1984-04-11

STATEMENTS PURSUANT TO S.O. 21


Hon. Jim Fleming (York West):: Mr. Speaker, I rise today to express my concern that something must be done to recognize formally the injustice suffered by Canadians of Japanese origin during World War II. I do it in the context of a Government which, over its current term, has made historic and exceptional moves to guarantee human rights and fight prejudice. We have the inclusion in our new Charter of Rights of fundamental laws basic to a nation like our own, built upon diversity. The Charter forbids discrimination on the basis of race, national, or ethnic origin.
This Government has for the first time added social responsibility and equity to its primary policy objectives in multicul-turalism. It has established a race relations unit. It has added millions of dollars for new programs to fight racism. It has, with opposition Party concurrence, sponsored the first ever Canadian parliamentary inquiry into the problems faced by our visible minorities.
Having served as Minister of Multiculturalism when these and other first time initiatives on racial equity took place, I think it will be most regrettable if the Cabinet does not formally recognize the appalling consequences, fear, and hysteria brought to thousands of good and committed Canadians. It is not only for the sake of a single community, but by focusing on a tragedy and injustice of major proportions we can indicate to all that we can redress the wrongs of earlier times, especially when many of those who suffered are still here today, living with their nightmarish memories. A formal admission; the public dedication of some lasting symbol is surely the least we can provide. Otherwise a living shadow lies across the path of hope this Government has set.


INDUSTRY
Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, on October 19, 1983, the Canadian footwear industry, because of high import penetration, rightly asked for the extension of global quotas for five years so as to permit the industry to obtain 50 per cent of the domestic market. The Canadian footwear industry is still waiting for a reply from the Government. In the meantime, Mr. Speaker, because no decision has yet been taken, many more jobs that could have been created have not materialized.
Footwear imports do not benefit the consumer. Imported shoes may cost less to make than an equivalent domestic product, but when one examines the situation as I have, they sell for the same price on the retail market.
Imports, Mr. Speaker, mean fewer jobs for Canadians. For every 2,500 pair of shoes imported, one Canadian job is lost. Last year 56 million pairs of shoes were imported into Canada, which means that Canada has exported 22,000 jobs.
Does it make sense, Mr. Speaker, to export thousands of permanent footwear industry jobs to countries such as Brazil, Korea, Taiwan, and others, which do not even allow imports of Canadian shoes?
Therefore, I call upon the Government to do everything possible, and to do the right thing regarding the Canadian footwear industry, by agreeing to its request for the extension of global quotas so that thousands of additional badly needed jobs can be created as soon as possible.


REGIONAL ECONOMIC EXPANSION
Mr. Henri Tousignant (Temiscamingue):: Mr. Speaker, we are all aware of the existing conditions in the sawmill industry in Canada. The production capacity is increasing more quickly than the marketing opportunities.
Considering that many companies are now applying for federal grants in order to modernize or build plants, the Government must review those applications very carefully so as not to favour some at the expense of others.
However, care should also be taken not to lapse into an excessive and short-sighted protectionism, systematically sup-

April 11, 1984
pressing within that industry a healthy competition which exists in other areas.
There is in my riding, Mr. Speaker, a remote village with almost no means of livelihood. The people there have decided to take charge, invest a good share of their welfare allowances and join forces with a responsible partner.
The decision of the Department of Regional Economic Development is a long time coming. I hope that the Government will consider that request not on the basis of the interests of cigar-smoking fat cats who haunt the boardrooms of giant multinationals, but on the basis of rationale and equity for people who will not let themselves go to pot and be eaten away by social welfare.


AGRICULTURE
Mr. Arnold Malone (Crowfoot):: Mr. Speaker, Canada's food producers are travelling down the road toward dire straits. Farm bankruptcies have increased by 290 per cent in the past five years. Net farm income as a ratio of gross income has declined continuously from 1965. Farm operating expenses have increased 115 per cent between 1976 and 1982. They are projected to increase another 110 per cent by 1986, while farm commodity prices decline.
It is against that background that the federal Government refuses to pay farmers nearly $1 billion of their own money in the Western Grain Stabilization Fund. It is in light of these devastating economic facts that Governments have caused farm fuels to be taxed 75 per cent more than production costs. It is against these hard economic realities that the federal Government has now increased the long-term interest rates of the Farm Credit Corporation to a devastating 15 per cent. Farmers everywhere know the impact of these facts.
Today I appeal to urban Canada to rise up in anger against the federal Government. Your food security is threatened, and you are dangerously close to losing your world price advantage on low-cost foods. All Canadians must hear the message. The business of food production is seriously threatened.


FISHERIES
Mr. Andre Maltais (Manicouagan):: Mr. Speaker, I should like to call the attention of the House to a situation concerning the fisheries on Quebec's Middle and Lower North Shore. Last
year, the Minister of Fisheries and Oceans announced that the federal government would invest $30 million in that area, and now the whole operation has stopped because the Quebec Minister of Agriculture, Fisheries and Food is preventing fishermen's committees from acquiring a site near the wharves where they could build processing plants or install an ice-house.
Mr. Speaker, I feel that it is important for the Quebec Minister to trust the fishermen from Middle and Lower North Shore, more specifically that part of the mainland between Kegaska and Blanc-Sablon facing Anticosti Island as far as Newfoundland in view of the forthcoming fishing season. Mr. Speaker, the Quebec Minister of Fisheries can certainly wait, but the fishing season will not, and the Canadian Saltfish Corporation would like to make sure that fishing facilities are available before entering into contract agreements with the various fishermen's associations of the Middle and Lower North Shore.
I therefore urge the Quebec minister without further delay to meet the requirements of the Middle and Lower North Shore fishermen.


HUMAN RIGHTS
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, Andrei Sakharov is a prominent Soviet physicist and well-known human rights activist who for years has been a respected critic of the violation of human rights in his native country, and has criticized the Soviet Union in respect of its stand on foreign relations and the immigration of some of its people. For this role Mr. Sakharov has been punished severely by the Soviet Government. He is now forced to live under constant surveillance in a remote and isolated area of the Soviet Union. He has been repeatedly refused permission to travel, and permission to receive hospital treatment for heart and kidney diseases.
Mr. Sakharov's wife, Elena Bonner, is currently in a state of badly deteriorating health and requires medical treatment for an eye ailment which is not available to her in the Soviet Union. Up to this point she has also been refused permission to travel outside the Soviet Union to receive treatment for her ailments.
Given Mr. Sakharov's stature as a crusader for the expansion of human rights in the Soviet Union, and the serious condition in which he and his wife find themselves as a direct result of their beliefs, I urge the Canadian Government to make an appeal on behalf of the Sakharovs to the Soviet Government asking that humanity be shown, that Mrs. Bonner be permitted to seek medical attention outside the Soviet Union, and that Mr. Sakharov be permitted hospital treatment. Also I would like to ask other Hon. Members of the
April 11, 1984

House concerned with and supportive of the brave campaign the Sakharovs have waged, to appeal to the Soviet Government to show some compassion in this case.


MULTICULTURALISM
Mr. Bill Yurko (Edmonton East):: Mr. Speaker, because of my ethnic background multiculturalism has been one of my top priorities for the last 15 years as an elected provincial and federal Member. During those 15 years multiculturalism has gained considerable provincial and federal prominence, with inclusion in the new Canadian Constitution. Permit me to state again in this Assembly what I said in my constitutional speech on March 10, 1981. I said:
The extension of duality promotes and enhances our diversity. Oneness would accelerate homogenization and rapidly destroy our diversity, as it has with our neighbour to the South. The melting pot process would prevail with oneness. Multiculturalism lives because duality is alive. It is duality which promotes and enhances our diversity. Bilingualism kindles the desire for, and extension of, multiculturalism. It is the very essence of bilingualism and multiculturalism which provides diversity and gives us an exciting national fabric which makes for a new nationhood, even though some ferment must be endured.
All ethnic Canadians, and particularly those in Manitoba, should weigh seriously their support for duality and multiculturalism and their inter-relationship.


Mr. Speaker:: Order. The Hon. Member's time has expired. Oral questions.



ORAL QUESTION PERIOD


Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Mr. Speaker, I have a question for the Minister of National Revenue. Members of Parliament have now had the opportunity to see the film that is used in training his auditors, the film which counsels his auditors to trap, mislead, catch taxpayers off guard, and how to manipulate taxpayers. Will the Minister order that film scrapped immediately?


Hon. Pierre Bussieres (Minister of National Revenue):: Yesterday, Mr. Speaker, the committee had an opportunity to discuss the nature of that film. It is unfortunate that the Hon. Member did not grasp the meaning of explanations on the true nature of the film. It is used to train a specific group of
Oral Questions
auditors and serves as a basis of discussion. I also indicated to the committee that an internal group within the Department is now making a review of all the training aids we use. I will receive a report from that committee in a few weeks.


FOREWORD TO FILM-&quot;FISHING EXPEDITION&quot; STATEMENT
Henry Perrin Beatty: Mr. Speaker, the Minister says that film is targeted only to a certain group. Is he aware of the introductory film which is shown to auditors, which contains his former Deputy Minister saying this to the auditors:
Though it concerns audit of a large corporation, the basic procedures for obtaining access to a taxpayers' records and documents should be pretty much the same regardless of the size of the business.
How does the Minister justify his statement with what Mr. MacDonald, his former Deputy Minister, has said? If the Minister has seen the film, does he agree with the statement in the film that auditors should treat every audit as if it were a fishing expedition? Does he agree that taxpayers should be manipulated and the Department should attempt to trap taxpayers in the way that is demonstrated in that film?


Pierre Bussières: Mr. Speaker, this is not the first time that the House is given an opportunity to see that the Hon. Member himself is a professional manipulator. Since he seems to enjoy manipulating public opinion, he sees everything just as he wants things to be manipulated. This film does not show auditors how to manipulate people, it is designed to train auditors. It has been used to train only those auditors who deal with yearly business operations of at least $500 million.
The Hon. Member himself is a manipulator and he distorts reality in the same way as he would like others to do.


Henry Perrin Beatty: Mr. Speaker, I will stand my reputation up against the Minister's any day of the week.


Some Hon. Members:: Hear, hear!


Henry Perrin Beatty: If Canadians have the truth on this issue, it has come from this side of the House, not like the half truths and evasions that have come from the other side.


Some Hon. Members:: Hear, hear!


DEPARMENT'S POWERS
Henry Perrin Beatty: One
thing that the Minister will know that the film does do accurately is to portray the fact that the breadth of power of the Department is so broad that taxpayers are not given the rights that accused criminals are given. In view of that fact, is the Minister prepared to exercise his ministerial responsibility to seek amendments to his Act to constrain the powers of his

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Oral Questions
Department so that they are consistent with basic civil liberties, and to ensure that ordinary taxpayers in Canada at least have the same rights that would be given to people charged with serious offences?
[ Translation]


Pierre Bussières: Mr. Speaker, those are the exact words and principles that I repeated to my Deputy Minister when he assumed his responsibilities last week. Yesterday, the Hon. Member was able to see for himself to what extent the Department of National Revenue respects those principles which we kept reasserting throughout the proceedings all day yesterday before the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Speaker, no wonder the Hon. Member does not understand anything! See him! Sly-looking, always turning around to seek the advice of his colleagues!
When it comes to reputation, I make my own! I do not feel the need to build it up through half-truths and misleading allegations.


FILM'S MESSAGE
Hon. Ray Hnatyshyn (Saskatoon West):: Mr. Speaker, my question is also directed to the Minister of National Revenue and deals with the film in which the message is, unlike that in the United States and the United Kingdom, is that the taxpayer is not to be trusted, the taxpayer is guilty until proven innocent, and that heavy-handed inquisitorial methods are to be used on the average taxpayer. Since this message is just the contrary to the direction given by the Minister to his Deputy Minister in a recent letter, will the Minister not now agree to withdraw this odious film from the training program?


Some Hon. Members:: Hear, hear!


Pierre Bussières: Mr. Speaker, I would withdraw the film if its message were along the line of thought just expressed by the Hon. Member, but that is not the message.


REQUEST THAT MINISTER REVIEW TRAINING TECHNIQUES
Ramon John Hnatyshyn: Mr. Speaker, I would simply like to point out to the Minister that, if he has seen the film, obviously he does not understand the implications of this very disturbing auditor training technique. For example, a taxpayer who questions the auditor's demands in the film is referred to as a nut. In light of the fact that the film contains the message: "Audits are not based on trust" of the taxpayer, I would like to know if the Minister will review all of the training techniques within his Department to ensure that
these repulsive messages are not included in any other technique quite part from this film.
[ Translation]


Pierre Bussières: In a
previous answer, Mr. Speaker, I indicated to the Hon. Member that all training aids within the Department are under review. I should like to point out to him as well that his quotation-taken out of context-must be linked to the dynamism of the film. Secondly, the Hon. Member must keep in mind the fact that the film is used during discussions among auditors who are expected to share their enlightening experiences so as to improve their technique and their approach to make top-notch audits. The Hon. Member forgets to say that, at the beginning of the film-and his colleague noted that earlier-my former Deputy Minister points out that tact and diplomacy are the best approach to any kind of audit. That, Mr. Speaker, is the basic message of the film!


EXTERNAL AFFAIRS
Mr. Jim Fulton (Skeena):: Mr. Speaker, my question is directed to the Prime Minister who has been nominated for the Nobel Peace Prize for his work on issues leading to world peace.


Some Hon. Members:: Hear, hear!


James Ross Fulton: He is well known for his international remarks on the Soviet invasion of Afghanistan, and on the topic of nuclear armaments and disarmament. I would ask the Prime Minister if he would not agree that the approval given in February by the President of the United States to the CIA to mine ports in Nicaragua is an intolerable act of international terrorism, and is an act of war which in reality is no different from the Soviet invasion of Afghanistan. Would the Prime Minister, in responding to that question, not agree that he would expect the world community to respond in a similar way in support of Canada if terrorists mined the port of Montreal or Vancouver?


Hon. Gerald Regan (Minister for International Trade):: Mr. Speaker, in relation to the question of the Hon. Member, Canada has taken the position that it is a definite breach of international law for mines to be placed outside ports of countries which are at peace and where hostilities are not occurring. We believe that the placing of mines in the situation in Nicaragua does constitute an illegal international act. It is not clear who is responsible for the placing of those mines.


An Hon. Member:: Baloney.


Gerald Augustine Regan: Canada has expressed its concern about this matter. It is clearly our position that it is an internationally illegal action.
Our position in general in Central America is well known. We abhor the use of violence and the intervention of outside power. At the present time the Secretary of State for External Affairs is in the Central American region. He has spoken on this subject as recently as this morning. Canada's position will continue to be that of disapproving of acts of violence and those who encourage violence in the area.


PRIME MINISTER'S POSITION
James Ross Fulton: Mr. Speaker, my supplementary question is for the Prime Minister. I know he can hear, and I know he is listening. Yesterday Great Britain publicly condemned the mining of Nicaragua's ports. France has publicly offered minesweepers to go in and clean up the American mines put in the ports. Last night, in one of their strongest condemnations of this century, the United States Senate voted 84 to 12, opposing any further mining or any acts related to mining. Even Senator Barry Goldwater thinks the U.S. President is off the deep end.
These acts of terrorism conducted by the Reagan administration deserve the full condemnation of the Prime Minister and this House. Rather than sitting there silently and tacitly approving of these acts, would the Prime Minister at least tell the House what he thinks of this kind of international terrorism against a sister country in the Americas?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I do not know why the Hon. Member suggests that I tacitly approve these acts. The Acting Secretary of State has answered on behalf of the Government. He obviously answered the questions the way I would have answered them. I do not know why the Hon. Member assumes I have the intention of condoning the mining in any way. The Minister has quite clearly condemned the mining. He has said that we have no evidence. The Hon. Member seems to have some that the President gave orders to the CIA in February. It would be interesting to find the source of this fact. We are trying to ascertain who is responsible for this act of terrorism which has been and will be condemned by us.
As the Minister said, the Secretary of State will be returning from the area at the end of this week. If we can ascertain that the acts are coming specifically from the U.S. administration, we will condemn them, as we have condemned the use of arms in the area by the United States and by Cuba. We have been very forceful in condemning the use of arms in that area by both sides. I think that is the difference between us and the NDP who want to condemn the Americans but not those who are supplying Soviet arms.


Mr. Speaker:: Final Supplementary. The Hon. Member for Skeena.
Oral Questions


MINISTER'S DESCRIPTION OF MINE LAYING
James Ross Fulton: Mr. Speaker, if the Prime Minister would take some time to follow these issues he would know that the U.S. Senate was informed last night that the President gave authorization to the CIA in writing to go ahead and mine those ports in Nicaragua. I am sure the Prime Minister is aware that yesterday, while in Nicaragua, his own hand-chosen Minister of External Affairs described the mining of the ports by the CIA as a "tension element". Perhaps the Prime Minister might decide to make the Minister of External Affairs the minister of sports. That sounds to me more like the description of a twisted jock strap than of the kinds of problems that there are going on in Central America right now. I would like to hear-


Mr. Speaker:: Will the Member ask his question? It is his second supplementary.


James Ross Fulton: I would like to hear the Prime Minister's view about the issue of Georges Bank which is before the International World Court. The Government of Nicaragua took the invasion matters before the International World Court-


Mr. Speaker:: The Hon. Member has not asked a supplementary question. The Chair will recognize the Hon. Member for York North.


Some Hon. Members:: Hear, hear!


NATIONAL REVENUE
Mr. John Gamble (York North):: Mr. Speaker, my question is for the Minister of National Revenue.


James Ross Fulton: Mr. Speaker, I would like a response from the Prime Minister on that.


John Albert Gamble: I, too, had an opportunity to witness the Revenue Canada training film which I felt was suitable as a training program for combat troops prior to a military engagement-


James Ross Fulton: Just because the Prime Minister is a coward, are you going to let him sit there?


John Albert Gamble: -in this case the enemy being the Canadian taxpayer.
One of the issues in the film which I had already drawn to the attention of the Minister on March 22 last-and in this case it is proudly proclaimed-is the absence of any right against self-incrimination specifically referred to in Section 231 of the Act, which is dealt with extensively in that film. Let me now ask the Minister, as I asked him on March 22-at which time he will recall he gave me an absolutely non
2938

April 11, 1984
Oral Questions
sequitur response-in light of the revelations which are made in that film is the Minister prepared to recommend to his colleagues in Cabinet that Section 231 be amended to delete any provisions which would oblige the taxpayers of Canada to incriminate themselves under oath in the way in which the Section now provides?


