Mr. Hovdebo:

Is Eugene Whelan back in town?

Mr. Wise:

He turned it down. We are not turning it down. We want to enable the farmers to buy fertilizer and seed and to enhance their position to secure operating credit from traditional lending institutions.

The Acting Speaker (Mr. Charest):

The Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria). I remind Hon. Members that there are approximately four minutes left for questions and comments.

Mr. Boudria:

Mr. Speaker, I will be very brief in my question to the Minister. It concerns agricultural issues in eastern Ontario.

Could he enlighten us about the state of the new Canada-Ontario agreement which I understand is under negotiation between himself and his colleagues in the Ontario Government? The previous agreement expired earlier this year and it had serious repercussions on improvements in the area of tile drainage for farm land in eastern Ontario.

The Minister has just related the cordial state of relations between himself and Mr. Timbrell of Ontario. Perhaps he could explain to the House the status of the new Canada-Ontario development agreement. Has the subsidiary agreement for agriculture been signed yet? What is the status of those projects?

If and when the agreement is signed, will it include a component to improve farm drainage? In eastern Ontario, I believe that the key to improvements in agriculture is the improvement in tile drainage. That is really the only way that we can become competitive with farmers in other parts of the province and the country.

The Minister, being an Ontario farmer himself, will be knowledgeable about this issue and perhaps he could enlighten the House as to the progress in this respect.

The Acting Speaker (Mr. Charest):

I would remind the Hon. Minister that he has approximately two minutes.

Mr. Wise:

Mr. Speaker, I appreciate the Hon. Member's question. 1 have some appreciation for his concern, particularly with reference to the part of this province that he represents. I am aware of the importance of the agreement because I can recall travelling to Kemptville when we were in government in 1979 and indeed signing the agreement.

As an old municipal politician, I have an appreciation of the importance of farm drainage. I must apologize to the Hon. Member that I cannot give him an exact, accurate update as to where we now stand with reference to the agreement or the subagreement. However, I would invite him to call my office where my officials would be very happy to brief the Hon.

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Member on the status of the eastern Ontario agreement. That is, whether or not a subagreement has been signed.

I think something must have progressed because when I met the farm leaders of eastern Ontario last Tuesday, I believe, in their documentation one of the members applauded us for taking immediate action in providing funding for that agreement. They were extremely appreciative, so we must have made some type of progress.

The Acting Speaker (Mr. Charest):

The ten-minute period for questions and comments is now over.

Mr. Boudria:

Mr. Speaker, I would simply ask you for some guidance. Since there are only five minutes left, and in the same spirit of co-operation that we demonstrated approximately half an hour ago, I wonder if you could call it one o'clock. At the resumption of the House this afternoon, I would be able to make my remarks in full instead of their being split up.

The Acting Speaker (Mr. Charest):

Is it agreed?

Agreed.

The Acting Speaker (Mr. Charest):

We will consider it one o'clock. It being one o'clock I do now leave the chair until 2 p.m.

At 12.54 p.m. the House took recess.

The Acting Speaker (Mr. Charest):

When the House rose at one o'clock the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) had been given the floor.

Mr. Don Boudria (Glengarry-Prescott-Russell):

Mr. Speaker, I notice that you had some trouble recalling the rather lengthy name of my constituency. I can assure you you are not alone, since even some of my colleagues have the same problem. I am sure that in time, all Hon. Members will find it a bit easier to remember.

It is a pleasure today to speak on behalf of our Party in this debate on the state of the agricultural industry, and more particularly on the need to act urgently in revising certain procedures, such as imposing a moratorium on Farm Credit Corporation interest rates, debt review and other issues involving the agriculture sector.

Before we discuss those issues, I think it important for us to reflect on what has happened in the agricultural industry and elsewhere over recent years. Of course, some of the problems we have in agriculture relate to the high interest rate cycle that we have had recently, but there are other causes as well. For instance, I am sure you will agree, Mr. Speaker, that the

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very low commodity prices to which farmers are subjected and have been subjected in recent years are certainly cause for great concern. Much of the cause for low commodity prices relates to the international situation and the subsidies other countries provide for their agricultural products.

