AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, October 27, 1998

• 0903

[English]

The Chairman (Mr. John Harvard (Charleswood St. James—Assiniboia)): Members, let's bring this meeting together.

We have a quorum to hear witnesses. We don't have a quorum to deal with other matters, so the steering committee report will have to be dealt with after we hear from the witnesses, especially for the ears of Mr. Hilstrom, who I know wanted to deal with the steering committee report first. Let's start with the witnesses.

Today we have the pleasure of hearing from two groups with regard to our WTO—

Mr. Howard Hilstrom (Selkirk—Interlake, Ref.): I have a point of order, Mr. Chairman. Can we begin listening to presenters and witnesses without a quorum here?

The Chairman: Yes. We have a quorum. We need only three for witnesses.

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): That's right.

The Chairman: Thank you.

We will be hearing from the Canadian Sugar Institute this morning, Sandra Marsden, president; and from the Canadian Sugar Beet Producers' Association Inc., Mark Kuryvial, president, and Ken Yuill, first vice-president. He is a gentleman from our province of Manitoba.

Welcome to all of you. Who is going to begin?.

Mr. Howard Hilstrom: On a point of order, Mr. Chairman, we now have a quorum here and I'd like to consider my motion. It's very short and will take only take five minutes to consider.

The Chairman: If you are right I would be delighted, but I'm not too sure whether that's the case. The way the clerk has written up the agenda, we are going to hear from the witnesses first and then deal with the steering committee report. Mr. Hilstrom would like to deal with the steering committee report first.

• 0905

Mr. Howard Hilstrom: If the witnesses and the questions are finished by 10.15 a.m., it would give us 15 minutes at the end of the committee hearing before the votes to go into this. That would be fine with me.

The Chairman: We should be able to finish this in an hour and ten minutes. Let's try it.

Who's starting first? Ms. Marsden?

Ms. Sandra Marsden (President, Canadian Sugar Institute): Yes. Thank you.

The Chairman: We would like you to provide us with a concise, succinct opening presentation and then we'll go to a round of questioning. Will we hear from the other gentlemen as well before we go to questions? Is that how we want to do it? Are we going to hear from all three or just two of you?

Mr. Mark Kuryvial (President, Canadian Sugar Beet Producers' Association Inc.): Two of us will present.

The Chairman: Okay, we'll start with Ms. Marsden and then Mr. Kuryvial.

Go ahead.

Ms. Sandra Marsden: Thank you, Mr. Chairman.

On behalf of the members of the Canadian Sugar Institute, I'd like to thank the committee for allowing us this opportunity here today.

The Canadian Sugar Institute is the trade association representing all Canadian manufacturers of refined sugar. We've been incorporated since 1966. Of course the industry has been in Canada much longer than that. Our primary function is to provide consensus to the government on international trade matters and other policy and regulatory matters.

I'd like to provide a brief historical perspective of the industry because the context is important in understanding the impact of recent trade agreements on our sector and the importance of achieving meaningful gains in the upcoming round of agricultural negotiations.

Our industry is firmly rooted in its tradition as a value-added contribution to the Canadian economy. We were first established in Canada in the early 1800s, and all members of the Canadian Sugar Institute today were in Canada by the late 1800s. The industry first started as a raw cane sugar refining industry, and that was important because it replaced very expensive imports of refined sugar.

The beet growing and processing industry was introduced a little later in the early 1900s, and both sectors are represented here today.

The industry has evolved, but we are still rooted in our tradition of providing refined sugar at prices that are among the lowest in the world. We produce today about 1.2 million tonnes of refined sugar annually. Of that, 90% is from imported raw cane sugar that has been duty-free since 1996 from countries such as Australia, South America, Central America and the Caribbean. The balance is from domestically produced refined beet sugar from our own grown sugar beets.

We're a very capital-intensive industry, so only a limited number of refineries can achieve the necessary economies of scale to operate profitably in a market the size of Canada. We have today five plant locations, and four of those are cane refineries at major seaports—Vancouver, Montreal, Toronto and Saint John, New Brunswick. We have one remaining sugar beet factory in Taber, Alberta, and Mr. Kuryvial will speak more to that.

The Canadian sugar industry supports many diverse sectors of the Canadian economy. We're a very bulky product so we're important to the transportation system, packaging, industrial machinery and natural resources. Perhaps most importantly, we're a low-cost input for the Canadian food processing sector and we've attracted substantial investment and jobs in that sector. Sugar is a major ingredient in products like confectionery, bakery, biscuits, wine making, soft drinks, cereal, fruit and dairy. Over 80% of our production is shipped to food manufacturers for further processing. So our industry can't be looked at in isolation of those other sectors.

We've evolved since we were established in the 1800s as a result of a number of competitive pressures. In fact 20 years ago we had 15 plants in this country, by the late 1970s we had 10, and today we have 5 plants. Since the early 1980s the main competitive factors affecting this industry have been related to international trade, most notably the very restricted market access, primarily to the United States because that's our major export market, as well as unfairly priced imports coming into the Canadian market.

• 0910

Perhaps I should clarify that the Canadian sugar industry, by international standards, is very unique. We're an open market. We've never had the protection of sugar policies or programs that are characteristic of the sugar market worldwide. We're virtually one of the very few—if not the only—developed economies that does not maintain price and production support.

The most recent plant closure was in 1997. That closely followed the World Trade Organization agreement that reduced that plant's access to the U.S. market and forced its closure.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Where was that?

Ms. Sandra Marsden: It was in Winnipeg, Manitoba.

The restructuring and rationalization of the industry is continuing in relation to both the current market realities—we really can't look much outside the domestic market because of the restrictive nature of the U.S. and other markets—and an outlook to the future.

The industry is preparing for a future freer trade environment. We're under no illusion that will come soon, but we must have an outlook to the future. All of our member companies are undergoing rationalization and restructuring investments. Redpath Industries completed a $40-million investment at its Toronto refinery recently. Rogers Sugar is through the first phase of the $40-million expansion of its Taber beet processing facility in Alberta. Lantic Sugar recently announced a $65-million expansion of its Montreal plant, concurrent with the planned closure of its Saint John plant by the end of 1999.

We have a strong foundation; we've evolved; we've rationalized; we're restructured and we're ready for the future, but the world export market isn't ready for us. We continue to be constrained by the highly protective sugar policies of our major trading partners, and I'll give you a few examples of that in a moment.

As I've said, virtually all developed economies have sugar programs of one sort or another. Together with that, they have tight import controls and they stimulate surplus production and exports. So on the one hand we can't access their markets, and on the other we're faced with unfairly priced imports that can enter Canada.

In all recent trade agreements we have fared worse, not better, in the sugar sector. I'll just briefly explain what happened under the NAFTA and the WTO. The North American Free Trade Agreement provided for reciprocal market access for the United States and Mexico. It excluded Canada-U.S. trade in sugar, or at least it adopted the same provisions as the free trade agreement. That means we had no improvements in access to the U.S. market. In fact, the situation was made worse because as part of the U.S.-Mexico deal, the U.S. carved off part of the global quota access for Mexico. So in fact, they reduced Canada's access to their market.

Things got worse under the WTO, and I'll just refer you to this exhibit that demonstrates historically what the impact of these trade agreements has been. The green bars represent the sugar content of sugar-containing food products and the blue bars represent refined sugar itself. So we've been hit in two ways: one, through quotas that have restricted access for sugar-containing products that are very high in sugar content, and if you'll recall, I mentioned that 80% of our production goes to food manufacturers to produce those products; and two, by refined sugar itself.

The WTO, in 1995, reduced access for both refined sugar and sugar-containing products. We were subject to a very small global refined quota that reduced our access effectively from 40,000 tonnes annually to 5,000 tonnes by 1996. On the sugar-containing product side, the U.S. took the opportunity to reclassify products that were not previously covered by quotas into restrictive quotas. The green bars show how dramatically that restricted our exports of high sugar content food products.

The effect of that, in dollar terms, was to reduce our exports to a $100-million annual loss. Of course, as I explained previously, the Manitoba sugar beet plant closure is most directly linked to the loss of access for refined sugar. Of that plant's production, 60% was destined for the U.S. market. Clearly, that plant couldn't remain viable with the closed market.

• 0915

In October 1997, Canada and the U.S. entered into a bilateral understanding to prevent further erosion of our market access. So we now have a Canada-U.S. understanding that protects the existing restricted-market access. It in no way is a long-term solution to restoring what our exports were historically. Even this picture is a far cry from what our exports were back in 1977.

Looking to the future, to the trade objectives for the next WTO round, clearly our primary objective is to seek meaningful improvement in market access. Surely we mustn't fare worse in this agreement and surely we should be able to achieve some gain.

Our principal export market is the United States. Compared to other agrifood sectors in Canada, we're a long way back. We have to make meaningful gains in the U.S. market before we can even think about achieving access to even more restricted global markets.

To that extent, we need to see measurable increases in the minimum access commitments. Those are the in-quota quantities that today are minimal. Without measurable increases in those access quotas for Canadian refined sugar and sugar-containing food products that contain Canadian refined cane or beet sugar, we won't achieve export access.

Second, we want to see a balanced tariff reduction. When global markets converted their absolute quotas into tariff rate quotas, they didn't achieve real gains in sugar access because the quotas were small and the over-quota tariffs were so high, they were prohibitive. So while we're increasing our in-quota access, we want to see those prohibitive over-quota tariffs reduced. Now, a gradual reduction in those tariffs will not mean anything meaningful to us in terms of our export access, because these are hundreds of percent over the actual value of the quota. At the same time, the only tariff protection that Canada maintains for the sugar industry is a very modest, non-prohibitive tariff on refined sugar.

Until those export markets are liberalized, we don't want to give that up. So what we don't want to see happen is an equal percentage drop between tariffs that are up here and our tariff. So what we want Canadian negotiators to understand or recognize is this imbalance.

Third, we want negotiators to recognize—to this extent, the Canadian government has adopted this position—that the refining of raw cane sugar in Canada confers origin. Rules of origin negotiations have been under way for some time. It's likely that those rules of origin negotiations under the WTO may dovetail with the WTO agricultural negotiations, so to that extent, we have to be able to fight back in Canada with all the sugar we can produce.

