Mr. Speaker, I am pleased to speak in support of the proposed amendments to the Farm Improvement and Marketing Cooperatives Loans Act. I am sure that my hon. colleagues will agree that they are solid, common sense measures and that the time has come to adopt them.
Important changes are taking place in the agricultural sector. The size of agricultural farms is increasing and it is becoming more difficult for a beginning farmer to obtain the funds required to set up a viable operation. About half of all farms, representing some $123 billion in assets, are run by farmers who are 55 and older.
What will happen when these farmers want to retire? A good number of them will do so in the next 15 years.
Over the next 15 years, Canadian farmers, operating almost 84,000 farms, are expected to retire. I say “expected” because we know some will work beyond the age of 70.
In any case, we are talking about a major intergenerational challenge for Canadian agriculture that is going to play out over the coming years, a challenge to attract young farmers to the business, a challenge to transfer family farms to the next generation, a challenge to renew and rejuvenate the Canadian agriculture and agrifood sector and to put it on a sound footing for generations to come.
We need to attract young people to a future in farming. Young farmers are the foundation of Canada's agriculture and agrifood sector. They enrich and strengthen communities across Canada through their hard work and innovative spirit. They exemplify the entrepreneurial spirit that is critical to our success in the years to come. As entrepreneurs, young farmers want a government that gives their farm businesses room to grow and the tools to capture new opportunities.
I want to talk about a young farm family that is part of the next generation. Robert and Erin Brunel farm with Rob's dad, Paul, in Ste. Rose, Manitoba. R.P. Brunel Inc. is a fourth-generation family farm that specializes in grain. The Brunels farm 3,000 acres. Rob and his wife, Erin, welcomed their first child, Myley, in to the family in mid-November. Rob would like to continue to expand the business and eventually take over the farm completely from his father.
The Brunels dream of a future in agriculture, but realizing that dream is much easier said than done. It is not uncommon for farms today to have assets of well over $1 million, a considerable amount for the next generation to finance. Rob says that there are programs to help young farmers out there, but he does not qualify for many of them and they are not targeted to his specific needs. He would like a program to help him proceed with his expansion plans and eventually finance the farm transfer.
Farmers like the Brunels are the future of the sector and we need programs that will help them capture that future. That is the objective of the proposed legislation we are discussing today.
For the past 20 years, the Farm Improvement and Marketing Cooperatives Loans Act, commonly known as FIMCLA, has helped farmers and farmer-owned co-operatives improve and develop their businesses through government loan guarantees. Guaranteed loans of up to $250,000 are available to farmers for up to 80% of the purchase price. The interest rate is capped. For co-operatives, the maximum loan is $3 million.
Over the years, FIMCLA has been a valuable financial tool for farmers, helping them improve their farming operations when other sources of funding are not available or priced too high to make them viable.
Federal programs to help beginning farmers enter the agricultural sector have a number of restrictions. The advance payments program, governed by the Agricultural Marketing Products Act, only provides short-term financing to new farmers. Provincial programs for beginning farmers vary a great deal in terms of the types of programs and the amount of assistance provided.
Support for agricultural cooperatives is also limited. Debt financing provided by credit institutions to cooperatives is insufficient and provincial programs present the same problem. There is no doubt that the rules are not fair.
Consequently, in 2005 the previous government announced that it intended to cancel the program. The industry did not see this as a solution, and neither does this government. That is why we have pledged not only to maintain FIMCLA, but to consult on how to make it more responsive to the needs of farmers today. Therefore, we did that.
We heard from young farmers across Canada, farmers like the Brunels, who talked about the need for support for both beginning farmers and farm transfers. We also heard from co-operatives that told us about the challenges they had in raising the equity they needed to help farmers participate in value-added ventures.
I want to linger a moment on the topic of co-operatives. There is no question farmer owned co-operatives are a way to move farmers further up the value chain. In fact, in my riding of Glengarry—Prescott—Russell there is a very important agricultural co-operative known as St-Albert Cheese. Some farmers like the co-op approach. In fact, I have met with some in my riding of Glengarry—Prescott—Russell.
Co-ops have a record of providing benefits to farmers, improving their competitiveness, pooling risk, coordinating marketing and retaining local wealth and promoting rural sustainability through local ownership and control.
For example, Agropur, a Quebec-based dairy co-op, is one of the top dairy companies in Canada. Agropur reported revenues of $2.3 billion and a surplus of over $120 million last year, and it is owned by farmers. Across Canada, some 1,200 agriculture co-operatives generate annual revenues of $13 billion and return over $200 million back to their farmer members.
Like the farmers they serve, co-ops are evolving to take advantage of opportunities in the bio economy, to meet new consumer demands and to find new sources of capital and specialized expertise. This is more challenging than ever, given the high capital requirements of ventures like these.
We listened and we acted. The result is what we have before us today.
Before coming up with the amendments proposed in this bill, Agriculture and Agri-Food Canada consulted widely with young farmers and financial institutions. According to stakeholders, changes to the Farm Improvement and Marketing Cooperatives Loans Act (FIMCLA) will be a great step forward.
