October 15, 1979 (31st Parliament, 1st Session)

PC

William Gordon Ritchie

Progressive Conservative

Mr. Gordon Ritchie (Dauphin):

Mr. Speaker, I rise to take part in the throne speech debate, as I have done on a number of occasions over the years, but this is the first time I have done so from the government's side. I should like very much to congratulate the mover and the seconder. They have much to offer, as do all new members of this House. I am sure the new members will appreciate the generosity and good will of individual members regardless of their parties. Although parties are necessary in this democratic process, still much can be accomplished on an individual basis, and a lasting understanding of all regions of the country can be shared.
Like you, Mr. Speaker, I am one of the class of '68, as is one of the hon. members from Hamilton who is present, and 1 should like to congratulate you on your re-election as Speaker. Over the years you have been, in my opinion, a reasonable and impartial Speaker, and you have expedited the business of this House. I think it can safely be said that you have carried out your office with dignity and justice. I wish you the best during this minority Parliament.
The election of May was significant in that it ended, for the moment anyway, an apparent domination by central Canada of the periphery, and now western Canada will have a chance to exert some effort in the executive, instead of indirectly, in attempting to change legislation designed specifically for the central region. In fact, with the enlargement of the House,
The Address-Mr. G. Ritchie
western Canada has finally come of age and will be enabled to exert on its central neighbours a much greater influence, regardless of which party is in power.
The redistribution carried out in the last Parliament based on the 1971 census, with the enlargement of the House, has largely brought this about. Had the redistribution based on the 1971 census been carried out with no enlargement of the House, with the proposed redistribution of that time, the old order would have held so that for another decade western Canadian representation would have been reduced in relation to other regions.
As one who served on that redistribution committee at the time I should like to pay tribute to one who has since departed but who contributed so much to our political life, the Right Hon. John Diefenbaker. It was his consistent questioning regarding representation in Saskatchewan that moved the prime minister of that day, now the right hon. Leader of the Opposition (Mr. Trudeau), to cause a re-examination of the electoral process and redistribution. I believe the result enhanced the political influence of western Canada markedly, and as well to some extent improved the influence of the eastern provinces and Newfoundland, so that our various regions have now become more important in actual political influence on the executive decisions of this government.
It has been obvious that for over 100 years Canada has been a compromise of the two large provinces of Ontario and Quebec, and when their economic influence was threatened they tended to influence the federal government to take positions that, of course, benefited them but were often inimical to western and eastern regions of Canada. I am hopeful that this Parliament will for a time give a better balance to all regions in the country.
There are many things to speak on in this throne speech debate, but I would like to confine any remarks largely to an area which affects my own constituency as well as the prairie region of Canada. That is the grain industry.
For some time we have had a discussion regarding food policy for Canada, but it is a fact that policies and suggestions have been piecemeal. It is also a fact that we import a great deal of our food from the southern United States and the tropics. This has been offset by the export of cereal grains and oilseeds. With our high standard of living and our high consumption, there are fewer and fewer agricultural products that we can export to other parts of the world efficiently enough to sell to countries which have a lower economic level than our own. At one time we were a significant exporter of beef, pork and apples, but we seem to have lost that position and have not been able to meet the competition from other exporting nations around the world.
The problem of food exports was the subject of a pamphlet issued by the Toronto-Dominion Bank from their department of economic research, and in it they detail something which is known to most farmers. It was suggested that exportable wheat could rise by 50 per cent by 1990. Since wheat exports

