1. Has CKOS Yorkton been granted a renewal of their licence as of last Fall to provide television to the viewing audience of the Dauphin area?

2. If so, when will the licence expire?

3. Will it be possible for the Dauphin audience to view programs directly from the C.B.C. that is to be extended to The Pas and Flin Flon areas since the C.B.C. will be using the Manitoba telephone transmitter line that runs through the Dauphin area?

Mr. Forbes:

Mr. Chairman, I wish to make a few brief remarks while the estimates of the Department of Agriculture are before us. In view of the excellent speeches which have been made on the subject of agriculture this afternoon I will confine my observations principally to the aspect of rising costs within the industry. I am prompted to do so owing to the inequitable position in which agriculture finds itself at the present time because of the spiralling costs of production.

The average farmer is concerned about conditions under which he can receive fair recompense for his labours and for his investment in land and equipment. But when he finds his profit margin less and less each year, he becomes concerned about the profits accruing in the field of retail distribution. And as the producer of the nation's food, he has every right to expect the government to do something about it.

We hear a lot of comment about efficiency in agricultural production, but farmers have always been efficient producers. The inequitable position in which they have been placed compared with other industry has compelled them to operate economically.

Now a word about costs. Increased wages of organized labour are having an inflationary effect upon the whole Canadian economy and are the main reason why farmers' income is not keeping ahead of costs. Labour unions are very aggressive and nearly always request a 15 to 20 per cent increase in wages, and recently as high as 30 per cent; I refer to the longshoremen and dock workers.

Farmers take the brunt of inflation because over 30 per cent of the products they sell are sold at world prices-the percentage is much higher in western Canada-while everything farmers buy is based on a domestic price.

According to statistics provided by the Dominion Bureau of Statistics and the Federation of Agriculture, between 1949 and 1963 the average net income in constant dollars of farmers in Canada increased only 7.8 per cent; yet average weekly manufacturing wages increased 42.8 per cent, and if we had the figures for the past three years I am sure the disparity noted would be much greater. I do not want my remarks to be interpreted that I am faulting labour for demanding a rate of pay commensurate with a decent standard of living. But I do emphasize that we must have a policy to ensure the purchasing power of farmers and labour if we hope to have a prosperous economy.

Supply-Agriculture

The time has arrived for an agricultural policy to attain this objective. The best customer of industry is the farmer because farmers are consumers as well as producers. But I ask this question: Is the government concerned about a price for agricultural products that will enable the farmers to stay on their farms and enjoy an equal standard of living? In other words, has the government an agricultural policy that is forward looking, especially with respect to prices for agricultural products?

I was particularly interested in a speech by the Minister of Finance in Toronto on November 10. He was speaking about the recent federal-provincial conference. I will just quote one paragraph.

The measure to stabilize provincial revenues will enable the provinces to harmonize their fiscal actions with those of the federal government in the event of a recession, and at the same time we have made it clear that the federal government will continue to use joint federal-provincial measures where necessary to ensure economic growth and stability, and to achieve other important national objectives.

What is the policy of the Minister of Agriculture to provide stability for agriculture at the present time and in the event of a recession? I am certain the farmers would like to know. In order to buy the necessary machinery to work their land in this technological age and, in some cases, purchase more land for what is called an efficient unit, farmers have been borrowing a tremendous amount of money. According to the chairman of the Farm Credit Corporation, demand for credit has risen sharply with 11,238 loans amounting to $208,984,900 being approved in the fiscal year ended March 31.

[DOT] (4:40 p.m.)

In my province of Manitoba 899 Farm Credit Corporation loans were advanced for a total of $14,879,500. This does not include loans made by the provincial farm loan board, which I am advised came to approximately $7 million. Farm improvement loans for the past year totalled $71,112,489, and farm machinery loans approximately $900,000. In addition there were loans made by credit unions, but I do not have any figures for them. If these figures indicate anything it is that farm income is too low to enable farmers to buy the necessary machinery and add to their holdings from revenue received from the sale of farm products.

I now wish to say a word about farm machinery. We acknowledge the prices of farm machinery are responsible for a large part of

November 25, 1966

Supply-Agriculture

farm operating costs, and we know that the minister has appointed a commission to inquire into the rapid rise in machinery prices. While I have every confidence in the personnel of the commission, I am wondering what action they could recommend in order to lower prices. It may be a year or more before the commission submits a report and in the interval farmers will be required to pay the prices asked by the machinery companies. In the event that we have two or three short crops in succession the results will be disastrous. The state would own most of the land and we would be headed for a system that is not conducive to a democracy.

