The price to be paid for each share redeemed by the Mint pursuant to subsection (1) is the issue price of the share.

Therefore, in 1969, when the 4,000 shares were issued at $10,000 each, the price was frozen at that level. That is understandable, as Ms. Lépine, the President of the Royal Canadian Mint, told us. The government was the only shareholder, and all the members of the board were government representatives. So there was little or no chance that the value of the shares would change. If it did, the government would benefit one way or another.

Under Bill C-41, the Royal Canadian Mint receives corporate status and the power to buy back its own shares.

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My friend, the member for Hochelaga—Maisonneuve, has been taking law courses in his spare time this fall. He already has a university degree and is qualified, but he wanted to brush up and upgrade his skills. I am sure his brilliant academic performance will make it possible for him to graduate magna cum laude. For his benefit, as a friend, and that of the members opposite, particularly the member for Winnipeg, who is absorbed in his reading right now, I would like to say that, in corporate law, purchase and redemption are two completely different things.

Redemption takes place without the holder's consent. This means that the Royal Canadian Mint could come to the minister and say “We have accumulated a surplus and decided to use it to redeem some of our shares. Here is $40 million in exchange for the 4,000 shares issued at $10,000 each in 1969”. This is called redemption. The shareholder, that is the government or the minister in this instance, does not have to agree.

This is how purchase differs from redemption. In one case, there is an agreement. We are talking about a transaction by mutual agreement. Agreement or consensus is what makes the difference between purchase and redemption.

Section 3.2, which is not amended by Bill C-41, provides that shares be redeemed at their issue price. At the same time the legislation gives the Royal Canadian Mint what it has long been asking for: the powers, privileges and legal capacity of a natural person, including the power to acquire interests in one or more corporations anywhere in Canada or abroad.

If the Royal Canadian Mint makes good investments and acquisitions, its shares will increase in value. In 1969, it issued 4,000 shares at $10,000 each. If it acquires companies, distributors, gold refiners or other interests in the industry, these shares will increase in value. I notice that the hon. member across the way, my friend who represents the riding where the military base of Petawawa is located, whose name escapes me, is nodding in approval. He knows I am right in making that statement, and I thank him for that.

The danger is that, some day, the royal mint may decide to privatize its operations. For two, three, four, five or ten years, the Royal Canadian Mint could make acquisitions, mergers and transactions to make sure its shares are worth good money. We may not always have ministers as honest as the ones we now have, including the current Minister of Public Works who manages all that and who is responsible for everything. Canadians could get taken by being told “We bought back our shares at $10,000 per share, even though their actual value is higher, and we sold them back for $10,000 each. We did not incur any loss”. However, there might have been a gain.

This is the type of operation we have to anticipate when we discuss a measure as important as Bill C-41.

Members must not say that this sort of things cannot happen. I have with me the report released by the auditor general in October 1997. Chapter 20 of that document dealt specifically with the privatization of Canada Communication Group, or the government printing bureau, as it used to be called.

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In his findings, the auditor general is far from praising the current government and the Minister of Public Works of the time, not the current minister. A transaction was probably presented to cabinet as a good operation, as a positive measure that would eventually be successful.

Some figures were submitted but, unfortunately, they were not absolutely up to date. According to the auditor general, the projections were for a three-year period but were not particularly useful because the printing bureau, that is Canada Communication Group, had invested in new technologies and, after allowance for depreciation over the first three years, anticipated benefits suffered. According to the auditor general, if a five-year period had been used, the figures would have been very different.

The presses were sold and the eventual buyer was given a five-year option to purchase all government contracts under $100,000. Say, for instance, that the auditor general's report has to be printed. This would cost under $100,000 so the Saint-Joseph group, which bought the presses, is called, and it does it without a call for tenders for $100,000. Right now, 95% of printing contracts awarded by the Government of Canada are for less than $100,000. So the Saint-Joseph group, which acquired the Canada Communication Group, enjoys an advantage that not all its competitors have.

I share the concern of the Reform Party member over this kind of attitude. The Auditor General of Canada also castigates the people who decided to sell the Canada Communication Group.

Between the tendering of submissions in November 1995 and the actual sale in March 1996, the bidder comes out $454,000 ahead. Were all the other bidders aware of this? It seems not. The highest bidder saw his price drop by $454,000.

If we do the same calculations, looking at these things, we notice that there is also a small error of $150,000, for a total of $604,000. That is over the half-million dollars that favours the Saint-Joseph group. The auditor general goes on for pages in his report criticizing this transaction. He does not condemn it, because it is the first major privatization this government undertook. But we can see that he is in the process of spilling the beans about a number of privatizations.

What concerns me at the moment is the day the mint is privatized, because we know that, when a business is in difficulty, it becomes a public business. When it turns a profit, the government sells it to its friends. The public at large absorbs the deficit, and the benefits are shared by a gang of friends, who, oddly enough, are rarely members of the opposition. They are more often friends of those on the right side.

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This sort of criticism has to stop. Provisions must be established to prevent this sort of criticism from recurring, to move this sort of thing far from the minds of politicians and legislators.

This is why I say that, had the government truly acted in good faith, it should have amended subsection 3.2(2) in Bill C-41 making the stock redemption price the fair market value of stocks at the time of redemption.

If the price fluctuates, if it goes up as we hope, the government will benefit. If it goes down, as the government is already the sole shareholder, it will make up the difference.

Although there is no talk right now of privatizing the Royal Canadian Mint, it is not unthinkable that such a proposal might be made in the not-so-distant future. If privatization is what Canadians and their government want, it should be carried out with the greatest possible appearance of transparency. We are moving away from that.

It would be even more difficult because the bill allows the Royal Canadian Mint to buy companies, goods, buildings, all sorts of things, but does not give the Auditor General of Canada the authority to audit companies owned by the Royal Canadian Mint.

There is another weak point that has not been raised yet. One day, I began to wonder about this. There was a post office in my riding that unfortunately was located in the middle of a shopping centre parking lot. The shopping centre owners had had their eye on the post office for ages. “If ever that comes up for sale,” they said, “we would certainly like to hear about it. We would be interested in buying it”. I do not know who started the rumour, but that same morning I received two calls at my office, from the two owners of the shopping mall, who told me that they heard the post office might be up for sale. I was surprised, because I had not heard the rumour myself.

I phoned Canada Post and was told that it was indeed a rumour whose origin was unknown. I was also told that, should Canada Post decide to hand over the post office, presumably to a charity, even parliamentarians and the government would not have a say in it. The only time the government has a say is when Canada Post submits its annual financial statement and tells the government “We generated x million dollars in profits for you, or we are asking for x million dollars because we incurred a deficit”. This is the only time the government can get involved and show its authority or lack thereof.

The government has no say in the day to day management of the corporation, or in the control of its assets and liabilities. This is increasingly the case with crown corporations and this is what we must control. Such a situation should not even exist. Unfortunately, because of some principle, the government comes up with bills like this one. We know we are in a minority and we have no illusions, but, according to the principles of sound management, we should have a say.

I see my friend, the hon. member for Charlevoix. He is a prosperous man who manages his business successfully. He is definitely not the type to keep his figures at the bottom of a drawer; he will always be accountable to his wife, to his children and to himself.

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A good manager must first and foremost be accountable to himself and then release the information to Canadians, particularly when that manager is a government that claims to be responsible.

The fact that we cannot buy back shares at their fair market value and the fact that the Auditor General of Canada does not have the authority to audit the subsidiaries of those companies owned by the Royal Canadian Mint were major concerns for us.

I am less worried about competition. My friend from the Reform Party referred to a company in western Canada—he gave the name but I have forgotten it—which has the expertise and the technical facilities to make coins. Yet, the mint competes with this company, which pays taxes to Ottawa. So this company's taxes are being used to support its competition and force it out of the market.

If this is true, I agree with the hon. member that there is something abnormal about this. I have heard people from the mint describe this particular company as “overworked and not able to keep up with demand. Recently, we had a requisition for 10-cent coins that we had to contract outside the country because the company referred to by the hon. member could not provide us with the coins when we needed them”.

The Royal Canadian Mint ought not to be competing with private business, but our companies need to be competitive. If dimes are needed for December 1, or loonies for January 1, there is no use having them for March 1. Deadlines must be met. As everyone knows, where money is concerned, deadlines are very important. Just think of the old saying: time is money.

I would like to say a few words about the crown corporations, which are not answerable to Parliament, the auditor general, or indeed anyone, except for having to produce an annual report. Some of them are even entitled not to have the auditor general look at their figures, their statistics and their accounting ledgers.

Let us discuss the Canada Mortgage and Housing Corporation. It was created under the National Housing Act right after the last war. The economy was growing and would give rise to the families of the baby boomers. Our parents moved from rural Canada or Quebec to the cities to help rebuild the economy. They wanted to be part of a booming economy. They headed to cities like Montreal and Quebec City.

So the National Housing Act was created to help these people, who otherwise would not have met the banks' or mortgage lenders' criteria. For example, in order to acquire property or a house, they had to come up with 25% of the total price in cash as a downpayment. At that time, people did not have that kind of money. So, the National Housing Act created the Canada Mortgage and Housing Corporation, which could authorize and guarantee loans with a much smaller downpayment. At the time it was 10% of the total value of the property, and it was recently brought down to 5%.

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If we ask for money, for a loan from a company and it cannot afford the 25% downpayment, we are told “Your loan is going to be approved and guaranteed by the Canada Mortgage and Housing Corporation. If you do not pay, that is not a problem, we will get our money back from the CMHC. We will take your house away and give it to the CMHC and we will get all our money back. The CMHC will deal with your house”.

This is not free. The Canada Mortgage and Housing Corporation charges $235 to look at the file. A few weeks ago, the CMHC decided, because of the competition and since this is a time when there are no house buyers, to reduce its fee for a while and to bring it from $235 down to $185, which is a $50 reduction.

People are being told “We are charging you $235 to assess your situation, to appraise the house you want to buy, and then we will let you know if we are going to lend you money”. But there are other costs involved. There is a scale of fees. There is a fee of 1% if you borrow less than $50,000; 1.5% if you borrow between $50,000 and $100,000; and 2% if you borrow between $100,000 and $150,000. That fee can reach 3.5%. The borrower, that is the buyer of the house, not a rich person to begin with since he does not have the required 25% for his mortgage equity, really gets dinged when he gets a loan.

For example, if the CMHC lends him $100,000, he is told “We will lend you $103,000, but we will withhold $3,000 on that amount to pay for your mortgage insurance”. We are now finding out, and this happens more and more frequently to the point where it is almost an established rule, that the Canada Mortgage Housing Corporation does not appraise the property for which it guarantees the loans. The CMHC will often loan $100,000 for a house and then discover, when it takes it back, that it is worth $45,000. This is true and it is a common occurrence.

The CMHC says “It is not a big deal. We charged $2,000, $2,500 or $2,800 to the borrower. With all these accumulated amounts, it is not a problem if we lose money, because we collected enough to pay the mortgagee and absorb a loss of $50,000, $60,000 or, in some cases, $70,000”. So, we are talking about 30%, 40% or 50%.

I think that this shows poor management on the part of the Canada Mortgage and Housing Corporation. When a person backs something, he should know what exactly it is he is backing and what it will cost if things go wrong. But no. The Canada Mortgage and Housing Corporation has more money than it knows what to do with. It takes the attitude that, if the borrower does not have the money, someone else will.

But if the Canada Mortgage and Housing Corporation were doing its job, if it were assessing all buildings, or 50% of buildings, and not just the 5% it is assessing right now in Quebec, perhaps, instead of charging borrowers between 2% and 3.5%, it would reduce this to 0.5% or a maximum of 1%. The Canada Mortgage and Housing Corporation would truly play the role it was originally intended to play.

But, instead, it still comes under the authority of the Minister of Public Works. A lax approach is taken, not to mention that people who feel that the Canada Mortgage and Housing Corporation is looking out for them and assume that it is in the government's interest to protect them are often misled. People say “I offer $100,000 for a property. If I am being had and it is not really worth that amount, the Canada Mortgage and Housing Corporation will let me know and turn down my application. It will see that I am paying too much.” But this is not the case. The Canada Mortgage and Housing Corporation does not do an assessment.

It is all very fine and well to trust a minister with one's hopes and dreams, but some caution is required.

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Ministers come and go, and not all of them are the same, which is a comforting thought. But when it comes to big money, they tend to sound alike. I noticed that. Their constituency is often the same, irrespective of what party is in office or who is managing government funds.

I will conclude on this note, but I would appreciate it if, the next time he tables a purely technical, housekeeping bill like Bill C-41 before us, the Minister of Public Works would go one step further and consider the impact such a bill really has on all the legislation governing or dealing with any government activity.

The Bloc Quebecois nevertheless recognizes how important it is for the Royal Canadian Mint to be able to compete and to grow. The Bloc Quebecois will therefore support, albeit very reluctantly, the bill at third reading.

[English]

Mr. John Solomon (Regina—Lumsden—Lake Centre, NDP): Mr. Speaker, it is a pleasure to stand in the House this afternoon to put forward the viewpoint of the New Democratic Party on Bill C-41, an act to amend the Royal Canadian MINT Act and the Currency Act.

I want to make a few comments about our position, what we think has happened and might happen in the future. I want to put forward some opinions I received from various Canadians across the country on the topic of money, currency, and in particular that part of the currency we refer to as toonies and loonies.

The bill will amend the Royal Canadian MINT Act to update the terminology for coins in order to reflect the market surge rather then the metals of which the coins are composed. The amendments simplify the process for issuing coins by giving additional powers to the mint and to the Minister of Public Works and Government Services.

The mint is given the capacity of a natural person and the power to incorporate subsidiaries and to acquire and dispose of interests in other entities. I will make some comments about that in due course. Other amendments are of an administrative nature. I want to make one reference in particular. It is not administrative but it may be viewed as administrative by the government.

Some of my colleagues in opposition have pointed out that the mint's capability of increasing its capital from $50 million to $75 million is an important development because the mint will be basically borrowing extra cash to expand its operations.

We support most of the sections of the bill. It is important to update the powers of the mint as time goes on and to make sure it is in line with the powers of other crown corporations. We are happy with a particular change that occurred between second and third reading when the bill was at committee.

The member for Winnipeg—Transcona spoke on the second reading of the bill. He indicated he was concerned that the coins circulated in Canada would continue to be circulated but any new issue of circulated coins would be on a 15 day notice. I see the committee has changed that to sustain the power of parliament to decide whether or not a new denomination of coin would be created.

I acknowledge the efforts of the member for Winnipeg—Transcona. I think that is an important democratic function and an important responsibility of the House of Commons and of parliament rather than letting regulation determine whether or not these things will happen. We have had additional time to consider them rather than just 15 days before they become law. The bill provides for this provision. I am pleased to see the amendment. But every Canadian will be affected by additions or deletions of coins. We must ensure their needs and concerns are properly heard.

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We have seen the introduction of the loony under the former Conservative government. It was widely believed at that time and has been actually proven accurate that the Mulroney government made pocket change of the one dollar bill. People were quite upset with that move until of course the Liberals got elected. They did one better than the Tories who were so roundly rejected by the taxpayers in 1993. They created pocket change out of the two dollar bill. So now what that means is that taxpayers have to earn a lot more money to buy the same goods and services they purchased earlier and the Liberal government is responsible for that effort.

The mint will drum up additional business outside the country. Before I get into that issue I want to make reference to the fact the Reform Party was quite concerned about a couple of issues, about the need for fair competition. Of course everyone is embracing and supporting fair competition.

The hon. member from the Reform Party made reference to the fact that the Competition Bureau ensures there is competition. The Competition Bureau is actually called, in the circles I travel in, not the Competition Bureau but the lack of competition bureau.

Time after time, whether it is drug pricing issues or gasoline pricing issues, the Competition Bureau has failed Canadians in terms of protecting the interests of consumers and ensuring there is fair competition. In fact, it has done the opposite, according to the thousands of people I have spoken to.

This legislation was brought in by the Conservatives. The Liberals endorse it wholeheartedly. The anti-combines legislation, which existed prior to Mr. Mulroney's getting elected in 1984, provided power to the Competition Bureau to investigate price fixing, to investigate predatory pricing without needing a letter from one president of a company to another saying let us fix prices. It had the ability to go into a particular business and investigate without notice whether allegations of price fixing or predatory pricing were true.

I join with my colleagues in the Reform Party by saying I agree with their comment with respect to having fair competition. I believe the only way we can do that is to have a competition bureau that has some teeth and has some capability to look into some of these very serious allegations.

I come from Saskatchewan. We have, depending on the year, approximately 25 crown corporations. What I find incredible with the federal government is that there is no committee responsible for holding crown corporations accountable for their actions.

In Saskatchewan I had the honour to chair the standing committee on crown corporations in the legislature. That committee had the power to call every year all the crown corporation presidents and their management individually before the committee as well as the ministers responsible. We could go for as long as we wanted, not two hours on each corporation, to investigate and question the officials and the ministers in charge of those corporations on matters before the public or matters they were dealing with in terms of their own crown responsibilities.

Saskatchewan is the only jurisdiction I am aware of in the Commonwealth that has a standing committee on crown corporations. That is why in Saskatchewan we have very significant crown corporations providing very significant services to the people of Saskatchewan in a very reasonably priced way, in an accountable way and in a transparent way.

What I would like to see the government do with respect to the Royal Canadian Mint and other crown corporations is establish a standing committee on crown corporations so that we as parliamentarians can have the presidents and their top staff and the ministers responsible come before the committee to answer questions which are important and relevant to the business they are in.

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What this does is provide, as a public committee meeting, an opportunity to make sure the crown corporations' objectives and missions are being adhered to, that they are transparent and doing the service to the public they were created to do. I think that is what we need in the House of Commons.

I am sure my colleagues in the Reform Party support this. We have a lot of support in the province of Saskatchewan for such a committee. I think the Royal Canadian Mint, a crown corporation, would not only continue to operate in a well organized way but its productivity, efficiency and profitability would be enhanced. I think that is a very important suggestion.

The annual reports would be on the table. We could ask any questions pertaining to those annual reports. We could ask any questions pertaining to the business of that crown corporation except for matters before the courts or matters pertaining to human resources for individuals. Those are logical things we do not want to talk about in public.

It is a similar recommendation such as I made to make the Board of Internal Economy a public board. In Saskatchewan the board of internal economy is a public board. The press and members can come. They cannot ask questions but they can see how the board operates rather than doing it in secret as we do in the House of Commons. It is a matter of accountability. It is a matter of being more accountable to the taxpayers and a matter of making sure everything is transparent in the business they do.

I also want to note the concerns of small business with respect to this bill. I am a small business person. Although I believe crown corporations play an important role in our economy, I support generally the initiatives of government to use crown corporations as economic instruments to deliver a program or service that is necessary. Collectively deliver it as opposed to individually if that is the mandate of the government.

The mint is located in Winnipeg where the minister responsible for small business comes from. I believe it is in his constituency. I used to live in his constituency many years ago when I was a young student. I know where the mint is located. It is a very good crown corporation. It provides a very good service. It employs a large number of individuals and pays them relatively well. I think that is something we have to continue to do.

With respect to the concerns of small businesses, they tell me they want to have in this bill enough notice as well as an opportunity to consult if any changes are made. I know the member for Saint Boniface, the minister in charge of small business, is very much aware of that. I know that in the minister's consultations with small business he has been told the same, in particular as it applies to the operation of the mint in his district.

We are very worried about this. I know that when the loonie and the toonie were introduced we had a number of small business people voice their concerns because of the short notice and the fact they were not consulted in advance and could not prepare their vending machines. Vending machines are becoming fairly important these days. We can get coffee from them, soda pop, food, sandwiches, all kinds of snacks. They are used in places without cafeterias. I think it is a very important thing to do.

Business people are telling me that when new coins are struck they should be consulted in advance so they can prepare their machines because it takes in some areas up to $300 to convert one machine for a new coinage denomination. Some companies have instituted some sort of cash box adapters, patented them and they are selling for around $10 each. Those are things that are a little more reasonable. But still they need time to convert those vending machines.

I would also like to make one quick reference with respect to what Reformers talked about. They talked about the need for fair competition which I agree with. I recommended the creation of a standing committee on crown corporations which they probably agree with. They made some reference to privatization. There is a good way to do privatization and there is a bad way to do privatization. What scares the living daylights out of me and my colleagues and the people of Saskatchewan is when the Reform Party starts promoting privatization.

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We had a Reform style government in Saskatchewan from 1982 to 1991. That was a Tory government which was a combination of Liberals, Tories and Reformers. Many are now members of the Reform Party in Saskatchewan called the Saskatchewan Party led by the former Reform House leader Elwin Hermanson. He has the same caucus members who ran the province in 1982 to 1991. They attended the Saskatchewan party convention.

