Ian Gardiner Waddell
New Democratic Party
In the Opposition again.
Subtopic: BUSINESS OF SUPPLY
Sub-subtopic: ALLOTTED DAY, S O. 62-FINANCIAL NEEDS OF CANADIAN FARMERS
In the Opposition again.
What we really want to talk about is the future. I believe that within five years we will have lost a fairly substantial portion of our farms. As the depression took hold, many farmers lost equity in their land. There is no way they can be saved. They will simply have to disappear. What about the 85 per cent who will survive? What do we need to do for them? First, we need higher prices. When you look at all the facts and you get to the bottom line, you find that the ordinary working Canadian spends only 13 per cent of his or her disposable income on real food. If you add all the potato chips and other fast-food items, 16 per cent of disposable income goes to food. This is simply too little.
The cheap food policy of the previous government-kept in by the NDP members, who are starting to quiet down, I better fire them up again-resulted in fewer and fewer farmers. This enabled consumers to have a cheap food policy, and the Liberal government could continue getting elected time and time again.
In Europe, the average disposable income spent on food is well over 20 per cent. It is between 25 per cent and 30 per cent depending upon which country it is. In any country governed by a socialist left-wing government, the amount of disposable income spent on food goes up to 50 per cent to 55 per cent. That is what happens when you get centralists and people who believe that governments can do everything.
We have to have higher prices. If the previous Minister of Agriculture had done his job, not just going around speaking to farm groups but also speaking to urban groups and explaining to city people why they have to pay more for their food so as to have a stable, solid, family-oriented farming community, Canadians would have accepted it. If we destroy the family farm, people will pay an enormous amount for their food. The family farm without a shadow of a doubt is the most efficient mechanism for the production of food. It provides stability and can carry on for generations.
In the international sphere, our Secretary of State for External Affairs (Mr. Clark) must take it upon himself and as government policy to direct our efforts toward the European Economic Community. The most destabilizing influence in agriculture in the world sphere is the European Economic Community. Its common agricultural policy, which is another way of saying subsidies to agriculture, is costing something like $24 billion. That has disoriented and disrupted the honest and legitimate flow of goods. We have a natural economic advantage in producing beef, grain and food which we can
November 23, 1984
send around the entire world at the cheapest possible price. They take $24 billion out of their taxpayers' pockets to subsidize agriculture. They are producing food, but to excess. Then they ship it around the world. Grain farmers in my riding as well as ranchers are going out of business because of Irish beef coming in which is being subsidized to the extent of 45 cents per pound. It is absurd and it must stop.
Within our Canadian sphere, there is much that we can do. The first is already in place. The Minister of Agriculture is genuinely working with provincial ministers of agriculture to come up with national programs. Over the last 15 years we have destroyed the Canadian common market-and it is supposed to be a common market where goods, capital and labour can flow back and forth freely-as a result of the federal Government not being co-operative and not coming up with good policies. The provinces have had to step in. We now have 10 agricultural countries in this country, and it is affecting us all badly.
We have to so stop those programs which permit provincial top loading. We cannot do that by passing a federal law and then imposing it. We have to work with the provinces and convince them that we would all be richer if my region of the province were producing beef for all of Canada. On the east side of the Rocky Mountains we have miles and miles of natural prairie grass that is not worth a cent unless you can run a cow over it and turn that grass into protein. We have a natural economic advantage. We must look at the Crow rate because it is distorting beef production in the West.
We have feed freight assistance. While that gives the appearance of helping the eastern provinces, it is actually hurting them. By subsidizing the export of grain from the Prairies to the Atlantic provinces, we are cutting out farmers who could develop an operation there. We have to look at that. I know the Minister is starting to do that.
The Minister is extending the special farm financial assistance program, improving the cash advance program, establishing a registered farm investment fund, extending the Small Business Bond to 1989 and providing fixed rates of interest for terms of one to five years. In short, things are coming on hand. It is going to be better in the future. I am sorry we will have to lose some farmers. I do not want them to forget for one second that the inflation brought on in this country hurts the very people whom the NDP and the Liberals purport to protect. You do not protect senior citizens by bringing on inflation which reduces their pension plans by 25 per cent. What kind of protection is that? They rely on us in this House to be in a trust relationship. They should be able to trust us. We will not bring on inflation. I do not want them to forget who brought it on the last time.