We have a very important domestic beet sugar and cane sugar refining industry. We mustn't be limited to our exports of Canadian refined beet sugar. Under the present scenario, we have such minimal access to the U.S. market that it would be meaningless for us to achieve gains in access for refined cane sugar. But if there is a day when we see significant increases in our export market access, we must be able to export all of the refined sugar from all locations in Canada, whether that's refined cane sugar or refined beet sugar.

Fourth, we want to see a fair, predictable, and transparent border administration. If the United States hasn't been able to restrict our access through quotas or tariffs, they'll find some other means. We don't want to see this occurring in the future, whether it's in the United States or in other markets. So these practices should be eliminated.

Currently, even with our Canada-U.S. bilateral understanding in which we have a very clear Canada-specific allocation of U.S. quotas for refined sugar and sugar-containing products, our government can't even enforce those quotas because the U.S. won't recognize our export certificates. So we negotiated a fixed share of U.S. quotas, and we're achieving about 80% or 90% of that share.

Finally I'd like to say that I appreciate very much the opportunity to be here. I'd like to commend the government on the transparent manner in which they're undertaking these consultations, and I hope that process continues.

Thank you.

The Chairman: Thank you, Ms. Marsden.

Mr. Kuryvial.

Mr. Mark Kuryvial: First of all, I'd like to thank you for the opportunity to be here. As a sugar beet farmer, I finished my harvest on Saturday, caught a plane on Sunday, and consequently I'm here. I'm feeling a little bit unprepared, so I hope you'll bear with me.

• 0920

The CSBPA, the Canadian Sugar Beet Producers' Association, is the industry voice of sugar beet farmers in Canada. We were founded in 1942. Currently our membership is in Alberta and Manitoba; however, unfortunately, with the closure of the Manitoba plant, we will soon be limited to 500 growers from Alberta.

In the long-term of the WTO, what we're looking for is, obviously, free and fair trade in sugar. However, we can't look at just the WTO itself; we must also look at bilateral agreements and the various regional agreements, because a lot of trade in sugar does happen outside WTO disciplines.

I think these “take note” hearings are quite timely, given the fact that at this present time there is a crisis building in many of the parts of the ag sector. Obviously, many problems facing the ag sector are trade related, and only through improved trade rules and greater disciplines can the inequities of the current agreements be addressed.

Sugar beet production is a competitive industry. Refined sugar produced from sugar beets is competitive with refined sugar produced from cane.

There also appears to be what I would characterize as a growing recognition of the disadvantage under which Canadians operate, due to poor terms of trade in sugar.

That is evidenced by the two resolutions adopted by the Canadian Chamber of Commerce this past September. The first recommendation was that we prepare to negotiate for other countries to implement free trade policies for sugar during the upcoming WTO negotiations. Their second recommendation was, at the same time, negotiate with the U.S. under NAFTA to allow increased exports of Canadian sugar to the U.S.

It's a fact that our industry has actually fared worse under recent trade agreements. When the U.S. imposed restrictions as a result of the implementation of the WTO, exports of refined beet sugar to the U.S. were severely impacted, which led directly to the Rogers Sugar decision to permanently close the Manitoba sugar beet processing facility.

As I said before, sugar processing from sugar beets is a competitive industry, and I think it's one area where we have become a lot more competitive in recent years. Beet growers have made tremendous strides to become more competitive over the last 10 years. If we go back 10 years, we could have characterized ourselves as uncompetitive, but we've made a lot of tough decisions and we've increased our yield of sugar per acre quite dramatically, and we've become quite a competitive industry.

But what seems to be one of our biggest stumbling blocks at this point is we're faced now with the possibility of becoming uncompetitive, and it's not by our own doing. It's because there's a lot of inequities in support among our major trading partners.

If we look at some of our major trading partners, the support programs they have can lead to overproduction, and with their ability to directly subsidize exports, it has a dramatic and almost exponentially downward effect on the world market. As Sandra mentioned in her presentation, there is no sugar program in Canada. We are not protected. So all our returns are based off the world market.

For that reason, we get to what we'd like to see come out of the next round of the WTO. I think, first and foremost, we would like to see the level of permissible spending on trade-distorting support obviously lowered. We would like to see the blue box category for domestic subsidies be eliminated.

• 0925

Canada has an objective of $40 billion in value-added food processing, and we think we can play a major role in achieving that goal. But in order for us to be able to do that, obviously we have to be able to access foreign markets. So as a result, we think Canada should try to get the maximum possible increase in minimum access commitments.

We would like to see the elimination of all encoded duties, the maximum possible reduction in overall tariffs, and clear and binding rules on the administration of tariff rate quotas.

We also feel very strongly that export subsidies should be eliminated. As I said before, they seem to have an exponential effect downward on prices.

There's also another issue that's gained a lot of attention lately, and that is sanitary and phytosanitary measures. One of the ways we see in which we'll be able to keep our competitive advantage in the future is through the use of transgenic sugar beet varieties. As I said, we have made tremendous strides in lowering our cost of production over the last 10 years and this is just another way we would be able to continue in that area.

So we would definitely like to see the WTO ensure these phytosanitary rules are science-based and don't became a veneer for protective practices.

In conclusion, I would like to say we are a competitive industry, but for us to move forward there has to be some effort to level the proverbial playing field, so we can obviously... One of our main reasons for being here, obviously, is we'd like to see the day when we can bring back sugar production in Manitoba and further increase the sugar production in Alberta. Unless we see some significant changes to world trade in sugar, it's not a reality. So for that reason, we need to push for a free and fair trade in sugar.

The other thing, I guess the last thing, is that as I said, there is a crisis building in the farm community, and unless significant improvements are made in our trade agreements, the Canadian government will be forced to, obviously, increase their funding to Canadian farmers, albeit realizing we have to live within our trade agreements. But nonetheless, they will be forced into having to increase their funding for Canadian farmers.

The Chairman: Thank you.

In just a few seconds you mentioned your wish list to liberalize trade. Do you think our negotiators at the WTO would have much leverage toward that end, and if so, what would that leverage be?

You shake your head.

Mr. Mark Kuryvial: That's a good question.

Obviously I'm not a trade negotiator, and I don't even pretend to understand the complexities of the situation. All I am saying is that change is inevitable, and we need to see some change. If we don't, we will be forced into being uncompetitive.

• 0930

The Chairman: But basically, what you're saying is the answers toward that end aren't readily evident. It's going to be tough slogging, you're suggesting.

Mr. Mark Kuryvial: No question.

The Chairman: Thank you.

Mr. Hilstrom, you have seven minutes. We really have a time crunch, members. We don't have this room beyond 11 a.m., but then we have a vote at about 10.35 a.m., so we're really short on time.

Mr. Hilstrom, you have seven minutes.

Mr. Howard Hilstrom: Thank you, Mr. Chairman.

I understand there are about 100 sugar-producing countries in the world, give or take a few maybe, and I don't know the extent of the exports they all do. We'll stay with WTO here for the most part, because those are the negotiations that are coming up.

I've been a strong believer in a continental market for agriculture products in North America: Mexico, Canada, and the United States. In regard to that, do you not think we have a better chance of achieving increased exports through eliminating all the restrictions under NAFTA, including the administrative ones? And in terms of the WTO, while we'll make an effort, it may not turn out to be as productive as putting a major effort into NAFTA. What do you think about that?

Ms. Sandra Marsden: It's a good question. As I mentioned, Canada-U.S. sugar trade and Canada-U.S. agricultural trade in large was left out of the NAFTA, and I think to a large extent the two countries are approaching the question of agriculture through the WTO. So I would agree with you the NAFTA market is of the most vital importance to our industry, but my understanding is that the tool to get at the NAFTA or at the North American context in agriculture is through the WTO.

The other thing I'll say is that currently Canada's access to the U.S. market is WTO access, so we're covered by global quotas, not by NAFTA quotas.

It's a very confusing conundrum we face. We have a preferential agreement under NAFTA and we have a global agreement. So in the context of trying to move the agenda on NAFTA, it's our understanding we have to first push the agenda under the WTO.

That being said, if there is an opportunity to achieve better access under NAFTA, we want to be there.

Mr. Howard Hilstrom: If the ideal goal is a subsidy-free world trade, free of tariffs and everything, if that ideal world ever happened, could Canada, our farmers and processors, compete with the sugar cane producing countries?

Ms. Sandra Marsden: Yes.

Mr. Howard Hilstrom: We could compete?

Ms. Sandra Marsden: Yes. We're primarily in the business of producing refined sugar in Canada—at least as we established for the Canadian market. That being said, as I mentioned, there has been tremendous rationalization in the industry.

The good news story out of this array of unfair trade practices is that our industry is preparing itself for that future. So you can be sure each of the refined sugar companies in Canada has that outlook to the future.

It would be nonsensical to be investing, as I've explained, if they didn't assume that some day out there we're going to have a freer trade environment.

Mr. Howard Hilstrom: Yes.

Ms. Sandra Marsden: What makes sense in sugar is to compete in regional markets. That's not happening today because the world market is so distorted. You have major economies like the European Union, the United States, and Japan that have policies that stimulate excess production and exports. They have subsidies. The U.S. has huge subsidies on exports of sugar, which are depressing world markets and sending sugar who knows where.

That's not the economy of the future and a freer trade environment in sugar. In the future we would be competing more in a North American context—that's the vision—and we would be competitive.

Mr. Howard Hilstrom: Okay. As we try to force and increase our exports, we inevitably end up having to give up something on the domestic side. It's one of those situations. I guess supply and management is an example. How do you have increased exports and still maintain domestic control there? It's a kind of “you can't have your sugar cake and eat it too” thing, to use that analogy.

In any event, I think your comments have been good, and I'd like to pass over to Rick Casson for one question if we have time left in our seven minutes.

The Chairman: Yes, you have a couple of minutes.

• 0935

Mr. Rick Casson (Lethbridge, Ref.): Thanks, Mr. Chairman.