I want to talk about privatization in Saskatchewan as it refers to the mint bill. We have experienced firsthand the Reform style of government in Saskatchewan. It came to power in 1982. We had the lowest tax rates in the country. We had free dental care for children 18 and under. We had the lowest cost prescription drug plan in the world. We had the lowest unemployment rate in the country. We had no debt as a province. After nine years of a Reform style privatization government, with 1 million people we have $15 billion in debt as a result of its privatization initiatives.

When Reformers talk about privatization the people of Saskatchewan look at them and just shake their head and say will they ever learn. Having listened to today's debates, my hon. colleagues in the Reform Party have not learned a thing, not one lesson from privatizing and bankrupting the province of Saskatchewan. Now they want to bring that experience to the House of Commons and bankrupt Canada as a result of some of their initiatives.

Canadians will look very closely and think twice before they support that kind of party with respect to its privatizations.

I will give an example of privatization in Saskatchewan. The government privatized a Saskatchewan potash corporation worth over $2 billion. It kept the debt for the taxpayers. It gave away the assets to the shareholders. As a result of that we have lost revenues of about $100 million a year to the treasury to help out programs like health care and education. We have half a billion dollars in extra debt as a result of that privatization which the taxpayers are now paying off for the next 40 or 50 years.

We had a reduction in employees in the corporation, an increase in the profits, but all the profits are now leaving the provinces to other parts of the world, which is just fine. The other interesting thing is that when we ran the potash corporation as a crown corporation the salary of the president was $150,000 a year Canadian. The privatized corporation is now paying $2 million U.S. to a president of the potash corporation who is from the U.S. Guess who the vice-presidents are? They are from the U.S. and they are all getting millions of dollars in U.S. payments and working in Canada for a Canadian crown corporation. That is the legacy of the Reform style government of Grant Devine in the 1980s in Saskatchewan.

That is the bad way to do privatization. Maybe there is a good way to do it. If a crown corporation is struggling and is not particularly providing any service to Canadians or any kind of programs to Canadian we should look at privatizing that to make sure we have a better service or a better program if that is what the government decides.

At this point we can more or less support Bill C-41. The Reform Party will not support this bill. Privatization is one thing. The Reform member for Elk Island has been pumping a company that is competing with this crown corporation. He has been supporting this company. That is fair. But when the Reform Party is creating policy it always fails to sell its policy in the light of day. In the backrooms or in the dark, if not telling anybody both sides of the issue, they are not reasonably bad ideas from time to time. When we expose the ideas or recommendations of Reformers to the light of day we see that they are pushing other motives. I do not know what relationship anybody has to the company from the Reform riding of Elk Island, but it is another reason people should be aware of in terms of why Reformers would oppose the bill. This is a newspaper story, but the member wants to hear more about how wonderful Reform style government did in privatization in Saskatchewan respecting the Royal Canadian Mint Act.

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An hon. member: Tell us about the NDP style government in British Columbia.

Mr. John Solomon: The NDP style government in Saskatchewan and the hon. member from the Reform are doing a fairly good job. They have taken the $15 billion debt of the Reform Party from 1982 to 1991 and have turned it around. They have made it very clear that they will continue to be responsible and accountable for their actions, unlike the Reform style government of Grant Devine.

An hon. member: Tell us how they have destroyed the economy of British Columbia.

Mr. John Solomon: A member of the Reform Party is asking about British Columbia. I would like to know his recommendations on how to manage a provincial economy when the population is increasing over a 10 year period by 85,000 or 90,000 people a year and no additional revenues are committed to infrastructure or to health programs. He would not know about that because he probably cannot count to 85,000 or 90,000. If he did, he would realize that when the population grows by a million over a 10 year period there have to be additional programs, supports and initiatives by government in infrastructure or transportation.

An hon. member: We have every socialist in the country feeding off the province.

Mr. John Solomon: The member from the Reform Party does not know what socialism is because if he did he would not say what he just said.

However, that aside, I am pleased to see the amendments undertaken by the government to retain the power of parliament in this bill. As a result we will be supporting the bill when it comes to a vote.

Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): Mr. Speaker, I will reply to the member for Regina—Lumsden—Lake Centre.

With regard to Reform's economic policy I suggest to the member that in the 1997 election the NDP put out its policy as to the economic conditions in Canada and what its solution was. Reform put out our policies. I see us sitting here with about 60 members after the election and them with maybe 20. The people judged the economic policies of the Reform Party to be far superior to that of the NDP.

The hon. member refers to the Reform being associated with the Progressive Conservative Party of Saskatchewan. My relatives are all from Saskatchewan. He knows very well, if he had done any research and looked at Reform Party policies on the economy and at what Grant Devine did in Saskatchewan, that there is no comparison. He is lying right here and right now when he talks like that.

The Deputy Speaker: The hon. member knows that kind of language is inappropriate. I know he will want to withdraw those words at once.

Mr. Howard Hilstrom: Mr. Speaker, it slipped out by accident and I apologize for that. It is not appropriate language for here.

In any event I would like the hon. member for Regina—Lumsden—Lake Centre to expand on his knowledge of comparison between the Grant Devine Conservative government and the honest economic policies of the Reform Party.

Mr. John Solomon: Mr. Speaker, I thank the hon. member for Selkirk—Interlake for his question. I am surprised why the member would not understand the history or the implications of what happened between 1982 and 1991 in Saskatchewan under the Devine-Reform-Liberal coalition. I know he would not be aware of it because as an RCMP officer at that time he was all over the country except in Saskatchewan.

An hon. member: What coalition was there?

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Mr. John Solomon: The coalition was with Elwin Hermanson, Grant Devine and Grant Schmidt who are all members of the Saskatchewan Party now. They are Reformers and supporters of the Grant Devine regime and were cabinet ministers.

I know this is a sore point with the Reform Party. We have had about 22 elected Reform, Tory, Liberal and officials from that Devine government, that coalition, who were charged for breach of trust and other very terrible things about which the former RCMP officer from Selkirk—Interlake would know more than I. I was just an MLA at that time and not part of the police force. It was his colleagues who investigated these people.

I do not know the number, but I think about 15 of them were found guilty. The Saskatchewan Party is a new party in Saskatchewan made up of Reformers. Elwin Hermanson, the former Reform house leader, is the leader of the Saskatchewan Party and has all these Grant Devine folks in there, those who were not in jail.

They attended a big convention the other day of about 150 people. By the way, on Saturday one of the provincial ridings in my federal district, Regina—Qu'Appelle Valley, had a nomination convention. We had just under 300 at a nomination convention for one provincial riding with only two people seeking nomination. We can tell how powerful the Reform Party of Saskatchewan is in Saskatchewan.

The Reform Party and the party in Saskatchewan of Grant Devine are basically the same. They put forward the same policies, the magic policies of less taxes, more services and more jobs. That is what they promise. Grant Devine did that and the Reform Party did that. Grant Devine was elected, however, and we ended up with fewer jobs, incredulous increases in taxes and very few people working. I believe that was part of the problem.

The Reform Party just embraced this Grant Devine policy. I should not be warning it not to continue doing that. I should encourage it to keep pumping that policy because if it does that it will never get elected. I am very concerned that Reform members do not remember their history. Somebody once said that if we forget the lessons of history we are doomed to repeat them.

I am not a teacher by background, but I think it is really important to remind them of their history. Their history in Saskatchewan is really bad, corrupt and terrible. It has been shown across the province that all the things they have undertaken resulted in fewer people working, higher unemployment rates and higher taxes for people, which resulted in money leaving the province and huge debts left for taxpayers.

We in the west are very worried about that. Yes, the member's arithmetic is right. There were more Reform members elected in the last election than there were New Democrat members, but that is the way it goes. We in this party respect democracy. Being from Saskatchewan, the member would know that there is an old saying that when you throw a rock in the dark and a dog yelps you have hit a dog.

Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker, I appreciate the comments of the hon. member from the NDP, but I did not hear a lot of relevance with respect to Bill C-41 on the Royal Canadian Mint.

The member alluded to and analysed the Saskatchewan government and how it has been very productive in the province of Saskatchewan. Since we are off on a tangent right now, would the member analyse the two provincial governments, the one of Bob Rae and perhaps the one of Glen Clark?

I understand they were both NDP governments that perhaps had problems with the issues of taxes and job loss and perhaps has a problem right now with a loss of confidence in the voters of those two particular provinces, particularly Bob Rae who unfortunately or fortunately for a lot of us no longer seems to be in the political sphere. Would the hon. member please analyse those two governments?

Mr. John Solomon: Mr. Speaker, I appreciate the question from the member for Brandon—Souris. He always has some great questions and I think this is a pretty good one.

I can only speak about things that I am familiar with. For example, I know that the NDP government in Saskatchewan did not send anybody to jail, whereas the Reform-Tory coalition sent 18 to jail. That is one example. I guess it is not very good.

The Bob Rae government did not send anybody to jail from its caucus. The Reform-Tory coalition in Saskatchewan sent about 17 or 18 to jail. I may be off by about one or two but it is approximate.

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As for the NDP government in British Columbia, none of its officials are in jail, at least yet. The Tories and the Reform in Saskatchewan sent 17 or 18 Tory and Reform MLAs to jail. I guess I can only compare what I know. To me that seems to be somewhat balanced.

I know the NDP in Ontario had a bit of a rough ride. The member for Brandon—Souris would appreciate this immensely because he is the member of a party that had a rough ride in 1993 in Canada. They went from government to two members. He can relate to the anxiousness and the anxiety of the NDP in Ontario.

If we look at the polls the NDP is doing very well across the country. We are leading the polls in Saskatchewan. We are leading the polls in Nova Scotia. We are leading the polls in Manitoba. That is three provinces. We have a government in Yukon. In British Columbia we have two more years to go, and I am very confident the NDP in that province will rebound.

Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, I really do not have a question but I do have a comment.

This is the House of Commons. It is a place with elected officials. One of the things that really bothers me about this presentation is the implication and innuendo that the member used. It reduces the respect that this place can generate.

For example, I had a number of people from the NDP support me in both the elections in which I ran, including the candidate for the NDP. I do not think he would want me to say that because of the presence of an NDP member on my executive I should automatically be considered a really bad guy. That is my comment. I think the hon. member is out to lunch.

Mr. John Solomon: Mr. Speaker, I think the member for Elk Island misinterpreted my comments. I did not make any reference to him personally by name. I did not make any reference to his executive. If it has NDP members on it, it has to be a darn good executive in my view.

In debate we have to look at the facts. In Saskatchewan we had a Reform-Tory-Liberal coalition in government that was corrupt, ended up in jail, and they happened to be Reformers.

Mr. Gilles Bernier (Tobique—Mactaquac, PC): Mr. Speaker, I am pleased once again to be able to speak to Bill C-41, an act to amend the Royal Canadian Mint Act and the Currency Act. I just want to get back to what we are here for, and it is not criticizing each other.

When the minister responsible for the mint first introduced the bill on May 7, I was careful to go through it with a fine toothed comb. I saw many important changes being proposed, but I also identified two items which caused me grave concern.

In the time since I have had a great number of meetings and have done a fair bit of work on the bill so that I am satisfied now that most of my concerns have been dealt with. As a result, I am pleased to say we will be supporting Bill C-41 at third reading.

Today I would like to talk about the process we have gone through to get to this point, readdress my original concern and discuss why I now believe it is important for members to support the bill.

When Bill C-41 was first introduced it contained two provisions that prevented me from immediately endorsing the bill without further study. The first of the changes contained in clause 3 would have stripped parliament of the authority to introduce new coins into circulation or to delete old coins from circulation. It proposed putting that authority into the hands of cabinet and streamlining the decision process.

I have always jealously guarded the authority of the Chamber. Members of the House are the people's representatives.

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It is right that having been vested with this authority we should have an important part in the decision making process of government. Unless there is a clear and compelling reason for any power held by members of parliament to be moved elsewhere, I oppose any effort to diminish the authority of the Commons.

This is not an academic discussion. It is very likely that at some point in the near future members of parliament will be asked to consider whether they wish to replace the $5 bill with a $5 coin. It is also quite conceivable that they will have to decide if having a penny in circulation serves any useful purpose or if it should be retired. As it stands now, if the government wishes to take an existing coin out of circulation, or bring in a new coin, it must introduce legislation for consideration by parliament.

As with all bills such as the one before us today, there must be a full public debate with committee hearings and ultimately a public vote before such a change can take place. This bill proposes turning this decision over to cabinet. It would require the minister to give 15 sitting days notice before cabinet makes the decision. However, it would have been powerless to stop any decision the public found undesirable and that is what I oppose. Government works best when it bases its decisions under the full scrutiny of the public eye. It is not pretty at times, but it works.

For example, take the decision to replace the $1 bill with the $1 coin back in 1987. I remember that there was great discussion over the efficacy of having the loonie. On one side of the discussion we had the vending machine lobby and the bus companies which promoted the convenience of having a $1 coin. On the other side was a diverse group of people who were concerned about replacing the dollar for reasons that ranged from nostalgia to concern that pant pockets would have to be reinforced because coins were too heavy. Regardless of what our individual feelings were on that issue, it was right for us to have that debate in the House, the most public of forums. It is right that we should have a debate here if there are to be similar changes to Canada's currency in the future. Understandably, the fact that Bill C-41 would take this decision away from parliament troubles me a lot.

I was fortunate enough to have a briefing on the bill in June by officials from the Royal Canadian Mint, including the master of the mint, Danielle Wetherup. When I asked Mrs. Wetherup why the government would consider removing from members of parliament the power to approve a change in the country's coinage she was able to give me some history behind this portion of the bill.

Apparently, when parliament was dealing with what was then Bill C-82, the act to replace the $2 note with a $2 coin, the master of the mint received some negative feedback from members of parliament on the process involved in approving the new coin. At that time it was in late June. The days were very hot. The government had a very busy agenda. The committee room where the government operations committee was reviewing the bill was not air conditioned.

In the heat of the moment, if members will pardon the pun, and faced with a large number of bills to approve in the final days before the House recessed for the summer, some members of parliament observed that Bill C-82 was not the most important piece of legislation before them. They wondered out loud if there was not an easier way to deal with what seemed to them to be a straightforward change.

Understandably, mint officials made a note of this. When it came time to update the Royal Canadian Mint Act, as is done every 20 years or so, they decided to propose changes to simplify the approval process for changes in coinage in response to suggestions by members of parliament at that time. The result was clause 3, as it appeared in the original printing of Bill C-41. However, members will note that clause 3 has changed.

For reasons that I have already explained, it was unacceptable to me that the decision to change Canada's coinage should have been taken from parliamentarians. Therefore, on behalf of my party I drafted a amendment to leave that decision where it belonged, in the hands of the peoples' representatives.

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I shared my idea with Mrs. Wetherup, the master of the mint, on two occasions, during our first real briefing with members of parliament and during the hearings of the natural resources and government operations committee into Bill C-41. Throughout the committee meeting she rightly stated that the final decision as to whether the government would support the amendment rested with the minister. She indicated during our first meeting that since the original idea for clause 3 had come from members of parliament the mint would not oppose leaving the decision making process the way it was if, on reflection, members of parliament believed it should remain that way.

I also spoke to the minister's office and to the critics from other parties about my amendment. I argued the importance of my amendment and said that members of parliament must continue to have an important role in the government decision making process. Apparently they must have found my arguments to be persuasive. When I presented my amendment in committee last Tuesday, it received the unanimous support of the members of parliament present. I acknowledge and thank all members of the committee and the minister for their considered, non-partisan support of my amendment.

Clause 7 is another provision of Bill C-41 that concerned me. It proposes increasing the borrowing authority of the mint from its present $50 million to $75 million. This proposed change troubled me because of a new venture the mint is undertaking in building a new facility in Winnipeg to manufacture coin blanks.

Clause 7 worried me principally because I thought the mint would use this newly acquired borrowing power to finance this poorly thought out venture and put a successful Canadian company out of business. I did not realize at that time that the mint financed this $30 million venture in March and that the building which will house the coin plating facility is nearly completed. It is clear at this point that Bill C-41 has no bearing on the mint's decision to build this new facility. Therefore, I must separate my opposition to this scheme from my position on the bill and evaluate clause 7 on its own merits.

Do not mistake my support of this bill as an endorsement of the mint's decision to get into the manufacturing of coin blanks. I oppose that decision for two reasons. First, the facility will put the Royal Canadian Mint into direct competition with a successful Canadian supplier of coin blanks, Westaim of Alberta. Westaim has supplied the mint with coin blanks for 35 years. It employs 110 people at its plant in Fort Saskatchewan and the entry of the mint into this industry will jeopardize this Westaim division and its 110 employees.

Second, this is a risky venture for the mint to undertake. Because it has borrowed the money on taxpayers' credit, it is also risky for Canadians. There is currently a 30% to 40% oversupply in the world's coin blanks market. If the entry of the mint into this market does not drive Westaim out of business and put its 110 employees on the unemployment line, it could go spectacularly down in flames and take millions of taxpayers' dollars along with it. Industry experts agree that the market for coin blanks will experience a slight blip in demand as the new European currency starts, but it will then continue its steady decline as electronic transactions become more popular and the need for coinage and paper money decreases.

As if poor markets were not enough, the costs of getting the mint into the coin plating business are enormous. The $30 million dollars borrowed by the mint in March is just to build the Winnipeg plant. Start-up costs are substantial for a new competitor in a mature to declining market. The Royal Canadian Mint will have to compete against established, experienced, well-entrenched competitors which have had decades to build their expertise and economies of scale.

For example, consider employee costs. The process of manufacturing coin blanks requires highly skilled workers. There are only two ways to obtain employees such as this. The first way is to spend an extraordinary amount of time and money to train these people. The other option is to hire them away from competitors by offering them more money. Either way, employee costs are going to be higher than those of competitors, and in a commoditized, price sensitive industry this is bad news.

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Not only will the mint have to contend with its high cost structure, but like any brand new business it will make many mistakes.

Thus, I fear for the Royal Canadian Mint, I fear for the employees of Westaim and I fear for the taxpayers who are, so far, on the hook for $30 million.

However, I realize now after considerable debate and consultation on Bill C-41 that these are two separate fights. Although I will continue to search for a resolution to the mint's entry into the coin blanks industry, I can happily say that we have won the fight on Bill C-41. Now that the committee has fixed the problem with the bill, it has removed the final obstacles to my party's support.

In closing, I would like to again thank the members of the Standing Committee on Natural Resources and Government Operations as well as the minister for helping to get my amendment approved.

I would like to thank Danielle Wetherup and the other officials of the mint who were kind enough to meet with me on a number of occasions, both privately and publicly, to review this bill and to discuss my concerns in detail.

Although, as I have mentioned, I do not agree with everything the mint is doing, I do agree with the changes to the Royal Canadian Mint Act and Currency Act as proposed in this bill.

I have no hesitation in supporting this bill and I would urge other members to do the same.

Mr. Werner Schmidt (Kelowna, Ref.): Mr. Speaker, I would like to congratulate the hon. member who just entered the debate. I thought his analysis of the function of the mint was very interesting and very good.

However, could he address the question of whether he finds his support of the bill, generally, not to be inconsistent with his criticism of what the mint is doing?

Would he agree that clause 2 of the bill, which amends section 4 of the Royal Canadian Mint Act, expands rather dramatically the power of the mint? It allows precisely what he just said in his speech. He disagrees with what the mint is doing, mainly getting into the coin plating business. This bill allows that to happen and gives the powers to the mint to do precisely that.

While he may disagree with the mint doing that, the legislation being proposed permits the mint to do precisely what he says he does not want it to do.

That is exactly the point and why I object to that clause. The hon. member, on the one hand, says he disagrees with that; on the other hand, he supports the amendment. Could he clarify the apparent contradiction here?

Mr. Gilles Bernier: Mr. Speaker, I want to thank the hon. member of the Reform Party for his question. It is a very good question.

I have been in business for over 20 years. I said from the start that government should not be in business. The mandate of government is to manage taxpayers' dollars, and I have not yet seen this government do that.

When there is a bill in front of the House, members do not have to agree with everything in the bill. They can work hard along with their party colleagues to try to make amendments and to change some provisions that would make the bill acceptable. That is what I did.

There are some flaws in the bill. However, being 43 years old, I believe in a life of compromise. That was the way I was brought up. My dad always told me that if someone wants to get a little in life they have to be able to give a little. I strongly believe that.

It is true that there are still some flaws in the bill. However, just because there are a few flaws here and a few flaws there, whether we vote for it or vote against it, the bill is going to pass anyway.

I fought to get the amendment I wanted and I won the amendment. The amendment is good for members of parliament because it keeps the power here in the House of Commons and it is good for Canadians in general.

Ms. Carolyn Parrish (Parliamentary Secretary to Minister of Public Works and Government Services, Lib.): Mr. Speaker, I have a comment to make. I would like to congratulate the member opposite. It is not often that someone gets to make their mark in this place. The member has made his mark today as well as at committee. I think he has done a very reasonable job.

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As the member just explained, there are parts in the bill he does not like, but he got in there and negotiated rather than just being negative. I really appreciated it and I would like to express the appreciation of the minister on his co-operation. Congratulations.