The Acting Speaker (Mr. Charest):
Questions or comments?
Mr. Speaker, I found the comments of the last Member rather interesting. On one hand, he is in favour of
de-regulation. On the other hand, he extols the virtues of supply management. He wants a red meat stabilization program, but he says the federal government should not impose anything on the provinces. He says the farmer should not go out of business, yet he says that red meat producers should not exist in my riding, only in his riding. I find that difficult to accept.
I also find it difficult to accept the Member's statement that the previous Government did not devote the required attention to agriculture. In the announcements of the Minister of Finance (Mr. Wilson) and the President of the Treasury Board (Mr. de Cotret), dairy programs are being cut by $6.2 million, departmental operations are being cut by $9.4 million, and Canagrex is being cut by $6.6 million. That would have been a very useful tool for the marketing of our agricultural products. The Government is deferring $4.9 million in the testing laboratory and research facility to be built in Trois-Rivieres, Quebec, and Victoriaville. All this is from a government which pretends it is going to pay more attention to agriculture. How can it direct more attention to agriculture when it does not want to invest the funds required?
In the same document, we see that $32.3 million will be cut in agricultural services. The document states that fees are currently charged for services such as food inspection, agricultural input quality assurance and so forth and that the level of these will be increased. I find it very difficult to accept that this Government would make cuts in agriculture while at the same time saying that it is interested in agriculture. Where I come from, you put your money where your mouth is.
Mr. Speaker, the comments of my friend opposite were rather interesting. I do not think I said I was in favour of supply management. I am in favour of each agricultural producer group being able to make that decision based on the unique circumstances of its own industry. The difference between the Government and the Hon. Member's Party is that when his Party was in government, it tried to impose supply management on every producer group for every type of problem they had. That was the solution of the former Minister of Agriculture.
That is not true.
That is absolutely true. If you want to check it, you will find it is true. Look at the beef industry. For years he denied the beef industry a reasonable stabilization program. To him the only solution was supply management. He knew full well that if supply management were brought in for the beef industry it would destroy the open border with the United States, which always worked to our benefit. By the end of every year, we have a substantial positive balance in beef trade with the United States.
There are cuts, and it is a tragedy. However, there is a tragedy that is far greater. If we do not get the fiscal management of this country under control, more and more of our tax dollars will flow to service the debt. I want the Hon. Member for Glengarry-Prescott-Russell (Mr. Boudria) to appreciate
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what happens. In 1974, 10 years ago, 16.6 per cent of our revenue went to service the debt. Ten years later, it is over 46 per cent. That means that off the top a greater and greater proportion of the tax dollar goes to service the debt. Tax dollars are the sweat and toil of our constituents. It is the miners who are getting black lung who are paying those dollars. The interest on that debt goes to people who already have enough money that they can lend it to the government, sit back in their chairs and get richer.
Look at the Third World countries. A small number of people at the top are fabulously wealthy and the rest have nothing. That came about as a result of inflation. It was Liberal government policies that brought inflation to this country.
Mr. Speaker, I listened to the Hon. Member's speech. I have before me a letter from one of my constituents, a Mr. Deptuck, East 15th Avenue, Vancouver. My constituent wrote to me saying that his gasoline costs have just risen two cents a litre, his telephone rates have gone up 15 per cent, his hydro company is going for another increase, his income tax went up in July with the announcement that he will no longer be receiving the standard deduction of $100 for medical expenses, but he has not had a raise for two years and is getting cut back to three days of work a week.
Did I hear the Hon. Member correctly when he said that he did not want to see more inflation but he was advocating increased food costs? Did he say that my constituent should have to pay more for his food? Did I hear him correctly?
Second, did I hear the Hon. Member correctly when he said that the goal that he saw was that people could arrange their own pension schemes and things like that? How far does he extend this goal? Does he extend it to medicare, to unemployment insurance, to family allowances? In other words, is his goal in fact to dismember the welfare state and to dismember all of these schemes? After all, I believe it was Sir Winston Churchill, and I believe he was a Conservative, who said that by having everyone contribute, we could provide a better deal for everyone.
