Mr. Speaker, I thank my colleague from Joliette for supporting this motion, which is asking the government that the first report of the Standing Committee on Agriculture and Agri-Food, presented on Thursday, June 8, 2006, be concurred in.
As usual, the Bloc Québécois is standing up for Quebec's milk producers. We have been working for a long time on the issue of milk protein imports. In committee, my colleague from the Bloc Québécois and myself decided to give priority to this motion regarding milk protein imports from various places, particularly Europe and New Zealand. These imports cause serious market distortions in Quebec and in Canada to the detriment of milk producers.
I want to thank my colleagues from the Liberal Party and the NDP who voted in favour of this motion. As a result, the committee adopted a very specific and very clear motion regarding milk protein.
I will read to the House the committee recommendations on this issue:
|| 1. That, since all the parties support supply management, the government take immediate action to strengthen import control measures, which are crucial to supply management, by limiting the importation of milk protein concentrates and any product specifically designed to circumvent the supply management rules.
|| 2. That the government adopt regulations that would classify all milk protein concentrates, regardless of their protein content, under tariff line 0404, or a tariff quota to be negotiated.
|| 3. That the government invoke Article XXVIII of the GATT where necessary in order to cap imports of milk protein concentrates by immediately launching negotiations with its trade partners and by amending its tariff schedule through a legislative measure adopted by Parliament.
That is what was requested by the Standing Committee on Agriculture and Agri-Food. As I said, the vote was split. Unfortunately, the government in power, the Conservative government, through its members on the committee, refused to protect the interests of dairy producers in Canada and Quebec. I hope that the Conservatives will correct that today, since I expect they will be able to participate in this debate.
I would like to give a brief historical overview of the milk protein concentrate issue. Since 1994 and the Uruguay round, Canada has consistently tried to limit the importation of milk proteins. Negotiations were underway at the WTO. Milk protein concentrates were classified under tariff line 0404. So far, so good.
In 1996, Canada successfully defended its position before the NAFTA panel as well. The problem arose shortly after, when the Canada Border Services Agency classified one milk protein concentrate, known in more technical terms as PROMILK 872B, under line 3502, which is tariff free. That made a huge difference, because the manufacturers of this milk protein could then export it without any tariff being applied. This meant that processors could take advantage of low prices to use more and more of this milk protein.
Obviously, milk protein imports rose in the wake of this decision by the Canada Border Services Agency. I have always said that the decision was a mistake. In 2003, the agency reviewed its classification and admitted that there was a problem and that it had been a mistake to classify that protein under tariff line 3502. PROMILK 872B was reclassified under line 0404. That had been Canada's intention all along, except during the brief time when the decision was made to change the classification.
Of course, the company that manufactures the protein contested the reclassification. The Canadian International Trade Tribunal decided in the manufacturer's favour, and the decision was upheld in January by the Federal Court.
We could lay down our arms and give up the fight, because a court ruled following the decision by the Canadian International Trade Tribunal. Milk protein would then be able to enter Canada and Quebec without problem and without tariff. But this would seriously threaten the whole supply management system. I will come back to this in a moment.
We know that 40% of farm income in Quebec comes from supply-managed industries. That is why it is so important for the Bloc Québécois and all my colleagues to protect the supply management system.
Canada lost a right it had negotiated at the WTO and always defended. What should we do at a time like that? We should stand up and make a decision. If we have the political will to defend our farmers, we will simply classify milk proteins under the proper tariff line. That is how a responsible government should act. This was not done, but it must and can be done. That is the beauty of it, and that is why we are making this motion.
The government, in cooperation with all the members of Parliament, can make a decision today that milk proteins will simply be classified under the tariff line they have always come under, except during the brief time when the Border Services Agency made that mistake, as I said earlier. Other countries do this. The Americans, correctly, do not hesitate to limit milk protein imports. Canada can follow suit. There are solutions. I mentioned them when I listed the recommendations we made in the Standing Committee on Agriculture and Agri-Food.
It is rather unfortunate, but milk and cream are being replaced more and more by milk proteins in cheese, yogurt and ice cream. How can this be remedied? Simple political will could allow this motion to be adopted. Clearly, this would be the first action to take. Besides, this is what Agriculture and Agri-food Canada officials who appeared before the committee have said. The government can take action to limit milk protein imports, if it wants to. Nothing is stopping it. The government has the right and the duty to control milk protein concentrate imports and has several options in terms of how to do so. Those options are indicated in the motion, as I said a few moments ago.
Pursuant to section 13 of the Customs Tariff, the minister can in fact modify the list of tariff provisions to change the tariff item number. Our interpretation is that of the Fédération des producteurs de lait du Québec who say that this could be modified simply via regulation, namely, a government decision that does not even require the support of Parliament. Others say that legislation must be passed. Not everyone agrees on which action to take. However, if that were the case, there would be no problem and I would like to assure the government of the Bloc Québécois' support. If the government were to decide to use that channel to modify this tariff line, all 51 Bloc Québécois members would agree, with no problem.
The government could also have recourse to article XXVIII of the GATT to negotiate a tariff rate quota with its trade partners. Canada would reserve the right to add tariff rate quotas, even in cases of failed negotiations with its partners. Has article XXVIII ever been used? Yes, by several countries. In the agriculture sector, the most recent example that comes to mind is the European Union, in 2002, concerning wheat and barley. At that time, European Union countries simply decided to protect their wheat and barley producers, which they successfully managed to do.
Article XXVIII of the GATT can be used, but there are consequences. Once negotiations with our trading partners have taken place under this article, we accept a 10% increase in imports. Therefore, it is not necessarily the first option we should resort to. We would prefer a government decision through regulation to prohibit or at least limit milk protein imports. Still, if necessary, we should not hesitate to use article XXVIII of the GATT. It is meant to be used for that purpose and it is totally consistent with WTO rules. We are not inventing anything by using this article; we are simply protecting what we have.
Our failure to do anything would obviously have serious consequences. Supply management is threatened. That is what I wanted to talk to you about earlier. There are three pillars to supply management: setting prices, limiting production through quotas and, of course, limiting imports. Therefore, if we weaken one of these pillars—let us take imports for example since that is what we are discussing here—we are compromising the whole supply management system in Quebec and in Canada.
Milk protein imports might replace over 25% of protein contained in milk that is produced here. That is what will happen if we do not act fast, if this government does not have the political will to protect what we have. The more milk protein we import, the more worthless milk powder will be produced, since processors will continue to use milk fat.
This huge quantity of milk powder is impossible to manage. Obviously, all this will cause a collapse in the price structure.
Furthermore, each tonne of milk protein concentrate replaces 2.6 tonnes of milk powder.
Imports cost $235 million in 2005. This is an increase of $60 million over 2004. We are talking about no less than $5 million a month. That is what it cost milk producers in Canada.
In Quebec, they are talking about a loss of revenue of $70 million. We can imagine what that represents in the dairy products sector, a loss of revenue of $70 million.
As I was saying, we estimate that, if the government goes on doing nothing in this file, milk producers will be facing serious economic consequences of some $500 million a year.
Supply management enables producers to make a fair income from the market without subsidies. During negotiations at the WTO, lots of countries have suggested or supposed for a long time that Canada is subsidizing its milk, poultry and egg producers, because of the supply management system in place. That is totally wrong.
Up to now, Canadian governments have always defended the system, but they are hesitating a little more now. All we have to do is look at the questions being put in the House to the Minister of Agriculture and Agri-Food since the beginning of the session, to realize what serious concerns there are. We need only think back to the arrival in Montreal, barely a few days ago, of the Director-General of the WTO, Pascal Lamy. He said that Canada should make concessions on its supply management system so that negotiations could conclude. The whole burden of proof, the whole weight is now on Canada’s shoulders. I think that is a lot to bear, when more than 150 countries belong to the WTO. I think that the other countries also have a lot of concessions to make before being able to ask us to disrupt our supply management system.