Thanks for the presentation, Mark. To jump off your beet digger one day and be here the next is admirable; you obviously need a secretary to do the work for you at home so you can jump and run. But thanks for trying to explain the situation to us.

What I'd like to get into is that as these trade negotiations have taken place over the history here we have seen a declining amount of quota for Canada. We've lost at the trade table. I know there has been talk in the sugar industry that we've been traded off against others, and we have to protect against that happening further in this round.

One thing you bring up is the push to have value-added products created in Canada, and that's something I certainly support. However, can you explain...? If we do go into that and we have more value added, more sugar-containing products, more of these sugar-containing products are going to contain non-Canadian refined sugar or non-Canadian produced sugar, is that right? And is that going to lower the amount of Canadian sugar that's being exported? Is that going to reduce our quota? Will our quota remain the same? When we get into the further processing, are we going to lose out in the end? Is more of the stuff going out of this country going to be non-Canadian sugar? I don't know if that's a fair question or an easy one to answer.

Ms. Sandra Marsden: If I understand your question correctly, in a freer trade environment there will be more imports and those would compete with Canadian refined sugar. Is that the question?

Mr. Rick Casson: No. If our quota is set at whatever, 60,000, 70,000 or 80,000 tonnes, and more of that quota is going to be processed, value-added or packaged, or whatever, are we going to eventually be losing market for our sugar?

Ms. Sandra Marsden: The answer is as complicated as the question and has to do with the rules of origin issue. Currently under the Canada-U.S. bilateral understanding we have a problem with the agreement that's in place, because in effect our access to the U.S. sugar-containing products quota, under the U.S. application of their rules of origin, prohibits us from selling products like powdered drink mixes that contain Canadian-refined cane sugar.

The long and short of it is that effectively 25% of the value of Canada's allocation under this U.S. quota has been eroded because these products have to contain U.S. sugar to get Canadian origin. I don't want to explain to you why that's the case, but effectively that's the case. A Canadian manufacturer of powdered drink mixes in Canada must use U.S. sugar under Canada's quota to get Canadian origin into the U.S. It's bizarre. That's the kind of thing we don't want to see happen in the future. That happens because the U.S. applies its own restrictive rules of origin. We're seeking the WTO to look at a more rational rule of origin that would prevent it from happening in the future.

The Chairman: Sorry, we're out of time, Mr. Casson.

Madame Alarie.

[Translation]

Ms. Hélène Alarie (Louis-Hébert, BQ): I'd like to know how much of the raw material is produced domestically compared to the volume of imported raw sugar. Sugar beets grown in Canada are the most likely raw material source.

• 0940

[English]

Ms. Sandra Marsden: About 10% of our refined sugar production originates from Canadian-grown sugar beets, the balance is from imported raw sugar, which is shipped in the hold of a ship from developing economies mostly, and also Australia, which we transform in Canada into refined sugar.

[Translation]

Ms. Hélène Alarie: Thank you. The problem is significant and it was my understanding that it stemmed from our relations with the United States as well as from existing subsidy levels. Production of sugar-containing products with value added has increased tremendously. I'm thinking, among other things, about the variety of juices that are now produced. Won't the issue of value added processed products be discussed during the negotiations? We can't make gains at all levels. What advantage would there be for us to support sugar beet producers more than the value added processing sector, which is making significant gains at this time?

[English]

Ms. Sandra Marsden: First let me say that the industry is very much linked, so the sugar beet industry is very much part of our sector. Rogers Sugar, a member of the Canadian Sugar Institute, depends on domestically grown sugar beets for its Taber operation. The whole industry has suffered as a result of the U.S. restrictions; not just the cane refining, the whole industry has suffered. We've closed refining operations as well as sugar beet processing operations.

We have to work together towards achieving more liberalized sugar trade for the benefit of the whole industry. It no longer is reasonable to be looking for protective sugar policies to carve out protection for one part of our industry. The future is certainly moving towards a more globalized trade and we want to be on that wave.

[Translation]

Ms. Hélène Alarie: My comments are directed to sugar beet growers in particular. I don't see how they can compete with other countries that grow sugar cane if they receive no subsidies. In eastern Canada and in Quebec in particular, this industry, which was first developed in the 1920s by settlers from Brittany, has died out.

I recall seeing people stooped over in the fields harvesting beet crops. We had a large beet-producing area along with a refinery. However, when it was decided that the industry would need too many subsidies to survive, it was allowed to die out. I can honestly say that the death of this flourishing industry was a sad site indeed. Therefore, I'm surprised to hear you say that we can compete with sugar cane exporting countries.

[English]

Mr. Mark Kuryvial: As I said, I think if I was to look back 10 or 12 years ago in Alberta, we at that time had an average yield of 15 to 16 tonnes of sugar beets per acre. Out of that tonne of beets we would have extractable sugar of roughly anywhere from 100 to 105 kilograms per tonne; that was our average. If you look at what we've done over those 10 or 12 years, our average for this year will be 23 tonnes per acre. So we've dramatically increased our tonnage per acre, but I think the biggest factor is we've also increased the sugar content and the extractable sugar per acre. We've gone from an extractable of 100 or 105 kilograms per tonne to well over 150 kilograms per tonne, so we've dramatically increased the amount of sugar we produce on each acre of land.

We've also looked at lowering our input costs. There used to be a tremendous amount of hand labour involved in the beet production. We've gone away from that. We've gone to planting to stand, which reduces seed costs. We've gone to band spraying, which dramatically decreases our chemical costs. We've done all those things, and I think if you look at it right now, we're competitive with most regions in the production of sugar.

• 0945

[Translation]

Ms. Hélène Alarie: Thank you.

[English]

The Chairman: Thank you, Madame Alarie.

Mr. Calder, you have seven minutes.

Mr. Murray Calder: Thank you very much, Mr. Chairman.

How did the harvest go, anyway, Mark?

Mr. Mark Kuryvial: It went fairly well. I don't know if you've ever been around a harvest, but—

Mr. Murray Calder: I farm in my other life.

Mr. Mark Kuryvial: It's kind of a stressful time, but it went pretty well.

Mr. Murray Calder: Good.

I want to read you a little something here, right off the bat, which as a farmer in my other life I'm very concerned about.

There was a report done on June 22, 1994, called The Impact of the GATT Agreement on Canadian Agriculture and Agri-Food. One of the quotes out of it is:

The results of many analyses (World Bank, OECD, USDA, various academics) showed that it would be reasonable to expect positive price impacts by the year 2000 in the ranges of 10% to 20% for wheat, 0 to 10% for feedgrains, and 0 to 5% for oilseeds and red meat.

It also said that:

Farm income impacts, which combine the volume and price impacts, are likely to be significantly positive for the grains and hogs/pork sectors, negative for dairy and eggs sectors, and negligible for the other major sectors.

That's what the analysis was of what we had signed in 1994.

It's interesting for your own industry and I'd be interested in hearing your response on the butter-oil issue, for instance, where New Zealand and Australia learned how to circumvent 1205 by coming in with a higher percentage of sugar, and how bringing that in affected your industry, because I believe they're bringing in about 8,000 or 10,000 tonnes a year—and they're flying it in.

The American Sugar Alliance has said that it long endorsed the goal of global free trade. In fact, one of their points is that a flexible strategy called “request offer” must be followed in the next trade round. What they're saying is they will provide foreign countries all the incentives that they have, as long as those governments reduce their programs by what the United States is going to reduce theirs by.

What subsidies do we have here in Canada for the sugar industry that we're going to take and bargain with, with the United States? If we don't have any subsidies in here for the sugar industry in Canada, this is almost like—and I'll use the analogy—going to a game of strip poker and you don't have your shirt on.

I'd like your comments on the position we're in.

Ms. Sandra Marsden: You've raised a number of issues.

First with respect to butter-oil-sugar blends, I wouldn't expect that New Zealand and Australia are the countries that are driving that trade, in particular. My understanding is that the butter-oil component is the main economic driver of that trade. Clearly there's sugar in there because that enables the product to meet the particular tariff classification.

Mr. Murray Calder: It's 51% sugar; that's why they're able to get around 1205.

Ms. Sandra Marsden: That's right. However, that's my understanding with respect to butter-oil-sugar blends.

With respect to the American Sugar Alliance endorsing the goal of global free trade—request offer—I think they're speaking out of both sides of their mouth. They complain about the Europeans, and the Europeans complain about them, and then nothing happens.

If you were to look at the sugar world, and request offer, and bargaining chips, I don't think anything would ever happen, because really all of those economies' sugar programs help one another. In effect, they really all want to maintain what they have.

You're right; we don't have a bargaining chip on sugar in Canada. We don't have subsidies. We're already there at the free market table. That's why I come back to the WTO and the broader agricultural agenda. There have to be other factors that are driving the agenda on a principled basis, and we want to be part of that agenda. As you probably are aware, we're members of the Canadian Alliance of Agri-Food Exporters, and we want to see that agenda pushed on the export side.

• 0950

Mr. Murray Calder: If we don't have a bargaining chip then, if we don't have any subsidies over here protecting our sugar industry, I guess the question is, how do you see us bargaining with the United States? How are we going to do that?

Ms. Sandra Marsden: We're not the negotiators.

Mr. Murray Calder: I realize that—

Ms. Sandra Marsden: But let me say that—

Mr. Murray Calder: —but I'm giving you the opportunity right now to make suggestions to the negotiators.

Mr. Sandra Marsden: Clearly, some sectors have fared worse, while some haven't changed as a result of recent trade agreements. I don't have to tell anybody in this room what those other sectors are.

We have suffered. We have more than paid the price to maintain the status quo. We think that's not good enough. We think the agenda has to move, and the Canadian government has to begin to move that agenda. We don't want to see other people hurt the way we've been hurt in the past. Don't let me make any mistakes, but the agenda has to move in the right direction. We have to begin the process.

Mr. Murray Calder: How much time do I have left, Mr. Chairman?

The Chairman: You have maybe one minute.

