regions apart from central Canada. Unfortunately, the disadvantages must be shared by all Canadians.



ORAL QUESTION PERIOD


Hon. Sinclair Stevens (York-Peel):: Madam Speaker, my question is directed to the Acting Prime Minister. Would the Acting Prime Minister indicate if he was quoted correctly and, if so, if he was speaking for the Government when he was reported to have stated yesterday that the Canadian Government, after a reasonable, decent period of time, would likely recognize the new Government in Grenada? I ask this, Madam Speaker, in view of the fact that the Government of Jamaica, the Government of Barbados and the Governments of other Commonwealth Caribbean nations have already indicated that they do not intend to follow that course.


Hon. Jean-Luc Pepin (Minister of State (External Relations)):: Madam Speaker, I remember teaching this subject to my students 20 years ago. There are two approaches to the phenomenon of recognizing de facto governments. One is referred to as the objective approach and the other is referred to as the subjective approach. Generally speaking, Canada has taken the objective approach to recognition of government, that is, we of course wait over a period of time and try to find out answers to a number of questions.
We need to find out what the relations will be between the government in question and neighbouring governments, and what the reality of the administration exercised by that government will be. We have to look at the attitude of the government to its own citizens. After a decent period of time, which is to be qualified in each case, the phenomenon of objective recognition takes place. It is a rather complex issue. Such recognition took place just a few days ago in the case of one of the African governments.


POSSIBLE ASSISTANCE TO CARIBBEAN REVOLUTIONS
Sinclair McKnight Stevens: Madam Speaker, my question is again directed to the Acting Prime Minister who, frankly, rather startles me with that type of a reply. Would the Acting Prime Minister indicate if he is aware of the fact that the National Mobilization Minister in Grenada, Selwyn Stra-chan, has stated that he believes there is room for comradely

October 21, 1983
Oral Questions
assistance to revolutions in the Caribbean? Mr. Strachan is presumably to be one of the new cabinet Ministers in Grenada. In that context, would the Minister at least indicate to the House whether he has consulted with the United Kingdom or with other Caribbean Commonwealth countries to determine what steps should now be taken, in view of the brutal and violent seizure of power in Grenada?


Jean-Luc Pepin: Madam Speaker, I try to be a bit constructive when answering these questions. I was asked by the press yesterday about what would happen, and I did my very best to try to describe the phenomenon as it would take place. Indeed, we will consult with the Governments of different West Indies islands. There is a meeting of West Indian Commonwealth Governments during the coming weekend, I undestand. We will be listening to their views on the subject. However, I cannot but describe it the way it is, and I cannot but repeat what I have already said.
When a government, a group of people, a junta or whatever, takes over power in a country by force, we must look at all of the factors that I have indicated. Those factors include the reality of the exercise of power, and the reaction of the neighbouring countries to that exercise of power. A sort of consensus builds up in the world and, after a period of time, the facts of life are accepted and recognition is given. By using the standards that the Hon. Member seems to imply, he would probably have refused to recognize the previous Government of Grenada in any event.


CANADIAN AID PROGRAMS
Sinclair McKnight Stevens: Madam Speaker, again my question is directed to the Acting Prime Minister, and perhaps it could be answered better if I were more specific.
There has been some $10 million worth of Canadian aid going into Grenada. Various programs are now under way, including improvements for port facilities, the improvement of a central garage facility, and other aid projects. In view of the fact that in other countries when there is a serious question about the safety of our aid personnel, the aid programs are suspended, would the Minister indicate if that is now under consideration with respect to the continuing programs for Grenada?


Jean-Luc Pepin: Madam Speaker, I think you have to start with the proposition that foreign aid, development aid, is not for the sake of recipient governments; it is for the sake of the people in the less developed countries. Consequently, we keep that in mind all the time-what is the interests of the people? In this particular instance $8.7 million has already been spent in the past in Grenada, and there is $1.6 million in current programs. With respect to the existing program, the purpose is to try to do as much as possible, which may not be much, because of the circumstances. The objective is to try to continue with the existing program.
With respect to future programs, obviously they are not in the making now. Again, it is reality that we try to cope with in this particular instance, and the interests of the people of Grenada.


POSSIBLE CONSULTATIONS ON SITUATION
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, my question is likewise addressed to the Minister who is Acting Prime Minister today but who, on Wednesday, was junior Minister of External Affairs. I wonder if he could tell the House whether the Prime Minister, who never fails to remind us of the great role he plays in the North-South dialogue, has had any discussion with the heads of the Caribbean Governments or with the President of the United States, on this brutal take-over in Grenada, with a view to concerting action, whether it be recognition, or other action in the hemisphere against the vicious Government now in place in Grenada?


Jean-Luc Pepin: Madam Speaker, I have already referred to the forthcoming Commonwealth Caribbean countries' meeting. Obviously we will be in consultation with them on the result of their meeting during the weekend.


COMMONWEALTH CARIBBEAN MEETING-REQUEST THAT CANADIAN OBSERVER ATTEND
Donald W. Munro: Madam Speaker, as was mentioned the other day, there are some 85 Canadians in Grenada at the present time, some as travellers and some as "cooperants" in the CIDA projects. I wonder if the Acting Prime Minister could tell the House whether any approach has been made to the Commonwealth Caribbean Ministers who are meeting today about whether Canada, as a member of the Commonwealth, could send an observer to that meeting so that we can know what actions are being concerted, and could fall in line with them?


Jean-Luc Pepin: Madam Speaker, my hon. friend does not seem to realize how confused the situation is. There are three or four versions of what took place, so every government in the world, including the Canadian Government is simply trying to find out what is happening.
With respect to the Canadians there, the number has already been referred to, and the information we have is that they are in contact with each other. As you know, there is one diplomat from our High Commission in Barbados now in Grenada. They are in contact with each other, and the information of the Department of External Affairs is that, generally, they are in a reasonably good mood. They have been told not to move because there is a curfew, and it is considered by the Department that if they start getting out of their hotels and homes at this time they would be more in danger than if they stayed put. That is the advice that has been given to them.
October 21, 1983


FUTURE RECOGNITION OF NEW REGIME
Donald W. Munro: Madam Speaker, the Acting Prime Minister will know that the Commonwealth Ministers are meeting today. They have all said they will not recognize that regime. Is the Acting Prime Minister suggesting that Canada is going to be out of step with the other Commonwealth members in this hemisphere, in recognizing that regime after a decent delay? After this atrocious occurrence in Grenada will Canada recognize that regime, after a decent delay?


Jean-Luc Pepin: No, Madam Speaker, I specifically said the opposite. I mentioned that among the factors which are borne in mind in the process of deciding whether or not recognition of a government should be given, is the conduct of that de facto in its relationships with neighbouring countries. Of course, one way in which we come to our decision is by looking to and consulting with neighbouring countries on what they will do. If, for a number of reasons, all the neighbouring countries of Grenada should decide not to grant recognition for a period of time-for a long period of time-I am sure this would be a major consideration in the decision Canada would have to make.


NUCLEAR ARMAMENTS
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Madam Speaker, in the absence of the Prime Minister I would like to direct my question to the Acting Prime Minister. The Prime Minister himself is reported to have set up a task force concerned with ways to ease East-West tensions. And the Government is reported to be going to spend some $500,000 this coming year on a verification program having to do with the arms race. Can the Acting Prime Minister tell this House, and the many Canadians who will be expressing their support of nuclear disarmament this weekend, how the Government reconciles this concern for verification procedures, on the one hand, with the decision of the very same Government to test the Cruise missile, a missile whose most distinctive and most frightening feature is its very unverifiability?


Sinclair McKnight Stevens: Just like the SS-20s.


Jean-Luc Pepin: Madam Speaker, in Canada we will find that easy to reconcile because we have decided, in conjunction with our NATO allies, to take a two-track approach-to defend ourselves properly and adequately and, at the same time, to do everything we can to bring about peace, disarmament, and so on. Those two things are easy to reconcile. I am sure that 99 per cent of the people of Canada have already reconciled them.
Oral Questions
With respect to the task force, indeed there is such a task force, and one would be expected to have such a task force. At the Williamsburg Summit the leaders pledged themselves, and promised they would do everything-and more colourful words were used at that time-to bring about peace and, particularly, to bring about forms of disarmament. Therefore, the task force is really in line with that pledge. The Prime Minister is collecting views from our own diplomats around the world as to what, when, where and how could East-West tensions be reduced. That is the purpose of the task force, and the Prime Minister, when he is at Guelph in a few days, will have a chance to give us his thinking on that particular subject.


William Alexander (Bill) Blaikie: Madam Speaker, how often do we have to listen to the line that this is in keeping with our NATO commitments? Expert after expert has said that this has nothing to do with NATO. If the Government is concerned about NATO, there are other ways in which it could beef up its commitment to NATO.


REQUEST THAT GOVERNMENT RECONSIDER MISSILE TESTING DECISION
William Alexander (Bill) Blaikie: Madam Speaker, we hear the Acting Prime Minister, like the Prime Minister, putting a lot of faith in arms control talks, talks which many experts, including Elva Myrdal, the Nobel Peace Prize winner of last year, has said are worth nil as far as real nuclear disarmament is concerned. Is the Government now prepared to admit, on the eve of this weekend when we hope the Prime Minister will make a half decent speech in Guelph, that these talks are not enough, that they are no substitute for courageous action to break the hold of the nuclear whirlpool on this planet?
Will the Acting Prime Minister now, in the name of the Government, indicate a willingness on the part of the Government to reconsider the testing of the Cruise missile? And would he also indicate at the same time the Government's position on other proposals, such as the call for a freeze on the testing, deployment, and development of new nuclear weapons? This is called "suffociation" in case the Acting Prime Minister and the Prime Minister do not know what that word means.


Jean-Luc Pepin: Madam Speaker, the Hon. Member was obviously more interested in preparing his second question than in listening to the answer I gave to his first question. I referred to the two-track approach. Most people who think about these problems, and many, many many do, are sort of reconciled with the fact that it makes sense that you try to protect yourself in the best possible way. That is a prudent decision to make. Yet at the same time you do your utmost to develop a spirit of co-operation in the field to bring about peace through disarmament. That is what the Secretary of State for External Affairs declared the other day.

October 21, 1983
Oral Questions
Canada has always been very conscious of the importance of verification as an ingredient of disarmament. What the Secretary of State declared the other day was not new, it was a continuation, with more money being assigned to it. But Canada is active, and the rest of the world thinks so, in all fora, employing all means or devices which can be used to bring about disarmament. We are active in the field of control of chemical weapons, outer space, and what not. So, to quote what was said at the time of the Williamsburg Conference, we really do our utmost to bring about better conditions for peace.


William Alexander (Bill) Blaikie: Madam Speaker, when will the blind see, and when will this Government see, that there is no protection to be had in the kind of arms race towards which it is contributing as the Canadian Government?


REQUEST FOR FREE VOTE ON ISSUE OF CRUISE TESTING
William Alexander (Bill) Blaikie: Madam Speaker, the Acting Prime Minister will know that many Canadians would like Parliament to be able to express an independent judgment on Cruise testing. So far a free vote has not been possible as a result of, in part, procedural language in our Standing Orders which results in many motions being motions of confidence although they need not be. Can the Acting Prime Minister tell us whether the Government intends to follow the recommendations of the Special Committee on Standing Orders and Procedure, or parliamentary reform as it is more popularly known, and allow for changes which would make such votes more possible? Perhaps if Parliament could express itself freely and independently on an issue such as this, the Government would not be in court today over Cruise testing and the role of Parliament-


Madam Speaker:: Order. I think we have had the question.
[ Translation]


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, this is a matter of parliamentary reform, and enough was said about the subject last Friday for the House to know where the parties stand on the matter. In the circumstances, I would refer the Hon. Member to last Friday's debate, which took place instead of the debate on Bill C-155, which, as the House is aware, is being delayed because of filibustering by the Progressive Conservatives and the New Democratic Party.


THE ADMINISTRATION
Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Madam Speaker, I have a question for the Acting Prime Minister who is well known for his candor. Will he tell the House whether a published report today is correct in stating that the Secretary of State for External Affairs has ordered that a Challenger
Jet, owned by the federal Government, be sent to Europe to ferry him about the Middle East, and that the Jet was sent with empty seats while the Minister flew commercially? If that is so, what is the Minister's reason for doing that? Is it that he is uncertain about the airworthiness of the Challenger Jet, or is it, as the press reports, that the Challenger Jet would be forced to put down at Iceland to refuel and the Minister does not like the weather in Iceland this time of year?


Yvon Pinard: It is too slow by boat.


Jean-Luc Pepin: Madam Speaker, the answer is, as usual, quite simple. It is to save time. The Secretary of State is rather a busy man. He is in Halifax for meetings with the U.S. Secretary of State on a certain day, and then he has to go to the Middle East. So the plane was sent to Europe because it takes longer to get there than a commercial jet. The Minister hitched on a commercial flight to wherever it is the plane was waiting for him, and in doing that he managed to save quite an amount of time.


COST OF TRAVEL ARRANGEMENTS
Henry Perrin Beatty: Madam Speaker, in that case would the Minister undertake to tell the House exactly how much time was saved between Canada and Amsterdam by the Minister going commercially, and how much money it cost, so we can figure out how much the Minister's time is worth per hour? Secondly, can he confirm that in fact the Minister's office has been putting out the story that the reason for doing this separately was that the Challenger was leaving from Ottawa and the Minister was leaving from Halifax? Will he inquire as to whether there are maps and compasses in the Department of External Affairs, and whether they recognize the fact that Halifax is en route from Ottawa to Amsterdam?


Jean-Luc Pepin: Madam Speaker, 1 will gladly ask the Secretary of State to give his agenda to the Hon. Member if he feels that way. But the easy answer is that the Minister, like other Ministers, and some other people presumably-


Mr. Chretien:: We will send Beatty to Iceland, too.


Jean-Luc Pepin: -has a pass on CP Air, so it did not cost the Government anything. Presumably there was quite a number of empty seats on the CP Air plane. I am quite sure that CP Air was delighted to have the Secretary of State on board.


TRUST COMPANIES
Mr. Bill Kempling (Burlington):: Madam Speaker, my question is directed to the Minister of Consumer and Corporate
October 21, 1983

Affairs, who is aware that some trust companies have placed clauses in their mortgage renewal contracts which remove a right given to a home owner under Section 10 of the Interest Act. Will the Minister deal with this matter in the report she will be releasing as a result of an investigation or inquiry undertaken by her officials?


Hon. Judy Erola (Minister of Consumer and Corporate Affairs):: Madam Speaker, 1 would like to inform the Hon. Member that a contract is a contract. I find it very difficult to accept that someone would sign such a waiver without examining very carefully what he or she had done. As to whether this particular type of incident has been detected or reported, I am not aware because I have not seen the full report. I expect it to be out shortly.


BRITISH COLUMBIA SUPREME COURT DECISION
William James Kempling: Madam Speaker, the Minister has stated she may seek a remedy to aid home owners through the Interest Act, and I am sure she will have been briefed on the decision rendered by the Supreme Court of British Columbia last summer dealing with Section 10 of that Act. Will the Minister, in her report on this matter, deal with the wording now being placed in mortgage renewal agreements which deems that the date of the mortgage will be the date of the renewal agreement and thus set aside the decision by the Supreme Court of British Columbia?


Judith A. Erola: Madam Speaker, we are looking at a number of options and we will disclose those to the Hon. Member at the appropriate time. But certainly full disclosure is one of those options which I feel must be examined very, very closely.


INDUSTRY
Mr. Bill McKnight (Kindersley-Lloydminster):: Madam Speaker, I would like to address a question to the Minister of Industry, Trade and Commerce on behalf of grain producers who have millions of dollars invested in White Farm equipment, and on behalf of the 150 plus dealers of White Canada. In view of the fact that the receiver is meeting today to review bids for White Canada, could the Minister inform the House how many realistic, firm bids have been made for the White assets, and if any of those bidders are Canadian?


Hon. Ed Lumley (Minister of Industry, Trade and Commerce and Minister of Regional Economic Expansion):: Madam Speaker, this week for the first time since the process started the receiver has received three bona fide bids. I understand the creditors have recommended that the receiver proceed to the bankruptcy court with a recommendation for the Borg-Warner proposal. The Borg-Warner board is meeting today with respect to adopting the conditions the receiver has
Oral Questions
put forward on behalf of the creditors in determining the commercial terms. If the Borg-Warner proposal is accepted, I understand that they are going to try to find a Canadian company to enter into a joint venture with them and that proposal will obviously have to come before the Foreign Investment Review Agency.
With respect to the federal Government, Madam Speaker, the conditions for our support have been the same as 1 have told the Hon. Member on several occasions in this House. Our first priority was to ensure that parts and supplies be made available, in keeping with provincial law, to the farmers right across the country; secondly, that the axial-flow technology will be kept here, exploited here, and manufactured here in Canada; thirdly, to try to preserve the dealer network across the country. The fourth, of course, was the same as the commercial lenders in trying to get a proposal. We are hopeful that the conditions we have set down will be accepted and that we will have a satisfactory conclusion to this lengthy negotiation.


TERMS OF BORG-WARNER PROPOSAL
William Hunter (Bill) McKnight: Madam Speaker, I take from the Minister's answer that the proposal was made by Borg-Warner Corporation, not Borg-Warner Acceptance. I presume that is who made the proposal. Would that proposal allow White Farm Canada to continue to operate as a viable company with the manufacturing of the conventional combines, the axial-flow new technology being manufacturing in Canada, and parts supply being continued by the Canadian White firm regardless of whether it is a joint venture or completely controlled by a Canadian?


Edward C. Lumley: Madam Speaker, if I recall, the proposal that the receiver has been recommended to accept is that of the Borg-Warner Acceptance Corporation which will in turn financially back another Canadian company that would, in essence, take over White Farm as a going concern. Of course the conditions that we have set down for the proposal, which I do not see any reason to change with respect to the FIRA application, are that parts supply will be made available to the Canadian farmers, that the dealer network will be maintained, and the technology will be developed right here in Canada. I do not see those conditions changing, but I believe it will be Borg-Warner Acceptance Corporation rather than the Borg-Warner Corporation.
28204

October 21, 1983

Oral Questions FISHERIES


RESTRUCTURING OF PECHEURS-UNIS DU QUEBEC- ADVANTAGES TO PROVINCE OF PARTNERSHIP IN NEW CORPORATION
Alexandre Cyr: Madam Speaker, my question is directed to the Minister of Fisheries and Oceans.
The Minister has submitted a plan for restructuring Pecheurs-Unis du Quebec by setting up a new company in which both fishermen and creditors would be represented, and I believe this is the way to save the Quebec fishing industry from disaster. Has the Minister explained to the Government of Quebec the advantages of being a partner in the new company, and what reply did he receive from his provincial counterpart, Mr. Jean Garon?


Hon. Pierre De Bane (Minister of Fisheries and Oceans):: Madam Speaker, I think the Hon. Member has described very well the importance of the project submitted by the Canadian Government in the same spirit as the project submitted to and accepted by, all intervenors in Newfoundland and Nova Scotia. The House is aware that the Government of Canada has allowed Pecheurs-Unis to continue its operations in the past two years, since Pecheurs-Unis covers nearly half of the fish processing plant workers in Quebec, and especially in the riding of Gaspe, as well as 30 to 40 per cent of fish landings. Two years ago the Government of Quebec asked for a long term restructuration plan for Pecheurs-Unis through which it could provide assistance. That plan now exists and is supported by all concerned, and I hope the Government of Quebec will support it as well, since Pecheurs-Unis were to disappear tomorrow, the biggest losers would not be the financial institutions, such as the Mouvement Desjardins or the Banque Nationale, but the Quebec Government, which, either directly or through the Societe de developpement cooperatif, where 90 per cent of the funding is the Government's, has the biggest share in this concern. I therefore urge the Quebec Minister of Agriculture, Fisheries and Food to join in a partnership with all parties concerned so that we can restructure this industry in a way that has already found acceptance with the Government of Nova Scotia and Newfoundland.
* *
*


ADMINISTRATION OF JUSTICE
Ms. Lynn McDonald (Broadview-Greenwood):: Madam Speaker, my question is directed to the Minister of Justice, who is undoubtedly aware that people in the two northern Territories are three to four times as likely to go to jail as people anywhere else in Canada, although we have no reason to believe that they are any more criminal or immoral. Will the Minister agree that this is a deplorable and unacceptable
state of affairs, and would he tell the House what responsibility he believes he has to see that there is some reduction in what seems to be the excessively vigorous application of the criminal law in the North?


