February 19, 1992

LIB

Maurice Brydon Foster

Liberal

Mr. Maurice Foster (Algoma):

Mr. Speaker, we would have been glad to hear from the hon. member but I guess if the rules are being strictly enforced we will have to accept your direction in that regard.

Bill C-54 provides amendments to the Farm Products Marketing Agencies Act and essentially changes this act by adding a new section to it which provides legislative authority to have check-offs for agencies established by the government, by an Order in Council, for national check-offs. These check-offs involve interprovincial groups, as well as check-offs for crops being marketed from the international realm into the Canadian marketplace. It is legislation that is very similar to some legislation now in place at the provincial level which establishes agencies, that are very different from the agencies provided for National Farm Products Marketing Agencies.

The bill changes the other legislation to remove the word "marketing" and puts in "National Farm Products Agencies Act". It is legislation that a number of organizations, including the beef producers, honey organiza-

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tions, and the Horticultural Council of Canada, have supported.

It has one very special feature to it and that is that these check-offs would not only apply to producers within Canada but to products coming into Canada. In some commodities where we do not import it would not be a very big feature.

For commodities such as fruits and vegetables which we do not produce in this country, perishable fruits in the wintertime, and so on, it would make provisions for a check-off. Those check-offs could be used for promotion of that product or they could be used for research.

I think the number of agencies asking for this indicates that they want it.

In sending this legislation to the standing committee we have to be sure of a number of things.

One is that the government is not planning to off-load their responsibility for research in this country onto the producers of the commodity, whether it is the beef producers, horticulture crop producers or whatever. The federal government historically has had a national responsibility for basic research, for fundamental research, for research that is transmitted and made available to producers.

Clearly, in the discussions which will take place in the standing committee, we will want to have those kinds of assurances. Perhaps they could be written into the legislation or perhaps there is some other mechanism to ensure that those safeguards are there.

We do not want this government which has drastically reduced the amount of support for research, I believe some $40 million between 1989 and 1990, to shirk its duty in that responsibility. We do not want it to off-load it on to the producers or the provinces, as it did with some of the safety net legislation. They have a responsibility to carry out that research.

The promotion itself is something that is up to producers. Clearly, there have to be mechanisms in the legislation to make sure that the majority of producers want this and that there are adequate safeguards to ensure that there is a referendum in the provinces that produce the commodity, or on a national basis to ensure that

February 19, 1992

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whatever is being done a majority and a good solid majority of the producers support that promotion.

It is my understanding that this legislation can be used by the existing supply management groups if they want to have check-offs. I believe they now have mechanisms where certain types of check-offs or funds come out of their national organization for promotion but I do not think it is used for research very often. So that adds another provision for those groups.

A number of organizations have indicated their support for this legislation, I understand the Canadian Cattlemen's Association, the Canadian Pork Council, the Canadian Horticultural Council, the Canadian Fruit Wholesalers Association, the Fresh for Flavour Foundation, the Western Grains Research Foundation, the Canadian Honey Council and the Canadian Nursery Trade Association. Clearly, there are those groups that support the legislation.

As I understand the legislation, there would be provision in it for co-operation between provincial and national organizations running check-offs.

It is interesting that a number of these organizations that are supporting this legislation really have been very reluctant ever to become involved in a national farm products marketing agencies act under the existing legislation which provides for supply management and cost of production and all the rest of it.

This bill before the House today needs to go to the standing committee to make sure that there are safeguards with regard to how it will be used.

Clearly, some groups like the National Farmers Union have expressed concern that they want to be able to appear before the standing committee.

They see it as a regressive tax on farm production because the majority of those producers of a commodity would be able to vote and have a levy which could be used for promoting that product nationally or internationally.

They are concerned that the government will off-load its research responsibility.

Those are legitimate concerns which need to be aired and examined.

The Canadian Pork Council is concerned that the check-off system would result in a costly additional bureaucracy and institutional arrangements.

It seems to me that those are the kinds of concerns that need to be explored and analyzed. We need to see if there are amendments that can be made to the legislation to ensure that those kinds of problems do not exist with this check-off legislation.

Clearly we would want to see that this legislation would be supported by the majority of producers. We should examine whether there is some way that the vast majority of the producers would support the legislation. The check-off could be very arbitrary and harmful to low income producers or smaller producers. I think we need to look at that aspect in the committee when it is being examined.

It is my understanding that this legislation can be used for the supply management sectors. They do have some provision, of course, for this kind of promotion under existing legislation but here they would be able to impose levies which could be used for the research project.

Those are a number of concerns that we have about Bill C-54.

It is my understanding that this legislation can be implemented on a basis in which it would be mandatory or could be refundable. That is another aspect that has to be clearly identified. There are voluntary check-offs now for beef producers and on some other commodities. We would like to know just how the legislation would operate in that regard.

Those are a number of the factors which we think need to be considered when we look at this legislation in the standing committee.

I want to say a word or two about the original legislation, the act that we are amending here today, the Farm Products Marketing Agencies Act.

That legislation was set up in 1971 by the Parliament of Canada. A number of national farm products marketing agencies have been established: the Canadian Egg Marketing Agency, the Canadian Turkey Marketing Agency, the Canadian Chicken Marketing Agency, and the Canadian Broiler Hatching Egg Marketing Agency.

At the present time, there has been a report and an examination. I understand that there will be a vote next

February 19, 1992

spring on the support that exists across the country for establishing a national apple marketing agency.

The reason I raise this is because that legislation was established some 20 years ago. It is really companion legislation to what was done under the Canadian Dairy Commission. It is under attack in the report that was issued by Arthur Dunkel, the secretary general of GATT in mid-December of last year.

That legislation has brought order out of chaos in several pieces of legislation in many farm sectors where farmers are able to produce and market a commodity and have some idea what the price will be.

It really was revolutionary legislation because in our country and in most of the western world the farmers' bargaining power is very little. In most commodities there are large international trading corporations which practically control the price of the commodities.

The National Farm Products Marketing Agencies Act, which was brought in in the early 1970s, gave producers the power to bargain in the marketplace with those large powerful retailing agencies, the international commodity companies.

Out of that has grown a very vibrant, progressive, effective farm supply management system where our poultry, egg, and dairy products are marketed on the basis of the cost of production, the average cost of production of the most efficient two-thirds.

It is amazing, as we look around the world, how much more efficient those producers have become. I do not have the exact figures in my head but the ones I remember are that Canadian dairy producers have become, during that 20-year period, about 70 per cent more efficient. For American producers it is about 42 per cent and for Great Britain it is around 25 per cent. We have a healthy, vibrant, rural agriculture.

There was great concern expressed during the free trade debate back in 1987-88 as to whether those supply management marketing agencies could survive the free trade agreement. Clearly they are very much under the gun today because of that.

I recall one meeting we had in Fredericton, N.B., where various groups, the local co-operative, the dairy farmers, the poultry producers, the egg producers came

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before our committee and said: "If you want to see what the market economy can do for agriculture in New Brunswick, just go across the border in Maine where you will find practically no agriculture".