Also, in addition to avoiding subsidies, the system benefits consumers. They are provided with a basket of quality products that are among the least expensive in the world. A survey, which I can quote here and which has been done 18 times since 1997, shows that dairy products cost 16% less here on average than in the U.S. This system must absolutely be protected.
Speaking of consumers, one may wonder if they are paying less, given that imports of low-cost milk proteins are coming into the country. Unfortunately, the answer is no; consumers are not even benefiting from this.
I can return to the example of one of the great battles of the Bloc Québécois, on butter oils in ice cream. Imports of butter oils used in making ice cream rose 557% between 1997 and 2002. That cost Quebec milk producers alone more than half a billion dollars. That is not negligible and the government of the time did nothing to prevent these butter oil imports which were coming mainly from the United States, as opposed to milk proteins which came mainly from Europe.
All you need to do is go to the supermarket to buy good ice cream and carefully read the label to find out the ingredients. If the ice cream is made with modified milk ingredients, it is sacrificing the taste of real ice cream, which should be made with cream. There are still a few Quebec companies, such as Laiterie de Coaticook and Laiterie Lamothe et Frères, that make excellent ice cream with cream, but this is unfortunately no longer the case with most of the ice cream we find in our grocery stores.
The irony in all this is that the ice cream made by Laiterie Coaticook or Laiterie Lamothe et Frères is not more expensive than the ice cream made with modified milk ingredients. On the other hand, the other day in the grocery store I saw that a big multinational has decided to play the marketing card and offer an ice cream made with real cream. In addition to real cream, it contains modified milk ingredients, but the cream is there. This was indicated on the ice cream carton, but believe it or not, this ice cream costs a lot more than the other ice creams. That represents added value for this multinational, which uses it for marketing purposes; in reality, we could quite easily make all of our ice cream with good cream. Obviously, our dairy producers and consumers would be the winners if this happened.
Consumers are increasingly conscious of the issues.
On the butter oil issue, we did a lot of awareness raising with dairy producers.
I know that, just about all over Quebec, dairy producers have recently been going to grocery stores handing out leaflets to tell people what they could find in dairy products such as cheese, yogurt and ice cream. People are increasingly aware, and they are reading labels more and more.
The only thing is that, as I was saying earlier, in marketing matters, there is always some arrangement that can be made, some way of getting around the way things are done, particularly the way a product is presented. When that happens, people can sometimes become a little confused about ingredients. But still, they are increasingly aware of what is happening, even on the international level.
I just recently read a news release, dated June 12, about the Canadian dairy, poultry and egg sectors. These are the people who are part of supply management in Canada. The release refers to a survey Léger Marketing was recently asked to do.
This survey shows that:
||—85% of Canadians agree that the federal government should support the supply management approach in the dairy, poultry and egg sectors. —98% feel that it is important to ensure Canadians have a stable supply of foods produced in Canada; 95% of respondents agree that family farms are an important part of the economy for rural communities; and 83% agree that supply management is a better approach than taxpayer-funded subsidies to ensuring an adequate quality of life for agricultural producers.
These numbers are interesting. They show that people are becoming more aware of how our system works.
Again from the news release:
|| The Canadian dairy, poultry and egg industries bring in approximately $7 billion in agricultural revenues, generate $39 billion worth of economic activity and provide jobs for several hundred thousand Canadians throughout the country.
These are very interesting statistics. As I said earlier, this is a very recent news release dated June 12, which is today. That is the consumers' perspective.
The milk protein importation issue has also generated a lot of support for dairy producers in Quebec and Canada. In April 2005, Quebec's National Assembly adopted a motion to support Quebec dairy producers in their struggle for adequate controls over the importation of dairy ingredients. The motion received unanimous consent from the National Assembly. A few months ago, I read in the newspaper, La Terre de chez nous, that Quebec's Minister of Agriculture was asking the federal government to act on this issue.
In May of that year, dairy producers gave bags of powdered milk to the Prime Minister of the day. Members of the Bloc Québécois, myself included, also took bags of milk to the Minister of Agriculture's office. People even built a wall of bags of milk in Montreal. These symbolic actions sent the message that bags of powdered milk had become worthless because of growing milk protein imports.
At the time, people wanted to use Article XXVIII of the GATT to limit milk protein imports. This issue has been dogging us for some time. Last January's Canadian International Trade Tribunal decision has made this urgency an emergency.
Other support includes that provided by 63 dairy processors. Finally, 75% of Quebec's processors, including the Agropur cooperative which processes over half the milk, support the milk producers' efforts. My colleague from Abitibi—Témiscamingue gave me a letter from the Amos cooperative, a processor in that region. I would like to quote from the letter. I will explain to a certain extent why even processors are supporting dairy producers in this situation:
||—we hereby wish to inform you that the cooperative unreservedly supports the cause of our producers who, at present, are fighting to re-establish a tariff that would have our processors use, first and foremost, protein produced locally.
|| Given that this directly affects farm income and, consequently, the purchasing power of our major customers, you will understand that we in turn, as input suppliers, are suffering from the effects of this practice.
That is very explicit. I hope that Parliament will carefully consider this matter. We must absolutely protect our supply management system. As mentioned earlier, one of the pillars of supply management is limiting imports. That is what the government is being asked to do today.
Mr. Speaker, I am pleased to be able to speak to this motion in the House of Commons.
I would like to begin by reiterating the words of the Minister of Agriculture and Agri-Food, who has emphasized the firm and unflagging support of the present government for supply management.
The system has served milk producers and processors well for many years and will continue to do so.
That is the crux of the matter, that is, support for supply management and the best approach to take in this connection.
Defending supply management represents a priority for this government. Why? Because supply management is an appropriate and efficient approach to take in agricultural production.
Not only does supply management enable producers to get a fair return on the market, but it is also ensures reliable quality and supply for consumers. Supply management is also a means of providing everyone in the value chain with a means of enabling them to collaborate and make shared gains.
It has been shown over the years that supply management makes it possible to achieve set goals. Of course it has evolved and been reinforced over time so as to support the interests of producers and consumers.
Supply management was the choice of milk, poultry and egg producers, and I can affirm that it is also the choice that Canada will firmly continue to support.
Let us look now at the action we have taken.
The present government is fully aware of the concerns of Canada’s milk producers concerning imports of milk protein concentrates. This is why the issue is one of the government’s big priorities.
The government has taken action to ensure that imports of milk concentrates containing up to 85% protein are subject to tariff quotas.
As for concentrates containing over 85% protein, we are keeping a very close watch on the situation. To date nothing indicates that there will be a rise in imports in this category.
In addition, the present government firmly believes that this question must be followed up in a spirit of collaboration, not of confrontation.
This is why the minister has invited sector leaders to form a task force in which all industry stakeholders can get together and consider not only specific questions concerning milk protein concentrates, but also long-term prospects with a view to boosting growth in the dairy sector.
The issues and challenges facing the dairy industry in Canada cannot be dealt with unless producers and processors work in close cooperation.
To that end, the executives of the Dairy Farmers of Canada and the Dairy Processors Association of Canada have accepted the minister’s invitation. They have undertaken discussions for the purpose of developing a joint position for answering those questions and getting the dairy industry growing again.
The minister assigned the following tasks to the working group: develop a strategy to promote growth in the industry; develop joint positions relating to standards for the use of milk and milk ingredients; address the questions of price setting and profitability; and determine how the industry and the government can combine their efforts to draw up plans that will enable them to meet other challenges in future, including the repercussions that the WTO negotiations may have.
The best way to solve these problems and many others is for producers and processors to work together.
There is no doubt that considerable pressure is being brought to bear on the dairy industry in Canada at present. Processors have concerns about the stagnant or declining market for dairy products, their capacity to develop new products and technologies that will help to develop markets.
Producers’ concerns focus on questions like the recent quota reductions, the size of the skimmed milk surplus and the associated costs, the erosion of domestic markets under the effects of imports of certain dairy products, and the pressure that Canada is currently under in the WTO negotiations.