Hon. Mark MacGuigan (Minister of Justice):: Madam Speaker, I think that the Hon. Member is indicating that there are several factors which could lead to this situation which exists. I am attempting to find out which of those factors are the causes, if we could determine that, in this particular case.
I would also draw to her attention that I hope that I will shortly be introducing new legislation, if the Opposition allows us to proceed to the new Session of Parliament when we could introduce new legislation, concerning sentencing, which I am sure will at least in some part relieve the situation which exists there, as well as some other situations in Canada.


Lynn McDonald: Certainly this new legislation would be welcomed, but I would like the Minister to try to answer the question more fully. He is responsible for prosecutions in the North and for the court system in the North. Of course, his colleague, the Solicitor General, is responsible for policing in the North. Altogether, it is a federal responsibility.


POSSIBILITY OF ADMINISTRATIVE CHANGES
Lynn McDonald: Madam Speaker, it seems to me that it will take more than just new legislation. Would the Minister comment on what kind of administrative changes might be needed? What are the alternatives, and how will they be developed? What kind of inquiries will he undertake? What input could we have from people such as the native people, who particularly suffer from the extensive use of the criminal justice system? Could he be more precise about what steps might be taken and what the responsibility is at the federal level?


Mark R. MacGuigan: Madam Speaker, the Hon. Member asks some good questions. I have this area under study at the present time. I will take her question as notice of issues that she will want to raise with me when I next appear before the Standing Committee on Justice and Legal Affairs.
1 also understand that the Committee has before it for its consideration the possibility of some further study itself into these questions. Therefore, I hope that in at least the next several months we will get better answers to those questions than are now available.


AIRPORTS
Mr. Scott Fennell (Ontario):: Madam Speaker, my question is directed to the Minister of Transport. In July of this year there was a report in The Globe and Mail of an initial phase
October 21, 1983

development of the Pickering Airport that would be announced on September 23. Could the Minister advise us what happened after that initial announcement?


Hon. Lloyd Axworthy (Minister of Transport):: Madam Speaker, it is still being examined.


Thomas Scott Fennell: I hope better consideration is given to the Pickering Airport development than was given to the Mirabel Airport development.


USE OF AGRICULTURAL LAND
Thomas Scott Fennell: Madam Speaker, will the Minister agree to allow young farmers to develop the surplus land at Pickering and give them a chance to develop and begin using that land for a productive purpose?


Lloyd Axworthy: Madam Speaker, I have already explained that all of the issues relating to that matter are now being examined.


NATIONAL DEFENCE
Hon. Allan B. McKinnon (Victoria):: Madam Speaker, my question is directed to the Minister of National Defence. Has he been briefed on the Pacific Petrel project which has been proceeding for some time without Treasury Board approval? If he has been briefed, could he tell us if he has decided to give post facto approval for those expenditures?


Hon.   J.-J. Blais@Minister of National Defence: Madam Speaker, I thank the hon. gentleman for his question. I also thank him for having brought that matter to my attention initially. After he spoke to me privately about the issue, I asked for a complete briefing from my officials. I have received a preliminary briefing and I have asked for additional details which would permit me to make a decision. Whether that decision will be in the line that is suggested by the Hon. gentleman I am not in a position to say today.


Allan Bruce McKinnon: It is always rather startling to find a million dollar project going on in the Minister's Department about which he or Treasury Board has known nothing.


MINISTER'S POSITION
Allan Bruce McKinnon: Madam Speaker, is the Minister in favour in principle of the construction of that sailing vessel on the West Coast, as a means of giving sail training to sea cadets, or is he not?


Hon.   J.-J. Blais@Minister of National Defence: Madam Speaker, that is the question I am addressing. I am not in a position today to advise the House as to what that decision will
Oral Questions
be. I, like the hon. gentleman before me, wish to make decisions with the full knowledge of the facts.


CONSUMER AFFAIRS
Mrs. Jennifer Cossitt (Leeds-Grenville):: Madam Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. It concerns the use of gamma radiation as a preservative of food. In keeping with the Government's desire to keep the public totally informed, would the Minister tell the House what decision, if any, she has made with respect to the type of logo that will be used to identify the foods that are treated with gamma rays?


Judith A. Erola: Madam Speaker, I thank the Hon. Member for her question, although it would be more properly directed to the Minister of National Health and Welfare since it is directly under her ambit. However, I would like to inform the Hon. Member that discussions are taking place between the two Departments and as soon as a decision is made it will be made public, of course.


IDENTIFICATION BY LOGO DESIGN
Jennifer Cossitt: Madam Speaker, my supplementary question is still directed to the Minister of Consumer and Corporate Affairs who, I understand, has the jurisdiction over labelling. This is the purpose of my question. I think it is very important that consumers have all the information available to them with which to make an informed decision on their purchases of such treated foods. Will the Minister assure the House that the logo designed and approved by her Department will not hide or cloud the fact that foods are treated with gamma rays?


Judith A. Erola: Madam Speaker, I would like to reassure the Hon. Member and the general public that that is exactly what will take place. In the meantime, there is, as far as we can measure, no danger to the public.


EMPLOYMENT
Hon. Bud Cullen (Sarnia-Lambton):: Madam Speaker, I have a question for the Minister of Employment and Immigration. American auctioneers are coming into Canada to work, using work permits that go for an extended period of time, and yet Canadian auctioneers are not allowed the same benefit. Will the Minister look into this matter and determine whether

October 21, 1983
Ora! Questions
we should stop the American auctioneers coming in or, in the alternative, reach some reciprocal arrangement or agreement?


Hon. John Roberts (Minister of Employment and Immigration):: Yes, Madam Speaker.


AUTOMOTIVE INDUSTRY
Ian Deans: Madam Speaker, my question is for the Minister of Industry, Trade and Commerce. Japan is apparently threatening Canada with retaliation if we adopt the recommendations of the automotive task force and establish a Canadian content requirement for imported vehicles. First, does the Minister recognize this threat for what it is? It is blackmail. Second, does he recognize that Japan virtually built its industry using a system in fact, that did not allow free entry into their market without there being Japanese content? Will he tell Japan that we will do what is in our best interests and take the steps necessary to implement the recommendations of the task force?


Edward C. Lumley: Madam Speaker, I have never known the Government of Canada to be intimidated by any country in the world.


Some Hon. Members:: Oh, oh!


Edward C. Lumley: Threats of retaliation is not the way to conduct negotiations which are now being undertaken with the Japanese automobile manufacturers. We find it rather strange that Japan will build an automotive manufacturing facility in Italy when Italy will allow only 2,000 Japanese cars into its market, whereas Canada allows about 150,000 cars into our market. We think we have a pretty good investment climate and we are hopeful the Japanese automobile manufacturers will see their way clear to invest in this country.


TASK FORCE RECOMMENDATIONS
Ian Deans: Madam Speaker, can 1 take it from that answer that the automotive task force report, which represents the best work of both the industry and the unions involved, is not going to be implemented by the Government?


Edward C. Lumley: Madam Speaker, we have already implemented some of the recommendations of the automotive task force, and we have three or four other recommendations to which we are giving serious consideration. As for the major proposal, the content proposal, I have said many times in this House that I think it would be irresponsible for the Government to act unilaterally in this regard.
Japan is a very valued trading partner of Canada. Also, 30 per cent of our Gross National Product is generated by exports. In addition, the Canadian way is the negotiation route, Madam Speaker. We will continue in this direction, but if we are not successful then we might have to take other action.


PENSIONS
Hon. Jake Epp (Provencher):: Madam Speaker, I wish to direct my question to the Minister of National Health and Welfare. On January 1, 1984, the agreement between Canada and Jamaica on social security arrangements will come into effect. That is the fifth agreement signed by Canada with other countries. There have been a number of requests to the Minister by former resident citizens of the United Kingdom, now citizens of Canada, for the same kind of reciprocal arrangement in order that they might not suffer the penalties they now have because they do not receive full funding of pension plans earned. What is the Minister's time line in order that an agreement between the United Kingdom and Canada can be reached on the same kind of reciprocal agreement?


Hon. Monique Begin (Minister of National Health and Welfare):: Madam Speaker, I am aware of and I must say I am quite sympathetic to the 40,000 or so British Canadian pensioners living in our country. I started on that dossier exactly six years ago. It is almost as old as medicare, by the way. Unfortunately, this matter does not depend on Canada, and I appreciate the chance the official critic gives me in being able to give an update on it. The problem is really with the other partner, namely, Great Britain, and I guess it is fair to say it is a money problem.
The parameters could be full indexation of British pensions for which people paid through general taxes all their lives with a certain amount which will have to cover retroactivity. It is fair to say that we would like something. This matter was on the agenda of the two Prime Ministers and 1 understand Mrs. Thatcher did not close the door.
Beyond that, I met with some of our pensioners in Canada recently and we are exploring what else can be done to try to press upon the British people that these British pensions have already been paid for, if I may way, as deferred wages through taxes.


REQUEST FOR MINISTERIAL ATTENTION
Arthur Jacob (Jake) Epp: Madam Speaker, I want to thank the Minister for that answer. Will she continue pursuing this dossier in light of the present discussion on pensions, and can she assure us that this matter will not in any way be put aside because we are also having a discussion on pensions on a larger question in Canada?
October 21, 1983


Monique Bégin: Madam Speaker, I can assure all my colleagues in the House that I have a mind of a critical path diagram and 1 follow activities in parallel form. Each activity gets its chance. Matters are not put aside because one major dossier is being discussed. The dossier of the reciprocal agreement for pensions and other social programs between Great Britain and Canada is an active one, totally separate from any other pension reform. I take this opportunity to do something unusual and ask the help of all Members on all sides of the House, and I am sure 1 will have it.


FINANCE
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, my question is for the Minister of Finance. On April 19 when the Minister's budget was tabled, he also presented a paper called "Research and Development Tax Policies." A key phrase in that paper indicates research and development has become a critical growth factor as a result of accelerating technological change. When will the Minister introduce in this House the draft legislation which will lead to a considerable increase in the generosity of tax credits and benefits available to small businesses embarking on research and development projects?


Hon. Marc Lalonde (Minister of Finance):: 1 thank the Hon. Member for raising this particular question. As he knows, we issued a paper with the budget which is the subject of extensive consultations with people in Canada interested in research and development. Through those consultations we have been able to make a number of adjustments and improvements. I can report to the Hon. Member that the general thrust of the recommendations has been supported by all those consulted. I would expect to be able to introduce draft legislation very, very shortly. As a matter of fact I have approved, as recently as a few days ago, the latest changes in that regard. I hope we can do this very shortly.


REQUEST FOR EARLY INTRODUCTION OF LEGISLATION
Thomas Edward Siddon: Madam Speaker, I think the Minister would realize that the date of the introduction of that draft legislation has a great bearing on the retroactivity of certain of those measures. If he checks with his departmental officials, he will find that they are saying there is no point in introducing this legislation at this time because the House will soon prorogue. I do not see what that has to do with draft legislation, Madam Speaker, nor do I understand the concern being expressed by his officials that an additional $100 million in tax credits is far too rich for the business Sector, the small business sector in particular. How does that square with the billions of dollars the Government is handing
Business of the House
out to the Canadairs, the Maislins, and the Dome Petroleums of this country?
Why can we not get on with introducing this legislation and give a break to the small and medium-sized business sector which needs generous increases in tax credits?


Marc Lalonde: Madam Speaker, the Hon. Member also forgot to mention the billions of dollars we are already giving in terms of tax advantages to small businesses in this country-


Thomas Edward Siddon: Two hundred million dollars.


Marc Lalonde: -and the money we have given to support Massey-Ferguson, de Havilland in Toronto, White Farm Implements, and hundreds and hundreds, indeed, thousands of business organizations in this country which have been supported by the tax and the grant system which the Government has in place to create jobs for Canadians.
As far as the Hon. Member's question is concerned, he seems to have an argument with my officials. I will check whether he is right or they are right, and who I should endorse. When I have reached a conclusion, I will let him know.


Madam Speaker:: The Hon. Member for Yukon.


BUSINESS OF THE HOUSE
Erik Nielsen: Madam Speaker, I presume the Question Period has terminated, and therefore I rise to facilitate the orderly transaction of the business of the House today. I would like to move, seconded by the Hon. Member for Portage-Marquette (Mr. Mayer):
That the House do now proceed to Orders of the Day.
If there is any doubt about the acceptability or the propriety of the motion, before the Chair makes any ruling I have submissions to make with respect thereto.


Madam Speaker:: The House has heard the terms of the motion. Is it the pleasure of the House to adopt the said motion?


Some Hon. Members:: Agreed.


Yvon Pinard: Madam Speaker, I rise on a point of order.


Madam Speaker:: I cannot entertain a point of order when I am putting the question.


[Stage Direction]
Motion agreed to.
[Stage Direction]
October 21, 1983
Supply


Mr. Charles Mayer (Portage-Marquette) moved:: That this House condemns the Government for its failure to recognize the economic hardship affecting all farmers in Canada, and its failure to help alleviate that hardship by implementing sound agricultural policies.


Madam Speaker:: The Hon. Member for Portage-Marquette.


Some Hon. Members:: Hear, hear!


Charles James Mayer: Mr. Speaker, 1 hope everyone will give me the same kind of reception after I finish speaking! This is certainly a great opportunity to talk about a very basic part of any country. If we are to be a sovereign country, we first have to assure an adequate food supply. When we speak to that, we speak to what goes on in Canadian agriculture.
In the past Canadian agriculture has served the country extremely well. It is the reason Canada was settled in the first place. There were vast amounts of land available. People came from literally all over the world to take advantage of the land and the opportunity to develop it and to plan for the future. Unfortunately, in the last 15 years or so this Government in particular has been extremely derelict in ensuring the same kind of opportunity for farmers now as was the case when the country was originally settled some 50 or 75 years ago, in the case of western Canada, or in many cases as many as 200 years ago and more in other parts of the country.
Agriculture is extremely important to any society. We can almost define any developed country in terms of the amount of disposable income its people have to spend to feed themselves. Recently figures were made available which showed that the average consumer in Canada spent something like 16 per cent of his or her disposable income or take-home pay on food. This means that there is 84 per cent left to do other things. Also it means that we can have shorter work weeks, holidays with pay and many of the amenities which have come to be taken for granted but are basically luxuries in other parts of the world. These are the types of things an efficient agricultural system provides and are necessary for a developed society.
Other parts of the world are unfortunately not as well off as we are. People spend as much as 50 per cent or 60 per cent of their income or time on feeding themselves. This means they do not have time for shorter work weeks and that basically they have to work long hours in the fields.
We are very fortunate. The Minister of Agriculture (Mr. Whelan) has said many times-and I agree with him-that we have a very efficient system of agriculture. I would argue that it has become efficient in many cases despite government policy. This speaks to the ingenuity of individual farmers. That same ingenuity is what attracted people to settle the country in
the first place; that same ingenuity made agriculture more productive.
When I say "16 per cent", that only tells part of the story. The 16 per cent of disposable income spent on food also includes many meals eaten away from the home. They are increasing. In the neighbourhood of 30 per cent to 40 per cent of all meals consumed in Canada are prepared outside the home. In addition, they include various fruits and vegetables which are out of season. This means they have to be transported into the country, which speaks to our balance of payments. In many cases this involves prepackaged and prepared food. It has been said that a potato does not go into a modern kitchen unless it is peeled. In many cases that is true. That is the kind of thing we take for granted today, in many ways at the peril of agriculture.
In the last two or three decades farming has changed. In many ways farmers were previously looked at as second-class citizens. For example, if a person was a poor driver, he was a farmer; he did not know how to drive because he had never been in a city. Now farmers are very sophisticated. We cannot tell the city kids any longer from the country kids. We all wear the same kind of clothes. We work with computers. We are a very modern, productive, forward-looking and energetic group of people. Unfortunately, the present Government has not kept pace with what Canadian agriculture is doing.
This motion is a very broad one and it is easy to condemn people out of hand, but I would like to be more specific by talking about it in terms of money, the basic problem of most of the country today. Certainly agriculture is no different, but in many ways its situation is a unique one. One of the ways agriculture has become more productive is that it has mainly become more capital-intensive. It now takes as many dollars to create a job in Canadian agriculture as it does in Canadian manufacturing. Farmers now need money to farm. They also need seed, fertilizer and modern machinery. They need access to capital. Certainly that speaks to government policy. As we all know, Government has become a very large factor in anybody's life today. That is what is going on in Canadian agriculture.
Many things could be done in the area of agricultural finance which do not require the spending of a lot of money. I would like to refer to some of the questions I am asked for which I do not have answers because the Government does not have any policies directed at answering such questions. When farmers see that there are term deposits in banks in the neighbourhood of 6 per cent, 7 per cent or 8 per cent, when they see the Farm Credit Corporation offering money at over 13 per cent, and when they see chartered banks offering money at the same rate, they wonder why they cannot have access to funds at lower rates. This makes sense because it means Canadians would be given a chance to invest in the most basic industry in any modern society. This would not involve a lot of subsidy.
We saw the attitude of the Minister of Finance (Mr. Lalonde) in Question Period today. The Government is giving things to people. It has given money to various sectors of
October 21, 1983

industry. Fanners are not asking to be given anything; they want to pay their own way. They want to be able to hold up their heads. This is what has made them very productive in the past. They are asking for an opportunity to pay their own way.
There are many things in the area of financing which could be done that would not require large Government expenditures. They are not big ticket items as far as Government moneys are concerned; in many ways they are just common sense. It makes no sense that we should raise fuel taxes. It is extremely expensive to fill a tractor before going to the field in the morning. If one fills up a 100-gallon fuel tank on a tractor-and there are many farm tractors with fuel tanks that size-as much as $ 100 in taxes goes into it. That is the kind of commitment a farmer has to meet when putting in spring crops. That money is not circulated back into the private sector, it goes to the Government. If we are having financial trouble, it does not make any sense to tax farmers to the brink of financial disaster on one hand, and on the other hand bring in programs that cost them money to assist them. That is a much simpler way of seeing that farmers stay in business and stay productive.
There are other things that could be done and some of my colleagues will outline them later in this debate. We are talking not only about western grain but the advance payments program. In many cases that has served us well. It puts money into the hands of the producers when they harvest their crops. If the crop is marketed over a period of time, it serves the Government and it serves the farm community very well.
In the case of the advance payments Act for western grain, it does not make sense that the Government does not increase the amount. Looking at the history of that program, it has served very well. The losses have been minimal. The Government pays the interest on it. The Canadian Wheat Board borrows the money at prime minus one-quarter per cent, which is better than any farmer can get. The more money that can be borrowed by the Canadian Wheat Board at prime minus one-quarter per cent to be put into circulation in the farm economy is better for the whole system, yet this Government refuses to increase cash advances to western farmers.
1 have had an opportunity to question the Minister on the agri-bond concept. It is still a concept, something that can be worked out. It is designed to allow the money generated in agriculture to stay in agriculture. It makes no sense, when a farmer sells out and wants to use that money as his retirement plan, to put it into the economy through trust funds, term deposits and so on in order to minimize the tax that he will have to pay on that money. What is wrong about developing incentives to have that money which was generated in agriculture remain in agriculture? It would alleviate some of the requirements for funds of the FCC and alleviate some of the requirements of the Minister of Agriculture on the banking institutions. However, we see no innovative proposals in terms of finance coming from this Government or this Minister.
Supply
A year ago last June 1 heard the Minister of Agriculture state over the radio that very shortly the Farm Credit Corporation would have a billion dollars available to loan to farmers at preferred rates of interest. However, we find that the FCC cannot even go to the domestic market to raise funds. That makes absolutely no sense. It further propagates the Minister's reputation as being somebody who likes to talk a lot and do very little. That is very unfortunate for the farmers of this country.
In many ways there is excessive regulation of the farming industry in this country. There is concern in western Canada about what is going on with producer cars. There are not enough available. That is one way the farmers can market their grain and save handling costs. There are problems in the British Columbia orchard industry. I am told that if the producers gave their product to the canneries, the canneries could not be competitive in their marketing with the products coming from offshore. There are problems on the east coast with the potato industry.
This Government has failed to negotiate on a square basis with the Americans. The Americans are our best neighbour and best trading partner. That does not mean that we have to roll over and play dead when it comes to negotiating with them. This Government has not maintained the proper connections with the Americans with whom we want to trade. They have to trade with us. They send us a lot of fruit and vegetables when they are not in season in Canada, as well as those we cannot produce. We certainly hold an ace as far as our trade with the United States is concerned. The Minister has not used that to the best advantage of our producers.
Let me touch briefly on what I believe is the real tragedy, and that is the attitude that seems to pervade the present Government. Agriculture is not asking for handouts, only an opportunity to be productive. Agriculture does not need a lot of subsidies and concessions, only a chance to be productive. If we can be competitive in world markets, we do not need a lot of the assistance and support that comes from time to time. What is needed is a proper economic climate.
The tragedy of this Government's agriculture policy is that it staggers from pillar to post. It reacts to situations once they are in place rather than looking at research and development. Some very exciting things are happening in research and development. There is the possibility of developing legume cereals which would very much reduce the cost of production and assist our producers in being competitive. What does this Government do? It cuts back on the amount of basic research. Our research is down the line once the product has been produced. Our producers should be armed with the best varieties and the best research in terms of pesticides, insecticides, fertilizer and so on. They would then be more than competitive.
This Government has failed to maintain a good climate for negotiations with the Provinces. We see a good example of that now in the stabilization program for red meats. I understand the federal Government took no meaningful part in the discussions and that is a tragedy. We had a debate in this

