Hon. John A. Fraser (Minister of Fisheries and Oceans) moved
that Bill C-6, an Act to amend the Saltfish Act, be read the second time and referred to the Standing Committee on Fisheries and Forestry.
He said: Mr. Speaker, I have the pleasure to introduce Bill C-6 for second reading. It is legislation to amend Subsection 17(2) of the Saltfish Act to increase the permitted borrowing limit of the Canadian Saltfish Corporation to $50 million from the present ceiling of $30 million.
This is part of the backlog of legislation left over from the previous session. I am seeking the co-operation of Hon. Members to give speedy passage to this item of legislation. Its implementation is of considerable importance to the effective operation of the Canadian Saltfish Corporation and the large number of fishermen and saltfish processors in Atlantic Canada who depend upon the Corporation to market their catch.
Let me briefly outline the situation which has led to the introduction of this amendment to the Saltfish Act. The Canadian Saltfish Corporation, as I am sure many Hon. Members are aware, is a Crown agency which was established in 1970 with the primary aim of improving returns to fishermen. It was set up to bring about a change in the inefficient and haphazard marketing situation for saltfish which existed previously. The record shows that it has done a commendable job in this regard.
Under the Act the Corporation has a monopoly of the interprovincial and export trade in cured codfish-that is to say, salt bulk and dried codfish-produced in the Province of Newfoundland and Labrador and on the lower north shore of the Province of Quebec. Under matching provincial legislation, the Corporation has exclusive purchase rights to cured codfish and to codfish for curing within the mandated region. The Corporation is required to buy all cured fish of an acceptable quality which is offered for sale within its area of jurisdiction.
When the Saltfish Act came into effect 14 years ago, the Corporation's borrowing limit was set at $10 million, which
was deemed adequate at the time. This limit was increased to $15 million in 1976 and to $30 million in 1980.
Due to the soft market conditions currently prevailing in the frozen groundfish industry, an increase in salt bulk and saltfish production is expected in the coming year. Because of this, and due to a number of other factors outside the Corporation's control, such as inflationary cost increases combined with severe devaluations of currency in importing countries, the Corporation anticipates that its peak borrowing in 1985-86 will be in the neighbourhood of $37 million. By the year 1988 it is predicted that this borrowing requirement will rise to $48 million.
I cannot emphasize too strongly that the sum of money established under the Act as the borrowing ceiling represents the absolute level of funds available to the Corporation as working capital in any one year. The Corporation cannot obtain additional credit outside this limit.
In summary, it is very clear that for the Corporation to operate effectively its borrowing limit must be increased from the current $30 million level. If this does not happen, the Corporation is likely to find itself in the impossible position of being obliged under its mandate to buy all the fish offered to it, at the same time having insufficient credit reserves to be able to pay the fishermen or processors. Of course, this is the same state of affairs confronting the Freshwater Fish Marketing Corporation which is also seeking to raise its borrowing limit under separate legislation.
As far as the Saltfish Corporation is concerned, this dilemma can be overcome by passage of the legislation before the House today. I trust Hon. Members will see their way clear to take that action with the minimum of delay.
Subtopic: SALTFISH ACT
Sub-subtopic: MEASURE TO AMEND