William Gordon RITCHIE

RITCHIE, William Gordon, M.D.

Personal Data

Progressive Conservative
Dauphin (Manitoba)
Birth Date
September 27, 1918
Deceased Date
November 20, 1998
physician, surgeon

Parliamentary Career

June 25, 1968 - September 1, 1972
  Dauphin (Manitoba)
October 30, 1972 - May 9, 1974
  Dauphin (Manitoba)
July 8, 1974 - March 26, 1979
  Dauphin (Manitoba)
May 22, 1979 - December 14, 1979
  Dauphin (Manitoba)

Most Recent Speeches (Page 1 of 197)

November 26, 1979

Mr. Gordon Ritchie (Dauphin):

Mr. Speaker, at five o'clock on Thursday I was discussing the budget and the nine envelopes which are involved in the budget. They are: fiscal transfers to the provinces, $3.6 billion; public debt charges, $9.8 billion; economic development and support, $8.4 billion; social affairs, $23.5 billion; justice and legal affairs, $1.2 billion; external affairs, $1.6 billion; defence, $4.9 billion; Parliament $100 million; and government services, $3.9 billion. And if there is a rise in OPEC oil prices, there will be a further drain for oil compensation payments.

This bill will go some way to allow money to remain in local hands and allow the local authorities a wider discretion in spending at the municipal level. Critics of this bill have said it will cost the federal government some hundreds of millions to billions in lost taxes. That is so, but it will also open up for the local governments an opportunity for higher tax revenues at the local level.

Municipal politicians are the only ones left who have any fear of the voters as to the handling of financial affairs of the citizens. It has been said both here and in Washington, in the U.S. experience, that the federal mandarins do not like this system of taxation with tax rebates for taxes and interest. Of course they do not like it because it reduces the federal government and the central executive, and hence the scope of the central executive of our government, to embarking on the massive and grandiose plans that so many centralists want to have. I have always said that the local municipal authority can spend taxpayers' money three times as profitably as Ottawa and twice as profitably as the provincial administrations. There is always much more return for the dollars spent of taxpayers' money when it is spent by municipal officials than by either federal or provincial officials.

Bill C-20 will open up for municipal officials greater taxation fields, and with the close scrutiny that municipal officials are subjected to in the spending of taxpayers' money it should be a decided advantage. And, of course, Ottawa will have less money to spend on its grandiose schemes. I am sure not many Canadians would miss the CBC budget being reduced somewhat.

Mr. Speaker, this measure will encourage home ownership. It will encourage Canadians to have a stake in their community and the country. Of course, this does not go well with the opposition who would much prefer a socialized housing stock. Nearly everyone for at least a portion of his life would like to own his house and to have the sense of security that ownership brings. Inflation has heightened the fact that home ownership is one of the best methods that a modest individual can use to prevent the ravages of inflation. Home ownership is considered a savings by our economists and we cannot hold the ideal too high. Savings are necessary if our society is not to become entirely owned and operated by the state.

This bill goes a long way to promote the ideal that home ownership is a good thing and should be spread widely over the

November 26, 1979

population. We have recognized the value of home ownership in our treatment of capital gains, now ravaged by inflation. We are allowing a once in a lifetime sale of a principal residence without capital gains and are allowing rollovers from one dwelling to another where the owners must move in order to carry on their occupation. This legislation very much complements the capital gains treatment of houses already in effect. Housing was essentially exempted from capital gains as a means of encouraging savings in home ownership. This legislation only endorses this.

I should like to read into the record an extract from this week's Newsweek of November 19, a comment by Mr. Milton Friedman on what the eighties will bring for the United States; 1 think it could be applied to Canada, also. Speaking of inflation, unemployment and big government, he said that while these were important they were only manifestations of more fundamental issues-the values that will shape our society. He went on to say:

Individual rsponsibility, equality of opportunity, personal freedom, limited government-these were the values of our Founding Fathers. Their counterpart is an economy organized predominantly by free-market capitalism and a government that is small and decentralized.

These values have been giving way to a very different set: social responsibility, equality of outcome, personal welfare, paternalistic government. Their counterpart is an economy organized predominantly by central direction and a government that is large and highly centralized.

The conflict between the two sets of values was at first not evident, but is now plain. No one can fail to recognize how greatly the role of government has changed, how much of our lives it controls.

There is concern about the family. Defenders of the new values blame capitalism. Its emphasis, they say, on rational calculation, material sucess, competition, exchange, undermines traditional nonrational institutions such as the family and church. But why should these effects show up only now, when capitalism is on the decline? The growth of government has done far more to undermine the family in the past 50 years than these amorphous effects did in the preceding millennium.

The conflict affects every aspect of our life: family vs. government; private vs. communal property; free v fair in speech, employment, trade; free choice as consumers vs. government protection of ourselves from ourselves.

The key issue of the 1980s is whether we shall be able to do so, and thereby reinvigorate the human freedom and economic freedom that together have made the U.S. a magnet for the poor and oppressed people of the world-or whether we shall succumb to creeping collectivism and become a totalitarian society.