Finally, I would like to ask the Hon. Member another question. He is almost a nice fellow. Why is he picking on members of the NDP? We were not government members last time, Liberal members were. We did not support the National Energy Program, contrary to what the Secretary of State for External Affairs (Mr. Clark) said when he was in Vancouver. We did not do that. The New Democratic Party governs in only one province. The Conservative Party governs all over the place. Why are Conservative members picking on us? I would like to have the Hon. Member answer those three questions succinctly.
The Acting Speaker (Mr. Charest):
I would like to remind the Hon. Member for Lethbridge-Foothills (Mr. Thacker) that there is approximately one minute left in the question and comment period.
Mr. Speaker, I will deal with Mr. Deptuck's letter because it covers the entire field. I have never had any trouble with anyone from the city; not even from the unemployed. It is easy to show them that if we let the agricultural community down and if we kill the family farms, Mr. Deptuck and people like him will pay three or four times as much as they are already paying. We need only look at socialist countries run by governments with the same philosophy as that of the Hon. Member for Vancouver-Kingsway (Mr. Waddell). In those countries, people are not only paying more for their food but they are having to stand in food lines for four or five hours. When people from those countries immigrate to this country, they are just astounded by the amount of food that our farmers can put on the table.
Regarding pensions, how did we help the senior citizens and all of the people who contributed to the Canada Pension Plan and their own company plans, by bringing on inflation? These people worked for 20 years and finally received a pension of $800 a month. Within 10 years, that pension was worth $300 a month. We have not helped those people by bringing on inflation.
I am saying that inflation came about because of Canadian policies. We had to pay more for energy. If the Right Hon. Member for Yellowhead had been left in power and if members of the NDP had not entered into an illicit relationship with the Grits in order to knock down the Government of the Right Hon. Member for Yellowhead, Mr. Deptuck would have a job today. He would have a job and he would not be suffering under this kind of inflation. His pension plan would still be secure.
The Acting Speaker (Mr. Charest):
The question and comment period is now over.
Mr. Nelson A. Riis (Kamloops-Shuswap):
Mr. Speaker, it is a real pleasure for me to have the opportunity today to rise in support of the motion that has been put by the New Democratic Party regarding the very critical situation facing Canadian food producers. I would like to take a moment to read the motion into the record. At the beginning of today's debate, we simply overlooked the actual motion having already read it on the Order Paper. The motion reads as follows:
That this House urges the Government to take immediate action to address the financial needs of Canada's farmers by immediately:
(1) declaring a moratorium on bankruptcy and foreclosure proceedings;
(2) establishing a debt review agency to act as a neutral third party between borrower and lender with power to change repayment schedules and to reduce the accumulated interest; and
(3) setting out a clear mandate for the Farm Credit Corporation in order that it can make viable, low-interest loans through Agribonds or other means for farmers, including such financing for operating credit over the first five years of the loan,
and further, that a farm incomes policy based upon a guarantee of production costs for domestically used farm products be implemented to provide parity pricing for Canada's farmers.
We felt that it was important to set aside an entire day of debate, not so much to hurl criticism at the past provincial and federal governments, not so much to harp about the nature of the problem but, more important, to identify ways and means
November 23, 1984
of resolving the very difficult problems being faced by the food producers of this country.
If I may, Mr. Speaker, I would like to say that what we are really debating here today is whether food producers in Canada will be family farmers and family ranchers or whether they will be agri-businesses. We must make a choice between the corporate farm and the family farm. If the Government does not take significant action and take it quickly, we will continue to see the slow movement toward agri-business and corporate farming as the main vehicle by which food will be produced.
I come from central British Columbia. There are literally hundreds and hundreds of both large and small cattle operations there. On an almost weekly basis, I come across a situation in which an often-times young family finds that the banks are initiating foreclosure proceedings. A receiver is identified and goes on to the land, padlocks are changed, machinery is taken away and cattle are sold. A young family, which has usually spent two or three generations on a ranch, finds itself no longer bona fide cattle ranchers but in fact wards of the state collecting welfare. This takes place day after day in my constituency, as I am certain it does in most of the rural or urban-rural constituencies of the country.
The important thing for us to recognize is that most of these failures have resulted through no fault of the operators. They have resulted from high operating costs and an interest rate policy of the past Liberal government and the present Conservative Government that encourages high interest rates. When a farmer is expected to maintain payments to the Farm Credit Corporation or to one of the traditional lending institutions at interest rates of 15 per cent, 16 per cent or even 17 per cent, there is simply no way he can make money and maintain his food production operation.