October 15, 1979
The Address-Mr. G. Ritchie
pay for some 50 per cent of all food that we import, this is highly desirable because, as our population grows, so will our demands for those imported foods we ourselves do not produce. In the pamphlet they point out the importance of the government, the Wheat Board, the railways and the terminals, all of which are necessary for Canada to be a reliable world supplier of grains.
In 1978 Canada's over-all food and agriculture trade surplus was $1.9 billion, but if imports of food and agricultural products continue to grow at the rate they have in the past 12 years, then a trade deficit in this area would appear within five years. This would result in grain and oilseed exports reaching $6 billion by 1990. Yet, for those who give a critical analysis of the industry of grain growing, there are reservations as to whether or not the projection of the increase in grain and oilseed production will occur.
Once the grain is grown the product follows a long and tenuous pathway to the ocean terminals, passing through many hands. It is therefore very susceptible to interruptions by the many different unions and groups who are vital to the movement of this grain. It has been suggested that there are some 30 different unions, any of which could interrupt the flow to the terminals. The grain transportation system has been relatively free of strikes in so far as any single union is concerned, but there have been frequent interruptions. I do not feel that these interruptions have been unduly restrictive, but they have certainly had their effect, on occasion.
There are many problems within the industry which are perhaps not as well understood as they might be. From the producers' point of view there has been a steady drop in the number of grain farmers producing grain and oilseed. This slow attrition will likely continue, causing the production to fall to fewer farming units. A new influence in this circumstance might be the rising cost of energy which is now being felt throughout the world. It is significant that for many decades there has been a stable relationship between the price of oil and the price of wheat.
The American balance of payments problem can be directly related to the fact that the grain exports of that country have not kept pace with the world price of oil. Before 1973 a bushel of wheat paid for a barrel of oil. I make this comparison based on the imperial system and not the metric system, which we are slowly adopting and which is such a bad system for agriculture. At the present time it takes approximately three to four bushels of wheat to pay for one barrel of oil.
Historically the relationship of the export price of wheat to oil has existed for many decades. Until the economy of the world corrects itself and brings the prices closer together, Canada and the United States are in for a bad balance of payments. When the economic forces do correct it, it is obvious that the world price of food will rise dramatically and pose new problems for those countries that import food. At the moment the world price of grain and oilseeds can be described as being at rock bottom.
The price received by Canadian farmers has reflected the low price of grains and oilseeds and, although energy costs

have been kept artificially below world prices, the continued low price of wheat and cereal grains has been a definite deterrent to production. The initial price paid by the Wheat Board has not changed for three or four years, except for a slight increase in initial prices announced by the minister in charge of the wheat board. Indeed, the initial price this year was slightly below the price of one year ago. Unless world prices rise, producers will not reach that goal of a 50 per cent increase in grain exports in this coming decade.
As well, there are the increased costs of farm machinery, transportation, fertilizers and fuel, which will have to be offset by a general increase in real return to the farmers before they can reach this increase of 50 per cent. Agriculture has become a very big energy consumer but, I believe, a very efficient user of energy.
The necessity to increase production brings into sharp focus the question of whether the wheat board and the grain commission are pursuing the best policies with regard to increasing the export potential of our grain. We have, up to the present time, attempted to give preference to the export of classes one and two grade wheat, hard spring and high protein wheat. This is the result of a deliberate effort on the part of the wheat board over the past two years in order to get the most dollars for our farmers. Unfortunately it has left in limbo a number of grain producers, particularly in the northern parts of the prairies and my own region, the parkland region.
The introduction of this new grading system has tended to force the parkland grown wheat into the number three grades and lower. The Wheat Board has not been able to move this number three wheat and equivalent quantities of barley. Indeed, many producers of number three wheat and barley have merely sold the minimum quotas, and there is certainly no way in which a viable grain operation can be carried on with the sale of quantities such as that.
Indeed, barley grown in 1977 which is now moving into the system will not have its final payment made until 1981, almost four years after the growing of the grain. Small wonder then, that having to wait four years for payment of the grain to the producer, with our high inflation rate, does not make for a prosperous grain producing industry. If we are to have a large increase in volume of wheat exports, consideration will have to be given to the growing of lower protein wheats and whether, this is in our best interests or not. 1 do not believe that the grain growing area where the high protein wheats can be grown is large enough to bring the needed increases, at least without sacrificing other crops, and then there is always the problem of tillage in a low rainfall area.
The Wheat Board and the grain commission will have to tackle this problem and decide whether to continue with the high quality Marquis type wheat or do as the Americans have, who increased their exports by some 70 per cent in the last six years by producing a low protein wheat. Apparently many countries buy this for milling.
October 15, 1979