I suggest that this bill regarding home ownership goes a little way toward making it possible to allow individuals to own their own homes.

There has been a great deal of discussion and argument that this proposal puts renters at a disadvantage. I cannot follow that argument. 1 believe it is specious. After all, when the renter gives his monthly rent to the landlord, the landlord is allowed to deduct local taxes, utility costs, maintenance costs, depreciation, and interest on any mortgages he may have on his property, before declaring his net income to be taxed.

It is well recognized that rental housing must return a net return to the landlord if housing stock is to be built. As much of housing stock is financed by large institutions such as insurance companies, workers' benefit funds and registered retirement funds which are the savings of millions of Canadi-

Mortgage Tax Credit

ans, these institutions must have a return on their investments which they put into rental housing in order to provide the pensions and savings by which the millions of individual Canadians, through these institutions, expect to meet their daily necessities when they can no longer work.

So, in effect, this legislation gives to the individual home owner something which has long been available to the renter in any case. If local property taxes, interest on mortgages and utility costs were not deductible by the landlord before paying his income tax, the cost of renting would be enormously greater for the renter than it is at the present time. Obviously, by making home ownership more attractive to people who are now renting, this should have a moderating effect on rents in the next few years, until a new equilibrium is established.

Much has been made of the fact that since the election interest rates, having continued their upward climb which had started long before May 22, have cancelled out the value of this home ownership rebate plan. There is no correlation between the two. Interest rates are a response by the country to two things. The first is the set of conditions abroad, particularly in the United States where, for the first time in a decade, they are coming to grips with the inflation problem. In Canada, with the long years of Liberal government, particularly since 1968, and with deficit after deficit, particularly in the last five years, we have spent our way into inflation, which must be brought under control or we will face a catastrophe, destruction of our financial institutions and the loss of savings in our banks and other paper instruments, such as happened in Germany after two world wars.

Interest rates are high, but this only reflects the fact that inflationary expectations are also high. Long experience has shown that interest rates are a combination of the real rate of about 3 per cent and the expected inflation rate. It seems to me that the Bank of Canada was to set the rate somewhere in line with what market forces dictate. If the bank was too far out, market forces would dictate otherwise. If, for instance, the bank set a ridiculous rate of 25 per cent, on the one hand, or 5 per cent on the other, market forces would entirely disregard what the Bank of Canada had stated as the prime rate. The bulk of lending would be at rates which would totally ignore the bank. We have an example of this: certain mortgage institutions have lowered their interest rates.

Interest rates in themselves will not cure inflation unless there is a corresponding reduction through other means. One of the greatest things to reduce inflation would be for the federal government to get the federal deficit under control, and that certainly can be done.

The comment has been made that rising interest rates cancel out the home ownership rebate of taxes and interest. In fact, the two are not related in any circumstance.

When the Conservative administration took over from the Schreyer government in the province of Manitoba, provincial finances were such that almost $1 in every $3 that the provincial government was spending was being borrowed. Every year the difference between the taxes collected and the money spent by the Schreyer administration was widening,

November 26, 1979

Mortgage Tax Credit

and the increase of this was much greater than the growth of the province's economy. It is small wonder, then, that many prudent investors were having second thoughts as to the integrity of Manitoba bonds. It is an anachronism of Canadian politics that when a province pursues prudent financial courses its citizens are penalized in a tax way because the federal tax system is able to take a greater share of the tax income as the province's share diminishes.

If we are serious about fighting inflation, there are many things we can do, but they all amount to a reduction of credit in order to reduce the total spending of the country. This might be done now by the control of interest rates, by the control of new credit or by way of new directions in the economy.

It is widely said that the cure for inflation will increase unemployment. This measure will do something to stimulate house building. But it also may be said that the increase in inflation will also bring unemployment as the bad effects of inflation manifest themselves. In other words, unemployment will occur whether in the cure of inflation, in its containment, or if it is allowed to run rampant, as at present. But, as evidence in South America shows, inflation is particularly damaging to middle-class virtues and financial positions. Certainly home ownership is one method by which the middle class can to some extent guard against inflation.

I would like also to point out to those who question high interest rates that it should not be forgotten that for a long time the people of Canada have been finding that their savings are being eroded as inflation speeds up. For every borrower there must be a lender, and a sober survey would show that anyone who is in the 50 per cent income tax bracket would have to have a 20 per cent return on his investment to break even.

The government has made a start in attempting to control the financial mess of the last ten years. Through this bill it has shown that it understands the necessity of broad home ownership across the country and that a measure of fiscal elbow room will be allowed to municipal authorities so that this most efficient of the three levels of government in the spending of taxpayers' money, which it controls, can be allowed to function.

Subtopic:   INCOME TAX ACT
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November 22, 1979

Mr. Gordon Ritchie (Dauphin):

Mr. Speaker, I rise to speak on Bill C-20 with some interest. I believe it is a far-reaching bill and points the way to a new era in our thinking. Essentially it is a bill that will cut the enormous power of the central government here in Ottawa and return it to the local level it never should have left.