Pierre Bussières: Mr. Speaker, I disagree totally with the Hon. Member's perception and indeed with his comprehension of the film. I invite him to go back to the discussion we had before the Standing Committee yesterday and to make an honest effort to understand firstly, the nature of the film, and secondly, the use that is to be made of it.
With respect to the powers contained in the Income Tax Act, especially in Section 231, the Hon. Member must remember that they arise from the very nature of our taxation system, which is based on self-assessment by the taxpayers themselves. This system is exceedingly demanding on the taxpayer since he is essentially responsible for making a comprehensive report of his income, assessing the taxes owed by him, and finally paying them. I think that if the Hon. Member subscribes to the basics of the system, he must also recognize that certain powers must be provided for in the Act to guarantee the soundness of the system.


John Albert Gamble: Mr. Speaker, if the Minister does not like my interpretation of that film, why does he not show it on national television and let the people of Canada decide for themselves?


PROVISION OF OFFICE SPACE AND PHOTOCOPYING SERVICES TO TAX ASSESSORS
John Albert Gamble: The Minister knows full well, Mr. Speaker, that the rules against self-incrimination are those which exist in other nations which have self-assessing principles. I want to ask him about one other very misleading provision of that film, and it relates-


Mr. Speaker:: Will the Hon. Member ask his question, please?


John Albert Gamble: I am asking the question, Mr. Speaker. There is a provision in that film relating to an obligation of the taxpayer to provide office space for assessors, and copying machines which they can use for the purpose of making copies of materials. Can the Minister tell this House, and all Canadians, where does it say in the Income Tax Act that taxpayers are obliged to provide office space for assessors and where it says they are obliged to provide free photocopying services?


An Hon. Member:: And filing cabinets?


Pierre Bussières: Mr. Speaker, the Hon. Member is following the Conservative Party philosophy very closely which consists in completely distorting and misinterpreting the facts. The film is used to train a very specific group of auditors who deal with cases relating to an amoung of at least $500 million. That is not the average taxpayer, Mr. Speaker.


TRANSFER OF MINISTERIAL AUTHORITY TO DEPUTY MINISTER
Hon. John A. Fraser (Vancouver South):: Mr. Speaker, my question is directed to the Minister of National Revenue. Yesterday the Minister, while conceding that he was not interfered with by any legal constraints within the Act in administering his Department, did concede that he had signed certain documents transferring some of his ministerial authority to his Deputy Minister. Would the Minister tell us what authority he transferred?


Pierre Bussières: Mr. Speaker, I have not reconsidered this whole issue since yesterday. There are certain provisions relating to the transfer of authority to deputy ministers which are applied in the normal way. I have kept certain powers and delegated others.


Mr. Speaker:: The Hon. Leader of the Opposition.


Mr. Mulroney:: Mr. Speaker, this is a most astonishing thing. No wonder the Department is in chaos. The Minister has just admitted that he is not sure that he signed a piece of paper giving away his responsibility. That is why it is in such chaos.
In light of this, and on a different matter, may I go to the Prime Minister? Grain freight rates have increased-


Some Hon. Members:: Order.


Mr. Ouellet:: Order.


Some Hon. Members:: Speaker.


Martin Brian Mulroney: I am allowed to go.


Ramon John Hnatyshyn: They don't want to hear it.


Mr. Speaker:: The Chair is trying to recognize supplementary questions, and the Chair was under the understanding that the Hon. Leader was asking a question supplementary to that of the Hon. Member for Vancouver South. The Chair has observed a certain order in those matters and is trying hard to be fair. It is normally the turn of the New Democratic Party. The Chair will then come back to the Hon. Leader of the Opposition for his turn.
The Hon. Member for Kootenay East-Revelstoke.


Mr. Parker:: Mr. Speaker my question is directed to the-
April 11, 1984


Mr. Speaker:: Order, the Hon. Member for Vancouver South on a supplementary.


Some Hon. Members:: Oh, oh!


Some Hon. Members:: Hear, hear!


REQUEST THAT MINISTER TABLE DOCUMENTS TRANSFERRING AUTHORITY
John Allen Fraser: Mr. Speaker, my supplementary question is directed to the Minister of National Revenue, who does not seem to know what he signed. Yesterday in high dudgeon at the tactics of this Party, he said that only a few days before he had written to the Leader of the Opposition saying that our objectives are the same with respect to reform of the problems. But he said this: "Criticism-"


Mr. Speaker:: Order. Will the Hon. Member ask his supplementary?


John Allen Fraser: I certainly shall, Mr. Speaker. The Minister said that "Criticism must be balanced, well considered, well documented and knowledgeable." In view of the fact that the Minister says that criticism should be knowledgeable, will the Minister table the documents transferring authority which he admits he signed? And will he table those documents immediately so we have some idea at least of what the Minister did?


Pierre Bussières: As
a Member of the Privy Council and as a former Member of a Cabinet, the Hon. Member should be aware of the conditions under which transfers of ministerial authority occur within a department. Mr. Speaker, I certainly would not want him to impute motives as his colleague did. I have requested information on the nature of these documents and the policy concerning them, and as soon as it is available, I shall be in a position to answer the Hon. Member's question.

Oral Questions
We are not asking for anything new. We are asking the Minister to assist in getting on with the development and getting these people back to work. Will the Minister take immediate steps to assist these people and get them back to work?


Hon. Ed Lumley (Minister of Regional Industrial Expansion):: Mr. Speaker, I have already received representations, for example, from the Hon. Member for Cape Breton-East Richmond as well as from the Leader of the Opposition and the Premier of Nova Scotia, and several other Members, who want us to fast-track a decision with respect to the opening of a new mine. My officials have been working since Friday with the Devco officials to bring this information to my attention. It is hoped that we can make a decision with respect to the new mine as soon as possible.


LACK OF EMPLOYMENT
Sidney James Parker: Mr. Speaker, it is very important. Markets are at stake. There is 24 per cent unemployment in this area. An additional 1,400 people are out of work and there are other areas where they could go to work. Will the Minister tell us now when he will be able to get these people back to work?


Edward C. Lumley: Mr. Speaker, I believe I answered that in my first response. We have been working on this thing for the last couple of months. It will cost a minimum of a quarter of a billion dollars to open up a new mine. Prior to the fire we have been working for the last two or three weeks extensively with respect to new capital projects for Devco. Hopefully we can make a decision as soon as we get all the necessary information as soon as possible.


Mr. Speaker:: The Hon. Leader of the Opposition.



AGRICULTURE


Sidney James Parker: Mr. Speaker, my question is directed to the Minister responsible for regional and industrial expansion. It arises from the tragic fire at Devco's No. 26 colliery in Cape Breton. As the Minister knows, one man is dead and 1,400 people are out of work because of the fire. The Leader of the New Democratic Party in Nova Scotia sent a telegram to the Minister yesterday calling on the Government to speed up development of the Lingan-Phelen coal mine, a move which would provide jobs and spare these people severe economic hardship.



FEDERAL SALES TAX ON FARM FUEL

Martin Brian Mulroney: Thank you for your courtesy, Mr. Speaker. My question is for the Prime Minister. Grain freight rates have already increased 18 per cent since the Crow legislation came into effect less than five months ago. They are projected to be up more than 400 per cent by the end of the decade. As the Prime Minister knows, western agricultural costs are projected to increase by another 31 per cent within the next two and a half years.
Given the enormous burden on the farmer and fisherman of the high cost of fuel, will the Prime Minister advise if, prior to his departure, the Government will give consideration to removing the 9 per cent federal sales tax on diesel fuel and gasoline used by farmers and fishermen? It would be of vital

April 11, 1984
Oral Questions
importance as a job creation component, and would be most appreciated by those charged with the responsibility of producing food in Canada.


Pierre Elliott Trudeau: Mr. Speaker, naturally the suggestion made by the Leader of the Opposition which he asked me to give consideration to, will receive that consideration from me. I cannot give an answer, of course, without looking into the cost of such relief. I am sure the Hon. Leader of the Opposition would not have asked this question if he did not have the exact figures, and perhaps he could tell me by how much the deficit would be increased if we were to give this tax relief?


Martin Brian Mulroney: I would be delighted to; he is badly in need of it. I want to tell the Prime Minister how dismayed I am that any time there is a request on behalf of farmers or fishermen there is a price tag-


Some Hon. Members:: Order.


Martin Brian Mulroney: -or condition attached to it by this Government. Western agriculture is where the biggest productivity gains have taken place in 15 years and it should be rewarded, not penalized.


Some Hon. Members:: Hear, hear!



COST OF REMOVING TAX

Martin Brian Mulroney: Mr. Speaker, the cost is in the neighbourhood of $250 million a year. However, as the Government of Saskatchewan proved by removing that tax provincially, it need not add to the deficit because it is a tremendous impetus for growth. That is what we want. The Saskatchewan experience is there for the Government to examine and I urge the Prime Minister-I take encouragement from his attitude-that, prior to his departure, he will at least once do something good for western agriculture.


Mr. Lapointe (Beauce):: What about Quebec, Mulroney?


Pierre Elliott Trudeau: Mr. Speaker, I am thankful to the Leader of the Opposition for educating me, as he says.


Martin Brian Mulroney: Any time.


Pierre Elliott Trudeau: He asked me a question of a statistical nature. He would know, if he is educated himself, that under the rules I cannot be expected to know the cost of every tax cut that he would propose to benefit all and sundry. I have told him that I will take notice of this question. I am at the present time trying to find out by how much the Leader of the Opposition would increase the deficit, not only to help the western grain farmers but also the fishermen, the Department of National Defence where he wants to increase spending, and also in the area of medicare where he wants to give more money to the provinces.
I will gladly add this quarter of a billion dollars a year to the deficit that the Hon. Leader of the Opposition is already increasing, but then I might come back and ask him how he can argue from the other side of his mouth that the Government should be cutting the deficit.


Some Hon. Members:: Hear, hear!


Martin Brian Mulroney: No matter how hard any profligate bunch of people tried, they could never exceed the record of profligacy of this Government in terms of deficits.


Some Hon. Members:: Hear, hear!


Some Hon. Members:: Oh, oh!


Martin Brian Mulroney: I hear the yelling. I tell you, that is confirmation of a pretty simple fact: hell hath no fury like a person spurned, or a Grit about whom someone has told the truth. However, I take encouragement from the Prime Minister's observation.



REQUEST THAT PRIME MINISTER EXAMINE ISSUE

Martin Brian Mulroney: Mr. Speaker, may I in fairness construe this-


Mr. Speaker:: Will the Hon. Leader of the Opposition ask a question, please?


Martin Brian Mulroney: Mr. Speaker, may I take it as a commitment by the Prime Minister to examine this vital question on behalf of farmers and fishermen, and advise the House at the earliest possible moment that it is, hopefully, his intention to proceed in this vital area?


Pierre Elliott Trudeau: Mr. Speaker, I did undertake to examine the question. He does realize that cutting taxes is a budgetary matter and it would have been more in order if he had raised this in the budget debate which terminated not so long ago.


Some Hon. Members:: We did.


Ramon John Hnatyshyn: You probably did not hear it.


Pierre Elliott Trudeau: I did hear, Mr. Speaker. I heard them over there accusing the Minister of Finance of having too high a deficit. But ever since I have heard proposals for increased spending from the Opposition. I would examine the question, but I must say I would listen with more sympathy if the Hon. Member had not been so injurious in phrasing his question.
He has asked what we did for the West. If he looks at the grain sales over the period which I have been in office, he will see that they have reached ever-increasing highs.


Mr. Epp:: You said: "Why should I sell your wheat?"


Pierre Elliott Trudeau: Mr. Speaker, from the words he used, the Leader of the Opposition seems to take the attitude that any bunch of fools could govern better than we can.
April 11, 1984


Some Hon. Members:: Hear, hear!


Pierre Elliott Trudeau: They are laughing, Mr. Speaker. It is on that basis that they seek to be elected; they are, Mr. Speaker.


Mr. Foster:: Right on.


Some Hon. Members:: Hear, hear!



EMPLOYMENT


Mr. David Berger (Laurier):: Mr. Speaker, my question is directed to the Hon. Minister of Employment and Immigration.

Seeing that the Leader of the Opposition is so interested in truth, deficits, and profligacy, he might be interested in listening to this question.
[ Translation]
The Minister of Employment and Immigration is aware that following a study which lasted many months, the Progressive Conservative Party released a professional training policy which did not "address" several major issues. This policy was described today by a Montreal editor as inconsistent, confusing, and without any indication as to who would foot the bill for this policy without increasing the deficit, let alone implement it.

My question to the Minister is this: In a recent report a national advisory panel made certain recommendations about educational leave, about which the Tories did not say a word.


Mr. Speaker:: I invite the Hon. Member to ask his question.


David Berger: Mr. Speaker, when will the Government be acting on these recommendations?


Hon. John Roberts (Minister of Employment and Immigration):: Mr. Speaker, I cannot help but comment that with respect to the proposals of the Conservative Party which my colleague referred to, I have to say there are some good proposals in their document, as well as some startling proposals. The good ones are the ones we already have in operation; the startling ones are the ones which are regressive.
In response to the Hon. Member's question about the Skill Development Leave task force, the report has been made to me as well as the National Advisory Panel report. I have already discussed the issues raised by that report with my provincial counterparts in our meeting in Saint John, New Brunswick. They agreed with me about the urgency of our continued discussion of those proposals, and we intend to have a conference between the federal Government and my provincial counterparts as soon as possible. We hope to arrange that in June,
Oral Questions
but it may not now take place until July. However, the conference has already been scheduled because we believe joint action is required by the Governments involved to respond to the recommendation made by that very valuable task force.



THE ADMINISTRATION


Hon. Allan Lawrence (Durham-Northumberland):: Mr. Speaker, my question is for the Prime Minister. Yesterday, presumably, the Prime Minister discussed with some of his Ministers certain questions of propriety relating to government-paid transportation and government-paid individuals being used for partisan political purposes. Could he indicate to the House what restrictions, if any, he has sugested to leadership candidates respecting the use in their campaigns of public servants, ministerial staff, consultants, and others who are on the public payroll?


Pierre Elliott Trudeau: Mr. Speaker, I did meet with some of the leadership candidates yesterday, and I plan to meet with the others in the next couple of days. We did essentially review the rules which apply in that area and I was satisfied to see that they were well understood by all the candiates with whom I talked.
They are well known rules. They have been stated in the House before. In essence they indicate that any flight that is strictly or essentially for partisan political purposes should not be taken at public expense. There are cases where Ministers will have to use government aircraft when they are essentially discharging governmental duties ad Ministers.


Allan Frederick Lawrence: Of course the Prime Minister has neglected to mention the second part of the question relating to ministerial staff, consultants, public officials and others on the governmental payroll.



MINISTER OF JUSTICE'S CAMPAIGN MANAGER

Allan Frederick Lawrence: Mr. Speaker, press reports indicate that the campaign manager for the Minister of Justice's leadership campaign is one Jim McDonald who can be reached, now, in the Minister's own governmental ministerial office, and who is on a daily personal financial retainer being paid out of public funds. Has the Prime Minister made sure that that gentleman, among many more whom we could mention, has been given the choice of either doing one job or the other, but not both?


Pierre Elliott Trudeau: Mr. Speaker, the rules concerning use of aircraft are a repetition of the rules which already exist. It is the same in the case of the ministerial

April 11, 1984
Oral Questions
exempt staff or, indeed, any staff. It is clear that any departmental staff should not be used in any political activity of any nature.
As to exempt staff, they are political by their nature. It is normal that they will discharge political functions for that Minister, as a Minister, and his constituency. It would be normal that they continue to do that. It would be like the exempt staff of the Leader of the Opposition which discharges essentially political activities. But of course there should be no active involvement of such staff in the leadership campaign in an overwhelming way, or any other important way, without that staff either resigning or asking for a leave of absence.



CANADIAN PACIFIC RAILWAY


David Orlikow: Mr. Speaker, my question is directed to the Minister of Transport. He will remember that during the long debate in connection with amending the Crowsnest Pass agreements he argued repeatedly that passage of the bill would lead to the employment of \ hundreds and thousands of more workers by the railways and associated companies. In the last couple of weeks CPR has reassigned work in Montreal, Toronto, and Winnipeg, so that at least 57 workers in the diesel shop, wheel shop, and powerhouse have been given their lay-off notices in the last couple of days, and at least 16 workers in the car shop have been given their lay-off notices.
Would the Minister explain to Members of the House and to the laid-off railway workers why the CPR is laying off workers, when the railway and the Minister promised so many times that we would have a greatly expanded workforce rather than less people working?


Hon. Lloyd Axworthy (Minister of Transport):: Mr. Speaker, I think it is important to point out to the Hon. Member that what we talked about in terms of a major economic expansion is indeed taking place. The railways have committed, in 1984 alone, over $1.4 billion of new purchases and expenditures. This spring we will be initiating perhaps the largest single public works project in North America when the tenders are finally awarded for the Beaver Tunnel.
In Manitoba alone there is the application of a new $14 million diesel shop, the development of a new telecommunications system, and there is double tracking taking place on some 750 kilometres of track. In other words, I could spend all afternoon talking about the number of initiatives and projects that have been launched as a result of the act that the railways are now trying to improve substantially their capacity for moving the natural resources of western Canada. What we stated in the House is in fact coming true.


David Orlikow: I would have thought that the Minister, who has a reputation of being progressive, would agree with me and other reasonable people that a large profitable corporation like
the CPR could keep people working with very small effort because they will be expanding their facilities greatly in the next few months.



CONTRACTING PRACTICES-EFFECT ON RAILWAY EMPLOYEES

David Orlikow: Both the CPR and
CNR have, in recent years, been contracting out more work because they say it is more efficient. It means that union members, railway workers who negotiated pay rates which are fair and decent, are being replaced by non union workers at a substantially lower wage. Would the Minister take up with the railways this whole question of contracting out and what it means to the large number of people who have worked for the railways for years and who are now going to be laid off?