It is important that we recognize that the problems being faced by food producers today are, to a large extent, created by governments. Thus, by definition, many of these problems can be solved by having the Government of Canada and the governments of the provinces take particular action. I believe that we have the opportunity, and indeed the obligation, to lay out what we feel are appropriate solutions to these problems.
I would like to take a moment or two to put into context just how serious the situation is and just what motivated members of the New Democratic Party to ask that an entire day be set aside to explore solutions to this virtual crisis situation. Very recently, we found out from the Farm Credit Corporation that about one in every five farms totalling nearly 40,000 farms are in severe financial distress. Severe financial distress is defined as a situation in which interest payments exceed 40 per cent of sales revenue or in which the net worth of a farm is less than 15 per cent of its total assets. I become particularly concerned, as a Member of Parliament from British Columbia, to find that the highest percentage of food producers who are in severe financial distress happen to be from British Columbia.
The Farm Credit Corporation report goes on to suggest that there are 1,700 farmers headed for inevitable collapses either this year or in the beginning months of 1985. Again, by and large, it is not the fault of the farmers but is the result of high production costs and an interest rate policy which makes it virtually impossible to be successful under these conditions.
It is important to recognize that we are dealing mainly with young farmers and ranchers who perhaps entered the business in the early seventies. Those are the people who are experiencing problems today. Farm bankruptcies until October of this year total 465. That is an increase of 19 per cent from the same period last year. When we are talking about the hundreds and hundreds of farm bankruptcies each year, we are only talking about the tip of the iceberg. For every farm bankruptcy, there are approximately six farmers who simply walk away from their operations. They voluntarily liquidate their operations. Of course, the major benefactors are usually the banks. They now own a good portion of Canada's farming units.
The total debt load of Canadian farmers is in excess of $21 billion. It represents an increase of more than a billion dollars over the last year. Meanwhile, over the past four years, the value of Canadian farm equity has fallen by more than $4 billion. When we ask ourselves how serious the situation is, it is important to compare it, for example, with the last decade. If we compared 1974 with 1984, we would find that in 1974 the net farm income in Canada accounted for approximately $3.4 billion. In 1984, ten years later-recognizing the ravages of inflation as was drawn to our attention by the previous speaker-one would expect that the net farm return would be significantly greater than $3.4 billion. Flowever, in 1984, the net farm income was again approximately $3.4 billion. In other words, the real cut which has occurred in farm incomes has been in the neighbourhood of 300 per cent. Today, farmers are receiving a net farm income which is approximately one-third of what they received in 1974.
Over the last number of years, the average farm investment has decreased, yet the average debt per farm has increased significantly over the same period. Investment went down and debt went up. It is interesting that the average debt increased across Canada by 16 per cent over the last three years. It is also interesting to look at the relative per farm capital investment levels. In 1981, British Columbia had an average per farm capital investment which was 56 per cent above the national average. It represented tremendous capital investments in the food production units of British Columbia. In 1984, that 56 per cent was reduced to 3 per cent above the national average. It is clear what is happening to the farm community in that province; it is being devastated.
One could go on and speak of the very difficult problems being faced by the food producers in Canada. However, it is more important to consider the solutions. I listened carefully to the speakers from the Liberal Party earlier today. They had some ideas of what might be appropriate in terms of resolving some of the problems, but I think it is important to remind
November 23, 1984
those Liberal members that last spring two Bills were introduced by the Liberal Government. One was Bill C-653, an Act to amend the Farmers' Creditors Arrangement Act. In essence, that Bill was an effort to bring in a third party to negotiate when borrowers and lenders were in dispute. That Bill was talked out by both Liberals and Conservatives in committee. A subsequent Bill was introduced. Bill C-17, which was an amendment to the Small Business Loans Act. Again, it was permitted to die on the Order Paper. When the Liberals tell us that they have great ideas and suggestions, we must ask where they have been in the last 10 to 15 years. Why were those suggestions not introduced?