Let us take a further look at costs. The minister of agriculture for Saskatchewan gave a fair illustration of the rapid rise in cash farm operational costs. He said that the increase was 20 per cent in Saskatchewan from 1961 to 1964 and if depreciation costs were added it was 24 per cent. The records of farm management clubs show that from 1960 to 1964 the operating costs per cultivated acre increased from $8.40 to $10.20. Depreciation costs increased in that period from $1.87 to $2.17, and investment costs increased from $3.14 to $4.01 on land at $39 per acre and, adding the labour costs of the operator and his family at $1 per hour, total farm costs per cultivated acre rose from $18.74 to $21.36.

To cover total costs a farmer would need to get an average grain yield of 24 bushels per acre at $1.75 per bushel, or 28.5 bushels per acre at $1.50. The yields suggested as necessary to cover the costs are considerably above the long-time average. Hon. members will note that he based his figures on land at $39 an acre. I do not know where you can buy good farm land at that price. In Manitoba it is priced at $100 and over per acre, and of course this would increase the costs of operation considerably. I would also remind the committee that these figures I have given do not include the increases in costs that have taken place during the last two years. The point I wish to make is that when you take into consideration the costs of farm operation and the price received for farm produce, farm loans are not a solution to the cost-price problem.

I now wish to put on record a resolution passed by Riding Mountain Farm Union Local 70 to indicate to the minister the thoughts of farmers on this problem. I shall not read the

full preamble to the resolution which reads as follows:

Be it resolved that an annual acreage payment of $2 per acre up to 200 acres be paid to every farmer with less than 501 acres listed in his 1965-66 Wheat Board permit book.

These farmers in this local by this resolution indicate their own thoughts and the thoughts of others in the province that the time has arrived because of the present cost-price squeeze that they need something in the form of a subsidy. I realize that the minister will be a little hesitant about recommending a subsidy to his colleagues in the cabinet. I for one would much prefer to see increased prices for agricultural products rather than any form of subsidy, but in this connection I would like to quote from a comparison report written by C. Knowlton Nash which appeared in the Canadian Farm Digest last spring, dealing with agriculture in the United States and in Canada. It reads in part as follows:

Canada has a widespread agricultural price support program, but it is a midget program compared to what Washington hands out as subsidies to farmers. Total U.S. government payments in 1964 amounted to $2,170 million, not counting extensive export subsidies on key agricultural products which amount into the hundreds of millions of dollars.

For wheat alone, the U.S. government provided domestic subsidies of one form or another last year amounting to well over $400 million and not a bushel of U.S. wheat is sold abroad without a heavy U.S. government export subsidy.

In the light of that report I can understand why a director of the Manitoba pool elevators said at their annual meeting last spring that surely the government could not expect the farmers of western Canada to compete with the treasury of the United States.

In the Liberal party farm program announced by the Prime Minister on Wednesday, October 6, 1965, the Prime Minister states:

The goal of the government's farm policy is that the family farm should be able to produce a living as good as the average industrial wage which is at present about $4,200 a year.

This ties in with my remarks about farm costs. What I would like to know is what the government proposes to do to implement that commitment in the present situation. I ask the minister, what steps has the government planned to fulfil this commitment? I suggest to the minister that his department should carry out research into production and marketing and be in a position to advise farmers on the prospect of markets for their products. I refer to Climax timothy as one example.

November 25, 1966

Over the years the government has endeavoured to induce farmers to diversify their production into such things as forage crops, chickens, etc. As part of this diversification farmers in Manitoba have gone into the production of forage crops. A few years ago there was a good market for these crops but at the present time the market is very low. I do not know if the minister is aware of this situation, and for his benefit I shall quote from an agricultural report published by his department on October 14, 1966:

Timothy: A crop of nearly 25 million pounds is forecast with the variety Climax accounting for nearly half of it. If the estimated amount is realized, the crop will exceed that of 1965 by about 8 million pounds and will top the previous record crop of 1960 by 2 million pounds. The estimated production is also 64 per cent greater than the ten-year average of 15,234,000 pounds. In addition to the 1966 production there was a carryover at June 30 of 4.6 million pounds-nearly four times that in 1965 and more than double the ten-year average carryover.

Surely, Mr. Minister, farmers are not in a position to inquire into the needs of the market. This is a service your department should give them. Had these farmers in Manitoba known last year that there was going to be such a huge surplus of Climax timothy they would have broken up their land and planted it with flax or some other remunerative crop. Last year certified Climax timothy sold in the Winnipeg area at 23.5 cents per pound. This year the dealers are offering 8 cents a pound. Surely there should be some guide lines from the department to indicate to farmers what they should produce and to indicate the needs of the market.