As well, producers and processors are concerned about the continuing decline in milk consumption and about problems caused by prices and profitability. Milk protein concentrates are only one of the many difficulties that the industry is facing at present.
The best way to deal with problems in the industry, in the interests of both parties, is to sit down at the same table and find realistic solutions. This is by far the most desirable approach, because it allows us to find solutions that suit both parties. It is preferable to settle our domestic differences this way rather than to take the issue of concentrates to the WTO.
The government is well aware that the industry recommends invoking article XXVIII of the GATT, so that the government could impose a tariff quota on milk protein concentrates with a protein concentration higher than 85%. That approach would have serious repercussions that we must weigh very carefully. I will explain why.
First, invoking XXVIII could be negative in terms of Canada’s ability to pursue its broad trade objectives at the WTO. We are at a delicate point in the Doha Round negotiations right now. In other words, from a strategic point of view, this is not the time to initiate that kind of process.
The government is of the opinion that Canada can better defend itself and support the interests of dairy producers and, in fact, the interests of the entire Canadian agriculture sector, by preserving its credibility and its influence in the negotiations.
Some major member countries of the WTO have warned Canada against invoking article XXVIII at this stage of the negotiations, that is, that it could seriously undermine our credibility and influence.
If the industry presents a united front and works to achieve a common objective, it will be able to meet the shared challenges more effectively. To do that, we will continue to work closely with the industry, in order to resolve the question of milk protein concentrates. More generally, we are also planning to pursue consultations with the supply managed industries regarding Canada’s participation in the WTO agriculture negotiations.
The WTO agriculture negotiations have reached a delicate point in Geneva. The government is continuing to work closely with supply managed industries and with all industries, as the negotiations progress.
I know that the supply managed bodies have taken an active part in the process, and I would point out that their firm commitment to this is greatly appreciated.
This kind of joint effort is important for Canada, and it is also important that the other WTO member countries see it.
The Minister of Agriculture and Agri-Food continues to work closely with all stakeholders in the agri-food sector, including the sectors under supply management, and is exchanging information and analyses on the main issues in order to flesh out Canada’s negotiation strategy.
I want to assure you that this close working relationship will be maintained as the negotiations proceed.
Canada is a firm believer in the merit of the WTO process. We are confident in the process and our negotiating team has our unreserved support. We believe that, through the WTO, we can make the rules of the game fairer at the international level by eliminating export subsidies, substantially reducing trade-distorting domestic support measures, and greatly improving access to foreign markets.
We are determined to defend our interests and obtain the best possible results at the WTO for the entire Canadian agricultural sector.
At the same time, there is no question that the key issues essential to supply management are under substantial pressure at the WTO negotiations.
We must keep in mind that the other 148 member countries of the WTO are prepared to accept at least some tariff reduction and some increase in tariff quotas for all sensitive products.
We have expended a good deal of effort defending the elements we consider important to our supply management system, but we are under enormous pressure and no other country supports our position. Whatever the case, we will continue to vigorously defend our interests. We must also dismiss any idea of abandoning or simply withdrawing from the WTO process.
Canada will not be withdrawing from the negotiations, as the Minister has clearly indicated. We have to sit down at the table to negotiate an agreement that is beneficial for our export-dependent sectors and to defend our supply-managed sectors.
The second reason I am opposed to the use of article XXVIII of GATT at the WTO is that it would not be effective in putting an end to imports of protein concentrates from the United States and Mexico. Those imports would in fact be authorized under NAFTA, and we fear that they will continue. However they would no longer be coming from overseas, but from our neighbours to the south.
At least two major plants in the United States are manufacturing protein concentrates. These could easily fill the void created by the absence of imports from New Zealand and Europe.
The other risk, if Canada decided simply to stop these imports from all its trading partners, would probably take the form of a trade challenge from the United States. We all know how much the Americans like our supply management system. Not only might they challenge on this particular issue, but they could also take advantage of the opportunity to re-start old battles that we already won. This could mean greater risk for the entire supply managed sector. That is why the minister has advised us to play it safe.
In conclusion, I would like to add that the government is convinced that the best solution is for the working group to get together and formulate what will be needed to help strengthen the supply management system and dairy sector of the future to ensure a healthier, more stable agricultural sector.
We are confident that the working group will come up with practical solutions that will make it possible to avoid the risks and dangers to which we would expose ourselves if we took this issue to the WTO.
The best solutions to these challenges will be those that dairy producers and processors come up with together. The working group is exactly the right body to find solutions that are acceptable to all parties.
We will be very happy to learn the results of their work in the near future.
Finally, the essence of supply management, historically as well as under current conditions, is in the cooperation of all the links in the value chain, especially producers and processors, who work together to provide consumers with quality products.
It is thanks to this spirit of cooperation that supply management works well. In my view, the working group will be imbued with this same spirit in its formulation of realistic solutions that serve the interests of all the stakeholders in this sector.
Mr. Speaker, I am indeed pleased to speak on the motion by the member for the Bloc Québécois. The motion before the House calls upon the government to join with the opposition parties and stand behind our supply management producers.
I am really amazed by the government changing its tune from what it said it would do during the election. This is what the Conservative election platform said with respect to supply management. It stated:
|| A Conservative government will:
|| Ensure that agriculture industries that choose to operate under domestic supply management remain viable.
That sounds good. The platform went on to state:
|| Canada needs efficient production planning, market-based returns to producers, and predictable imports to operate domestic supply management systems.
Yet, and this is where the real concerns come in, there is another document by the Conservative Party, signed by the current Prime Minister and Minister of Foreign Affairs in February 2004. It stated:
|| A Conservative government will ensure that any agreement which impacts supply management gives our producers guaranteed access to foreign markets, and that there will be a significant transition period in any move towards a market-driven environment.
That is really sliding away from protection of supply management and how the supply management system operates. That is really suggesting that the Conservatives would go to an open market marketing system and have a transition period so that the supply management system could figure out what to do with itself in that time. At the end of the day, though, producers would be in an open market marketing system at the mercy of the multinational corporate sector, which many of the other commodities are at the moment, and that is why they are in such great difficulty.
This statement clearly will result in the undermining and destruction of supply management. Neither the Prime Minister nor the foreign affairs minister repudiated this statement. There is an opportunity for members opposite, for the Minister of Agriculture and Agri-Food or indeed his parliamentary secretary, to do that today. We will see if they will. We will give them the opportunity to come clean on where the Conservative Party of Canada really stands with respect to the supply management industry.
With respect to supply management, then, the system was the result of government and farm organizations realizing that to stabilize the Canadian industry, to ensure security of supply and quality, and to provide the basis upon which the primary producer would realize an adequate income, a system of supply controls, reflecting demand, would prove to be the best course of action. In other words, through the Canadian milk supply management system, it is effectively figured out what market demand will be in the country and then production is matched to meet demand.
That is why this discussion is so important. We allow, as I said earlier, 6% imports of dairy products. That is factored in. The opponents of supply management talk about supply management being absolutely protectionist. It is not. We allow 6% imports of dairy products into this country. The Americans allow only 2.75%. Canada is much more open in dairy than are the Americans, and far, far more open than are the Europeans.
However, with respect to the current motion before the House, with milk protein able to come in through other ways, we as an industry cannot really know how much of that market is going to be displaced or how much of the product is going to require disposal through the skim milk powder disposal system. It jeopardizes that supply management system.
That is why this motion, put forward in concurrence with what the committee did the other day, is so very important.
As for allowing this situation to continue, let us go back to when supply management first was brought in. We were not technologically advanced then. Milk was milk was milk. The quota system basically was based on butterfat. Now the technology is there to break milk down into various components. The industry breaks it down into various components and ingredients. Violating the intent of the system, it is imported and basically it is remanufactured it into cheese or ice cream or whatever. This has an impact on the original design of the supply management system.