There are actions which could be taken. As our motion indicates, we should immediately put a moratorium on all farm foreclosures. We have seen that action taken by the Minister of Agriculture (Mr. Wise), and I applaud him for it, as the Government is associated with the Farm Credit Corporation. However, we must recognize that the moratorium will only be in effect until January 15, 1985. It is clear that the moratorium must continue until the Government tells us what will happen with the other support programs it may introduce. I suggest that it would be appropriate to place a moratorium on all financial institutions. After all, the record demonstrates very clearly that one of the reasons so many young food producers have got themselves into financial difficulty is that the banks of Canada tried to shovel money into them. The banks encouraged young farmers to expand, and farm advisers told them that, with the kind of cashflows which were projected, they could handle large debts. People had money pushed at them. What happened? The banks foreclosed on food producers across the country. These are banks which have the largest real interest rates in the industrial western world. They also represent a national banking system which is the most profitable in the entire world.
It is not unreasonable for the Parliament of Canada to ask the national banks to participate in a moratorium program until the Government can put into place financial support systems. That is not an unreasonable expectation, nor is it an unreasonable request. As the Minister of Agriculture has indicated, it would require an Act of Parliament. I suspect that Members on all sides of the House would be only too anxious to pass such a Bill quickly.
Of course, the whole matter of stabilization programs must be raised. We have heard from our constituents and we have heard in the House of Commons that our red meat industry is competing with Irish beef, which is subsidized to the tune of up to 45 cents per pound. That means Canadian beef producers cannot compete. Countries around the world are promoting exports of foodstuffs and supporting their industries in one way or another, but Canada still retains a policy from another era which expounds the virtues of free enterprise. The only players in this particular area now are some sectors of the Canadian food production industry. We cannot have it both ways. We cannot have the Government of Canada stepping in either to impose quotas on subsidized Irish beef, to bring in countervailing duties, or to ask for a voluntary restraint program on imports. It is time for Canadian food producers to recognize that there is a real need for stabilization programs based on basic production costs. We would not find many sectors of the Canadian economy with a price which is lower than the cost of production. However, that is the case of most commodity areas within the agricultural industry. The time has now come, Mr. Speaker, for the Government to take very seriously this need for stabilization programs.
I would like to comment as well on the need to take action on the agri-bond front. The concept of agri-bonds has been before us now for many, many months. The matter was at one time referred to the Standing Committee on Finance, Trade and Economic Affairs. The inquiry was completed. We saw there was, indeed, an excellent opportunity for food producers where an agri-bond could be floated by the federal Government, an investor could obtain 6 per cent or 7 per cent return on his investment, and, with a tax credit, could equal the kind of return he would get in the open money markets. What that would do, Mr. Speaker, is to provide a large pool of money, costing about 6 per cent or 7 per cent, which the Farm Credit Corporation could lend for 7 per cent or 8 per cent. That is the kind of cost of money which would enable not only the young people to get back into the field of agriculture but would enable many existing food producers to be successful during these difficult economic times.
In terms of dealing with the moratorium on foreclosures either by the Farm Credit Corporation or by traditional lending institutions, there should be a debt review board instituted to act as a third party and, again through an Act of Parliament, to arbitrate where there is a difficulty between a lender and a borrower, and to be able to extend the period of repayment. Perhaps in some cases it could recognize that the bank or other lending institution might well be able to take a small loss. After all, as previous speakers have indicated, we are quite prepared to ignore the debts of certain large corporations. I think it is time that we did the same for the food producers of Canada.
I believe the important thing is that there are solutions, there are answers, and many have been presented today. If the Government is concerned about the viability of the family farm or ranch, and if it really wants to take action to assist the agricultural community, there are a variety of options from which it can choose. Most of these options have been presented today, Mr. Speaker, and I would like to suggest that the first step ought to be action through an Act of Parliament to place a moratorium on farm foreclosures.
The Acting Speaker (Mr. Charest):
Questions or comments?
Mr. Speaker, I have been most interested in the comments of the speakers from the New Democratic Party and, in particular, in their motion as it relates to the agri-bond.
I come from an urban riding. Although I do not claim to know an awful lot about agriculture or, for that matter, about the
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agri-bond, part of my riding is represented by the Minister of Agriculture for the Province of Ontario, so we do have some connection with the agricultural community in that sense. I was most interested in the comments relating to the agri-bond and the whole concept of trying to encourage investors, apart from the farm community, to come in and invest in farms and in agricultural endeavours by offering this tax incentive, a lower interest rate, I take it, and then some sort of tax exemption in order to induce the investors to come in. That sort of thing seems to make a good deal of sense to me and to people who may think in the same way as I do.