In this respect one can look to the European Economic Community and to the United States of America, both of which have created downward pressure on farm commodity prices in Canada because we live in a global village.

How do we solve the dilemma? The previous government attempted to have price stabilization programs, market sharing quota systems and so on. By and large, where those systems exist they have had a meaningful impact on assisting farmers through the very difficult situations in which they live. But more has to be done, particularly now that we are picking up after the economic recession.

We notice that agriculture is much slower to recover than other industries but there are reasons for this. Agriculture is a very capital-intensive industry. It has often been said in the past that farmers live poor and die rich. A new variation of that is that in recent years farmers lived poor and, unfortunately, died poor even though they have all the riches of the farm, the implements and everything that goes with the farm operation. This has created a very difficult situation.

In an attempt to redress some of this, during previous elections the former government enumerated a few select programs which we felt could be achieved in the reasonable future. We felt those programs, if adopted, would assist this country's agricultural community.

The present Government has made quite a few promises. Those promises were not only in the area of agriculture. There were 331 promises made, out of which 20 were in the area of agriculture. 1 could read them all into the record today, but I am sure Members do not want to be subjected to having to listen again to all those promises which obviously will not be fulfilled by this Government. However, we should think of the few promises which the Government is bound to realize in the very near future and concentrate on those.

I congratulate the Minister of Agriculture (Mr. Wise) on his appointment. He obviously has a very strong feel for the agricultural community, coming from that community, unlike his provincial counterpart in the Ontario Government who has very limited qualifications in that area. I am being generous when I say that because many people argue that the Ontario Minister of Agriculture is totally devoid of any qualifications for such a position.

It is the hope of Members on this side of the House that the Minister of Agriculture will succeed in mustering the clout required to obtain from the Minister of Finance (Mr. Wilson)-"Mike the Knife", as I referred to him a few days ago- the funds required to fulfil the 20 election promises made by the Conservative Party during the election campaign.

When we talk about the in depth review process and the moratorium Bill, we are obviously dealing with very important issues. One of my Party's Members in the last Parliament introduced a Bill on farm foreclosures. Unfortunately, that Bill was not passed. We promised to reintroduce similar legislation if elected as the government. With the present Government in power, we hope it will introduce such legislation in the very near future.

There is another aspect to the Farm Credit Corporation that we should talk about today. I do not believe it has been addressed in the motion presented by the Hon. Member for Humboldt-Lake Centre (Mr. Althouse). Nevertheless, it is a very significant issue. I refer to the delays in processing Farm Credit Corporation applications. As Hon. Members know, justice delayed is justice denied. Of course, a benefit delayed is also a benefit denied, in my opinion. A farmer applying for a Farm Credit Corporation loan may be refused six, eight, ten or twelve months later and then has to go through the whole process again. That does not constitute justice, in my view.

With your indulgence, Mr. Speaker, I will take a few minutes to make Members aware of some of the hardships that have been created by delays in the Farm Credit Corporation in my constituency.

Mr. Speaker, one of my constituents wrote to tell me she had applied to the Farm Credit Corporation on April 16, 1984. She said she handed the papers to the Farm Credit Corporation officer ten days later, and that at the time, she expected to get a loan at a rate of 13.25 per cent. It seems that on June 7, 1984, when she went back to the FCC office, she found that the rate had gone up from 13.25 to 14 per cent. She was told the application she made several months previous could no longer be "entertained" and that she would have to wait. So she waited a few weeks and then applied at the Ontario regional office-I am told the office is located in Guelph-and there was more delay. A week later she phoned again and was told the officer concerned was on holiday. You can appreciate that in late June or early July farmers have a lot of other things to do besides standing by the phone and waiting for a government official to call them. They are quite busy bringing in the crops and working the fields.