[DOT] (4:50 p.m.)

In concluding my remarks on this occasion I suggest to the minister that there are certain considerations which should be taken into account in an effort to keep farm costs under control. First there should be a review of the Agricultural Stabilization Act, keeping in mind that this act now is ten years old. It has not been updated and farmers are suffering in this regard. It should be reviewed in an effort to bring it more in line with present day production costs.

The next matter which should be considered is the Crowsnest freight rates. They should remain as they are. There should be no increase in the St. Lawrence Seaway tolls. The 11 per cent sales tax on building materials should be removed. Let me cite one case. I know of a young fellow who built a machine shed last year. It cost a little over $4,000. In addition to the problem in respect of the

Supply-Agriculture

shortage of money and the low prices for his agricultural products he was obliged to pay $440 in sales tax on the material which went into that shed. The time has now arrived when the government should announce a policy for agriculture that will ensure to the farmer a price for his products which will bear a fair relationship to the cost of production plus a reasonable margin of profit.

Mr. R. E. Forbes (Dauphin):

Mr. Speaker, as seconder to the motion made by my colleague, the hon. member for Kindersley (Mr. Cantelon), to adjourn the business of the house to debate this urgent and important public question, I appreciate the excellent contributions that have been made by previous speakers on this important subject, and my comments will be brief. The urgency in this matter has indicated that if the request of the St. Lawrence seaway is granted, the new rates will come into effect on July 1, 1966. I cannot think of any other action by our transportation system that is as far reaching in its effect on the economy of Canada and particularly on the grain producers of western Canada.

It has been estimated by authorities that the proposed increase in tolls will cost the producers of grain one and a half cents per bushel at a time when wheat prices have been reduced by an average of 17 cents per bushel during the past year; and I wish to emphasize this point. Also at a time when the costs of production have risen to an all time high, if the increase in tolls is allowed on iron ore this extra cost will be reflected on the price of machinery purchased by farmers. The farmers have no way of passing on their increased costs to the purchasers of their products.

Much of the current high level of business activity in Canada is due to the building of the St. Lawrence seaway and the deepening of the Welland canal, for without these two vital transportation facilities, both largely due to Canadian initiative, it would not have been possible for the government of Canada to contract to supply Russia and other European countries with wheat on the enormous scale that has been evident in the past three years.

May 26. 1966

Seaway and Canal Tolls

[DOT] (7:40 p.m.)

If canal tolls are imposed, every one of the 200,000 or 300,000 grain producers on the prairies will have to accept lower prices for his wheat and other grains exported. Let us review very briefly the history of water transportation with respect to tolls. In 1904 Sir Wilfrid Laurier stated that if tolls were imposed they would be an additional burden on the grain growers of the west. This was interpreted as favouritism to the west, although it really was an effort to lessen the charges on the movement of wheat from Fort William and Port Arthur to Montreal, destined for the markets of the world. When George P. Graham was minister of railways and canals, he stated:

It cannot be denied that every dollar you impose in tolls must come out of the produce or the cargo. There is no other way to pay for it.

I wish to quote again from the MacPherson report on transportation, volume 2, page 195:

We would not wish, in other words, to encourage the Canadian public to believe that a country such as ours can expect to obtain the kind of transport facilities, designed to fulfil national policy objectives that transcend commercial consideration, without a continuing outlay of public funds of a considerable order of magnitude.

The seaway between Montreal and lake Ontario is the only section of over 27,000 miles of navigable waterways in North America upon which tolls are levied. If the St. Lawrence seaway is to achieve its proper status as Canada's sole means of access by water to her heartland, it must not be impeded by a crippling toll structure. Similarly the Welland ship canal, located in the very heart of Canada's major industrial zone, must be permitted to function without the obstacles of tolls.

I wish to impress upon hon. members once again the fact that low cost water transportation is essential to the continued progress and prosperity of Canada. Not only does it increase the movement of primary and manufactured goods from one part of the country to the other, but it also assists the sale of Canadian wheat and other exports in the highly competitive overseas market.

In further substantiation of my argument against the imposition of tolls, Mr. Speaker, I wish to refer to a statement made by the three western grain pools, and I quote:

Another reason why farmers oppose seaway tolls is because the toll structure seeks to recover capital investment and this the farmers do not think is desirable for a publicly-owned transportation utility. Farmers do not find justification for the recovery of capital investment from seaway

users by a government which through the years has made many kinds of public investment in transportation facilities without there being any direct obligation for the users to repay the investment. Consider, for example, the following list of public investment in transportation which was compiled by Mr. Justice W. F. A. Turgeon when he was chairman of a 1951 royal commission on transportation. The list included:

(i) The construction of the National Transcontinental Railway to encourage the shipment of goods through Canadian ports;

(ii) The construction in central Canada of an extensive canal system which became toll free, built at a cost of about $328 millions and maintained at government expense;

(iii) The granting of substantial areas of land and subsidies to encourage and assist railway construction and the opening up of the country.