The Canadian Young Farmers Forum is backing these recommendations. It has also insisted that the paperwork be simplified.
Accordingly, the Department of Agriculture and Agri-Food will devise an electronic loans system under the amended FIMCLA in order to reduce processing times for loan applications.
Under the legislation we are proposing, FIMCLA, or the Farm Improvement and Marketing Cooperatives Loans Act, would be opened up to beginning farmers, to family farm transfers, and to a wider range of agricultural co-operatives.
For beginning farmers, the loan limit would be increased from 80% to 90% of the purchase price. We are proposing an increase in loan limits to $500,000 for real property and $350,000 for all other loan purposes. Loan guarantees would now be available on farm transfers through shares of a corporation or interest in a partnership.
For co-operatives, this proposed legislation would respond to the co-op sector's needs by expanding eligibility requirements to include all agricultural co-operatives with a majority, 50% plus 1 of farm members. These measures respond to recent trends in co-op development by allowing non-farmer investment while at the same time retaining farmer control.
The proposed bill would also build in flexibility in the regulations so that loan limits can be changed as the need arises. We are not talking about just fine-tuning FIMCLA. We are talking about key improvements to the core program.
That is why we are proposing in the new bill that the program name be changed to the Canadian agricultural loans act. This is a better reflection of the proposed legislation's stronger national focus.
Opening up the program to beginning farmers, intergenerational farm transfers, and a broader range of agricultural co-operatives would create a national loan guarantee program that would support the entire agricultural community, and it would bring parity to the agricultural sector with other sectors of the economy which are entitled to benefit from small business financing programs.
This is a government that delivers for young farmers.
We have helped support family farm transfers by increasing the lifetime capital gains exemption from $500,000 to $750,000, the first increase in 20 years. To help farmers manage cashflow, we have doubled the amount of interest free money available through cash advance programs. This would make about $600 million per year available to agricultural producers. We have delivered stable, predictable and bankable support for farm families.
We are working with provinces and industry to design programs under the growing forward framework to secure a profitable and vibrant agricultural sector for the next generation. This government supports strong, young farmer associations such as the Canadian 4-H Council, Canadian Young Farmers Forum, and Canada's outstanding young farmers.
I would like to quote briefly Doug Spencer, a dairy farmer from Campbellford, Ontario, because he touches on an important issue in the farming community right at the moment:
|| At the moment, the highest priority for my wife and me is to know that the business we've built up will be taken care of by the next generation, and this plan will help see to that.
The proposed amendments to FIMCLA will help farm families like the Spencers keep the farm in the family and help the older generation retire with dignity. It is good news for beginning farmers, for retiring farmers, for farmer-owned co-operatives, and for the whole sector.
The bill would provide fairness and parity with other businesses, both for beginning farmers and for farm families looking to transfer the business to the next generation.
It supports the next generation of farmers and agricultural co-operatives. It gets rid of some of the red tape and paperwork to make the program more accessible and more flexible to all farmers.
Farmers in my riding of Glengarry—Prescott—Russell represent the strong and vibrant agricultural community. They are in favour of this type of legislation and of the increased access to credit that it affords them.
I highlight that we have introduced business risk management programs. We have invested in the agricultural sector and launched new initiatives to help our farmers across the country. The minister has been very busy, opening foreign markets once again to help our agricultural sector. We are taking real action to defend and promote the best interests of our farmers.
Farmers strongly support this bill and I invite members to support the changes we are proposing to the Farm Improvement and Marketing Cooperatives Loans Act.
Mr. Speaker, I am indeed pleased to speak on Bill . During my remarks, I hope to explain the benefits of Bill and why the Liberal Party will support a quick passage of this bill. We in fact are willing to pass it through all stages and get it to the Senate so that it can be dealt with quickly and kick into gear, because the bill has been very late coming.
However, it is also critically important for the Conservative government to actually bring forward immediate measures that would deal with the income loss problems of primary producers.
I will outline those areas and propose some solutions.
The reality is that the minister talks, as the parliamentary secretary did in his remarks, of putting farmers first. However, when we drill down into the minister's record, it is nothing but a record of failure. The bill, in its final analysis, would add to what the government has been most successful at doing; that is, increasing farm debt.
Since the Conservative government has taken office, farm debt has increased by $5.1 billion and now stands at $54 billion, four times higher than that of the United States' farmers.
Worse, in recent years, this debt has not been for new technologies or new investments, in the main, but much of it has been for primary producers borrowing more money or gaining advance payments program money loans in the hog and beef sector just for their very economic survival. In the agricultural industry in this country, some commodities are in serious trouble.
So let us be clear. While the bill would provide availability of credit to farmers, it is not designed only for the interests of the farming community. It is designed, in its final analysis, to guarantee the banks 95% protection on the money they have lent.