Mr. Gilles Bernier: Mr. Speaker, I just wanted to comment on what the hon. parliamentary secretary said. I am very flattered. It is not often that this happens in this place.

I believe that regardless of which political party we are from, we were sent here by Canadians to represent Canadians. I am here to represent the people of Tobique—Mactaquac in New Brunswick. In my portfolio of public works and government operations, I am here to represent all Canadians, whether it has to do with Canada Post or the Royal Canadian Mint. It is one of the biggest departments in Canada. It includes Canada Mortgage and Housing Corporation and a lot of others.

Whether one is a Reformer, an NDP, a Bloc, a Conservative or a Liberal, we have to work together in the House to make things happen for Canadians. That is what Canadians deserve and that is what we have to do for them. I hope by the time the next election comes around people will see the work that I do and they will elect more Conservatives.

Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, I have been listening to all of this debate today. It shows how insidious Ottawa is that people can come forward with a bill that competes with the private sector, uses taxpayers to do it, and people in the House will stand and support it and help to shut down private businesses.

This is not the only time this has happened. Canada Post uses its dollars, the dollars that hon. members and other taxpayers will spend in terms of regular mail, to cross-subsidize and compete against people in the courier industry and against people in the private sector who deal with e-mail when Canada Post delves into that for the first time.

Once again we have the situation of the mint using taxpayer dollars to edge out private competitors. That is the type of wrong-headed philosophy that has got us into the debt that we have. As well it has been responsible for limiting and curtailing business possibilities and entrepreneurship.

I do not know how people can reasonably stand and be in favour of edging out private business.

Mr. Gilles Bernier: Mr. Speaker, again the hon. member from the Reform Party has a good question but he is way off base. He does not know what he is talking about.

The reason I am saying that is the Royal Canadian Mint is building a plant in Winnipeg for a price tag of some $30 million. The mint is not using taxpayers' money. It has borrowing authority. It borrows from banks. A person who wants to buy a car does not come to the government, that person will go to the bank. That is what the Royal Canadian Mint did.

The mint is asking parliament to increase its borrowing authority from $50 million to $75 million. The plant it is building in Winnipeg was started last March, before presentation of this bill. The mint went to wherever it went and borrowed the money. It is not taxpayers' money. There is a cliche in that. If the Royal Canadian Mint makes money, Canada wins. If the Royal Canadian Mint, which is a crown corporation, loses money, the government is liable and the taxpayers are going to pick up the tab. The money used to build that plant in Winnipeg is not taxpayers' money, it is money that the corporation borrowed from an outside source.

Mr. Rob Anders: Mr. Speaker, it is a crown corporation. Whether it borrows that money or however it comes by it, that is eventually a public debt.

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This country has a number of other crown corporations. For somebody to stand here today and say that crown corporations do not somehow involve public money, that is not the definition I understand crown corporations by. Ultimately if they have problems, it is the taxpayer that is left holding the bag.

Mr. Gilles Bernier: Mr. Speaker, I said that we are debating Bill C-41, an act to amend the Royal Canadian Mint Act and the Currency Act. I am not talking about other corporations. I am talking about the Royal Canadian Mint which is a crown corporation.

That corporation itself does not get money from the government. The mint has borrowing authority from the government to go outside and borrow the money it needs. I do not know where the hon. member from the Reform Party is coming from when he says it is the taxpayers' money. It is not taxpayers' money. It is borrowing money from a bank. It is the bank that owns the Royal Canadian Mint until the loan is paid. What is wrong with that? It is a business deal.

Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, I am again honoured to stand in my place here in the House of Commons to represent my understanding of what is good for Canadians and to represent also the needs and aspirations of a number of people in my riding. That certainly does apply in the case of Bill C-41.

I cannot help but begin my speech by saying that the member from the NDP who spoke sure did drift a long way from the intent of what the bill is about. I was very disappointed that he allowed himself to be reduced to getting into a whole bunch of innuendoes that does not fit this place. It is disrespectful of what the House of Commons represents as well as what we as individual members are to do here.

I want to talk about the various implications of the bill. I am sure most members are well aware that as with almost any bill there are some good parts and some bad parts. I would like to use the first few minutes of my time to talk a bit about the process in terms of how bills are brought in and how these decisions are made.

It is very important for the government, whichever party it is that is governing at the time, to listen very carefully to people who have problems with a bill or motion. Usually it is government bills. The government should pay close attention when we have some legitimate concerns.

I would like to congratulate the hon. member for Tobique—Mactaquac. He is indeed an honourable member of the committee. It has been good to work with him, although I will admit that I was there as a substitute and I am not a regular member of that committee. The member, by compromising, did win one point.

I want to throw out the question: Is that really what we ought to be doing? Should we really be selling out on five items in order to gain one? That is what we are reduced to. It does not matter whether the members are on the opposition side or whether they are backbenchers on the Liberal side. The instructions that come to the committee are from the minister, the deputy minister or whoever it is in the department. We detected that in this bill as we have seen it so often before.

Yes, this amendment was put forward and yes the hon. member talked to other members about it and he was able to persuade them. But the member himself said that he would like to thank the minister for being open to his amendment. One person. I know, we balance this. The minister is ultimately responsible for the operation of the department. That is true. There is a lot of obligation on his part. But in this particular instance we also need to recognize that there are some concerns beyond just this one that got horse traded into existence. I wish there would have been a greater openness.

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I hesitate to do this so soon before the joyous season of Christmas, but I have to admit that I sometimes despair of the process used in this place. I really wish we had a much more open and more democratic way of doing these things.

Speaking about this bill, the first issue I am going to talk about is the one that causes me a great amount of concern. The mint is a crown corporation, but this bill gives to the mint new rights and powers which exceed what it had in the previous act. It might be illustrative to read the amendment which we know is going to be passed. Once the government decides that it is going to do something, that an amendment is no good and another one is okay, we know the Liberals will pass it based on previous experience and knowing how they operate.

The bill says that in carrying out its objects “the mint has the rights, powers and privileges and the capacity of a natural person and may in particular” and then there are several things listed. One of the things the mint may do in particular is it may procure the incorporation, dissolution or amalgamation of subsidiaries and acquire or dispose of any shares in them.

The mint as a mother corporation may have a whole bunch of subsidiary corporations. To me, that is fraught with danger. When there are subsidiaries and subsidiaries and so on, it removes accountability further from the minister and hence from this place and hence from the people.

The bill will permit the mint to acquire and dispose of any interest in any entity by any means. When somebody says “I am going to give you the right to do anything that you want by any means you choose” I have a bit of a problem with that.

Of course, the preamble says it must use this power in order to promote the well-being of the mint in order to carry out the objects of its incorporation. The mint may buy a corporation or it may set one up by any means it wants. Perhaps it would pay $29 a share for a little subsidiary corporation that it wants to own. Then it can dispose of it by any means that it wishes. All one has to do is use one's imagination on how this could happen.

The very subtle thing here is it would permit the mint, using the backing of the government as its financial base, to procure anyone who dares to compete with it and then to dispose of them by basically shutting down the business. That is scary. We need to be careful about that.

The next thing listed that the mint might do also has all of these all-inclusive terms. The mint can generally do all things that are incidental or conducive to the exercise of its powers and the bill talks about the coins of the currency of Canada, the coins of the currency of countries other than Canada, gold, silver and other metals, and also metal plaques, tokens and other objects made or partially made of metal. Generally the mint can do all things that are incidental.

If I were to allow my imagination to run freely, and I do not do this often, I usually have a disciplined mind, but if I were to just let it run a little freely, one of the things the mint has to do is to move its product from place to place. I can see that it might want to have a subsidiary trucking company or perhaps it might want to buy a railroad or two. I am exaggerating of course, but this bill would allow the mint to do that if it so chose. It is something we really need to guard against in giving a crown corporation this kind of power. There has to be a continued line of accountability and approval related directly to what is good for the people.

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There is a section that has to do with non-circulation coins. We know there are a number of coins produced every year, coins for medals and coins for commemoration. I imagine we will be inundated with coins at the millennium. I have read a few articles on that topic. In 1867 the country was born and in 1967 we had coin for each province to commemorate. It was a series of quarters. I imagine this can happen again.

Medals and non-circulation coins and collectors coins may be determined both in characteristics and denomination by governor in council, which means the minister can authorize it. It can be announced and that will be the end of it.

When it comes to circulation coins, happily the amendment from my colleague from the Conservative Party did gain approval and certainly with our support as well. There is a danger when circulation coins are brought in or removed that the people could be ignored in the decision. One thing does concern us, the amount of public debate and accountability when characteristics of coins are changed. As the coin business goes this also is very important to Canadians. There are literally thousands of people use coin operated equipment. When a coin is changed in design or structure, that has implications to machines that accept coins as payment.

There is a cost saving measure now to steel plate coins with nickel on top of them so they would be nickel plated steel. When that happens the density of the coin changes. Any mechanism in the machines to detect whether this is a genuine quarter or just a slug will be affected. I have talked to the administrative people in the mint. They are fine people. They are friendly. I found them very easy to talk to and I am sure they would make sure that when they changed the composition of coins or the shape of coins they would pay attention to this. But there is nothing here that requires them to so. It just says they can do whatever they want to in order to pursue their own objectives, presumably to make money for the mint.

Our penny has changed in the last couple of years. It went from a 12 sided coin to a fully round coin. Of course we do not use pennies except in Swift Current, Saskatchewan. I do not know if they still do.

In places around here you can pay one dollar for 10 minutes in parking meters. Swift Current had 12 minutes of parking for a penny. I could not resist the temptation, though I was just going into the post office and back out, I plugged in five pennies because it felt so good to get an hour of parking for five pennies. That was several years to.

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Municipalities that have parking meters need those meters adjusted if the coin composition changes, if the shape changes or if the weight changes in order that the parking meter will accept the appropriate coin.

I think it is a ripoff at Ottawa's airport right now where it wants us to put our credit card in and then dings us for a dollar every 10 minutes. To me that is a huge ripoff because we only go there to pick someone up. To rip people off that high is not acceptable.

That is a diversion almost as far away as my NDP member so I had better get back on to the list of things I am concerned about.

Included in this act are a definition and a few little changes on what constitutes legal tender. Everyone once in a while we hear someone who is fed up with a big bill they got so they pack up five big pails of pennies and pay the bill with pennies. The person to whom they are paying it really does not have to receive it because legal tender is limited, as it always has been. Usually they accept it and the guy gets his day in the sun and his picture in the paper.

However, the limits are also given. For example, Mr. Speaker, if you owed me $40 you could pay that with $2 coins but you could not pay it with $1 coins. Those limitations are given here. Using $2 coins is limited to $40 and using $1 coins it is limited to $25. Using 10 cent pieces, quarters and 50 cent pieces is limited to $10. Using nickels is limited to $5 and using pennies is limited to 25 cents. The person can actually demand currency other than pennies for any debt owed which is greater than 25 cents. I expect that sometime soon we will have a move to remove the penny since I think its usefulness in this inflated era is reduced in value and I am not sure we should maintain it. Perhaps it should become a giant collector's item. I would certainly favour that.

I want to say something now about the mint and its production of its own blanks. This does impinge on the Westaim Corporation which operates in my riding. I have spoken on this topic before and it is a continued distress for me. I have talked to both sides. I have talked to people from Westaim and I think they are very fine people just like the people in the mint.

There are certainly two sides to this debate but there is one side I think really needs to be emphasized. Even though one can argue it is not borrowing from the consolidated fund nor is it taking money directly from the taxpayer, it is a government guaranteed loan. This legislation states that it may borrow now instead of a maximum of $50 million up to $75 million and may get it from either the consolidated revenue fund or from any other source.

Of course for the building of the plant in Winnipeg it did use other sources. It borrowed $31 million through the sale of regular financial instruments and received a very good rate. Why not? If I as an investor wanted to put some money somewhere I know the mint is a really safe place to put it. I am willing to accept a lower rate of interest. The mint gains by that and by being backed up by the government and the investor is a beneficiary because that investor knows the mint is not going to go broke unless the whole country goes broke. I suppose that is always a possibility but it is much more remote than for other corporations.

The coin plating plant is competing with private enterprise, competing with the job that 100 people in my riding have been doing successfully for 30 years, with the backing of the Canadian dollar, including the taxpayer dollars that have been collected from Westaim and its employees.

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They are forced as taxpayers to back up their very competition that is driving business elsewhere. I find this very distressing. It is a faulty principle. The government is getting out of business. It has privatized with NavCan. It has privatized a whole bunch airports. We even have portions of the military forces being run by private groups on contracts. In this instance it is going in the opposite direction. It is wrong headed. It is wrong for the government to be in competition.

Mr. Philip Mayfield (Cariboo—Chilcotin, Ref.): Mr. Speaker, I compliment my colleague from Elk Island for his thoughtful and disciplined look at this bill and the explanation he has given.

A number of thoughts came to my mind that I would like to raise for his consideration. He mentioned NavCanada coming out of Transport Canada. In that instance we see private pilots who will begin to pay $60 per year for their airplanes to use the navigation system. But they are not getting anything back for that. They are still paying the same amount of taxes on aircraft fuel.

Another instance is the post office. We have seen how that crown corporation has gone into the courier business in direct competition with other couriers. It has the advantage of being the only corporation that distributes first class mail. It has the resources of the government to compete.

There is a general thrust of the federal government taking more and more discretionary and using that power to open up a competitive force against private business. My colleague mentioned the discretion of the minister in this legislation to make decisions without reference to parliament. The other side to that kind of discretionary action is it diminishes the powers of the parliament which is directly responsible to the people.

This lack of discretion and this opening up of the competitive front against private industry is something that truly concerns me. It seems to work against the best interests of not only corporate Canada but individuals who are attempting to make a living and support their families and their children.

I would like the member to comment on this whole thrust of the government's increasingly taking more and more discretionary power and by the same token reducing the authority, responsibility and accountability of parliament to the Canadian people.

Mr. Ken Epp: Mr. Speaker, there is a balance to be reached here. I am not one to say the government should not do anything. I spoke against it building this coin plating plant because there is a very fine plant in business. It has a very long history of producing excellent coin blanks not only for Canadian use but across the country. I do not see any need for the government to get into that business.

There are things that government should be doing. As a people there are things we can do collectively through our government more efficiently than having everything privatized. For example, the post office as a crown corporation is an entity that can do a good job for the Canadian people. In some instances the individual outlets of the post office have been privatized. They are put out to tender.

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I have heard both sides of the story. Some people say that it is great they can go to Shoppers Drug Mart at 10 p.m. and can get postal services, something they could never get before. Yet there are other people who say they cannot get the service they used to have because the people sometimes are not trained, their regular post office people have gone away and somebody else from cosmetics is filling in and they do not know the answers. There are some problems.

As parliamentarians and as a government we have an obligation to account to the people of Canada how we are administering their tax dollars and how the corporations that are run on their behalf are operated. It is not totally one side or the other.

I would not want to see everything in the country privatized, but I certainly have objection to the government using income from taxpayers and from corporations to run in direct competition with the people who have paid the taxes in the first place.

I remember many years ago there was a move in Saskatchewan where I grew up. There was a guy who had a good business—he supported his family with it—running a bus from Battleford up to Meadow Lake. He made a run a day and he always had enough passengers and freight that he could fill up his bus. He made the run and everybody was happy. He made a living on it.

Lo and behold the Government of Saskatchewan, the NDP government that likes to run everything on behalf of the people, bought the business. It gave fine service as far as I know. The service was not diminished but it lost money ever after that. Every year it posted a loss on that run and put this guy out of his job. That was a wrong decision.

Mr. Werner Schmidt (Kelowna, Ref.): Mr. Speaker, I was pleased with the hon. member's comments, particularly the rational way in which he analysed the bill.

How would he apply the general principle that government should do those things and only those things that the people cannot do as well or better themselves? This is a fundamental principle. The government should do things. I agree with the hon. member that there are things the government can do which the people cannot do for themselves or cannot do as well for themselves. Could he elaborate on that a little more?

Some of the crown corporations become an end unto themselves. They serve their own ends. They are no longer filling a gap or doing that which the people cannot do as well. They are taking jobs away from people.

It is this principle we have to look at, particularly with regard to proposed clause 2 of the Royal Canadian Mint Act which expands those powers to where the act says the mint can buy anything, do anything, and so on.

Mr. Ken Epp: Mr. Speaker, this is a real challenge because it is a balancing decision.

A couple of general principles could be applied. One I would use is that if there has been or is already a private firm or competition among private businesses, the government should stay out of it. If it is already being done and done well, the government should simply stay out of it as a matter of principle. That is a principle of government. It is in place but the Liberal government is ignoring it.

It is supposed to be a principle of governing that it does not compete with private enterprise. On the other hand we have those situations where the government can do best. I think of an example which relates back to my youth a long time ago. I remember when I grew up in Saskatchewan that my dad was the chairman of the Bode telephone company.

Members have probably heard of Alberta Government Telephones and B.C. Government Telephones. Now they are evolving into the different names and we have Telus. Before Saskatchewan Government Telephones ever came along there were literally thousands of individual telephone companies spread around all the provinces. My dad was the chairman of the local one and there were five subscribers. It was a big company. We had five people on the line and two longs and a short was us.

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My grandfather was with a different company, the Peel telephone company. If we wanted to phone my grandfather we had to dial one long, which was the operator. She would hear this as sat in her little office in Swift Current. Everyone has seen Lily Tomlin do this. Well there she was in Swift Current pulling the cord out and connecting our line to Peel. Then she would dial grandpa's number. He would answer, or grandmother would answer, and we would be able to talk to them.

That was very inefficient and going nowhere. What happened in each province at least out west is that all these little individual companies got together and formed an organization that would allow the whole province to do it together. It was done under the auspices of the government. It was a fine co-operative effort on behalf of the people. At that stage it was a totally legitimate way of doing things.

That is probably no longer the case. With communications being what they are, it is probably better to let free enterprise and competition rule.

Mr. Rob Anders (Calgary West, Ref.): Mr. Speaker, I had to get in my two cents worth on this issue. I had to listen all day to members justify how a crown corporation should have access to consolidated revenue funds. This is my duty day so I had to get up to give my piece.

There are three reasons I have problems with the bill as it stands. Under the bill $75 million in taxpayer dollars will be used for a guaranteed loan through the consolidated revenue fund or any other source. That is how it is worded. At the end of the day that means taxpayer dollars are being used to prop this up. If it were to go belly up, the taxpayers would be left holding the bag.

What is so insidious and evil about these types of things is that it is actually taxpayer money, money people pay out of their own wallets, that is being used against them. I have often maintained that it is actually better to burn a million dollars than it is to give it to the government. This is a small insidious case but nonetheless it is a classic example of what happens in this place.

People pay their good hard earned money into this place and it is used against them. The people who are employed by a company like Westaim will see government dollars being used to try to shove them out of the marketplace. That is what is evil about it. There is a private sector company performing the task of producing blank coins and the government is going ahead and putting it out of business, shoving it out of the way.

If this were just one example it might fly and people would not pay it any heed or any attention. People like me would not get up to speak. Unfortunately this is just one among many examples. There is the Royal Canadian Mint. Canada Post is trying to shove out people with e-mail. Canada Post is trying to shove out private sector competitors for parcel delivery. Canada Post is trying to shove out courier competitors. Canada Post is shutting down Overnight Express in Calgary. It was delivering mail in the T2P area code downtown for a fraction of what Canada Post does it for and guaranteeing mail delivery overnight. Canada Post shut it down because it has a monopoly.

There is another example in training programs. Henderson Business College was operating in the city of Calgary. For decades it provided good training for those who were looking to improve their typing skills and their abilities in various business related areas. The government subsidies came in and the universities and colleges that had access to all the public funds in the city of Calgary, in the province of Alberta, were edging out private sector businesses. It kept going ahead and developing curricula and programs. It ate away at private sector businesses and eventually shut them down. Henderson Business College shrunk. It shut down. It used to have two offices. It went down to one. Then it went out of business. That was because of the insidious type of thing we have where the government uses people's money to put them out of business. It uses their own taxpayer dollars to put them out of business.

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I remember this only too well in the city of Calgary when Petro-Canada was nationalized and Petrofina was brought together with some other companies. The government went ahead and used government dollars to establish the tallest oil and gas building in the city of Calgary just so that the prime minister of the day, Pierre Elliot Trudeau, could remark with pride that Petro-Canada towered above its private sector competitors that did not have access to the type of dollars and the endless taxpayer pocket to which the Liberal government, the Liberal administration of the day, had access.

That is the type of problem I have with the bill, with guaranteed loans and with shoving out private sector businesses. It hurts private sector businesses with their own hard earned taxpayer dollars.

Another aspect is that the government is trying to establish an arm's length relationship. It is doing it time and time again, whether it is with Revenue Canada or a whole host of other things. It does not like the idea of ministerial accountability. It does not like the idea of parliamentary supremacy in being able to question the government on some of these things. It continually goes ahead and moves them further down the line.