October 21, 1983
Supply
House a couple of years ago when we talked about the Constitution and all kinds of other things which the federal Government needed in order to have some clout. There is much that could be done with a simple change of attitude.
It would have been a lot more helpful to the livestock industry if the federal Government had participated fully in that program. It should have been at the table encouraging the negotiations and the development of a program. It could have said how much money it was willing to put on the table. It knows from the past that all the Provinces got into the act simply because the federal Government refused to get into the stabilizaton field as far as red meats are concerned.
The Minister has been derelict and negligent in this area. Because of that the four Provinces which represent 80 per cent of cattle production in this country have had to sit down together. The four Provinces recently reached an agreement in principle on how to proceed on the basis of a three-party program involving the Provinces, producers and the federal Government. We still do not know whether the federal Government will get involved and, if so, how much money it will put up. It is my information that all the federal Government contingency plans have been made on the basis that the Provinces would not arrive at an agreement. That is ridiculous as far as the federal Government and Minister are concerned. They are not in a position at the meetings to negotiate or show any leadership. They will not say how much money they will put on the table to see that this comes about.
I also recommend that the Agricultural Stabilization Act be used. In British Columbia there is a stabilization payment that has been due since 1982. It is not yet made. The Agricultural Stabilization Act needs to be overhauled in terms of the time period. It was moved from ten years to five years, and you can make the argument that it should be moved to a three-year average. The point is that whatever program is used, surely it should be incumbent upon the Government and the present Minister to see that it is administered in such a way that the payments are made at a time when they mean something. Producers in British Columbia have managed to survive for a whole year without payments being made. That calls into question the seriousness with which the Minister takes his responsibility.
I have almost run out of time and 1 would like to conclude, if 1 may, by making two or three suggestions that will not solve all of the problems but will at least show the producers that the Government is at least aware of the serious situation that exists with agriculture and recognizes how important agriculture is to a country like Canada. I have not mentioned how important agriculture is in terms of the balance of payments and that agricultural exports amount to some $9 billion. I have not mentioned the problems that the Minister seems to be ignoring in many of the other segments of agriculture, like the sheep industry or the Western Grain Stabilization Act. I have not mentioned any of those things. If I could take another 20
minutes, Mr. Speaker, I could outline the areas of responsibility that the Government and the Minister have not addressed.
Let me first suggest that the Minister take seriously the Agricultural Stabilization Act and that he see that there are enough people in his Department to administer it properly so that the payments are made on time and as quickly as possible after a crop has been harvested and the information is available as to whether or not there should be a payout. That is the very least the Minister can do. That would affect agricultural producers right across the country.
Let me also suggest to the Minister that he should move as quickly as he can to increase the level of cash advances. That is something that has been called for by all segments of the industry. It is something that would cost the Government a very, very minimal amount of money because, as I have already said, the history of that program in the past has shown that the losses have been minimal. When the Government does pick up the interest costs, as everyone appreciates, the interest costs are based on borrowing money at prime rate minus one-quarter of a per cent.
These are actions that are not earth shattering, but to take these actions would at least show the agriculture industry that the Government and the Minister have some interest in agriculture and are interested in seeing that efficiency continues to be improved and that the Canadian public continues to be served. The main thing is that agriculture continue to provide opportunities for young farmers to have the jobs that are so desperately needed.


Mr. Althouse:: Mr. Speaker, I note that the Hon. Member for Portage-Marquette (Mr. Mayer) spent a good part of his time outlining three topics. Two of those topics were more cash advances and easier credit which, while I refer to them as two different topics, are probably addressing the same problem of lack of cash. The third topic was the stabilization programs and I would focus my question on that topic for the moment.
The Hon. Member seems to think that the current base for the stabilization programs that now exist is fine and that the only real shortcoming is that too many years are thrown into the average. He has suggested that we move from the current five years to a three-year period. Does the Hon. Member not think that there is something inherently wrong with the base of the historical market price which those five or ten or three years give to the formula? Would he not think that we would be better off with a system that is based on costs rather than on market price, that would follow the actual costs from year to year and provide a much better form of stability to producers? Why did he ignore the possibility of moving to a cost base rather than simply trying to extend and make the old historically based data work?


Charles James Mayer: Mr. Speaker, I certainly did not say that at all. If the Hon. Member wants to deal with the whole question of stabilization, it would take a long time because it is a very, very involved topic. All I suggested was that the Government at least be serious about the programs it has in place and administer them the way they were legislated.
October 21, 1983

There are many, many areas in the whole concept of stabilization that can be looked at and changed to improve the situation. In the meantime, the only thing we should ask the Government to do is to have the courtesy, the decency and the guts to administer properly what it already has in place so that at least we would know there is someone here doing something to take an interest in the farming community in the country.


Mr. Gurbin:: Mr. Speaker, I would like to address a question to the Hon. Member because I did not hear part of his speech very well. I know the Hon. Member for Portage-Marquette (Mr. Mayer) touched upon the subject of financing but I did not hear him express whether or not he in fact knew that the Farm Credit Corporation was so low on funds that in some areas only 20 per cent of the people are being served by the Farm Credit Corporation and that 1,000 farmers are now stuck with an interest rate of 16% per cent. Of those 1,000 farmers, one-third are under the subsidization program and have had their interest rates lowered by 4 per cent. They will face an interest rate of 16% per cent again in the coming year. Even now they are not able to afford a rate of 12% per cent. I did not hear the Hon. Member mention that and I wondered if he could comment on that.


Charles James Mayer: Mr. Speaker, that is a very, very sad situation which is occurring among a lot of farmers in the country. In many ways, those farmers were forced into the 16% per cent interest rate in the first place because it was either accept that kind of an interest rate or simply not be able to survive for another year. Certainly the attitude of the present Minister is that what he says and what he does are two entirely different things. He has gone on record as saying that he does not want to see the Farm Credit Corporation become a lender of last resort. I will agree with him. Yet the actions of the Government force the Farm Credit Corporation into becoming a lender of last resort so it is not able to address the problems that the Hon. member for Bruce-Grey (Mr. Gurbin) mentioned.
Certainly there should be room in the new Farm Credit Corporation Act, Bill C-88, that we in the House passed some 18 months ago to provide specifically for the Farm Credit Corporation to have authorization, with the concurrence of the Minister of Finance, to raise funds by any means it sees fit. These means would include some of the agri-bond concepts or access to domestic markets if the Minister of Agriculture could convince the Minister of Finance to let the Farm Credit Corporation go ahead with that. If some of those things could be done, then the Farm Credit Corporation would be in a position to borrow funds at a cheaper interest rate and look after some of the problems that it will have once these farmers are again forced to pay an interest rate of 16% per cent.


Gary Michael Gurbin: Mr. Speaker, I have another question for the Hon. Member for Portage-Marquette. When discussing the situation of the Farm Credit Corporation and the financing that is available through it, does the Hon. Member know of any specific proposal brought forward by the Government or discussed privately that would in fact indicate that the Minis-
Supply
ter of Agriculture has done anything at all in the past four years since he has again become Minister of Agriculture to help the long-term financing situation in agriculture?


Charles James Mayer: Mr. Speaker, I guess it is with a great deal of sadness and a lot of lament that I must simply answer no.


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, the Hon. Member who is the agriculture critic for the Official Opposition has spoken and I am sure the record will show how good the first part of his speech was. He talked about efficiency in the agriculture industry and how it had developed over a period of years. He then tried to say that things had changed in the last 10 or 15 years. Things have changed. We are very proud of the vast majority of those changes because they have been for the better. There never have been such advances in agriculture as have taken place since November, 1972 when I was appointed Minister of Agriculture. These advances are the envy of the world. The huge superpowers that send people into space, send others to this country to see how we farm. For instance, 55 per cent of our farming takes place further north than in any other nation. People cannot understand how we do what we do, thanks to the Department of Agriculture and our research.


Some Hon. Members:: Oh, oh!


Eugene Whelan: I can tell the Hon. Member from away down on the East Coast that even in his Province where agriculture is successful, it is because of the Department of Agriculture and its research. Research was established in Canada practically when agriculture started. We had experimental farms in western Canada before we had provinces. When settlers first moved into that area they realized the importance of having information available. Other nations that have been settled for 300 years are doing what we did at the beginning. Some say that research should be isolated and not mobile. The main research station is located in this city at the present time, although it was not in the city when it was first established over 100 years ago; but now it is in the centre of the capital of Canada, and is our largest research station.
Marquis wheat was developed in eastern Canada at our Ottawa station, and it has made Canada a power in the production of wheat. Some people said that that area of western Canada would never be farmed. Marquis wheat has made us a super food power through the research developed at the station in this city.
We have recently developed a new variety of wheat. The researchers told me to wait for another couple of years and they would put out a new variety called Columbus for the far northern regions. It has a husk that will allow the grain to withstand excessive moisture and other conditions. In two years it can mean up to a 4 per cent increase in wheat production in western Canada. That one variety of wheat took 14 years for researchers to develop. And there is a new program for a new variety of Columbus that will even be superior to the original.

October 21, 1983
Supply
It is for these reasons that other countries send people to visit our research stations and exchange scientists with us. We have readily signed such agreements with other countries, because no matter what we do by ourselves, if it is in isolation we can never feed the world. In 1980, the population of the world was 4.2 billion people. By the year 2000 it will be nearly six billion and in 20 years we will see the largest increase in population ever in history. The greatest challenge of all, therefore, is to produce food and to assist people in producing it.
Some Members have mentioned travelling. Perhaps they should see the travel vouchers I sign for our officials to go all over the world in order to assist other people in the control of disease and better plant production. My budget from the federal Government is not great, only 1.4 per cent of total federal expenditures, but a good portion of it goes for assistance to other countries. We have one of the healthiest agricultural industries in the world.
The Hon. Member's motion mentions "all farmers" but, Mr. Speaker, 50 per cent of farmers in Canada have no debts whatsoever; 35 per cent have still about an 85 per cent equity in their holdings, so only between 5 per cent and 15 per cent of our farmers are in some kind of financial difficulty.
It has been suggested that financing or stabilization would assist farmers in need. Mr. Speaker, we financed special loans at 12 per cent interest when the interest rate was 16 per cent or 18 per cent. We subsidized that interest rate by four points. We have seen what the Provinces did for producers who depend on the great free market to give them a proper return.
Our agricultural bill is ASA-it is a kind of aspirin for a very sick market. And that is what it is, Mr. Speaker, a sick market. It does not give the efficient producer a sufficient return for him to pay his bills. The producers say they do not want any handouts. The Hon. Member who presented the motion complained that I am not going ahead with stabilization as quickly as I should. He said that the Provinces have offered a plan. Mr. Speaker, it is a plan similar to the one I offered to them in 1977, so that is tremendous progress! 1 do not know if you want to call that progressive conservatism, but it certainly is not liberalism.
1 offered that plan to them in Yorkton, Saskatchewan, at a federal-provincial ministers' meeting. It was a 100 per cent guaranteed income assurance. The Provinces said no and the producers said no. They said this wild man Whelan was offering concessions to producers that would cause overproduction and all kinds of things that they did not want. What do you think they are suggesting now, Mr. Speaker? They go so far as to say that I should pay a producer on as high as 12,000 head of swine or 16,000 head of cattle. They say that is how the Agricultural Stabilization Act should be. That means that the lawyers on the fifteenth, sixteenth and twentieth floors could be producers-vertical integration in a massive form, is what they are suggesting. I can tell you right now, Mr. Speaker, that I am not going for that massive figure they have suggested.
We have taken part in every meeting since June. Last fall they told me that if I did not have anything for them, they would have something for me by July 1. I told them to go ahead and present me with something. The Provinces were going to work in harmony, in a peaceful, constructive attitude and I thought that was fine. I had offered them something and only one Province thought it could support me. The Minister from Ontario said he would support me but he never got the official support of his Government. Then a new Minister of Agriculture in Ontario said that if we were not going to do it he would do it. I told him to go ahead. The Provinces worked together for pretty nearly a year but only four of them said they were in favour of some kind of plan. I thought that was pretty good because I did not expect ten of them to agree on anything at any time.
The Canadian Pork Council, which represents every Province, said it wanted the same thing for pork, but the provincial Ministers do not say that they will come in. How can we have a national plan if only four Provinces support one commodity? It has been suggested that this is a voluntary program, a dollar from the producers, a dollar from the Provinces and a dollar from the federal Government in order to build up a fund. But some producers do not have a dollar. We would have to sign a contract with them to the effect that when they sell their product, whether it be a lamb, a pig, a calf, a finished animal or whatever, we would deduct the first premium from the cost. That is the only way they would be able to participate in the plan at the present time. We used that principle in the crop insurance program. Some of the farmers could never get a dollar from the banks.
The Hon. Member who proposed the motion condemned the Farm Credit Corporation but, Mr. Speaker, his Party condemns Crown corporations right and left. Does he not realize that there are other lending institutions in the country that have a responsibility to lend in rural Canada also? In 1976 we asked the lending institutions if they would lend money to farmers. They said they would and that they would participate in long-term mortgages. I can show you records, Mr. Speaker, of farmers who thought they had long-term records but really had nothing but a piece of paper which, at the will and fancy of the manager of the bank, could be turned into a floating note. That is what happened in many cases. When farmers thought they had a loan at 1 I per cent it jumped to 24 per cent.
The Hon. Member for Bruce-Grey (Mr. Gurbin) knows very well that when we were lending money at 16 per cent, those farmers were being taken off the hook because banks were charging them 22 per cent or 23 per cent. We were lending at 16 per cent. Hon. Members opposite forget that we subsidized those farmers for two years, down to 12 per cent which no lending institution, other than the Farm Credit Corporation, would give for any kind of long-term money. I challenge any Hon. Members to come forward and show me a lending institution today which would give a farmer a 20-year mortgage. That is what the Farm Credit Corporation is doing. We are giving a 20-year mortgage with a fixed interest rate for
October 21, 1983

the first ten years. If any Hon. Members can get a fixed interest rate for longer than three years from any bank or lending institution, I ask him to bring it forward and present it in this House.
Are Hon. Members opposite suggesting to me that the Farm Credit Corporation should be the total lender for the whole agriculture industry? It seems to be that way, because this year we have put up the largest amount of money we have ever loaned in Canada under the Farm Credit Corporation, a corporation which Members opposite have spent days in this House condemning-a terrible thing, they say, which is going to swallow up the whole nation.
We are told we are not aiding agriculture in Saskatchewan-which has that good Conservative Government-yet they sold 500 Hereford heifers to a terrible system, Bulgaria, a Communist system, and we assembled the cattle for them free. We did all the testing for them free. We made sure the cattle got to Sherbrooke, Quebec. Our Canadian veterinarians went to Bulgaria on the boat. And how did they sell them out of Saskatchewan? Through ADCO, a Crown corporation which is used for export in Saskatchewan. According to the newspapers, the Premier of Saskatchewan is going to enter into a contract with Communist China. It will be a partner with good old Conservative Saskatchewan for $500 million in a joint potash operation. I find it funny. 1 find it hypocritical also. At election time these countries are condemned. The feds are condemned for even talking trade with these countries.
Not too many days ago an Hon. Member in this House condemned us for being friendly with Cuba, saying that Cuba was the Prime Minister's friend. We sell to Cuba a lot of agriculture products, and they have paid for every one of them on the barrelhead. Last year we did $340 million worth of trade with Cuba. It pays. We are not supposed to assist Cuba in agriculture and trade with it. Not only the Premier of Saskatchewan but the Premier of Alberta was in China. The Premier of Ontario was in Indonesia and all over South East Asia. The Minister of Agriculture of British Columbia is over in Europe. He is going to be visiting many of the same countries we trade with. He is going to improve trade. How are these governments doing it? They are doing it with Crown corporations because that is the only way they can trade with some of those countries.
Canagrex, which could have been in business two years ago had it been allowed to go through this House, could have improved trade because there is no other nation of agricultural producers which depends so much on trade as we do. Some 50 per cent of our income comes from trade. Last year our biggest sale ever of grain, over 29 million metric tonnes, moved out of this country into trade. Our exports of agricultural products last year went up 12 per cent. In the United States of America, which gives all kinds of concessions, exports of agricultural products went down 12 per cent. The U.S. had great interest-free concessions, charitable repayment plans, which we did not even involve ourselves in because Canada has the respect of the
Supply
world, and these people understand that when they go trading.
I am talking about the Farm Credit Corporation, the NEED Program and so on.
Let us not forget that under the Constitution agriculture is a joint responsibility. That should be made very plain and clear. The Official Opposition agriculture critic comes from the Province of Manitoba where we spend twice as much money assisting farmers with programs than the Province of Manitoba ever did under an NDP or Conservative government. That government never spent the proportion of money we do.
We spend more than twice as much on agriculture in the Province of Saskatchewan than the provincial government does. Yet the Premier has funds to appoint a trade minister to run all over the world. We do not do it in Alberta because Alberta has the Heritage Fund, and it is saying it is cutting back on irrigation plans and so on. What the PFRA spends in the Province of Saskatchewan, for instance, does keep rural municipalities alive. In the last ten years we spent $33 million in small towns and villages for sewage systems and water reservoirs. We funded 50 per cent and we gave an outright grant for the other 50 per cent. The Prairie Farm Rehabilitation Association is one of the best organizations ever created in this country, and it should be there for all of Canada.
We have been told we are slow in British Columbia in the matter of stabilization and how much money we are spending. I met with the farmers in British Columbia. I went with an Hon. Member of the Opposition from that area and talked to farmers. The Minister of Agriculture in British Columbia did not suggest any tariffs, as some Hon. Member said. He said to me at a meeting: "We are not suggesting tariffs because they might reciprocate on lumber and we ship a lot of lumber into the great United States of America". So we are subject to this type of importation and all the different kinds of trade problems.
I am sure the Hon. Member knows what is going on in the United States now. There is a hearing being conducted. We hope the decision will be handed down in November. Potatoes going into the United States from the Maritimes have an extra 17-cent tariff tacked on because little New Brunswick and little Prince Edward Island are going to destroy the great potato industry in New England. The U.S. says this is because the federal Minister of Agriculture has such superior programs that it cannot compete with us.
I received a letter from a person representing the Canadian Horticultural Society. He comes from the Province of Manitoba. It did this Minister's heart good to hear him tell in glowing terms about the great job that was being done, and how the Secretary for Agriculture in	the	United	States	is not payingany attention. Right now in	the United	States	of America alaw has been passed through its	Senate	which	will limit theimportation of beef. It has	not	gone through	its Congress.
Because there is no control on dairy production, those farmers are scared to death that what the Secretary for Agriculture is going to do in dairy production will cause over a million dairy cows to be slaughtered. These cows are producing nutritious food which could be distributed all over the world, ft is

October 21, 1983
Supply
suggested they be slaughtered because the U.S. has a straight subsidy program, a very high subsidy program, which does not have any control over production.
The efficient American dairy farmers just produced and produced and now there are nearly 700,000 metric tonnes of surplus skim milk powder. There are over 320,000 metric tonnes of surplus butter. They do not know what to do with it. They are taking some of our markets because the U.S. is a much bigger economic power than we are. It says it is not. Let us use Jamaica as an example. This is a country to which we supplied skim milk powder for years. It trades dairy products, mainly powder, for bauxite. We do not need that in Canada so it trades with the U.S. In Mexico, the U.S. sold 60,000 tonnes of skim milk powder and gave them 20,000 tonnes of food aid. They said that did not lower the price, but that is questionable as far as I am concerned.
I would like to speak about research for a moment. Poultry production owes its reputation for being so efficient in the world to Agriculture Canada research, which developed a serum so that instead of losing one-third of your poultry flock through a normal laying span, you lose less than half of one per cent. Never did our chickens lay so much and do so much for society. It used to take almost an hour's wages to buy one dozen eggs. In Canada today, because of efficiency and the longevity of the chicken, and because of productivity, one hour's average industrial wage will buy the average Canadian a year's supply of eggs. The average Canadian eats 12 dozen eggs per year. The average industrial wage is $12 per hour, and the average price for a dozen eggs in Canada today is one dollar. We are the envy of the whole world.
This will be our largest year for exporting pure-bred Holstein cattle. These exports have expanded and expanded. It will be our largest year for exporting semen, exporting grain.
I could go on and on telling you the things we have done in agriculture. The Hon. Member says I have not done anything. We put 14 new programs into effect since 1 have been in agriculture and we only added 26 man-years to Agriculture Canada. The Auditor General has commended the Agriculture Department for the tremendous job it has done.
I could go on and talk about interest-free advance payments. The Hon. Member says he does not want handouts, but there are these interest-free advance payments, and not only with the Wheat Board. Last year there was nearly $500 million in interest-free advance payments, yet they say we are not doing anything. I will just close by saying that nothing is so firmly believed but that which is least known.