In fact, if we look at the 's announcement, he states that he will bring forward new legislation to guarantee an estimated $1 billion in loans over the next five years to Canadian farm families and co-operatives.
So let us be clear. The did everything he could in the announcement to make it look like he was providing $1 billion. He is not providing $1 billion. It is loans that are coming from the lending community, and the Government of Canada, through this legislation, is guaranteeing the lenders 95% security on those moneys.
The real problem in the farm sector is price, stability of income; and that, the government fails to address. I want to be very clear on that. Adding debt, then, will just not do it. Farmers' real challenge is sustainable farm income, and I will come back to that serious issue in a moment.
Bill , then, really is about amendments, as the parliamentary secretary said, and it would provide a new loan guarantee program for these areas. Farmers would be eligible for new loan limits of up to $500,000 for the purchase of real property, and $350,000 for all other loan purposes. New farmers and producers taking over the family farm would be eligible for loans. They are not currently eligible under the current legislation, and I think that is important for intergenerational transfer.
However, keep in mind, the big issue on intergenerational transfer and why in my question earlier I talked about farms stopping at the sixth generation is not just access to credit. The fact of the matter is they cannot balance their balance sheets economically under the current pricing regime, and the government is absolutely nowhere to be found. We are losing some industries in this country.
As well, as the parliamentary secretary said, agriculture cooperatives, including now the ones with a majority of farmer members, 50% plus one, would be eligible for loans up to $3 million for the processing, distribution or marketing of farm products. But that is an important point in itself. It used to be that we had 100% farm members. Now we are dropping to 50% plus one. That tells us that there is a serious problem in rural Canada in that the assets are no longer there for the farmers themselves to provide the asset base and the stability for those cooperatives, and we have to go to others in the community. That is a sad commentary, because farmers themselves need to have the asset base and the net worth to be able to provide for cooperatives in this country, which is a good system. A new online system would improve the delivery of the program, and we certainly agree with that.
However, again, I must mention, the bill provides far more guarantees for banks than it does for farmers, which speaks to the government record in increasing farm debt. Farm debt has skyrocketed to over $55 billion today. The real challenge facing farmers is sustainable farm incomes. The Conservatives have a long list of broken promises with regard to support for farmers.
While we can support the changes in Bill to better reflect the size of today's farms, we should not let the Conservatives forget the list of Conservative failures to help improve farm income. They promised hundreds of millions of dollars and raised the hopes of farm families, but then consistently failed to deliver on those promises.
In March 2007, the himself announced $100 million per year to farm families to address rising “cost of production issues”. That plan was cancelled in the 2009 budget before it was ever implemented.
Also in 2007, the announced AgriInvest, a new savings program to help farmers manage business risks. The Prime Minister touted this initiative as “programming that is more predictable, bankable and better enables farmers to better respond to rising costs”. Two years later, it still has not been implemented. I remind the parliamentary secretary, because he used those words of predictability in his remarks, it only works if farmers have income that they can put into the investment and the government is failing to assist in terms of that level of income.
In November 2007, the minister committed $6 million to strengthen value-added processing in Atlantic Canada to help struggling beef and hog farmers there. Now, a year and a half later, this money has not been provided and we find out that it is also a loan, more lending, more credit, not income.
During the 2008 election campaign the committed $500 million over four years to create an agricultural flexibility program, to help farmers build flexible programs to meet their local needs, but once re-elected, the government broke its promise again and announced a program of less dollars that could not be used for flexible programming. In reality, it was only $190 million over five years and was not allowed to be used for RMP in Ontario or ASRA in Quebec.
In budget 2009, the announced a new $50 million investment in processing capacity for livestock producers. Then, four months later, it changed into a loan program, far from what cattle farmers were led to believe.
By golly, Mr. Speaker, I almost forgot, do you remember when the previous minister announced the farm families options program, targeted to low-income farm families? After one year of a two-year commitment, it was cancelled in midstream.
That cancellation virtually robbed farm families of $246 million, money they had counted on. So much for the Conservative government putting farmers first. The fact of the matter is that what the Conservative government has done has increased debt and added to the farm community's financial instability.
Allow me to turn to some of the specific commodities, and I will make a few comments.
In P.E.I., the government's lack of action has caused, to a great extent, the loss of the hog industry. Roughly 80% of that industry has now gone in the last 18 months, and P.E.I. has lost its only hog slaughter plant. If the minister does not soon deal with assisting the regional issue of pork production and the one slaughter plant that remains in Atlantic Canada, then we could in fact lose the total regional industry. There are only four producers left in the province of Nova Scotia.
So I ask the minister to start to deal with the issue at the farm income level. There are several things that the minister could do. Certainly the minister has to come in with a major payment for the pork industry in this country, which is finding itself in financial distress, and nothing less than $1 billion in an ad hoc payment will save this industry.
The Canadian government must stand up for Canadian producers, must challenge the U.S. in terms of the country of origin legislation and ensure not more debt but that the cash is there to assist in the survival of this industry.