Lloyd Axworthy: Mr. Speaker, it so happens that I will be meeting with the representatives of CP Rail this afternoon to talk about a number of matters related to the operation of the grain expansion program. I will ask the questions that the Hon. Member has presented.
I want to point out that it is important to recognize that one of the objectives under the new Bill is to improve the efficiency and productivity of our transportation system to allow us to ship our grain to markets at a lower cost so that we can stay internationally competitive. We will be in a very tough competitive world of which transportation is a major component.
In terms of the adjustments that companies must make between workers, we have spoken to them about making sure that those adjustments are made in a tolerant and proper way. I do not think that the Hon. Member would want us in any way to impede the ability of the railways to provide a more productive system, because that would then rebound upon the ability of grain farmers in western Canada to sell their products.



PRESENCE IN GALLERY OF HIS EXCELLENCY GENERAL PREM TINSULANONDA, PRIME MINISTER OF THE KINGDOM OF THAILAND

Mr. Speaker:: May I call the attention of the House to the presence in our gallery of a delegation from the Kingdom of Thailand, led by the Prime Minister, His Excellency, General Prem Tinsulanonda.


Some Hon. Members:: Hear, hear!



CANADA PENSION PLAN


Mrs. Ursula Appolloni (York South-Weston):: Mr. Speaker, in the absence of the Minister of Finance my question is
April 11, 1984

directed to the Prime Minister. Since the Leader of the Opposition has today apparently proposed an increase in the federal deficit on behalf of the farmers of Canada, would the Prime Minister accept the same proposal as a basis upon which to permit farmers' wives and wives of all other Canadian households to contribute to the Canada Pension Plan and thus help solve the problem of needy elderly women?


Pierre Elliott Trudeau: Mr. Speaker, I think that question illustrates the unthinking character of the Leader of the Opposition's question.


Ramon John Hnatyshyn: Come on, Pierre!


Pierre Elliott Trudeau: He thinks of the farmers but forgets half the Canadian population.


Some Hon. Members:: Oh, oh!


Ramon John Hnatyshyn: You're hurting on that issue and you know it. Just answer the question.


Mr. Mazankowski:: We got him.


Pierre Elliott Trudeau: I am not surprised to see such anger on the other side. We know how vulnerable they are in that particular area, and they know how proactive the Government has been. I will discuss the Hon. Member's suggestion with the Minister of National Health and Welfare and attempt to supply her with an answer.



AUTOMOTIVE INDUSTRY


Mr. Bill Kempling (Burlington):: Mr. Speaker, my question is directed to the Minister of Regional and Industrial Expansion. On several occasions the Minister has made reference to negotiations he is having with Japanese manufacturers and investors regarding their participation in the manufacture of automobiles or component parts in Canada. Will the Minister advise the House on the progress he has made with these discussions, or are his statements mere rhetoric meant to cloud the discussions on quotas with Japanese automobile manufacturers and government officials?


Edward C. Lumley: Mr. Speaker, I am sure the Hon. Member, who is a businessman, would not want me to divulge in the House the details of the negotiations that are taking place with individual companies. I would hope that we would have some positive announcements in a very short period of time with respect to these negotiations on investment, not only from foreign automotive companies but also North American automobile companies. 1 think it is important to note that at the present time there are on my desk about $2 billion of potential investments in the automotive industry in the Province of
Point of Order-Mr. McDermid
Ontario. I would think that the Hon. Member would consider that positive.



PROPOSAL TO ESTABLISH AUTOMOTIVE COUNCIL

William James Kempling: Mr. Speaker, I have a supplementary question for the Minister of Regional Industrial Expansion. Can the Minister advise if we now have in place an accurate statistical gathering system so that we can know the true figures on production and imports under the auto pact? When will we see the first annual report on the Canadian automobile industry? When is the Minister planning to establish the Automotive Council that he has suggested he would establish?


Edward C. Lumley: Mr. Speaker, I am planning to give a speech tomorrow to the auto parts industry, and the Automotive Council will be announced at that time.



POINTS OF ORDER


Mr. John McDermid (Brampton-Georgetown):: Mr. Speaker, I rise on two points of order regarding unparliamentary references made in this House of Commons yesterday. I understand it is a courtesy in the House of Commons if the individual who made the unparliamentary remarks is not in the House that we postpone the point of order until he is present. Is that correct, Mr. Speaker?


Mr. Speaker:: Would the Hon. Member state his point of order. I think I know what he is talking about, but I think he should state his point of order.


Some Hon. Members:: Oh, oh!


John Horton McDermid: I am sure you do, Mr. Speaker.
The first point of order concerns remarks made by the Minister of Indian Affairs and Northern Development. A famous Nova Scotia writer once said:
For when a man is wrong, and won't admit it, he gets angry.
Yesterday, here in this Chamber, during the exchange I had with the Prime Minister, the Minister of Indian Affairs and Northern Development displayed, for all to hear, his eloquent command of the English language when he requested that I keep quiet, and then made a very uncomplimentary observation. Now a learned man-


Mr. Speaker:: Order, please. With regard to the Hon. Member's observation, the Speaker has had a chance to check the "blues". Obviously an unparliamentary term was used. There is no question that at the appropriate time the Chair is prepared to ask the Hon. Minister to withdraw such an unparliamentary reference.

April 11, 1984
Point of Order-Mr. McDermid


John Horton McDermid: Mr. Speaker, I would like a chance to put on the record my disgust at what went on yesterday in this House of Commons.


Mr. Speaker:: The Hon. Member is engaging at this point in argument. On the point of order with regard to the unparliamentary language, the Chair has no problem coming to a decision. The Hon. Member says he has two points of order. Will he please state his second?



MR. MCDERMID-ALLEGED UNPARLIAMENTARY LANGUAGE

John Horton McDermid: Mr. Speaker, my second point of order also refers to unparliamentary references made to me by the Minister of Public Works during my supplementary question to the Prime Minister. The Minister of Public Works referred to me as "demagogue". This remark was ruled unparliamentary on June 16, 1963. Obviously, Mr. Speaker, my questions yesterday struck a nerve and the Government was reduced to name-calling. I would request that you ask for and receive the unequivocal withdrawal of this remark which is found on page 2,900 of Hansard for April 10, 1984, made by the Minister of Public Works.


Mr. Speaker:: The Chair will take note of it. The Chair has one observation to make with regard to the matter. The use of unparliamentary language is a function of the context and the Chair is delighted to have the Hon. Member cite with approval the practices in 1963 in this House because I am sure in many respects they were an improvement over what we are following at the present time.


Ramon John Hnatyshyn: That is a reflection on the House.


Hon. Romeo LeBlanc (Minister of Public Works):: Mr. Speaker, I have sat here for a number of years and I thought the term I used was rather a mild one compared to what I have seen published. But I am told it is unparliamentary.


An Hon. Member:: You would have full understanding of the meaning of that word.


Roméo LeBlanc: To make sure that I am really saying what I mean I shall use a language of which I have a better command, as the Hon. Member seems to suggest. Having read the exchange in question, I am surprised that the Hon. Member raised this issue, for I found it as embarrassing to read today as it was to hear yesterday.
If the expression "demagogue" is deemed unparliamentary, I apologize to the House; having said that, however, I suggest that this exchange is far from being representative of what exchanges in the House ought to be.


Mr. Speaker:: The Hon. Minister has indicated his apologies to the House for the use of the language. I hope that settles the incident.


An Hon. Member:: He is his usual gracious self.



PETITION


Mr. Speaker:: I have the honour to inform the House that the petition presented by the Hon. Member for Peterborough (Mr. Domm) on Tuesday, April 10, 1984, meets the requirements of the Standing Orders as to form.



ROUTINE PROCEEDINGS


Mr. Doug Lewis (Simcoe North):: Mr. Speaker, I have the honour to present the second report of the Standing Committee on Public Accounts to which, pursuant to Standing Order 69(13), the Committee requests a comprehensive response.


PETITIONS
Mr. Charles Mayer (Portage-Marquette):: Mr. Speaker, the petition of the undersigned in the constituency of Portage-Marquette who now avail themselves of their ancient and undoubted right thus to present a grievance common to your petitioners in the certain assurance that your Hon. House will therefore provide a remedy.
The petition points out that the federal authorities mishandled in a negligent way the situation involving the cattle of one of my constituents in Rossburn, Manitoba, and that he should be compensated immediately for the inconvenience caused as well as the loss of income that he suffered as a result of inaction by the federal Government. And that pertaining to the tuberculosis in Mr. Randy Checkowski's cattle, we feel that the federal Government should pressure the provincial government to stop the practice of using unfit bear bait, namely, dead livestock of the domestic type.
Wherefore we, the undersigned, our petitioners, humbly pray and call upon Parliament to recommend to the Government of Canada that steps be taken to control the threat of disease spreading to neighbouring herds and that proper compensation under the Animal Disease and Protection Act be granted to Mr. Checkowski.


Mr. Otto Jelinek (Hatton):: Mr. Speaker, following the tragic death of six teenagers at the railway crossing in Milton,
April 11, 1984

Ontario, where it appears that insufficient safety precautions may have caused this sad loss of life, I would like to take this opportunity to present to this House a petition signed by 2,765 residents of Halton supporting the request made to the Canadian Transport Commission by the Town of Milton and the Region of Halton recommending the installation of safety measures at railway crossings in the Halton County, specifically the Derry Road crossing in Milton where not only this tragic accident took place on March 30, 1984, but previous accidents took the lives of Canadians at that same crossing without any action being taken by the CTC.


Mr. Bill Domm (Peterborough):: Mr. Speaker, I am pleased to present the attached petition from the Church of the Open Bible in Peterborough, Ontario, which states that we the undersigned oppose any legislation or action permitting no-fault divorce, no-court divorce, or any other means of making divorce quick and easy.


Hon. Bud Cullen (Sarnia-Lambton):: Mr. Speaker, I have the honour to present a petition of the undersigned residents of the City of Sarnia who humbly showeth that the recent murder of two young Sarnia girls is a sad example of the violence that is prevalent and that this petition was brought about by a longstanding desire to curb violence in Canadian society. In the opinion of the undersigned capital punishment is a deterrent and wherefore the undersigned, your petitioners, humbly pray and call upon Parliament to enact legislation reinstating capital punishment. As in duty bound your petitioners will ever pray.



BANK ACT


Hon. Roy MacLaren (Minister of State (Finance)) moved: for leave to introduce Bill C-30 to amend the Bank Act.


[Stage Direction]
Motion agreed to, Bill read the first time and ordered to be printed.

Mr. Evans:: Mr. Speaker, I rise at this time to make a clarification of the order of business for tomorrow. Yesterday the House Leader, the President of the Privy Council, referred to Bill C-24 as being the order of government business. At this time I would like to clarify for the House that tomorrow we will be resuming debate on Bill C-12 and that Bill C-14 will be
Order Paper Questions
the back-up Bill. Apart from that, all other business for coming days will be as stated by the Hon. President of the Privy Council.


Ramon John Hnatyshyn: Mr. Speaker, I appreciate the Parliamentary Secretary giving me prior notice of the intention to change the order of business with respect to business for tomorrow. In elucidating what will be the business, would the Parliamentary Secretary tell me what will be the second back-up Bill in the event that deliberations on Bill C-12 and on Bill C-14 are finished tomorrow? Is there any other item of business as a back-up Bill?


John Leslie Evans: Mr. Speaker, my information is that in addition to Bill C-12 we will have Bill C-14 as the back up. I will find out what will be the second back-up Bill and will inform the Hon. Member.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
John Leslie Evans: Mr. Speaker, the following questions will be answered today: Nos. 423, 473, 573, 575 and 628.


Mr. St. Germain: 1.	How many housing projects did Canada Mortgage and Housing Corporation originally assist under the Assistance Rental Program?
2.	How many of these housing projects were terminated under this program because there was a violation of the original agreement signed with the representative contractors?
3.	How many of these projects did CMHC, or other Crown corporations, take over as a result of the termination of the assistance program originally contracted for?


Roméo LeBlanc: I am
informed by Canada Mortgage and Housing Corporation as follows:
1.	Two thousand, two hundred and eighty-seven.
2.	CMHC acquired 220 projects as a result of borrower default, which constitutes a breach of the agreement. In addition, 26 accounts have been terminated because the projects were sold without CMHC approval. This is also a breach of the agreement.
3.	None known. The assistance was normally terminated as a result of borrower default and such termination is therefore an effect of default rather than a cause.


Mr. Howie: In the fiscal year ending March 31, 1983 what was the total revenue collected from capital gains tax?

April 11, 1984
Order Paper Questions


Roy MacLaren: There is no capital gains tax per se. Rather, under the personal income tax system one-half of total capital gains or losses are included in the calculation of income for taxation at normal personal tax rates. Effective October 1, 1983, the tax on the inflationary portion of capital gains earned on moneys invested in an Indexed Security Investment Plan (ISIP) was eliminated. Under the corporate tax system one-half of the excess of capital gains over losses accrued since 1971 and realized on the
disposition of certain properties is included in income and taxed at normal tax rates. Although accurate data on both total personal and total corporate income tax revenues are available, the portion directly attributable to net capital gains can only be estimated. On the basis of the latest available published information for the 1981 taxation year, total federal and provincial revenues from the taxation of capital gains are estimated to be $1.6 billion.



DEVCO BOARD OF DIRECTORS


Mr. Howie: Question No. 628-Mr. Mazankowski:
What are the (a) names (b) positions of the persons who occupy positions on the Executive and Board of Directors of the Cape Breton Development Corporation and, in each case, what amount was he/she paid in respect of that position in the fiscal year ended March 31, 1983?


Edward C. Lumley: The reply for the Cape Breton Development Corporation (Devco) is as follows:
(a)	Name
Executive Board:
(b) Position
Mr. John L. Dodge Mr. John J. Gillman Mr. A. Roy MacLean Mr. Bruce R. McDade
Mr. D. S. Rankin Mr. Douglas Shield
Mr. Graham Skerrett Mr. Carl Turner
Board of Directors:
Vice-President, Industrial Development Vice-President, Project Development Vice-President, Corporate Planning Senior Vice-President and Corporate Secretary
President and Chief Executive Officer Senior Vice-President, Coal Mining and Distribution
Vice-President-Treasurer Vice-President, Human Resources
Dr. John F. Burke	Director
Mr. D. S. Rankin	Acting Chairman of Board Meetings
Compensation. See the report on Governor in Council appointees tabled in the House of Commons on November 17, 1983. Compensation for all other positions not listed in the report is regarded as proprietary information to the Cape Breton Development Corporation.



CFDC-BOARD OF DIRECTORS

Mr. Howie: What are the (a) names (b) positions of the persons who occupy positions on the Executive and Board of Directors of the Canadian Film Development Corporation and, in each case, what amount was he/she paid in respect of that position in the fiscal year ended March 31, 1983?


Hon. Francis Fox (Minister of Communications):: I am
informed by the Canadian Film Development Corporation as follows:
1.	Is there a Small Business Consultative Committee and, if so, what (a) are its terms of reference (b) is the (i) name (ii) background or expertise (iii) term of appointment of each member (c) remuneration, such as salary or travel expenses (i) do the members receive (ii) did the members receive to date (d) other funding, if any, is provided by the government?
2.	During the fiscal year 1982-83, did the committee meet and, if so (a) how often (b) how often is it required to meet (c) what matters did it consider (d) what reports and/or recommendations were published?


Hon. David Smith (Minister of State (Small Businesses and Tourism)):: 1. Yes. (a) Its terms of reference state that the committee will advise and assist the Minister of State (Small Businesses and Tourism) in his role as advocate by providing a forum for obtaining widespread and direct participation of entrepreneurs and professionals serving small businesses on existing and proposed government policies and programs for entrepreneurs. It also provides advice on the effect of developments in the marketplace and the need for government action
to	assist small businesses.	
(b)	(i) Name	(ii) Occupation
	Mr. Claude Arcand	Director, Harricana Metal Inc.
	Mr. Peter Benedict	President, Safety Offshore Sources
	Mr. Jim Bennett	Executive Director, Legislative Affairs, Canadian Independent Business
	Mr. Gordon Chambers	President and Chief Executive Officer, Chambers Olson Ltd.
	Mr. William Crossin	President, Merle Norman Cosmetics
	Mr. George Fells	President, SB Capital Corporation
	Mr. Ronald Fenwick	Vice-President, CIBC Mortgage Corporation President, Electrovert
	Mr. Nicholas Fodor	
	Mr. Geoffrey Hale	Vice-President, Policy and Government Relations, Canadian Organization of Small Business
	Mr. Ronnie Hemming	Vice-President, Outcrop Ltd.
	Mr. Art Howard	General Manager, Day and Ross Transport
	Mr. Richard Irlam	Flett Motors Ltd.
	Prof. Raymond Kao	Ryerson Polytechnical Institute
	Mr. Peter King	Retaurateur
	Prof. Claude LeBon	Dean, Faculty of Science of Administration, Laval University
Name
Mr. Andre Lamy
Mr. Claude Bruneau Mr. David Leighton Mr. Claude Morin Mr. James Domville Mrs. Muriel Sherrin Mr. David Silcox
Position
Executive Director
Member of the Board Member of the Board Member of the Board Member of the Board Member of the Board Chairman of the Board
Salary	$225 daily	
Scale	Fees	Expenses
GIC-7		
($63,070 to $74,200)		
	$1,575 (7 days)	$ 690.52
	$1,575 (7 days)	$ 518.25
	$2,475 (11 days)	$ 1,650.40
	-	$ 549.61
	$ 675 (3 days)	$ 930.20
	83 days at $325	$17,118.29
	plus a $200	
	adjustment: $27,175	
April 11, 1984

Mr. Cameron Millikin Mr. Richard Pearce
Mr. Peter Petropoulos Mrs. Rita Rolland
Mr. Clem Roles Mr. Jim Scopick
Mr. Ken Wilson
Consultant
President, Canadian Air Compressor Ltd.
Barrister and Solicitor Manager, Tourism Industry Association of Manitoba President, Smith-Roles Ltd.
Senior Vice-President, Federal Business Development Bank Vice-President, Royal Bank of Canada
(iii) Approximately one year.
(c)	(i) Remuneration: nil, salary: nil, travel expenses: members are reimbursed for travel expenses, (ii) See below.
(d)	No other direct funding is provided; however, certain secretariat costs, such as office supplies, stationery, etc., are covered by the Department of Regional Industrial Expansion.
2. Yes. (a) Five times, sub-committees seven times, (b) Six times per year or at the call of the Chairman, (c) The Small Business Financing Review; the role of the Federal Business Development Bank; Small Business and Economic Development; Tax Policy; Trade; Small Businesses Loans Act. (d) None.
Travel Expenses
September, 1982 to December 31, 1983


Mr. Claude  Arcand@: $3,084
	0
	0


Mr. Gordon  Chambers@: 0
Mr William Crossin:	1,685
	2,537
Mr Ronald Fenwick:	0
Mr. Nicholas Fodor	1,393


Mr. Geoffrey  Hale@: 3,007
	0
	4.727
	0
	0
	7,452
	3,591
	0
	0


Mr. Peter  Petropoulos@: 0
	0
	7.468
	0
	0
[English]


John Leslie Evans: Mr. Speaker, I ask that the remaining questions be allowed to stand.