Most of their poultry and egg commodities are being produced in Georgia and Alabama and in southern states where there are no energy costs. Most of their milk is being produced in New Jersey or farther south.

We have in Atlantic Canada, in Quebec, in Ontario, and in parts of Manitoba and British Columbia a very vibrant, healthy, rural economy. It is something we have put in place. It is unique in the world. We produce the commodities that we need. We do not flood the international market. We continue to provide for the amount of access that historically has been the case from other countries such as the United States for poultry, turkey, eggs, or whatever was in place.

This system has meant prosperity, a continuous supply of farm commodities to the consumers at reasonable prices. Historically it has not increased any more than the Consumer Price Index and has increased at a price lower than those for commodities not produced under supply management. This is a legacy the Parliament of Canada has put in place under the legislation we propose to amend today.

There have been two very serious challenges to the whole system of marketing by the free trade agreement. When the government negotiated the free trade agreement it did not get any import controls for dairy commodities. The United States had an historical protection called a waiver which it got from the GATT negotiations back in 1954. It gave it complete control of imports.

As Minister of Agriculture John Wise stood in the House and said that the free trade deal did not threaten the supply management marketing boards of this country. I do not know whether he did not know or whether he did not want to face the reality of it, but clearly the FTA did so. There was no provision in there for import controls for processed dairy products like yogurt and ice-cream or any of the other processed dairy products. The historical arrangement under article XI of GATT provided for fresh farm produce but certainly did not provide for processed dairy products.

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Mr. Wise made the pronouncement in January 1988 that there would be no problem for our dairy and poultry industries; he would simply put these dairy products on the import control list. He was immediately challenged by Senator Lloyd Benson from Texas who said there was no provision in the free trade agreement to regulate import controls and if the government did it the United States government would immediately challenge it.

About 11 months later the government put ice-cream, yogurt and a number of cheeses, butters, powders and so on on the import control list as of January 1, 1989. Immediately the United States challenged it and a GATT panel was struck. Nine months later, in September 1989, lo and behold the member of the senate finance committee of the United States was right that there were no import controls under the FTA and the decision of the government to place ice-cream and yogurt on the import control list was struck down by a GATT panel. Three months later, in early December 1989, the government agreed to the decision of the GATT panel.

That was when we got into the GATT provisions and that is why when the government went to the GATT it asked for not just the maintenance of article XI but the strengthening and clarification of article XI. The strengthening was to make it apply not only to fresh raw farm commodities like milk, chicken, and eggs but to any commodity that contained more than 51 per cent of that fresh raw farm commodity. That is where we are today. The government has been at the GATT table since 1986, the Uruguay round which could well have been the Vancouver round. The Prime Minister was determined that the meeting had to be in Montreal in 1986 so the decision was that it would be the Uruguay round because he would not support the Vancouver round approach.

During the last five years we have to look at what progress the government has made in pursuing its position to strengthen and clarify article XI of the GATT. The government should get busy in the next eight weeks and persuade the United States Congress and President Bush to accept our position. Let us be frank about this: very few countries oppose our position. Perhaps Holland and Britain, but most European countries are not very upset with the strengthening and clarifying of article XI. Most of the Cairns group apart from perhaps New Zealand is opposed to our position.

The government says in the House that 102 countries are opposing our position. That is probably not right. Probably a few oppose it, but our main problem is with the United States that wants access to our dairy and poultry products market in Canada because its industry, especially the dairy industry, is in total disarray. Literally thousands of dairy producers go broke daily or weekly or monthly because they have a system that simply does not provide them with an adequate return.

The final eight weeks of the GATT negotiations are critical. In my view there is one window where the Prime Minister should get busy and persuade the European countries to support his position. Most of all he should persuade George Bush to support his position. If that happens we will continue to have a supply management system.

What happens if the GATT negotiations break down totally? We go back to what is left from the FTA which is a disaster because the Americans already have access to our ice-cream and yogurt market. One more reference by the United States to a GATT panel for butter, cheese and powder, the major dairy commodities, would probably render the same solution. That would be extremely disastrous for our supply management system. Once a precedent were set for dairy products it would probably apply to poultry products and eggs as well.

The second alternative is if the government at the end of the day agrees to the tariffication system or there is agreement and the tariffication system becomes the order of the day. There are so many unknowns in that regard, but clearly none of the supply management groups believe the tariffication system will allow for the long-term operation of the supply management system.

We have increased access. We have the violent fluctuations of 100 per cent and 200 per cent in the value of commodities, and the value of commodities we would be referenced to would be United States commodities. In no time the tremendous capacity of United States producers to flood our market and put producers out of business would be evident.

We have an excellent system. The legislation that provides for this system is the Farm Products Marketing Agencies Act and the Canadian Dairy Commission which operates in a very similar kind of way. We are going to see 25,000 people on the Hill on Friday of this week, and they are not just farmers. They are the rural suppliers, people from the co-ops, people from the fuel

February 19, 1992

companies, farm equipment suppliers, all kinds of groups.

Yesterday a representative from the Chamber of Commerce-I think he was in the Fraser Valley-stood up and told the Prime Minister: "This is not just an issue for the dairy and poultry industries of Fraser Valley. It is for our entire community".

These are the people who keep the economy of rural Canada going. You take them away and get less successful, or less prosperous industries. Their buying power, their impact on the community is lower. They gave the figure that for every $1 million worth of supply management commodity that is marketed in this country, some 14 jobs are created. There are 38,000 supply management producers, farmers, and farming businesses across this country. They employ some 22,000 people directly.

If you go into the processing industry, the processors of milk, the processors of dairy commodities, novelties, ice cream, yogurt, and all these products, or if you go into the poultry sector, the processing of those, you are talking about over 95,000 jobs in this country. These are not jobs that are all in downtown Toronto. These are jobs that are spread out through rural Canada, through Ontario, Manitoba, certainly in the prairies as well, in B.C., and the maritimes. This is an important sector of our economy. It would be impossible to exaggerate the impact that the Dunkel report would have on rural Canada. It really deals with the food security of our country.

The time will come, in my view, when most of the countries of the world, like the United States, will have vast vertically integrated food production systems. There are producers of eggs for instance in the United States who produce as many eggs as our whole production in Canada. They are usually located in the southern states where they do not have high energy costs and they have very low labour costs.

We do not want that system. We want a system that meets our needs and creates jobs, where we have a better environmental arrangement. When we go into factory operations we have all kinds of environmental

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and health problems. We want to maintain that kind of system.

The basic legislation which we are amending today to provide for check-offs and for research is that basic legislation which has provided that very secure, stable, progressive, and efficient production of agricultural commodities. It is a pity that all sectors could not have it. We simply cannot operate on that basis with major export commodities because you have to operate at a world price. Even at that we do have orderly marketing for wheat and barley by having the Canadian Wheat Board and similar kinds of marketing agencies for wheat and commodities in eastern Canada.