Mr. Murray Calder: I'll transfer this to Mrs. Ur.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): I have a quick question. You mentioned Alberta and Manitoba, which are the strong sugar beet producers. I have to throw my accolades in. Part of my riding is Kent. You may know that we have a great industry reviving there.

Last Friday, I had the pleasure of taking the Minister of Agriculture to that particular industry. I can say he was quite moved by what he saw there.

We grow for a sugar company in the United States, and there's no problem getting contracts because of the high-quality sugar beets that we can grow in Kent, which is part of my riding. It's superior quality to that of the United States sugar beet growers, so I think we have advantages there.

What acreages do you have to provide for a processing plant to be viable?

Ms. Sandra Marsden: I'll let Mark answer that one.

Mr. Mark Kuryvial: If I look back at Alberta, I guess that was one of our concerns. We did have a fairly small plant. The plant sliced about 4,000 tonnes of sugar beets a day during the campaign. We had, at that time, about 32,000 acres of sugar beets.

But you need to have economies of scale, so we're in the midst of an expansion there right now. This year, we had 42,000 acres of beets. They hope to slice slightly more than 5,000 tonnes of sugar beets a day. Then next year, we will be up to full production, so we'll go to in excess of 50,000 acres.

Mrs. Rose-Marie Ur: Are we having problems because of chemicals they use in the United States compared to what we can have here in Canada with, say, Upbeet?

Mr. Mark Kuryvial: Upbeet would be the primary one, and we're hoping obviously for registration. That's an issue, but generally, in our area anyway, we have particularly a good weed control program.

But if we go beyond that, I think the transgenic varieties are a concern, because the States will be ahead of us on the transgenic varieties. That's a competitive concern. That one has to be addressed also.

The Chairman: We have to move on.

Mr. Proctor.

Mr. Dick Proctor (Palliser, NDP): Thank you very much, Mr. Chairman.

I would say, in listening to the presentations this morning, the focus is clearly that you're feeling perhaps that you want—I'll address the question to Ms. Marsden—more access to U.S. market. What about other countries? Are there some possibilities there for increased access, and if so, which ones are they?

Ms. Sandra Marsden: As I mentioned, our vision for the future is to have more regional trading environments in sugar. That doesn't work now because the world market is as distorted as it is. So certainly in the North American context, United States and Mexico, the reality is that countries like Mexico and Brazil are very large sugar producers who may have an interest in selling sugar into Canada. We have to be competitive enough that we can send a signal back to their markets that would discourage them from doing that, but today we can't.

• 0955

There are other markets. The most logical market is the U.S. What we would see in the future in a freer trade environment, given the bulky nature of the product, is a more north-south flow of sugar in the east of Canada, central Canada and western Canada to the U.S., as distinct from now, where we have huge transport costs across a very large market.

I think there will be other opportunities in regional markets and we will be at the table in the FTAA discussions. We've currently put a paper in under the European Free Trade Association discussions, so I think in a value-added sugar-containing product sector there is perhaps more opportunity. Again, so many of those countries still maintain protective policies that the opportunity isn't there yet.

Mr. Dick Proctor: You talked about the reduction in the number of plants. I think you said it's gone from twenty to five. Have most of those losses been since the WTO?

Ms. Sandra Marsden: We've gone from ten plants in the late 1970s to five today, but most of that has been since the early 1980s, when the U.S. introduced its restrictive country-specific quotas and all of the other policies that helped stimulate domestic production and exports and restrict imports. So it was mostly tied to the U.S. practices at that time.

Mr. Dick Proctor: I'm sure from your point of view this chart on Canadian access to U.S. quotas is very disturbing. If it were a public opinion poll, you'd say the trend line was down and you're almost at the margin of error in terms of what sugar you're exporting. Do you foresee such a bleak future that Canada one day could be totally out of this industry, or do you think there will always be some kind of a sugar industry in this country?

Ms. Sandra Marsden: As I mentioned, we produce 1.2 million tonnes on an annual basis today and our production essentially grows modestly with Canadian population growth.

We have had better access to export markets in the past. Unfortunately, our production has remained rather flat because we've lost the export markets coincidental with the modest increase in our domestic market.

We're here for the future. We have an important domestic market. The extent to which we can reinvest more in the future and grow our industry will depend on achieving market access gains. We've probably restructured just about to the bare bones, and if we want to sustain those reinvestments we're currently making, we have to see meaningful gains. We can't maintain a one-way system where our borders are open and we can't respond.

Mr. Dick Proctor: Thank you.

The Chairman: Thank you, Mr. Proctor.

Mr. Borotsik, five minutes.

Mr. Rick Borotsik (Brandon—Souris, PC): Thank you, Mr. Chairman.

I have to admit I've learned a lot about the sugar industry today, and as that great American politician once said, I feel your pain. I can well understand the reduction of your export markets.

I have a couple of questions with respect to the WTO and the trade. You mentioned earlier in your dissertation that other agrifood sectors have fared much better and I agree with you. Trade into the United States particularly has expanded quite dramatically in agrifoods.

Would you suggest that during the WTO negotiations sugar was used as a trading pawn? Was it used as a throwaway in those negotiations in order to achieve accessibility to other agrifood sectors?

Ms. Sandra Marsden: I won't comment on how it was used because I really don't know. However, it was a throwaway, in my opinion. We lost, clearly.

Mr. Larry McCormick: What year was that? What government was involved?

Mr. Rick Borotsik: I don't think it's political right now. I would like to see, Mr. McCormick, how we can improve upon that situation. I'm sure everybody on the other benches would also like to see that.

Do you consider it was a throwaway at that time, and you were the ones who were affected by other areas that were improved? There were substantial areas that were improved

Ms. Sandra Marsden: Yes, we were clearly affected by other decisions at the table.

Mr. Rick Borotsik: By the way, I appreciate one of the comments you made, that you weren't at the table. You didn't have options at that time.

Would the sugar industry like to have a seat on the Sectoral Advisory Groups for International Trade organization? Have you had any contact with the minister's office, for example, to see if the sugar industry could sit on that organization, and would you sit on it if you were given the opportunity?

Ms. Sandra Marsden: My understanding is that I will have the opportunity. We have advocated for that for a number of years.

Mr. Rick Borotsik: My understanding is you will have. Did that come from the minister's office?

Ms. Sandra Marsden: I have been invited to sit on the sectoral advisory group and that's very important. The last time around we were not effectively consulted. Yes, we lost and were a throwaway, however you want to characterize it, but whether we could have prevented that I don't know.

• 1000

Mr. Rick Borotsik: But now at least you have the option.

Ms. Sandra Marsden: At least now we have the option. With better education of our officials and understanding of what was going on, we might have prevented the severity of what happened.

Mr. Rick Borotsik: Obviously I have some deeper concerns with respect to the sugar beet side of it, coming from western Canada, than with the cane side of it, quite frankly. Needless to say it's a diversification of our own agricultural industry out there.

You mentioned inequities in support with respect to the American side as opposed to the Canadian side. I appreciate there are no support levels with respect to any agricultural sector—and I can talk about cereal grains and oil seeds at great length—however, what types of supports are there in the United States currently that we are competing with on an unlevel playing field? What levels of support are there in the United States? How are those levels of support put into place?

Ms. Sandra Marsden: The U.S. system works through a loan program and there are minimum support price levels. Right now—and this chart shows it quite clearly—Canada's down here at the bottom. This is a retail price comparison that's conducted every couple of years by an international commodity research organization. Right now the U.S. support price is in the order of 22¢ U.S. a pound. That's the raw sugar equivalent.

Mr. Rick Borotsik: How do they do that? The reason I ask is we're going to have some very serious debates around this table in the not-too-distant future, looking at support levels for other commodities. I want to know how the Americans currently do the support levels in sugar.

You were mentioning loans.

Ms. Sandra Marsden: They have a loan program that effectively maintains a minimum price level. You would have to forfeit the sugar if market prices were below the loan level, so it doesn't happen.

Mr. Rick Borotsik: Are there any other support systems in place in the U.S. and other countries for sugar that you can share with us?

Ms. Sandra Marsden: The European Union has a very complicated system of market prices and threshold prices. There's a whole array of them and we'd be happy to share all of the detailed information on them. They also maintain import controls that protect the market from depressing the prices. That's really critical in both the U.S. and European cases.

Mr. Rick Borotsik: Yes, we don't want to get into that. I want to talk about support levels.

Ms. Sandra Marsden: Okay.

Mr. Rick Borotsik: Thank you, Mr. Chairman.

The Chairman: Just before we go to Mr. McCormick, I have one short question.

Some of your adversaries in this fight are those who support or push subsidies in the United Sates. Would you also include in your adversaries the representatives of the confectionery industry in this country? Are they fairly happy with the status quo?

Ms. Sandra Marsden: I would think the confectionery and other food processors would support the agenda of expanding exports. We're all on the same song sheet there.

The Chairman: But do they not benefit from the spillover of subsidized products into Canada?

Ms. Sandra Marsden: There's a program in the United States that enables cane refiners and their customers—confectionery manufacturers or other users of refined sugar—to bypass the U.S. price system as long as they get sugar out. That hurts us in Canada because it's the same dumped and subsidized sugar we would face directly, but it's in food products. Some confectionery manufacturers that have operations in both Canada and the United States benefit from that because they've been hurt through the U.S. system in their own market.

At the same time, there are Canadian-based confectionery manufacturers that don't like it because they feel they're competing unfairly with those imports into Canada. So there are two sides to that issue. In the long run, if there is freer trade and price support levels are more equivalent in Canada and the U.S., they won't need that kind of program.

The Chairman: Mr. McCormick, five minutes.

Mr. Larry McCormick: Thank you very much, Mr. Chair, and thank you for being here.

I was glad to hear my colleague Ms. Ur speak about the growers and producers in her area, because I know when I've been in Michigan I've seen the wagons running back and forth for the beets. I'm glad to hear that our producers are able to produce more acreage here in Ontario for that outlet.