If we survey what has happened to our country in the last 25 years, one of the things that stands out is the obvious expansion of power of the federal government. In defiance of the BNA Act, they took over the essential direction of this country in a financial way from the provincial and municipal authorities, using the tax system, though specifically exempted under the BNA Act, and assigned to the provinces responsibility for health, welfare and, in large measure, education.

This accrual to the federal government of vast amounts of money through the tax system, namely the income tax, the gathering into Ottawa of these vast sums of money, their redirection through the provincial authority and their expenditure is, in part, responsible for the fiscal disaster that we are now facing in this country. Indeed, anyone who cares to listen would describe this rich country, which has not experienced severe internal or external turmoil, as broke.

November 22, 1979

Twenty-five years ago the financing of health, welfare and general education was very much under the control of local authorities. The money was raised and spent at their discretion. What is ahead of us in the budget? It must cope with the so-called nine envelopes: fiscal transfers to the provinces, $3.6 billion; public debt charges, $9.8 billion; economic development and support programs, $8.4 billion; social affairs, general welfare development-

Subtopic:   INCOME TAX ACT
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November 1, 1979

Mr. Ritchie (Dauphin):

Mr. Chairman, I should like to speak for a few moments on this clause. As a member of a profession for whom this legislation was primarily designed, I might say that putting the rate back at 3316 makes it about as neutral as it can be.

November 1, 1979

The hon. member who just sat down pointed out that dummy corporations have people who get money out of them through wages that they basically do not earn. Many small businesses have people on their payroll who, strictly speaking, might not be considered productive. This seems to be one of the disadvantages of tax systems.

One of the problems that has come from this is the high margin of income tax rates that we have. If the marginal income tax rates were not so high, this sort of thing would not occur so much. Without some provision like this, say with limited liability, it would be almost impossible for physicians, for example, to hold property in groups and to have facilities. Most provinces do not allow physicians to incorporate their incomes; certainly Manitoba does not. I realize that Alberta does allow professional people to incorporate their incomes, but it has probably changed the rules to some extent.

I have considered this over many years and have discussed it with my accountant at various times but I could never see where it paid to incorporate a medical practice, except for the limited liability aspect. For instance, if four doctors decided to build a facility for $150,000 or $200,000, they would pretty well need to have a company to do so. It would have to be organized on a partnership basis. In any case, the tax changes of 1972 made partnerships almost impossible to carry on on an income tax basis if there was any complexity. Most accountant firms will advise against partnerships of almost any kind. As I say, the 331/3 is as neutral as can be.

The hon. member who just spoke implied that all physicians and all professionals were pretty well assured of an income. Mr. Chairman, they are no more assured of an income than the corner grocer. Physicians and lawyers who work on a salary for a firm must pay income tax just as we do. It is not necessarily true that many will come in the door demanding to be paid high salaries or be provided with a high income. I might say that in a practical sort of a way the physician in Manitoba makes about $10 or $14 per hour before taxes. Ele makes up for some of this by working 50 to 60 hours a week. Whether that is too much, I do not know.

I would to like to point out there are many professions, such as pharmacy, which are not included in this. In practice, however, pharmacists can incorporate their companies. They have to be able to incorporate because of the large stock they carry and so on. Usually about half of their income can be classified in the same way as incomes of lawyers and physicians.

If everything went very well and circumstances were exceptionally favourable, it might be that a person could use the 331/3 per cent and make considerable money. However, from my discussions with many physicians, I find they have tended to lose on this. By and large their companies have not been around for a long time. They have been holding companies or real estate companies.

It would be almost impossible to get facilities without having some kind of company. Presumably we would not have

Income Tax Act

clinics and this sort of thing where there is a physical facility. Physicians have told me that having a company has not particularly resulted in their making money. In many cases, their income has been less than had they paid the marginal rate.

The limited liability feature, the possibility of bankruptcy, suits for injuries and so on make it necessary for professionals to be able to set up companies of some kind. This may not be the best way to do that. I have gone through the white paper on taxation of 1970 and subsequent legislation. As a professional, I do not particularly ask for favours. However, something has to be set up in order that facilities can be built and manned.

Another problem that remains unsolved is those who have spent long years preparing themselves and do not earn money until they are in their thirties. They presumably then earn a high income and pay a great deal in tax. Obviously that is a difficult problem. While this change may not necessarily be the best, it seems the most neutral we can arrive at for the moment.

I would ask the parliamentary secretary whether this effective 331/3 per cent rate commenced in November of last year, or will it become effective when this bill is passed, or, in fact, is it effective at the present time?

Subtopic:   INCOME TAX ACT
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October 31, 1979

Mr. Ritchie (Dauphin):

Mr. Chairman, we have been constantly lectured by Third World countries that we are not doing enough for them. With regard to the mine in Guatemala which the hon. member just mentioned, it seems to me that we have contributed substantially to development in that country. Even though the wages may only be two bits an hour, they are still greater than what they were before. At any rate, in many cases these companies are taken over by those Third World governments, and they end up with the assets which Canada has contributed in the development of the country.

Subtopic:   INCOME TAX ACT
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October 15, 1979

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.

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