The genius of the National Farm Products Marketing Act which we are amending in this legislation today to provide a whole new section has been that it provides a very stable, secure system for food production in this country. This system can become more efficient and provide employment, food security, a vibrant rural life in Canada.

We have seen a devastation of our manufacturing sector in this past two or three years. In my constituency there have been literally thousands of jobs lost in the manufacturing sector. We certainly do not want to see that happen as a result of our downgrading the supply management system for dairy and poultry farmers.

If the Dunkel report was adopted, as has been proposed, every one of those sectors claim they would not survive the six years. In the case of poultry, they talked about going from 2,400 poultry producers to some 32 massive, vertically integrated production units, probably located in central Canada with the western part of our country and the vast rural areas of Atlantic Canada completely shut out.

The motion that was put by my party last week when we had the special debate on the GATT negotiations and on supply management called on the Prime Minister to personally get involved in those negotiations. We do not believe that the negotiators, regardless of how good they are, and I believe that they are capable people, have had much success. They have been there for five years in the Uruguay round in Geneva.

February 19, 1992

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When the Dunkel report came out it did not mention the strengthening and clarifying of our supply management, article XI. Therefore, it is up to the Prime Minister to use the power and prestige of his office, as the motion that was unanimously adopted by this House asks, and that the Prime Minister become personally involved, that he gamer the support of the other countries that favour our position: Japan, Israel, Norway, Switzerland, and Korea. I believe he should be getting a joint declaration.

There was a declaration by the negotiators which they took to Mr. Dunkel, Secretary-General of GATT, back in mid-December. That motion by those negotiators does not have the same prestige it would have had if the Prime Minister sat down with the Prime Minister of Japan and Israel and the other countries involved and they issued a joint declaration.

We are a major trading country. Japan is a major trading country. Korea is becoming an important trading country. Israel has a lot of influence in the world.

"This is our bottom line. This is what we want. We do not expect to be able to flood the world with cheap surplus food. We are net importers of these commodities. We are willing to provide an increased access of 3 or 5 per cent", I believe was the government's negotiating position. We are willing to reduce any subsidies. There is very little subsidy involved anyway. But this was the position put forward but we want to have a strengthened and clarified article XI.

If the Prime Minister would take that action and then arrange to meet jointly, as a motion of the Elouse calls on him to do, supported by the prime ministers of these other countries who are just as adamant as we are, saying that this is our position, this is what we want to achieve out of the GAIT round because the GATT round does make some changes with regard to export subsidies, for instance to the United States Export Enhancement Program, the European subsidies and so on, which will be beneficial to the grain and oilseeds sector.

If we sat down with the leadership of Europe, with the President of the United States and said: "This is what we have to have in order to maintain rural Canada, the family farm, the basis, the most secure and stable sector of our agriculture," I believe that we could be successful.

I see that as a very narrow window to have a strengthened and clarified article XI.

If we go back to what has been left over, the ice cream and yogurt decision from the free trade deal, that is very, very dangerous. The U.S. could move in easily on us. The tariffication proposal also is unacceptable for maintaining these marketing boards which were established under the original Farm Products Marketing Agencies Act.

We want to see the amendments go to committee for consideration, discussion, and examination of the concerns that have been expressed by some producers, although a great many of the agencies have expressed their support. I hope that the Prime Minister and the government will act now because the time is late for maintaining those agencies which are provided for under this original legislation. It would be impossible to exaggerate the importance to rural Canada of maintaining those agencies, those producers, those jobs and that processing industry. It is very important to Canada.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
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PC

Steve Eugene Paproski (Deputy Chair of Committees of the Whole)

Progressive Conservative

The Acting Speaker (Mr. Paproski):

Under Standing Order 74, the hon. member now has 20 minutes plus 10 minutes questions and comments.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Victor Fredrich (Vic) Althouse

New Democratic Party

Mr. Vic Althouse (Mackenzie):

Mr. Speaker, I realize that my remarks have to be limited.

The bill that we have before us, C-54, is a proposal to amend the Farm Products Marketing Agencies Act and other acts of consequence thereof. We will also be amending the Customs and Tariffs Act, the Access to Information Act, the Privacy Act and the Public Service Staff Relations Act.

The legislation that we are amending has been around almost 20 years and was an attempt, and I think a fair attempt, at providing farmers with the marketing tools they need to become self-reliant and market oriented individuals in a world market.

I am not particularly happy with the amendments that are being proposed today. What we have is equivalent to offering a student a pencil, with these amendments when we know computers are available. That is essentially what the government is doing with this bill. It is understandable knowing where the government came from.

Members of the government opposed the implementation of this act 20 years ago. They fought it as long and as hard as they could and you will remember, Mr. Speaker, that in those days it was possible for private members to hold up bills for a long, long time. You could speak forever instead of being limited to 20 minutes, as I am now. You could continue the debate ad nauseam. As long as any member wanted to make a speech it could be

February 19, 1992

made. Now this debate can be limited to two days and it then goes off to committee. In other words, in the old democratic House, this legislation had a terrible time getting through.

As a result of democracy having more sway or full sway relative to today's circumstances, the opponents to the government's proposal were able to make considerable changes. We have quite a few pages in the existing National Farm Products Marketing Agencies Act which are due to interventions on behalf of the Cattlemen's Association by the Conservative Party of Canada.

Essentially the upshot of it was that the national products marketing legislation that we have is very limiting. It is so limiting that same Cattlemen's Association has had to come to the government to get it to make amendments to the act so that it can do a few minor things it would like to do, namely raise funds for promotion of products and for some research.

I point out that those marketing agencies and marketing boards that have been established under the act have both of those rights within the existing act. They can in fact raise levies for marketing and during the course of that marketing they can do promotion and market research. I understand some of what is being proposed in this act would extend the terminology, the definition of research, beyond that used for market research to actual production research.

This act has functioned in Canadian Confederation because there are similar acts in each of the provinces which permit the establishment of marketing agencies or marketing boards within each province. This particular marketing agencies act permitted those agencies to come together under a federal umbrella and act for all of the producers of that particular commodity across all of Canada.

The government is proposing here today to set up a companion section in the act which would permit the establishment under very similar terms of agencies whose job would be simply to take funds from producers by way of a check-off and to permit the producer group to administer those funds for what they call promotion of the product. I think that is a rather inefficient way to do it.

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I hear of trips by the cattlemen's commission in Alberta, for instance, which has done this on a provincial basis overseas. I hear of some of the other commodity groups making similar trips. They are very good junkets for the board of directors and perhaps some of the management people who have been hired by the agencies, but they do not really do a very effective job of promoting the Canadian product.

Put yourself in the position of a would-be-buyer. You are approached by a bunch of Canadian beef producers who give you a very good spiel on the benefits of Canadian beef. It is clean. It is raised in a proper environment, free of all sorts of agents that might exist from more industrialized countries. You are all set to buy and when you tell them so, they say: "Well, gee, we do not have any beef. We do not really get into that business. We produce it and we promote it, but golly, we cannot give you any because we are not in that part of the business. You will have to deal with one of our packing plants".