Liberals like to put them at a further and further distance from themselves so that when problems arise and the opposition points them out and puts forward amendments they can say “Don't worry. Trust us”. Years down the road once it has established an arm's length relationship we see problems that we said would happen. Then the government says it is not its problem any more, that it is an agency or something beyond a crown corporation. We cannot touch the government any more. The minister is not accountable.

There are three good reasons to oppose the bill. The first is taxpayer money being used as a loan guarantee. The second is public dollars, taxpayer dollars, business dollars, being used to shut down private enterprise to be able foist the public sector on them. The third is the whole idea of lessening accountability and creating a greater distance with arm's length relationships and cutting down on ministerial accountability.

Ms. Carolyn Parrish (Parliamentary Secretary to Minister of Public Works and Government Services, Lib.): Mr. Speaker, in the last hour I feel like I have sat through the good, the bad and the ugly. The good is over there and the bad and the ugly are over here.

I do not understand if the corporation is being defended so severely and is being put out of business why—and perhaps the member can answer this—it can only produce about 20% of what the mint needs. In actual fact the mint has to go outside Canada to buy plated blanks to do the job. If we are shutting them out of business, perhaps the member could explain to me why the corporation cannot supply 100% of the blanks we need at this time.

Mr. Rob Anders: Mr. Speaker, as I understand it, Westaim could produce all the blanks the government needs but right now that contract only takes up about one-third of its capacity. The parliamentary secretary should not try to use the capacity of Westaim as an excuse for trying to shut it down and put it out of business. That has nothing to do with it.

Mr. Werner Schmidt (Kelowna, Ref.): Mr. Speaker, I thank my colleague for entering into the debate in the direction that he went. I thought his arguments were rather lucid and very concise on the three points. I thought they were excellent.

I would like him to explain a bit further how he accounts for the potential shift in terms of administration in the mint today. I think he would agree that the mint administration today is exemplary. It has turned the mint around. It is now a profitable organization. It has good personnel relationships. It has a good operating plant. It is doing the job correctly.

With that kind of consistency and quality of management all the way we would not have to be too concerned about the policy, but the bill shifts the policy and gives all kinds of power to anyone.

The question becomes what sort of person will take over the management of the mint which is operating very successfully today. I have nothing but respect for the mint master, but the question is what happens if the mint master moves aside.

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I wonder if the member could talk about that a little.

I would also like him to address the question of what happens if something goes awry and some of the things we have mentioned here today actually take place. How does one reverse legislation once it has gone to a point where this becomes a pattern, almost a culture that develops within a crown corporation? How does one change that culture once it is in place?

Mr. Rob Anders: Mr. Speaker, that is part of the problem here. The government always thinks that more government is the answer and the solution. Too often we find that it is actually government that is the problem. It thinks that by expanding it and making it bigger somehow it is going to make the problem go away. Often we find that more government involvement makes the problem bigger rather than smaller.

My colleague raises a very good point. What if a very competent mint master moves aside and somebody else comes into play?

The government and the taxpayers then stand up and proudly beat their chest and say that this is an entirely profitable venture, for who better to loan money to than the mint, the one making the money. I guess there is not a much better loan than that. One cannot have more security on one's assets than from the people who actually produce the money themselves.

However, that is based on the current mint master. If that person moves along and somebody else who is not as competent takes over that administration then the taxpayers are the ones who are left holding the bag for any problems or mishaps.

It wants to go ahead and create this system that will shove out and hurt a private sector competitor. I remember the talks we had over hepatitis C and tainted blood and whether the government should be able to, in a sense, operate in monopolies like this. When the government does things like that, ultimately the culpability, the responsibility, falls entirely on it.

Private sector competitors have the ability to operate in the marketplace but if there are problems with the marketplace it is not entirely the government's fault, for there are other players in the field. However, if it is the only player in the field then it is the government that is entirely culpable and responsible for what goes wrong.

I do not think the government wants that responsibility but today in this bill it is going to grab for it.

Mr. Ken Epp (Elk Island, Ref.): Mr. Speaker, I have one more little comment that has to do with the actual competition.

What would happen if the mint were to produce all its own coinage out of the Winnipeg plant? We hear that it took only 20% of its supply from Westaim and 85% from elsewhere. That is because of the bidding process, NAFTA and other suppliers. There have been a few occasions where I understand the timeline given was insufficient for Westaim to deliver on a timeline that was not usual. It had a real fast order and Westaim said it needed a little longer to fulfil it so it went elsewhere. That is fair but that has happened very seldom.

The problem is that by building this plant in Winnipeg, Westaim thinks it can supply all its needs with this plant that has only one-third the capacity of the present Westaim plant in Fort Saskatchewan. The arithmetic just does not add up. The fact is it is competing.

The other thing that really bothers me is that the minister said we would not be competing. The documents from the mint itself said it expects to make $3 million in revenue not from Canadian sales but from sales to foreign countries buying these blanks.

The concept of not competing is very inconsistently communicated. I think it is going to happen and it is wrong.

The other thing we need to recognize is that many foreign countries actually like to deal with governments and it gives them a tremendously unfair advantage.

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Mr. Rob Anders: Mr. Speaker, this type of insidiousness, this type of evil of shoving out private sector money with public sector money expands beyond our borders. Not only will it go ahead and pick up market shares and help to frustrate a private business in Canada that provides jobs in ridings for some of my colleagues and fellow Canadians, it will eat into private sector jobs overseas. It is not just about beating down the private sector businesses in this country. It is about beating down private sector businesses around the world.

The parliamentary secretary is shaking her head with glee. The Liberals have no problem competing with private sector businesses and beating them about in the marketplace with the very dollars they pay into the tax coffers of the government in overly generous surpluses, overpayments in employment insurance, the Canada pension plan and a host of other programs. The Liberals are only too happy to take these dollars from private sector industries and use them against them to cut them out of their marketplace and market share whether here or abroad. Shame on them.

Ms. Carolyn Parrish (Parliamentary Secretary to Minister of Public Works and Government Services, Lib.): Mr. Speaker, the other member talked about having one or two companies out there doing a really good job of something and the federal government should not get involved.

I would like to hear how the member would expect the mint that produces coins to survive if those companies doing a really good job of making the raw materials decided to raise the prices, triple or quadruple what they are now. What controls would we have over that? It sounded like a fairyland over there.

Mr. Rob Anders: Mr. Speaker, the one thing the Liberals do not understand is competition. It is called open bidding. If they are willing to generate $3 million in revenue from foreign sales, they can just as easily go ahead and purchase through foreign sales the products they need.

[Translation]

The Acting Speaker (Mr. McClelland): Is the House ready for the question?

Some hon. members: Question.

The Acting Speaker (Mr. McClelland): Is it the pleasure of the House to adopt the motion?

Some hon. members: Agreed.

Some hon. members: No.

The Acting Speaker (Mr. McClelland): All those in favour will please say yea.

Some hon. members: Yea.

The Acting Speaker (Mr. McClelland): All those opposed will please say nay.

Some hon. members: Nay.

The Acting Speaker (Mr. McClelland): In my opinion the nays have it.

And more than five members having risen:

The Acting Speaker (Mr. McClelland): Call in the members.

And the bells having rung:  

The Acting Speaker (Mr. McClelland): The recorded division on this motion stands deferred until Tuesday, December 1, 1998, at the end of government orders.

[English]

SUSPENSION OF SITTING

Mr. Peter Adams: Mr. Speaker, I suggest the House be suspended until 6.30 p.m.

The Acting Speaker (Mr. McClelland): Is that agreed?

Some hon. members: Agreed.

(The sitting of the House was suspended at 6.24 p.m.)

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SITTING RESUMED

The House resumed at 6.30 p.m.

The Speaker: Order, please. Pursuant to order made earlier this day, the House will now proceed to the consideration of a motion to adjourn the House for the purpose of discussing a specific and important matter requiring urgent consideration, namely the agriculture industry.

---

EMERGENCY DEBATE

[English]

AGRICULTURE

Mr. Gerald Keddy (South Shore, PC): Mr. Speaker, I move:  

That this House do now adjourn.

The Speaker: Before I call on the hon. member for South Shore, so that we all know what is transpiring, the length of speeches is 20 minutes. You may split the speeches in any way you want. Any speaker may split his or her allotted time. There will be four hours of debate.

Mr. Gerald Keddy: Mr. Speaker, it is an honour and a privilege to rise in this House this evening and speak on the emergency debate on agriculture. Mr. Speaker, I would like to thank you for granting that debate last Friday.

I would like to split my time with our agriculture critic, the hon. member for Brandon—Souris.

I am certain everyone in this House is aware that there is an agriculture crisis in Canada. That crisis is very real and it is with us today. It has been with us for the last couple of years in the agriculture community and we expect it will be here tomorrow. It will take some resolve on the part of this government. It is going to take some resolve on the part of the minister of agriculture and some resolve on the part of the finance minister to find the means to attack this problem.

Several international factors have combined to threaten many parts of Canada's agriculture industry. The huge support payments of the European Community and the U.S. government's support to farmers combined with the Asian financial crisis have had a devastating effect on the Canadian agriculture community and the rural way of life across Canada.

In 1997 net farm income fell 55% nationally. In 1998 farm cash receipts in western Canada are down drastically. There is a crisis in the hog industry that is affecting every major hog producing province, provinces like Quebec, Manitoba and Ontario. To add to this problem, the agriculture industry in Nova Scotia is reeling from two years of drought that have coincided with significant cuts to government support programs.

Many in the agriculture industry feel that farm safety nets will not be strong enough to protect Canadian farmers from further drops in farm income.

Some statistics are worth repeating. I am sure before the evening is over, we will repeat this one several times. However, I will say it one more time because I want to stress the importance of this. In 1997 net farm income fell 55%. That is half the net farm income gone. It is impossible. It is a concept that most of us in small business have a very difficult time and a very difficult job to grasp. In 1998 farm cash receipts in western Canada are down again and there are concerns that the farm safety nets will not hold.

Canada ranked second last in the Organization for Economic Co-operation and Development for government assistance to farmers. Canada's producer subsidy equivalent is 2%. The United States is 16% and the European Union is 49%.

Our farmers do not have to take a back seat to anyone in the world. They can compete on a fair basis with any farmers anywhere in the world. However, when farmers and producers in the United States are getting a 16% subsidy and farmers and producers in the European Union are getting a 49% subsidy, it makes it very difficult for our farmers to compete on an even footing.

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It is not sensible for anyone in this House to think the European Union will drop its subsidies in the short term or that the United States will drop its subsidies in the short term. The only sensible train of thought taken from that would be to support our farmers with the same type of subsidy in the same type of support the Americans are giving to their farmers and the same type of support the Europeans are giving to their farmers.

The Asian crisis has had a significant and dramatic effect on farm incomes. To combat the Asian crisis the United States recently announced an additional $6 billion in support bringing its total in excess of $14.5 billion U.S., which is $22.2 billion Canadian, for 1998 alone.

It goes on and on. Somehow we have to come to grips with the fact that the farm situation in Canada is in a meltdown. Thousands of farmers are facing bankruptcy and the NISA accounts simply do not have enough money to protect them. It is incumbent upon the Parliament of Canada to find some solution to this problem.

The Asian crisis has aggravated this problem. At the same time the European Union has aggressively pushed production over the last two years, despite falling wheat prices. The European Union is providing direct support for grain at $175 per acre of wheat grown. The EU is intervening to support the floor price of grain with intervention support prices of $205 Canadian per tonne. The EU export subsidies are $55 Canadian per tonne for wheat, $119 Canadian per tonne for barley and $137 Canadian per tonne for malt. A European farmer will not receive less than $5.58 per bushel. Our farmers are receiving somewhere in the range of 40 cents.

We have to recognize this as a major problem and a major affront to the Canadian economy. We have to come up with some type of support program to protect our farmers and to help them in situations like this.

Canada's prime farm safety net, the net income stabilization account, was developed by a Progressive Conservative government as a rainy day account whereby farmers in good years could put away up to 2% of their profits per year, which is not a huge amount of money, and have that amount matched by the federal and provincial governments. The income in the account could be drawn upon during poor years. Farmers have started to withdraw money from their NISA accounts. For a six-month period in 1998 withdrawals increased by 70%. There is currently $2.5 billion in the NISA account.

Other safety net measures include crop insurance and companion programs like advanced payments for crops. The federal government contributes $600 million and the provinces $400 million to the total safety net structure. That is not enough. It is inadequate.

Since 1993 federal and provincial government farm support has decreased by more than 60%. Farmers are looking for a long term commitment from the federal government for support in good times and bad. Economists have estimated that Canadian wheat farmers are receiving less than 40 cents a bushel in direct support from the Canadian government. How can we compete against countries that give $2.60 and countries that give up to $5.69? It cannot happen.

I would like to draw upon a few facts which will be on record for the House and for members of the other parties who I hope will be supporting the debate tonight.

The Progressive Conservative Party has had a very positive record for assisting Canadian agriculture during hard times. Between 1984-85 and 1988-89 crop and income insurance totalled $21.7 billion. We established a special Canadian grains program to offset the effects of low grain prices caused by the trade war between the European Union and the U.S. and $2 billion was paid out over two years. Between 1988 and 1993 $800 million was paid to Canadian farmers to offset losses from drought through the Canadian drought assistance program.

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The PC party has stated that the federal surplus should be utilized in the following manner: one-third for debt reduction; one-third for tax relief; and one-third for government spending. The current farm income crisis makes it necessary to increase spending in this area.

Farmers need a long term commitment on farm safety nets. Currently the minister of agriculture is only negotiating a one-year extension with his provincial counterparts. Farmers need assurance of the government's ongoing commitment to a national farm safety net program. Farmers need a national program that is consistent from east to west and which is available to all producers. The assistance programs must be delivered equitably and fairly.

In the short time I have left, I would like to make a plea to the members of the Reform Party that they support this emergency debate and that they understand the crisis. Many of the members are from western Canada. They also understand that in the past we spoke as a party with a strong united voice for the producers of western Canada.

Mr. Rick Borotsik (Brandon—Souris, PC): Mr. Speaker, I too would like to thank the Speaker of the House of Commons for allowing this emergency debate to take place this evening. I would like to thank my colleague from South Shore for putting forward the motion in my absence.

My colleagues recognize and I am sure the minister of agriculture and members of the government recognize that I spent last week talking and more importantly listening to producers across western Canada. Quite frankly, I have heard too many tales of horror over the last week to recount to this House but suffice to say, this issue is a crisis. It is an emergency. An emergency debate is very necessary in order to put the issue on the table.

On November 4 when the minister of agriculture met with the provincial ministers and agriculture leaders to discuss farm income support, he said that it was a discussion meeting, not a decision meeting. This past Thursday the minister was also supposed to meet with the cabinet's social and economic committee to finalize his proposal to combat the farm income crisis. Still there is no proposal. As of Friday the minister still did not have an agreement in principle on the apparent $2 billion bailout package as reported by CBC last Wednesday.

This week the minister is supposed to meet with cabinet yet again to try to convince his colleagues why they should support agriculture. Yet another meeting in the growing list of excuses is being used to put off making a decision on the farm income crisis. The government was even trying to make last minute attempts to put off tonight's debate. Yet another excuse for the government to put off serious discussions and deliberations.

The minister had an opportunity to show leadership on July 16 this year when he met with his provincial and territorial counterparts in Niagara-on-the-Lake to discuss the agricultural safety net program but refused to offer anything more than was under the current system.

Aside from that particular meeting this past summer, the minister has been aware of this issue since he was appointed by the Prime Minister to lead his department last year. This is an issue that should not be new to the minister or to anyone else in this House.

The minister has had access to departmental information on the farm income situation for over a year. The minister has resources, yet the Government of Canada chose and chooses to do nothing.

1845

It appears to be the policy of the Liberal government to wait until things are in crisis before it attempts to fix the problem, like it did with the helicopter contracts, the department of fisheries and the Canada pension plan, to name a few.

We would not be in this situation if the political will were there. It would appear it is not. As was mentioned earlier, do our competitors have political will?

It took the Americans a very short period of time to put another $6 billion into the pockets of their producers. The U.K. recently announced a $250 million program. I quote the minister of agriculture for Great Britain, Mr. Brown: “I know the industry has been going through a bad patch but I am confident it has a prosperous future. To get there it needs our support now and that is what I am providing”.

This was from the minister of agriculture in the U.K., our competitor in the world marketplace and certainly one which has the political will to put its money where it has to be spent, to the producers.

As we witnessed in October, our neighbours to the south announced a $6 billion package which, on top of the $8.25 billion package in the U.S. federal agriculture income reform act, makes $14 billion into American farmer pockets.

I will be perfectly clear. I am not, nor is the Progressive Conservative Party, suggesting that we match the United States in income support. It would be futile. We cannot compete with the U.S. or the European Union on the same cash level. It would also be futile to think Canada can convince the U.S. or the EU over the next week to reduce their producer support to Canadian levels. They simply would not. But something has to be done.

That is why a short term immediate cash injection is needed to prevent future destruction to the fundamentals of this Canadian industry. With the short term cash injection for this year we must also develop long term solutions. We must try to protect our industry with a two pronged approach, the short term cash injection for this year combined with a long term whole farm program that will not be countervailable by the U.S. in the next round of trade talks.

If we only provide a short term approach we will only have long term problems for our agricultural industry.

I would be remiss if I did not point out that I find it quite ironic that the agriculture minister repeatedly said that he would never resort to an ad hoc program yet that is exactly what we are dealing with right now in cabinet. I do not, nor does any member of the PC party, believe that ad hoc programs are what producers need but unfortunately the government has given the industry no other options after gutting the safety net program. We would not be in this position if the government had the foresight to replace a long term program when it eliminated the GRIP in 1995.

In 1995 the government decided to take short term gain for long term pain. Other provinces did not. Alberta has a FIDIP program, a revenue program, and Ontario has a market revenue insurance program which is similar to GRIP in style but was massaged so it dealt with any countervail problems.

When commodity prices were doing well and everything seemed great on the farm, why would people think they should put emphasis on farm safety programs? The problem with that kind of thinking is that more often than not good times do not last forever. Now we are in that situation. If we had strong federal leadership for the industry we would not be in this situation.

Progressive Conservative provincial governments are making efforts to bridge the gap in the current safety net crisis. On Friday the Alberta government pledged to increase interest free loans for producers to $50,000 from $15,000 for hog producers. Manitoba has offered share in support of a national program, and hot off the press, in Manitoba the agriculture minister, Mr. Harry Enns, has just indicated that he has asked the Manitoba Agricultural Credit Corporation to work with producers on case by case basis where appropriate to defer scheduled payments so that they can keep agriculture on the farm. P.E.I. also recently announced income support for its hog industry.

The time for meetings is over. The time for action is now. Producers are selling at a loss. According to StatsCan net farm incomes dropped 55% nationally between 1996 and 1997.

1850

It was projected to drop another 35% in 1997-98. Next year it is only expected to be worse. This industry is expected to lose $170 million next year, the first negative income figure since the Great Depression.

Farmers cannot wait. They need our support and they need it now. We know there is a problem, now let us get on with it.

I remind the minister of agriculture of his own words on February 9, 1993 in this House: “I want to address this to the taxpayers who wonder why governments spend billions of dollars on agriculture. The taxpayer, like all of us in these recessionary times, finds it difficult to rationalize big expenses. Why do we continue to support agriculture? The answer is because it is worth our support. The cost for farm support is not cheap but Canadians should ask themselves where they want their food to come from. I believe they want it to come from Canada”. I agree with those comments. Let us do something.

I would like to be of assistance in this debate. I would like to make sure the minister of agriculture knows he has our support in the Progressive Conservative Party. I implore him to go to his cabinet colleagues to make sure this program is put into place before the end of the year, sooner than later, so my producers can come back to the land in the spring.

Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food, Lib.): Mr. Speaker, I will split my time with my parliamentary secretary.

There is no question we are all aware and many more Canadians are aware this week and in the last number of days of the tremendous anxiety in the farm community in Canada today, particularly among those farmers who are involved in the hog and grain sectors.

I have spent my lifetime in the agriculture and agri-food industry. I know the situation that too many Canadian farmers are in today. I can tell the House in all sincerity that I have never worked harder on any issue than I have on this and will continue to do so. I appreciate the support of my colleagues in cabinet, my counterparts in the provinces, farmers themselves, the farm organizations, my colleagues on this side of the House and all members on this issue.

We need to come up with a program, some support and the most effective solution that we can to meet the needs of the agricultural community and the country as a whole.

I also thank all my colleagues in the House for continuing to bring this issue to the attention of all Canadians. Agriculture producers are hardworking people. They represent one of the pillars of our economy.

However, at times I think many Canadians who live in urban areas forget just how important the agricultural industry is. I thank the previous speaker for reading again into the House some comments I made along that line some years ago.

A motion like this can be very helpful in informing the public about the serious situation our farmers presently face. I am certainly well aware of the struggle of some producers and how serious that struggle is right now. I have certainly met with a lot of farmers, as I said, farm organizations, provincial colleagues and I could go on. I have been talking with them across the country from coast to coast a great deal over the last number of days and weeks.