Finally, it seems that she got an answer from the Farm Credit Corporation on July 16, 1984 telling her that some information was missing. Hon. Members will recall that the whole show began in April. The two allegedly missing documents had been sent to the Farm Credit Corporation on May 31. Apparently they got lost. Anyway, the documents were found two days later on July 18. We are already several months later, Mr. Speaker. And so it went on and on-I will spare you the details-until September 1984 when my constituent still had not been told by the Farm Credit Corporation whether she was eligible for a loan or not.

I am told that she has now received that answer, that she has been turned down and has now initiated the appeal

November 23, 1984

procedure. And we wonder whether the Farm Credit Corporation will provide a final answer in time for next spring. Such delays are unreasonable in my view. If for instance the farmer has to ask a bank to wait for refund payments, I am sure the bank would not wait until next spring. Nobody can afford to wait that long. Certainly if another industry was waiting for a Government loan, it would go elsewhere if it was unable to get grants within a reasonable timeframe. It is my view that farmers also should be entitled to government service within a somewhat more adequate time period.

Mr. Speaker, being from Eastern Ontario, I find it hard to discuss farming without referring to the poultry farm situation in our area. They are faced with very special financial difficulties because the various levels of Government, especially the Ontario Government and its chicken marketing board, but also the federal marketing board have cut their production on the grounds that they have not reached their quotas in the past. That matter has been dragging now since 1978 before all sorts of administrative courts, courts of justice and so on and so forth, and has not yet been settled. However, producers still have to go on making payments on their facilities, and they have to live like everybody else, without their problems being solved and without their being able to find someone to help them so they can keep on operating their farms.

This is another example of a delay which creates great hardship for the farmers of the Glengarry-Prescott-Russell area.

In closing, Mr. Speaker, I would like to draw the attention of the House to an issue which was mentioned yesterday morning by the Hon. Member for Algoma (Mr. Foster), the Liberal critic for agriculture, namely the problems of Canadian hog producers. As we all know, most of the pork produced in Canada is exported. As is the case with other farm industries, hog producers were affected by very low prices. However, they must now face a new problem, that of marketing their product, since there are many rumours to the effect that the United States will curtail their pork imports from Canada.

I would urge the Minister of Agriculture to get together with his U.S. counterpart as soon as possible with a view to ensuring that the levels of exports of pork from Canada to the United States are retained and possibly enhanced. We do not want to see the loss of those pork exports to the United States. Those exports are very meaningful, not only because of the price but because the survival of that entire industry depends upon them.

My colleague, the Hon. Member for Hamilton East (Ms. Copps), is also very concerned about some remarks that have been made in the House today by the Minister of Agriculture concerning the grape growers of the Province of Ontario. The Minister, who is not present in the House at this time, did say this morning that there would be assistance for the grape

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growers. I am sure all Hon. Members of the House would want to know in more detail about what kind of help would be given to the grape growers of the Province of Ontario.

In closing, Mr. Speaker, I would just like to reiterate a point that I raised this morning, and that is the need for a new Canada-Ontario development agreement. That federal-provincial agreement, particularly as it affects the part of the province in which I live, is indeed very important for the agricultural sector, particularly because of the farm drainage, farm improvement and other grants that are made available to farmers. We do not see how the farmers of eastern Ontario in particular will ever be able to compete with the farmers of the rest of the country until improvements are made to the technology and drainage of those farms. I would urge the Government to continue its negotiations with the Province of Ontario, not only so that a general agreement between Canada and Ontario is signed, but also so that subsidiary agreements as they pertain to the agricultural sector are signed, thus ensuring the enhancement of the agricultural sector of the country.

The Acting Speaker (Mr. Charest):

Questions or comments? Debate.

Mr. Steven W. Langdon (Essex-Windsor):

Mr. Speaker, it is a particular pleasure for me to take part in this debate today. Had I not done so, it would have been the first time in 22 years that a debate on agriculture had not included the Member for Essex-Windsor. I was tempted to mark the occasion by bringing a green stetson with me! However, 1 have resisted that temptation. I must say as well that I have promised my colleagues that I will try to speak in both official languages, unlike the previous Member for Essex-Windsor who claimed that he did not speak either official language!