They will say: "When we get home to Canada, we will tell this packing plant that you are interested in Canadian beef". They will report to their farmers and their ranchers that they have done a great job of having promoted Canadian beef in another foreign country, but no sales have been made and nothing has been completed. Those agencies that are established as marketing boards, however, do have the option and the opportunity to complete the sale. When one of the pork boards or combined force of the pork boards goes overseas to talk about the benefits of Canadian pork they can complete the sale and have it within their power and their ability to deliver a product to the people with whom they have created an interest.

In terms of straight efficiency and furtherance of a market oriented approach, the government has missed the boat quite badly with the kind of amendments it has put here by forcing a second tier in this particular legislation. If it had wanted to be helpful to producers, it would have taken away the prohibition on the establishment of such marketing agencies as exists now for poultry, eggs, turkeys, and hatching eggs, by lifting the requirement that when a producer group forms marketing agencies across the country in each of the provinces it has to work very hard to get itself together, put a plan together, then picket or lobby the House of Commons

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and the government to force the government to open up the National Products Marketing Agencies Act in order to include its particular product.

Apple producers are in that position now. Seven or eight years ago we had the tobacco people in here. Unfortunately, the tobacco people had expended so much time, money and effort just getting their little one word amendment to the act that they had no more energy or money to pursue the process after they succeeded in getting what they wanted.

There are some problems with only going as far as the government is proposing to go with these promotion agencies. As I said in the beginning, it is like offering people a pencil when you know there are computers. It is not veiy a high-tech solution to providing farmers with the necessary tools they need to do a good job of marketing and promotion. But this is all the government proposes to offer.

There are some questions as to what the effect will be, given this limited offer that has been proposed. The Minister for Grains and Oilseeds opened the debate for the government. He said: "For instance, barley producers could use this legislation if they want to promote barley". The minister and I had a little discussion after and he admits that is not really quite true right across the country. That might apply to parts of Ontario that lie east of Thunder Bay and, perhaps, Quebec and Atlantic Canada, but it does not apply in the Wheat Board area which is from Thunder Bay west.

Those producers of wheat and barley fall under the Canadian Wheat Board Act and the proposals we have before us explicitly take them out of the authority of this particular act. If they want to provide for such checkoffs, they would have to apply under the Canadian Wheat Board Act. In fact, the Canadian Wheat Board does an excellent job of market promotion and research and funds them from the moneys it has available as the sole marketer of Canadian wheat and barley for export.

Likewise, those people who are in the pork business have the ability to raise funds for market promotion and research under the various provincial marketing boards

that now exist. That is not a restraint on the abilities of that particular commodity group to function.

With the proposal we have here perhaps we will see the pork council succeed in convincing the minister who is really the only one who needs to be convinced in these matters. With the approval of the marketing council, they should be able to institute a national check-off over and above the check-off that the provincial pork marketing boards have at that time. These check-offs would either be mandatory or voluntary, at the choice of the initiating group. If it is decided to be mandatory then all producers who sell or import that particular commodity would be subject to the levy. In order to catch the imports, the Customs Act is being opened up. The agency that is struck for promotion would have the ability to go to the customs officials and ask for documentation to see whether the voluntary reporting by an importer complies and fits with the actual amount of the affected good that was imported.

The whole inclusion of imported product also raises some questions. If we are going to be extolling the virtues for instance of Canadian beef, and we are doing so, can we in fact do that honestly if we are also including the beef that is imported and collecting a levy from it? We do not identify that now. If it goes through a Canadian processor, it wears a Canadian grade and is viewed by consumers as being Canadian beef whether it originated here or not.

If we talk about Canadian beef, will that be GAITable or will we have to describe it as generic beef? I know that producers are going to be putting up most of the money for this, but there was some mention in the minister's speech about matching funds, which raises the whole question of where those other funds will come from. I presume that some of it could come from a provincial or the federal government, in which case it would be GATTable.

The whole question of the effectiveness of beef producers raising money to promote beef, while poultry producers raise money to promote poultry, while hog producers raise money to promote pork, and the turkey producers are doing the same thing, raises in my mind

February 19, 1992

the whole question of how effective is all this advertising in promoting an increase in the size of the stomachs of Canadian consumers.

It seems to me that the chief beneficiaries of a lot of these programs are advertising agencies and the various media that carries the message.

Those are some questions that we have to try to find answers for in committee. Another unanswered area of questioning is the whole area of the use of these funds for research.

The minister made it quite clear that he was not talking just about market research, that he was talking about production research as well. While there may be pet projects that producers might be happy to be financing, generally speaking, the publicly sponsored research in this country has done a terrific job for consumers. The kind of research that has been put forward by both provincial and federal governments has tended to reduce consumer costs at a much higher rate than the cost to the consumer through their taxpaying pocket. In other words, it has been a very good deal for consumers because the benefits they get from each research dollar far exceeds the cost of that dollar.

Production research virtually always ends up in showing producers new ways to produce more.

I have made many speeches in this House discussing the problem "producing more" causes in food production. It is very natural for producers to want to produce the veiy most they can, to achieve the highest yield and the fastest growth rates. However, achieving that forces the price down because market economies do not treat food as anything particularly special, they simply look at what the farmers produce as a surplus. The value of all the products then goes down to the surplus value, which is usually very low.

To be using, even more directly, financing the assurance that we are going to have lower prices is not a prospect that most farmers look to with obvious glee. I think there will be some people we may get an opportunity to hear when we take this to committee who will have done some more research on that. They could perhaps give some advice to the committee and to the government.

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The range of this legislation might be restricted to market research because the original intent of this legislation was to aid and assist with marketing so that farmers could connect themselves more directly to consumers through marketing.

It provides the necessary tools to set up agencies like marketing boards. It could provide the product, get it efficiently and quickly to market, and make certain that it was processed in a way the consumer could utilize it. It could also provide the agencies with enough flexibility to do market promotion and basic research on new markets.

That establishes the product outside the current countries in which we now market the product. Marketing boards can be an excellent method of market development. My main regret about opening up this legislation is that the government did not open it up in a way that would allow all commodities to have fairly ready access to it as a marketing tool.

The extension of the new sections being proposed to put forward promotion and research agencies needs a lot more study. I am quite dubious about the overall effect of this. It may be quite justifiably viewed by a lot of producers as something about as efficient as another GST because it will be a tax on their production.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
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LIB

Beryl Gaffney

Liberal

Mrs. Beryl Gaffney (Nepean):

Mr. Speaker, I listened quite closely to the New Democratic member from Saskatchewan. I would like to ask him a question.

I would like to know if there are consumers on the National Farm Marketing Council and if he feels they are an effective voice? The increase in income to the primary producers has been very modest and stable over the years while retail prices have increased dramatically. Would the member not agree that consumers should be on the boards of directors of the major food chains?

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
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NDP

Victor Fredrich (Vic) Althouse

New Democratic Party

Mr. Althouse:

Mr. Speaker, I am not aware of any impediment to consumers being on the National Farm Products Marketing Council.