Mr. Gustafson:: Mr. Speaker, it almost sounds as thought the Minister was rereading one of the speeches of Mr. Gardiner in Saskatchewan 20 years ago. His figures do not add up today. If you look at the $6 billion of profit the farmers have added to this country and compare that with 1.25 per cent of the budget attributed to agriculture, it is a pretty sick figure. That is all I have to say about that speech.


Eugene Whelan: I could comment a little bit about that. I am really glad that the Hon. Member mentioned the late Jimmy Gardiner, who was the Minister of Agriculture in Canada for 22 years. He was from Saskatchewan and he did more for agriculture than probably anyone else. He understood agriculture, which is something the Hon. Member does not understand.
The Hon. Member is contracting his colleague because his colleague said it is not money that makes for a healthy agriculture. He is saying we should spend more money. Some of the countries spending more money than us do not have as healthy an agricultural industry as we do.
We have programs in this country which will allow farmers to receive a decent price in the marketplace if they want to organize themselves. I think he is suggesting, Mr. Speaker, that we pour millions and millions more dollars into agriculture and that is going to be its salvation. I am sure he does not mean that at all because I am told his own operation does not depend on Government handouts. I am sure that if he wanted to give you his account books, he would be in that 50 per cent bracket I talked about-the people who do not owe a penny.


Arthur Jacob (Jake) Epp: Mr. Speaker, in his comments the Minister said that all that the farmers want is a decent profit. That being the case, they must be able to meet their expenses and I agree with that. I would like to ask the Minister why he was not able to get through Cabinet a formula agreed to by his Government and the egg producers, namely that their input costs would be met? Why was he not able to get through Cabinet that the input costs farmers face be subject to six and five?


Eugene Whelan: Mr. Speaker, the Hon. Member does not know what went through Cabinet. I do not think he does. We are just dealing with it this week and I am sure he would be very surprised at what went through Cabinet. But I am not at liberty to tell him at this time.
I am really happy that the Hon. Member for Provencher (Mr. Epp) is so supportive of marketing boards. I hope you have that from your Party caucus and your Leader. I continually get people saying "Wait until we change the Government and we will get rid of all of them".


Mr. McCain:: No, you never heard that from this side of the House.


Eugene Whelan: I get letters on this. You do not know what impression you have planted in people's minds. Yet the Hon. Member is supporting the marketing boards, which I have supported. I say as humbly as 1 can that probably the Hon. Member would not even be asking questions if I had not supported the Canadian Egg Marketing Agency when it was so controversial. Most Prime Ministers would have said that is too controversial and would get it out of here. But the Prime Minister (Mr. Trudeau) said to me: "Mr. Minister, as long as they are doing things honestly and so on and you say that you are doing it properly, I will back you". I am now glad I have the backing of the Hon. Member for Provencher.
October 21, 1983


The Acting Speaker (Mr. Blaker):: I would want to recognize the Hon. Member to give him an opportunity to enter into questions, answers and comments but I have to recognize him on a point of order.


Fred Alward McCain: Mr. Speaker, the Conservative policy has been misstated. This is not debate, it is merely a statement of fact. The Conservative policy has been that marketing boards, when it is the wish of the farmer, shall be organized, respected and assisted. But there shall be no compulsion from an arrogant Minister to force any group of farmers at any point in time to form themselves into a marketing board.


Eugene Whelan: The Hon. Member could not find any time that I forced anyone into a marketing board. I have suggested this to them. If the Hon. Member wanted to do some good, he could go down to his own Province. They are asking me now to spend millions of dollars because the marketplace has not returned a decent profit to potato producers in his own Province. We have spent millions and millions on stabilization and he knows it. I would like to see that Party's policy, and I hope the Hon. Member will send it to me, the official Party policy which supports marketing boards.


Charles James Mayer: Mr. Speaker, I agree with the Minister when he says things humbly. I agree that he has a lot to be humble about and I am glad he recognizes that.
Just to support and elaborate a little on what the Hon. Member for Carleton-Charlotte (Mr. McCain) said, he is precisely right in stating our position on marketing boards. Let me go further and say there are ways other than compulsion to form marketing boards. I sat in a room with this Minister some seven or eight years ago when he used coercion and other things to-


Jack Sydney George (Bud) Cullen: Friendly persuasion.


Charles James Mayer: It is one thing to use friendly persuasion; it is another thing to take an industry when it is down and say: "You are not going to have anything from me unless you agree with me on supply management". That is where we on this side disagree. The Minister may want to use coercion and compulsion, although it may not be compulsion in his mind, but when you find a producer in a very bad financial situation, it in fact becomes compulsion. We do not agree with kicking people when they are down. We like to help people so they do not find themselves in a bad financial position.
Very specifically, is the Minister in favour of reducing the tax on farm fuels in order ot keep producers' cost of production down? There is another way of getting returns from the marketplace which satisfy your expenses and that is by reducing the expenses. Is this Minister in favour of reducing-I did not say eliminating-the federal Government tax on farm fuel?


Eugene Whelan: The Hon. Member has talked about coercion. I challenge him on what he said. I may use moral suasion on people, tell them the benefits of marketing boards and their participation, but I have never suggested to anyone that there
Supply
would be any action taken which would be coercion. Not this Minister of Agriculture. 1 have been elected to office since I was 21 years of age and I know about democracy.
The Hon. Member talks about fuel taxes. Earlier he said that he did not want handouts. The marketplace is the place to get the return for farmers. For instance, canola seed has gone up, what, 40 per cent since July? That is the seed. Meal has gone up 42 per cent and the oil has gone up 92 per cent. He never mentioned in his speech about how rapidly the market can change. That has more effect on farmers. But what he is saying is: "Whelan, you must have programs that guarantee that when the free market system gets sick, you must be the doctor who comes in with the proper medicine to make sure it gets healthy again".
We know there are marketing people in this country to whom I have not given a penny of aid since 1972, and when there was another government here for a short term, it did not give them a penny of aid either. That is the poultry industry all the way through. We have not changed our aid to the dairy industry for over seven years. If you find me one of those efficient producers in that bracket who are going broke, I would be very surprised.


Victor Fredrich (Vic) Althouse: Mr. Speaker, I have a very short intervention. It seems to me that there is perhaps some logic to the Minister saying that he has not implemented changes to the stabilization program because it requires the consent of the Provinces and he does not have a program along the East Coast for potato producers to form a marketing board because he must rely on the assistance of the Provinces.
However, there is one area which is strictly within his own jurisdiction but in which he has not been acting very quickly. I refer to putting the personnel in place for Canagrex. He had plenty of time when the Canagrex legislation was in its various stages of debate to hold the interviews and make the preparations. How long must we wait for the people who will be appointed to Canagrex?


Eugene Whelan: First, Mr. Speaker, I was not that optimistic that Canagrex would ever be passed. I think it would have been very wrong for me to interview people and say: "You are going to be hired for Canagrex". I did not do anything until after Parliament finally passed it into law. We hired Peat Marwick to do headhunting for us and put ads in the papers, and I made my recommendations to the Government about three weeks ago.


The Acting Speaker (Mr. Blaker):: Hon. Members will recognize that I have allowed the debate to continue slightly past one o'clock in order to provide for the entire ten-minute period of questions and answers to expire before coming back at two o'clock.
However, there remain a number of Hon. Members who have not had an opportunity to exchange comments or ques-

October 21, 1983
Supply
tions with the Minister. I do not know whether it is their intention to seek an extension of that period.


Arthur Jacob (Jake) Epp: No.


The Acting Speaker (Mr. Blaker):: There is not. In that case, it being one o'clock I do now leave the chair until two o'clock this afternoon.
At 1.03 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Leonard J. Gustafson: Mr. Speaker, I am pleased to rise and speak on this motion put forward today because of the serious situation in which farmers find themselves with regard to present cash flow problems.
The Minister of Agriculture (Mr. Whelan) who finished his remarks just before lunch made the point that agriculture and farmers had been very progressive throughout the years and I agree with that. They have been very productive in terms of their input into Canada's economy, being $8 billion to $9 billion; but I do not agree when the Minister said it was because of what the Government did. Basically, that is what I heard him say, that producers were so productive. In fact, the opposite is true. It is in spite of the lack of policy and direction with regard to agriculture that farmers have produced and have been productive.
I want to talk about some matters today, hopefully in a positive sense so that we can have an adjustment of some very serious problems that exist for the producers. First is one which has been mentioned by other Members, the Western Grain Stabilization Program. That Program came into existence in 1976. There was a small payout. When the Hon. Otto Lang introduced that program, it was on the basis that it was not to be crop insurance but a program that would deal with the cash flow problems of farmers.
Let us face the situation as it exists. This Program has not dealt with this problem of the farmers. However, the Government has $860 million of farmers' money in the treasury somewhere. By the middle of January it is projected that the Government will have over $1 billion of farmers' money. I see the Minister of Agriculture (Mr. Whelan) in the House this afternoon. I contend that the Government is playing politics with farmers' money.
We remember that farmers first paid in $500, which was deducted at the elevator at the time they delivered their grain. Then it was increased to $900, and last year there was a further increase to $1,200. If a farmer got into the plan in 1979 and made no payment since, he would have paid in $4,800, that is, if he paid the maximum. Had he invested that amount of money in a bank at prime interest rates, he would
have accumulated $7,124. Just by depositing that money in the bank, the farmer would have had some $7,124 to be used in his cash flow. Yet the Minister rises in the House and tells Canadians what a great job the Government has done. I want to set the record straight. It has done great job of hanging on to the farmers' money, every cent of which the primary producer deposited at his own cost into a program to enhance and benefit the farmer when he had major cash flow problems.
1 am glad the Minister is present. He must deal with this situation and take some positive steps toward helping farmers. Let us deal with the problem. I contend that the Government and the Minister of Agriculture are playing politics here.


Eugene Whelan: Can you imagine?


Leonard J. Gustafson: I hear the Minister. About two months before the election there is nothing more they would like to do than to write out a nice little cheque. What I am trying to do-


Eugene Whelan: What are you doing?


Leonard J. Gustafson: I am trying to bring about some responsible action. The way this can be done is simple. The program has to be adjusted. It is not working on a five-year, retroactive basis. The formula does not add up.


Eugene Whelan: Why isn't it working?


Leonard J. Gustafson: The Minister of Agriculture is heckling me because I have hit a very sensitive spot.
It is most important that the Government deal with this issue. I meet with my farmers weekly. They are saying that the program should either be cleaned up or they should be let out of it. They cannot afford to pay $1,200. They have to pay their fuel and grocery bills. They have to pay machine costs, and they are faced with a major cash flow problem at this time.
1 ask the Minister to carry this representation concerning the very serious problem in grain stabilization to Cabinet and to the Prime Minister (Mr. Trudeau). The Prime Minister suggested to the House that because there was no representation in western Canada, basically speaking in agricultural areas, he would make a special effort to deal with the problems, the presentations and the representations that were made. The Minister of Agriculture owes it to western producers to look into the Western Grain Stabilization Program.
Another area of cash flow problems about which the Government could do something very positive is the initial price of grain. What is its history? On almost a daily basis I have contacted the Canadian Wheat Board to discover that the asking price of wheat, going back to January of this year, has been 99 cents to $1 per bushel higher than what farmers are receiving as an initial price delivered at the grain elevator. In the case of Durum, I obtained figures from the Wheat Board yesterday indicating that the asking price was $2.10 per bushel higher. Farmers were pleased to see an increase in the initial price of barley. Today it is selling at $140 per tonne in Thunder Bay.
October 21, 1983


Mr. Schellenberger:: And higher in Vancouver.


Leonard J. Gustafson: Yes, it is even higher in Vancouver. The Government should take some positive steps to increase the cash flow position of farmers. All it has to do is give them their money and increase the initial price of wheat, as well as the initial price of Durum. Most responsible people in the grain trade will say that 50 cents per bushel is adequate leeway or an adequate holdback within the Canadian Wheat Board to deal with problems that may arise. Certainly the Minister could recommend to Cabinet that the initial price of wheat and of Durum be increased by 50 cents per bushel.
As I indicated earlier, this is the farmers' money. They are not asking for handouts. The Minister said today that he was handing out money for this and that to farmers. In comparison with the contribution that agriculture makes to the country, farmers are being short-changed in terms of the budget which goes through this place. I pointed this out to the Minister earlier, and he walked all the way around it. In fact, farmers are being considered only in about 1.25 per cent of the entire budget of the country. He knows that those figures are accurate. The Government could take some positive direction in the area of western grain stabilization. There could be improvement in the initial price of grain which would in turn improve the cash flow of farmers.
Instead of giving, the Government is taking. It has placed an excessive farm fuel tax on diesel fuel and other fuels used for the production of food. The Government has a direct federal tax of 77 cents per gallon on farm fuels. That is very excessive. On December 13, 1979 when we were defeated, it was a bad day-


An Hon. Member:: A bad day for Canada.


Leonard J. Gustafson: Yes, it was a bad day for Canada. At that time the price of fuel in the little village of Macoun-is Mr. Speaker, indicating that my time is up?


Mr. Deputy Speaker:: Yes.


Leonard J. Gustafson: Perhaps you could seek unanimous consent.


Mr. Deputy Speaker:: Is there unanimous consent for the Hon. Member to continue his remarks?


Some Hon. Members:: Agreed.


Mr. Deputy Speaker:: There appears to be unanimous consent.


Leonard J. Gustafson: Thank you, Mr. Speaker. I will make my comments short. As I was saying, on December 13, 1979 in the little village of Macoun the price of fuel was 98 cents per gallon. I recall that day. It was a rather dark day for a new Member who had been defeated. Today the price of fuel is close to $2 per gallon.


Mr. Deputy Speaker:: Order. I would like to inform the Hon. Member that the Chair was in error. He had 20 minutes in total, of which he has ten remaining.
Supply


Leonard J. Gustafson: It is important to have this heavy-handed farm fuel tax removed. The Minister has said that the Government has made contributions to farmers, but farmers have been paying heavy-handed taxes to the Government on farm fuel. This is counterproductive for farmers. Many of them are not working. Many of them are not involved in summer fallow because they simply cannot afford it. It costs $150 to fill the fuel tank of a tractor. This will reflect in the cost of production. Have the Minister and the Government considered removing some of this tax on the farmers in order that they can be as productive as they have been in the past and even improve upon that?
I wish to deal with another area where this Government has long promised to move but has failed to do so. I refer to the capital gains tax on farmers. Members may ask what that has to do with cash flow. It has a lot to do with it. Let me give an example.
A father may ask his son for a reasonable sum of money for his land in order that he may retire with some dignity in a small town after years of hard work. The young farmer will do it so that his father may live with respectability. At that point the father is expected to pay capital gains tax to the Government of Canada. It becomes restrictive. Again and again in this House, as recently as two weeks ago, we have called upon the Government to remove the capital gains tax on farms, but nothing has been done to this point.
In the last three elections the Government promised to make moves in this direction, but it has failed to do so. It is my hope that the Minister of Agriculture will ask Cabinet to look into the capital gains tax on farms, which is very restrictive and counterproductive to agriculture.
The Minister had something to say about farm credit, as he does from time to time. There are some solutions to the farm credit problem. There is not enough money in the fund. More important, the rate is far too high. Young farmers cannot afford to borrow at those high rates. Our Party has proposed a way to get around this. There are farmers who would invest their money in an agri-bond. Young farmers would receive the benefit of that investment. They would be able to borrow from that fund to finance their farm. We made this suggestion some time ago and the Minister is well aware of it. The Government has failed to act in a positive way in regard to financing for farmers. This would facilitate the situation as at present the needs of young farmers are not being met.
The Minister talked about how much money the federal Government was paying to the Provinces. However, he failed to mention the great contribution by agriculture through taxation to central Canada, particularly the bureaucracy. The farmers are not happy with the way the Government spends their hard-earned money. They make that clear to us.
I now want to deal with another important point. 1 have contended for some time that there seem to be different standards for different areas of production. That is not right. The farmer has many expenses, such as machinery and fuel

October 21, 1983
Supply
bills. After meeting his expenses, he should be able to have a good standard of living for himself and his family. However, according to the Tax Department and other sources, the average net income of a farmer is approximately $4,000. Compare this to the fact that a consumer spends about 15 per cent of his earnings on food. That is a rather dynamic result from the production of our primary producers. It is most important that this continue.
Our farmers are proud that they can produce cheap food for Canadians. In return, it is only fair that this Government not penalize our producers. Farmers should not be discouraged from contributing in such a positive way.
The latest move by this Government with regard to the statutory Crow rate will result in very high freight rates. This will cause major problems. I was aghast when the Minister of Transport (Mr. Axworthy) rose to impose closure on Bill C-155, the statutory Crow rate. He is inflicting upon the farmers freight rate increases at a time when they cannot afford it. No consideration is being given to the cash flow problems of the farmer.
I see you rising, Mr. Speaker. Thank you for the opportunity to put forward briefly some of our concerns regarding agriculture. I hope that the Government, and the Minister of Agriculture in particular, will lend an ear to some of the recommendations we have made which will result in a positive effect on agriculture in the future.


Mr. Deputy Speaker:: Are Hon. Members rising to ask questions? If not, the Chair will recognize the Hon. Member for Lambton-Middlesex (Mr. Ferguson).