Mr. Stevens:: Mr. Speaker, does the Parliamentary Secretary have any credible reason for questions Nos. 101, 102, 104 and 105, dealing with the trippings of the Prime Minister around the world, the expenses entailed in those trips and to what extent Canadian taxpayers are expected to pick up those costs, not being answered?


John Leslie Evans: Mr. Speaker, I will look into the matter for the Hon. Member and see whether I can find what would be the reason for any delay in ansering those questions. However, I can assure the Hon. Member that the Government is doing everything possible to answer these questions as expeditiously as possible.
Order Paper Questions


Ramon John Hnatyshyn: Before June 16.


Mr. McKenzie:: Mr. Speaker, I wonder whether the Parliamentary Secretary would also check out the following questions. First, question No. 2 was originally placed on the Order Paper on October 24, 1983. It reads:
Does the Minister of Transport have a private parking stall at the Winnipeg International Airport?
I think Canadian taxpayers are entitled to know the cost of equipping this stall and how many employees are required to look after it for the Minister of Transport.
I also originally placed a question on the Order Paper on October 17, 1983 asking for the total amount budgeted for the Saanich renewal program of the Public Works Federal Identity Program. Almost a year ago I placed question No. 11 on the Order Paper, on May 24, 1983, asking the following:
What is the salary of the (a) President and Chief Executive Officer ... of the Canada Post Corporation?
I also included a series of other executives in Canada Post and have asked for their salary ranges. I feel this is an exceptionally long period of time for this type of question to be on the Order Paper.
If you can believe this, Mr. Speaker, I also have a question which I originally placed on the Order Paper in November 1981. There is no excuse for this question being on the Order Paper for this length of time. It reads:
Could the Minister of Supply and Services and the Minister of Industry-


Mr. Speaker:: The Hon. Member does not need to repeat every question, if he could name the question and give a general indication of it.


A. Daniel McKenzie: Mr. Speaker, it is question No. 13. 1 want to know why three separate Ministers took three separate Jet-Stars to Winnipeg to fly in Liberal campaign workers to work in the last provincial election in Manitoba.


John Leslie Evans: I will look into all those questions, but I think the last question to which the Hon. Member referred was also asked in the House of Commons at that time and explanations were given. If the Hon. Member will do his research, he will find that salary ranges for Crown corporation heads are a matter of public record.


A. Daniel McKenzie: Say that in the answer, then.


Sinclair McKnight Stevens: Mr. Speaker, in reply to my point of order, the Parliamentary Secretary used the words that the Government was answering my four questions as expeditiously as possible. This may well be a matter which will have to take up time in Parliament. Questions asked about trips approximately three years ago, questions which have been on the Order Paper for three years-


Mr. Speaker:: With all due respect to the Hon. Member, a question relating to a specific question on the Order Paper certainly is in order at this point. However, the Hon. Member should not engage in debate in general terms regarding the

April 11, 1984
Motions for Papers
policy applicable to answering questions. If the Hon. Member has a further specific question regarding a question on the Order Paper, the Chair would entertain his question. If not, I invite him to resume whatever action he considers appropriate at another stage in the proceedings.


Sinclair McKnight Stevens: Mr. Speaker, I rise on a point of order. I simply wanted to continue on my point of order which I originally raised with the Parliamentary Secretary to indicate-


Mr. Speaker:: The Hon. Member has made his point with regard to the delay in the answering of questions. I believe that having made his point, that is his point. Does he have another point?


Sinclair McKnight Stevens: Yes.


Mr. Speaker:: I hope the Hon. Member really has another point. I will recognize him.


Sinclair McKnight Stevens: Thank you, Mr. Speaker. Having heard the reply of the Parliamentary Secretary that the Government was acting expeditiously, I am pointing out that the Prime Minister may well be gone from this Chamber in a couple of months and that we need the answers-


Mr. Speaker:: The Hon. Member is not making a point of order in any respect, and he knows that. The Parliamentary Secretary has answered the questions. Does he have any further point of order? The Parliamentary Secretary to President of the Privy Council.


John Leslie Evans: Mr. Speaker, I just want to assure you and the House that the Government is doing everything possible to answer these questions. However, if the Hon. Member would refer to Beauchesne's he will find that the Government is under no obligation to answer those questions, so it is not a point of order.


Mr. Speaker:: We are not into debate at this point. Hon. Members have made inquiries about specific questions and the Parliamentary Secretary has undertaken to try to provide answers.
The questions enumerated by the Parliamentary Secretary have been answered. Shall the remaining questions be allowed to stand?


Some Hon. Members:: Agreed.



MOTIONS FOR PAPERS

John Leslie Evans: Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.


Mr. Speaker:: Shall all notices of motions for the production of papers be allowed to stand?


Some Hon. Members:: Agreed.



GOVERNMENT ORDERS


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ALLOTTED DAY S O. 62-INTEREST RATES FOR FARM CREDIT Mr. Vic Althouse (Humboldt-Lake Centre) moved:
That this House condemns the Government for abandoning farmers who are having problems with credit costs and falling commodity prices as demonstrated
(1)	by the higher interest rates and shortened terms imposed on Farm Credit Corporation loans;
(2)	by the Government's lack of support for the agribond concept thereby denying farmers access to funds at lower costs; and
(3)	by the failure of the Government to renew the 4 per cent interest rebate program offered by the Farm Credit Corporation to farmers in Financial distress.
He said: Mr. Speaker, what we have before us today is a problem that is approaching crisis conditions for farmers across Canada. Yesterday the Minister of Agriculture, (Mr. Whelan), who is in charge of the Farm Credit Corporation, announced new credit terms and time periods for loans under the Farm Credit Corporation. It was a real shock to farmers who were expecting some relief from interest rates and an expansion of Farm Credit Corporation to meet the needs of many farmers who now have to refinance and re-group in order to meet this year's financing requirements to seed one more crop.
Yesterday the Minister proposed to increase the interest rate in existence before Christmas of 13 per cent to a long-term rate of 15 per cent. He gave us five sets of terms, five-year, ten-year and 20-year. The five-year term is at 14 per cent. Five-year term loans of some banks can be obtained for 13.25 per cent. At some credit unions the same loans can be obtained at 12.75 per cent. The larger loans just will not be acceptable for the needs of farmers at this moment.
Moving on quickly to the second point in the overall discussion of the motion before us before I begin to explain how I believe we got to where we are, and to propose some longer-term and shorter-term solutions, if we can believe what the Minister was saying in the House, in committee and on the hustings, the Government was to bring in some some sort of agri-bond program in the Budget brought down in February. There was no agri-bond announcement then, simply an announcement to submit the idea for further study. The Budget has been down for seven or eight years and so far no committee has been struck to do that job.
The third item for which we are condemning the Government today relates to the matter of farmers who two years ago
April 11, 1984
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were determined to have been in financial distress. The Minister, through FCC, initiated a special program to help farmers facing financial disaster. He proposed to rebate them 4 per cent of the cost of their loans, bringing down most of their loans to 12.75 per cent, close to 13 per cent. That program has run out. Several thousand farmers in that category now face bankruptcy and there has been no action on the part of the Government to deal with that problem.
1 want to take a few moments to go back over the record of farm financing. As a sideline, we will be looking at the record of this Government and this Minister because that is one of the recurring themes throughout the period I will be covering. I want to give some idea of the numbers involved in farm credit and farm financing. I have chosen the years 1971 and 1981 so that we can get a handle on the changes that have occurred in agriculture over that time period. I regret that I cannot use numbers more current than 1981, but they are the latest numbers that we are able to get that are not just estimates.
Let us go back to 1971 and look at the amount of credit outstanding at that time. I have here a market commentary on the cost of farm inputs and finance put out by Agriculture Canada in 1983. The most up to date figures there show that in 1971 the total credit extended was $4.6 billion. By 1981, the amount of farm credit outstanding to farmers was $18.4 billion, an increase of just over four times within that decade. When you look at farm incomes within that period, there are some very revealing figures. Most people familiar with agriculture know that 1971 was a disastrous year for most commodities produced in Canada. Farmers had suffered a series of poor markets and net incomes were extremely low at that time. They got back to normal in 1974. For the first time in some years, net farm income in Canada was at $3.5 billion.
According to the estimates produced by Agriculture Canada at the Outlook Conference, ten years later, 1984 would show a net farm income in the neighbourhood of $3.5 billion. A decade has passed and net farm incomes stuck at that level. In between there were a couple of blips when it went to almost $4 billion and a few times when it dropped below $3.5 billion, down to $3.2 billion. Incomes have been extremely stable for Canadian farmers, but what would the dollar buy in that same period? There was a deterioration in the buying power of the Canadian agricultural dollar in that period of time. The 1974 dollar would buy almost two and one-half times as much as the 1984 dollar.
In real terms, farm incomes have been more than cut in half. No small wonder farmers have turned to the only source of funds they can find, debt. That is why the debt load increased four times from 1971 to 1981. If we had more up to date statistics, I am sure they would show that the debt load would have increased almost that much again between 1981 and the current year.
The effects on the farming community are fairly clearcut. I simply refer to some of the problems that the extra debt and the increase in interest rates have brought about. I refer to a recent brief sent to most Members of this House by the Canadian Federation of Agriculture. They say that in 1971,
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17.9 per cent of Farm Credit Corporation repayments due were in arrears. It will be recalled that 1971 ranks as one of the poorest years for Canadian farmers, almost ranking with the 1931-32 period.
What do we find in 1983? The repayments due to Farm Credit Corporation were 17.5 per cent, almost the same. There is a striking parallel between the poorest year in living memory and our recent experience.
There were a couple of interesting differences between 1971 and 1981 that the Canadian Federation of Agriculture was quick to point out. These should be on the record to show that to some extent the current crop of farmers are worse off than those who suffered through the 1971 period. The percentage of interest costs on returns to capital in self-employed and unpaid family labour in 1971 was 18 per cent. In 1982 that percentage had doubled to 36 per cent. Another way of expressing it is that a 3 per cent on total farmers' equity in 1971 represented 52 per cent of his net income. In other words, for half of his income he was living on his investment equity.
In 1982, the return on the farmer's investment equity represented 91 per cent of his net income. This means that that poor man earned very little after paying for labour, management and so on. He is simply living off of the equity he has in his farm.
Another way to put it is that of total farm capital, the interest bill in 1971 would have eaten up 82 per cent of the returns to capital in self-employed and unpaid family labour. What really hurts is that by 1982, that figure rose to 140 per cent of the farmer's income. That amount went to paid and unpaid family labour. It is small wonder that farmers are going broke. Operations are costing them 50 cents for every dollar of net income they once earned.
A heavy burden has been placed on Canadian farmers. This burden shows up when looking at the bankruptcy statistics. Raw data is available, but if we call the 1979 bankruptcy index 100-and there were many bankruptcies in 1979-in 1984, the same index would be 620. In a mere five years, farm bankruptcies have increased by 6.2 times.
We can dig those numbers out of the statistics but statistics are slow to respond to current affairs. Statistics are always two or three years behind the times as you know, Mr. Speaker. By looking at the statistics we can see the problems that have developed. But we do not need those statistics to illustrate what we see when we go to the farming communities. We only need look around the farming communities to see that farmers are in trouble, particularly the younger farmers who have started up in the last 10 or 12 years and those farmers who have expanded in an attempt to include the next generation.
This effect can be seen even in western Canada where the agricultural recession did not hit as hard. When land was for sale in the past, it was taken off the listings within a week or two. However, most of the small newspapers in my riding have advertised lands for sale throughout the winter. Apparently, those lands will still be for sale in the spring. People are not
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interested in buying land from farmers who want to unload their farms. People who are facing debts greater than they think they can manage are attempting to sell out but cannot find buyers.
What has the Minister's response been to that need? The interest rates have risen. When I and other members of my caucus tour the farming communities, we meet far more farmers who are complaining of credit problems than we did in previous years. We hear from fertilizer and fuel dealers who, last year, extended credit to farmers and have not yet collected the money owed them. Those dealers must make a decision, as must the farmers, about going on for another year.
We sometimes hear of fairly large farm operators who are no longer dealing for their fuel and fertilizer needs with their local community dealers because their credit is no longer good. They are shopping further afield with the hope that the size of their business needs will attract a supplier from communities 30, 40 or 50 miles away. In that way they can receive credit for one more year, with the hope that the prices of grain or livestock will rise so they will be able to pay their debts.
A crisis is occurring and government Members have not addressed that particular set of problems. Increasing the interest rate does not meet the needs of farmers. The whole attitude to the Farm Credit Corporation seems to have changed over the last decade. The Farm Credit Corporation was once the means of providing long-term credit to agriculture so that land could change hands from one generation to another. At the urging of the Minister responsible, the FCC has deliberately pulled itself back from that long-term market to make room for the banks. That was stated policy during the debate on the Bank Act. What the Government had in mind was even urged by the Official Opposition.
The only role that seems to be left open to the FCC is that of a financer of last resort. When all else fails, when private banking institutions will not provide any more funds to a farmer, he goes to the Farm Credit Corporation to try to consolidate his debts and get a longer term on his loan with a fixed rate of interest. The Minister, by increasing the interest rates of the FCC, has effectively taken away that option. The only option left for a great many of these farmers now is nothing short of going bankrupt or, in many cases, attempting unsuccessfully to sell their assets and try to find some other form of livelihood.
We know that the basic problem is one of farm income. We know that there has been no general recognition of longer-term programs that would keep farmers from getting into this mess. We know that there has been very little attention paid to improving the market so that farmers can recover a larger proportion of their costs from the marketplace. We know that there are no stabilization programs to respond quickly when incomes drop. We know that these things must be addressed in the House. However, we know that the solutions to those problems are medium and long-term solutions and, as John Maynard Keynes was fond of saying in the 1930s, in the long run, we are all dead. That, Mr. Speaker, will happen to several thousand operators in the country because of the inability of
this Government and the previous Government to create a long-term and a medium-term policy.
We are left with only one source of hope for these people, and that is an immediate short-term policy to provide adequate amounts of farm credit, guaranteed prices and interest rates that are low enough to allow a farmer to get out of the mess in which he has found himself. However, this will not happen as long as the current attitude persists.
We in the NDP have presented an outline for an agri-bond program. We proposed that that would be a way of maintaining an increasing amount of money within the agricultural sector. We think that agriculture is still a growth sector which can provide a great deal of spin-off growth to the rest of the economy. We are concerned about the fact that the official agriculture spokesman for the Conservative Party, the Hon. Member for Portage-Marquette (Mr. Mayer), has been quite vocal in the press and has said that he does not think the agri-bond system will work. He has been quoted as saying that it may do more harm than good, particularly given the impact of such a program on land values. I regret that that is the attitude which has been taken. I hope that is not the reason the committee on agri-bonds has been delayed. I hope, Mr. Speaker, that this House-
The Acting Speaker (Mr. Guilbault):: Order, please. The Chair regrets to interrupt the hon. gentleman, but his speaking time is up. At this time in our proceeding a 10-minute period is allowed for questions or comments on the subject of the Hon. Member's remarks. The Hon. Member for Portage-Marquette (Mr. Mayer).


Charles James Mayer: Mr. Speaker, I would like to make a comment on the last statement made by the Member who just concluded speaking. He has been in politics, and has been around for a while. I am sure he does not believe everything he reads in the press. I think I am familiar with the quotes he is using. I am quoted entirely out of context and the meaning is totally wrong. This Party is on record as supporting agri-bonds and its concept for over 10 years. In fact, one of the first people to raise the issue in the House was the Hon. Member for Wetaskiwin (Mr. Schellenberger). I read some of the comments he made in the House before I had a chance to meet him and sit with him in the House.
Our position as a Party on agri-bonds is exactly as it is on the record in the House and elsewhere. We have also said that there are some concerns with the agri-bonds; when we do provide some long-term stable interest rates to farmers, we do not want that advantage to simply be recapitalized back into the value of the land. We recognize that there are some concerns.
The Government has the power to put agri-bonds into operation as a result of a Bill that was passed in the House well over a year ago. If agri-bonds were allowed, they would be of great assistance to Canadian agriculture at a time when it is sorely in need of some assistance and direction. Sadly, there
April 11, 1984

has not been a lot of direction from the Government, Mr. Speaker. I hope that allays the concerns of the Member for Humboldt-Lake Centre (Mr. Althouse). This Party, and specifically myself, are totally in support of the concept of agri-bonds.


Mr. Althouse:: Mr. Speaker, I am pleased that the Member has attempted to clarify his position. I simply point out that the report occurred on February 2, 1984 in The Manitoba Co-Operator. On March 13 there was the same kind of quotation in Town and Country magazine. In neither of those magazines did I see a letter pointing out the error of the report. I am glad the Member has attempted to clarify the position. I hope that those newspapers will report it accordingly.


Charles James Mayer: Mr. Speaker, I hope that by my comments I have done more than attempt to clarify it. I think the article he referred to was written by Mr. Richard Gibbons. I have never met Mr. Gibbons or given him an interview on this matter. To my knowledge we have never had any discussion on agri-bonds or on any other similar concept. I do not know where he gets his information.


The Acting Speaker (Mr. Guilbault):: For debate, the Hon. Minister of Agriculture (Mr. Whelan).