One or two are named to that council. It is the prerogative of the government in power at any particular time. One of the functions of that council is to ensure that the consumer interest is protected along with the farmer interest. Both sides have to be represented on the council.

February 19, 1992

Government Orders

The hon. member asked whether I thought it would be a good idea to have consumers represented on the boards of directors of the chain stores. I would say certainly, but that is not something we have any power over in this Parliament. That is something determined by the rules and regulations of each corporation. I would think that as we move into the 1990s more corporations would structure their boards so that specific consumer representatives will show up on their boards of directors.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
NDP

Ron Fisher

New Democratic Party

Mr. Ron Fisher (Saskatoon-Dundurn):

Mr. Speaker, I would like to thank the member for Mackenzie for a very fine speech. In his usual inimitable way he has done a good job of analysing the situation and the question before us.

I am rather intrigued by the differentiation between production research and marketing research. It is certainly an aspect of the whole field that had not occurred to me before. He emphasized marketing research for the obvious reason that production research could almost be self-destructive. I am probably expressing his opinion a little too strongly.

The marketing research side conjures up very intriguing and, what one would hope would be, original television commercials as we have seen in the marketing of dairy products, particularly those wonderful ads we see of the asparagus and the butter and so on. I am looking forward to the marketing research people producing innovative commercials.

I would like to ask the member if he could comment on possible conflicts between what is GATTable and what is not GATThble. It sounds like he might get into some sort of biblical genealogy but I am sure it is not.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
NDP

Victor Fredrich (Vic) Althouse

New Democratic Party

Mr. Althouse:

Mr. Speaker, we only run into the problem of GATTable promotion assistance when we get into the question of sharing the cost to which the minister alluded in his speech.

He mentioned that having promotion funds available to a group made it much easier for them to find matching grants and matching funds. Under the proposed GATT rules those matching funds and matching grants will be more acceptable if industry was helping to finance them rather than the government.

There could be some difficulties which would cause governments to place more of the load for promotion and market development on producers. There is hesi-tance among a lot of farmers and producers to get into this type of self-taxation because as soon as we have the ability to raise funds to do various things we have a fairly high suspicion that government will let us and get out. This would end up being a further tax on ourselves benefiting all Canadians, particularly in the area of production research. The benefits fall almost entirely on consumers in Canada rather than on the farm producers.

Therefore it is a much more justifiable expenditure for the Government of Canada, on behalf of those consumers, to have paid for the initial basic research to begin with.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
?

Mr, Maurice Foster (Algoma):

Mr. Speaker, I was interested in the comments by the hon. member for Mackenzie because he is a veiy active member of the agriculture committee and this bill obviously opens up a number of avenues of concern.

There are a number of areas which we have to be concerned about. One is that the government is essentially putting in place a mechanism to off-load its research projects onto the producers of farm commodities.

The other is what provisions or safeguards will there be for the small producer who really is not in the mainstream but maybe has a small plot or a small operation and has a very local market. So that is a matter of concern.

It seems to me that we are going through much hardship in many sectors of agriculture. I cannot remember in the 22 or 23 years I have been a member here that we have gone through such anguish as we have in the last six months.

Clearly, with the dramatic downturn in farm incomes in 1990-91 and now the tremendous uncertainty with the supply managed sector and the outcome of the GATT negotiations we really have to have better mechanisms of informing and advising people of the overall benefit of agriculture in terms of jobs, rural economy, food supply, and long-term benefits to the country.

Perhaps that is one sector on which agricultural producer need to be working in unison across the whole spectrum of agriculture. Producers perhaps should work with governments as well to try to communicate to urban Canada which represents probably 96 per cent of the population even though I believe that the 4 per cent who

February 19, 1992

per cent who are directly involved in agriculture their influence involves maybe 10 times less.

Remember there needs to be a better means of communication whether it is through a check-off or whether it is through marketing agencies or government to communicate the rural message to Canadians generally-

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
NDP

Victor Fredrich (Vic) Althouse

New Democratic Party

Mr. Althouse:

Mr. Speaker, I think if governments were really interested in having a better voice coming from the rural community, something that would be a fairly unified voice, a long time ago they would have provided for an ability to permit farmers right across the country to organize along the lines that the Quebec farmers were permitted to do.

There they simply permitted farmers to comply with the Rand formula. As soon as 50 per cent plus one of the population who were farming signed up to become members of the over-all organization, they could then automatically pay dues for all of the others. It would make life much easier for governments and for urban Canada to hear the true voice of farming.

Because we have failed to do that and government is not anxious to hear one single voice for farmers, we will continue to hear a wide variety of voices and opinions. Governments live very well with this system.

If they get advice they do not like from one major group they can always go out and create another group with three or four farmers who will tell them exactly what they want to hear.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
LIB

Lyle Vanclief

Liberal

Mr. Lyle Vanclief (Prince Edward-Hastings):

Mr. Speaker, thank you very much, I am pleased to be able to join in this debate this evening on Bill C-54, an act to amend the Farm Products Marketing Agencies Act.

One of the first things that we have to find out is what this bill does. It changes the name of the act to the Farm Products Agencies Act. It removes the word marketing.

Now we have to understand that it really does not prohibit any of the former activity or enabling portion of the previous act but it broadens the act out so that it can play an increased and different role in the agricultural industry.

Government Orders

As we know, the bill as enacted is going to allow the formation of agencies within the commodity groups and with the agricultural community.

Those agencies will have the power, once they are formed and after they are requested, to collect levies from the production of the particular commodity or product they are involved in as producers.

They will be able to use those moneys that are collected to promote the marketing of the product, the consumption of the product, the benefits of the product and education regarding the product.

The moneys could be used for research and development with regard to the growing, the processing, the marketing and all of the other benefits of it. That is being done in different provinces by different groups at the present time to quite an extent within Canada.

The benefit I see of this bill-I will get to some concerns about the bill in a few minutes-is that it allows those levies also to be collected on those products that are imported into the country. We do not have that now, and that is a problem the industry has.

It is not a new concept in agriculture. Other countries have it. The United States has it and uses it very effectively. I guess if I were an American producer, I would be very pleased that it was there. We are not on a level playing field until we get a similar situation here.

For example, we all know in the last two or three years, the American concern and the countervail that the American pork producers have been effectively placing on Canadian pork exported into the United States.

At the very same time that that product was being exported into the United States, the United States was collecting a levy on the Canadian product going in there. It was collecting that levy and using those Canadian dollars to work against the Canadian producers. They do that on beef as well.

I guess what I am saying is that we import from other countries. We import particular cuts of pork from the United States as well. We eat a lot of bacon and we do not have enough bacon in Canada. The particular portion of the pig that that comes from, pork belly, we have to import from the United States.

February 19, 1992

Government Orders

I guess what I am saying is that this will put us in a better position. What is sauce for the goose is sauce for the gander. If other countries are going to charge us levies on products that we ship in there and use those moneys to promote their own product, then we should he in the same position.