Mr. Ralph Ferguson (Lambton-Middlesex):: Mr. Speaker, I am delighted to take part in this debate. 1 commend the Minister of Agriculture (Mr. Whelan) for the firm direction he has given to this vital renewable resource as he enters into his eleventh year, except for a brief sabbatical, as Minister of Agriculture for Canada. He has given us the direction and legislation we have needed to make the Canadian farmer one of the most efficient and productive in any country of the world.
I have to take issue with some of the comments made by previous speakers who have suggested that the tri-party stabilization programs are the answer to all our problems. For a few years I belonged to a program. In the Province of Ontario there was a joint program between the producers and the provincial Government. The producers paid in an equal amount to the Ontario Government for a cow-calf stabilization program that seemed at the beginning to be an excellent program. In fact, in the first three years of the program we received a payout because the price received was not comparable to that of the cost of production. However, in the fourth year of the program we all realized that there would be no payout, but many of us sent in our premiums regardless. However, that program was cancelled in the fourth year because less than half of the farmers involved had sent in their premiums. Consequently, the program collapsed.
[DOT] (M30)
I would hope that if we are to proceed with a stabilization program for the red meat sector, there will be guarantees built in to make it compulsory for the producer to sign up and to remain a part of that program for the required number of years. The producer should not simply sign up when prices are low and ride out the peak times when prices are good. I believe, however, that farm stabilization programs are not the answer.
When looking at methods used to establish a price discovery mechanism for many of the products produced in Canada which do not fall under the jurisdiction of the marketing agencies, we have to realize that there must be a counterbalance or a countervailing force in the marketplace. Last week, for example, the price of soybeans on the Chicago futures market had dropped by approximately 75 cents per bushel. Soybean futures dropped that much in spite of the fact that a week ago yesterday a United States Department of Agriculture report pointed out that supplies of soybeans needed to carry us through to the next crop year would perhaps be inadequate to meet the demand. If that was the case, why did the price drop last week? I submit, Mr. Speaker, that the system has broken down and that it is only through a system of establishing a price at the farm gate that reflects the cost of production to the efficient producer that we can overcome this problem.
Since we have such large requirements for capital in the farming sector at the present time, I submit to you, Sir, that the solution could be found if the national marketing agencies which are in existence at the present time, whether through dairy, poultry or another commodity, were to have price setting mechanisms that reflected the cost of production of the efficient producer and if they were to be under the jurisdiction of a supervisory body so that the interests of the consumer are also protected. No company can operate without a return on investment, management and risk. Consequently, farming is no longer a way of life; rather, it is big business and we must have these guarantees built in if it is to be successful.
No amount of funding, whether from the Farm Credit Corporation or any other body, will relieve the situation if we do not first cure the problem of the price at the farm gate to the farmer. I suggest that to increase the amount of funding available through the Farm Credit Corporation would perhaps be a short-term solution, but the producer cannot borrow himself out of trouble. There must be a return from the marketplace that reflects that cost to the producer and then there must be a reasonable markup to the packer or processor and to the retailer. Finally, most important of all, there must be a fair price to the consumer.
My colleagues have been speaking about the need for agribonds and I do not quarrel with that need. I believe there is a place for agri-bonds but I do not think they go far enough. For example, what if a father wanted to turn the family farm over to his son? Many of us began farming with the assistance of our fathers who loaned us machinery for those first crucial years of farming so that we did not have to make huge cash
October 21, 1983

outlays. Many of us received an interest rate on mortgages well below the current rate from our fathers. Under the agri-bond system, this is not possible.
I submit, Mr. Speaker, that we must come up with a different provision to maintain the family farm, which is recognized as the most efficient production unit in the world today. I submit we must come up with a different proposal to guarantee a mortgage, if the farmer in fact took one back on his fixed capital assets, on the sale of his enterprise to a member of his family. I maintain that this is essential if the family farm is to continue to be the backbone of the Canadian agriculture sector. We need provisions to allow the farmer the flexibility to give a member of his family a reduced rate of interest in order to give him a start, so that he can build up an operation, achieve a level of equity that puts him on a secure footing and which allows him to proceed to contribute to the industry that is so important to the economy of the country.
The lending of the Farm Credit Corporation in itself tells a story about what is required in the agricultural sector. We should look at the number of farmers who are in arrears to the Farm Credit Corporation and look back to see in which sector of the agricultural industry they are involved. We would recognize immediately that those farmers involved in the red meat sector form the largest percentage of those in arrears. Grain farmers come next. The reason for this is that these are the producers who do not have the power to set their prices at the farm gate. They have to rely on the vagaries of the marketplace as well as the vagaries of mother nature. This creates the type of speculation that is taking place today on the commodity futures market. There certainly is no security there for any of the farmers who need this money so badly.
Another situation that has occurred over the last several years is that the number of retail food outlets has dropped dramatically. The fact is that five retail food chains control 75 per cent of the retail food outlets in Canada. Those five chains have in turn banded together to form buying groups to exert even more pressure on the marketplace. Consequently, there is the need for an even greater countervailing force in the marketplace than the national marketing agencies can provide. It is in this context that I hope the producers of Canada will take advantage of the legislation available to them not only at the provincial level but also at the federal level to give them the type of income that is commensurate with that of the rest of society and to protect their investments. This is essential if we are to have a healthy agricultural industry in Canada.
As I look further at the type of federal assistance that exists for the farmers in Canada, I see that there is assistance not only through the Farm Credit Corporation but assistance is also provided to the vegetable producers and the fruit growers to ensure that there are adequate supplies of fresh Canadian fruits and vegetables available to Canadians. The vegetable cold storage program has been utilized across Canada to a great extent. We have a large number of programs that are not recognized by many Members of Parliament. There is the grain storage program under which money can be borrowed from the Government interest-free on grain held in storage to
Supply
allow it to go to the marketplace in an orderly fashion. They are all very positive programs. The fact remains, however, that there is a provincial responsibility that must be used in co-ordination with the federal programs.
The Minister of Agriculture has had a great deal of involvement in research and ours is among the best in the world. We have the highest quality food of any country and we have the highest standards of any country. Consequently, even though the budget of the Department of Agriculture is lower than some of us would like it to be, it reflects the lean, hard image portrayed by the Minister himself.


Mr. Murta:: Even the Minister is smiling at that!


Ralph Ferguson: There is no fat in the Department.


Mr. Bosley:: Lean, mean Gene.


Ralph Ferguson: It has a lean, hard image which reflects the position we have taken over the years that we have to trim off the fat. We must make sure that we recognize the latest methods of production so that we can keep abreast or ahead of the rest of the world in the marketplace.
When we compare yields of the various crops, we see that in Canada, and particularly in Ontario, our average production per acre is higher than that of the United States, whether it be in soybeans or corn. I think it is interesting that we have this potential productivity.
I want to reflect now on the increased productivity that has taken place through research and development and marketing agencies. Many people say that our system of planned production through marketing boards leads to inefficiencies. The figures show otherwise, Mr. Speaker. A few years ago a laying hen would produce approximately 20 dozen eggs in any one-year laying cycle; now the production is 24 dozen per bird. The number of pounds of feed necessary to produce a dozen eggs has decreased as well. As the Minister said this morning, the mortality rate has decreased. This is an example of the efficiencies that have come about. Although the price is set according to the cost of production, if the farmer can be more efficient than average, he can increase his margin of profit. This has happened and he has become more efficient in the process.
A number of buyers from other countries come to my constituency. Recently a buyer came from Russia to buy dairy cattle. Some of the best productivity records in the world are held by Canadian producers. Some of these cattle are used to increase the number of offspring of one select animal by way of embryo transplant. One mother can mother six or eight offspring in one year and the embryo can be transplanted into a host cow.
When you have a man as busy and who does such a good job as the Minister of Agriculture, it would be nice if we could clone him and have two of him.

October 21, 1983
Supply
Whether Canadians are farmers or are engaged in the agri-food industry as a veterinarian, say, they have been leaders in research in spite of the fact that the budget is not as great as that of many other countries. This just shows the ingenuity and imagination of the people involved in this sector. We can look at its accomplishments with pride. Well within the span of my lifetime one farmer fed eight people; now one farmer feeds 70 people. Of course, I am talking about southwestern Ontario. That part of Ontario that lies west of a line drawn between Georgian Bay and Toronto produces about 20 per cent of all agricultural production in Canada on a dollar basis. Through the greenhouse industry and intensified farming practices it has a higher rate of productivity than other areas of the country. Climatic conditions contribute to production as well, because in that area it is unusual to have a crop failure or to suffer the drought that sometimes happens in other parts of Canada.
The federal Government has met its responsibilities not only in the area of food production but also in research, plant health programs and inspection programs. I recently received a call from a show in Cologne, Germany, asking us to supply 600 tonnes of turkey. The largest turkey hatchery in the world is in my riding and it has branches in the United States. It supplies 22 per cent of the North American market and 11 per cent of the world market. It is a very sophisticated Canadian operation and is a family business. Through research and assistance from the Department of Agriculture they have been able to raise their production to the standards required to break into the world market. This is a credit to the Canadian Department of Agriculture and to Canadian farmers.
Through the PIK program in the United States this year they tried to take land out of production and a drought followed. This has not happened in Canada with our programs. There has been drought and adverse weather conditions in some areas of the country but we do not have a PIK program. One has to question the morality of such a program for Canada when there are so many hungry nations in the world. Our programs are tailored to meet the demand of the domestic and export markets. The crop year in grain production is tailored so that none of the product is actually sold prior to leaving the farm. When it leaves the farm we know that it is on the way to market.
During the hearings on the Crow rate I could not help but think that ours has to be one of the most efficient systems in the world. The cost to the producer is well within his means and he can afford to get his crop to market, especially with assistance from the Government.


Arnold John Malone: Mr. Speaker, I have a question for the Hon. Member for Lambton-Middlesex (Mr. Ferguson). I made a note of the enormous efficiencies he has claimed that have taken place in the farming community in recent years. I should like to ask him how it is that a farmer today can feed 70 people and yet he himself starves.


Ralph Ferguson: Mr. Speaker, I am sorry the Hon. Member has missed the point I was making. Those farmers who have orderly marketing systems are making a reasonable return on their investment and a reasonable return for management and risk. If the other parts of our agricultural sector would take advantage of the programs which are available to them-the meat sector and some of the grain sectors-to establish the price at the farm gate, then they could also enjoy the same level of prosperity as those who have their marketing agencies operative and in place.


Arnold John Malone: Mr. Speaker, just so I have that question on the record, could we take it, then, that the position of the Liberal Members is that there should be marketing boards for the beef industry? Is that the position of the Government?


Ralph Ferguson: Mr. Speaker, regarding the beef industry I should point out, being a beef producer myself-and I have been for a lot more years than I care to remember, well over 35 years-that is one part of our operation which is certainly not showing a profit. I started out as a beef producer when I was 14 years old. I was a 4H Club member. I bought a heifer calf and built up a herd. I am very proud of that herd, but in an economic sense I should have sold it quite a few years ago. However, I do have scrub land across part of my home farm and if I am going to scavenge the pasture off that land, I have to keep some cattle. It is not a profitable venture.
1 am suggesting there is a way that we can bring a reasonable return to the beef producers of Canada. I would like to suggest to the Hon. Member that we allow our feedlot operators to fill up to capacity, and base this on cost of production. However, rather than feeding those steers out to 1,250 pounds to 1,300 pounds, what is wrong with selling them 50 pounds lighter than that if the demand is not there? By so doing we would tailor our production to the marketplace to reflect the demand, whether domestic or export.
These are my own ideas and thoughts on the matter. I am not sure what the Minister of Agriculture thinks about it. I believe he would agree with me that it is a great idea. I feel it would solve a lot of problems in the red meat sector if we had a system like this, where a person could set their price at the farm gate rather than have the existing conditions continue. The spread between the wholesaler and consumer in Montreal a year ago last August was 41 cents a pound greater than a similar spread in the United States. Someone is ripping off the marketplace, and I suggest to you it is not the farmer but someone further up the ladder. If the farmer was even getting half of that spread, he would be making a profit.


Arnold John Malone: Mr. Speaker, it quite amazes me that the Hon. Member can claim to be associated with 4H Clubs and, after that number of years of pledging his head to clearer thinking, would still join the Liberal Party.
I still ask him whether it is or is not the policy of the Government of Canada today to have beef marketing boards for the sale of beef. 1 believe that was the answer he applied to
October 21, 1983

my first question. If that was the answer, I want him to say definitively whether or not he and his Party are trying to have a system of marketing boards for the beef industry. I want a yes or no answer for the record.


Ralph Ferguson: Mr. Speaker, there is no way I can speak on behalf of the Minister of Agriculture. However, as a person who has spent so many years in the beef industry, I know what the needs of that industry are, and my personal opinion is, after losing money for several years, that there has to be a better way. Being a Liberal and a pragmatist as well, I am willing to try something new. If that is the only way left, then I am willing to give it a try. However, I am not going to be hamstrung by some old fashioned thinking that there is a free enterprise system left in the marketplace today where we have various types of monopolies in existence.


Gordon Edward Taylor: Mr. Speaker, the Hon. Member for Lambton-Middlesex (Mr. Ferguson) used the word "tailored" several times during his address. I would suggest that he meant to say "Whelaned". Had the agricultural policy of this country been "Taylored", agriculture would not be in the mess it is in today!
1 would like to ask the Hon. Member a question in connection with egg production. The egg producers of Alberta are now having a very difficult time. They have co-operated 100 per cent with the Government in the six and five program. They are now up to the six and five ceiling, but the production costs have kept on increasing. Production costs are now between 4 per cent and 5 per cent above what the producers are able to charge, because they have reached their limit under the six and five program. These egg producers are unable to carry that burden, which simply means that if something is not done to provide the egg producers with the opportunity of increasing their price, they are going to go into bankruptcy. Has the Hon. Member for Lambton-Middlesex any comment as to what the Government might be able to do to keep these producers viable?


Ralph Ferguson: Mr. Speaker, I am pleased to respond to that question because I have been following the problem very closely. 1 am glad to see the Hon. Member has tailored his thinking along the lines of the marketing boards. I am also very much aware that the marketing board people were the first to endorse the six and five program. During my address I spoke about the vagaries of the marketplace and what is happening on the Chicago futures exchange. In fact, the price of feed has increased by 23 per cent since last June. That is well beyond the capability of the egg producer to cope with, I quite agree with the Hon. Member.
I have been in discussion with many of the egg producers on this particular problem. 1 have suggested to the Minister of Agriculture that perhaps the feed component should be isolated as one of the variables which cannot be adhered to under the six and five program. However, the rest of the components of the cost of production formula, such as pullet cost, labour and so on, could be adhered to very easily. With that one exception, I believe the egg producer could continue under the
Supply
six and five program and show the same responsible pricing methods as they have in past years.


Gordon Edward Taylor: Mr. Speaker, when he has reached the end of his income and the bills are still not paid, the producer is in a pretty tough spot. There is no easy way out for him. There is no use saying he wants to co-operate. He does want to co-operate. It simply means he is going to go into bankruptcy. When he loses 4 cents or 5 cents on every dozen eggs he sells, it just means he is going to go that much deeper into debt until he just cannot continue to operate.
I have forwarded letters to both the Minister of Finance (Mr. Lalonde) and the Minister of Agriculture (Mr. Whelan) in connection with this problem. If the policy of this Government is to keep agriculture viable, it has to take a realistic look at these things. If these egg producers go down the drain, what it will mean is that the larger corporations will take over and prices will go up for the consumers. There are no two ways about it: the consumer will have to pay more. I am trying to keep the price viable for the consumer by being reasonable with the egg producers today. I believe this is a responsibility which the Government should undertake, look at and resolve, not become part of the problem, but become, for a change, part of the solution.
This is a simple problem, it cannot be that hard to solve. If we do not, it means that the people of this country are going to pay more for their eggs or else go without them. The egg producer cannot continue to lose money on every dozen eggs he sells and stay in business. It is just that simple.


Ralph Ferguson: Mr. Speaker, I am pleased to respond to that. I am well aware of the margin of profit the egg producer has. The average for Canada is, I believe, 2.7 cents a dozen. I am confident that if the Minister of Agriculture follows the advice I gave him, and he indicated this morning that Cabinet was considering it and maybe even has made a decision, I think the problems of the egg producer will be resolved. I only hope the cattle producers would follow through with a similar plan so they could have the same level of stability.
Given all the problems I had as a Member of Parliament concerning farmers in financial difficulty in the last three and one half years, I have not had one egg producer, one dairy producer, one chicken broiler or turkey producer among them. So I think we have to recognize the importance of the cost of production formulas, that they have stood up to the challenge, and consequently I am confident that the Minister of Agriculture will use his persuasive powers to clear up any misunderstanding and that in the very near future we will have something to announce that will be acceptable to everyone.


Victor Fredrich (Vic) Althouse: Mr. Speaker, today's debate has centered on condemning the Government for its failure to recognize the economic hardship affecting all farmers in Canada, and its failure to alleviate that hardship by implementing good agricultural policies. The Minister said it was not really that much of a problem. According to his

October 21, 1983
Supply
Department's figures, 50 per cent of farmers have no debt. He said 35 per cent of the farmers in Canada own more than 85 per cent of their assets, so less than 15 per cent of their assets are in the form of debt. But he did admit that 5 per cent to 15 per cent are in financial difficulty, to use his term.
I think, Mr. Speaker, the hardship is more deeply ingrained than that and goes much beyond what the Minister has told to us today. I would like to spend a few moments outlining the situation as I see it. It seems to me the place to start is first to consider the realized net farm income, the costs farmers are subject to, and then to determine whether they are as a group able to move forward under that regime. I would then look at the debt statistics and the rate of debt increase, which I think will substantiate the allegations made by the Hon. Member for Portage-Marquette (Mr. Mayer) when he said there is extreme hardship out there on the farms and in agriculture.
Realized net income has been relatively stable. In 1974 it was $3.5 billion or $3.6 billion. In 1983 it was $3.7 billion. For over a decade farmers have had virtually the same net income, the one exception being in 1981 when they broke the $4 billion mark at $4.1 billion. But in 1980 it was down to $3.3 billion. However, it has been running along at $3.6 billion, or $3.5 billion. This in spite of the fact that costs in that period of time for all Canadians, and we are talking only about net farm incomes so we are talking about the take-home pay of the farm community, rose by well over 200 per cent, to be exact, 240 per cent. Just to bring us up to date, in the last four or five years we find the farm input price index has increased 29 per cent. That is between 1979 and 1983. At the same time farm commodity prices have increased only 11 per cent, with a resulting net income increase over those four years of 5 per cent. If you were to translate that into real dollars, it means a net decline in income of 25 per cent. So there has been in effect 25 per cent less spending power in the hands of Canadian farmers between 1979 and 1983. That leads us to conclude there is a very real possibility that hardship will occur.
Let us look at another set of data, that of the Farm Credit Corporation. Let us look at how many accounts are in arrears with the FCC as of September 30, 1983. Of beef producers with outstanding loans, 24 per cent are in arrears. Of crop producers with outstanding loans, 21 per cent are in arrears. That compares with a couple of years ago when only 14 per cent of the beef producers were in arrears, and only 14 per cent of crop producers were in arrears in 1981. If these people are not having financial difficulty, why are they so far in arrears? Why is the number of people in arrears going up? We have heard an argument, which seems to make some sense, that if farmers had marketing programs, they would not have those financial difficulties. I submit, Mr. Speaker, that the figures show that is no longer the case. Of farmers who were in fluid dairy production in 1981, only 6 per cent were in arrears with the FCC. However, as of September of this year 9.1 per cent were in arrears. That is the cream of the crop. That is the sector of the agriculture industry which is the best organized in terms of controlling production and also the most subsidized of any segment of agriculture. The amount of money in arrears
has increased 50 per cent in just two years. Producers are beginning to feel the pinch as well.
What about people in the poultry business? They are operating under supply management boards, and you would not think there would be many people in arrears with the FCC in that sector of agriculture. Yet we find that while in 1981 some 9.4 per cent were in arrears, today 14 per cent of them are in arrears on their FCC loans. In 1981, almost 21 per cent of hog producers were in arrears with their Farm Credit Corporation loans, and the same situation exists today.
Therefore, I believe that the allegation that there is hardship on the farms is correct. I am not sure that the immediate answer is simply to increase the amount of credit available. These people to whom I have been referring have had credit offered to them and they have had difficulty making their payments even on a 20-year or 30-year repayment schedule. The problem is not just one of needing more credit. The outstanding credit in Canadian agriculture was approximately $19 billion at the end of 1981. That figure is presently estimated to be $6 billion to $10 billion higher. The interest charges are now at the point where they are almost equivalent to the net farm income that farmers receive.
When I was attempting to begin farming about 25 years ago, there was a rule of thumb that one's sales from farming should be at least equivalent to one-fifth of the money invested in the farm. Much of the invested money would be borrowed, but that is beside the point. The theory was that one should be able to turn over the value of the farm once every five years so that the five-year sales should be at least equivalent to what was invested in the farm.
That is virtually impossible to achieve today in a cropping program, whether in western Canada or central Canada. In fact, a farmer who can turn over his assets in sales by ten years is doing extremely well. This means that the proportion of money that remains to the farmer to spend on his family, on reinvestment and improvements to his farm is shrinking all the time.
When I was deciding to become a farmer in the 1950s, farm economists and Government people were saying that there were obviously too many people involved in farming. They arrived at that conclusion then by taking the amount of income that is left, deciding what a good average wage would be and dividing that into the amount of income. In this way they concluded that there should be half as many farmers. With today's agricultural technology, I submit that it is quite difficult to argue that there are too many farmers. Today's farmers are very well equipped. They are using the latest technology and the latest information. They are working very long and hard hours. Even the academics are not making a case that there are too many farmers. They are not making the same arguments about under employment as were made in the 1950s and 1960s.
In fact, today's farmers face great financial hardship. I believe it is time to begin looking at some of the sources of that
October 21, 1983