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I would like to make one comment about The Manitoba Co-Operator. I am written about at length at times in that magazine. I do not think I have ever been contacted by the reporter either. Some of the things he says are very inaccurate. Sometimes we do write letters to The Manitoba Co-Operator correcting them. I find it difficult to be criticised by a paper that maintains it is a supporter of farmers when some of the criticism is so unfair.
I would like to make it very clear that we all realize that we cannot finance people out of economic problems. There seems to be an idea that you can finance them out of their difficulty by lending them more money. In many instances the reason they are in difficulty is because of the way money was lent to them in the first place by other lending institutions. The Hon. Member for Humboldt-Lake Centre (Mr. Althouse) neglected to point out that if you check the financial statements of some of the farmers who are in arrears you will find they have been in economic trouble for as many as seven or eight years. Some of them have not been able to make payments on their loans for four years. Then these operations are put up for sale.
What can we do with farms in that position? Let us look at what we did last year. The Farm Credit Corporation loaned $750 million to people in Canada. Around 60 per cent of that went to the banks to refinance these people. Before last year I believe 18 per cent was the most that went to other lending institutions. We gave the banks approximately $500 million that they could have lent back to the agricultural community, but they did not.
Let us remember that the farmers have some say about what they get for their products. The poultry farmers produce
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broilers, eggs and turkeys. The dairy farmers produce industrial dairy products and fluid milk. The farmers in some provinces contract their crops for food processing. In the Province of Ontario there have been marketing boards for those commodities for 40 years. The day they sign the contract they know what they are going to receive for about 30 different commodities if they deliver a high quality product. In that agreement you get crop insurance and other things which are taken out of the contract. They do not have to advance any money at that time for those things. We must consider what these people do to help themselves.
I am going to try to be as quick as I can, Mr. Speaker. I am delighted to respond to the Member for Humboldt-Lake Centre. This gives me a chance to review the actions the Government has taken to help farmers and the Canadian agri-food industry in short term as well as in building a solid foundation for the future. I would like to make it clear to the Members that there are a lot of farmers in financial difficulty.
I understand that. The figures show this. However, percentage-wise they are in less difficulty than small and big business in Canada. That means that in total they are probably a little bit better off.
Last year net farm income dropped by 2 percentage points after suffering a 9 per cent drop in 1982. This year we are hoping for an increase in net farm income of 5 per cent or 6 per cent. Even with that improvement we will continue to have about 5 per cent of Canadian farmers in serious financial difficulty and another 5 per cent to 10 per cent in some degree of difficulty. Some of the farmers will not make it. No Minister of Agriculture and no politician can guarantee that every farmer will stay in business. We cannot do that for any business person in Canada.
However, what I and the Government can and have done is to provide farmers with safety nets to cushion the falls in production and market prices and to help cope with the most severe aspects of the cost-price squeeze through emergency financial assistance programs. We have also provided ladders to help farmers improve their incomes through research and development programs, market assistance and so on. In total my Department will spend more than $1.2 billion this year.
I have a breakdown by province of my Department's expenditures. I ask the permission of the House to table these with my comments as I will not go over them at this time. These figures do not include the spending in the national capital area which benefits the agri-food industry across the great country of Canada.
As I said, the spending of my Department will amount to about $1.2 billion this year. Other federal departments also contribute to strengthening Canadian agriculture. Transport Canada spends about $700 million. When you add this all up, the federal Government is spending about $2.1 billion a year on agriculture. In addition, in the last fiscal year the provinces spent about $1.2 billion on agriculture. That is a grand total of about $3.3 billion between the two levels of government. That does not include the lending of money by the Farm Credit

April 11, 1984
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Corporation which amounted to $750 million last year and will rise to as much as $825 million this year.
In short, Mr. Speaker, we are talking about a very substantial contribution to Canadian agriculture. For the Member for Humboldt-Lake Centre to suggest we have abandoned the farmers is absurd. Let us look at some of the special programs we have initiated to help hard-pressed farmers in recent years.
In the June 1982 Budget we provided $200 million for the Farm Credit Corporation to administer a special lending program at rates 4 per cent below the prevailing rate.
I see some people from the CFA sitting in the gallery.
It is interesting how rapidly the requests change from $200 million to $1 billion, this type of thing. The requests are not very consistent in what they ask for, either. Flowever, we did provide what we said we would. We provided $200 million extra.
The April, 1983 Budget provided a further $100 million in funds for that same special program, providing a special lending program of rates four point below the prevailing rate. Previous to this, Mr. Speaker, in 1981, the Budget provided for $45 million for debt refinancing by farmers with an interest rate of 5 percentage points for the first two years of the loan.
A lot of farmers use the small business bond with the special interest rate, which was approximately half of the current rate of interest at that time, providing low interest loans to qualifying farmers. I know a lot of people are aware of what that amounted to and what it did.
The Farm Credit Corporation in April 1982-1983 provided $145 million, I repeat, from its regular funds at a special reduced rate of interest. I am sure Hon. Members know that even though a lot of people received that reduced interest rate, it all depended on what production entity they were in. If they were producing for this open and free market system, which so many people talk about, hogs and beef or potatoes, and refused to get into any other crop and some kind of a marketing system where they have some say in the market, but depended on everyone else to look after them, they were the ones in the most financial difficulty.
The other farmers I mentioned, Mr. Speaker, who had some say in the marketplace, they are not the ones going broke. They are not the ones who are applying for the big loans either, because they can go to the banks and other lending institutions and get loans right away. Even if they only have a low equity in their operation, they know in time they can pay that off, whereas if you go with high equity into one of these other production entities like potatoes, red meat, pork or beef, there are statistics which show it disappears, because the sick marketplace is not giving you a return. The market is not being fair with you at all.
Further to the accusation that we have not done anything, the most recent Budget in February contained several items of benefit to the farming community, including the generous treatment of capital gains for retiring farmers. That is why we
have again done some checking on farms which are advertised for sale, because these farmers will be able to have $250,000 tax free, if they are selling. A lot of them are waiting for that change in the legislation.
Further to the accusation that the Government has abandoned farmers, let us look at some of the regular programs of my Department, and some of our new initiatives. I mentioned that my Department is now spending just over $1.2 billion a year. I will give you a breakdown by major activity. Our research department is spending $237 million in the current fiscal year. You read so much lately about how we are cutting back on research. That is up by $35 million from the previous year. I would say it is significantly up. Our research program represents well over half of the agri-food research done in Canada. The private sector should be doing much more than it is. But some people in the private sector and in the other Parties, especially the Conservative Party, keep saying we should spend more public funds on research. I agree, but 1 hope they are saying the same thing to the food processing industry, the grocery products manufacturers, and so on, who do not even spend . 1 per cent of their gross national product on research.
I should mention that our capital improvement program for the research branch over the coming ten years is close to $500 million. There is a false impression that we have reduced our spending on research. I hope these figures have cleared that up.
Our regional development program, which includes things like record of performance testing, as well as the sub-agreements and development programs we have in provinces and regions, amounts to about $55 million per year.
We have changed the Farm Credit Corporation to make it more realistic. For instance, the Chairman of the Farm Credit Corporation was a grain and beef farmer in Saskatchewan before he came here. Real Lambert from Quebec is a dairy farmer. Claude Palmer from Prince Edward Island is a potato farmer. Irene Perlich from Alberta has a cow-calf operation and an auction mart. She knows agriculture. From Ontario we have a former bank manager of the Imperial Bank of Commerce. Doctor Trant is from the Stabilization Board and Paul Babey is from Alberta. So you can see, Mr. Speaker, that the Farm Credit Corporation represents people from all over Canada. It can be identified as truly an organization which understands Canadian farmers. These people will have a much better understanding of what is going on.
We are spending $215 million this year on regulation and inspection. This service is to help maintain quality and hence the premium attached to Canadian agri-food products.
Let us look at some of the safety nets provided by my Department's Farm Income Services Branch. We have been spending an average of about $350 million a year on stabilization payments for named and designated commodities in recent years. I was pleased to announce, as I am sure all Hon. Members are aware, the agreement we have reached in triparty legislation for a new red meat stabilization plan. This should not only provide an improved level of support for
April 11, 1984

participating farmers but also help to reduce the disparities which exist between provinces. We offered them an even better program in 1977 and they turned it down. Even farm organizations turned it down, saying it would be too rich and would cause all kinds of problems. Some of them have short memories.
With respect to the Western Grain Stabilization Plan, like the red meat program, the Speech from the Throne mentioned that the Western Grain Stabilization Plan would be improved, and I hope we will be able to make an announcement in that regard in the very near future. Coming up with a new formula has not been an easy task because, despite the individual problems that many western farmers are experiencing, their overall grain receipts last year, $6.15 billion, was second only to the record set in 1981 of $6.2 billion. Commodity prices were lower and costs were higher, but the sheer volume of sales, 36.7 million metric tonnes of grain kept the overall net income figure above the trigger level. So there was no payment.
A few other figures help to put the western grain stabilization issue into perspective. Since the program began in 1976, farmers have contributed just under $350 million to it. The federal Government contributed nearly $700 million and it has paid $204 million in interest on the funds. Last year alone the Government paid about $130 million into the fund. The total producer and government payments into the fund amount ot $1.25 billion, and when you subtract the pay-outs of $368 million, you are left with the current fund balance of $885 million. That is where it stood at the end of 1983. We are talking about a lot of money, Mr. Speaker.
With respect to crop insurance, let us not forget that the federal Government is contributing around $150 million a year towards this excellent co-operative program. We pay 50 per cent of the premiums, the producers pay the other 50 per cent, and the provinces administer the program, and if it is any good they try to take 95 per cent of the credit for it. Saskatchewan thought it was so good that it appointed a minister just to be in charge of crop insurance, looking after the producers' money and the money which the federal Government contributes to that plan, amounting to about $56 million a year. For instance, when you add up the interest free advance payments, and all of these other things, it amounts to nearly $900 million for the three prairie provinces.
Taking Saskatchewan alone, with interest free advance payments, both under the Wheat Board and the other program we have, and the money put into the Farm Credit Corporation, the actual expenditure on agriculture in Saskatchewan is nearly $500 million in one year. The Province of Saskatchewan, knowing full well its main industry is agriculture, spends about $86 million on agriculture. Last year our actual expenditure was some $130 million. That is one of the greatest provinces for agriculture production. But, again, the province shows that it does not think agriculture is so important, and I can show you in other provinces, Mr. Speaker, that things are the same.
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We also guarantee farm improvement loans; more than $200 million a year under the program so that farmers can buy equipment. But, $500 million interest free, that is nothing; that is what the Members say. Well, those are programs we put into effect for all crops, not just those under the Canadian Wheat Board.
The Crowsnest Pass freight rates have been talked about, Mr. Speaker. They have an effect on farm income, especially prairie farm income, as everyone knows. Everyone talks about the rise in the cost of shipping grain, but few people mention that under the Western Grain Stabilization Act there have been reductions of about 75 per cent in the cost of shipping canola oil and meal, linseed oil and meal, sunflower seeds and oil, mustard see, triticale, dehydrated alfalfa and special crops. The rate has gone from a high of over $42 a ton to the current low of $7 or $8 per ton to ship that product to ports of export. But you never hear about that; all you hear about is the increase in costs. The Leader of the Opposition (Mr. Mul-roney) spoke today about this tremendous increase in costs. Well, the farmers producing those products will save about $34 a ton if it is passed on to them by the trade.
Another thing that I do not hear the Government getting much credit for is providing credit needed to sell grain on today's world market. You would think the Government was not even involved in that. The Hon. Member for Elgin (Mr. Wise), who was the Minister of Agriculture in a previous Government, knows. He had to sit and listen to how the Government had to guarantee the sales. That amounts to billions of dollars, and some of those sales are pretty risky. But if the Government did not do that those sales would not be made.
The Hon. Member for Humboldt-Lake Centre (Mr. Alt-house) seems to think that we are oblivious to what is going on around us and in other countries. We cannot do that and we know it. They were attacking the Farm Credit Corporation interest rates. Well, they must not forget that no other lending institution is giving the same long-term rates, regardless of what the Members say. We have done a study on this and I challenge the Hon. Member to find the kind of long-term interest rates we provide in any other lending institution.
We know farmers are backing off from buying. We are still working very hard on the agri-bond sector and some of the other things which are so important. But I repeat: You cannot finance all the farmers out of the economic problems they are in.


The Acting Speaker (Mr. Guilbault):: A ten-minute question period is now provided.


Mr. Wise:: Mr. Speaker, I had a very busy schedule this afternoon and a number of important meetings. I cancelled the meetings so I would have a chance to be here to listen to the Minister of Agriculture (Mr. Whelan) respond to the motion before us today. In view of the very serious economic conditions many Canadian farmers are facing, I was certain that he

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would utilize this opportunity to make some policy announcements and provide encouragement, to the effect that some additional dollars had been found to help those farmers who are locked into loans with interest rates in the neighbourhood of 16.75 per cent, and indeed those who qualify for the 4 per cent interest rate program.
The Minister has been telling us and the industry over the last six or eight months that he was about to announce some special program. We have seen some press reports recently that the Minister of Finance (Mr. Lalonde) has provided the Minister with the authority, I believe it was under Bill C-88, to borrow an additional $75 million. I believe there is a special fund in the neighbourhood of $275 million this year as compared to $200 million last year.
Let me simply ask the Minister if any portion of that money that the FCC will borrow from the private sector will be set aside to assist the people who are locked in at the 16.75 per cent interest rate level, and those who have qualified for the 4 per cent rebate? The special farm assistance program is now expiring on many of those loans and they are having to revert to the 16.75 per cent.


Eugene Whelan: Mr. Speaker, I am sure the Hon. Member knows that these loans vary from 15 per cent to 16.75 per cent. We are working on a program, and I wish I was able to announce it today because we want to do even better than the announcement I made the other day concerning 14 per cent for five years as we can borrow money on the long term market at a better interest rate for five years then we can for 10 or 20. We do not know what is going to happen in the private money market, but we are also working on programs which will amortize loans to farmers.
I am sure the Hon. Member is aware that in some instances farmers have been unable to make a payment even with the reduced interest rate. If we gave some of them the money free they would not even make a good living for themselves. Some farmers are suggesting that we take over the farm. That is not much different than giving them the money free. They say, put them under an operational management plan. Then, in three to five years, if they were in a financially sound condition, they would be given an opportunity to buy the farm back from us. I am getting a lot of letters from farmers in Manitoba suggesting this very thing. They cannot make their payments, they are three or four years in arrears, and please do something to let them continue on with their family farms.
I do not know what we are going to come up with, Mr. Speaker. As I said yesterday in the House, the opposition Members concern is great, but it is no greater than mine regarding what we can do to save these people and keep them in production, because they are generally good producers. Some of them have been farming all their lives. Some are new farmers. There is every kind of farmer you can think of, every age bracket, and a lot of them are young people who have maybe over-capitalized or over-spent.
Some of the farmers say to me, when I make a speech about how we might assist them, and I am sure the other Members
hear this, do not help them because they got in that trouble themselves. In some instances this may be true, but we will need all these food producers for the future because the biggest challenge we face is food production.


Donald Frank Mazankowski: Mr. Speaker, for some reason or other I sense the Minister has lost his resolve to go to bat for the farmers who are in serious difficulty. It is a crisis situation. Look at the record since his Government was returned to office. In 1979 there were some 125 farm bankruptcies recorded; in 1983 it was roughly 500. Those are the official statistics and they do not tell the whole story. In the first two months of this year farm bankruptcies were up 110 per cent in western Canada. The Minister seems to lay the blame on the managerial abilities of producers. The fact is that in most cases these producers are in trouble because of things beyond their control-high interest rates, high input costs; fuel prices have doubled under this Government's National Energy Program since 1980. All of these things put together have increased input costs by roughly 35 percent, while commodity prices are roughly at the 1972 and 1973 level.
The Minister can certainly offer more relief than simply the kind of flim-flam he gave us here today. I know that he said during the last election campaign that he did not believe that the producers of food should have an onerous tax regime on fuels used for farm production. Is he still of the same opinion? What will he do about facilitating and moving forward our motion, which has now been referred to the Standing Committee on Finance, Trade and Economic Affairs, to do away with the 9 per cent federal sales tax on fuel used for the production of food?


Eugene Whelan: First, I want to say that the province the Hon. Member comes from, which is a very rich province, I believe has five loan programs for farmers. A lot of them find themselves in real great financial difficulty.


Donald Frank Mazankowski: Do not talk about Alberta. You have a national responsibility. Do not weasel out of it.


Eugene Whelan: It is a giant responsibility and that is why his province has been involved in these lending programs. They have made loans to a lot of people to whom, they now admit, they should not have loaned money at preferred interest rates. Those loan programs are still in effect in Alberta. Some of them are coming to us now asking the Farm Credit Corporation to take over their loans, loans from the Alberta Treasury Bank, for example. That great free enterprise province has a bank which it owns itself. I must say that it did provide some services to the farmers.
When the Member talks about the energy program, it would even be worse than it is if we did everything that the Province of Alberta wanted. It wanted world prices for oil and wanted us to pay even higher prices for the energy.


Donald Frank Mazankowski: You charge world prices.
April 11, 1984


Eugene Whelan: I tried to get away from the fact that it had nothing to do with energy prices. It has a lot to do with energy prices.
I agree with the Hon. Member on one point. There should not be any fuel tax on any food production entity.


Donald Frank Mazankowski: What are you going to do about it?


Eugene Whelan: There should not be any fuel tax on any food production entity in Canada. I still say that, and still fight for that belief. But let us not be so unfair as to say that the total increase in energy cost is our fault, because the provinces that have the energy are the ones that created the main increase in the price for farmers in Canada as far as that goes. They were demanding what the OPEC countries had said was a realistic price, that they should have the same thing.


Mr. Bloomfield:: Mr. Speaker, with regard to the stabilization plan and the red meat industry, I understand that four provinces are on side with that program. Could the Minister tell us when they hope to have the program in place, and how hopeful he is of the other provinces coming on side?


The Acting Speaker (Mr. Guilbault):: The Hon. Minister has approximately one minute in which to answer.


Eugene Whelan: Mr. Speaker, I will be as brief as I can. We proposed a plan in 1977. They said they did not want that plan and told me almost two years ago that if I did not come forward with a plan they would come forward with one. They did not come forward with a plan last July. We worked with them to try to develop a plan. I do not know how many will accept the plan that we now have, but we are going ahead with the legislation. We will be presenting it to the provincial ministers, hopefully for signature, at their meeting in July.
They said that there were four provinces on side, which amounted to some 90 per cent of the red meat production in Canada. Now we find that maybe those four are not in full agreement. However, the producers across the land are in much greater agreement than are the provincial ministers or provincial governments are.


The Acting Speaker (Mr. Guilbault):: Resuming debate.


Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, it is a pleasure to enter into the debate on the motion which was put forward by the Hon. Member for Humboldt-Lake Centre (Mr. Althouse). When I read the motion, I suspected that the Member had found on his desk a copy of the ten-point agricultural program we proposed over a year ago and decided to put a few of our points into his motion. He has finally come on side respect to our agri-bond concept. It is good to see that the New Democratic Party is finally supporting that position.
The Hon. Member says that he is concerned about agriculture. We wish he had had the same concern when we were debating the Crow legislation, that Bill of great importance to western Canada. I will talk about that issue since it has increased the cost to western Farmers this year.
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Before discussing that issue, I want to deal with some of the points raised by the Minister of Agriculture (Mr. Whelan) a few moments ago. The most important fact about farmers, who are in a high risk business, is that they are price takers, not price setters. They require positive indicators that show the markets will be there for them, that prices will be reasonable and their input costs will not be there for them, that prices will be reasonable and their input costs will not go out of line. The indication they have received form the Government during the last year and a half is that it has given up on them. The Minister of Agriculture is incapable of getting the concurrence from the national Cabinet that will allow him to assist the farmers in distress areas across the country.
The Minister is quick to point out that farmers who are involved in supply management are not in as great distress. He is correct. The reason they are not in as much distress is that they are producing for an internal market that is controlled and, therefore, allows them to set the price. However, I remember when the Minister recently chastised the American farmers for limiting control of production on grain. Is he now suggesting to grain farmers today that they limit the production of grain in this country? Is that a solution to the desperate plight that many of those farmers find themselves in? Since the Minister recently said that this was unchristian, I wonder whether he is talking out of both sides of his mouth on this question.
The Minister talks about the Agricultural Stabilization Act. The Government must pay out $350 million under the Agricultural Stabilization Act because farm prices for those farm products are less than the five-year average. That is a horrendous fact and something about which I would not want to brag.
I happen to have the statistics that were provided by the Canadian Federation of Agriculture. It shows that farmers are receiving the same realized net income this year as they were in 1971. I remember 1971 very well, because that was the year we were selling barley in western Canada at three bushels for $1. It was the most depressed time in agricultural history since the 1930s. Farmers are experiencing the same depression today, because the realized net income this year is the same as it was in 1971.
Input costs have gone through the roof. Interest rates, as the motion points out, are a huge cost to farmers, plus the fact that the prices that farmers receive for their livestock, grains and other commodities they produce are not sufficient to meet the increased costs of production. Farmers simply cannot tolerate another period of high interest rates. Presently, the average farm carries a substantially greater proportion of debt than it did 10 or 20 years ago. Today, Canadian farmers are carrying $20 billion worth of debt, so that even an increase of one per cent in interest rates would put them in a distressed position.
When interest rates went up to 22 per cent two years ago, farmers began to live on their equity. At the same time, as land prices dropped and machinery prices went down because no one was buying, their equity decreased. Many farmers are

April 11, 1984
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now incapable of obtaining sufficient capital to put their crops in this year. This brings up another point. There was a time 20 years when most farmers had built up sufficient savings to be able to finance a crop from their bank accounts, in case of disaster. Today, most farmers borrow their money in order to plant their crops. If they lose a crop they are in serious trouble. Sure, we have farm insurance which should assist them, but it is generally not enough to keep them in business to give them the costs that are attached.
Farm Credit has put forward some very interesting statistics. The Minister says, and I think I quote him correctly, that ten per cent of the farmers are in financial difficulty and 5 per cent to 10 per cent are in some degree of difficulty. The statistics of the Farm Credit Corporation have just been put before the Agricultural Committee. They show that there were 86 Farm Credit foreclosures last year.
Then we have the statistics that are more revealing. The Minister says that farmers are doing better than other businesses. Farmers are experiencing less bankruptcies than both small and big businesses. But the difficult part and the reason you cannot relate the two is that many people are in and out of small and large businesses over their lifetimes. Very few businesses are family businesses that have continued for generation after generation.
In the case of agriculture that does not happen. A son generally takes over from a father who has taken over from his father. There is pride in continuing the family farm. When you push out a generation of farmers, you are not just pushing out one individual, you are pushing out a whole family that has built a farm over decades and generations. When we lose 86 people, we lose 86 people generally with a tremendous amount of farm experience.
As far as businesses are concerned, in most cases people are in and out of businesses. I know it is hard to lose a small business. Our family went through that. But it is not the same as if one were to lose the family farm. My grandfather came to this country, cut the trees, and began planting. That is part of my family. And so we hear 86 farmers are out. It does not seem like a lot but that tells a lot. Here is the more interesting statistics. Two hundred and sixty-six farmers who had a Farm Credit loans voluntarily went out of business. They did not wait until the sheriff came and seized their assets. They said with pride that they could not make it anymore. As the Hon. Member for Vegreville (Mr. Mazankowski) said, it was not because of their management, but because of outside forces, such as high costs of fuel, interest rates, fertilizer et cetera, together with low commodity prices. This is what put them out of business. With pride, they said, "We will shut down and get out before we lose everything". They did it voluntarily.
But here is another statistic that concerns me. As of January 1, 1984, 14,265 Farm Credit accounts were in arrears. That means farmers are having difficulty paying their bills this year. The Minister and that Government cannot get their act together to get the Western Grain Stabilization Bill passed.
They cannot get their act together to get the advanced payments legislation passed through this House. We have said we would pass both Bills quickly. They have not been able to move on Farm Credit interest rates. I remember when we went to camp we had a song we called, "announcements, announcements". This activity happened at the beginning of each day. The Minister keeps telling farmers-we get the press releases, they come shuffling through our office-that he is going to announce, as he just said, some great thing for interest rates for farmers. The Minister is going to announce something on stabilization for red meats, that the Government will soon have a Bill on western grain stabilization to assist farmers. While the Minister is saying he is going to do something for farmers, every day another one bites the dust. That announcement will not do the Minister the good of a hill of beans. It will not do him any good at all.
What farmers are looking for is an indicator that this Minister will act quickly, because they are putting crops in the ground this spring. They are having to buy new cattle for their feed lots. They are having to keep their livelihood together and they are not getting the indicators that are essential to deciding whether to continue in production and continue to fight to hang on until something happens with commodity prices. Those are serious statistics.
If you say that Farm Credit lends approximately just under half the money in Canada to farmers, it means you have to double that to get the exact figures. If you look at the number of losses the Farm Credit Corporation has had, probably the statistics show there are less arrears and less bankruptcies than the banks experience. In actuality things are probably worse than that. A serious situation exists.
What happened yesterday? What indicator did we have to the farmers that this Government was concerned about one of their chief costs, namely interest rates? We had a press release that said interest rates were going up 1 per cent; not that interest rates were going to remain stable, not an announcement that would indicate the Government is concerned about farmers.
What about this new red meat proposal the Minister has just waved in front of us? We do not even know what it is. Do we hear that the Government is ready to act on it? No, Mr. Speaker, The indicator we have is that interest rates are going up 1 per cent. What does that say to a farm community?
The Hon. Member for Bruce Grey (Mr. Gurbin) brought forward a motion which was passed in this House. It passed in this House because all Members are concerned about this problem. The Hon. Member for Vegreville brought forward a motion on farm fuels. It was passed in this House during Private Members' Hour. This was a private members motion that said that all Members in this House are concerned about farmers. Members want these motions to go to the finance committee to be dealt with because there might be something here to assist farmers. But what does the Liberal majority in the finance committee do? They said "We can't deal with this. We must have a study. We have to hire a person in the Library
April 11, 1984

of Parliament to do a study. We hope we will have it ready some time in May".


Donald Frank Mazankowski: Shame.


Stanley Kenneth Schellenberger: After most farmers have put their crops in the ground, the Government might find some time to study this proposal that has been put forward. Not that the Government would act on it immediately because there is a serious problem in this country, or that we should sit day and night until we come up with a solution. No, that does not happen, Mr. Speaker. We hear that the Government does not have the time and it needs a further study.
It frustrates me as a Member representing farmers who I see selling their land, putting their land up for sale, or going bankrupt every day. Farmers are asking me what they ought to do. Other Members have put the horrendous statistics on the record about what is happening. Bankruptcies were up 300 per cent in Alberta between January and February this year over last year. There were 480 bankruptcies across Canada in 1983.
I want to talk a little bit about the motion put forward by the Hon. Member for Humbolt-Lake Centre which says that farmers are in difficulty. I want to talk about what his Party suggested we do when the Crow Bill was put forward. Western farmers have serious difficulties because of interest rates, because of the costs of fertilizer sprays, seed, machinery and so forth. What is added to that this year is an increased freight bill because of the Crow legislation. The Hon. Member who put forward this motion today had a lot to say about the Crow. He is the deputy critic for transport in the New Democratic Party and he only managed to attend 68 per cent of the meetings. The Hon. Member for Regina West (Mr. Benjamin), who was the critic, managed to attend 61 of the 66 meetings. What about Members on this side? The Hon. Member for Vegreville who was heading our committee never missed one meeting. He attended all the meetings.


Victor Fredrich (Vic) Althouse: What about Winnipeg?


Donald Frank Mazankowski: Check the record.


Stanley Kenneth Schellenberger: Members from each of the provinces who represented our Party, the main representatives from Manitoba, Saskatchewan, and Alberta all attended 63 out of 66 meetings. That showed their concern for the western farmer. We changed that Bill substantially even though it was put forward in a manner not acceptable to this Party.
The more serious situation was that the Hon. Member put forward a motion which would amend the safety net. He was very concerned about farm costs. His motion was rather lengthy and concerned the shippers' share limitation. It was similar to the original motion moved by the Minister of Transport, with which I will deal in a minute. However, it had one basic difference, that it would put the price ratio limit per calendar year at 3 per cent.
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If that motion had been passed, farmers this year would have been paying more for transportation than they are under the Government's Bill. It exposed producers to a substantial increase in freight rates. Under the NDP plan, their rates could have risen to $6 per tonne before the safety net limit was reached.
The safety net in the Crow legislation is all that farmers have as protection that their freight rates will not rise above what they can afford in transportation costs. If the six-grain limit of the Government which is now in effect remains without change, it could very well prohibit the shipping of barley, oats and rye by 1990 from western Canada to ports because it would cost more than the cost of production. The Hon. Member for Humboldt-Lake Centre never addressed that. He just addressed the levels. If he was as concerned about farmers in Saskatchewan as I am about the ones in Alberta, he would know that the six-grain level has to be addressed because it is unfair to coarse grain producers. If costs continue as they are and world prices do not escalate, they will be unable to ship their grains.
The Minister responsible for the Canadian Wheat Board made a wonderful announcement for farmers! He said that farmers in western Canada had to expect a lower initial price from the Wheat Board this year for their production. That is another indicator of which the Government is proud.


An Hon. Member:: You are kidding.


Stanley Kenneth Schellenberger: No, that was the announcement. Just as farmers were prepared to put seed in the ground, the Government came forward in an attempt to prepare them for the problem and said that their initial prices this year will be less than they were last year. These are the indicators which the Government puts forward to farmers across the nation. They are unacceptable. They will not deal with the distressing situation faced by farmers today. The Government should burn the midnight oil. The Minister should have a distressed look on his face because of the difficulties faced by farmers today and he is the Minister responsible in a national sense for that.


Some Hon. Members:: Hear, hear!


The Acting Speaker (Mr. Guiibault):: Are there any questions or comments relating to the Hon. Member's remarks? The Hon. Member for Humboldt-Lake Centre (Mr. Althouse).


Victor Fredrich (Vic) Althouse: Mr. Speaker, I think the record should be corrected. The latter part of the speech of the Hon. Member for Wetaskiwin (Mr. Scheilenberger) did not deal specifically with farm credit, but the Hon. Member became a little carried away with some of his interpretations of what had gone on in the Crow debate. Since it was allowed in the earlier part of his speech, Mr. Speaker, I hope you will permit me to make a short response.
The Hon. Member continues to misinterpret a very clear motion which we put forward concerning the rates that farm-

April 11, 1984
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ers would pay under the Crow Bill. Our proposal was that the Crow rate was and should continue to be an average of $4.89 per tonne and that the safety net clause, which was extremely clear and which everyone understood except the Hon. Member for Wetaskiwin and two or three of his confreres, included the provision that the percentage of freight to the price of grain could never go beyond a certain percentage.


Donald Frank Mazankowski: What percentage?


Victor Fredrich (Vic) Althouse: I think at the moment it was 6 per cent. That would have provided protection when grain prices dropped. As grain prices dropped, that safety net would have had the effect, had the Hon. Member done the mathematics and understood the motion, of pulling the actual freight rate down from $1.89 on average per tonne instead of providing the tremendous increase which he interpreted. People outside the committee and people in the press understood it. Only a few Hon. Members in the House pretended not to be able to understand it.


Stanley Kenneth Schellenberger: Mr. Speaker, the Hon. Member puts forward a pretty weak defence of his plan. If he had followed the leadership of my Party, he would have put forward a much simpler plan to freeze rates at the Crow level for farmers until the review process.
We have made the calculations very carefully. If his amendment had been in place, this year the safety net would not have been triggered until the $6 per tonne level had been reached. That is a little better than the Government's proposal which was $8 per tonne, but it certainly was not as good as ours. If our suggestion to freeze rate increases had been accepted, farmers would have been in tremendous shape this year and would not be facing increased freight costs when they cannot afford them.


Donald Frank Mazankowski: Mr. Speaker, I think the Hon. Member for Humboldt-Lake Centre (Mr. Althouse) helped to make the point which the Hon. Member for Wetaskiwin (Mr. Schellenberger) was making. The fact of the matter is that freight rate costs were equal to 2.5 per cent of the weighted average of grains sold. He said that they were asking for a safety net of 6 per cent, so it is very obvious that those who claimed to stand in defence of the Crow really, by the presentation of their amendment, contributed to the dismantlement of the Crow.
I would like to ask my colleague a question. I know that he and his family are engaged in a farming operation.


Victor Fredrich (Vic) Althouse: You cannot read, Don.


Donald Frank Mazankowski: I can certainly understand your line of logic.


Victor Fredrich (Vic) Althouse: It was a frozen rate.


Donald Frank Mazankowski: Mr. Speaker, he is stumbling over his own words. I cannot help it.
As I was saying, my colleague is engaged in a family farm operation. Could he explain to the House, on the basis of his
experience in his own operation, the impact of high interest rates, high input costs and low commodity prices, over which he as an individual manager-I hapen to know that he is a good manager because he keeps an accurate set of books-has no control?


Stanley Kenneth Schellenberger: Mr. Speaker, I hate to put this on the record. After farming for years, this year, as a result of interest rate costs, input costs and two years of relative drought in my area, we will have to cut the number of acres we seed in half just for the farming operation to stay alive. We have done everything according to the best research available. Even with two managing my family farm, we are incapable of continuing to farm the number of acres we have farmed in the past.
This is not unusual in our area. Almost all farmers in my region, given the situation and the climate in which they have been farming, are incapable of finding sufficient cash to put their crop in the ground this year. Ten per cent of them have been unable to pay the fuel bills for last year. The situation is serious. They are looking for an indication of some hope in the future, given reasonable weather conditions, that they will be able to continue to survive and to farm.
[ Translation]


Mr. Marcel Dionne (Chicoutimi):: Mr. Speaker, I have been listening carefully to the remarks made about the farming community by Members on the other side of the House. I am a little ill at ease to hear the many criticisms against the Government, especially that it is being unfair to farmers, who forever find themselves in a bad predicament. I am embarrassed for Canadian agricultural producers, and I think it must be said that their productivity is almost second to none. It is not true to say that Canada's farming community is in the doldrums and badly treated.
That is why I take this opportunity to tell the House about the many constructive measures the Government has been implementing for years on behalf of farmers, through the Farm Credit Corporation. Mr. Speaker, I cannot deny that the agricultural sector does experience serious difficulties, but the situation is not quite as desperate as some people would have us believe. The Canadian Government has given unfailing support to those Canadian farmers who have been hardest hit by the economic recession. This support is not just a fleeting trend since it dates back to 1929 when the Government established the Canadian Farm Loan Board to help farmers who were unable to secure the long-term credit they needed. The Board and its successor, the Farm Credit Corporation, have now been filling the void for 55 years. Just so Hon. Members will have an idea of the amount of money invested in agriculture by the Farm Credit Corporation, I point out that is has some 79,300 loans outstanding for a total investment of $4.7 billion right now.
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Any way one looks at it, Mr. Speaker, that is a significant contribution to the economic well-being of Canadian farmers. During the year ended March 31, 1984, the Farm Credit Corporation authorized 5,736 loans under its regular credit program and the special agricultural financial assistance program, almost $758 million all told. That is $141 million more than the previous year. Mr. Speaker, it is a shame to claim that nothing is being done to meet the needs of Canadians farmers, and I wonder indeed what Hon. Members opposite would do.
Just recently, the Government approved a budget which increases to about $825 million the funds available through the Farm Credit Corporation for loans to Canada's farmers in 1984-85.
Pursuant to its terms of reference, the FCC helps young people and newcomers to farming, those whose equity falls short of the requirements of commercial lending institutions. The Farm Credit Corporation plays a key role. Neophyte farmers and owners of small farming operations in full expansion are much more vulnerable than long-time farmers. Since their assets are limited, they need quite a bit of capital to start and maintain profitable operations. That is why they must be able to borrow at preferential rates which commercial lenders cannot offer them.


The Acting Speaker (Mr. Guilbault):: I regret to interrupt the Hon. Member, but we have reached the end of the questions and comments period.
The Hon. Member for Chicoutimi on a question of privilege.


Marcel Dionne: I thought we were continuing the debate.


The Acting Speaker (Mr. Guilbault):: Debate.

The Chair thought we were in question period. If the Hon. Member is debating, he may continue, provided no other Member has a question.