I know how desperate too many producers are. They fear for their future and for their ability to provide for their families.

Beyond my concern about their personal circumstances, I am also very concerned about what this current situation will do to an industry that has been very robust, one that has taken calculated risks and has made a significant contribution to the economic growth of Canada in the past several years.

1855

Let us not forget this industry is responsible for more than 8% of the gross domestic product. It has made a tremendous contribution to the restoration of the country's public finances. Our farmers have been very willing to take risks. We have all been the better for that. They jumped into the export markets feet first. That helped to fuel the growth of our national economy.

It concerns me that if producers feel they cannot count on us in their time need they will be less willing to take those risks in the future. Let me assure members that would have a negative impact on all of us. The federal and provincial governments have provided tools to help farmers manage the risks they have taken. We want those tools to be used.

At the same time I know in talking to farmers and provincial governments that these existing tools will not be enough to meet the needs of certain producers especially in the difficult times and circumstances right now. I am very concerned that we offer the necessary support to those producers over the short term so that efficient and productive farmers are not sacrificed because of global market conditions that are no fault of their own.

I know there are a number of members opposite who are pounding away on the need to do something immediately. I can tell members we are working as quickly as possible to do that. As everyone is aware, I have discussed this very thoroughly with my colleagues in cabinet. They understand the severity of the situation and are currently helping me to determine how best to act.

We have taken action to make sure farmers are able to use the tools already in place while we are mapping out the best course of action ahead. We put in place a process for interim withdrawal provisions so producers could call on their NISA accounts before the end of the tax year. We took measures to make sure producers are well aware of the advance payments for crops program to help deal with their cashflow issue at the present time.

Meanwhile I met with farm organizations and provincial representatives. We agreed to work together to look at short term options and accelerate the longer term review being carried out by the safety net advisory committee. Since then I have received the report of that committee. I have raised it with members of cabinet. We are continuing to put together the information we need to come up with a program that is effective and equitable and that does not undermine the investments we have already made.

I have also talked to input suppliers such as the Canadian Fertilizer Institute which I met with a little over a week ago. Last Friday I met with the Royal Bank. I will be meeting with other financial institutions to make sure they understand the situation our farmers are facing. I am taking every opportunity to encourage everyone who deals with farmers to act with compassion and to work with producers to manage the payment schedules in the best way possible during these tough times.

Tomorrow I plan to speak to representatives of the U.S. agricultural industry in Washington to try to convince them of the need to call a halt to the subsidy war that is again revving up. It is clear to me and I know to members on the opposite side that getting into another bidding war with the Europeans and the Americans like the one we had in the 1980s will only hurt everyone.

That is why even in the midst of the current income problems we need to continue working to formulate a strong position to go into the next round of the world trade negotiations. In the meantime I will be seeking the collaboration of provinces, the sector and my cabinet colleagues. With the support of the members opposite, I am putting all my energy into coming up with viable actions to help alleviate the burden on Canadian producers.

My caucus colleagues are sparing no efforts pointing out to me the necessity of addressing this issue. This government wants to do the best we can for our farmers. We are also aware of the need to best what we can do best for all Canadians. Supporting an industry as significant as agriculture is what is good for Canadians. There is absolutely no doubt in my mind. It is now a matter to determine what we can afford to do and how we can shape our assistance to make sure it helps those most in need. There is also a need to talk to the provincial ministers to work out some of the details. I am counting on the provinces to do their part. The bottom line is that the Canadian agriculture industry deserves the support of all of us in these difficult times.

1900

I consider it an honour to represent Canadian farmers and I take that responsibility very seriously. I can pledge to this House and to the farmers across this country that I will do everything in my power to make sure farmers get the support they need.

Mr. Joe McGuire (Parliamentary Secretary to Minister of Agriculture and Agri-Food, Lib.): Mr. Speaker, it is a pleasure for me to take part in this debate tonight.

I think before we go any further we should put on the record what the fifth party and the official opposition said just a few short months ago about the future they saw for agriculture in this country. I am going to quote directly from the platform of the Progressive Conservative Party, the fifth party.

I quote directly from the platform. It states “In cases such as agriculture and transportation—”

Some hon. members: Oh, oh.

The Deputy Speaker: Order, please. It is very difficult for the Chair to hear the hon. member. Obviously his remarks have provoked something of an uproar, but I am unable to tell. I would appreciate it if we could have a little order so that the Chair is able to hear the debate. The Chair is very interested in this debate too.

Mr. Joe McGuire: Mr. Speaker, I think I have touched a very sore spot. I am quoting from their very own platform of 1997. I want to put on the record just what is in that platform.

It states:

In cases such as agriculture and transportation, there is significant overlap between the provinces and the federal governments, with substantial duplication of services as a result. In the case of the environment, there are four federal departments responsible for elements of our environment. By merging the Departments of Agriculture and Agri-Food, Environment, Natural Resources and Fisheries and Oceans into a Department of Sustainable Development, we can ensure proper priority is placed on the inter-generational responsibilities we all bear for the preservation of our environment, while at the same time finding the savings we need to meet our other main objectives.

In that regard they were going to cut the department of agriculture, which was going to be a savings of $608 million.

They go on to say:

We intend to reform this Department with a view to aligning its objectives more closely with those of the large and well-funded provincial ministries of agriculture.

I am not sure what the provincial ministers are saying about this today.

They go on to say:

Consistent with the trend in recent multilateral trade negotiations, we will be moving to reduce and eventually eliminate farm subsidy programs.

They were going to eliminate them all.

They continue:

Consistent with our commitment to freer markets, we will also accelerate the five year phase out in dairy subsidies.

The relationship between this Department and the private sector will also be changed. For example, we will broaden the scope for the transfer of research and development activities to the private sector. In exchange, we will be looking to increase cost-recovery for food inspection and regulatory oversight.

I know this is very difficult for them to accept after the initial speech in which they were asking the government to come out with both long term and short term subsidies to help farmers, which we are taking very seriously.

I will summarize what they would have done if they were sitting on this side of the House. Number one, the Department of Agriculture and Agri-Food would have disappeared. The budget would have been cut by $608 million or 40%.

1905

Research and development activities would have been transferred to the private sector. Cost recovery for food inspection and regulatory oversight would have been increased. The dairy subsidy would have been phased out in three years, not five, without any compensation to dairy farmers, and farm subsidy programs would have been reduced and eliminated.

This platform is very similar to the Reform platform. They were going to put agriculture under a department for sustainable development. They did not foresee in the foreseeable future that farming might take a tumble.

Our government and our minister are working toward both a long term and a short term solution to the problems farmers are experiencing today.

The system, as a whole, is a good system. However, the minister has also clearly said that he recognizes the current downturn might prove too deep and too difficult for some producers to manage using what is currently in place.

Some farmers may not have enough in their NISA accounts to see them through 1999. That may be because they are new to the business or because they have had a couple of bad years due to circumstances outside their control. For whatever reason, they have not been able to save enough in their NISA accounts. We want to be able to assist those farmers.

We also want to design a program that will not undermine the system we have. In other words, we want to make sure that we design something which encourages farmers to use NISA in the way it was intended, but also provide a system to those most in need.

The National Safety Net Advisory Committee has examined disaster programs that are in place in British Columbia, Alberta and Prince Edward Island. It has recommended that a program based on the design of these programs, but with some modifications, be implemented at the national level.

The committee wants the program to be income-based and generally available to ensure it meets our trade obligations and cannot be successfully challenged. Such a whole farm approach is essential for this program to be effective and to succeed. I say that because some hon. members may either be nostalgic for the days of huge Tory-style payouts or may be confusing the committee's recommendations with such an approach.

The program viewed by the safety net committee would be a so-called green program, one that treats all farms fairly and does not discriminate against any commodity. That will be welcome news to farmers across the country.

The Minister of Agriculture and Agri-Food has said that he and his provincial counterparts are looking at this design very carefully. Such a proposal is in line with the results of a meeting held with the Minister of Agriculture and Agri-Food and his provincial counterparts in Niagara-on-the-Lake in July of this year.

I began my speech by asking where the solutions to the farm income situation were going to come from. They are not going to come from the PC platform or the Reform Party platform.

NISA and its companion funds provide a partial answer. I am confident that the ongoing work of the Minister of Agriculture and Agri-Food and the cabinet, in partnership with farmers and provincial governments, will give us the other parts.

Mr. Preston Manning (Leader of the Opposition, Ref.): Mr. Speaker, I rise to participate in this emergency debate on the income crisis in agriculture, which is of concern not only to our farm people, but to all of us in this House.

I will be splitting my time with the official opposition agriculture critic, the member for Selkirk—Interlake.

Surely the issue here is not whether there is an income crisis in agriculture. This fact was clearly established during the supply day debate on November 3 in this House when the official opposition urged the government to move immediately to defend the interests of Canadian farmers from unfair subsidies and unfair treatment by foreign countries which have changed the problem of stagnant farm incomes to a full blown farm income crisis.

Tonight, therefore, I would like to focus on two questions. First, why is it taking the government so long to act? Second, will the government provide a real solution or simply a band-aid?

Over a year ago Statistics Canada and Agriculture Canada predicted that realized net farm income would fall by 46% Canada-wide. The government did not react at that time to that prediction in a substantive way. Earlier this year Agriculture Canada predicted another 30% drop in net farm income, but there was still no substantive long range or short range reaction from the government. May I suggest that this has become part of a pattern with this government. It is slow to act, period.

1910

For example, for years it was known that the cod fish stocks off the Atlantic coast and now the salmon fish stocks off the west coast have been declining in absolute terms. The government expresses alarm. The government does studies. The government wrings its hands. But the government never acts until there is a full blown crisis and even then it usually acts with band-aids.

The House, therefore, calls upon the government to act with speed on the agriculture income crisis, but also asks why the government always has to wait until an emergency is upon it to do something substantive.

The question is, will the government provide band-aids or real long term solutions? The government may talk about emergency aid of $450 million this year and another $450 million next year, as has been rumoured in the press. The government may put forward a non-contributory, non-commodity specific plan which would make up part of the shortfall if farmers' gross margins fall below some percentage of a five year average, as has been suggested; essentially a revenue insurance program without the premiums. But our concern is that Canadian agriculture needs more than band-aid solutions. It needs real, long term solutions.

As the official opposition repeatedly pointed out in debate on the supply day motion earlier this month, these long term solutions involve two elements. First, a more aggressive strategy to reduce, through political pressure and international trade negotiations, the subsidies paid to American and European farmers. This country has done its part to lower agricultural subsidies and it expects and should insist that its trading partners do likewise.

We suggest a two-stage strategy: a special effort to resolve our trade differences with the Americans first through NAFTA and then a co-operative joint effort on behalf of Canada and the United States to attack European subsidies, which are really at the root of this problem.

Second, and this is the main point I want to make—it is the reason I am in this debate—what the agricultural sector needs is what every Canadian needs, what every family needs, what every sector needs, particularly those sectors experiencing reduced incomes, and that is broad based, substantive tax relief.

What has been the fiscal policy of Liberal and Tory governments in this country for over 30 years? If it moves, tax it. If it continues to move, tax it more. And if it stops moving, subsidize it.

I have in my hand a table from Statistics Canada titled “Income Tax Paid by Canadian Farmers 1993-96”. It shows a total paid over those four years of $4.2 billion, about $1 billion per year, $2.75 billion of which went to the federal government.

I would like to see this done by the agriculture department. It should be part of its presentation to finance and cabinet. There should be a calculation of all the taxes paid by individuals, families and companies in the agriculture sector on inputs from sales taxes on consumer goods and equipment to taxes on fuel and fertilizer. For example, we know that in 1997 alone Canadian farmers spent $2.037 billion on fertilizer. Of that total, 15% was taxed. That is $306 million in taxes on one input item, in one year alone, that the government took from farmers.

My point is that this government plays a shell game with taxes and subsidies. It takes with one hand and it gives with the other. But the taking is always greater than the giving.

If the government had followed the advice of the official opposition and farmers across this country and substantially reduced taxes on this sector over the last five years, I would suggest that the balances in the net income stabilization accounts would have been much higher, the savings of farmers would have been much higher and farmers would have been in a much better position to withstand the downturn in commodity prices than they are today.

1915

What is the position of the official opposition on the emergency aid package which the government intends to bring forward? It is hard to say because nothing was brought forward tonight. We want to study the details when they are brought forward and cost them out.

Basically our position is this: if the finance minister will clearly declare that the forthcoming budget will contain broad based tax relief for all Canadians, including the agricultural sector, then the official opposition would be prepared to support a temporary aid package as part of that long term solution. We would also insist that temporary aid be presented as compensation for demonstrable injury done to our producers by foreign subsidies so that it is seen as an anti-subsidy measure.

On the other hand, if all the government has to offer is a band-aid without offering these long term solutions, we will declare that band-aid insufficient and continue to fight for the long term solutions upon which the future prosperity of Canadian agriculture truly rests.

Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): Mr. Speaker, I certainly will participate in the debate tonight. This issue is of utmost importance to many people in my riding and across the country.

The debate tonight has already been held in the House in that Reform had a supply day motion where the whole farm income issue was debated. In essence we are going over again the very thing that Reform initiated a couple of weeks ago.

At the agriculture committee once again a Reform motion required the committee to hold hearings and come up with a report along with recommendations to the minister. That will be delivered on December 7 for the benefit of the agriculture minister.

While the debate is important in that we want to talk about it as much as possible and get all the facts out, the fact is that the Conservatives under their new leader, Mr. Joe Clark, are once again three steps behind the issue.

As noted by the hon. member for Calgary Southwest, the current Liberal government knew at least a year ago that this crisis was on our doorstep. It continued to ignore farmers until pictures of dead pigs and bankrupt farmers on the nightly news forced it to think of something. Without the Reform Party's action in committee and in the House of Commons, I wonder if this issue would be as far down the road as it is today. This crisis is real. It is national in scope and will not be over soon. This fallen income was forecast by Statistics Canada and Agriculture Canada some time ago.

Why did the Liberals fail to take action? The question has been asked before but it must be asked again. If a drop in income this severe was forecast for any other major industry such as the auto sector, would the government have failed to act or not reacted as it could have?

Our producers must have more than just a temporary band-aid. They need a long term solution. In arriving at this solution the Minister of Agriculture and Agri-Food and the Minister responsible for the Canadian Wheat Board did not attend the Saskatchewan Wheat Pool meetings two weeks ago. There were farmers there, primarily producers who had stories to tell about the income crisis facing Saskatchewan. After the tough questions at the United Grain Growers annual meeting I suppose the minister was a bit hesitant to attend another farmer rally. However I believe that the junior minister for agriculture from the government did attend.

How can the government claim to understand the problem or develop real solutions to the problems if it does not even take the time to listen to producers in addition to industry representatives? How can the government claim to care about farmers when even rural ministers cannot drag themselves out of Ottawa?

I would like to talk about a farm rally that happened in Neilburg, Saskatchewan. All politicians and all the general public were invited to attend the rally to talk about the income crisis. There were no federal Liberals there. There were no federal NDP there. There were no federal Conservatives at this open public meeting.

1920

Over 500 concerned producers organized a meeting and invited everyone. They were not only talking about income but a serious drought that hit a larger portion of Alberta and Saskatchewan. These are real people who are facing the destruction of their livelihoods. The minister of agriculture from Saskatchewan took time to attend. Once again federal representation, with the exception of two members of the Reform Party, was totally missing.

Reform attended both the Saskatchewan Wheat Pool meetings and the Neilburg rally in order to get direct input from the farmers concerned. It is because Reform has been listening to farmers that we have been pressuring the government to take action since the opening of parliament.

Unfortunately the government has not been listening, which is why we are in the middle of an emergency debate. Why did the Liberals delay the hearings of the agriculture committee by a month? Why has the government done little to implement Reform's November 3 supply day motion.

Farmers need more than handouts. At these meetings farmers told me over and over again that they needed help today. They cannot keep coming back to the government every few years. Government must create the conditions that will allow them to survive and prosper without a federal cheque.

On this list are also marketing problems that are endemic across western Canada in the way we market wheat and barley. Many grain companies and farmers have innovative ideas about how to market grains and are restricted from doing so because of the Canadian Wheat Board. It is a sad to read the papers every day of farmers being fined tens of thousands of dollars in lots of cases and some even going to jail for marketing their own grain.

This feedback has been the basis of Reform's plan to get us out of the emergency we are in. However, it must be part of a larger package. The broader package must address two key root causes of the current farm income crisis: international causes and domestic causes.

International action is required. We must have free and fair trade abroad. This means our government must take strong action to reduce foreign subsidies. For example, the European Union subsidies on wheat production are 773% above Canadian subsidies while the U.S. wheat subsidies are 480% above Canadian subsidies. Our farmers cannot wait until the end of the next WTO talks to have these subsidies fall.

We see who is going to Europe to talk about these subsidies. A large number of senators are going over to Europe at a cost $107,750. These unelected people will come back and have very little, if anything, to say. They certainly will not have any impact on Europeans. The agriculture minister and trade minister should be going there. At least they are elected. If their actions do nothing to help farmers, they can be thrown out in the next election.

Many people have suggested that we enter bilateral negotiations with the U.S. to develop North American opposition to the high EU subsidies. Unfortunately the Liberals have made no attempt to initiate these types of negotiations. Our government must ensure that our trading partners live up to agreements that have already been signed. The European Union is still stopping our beef and our canola exports into those countries. Trade tribunals have ruled against the Europeans in this regard but they continue to take that action and our government seems unable to do anything about it.

On September 16 the governor of South Dakota began stopping Canadian agriculture exports. South Dakota had given the trade minister a two week warning and yet the border remained closed until the first week of October. The government claimed that this dispute was due to election hype, but this was not true because we see the trade disputes continuing. North Dakota farmers have indicated that they will once again blockade the border on December 6. Where is the action to make sure that this does not happen?

Farmers who are facing some of the lowest commodity prices in recent years cannot afford to have their income problems compounded by an incompetent trade minister.

1925

I will talk for a few minutes about the domestic action that is required. A short term disaster assistance plan has to be related to actual harm created by the trade subsidies of other countries. Farmers not only need lower subsidies abroad. They must have lower taxes at home.

The hon. member for Calgary Southwest outlined three specific areas in which the government could reduce its burden on producers. These were to suspend the user fees of the Department of Agriculture of $138 million per year, suspend federal 4 cent per litre excise tax on farm fuel, and suspend taxes on farm input such as fertilizer. Federal taxes account for about 15% of the retail cost of fertilizers.

By suspending its tax grab in these areas it would give farmers about $500 million. The rumours of how much aid will be put forward by the federal government are right in that neighbourhood. We would not have this problem if only tax reform was put forward by the government. The government is contemplating giving farmers emergency aid while at the same time taking more than $500 million directly out of their pockets. This does not seem to make sense to a reasonable person.

Reform's plan could be implemented today. Other proposals will take time to implement and some of our producers will be lost in the wait. Unlike ad hoc payments, Reform's plan for targeted reduction on the cost of government will have lasting effects on the viability of agriculture. Our plan will allow producers to compete in the global agriculture environment without interference from the federal government.

Reform's plan to reduce the cost of government will not only immediately benefit agricultural producers. It will also immediately benefit the industries that support our producers. Our plan will have an immediate benefit to the economy of the entire Canadian agriculture and agrifood sector.

Above all, I absolutely insist and demand that the government not institute any program which the Americans will feel has to be countervailed due to interpretations of the World Trade Organization rules and NAFTA. If the government takes that kind of action the hurt in the agriculture area, particularly in the area of hogs and cattle, will be at least 1,000 times more than what it is today.

In encouraging the government to look at this crisis I also caution it not to do anything that will destroy what is left of the economy in western Canada.

[Translation]

Ms. Hélène Alarie (Louis-Hébert, BQ): Mr. Speaker, I feel a great deal of responsibility and emotion in rising to speak in this emergency debate on the income crisis in agriculture.

This crisis resembles the one in the early 1980s, when the government was providing three times as much income security as it does currently. At that time, the figure was $3.5 billion, while now it is only $727 million. Something needs to be done urgently, therefore.

There is urgency because farm incomes have dropped 20% to 40%, and for certain types of operation, up to 70%. There is urgency because, to give one example, the sales price of pork is half what it costs to produce it. So what is there left for the producers?

In November 1997, hogs were selling at $168 per hundredweight, while last Friday it was $67 per hundredweight. Grain prices are going the same way.

We are therefore calling for an emergency plan to assist farmers, who have seen their average price go down by 70% this year.

Over and above the market price, there are the rules of international trade to consider, as well as the support the European Union has given to export subsidies, not to mention direct support given to farmers. The U.S.A. has made a direct injection of $6 billion to producers. This breaks down into $2.6 billion in disaster relief and the rest is connected to low market prices. And that is not the end of it.

1930

At a meeting in Montreal as part of the upcoming WTO negotiations, both the Americans and the Europeans expressed a desire to continue supporting their farmers. We must act now with all urgency and fairness for the 1998 production and in the future, depending on the state of the crisis.