I have a simple question about how much of an increase there could be in our domestic market. Yet as I ask that, I see a producer here from Alberta. Transportation is such a factor in everything we do here in Canada. I certainly had my eyes opened recently when I found out that cement, a raw product not completely different from sugar, was being dumped on the market in California from Taiwan and other countries. It's just overwhelming that you can bring cement across the ocean and sell it more cheaply. You can produce it even here in the Great Lakes with our limestone.

• 1005

Firstly, I'm just wondering about how much more domestic market we might have that we could focus on.

Ms. Sandra Marsden: Your example is an appropriate one. In fact, we in the industry had to invoke Canada's anti-dumping and countervail legislation in 1995 for that very reason. So today we have duty protection against dumped and subsidized imports from the United States and the European Union. We have captured some of the domestic market we lost prior to that.

In the long run we don't believe we should have to rely on these kinds of tools, because they're only a short-term remedy for a very inequitable trade situation.

Mr. Larry McCormick: And Mark, we do need strong partnerships between producers and processors, and you're both here today.

We've heard some people say that in the next round of negotiations the agrifood industry should have a stronger voice, more so than in the past, versus the producers. I'm concerned here for the producers and I'm wondering what your view would be. There's a conflict here by people bringing this forward, that we should hear more from the processors, and I don't want to see our producers lose their strong voice at the table.

Do you have any thoughts on that?

Mr. Mark Kuryvial: I don't want to lose our voice either at the table, but it's important that we speak together with the processors, because we are linked. I can't operate without her processing plants; and vice versa, on the sugar beet sector side she can't operate without me. So it's important that we work together.

Mr. Larry McCormick: Thank you.

This question is not directed to my honourable friend from Brandon. During the last round of multilateral trade negotiations I don't know whether your commodity at any time had an opportunity to be briefed and kept abreast of what was happening. Were you involved in any way? We do want to move on, and it's the next few years that are most important.

Ms. Sandra Marsden: We did have discussions with officials; we put in positions. I would call it a little bit superficial in that we were not aware of the complexities in the negotiating process, and certainly we had no idea of how we would fare in the end.

Mr. Larry McCormick: Thank you very much, Mr. Chair.

The Chairman: Thank you, Mr. McCormick. We can always count on you to raise a concrete issue.

Mr. Hoeppner, you have five minutes.

Mr. Jake E. Hoeppner (Portage—Lisgar, Ref.): Thank you, Mr. Chairman.

I just want to go back to this chart. When I look at this chart, people were talking about playing strip poker. When you've dealt with the Conservative or Liberal governments you have been missing much more than a shirt; you were fairly well bare. To see this kind of a chart, to me, is disastrous.

My question is to Ken. I know he hasn't said anything, yet I'm sure he has a lot to say. What is different in Manitoba compared to Ontario? Why can you not in Manitoba deliver sugar beets to a U.S. plant with a good transportation system?

Mr. Ken Yuill (First Vice-President, Canadian Sugar Beet Producers' Association Inc.): Mr. Hoeppner, you likely know a little history of our struggle to stay in business. We had spent a fair amount of time in discussions with American processors. The primary reason why we are not delivering right now to the U.S. is the fact that their plants are running at full capacity. As they generate more money for capital for their plant improvements, there's enough acres of their own to keep those plants busy.

Mr. Jake Hoeppner: I appreciate that comment. Is there a dialogue between the American sugar beet growers and the Manitoba growers on an expansion in Manitoba or the U.S.? It seems to me that the dialogue between farmers on both sides is a lot more productive than that with government officials sometimes.

I have another question I'd like to ask you. Going back to the loan rate that the U.S. has for its producers, can our sugar beet growers compete with that type of a program? Is the loan program high enough for a viable industry?

• 1010

Mr. Ken Yuill: I'm glad you asked the question, because Mr. Borotsik asked a similar question. In the struggle to maintain the industry in Manitoba we have done a lot of investigating. As you well know, the sugar beet industry in the Red River Valley is very viable; it's a huge part of their income in that area. Those plants are primarily owned by the producers through a cooperative.

In simple terms, I'm not sure that everybody will agree, but if you investigate it very thoroughly, the American sugar policy is nothing but a huge marketing board. They maintain their domestic prices by limiting the incoming sugar from wherever and exporting out to keep their local supply not overabundant.

Mr. Jake Hoeppner: So we need some trade-offs, which we don't have, right?

Mr. Ken Yuill: I'm not sure. I've talked to American politicians and to the American people in the industry and I said, “Why us?” Simply put, they said it was easy to do. I'm not sure what that means.

Mr. Jake Hoeppner: All the while you were negotiating...the rest was all missing, is that right?

Mr. Ken Yuill: We weren't part of the process, quite frankly.

Mr. Jake Hoeppner: I find that astounding, with the amount of publicity we've had in Manitoba over the sugar industry. This has gone on for years, as I remember it.

Mr. Ken Yuill: I would like to reiterate a comment made by my cohort here. I think some of these studies were based on very good facts. And I'll speak for Manitoba, and it's the same in Alberta. We were, if not the lowest, then the second-lowest cost producers in the world. That can be backed up by statistics.

Mr. Jake Hoeppner: That's impressive. If that is the case, then why don't we have a co-op establishing a processing plant and reaping all the benefits?

Mr. Ken Yuill: You have to have a market.

Mr. Jake Hoeppner: Back to that issue...the trade-off. To me this is astounding because I know the productivity of the Manitoba beet industry, the soil it has, the access to other things. Perhaps we should trade off the wheat board and give...the big problem here is we need the value-added industry in Manitoba. Why are we not getting it? Do you know whose product the durum growers in North Dakota are using?

Mr. Ken Yuill: Mr. Chairman, I didn't say trade off the Canadian Wheat Board.

The Chairman: No, I'm sure you won't take up Hoeppner's call.

We're out of time, Mr. Hoeppner. We'll go to Mr. Bonwick.

Mr. Paul Bonwick (Simcoe—Grey, Lib.): Thank you, Mr. Chair.

I have some pointed questions. First of all, I should congratulate Mark on raising the level of efficiency on his farm, and his colleagues for rising to that global challenge. From what I've heard from Ms. Marsden, the sugar industry sounds as though it has rationalized its way of doing business over the last decade, as many industries have.

I'm not a farmer, so I'm going to ask for some help on clarifying some of the issues that are in my mind.

I've read through some of the information you've provided. Could you give me some shorter answers? I only have five minutes. Do we consume more sugar than we produce in Canada—not refined, but produced at the growing level?

Ms. Sandra Marsden: Yes, substantially more.

Mr. Paul Bonwick: Do we export more sugar than we produce?

Ms. Sandra Marsden: No. We're a net importer.

Mr. Paul Bonwick: I understand that, but from the production side, from the farmer's side, if we produce, for ease of numbers, 1,000 pounds of beets, do we export less than 1,000 pounds of beets, or do we export more than 1,000 pounds of beets even though we consume more than we produce?

Mr. Mark Kuryvial: We'll produce 120,000 tonnes of sugar this year.

• 1015

Ms. Sandra Marsden: Our access to the U.S. market is 10,000 tonnes. There is sugar in sugar-containing products that are exported, which in terms of the actual volume we wouldn't get a handle on, but certainly it's a relatively small percentage of our production.

Am I answering your question?

Mr. Paul Bonwick: No. What I'm trying to find out is, if in fact we have a much greater demand than we have production and yet we're still concerned about export markets, what in fact are the refineries doing? Are they using the export markets to negotiate with the Canadian producers to try to devalue the purchase price?

Ms. Sandra Marsden: In a way we have two markets in Canada, one of which is a regional prairie market. The reason we have cane refineries and we import raw sugars is because of their location in deep sea ports. We can't grow sugar cane. We could grow sugar beets in other areas, but it's the most cost-effective, and that's the way the industry has evolved, to the extent that we have a very cost-competitive industry in the prairies, the beet sugar industry, and we have cane refining in the major ports. We're obviously trying to rationalize our capacity to meet domestic demand. There's no problem meeting domestic demand. We have more capacity to export. We are reinvesting for that future.

I still don't know if I'm answering the question.

Mr. Paul Bonwick: What I'm trying to resolve in my own mind is the fact that we have a lot of demand within our Canadian borders, much more so than we produce, yet the producers, and more so the refiners, are talking about impediments to export markets. I'm wondering why we wouldn't be concentrating more on maintaining some of our internal market as opposed to being concern about export markets.

Ms. Sandra Marsden: We have no problem meeting the demand for the domestic market.

Mr. Paul Bonwick: Perhaps I'm not wording my question clearly enough. You have told me that we consume far more than we produce in Canada.

Ms. Sandra Marsden: In beet production, yes.

Mr. Paul Bonwick: Okay.

Ms. Sandra Marsden: But are you suggesting that we transplant all of our—

Mr. Paul Bonwick: In sugar.

Ms. Sandra Marsden: Do you mean refined sugar?

Mr. Paul Bonwick: From the sugar beet production, we consume far more sugar than what we're actually producing, if I understood you correctly. Everybody is nodding yes.

Mr. Mark Kuryvial: I think you're talking specifically about refined sugar from beets.

Mr. Paul Bonwick: Yes.

Mr. Mark Kuryvial: Out of the Canadian market, we only supply approximately 10%.

Mr. Paul Bonwick: Could you elaborate as to why that is?

Mr. Mark Kuryvial: Obviously, we're in competition with the cane refiners. They are set up at ports. Part of our competitive advantage has been in the prairies. There is the transportation issue. If they're going to bring in cane sugar and refine it and then ship it to the prairie market, there is a transportation cost. We're already set up in the prairies.

Mr. Paul Bonwick: Are you suggesting, then, that the federal government should have in place some sort of support mechanism to directly support sugar beet producers?

Mr. Mark Kuryvial: No. What I'd like to see, ultimately, is free trade in sugar. What I'm suggesting is if that cannot be achieved through some type of comprehensive negotiation, then the government will be forced to look at supporting Canadian agriculture through the green box or some other sort of program that meets our requirements.

The Chairman: Maybe you two will have to get together after the meeting to see if you can come to a meeting of minds. Sorry, Paul, but we have to go on to Rose-Marie Ur.