There are considerable benefits. The question might be raised from this: What will this do? This act, as we know, allowed a number of years ago the putting in place of the Canadian milk supply management system, the egg, the chicken, the turkey and the broiler hatching egg marketing agencies, the supply managed ones.

This will not affect them, but I will tell the House and I will tell those who are watching that unless the Prime Minister is able to deliver on what he has said to the producers as recently as yesterday as far as the strengthening and clarifying of article XI of the GATT in the Uruguay round, unfortunately, I think there may vety well be greater volumes of dairy, egg and poultry products coming into Canada from outside.

It is very clear that a system of tariffication will not give Canadian producers, consumers, and processors the protection or the food security that we have at the present time.

Even though all of those boards at the present time are collecting levies, they are using them I think primarily for promotion at this stage, but also for some research. I asked the dairy farmers this afternoon if the levy taken off their milk production was used for research at the present time, and they said that some of it was.

If that very unfortunate situation takes place that this government agrees to sign a GATT agreement that has a tariffication clause in it as the producers have been telling Canadians so clearly in the last number of weeks and months, those levels of imports will rise.

I will tell you we had better be able to have a check-off on them if that unfortunate situation happens.

As I said, this legislation will not have any great effect on the present act, other than strengthening it and enabling it to do a bit more.

The biggest benefit is the level of levies and the fact that levies can be applied to imports coming in. Research and promotion organizations or agencies would be funded by these levies and they would be run by producer groups.

The legislation is so worded that the Governor in Council could ask for a referendum among the producers of a certain product. If there was a majority of producers and importers together, each importer and each producer would have one vote, then the agency could be set up and they could go about their business and decide how they wanted to do it.

I must stress that this does not put any of these agencies in place. It is like so much of the legislation that we pass in this place. It is enabling legislation.

As I point out very clearly to constituents in my riding and to people when I am talking to them at different places, it is another piece of legislation where I, as a member of Parliament, would like to see the regulations to a greater extent than we do before the legislation becomes law.

We pass enabling legislation. We think that yes, it is a good idea, and then it goes into the hands of others who are not elected to this place and they write the rules. They write the rule book. It can be interpreted in a different manner from what we think it should be or may be when we see the legislation. That is one of the grave dangers of this place.

I know it is another subject, but I certainly would like to see this place improved somehow so that once enabling legislation was passed and before that legislation went into place the regulations come back before us as members of Parliament.

We are the ones who take the phone calls, we are the ones who take the flack. Every once in a while, if we are lucky, we are the ones who take the praise for legislation that has been passed.

But it is not very often we hear the praise because someone will put a specific little nitty-gritty clause in there because that is the way he or she particularly interprets it. It can be difficult to enforce and it may very well not be realistic as well.

February 19, 1992

I just want to give some examples of where this could be of some benefit to the industry out there. For a number of years I was a director on different boards in the province of Ontario when I was actively farming.

At that time one of the boards I was on was the Ontario Vegetable Growers Marketing Board and we had a check-off. It was allowed through provincial legislation. We had a check-off. And herein lies one of the dangers, and it has been raised by my colleague from Algoma and by the critic on agriculture from the New Democratic Party as well.

The danger of this type of legislation is that it allows a government to say to a particular producer group, if it requests and lobbies and pressures for more research or development into the production methods or marketing methods or processing of its product: "Well, you have the power, the power is there for you to put a collection agency-if you want to call it that-in place, and you draw that money out of your own producers, because we are not going to use any of the taxpayers' money to provide that or to do that for you".

We must recognize that it does put in place an [DOT] opportunity for governments to withdraw funding from research and development, promotion, or marketing, or whatever roles that governments have played in the past.

We do not need any more of this in the agricultural industry. The agricultural industry is one of the major ones in the handful of wealth creators that we have in this country or that any country has.

I get very upset when I look at the expenditures and I see that the present government, for example, in the fiscal year 1989-90 withdrew $40 million from agricultural research and development. That is not the way we should go if we are to sustain and promote that industry.

I will give another example. At the present time Ontario apple growers are conducting a program called "Orchard Crisp". They are marketing and promoting Ontario apples under that program and it has been very effective. We also know that six out of ten apples eaten in Canada are imported.

Government Orders

I will just back up a little. At the present time, when Canadian producers decide to promote a product, they can only get support from their own growers, from a provincial check-off or maybe some provincial and federal funding, if they are lucky, to assist them in that regard. If they are promoting apples, for example, the consumers cannot, even though it is on the label, easily distinguish between apples coming in from the United States or somewhere other than Canada. So a promotion to eat apples assists everybody, whether or not they are Canadian apple growers, and it is paid for by Canadian producers.

This legislation would allow for a check-off for imported apples. Therefore we would have a situation when they are promoting apples where all apples eaten in Canada would have contributed to that check-off and the production would have contributed to that check-off. That is a benefit.

Ontario berry growers, the producers themselves, have a similar program. I would hazard a guess that 50 per cent of the strawberries we eat in Canada in a year, in a 12-month period, are likely imported. However, when Ontario berry growers or other Canadian berry growers promote strawberries and encourage people to make desserts and jams and jellies, they do it at different times of the year other than the peak of three, four or five weeks in June and July. The imported berries they buy have not contributed to that and I think our producers pay an unfair share. We would be on an equal basis with other countries in this regard because other countries do the same with what we export to them.

For the most part, farm production organizations and boards are in favour of this legislation. They have raised some concerns. I have raised a couple of them, but I also have a couple of other questions. I am pleased the bill is going to the Standing Committee on Agriculture. There are some things we have to clarify there.

The term GATIable has been mentioned by previous speakers. We hear that term or the words acceptable at the GATT a lot right now. Could an agency established under this legislation for a particular product be accepted because of what it does with those moneys? Would it be accepted at the GATT by other countries?

February 19, 1992

Government Orders

Another concern we have to clarify in committee is: Could a research and promotion agency be established for a particular product in one region of Canada, or would it have to be a commodity specific at either the provincial or national level?

Another question we have to clarify is: If an agency were regional specific, would it be possible for other Canadian regions to benefit from the research paid from the levies on that small producer group? Those are a couple of the concerns I have.

Another concern I have is: If a sector of the agriculture commodity after a vote or a plebiscite or whatever agreed to have a check-off, how would it affect smaller producers? I know the logistics of this could be and would be addressed in regulations, but I am thinking in particular of a veiy complicated industry such as the horticultural industry where there are large producers and small producers. How would the size be established at which we began to have a check-off? Many horticultural production units are only one, two, or three acres in size. They do not sound like very large operations in Canada compared to some of our other types of farming, but they may very well produce a sizeable amount of fruit or vegetables. The logistics would be checked off.

A good example, and the minister raised it earlier, of how this type of thing can work is the National Beef Information Centre. I just want to touch on that because I am pleased and proud to have a family owned facility in Wellington, Ontario, in my riding Prince Edward-Hastings in Prince Edward county that has worked with the National Beef Information Centre to get the Canadian patents for a new product called beef fingers.