Our Party's agricultural critic has described the national farm crisis in considerable detail. He has described the credit squeeze which has been hitting farmers throughout the country and the consequences of that squeeze not only for farmers but for the small communities which depend upon farm income and indeed for farm equipment manufacturers throughout the country. He has also outlined in today's motion some of the suggested emergency measures which we feel are crucial.

What I would like to do today is deal with two additional points. First, I want to discuss the dimensions of this problem as it affects Ontario. Second, as the economic development critic for our Party, I would like to suggest some of the broader economic development questions to which the agricultural sector must relate.

The Farm Credit Corporation has recently reported that the crisis that is hitting the farmers of the country is also present in Ontario. It has been reported that 18 per cent of Ontario farmers face severe cash flow difficulties, more than in any other province with the exception of British Columbia. In addition, 5 per cent of Ontario farmers are facing moderately difficult circumstances.

These circumstances are particularly severe for those farmers who live in Huron County, Bruce County and Grey

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County. It is in those counties of Ontario that the farm survival movement developed over the last few years as a demonstration of just how serious that crisis has become.

We can see this crisis reflected very clearly in the Farm Credit Corporation's 1984 report on the financial circumstances affecting farmers across the country. That report shows that the net worth of farms in Ontario has declined by 14.2 per cent between 1981 and 1984. That is far more than the 4.3 per cent decline that has affected Canadian farms as a whole. This negative impact has been particularly hard on cash-crop farms, for which the decline in net worth has been 21 per cent as compared to a .2 per cent increase in Canada as a whole. It has as well been particularly hard on hog farms for which the reduction in net worth has been 35.7 per cent while Canada as a whole has only seen a decrease of something over 12 per cent.

From an economic development point of view, what is particularly significant is that the farms that are being hit are the middle and higher-level producers, the farms that are particularly effective and efficient. In the case of middle-level producers of Ontario, the decline in net worth has been over 20 per cent. In the case of the most highly efficient and effective producers, the decline has been over 18 per cent. Both these figures are far higher than the average for the rest of the country. The result is that the average Ontario farm in 1984 is carrying over $25,000 in short-run debts as compared to just under $3,000 in 1981. In three years it represents an increase of $22,000 in short-term debt. Again, that figure is much higher than it is for Canada as a whole.

The result of this is evident from what has happened to farm investment in the most recent years in Ontario. There have been decreases from 1981 of 42 per cent in equipment investments, 37 per cent in new livestock investments and 33 per cent in new land purchase investments. As the president of the Ontario Federation of Agriculture has recently remarked, the result is that 65 per cent of the farm income of Ontario farmers is being used to pay interest costs.

[ Translation]

There are also major problems in Quebec. There has been a 12 per cent decrease in the net assets of field crop producers. There has been a decrease of 17 per cent in equipment investments and of 24 per cent in new livestock investments.

I want to focus briefly on the situation in my constituency of Essex County. It is a relatively rich area. It is an area which has a fair mixture of products-soybeans are particularly important, tomatoes, grapes, livestock, market gardening and some dairying. Despite the richness of the area, farms in that county are being hit by increased bankruptcies. In facts, bankruptcies have almost doubled in the last year. Land prices have fallen dramatically as a reflection of that. In the case of land used by small livestock producers and those farmers who produce lambs, the value of land has dropped from an average of $2,500 per acre in 1980 to $1,500 per acre in 1984. In the case of farmers with land suitable for producing tomatoes, the

reduction has been from $5,000 per acre to approximately $3,500 per acre. Many of the farmers cannot sell their land because the bottom has been taken out of the agricultural economy in that area.

The Ontario Federation of Agriculture leaders in Essex County suggest that young farmers have been hit particularly hard. Farmers who began farming in the late seventies have been forced to assume the major debts associated with starting their enterprises. It is not only the young farmers who are suffering; even the more efficient and more established, older farmers find that economically they are not able to keep their farms viable and intact.