Mrs. Rose-Marie Ur: I'll just pursue that matter. If we only have 10% of the market and there's a 90% opportunity, why would we not be looking after our own Canadian farmers and working on supplying that 90% instead of shipping in cane from another country? Is it the cost factor to refine the cane compared to the sugar beets? Is that the long and short of it? Ken said that we have the second-lowest cost-effective processing in Canada.

• 1020

Mr. Ken Yuill: It's the second lowest in the world. I didn't say processing, I said producers.

Mrs. Rose-Marie Ur: Oh, producers, I apologize.

With a 90% market there, why don't we go for it? Why are we importing all this cane? Why don't we give the opportunity to our Canadian farmers? What's the problem?

Mr. Mark Kuryvial: It's a question again of competitiveness. It gets down to that. There's no sugar program in Canada, and if it's cost-effective to bring in cane sugar, and that's where most of our... As she said before, there has been rationalization in the industry, and most of our production capability is on the raw cane side.

There are a lot of reasons there's not any more than 10% production. We had a plant in Manitoba, and it was a situation that was similar to what was in Alberta before. It was a very small plant, and while the growers were efficient producers, they weren't as efficient on the processing side, so that made that sugar more costly than bringing in the raw product.

Mrs. Rose-Marie Ur: So cane sugar is cheaper than beet sugar.

Mr. Mark Kuryvial: It is in certain instances.

Mrs. Rose-Marie Ur: What do you mean by that?

Mr. Mark Kuryvial: It gets back to transportation costs again. They are situated on the coast where it happens the large populations are, and so they bring in the raw product and refine it. They're right there. I'm out on the prairies. If I produce my product, then I have to ship it all the way there, so there is a transportation factor.

Mrs. Rose-Marie Ur: Go ahead, Ms. Marsden.

Mr. Sandra Marsden: Let me just say that you have to try to put the Canadian industry, beet and cane, in context. We've always been driven by the economics. Now, there have been more sugar beets grown in Ontario and Quebec in the past, so it has certainly been tried. But we're driven by economics, and we're linked to the world price, which is essentially a free market price. So as Mark said, the economics have driven the establishment of cane refineries at ports.

The prairie industry has survived in that context because of its geographical location. Over time it has become much more efficient and productive. If there were a greatly expanded export, who's to say that beet industry in Ontario couldn't flourish, too? But clearly the fixed market size today in Canada won't enable it to do that, given the economics driving cane refining.

As I mentioned, it's a very capital-intensive process, so it would be very expensive to attract investment in sugar beet processing and to set that up to compete against refineries that have already amortized their costs over 100 years.

Mrs. Rose-Marie Ur: But does it not cost anything to import sugar cane? Where you have the sugar beet grown at home, is there no cost? Surely it costs something to import sugar cane to these ports.

Ms. Sandra Marsden: Certainly, and you can do the economics. The picture we're trying to paint is that the prairie sugar beet industry is economical, but it may not be if it were situated in Montreal or Toronto. We import vast quantities of raw sugar, up to 60,000 tonnes in the hold of a ship, so the transportation costs are reduced across such a huge volume.

Mrs. Rose-Marie Ur: Should we be more proactive, then, as to where we...? Not to deter from Alberta or Manitoba, but should we be more business minded when we put up these processing plants and make sure that we have closer access to transportation routes, which would address the cost factor with sugar cane versus sugar beets, then, instead of setting it up in the west?

The Chairman: That was your last question in this round.

Go ahead, Ms. Marsden.

Ms. Sandra Marsden: I think if we could go back 150 years, we might do it differently. But the fact of the matter is those plants are established and there have been hundreds of millions of dollars worth of investment. So what's happening is they're closing some and reinvesting in others for that very reason. Obviously, the Taber plant was determined to have the most opportunity to build on existing investment and to enhance its efficiency for the future.

• 1025

The Chairman: Thank you, Mrs. Ur.

Especially for the benefit of Mr. Hilstrom, I'd like to say the bells for the vote haven't begun. It's a 30-minute bell, so I assume we're going to have all of our allotted time. I have only two listed questioners, so if each takes his—

Mr. Howard Hilstrom: I have a question.

The Chairman: You're asking for time too? So that's up to 15 minutes. Maybe we can get to yours in 15 minutes, which would be about 20 minutes to the hour, Mr. Hilstrom.

We'll go to Mr. McGuire, and then Mr. Paradis.

Mr. Joe McGuire (Egmont, Lib.): Thank you, Mr. Chairman.

I'd just like to follow up on Mrs. Ur's questions and your answers to those questions.

Since the sugar cane industries developed 150 years ago or whatever, they've become more efficient, the plants are built, and so on. I notice in your presentation you said the only deep-water port where there was a factory is closing—Saint John, New Brunswick—and it's been there for well over 100 years. The ports of Montreal and Toronto, which are not saltwater ports at all, are still operating. What was the difference there? Why was that choice made to close Saint John, Brunswick?

Ms. Sandra Marsden: I won't speak on behalf of one member company. My understanding is Lantic Sugar had to take a look at the existing capacity in their company and had to make a choice. I'm sure to a large extent that was based on economics.

Mr. Joe McGuire: But if you're importing cane from the Caribbean, Saint John would be much closer than Montreal or Toronto.

Ms. Sandra Marsden: Certainly, but the major market is in Ontario and Quebec, so they would have to look at that transportation cost to ship the refined sugar to the major markets in Ontario and Quebec. So that, I'm sure, would be a significant factor. The lack of U.S. market access is a very important factor, because without any foreseeable gain in the near future... There's a fixed market those two plants could supply.

The Chairman: Okay. Thanks, Joe.

Mr. Paradis, followed by Mr. Casson, then Mr. Calder, and maybe that will be it.

Mr. Paradis, go ahead please.

[Translation]

Mr. Denis Paradis (Brome—Missisquoi, Lib.): I have a brief question.

We've heard that 10 per cent of our refined sugar is produced from sugar beets, whereas 90 per cent is produced from imported raw sugar cane. My question is very simple: do our refineries generally have direct ties with sugar cane growing operations in other countries? Do the refineries own these sugar cane fields, or do they lease them on a long-term basis, which makes it advantageous for them to import sugar cane into Canada?

[English]

Ms. Sandra Marsden: The industry would contract with the supplying countries over a certain period of time. For example, Redpath Sugars is owned by Tate & Lyle, which is a very large international company, and it's possible they might have some cane milling operations in countries where we supply sugar. But largely our companies here in Canada negotiate for the best price under large contracts from various countries. So it's driven more by the reliability of supply, the quality, and the price that can be negotiated.

Mr. Denis Paradis: So there is no vertical integration in that deal.

Ms. Sandra Marsden: Not really in Canada, but certainly in other countries. What we're seeing more of, for example in Mexico, is that as a market, sugar milling operations are adding a white end so they can produce right through to refined sugar for their own market. That makes economic sense. For us it makes more economic sense to import the raw product at a much lower cost than to import refined, because we can import raw sugar in the hold of a ship, versus having the very high cost of bagging it and containerizing it to preserve its quality.

• 1030

[Translation]

Mr. Denis Paradis: However, you can't say if most refineries have negotiated supply contracts or leased sugar cane fields or if they own some of these sugar cane fields outright? I'm trying to find out where sugar beets fit in. If 90 per cent of Canada's refined sugar is produced from imported raw sugar cane, maybe there's a reason for this. Undoubtedly, there are economic considerations. Could it be that our refineries already own these sugar cane fields or have entered into long-term leases in other countries?

[English]

Ms. Sandra Marsden: No. It's largely because of the actual cost of importing it raw.

Mr. Denis Paradis: Thank you.

The Chairman: Ms. Marsden, would it be safe to assume that if the environment were much more conducive to liberalized trade for sugar beet production, you might not actually take on the market in, say, Toronto or Montreal, but in the United States instead? In other words, you might not be able, from a prairie perspective, to compete with the cane refiners or producers who serve Toronto or Montreal, but you might be able to serve, let's say, the Minneapolis area. Would that make sense to you?

Ms. Sandra Marsden: Clearly, I think that would make sense geographically. We have a cane refinery at the Vancouver port, which has a huge market to its south. The prairie market may be looking more north-south at the eastern United States market.

The Chairman: So the fact that you meet only 10% of the market in Canada right now is a bit illusory in that your salvation doesn't lie in expanding that to say 20%, 30%, or 40%, but in simply having more liberalized trade and finding a market wherever it is that's more favourable to you, perhaps across the line.

Ms. Sandra Marsden: Precisely.

The Chairman: Have you got it all figured out now, Paul?

Mr. Casson.

Mr. Rick Casson: I understand a little bit of the situation that Sandra finds herself in. She's here representing the Canadian Sugar Institute, while Mark is representing the sugar beet producers, so there are two stories here.

Mark, raising sugar beets takes a certain amount of heat and water and a certain type of soil. As producers in Canada, how much could you reasonably expand on the land base that we have now? Could you double or triple it? This is just for production; we'll worry about refining later. What could it go to?

Mr. Mark Kuryvial: Well, I really can't speak for conditions in other provinces to really know what they could do. I know that in Alberta we've looked at what our optimal or possible acreage could be. We think that could be in the range of 80,000 to 100,000 acres.

Mr. Rick Casson: What are you presently at, 40,000 acres?

Mr. Mark Kuryvial: Yes, and we'll be at 50,000 acres next year.

Mr. Rick Casson: How long would it take for the producers to double their production?

Mr. Mark Kuryvial: I don't think it would take very long. As I said, we've allocated the acreage for next year to go to 50,000 acres, and we still have a large waiting list of growers wanting to produce sugar beets. I don't think it would be very hard. It wouldn't take more than a matter of a couple of years to get to that if it was a possibility.

Mr. Rick Casson: I guess the question's been asked as to whether it's 10% of the domestic production or 20% or whatever it is. It's a fact that whatever we grow here, we have to find a market for it and it has to be cost-effective. Do you want a Canada sugar policy stipulating that 20%, 30%, or 40%, whatever it is, of domestic production must be produced from sugar beets? Is that what you want? Is that the answer?