Basically the system is one that I think we should be presenting to the rest of the world as a rural development policy. It is a system that makes sense for sensitive products, and every country has sensitive products. It is a system that provides reasonable returns for efficient producers and a high quality product to consumers at reasonable prices. Let us look at our prices for dairy products in Canada. Sometimes they are a little higher than those in the United States, but on average they are lower. As a result, our producers are able to invest capital in their industry because they know that if they are efficient they are going to have reasonable returns.
Why do we think Canada is recognized as having among the best breeding stock in the world in terms of the dairy industry? Because for decades dairy producers have been able to invest in the genetics and the breeding stock to build that herd, that is why. They knew they would make reasonable returns on the sale of their milk, so as a result, we built one of the best and high quality genetic breeding stocks in the world. That stock is in demand.
There is a problem with the United States at the moment, in that it will not take cattle over 30 months. The government has failed absolutely to address that problem with the U.S. Farmers are suffering as a result of that border restriction.
On the mad cow situation, the Americans said long ago that they would abide by the science, but then there was another animal with the disease found in B.C., just as there have been more animals with the disease found in the U.S. Then Congress puts a little pressure on the administration and it goes against the basic agreement that it would allow live cattle over 30 months in by June. As a result, Canadian dairy, beef and breeding stock producers suffer again and the government opposite sits on its hands because it does not want to challenge its good friend, George Bush. Who suffers? Producers suffer.
How important is the supply management sector? Supply management generates over $7 billion in farm cash receipts a year, accounting for 20% of Canada's total agriculture receipts. With an average age of 47, dairy, poultry and egg producers can see a future that allows them to raise their families and make a living in rural Canada.
The stability of supply management allows producers with young families to contribute to rural development. Canadian dairy, poultry and egg producers use over $3.1 billion worth of feed per year. Milk, chickens, turkeys and eggs produced in Canada support jobs in over 1,100 processing plants.
Again, the pressure from our trading partners is to move Canada further away from these institutional structures that have benefited consumers and producers to those that favour unfettered trade. We have seen the kind of money that we have had to put out as government in the last number of years to those commodities that trade in a so-called unfettered market, and it is anything but unfettered.
The fact of the matter is that producers in Canada are competitive and they are efficient, but they cannot compete against the treasuries of the United States and the European Community. It is very difficult to compete against trade law that allows Brazil and Argentina and other countries to use low wages, poor environmental standards and poor land policy in the production of their products.
The whole system at the WTO needs to be revamped, but it needs to go further than what is currently on the table, because if we really are going to have a level playing field, then we have to include labour, labour standards, safety of workers, environment and land use. If we had that and no competition in international subsidies from some of our trading partners, then there is no question about it, Canadian producers would be at the top of the line.
Recent surveys found that close to 90% of Canadians surveyed believe that we as a country should be producing food domestically to meet Canadian needs. The assumption by some is that to continue supporting supply management the consequences are that Canada prevents imports and prevents access to Canadian markets. I want to make a point on that. The fact of the matter is that this argument that Canada does not allow imports in its supply management sector is very, very faulty. I know that the government opposite has fallen for that argument. It believes that supply management is protectionist.
Let me read some figures for the members. Canada imports 6% of its market in dairy products, 5% for eggs and turkey, 7.5% for chicken and 21% in hatching eggs. The United States, as I said earlier, allows only 2.75% access for dairy. Europe allows only 0.5% for poultry. When we figure it out, if all countries provided the 5% access that we do, overall trade in the global community would increase by these figures: a 77.5% increase in cheese, a 114% increase in pork, a 152% increase in poultry, a 50% increase in wheat, and a 92% increase in beef.
The problem is not Canada and Canada's supply management system, even though some perceive it to be. It is not the problem. This clearly shows that the position the previous government had taken in negotiating a sensitive products category made absolute sense, because other countries have sensitive products.
As for the Conservative government, we wonder what it is doing. The parliamentary secretary said earlier today that the Conservatives are really standing on the fence. They are trying to leave the impression that they are doing something when they really are not doing much at all.
In testimony before the Senate agriculture committee on May 11, the president of UPA made the following observation with respect to the Canadian Wheat Board and the future of supply management. Mr. Pellerin said:
|| If you attack the Canadian Wheat Board, in the end you will attack those types of central selling desks. That is the final objective of the free marketers....
I make that statement because we know very well what this is all about. In fact, I believe the parliamentary secretary said that the Minister of Agriculture is going before the agriculture committee tomorrow to talk about why he wants to destroy the Canadian Wheat Board. That is what it is all about.
The Conservatives talk about dual marketing but there is no such thing as dual marketing when it comes to single desk selling. We either have single desk selling or we do not. If we do not have single desk selling then the Canadian Wheat Board will not have the opportunity to maximize returns back to the primary producers.
In response to a question in the House on the government's position at the WTO on state trading enterprises and the Canadian Wheat Board, the Minister of Agriculture gave a very confusing answer and left unclear what its real position was. I mention that because if the government is sincere about the supply management system, which is what the motion is about, it should show us its unequivocal support for the motion and then we will see what happens at the end of the day. When we look at some of the other positions it is taking it is not really all that strongly on side.
Consumers have also consistently maintained a serious concern with respect to the quality of their food. A recent survey for Agriculture and Agri-Food Canada found that 38% of consumers were concerned about the presence of GMOs in their food and that 49% were concerned about the presence of hormones in their food. An effort by the pharmaceutical company, Monsanto, in the mid-1990s to introduce the growth hormone RBST for use in dairy cattle to increase milk production was opposed by the dairy industry, and with good reason. One survey found at the time that if this hormone were introduced into Canada, 34% of consumers would lessen their purchases of milk and dairy products.
The point I am raising is the whole strategy at that time was to increase milk production when we did not need to increase milk production. We were meeting our domestic demand. The dairy industry strongly opposed it and the dairy industry, along with ourselves, won the day and prevented that system from coming forward. It shows the kind of support I think there is for the supply management system.
Support for the supply management system was again demonstrated in November 2005 with the unanimous passage of a motion in the House of Commons supporting the current supply management system at the WTO.
A prominent United States agriculture economist has found in a recent study,“Rethinking U.S. agriculture policy”, reported by the Agriculture Policy Analysis Centre in 2003 at page 15, that:
|| The traditional role of the federal government was to do for agriculture what it could not do for itself: manage productive capacity to provide sustainable and stable prices and incomes. Supply management policies have historically prevented chronic over production and depressed prices.
What that statement clearly shows is that many people understand that the supply management system prevents the manipulation of producers and countries one against the other. It empowers farmers to manage their own industry by matching supply to meet demand. The supply management system is under such attack at the WTO because the multinationals do not like that system. They want to be able to manipulate, manoeuvre and abuse and to buy cheap and sell high.
What worries me about the government's waffling on this motion and the fact that it is not taking a very clear stand at the WTO is that it will open up our supply management system to problems in this country and the ultimate losers will be our supply management producers and Canadians as a whole.
If we could gain the support of the government for the motion, although it would not be absolute that it is solid at the WTO in terms of its discussions and that it is absolutely solid in support of supply management, it would be an indication that it is moving ahead a wee bit.
Mr. Speaker, I am sharing my time with the member for Thunder Bay—Rainy River. For the next 10 minutes, I will tell the House why I feel we must stand up for the rural community, for the farm community that is supported and works within the supply management sector.
The debate is very timely in the sense of the urgency, given that we are now in the WTO discussions. We need to remain at the table. I think all parties in the House would agree we cannot abandon the issue.
It is also important to recognize that farmers need to have an ally. If farmers do not have the government in their corner, pray tell, who else can they go to? Who else is there fighting for them? We know the volume of trade Canada does in agriculture has doubled over the last 13 years. We have gone from $12.5 billion to about $26 billion today. Who has become rich? I believe the multinationals, the large corporations and traders in agriculture have made money. The farm gate has seen very little of those dollars.