I would add a note of caution. If government does introduce an ad hoc payment, then it needs to be a total package. Number one, we need the ad hoc payment.
Number two, the severe economic hardship moneys that were advanced last year, which are now loans, were put in place not to provide income but to allow debt servicing so that farmers could maintain a credit line. Those severe economic hardship moneys must be extended out, not just using an ad hoc payment to pay off that debt, but that a new ad hoc payment can come in so that producers can use that for working capital they direly need.
As well, the beef industry is in serious trouble. Instead of dealing with the problems they have in that industry, the Government of Canada set up a system where they can acquire more debt. That is not what they need to do. I would suggest that what the government needs to do in this case is allow the current safety net program to work. First, eliminate the viability test; and second, allow producers the better of the Olympic or previous three years' average for reference margin calculations so that they can trigger the current program.
Regarding the current safety net program, if we remember back in the 2006 election, the said he was going to cancel the CAIS program. What did he do? He changed the name. In fact, the new AgriStability program is even worse than the old CAIS program in times of economic difficulty.
The suggestions I am putting forward for the beef and hog industries would allow the program to work for those industries. They cannot access the safety net programs now because the reference margins are not there. What I am proposing today is a simple solution so that the minister could allow the safety net programs to do what they were designed to do and allow hog and beef producers in my province of Prince Edward Island and across the country to be able to trigger a payment they direly need.
A similar situation exists actually in the potato and root crop industry in my own province of Prince Edward Island.
Last year, as the minister knows, there was a lot of weather damaged crop, which triggered the new agrirecovery program. The problem is that agrirecovery, although the government talks about it as a disaster program, does not work as a disaster program. The minister promised $12 million but only around $3 million was spent and that money was only allowed to be spent to assist in the costs of disposal of the crop, whether it was in the warehouse or in the field.
I have two neighbours in my home province of Prince Edward Island who are not planting this year because of the disaster caused by weather conditions. The government's program leaves them out in the cold and does not assist them. It costs $2,800 to $2,900 to grow an acre of crop. The agrirecovery program gave them $200 and it cost them $200 to dispose of the crop. That program is not working. What I would suggest to the government in that case is similar to what I suggested in terms of beef and hogs. The government should allow the agristability program to once again work. it should cut out that bad year and go back to the other years to get reference margins so that producers could at least trigger a payment.
I have two more points on the potato industry that I should make relative to Prince Edward Island. The government should not allow the disaster year to be counted in their production history. It is an event beyond producers' control. Weather crop loss is an act of nature. If it is kept simple and that year is not be counted in the production history, the producer would be more likely able to trigger a payment. The potato industry in P.E.I. and the other root crop industries really need a stay of default on the advance payment program so they can trigger that program again in order to have the working capital to put in a crop.
That is what is direly needed in this industry. Whether it is in hogs and beef, there are potential solutions. Credit is not the only thing that needs to be talked about. It is the same thing in the potato industry. Farmers need income and they need cash to do what needs to be done.
Again going to the record of failure, the government has been responsible for the loss of more slaughter capacity and value-added production in this industry than any other government in Canadian history. I will run through a list: two Maple Leaf Foods plants in Winnipeg and Saskatoon; two Olymel plants in Saint-Valérien-de-Milton and Saint-Simon-de-Bagot in Quebec; one Qualiporc Regroupement Coopératif plant in Les Cèdres, Quebec; and one Natural and Organic Food Group plant in Charlottetown, Prince Edward Island.
CanFax Packers directory reported that out of 33 federally inspected slaughterhouses in January 2006, only 26 plants remained in January 2009. Among those that closed down were Blue Mountain in British Columbia, Rancher's Beef in Alberta, Natural Valley Foods in Saskatchewan, Gencor Foods in Ontario and Abattoirs Zénon Billette in Quebec.
My point is that the record of the government is one of failure. While the bill today is needed in terms of advancing available credit, it ties into the record that the only thing the government has been successful at is increasing debt and as a result our industry is in trouble. The government must seriously address within days making sustainability a firm income sustainable and that way producers would be able to pay back the debt and not just get additional loans.
Mr. Speaker, it is my pleasure to take part in the debate on Bill to amend the Farm Improvement and Marketing Cooperatives Loans Act.
The Bloc Québécois supports this bill. However, even though the government members might not be happy about this, we will raise some concerns and issues that could have been resolved through this legislation or other programs. Some questions must be asked. Nevertheless, this bill does include some positive elements, and we do not intend to stand in the government's way, because we would like this bill to move forward quickly.
That being said, I want to point out that the government does not seem to learn from experience. As I have said before, this government is all about marketing. It makes wonderful promises and big announcements in perfectly planned settings, but afterward it becomes clear that the government is trying to force something on us and that the promises look different on paper.
For example, just before the most recent budget was tabled, the made a big to-do about finally bringing in a truly flexible program. As we all know, the Canadian Federation of Agriculture had proposed a program called AgriFlex.