Marcel Dionne: Mr. Speaker, I am sorry if I have misinterpreted what you said earlier, but I shall continue.
In the Canadian labour force, the only people genuinely able and willing to become farm producers are farmers' sons and daughters. They are the only ones who have the required knowledge and any practical experience in agriculture.
We must therefore encourage the transfer of farming operations to their generation if we want to keep these human resources in the field of agriculture and maintain or increase the productivity of the farming industry.
The only way this can happen is to offer these people reasonable interest rates and favourable credit terms, and this the commercial financial institutions do not normally do. In addition, a family farm is usually transferred on a step by step
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basis. The son or the daughter generally buy the operation step by step while they obtain the funds and the experience required, and eventually take over the whole business. As the land itself is the basic requirement for most farm producers, newcomers usually need credit to purchase land. Farm real estate represents an average of nearly 80 per cent of total investment requirements in agriculture. Credit requirements for land purchases are therefore very high. Even though parents generally want to help a son or a daughter take over their farm, they must recover the accumulated assets in the farm if they want to be in a position to retire or divide their property equitably between all the members of their family. Even young farmers who are getting started with the help of their family will therefore need credit at conditions not generally offered by the commercial sector.
This is what the Farm Credit Corporation is offering them. At the present time, it is offering farm operators loans of a maximum of $350,000 or $600,000, depending on whether the operation includes one or more eligible applicants. The loan limits of the Farm Credit Corporation have been increased twice during the last three years to meet the needs of farmers more adequately.
In view of the special financing requirements of farm operations, the federal Government has offered them, through the Farm Credit Corporation, long term farm credit programs on terms which are not generally available neither to them nor to small businesses, so as to promote farm production. Such terms include mortgages at interest rates frozen for five, ten and twenty years, repayment periods of up to thirty years, flexible repayment schedules, a recovery policy which takes into account temporary financial difficulties and the cyclical nature of farm income, loans of up to 100 per cent of the assets stated as security, as well as a financial advice and consultation service for farmers.
Mr. Speaker, I believe that these new initiatives come at a time when producers need them the most, and I understand that these innovations were introduced by our Minister and the Farm Credit Corporation.
The FCC puts loads of energy into its consultation services program because farmers need to have a sound understanding of financial management in order to succeed. It provides counselling at the preliminary stage, when the loan is approved and at various stages afterwards. While financial counselling is available to all farmers, the Corporation takes special care of new borrowers or other borrowers in need or those who ask for assistance. Its counselling is aimed at helping farmers to run their financial operations and eventually achieve their personal and economic goals.
Borrowers from the Farm Credit Corporation who need counselling are generally those with small assets or large debts, with a developing operation, without experience, with a high-risk business or financial problems. The Corporation's credit counsellor provides borrowers with the assistance they need to

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start a bookkeeping system, to interpret and analyze financial data, so that they can identify and solve problems as soon as they crop up.
Normally, borrowers also get involved in the program for two or three years. This is generally long enough for them to learn to manage their financial affairs efficiently. As of March 31, 1984, 4,800 FCC borrowers were involved in the consultation services program, which accounts for 30 per cent of all FCC borrowers.
In addition to offering this credit program, the FCC is co-operating with federal agencies and departments, provincial governments and private financial institutions in meeting the special needs of farmers. For several years, it has been co-operating with certain provinces, namely, Quebec, New Brunswick, Nova Scotia and Alberta, by sharing the costs of their interest rate subsidization programs. The FCC intensified its efforts in this area in 1982-83 by participating in the Saskatchewan farm purchase program as a financing agency.
Fast year, the FCC also signed an agreement with the Province of Ontario to act as lender for the new farmers assistance program.
The FCC lends to farmers who represent high risks for the private sector. A survey carried out by the Corporation has indicated that the average Canadian farm had net assets of 85 per cent. On the other hand, those farmers who obtained a regular loan from the Canadian Farm Corporation had net assets of nearly 50 per cent during the last five years. The average net assets of farmers who obtained a loan under the special Farm Financial Assistance Program were even lower, namely 35 per cent during the 1983-84 fiscal year and 40 per cent the previous year.
The loan-to-equity ratio is also indicative of the risks taken. As the Farm Credit Corporation was authorized in 1975-76 to lend up to 100 per cent of the value of the property offered as equity the loan-to-security ratio is increasing. The Farm Credit Corporation has granted a greater proportion of its loans to farmers who offer less equity than in the past. This tendency to lend to farmers with lower net assets and a higher loan-to-equity ratio results from the fact that the Corporation is lending to younger farmers with limited resources and also from the difficult economic situation.
The special Farm Financial Assistance Program was reintroduced in the Budget of June 1982.
Foans to farmers under 35 continue to account for the larger part of the funds loaned by the Corporation making up 62 per cent of the total. Most of these farmers own little land and have few personal assets. Whether they want to get into farming or to extend their operations, these younger farmers must borrow large amounts for longer periods. Many of them, especially those who must consolidate their debts, cannot offer
additional equity, which means an even higher loan-to-equity ratio.
As Hon. Members are certainly aware, the Farm Credit Corporation has administered the special financial assistance program for agriculture ever since it was implemented in November 1981. Under this program, farmers facing financial disaster have access for two years to a rebate on their loans to the Farm Credit Corporation. Parliament has allocated funds to the Farm Credit Corporation to cover the rebate on these special loans. When the program was set up in November 1981, the Government had allocated to it a total of $50 million, including $5 million to cover the 5 per cent interest rebate which was its key-element. The funds so earmarked were spent very quickly, and the program expired on March 31, 1982. This time, the new program allowed for a 4 per cent interest rebate. Moreover, a budget of $200 million was allocated to this program, with some $16 million earmarked for interest rebates. This program was extended again in the April 1983 budget. Then the Government came up with an additional $100 million. Between November 1981 and March 31, 1984, the Farm Credit Corporation has spent over $341.1 million on this program, and over 2,200 Canadian farmers have received or are still receiving benefits under this program. When the Government implemented this program, it expected an economic recovery within the next two years during which the rebate program would apply. We are aware that the recovery in agriculture has been slow. The Government is currently looking into a possible extension of the rebate period and other means to help farmers in financial distress. As the minister has indicated, a decision is forthcoming.
I should emphasize, Mr. Speaker, that the role of the Farm Credit Corporation is not to provide mortgage loans to all farmers, but only to high risk ones. The Farm Credit Corporation has not been established to discharge banks from their responsibilities or to provide credit to commercial farms. At the end of the seventies, at a time when the agricultural economy was at its best, commercial lenders asked for a larger share of that market. In spite of a slowdown in the farming sector, I expect that they will continue to lend to farmers.
The Government follows very closely the trend of the longterm farm credit market. It is looking into various options which would allow it to provide funds to the Farm Credit Corporation. The latter, on the other hand, is now considering the means of lowering the rates on those high-interest loans. The Government's commitment to agriculture is unequivocal and we are trying our best to give a new impetus to the industry while it is still emerging from the recession. I would like to remind Hon. Members that the Farm Credit Corporation is one of the few lending institutions to have a repayment policy based on the cyclical nature of farm revenues. As long as any undertaking stands a fair chance of pulling itself out of a precarious financial situation, the FCC will be there to help. The federal Government supports the agricultural sector
April 11, 1984

through credit programs to help farmers maintain prosperous operations. Through the Farm Credit Corporation's long- and medium-term mortgage loan programs guaranteed under the Farm Improvement Loans Act, the federal Government makes sure that Canada's agriculture ranks among the most efficient and most productive sectors of the Canadian economy.
Mr. Speaker, that is the message I wanted to convey today on behalf of the Canadian Government and the Farm Credit Corporation in answer to Hon. Members who keep saying that nothing has been done for the farming community. The truth is that the Farm Credit Corporation may just be the organization which on many occasions in the past two years has been prepared to come to the rescue of financially threatened agricultural operations. Mr. Speaker, that is why many laws were passed to help the most needy through every kind of low-interest program which kept those farmers active and productive.
More legislation is forthcoming to help farmers who are still experiencing hardship. I might say again that the Government and the private sector ought to share this role to support the farming community, particularly when it is going through hard times.


Mr. Deputy Speaker:: Questions or comments? Debate.


Mr. Murray Cardiff (Huron-Bruce):: Mr. Speaker, I am glad to have the opportunity to join in this debate today to share the concerns of many of my colleagues about what we are debating today and to talk about the insensitivity and disregard of the Government for the agricultural sector of the country. This is not a very nice subject to have to talk about. The fact that we must remind the Government of its responsibility to an industry which overall employs about 18 per cent of the labour force, represents about 40 per cent of Canada's economy, accounts for 10 per cent of our exports, and generates $7 for every SI spent, is, simply put, appalling.
While the Government appears to be willing to provide money, incentives such as rebates, tax credits and so on in large amounts to so many other sectors, it is completely unwilling to respond in a positive way to the demands of agriculture. When a positive step is taken, it is generally only as a result of years of complaint from the farmers themselves and from this side of the House. The Government appears to be unwilling to take the initiative to place agriculture high enough on its list of priorities. This is the root of the problem.
The biggest crisis is the unavailability of affordable credit. Interest rates now appear to be on the rise again; we are seeing that every day. We have just come out of a period of very high interest rates. They were as high as 21.24 per cent in August of 1981 and even higher for some first mortgages. According to the Conference Board of Canada, continuing high levels of interest rates are going to be one of the major factors in a projected slow down in the economy. This is occurring at a
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time when farmers can least afford an increase in the rates of credit. Unlike other sectors, agriculture is still hurting from the recent recession. Last year farm bankruptcies were up 16 per cent from 1982; they rose from 410 to 488. Ontario let the nation with a total of 165 declared bankruptcies. There were probably as many or even more, undeclared bankruptcies. Prairie farm failures doubled last year. By the end of February this year farm bankruptcies were up 58 per cent over the same period last year.
The main point that must be made, Mr. Speaker, is that farmers are still hurting very badly. They have not seen this recovery of which the Liberals boast. A very well respected financial constultant was quoted recently in the London Free Press as saying that many farmers continue to suffer the painful hangover of recession. Some may never get over it. If interest rates rise now many will be forced into the red and off the farm. He estimates about 40 per cent of farmers are in financial difficulty. If banks and governments keep hiding their heads in the sand, no solution is possible for farmers.
The outlook for farmers is not good, Mr. Speaker. Debt loads carried by agriculture will soon reach $20 billion. Farm input costs are high and have increased at a much higher rate than prices which farmers receive for their products. Many inputs which farmers have to buy are paid for on credit in anticipation of future harvests. With high levels of credit, high costs become almost unbearable. In most cases they become so unbearable that a farmer is forced into bankruptcy or into selling the farm at a reduced price.
Let us look for a minute at the cost of interest rates on the purchase of a used tractor. You cannot buy much of a tractor for $25,000. Anyone who knows anything about agriculture knows that is a very small tractor. Very often we are faced with prices of tractors anywhere from $45,000, $55,000 or $60,000 to $90,000 or $100,000. Many farmers require that size of a tractor, but we will use a $25,000 tractor as an example.
A $25,000 tractor purchased on a five-year credit would cost $31,860 in total at 10 per cent interest. At 15 per cent interest it would cost $35,700. At 20 per cent that $25,000 tractor would cost almost $40,000. I am not saying for a moment that farmers are the only ones who have this sort of problem. I am saying that farmers are often ignored in this country, especially by the Government which does not seem to realize the enormous costs which go into maintaining a farm to produce food for Canadians and for export.
At this point in time, after the cumulative effects of recession, inflation and high interest rates, as well as low commodity prices, there are 14,000 Farm Credit Corporation loans in arrears, or 18 per cent of all Farm Credit Corporation loans. I am saying that farmers already face a serious situation and they cannot afford higher interest rates and further insensitivity by the Government to their situation.
So what happens? Over the past few weeks we have watched as the Government continues to neglect the agricultural sector. Instead of responding to the situation and trying to implement serious policies which can take some of the burden off

like so many things before it. They will die in the same way Bill C-653, the Farm Creditors Arrangement Act, died and we will have to bring the matter up again. In the meantime, the legislation could be passed if a sub-committee was created. But again the Government has indicated its lack of interest in the agricultural sector.
We have seen so often in the past that a low priority is placed on agriculture by this Government and we are right now watching history repeat itself. Hon. Members opposite do not care about agriculture any more now than they have in past decades.
To conclude, Mr. Speaker, we in this Party are often accused of having no policy. Well, we are discussing our policy today. The Government is well aware of our policy because we have been discussing these and other issues for many years. The problem is that the Government will not listen to our policies and implement them to the benefit not only of farmers but of the Canadian consumer who buys the products of farmers' labour. This is why we are cynical about the Government, especially with regard to agriculture. We have been driven to a strong sense of cynicism about what the future brings as a direct result of our observation of the way in which this Government abandons its responsibilities, particularly with regards to farmers.
We have alternatives, Mr. Speaker, simply because we care. We have not forgotten that it was farmers who built this country and made it strong. We know that things can be better for farmers with a series of measures, most importantly the maintenance of affordable credit for farmers. In part, this means that the Government must take responsibility for the economy in order to keep interest rates in general at affordable rates. We are not sure that the Government can do that either. It must, Mr. Speaker, look carefully at these issues, and more importantly at its own priorities, because farmers cannot bear a repeat of the last few years so soon. If farmers are in trouble, we are all in very serious trouble.
I have always maintained-I am sure many of my colleagues will agree-that if we have a strong agricultural base, we will have a very viable country. We know that farmers are great spenders. If they receive even an expectation of a good crop and a reasonable price, they will usually purchase machinery and in so doing stimulate the economy. I say everything starts with the soil in this country. If we can give some direction and offer of hope to these farmers who are producing the fine food, not only for us but for people in many parts of the world, I think we have a duty and obligation to do so in order to ensure we have a strong and viable agriculture industry.


Mr. Deputy Speaker:: Order. Questions or comments?


Mr. Peterson:: Mr. Speaker, I believe a lot of what the Hon. Member for Huron-Bruce (Mr. Cardiff) has said is basic to this country. I particularly agree with his strong statement that if we have a healthy agricultural sector in Canada we have the makings of a very strong base for our entire economy. I just wanted to stand up and tell him that I believe what he
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said is excellent and should be repeated. I also want to say that he is a person who has a great deal of credibility because of the work he has done in this House and on behalf of his constituents.
I certainly do not agree with all the Hon. Member's rhetoric to the extent that Liberal Members on this side do not care about farmers. However, if we can get away from political partisanship here, I believe that working constructively together we have to follow his line, which is to ensure that the farmers in this country do have a strong economic base for carrying on their activities. We look forward to continuing the constructive dialogue on the positive ways in which these types of things can be achieved.
I would also like to say that I know the Hon. Member is aware of the fact that it is really not true that the Government has done nothing for the farmers in this country. I am sure he will admit that. Even in his area, for example, CIDA, the Canadian International Development Agency, purchases an incredible number of edible beans for shipment to Third World countries. We have a foreign aid package which is among the best in the world in terms of food aid and which does directly help the farmers.
I have one question for the Hon. Member. He referred in the opening of his speech to a newspaper called the London Free Press. Is that the scurrilous Tory rag which is owned by Peter White?


Mr. McCain:: You are like the cow that kicked the pail of milk over, are you not?


Murray Cardiff: Mr. Speaker, I have no idea who owns the London Free Press. However, I thank the Hon. Member for Willowdale (Mr. Peterson) for his comments. I do not know if it is appropriate to ask him to be my campaign manager in the upcoming election or not!


Mr. Munro (Esquimalt-Saanich):: He will not have anything else to do!


Murray Cardiff: Well, I do not know. That could be a possibility.
The Hon. Member touched on many subjects, such as CIDA and foreign aid, and I believe we must congratulate our farmers in this country for producing this food. And yes, I do support the positions taken in the purchase of food, and not only white beans, because as the Hon. Member knows full well, there are many other commodities across this country which the food aid program purchases and sends to countries in distress or in need. As the Hon. Member said, if we work together we can do many of these things. I am sure that if there was an offer of co-operation, he would find a lot more co-operation coming from this side, such as on the agri-bond issue. That is an issue we would have liked to deal with very quickly. Perhaps the Hon. Member could encourage some of his colleagues to help us get that matter back to the Standing Committee on Finance, Trade and Economic Affairs much faster.

April 11, 1984
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Mr. Deputy Speaker:: Are there any further comments or questions? Debate.


Mr. Ralph Ferguson (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, I should point out to my colleague across the floor that the previous Parliamentary Secretary to the Minister of Finance moved in this House on February 7 that the agri-bond issue be sent to the Finance Committee for study. I seconded the motion. The fact remains that the other items before the committee dragged on to the point where we I had a first meeting on this last Thursday. However, I am somewhat disappointed in that we had to ask the researcher from the Finance Committee to bring forward a background paper on this issue because there are several variations which were put forward, generally that lenders would obtain a tax benefit for interest on eligible funds loaned. It was also suggested that the tax benefit be restructured as a credit rather than an exemption to improve the fairness of the measure. And, of course, this applies to eligible funds that we have loaned to farmers at presumably lower than market rates.
There are other areas which I know Hon. Members of Parliament, and particularly members of the Finance Committee, will want to look at in depth. The reason is that this is a tax measure which is important to the future financing of the agricultural industry. But no lending program is going to cure all the problems of the industry in Canada.
When we look at farm cash receipts of a few years ago, as well as the total investment, they increased from $24 billion in 1971 to $132 billion in 1982; a tremendous increase. During the same period production costs have increased sharply from $2.9 billion in 1971 to $12.8 billion in 1982. They are up again this year. Total farm credit increased from $2.2 billion in 1970 to $10.3 billion in 1981, dropping slightly in 1982. With greater amounts of credit being extended each year, total farm debt increased from $4.4 billion in 1970 to $20.2 billion in 1982. The debt-equity ratio in 1972 compared to 1982 deteriorated slightly and I expect it will deteriorate further as we get the figures in for 1983 and 1984. In 1983 total cash receipts amounted to $18.8 billion, and expenses to $15.5 billion, leaving a net income of about $3.6 billion. In 1984, realized net farm income is expected to increase to $3.9 billion, or about 6 per cent.
Today the Hon. Member for Wetaskiwin (Mr. Schellen-berger) stated that farmers are price takers, not price setters. I want to remind the Opposition that we have marketing legislation in Canada which will allow farm groups to organize so that they can set their own prices. This is available at both federal and provincial government levels. Those producers who have chosen to use this legislation have been able to pass on their increased costs and ride out the variables of input costs much better than those who have not taken advantage of it.
If we are to look at farming as a business, then we must have a counterbalance in the system to enable our farmers to obtain a reasonable return on their investment; a return for management and risk, a return which will allow them to live a
life commensurate with that of the rest of society. They can take advantage of the provisions of the Budget of February 15 which will allow them to invest in RRSPs. They can defer the payment of capital gains tax.
Let us look at that in its total context. If a man had an operation that was worth $120,000 when capital gains tax first came in, and it increased to $360,000 in 1984, he would have a capital gain of $240,000, half of which is taxable. He could invest the other $120,000 in RRSPs. This has been a tremendous step forward for Canadian farmers and has been well accepted, certainly by the Canadian federation of Agriculture and other commodity groups.
I quite realize that opposition members today have not said much about improving cash flow in the farming sector and changing the position of farmers from that of price takers to that of price setters. Can they explain just what the price determination factor is in the futures market? Is it based on rumours which can set off speculative trading? Does it sometimes reflect the buying power of a few large multinational grain companies? This exemplifies the need for a countervailing force in the system. Canadian farmers have legislation which enables them to receive a domestic price for wheat and an export price. I fully realize that with the prices of the last few years the difference has not been significant, but the precedent has been set.
The Minister of Agriculture (Mr. Whelan) has reached an agreement with four of his provincial counterparts to proceed with the tripartite stabilization program to provide a measure of relief to some of our producers. But I maintain that we cannot stop there. We have to continue to seek out better mechanisms to ensure that the cash flow of our farmers is such that they can pay off their borrowings. They cannot borrow their way out of trouble. There has to be a cash flow and a system which ensures a return so they can expand their operation and take advantage of our position in export markets.
Look at what is happening in the European Common Market with their accumulated surpluses. We should encourage our producers to re-examine legislation at provincial and federal levels to ensure the cash flow of the efficient Canadian producer is maintained. The Minister is presently in his office meeting with the Deputy Minister of Agriculture from Thailand. They are seeking opportunities through Canadian technology to enhance their own operations. But I think Canadian farmers have a tremendous opportunity available to them.
The Leader of the Opposition (Mr. Mulroney) today asked a question regarding the tax on farm fuels. He gave a figure of about $250 million as the saving to farmers. This amounts to 1 per cent of farm input costs for 1983. Therefore, no one program will resolve the financial hardships we have in the Canadian agricultural industry at the present time. I maintain that we have to look at a series of programs which will not only provide for long-term stability, but also a series of programs which will allow them an adequate return on their investment, management and risk.
April 11, 1984


Mr. Deputy Speaker:: Questions or comments? Debate.