When farmers continually buy at retail prices and continually sell at wholesale prices, it is very difficult for me to understand why society cannot realize why farmers are in difficulty today. The supply management sector depends upon this protection, but I see it as no more protection than what the auto industry or the pharmaceutical industry have in how they operate their business. Many industries today simply do not produce a product if they cannot sell it at a profit.
For the most part, farmers cannot put a price on their product, a price that will give them a profit. Within the supply managed sector, they can receive a return which guarantees them some element of protection because the cost of production is included.
It is interesting that we should talk about this today. The dairy industry has recently concluded a study which shows that it costs less to produce a litre of milk than it did seven years ago. What other industries today show those kinds of efficiencies, more milk per cow, butter fat at levels that we have not known before, doing things we have been unable to do in previous times, the genetics in our country? It is unfortunate for those who have developed those genetics in their breeding lines. At this moment, they are unable to sell their breeding stock because of the embargo against us from the United States.
However, those farmers are still surviving and have a lot of optimism. I think they constantly wonder whether the government will be there for them and whether there will be a supply management sector after this round of negotiations has concluded?
We know there is a lot of pressure from the government side, from the free traders, those who believe we should trade away everything we have as a raw product. It does not matter about the farm gate because there will always be farmers and people who produce product that will in the end fill the coffers of big business.
I would like to think that we are here, all parties of all stripes, to defend those people who do things they feel are important, and that is to feed the people of this nation. I am a farmer and I represent a purely agricultural riding. Not only do we have dairy and poultry producers, and a great many of them, we also have grains and oilseeds producers and other commodities.
I am not here defending supply management at the expense of another industry. I simply want to let my constituents and people across the country know that some members in the House who understand agriculture.
I have done a considerable amount of questioning, as I go around the country. I have asked people what they believe is the real cause and essence of our problem today. I have not heard consumer groups say that they pay too much for milk or eggs, or that farmers get rich at the expense of the consumer.
People today have choice and we have allowed them that choice. We have those who choose to buy organic products. They have the ability to buy those products from the shelves of our large stores. I believe it is important that we encourage this industry. We also have people who want to buy organic milk, and we have that commodities.
If we want to understand where we need to go in the future, we need to understand that, as a nation, we have a responsibility to feed our people. If we want to continue to feed our people, then we must do it in such a way that everyone understands who puts the effort into this food product available.
Even though there may be some differences, from time to time, on matters of political principles, it is important that together we, in the House of Commons, stand with Canadians. It is important that we support the motion that we go to the WTO and be prepared to put forward article 28. This is something we have hesitated to do for a long time, but the hour is late and we must move rather quickly. We need to move now to ensure that those farmers in the dairy and poultry businesses know we support them. We need to protect our farmers, particularly those in the supply management sector.
I would encourage everyone to take note of this. We know this is serious. We know butter oils created a tremendous problem in the manufacturing of ice cream in our country. Now milk protein supplements are causing great problems with the manufacturing of cheese, replacing what would be normally milk products with other products, which allow them to make these products. It is all done in the name of the almighty dollar.
I would encourage all of us to stand together and support this matter, which is of the utmost importance to our supply management sector.
Mr. Speaker, this debate is truly interesting because it does represent not only the dairy industry as the point in question but it comes down to not only producers and consumers questioning whether butter tarts should have butter in them, whether cheese should not be described as a cheese-like product, and whether milk should not be described as near-milk or ice cream as almost ice cream.
Indeed, in my riding the Thunder Bay Federation of Agriculture has presented several petitions and cases noticing the 2.65% cutback in milk quotas and only a .015% increase in the price of milk. They are still expected to somehow cope not only with these negotiations at an international level at a city far away from all of us but right there on the farmstead.
At the agricultural committee several other parties and the government were there and heard this case. It comes down to how we actually manifest milk protein concentrates and what the impact is on a daily basis. Well it comes to a loss of approximately $2 million a month for our dairy industry. As this continues, clearly that cannot be sustained.
Members of the House would be well advised to know that when these people come to us, they are not coming as some kind of ill-informed protestors. There is hard research. These are people who care deeply about the future of our country who provide good food and good product to Canadians. When we find out that every time MPCs replace 2.6 tonnes of skim milk powder, we can see the immediate impact in a very physical kind of way. Are we finding now that MPC imports are constituting some kind of breaking point for supply management? The question is, do we go on pretending that it is not something to be concerned about or do we respond?
I believe that the motion before us is our opportunity, as a trigger, to emphasize to the farming community that we are responding very directly in a caring way and that this message is something that we take very seriously. There is a point that will come eventually, as these imports continue unabated, that the milk price structure in Canada may collapse and that is a fact.
When people who have been doing research on this and follow it, if not daily, hourly, tell us that, I am certain that they have concerns. Therefore, it is our duty as elected representatives to respond. In the agriculture committee, when we heard these presentations the committee decided in a vote to bring it to the House because it had now reached that level of concern.
A question was asked earlier about the other components of the industry. It was concluded in committee to support the dairy farmers. This would lend credence to their case in their discussions and negotiations with other aspects of the industry, including the consumers. In this way they would know the state of the industry at this time.
When we look at what is happening, we cannot at any time weaken our government's position. Unfortunately for the government, the Conservatives voted against supply management and against the dairy farmers in committee. That is the message that I have been receiving from farmers, so when I hear appeals from all four parties here in the House that this issue be addressed in a non-partisan manner, I am quite willing to join that and really want to do it.
I hear flimsy things blaming the previous government for all the ills. After six months people are asking where are all the miracle cures that we were proposing for the past number of years because they are not happening? This is not a simple issue. It is complex and difficult.
Last year the previous government set record payments for agriculture in the farming community. Farmers know what was done for them last year. When the present government says that, it loses all credibility. It is amazing what happens. We cannot pull the wool over the farmers' eyes. They feel it daily and they understand immediately the impacts of these decisions.
When we pushed again in the agriculture committee to get the money for the grains and oilseeds people earlier this spring, the minister actually claimed last year's money from the previous minister was the rescue money. Farmers know exactly what is going on; these people will not be taken in.
We have to understand that when things like the Wheat Board come up simultaneously with the concerns of the dairy farmers, they are asking what is really going on here. If the government claims to be in support of supply management, why is it not adamantly standing up for them? When it claims to be in favour of the Canadian Wheat Board, why is there a private member's bill that would destroy it?
We get calls from all over the country. I find it quite amazing the number of provinces that have called me, being from Thunder Bay--Rainy River in the heart of Canada. It is an interesting receiving point for these things, but primarily it is because of my role as a member of the agriculture committee. I am impressed by the high level of awareness and understanding in the rural communities on this issue and all of its complexities.
The farmers know, as we speak here, who is really going to be supporting them. Therefore, when members ask us to say, no, let us not really trouble our American neighbours as they flood our milk industry, dairy farmers are perplexed. To a large extent they are waiting to see what will happen, but I know that they are quietly angry and feeling deceived that the members they had theoretically supported at the ballot box are now abandoning them.
I have to face these people straight on in my riding. They come to see me in my office or I go to see them at the farm gate or in their agricultural society meetings or in the western part of the riding with the Rainy River Federation of Agriculture. They know exactly what the price of milk is per minute. They know the impacts of all these legislative things and what they can do. They know how many tonnes are coming in and they know how it affects them each and every day as they try to produce a quality product for Canadians.
Each and every one of us here has to deal with this and has to answer to the farming community. In the agriculture committee I asked a question of those people who were speaking for us in Geneva and at all these other trade talks in different places. I asked them if they truly, not just from an international trade standpoint, believed that supporting the Canadian farm industry was the main reason that they were going to bat, that they were going to negotiate, and that they were going to speak for all those farmers with passion, determination and a commitment.
This was not just academic. We wanted them to take the economy of the Canadian dairy and farming industries to heart. We wanted them to believe in the industries and to represent their interests in supply management with a fervour and a passion.