hardship. We know that the most logical solution, one which many industrialized countries are in fact following, is to attempt to become as self-sufficient as possible in the production of food so that we do not have to rely on offshore producers for our livelihood. We discovered that in our country as a result of our experiments in dairy policy some 12 to 15 years ago. We decided to import some butter, cut back production and rely on those imports because it was much cheaper than it could be produced in our northern climate. When we finally arrived at an import position, our extra demand forced the world price of butter up so high that we could not afford to import it. We then moved to the program of subsidies and controlled production that is in place now. I suggest that is a reasonable policy for a country like ours, as it is for virtually any country.
However, we have not used that type of analysis in determining our needs for other products such as fruits and vegetables. If we were to extract our exports of grains from the import-export figures, there would actually be a net import requirement of approximately $2 billion in food products. These products are primarily fruits and vegetables. Even during the last 15 years our country has been processing fewer fruits and vegetables and has not been taking advantage of the very seasonal nature of our northern climate to keep them for the other eight to ten months that we are incapable of production because of the weather. We have given up those techniques to a large extent, with the result that farmers have had to ease out of producing some fruits and vegetables.
Let me point out some areas of the country where this is occurring. British Columbia is a traditional area of apple production in our country. The cost of production is estimated to be 14 cents per pound. Farmers receive approximately 4.5 cents at the farm, and there is a stabilization program in B.C. which adds another 2.5 cents. This means a seven-cent return to the farmer for a 14-cent outlay.
This situation does not only apply to British Columbia. With respect to the beef industry on the Prairies, the market yields approximately two-thirds of the actual cost of producing a pound of beef or pork.
In regard to potato production in the Maritimes, 50 per cent to 60 per cent of the costs are realized from the market while the rest adds to the debt of those particular farmers and increases the overburdening debt load that many of them face. This is causing a tremendous hardship.
The only solution is to do two and possibly three things. In the short term we have to devise better ways of providing short-term credit. More important, we must take action to solve the problem on a longer term basis. We must recognize that there should be some stabilization programs that are addressed at maintaining incomes by using costs rather than traditional market prices as the base. It makes no sense at all to have the historic market price as the base for stabilization programs.
In the British Columbia apple situation, the market is yielding only about a third of the costs. This has been the situation over the last three years. Even when the data base is
Supply
shortened to three years, it still means that the farmer will be stabilized at approximately 35 per cent to 50 per cent of his real production costs. Therefore that kind of stabilization program does not provide any stability to the farming sector or solve the problem of ever increasing debt.
Some Provinces have begun to develop programs based on costs, but this is done to a very limited extent since their financing capability is limited. They are also limited by the fact that much of the production goes beyond the Province, which means that any subsidy is essentially a subsidy to people who live outside the Province. We need a national stabilization program based on costs. Furthermore, we have to work hard at developing better marketing methods for those products, because there is no sense to having a stabilization program for a product that is not properly marketed. The buyers could take the attitude that they will pay a lower price because the farmer will take a very poor price for his product. The stabilization plan will simply go up to cover that price since it is cost based anyway. There should be a system of marketing the product linked to that stabilization program so that maximum returns can be gained from the market. We are seeing some experiments in that field in some Provinces. I note the beef programs in Manitoba and Saskatchewan and the hog programs in Ontario, Alberta, Saskatchewan, Manitoba and Prince Edward Island. They have been experimenting with that concept and it is one that is working relatively well.
I think it is generally agreed that a tripartite program involving the producer, his provincial Government and the federal level could provide an even better kind of program. Hopefully, the Government would be able to move very quickly on that kind of program, provided that some proposed legislation is introduced in the session, which, we are told, is imminent.
Finally, on the very short term, improved ways of permitting the turnover of land from one generation to the next is vital. We should be looking at reductions in the requirements for capital gains. We had that argument advanced several weeks ago in this House. Some new methods of transferring land from one generation to the other have been experimented with in some parts of the country with relatively good results.
The land bank in Saskatchewan allowed families who did not have a great deal of money to trade the land from one generation to the next and permitted them to roll it over to the following generation. This allows for relatively low cost production because the land does not have to be refinanced with each new generation and ultimately allows our country to compete effectively with those countries where land stays within the same family and is simply transferred from one generation to the next, free of charge. That is the system they have in certain parts of Europe. It is traditional. It allows us to compete effectively with producers whose land costs them practically nothing.
I close by urging the Government to reassess its agricultural program, to admit that hardship is being effected on producers

October 21, 1983
Supply
and that we move as quickly as possible to better marketing programs, stabilization programs and refinancing programs to overcome these problems.


Eugene Whelan: Mr. Speaker, I have a couple of questions for the Hon. Member. He talks about the terrible plight farmers are in. He gives the impression that it is the case for all farmers. Is the Hon. Member aware that even in his Province land values have hardly decreased at all? Is he aware that the repayment ability of farmers in that province is the best in all of Canada? Is he aware that the Royal Bank is opening 12 or 14 new branches this year in Saskatchewan?


Victor Fredrich (Vic) Althouse: Yes, Mr. Speaker, I am aware that lending institutions are still very interested in Saskatchewan. I think that if you analyse the situation you will find that Saskatchewan was one of the last provinces to respond to the current difficulties by reducing the value of land. There are two reasons that land prices have not gone down in Saskatchewan as quickly as in other areas.


Mr. Nickerson:: Because a Conservative Government was elected.


Victor Fredrich (Vic) Althouse: First, there was a fairly good crop for the last two years and the volumes moved have been fairly good. The Hon. Member beside me says it was a good Conservative Government that was elected. To some extent that has contributed. The Government has added not only to the 4 per cent reduction in the interest that is available for four years under the FCC, but it has extended that to any person looking for land who is under a certain age. That subsidy, though it is only short-term and will only apply for four years, has served to maintain the price of land. Therefore, rather than falling as dramatically as has been the case in some parts of Canada, the reduction in land prices is probably still to come in Saskatchewan.


Eugene Whelan: Mr. Speaker, I just want to clarify that land prices have hardly gone down. With the increase in price of commodities, will the Hon. Member not agree they will probably go back up again? Canola seed oil is up $90 a tonne; canola oil meal is up $42; canola seed is up $40 a tonne, all in the space of about six weeks. That is more than enough to pay amply the increasing Crow rates for ten years. This has an effect, Mr. Speaker. Maybe the price of land going down in Saskatchewan has some effect. Would he not consider the question that Saskatchewan is overgoverned by 31 Cabinet Ministers for a population of less than one million people? Does the Hon. Member not think it is costly to run the crop insurance to which federally we contribute $56 million and to which producers contribute the other $56 million, while the Province spends $3 million or $4 million administering the program and has a special Cabinet Minister for it? Is that not a costly thing for farmers?


Victor Fredrich (Vic) Althouse: Mr. Speaker, there are a number of questions asked by the Minister. I will take the last one first. Yes, there has been a tremendous increase in the size of the Cabinet and
the cost of governing the Province. That has been reflected in the very large deficit in the order of $500 million to $600 million, a deficit which had not existed before. To some extent, I suppose, putting residents of the Province in debt into the future is perhaps being used to hold up some of the jobs in that Province.
With regard to the sudden increase in the price of canola, I would simply remind the House that the sudden surge in prices is very similar to the surge in prices we had in 1973 or 1974. It was very short-lived then and it will probably be short-lived now. We have not seen quite the same price levels for canola as we saw in 1974. Costs are something like 2.4 times as high now as then. Even with the sudden surge in prices, I do not think you will see a huge rush by Saskatchewan farmers to go out and start purchasing things.


William Hunter (Bill) McKnight: Mr. Speaker, I have a question for the Hon. Member for Humboldt-Lake Centre (Mr. Althouse). Comparing the land bank program to the family farm purchase program, which is presently in place in Saskatchewan, up to the present time over 1600 individual family farm purchases have been assisted by the family farm purchase program. I would draw to the attention of the Chair that this is more than the whole land bank system had helped in the previous seven years. If the Hon. Member is serious, I would like to ask his opinion on the federal Government's refusal to accept some $200 million through the Province of Saskatchewan to the Farm Credit Corporation to be lent out to people in Saskatchewan to allow them to continue the family farm purchase program.


Eugene Whelan: It was discriminatory and the human rights people would have been after us.


Some Hon. Members:: Oh, oh!


Victor Fredrich (Vic) Althouse: Mr. Speaker, one of the problems that exists with these kinds of programs is that the federal Government will have to decide when it cuts people off and when it does not. We have not had any reasons, and I do not know the reasons, for the federal Government having refused to accept a loan of $200 million, if indeed that loan was offered. The increase in purchases is in very large part due to this sudden availability of the 4 per cent reduction in interest. With the size of loans these days, that is pretty well enough to keep a family operating for a year. That 4 per cent reduction supplies them with food, clothing and automobiles. It would, of course, bring about a great many potential customers.
The problem with the program is that it is dependent upon the borrower being eligible under the rules of the FCC, which means that they have to have a fair amount of assets to begin with. People who would have qualified for the land bank program to get land do not often have those kinds of assets and therefore are not part of this program. There is some inequity as a result.
October 21, 1983


Eugene Whelan: Does the Hon. Member know that the $200 million offered by the Province of Saskatchewan was more costly than what we could borrow any other place? Does he know that it had to be re-lent in Saskatchewan? It was discriminatory. We could not lend it in any other Province.


Victor Fredrich (Vic) Althouse: I will take that as an answer to the previous question rather than another question.


Mr. Jim Peterson (Willowdale):: Mr. Speaker, I am pleased to rise to participate in this debate. There has been much misconception by Hon. Members opposite, which is evident in the motion itself. The entire state of the agricultural industry in Canada is not as the hon. proposer of the motion indicated.
I would like to cite a few statistics. Net farm income in Canada in 1983 will be up about 5 per cent above 1982 levels. The total cost of production to farmers at the same time will decline by about 3 per cent. Wheat is another example. Exports totalled 21.4 million tonnes, or three million tonnes more than in 1981-82. Grains and oilseed exports are up to 29.7 million tonnes. Barley is up approximately seven million tonnes, despite the fact that there have been tremendous surpluses of coarse grains in the United States. The price of canola to producers and western farmers is up about 20 per cent. If we look at pork, one of the difficult industries and one of the areas on which we should focus attention, in 1982-83 exports were 25 per cent to 30 per cent above 1981 levels. In the area of milk, through a system of supply management in Canada we have been able to keep our surpluses at a reasonable and manageable level. The contrary has occurred in the United States. It has incredible surpluses, about 12 per cent above requirements. The problems the Americans are facing in dealing with these surpluses are mindboggling.
The problem is not right across the board in agriculture. We must be responsible in pinpointing areas of concern and targeting on farmers who need help. As we all know, this is in the red meat area. Contrary to what is implicit in the motion before the House, our farmers are the most efficient of agricultural producers in all countries of the world, not only in terms of productivity but in terms of the quality of the products produced for consumption here and outside Canada. This enviable record is achieved despite the fact that 55 per cent of our agricultural lands are the most northerly of those of all other countries. Despite these hostile environmental factors, Canadian farmers are the most efficient producers of any in the world.
This has brought tremendous benefits, particularly for consumers. The cost of food to Canadian consumers is less than 16 per cent of their income. If this is not the best, it is the next to best record of any country. In addition, the efficiency and productivity of the farming community have led to reduced inflation in Canada. Our agricultural producers have to take a tremendous amount of the credit for the fact that our inflation rates are at a low level. In the statistics presented last week, the inflation rate was down to 5 per cent. Let us not forget the tremendous contribution to the Consumer Price Index and the
Supply
lowering of the rate of inflation by our agricultural community.
In focusing on what we might do to help farmers, let us recall that it is an area of divided jurisdiction. Under the Constitution, agricultural production is part federal and part provincial. Let us concentrate on some of the things the federal Government has undertaken. One problem mentioned has been the high cost of carrying credit or raising money to certain farmers. The federal Government has in place six programs designed to aid this situation-the Farm Credit Act, the Farm Credit Corporation Special Farm Assistance Program, the Farm Syndicates Credit Act, the Farm Improvement Loans Act, the Fruit and Vegetable Storage Construction Financial Assistance Program and the Small Business Bond Program.
By contrast I turn to the programs of the Province of Ontario, its four small, paltry programs. If the Ontario Minister of Agriculture thinks he can pass the buck to us for the farmers of my Province, he has another guess coming. He has not fulfilled his responsibilities to farmers in the area of credit assistance.
Turning to the red meat area, admittedly that is where there are the most problems. Almost all farm insolvencies relate to areas where there has not been some type of supply management program or marketing board program. The Ontario Minister of Agriculture proposed a stabilization program for red meat-producers, the Province and the federal Government each contributing a third. One would have to ask that Ontario Minister what happened to the program which was in effect in Ontario in the 1970s. It was a stabilization program that was similar in nature. It lasted a total of three years and fell flat on its face in the fourth year when only 10 per cent of farmers would contribute their third of the stabilization because prices went up and they would not need it that year. Is that any way to run the stabilization program? Is that the type of program that will provide security to producers who need it most in the circumstances?
This issue is fraught with politics. I realize the agricultural community is divided on the issue, but this does not mean that we should not attempt to follow the directions our experiences have indicated will work and have worked in the past. I welcome the leadership shown in this very vital area by our outstanding, knowledgeable and competent Minister of Agriculture (Mr. Whelan).
Having looked at the present problem and having commented upon it, I feel we should also be looking forward and looking at what we as a federal Government might do on behalf of all Canadians to try to bring about greater equity and greater possibility for stable production and to try to help our farmers and ourselves.
I have five points upon which I would like to touch briefly. The first is the transportation system. In fact, the efficiency of production of western farmers or grain producers and their incredible productivity has been a mixed blessing. We can no longer envisage our present rail system being able to carry their grain to market under the present rate structure, if they continue producing at increased levels. The farmer's produc-

October 21, 1983
Supply
tivity has in fact brought upon us the need to rebuild our rail system to ensure that we have the capacity to export those products to market.
What are we doing today in this area? We have a Elouse which is not prepared to deal with that issue and debate it firmly. The best thing we can do for our western farmers is to ensure for them a rail capacity which will guarantee them exports. As a country and a nation we will be able to enter into export contracts with foreign purchasers, never having to fear the possibility that that grain cannot be taken to market.
With a new transportation system in the West, new port facilities, double-tracking, upgraded facilities and more cars, we will be able to assure our foreign buyers that our product can be delivered to them on time. This is critical to the prairie farmer as well. He would not have to worry about the export logjam. He can go ahead producing his product, his wheat, with the assurance that we can do the job of exporting it. It will cost him less to store the crops on his land. He will have better cash flow.
The single one thing that will do more for the western farmer than anything else, apart from higher world prices, is the ability of Canadians to compete more effectively in the export markets through an increased rail capacity. That is why essential to what we are doing in our transportation program today is to increase the capacity of our rail system to carry the western farmers' product to market.
The second area I would like to touch upon briefly is the whole field of research and development. Why are we among the most efficient producers of agricultural products in the world? It is because we have undertaken tremendous research and development in order to produce new crops, plants and types of cattle and beef that stand up to Canadian climate and conditions and which can be exported. Marquis wheat is one example, canola is another. We have 72 different nations sending their agricultural representatives to Canada to find out how we are doing some of these things.
Look at the entrepreneurial flare of many Canadians and what they have been able to do. E. P. Taylor has put Canada on the international map in terms of the types of bloodstock he has been able to produce. There are many Canadians who have followed in his footsteps. One of them I know very well. Anderson Farms, which started out ten years ago near St. Thomas, is now a leading exporter of stock to the United States and elsewhere. We have seen what the Holstein cow, developed in Canada, has done for milk production in many other countries. We are now advancing our technology of open transplants and exporting semen. We are able to bring these technologies, these new ways of doing things, to many other nations of the world. This is critical to what we are doing.
Agriculture Canada spends more than $200 million a year on this type of research and development. It goes into soils, plants, water, energy, equipment, animals, food processing, all these types of areas. We have produced 30 to 40 new plant varieties for the benefit of Canadian farmers in the grains,
fruits and vegetables areas. After Agriculture Canada was able to find these products, rather than keeping them to itself, it has put them out through the SeCan Association for immediate distribution to the farmers so that the benefits of these new technologies become immediately available. SeCan is presently handling 77 new varieties of plants.
I am very proud of the research and development record in Canada. However, this record does not mean we can sit pat. Our competitors abroad are getting more deeply into these areas as well. It is our obligation to devote more and more effort to high-level research and development in Canada.
A short while ago 1 had the pleasure of visiting Red Williams in Saskatoon and seeing his tremendous research facilities, of which he is very proud. That Canadian has achieved an international reputation. We need more of this type of individual in our agricultural research in Canada.
The third area we should be looking at in terms of agricultural policy is the whole concept of foreign aid. Except in emergency-like situations such as floods or extreme drought, I do not believe that exporting surplus Canadian food to developing countries is the answer to either their problem or our need for foreign markets. It is critical that they have this food when people are starving. I am not denigrating that role for food aid at all. Even more important than food aid over the longer term is bringing these new agricultural technologies to the developing countries. Our role as a leader in research and development, biotechnologies and the new techniques, as a nation that has developed many new types of animals, plants and trees which can stand up to the harsh vigours of the Canadian environment, gives us a tremendous role to play in exporting those agricultural technologies to the Third World countries. The greatest thing we can do for those nations is to make them self-sufficient in food. They would not have to spend their very scarce foreign exchange reserves on importing produce from other nations. They would be able to feed their people through cycles of drought, heat or pestilence with new products that we with our expertise can help them develop. I believe this would be the greatest contribution we could make in the name of humanity.
A fourth area to look at where we should explore further possibilities to assist the agriculture community and all Canadians is in the area of taxation. I welcome the provisions of the April 19 budget in which the Minister of Finance (Mr. Lalonde) extended loss carryovers so that those farmers who have experienced difficulty over the past couple of years will be able to spread those losses backwards and forwards to a far greater extent so that income taxes payable before or in the future can be offset by those losses. The farmers will have the cash.
Very important, and some Members have mentioned it today, is the issue of capital gains. In many instances, the farm is the retirement security for the farmer. If the children do not want to take it over and benefit from the capital gains rollover, if they do not have children who can take it over, if they are forced or want to leave the farm because of age or illness, we have to look very seriously at whether we should be taking the
October 21, 1983

slice of taxes that we are out of that retirement security, namely the farm, which they worked so hard to build up and into which they have put so much. I am very partial to recommendations to take a second look at changing the valuation day to 1974 and offering farmers the option of either choosing 1972 or 1974 as a valuation year for valuing their farms and disposition. 1 think we should also look very carefully at the impact that inflation might have had upon the value of their farms, and I think we should ask ourselves if it is right, if it is proper and if it is the most efficient use of resources to tax farmers on inflationary gains from that valuation year of 1972 or 1974.
The fifth area I would like to touch upon very briefly in the one minute left to me is the whole concept of self-sufficiency. We have within our means the ability to produce more foodstuffs in Canada. The consumers of Canada will benefit and they can help us by buying Canadian goods, even if they are buying Canadian fruits that are canned. Why do we always need to have fresh fruit throughout the winter? Why do we have to import fruit? Why could we not be growing more of our own foodstuffs in greenhouses, which would take advantage of the tremendous energy surpluses, particularly of western gas? There are tremendously imaginative new methods from which, if implemented, we can all benefit.
The agriculture industry is not the disaster that the Hon. Members opposite have indicated. It is one of the most dynamic, forward looking, entrepreneurial industries in the country. It is one of the best. We should all be proud of what the agriculture industry and the farmers have been able to achieve.