Fred Alward McCain: Mr. Speaker, the figures that have been tossed around this afternoon have sort of made one wonder what is the relative position of the farmer with respect to income on his equity invested. The Federation of Agriculture has provided us with some figures today. I would like to point out that in 1982 the net income of farmers was $3,696 billion. That net income arose from an equity position of the farmers of $111,853 billion. If you relate the net income of the farmer to his equity, you find that the farmer has made about 3.5 per cent on his equity.
If, on the other hand, you relate the farmer to any other form of business, you find the farmer on average has a very high percentage of his investment, relatively speaking, in land which is not depreciable. If the equity position of the farmer were totally depreciable, as many businesses are nearly totally depreciable, there would not be a net income for the farming community at all.
I think it is interesting to note also from these figures that from 1971 to 1984 there was an increment of income for the farmer in real dollars of $76 million. But there were 316,770 farmers which means the real increase in income of the farmer in that 14-year period was 250 real dollars per farmer.
When any Minister of the Crown can stand in this House and say that he has done well by agriculture, as he presided as Minister in 13 of those 14 years, I wonder what he would consider is a bad job. What would be a bad job in his estimation? I would like to point out to you, Mr. Speaker, that from 1971 to 1982 the indebtedness of farmers went up, according to my hasty calculations, something over 700 per cent. That is so the farmer can make an increment of income of 250 real dollars. If we carry that a little further, we find the interest load is up 700 per cent. If you go a little further, you will find that the net realized income for a self-employed farmer for man-years, not counting the free labour of the family on the farm, has increased by 25 per cent. The farmer has had a 25 per cent increase, with free labour, in net income but he has had a 700 per cent increase in interest and he has had maybe a 750 per cent increase in his indebtedness.
I want to tell you, Sir, that when you get an increment in terms of 700 per cent versus 3.5 per cent you are not very solid and your industry is in very very shaky shape. I want to tell you also that in the general structure of regulated industries, such as the public utilities of Canada, you are allowed something in the nature of 15 per cent return on your equity. You are also allowed, if you are an operator of a public utility, an increment on an annual basis which will approach that return of 15 per cent on your equity, and the farmer is getting 3.5 per cent.
Maybe farmers are as prosperous and as well off as the Minister stated they were today, but they are not as well off as the public utilities by any stretch of the imagination, and they are totally regulated by the governments of this land. If, and I want to emphasize this, the farmer could depreciate as much
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of his percentage of property which he has invested as Canada public utilities, it would be an interesting economic problem to study and I think you would find that he would then show a net loss. That is not very good.
I know, Mr. Speaker, that you are as interested as I am in the health of certain aspects of the agricultural industry, particularly potatoes. I want to ask the Minister why he has not at this time addressed the application of the Province of New Brunswick for price stabilization for the 1982-83 crop year. There was a point in time when there was reason for delay in consideration of that application. That reason has now gone by. The farmers have now planted a second crop since that crop was harvested and it is high time that that application for price stabilization is given favourable consideration by the Government in the generous terms which the industry requires and which you and I both, I am sure, Sir, want to see for our farmers. The application has been on the desk for quite some time and it has not been considered.
During the remarks of the Minister today he suggested that certain areas of agriculture should organize. I am going to ask him to address the same problem that I have asked him to address every time he has thrown that piece of slop across the floor. When he gets a task force to investigate the possibilities of supply management and price control in a product which is so variable in its annual yield that we have shortages and surpluses, perhaps he could get that task force to address also the vital necessity of international trade, whether it be maple syrup, white beans, apples, potatoes, carrots and onions. International trade is a vital part of the production of virtually all of the fruits and vegetables of the Dominion of Canada and if we can address the means by which we can retain our international markets, while at the same time introducing supply and price management, then I would be very happy.
This is a problem that has been addressed by agricultural organizations but they have not come up with the answer. I want it to be addressed in such a way that we do not upset our trade patterns. The Government on the one hand is preaching free trade for Canada in the world, but on the other hand it is asking for supply management and price controls on fruits and vegetables-if we are going to get price stabilization for any of those products anywhere in Canada.
This does not make sense, Mr. Speaker. By doing that we are breaking the GATT rules and regulations to which we have subscribed. We will be putting up trade barriers on other items because, in retribution for our violation of our agreement, they will certainly seek a price. It is not a simple thing. We did close our doors to international trade, except by permit in the poultry and egg industry. That did not make us any friends. We have closed the doors in the dairy industry. In these instances we have got away with supply management and price control. But if we expand this, the international price in trade will be more than Canada can bear. We have to realize that and the Minister of Agriculture (Mr. Whelan) has to realize it.
I do not like to be scorned by the Minister, Mr. Speaker. I do not like my people to be scorned by him either. But that is

April 11, 1984
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precisely what he is doing. Because there is no supply management, he says we should not get price stabilization, although the Act entitled fruit and vegetable growers-organised or unorganised, it does not specify-to an element of assistance which approaches cost of production on a near automatic basis. That is what we have been denied.
I challenge the Minister as he was earlier challenged, I believe by the Hon. Member for Wetaskiwin (Mr. Schellen-berger), on the basis of how can we on the one hand criticize the United States for constraining production and on the other hand proffer the idea that there should be supply management and price control in any agricultural product? It sort of looks to me as though we are standing in a glass house hurling stones, which is not a very good process to follow. The input costs have not become the proper factor to establish a base price for any assistance which would be given. This has been proven in western stabilization and in the approach of the Department of Agriculture to the fruit and vegetable side of our farm business. For instance, the fact that some costs such as interest rates have gone up as much as 700 per cent has not been taken into account, and whatever yearly average price the Minister may take does not necessarily approach the stock loss requirements that price stabilization has historically provided.
However, I hope that the Minister will soon address this problem and on behalf of the farmers of my constituency I hope he will address the removal of some of the tax on farm fuels. It involves a huge amount of money in our constituencies and it is a problem that must be addressed.
We must redefine what a farmer is for tax purposes. For example, a farmer may have had the misfortune to have a five-year loss. He might have to seek extra income to stay on his farm and retain his investment. There is no way that someone who has probably never turned a furrow in his life and has no conception of the inner thoughts of a man who is trying to farm should be able to assess and tax him as a part-time or hobby farmer. These cases must be assessed on individual facts and cannot be covered by blanket guidelines or the judgment of one person.
I see that Members from both sides of the House are in fact interested in agriculture. We must address this issue in a unified fashion in order to alleviate the difficulties in which our farmers presently find themselves. Indeed, they should be treated like small businessmen. When a small businessman takes outside employment it does not affect his income. He is taxed on his total net income and his business is not anticipated as being non-profit. The accumulation of his income is taxable, as it should be with so many of our farmers.
I could name a farmer in your constituency, Mr. Speaker, who certainly needs that kind of attention because he has been taxed unmercifully as a result of unknowledgeable people assessing him for what they thought he was rather than what he did in the community.
This is not a political question; it is a matter of discussing right and wrong, fairness and equity. This issue needs the
support of the people to your right, Mr, Speaker, as well as the pleas from people to your left.
Today the Minister said that the tripartite principle of red meat programs was totally accepted by the producers. I talked to a producer from New Brunswick who does not accept the principle of the proposed formula as he understood it. In Atlantic Canada we are paying $50 per tonne more for corn or western barley or wheat. He tells me that if a farmer in our area must pay that much more for his grain than a farmer in another area of Canada, and if Atlantic Canada is to retain any segment of the red meat industry, then that program must be formulated in such a way that it will trigger a payment at a particular percentage of cost in a particular province or region. Until that problem is addressed, Atlantic Canada red meat producers are very concerned that they may be left out in the cold. They are not ready to support any tripartite Bill which may come to the House of Commons.
The Minister is absent while this subject matter is being discussed. I submit that that is disrespectful. While I accept the fact that all Members of Parliament have responsibilities, in view of the Minister's bragging I think he should at least be able to brag that he is in the House on days when subject matters concerning his ministry are discussed. He is not here today and I do not believe he was here when this subject was discussed previously. He should be here in view of the magnitude of interest in this subject that has been shown by farmers.
When the Minister introduces more legislation on any subject matter, I ask him to consider the representations made by the farmers of Canada on a regional basis, as they must be if the program is to be universally accepted. There is great room for improvement. A 3.5 per cent return on equity for a farmer with only a fraction of his investment being depreciable is not good enough. A 15 per cent return, such as it is for a public utility, is more likely to provide the profit which is needed. That is government approved. Let us address this as a real problem and not play games or brag any more. Let us produce.


Mr. Deputy Speaker:: Questions and comments? Debate.


Mr. Keith Penner (Cochrane-Superior):: Mr. Speaker, I was hoping to have a little more time in this important debate on agriculture to share with the House some very exciting new technology that has been developed at the Agriculture Canada research station at Kapuskasing. I wanted to describe to the House the work that has been done in the development of forage fed grade A-beef.
I believe Agriculture Canada has recognized in its agri-food strategy that there is a growing importance for the role of agriculture in northern Canada. The work that has been done at Kapuskasing and Thunder Bay has made a very significant contribution to this strategy.
However, in developing this theme and sharing it with the House, I am cognizant of the tradition of the House of Commons that the political Party that presented the motion for debate is also the Party that should close the debate. Therefore, I will postpone to another day my opportunity to share this exciting new development with Hon. Members and

April 11, 1984

at this time I would like to yield the floor to the NDP so that they can close today's debate.


Mr. Deputy Speaker:: Are there questions or comments? Debate.


Mr. Terry Sargeant (Selkirk-Interlake):: Mr. Speaker, when the Hon. Member for Cochrane-Superior (Mr. Penner) said that he was going to share an exciting new development with us, my friend from Humboldt-Lake Centre (Mr. Althouse) was hoping that he was going to announce to the House that the research centre he was speaking of had developed a tree that grows money! I am sure many farmers would find something like that very attractive.


B. Keith Penner: It is better than that. You can't eat money.


Terence James (Terry) Sargeant: With respect to the motion and the concerns of the Farm Credit Corporation, I received a phone call yesterday morning from one of my constituents who just heard the happy news that the Farm Credit Corporation had increased its interest rates again from 13 per cent to 14 per cent, 14 and %ths per cent and 15 per cent. Of course, I say he was happy somewhat facetiously. He was not happy at all. Indeed, toward the end of our brief conversation he was asking what he had to do to make the Government notice the fact that farmers could not afford any more increases in their interest rates at this time.
He concluded by asking if it is necessary for him to drive his tractor from Manitoba to Ottawa and then do something with it that I cannot say in the House since it would be unparliamentary. But it is an example of how frustrated many farmers have become with the increasing costs of operating a farm, the decreasing returns and the increasing difficulties they are facing in trying to simply stay alive.
I am fairly familiar with this person who phoned me. He is a good farmer who has quite good land and modern equipment. He has quite a bit of land. He is a good manager but he still has troubles in that there is so much stacked against him with all the increased costs.
In the past few months we have seen the changes in the Crow rate. Just by a fluke more than anything else, the area in which he lives was one of the latter blocks to be opened up for Wheat Board quotas, so his cash flow has been delayed. Also by a fluke of nature, in the last few years there have been problems with the weather. One year there was an early frost, another year there was too much rain and last summer there was serious drought. For those of us who are non-farmers, last year it was a beautiful summer in Manitoba. It was hot and dry. It was great for outdoor activities such as going to the beaches.


Mr. Crosby:: I thought you did not have any beaches out there.


Terence James (Terry) Sargeant: We have beautiful beaches in Manitoba, Howard. For most farmers in Manitoba, last year's weather
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was not at all good. I have talked with farmers in my home town and with farmers throughout my constituency who have told me about kernels of grain actually cooking in the head as they stood in the fields because of extreme temperatures.
Approximately six weeks ago when Parliament recessed, I spent all that time travelling around my constituency and holding public meetings with anyone who wanted to attend. At every one of the meetings there were at least one or two, a half dozen or in some cases quite a few farmers who came to discuss their general concerns. We also spent some time talking about their specific concerns. It was a bit of a lesson for me. We discussed things about which I heard a bit but I certainly had room to learn more. Some of their problems- and that is what a farmer who telephoned me told me yesterday-related to the cost of their loans and the increasing cost of fuels. In every community which I visited I was asked why the tax on farm fuels could not be reduced. I must admit that I agree with them on that. It would be very good for any government to give farmers a little break, at least in the cost of their fuels. Fuel costs have increased incredibly in recent years. It is a matter which we must address very soon. Coupled with these increased costs is the fact that their returns or the prices they are receiving for their products have either remained the same or in many cases have fallen in recent years.
In one such community, the Town of Riverton, there were some unique problems. For seven of the last eight years-I spoke about this matter in another debate in the House a few weeks ago, but certainly it is worth repeating because it highlights one critical situation in my constituency-farmers in the Riverton area have experienced crop failure. In normal times this is a fairly good farming area. They have good land and normally had good weather conditions until eight years ago. For some strange reason, in seven of the last eight years they have been hit by serious drought, then serious flooding and crop failures. Most businesses which have had failure for seven years out of eight would be lucky still to be in existence. However, these farmers have struggled. They have found money, they have scraped it together and have pulled in their belts a little tighter. They have mortgaged some of their property, but it is reaching a point where it is almost too much. They have gone to the banks and to credit unions in their community. They have gone to the Farm Credit Corporation looking for more money just to put in this year's crop. The ones who visited me-and there were a number of them-did not lead me to believe that it involved just a few farmers who were perhaps bad managers. I was told that probably 50 per cent of the farmers in the general area of Riverton were living under similar conditions.
A new crop season is starting any day now. Last weekend I spoke with a few farmers in my constituency who told me that with the very mild and dry spring in Manitoba this year they could be out in their fields as soon as next weekend. However, the farmers in Riverton may not be able to go into their fields because they do not have any money with which to put in this year's crop. They do not have any money to buy fuel, seed or fertilizer. What can they do? FCC will not give it to them nor

April 11, 1984
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any of the other lending agencies. They are leery to give them any more money because there is no guarantee that this year will be a good one for crops.
Last Friday night I talked to a gentleman who is somewhat renowned in Manitoba. His name is Anton Chorney and he is from East Selkirk. He is a weather prognosticator and he told me that his prediction for 1984 is another hot and dry summer like last year for Manitoba. Certainly that is not good news for any farmer in the province.
What do I tell these farmers who have experienced so many crop failures? They do not have any guarantee that this year will not be the same as seven of the last eight years. They are carrying large debt loads. They have been farmers all their lives. It is not easy for them to change occupations. Even at the best of times when there are lots of jobs in other sectors of the economy, it is not easy for farmers to change their way of life, let alone at times such as this with high unemployment rates. What do I tell them that their Government in Ottawa is doing for them? What do I tell them that the FCC is prepared to do for them?
About a month ago I spoke in the House about farm issues. I said at that time that the Government had to make a decision as to whether or not it wanted family farms to continue to exist. I grew up on the Prairies. I am not a farm boy. I had very little to do with farms other than visiting some in my community from time to time. However, I learned from growing up on the Prairies about the sanctity of the family farm, that the family farm was the basis of prairie life.
Not only are farmers faced with the costs about which I have spoken but they have been subjected to the despicable way in which Revenue Canada has picked on them in recent months. This matter has been highlighted by both Parties on this side of the House. The Government seems to be following
policies which are not in favour of the continued existence of family farms. I am working on a case involving a couple of young brothers in my constituency who have taken over their father's farm. They are in their late twenties and are in serious trouble for the same reasons-crop failure in 1980, not a very good crop in 1981. They had to mortgage their house and then some of their property to keep the farm going. This farm has been in their family for 50 years as of this year. The FCC sent them a notice through its lawyer in Winnipeg on March 10 this year indicating that if they did not come up with $50,000-I cannot quite remember the figure-within 20 days, their farm would be taken away. How can they find this amount of money at the beginning of the crop year? They told me that if they use the money which they might have to put in this year's crop to pay FCC by April 1, they would be unable to plant and that would certainly scuttle their farm. They promised FCC that if it waited until the fall they would be able to make the payments. The matter is still being considered at this time by FCC. I have written to the Minister about this situation. I hope he will look at what is going on with these two young men who are starting out in life. They closed one of their letters by saying that they were disillusioned and disheartened. I do not think that is the kind of Canada we want.
I see that it is the end of the day. I thank the House for the opportunity to say a few words on this important motion.


Mr. Deputy Speaker:: Order. It being six o'clock, it is my duty to inform the House that pursuant to Standing Order 62(11) proceedings on the motion have expired.
This House stands adjourned until tomorrow at eleven o'clock a.m., pursuant to Standing Order 2(1).
At 6 p.m., the House adjourned, without question put, pursuant to Standing Order.

Thursday, April 12, 1984