Mr. Speaker, the main issue facing us today is that dairy producers are being hurt by the importation of milk protein concentrates. The reason for this is that they are classified as proteins and not milk products. Eighty-five per cent of these milk protein concentrates are over the protein content and in this case 87.5% are pure protein which allows them to enter without tariffs. If the protein content were lower, there would be certain tariffs.
The committee recommended that:
||--all milk protein concentrates, regardless of their protein content, under tariff line 0404, or a tariff quota to be negotiated.
One kilogram of this milk protein concentrate, which I believe is coming in from New Zealand and the European Union, equals 2.5 kilograms of displaced milk concentrate. This means it is more efficient for our processors to import this protein thereby giving producers two and a half times as much milk protein concentrate but they are not sure what to do with it. I think this is the key.
I am encouraged by the fact that the Minister of Agriculture asked producers and processors to get together to try to come to an acceptable solution that would benefit both of them. However, if we allow unlimited milk protein content, or MPCs, to enter Canada, this could in the long run destroy our whole supply management system.
The government says that it wants to protect the supply management system. It must have the means and the solutions to do so. Our nation's identity is at stake. We developed and implemented the supply management system. It is a part of the agricultural sector that gives producers the opportunity to earn a bit of money. If we don't protect it, we will see the slow death of the supply management system.
I have noted the following. It seems to me that Canada sometimes hesitates to protect our particular programs at the WTO and under NAFTA. We are told that we must not create precedents, but it is possible that we are alone in not attempting to do so. There are already precedents. There are governments that do their utmost to protect their agriculture industry and above all their producers. That is our duty.
If we do not stand up for our dairy producers in this case we will see a slow erosion of supply management. I am encouraged once again by the government's stance that it wants to protect supply management. If we bow to international pressures and we modify it a little bit then what is the stop them? What is to stop other trading partners, such as the Americans, through the WTO to make an effort to get rid, for example, of our Canadian Wheat Board?
Any changes to the Canadian Wheat Board should be made by the farmers and not by governments, whether this one or any other government, and especially not by international organizations such as the WTO.
The three western provincial governments recently stated that we must modify supply management to increase our market access. Interestingly, I was just at a meeting of the trade committee and we were talking about market access and how it affects supply management. Specifically, they want us to increase our TRQs from the current 5%.
Apparently, if this were done this would somehow gain more market access in spite of the fact that there are heavy government subsidies in agriculture in the European Union and the United States. What we should be doing at the WTO is getting other countries to increase their TRQs to the 5% that was agreed upon in the Uruguay round. The TRQs in the European Union, for example, for pork, which is their sensitive category, is 0.5%.
That does not help our pork producers who want to export to the European Union. Somehow we are being asked, if we do not protect our supply management at the World Trade Organization, to increase the quotas for other countries to export their produce to our country and that somehow this will help us get more access to world markets. I do not think the two are tied in.
What we are talking about today is one small aspect of supply management, one small aspect of agriculture that we as Canadians have developed. This is one system that actually works and where people actually make money. It is very important in this case for us to be very careful before we fool around with the system.
I want to emphasize that we can fight for better access to world markets at the WTO table but this should not be at the expense of one segment of our farmers, those who are part of the supply management system. We know that farming is in a state of crisis and we are looking at different ways of solving the crisis. We need steps to remedy the situation.
The answer to helping our farmers is not by slowly eroding one part of the agriculture industry that works for us. While it may seem sort of far away somewhere in Geneva, this one point with regard to milk protein concentrates could be what starts this snowball rolling. I think we need to be very careful at how we approach the situation.
Once again, I am encouraged by the Minister of Agriculture and the fact that we are standing up for this system at the World Trade Organization. It is a system that works and it does not cost the taxpayer any money. Other countries are aggressively protecting their agriculture.
Thus, our initial position should be very strong. Our country has distinctive elements, such as supply management and our Canadian Wheat Board. It is up to us to decide the future of our agrifood industry.
In my opinion, what is most important is that we are responsible for protecting Quebec and Canadian producers at all costs. That is our duty.
Today, the supply management system is at risk. Tomorrow, it could be the Canadian Wheat Board. In the end, it may be our Canadian identity.
By standing up and working together with our primary producers in this instance, and by our friends all across Canada, we are not only protecting agriculture but we are standing up for our rural way of life which is under threat, through the World Trade Organization, by multinational companies which are under threat by other trading partners, such as our friends to the south who want us to disband different programs that we have.
Therefore, it is our duty to work together with the producers and the processors to protect supply management by ensuring that milk protein concentrates do not hurt the livelihoods of those producers, specifically in Quebec and Ontario.
It is our duty to stand firm.
Mr. Speaker, I would like to start by congratulating the hon. member for Richmond—Arthabaska on his work, on introducing this motion in the House, and especially on asking me to second it. I am proud to do so.
Contrary to what a Conservative member was saying a little while ago, this is the right time for the motion. For too long and on too many occasions, the government—whether that of the previous Liberals or the current Conservatives—has claimed that it could not defend managed supply, have assistance programs in the apparel and textile sector, and do something to save the bicycle industry because the time was not right. They claim that something is happening now at the World Trade Organization and we cannot frustrate our trading partners. If we did, they would take a dim view of Canada, and that would weaken our negotiating position.
Let us look at the facts. They did not have any plan to help the apparel and textile sector. The Hong Kong meeting was, at best, a continuation of the work. No major progress was made. In the meantime, we have lost a tremendous number of jobs in these sectors and are still doing so. Still there is no assistance program.
It is the same in the bicycle industry. They do not want to antagonize China and Vietnam, with the result that nothing is done. They are prepared to sacrifice our industries for some alleged progress in trade agreements. We know that the WTO is currently deadlocked, not only in agriculture but in other areas as well. Nevertheless, they still say that the time is not ripe yet to help an economic sector or an employment sector in Canada.
I have been listening to this argument for as long as I have been here: it is never the right time to introduce a motion defending anyone in Canada and Quebec.
In actual fact, passing this motion, like the one last November 22, would send a clear message at a time when the director general of the World Trade Organization, Mr. Pascal Lamy, is talking about a deadline of maybe July 31 to reach an agreement on agriculture.
It is important for the House to reaffirm its support for supply management, especially in relation to something new. It is obviously not directly a question of supply management in this debate but rather of a flaw in the Canadian customs system that makes it possible for milk substitutes to enter freely and undermine managed supply.
If this motion were adopted by this House—I hope and think it will be—not only would we be sending a clear message about this very specific issue of milk proteins, but we would also be sending a very clear message to the entire international community that our supply management system is very important to us. There is room for negotiation on various aspects. However, there is no room for compromise on the pillars of this system. We will try to sort out the necessary adjustments with the others.
I want to remind hon. members that the World Trade Organization is responsible for controlling international trade relations. It is not there just to outright lift restrictions on all trade relations. That is true for agriculture, culture and for other areas. In that respect, too often people think—I get the feeling this is the case for the Conservative party—that the equation is as follows: the World Trade Organization equals excessive easing of restrictions on trade. That is not it. The World Trade Organization is there to civilize trade and ensure that disputes are resolved without applying the might is right rule. That does not mean we necessarily have to end up with agreements that further ease restrictions on trade. This is particularly true when it comes to agriculture.
We would not be having this debate if, on January 31, the Federal Court had not confirmed the decision of the Canadian International Trade Tribunal opening the Canadian market to imports of milk protein concentrates. As hon. members know, for supply management to work, imports have to be highly regulated. Under this system, supply meets demand and price is agreed upon with processors and producers to ensure suitable income for agricultural producers. However, in order to be able to adjust supply to demand, we must ensure that the Canadian and Quebec market is not invaded through the back by foreign imports.
There was a real weakness there, which has been exposed in this House several times.
We are all well aware that new technology has made it possible to break milk down into several parts. Instead of importing milk into Canada, we are importing milk proteins. We can import butter fat and completely reconstitute milk from a number of products not currently covered under tariff lines.