I am interested in two of these aspects from the point of view of the New Democratic Party. I wonder if perhaps the Hon. Member could say whether or not this would create another one of these tax loopholes about which the New Democratic Party has indicated some concern over many years. In other words, does it not create a situation where the rich can put their money into investments and receive a tax break and, therefore, would not have to pay any taxes or not as much in the way of taxes?
Second, if we impose or superimpose on top of the agri-bond concept the idea of a minimum tax on the rich, would that not perhaps discourage those people who might otherwise want to invest in agri-bonds from doing so, and would that not then be counterproductive to the whole concept of agri-bonds and the assistance to agriculture which they would create?
Mr. Speaker, I appreciate the Hon. Member's question. The topic of agri-bonds is something which the Government in its economic statement has indicated it now wants to pursue. It will be striking a committee, hopefully soon, to examine the variety of routes which one can take to implement an agri-bond program. Other countries have different kinds of agri-bonds, and they are something we need in our country as well.
In terms of conflict with the position of the New Democratic Party on the tax system, we have always believed very strongly that there are certainly very legitimate tax incentives. Many of the provisions in the Income tax Act, in fact, do serve Canadians well, such as appropriate types of home construction, the agricultural community, the fishing community, and one can go on and on. Our Party says that there are hundreds of tax loopholes and there has never been in recent times an adequate review of who benefits. We are simply suggesting that many of those loopholes, in our estimation, in fact provide no general gain to the country. As a matter of fact, they often result in a net loss to Canada. There is no job creation or economic expansion as a result of these loopholes. If it is going to cost us hundreds of millions of dollars, nay, billions of dollars each year in lost tax revenues as a result of these tax incentives, I feel it is not unreasonable to obtain a very clear statement on who benefits and to what extent, so that we can measure whether or not a tax incentive is in the best interests of our country.
To answer specifically the question raised by the Hon. Member, I will say that we feel that a minimum tax, and an incentive program which would result in a pool of low interest
capital for agricultural purposes, is not inconsistent one with the other. There is room for both. We feel very strongly, however, that with a tax system which is voluntary-and I think it is important that we as parliamentarians remind ourselves of that fact-we must operate in such a way that the billions of dollars presently operating in the underground economy are brought to the surface. We must have a tax system which people perceive as being fair, where equity is part of the entire system.
All we are saying is that when we find that year after year thousands and thousands of individuals whose incomes are in the $500,000 to $1 million range, are paying no income tax whatsoever, and when we find year after year that large corporations, which are extremely profitable-and I emphasize that-pay not a single penny of income tax, we say that our tax system has got out of control. I do not believe there is a single tax lawyer or accountant in Canada who would not agree with that observation.
The Hon. Member genuinely expressed concern for the plight of the Canadian farmer and, most particularly, for the Canadian farm family. During the election campaign, the Leader of our Party, now the Prime Minister of Canada (Mr. Mulroney) while campaigning in the Niagara Peninsula promised assistance to grape growers, who are experiencing a serious problem this year because of surplus grapes. This promise was also supported by the Ontario provincial Minister of Agriculture, the Honourable Dennis Trimbrell. He also promised provincial funds. The federal Minister of Agriculture (Mr. Wise) has today announced that the new federal Government will keep its promise and has in fact arrived at an agreement with the province and a decision has been made to purchase the surplus grapes from the growers.
This past weekend I visited grape growers in my riding and they were very pleased with this decision. Many growers, because of a lack of markets, would be ruined without this help. Grapes are a major agricultural product in Canada and in my riding in the Niagara Peninsula. I am pleased that the Government has kept its promise in this regard. I would ask the Hon. Member for Kamloops-Shuswap (Mr. Riis) if he does not agree that the Government has kept its promise to the grape growers? And would the Hon. Member tell us why, when he is so genuinely concerned with the plight of the small farmer, he does not give recognition to this excellent effort by the new Government to assist grape farmers who, in almost all cases, are made up of small family farm units?