I know all of us in the House realize that cows do not have fingers, but we also have to remember that we have eaten a lot of chicken fingers and chickens do not have fingers either. I guess we can see what research has done: the National Beef Information Centre and these entrepreneurs in my riding have developed fingers on cattle.

It is an excellent product. I had an opportunity back in August to sample some. I am pleased to say that it is going to be a success story. There are investors coming forward wanting to get involved. Strips of pure lean Canadian beef are going to be used for that.

This is a case where a check-off has helped and can help. It is a good example because a lot of promotion has been done and will be done in the future.

I thought I would take a minute as well to talk about marketing boards. Being one that has been involved in different types of marketing boards, I thought it might be worth while to explain to the House and to explain to the Canadian people a bit about the different types of marketing boards.

Quite frankly we all have to admit unfortunately that too many consumers out there do not realize the importance of farm boards. When they hear the words "marketing boards" too often the dollar sign flashes in front of their eyes and they say: "Yes, they cost me money". I want to make very clear that they do not cost producers money. For the most part they do not cost the taxpayer a very great amount of money at all. However, they do provide the farming community-and when I say "the farming community", I mean the whole agrifood community: the producers, the suppliers, the processors and the trucking industry-with a tremendous service.

There are different types. Yes, we do have the supply management boards where we say to the rest of world that we will not provide surpluses, produce surpluses and ship them into their markets. Therefore we feel we have the right to limit the amount that they ship into the Canadian market. We also have other types of marketing agencies. There are the ones that I refer to as the pooling types. A good example of that is the Ontario Wheat Producers Marketing Board where producers of wheat in Ontario deliver their wheat to an elevator and the price is pooled. There is no price set. Whatever the price is over a 12-month period, it is pooled and every producers gets the same amount per tonne of grain. There is no pre-set price. The world sets the price and the market sets the price.

There is another type of board where the product is assembled for sale. They simply have producers of such things as hogs take them to an assembly yard where they are marketed and offered for sale.

I am pleased that this bill is going to the Standing Committee on Agriculture. There are some questions I think we need to clarify for Canadian producers and Canadian consumers. I look forward to that discussion and debate in committee.

February 19, 1992

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
NDP

Victor Fredrich (Vic) Althouse

New Democratic Party

Mr. Vic Althouse (Mackenzie):

Mr. Speaker, the hon. member has discussed some of the commodities that have been using marketing boards. He mentioned that he is a pork producer, or has been a pork producer. I wonder if he would care to comment on the problems some of the commodity groups have had with the concept of this kind of marketing legislation which we are amending here today.

Would he be comfortable freeing up this legislation, while we have it open already, to permit the establishment of national marketing boards for other commodities, without each of them having to come to the House to convince the government it should be a named commodity and should be included in the legislation? Is he comfortable with that approach?

I ask this question because I understand from watching the proceedings back in the 1970s that the Canadian cattlemen seemed to be almost paranoid about any legislation on the books which would permit 50 or 60 per cent of the producers to opt to use a marketing agency for the marketing of their commodities. For some reason they were absolutely afraid of what might transpire if democracy prevailed and 50 or 60 per cent of producers decided that they wanted to operate under this kind of legislation.

I am wondering if he could give us his opinion as to whether this legislation could be expanded, while we have it open, specifically the requirement that the government must name the product before producers can set up an agency under the marketing side of this act.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
LIB

Lyle Vanclief

Liberal

Mr. Vanclief:

Mr. Speaker, the member raises a good point.

We have to recognize what has gone on and what is going on in the Canadian agrifood industry at the present time. The production sectors have given any economic viability to the agrifood industry over the last number of years. Those production groups have been dairy, eggs, and poultry. They are the five that are there at the present time.

My first response to the request by the apple producers in Canada was that it was a very realistic and very mature request. I do not know how anyone can oppose that. They are saying to the Canadian consumer that they do not want to comer 100 per cent of the apple

Government Orders

market. At the present time there is a level of importation into Canada. They are prepared to live with that. They do not want to roll it back.

I used to produce a number of hogs per year. It was extremely difficult for me to do any budgeting. Four or five years ago I can remember the day when I was happy if the price of pork for the producer hit $2.20 per kilogram or $1 per pound. This is on a dressed weight basis.

Six weeks ago it hit $1.02. If you are working in a factory, have your own plant, or are working in an office, how would you react as an employee or a producer of anything, whether or not it is connected with agriculture, if that fluctuation was there?

The reasonable level of profit this type of legislation has allowed to the dairy, egg and poultry sectors has also allowed those sectors of agriculture to play a very major role. They have been able to be environmentally sustainable. With that reasonable level of profit-and it is not an exorbitant profit, by any stretch of the imagination- because of the security of their income they have been able to budget, to practise proper soil conservation, land conservation, and to buy the pieces of equipment which allow them to do that.

We do not have to say it very often in this House because we know it: Two-dollar wheat does not allow the Saskatchewan farmer to farm the way he or she knows they should farm because they simply cannot afford to do it.

This type of legislation allows that to happen. It allows the proper agencies to be put in place to improve not only the lot of the Canadian farmer and all of the spin-offs to related industries but also benefits the Canadian consumers in the long mn because it allows us to keep a Canadian food security policy in place.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
NDP

Leonard William (Len) Taylor

New Democratic Party

Mr. Len Taylor (The Battlefords-Meadow Lake):

Mr. Speaker, two quick comments and a short question for the member for Prince Edward-Hastings who spoke very well.

First, I would like to inform you, Mr. Speaker, that I have an interest in speaking on this bill. Judging by the time tonight my chance to speak on this bill will likely be another day. I am looking forward to speaking on this bill and participating in the debate on this interesting and important issue.

February 19, 1992

Private Members' Business

Second, and I want to make this point because I have not had an opportunity today to raise this matter. On the day the Prime Minister and the Minister for International Trade are travelling to Europe to discuss the supply management sector at the GATT I want to say on public record that I very much support the strengthening of article XI. I hope that the government will take all the steps it can to protect the supply managed sectors of our farm economy and ensure that when the negotiators return and the GATT talks are over the thousands of producers of poultry, eggs, turkey, and other supply managed products have a secure future in Canada and can operate as they have in the past.

My question to the member for Prince Edward-Hastings relates to this legislation, specifically because he mentioned the National Beef Information Centre. I am very much aware of the activities some of the breed organizations are involved in. For example, in my comer of the province of Saskatchewan the Hereford breeders are very active in their work and are very anxious to promote the Hereford product as opposed to other beef products. I am aware that there is tremendous competition amongst the breeders of the various breeds of cattle.

I am wondering if the hon. member has looked at this legislation closely enough to be able to tell me if there are opportunities for breed action in terms of the check-off or if the money for check-off all go to beef, whoever that happens to be?

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
LIB

Lyle Vanclief

Liberal

Mr. Vanclief:

Mr. Speaker, the member for The Battle-fords-Meadow Lake has raised a good point.

