Hon. Maurice Sauve (Minister of Forestry):
I have the pleasure of announcing to the house that the government has authorized an interim policy on feed grains. Henceforth western grain moved by trucks within eastern Canada will also be eligible for freight assistance. Moreover, the government has decided on a new basis for the payment of freight assistance.
These two reforms were necessary. The original policy goes back to 1941. Many changes have occurred since its introduction. Methods and rates of transportation have changed and the fact that freight assistance was available only on inland movement by rail tended to prevent the decrease of certain inland rates. Some inequities in the balance of costs to various destinations have resulted.
We wished to correct these deficiencies immediately in order to follow up the measure concerning reimbursement of winter storage costs in authorized eastern elevators, introduced last autumn by my colleague the Minister of Agriculture. This measure, established simultaneously with the extension to barley and oats of the Canadian wheat board's policy of deferred pricing, encourages a more economical movement of grain during the navigation season, and sufficient stock-piling of grains in the east for winter needs. For this reason eastern prices of grains and millfeeds have fluctuated much less during the last year.
The changes now made should therefore permit the most economical transportation of feed grains to their destination. More active competition will lower a number of rates.
As to its consequences for livestock producers, it can be said that this new policy
will result in substantial reductions in the spread between balances of transportation costs payable by producers in various regions. This spread under the former policy ran from an excess of assistance paid over the actual transportation cost of $1.80 to a balance of cost payable by local producers reaching $6.20 in certain areas. Under this new policy we have sought to narrow this spread of approximately $8 to $2.60 in eastern Canada, and we expect truck competition to eventually reduce it to less than $1.60.
All regions of British Columbia will see their balance of cost reduced by $0.60. Northern Ontario and northwestern Quebec will benefit from reductions reaching up to $3.60. There will be an appreciable reduction at most points north of the St. Lawrence, in various regions of the maritimes farthest from ports of entry and in some zones in Newfoundland. Furthermore, in other regions an effort has been made to standardize balance of cost wherever possible, while ensuring a readjustment for destination points receiving assistance in excess of cost of transportation.
I may say that rates to the maritimes are based on water movement. We plan to keep a close watch on supplies as the season progresses and should stocks in storage in the area be inadequate by the close of navigation, the government is prepared to re-examine the matter.
We repeat that our new policy, which will come into effect on August 31 next, is only an interim policy. We are waiting for the report of the house committee on agriculture and the result of certain studies, before establishing a more permanent feed grain policy.
Moreover such a permanent policy must be coherently integrated with overall legislation aimed at the agricultural renovation of eastern Canada.
Subtopic: POLICY ANNOUNCEMENT RESPECTING FEED GRAINS IN EASTERN CANADA