The Acting Speaker (Mr. Blaker):: Questions, comments, answers? Debate.


Mr. Bill Vankoughnet (Hastings-Frontenac-Lennox and Addington):: Mr. Speaker, since I come from eastern Ontario and represent what is primarily a rural constituency, I welcome the opportunity to discuss agriculture and its importance to Canada. I have always admired the forthrightness, foresight and determination of Canadian farmers. They have had the ability to lead by example, to thrive on challenge and to increase the efficiency which has built the country. Agriculture helped to build the country with roots which are deep and strong. Determination, sharing and hard work have helped to overcome adversaries in all shapes and forms. Our tradition is strong and we are slow to change from the known to the unknown simply for the sake of change alone.
The federal Government should follow the lead of the farmers with the many attributes which have been ascribed to them, which include those of leadership, self-sufficiency, unity and hard work. These qualities will help in bringing about solutions to the very real problems facing Canadian farmers today.
One problem facing Canadians is that of energy. We all use various forms of energy, and farmers are no exception. Rising
Supply
fuel costs and security of supply are important matters that must be faced in the near future.
We are fortunate here in Canada to have the potential for energy self-sufficiency. The Government's energy policy proclaims self-sufficiency by the year 1990. However, what we see as a result of its policies are uncertainty, increased costs and indecisiveness all across the country.
Farmers have not only been plagued by high energy costs, but because of the federal Government's interests rate policy, they have also been hit with high financing costs. As a result of high financing costs, many independent farmers have been forced into bankruptcy. Economic hardship in the agricultural sector can have a far-reaching impact affecting the welfare of many people other than farmers and their families.
We have observed the extension of such problems into the farm machinery industry and other farm supply industries as farmers have been forced to curtail expenditures and new capital investment. The need for new capital investment in the farming community continues even though many farmers cannot afford to borrow. Machinery continues to wear out and must be replaced, but it is expensive. If money is put into machinery, it is not used to put food on the table of the farmer. Every day the need for adequate funding for the Farm Credit Corporation grows. Daily financial pressures are forcing farmers to go to the Farm Credit Corporation and farmers are increasingly being told: "Sorry, there is no money".
The Farm Credit Corporation recently requested permission to borrow $600 million from foreign money markets in order to finance the corporation until March, 1984. Finance Department officials turned a deaf ear to this request. The Minister of Finance (Mr. Lalonde), when questioned in the House of Commons, stated that $250 million was adequate. The Minister's response only goes to show his lack of understanding of the problems facing Canada's farming community.
Another problem facing the farming community is that of retirement. The nature of the agricultural industry and the present tax system create many problems that other industries do not face. Incomes tend to be very erratic, fluctuating with the extremes of weather, the changes in domestic and foreign commodity markets and general economic conditions as a whole. A large percentage of any profit made by a farmer goes directly back into the farm in order to finance the purchase of additional land, cattle, fertilizer, machinery and the like.
At present, farmers have no over-all pension fund other than the Canada Pension Plan. Because the farmer's income is so erratic, his ability to contribute to an RRSP is greatly reduced. There is an old saying that goes: "Farmers are cash poor but asset rich". However, that saying does not answer the question of where a farmer will get a pension when he or she becomes unable to farm in later life. Historically, the farmer's pension has been his farm.
The proceeds of the sale of a farm are eligible for capital gains tax. In the November 12, 1981, federal budget, the IAAC was replaced by forward averaging. This has caused a

October 21, 1983
Supply
great deal of concern because of the potential long-run divergence between interest and inflation rates.
I believe, Mr. Speaker, that the Minister of Finance should re-examine his policy of levying capital gains taxes upon farmers and their farms and that he should also review his forward averaging policies in order to allay the fears expressed by the farming community.
Having heard that the Province of Ontario proposes to introduce agriculture as a compulsory part of the core science courses in grades seven through ten, I strongly urge the Minister of Agriculture (Mr. Whelan) to support this provincial initiative and to urge other Provinces to follow suit. Such courses would make the job of Minister of Agriculture much easier.
To many people, and in particular the Minister of Finance, are unaware of the importance of agriculture to the Canadian economy. Agriculture accounts for one-sixth of all economic activity in Canada. The agricultural sector employs 18 per cent of the Canadian work force and generates nearly 12 per cent of Canada's exports. However, the recession has hit hard. Farm bankruptcies have soared to record numbers, and one agricultural economist has estimated that the recession has taken $5.5 billion worth of assets off the national farm balance sheet.
The Progressive Conservative Party has announced a ten-point program to help the producers survive this recession. We called for greater funding to the Farm Credit Corporation. The Minister of Agriculture agreed with us but his colleague, the Minister of Finance, ignored his advice and slashed the Farm Credit Corporation's request for more funds by over 55 per cent. We called for the establishment of an agri-bond program. The Minister of Agriculture agreed, but again the Minister of Finance has refused to implement such a program.
We called for an improved stabilization plan. Once again, the Minister of Agriculture agreed. However, the Minister of Finance did not agree and, as a result, Canadian producers will continue to suffer from a plan that does not fully take into account rising production costs and a plan that makes its payments after much of the economic damage has been done. We called for revisions to the capital gains tax and other taxation matters. Again, the Minister of Agriculture agreed with the need for such revisions, but again the Minister of Finance has refused to make any changes, although his predecessor did consider a study of the matter.
It is clear from this list that the Minister of Finance is not aware of the importance of and opportunities in Canadian agriculture, nor is he aware of the problems besetting this vital Canadian resource. With the establishment of compulsory agricultural courses at the secondary school level, hopefully future Ministers of Finance will not suffer from the same ignorance.
Recent figures on Farm Credit Corporation loan approvals point to a poor credit picture for financially troubled or beginning farmers seeking mortgages from the federal lending
agency. In July, the FCC got approval to borrow $250 million more. It needed at least $600 million. This $250 million just will not cover the tremendous need and demand from farmers.
This is a real danger if we continue on our present course. In 1981, there were 318,361 census farms in Canada, a 12 per cent decline from 366,128 of 1971, and a 57 per cent decline from the 732,858 of 1941. We all know that farms are larger and more efficient but we also know there is a limit to efficiency, and now we see the numbers of farms going out of production at an alarming rate. In the 40 years between 1941 and 1981 the farm population in Canada decreased by nearly 66 per cent, a rate of decline averaging some 4,300 persons per month. Atlantic Canada has suffered the worst with farm population declines of approximately 93 per cent in both New Brunswick and Nova Scotia. Farmers are our unsung heroes. In 1940 the average Canadian farm produced enough food to feed 11 people; today an average farm feeds over 60 people. This trend has reached a peak because of the lack of reward for the hard work which is associated with farming.
The net farm income as a proportion of gross farm income has slumped from 37 per cent in 1965 to 19.6 per cent in 1982. In 1965, gross farm income was $4 billion and net farm income was $1.5 billion. In 1970, gross farm income was $4.4 billion and net farm income was $1.3 billion, or 28.8 per cent. In 1982, gross farm income was $19.3 billion and farm income was $3.8 billion.
Agriculture Canada has estimated that production costs will increase by 11 per cent in 1981 and 1986. Farm operating expenses increased 115 per cent between 1976 and 1982. The Minister of Agriculture brags about cheap food and being able today to buy more eggs with a dollar than before. If this trend continues consumers will not be able to buy farm products at any price. What about costs of production and the prices of farm products which have not kept pace? Mr. Speaker, one factor alone which the Government has placed on the backs of our farmers is the costs which stem from the deficit and indirect costs of energy and the federal farm fuel tax which accounts for one quarter of farm operating expenses. In 1972, interest charges comprised 8.6 per cent of farm operating expenses. In 1982, this has grown to 13.9 per cent of farm operating expenses.
It is a crime that FCC does not have the funds available. Farmers in Ontario given conditional loan approvals last summer will have to wait until at least 1984 for any hope of getting these funds.
Settlement in Hastings-Frontenac-Lennox and Addington on June 16, 1784 by United Empire Loyalists was a situation of which we have little understanding today. These settlers, who faced starvation, planted turnips that summer and survived on rations of food until the first crop could be grown the next year. From this hearty stock of first farmers in Ontario came future generations of farmers who, to this very day, owe so much to their ancestors. 1984 will mark this bicentennial of agriculture in Ontario, and I hope the Minister of Agriculture will make every effort to recognize this significant contribution to the history of agriculture in Canada during 1984.
October 21, 1983

There is a vital role for Governments to play in agriculture such as the promotion of soil conservation, the safeguarding and managing of water resources, agricultural research and the conserving of genetic resources. However, Government intervention frequently goes far beyond such concerns since it is often motivated by political consideration and a very narrow view of economic gain.
In a recent report by the science and technology division of the Library of Parliament on world food security it was stated that not so many years ago, the promise of the green revolution seemed to have calmed down fears about society's ability to feed a burgeoning world population. Agricultural technology held the prospect of pushing the problem of food supply far into the future. Between 1950 and 1971, world grain production almost doubled, and despite a rate of population increase unmatched in human history, per capita grain production rose by more than 30 per cent. Today, agricultural systems in developed and developing countries alike are experiencing difficulties, although the causes vary.
The question that arises from this statement is whether or not central planning, uneconomic price ceilings, import restrictions, export taxes, and subsidies established by the Government of Canada have created the problem of supply and distribution, not only affecting the market in Canada but also the world. Increasingly, Canadian agricultural policies are being felt throughout the world because of our large exports of agricultural produce. Canada is one of the largest exporters of grain in the world. What would happen to the world if Canada's grain farmers found that they would no longer afford to supply cheap grain to the hungry masses of people? The result would be that many hundreds of people would die. In light of this fact, the Canadian Government and people have an added responsibility to ensure that our farmers can meet such demands, at home as well as abroad.


The Acting Speaker (Mr. Nickerson):: Are there any questions or comments? There being no questions or comments, we will proceed to debate. The Hon. Member for Carleton-Char-lotte (Mr. McCain).


Fred Alward McCain: Mr. Speaker, this is one of the occasions when I wish there were all kinds of time for a Member to speak. In this debate a lot of things should be answered. A great deal of dreaming is done by Members on your right. There is a facade of confidence over there. It has been pointed out unequivocally by Members on this side that the statistics offered by the Minister of Agriculture have not been authenticated. When you compare his daydreams with the statistics presented by Members on this side, his knowledge of the condition of agriculture today is found to be wanting.
I want to draw the attention of the House and the country as a whole to a situation that has arisen in trade between Canada and the United States. It was apparent from the very beginning that it was going to impact upon Prince Edward Island and New Brunswick particularly, and therefore it was judged not to have any significance, not only to the Government but also to the agricultural organizations in Canada.
Supply
Early last year, the State of Maine launched an appeal to the U.S. Department of Commerce to declare that potatoes, round whites in particular, had been dumped into the United States and that they had damaged the return of the industry in the State of Maine and the eastern seaboard. This is very alarming to eastern Canada because we do rely upon shipping a portion of our crop on a near annual basis to the eastern seaboard of the United States. If that market is eliminated or if the return from that market is reduced, it will very seriously affect the income of the Atlantic farmer in the potato industry. However, that is not where it stops, Mr. Speaker. This is where I criticize other areas of Canada. If the export market to the United States reduces the net return to the farmer of Atlantic Canada, at the same time it reduces the net return to every potato producer east of Thunder Bay. Every potato producer in Quebec and Ontario will suffer because of an oversupply of potatoes which would ordinarily have been exported but must now be marketed in eastern Canada, east of Thunder Bay at its extremity. That is the consequence. Unfortunately, the hearings ended in a successful result of the application of the State of Maine, and on July 26 it was found by the Department of Commerce that:
We have preliminarily determined that there is a reasonable basis to believe or suspect that fall-harvested, round white potatoes from Canada are being, or are likely to be, sold in the United States at less than "fair value", as provided in Section 733 of the Tariff Act 1930, as amended (19 U.S.C. 1673) (the Act).
In response to that there was a communique issued by the Minister of State for International Trade (Mr. Regan) in respect of the decision of July 26. After weeks and months of the presence of this problem to Canadian trade, the Minister said this:
Minister Regan noted that officials have not yet had time to study the U.S. Commerce Department's preliminary determination in detail but would be doing so to ensure that the United States is acting in conformity with its international obligations.
I quote from the determination of the Department of Commerce in the United States as follows:
The U.S. Government imposed am import penalty tax on potatoes from the Maritime Provinces today in an interim decision subject to review.
It assessed an interim penalty of an average 17.9 per cent of the import value. That means importers must post a bonded promise to pay that levy on any imports pending a final ruling-and possible adjustment of the dumping duty- this fall.
Please note, Mr. Speaker, that not only is there a tax imposed, but that tax may be readjusted at a later date upward or downward. This imposes a virtual embargo on all except for those most gambling of individuals on this product imported into Canada. However, I think we should note the final line of the release from the Department of Commerce of the United States which reads:
The ITC found in a split decision last March that there were preliminary indications of injury to U.S. producers.
The first question I want to raise is why is the Minister unprepared, after months of opportunity to study this situation, because a report of that commission says this:

October 21, 1983
Supply
On February 9, 1983, we received a petition filed by counsel on behalf of the Main Potato Council.
That means, Mr. Speaker, that the Minister had from February 9 until June 28 to study and become knowledgeable about the problem which was to hand. He stated, "We have not had time as yet to consider the consequences". As to who is damaging whom, 1 want to read into the record of this House the statistics which relate to the importation of potatoes by Canada and the export of potatoes by Canada to the United States in their relative quantities in relation to the quantity of potatoes we consume. In 1971, the U.S. exported to Canada 7.1 per cent of our total consumption. We exported .3 per cent of its consumption. Relatively speaking, then, we probably received 24 times as many potatoes as they received from us. In 1972, it was 7.8 per cent we imported. We exported to the United States .2 per cent. I will not read all the figures because they go up to 1982. However, let us take a look at 1977. We imported 17.2 per cent of our requirements and exported .3 per cent of American requirements. In 1981, we imported 11.8 per cent of our requirements and exported 1 per cent of the American requirements. This is roughly as low a ratio as there is available. It is roughly 12 to 1 on a consumption basis, which we imported versus what we exported for U.S. requirements.
1 stated from day one that this was but the tip of the iceberg. I was ridiculed by federal authorities when I tried to contact them for some discussion on this matter. I was really ridiculed by many others in the trade when they said, "Oh, no, we can win this case. It does not really mean anything." There was to be a hearing on September 20, I believe, in Washington. When I called Government officials for advice as to what the potato industry of Canada should do in this case, I was told that this was merely a technical situation, that we really should not put much effort into defending or presenting the Canadian position. That is the answer I received from officials of the Government of Canada.
I went further, Mr. Speaker, and inquired of some highly placed U.S. people. While they did not want us to win, their response was-and I submit to you that every government official which had to do with the potato industry in Canada's trade should have known this-"If you lose the hearings of September 20, you have lost the biscuit." The Canadian Government advisers were saying to the industry, and to me, "This is just a technical thing. Forget it. Don't bother." That is the kind of service which agriculture has had from the Department of Agriculture.
To show you, Mr. Speaker, that this was but the tip of the iceberg, I have in my hand a Bill introduced in the House of Representatives by Mr. Gilman. That Bill was to provide equitable treatment for certain fresh vegetables produced in the United States. It deals with the authority of the Secretary of Agriculture to impose at his discretion and on the advice and petition from producers, surcharges on importations from Canada on vegetables. Those vegetables are cabbages, carrots, celery, lettuce, red onions, potatoes and radishes. However, please take note of this:
The Secretary, for the purpose of this Act, may add for the duration of a marketing season any classification of fresh vegetable provided for in such Schedules as a vegetable category if a United States producer of vegetables-
I repeat, "a United States producer of vegetables".
-of that kind petitions the Secretary for such addition and the Secretary concludes that economic injury is being caused or threatened to United States producers-
I have a flyleaf also of a Bill introduced in the Senate of the United States. It is an identical Bill. So now we have a Bill in the House and a Bill in the Senate of the United States. That is what I meant, Mr. Speaker, when 1 said it is the tip of the iceberg. What offends me is that the Minister of State for International Trade has not yet, after months, concluded what should be done. The industry in New Brunswick pleaded with the Minister of Agriculture to find ways and means of assisting the industry of Atlantic Canada in defending its case.
I say to you unequivocally that the industry is going to spend not less than $250,000 in co-operation with the Canadian Horticultural Council, which, thank Providence, has chosen to champion this cause. The Minister has received letters pleading for financial support for the council and the New Brunswick Potato Agency. Of the $147,000 plus incurred to date in legal fees, the New Brunswick industry alone has already remitted $37,000 to the Canadian Horticultural Council in part payment of its share of the cost of the defence to date. Another $27,000 is going to be needed, which makes for a total of over $75,000 in New Brunswick alone. This, of course, is an organization in an industry which has been downtrodden, ignored and condemned by the Minister of Agriculture (Mr. Whelan). This money has come from the New Brunswick Potato Association whose total promotional budget for 1983-84 is only $35,000, yet their Bill will be $75,000.
I tried to obtain from Government Departments, including the Department of Agriculture, Mr. Speaker, copies of the legislation introduced in the U.S. Congress and Senate. "Oh, we do not have them", they said. I went around to three Departments trying to get those Bills and was told that the Government did not have them, or I was denied copies. However, I obtained copies and, since the Minister does not have them, I am going to ask a messenger to deliver them to him when I conclude my remarks.
There is now a third Bill which has been introduced to give the U.S. Government blanket authority to subsidize or pay the cost of applications on behalf of a producer or association of producers who appeal to the U.S. Secretary of Agriculture for surcharges on agricultural exports to the U.S. This Government apparently does not have that one either, but I shall have it early next week and I will present it to the Hon. Minister of Agriculture and the Minister of State for International Trade. I am also going to send to the Minister the brief prepared for the hearing in September, along with a copy of all those documents issued by the U.S. Department of Commerce. If we are to allow this incursion, this breach of the moral principles of trade between Canada and the U.S. without a voice of
October 21, 1983

complaint, if we allow this proposal to become law without a formal protest, we may well look forward to its extention to the feed, grain and oil seed industries, and goodness only knows what other industries.
I appeal to this Government to heed what I am saying. The consequences of neglect and lack of financing, the consequences of a lack of professional input into opposing this matter, will range from coast to coast in not only the fruit and vegetable industry, but other industries in this nation as well.


Mr. Lome Greenaway (Cariboo-Chilcotin):: Mr. Speaker, at this time last week I was in my riding and I had the pleasure of attending the sale ring of the local livestock co-op. They ran through about 1,500 hundred head that day, mostly of calves. Good steer calves were going for about 75 cents a pound. The last time I sold calves in that same sale ring was in 1973 and I got 73 cents a pound. 1 can remember at that time paying about 38 cents to 40 cents a gallon for gasoline, and you know what a gallon of gasoline is worth now.


Mr. Huntington:: What is it worth?