The minister said that he would invest $500 million in the program, just as the producers wanted. The program that turned up in the budget had nothing to do with what producers wanted, and risk management was left out. Also, instead of $500 million over four years, the government promised $500 million over five years.
The worst part is that the provinces do not have the flexibility they need to implement their own programs. In other words, the provinces do not have the flexibility they need to funnel that money into the programs that they have already set up. As it turns out, the announcement was not so wonderful after all.
There is also the issue of the “Product of Canada” label. Earlier, I talked about the consultations that were announced with great fanfare by the government on every issue. The principle is the same. The Standing Committee on Agriculture and Agri-Food discussed changing the totally obsolete rule for “Product of Canada” labels. I am going to explain this rule, even though it is very well known. Under that rule a food product could be labelled a “Product of Canada”, provided that at least 51% of its total cost was Canadian.
That aberration was obvious when we would see the “Product of Canada” label on a jar of olives, because the jar, the lid and the liquid were Canadian, but the olives obviously could not have come from Canada or Quebec. We have yet to see olives grow in any part of Canada, whether it is Prince Edward Island, Vancouver, Quebec or Ontario. Therefore, the legislation had to be amended, so that consumers would know that they were buying a food product that was really produced here, that really came from here.
So, the committee's consultations were going well, until the and the announced, on a farm located in the pastoral setting that I described earlier, that they were changing the regulations on “Product of Canada” labelling, and that this issue would be settled.
As for us, we had not even finished our work, we were still consulting people. Thus, they proposed a standard that Conservative members on the committee had never told us about, namely the 98% rule for obtaining the “Product of Canada” label. This has the reverse effect of the infamous 51% of the total cost rule. Before, anything could be called a “Product of Canada”, but now it is nearly impossible for a product to get that label. It seems that the government has not learned from its mistakes.
The member for also referred to the options program, which had also been announced with great fanfare. The idea was to help the neediest agricultural producers but now, two years later, we realize that the program is not working very well and is not really adequate.
As we said before, it is hard to be against this. Helping the poorest farmers is not necessarily a bad thing, but it is not at all what farmers wanted. The government decided to drop the program simply because it was not working. Insofar as consultations are concerned, I wonder where the government went in order to realize that these changes were not wanted. It sure laid an egg with this program, which no longer exists.
The purpose of Bill is to increase the availability of loans to help farmers get established or to develop and improve their farms, including through the processing, distribution and marketing of farm products. We will therefore vote for this bill. The government will make loans more available by providing loan guarantees at designated financial institutions.
The Bloc Québécois wants to remind the House that farmers often find themselves in a precarious situation as a result of the decline in farm income, the economic crisis and all the various problems that have affected agriculture. The government should not use this bill, however, as an excuse for not taking other measures that should be implemented to help various agricultural sectors deal with the crisis facing them.
We are also concerned about the latitude the government has given itself by retaining the right to change the process and criteria by regulation. If the minister is given broad discretionary powers, we may be left with terms and conditions that make particular programs available in theory but the minister has the power to block it all. I will provide examples later if time permits.
The amendments to the current act will ensure that beginning farmers—the next generation therefore—are included in the definition of a farmer, and that is a good thing. The amendments will also extend eligibility to farm product cooperatives whose members are at least 50% + 1 farmers, instead of requiring all members to be farmers, as was previously the case. In addition, the bill increases the availability of loans by including in the definition of a lender other designated organizations.
The bill also amends the current legislation regarding the percentage of a lender’s loss that can be reimbursed for loans to farmers that are guaranteed by the government. This provision provides compensation of as much as 95% of the losses suffered, unless a lesser percentage has been fixed by the regulations. This is an example of the minister’s discretionary power. It is the same in clause 4(2)(c), where the government reserves the right to add various kinds of livestock to the program or eliminate them from it.
The bill also makes it possible to use the loan to buy land and not just new land, as was previously the case. This small but important adjustment makes it possible to use the loan to buy shares in a corporation or membership in a cooperative and allows for intergenerational farm transfers, instead of limiting it to the purchase of new farm land.
As for the famous consultations with stakeholders, I saw the document the government released. It is available on the Agriculture and Agri-Food Canada website. The government did hold consultations across Canada. In Quebec, they took place in Longueuil. To my great surprise, the Union des producteurs agricoles du Québec, the Coop fédérée and the Fédération de la relève agricole du Québec were not present at this consultation.
This makes me wonder whether the government was truly committed to consulting the people directly affected by such measures. Many people from the banks were present. Earlier, the member for explained that rather than being designed to really help young farmers and producers, the bill was designed to help the banks and guarantee the credit they would then give to producers and young farmers.
I also spoke to Frédéric Marcoux, the president of the Fédération de la relève agricole du Québec who said he was nonetheless “enthusiastic about the political will to support beginning farmers, which the federal government eventually affirms”.
It is important to quote the federation's press release, which says:
|| However the Federation regrets that the young farmers were not previously consulted and would like to know more into details the ins and outs of the program, before giving a more precise opinion...the loan insurance problem is not the main difficulty for the youth who wish to start in agriculture.