My interpretation of the legislation at the present time is that it would be the Cattlemen's Association or the Beef Producers Association and this legislation would not allow it to break down to an individual breed organization promoting a breed. It may very well be but it is a valid point and we should clarify that in the committee. I am sure we will when it goes to the standing committee.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink
PC

Steve Eugene Paproski (Deputy Chair of Committees of the Whole)

Progressive Conservative

The Acting Speaker (Mr. Paproski):

It being seven o'clock p.m., pursuant to Standing Order 36 the House will now proceed to the consideration of Private Members' Business as listed on today's Order Paper.

Topic:   GOVERNMENT ORDERS
Subtopic:   FARM PRODUCTS MARKETING AGENCIES ACT
Sub-subtopic:   MEASURE TO AMEND
Permalink

PRIVATE MEMBERS' BUSINESS



PHARMACEUTICAL INDUSTRY


The House resumed from Monday, February 10, consideration of the motion of Mr. Caccia. (p. 6615)


PC

Barbara Jane (Bobbie) Sparrow (Parliamentary Secretary to the Minister of National Health and Welfare)

Progressive Conservative

Mrs. Barbara Sparrow (Parliamentary Secretary to Minister of National Health and Welfare):

Mr. Speaker, I am very pleased with and interested in the proposal that has been put forth by the hon. member for Davenport, that a royal commission study be initiated to study the pricing of pharmaceuticals in Canada.

Clearly, Canadians need and deserve a system in which pharmaceuticals are available at a price that is not going to cripple the ability of the provinces to provide services and not going to cripple the consumers as well. The Minister of National Health and Welfare has stated many times here in this House that he is committed to work with the provinces to make sure that we do maintain and keep reasonable prices for consumers.

Drug pricing in Canada is a complex issue and it covers many jurisdictions. Federal jurisdiction is confined to the factory gate prices of patented medicines. The provinces have jurisdiction over retail prices and dispensing fees for patented and non-patented medicines.

I am really concerned that a royal commission into drug pricing would become bogged in jurisdictional disputes on what belongs in the federal responsibility versus what belongs to the provincial responsibility. No one in this House wants to derail a process of looking at the prices of drugs within this country. That could be the effect of a royal commission.

Perhaps all of our efforts here in the House would be better used to study drug pricing and direct them toward the areas where the Government of Canada has sole jurisdiction. One such area is in the regulatory system that tests new drugs before they are made available to the public. Canada has a regulatory system that ensures safety, efficacy, and the quality of drugs that are marketed here in Canada. Our system is one of the most stringent and demanding in the world and it has been in

February 19, 1992

place for some 30 years. There is a price that Canadians pay for maintaining, as I said, one of the most stringent and demanding regulatory regimes. It often takes our drugs a lot longer to reach the marketplace than in other countries. Regulatory processes also add to the costs of government. They add to the costs of doing business and they add to the price of the pharmaceutical products.

There are many questions that can be raised about the Canadian drug regulatory system, questions that clearly fall in our jurisdiction, the federal jurisdiction. How does our system, Canada's system, compare to those of other national regulatory agencies? What can be done? What can be done to create an international system where testing procedures in one country will be recognized in another country? With one of the most exacting and demanding systems for drug approval in all the world, could Canada become a leading international centre for clinical testing? Other countries could then recognize Canada and recognize our approval, only if it meets their own standards. In fact, since 1986 Health and Welfare has conducted a lot of certifications of World Health Organization vaccines for measles, polio, diphtheria, and in the last couples of years has extended that to include tuberculosis and tetanus. Drugs would be in the hands of consumers more readily if we had one system for qualifying and making sure that they were safe all around the world.

One of the questions we have to ask is on the optimum level of international harmonization. I know that sounds difficult. I think as the global community gets smaller and smaller, we are going to see various agencies from one country start to harmonize with an agency of another country. Let us see how Canada could contribute here.

Last October, we hosted the Sixth International Conference on Drug Regulatory Authorities. In 1989, we hosted the International Symposium on Drug Safety. We have joined the European Free Trade Association scheme for the evaluation of pharmaceutical reports. We support the expansion of the World Health Organization certification scheme and are committed to ensuring that drug exports from Canada are authorized for sale in Canada and that they conform to the good manufacturing practices scheme of the World Health Organization.

Private Members' Business

We already are harmonizing with meeting standards of many countries around the world.

What is our role in the international marketplace for medicines? Does the current regulatory regime add to public health intelligence? Can we adopt a system for categorization, for drug evaluation that would be based on a level of risk? Maybe this is the route we should go.

What elements of the regulatory program can be transferred from government level to industry or to health care professionals without compromising the safety or quality? These are all questions. They all fall under our jurisdiction.

A royal commission is not necessary to answer these questions. The Government of Canada has already embarked upon a review that is going to answer a lot of questions about the regulatory system here in Canada.

Last month the Minister of National Health and Welfare announced an external review of the Canadian drug approval system. It is going to be undertaken by Dr. Denis J. Gagnon who is vice rector of research at Laval University. The review will advise the minister on the regulatory model and drug approval processes that will best serve the Canadian public and that will take us into the next century.

It is going to review and look at the recommendations for the regulatory system released in 1985 by the Nielsen task force report. Valuable information can also be gleaned from Auditor General's reports and the report of the Stein working group on drug submission review. There are many pieces of information out there. In fact, when we look at the amount of information that is currently available here in Canada, we can conclude that a royal commission would really be duplicating the information that is available and adding a severe cost that is really not necessary.

Therefore, it is not necessary for this commission to travel across the country. All we have to do is review the information that is available right here.

Also, we have asked Dr. Gagnon to look at the policies and practices of national regulatory agencies in other parts of the world and the level and extent of international harmonization and how we can make it work and

February 19, 1992

Private Members' Business

what would be appropriate for Canada and what would be an appropriate role that this government might play.

He is expected to submit his report to the minister later this year. I know it is going to provide practical and specific recommendations to continue to assure the safety, the efficacy, and the quality of drugs. It is also going to minimize the regulatory burden.

We have to minimize it, absolutely. This is where a lot of our costs come from. But we cannot compromise our standards and we cannot compromise safety to protect the consumers. There is no need for this royal commission. Most of them, Mr. Speaker as you well know, run in the area of $15 million to $20 million, if not $25 million. That information, as I have already stated, is available here.

I feel very confident, and I know the minister will look forward to Dr. Gagnon's report.

Perhaps, as I said, the time has come for each country to take a look at harmonizing. If we recognize the standards and the safety factors of other countries, we do not need the burdens and regulatory agencies. Canada is one of the best and one of the most stringent, and indeed other countries could recognize us. A lot of the clinical testing could be done here.

I would like to conclude by saying that there is absolutely no need for royal commission at this particular point in time. I would hope the House would support the government's effort to review the whole drug regulatory system. We look forward to the results of Dr. Gagnon's report.

Topic:   PRIVATE MEMBERS' BUSINESS
Subtopic:   PHARMACEUTICAL INDUSTRY
Sub-subtopic:   ESTABLISHMENT OF ROYAL COMMISSION INTO PRICING PRACTICES
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February 19, 1992