What are the effects of this crisis? There are direct effects and there are secondary effects. The direct effects are the abandonment of farms, the agricultural crisis, which very often leads to a family crisis, the move of people from the country to the city and human tragedy on the scale of the suffering experienced on the farm.

Farm producers see a long way ahead. They have a sense of continuity. Theirs is a vocation, a way of life. Agricultural products are not like preserves, set aside until the prices rise.

Then there are the adverse effects. The two most important ones are the direct attack on rural life and the loss of expertise. The attack on rural life is straightforward. When the countryside is emptied, the community loses its structure. As to the loss of expertise, there are actual cases where people realize that destructuring the agricultural community leads to a loss of knowledge that it took years to acquire and that is hard to replace.

We heard an example of adverse effect last week, when the representatives of the Canadian canola association appeared before the agriculture committee and stated that a number of farmers wanted to produce canola because prices were good.

What are the disadvantages? First, there is a drop in productivity, because some producers will not be familiar with this method—this is to be expected from those just starting out—because this does not work everywhere, and rotation may be less successful if not done properly.

A second disadvantage is that, if supply increases, prices go down. So what was a good crop becomes an average crop because the market is flooded. There is also an increase in disease because of greater crop concentration. Nobody is a winner.

The solution is several hundreds of millions of dollars in direct assistance based on farmers' needs. This is what we are calling “operation bail-out”. There are other things that can be done, however.

Speaking of other things, I think of the Canadian Pork Council's food bank idea. This does not get a lot of attention, but it should, because there are food shortages, for instance in Central America after Hurricane Mitch, in Russia, with an economic crisis threatening to spill over into adjoining countries, and in North Korea, which is in the throes of a famine. But all these countries, whatever their religion and customs, eat pork.

What led up to the crisis we are now experiencing? It came about not because of overproduction, but because of a lack of money among some of our clients, notably Asia and Russia. We must therefore not panic and cut back on production, or we will no longer be competitive.

Why stockpile when part of the world does not have enough to eat? Canada should get going and create a food bank. The United States took this step this year, contributing 50,000 tonnes of pork, and we could follow suit, with 10,000 tonnes of pork.

This is therefore not a chronic supply and demand problem because, if our clients had the money, demand would still be going up.

Finally, I would like to speak about Quebec's problem, which is different from that of the other provinces. The Quebec pork industry generates close to $4 billion in economic spinoffs annually and creates some 30,000 direct and indirect jobs, particularly in the regions. All hogs sold are slaughtered, and therefore undergo primary processing, in Quebec, rather than flooding abattoirs in the United States.

1935

Producers participate in the farm income stabilization insurance program, which makes up the difference between the cost of production and market prices. For instance, if the present cost of production is $140 per 100 kilos and the market price is $67, the difference between $67 and $140 will be paid by the farm income stabilization insurance program.

In good years, when the price of pork is $225, obviously nobody receives any compensation payments from this program. It is a bank for when times are bad. Obviously, we did not expect times to be as bad as they are right now.

In this program, one third of the costs are paid by the producers themselves and the money the federal government puts into the net income stabilization account in other provinces goes directly, in our case, into the farm income stabilization insurance program. This is a major difference with the practice in other provinces.

The Government of Quebec has just put $30 million into the farm income stabilization insurance program to shore up the income of pork producers. It therefore expects to receive its fair share in the present crisis and to have that share cover the 1998 losses and any other losses as long as the crisis continues.

Quebec's farming sector is now undergoing a crisis of confidence. We were unfortunate, not to say unlucky, in the outcome of the scrapie crisis, and feel we did not receive our fair share of the compensation due us. I also resent some recent intrusions by the Minister of Agriculture and Agri-Food in our jurisdiction.

I am thinking of the meeting held here in Ottawa, when a meeting was being held in Montreal with the same leaders as part of the WTO negotiations. The same thing is going to happen again this week during the meeting of the Union des producteurs agricoles, and tomorrow, for the visit in Washington, the fourth and fifth parties have been invited, but not the third. This leaves us bitter, worried and anxious, and this is the place to say so.

The meeting of the Union des producteurs agricoles, which consists of all representatives of farmers in Quebec, and is therefore the only organization representing them, has as its theme next week “Growing the future together”. How can we think about the future, when our farmers are unable to make a living in the present?

In conclusion, whatever the federal government's new plan is, it should take into account the Government of Quebec's initiative, and the particular nature of Quebec's farm safety net income program. The Bloc Quebecois will be opposed to the soon-to-be-announced emergency plan if it penalizes Quebec's producers, particularly our hog producers, in any way.

Our political party will also be opposed if the federal government favours one region over another in the kind of assistance it plans to provide. By this I mean that, by providing greater assistance for live hog producers than for producers of processed pork, the federal government would be favouring Ontario, which exports live hogs, over Quebec, which exports processed pork.

Whatever the outcome in Quebec today, the Bloc Quebecois will be very vigilant. A speedy response to this crisis is necessary.

In order to take into account the special character of Quebec and the fact that the government has already taken specific action to assist affected hog producers, various solutions could be considered, one of which might simply be to compensate the Government of Quebec for the assistance it decides to give hog producers.

[English]

Ms. Alexa McDonough (Halifax, NDP): Mr. Speaker, I am very pleased to have the opportunity to participate in the debate this evening and to share my time with my colleague, the member for Regina—Lumsden—Lake Centre. He was the first member of the House to begin calling for an emergency debate on the crisis faced by our farm families and our farm communities.

1940

Our caucus ever since has been calling for swift action by the government. It is very regrettable that we do not yet see signs that the federal Liberal government recognizes the severity of this crisis nor the urgency that is required to move swiftly to address the tragedy that is unfolding. Let us be clear that the magnitude of this crisis is surpassed in this century only by the Great Depression of the dirty thirties.

We have been trying to get the government to recognize that it must act before more lives are devastated, before more lifelong investments are jeopardized and more livelihoods destroyed. Regrettably farmers and their families are still waiting for that swift action.

Low international commodity prices for agriculture products, particularly grain and hogs, and the tailspin in Asian markets have put the livelihoods of tens of thousands of Canadian farmers at risk. Nowhere is it clearer than on our farms today that globalization rules crafted to meet the demands of the mega corporations to make mega profits will never serve ordinary hardworking farm families. We must ensure that increased globalization is accompanied by increased safeguards at the international level.

However, proposals to rein in speculators in money and commodities and to bring humanity to international economies cannot be put in place overnight. A Tobin tax on international speculation will not help our farmers today. Promises of more rational international economic management will not provide relief tomorrow. As I said in the House last week, we cannot feed pigs with promises and we cannot grow grain in such uncertain ground.

Canadian farmers face a crisis now. It is not good enough for Liberals to do as little as possible as late as possible. Nor is it helpful for the Reform Party in its usual Pavlovian fashion to pretend that lower taxes offer a solution to this crisis because they do not. And to howl long and loud about international subsidies will not solve the crisis either.

These farm families need urgent assistance and they need it now. They need quick and decisive action. Neither the government nor the official opposition seems to understand that. Or if they do, they apparently are not willing to respond with the urgent measures that are so desperately needed.

Make no mistake. This is a crisis. In 1998 farm income in Saskatchewan will decline by nearly one-half a billion dollars. That is over a 70% decline in income. In Manitoba it will decline by more than a quarter of a billion dollars, $300 million. In Prince Edward Island incomes will be 33% lower than the 1993-97 average.

Since 1995 wheat prices at the farm gate have dropped 40%. Hog prices have dropped 60% from 1997 levels. In my home province of Nova Scotia almost $50 million will be required to make up for lost revenues. The lost farm income in Manitoba and Saskatchewan alone is equal to all of the losses in this January's ice storm.

What is the cost of waiting? What is the cost of the Liberal approach of waiting until the last minute to pay as little as possible to our farm families in distress?

First, it means fewer family farms and more agribusiness. If trends continue, there will be 7,500 fewer farms in Manitoba in less than 10 years. Fewer family farms spells disaster for the small businesses that depend on the strong local farm economy. And fewer farm families means greater strains on our rural infrastructure, more school and hospital closures, reduced services and destruction of a way of life.

Second, the Liberal delay means that thousands of farms that can be viable if they are helped to weather this storm will not be around when the snow melts. They will not be able to afford the seed, the feed or the fertilizers they need to survive into next year.

Inside and outside this House the member for Palliser and other NDP members have been warning the minister since last March of the mounting farm crisis. In October, New Democrats proposed an emergency program to match recently announced U.S. assistance. In response to our questions, the minister simply boasted that Americans envy our farm support programs and that his government was studying the problem.

1945

The Americans did more than study. They acted at the first sign of trouble. Meanwhile our agriculture minister has not yet convinced his colleagues of the urgency of the crisis. It is shameful and a national disgrace that a government that boasts a $10.5 billion surplus has neither the humanity nor the competence to address this crisis.

Since the United States implemented its program of relief, what have we had from this federal Liberal government? Sixty more days of inaction. Sixty more days of bankruptcy. Sixty more days of foreclosures. Sixty more days of stress and crippling uncertainty for our farm families.

In Saskatchewan alone requests for farm debt mediation and consultation services have increased 76%. Meanwhile Reformers advocate tax cuts for fertilizer and farm implements as the remedy. Talk about an eyedropper in an ocean. A few hundred dollars in tax relief from reduced sales taxes is not going to make up for the $60 lost in each and every hog produced or compensate for more than a 70% reduction in farm income.

Reform talks about unfair subsidies. Our farmers are in this crisis partly because the Liberal government blindly and foolishly followed Reform proposals to cut $600 million in farm support. In fact, the Liberals driven by Reform mean-spiritedness cut nearly $2 billion in support. They went further than the Reform Party advocated in the way of cuts, which is why we are in this mess today.

While Europeans and Americans were carefully and steadily reducing subsidies in line with the WTO guidelines by 25% over five years, Canada chose to reduce subsidies by over 60% for crops. Cancelling the Crow benefit alone meant an annual loss of $700 million to prairie farmers.

Reform's leader said he was not convinced of the need for an emergency income program. He should open his eyes and unplug his ears. Listen to farmers across this country who see their livelihood threatened by an international crisis not of their own making and a government that has slashed agricultural support far beyond that of our competitors and far beyond WTO requirements.

People's lives are at stake. They need assistance, not Reform members shaking their fists at international subsidies.

What should the government do to restore hope to Canadian farmers? Let me outline a four point plan that must be implemented immediately.

First, a program of emergency income assistance, at least $700 million, that matches the aid provided to U.S. farmers. Second, in conjunction with the banks, a moratorium on farm foreclosures. Third, improved debt management provisions for farm families and the businesses that depend on them. Finally, we must ensure that food is not destroyed, not ploughed under, not slaughtered and left to rot in this crisis. This is food that could be used to feed hungry people in crisis at home and abroad. We should make sure that we take this humanitarian approach.

This has to be a national program to meet the needs of all Canada's farmers. The national government must take the leadership and the lion's share of the responsibility, leaving room to be sure for supplementary programming from the provinces.

In closing, I want to say that agriculture is one of the most hopeful and visionary of all occupations. More than an occupation, it is a calling.

Each year a new spring gives renewed optimism for the future. Better weather, better crops, better prices. We must ensure that this coming spring is one of hope. If we fail, it will be instead a spring of despair. We can make it a spring of hope, but we must act quickly and we must act now.

1950

Mr. John Solomon (Regina—Lumsden—Lake Centre, NDP): Mr. Speaker, I am very pleased to participate in the debate this evening.

I was the member of parliament who on October 5 called for an emergency debate on the looming farm crisis. My colleague the member for Palliser had been raising this issue in the House of Commons for weeks prior to that. We see the looming crisis now upon us and I want to share a few reasons for that.

We have seen in Saskatchewan the net farm income to farmers decline by 70% in 1998 over 1997. We have seen the price of hogs basically collapse in the last four or five months. They are decreased in value in terms of selling price by 60%, although at the supermarket the price of pork is still the same. There must be some kind of a gouging in the middle. Maybe the government could look at that. Certainly the consumers are not getting any benefit of this crash in the price of hogs, nor are the farmers. I am sure it is some of the larger corporations that subsidize and donate to the Liberal and Reform parties.

We have had a number of signals from Saskatchewan and other parts of western Canada.

Donette Elder is a farmer at Fillmore who operates a farm distress hotline. She told me that in her 15 years involved in this operation, it has never been as busy as it has been this year. The Saskatchewan government has a group which handles stress calls from farmers as well. The numbers are way up. There is a farm debt mediation services and farm consultation services organization in Saskatchewan that deals with farmers who are in financial distress with respect to their land. They deal with farmers before it gets to the foreclosure situation. Their business unfortunately is up 72% over last year. To date, 371 farmers have asked for mediation services with respect to their financial condition which is an increase of 155 farms over last year.

I have been in my constituency and other parts of the country. I have been in Tugaske and Lumsden and Craik and Nokomis and Brownlee. I met with hundreds of farmers. I never got to Neilberg for the big rally. It is a little distance from my constituency. I was in Ottawa at that time. I know that Saskatchewan minister of agriculture Eric Upshall was there and represented the NDP very well.

Farmers from Tugaske and other places are telling me that they are in big trouble. Craik is a very small town, actually a village, with a number of larger farms around the community. There were 22 producers who could not pay their chemical bill as of November 1 from the last crop year. Should an alarm bell not go off in terms of what is happening? This is some of the finest farmland in Saskatchewan with very high production and very high yield.

We have seen the fertilizer costs go up 57% from 1992 to 1997. We have seen farm chemicals increase 63% over that same period. We have seen $130 million extra in cost recovery, for example the privatization of the meat inspection facilities, that have gone on the farmers' backs. We have seen the biggest problem that farms and in particular grain producers and wheat producers are facing which is the loss of the Crow benefit.

I went to the Council of Europe in Strasbourg, France. I happen to have a community in my riding called Strasbourg. I went to Strasbourg, France in 1995 to speak at the Council of Europe. I went there as a delegate from this parliament. I had an opportunity to meet with the 38 European countries that are members of the Council of Europe. They meet quarterly and discuss issues such as agriculture.

I met with the agriculture committee in 1995 I asked all the MPs from the 38 European and eastern European countries what they were doing to address the farm subsidy issue in their countries. I told them that the Liberal Government of Canada was eliminating the Crow benefit, which was a subsidy, because of the WTO requirements. I said “We have eliminated our Crow benefit which is about a $700 million benefit a year to our grain producers which is guaranteed in legislation. We are eliminating that in order to have good competition. What are you going to do about it?”

They said “We have five years under WTO to address the subsidy issue, not to solve it but to address it. If you think after five years we are going to sacrifice our farmers for the U.S.A., you are crazy. We will never do that”. Three years later after we have gutted the Crow benefit, the European Community and the U.S.A. are providing not the same but higher subsidies than three years ago. Meanwhile we have abandoned our farmers.

1955

We can only draw one of two conclusions from this. Did the Liberal government get suckered on this negotiation and deliberately betray Canada's farmers, or did it deliberately do it, knowing that it did not really care to support farmers in our country? I sense it was both. The Liberals do not really like farmers in western Canada because farmers do not seem to vote for every Liberal candidate who runs. That is negligence on behalf of the government. I would ask the government to consider that.

The final word I got was from a gentleman by the name of John Germs. He is the president of the Saskatchewan pork producers. He wrote to me saying hog farmers in Saskatchewan and other parts of the country are suicidal because of the loss on their hog farms. That is a very serious issue.

We should have long term solutions and short term solutions. I am proposing five items for short term solutions.

We need to provide some disaster relief for farmers as soon as possible. Some say $700 million. The NDP says $700 million is a start. It is a good number for grain and pork producers.

We should accelerate or advance the date for the final payments on wheat and barley to provide cash to farmers in a quicker way.

If NISA is used, and I am not advocating that it be used, but if it is used it should be provided to farmers as quickly as possible without the red tape that is required to get it. They should only be allowed to use the tax free portion so they do not have to pay taxes held on their NISA accounts.

The Government of Canada should deal with the input costs I have referred to. We have a lot of farmers who do not have a lot of bank debt in comparison to the farm crisis in the 1980s but they do have more credit with suppliers such as fertilizer companies, chemical companies, grain companies and machinery companies.

The government would do well to take my advice to pursue the issue of gasoline and diesel fuel price fixing in Saskatchewan. The farmers are being hammered on that input cost alone and it should do something with it.

I think the agriculture minister has already said this, that the government will deal with the financial institutions and work in a co-operative and collective way to ensure that our farmers are not taken advantage of by the institutions.

There are two long term solutions. We should address the issue of the subsidies that the EU provides its farmers and the U.S. provides its farmers. If they do not comply within a period of time, let us say 12 months, then maybe we should be looking at reinstating some kind of competitive agricultural program to support our farmers.

There is another issue I want to raise in terms of long term. When the Crow benefit was depleted, the deregulation of railroads occurred at the same time. Farmers' transportation costs doubled and in some cases tripled as a result of the deregulation and the Crow benefit being taken away.

We have a serious situation with respect to the agriculture economy. We have very solid recommendations from the NDP to the Government of Canada to follow these issues to the end and make sure that our farmers do have some sort of protection.

The Reform Party has touched on a couple of issues I want to respond to. Many people tell me that the Reform Party has lost touch with the bread and butter issues that first sent it to Ottawa. In the House of Commons on November 3 I asked the Leader of the Opposition whether under the circumstances with respect to the farm income crisis he would support an emergency disaster program, a relief program for farmers. He stood in this House and said he would not support any kind of cash supports for farmers in terms of the emergency.

The Reform member for Selkirk—Interlake, the agriculture critic went to the Saskatchewan Wheat Pool meeting a week ago last Friday where I spoke as well. Farmers pleaded to both of us to support an emergency program. The Reform agriculture critic said no that they were going to have tax cuts and if they ever make any income it is taxable and they will do all sorts of positive things.

To set the record straight, the Reform Party is not a friend of the farmers. On the contrary, I think it is a friend of the chemical and oil companies because the Leader of the Opposition worked for the oil companies for many years. They fund his party and they decide what policies the Reform Party will undertake and support in the House.

2000

People in this country are telling me more and more that the Reform MPs are letting ideology get in the way of common sense. Farmer after farmer, business person after business person, housewife after housewife, every person I speak to in Saskatchewan tells me the Reform Party has lost touch. That is a very serious condition, in particular when we are trying to defend and support an agricultural sector that is under attack not only by the European Community and the U.S. but by the Reform Party inside our own country.

Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.): Mr. Speaker, I will be sharing my time with the distinguished member for Hastings—Frontenac—Lennox and Addington.

Earlier this evening I listened with interest to the remarks of the hon. Minister of Agriculture and Agri-Food. His 25 years of experience as a farmer show that he truly understands the extent of the problem some Canadian farmers are currently experiencing. Like Canadian farmers, I am very pleased and reassured to see the minister is on top of the situation and that he is acting on it. He is doing everything in his power, everything he can, to tackle this issue. He has kept everyone in the House well informed of the situation. He has had ongoing discussions with industry, the financial community, the provinces, his cabinet colleagues and the members of the House to encourage all of us to work with him in putting forward concrete solutions to this very real problem.

We all agree that the agriculture and agri-food sector is crucial to the Canadian economy. It is one of Canada's top five industries and it is Canada's third largest employer. None of us can afford to let it go down the drain. We all agree that what Canadian farmers need right now is some type of assistance to help them deal with the situation on a short term basis. They need a program to keep their businesses going in a very severe unprecedented downturn.

That is where the whole discussion about a combination of programs comes into place. The minister and cabinet are working to develop the right mix, the right combination of programs, including the use of the present system of safety nets and the creation of a national disaster program.

We all agree our plan of action must not only deal with the short term, which this government is doing under the direction of the Minister of Agriculture and Agri-Food, but we must also focus on longer term effective solutions. As markets around the world gain strength, and we know they will, Canadian farmers must be in a position to capitalize on that economic renewal.

Our record performance of the last four or five years will come back. It will come back because we have a highly competitive industry and even in the face of the current market downturns we are doing what we need to do to get ready for the future. The perfect example of that is the ongoing consultation with the Canadian industry to put together a strong negotiating position for the upcoming round of negotiations at the World Trade Organization.

As chairman of the Standing Committee on Agriculture and Agri-Food, I can say that organizations within the industry from one end of the country to the other appreciate that we have invited them to give us their input on the kind of negotiating position we should strike for the beginning of the WTO negotiations a little more than a year from now.

These negotiations represent an important opportunity for Canada to maintain and extend its competitive advantage. The talks represent a unique chance to continue what we started over four years ago when we signed on to the WTO agreement at the end of the Uruguay round. That round brought some semblance of order, some rules to world trade in food and agricultural products.

2005

However, the current farm income troubles have a lot to do with poor world market conditions, conditions that have been worsened by the protectionist mood in some parts of the U.S. and by the EU's continued use of subsidies.