The federation president stated:
|| “It would be good to involve us much more in the thinking process engaged by the federal government, a preliminary diagnosis of the situation of the establishment in agriculture in Canada would be a good basis to then propose suitable and efficient measures.”
We can see that young people are very aware of what they need and want and that they did not feel at all involved in the government's decision to introduce such a measure. They did not feel that they had been listened to. The is a member from Quebec, and every time questions are put to him, he answers that he is listening carefully and that he is very open. I have rarely seen a minister with such large ears. But I think that he is not listening to the same people we are. What we are wondering is: whom is he listening to? Whom is he consulting?
Earlier I referred to the example of the “Product of Canada” label. That is a perfect example. One might wonder where the minister was, or where the was. Where were those individuals when everyone agreed that 98% was completely unacceptable? Yet the minister says he is listening. It appears he did not listen to the Fédération de la relève agricole du Québec, since it was not even invited to the famous consultation that took place in Longueuil.
In Canada, I found only one location, Newfoundland, where young farmers were in fact represented. I must admit, somewhere in Canada, one person spoke on behalf of young farmers. That was in Newfoundland. Everywhere else, there was not one representative of young farmers in attendance at those consultations. That is simply not enough.
As for the positive aspects, the Canadian Federation of Agriculture, whose new president is Laurent Pellerin, commended these measures, which will give farmers a boost. Mr. Pellerin said that young farmers and cooperatives are a vital part of the agriculture sector, and that the proposed changes could be helpful in that regard.
The Fédération de la relève agricole du Québec also pointed out that Quebec is losing more than one farm per day and that the problem must be addressed through fiscal measures, in order to preserve existing farms and keep them from going under. It said that the government must take these factors into consideration if it wants to help young farmers and that, more than ever, the problems facing the next generation of farmers must be at the heart of Agriculture and Agri-Food Canada’s concerns.
Unfortunately, young farmers gave their opinion after the fact. It would have been better if the government had heard from young farmers before Bill was drafted.
We are talking about consultations and listening to stakeholders. It is no surprise that the Bloc Québécois is always ahead in Quebec. The reason is simple: we really go out and meet people, and hear what they have to say. That is what we did with young farmers.
In January 2005, the Bloc Québécois organized a conference called “Vers un transfert de fermes gagnant”. The Union des producteurs agricoles took part, as well as the Bloc québécois and the Syndicat de la relève agricole de la Côte-du-Sud. The conclusion we reached was that several tax measures could be taken to help the next generation of farmers. If the government is really serious about helping the next generation and establishing winning conditions, if I may use that term, to ensure that the farm sector survives, it should listen to the proposals that came out of our 2005 conference.
That is not all the Bloc did. On several occasions, it put forward motions proposing these ideas. I managed in committee to have them included in the recommendations made in various files in order to ensure that the government knew that some very effective measures could be taken.
In order to make it more attractive to transfer farms rather than dismantle them, the Bloc Québécois suggested in particular that the capital gains deduction on agricultural property should be increased from $500,000 to $1 million. A change was made and the amount is now $750,000, although this could be increased to $1 million solely in the case of transactions which result in the farm being maintained.
We also suggested the government should extend the rollover provision to other transfers beyond parent–child. We said it should be extended to other immediate family members less than 40 years of age. It could be brothers, sisters, nephews, nieces, grandparents, grandchildren, and so forth. It is good for farms to stay in the immediate family, but we should not prevent them from being transferred outside the parent–child relationship. It would be very easy to expand this and make it easier to hand down farm assets.
We also proposed a farm transfer savings plan that would enable farmers to accumulate a non-taxable retirement fund. Governments could also contribute, as they do in the case of the education savings plan. This contribution would be conditional on the farm being preserved after the transfer.
We also suggested that the government make the home buyers' plan more flexible to allow young farmers to obtain, in whole or in part, a larger portion of a residence owned by a corporation and to use their RRSP to acquire an agricultural business. Currently, the home buyers' plan, also known as the HBP, allows individuals to use their RRSP to purchase a residence. The next generation of farmers has asked us to propose two measures to make the home buyers' plan more flexible so that they can acquire a farm, not just a residence, for the purpose of becoming a co-owner of the family farm, not just a homeowner.
This proposal comes directly from those representing the next generation, those who know what they need. After plenty of proper consultation, we think that the government could easily implement these measures. It would have been nice if some parties other than the Bloc Québécois had made similar proposals during the election campaign.
We also proposed that the federal government transfer a recurring envelope of funds to the Government of Quebec to encourage young people to take up farming. For example, the Government of Quebec could extend access to the start-up subsidy, improve interest rate protection and raise eligibility limits, introduce a start-up subsidy for young people starting up in agriculture part time and gradually moving into full time, and create a single-window approach to match farms with no succession and young aspiring farmers without farms.