Mr. Speaker, 1 am pleased that the Hon. Member raised this issue because it is important. I have no hesitation in recognizing that the Minister of Agriculture (Mr. Wise) had in fact assisted farmers across the country by his action with the Farm Credit Corporation. Indeed, he took steps to assist hard-pressed farmers in various parts of the country, and the Hon. Member named one.
I want to make the observation that before I spoke we heard a speaker from the Conservative Party going on and on about
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the abhorrence of having government play a role hand in hand with agriculture. Ele espoused the myth of the free enterpriser. Quite frankly, it is a pleasure to hear this Hon. Member stand in his place and say, thank goodness there was co-operation between the federal and provincial governments and producers in the Niagara Peninsula. That is what the NDP has always stood for, the benefits and value of a mixed economy, recognizing that there is a role for the private entrepreneur and there is a role for government to play. I think the Hon. Member explained that mix extremely clearly and extremely well, and I thank him for that.
Mr. Speaker, my colleague is an urban planner and I want to know whether he feels there is a potential in the agricultural business for urban greenhouses. There has been extreme interest in some communities in my riding in this and I wonder if he has any ideas on this issue.
Mr. Speaker, urban agriculture is obviously a growth industry along with aquaculture and a whole variety of new and creative ways of producing food. We are still, by and large, producing food in the traditional way as we did 3,000 years ago. There are many new initiatives that ought to be taken, and urban agriculture is certainly one of them.
Mr. Murray Dorin (Edmonton West):
Mr. Speaker, it is a pleasure to be able to rise to speak to this House on the motion put forward by the Hon. Member for Humboldt-Lake Centre (Mr. Althouse). I represent an urban riding. As such, I think it is important that some of us from urban ridings put forward our views to demonstrate that the Government and its actions are supported not just by Members from rural areas, but in fact by all members of the Government.
The economy of Alberta is built on three foundations, Mr. Speaker: agriculture, energy, and transporation. The two primary industries, agriculture and energy, are of importance, not just to agricultural and rural communities but to the urban communities and the people I represent. I have some knowledge of rural life and farm life in that I grew up in a rural area of Alberta. I spent the first 18 years of my life in an area now represented by the Minister of Transport (Mr. Mazankowsky). I must say that over the years I have taken lessons from watching how he has conducted himself in his distinguished career, and I can only hope that mine will be as long and that in the next election I can achieve a majority similar in size to his.
The importance of maintaining a strong and dynamic agrifood industry has always been well understood by my party. Indeed, much, perhaps the majority, of federal agricultural legislation and institutions were established by Conservative governments. Going back to the days of the government of the Right Hon. John Diefenbaker and Ministers such as my colleague, the Hon. Member for Qu'Appelle-Moose Mountain (Mr. Hamilton), people from the West, indeed farmers and agricultural people from all over Canada, have recognized that it is the Progressive Conservative Party that represents their interests. This is in large part the reason we have enjoyed continual electoral success for many, many years no matter
what the political winds happen to be. The Canadian Wheat Board, the Farm Credit Corporation, crop insurance, the Agricultural Stabilization Act, ARDA and PFRA are primary examples of our concern for Canadian agriculture. These are examples of the items our Party has brought forward over the years to respond to the needs of the agricultural community.
However, Mr. Speaker, I want to make it clear that these institutions, organizations and legislation are only support mechanisms. They were never intended to interfere with farmers' personal freedom and responsibility for their own success. As a farmer himself, the Hon. Member for Humboldt-Lake Centre is aware of the harsh realities of agricultural life. He knows farmers have to be careful, frugal, work hard and live within their means because of the narrow margins, traditionally poor returns on capital, and the terrible risks they face both through natural hazards and market forces.
The market-place is no less threatening to farmers than flood or drought or frost. Each farm family must take primary responsibility for coping as best it can with the hazards. Farmers understand this. They understand there is no escape from the harsh realities, no excuse for bad management. In short, they must carry their own weight, take their own risks and live with the consequences. Every independent businessman must maintain that sort of attitude towards his or her enterprise.
However, the federal Government recognizes that there are some aspects of agricultural life which are unique, such as, for example, the vulnerability to weather and international political and economic forces, plus the historically low rate of return on capital, all of which require governments to adopt special programs for farmers. This is not done to guarantee every farmer a living, but to ensure a general environment and climate in which Canadian farmers may prosper, and also to ensure that Canadian consumers have a continuing supply of high quality food at reasonable prices. In addition, government support of the agricultural industry enhances that industry's contribution to the national economy, such as to the balance of trade.