Canadian farmers are justifiably worried about what might be around the corner. I want to reassure them that this government is doing everything in its power to dissuade the EU and the United States from falling into another trade subsidy war. We are absolutely committed to continue working on this front.

Members heard the minister say he will continue to talk on a bilateral basis with leaders of the United States and Europe. We also intend to fully use the next WTO round to put an end to the big powers' trade distorting tactics.

Subsidies especially hurt smaller and medium size countries like Canada. They are a detriment to a strong and healthy global agricultural economy. Canada will be pushing hard in these negotiations for a multilateral commitment to phase out agricultural export subsidies once and for all. Such subsidies were banned for industrial products in the mid-1950s.

Surely after half a century it is time to rid the agricultural sector of this most aggressive and unfair form of government support. Producers in one country should not have to compete against the treasury of another.

Whether wheat growers in Saskatchewan, Argentina or in the United States, farmers are a vital and valued part of society. No matter who we are or where we are from, we all have the same goals of strong agricultural economies, prosperous rural communities and a decent standard of living for those who work the land.

Over the next year the Minister of Agriculture and Agri-Food will continue to consult with industry groups to craft a solid, unified negotiating position that takes into account the full spectrum of interest within our diverse agriculture and agri-food sector.

This round of talks is one further essential tool in our long term strategy for the sector. As members know, these sorts of negotiations take time. They are very much our long term approach.

This government has heard the industry's call for a disaster program to deal with the immediate very serious income shortfalls and we intend to take short term action as well as action over the longer term.

I conclude on one extremely important point the Minister of Agriculture and Agri-Food has made over and over again since the farm income ordeal began.

Our long term and short term strategies must first and foremost be complementary. One cannot hurt the other. One cannot take precedence over the other. Our solution to this extraordinary situation must be what we call WTO green.

Canada cannot afford to open the door to any further countervailing actions from its competitors. That is why the government, including the Minister of Agriculture and Agri-Food and the Minister for International Trade, is working very hard to ensure that whatever we do will be ultimately helpful and will not hurt our producers or taxpayers by generating retaliatory trade actions.

I remind members the hog industry is one that has lost a lot of money to countervailing actions in the past and none of us wants to see that again.

That is why the government is taking the necessary time to design the very best possible program, a program that meets the needs of farmers and all Canadians and programs that are WTO green so that the money ends up in the pockets of farmers.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Mr. Speaker, I appreciate the opportunity to speak on the emergency debate on farm income.

I am very glad that our Standing Committee on Agriculture and Agri-Food has been listening to witnesses from almost all commodity groups across the country for several weeks.

2010

Because this crisis is very real we want to work with all involved to assist our farmers.

The Minister of Agriculture and Agri-Food has spoken with passion and conviction about the serious situation in farm income. I know his commitment to deal with this problem is sincere and his response reflects the nature of the challenge.

Demand for key agricultural products in Asia and Russia has been drastically reduced as the buying power of consumers has shrunk. The link between the global financial crisis and farm income in Canada is not a matter for debate.

Combine this with the simultaneous cyclical price downturns in grains, hogs and cattle and pockets of poor production in some areas and we get a situation in which many producers are seeing a pretty significant reduction in income this year, in fact a drastic reduction.

There may be some members who would argue the answer to these problems is insulation from the global economy, but that reflects their simplistic view of the world rather than compassion for those affected by this crisis. Offering complaints cannot be equated with offering solutions and what people need are workable solutions.

Talk of removing Canada from global markets, international trade and the need to export makes great rhetoric but will not make one iota of difference to the financial security of men and women working on Canadian farms. Neither will bland complaints about not getting everything we want or when we want it from trade negotiations.

Let us do our farmers justice by eliminating the rhetoric and instead working together to offer practical responses to a complicated problem.

The responsibility of governing demands that we offer the pragmatic and not the dramatic. As this government has done in the past, we will continue to work with farmers and provincial governments to put programs in place that are equitable and available to all in need, no matter what province they live in.

We will also work with these same partners to develop a strong, united and compelling position for international trade negotiations. In bringing forth long term and short term responses to this serious situation, we are committed to both collaboration and co-operation.

Canadian farmers have a right to expect such an approach to this problem. There is no room for theatrics or one-upmanship given the nature and the magnitude of the problem.

Our most recent farm income figures, and let me underline that these figures were developed with the provinces, show that at the national level overall net farm income is down 4% from the average over the last five years and down 20% from 1997.

Of course that aggregate number hides the problems we know exist. Some parts of the country are suffering worse than others and depending on the commodity, some producers are practically unaffected while others are hurting very severely.

We know there are serious problems in the hog and grain sectors. The majority of hog producers are in Quebec, Ontario and Manitoba and yet Atlantic Canada has significant hog production and so these areas have been affected.

The majority of grain farmers are in Saskatchewan, Manitoba and Alberta. There are grain farmers in parts of Ontario. There are wheat farmers in my riding. Meanwhile we must not forget that we have other producers who experienced serious droughts and even outbreaks of disease such as scrapie. This is the full context of the farm income situation and we must recognize all the forces at work. Doing this will help to bring sense to the numbers.

Looking at these problems regionally we see that in Prince Edward Island, Saskatchewan and Manitoba the situation is particularly serious. Realized net farm income is forecast to be down 40% this year in P.E.I. and Manitoba while in Saskatchewan farm income could fall almost 70% relative to the previous five year average. Unfortunately our current forecast also predicts that those who are having trouble this year are not likely to see improvements next year.

I know there are a great many people in communities from coast to coast facing hardship and who are looking to the Government of Canada for relief and assistance. There are other pressing issues that demand the attention of the federal government. It is not one or the other. We must find a way to do the best we can for all these people.

2015

The farm income situation is not one that the government will retreat from any more than it will retreat in the face of any other challenge. We want to fix this problem as quickly as possible in order to bring some sense of calm back to the sector that has become increasingly desperate in recent days.

Moving forward, not backward, requires partnership between the levels of government. That principle was established in previous events. As with the ice storm earlier this year, the federal government will pay its share. The provinces can count on that.

In designing our immediate response to the farm income situation, we will shoulder our load. Clearly provincial governments in affected areas will also have a load to bear, and that is unavoidable. The challenge is to design a response that divides the load and best serves the public interest. Again this is a sincere and pragmatic approach and reflects the responsibility of government.

There is never a place for adversarial relationships between federal and provincial governments. In the current situation this is especially true. The Minister of Agriculture and Agri-Food has made it clear that he wants to work with the provinces in addressing this situation. Farm organizations and both levels of government are now working on solutions that address conditions in the affected regions to meet the needs of those most affected.

The minister has also emphasized the need for open communications and a transparent process to let people know what is happening. Solutions will come from this hard work. Effective programs will be produced by this approach. Will it be flashy? No. Will it be a total cure? I think not. There are no quick, easy or total solutions.

Workable and meaningful solutions do not have to be flashy or miraculous in order to make a difference. Making a difference is part of governing. The Government of Canada is committed to making a difference in the farm income situation.

Mr. Garry Breitkreuz (Yorkton—Melville, Ref.): Mr. Speaker, I have a one hour speech but you are not going to give me an hour. I prepared a lot of my speech in advance because I knew this debate was coming. I will lay aside my speech, if I do not have this hour, and I will be sharing my time.

I am not here to score cheap political points as some of the other political parties. I was to describe the farming situation. Instead this evening I will read to the House, describe to the House and give the House some of the comments farmers have made directly to me.

I will start with a letter from Bill Lozinski that I received last week. I am hoping the government will listen because the people I will tell the House about today are real people and they need to be heard. This is what Mr. Lozinski had to say:

Dear Mr. Breitkreuz,

I do not feel guilty or ashamed to be paid fairly for what I produce. The unfairness in today's agriculture situation is unbelievable.

One bushel of wheat will produce approximately 125 loaves of bread which amounts to $250 (give or take a dollar or two)—

That is if they are bought in a grocery store. He went on to say that farmers get $2.50 of that amount. Out of the $250 that it cost people to buy the bread, he says farmers get $2.50. He continued:

—and it costs us $75-$100 an acre to produce it. (fuel, fertilizer, chemical and seed). I'm not even mentioning the cost of machinery.

Let me stop here for a minute. I used his calculations. Does the House know that from one acre a farmer can produce 3,750 loaves of bread? That is how much these farmers are producing and he said that they are not getting anything for it. Yet the people of Canada are benefiting. Let me continue with his letter:

When farmers have money, the economy thrives. I once read that one dollar in a farmer's hand is multiplied 15 times because it is put into the economy in so many different ways.

We are not a burden on the taxpayers. We subsidize every person who buys groceries. The cheap food policy is killing rural Canada. When the price of food goes up in the store, farmers never see an increase in commodity prices. In fact, it's going backward. We are making a lot less.

(The price of a bushel of wheat in 1929 was $2.65 a bushel).

2020

We can compare that to around $2.50 or $3.00 today. Things have not changed but everyone knows what has happened to costs. Let me get back to his letter. It is very interesting. It went on to state:

My brother-in-law lived in Switzerland for the last three years. Their grocery bill was about 50% of their gross income. A pound of hamburger was $15. A half a loaf of bread was $3.50. A turkey was $85. (Not even a good one, according to my sister-in-law). Their farmers receive an outstanding price for their commodities. I'm sure you have heard the stories of $12 for a bushel of wheat. Well, the truth is they make a lot more. Their farms are small and they have a lot of them. They are more numerous than most farm families here.

I cannot read all of his letter so I will go to the end of it:

A strong and diverse rural economy is in everyone's best interest. It is not a question of can we afford $50 an acre to offset the low commodity prices. We cannot afford not to.

That is the point. At $50 an acre we cannot afford not to have that. He continued:

Thank you, Mr. Breitkreuz, for your efforts. You can't even imagine how important this issue is today and will become in the future. Affordable food is the single most important thing in all our lives. Let's make sure it doesn't become the thing that kills us in the long run.

Let us listen to what he has to say. I especially address that to the people in the cities who are listening today.

I have spent a lot of time and effort finding out what farmers in my riding have to say in this regard. I have received over 1,000 replies in the last week alone on this issue. In the last few hours I have attempted to summarize what these people have to say.

Is there a farm crisis? Ninety-two per cent of the people who contacted my office, a mix of farmers and non-farmers, say that there is a crisis. About 70% of the people who have been contacting my office are farmers. Eighty-seven per cent of those who contacted my office said that it was affecting them directly.

Another question they responded to was what is causing this. Quite a large percentage said that what was hurting them was that input costs were too high. The second thing they emphasized in regard to what is really hurting them is the grain prices that are too low. Those two factors were the key factors causing this crisis.

How is this manifested? They cannot pay their bills. They are forced to get off farm jobs, which is creating a lot of stress for them. Businesses are complaining that farmers are not spending money in the communities around the farms and incomes have dropped substantially. That is what I am hearing from the people in my riding as I try to summarize all the responses in this regard.

Another thing I have been asking a lot of the people is whether NISA and crop insurance is good enough. This shocked me. Ninety per cent of the people who responded to my office said NISA and crop insurance were not enough to address this problem. I hope the government is listening, because it is not Reform or me who is saying this. This is what the farmers are telling me.

What are the solutions? Where are we to go on this? Approximately 50% of the people are saying they need some emergency help right now. A good percentage are saying they need help in transportation. Another thing they emphasize is that they need tax reductions. Almost half of them are saying they need some form of tax reduction.

I was quite surprised at the next one. There are very few who say they need to be able to borrow more money. They do not see that as an answer. There is also quite a large percentage that says user fees must be stopped because they are killing them. I guess everyone knows there is about $138 million in that.

If there is to be some emergency aid, one of the things I asked them was how they would like it to be distributed. I think this is important so I hope the government is listening. Over 50%, the vast majority, feel that it should be a per acre or livestock production specific. They feel that would be the fairest way for the government to address this issue.

2025

NISA did not score very high. Less than 5% said that if we improve NISA it will somehow help. About 10% of the people said that we needed a guaranteed price for our grain. By and large they felt that a per acre payout of some kind or some livestock specific production was needed.

I have also gone ahead and summarized a lot of comments. Members have to realize that when one gets a 1,000 letters and responses coming into a riding on this issue it is very difficult to have everybody's opinion tabled in the House of Commons. I will quickly summarize them.

Most farmers said that NISA was useless. The ones who have money in it are wondering why they should be forced to take their money out during these tough times as they are using it for their retirement. The other farmers who are really struggling have said they have either withdrawn all their funds already or have very little money in their accounts and it will not make any difference in keeping their farm operation alive.

Farmers have said that NISA needs to be improved. Contributions could be increased from the federal government and the penalties would not be so high for those who withdraw their funds at the wrong times of the year.

Another group of comments come from business people. They are concerned about a farm aid package. Business people feel that it is tough for them as well. They say times are tough. Businesses are not getting any handouts from government, so why should farmers get these handouts when times are tough? These business people also say that if the farm economy fails so will their business. From that point subsidies are seen as not being so bad.

Most farmers see the solution to a farm aid package on a per acre in production basis. Farmers want to be sure however the money does not go to landlords but goes to the person who is renting the land and using it to produce a crop. As for the production set aside, farmers think there would have to be some type of formula developed for each livestock producer and that it would have to be tied to their cost of production.

In conclusion, some farmers are talking about the absurd prices for inputs: fertilizers, seed and chemicals. They say there needs to be some type of a cap on these costs. A tax reduction would help eliminate some of these but producers respond by saying that chemical companies will not lower their prices. They will increase their profit margin.

I have another 50 minutes in my speech. I will conclude by saying I hope the government will talk to me. I have been talking to farmers one on one. I have received over 1,000 responses. I would ask the government to please be open. I would like to work co-operatively with it in addressing the issue.

Mr. Jake E. Hoeppner (Portage—Lisgar, Ref.): Mr. Speaker, I will add the 50 minutes to my hour. Then maybe we will get through this issue. It is a pleasure to say a few words but it is also a sad moment for me.

There is a crisis on the farm scene. Nobody doubts that. There is a bigger crisis in the Liberal front benches. I do not see any of them over there. That is where the crisis is. I am almost blind but I noticed it somehow.

I will read a couple of quotes. Since I was elected in 1993 we have worked on the agriculture committee. We pointed out to the government that we need a whole farm income support program. This is a question that was put by the member for Haldimand—Norfolk to the agriculture minister on February 9, 1994.

In the red book we promised a system of whole farm support that would help Canadian farmers who were in distress. This was in 1994. The agriculture minister replied:

I appreciate the question. Under the previous government in conjunction with provincial governments a process is under way to review and revamp Canadian farm income safety nets.

That has never been accomplished. Why not? In 1994 everybody knew that the Europeans had huge subsidies. The Europeans would not allow their farmers to get into a financial problem. They would support them. We had to be prepared to have some safety net programs in place.

How huge is this crisis in farming?

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I was quite appreciative of the member for Yorkton—Melville when he started comparing prices. I know there are a lot of supply management people in this House who have been supporting that type of system. These are prices for their products. From a devilled egg that costs $1.60, they get 10 cents at the farm gate. From a whole quiche which costs $12.50, which has three eggs, 2 ounces of cheese and 16 ounces of milk, the farmer gets 92 cents. From a 6 ounce grilled breast of chicken, costing $8.20, the farmer gets 29 cents. This is in the supply management sector. When we go back to the wheat and the hogs, as the member for Yorkton—Melville pointed out, it is disaster.

I saw a letter from a farmer who said “If you can imagine, in 1981 I received $4 a bushel net initial for No. 3 hard spring wheat. Today I receive $1.80 for that same type of wheat”. It is not even one-half of what this farmer received in 1981.

We know what has happened to the price of fertilizer. We know what has happened to the price of equipment. We have a pretty good idea of what the cost/price squeeze is.

How are these farmers supposed to deal with this? Farmers have been looking far and wide to see if they can get better prices. It is astounding that the special crops industry has not done too badly. The canola prices this year are such that if it was not for that income I think 100% of the farms would be in crisis. At least they have some value from the special crops industry with which they can supplement their income.

In the 1992 crop year in Saskatchewan grain was damaged by frost. It looked like everything would be turned into feed. Saskatchewan farmers looked across the border and found a market where they realized they could pretty well double the price for their feed wheat. What did the grain companies and the wheat board do? They dumped 1.5 million bushels into that market and ruined it.

In 1993-94, when Manitoba had the fusarium problem, what happened? Farmers who found a market for that product were not allowed to sell to that market. It was demanded that they get an export licence from the wheat board and they were charged as much as $40 to $50 a tonne more for that grain than they got in the final return.

Farmers who did not abide the law and marketed it on their own wound up with huge penalties, fines and even jail terms. Is it democracy when farmers are in a financial bind and they know there is a market a dozen or two dozen miles way that they can access but are not allowed to? If they do, then they are put away.

One of the farmers drove all the way from Saskatchewan to the Manitoba border crossing to object and to protest. He got worse than the APEC protesters in Vancouver. He was not allowed to go back without paying a fine. He was fined $1,500 and was told to turn his car in. Andy McMechan, as we know, had some barley which no one could market for him. It was a specialty barley. He wound up in prison.

Farmers will find a remedy. I had at least half a dozen farmers phone me last week. They said “I don't need any money. If you can get me a guarantee that I can market my own grain, don't bother with any payments. We will make it. We will find a market and we will survive this crisis”.

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How do we deal with this? On the one hand we have markets that have developed themselves because of crisis issues, but other markets are not allowed to be developed to the point where they pay properly. That more or less puts pressure on farmers to go to markets with decent prices so they can survive, make their farms viable and have more over-production.

The hog producers in Manitoba, Saskatchewan and Alberta did not want to get into these huge hog operations because they knew it would cost a small fortune to build the barns, but they had no way out. The feed grains were such a price that they could not afford to keep their farms viable. So with provincial encouragement they expanded and diversified. Today they are losing $50 to $60 a hog.

I ordered bacon and eggs for breakfast this morning and I figured I would get a plate full of bacon because pork is cheap. They could do away with the potatoes and give me the bacon. They could have taken that bacon off a live pig and it would not have lost a squeal. That is the amount of bacon I got. It was worthless. How do we deal with a situation like that? it is funny, but it is true. I did not have to swallow too hard to put those two thin little slices of bacon away with one swallow. Then I had the two eggs left with a bit of toast.

Guess what that toast costs at that restaurant? A bushel of wheat yields about 120 loaves of bread, which amounts to about two cents a loaf. If a loaf has 24 slices and I had two slices, there would be one-twelfth of a cent of wheat in that toast. How can the price of the breakfast be $5? I know the potatoes do not cost that. I am astounded. Farmers are supposed to survive and they are not supposed to be subsidized.

Mr. Hehn appeared before the standing committee. I asked him why we were not getting better prices for our wheat. He said they were pricing it at Thunder Bay. I asked him what if they priced it in Manitoba and he said that this was the price. The price of a bushel of wheat was initially $1.57 at the elevator. The buy-back price was $3.93 at Morris, not at Thunder Bay.

It does not make sense. Farmers cannot survive. Subsidies are part of the problem, but politics and the marketing system are probably more to blame than the Europeans and the Americans thrown together in one washtub.

Mr. Paul Steckle (Huron—Bruce, Lib.): Mr. Speaker, I will be sharing my time with the hon. member for Lambton—Kent—Middlesex.

I am pleased to have the opportunity to address the motion currently before the House.

Each day in this place we as parliamentarians collectively undertake to explore and debate numerous subjects of a widely varying degree of weight and sensitivity. This issue is perhaps one of the most consequential topics examined by this parliament. I do not wish to come off as sounding melodramatic, but each and every one of us likes to eat each and every day. It is for that very reason that we must decisively act now.

Tonight we are participating in an emergency debate. It is an emergency because Canadian farmers cannot wait six months for further action.

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It is no understatement to say that Canadian agriculture today finds itself at a crossroads. The current crisis, if left unchecked, will without a doubt spell certain disaster or perhaps even a virtual collapse in market share for the small and medium sized members of this founding national industry.

I would venture to say that there should not be a single member of this House who is not cognizant of the massive financial challenges regularly faced by the farming communities across this land.

Drought, frost, disease, high overhead costs and fierce competition are all factors dealt with on a regular and recurring basis by our primary producers.

However, the impression should not be given that these challenges have not been without benefit. As a lifelong farmer myself, I can honestly say that, due in part to these daily complications, the Canadian agricultural industry has evolved into one of the most competitive and efficient of its kind in the world.

With that being said, when one adds new and complex problems such as low and dramatic vacillations in commodity prices upon the already heavily laden shoulders of our farmers, is it any wonder that we are now faced with a crisis.

I represent one of the largest agricultural producing constituencies east of the Manitoba border. In my home county, Huron county in southwestern Ontario, we have nearly half a million hogs, a number that exceeds the human population of Huron by a factor of 7.

With this in mind, people can understand that the current drop in the price of pork has devastated this commodity group. For those who might not be aware, only a few short months ago a pork farmer would receive somewhere in the neighbourhood of $2 per kilogram for his product. That same producer today would be fortunate to receive 60 cents.