(iv) The taking over by the country in the years between 1918-23 of the bankrupt railway lines and the welding of them along with government lines into the Canadian National Railway system;

(v) The construction of Hudson Bay Railway and the development of the port of Churchill;

(vi) The subsidization of coastal shipping services and large investments in harbors and other navigation facilities; and

(vii) The large investment in and operation of Trans-Canada Air Lines and assistance given to other air lines.

The learned jurist said this government activity in the transportation industry indicates "the continuous concern of parliament with Canada's transportation problems including the problem inherent in great distances and sparse population." The wheat pools do not believe the government sought recovery of its investment from the users in the previous instances and cannot support the attempt to recover Seaway investment through user tolls.

I am firmly convinced that any increase in tolls will be detrimental to the expansion of our international trade and should not be allowed.

Mr. Forbes:

I should like to direct one question to the minister. We have three designated areas in Manitoba. Would these

May 12, 1966

same areas be eligible lor assistance under the ARDA program?

Mr. R. E. Forbes (Dauphin):

Mr. Speaker, my purpose in taking part in this debate is to compliment the Electoral Boundaries Commission on its good judgment in giving recognition to the community of interests of the electors of the Dauphin federal constituency, and on the proposed boundary extension to include the area known as the Swan River valley. The Dauphin federal constituency, together with the proposed extension, is one of the most highly diversified agricultural areas in Manitoba. Maybe at this time I should indicate the interest that the residents have in common.

[DOT] (5:20 p.m.)

Within the framework of the proposed boundary alteration we have a large number of beef cattle ranchers and a number of the best dairy herds in the province. We also have fur farmers, turkey raisers, egg and poultry producers, and honey producers. We have a large fishing and lumber industry at lake Winnipegosis. In addition, we produce considerable quantities of wheat, oats, barley, flax, and during the last few years have included rape and mustard seed. Many of the farmers are specialists in the production of registered grains and forage crops. Also we have a large tourist industry that includes the whole area from McCreary to Swan River.

It is one of the most cosmopolitan areas in Manitoba. Settlement began about 1890. The first settlers were of British and French origin, emigrating from Ontario and Quebec, followed by a large number from the Ukraine, Poland, Holland, Germany, and Iceland, bringing with them their cultures

[Mr. Simpson.1

and traditions which have become part of our way of life.

The proposed constituency is well located geographically, and can be served conveniently through a network of highways and municipal roads by political organizations, chambers of commerce, churches and farm organizations that have been working together for the advancement of their community since the creation of the Dauphin constituency in 1903. To my knowledge residents of the Swan River area have indicated on numerous occasions a preference to be included in the Dauphin federal constituency.

I think I can summarize the community of interest of the residents of the proposed area as follows:

1. The proposed alteration is within the present Dauphin judicial district which also determines the representation on the union of Manitoba municipalities.

2. Approximately one fifth of the present Dauphin electors are included in the Swan River health, diagnostic and hospital district, and welfare services.

3. Two local government land districts are presently administered from Swan River, which includes provincial government engineering services etc.

4. Recently the school boundaries have been adjusted under the new school division plan for convenient administration from Swan River to part of the present Dauphin federal constituency.

5. The proposed extension is served by radio station CKDM and television station CKOS.

I think, Mr. Speaker, that the foregoing has indicated the community of interest of the constituents of the present Dauphin constituency and those within the boundary extension as proposed by the commission, and it is my hope that the boundaries outlined by the commission will meet with the approval of all concerned.

I should like to conclude by saying a few words with respect to the two constituencies which lie adjacent to my own, Selkirk and Churchill. Certainly Churchill is much too large. As indicated by the previous speaker, it covers almost two thirds of Manitoba. What it needs is less land, not more.

The commission could reduce this area, and also give the people in the Selkirk area a greater community of interest by putting the Selkirk constituency back in its original form with respect to that area which lies between

May 4, 1966

lake Winnipeg and lake Manitoba. This could be done with very little adjustment to the tolerance allowed under the act.

I would hope the commission would give consideration to the community of interest of the people who live in that general area. There is another feature about the Churchill constituency. If one looks at a map he can see it is broadly spaced over two thirds of the province, as has been said previously. Therefore the government might well give consideration to allowing some compensation to the member who represents that area for travelling purposes in order to enable him to cover his constituency.