Federal and provincial governments have adopted a wide range of programs to help the industry. At the federal level nearly $2 billion is being spent annually on agriculture. In ballpark figures, this includes $60 million a year in stabilization payments, $300 million a year in dairy subsidies, $140 million in federal contributions toward crop insurance, $250 million on federally sponsored agricultural research, $200 million on inspection and regulation, $650 million through the Crow benefit, and $110 million a year to the Western Grain Stabilization Program. In addition, there are many market development programs, including advance payments programs which provide around $450 million a year in interest-free cash advances to farmers. There is also freight assistance to areas hard hit by drought and other natural disasters and for feed deficient areas of Canada. There are agricultural subsidiary agreements under which we encourage market development, technology development and improvements to the natural and human resources of agriculture. Designed in co-operation with
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the provinces, these programs are tailor made to get the most from the agricultural area of the country.
Through the Farm Credit Corporation, Mr. Speaker, the Government provides loans to thousands of young and beginning farmers who do not have enough equity to get loans from commercial sources. As I said, I grew up in a rural area. In fact, I might still be there. However, as all Members know, unless one has a family farm to take over, or a sizeable family fortune, going into farming today is nearly impossible. As a result of this, I chose to emigrate to the city and become a chartered accountant. 1 still hope, however, that I may be able to return some day to farm life in the rural community. If we can get things straightened out in the Government of Canada in the next few years, I may still be able to realize that objective. I realize of course that with the requirements of farming being what they are, I do not have too many years to wait. I must do it in my relatively younger years, but I hope to still have that opportunity.
In recent years, in response to financial problems that have arisen as a result of high interest rates, several special programs were introduced including small business bonds, small business development bonds and the special farm financial assistance program. Most recently, the Government has placed a moratorium on recovery actions by the Farm Credit Corporation to give us time to develop innovative credit programs for farmers.
One part of this motion calls for a moratorium on foreclosure. 1 think that we must realize that such a call must be viewed with skepticism in light of the fact that a moratorium has the potential to reduce the availability of credit for farmers who are in fact currently in a strong and healthy position, able to carry debt and take out new loans. We would not want to dry up the sources of capital that are available to farmers who are currently strong by imposing a debt moratorium. Any move in this direction must be viewed with caution. Nevertheless, Mr. Speaker, the Minister has placed a moratorium for a temporary period until January 15 of next year to give our new Government some time to study the problems farmers are facing. We also need time to determine what programs can be made available which would offer reasonable solutions.
Inter-generational transfers are being facilitated. We intend to proceed with the previous government's proposal to allow farmers to deduct up to $120,000 in taxable gains on the sale of farms after December 31, 1983, provided these funds are invested in an RRSP. Furthermore, Mr. Speaker, the federal Government is co-operating with the provinces in exploring a whole range of credit and tax options. These were discussed at the federal-provincial Ministers' meeting in Toronto earlier this month.
In his economic statement to Parliament, the Minister of Finance (Mr. Wilson) announced that the Government will soon be referring a number of agricultural taxation issues to a parliamentary committee. These include the taxation of parttime farmers, the question of agri-bonds, and the taxation of
capital gains on farmland. The Government will issue a background paper on these issues and will request the parliamentary committee to report expeditiously. Although not directly related to farm finance, the Minister of Finance also indicated that farmers will be eligible for a fuel tax rebate which, after considering fuel price changes, should be about 4.5 cents per litre. This should assist all farmers in strengthening their cash flows. I would hope that provincial Ministers of Agriculture would appear before this parliamentary committee on the issue of agri-bonds united in a common purpose.
I believe that the Western Grain Transportation Act, when considered with the motion and its mention of input costs, is very significant. The first review regarding the method of payment is in progress and will be completed early in 1985. With regard to the method of payment, I believe that paying the Crow benefit directly to the railways distorts local prices for grain and thereby creates a disincentive to raising livestock or to processing grain locally. By paying the railways directly there is also a clear bias toward using rail for transporting grain. Other transportation modes or other services might be more efficient in some instances, but they are at a cost disadvantage under the present method of payment.