The problem posed by this is that the input costs remain. It has been estimated that the average pork producer will take a loss of $60 for every fat hog sold at today's prices. I understand it is even higher than that.

Over the last number of days I have listened and corresponded with untold numbers of pork farmers in my riding of Huron—Bruce. We have been told that if we do not act immediately and if help does not coming right away, their doors will be closed by Christmas. They have no choices available. They cannot afford to keep their pigs and they cannot afford to sell them.

This is a sad reality, but worse is the statistical probability that this slump will expand into other sectors. Cash crops, beef, sheep and lamb are all at risk.

I think members would agree that failure is simply not an option for us. Surely adequately feeding our population should be paramount in the minds of any responsible legislator. In addition, we must also be aware that agriculture now enjoys the status of big business in Canada. In fact, in addition to employing thousands last year, it contributed approximately $20 billion to our national economic output.

The world population is expected to exceed seven billion by the year 2000, a fact that means global production of sustenance must increase exponentially. If given the chance, Canada can assume a leadership role in this endeavour.

The potential is endless only if we maintain a stable economic foothold in the markets. Our agriculture industry has already grown in leaps and bounds during the course of the 20th century, a trend that I strongly feel should be encouraged to continue.

Sadly, as we progress toward the next millennium, the days and the ways of the small family farm face the very real prospect of being moved out to pasture. We are approaching the proverbial fork in the road.

With the rapidly developing and expanding global economy, we can no longer blindly pump public money into controversial and bureaucratic ad hoc programs.

Farmers need a hand up, not a handout. Strategic investment into key areas of growth is essential. Failure to do so promises to be the final nail in the coffin, that of the family farm.

Members must understand that the family farm has been the backbone of the agriculture sector for over a century; a backbone that if broken will seriously cripple our nation's ability to ensure certain quality controls, availability and security.

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If something is not done immediately, I see Canada's farming industry then approaching the same slippery slope that our American neighbours fell victim to. Today U.S. corporate giants such as Tyson, Perdu Poultry and Archer, Daniels Midland have the ability to use their dominance and control over the food supply to hold the American consumer hostage. We simply cannot permit that situation to occur here.

We need look no further than our largest trading partner and neighbour to the south to see the potential danger lurking around the corner. In the United States farming is corporate territory controlled exclusively by market fluctuations, shareholders and large multinationals, a reality that should be unsettling to say the least.

There are those among us who believe that bigger is always better. To those people I would simply say that bigger can be good but it does not always mean more efficient. In actuality when a corporation reaches transnational status it usually means power, not necessarily accountability or effectiveness.

One only has to read the mission statement of corporations such as ADM, Monsanto or ConAgra to see that their primary objective is increasing the accumulation of wealth for their shareholders rather than advancing the business of farming for any greater purpose.

To that end I would draw attention to the fact that in the United States poultry industry 38 firms now have 240 processing plants that are responsible for almost 98% of all U.S. chicken. In reality there are only 38 chicken farmers in all of the United States.

In my riding of Huron—Bruce I have 150 operations. In fact, the U.S. chicken farmer is little more than a labourer who receives a meagre 3 cents to 4 cents per pound to grow broilers, a number that would certainly not be acceptable by our own chicken farmers.

It is also important to mention that this figure has remained virtually stagnant and unchanged since the mid-1980s. Stability is one thing, however the unfortunate reality is that the cost incurred by the American farmer has not remained static. Mortgages, taxes and land costs are on the rise. As a result their farmers are subjected to the whims of the corporate masters while being forced to take all the financial risks associated with managing a farming operation of this type. Even with their high risk factor they have no chance of increasing their own profitability, unlike our supply management sectors in Canada.

As unsavoury as this type of arrangement sounds, it is not isolated to the American poultry industry. To the contrary, it is the norm and not the exception in almost every facet of American agriculture. In sheep slaughter the largest four national producers control nearly 70% of all production. IBP, ConAgra, Cargill and Beef America command dominance over a whopping 78% of the entire American beef sector. In the U.S. 20 feed lots market over 50% of the fed beef. In turkey the four U.S. giants, Rocco Turkeys, Hormel, Carolina Turkeys and ConAgra, account for 35% of the business, and these numbers go on and on.

As a rural Canadian it frightens me to think we might be moving in the same direction but that is the reality of the situation currently before us. In a nutshell, if we fail to act immediately our small and medium size producers are doomed. With them out of the way their larger competition will simply move in and take over. Rural Canada then becomes a little more than a branch of corporate America.

I would simply ask all our colleagues to be aware of the gravity of the situation. Talk is cheap and the price of pork even cheaper. In a world of high input costs, unpredictable growing conditions, El Nino, taxes, the Asian flu and the like, the margin of profit for farmers is shrinking fast.

The real question is should we be asking ourself today where do we see Canadian agriculture in the next century. We have a reputation for quality. It could be said that even with the new high tech integration and massive demands on our time Canadian farmers are considered by the world to be among the best and the brightest. Our commitment to excellence is strong but help is needed if we are to continue to be outstanding in our field.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): Mr. Speaker, this is an important debate tonight and I congratulate the member for South Shore for proposing it.

As members will know, headlines and news broadcasts every day and night highlight the farm income crisis. The family farm is under siege. Any sensible approach to helping with this crisis would involve examining the reasons behind the crisis because no farmer wants a subsidy and taxpayers from coast to coast to coast generally oppose multimillion dollar bailouts that would serve no useful purpose other than to neutralize the daily headlines calling for a quick fix.

This problem is international in nature and thus we must look at the big picture. To me a grain farmer in Saskatchewan is just as important as a hog farmer in Lambton—Kent—Middlesex in Ontario. I am confident the Minister of Agriculture and Agri-Food in co-operation with his provincial colleagues and with producers groups will arrive at an equitable solution that is fair both to the industry and to the Canadian taxpayer.

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As I mentioned in the House this afternoon, pork producers, for example, are selling hogs for about half the cost of production. There is now a huge oversupply in the marketplace. With the 15% expansion in production in the past two years, with the weak demand and foreign subsidies further distorting the market, the farm income crisis is a complex problem with no easy answers.

There is a discussion on a combination of programs, including the use of the present system, the safety net. We have certainly heard very clearly from the farmers their desire for a national disaster program. In very severe situations this will kick in and give some support to the farmers when the current safety net system may not be sufficient. Grain and pork prices are at or are near historic lows. Farm income is also depressed for many producers of other commodities as well. While the effect is not apparent in provincial estimates of total farm income for provinces with diversified agriculture such as Ontario, the damage is every bit as severe for affected farmers in Ontario as any other province.

The Middlesex county portion of my riding produces more agriculture commodities than that of Nova Scotia, New Brunswick and Prince Edward Island. It is big business. My riding alone produces nearly half a million hogs per year. The pork industry supports $4.51 billion worth of economic activity in Ontario alone.

The proposed national disaster program should work well for many Ontario pork producers if it can be implemented quickly. At 56 cents a kilogram hog farmers are losing between $55 and $60 for every pig they send to market. A farmer with a 300 sow operation is now losing $1,000 a day. To find prices that low we have to dust off the history books as far as 1972, but even that is not a real comparison due to inflation. In 1972 a pickup cost $5,000. Today it can cost $25,000.

Several years ago agriculture economists predicted the Asian market would be an excellent place for Ontario pork. Saskatchewan even subsidized farmers to switch over to hogs. Not only did Ontario and Canadian farmers expand, so did the Americans. In the third week of October 1998 Ontario farmers shipped 104,000 head, the largest number of hogs ever sold during one week. In the United States weekly hog sales were also breaking records. Low demand is now resulting in low prices and oversupply. Meanwhile grocery store profits are up 20% for Loblaws, 21% for Empire and 38% for Oshawa Group. Someone is still making money but it sure is not the farmer.

I have also heard from farmers whose NISA accounts are drained, as well as their RRSPs.

I have heard from constituents on the other side of the issue who state that the pork industry expanded and some are still expanding, building bigger barns, now with a product for which there is no market, so why bail them out.

I received an e-mail today from a cash crop farmer in my riding: “I am puzzled. The North American pork industry is big, efficient and has been profitable. There is a speed bump in the market and there is this great cry for help from taxpayers. I support our agricultural community wholeheartedly but sometimes we in the farming business need to reassess our position. When corn prices are low and there are a lot of acres being planted in the U.S., farmers take a look and then they decide perhaps they should get their bean drills out and plant a few more acres of beans. Is the Government of Canada going to support the hog farmer enough, because they will need more than just this rescue package to make them world competitive?”

The situation is far different, however, for grains and oilseeds where the basic market problem involved huge U.S. and European subsidies which are likely to depress prices for longer durations.

A program such as the proposed disaster relief by the Canadian Federation of Agriculture would provide support at 70% of a three year average. It would only provide short term help for grain producers. GRIP uses a 15 year average.

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Former grain stabilization programs which provided support at 100% in the prairie provinces and 90% in the rest of Canada were thrown out in 1991 because the five year averaging period was too short when grain prices are depressed for several successive years by foreign subsidy awards. It is a difficult situation to be sure with no easy answers. However, I am confident that the minister and his officials will provide a sensible approach to this issue.

We must also look beyond our borders. As members know, it took 45 years before agriculture became a formal part of the WTO agreement. But even with a foot in the door, much remains to be done. Many high tariff barriers remain in place. The procedures for enforcing agreements are very loose and backsliding is common.

The GATT has been revamped and the membership is now bigger and growing. Our country, as an efficient and profitable exporter, as an immense interest in the reform of agricultural trade barriers. It is also equally true that countries which protect their inefficient agriculture producers have an intense interest in maintaining trade barriers. The United States and the European Union in particular typically defend subsidies when the truth is that they hurt their own producers as much as they hurt ours.

If we understand the reasons for this contradiction, we would be well on the way to resolving many of the quandaries of international trade. We must address and develop a set of actions that will lead to more liberal trading arrangements for agriculture in the years ahead. Only then can we avoid the warped market we see today.

We need to find answers because they will form the building blocks in the construction of new rules for global trade in agriculture and a more prosperous future for all the farmers we represent.

In 1941 the Atlantic charter, which became the rationale for GATT, stated its aim was to ensure that after the war all countries “great or small, victor or vanquished, would enjoy access on equal terms to the trade into the raw materials of the world”.

Today that seems to be still a very big goal. Canadian farmers, like all farmers, understand they have a responsibility to feed the world and guarantee a secure future in food supplies. As we do that we have a responsibility to support our farmers through this difficult process, not to abandon the process.

The challenge for Canada and other countries over the next 52 years is quite simply how are we to feed a world of 10 billion people, the estimated population by the year 2050. What it means is we have to produce double the amount of food we do now. Even in the next 25 to 30 years the world will need to produce 300 million tonnes more of wheat, 260 tonnes more of corn and 16 million tonnes more of fish.

Farmers understand this is attainable if they are paid a reasonable and fair price for their efforts. The people who eat the food must understand that as well.

Trade liberalization is the key to an efficient and affordable world food trading system. Unfair subsidies from the United States and the EU are trade distorting. We must all be committed to the reduction of trade subsidies, and the rest of the world, if it wants to be fed, will sooner or later need to come to grips with that.

Stepping on to the world stage, mixing it up with competitors such as the United States, Europe and Japan is a very rough environment and Canada has been succeeding. We are now experiencing a bump in the road with some prices hitting levels not seen since the Great Depression. Many would say this is a unique downturn under special circumstances that requires a national collective effort.

Hon. Lorne Nystrom (Regina—Qu'Appelle, NDP): Mr. Speaker, I want to say a few words about the farm crisis we are facing which is particularly difficult in my home province of Saskatchewan where it has been hitting harder than in any other province in the country.

Farm income in Saskatchewan is down by 70% or 80%. The net farm income for grain farmers, I understand, is down by about $300 and some million. There is really a very severe crisis in the province of Saskatchewan and something has to be done about it in both the short run and in the long run. That is why this debate is very important this evening.

Over the last couple of months I have had a lot of farmers speak to me in my riding. My riding is roughly half of the city of Regina and half outside the city of Regina. I think we have something like 1,500 farm families in the riding.

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We received a lot of calls and letters from these people saying that they were in dire straits. Much of what is happening is not the fault of the farmer. Two things have occurred that put the farmer in a very difficult position today. The main thing is the trade and subsidy war that is going on in Europe and the United States.

To give an idea of what I mean, the American farmer is subsidized five times higher than the Canadian farmer. Just this fall the U.S. Congress passed a bill that subsidized farmers in the United States by an additional $6 billion. The total American subsidy for farmers is $22 billion or five times higher than what the subsidies are in this country.

In the European Union wheat farmers are subsidized by a total of $205 per tonne. That is the subsidy in Europe. Against these odds it is no wonder that the price of grain without the subsidy is very low. Indeed it is below the cost of production. For that reason a lot of farmers are suffering.

There is a fellow in my riding from Balcarres named Lloyd Pletz. He has said publicly in the media “I am finished in the spring. I have no way to hang on”. He told a story in a press conference on October 16 organized by me and the member for Palliser. He talked about the farmers in his neighbourhood who were going bankrupt and were broke. They would have to sell their farms and get out of farming come next spring if there is no help on the way. He also talked about farm stress and difficulties in families.

There was another women named Mrs. Elder who operates a farm distress line. She said “My phone has never been ringing as much as it has been ringing this fall with people calling in. There are marriage breakdowns, financial difficulties, stress in the family, sicknesses and so on”.

We have a real crisis that is not of our own making as Canadian people. The question is what do we do about it. There are three things we have to do. One we are already doing. In the short run we need an emergency payout to farmers. I am talking primarily about cereal producers, grain producers and wheat producers but also about hog producers.

That issue is a bit different. Hog prices have fallen drastically mainly because of what has happened in Asia and the loss of that market because of collapse of the Asian currency and the Asian economy. The market is not there. Hopefully that will recover. There are signs that it might be recovering a bit in that part of the world.

We need an emergency payout to farmers to make sure they survive and can plant a crop next spring. We can afford that as country. We cannot afford not to do it as a country.

The Minister of Finance a few weeks ago announced that in the first six months of this year our surplus was running at $10.5 billion. The Minister of Finance should signal very quickly that several hundred million of that will be paid out by springtime to farmers in emergency aid. That will not only keep farmers on the land, which is important, but it will also provide jobs in the Canadian economy and a spin-off for people in the small towns and cities across the country.

Emergency aid of several hundreds of millions of dollars is needed to keep farmers on the land. We are running a surplus of some $10 billion at this time. Maybe it will be $15 billion, $20 billion or $25 billion by the end of the year. We do not know. Surely to goodness we can provide $700 million or $800 million to farmers between now and spring seeding time.

That is my basic plea this evening. We should do that and announce it before Christmas so farmers will know, their bankers will know and the credit unions which finance farm loans will know well ahead of time that a payment is coming. Then farmers will be able to afford to plant their crops in the spring. That is extremely important.

Another thing we need is a long term farm policy, a long term program that is put in place to handle a crisis like this one. I know this is being discussed in the agriculture committee and in other forums around the country. It should be a program based on the cost of production, so that if the cost of production falls radically and drastically as we have seen now there will be an automatic kick-in where the farmer then is supported up to the basic cost of production.

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That is what we need in terms of a long term farm program so that there is something there. It would be a bit like the unemployment insurance program used to be for workers, something that was there in a time of crisis, in a time when the man or the woman lost his or her job so that there was something there. We need that too when it comes to agriculture in terms of the long run.

I also want to mention this evening the whole area of the trade wars. I know the government has spoken out on this matter. I know the foreign minister and the minister of agriculture are on their way to Washington tonight and tomorrow. I think we have to take a very aggressive role in the international community, in Washington, at the WTO, in GATT, in Europe and in the Council of Europe in speaking out against these subsidies that are killing the farmers of this country. We have to do that and I know our government is doing that.

Parliament should express itself very clearly from all parties in the House. The ministers should do that as often as they possibly can on behalf of our farmers. That is extremely important.

What is happening today is not the fault of our farmers. It is the fault of the treasuries of Europe and the treasury of Washington that are subsidizing their farmers to such a large degree that our farmers are going down. It is a crisis, unless one has been on the prairies, that might be difficult to visualize. It is the worse crisis facing farmers in my province since the Great Depression of the 1930s. That is without any exaggeration.

This has a tremendous spin-off in terms of the whole economy, the small towns and cities across the country. When farmers are going to lose their jobs or are worse off they do not spend money and everyone is worse off.

Why do we not unite in the House and send a very clear signal to the Minister of Finance and to the Treasury Board that part of the expected surplus this year should be spent before spring on an emergency payment to farmers?

Some hon. members: Hear, hear.

Hon. Lorne Nystrom: I hear the members of the Liberal Party saying “Hear, hear”. I am glad to hear that. If we could somehow come to an agreement in the House through a unanimous vote of one sort or another we would send a signal to the minister and to cabinet that would be very worth while. Perhaps that is what we should talk about after this debate is over in terms of an all party agreement. It might be useful to pursue that. I am just thinking of it as I am on my feet.

This is where ideologies are set aside. We have our differences with different parties in the House, but this is a crisis all Canadians must get together to help resolve. We did it in the Saguenay. We did it in the Red River. We did it over the ice storm. I think we should do it now.

Mr. Peter Stoffer (Sackville—Eastern Shore, NDP): Mr. Speaker, it is a great privilege to speak in the House this evening on a crisis, it saddens me to say, of truly biblical proportions when we think about what is happening to our farmers in western Canada, central Canada and the maritimes.

My critic role in parliament is on fisheries and oceans. Probably some people may be asking why I would be discussing the farm crisis. I can tell people firsthand of the crisis that happened to the people of Newfoundland, Nova Scotia and the rest of the Atlantic provinces. That is happening to people in western Canada. That is happening to people in central Canada. That is exactly what is happening to farmers.

Farmers are the finest people in all of Canada when it comes to agricultural work. We are not just talking about people who work the land. We are talking about people who actually risk their lives every day because farming is one of the toughest occupations out there. They deserve our help and they need our help now.

In my 10 minutes I will read a letter from the minister of agriculture and food of Saskatchewan. This is a letter he has written to everyone in the House of Commons. Although he cannot be here to read it himself, I would like to read it for him because it states exactly what the problem is:

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Dear House of Commons:

It is with regret that I have to write this letter to inform you about the serious situation facing Saskatchewan farmers.

I first want to point out that Saskatchewan farmers are among the most productive in the world. They are prepared to compete in world markets on a fair basis. However, current world markets are anything but fair. The United States and the European Union continue to provide massive subsidies on their production and exports. This has been a major factor in driving grain prices down over the last year.

The level of subsidies in the U.S. and EU can be illustrated by looking at information from the Organization for Economic and Co-operative Development (OECD). For wheat, the subsidy, as measured by a producer subsidy equivalent measure, was 10 per cent in Canada, 32 per cent in the U.S. and 36 per cent in the EU. This means a Saskatchewan farmer growing wheat has to compete against farmers getting 3.2 to 3.6 times as much assistance.

The impact of low prices is being felt in the agriculture sector and throughout the provincial economy. Farm incomes for 1998 are projected to drop $407 million from the five-year average. In 1999, they are projected to be $766 million below the five-year average. Clearly, our agriculture sector cannot be expected to handle this type of situation on its own.

There are two issues that need to be dealt with. One is the need for a long-term strategy to deal with multi-year disasters. Saskatchewan asked at the 1998 summer annual meeting of federal-provincial ministers for this to be addressed as we jointly negotiate a new five-year framework agreement to begin in the year 2000. The second and more pressing issue is the need for a short-term solution to the cash flow problem Saskatchewan producers are facing today.

I am seeking support for a disaster program to protect our farmers against the dramatic income drop. The program must be federally funded in the same way that the U.S. and EU fund their farm programs. Only the federal government has the fiscal ability to fund such a program. Saskatchewan is prepared to help our agriculture sector as much as possible. We do this by contributing 40 per cent of the costs to such programs as crop insurance and the Net Income Stabilization Account (NISA) program. We already fund agricultural programs at a much higher level relative to our tax base than any other government in Canada. In fact, it is over four times higher (on a per capita basis) than the federal government and the average support provided by all provinces. Saskatchewan clearly does not have the additional fiscal capacity to fund this type of disaster program.

The current farm income situation is a federal responsibility: the income problem is primarily a result of the use of subsidies by other countries and international trade is a federal responsibility; subsidization of our industry's competitors is primarily being provided by the national governments in both the EU and U.S.; only the federal government has the treasury that can deal with this type of problem; and the federal government chose to completely eliminate export subsidies in Canada prior to receiving the same commitments from other countries when it eliminated the Crow benefit. This federal decision has taken $320 million annually out of the pockets of Saskatchewan producers.

These large problems are clearly beyond the scope of an individual province. Saskatchewan cannot go to those farmers who have lost almost 70 per cent of their net income this year and to the 40 per cent of Saskatchewan people whose livelihoods are indirectly supported by agriculture in this province—and ask them for more tax dollars to fix a problem created by our federal government.