Dairy producers have asked, and rightly so, that milk protein concentrates be considered as dairy products, just like milk, and be subject to tariff lines and quotas. This is not yet the case. In this respect, I must say that the federal government has not fulfilled its part of the social contract because—it must be said—supply management is a social contract wherein each party has certain responsibilities.
As we all know, when there is a surplus, producers are required to absorb it. Currently, given that there are no import quotas for milk proteins, these surpluses are growing and posing a real threat to supply management.
For example, we are told that in cheese production, milk protein concentrates could replace up to 25% of Canadian milk proteins. That will make for a very significant shortfall.
I remember that in a previous debate, someone stated that this type of import could cause losses amounting to $175 million for Canada and about $70 million for Quebec producers.
There is another aspect I think deserves some emphasis. Not only has this loophole weakened the supply management system, it has also undermined an agricultural development model, which is far more serious. If this system falls apart, we can say goodbye to family farms. Proof of this can be found in Australia and New Zealand. When they dropped the existing regulatory structure, which was not exactly like supply management, but quite similar, the number of farms shrank. Apparently, only industrial-scale farms were able to survive in that market.
For example, whereas the number of farms was declining by 1% to 2.4% in the years before deregulation in 2000-01, the rate of decrease in the number of dairy farms—I am still talking about Australia—went from 8.2% to 6.7%, 3.6%, 9.8% and 3.7% in the five years that followed deregulation. From nearly 14,000 in 1994-95, the number of dairy farms declined to just over 9,000 in 2004-05.
This is a societal choice that is being compromised by the federal government's inertia. This was true in the case of the Liberals, and it appears, unfortunately, that it is still true in the case of the Conservatives.
Judging by some members' remarks, we cannot say that we are going to drop supply management. Those members have voted on several occasions, as we have, to maintain supply management.
During the election campaign, the current Prime Minister promised to maintain this system. As I said when I began my remarks, the government will simply say that this is not the right time. But I think it is the right time. Management of the World Trade Organization is exerting an enormous amount of pressure on all the countries—not only Canada, but the European Union and the United States as well—to reach some kind of agreement by July 31.
In my opinion, passing this motion would send a strong message from all members of this House to the international community that we have a system that works well. Everyone agrees. We have a system that requires border control, first of quotas, then of quota-free tariff lines, and we have to maintain that system because it is our model of agricultural development.
For some time now, I have heard members referring to isolation, and that bothers me.
When he appeared before a committee, the Minister of Agriculture and Agri-Food, in answer to a question from the member for Richmond—Arthabaska, said that we were isolated. Are we that isolated? Of course, economically, Canada does not have the same dimensions as the European Union or the United States. When the Americans defend the Farm Bill, are they isolated? No, they seek to obtain the best for all their farmers, as we do during negotiations. When the European Union defends its subsidies and its domestic support, do we say that Europeans are isolated? No, we say that they defend their model of agricultural development that is the Common Agricultural Policy, the CAP. It is totally normal.
When it is Canada's turn to defend its farmers, then it is awful, because it seems that Canada will get isolated. I think that the government is playing on words. Wanting to defend agriculture and producers, particularly when it comes to the supply management system, will not lead to isolation. It is simply doing the work that it has to do as a responsible government. In this case, it is defending Canada's national interests. Indeed, Canada is not a nation; as you know, the Canadian territory is comprised of several nations. However, it defends what it has to defend and it will find the compromises that are necessary. However, shady deals are not acceptable.
It seems that the Conservative government clearly refuses to support the motion. That is the impression I get. I hope that at the end of the day, after our debate, the Conservatives will change their minds. It seems to me that there is nothing contentious about the motion. I will read the motion adopted by the Standing Committee on Agriculture and Agri-Food because I think it is important:
|| 1. That, since all the parties support supply management, the government take immediate action to strengthen import control measures, which are crucial to supply management, by limiting the importation of milk protein concentrates and any product specifically designed to circumvent the supply management rules.
If we really want to keep the supply management system, we should come quite easily to an agreement.
|| 2. That the government adopt regulations that would classify all milk protein concentrates, regardless of their protein content, under tariff line 0404, or a tariff quota to be negotiated.
I remind you that as far as I know, the Americans use that process. If the government does not want to do that and prefers to involve the whole House, very well. Then, legislation like that mentioned in the third part of the motion would be needed:
|| 3. That the government invoke Article XXVIII of the GATT where necessary in order to cap imports of milk protein concentrates by immediately launching negotiations with its trade partners and by amending its tariff schedule through a legislative measure adopted by Parliament.
That goes to show that there are options. What may be lacking is the political will. As I indicated earlier, we are probably going to be told that the problem is not that the government does not want to ensure that all the conditions are in place for the supply management system to be maintained, but that the timing is not right. Those of us who have participated in negotiations in the past know that the timing is right to send a message, if we do not want to give the impression, as we did on the softwood lumber issue, that we are prepared to settle for a bargain basement deal.
The Americans heard clearly. Today still, we know that negotiations are conducted based on the framework agreement and that a deadline has been set. The matter has to be resolved by a given time on a given date. Canada is the one setting this deadline for itself. So, what happens? The Americans sit and wait. As the deadline nears, the “bananisation”, to use the word coined by Mr. Parizeau to describe the action of causing oneself to slip on a banana peel, intensifies, as we put pressure on ourselves. That is precisely what we are doing right now by saying that Canada is isolated.
I think that it is important to remember something else. Before the election, the Bloc Québécois held, here in Ottawa, a working meeting between the Union des producteurs agricoles and all the embassy and consulate representatives to explain what supply management is all about. It is a fact that some do not understand what it is about. They think that it is a subsidized system. They heard about it from the Americans, who said it was not a very good system, or from the Australians or New-Zealanders.
If they were presented with the nuts and bolts of this system, I am convinced that a fair number of developing countries which want to have their own agricultural model could find in it a system they could adopt to have human-scale farms.
Naturally, we were once again told that New Zealand and Australia once had similar systems, which they abandoned, and that was for the best.
I will read a small excerpt from a document written by Daniel-Mercier Gouin, an economics professor at Université Laval. He said, in the conclusion of one of his studies on supply management, that:
|| New Zealand's experience can be enlightening. The deregulation gradually implemented in this sector in New Zealand between 1985 and 1993, which has since become total, does not seem, at first glance, to have benefited consumers with regard to prices...
We hear that type of comment often. Furthermore, Mr. Gouin said:
|| Not only did consumer prices increase more than anywhere else [Australia, the United States, the Netherlands, France and Canada, over an extended period], but the increase was the most dramatic for fluid milk, which in 2002 was priced at four times its 1981 level.
The consumer would not come out as a winner in deregulation.
I know the Conservative government does not want to deregulate, but allowing these substitutes, the milk proteins, to enter is causing us to deregulate this sector.
Mr. Gouin goes on to say:
|| Nor did deregulation in this sector benefit New Zealand dairy producers, who lost the market powers they held through the regulatory mechanisms that administered the farmgate price of fluid milk deliveries.
Who benefited? The distributors did—not the consumers.
We can even come back to another Canadian example that has been cause for much debate in this House. During the mad cow crisis, when we were forced to dispose of surplus cull meat, I never saw the price of beef go down. At home I do the grocery shopping. There are some people who pocketed the profits, but it was not the agricultural producers or the consumers. It was the middleman.
Behind this desire to deregulate, there is the reality that this would benefit neither consumers nor agricultural producers. Consequently, it seems to me that our parliamentary responsibility is to defend the interests of the majority, that is of both consumers and agricultural producers. To that end, and in order to find the right system, we must do more than just pay lip service to the protection of our supply management system—we must take appropriate action. We must take action at the WTO, we must take action in Canada, we must take action in this House.
I believe that the government should give a very considered response to the committee's question and, as I stated, review the possibility of adopting a regulation to again classify protein concentrates under tariff item 0404, or returning to this chamber and invoking article XXVIII of the WTO. It is allowed, as you know. As the member for Richmond—Arthabaska mentioned earlier, a special NAFTA group has already examined the validity of this step.