Mr. Rick Borotsik: I'd like to ask that question of Ms. Marsden also.

Mr. Mark Kuryvial: I think if you look at our past record, obviously that's what we were looking for. It was something in that area.

But I think we've also gone beyond that now. I really think we're looking more at the area of free trade. We voluntarily left the NTSP, which was a support program for us. We've kind of gone away from where we wanted to be able to get our returns solely from the marketplace. I think that's the way we'd like to go. If we can compete with the raw cane side and have 40% to 50% of the market, which I think isn't unrealistic, then that's fine. I just don't want to be the one to say give me the support program, that you have to give me 30% of the market.

• 1035

The Chairman: Thank you. That was the final question.

Our questions will come from Mr. Calder.

Mr. Murray Calder: Thank you, Mr. Chairman.

I want to go back to this business of why there's such a difference between sugar beets and cane, why cane has 90% of the market. I've looked through this. You have six plants in six provinces, so there's pretty good distribution of processing here. And yet when you process the cane, are there any by-products that come from the cane after it's been processed into sugar?

Ms. Sandra Marsden: There's molasses, but we import raw cane sugar so the other by-product would be at the location of the mill in the other country. But certainly molasses would be a by-product.

Mr. Murray Calder: So you've basically had primary processing done in a foreign country and you've imported in a raw product that you're basically further processing into cube sugar or granular, whatever. Right?

Ms. Sandra Marsden: Granulated sugar, specialty products and liquid sugar.

Mr. Murray Calder: And when we process sugar beets in here, you're getting a by-product out of that. You're obviously getting cattle feed and you're getting molasses out of it too. So you have two by-products coming out of it.

So the raw primary product coming from cane must be incredibly cheaper than what the sugar beets are themselves, considering the fact that you have two by-products coming out of this also. Would I be right in saying that?

Ms. Sandra Marsden: I'm not sure you can compare raw cane sugar with sugar beets. You have to look at the whole economics of where the plants are located, what the input cost is, what it costs to get it to Canada and the cost to refine it. If you've seen a sugar cane refining plant, it's a very large operation; it's a very substantial process. What the cost would be for a Canadian refinery to ship the product to the prairie market...

The industry has evolved today because of economics.

Mr. Murray Calder: Yes.

Ms. Sandra Marsden: I hate to repeat myself, but clearly Rogers Sugar has determined that the beet sugar industry in Alberta is competitive because there's nothing stopping cane refiners in the east from shipping to the west. So it's economics that's making it work. They're not supported by subsidies or any other artificial means, so they have to operate under the economics of their marketplace.

Mr. Murray Calder: And this is what I'm confused about right now. I could see bringing in a raw cane product and having it processed in B.C. I can see it being processed in Alberta. But I also have some good background on the WGTA when we worked with that issue, and I would be curious then about why the plant of Rogers Sugar that's situated in Manitoba, for instance, wouldn't be more efficient using sugar beets than it would be using a cane product. Or is that the case?

Ms. Sandra Marsden: It's not using a cane product.

Mr. Murray Calder: It isn't. So it's using totally sugar beets out of that plant, then.

Ms. Sandra Marsden: The plant's closed.

Mr. Murray Calder: I'm looking at what's on here.

Ms. Sandra Marsden: In that brochure there's a little addendum at the very back of the brochure that explains the Manitoba plant was closed after the production of that brochure in 1997.

Mr. Murray Calder: Okay.

Mr. Rick Borotsik: It was using sugar beets.

Ms. Sandra Marsden: That's right.

Mr. Murray Calder: So there is a transportation issue. That's what I wanted to get at. That's fine.

The Chairman: Thank you very much, especially to the witnesses. We appreciate what you've told us and I can assure you that your views from this forum and from elsewhere will get back to the appropriate people within the government. I hope that as we come closer to the WTO negotiations, you will have on several occasions the opportunity to express yourselves and represent adequately your industry. Thank you again.

Members, we'll break for half a minute to allow our witnesses to leave and then we have to have one housekeeping task, and that is to adopt the report of the steering committee. So we'll break for a few seconds.

• 1039

• 1041

The Chairman: Members, we have only 17 or 18 minutes to vacate this room, so I think we'd better get back to work.

Mr. Murray Calder: Mr. Chairman, tell them to quit campaigning.

The Chairman: Members, let's hope we can get through this very quickly. First of all, may I simply have a motion from someone for the adoption of the report of the steering committee, and then once we get the motion moved, we can deal with it.

Mr. McCormick moves the adoption of the report of the subcommittee on agenda and procedure.

Mr. Rick Borotsik: Mr. Chairman, if I can at this point in time rise on a point of order, I have to apologize for not being here for the steering committee meeting, but I'm terribly disappointed in seeing what transpired in the steering committee and seeing that there has been a major change in a meeting that was struck for Wednesday. The steering committee was quite specific that we deal with items of support services for agriculture, to the point where it was agreed to have some meetings on Wednesdays.

Mr. Howard Hilstrom: On a point of order, Mr. Chairman—sorry, Rick—how can we be discussing the agenda when we haven't even passed the motion?

Mr. Rick Borotsik: Exactly. There was a motion sitting there. There was an issue here that we were dealing with.

As I understand it, the Minister of Agriculture has made some changes to the agenda already, and I find that this is somewhat disconcerting, obviously, to this committee. We had members of the Liberal Party—

Mr. Larry McCormick:

[Editor's Note: Inaudible]

Mr. Rick Borotsik: That's not what I hear.

A voice: You weren't there.

Mr. Rick Borotsik: No, but I do have other sources, thank you.

Mr. Murray Calder: You're psychic.

Mr. Rick Borotsik: I am. Trust me, on this one I am more than psychic; I'm very political.

The Chairman: Mr. Borotsik, can you be a little bit more specific? What is the intent of your intervention?

Mr. Rick Borotsik: Mr. Chairman, there was a point of order tabled in the last meeting by a colleague of mine, Mr. Keddy, and that point of order was not dealt with. Quite frankly, I would like to see the points of order dealt with at the time they are raised at this committee, and then we can talk about the steering committee and we can talk about the process with respect to the support sections.

The Chairman: We have two separate bodies. We have a steering committee, and this is the full committee. If you have a problem at the steering committee, you're going to have to deal with it at that time. Right now we're sitting as a full committee.

Mr. Rick Borotsik: We're approving the steering committee's report, Mr. Chairman.

The Chairman: That's right. Do you have any particular problem with the way it's written?

Mr. Rick Borotsik: Not as to the steering report, Mr. Chairman, but I do have some problems with what transpired out of that steering committee.

• 1045

The Chairman: Can we deal with that later? Can we deal with this motion?

Could I just suggest that the last paragraph of the report could be slightly better written. Actually, I would suggest taking out four words. I'm not changing the meaning of it, it's simply redundant.

The first line says “study and report to the Government”, and if you'll notice at the end in the second sentence, it says “The Committee should review and report to the Minister”. One could even conclude from the way it is written that this is really calling for two reports to two different entities—one to the minister, one to the government. I don't think that's the intent of the motion at all. I would simply suggest erasing the words “and report to the Government on” in the first sentence, and then it simply would read:

That, this Committee study the upcoming crisis in farm incomes due to the worldwide collapse of commodity prices. The Committee should review and report to the Government, the extent of the crisis and the direction that it is going.

Could I have agreement on that? It is not my intent to change the meaning of it, but it's simply clearer. There's no need to have that kind of repetition.

Some hon. members: Agreed.

The Chairman: Okay. So it now reads:

That, this Committee study the upcoming crisis in farm incomes due to the worldwide collapse of commodity price. The Committee should review and report to the Government, the extent of the crisis

Mr. Rick Borotsik: “To the Government?”

The Chairman: “To the Government”, so we don't have “Government” in one place and “Minister” in the other.

Mr. Paul Bonwick: Sorry, Mr. Chair. Doesn't this committee report to the minister, not the government of the whole?

The Chairman: We're reporting to the government. We'll be reporting to the House of Commons, which is to the government. Okay, is that fair?

Mr. Howard Hilstrom: Mr. Chairman, the only comment I have is that this report you're referring to there on the extent of the crisis should also include solutions to the crisis.

The Chairman: I wasn't trying to preclude your amendment, Mr. Hilstrom. I'm just trying to get this straight, and then we can entertain your amendment. Okay?

So everyone is straight on the motion.

We're going to have a vote, because Mr. Hilstrom has a motion. He wants to amend it, right?

Mr. Howard Hilstrom: I would, please, yes.

The Chairman: You want to replace the last line with—

Mr. Howard Hilstrom: Mr. Chairman, my motion would simply read—

Mr. Denis Coderre (Bourassa, Lib.): On a point of order,

[Translation]

Mr. Chairman, it's a matter of principle for me, as always. I'm a French Canadian and proud of it. In order for this committee, or any other committee, to function properly, it must ensure that its proceedings are fully bilingual. The same applies to the government. Since this amendment hasn't been translated, I believe it is out order.

[English]

The Chairman: I've consulted the clerk and the clerk tells me that the rules are that amendments have to be in both languages.

Mr. Howard Hilstrom: Mr. Chairman, we'll have to follow this up, because our request for translation was made on Monday, and it was not delivered as of this date.

Mr. Paul Bonwick: Last Monday or yesterday?

Mr. Howard Hilstrom: Yesterday. They cannot translate one line in a day?

An hon. member: That's possible.

The Chairman: Mr. Borotsik.

Mr. Rick Borotsik: Mr. Chairman, Mr. Coderre knows I support his position in every case with respect to bilingual translation, and I've done it myself. However, in this particular case I wonder if Mr. Coderre could make an exception, because it is a situation that has to be dealt with very quickly.

It is not something that we, again, can put on hold for any length of time, and I'll speak to that at a little later date. With one line of an amendment, I wonder if Mr. Coderre would give us the opportunity of going forward with this. The bigger issue, obviously, is the report to government and looking at social safety nets and support systems. I appreciate his concerns, but I would really—

[Translation]

Mr. Denis Coderre: Mr. Chairman, I'm not prepared to make any concessions on principles. When I look at myself in the mirror, I'm proud of who I am.