These were the ideas that came out of a tour by the Bloc Québécois concerning land use. My colleague for , who is present, participated in this tour of Quebec. It is obvious that if we do not foster and support agricultural succession, farms in many regions will disappear. We have already provided some statistics. The member for and I spoke about this. A number of farms cease operations every day in Quebec and Canada. We have to be proactive if we do not want farmers to disappear. These measures, which are loan guarantees, will be welcomed by some sectors.
Just last week we heard pork producers say that they are being affected by H1N1 even though we know very well that this flu is transmitted from human to human. They have not yet put their problems behind them and this type of program will not help.
This program also will not help potato farmers in Saint-Amable who are still fighting the golden nematode, which struck in 2006. They still do not have a long-term plan for alternative crops.
Therefore, there remains work to be done. I invite the government to reread what I just said about measures to help the next generation of farmers. It might really give a little bit of help to those who need it.
Mr. Speaker, I am pleased to speak to this critical issue to farmers. It is also a critical issue to consumers of those farm products, because without farmers clearly we would be at a loss. There are not too many of us who can provide for ourselves when it comes to food substance.
As much as the bill looks at increasing debt and doubles the amount of available credit from $250,000 to $500,000 for individual farmers, as my hon. colleague from the Bloc has pointed out, at least in Quebec, they did not talk to young farmers' associations.
Across this country, the age of farmers is on the increase. Parents quite often give their children advice. Unfortunately in a lot of cases, the parents in farm families are advising their children against getting into the farm business, to not be as foolish as they were. They are not just working on the farm to try to make it viable, the subsidy that farmers give to their farm is the off-farm job they have to perform to keep their farm.
There are not too many of us who would have a second job just to keep the first job. Farmers who are passionate about being farmers are willing to subsidize their own farm by getting a second job. We hope this credit program will not drive them into getting a third job just to pay the debt.
As we look at debt loads for farmers, it is quite telling. Where were the debt loads 10, 20, 30 years ago? In 1972, the debt to income ratio was 2:1. It went to 23:1 between 2004 and 2005, which is significant. within that timeframe were the 1980s, where we saw interest rates of 18% to 22%, for those who remember it. I certainly remember it all too well, as I had to remortgage the family home when interest rates were 18% to 22%. What that meant as far as paying down the principal of the mortgage was about a penny a week.
Farmers got caught in that trap. To them it was not about paying a penny a week against the principal on the family home and farm, there were farm foreclosures across this country. Farms were lost, and farmers were driven off the land. In some cases these were farms that had been in a family for generations.
The problem with debt is that it can be an asset to a business. We should make no mistake about it, farms are small and medium size businesses, and sometimes they are very large enterprises, depending on the size of the farm. Debt is an instrument to be used as part of working the farm in the sense of what needs to be done. Most farmers have debt, whether it is for buying seeds or buying equipment, doing that capitalization.
We see the increase in debt clearly continuing from the seventies all the way through to this century. If that continues, the farmer may be caught in a period of high interest rates. The interest rates do not have to be as high as they were when I was a young person, at 18% to 22%; they simply have to move away from where they are now. The margins are so razor thin for farmers, if the debt ratio were to increase slightly, or the interest rates were to bump up by 4%, 5% or 6%, farmers would be in one heck of a lot of trouble. We, as a society, would be in even more trouble.
The bill has assets that New Democrats are willing to support to get to committee so we can do an investigation and work on the legislation. However, it does not have all the assets we need to see as a comprehensive policy for farmers across this country.
As my colleague mentioned, the vast majority of us lined up to get into the Senate courtyard last week when the pork producers were here to show our solidarity with pork producers, to show Canadians that pork is safe to consume. In fact, Canadian pork is the best pork, not only in this country or on this continent but around the world.
The pork producers were saying that they do not want another loan. The president of the Ontario Pork Producers Association said to me quite clearly, and I had been at an engagement with him not long ago, that he does not want another loan. He has had enough loans to keep him in business until the end of his days, plus some. He said that he needed some money, that he needed cash was how he put it. As a friend of mine used to tell me, cash is king. In this case, he needs cash and his producers and the producers across this country also need that cash. They do not need additional debt.
There is not a farmer across this country who does not have debt. If we ask young farmers to take on debt, we are just emulating what we have asked young people to do with their education, which is to take on debt. We have seen the success of that. We have young folks who are bankrupt before they get to their 30th birthday. I have never seen that before in my lifetime. When I was a young man, I never saw young people go into bankruptcy just because they went to university.
Heaven forbid that we should tell young farmers that this is a great career, they are anxious to get at it, then we put them into debt and bankrupt them in 10 years. That will not do anything for farmers, and it will not do anything for this country. We need to make sure when we actually provide programs to young farmers and to existing farmers who are on the farm today that indeed we are supportive of them.
The farmers are saying they already subsidize their farms. It is called off-job farming. It is amazing to me how they can still do that. But we have seen casualties. My hon. colleague from has quoted statistics numerous times in committee and here in the House about the number of farms we see going out of business in this country. If they were other enterprises, we would call that a crisis, but because they are farms, it seems to get lost.