Thus, there are no technical barriers; it is simply a question of political will. There are solutions. I would like the government to change its position somewhat.
I will close by mentioning the surveys. Some may say that agricultural producers will obviously defend their system because it provides them with a reasonable income. It is also true that the opposition parties will support it because 40% of Quebec's agricultural income is derived from supply management. For us, it is an important sector and, in addition, people have placed their trust in us and hope that we will defend them. But a survey of 1,500 Canadians conducted between May 15 and May 21, 2006, by Léger Marketing revealed that the majority were in favour of the results of supply management or of the system itself.
In closing, I have a statistic that I find fascinating. Fifty per cent agreed with keeping supply management and 35% said they were somewhat in favour of it. We know that the concept of supply management is not always readily understood and that, as I mentioned, it should be explained more. So, just imagine if the Conservative government were to take to the road to explain the benefits of supply management to the international community and to Canadians. The approval rates for supply management would easily be in the neighbourhood of 90%.
Mr. Speaker, I am very happy to speak to this motion today and I thank the member for Richmond—Arthabaska for raising this question in the House.
As a member of Parliament, I represent a riding with an important agriculture industry, particularly in the dairy sector. In the whole south coast region of Quebec, in Montmagny, L'Islet, Kamouraska and Rivière-du-Loup, there is an important dairy production. There are also chicken and egg producers. Thanks to supply management, a stable and strong economy was established. This is the most important regional economy stabilizing factor we have. It has allowed us to develop a market for hardware stores, to maintain our villages alive and to help the next generation to take over, although it is difficult in agriculture. This is an important part of the economy.
Today, we are living a replay of last fall. At that time, the Bloc Québécois had introduced a motion in the House to ensure that our negotiators, before and after the elections, would protect our management supply system. The position of Canada had to be in favour of maintaining the supply management system. As my colleague from Joliette just said in his speech and during the questions and comments period, we were successful in our attempt. We were able to obtain the unanimous support of the House on this matter.
Up to now, there is an important difference. We will probably vote on this motion at the end of the debate. The three hours of debate will end soon, then we will have a vote. I invite the people from all agricultural areas of Quebec and Canada to check how their member of Parliament will vote. It will be a good test to determine if their member of Parliament is trying to represent their riding in Ottawa or if he or she is trying to represent Ottawa in their riding.
I know people in my riding who will be listening and watching to see whether the Parliamentary Secretary to the Minister of Agriculture and Agri-Food, for example, defends the farmers in his riding or the federal negotiators instead. We will see when he has to meet with grassroots unions or the UPA members in his riding. Undoubtedly there will be unanimity about the need to ensure that our system is properly protected.
This motion that was made by the member for Richmond—Arthabaska and is now before us was also adopted by a parliamentary committee. A majority of members of the committee voted in favour of it. As far as I know, only the Conservative members opposed the motion and took another position. I do not know exactly which members were present. There may have been more members from the west or perhaps members who are less aware of the issue of supply management and the need to protect products, as mentioned in the motion.
Here, all members will be able to vote. We will all be sufficiently informed. All the Conservative members from Quebec will vote on this motion, and that will have a huge impact. Not only would they be going against the position all the producers support, but they would also be diluting the message this House sent last fall. Voting against the motion will amount to saying that supply management can perhaps be watered down, that Canada can agree to put this issue on the table.
Canada does not have to take such a position in the negotiations that are under way. This House must send a clear message to the government that a committee report was adopted by the House and that the members now want the government to act on the recommendations in that report. That is how we would like to see today's vote go.
In order for people to have a clear understanding of what is involved, let us set aside the mechanics of the motion. Ingredients used in milk production, ingredients in the product, the milk, are currently being imported in large quantities, because we did not make the right decisions in the past. We have a tool—article XXVIII of GATT—that we can use to correct that error. That is the message we are sending with this motion. I will read an excerpt from the parliamentary committee report:
|| 1. That, since all parties have expressed support for supply management—
You see the link. I will continue to read from the recommendation:
||—the government intervene immediately in order to maintain the control measures, which are a main pillar of supply management, by limiting imports of milk protein concentrates and all products designed specifically to circumvent the rules of supply management.
When the Conservatives voted against this motion in committee, is it because they repudiated the position of all parties concerning supply management? Is it because they thought the situation was not all that serious and that it was not important? If that was their attitude, today's debate here in this House has shown Conservative members that their attitude in committee was wrong. This situation must be rectified via the present debate.
I remain hopeful, given that, last fall, when we voted on supply management, the Bloc Québécois introduced the motion at the beginning of the day, the other parties rallied together over the course of the day and, in the end, we achieved unanimity, which allowed for negotiations with a firm, solid position and concrete results. I hope to achieve that result here again today.
It is important to understand that this responsibility must be shared equally by people who live in urban areas and those who live in rural settings. Milk is produced, chickens are produced and eggs are produced, all in rural settings. Lastly, production allows for a pricing system that is reasonable, acceptable and that provides sufficient revenue for farmers.
I call upon all representatives in this House, whether they represent an urban or a rural riding. It is important to make the government understand that people do not want the opinions of negotiation experts or bureaucrats. They want the people who represent them to vote to protect their interests. Let us do it so that next weekend, when we go back to our ridings, our voters can say that they are proud of the result of the vote on the motion and of the proposal and they can say that the person they elected voted in favour of the Bloc's motion and the position of the Standing Committee of Agriculture and Agri-Food to close the door to the importation of products that disrupt the milk market.
Everybody must understand that so that we can adopt a motion that will give the expected results. The message we sent last fall has been well understood: we all wanted the supply management system to be protected. However, if we choose the opposite direction and if the Conservative members vote against the motion, we can be sure that that message will not fall on deaf ears at the negotiating table. It would almost be like following up on the visit the chief executive officer of the WTO, Mr. Pascal Lamy, made last week, when he told the Canadian government, Quebeckers and Canadians that they will have to accept some changes to the supply management. By voting against the motion, the government would look as if it were saying to Mr. Lamy that, after his visit, it decided to follow suit and weaken its own position, and that it is opening the door and that the next time, it will yield. That is the message the Conservative government is sending. I personally think that we must avoid, at all cost, sending such a message.
This has an impact in our regions: agricultural producers earn a bit less, so people are forced into disputes with each other because imports are shrinking their market share. Agriculture is already in a difficult position, what with the mad cow crisis, debt and rising interest rates. This is an added difficulty.
Last weekend, I went to talk to people at a supper in an agricultural area. I had a heated discussion with people on the one hand, who love agriculture and have dedicated their lives to it, and those on the other hand, who have dedicated their lives to it and found it very difficult. The latter found that conditions for agricultural producers left much to be desired.
Last week, I also went to the Montmagny agricultural exhibition. While talking to the people there, I sensed their pride in having a strong agricultural community. I also recognized the need for their elected representatives in the House of Commons, the Quebec National Assembly and elsewhere to stand up for agriculture and, especially, to ensure that the regions are in good financial health. In rural areas, when agriculture begins to suffer, the whole environment starts to fall apart.
People are leaving the region. Families are losing control of their farms, and we are moving toward the industrialization of agriculture, which is not necessarily the best path to take.
By introducing this motion in the House today, the member for Richmond—Arthabaska has succeeded in bringing about this debate. At the end of the debate, there will be a vote. I hope that the Conservative members will have taken the time to read the text of the motion so that they have a good understanding of what is before us. It is vital that we close the door on anything that could weaken supply management. This is our first test. I urge the members of this House to vote for the second motion the Bloc has presented on this issue in less than a year.
We are the ones who introduced in the House a motion that is essential to the development and maintenance of a good, solid, rural and agricultural economy. I thank the member for Richmond—Arthabaska, who has enabled us to fight this battle that, in the end, will benefit all of our regions.