• 1050

As far as I'm concerned, the motion on the table is quite in order because it was drafted in both languages. It would allow us to resolve the situation and to examine the anticipated farm income crisis. I won't accept, for whatever reason, an amendment being tabled in one language. Even if it were tabled by my own colleagues—you can check with other committees—I wouldn't back down.

[English]

M. Howard Hilstrom: Mr. Chairman, I'll put it in French. The amendment is:

[Translation]

The committee should also review and report to government potential solutions to the crisis.

[English]

The Chairman: Do we need it in writing?

Mr. Denis Coderre: You should write it out.

The Chairman: I'm just wondering, members, since we're not having a meeting on farm incomes tomorrow—

Mr. Rick Borotsik: That's another issue.

The Chairman: —and we're have a meeting on WTO on Thursday, we could lay this over until Thursday and get it done. That's one compromise.

What do you think, Mrs. Alarie?

[Translation]

Ms. Hélène Alarie: I have no objections to postponing this matter until Thursday. There's no rush. My colleague, Mr. Coderre, beat me to it. Had he not raised this objection, I would have done so. It is important to remember that in the future, we should take precautions to avoid this morning's misunderstanding.

[English]

The Chairman: Since we don't have a meeting tomorrow on this, there is really no material delay in waiting until Thursday to deal with this.

[Translation]

Mr. Denis Paradis: Mr. Chairman, on a point of order, I'd like to know what you think. Point 3 proposes that we report to the government or to the minister. Most House of Commons committees that I have sat on report to the House, not to the government or to a minister.

Is it standard procedure for a House committee to report to the government or to the minister rather than to the House itself?

[English]

The Chairman: According to the clerk, Mr. Paradis, we have a choice between the minister and the House. We can change it again, and just make it to the House if you want.

Mr. Denis Paradis: It's just a question of clarification.

The Chairman: As long as it's made public, that's the most important thing.

Do you want to change it again to the House, so that way then we're all agreed? It would then read:

That, this Committee study the upcoming crisis in farm incomes due to the worldwide collapse of commodity prices. The Committee should review and report to the House, the extent of the crisis and the direction that it is going.

Some hon. members: Agreed.

The Chairman: We have this amendment which we must deal with either now or on Thursday.

Mr. Hilstrom.

Mr. Howard Hilstrom: Mr. Chairman, could I just ask a question? What is the matter with having the solutions put forward as part of the report? I don't quite understand that as recommendations—

The Chairman: Hold it. We haven't got to your motion yet.

Mr. Denis Coderre: Mr. Hilstrom, I just want it to be clear. It has nothing to do with the content of your amendment; I'll deal with that later. From now on, everybody will respect both languages, and that's my main principle. That's the reason why I'm in the House of Commons. It's because as a French Canadian I'm not a second-class citizen.

What I'm saying is that from now on if we have an amendment or a motion from your side or from our side, it should be in both languages, period.

The Chairman: So why don't we put it over until Thursday, then, with Mr. Coderre?

Mr. Rick Borotsik: Mr. Coderre has it now, Mr. Chairman.

[Translation]

Mr. Denis Coderre:

The committee should also review and report to government potential solutions to the crisis.

Ms. Hélène Alarie: And not to the House?

[English]

The Chairman: To the House.

[Translation]

Mr. Denis Coderre:... and report to the House of Commons.

[English]

The Chairman: Okay, we have five minutes to deal with the amendment.

Mr. Hilstrom, go ahead, you can speak to it.

Mr. Howard Hilstrom: My comment is very short. We're going through the exercise of hearing from these people. They're going to give us some suggestions. The reason that we need solutions to be put forward from this committee is that the Bloc or the Conservatives may emphasize some aspect or another as being a good solution on that. It's just the emphasis that gets put on it. There's nothing the matter with having solutions forwarded.

The Chairman: We'll have Mr. Calder, and then Mr. Bonwick.

• 1055

Mr. Murray Calder: Thank you very much, Mr. Chairman. I've already gone through this before.

First, I want to hear from these people to find out what exactly they're experiencing, what the crisis is. They're going to have a pretty good idea of where the crisis is going. That's the first thing. And we have to know what it is before we can come up with solutions.

Obviously, when they appear in front of us they're going to have some ideas for some solutions and everything. But as far as I'm concerned, how can we incorporate solutions into a motion here right now, first of all, when we don't know what the crisis is, how far it's gone, and where it's going?

Secondly, any solution that has ever been agreed upon has always been by a mutual agreement within this committee, and that is something we could put forward to the minister at a later date. But let's find out what the problem is and where the problem is going first.

The Chairman: Mr. Bonwick.

Mr. Paul Bonwick: I agree with Mr. Calder as far as his assessment of identifying the problem and then identifying solutions goes, but I sort of see an opportunity for both things to be accommodated at the same time. We're going to hear what the problem is and we're going to also have recommendations on solutions, and then we'll have, in my opinion, an open committee discussion on whether or not we support those types of solutions.

The Chairman: Mr. McCormick and then Mr. Borotsik.

Mr. Larry McCormick: I may have missed something, but I'm sure we all heard the question by our colleague Mr. Calder in the House yesterday, whether the opposition likes the way it was framed or not. But the fact that the provinces—from all parts of Canada, each and every province—are going to bring forth figures that normally are not brought forth until February will help us to look at this farm crisis. It is a real crisis, and there's nothing more important for us to look at today, and on into 1999 and throughout the year.

But I think if we have this ammunition and these facts and figures, it will help us as we listen to the commodity groups and ask our questions.

The Chairman: Mr. Borotsik.

Mr. Rick Borotsik: Thank you, Mr. Chairman. I cannot for the life of me understand the rationale of the Liberal government in not allowing this amendment. In speaking to the amendment, Mr. Chairman, it's simply a matter of allowing us to put forward some of the solutions after we have in fact heard from the organizations and commodity groups that are going to come forward and tell us what the problem is. And they will have those solutions.

All it is is allowing us to do it; it has nothing in it to suggest we can't go parallel on these two motions. So I would support the amendment and I would certainly beseech the Liberal members of the government to also support the amendment, and let's get on with the real issue.

The real issue is listening to the people and putting forward some very viable solutions to make sure this isn't going to continue into the spring. So let's get on with this.

The Chairman: Let's hear from Mr. Hoeppner, and then I'll call the question on the amendment.

Mr. Jake Hoeppner: Thank you, Mr. Chairman.

I think it's ludicrous if we don't talk about solutions. Mr. Calder knows there's a cash shortage, the prices are too low. We know that. We don't have to call these people in to ask that question. That's what they're going to tell us.

But what we want to know is how we're going to fix it. So we have to ask them what their ideas are on solutions. If we don't, I think it's a waste of time. I think that's why we have to take that into account and present it to the House. Here are certain ideas, which ones do you favour, which way are we going to go?

We have to somehow give the House something they can make a decision on. If we don't, we'll be fighting in the House over what the solutions are.

The Chairman: Madame Alarie, and then I'll call the question.

[Translation]

Ms. Hélène Alarie: I'm prepared support the motion. The witnesses have explained to us the crisis that they are experiencing. They are in a position to suggest potential solutions. What we do with their suggestions, that's another matter.

[English]

The Chairman: Do you want me to read the amendment, or do you understand it?

(Amendment agreed to—See Minutes of Proceedings)

The Chairman: Now we just have to go to the main motion.

Mr. Jake Hoeppner: We want one, Murray.

The Chairman: Can I have a motion to support the report of the steering committee, the whole report?

Mr. Rick Borotsik: I think we have that.

Mr. Larry McCormick: I so move.

(Amendment agreed to)

Mr. Rick Borotsik: Now, Mr. Chairman, if I can take just one moment, I have a point of order.

Could you please inform this committee why the meetings on Wednesday that were going to take place with AgriCorp, the Canadian Pork Council, and the Canadian Federation of Agriculture were cancelled?

• 1100

Mr. Larry McCormick: You heard it in the House yesterday.

Mr. Rick Borotsik: No, I'd like to hear it at this committee. This committee was the one that said we were going to meet with those individuals, we were going to meet on this issue. Could you tell me why they were cancelled, Mr. Chairman?

The Chairman: Mr. Borotsik, you're confused between the steering committee and the full committee.

Mr. Rick Borotsik: Could you tell me why they were cancelled, Mr. Chairman?

The Chairman: Yes. If you want to take a few seconds, yes, I can explain it to you.

Mr. Rick Borotsik: Please.

The Chairman: Okay. We had a steering committee meeting in the middle of last week—on Wednesday or Thursday, I forget what day it was. And we had a tentative schedule—not confirmed, tentative—to have our first meeting on Wednesday—

Mr. Rick Borotsik: Tomorrow.

The Chairman: —anticipating that the motion would be passed. I discovered on Friday that at the meeting that will be held on November 4 involving the industry, the provinces, and the federal government, there will be new data announced on the farm income situation, data that's not normally available at this time of the year. I simply felt, as committee chair, that since that new data is going to be available in just a matter of days, we should hold back our hearings until we get it.

Mr. Rick Borotsik: Mr. Chairman, I would like it on the record, please, that in my estimation it's not up to the committee chair but up to the committee to make those changes.

The Chairman: Mr. Borotsik, the date was not set by the steering committee. The date was not firmed up. We simply looked at a possibility of next Wednesday.

Mr. Rick Borotsik: That was mentioned in the minutes of the meeting, Mr. Chairman. Again, I would like to make it on the record that it is up to this committee to make those changes and not the chair of the committee, Mr. Chairman.

The Chairman: Mr. Borotsik, it's really hard to take advice from you when you didn't even take the responsibility of being at the meeting.

Mr. Rick Borotsik: Mr. Chairman, it would be very nice for you to know I was with the Secretary of State for Agriculture at that time.

I would also like to have better notice given by the chair for these particular meetings.

[Translation]

Mr. Denis Paradis: Mr. Chairman, as it is 11 a.m., I move that the meeting now be adjourned.

[English]

The Chairman: I'll accept that advice. This meeting is adjourned. Thank you.