Much has been said about grain rates and transportation of grain. Protected by statutory rates, the grain has moved to ocean ports at modest charges compared to the equivalent American rates. Although the railways have complained bitterly about their losses on this grain movement, it seems that at least until 1973 returns to the railways were reasonable. They were reasonable because although the railways' wage structure was rising, their efficiency was increasing. Since 1973 the railways have claimed a marked deterioration in their position, as the Snavely report indicates. To increase the statutory rates this time, while meeting the railways objectives, would impose on the producer a price differential that would be too great for him to support. As well, there is real evidence that higher rates on grain necessarily has the railways moving it. For instance, in North Dakota, railway rates of 56 cents per bushel have not produced an entirely satisfactory movement of grain nor have they kept the railways in the position of keeping up their lines to modern standard. It seems significant that trucking costs as quoted for U.S. grain, are close to what the rail costs are, and it does seem to me that trucking will enter into grain transportation more in the future. While everyone would concede that a properly optimum loaded grain train, such as a unit train, with the proper locomotive power, is a very efficient way of moving grain as opposed to truck transportation, still, in small amounts and in shorter distances, trucks would seem to have their place. They lend themselves to versatility, to individual ownership, and give a great deal more flexibility.
i believe that this individual ownership would do much to enhance our transportation system. I think we should look at the fact that the railways are also in the trucking business although, generally speaking, 1 do not believe it is good to have such large monopolies as the railways also being able to control their trucks. It seems to me that we could improve facilities for unloading and transporting grain by truck, particularly for those grains that are not under quota or where quotas are of lesser importance in relationship to volume. We have high quality grains with high unit potential being trucked out of Manitoba as far south as Minneapolis thus reducing the strain on our existing transportation system.
1 would like to reiterate my support for Churchill as the export port for the northeastern prairies. While in the short run an immediate reduction in the movement of grain out of Churchill might give some more slight movement in the south, it would discriminate against the northern areas of the eastern prairies. But these areas are already the farthest from Thunder Bay or Vancouver and so are already disadvantaged. It is widely said, and it has not been refuted, that at the present price, wheat brings some 40 cents a bushel more and barley 25 cents more when shipped out of Churchill, as opposed to the St. Lawrence Seaway. Under the pooling system, of course, all producers share in this benefit, but the producer whose grain goes via Churchill has to wait almost a year to deliver his grain even at the earliest. This, of course, is because the shipping season is over before the grain harvest is ready to be sent to Churchill.
The Address-Mr. A. Lambert
The Wheat Board should make some effort, I think, to see if they could not reward producers who must wait this long time for delivery of their grains for Churchill shipment, and must hold back some grain for this purpose. It seems to me that they should be rewarded in some manner, and I would bring this to the attention of the minister in charge of the wheat board.
The value of Churchill has always been that it acted as a brake for excessive demands of interests in the lake system and St. Lawrence Seaway. We have experienced the four-month long strike of grain loaders in Montreal who, incidentally, are likely to make more income than the grain producers themselves. For all the people who handle the grain the wage structure is based on the prevailing rates of our internal economy. But the producer of grain does not get an automatic index in the world market. He has to take what the markets of the world pay him. His final payment for his product is the world price less what is involved in the handling and transportation of the grain. At the moment, world prices are such that the producer is finding his returns squeezed by the cost of moving grain from his farm to the world market.
I close with the thought that the typical permit holder with something like 600 acres, who is a good producer and gets a good crop, will be lucky to gross $35,000 to $40,000 from the sale of his crops. Many of the people handling this product from the time it leaves the farm until it gets on the boat for overseas, will make almost as much. We have to ask ourselves how we can expect production of grains to increase in the next decade, and what our future pattern will be.
Our domestic wages are high, but we must increase the amount of grain available to export in the 1980s if we are to keep the balance of payments in food at their present level. Indeed, I believe it is doubtful if we can do that by the end of the next decade. The grain industry is probably facing as severe problems as any food industry in the world. It means that the historic relationship between oil and wheat must be restored if grain farmers are to become prosperous and make their contribution to the economy of Canada as they have done in the past.

Topic:   ROUTINE PROCEEDINGS
Subtopic:   SPEECH FROM THE THRONE
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