We are very pleased at some of the initiatives which have been taken by the new Minister of Agriculture (Mr. Wise). He has established a freeze on foreclosures by the Farm Credit Corporation. That is very important in Essex County, because as recently as this past summer the FCC foreclosed on at least one farm in the area. However, not nearly enough is being done in the face of the very significant decline in the viability of the agricultural economy. That is why we have put the motion today.

I have spoken with Ontario Federation of Agriculture leaders in my constituency. Their feeling, which is quite nonpartisan, is that the kind of program which we are proposing today-a freeze on foreclosures, an independent tribunal to deal with debt renegotiation, and a serious effort to refurbish the Farm Credit Corporation-is a package which would represent a very important response to the real problems which Essex County, Ontario and Quebec farmers are experiencing.

A small point which I would like the Minister to consider is the Conservative Party's commitment of the removal of capital gains tax on the sale of agricultural land. One of the points which we made during the election campaign that is worth considering is this. Rather than a complete removal of the capital gains tax, why not tell farmers that the tax will be removed if they put the money that they receive into agribonds under the Farm Credit Corporation? It would be a significant way by which to get the private sector and the farm sector to refurbish and rebuild the financial base of the FCC. Farm leaders in Essex County are quite willing to view that as a satisfactory alternative to the much more costly effort about which the Conservative Party has talked-the removal of all capital gains tax without those conditions.

Finally, I want to emphasize that this is not only a debate about the agricultural sector. The agricultural sector in Canada, historically and today, is a base of growth, potential prosperity and employment for the whole economy. We are not talking about a response to a special interest group or a response to a particular problem of a particular sector. It is one example of a philosophy which could be taken in an attempt to rebuild the economy. It is a philosophy which suggests that we must build on the resource base we have in Canada, not just in agriculture but in forestry, the fisheries and the mining sector.

We must make use of the resource base we have in Canada. We must build on that base and use the output from those

November 23, 1984

sectors as the input to our industrial sector to help us rebuild the industrial sector. In the case of agriculture, we should be building a much stronger and more effective food processing industry. We should revive agriculture to help rebuild the agricultural implements industry. Finally, we should rebuild agriculture and deal with the serious credit problems to ensure that small businesses in the small communities across Canada which depend on agriculture will once more have an opportunity to grow.

It is crucially important for us to deal with these problems in agriculture now. As an economist, I am shocked to see the survey figures which tell us about the major decrease in the net worth of our agricultural production land. Let us get involved in a major effort to rebuild the agricultural sector. Let us solve the cash flow problem in an emergency way and, in doing so, contribute to the rebuilding of our whole economy.

The Acting Speaker (Mr. Charest):

Questions or comments?

Mrs. Mailly:

Mr. Speaker

Mr. Deans:

You are not in your own seat!

Mrs. Mailly:

I am sorry; I shall go to my own seat. I would like to ask the Hon. Member for Essex-Windsor (Mr. Lang-don) whether requiring people to funnel the profits from the sale of the farm into agri-bonds rather than letting them save completely on the capital gains would harm the freedom of the farmer to use these funds for his retirement or in some other way? Would it not put a constraint on the farmer who is selling his farm if he has to channel part of the receipts from the sale into agri-bonds in order to benefit from not having to pay capital gains?

I would also like to ask the Hon. Member if he does not feel that there needs to be another flow of investment capital towards the agri-bond other than which already exists in the farming community. In other words, should not the agri-bonds be made attractive to other investors rather than just the people already involved in farming? If there is a constraint on the disposition of the profits from the sale of the farm, being the obligation to channel some of it into agri-bonds, is that not going to restrict the flow of capital other than from the farming community into the agri-bonds?

Finally, I would like to ask the Hon. Member whether this particular constraint would also harm what we call in Quebec-

-the transfer of family farms from one generation to the next, because very often, a problem arises when parents are selling their farms to their children: when the family farm is assessed, the children cannot afford to pay a price which would enable the parents to support themselves during their retirement years. The children are then compelled to borrow on the public market, and if interest rates are too high, or if there is a limit on capital, they have a hard time taking over their parents'

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farm. That is why I wonder whether if we restrict the capital flow, we do not make it more difficult for children to buy their parents' farms.