Lorne Everett Greenaway: It is about $2.40, something like that. In any event, cattle receipts today are low, costs have probably tripled and people are in real trouble. Many farmers and ranchers have had to take jobs off the farm to try to meet their mortgage and operating expenses. This seems like a very normal thing to do because you are trying to save your business and stay afloat. All was well in my riding until about January this year when the Department of National Revenue sent in teams of auditors who decided that these ranchers, because they were making an off farm income, had to be recategorized from full-time farmers to part-time or even hobby farmers. What is worse, they went back as far as four years and are now sending out reassessments as high as $75,000 and literally bankrupting many of these people.
If you do not think this is a problem, Mr. Speaker, I can lay out the evidence to show you it really is. It is a problem right across the country. In 1981, Statistics Canada claimed that over 39 per cent of all farmers and over 50 per cent of beef farmers are working off the farms to the extent of 171 days a year. I know that in 1982, approximately 125,000 had off farm income. Yesterday I received a zerox copy of an advertisement for a herd dispersal sale involving 100 head of cattle. This is Kelso Angus in Georgetown, Ontario, and what is interesting about this is that at the bottom it says, "A victim of Section 31 of the Income Tax Act". Kelso Angus had been designated as a hobby farm under an interpretation of this Act and as a result of subsequent assessment they were left with no alternative but totally to disperse this major herd which was just attaining the peak of its young productive life. I say that is a disgrace and it should not be happening in this country, Mr. Speaker. 1 have literally a couple of hundred cases as bad as that. I am going to read from a few letters I have received because they set out the problem so succinctly that I think it will drive home to you how very serious the problem is.
Supply
The first letter is from a lady at 150 Mile House, British Columbia, who was audited in January and received a reassessment in April. In May she received a call from the auditor, a Mr. Wilson, stating that they would only be reassessed for 1981, not 1979 and 1980 as previously indicated. He did not give any reason. These people merely went about their business and purchased an old bailer and a pick-up truck thinking that they would have only one year's income tax bill to pay at the worst. Then, all of a sudden, the same auditor phoned back to say he made a mistake and these people would be reassessed for all three years. That just goes to show the incompetence of these auditors, Mr. Speaker. None of them have any agriculture expertise, and we have proved that already in this House.
1 have another letter from Quesnel, British Columbia. These people were audited on March 16 and were told they were now classified as a hobby farm because they had no reasonable expectation of a profit. They had three weeks in which to appeal, they went straight to their accountant, found they showed a profit this year and would be glad to show the auditor the books. So they met, and the auditor changed his mind a bit but said that he was still going to classify it as a hobby farm. They then sent their appeal letter, a copy of which came to me, on March 30, and on May 3 the auditor phoned and said he reviewed their case and they were now classified as part-time farmers. In other words, they could deduct up to $5,000, and was that okay with them? She said yes but that her husband was not home and she wanted to ask him before agreeing finally. She asked the auditor on the phone twice if this means they do not owe the Government anything and he said twice, "No, you don't. You don't owe us anything." The next day he phoned back and asked if she had talked to her husband and if he agreed with the decision. She said that he did. The auditor said that as long as he agrees, he did not have to send them a letter. She said no, that she would like the letter. He said that it would take a couple of weeks, and that was okay with her.
Two weeks went by without any letter. She phoned the auditor on May 30 and asked why she had not received her letter. He said that they had reviewed their appeal again and decided that they were back to being assessed as hobby farmers. She asked why she was not notified, and he replied that it had been in the works for "the last two weeks". That was the only reason he gave. She then asked again if they owed the Government anything, and he said yes, as far as his office was concerned.
How can people conduct their business when the tax department harasses them in that manner? Another fact which has come to light is that many young farmers are being hit under Section 31 of the Income Tax Act. I would like to read one case from the presentation that was put together by the Minister of Agriculture for Ontario. He composed a 22-page document called "Income Tax Treatment of Small and PartTime Farmers" which he presented this summer to the Interprovincial and Federal Provincial Conference of Ministers and the Deputy Ministers of Agriculture in Prince Edward Island.

October 21, 1983
Supply
It is an indictment of the whole problem that I am bringing to the attention of the House in regard to Section 31 of the Income Tax Act.
In this report he points out particularly how absolutely wretched this situation is as far as farmers starting out are concerned. I will just read the one case which he uses as an example:
In 1974, Mr. A bought a half-section of land for grain farming, the price of which was partially financed by a mortgage and partially by savings. He gradually added to the size of his farm, so that by 1979 he had 800 acres, and had also acquired a full line of farming machinery. Again, these additions were financed by savings and by outside borrowings. During this period, Mr. A had kept his job at a uranium mine, where he was employed on a seven-day-on-seven-days off shift basis.
Mr. A found that with the help of his wife and his two teenage sons, the seven consecutive days off every second week were enough to enable him to carry on his grain farming operation. He also took one week's vacation in the spring and one week in the fall which, together with his regular time off, allowed he and his family to do the planting and harvesting of the crops.
By 1980, Mr. A felt confident enough about the future of his farm that he gave up his job to devote his full time to the farming operation. Unfortunately, his timing was unlucky, and the combination of high interest rates, low grain prices, dry conditions, grasshopper infestation and higher general operating costs forced him to take another job in early 1981.
While this would seem to be an example of an individual genuinely trying to get a start in the farming business, and committing practically all of his capital and most of his energies to the business, Revenue Canada invoked Section 31 and limited Mr. A's farm loss deduction to $5,000 annually. Mr. A's objection to the Appeals Division of Revenue Canada has been rejected, and if he wishes to carry his case further, he must now go to either the Tax Review Board or the Federal Court, either one of which will be a costly and time-consuming procedure.
There are three other examples given here which are all as bad, if not worse.
An interesting thing which is mentioned here and in the other cases is the fact that the wives and children in all of these cases generally work many long hours on these farms, and this labour is not recognized at all by the Department of Revenue. If a farmer employs someone the Department will recognize that. While that is in the farmer's favour, the Department will not credit any labour by the wife or children.
As well, the Department states that if someone has a full-time job, that person does not have the time to spend on the farm. Luckily, the wife of a rancher in my riding kept a diary in 1980. The rancher had a job in a mill where he worked 37.5 hours a week. He put in a total of 1,950 hours that year. In the same year he put in 2,260 hours on his farm. This does not count the hours put in by his wife and children. Of course, the auditors coming from the city figure that if one puts in a 7.5-hour day, that is all one is good for. It only proves that they do not understand farming or what makes a farm or ranch work.
Since I first brought up this issue in the House approximately a year ago, I have managed to get the attention of the Minister of Agriculture (Mr. Whelan). He writes different replies on the subject to almost anyone who writes him a letter, but at least he is beginning to realize that there might be a problem.
I have copies of letters that he has written to people all across the country. They are interesting and I will read a few
key sentences. I have a letter dated May 31 which is a written to a Mr. Lyle Klein of Quesnel, British Columbia, in which he states: "I am in favour of a thoroughgoing review of Section 31 because this provision means that farming is treated differently than other businesses and that the full losses from other businesses can be deducted from the taxpayers' income from other sources."
The Minister says, in a letter to David Kirk, Executive Secretary of the Canadian Federation of Agriculture dated June 17, "Now is the time to address the basic issue of why there should be any limitation on loss deductibility for farming businesses when there is no such limitation in respect of other businesses the taxpayer may pursue." In the final paragraph, he says, "I personally regard Section 31 as a priority issue in agriculture at the present time."
I submit that one surely would not know that it is a priority with him if one tried to do some of the things I have done to get his attention.
In an August 8 letter to Mr. Brian Griffith, President of the Ontario Aberdeen-Angus Association, the Minister of Agriculture said, "My own view is similar to yours in that I am not comfortable with the $5,000 limitation under Section 31 on the deduction which can be made from other sources of income with respect to farming losses. If the person passes the test of having a genuine farming business, I would favour the unlimited loss deductibility which applies to non-agriculturai businesses." The Minister is finally realizing that there is a problem.
It did not take the Minister of Finance (Mr. Lalonde) as long. I received a reply from him to letters I had written to him on June 6. He said, "I am disturbed by the number of letters and press clippings that I have received illustrating that a rigid application of the restrictive farm loss rules can result in an unfair taxation of bona fide farmers." While he does not go on to say that he will do anything about it, he realizes that there is a problem.
The assessments in my riding are now pouring in. There are approximately 150 people who are getting their reassessment notices, and most of them are anywhere from $5,000 to $75,000. It is interesting to see what happens. The minute one receives that notice, the collection division of Revenue Canada immediately begins its attack. Generally, it phones to say that it demands the amount of money immediately, whether or not that person intends to appeal his case.
People should be aware of the fact that they do not have to pay cash. Some have been foolish enough to borrow money from the bank to pay, but it is possible to go to the bank and arrange for a letter of credit. It costs .5 per cent per year. That will keep the taxman away until the hearing is completed.
If that does not work, they can put a lien on the ranch or farm, and that is not advisable. What is interesting about the letter of credit is that if the case is lost, the bank has to forward that money immediately to the Department of Revenue. The bank then debits the account and makes it a demand loan. With a $100,000 operating loan, for example, the bank
October 21, 1983

would deduct that letter of credit from the total operating loan so that the person would be cut back during that interval.
When a person receives an assessment, there is an opportunity to file a notice of objection. Generally there is 90 days to file that objection. It will take approximately two to three months to hear from the Department of Revenue. It appears that the Department of Revenue is simply rubberstamping these objections and throwing them out without given them any consideration. I presume that the Department does not want to admit that anyone has made a mistake. When an objection is overruled, the next step is to go to the tax court of Canada. In order to do that, you have to write to Ottawa to the Court of Administration at 381 Kent Street, Ottawa and ask for an appointment. It might take up to two or three months or even longer to get an appointment with the tax court. You go before a judge. You do not need to have a lawyer. It does not cost you anything. It is probably a good idea though to have a lawyer. You go before the judge and, hopefully, if you win the case, you are all right. But if you do not, the only thing left is to go to the Supreme Court of Canada. You have to go through the court system, which is terribly expensive. I know of only one person with whom I have been in contact out of about 500 who is going that route.
There was an interesting case of a chap at 100 Mile House who has a horse farm. That throws taxation auditors into a tizzy. They do not understand horses at all. They do not understand cattle, goats or anything else as far as I am concerned, but horses really throw them for a loop. Tax people claim that horse breeding is not classed as a legitimate business in Canada. That is their stand on horse breeding. This particular chap was reassessed about $70,000. He went to the bank to try to get a letter of credit. Because he did not have a great line of operating credit, he did not get the amount needed. Revenue Canada is now forcing him to sell his horses. This will put him into receivership. At the same time he has launched an appeal. He wants to go to the tax court, but he will be broke long before he gets there.
This problem is damaging to agriculture. It removes the incentive for anyone wanting to get into farming. I had a person in my office last week. When he went through some of the stuff with me I found he had 500 acres of land, but he decided to let it sit there. As long as we have this kind of legislation and these kinds of over-zealous auditors and a Minister of Revenue who is as heartless as he appears to me to be, agriculture in Canada will go nowhere.


The Acting Speaker (Mr. Blaker):: Questions? Comments? Debate?


Mr. Ian Watson (Chateauguay):: Mr. Speaker, I am happy to have this opportunity this afternoon to take part in a debate introduced by the Hon. Member for Portage-Marquette (Mr. Mayer). The Government has been accused in this resolution of not responding to the financial needs of farmers. It provides
Supply
us on this side with a very useful occasion to put a few facts on the record.
I come from an area that is no longer truly agricultural but I do have, in two or three of my municipalities, a substantial dairying industry. In another part of my constituency, the black earth area, I have a very fast growing industry in the production of vegetables, many of which are being exported to the United States in numbers and quantities that last year exceeded revenues of $16 million and this year will probably be in the order of at least $20 million. This is a small geographic area but it is an extremely rich agricultural area. Exports of vegetables are penetrating markets that have never been penetrated before by Canadian products. Markets are being penetrated largely because the federal Government has been helpful in many areas, either providing for refrigerated storage allowing, for example, carrots to be kept in perfect condition until late spring or early summer, even carried over from the previous year, or, in the case of some salad crops, providing assistance in fast chilling facilities.
The federal Government has been helpful and it is paying off for the Canadian economy. To accuse the present Minister of not doing his best for agriculture is really a travesty. I think every Canadian farmer knows that the present Minister has been a staunch defender of farmers' interests whenever he has had the opportunity in Cabinet to do that. I am sure in many, many a Cabinet meeting the present Minister has been an "enfant terrible" in favour of the interests of Canadian farmers, and his actions have paid off in a number of the new programs that we have seen.
[ Translation]
I would especially like to mention a few items concerning the dairy industry, which is an important sector in an area like the federal riding of Chateauguay. Canada's dairy industry has had to face two major setbacks in recent years. A drop in domestic demand for dairy products was followed by a spectacular drop in prices as result of reduced demand and an unprecedented surplus of over two million tons in other countries producing dairy products. We are now overcoming these problems thanks to our supply management program and other federal policy measures. The dairy program has been in effect since 1975, with changes being made regularly following recommendations and meetings with members of the dairy industry.
As far as subsidies are concerned, in order to maintain the importance of our dairy industry, subsidies are granted directly to producers of industrial milk. At the present time, the subsidy is $6.03 per hectoliter on shipments meeting domestic requirements. It is expected that $280 million in subsidies will be paid during the present dairy campaign which started August 1.
Last year, Quebec producers received $132 million in subsidies. Within the framework of our national dairy policy, the Federal Government determines a target price for processed milk and cream to ensure that increases in production costs of

October 21, 1983
Supply
dairy producers are covered by market prices. The target price is calculated according to a formula established in 1975, which allows for variations in production costs and other factors. The price serves as a guide for provincial milk marketing boards and in setting prices for processed milk and cream in the provinces. The present target price is $42.80 per hectoliter.
In 1975, when the present national dairy policy was established, the target price was set at $25. This means there has been an increase of 72 per cent. According to Mr. Garon, the Quebec Minister responsible for Agriculture, the Federal Government is doing nothing for farmers. However, we have increased income from industrial milk by 72 per cent since 1975.
Since 1975, Federal Government expenditures with respect to dairy products have averaged $300 million per year. These funds are helping to ensure the continued development of the Canadian dairy industry.

1 would like to mention one other area we tend to neglect when we talk about agriculture. A tremendous contribution has been made by our agricultural research. These policies have contributed not only to agriculture but to the Canadian economy by strengthening the quality of our agricultural products and thus our ability to compete in world markets.
We spend more than $200 million a year on agri-food research. This amounts to almost half of what is being spent by all organizations in the country, both private and public, on that kind of research. We have developed, as a result, one of the most successful and productive agricultural systems in the world. Plant breeding has gained for Canada a reputation second to none. A whole variety of new plants which are able to defeat diseases and increase yield have been developed. The Department produces 30 to 40 new plant varieties each year for the benefit of Canadian farmers. They cover a wide variety of crops, including grains, fruit and vegetables. Oilseeds have been a particular success story. Canola, rapeseed which was a Canadian research success story-


Mr. Fraser:: It was a bad word, and you know it.


Ian Watson: Canola is now giving Canada about $500 million a year in foreign exchange. This is what it is worth from an export point of view. It is an extremely important product, not only for Canadian farmers but for the rest of the economy because of the secondary effects of that money. There has been a succession of new varieties of wheat over the years.
Something which is of particular interest to my part of the world, about which I might as well be talking, is this new Leger barley variety. It is now available for the first time to Canadian farmers. It outyields all other barleys grown in eastern Canada by wide margins. Leger barley is so promising that it could supplant all other barleys grown in Ontario, Quebec and the Atlantic Provinces over the next few years. It
could reduce the dependency of eastern farmers, particularly those in Quebec and the Maritimes, on grain for animal feed imported from outside their provincial borders. One day Leger barley could help make eastern Canada self-sufficient in grain grown for animal feed, along with new corn varieties which require an ever shorter growing season and which, combined, put a lie to the kind of propagandistic opposition of some farmers' organizations against changes to the Crow. In effect, this kind of argument was being made to stir up eastern farmers against the Crow arrangement. It was to the effect that they would be paying so much more for western grain that they would never be able to compete, etc. What nonsense! Within a few years eastern Canada will be self-sufficient in feed grain production. In my view that argument was totally false, as are many of the arguments used against the Crow in the West.

Finally, Mr. Speaker, I would like to mention, but only briefly, because I would like to let others ... I would like to mention the compensation plan for apple growers in Eastern Canada. In the winter of 1980-1981 and the following spring, severe frost caused very serious damage to orchards in Eastern Canada. In many cases, producers suffered losses of over 50 per cent. After a thorough analysis of the situation, the Federal Government, in consultation with apple growers in the areas concerned, developed a compensation and reestablishment plan. We want to help apple growers in Eastern Canada recover their full production capacity. The compensation provisions are as follows: between now and December 31, 1984, apple growers will receive compensation for trees damaged in 1980-1981. Forty dollars per standard tree will be paid to cover the cost of removal of dead trees and preparing the soil for new plantings. New plantings in the orchards concerned will be covered by the plan as follows: As soon as the orchards destroyed by frost have been replanted, $16 per standard tree will be paid to cover the cost of maintaining the new trees until they start producing.
Mr. Speaker, I feel this is a major contribution towards helping our apple growers, and an indication of the assistance the Government is giving to farmers across the country. I shall not comment any further, since 1 would like to give the Official Opposition a chance to finish the debate.


The Acting Speaker (Mr. Blaker):: Any questions? Comments? Debate. The Hon. Member for Wetaskiwin (Mr. Schellenberger) has the floor.


Stanley Kenneth Schellenberger: Mr. Speaker, in the dying minutes of Friday afternoon it gives me pleasure to rise and conclude the debate. I was very pleased to hear the comments of the Hon. Member for Chateauguay (Mr. Watson). He expressed some very progressive thoughts on the Crow rate. I see the former Minister of Transport is present today. He probably listened with a very open mind to those
October 21, 1983

comments. He should have acted when he was Minister, and we would have had a lot fewer problems and difficulties in the whole Crow debate. They were very progressive thoughts, and I was pleased to hear them being expressed by the Hon. Member for Chateauguay.
The motion of the Hon. Member for Portage-Marquette (Mr. Mayer) is true in what it says. It condemns the Government "for its failure to recognize the economic hardship affecting all farmers in Canada". It has never been a more true statement than it is today. The Hon. Member for Cari-boo-Chilcotin (Mr. Greenaway) gave one very clear example of it in his speech. Another example of the Minister of Agriculture (Mr. Whelan) not recognizing the difficulty in the vegetable and potato industry was put before the House by the Hon. Member for Carleton-Charlotte (Mr. McCain). Also, the Hon. Member for Assiniboia (Mr. Gustafson) put in very clear language the difficulties with the agricultural grain stabilization plan at a time when grain farmers in western Canada have been severely hurt by difficult economic times. Almost $1 billion of their own money is sitting in the federal Treasury, and the Government is not prepared to change the formula so that the money can get to those farmers in need at this time, not a year or two years from now.
These examples were put before the House. The Hon. Member for Portage-Marquette dealt with a group of plans which have been put in place for agriculture over the last 40 years. If we look at the record of the Minister and the number of Bills he has put before the House in the last ten years, we find that most of them were only improvements on legislation passed before he ever became Minister. The Hon. Member for Portage-Marquette suggested that the Minister should use the tools which are in place at this time if he has no new ideas to put before the House to assist farmers in difficult times.
If we look at the net incomes of farmers, as the Hon. Member for Humboldt-Lake Centre (Mr. Althouse) pointed out, we see that in net constant dollars farmers in 1982 were making less than they were making in 1956. That is very
Supply
eye-opening because there are fewer farmers today than there were at that time. If we look at farm expenses, we find that they have increased tremendously. It makes me wonder how they are capable of hanging on, given that statistical picture. Farm production costs are estimated to increase from 1981 to 1986 by 110 per cent. If we look at the prices of commodities, we find that there is no chance for that kind of increase in commodity prices to keep up with expenses.
Basically, the motion is saying that we need some policies to bring agriculture into the eighties and to carry it into the nineties. The Minister should not sit back and brag about the policies on which he has sat during the ten years he has been Minister of Agriculture. They are not sufficient to carry us into the next decade. That is why the motion condemns the Government for its failure to implement sound agricultural policies to carry us into these coming years. This is very evident to farmers throughout the country.
I know time is drawing to an end, but in conclusion I ask the Government to look at the agricultural adjustment fund to deal with western livestock affected in the Crow debate. It is most important if it intends to continue on the path in the Crow debate which it has followed to this point.
[ Translation]


The Acting Speaker (Mr. Blaker):: It seems I am in the
habit of wishing Hon. Members a good weekend-

-and I would choose to do so, as I usually do. I see the Hon. Member for Capilano (Mr. Huntington) present and I am reminded of certain procedural difficulties this afternoon relating to the Hon. Member for Yorkton-Meiville (Mr. Nystrom), whom I would not refuse in the circumstances. That Hon. Member reminded me of the difference, if I may say this as a good wish to Hon. Members for the weekend, between a lawyer and a rooster, that is, that a rooster clucks defiance. I wish Hon. Members a good weekend.
At 5.02 p.m. the House adjourned, without question put, pursuant to Standing Orders.
28237

Monday, October 24, 1983