It seems that if it happens to the farm community, it is assumed that someone else will farm that land. I can tell the House that in my riding there is a lot of fallow land, and it is not because the farmer let it go to fallow this year; it is because there is no one there to produce the land anymore.
We have watched different places close, such as CanGro, which my hon. colleague from mentioned. CanGro was a processing plant in St. David's, just outside of my riding on the Niagara Peninsula. It was the last canning factory east of the Rocky Mountains. It took in a great deal of the tender fruit, especially pears and peaches, from the Niagara region. With the closure of that plant just over a year ago, those farmers who were growing clingstone peaches no longer have a market.
However, there is a market for peaches in this country. Canned peaches now do not come from St. David's, Ontario; they come from China. For those who happen to be growing peaches in the Niagara Peninsula, it is pretty tough to pick those peaches, send them over to China and expect them to be canned and sent back. Those farmers are pulling their trees out.
What do they do next? They can get another loan, but they do not have a crop to pay the last loan, so they get another loan with no income. How do they encourage their young folks to take over the family farm when the young people look around and all they see is a field where those peaches once grew?
There are some folks who are trying to be creative in marketing some different things. In fact one farmer's spouse said she was going to get back in the canning business because she does not believe the majority of Ontarians know how to can products anymore. She is probably right. She is going to start up a small business, teaching folks like me and my kids how to can. So they are going to keep their peach farm.
That is an innovative idea. Only farmers could come up with those innovative ideas. They are truly the most innovative group of small business people across this land. They really want to work, and they want to work with us. We have to find a way to work with them, a way that is different from the programs we have been handing to them for the last 30 or 40 years, because clearly they have not all worked. There was some short-term relief in some of them and a bit longer-term relief in others, but we have never fixed the problem to make sure they are viable.
There are many, many reasons as to why that viability does not exist today. Some talk about international markets; some talk about the local markets. But clearly there is a disconnect between what the consumer pays at the grocery store and what the farmers receive at the end, which is basically a pittance compared to what has been taken through the system. We see too many of them going out of business because they do not make enough money at it anymore. Some are so beat up and so worn out that they get to a stage where they simply say that enough is enough.
Too often we hear people say, “Your equity is in your farm. Do not worry about it. You can sell it when you get older.”
If farmers have a viable farm in the greenbelt in Ontario, they need to keep it that way because it is the only thing they can sell it as. The problem is if they do not have any young people who want to take up farming or someone who wants to amalgamate the farm into their farm, they are stuck with a farm that is useless because they cannot sell it. All they are doing is holding it. Who are they holding it for, if it is not for the next generation or for neighbours? They might not want to lose any more money because they have already lost money or take on more debt. Farmers have built up equity through 40 years of sweat and toil on the lands to help feed Canadians. Now there is no return for those farmers, and that is a shame.
We talk about how we could help farmers. We talk to them about buying local. A couple of things happen when we buy local. Quite often we do it at the farmers' market, but we do not see any support for the farmers' markets across the country. Even though the Canadian Federation of Agriculture has asked for that support, it has not seen it yet. This would be one way to ensure our local producers could get to the farmers' market so they could make some additional money and become, hopefully, viable from a financial perspective.
However, the other side of it is the national grocery chains. Quite often there is no place for local products. There is no placement on the shelf, as they call it in the trade. Because of the numbers of outsourced products, the quantities they can bring in and the way they can control them, they get pride of place. Even though local producers have that ability to produce the quantities, we still do not get pride of place. Sometimes we do not get any place at all. It depends sometimes on the local market itself or whether the local supermarket wants to do it.
I know my hon. colleague from knows this when it comes to potatoes. I listened to a potato producer in Ontario who said producers sold their potatoes locally only after they had travelled 300 kilometres away and 300 kilometres back. I do not quite understand that. Here is a potato producer, planting potatoes down the street from where he wants to sell them, harvesting them, bagging them, shipping them away, only to ship them back to the same place he is going to sell them. Tell me the rationale to that. Could the government explain why we need to do this? It does not make any sense. It is one thing for potatoes to come from P.E.I. to Ontario. That is a different thing. Those things do not make sense. We need to find a way to make sense for agriculture producers. They are asking for that. They are not asking for a great deal. They are simply saying they need to make things make sense for them as farmers and for us as consumers.
My colleagues have talked about how we know things are made in Canada. I know my colleague from has done this with his wine tasting, but I would like to survey the folks in here and ask them this. When it comes to the wines the Niagara Peninsula, do they know what “cellared” means? What does VQA mean? If we look at a cellared product, it says “cellared in Canada”. Does that mean it is a Canadian product? Are those grapes harvested, picked, pressed and put into a bottle here in Canada? The answer is no.
The grape that goes into that bottle of wine called “cellared in Canada” primarily comes from about three different places: Chile, Australia and sometimes South Africa. They are not coming from the Niagara Peninsula, or the Okanagan, or down by Pelee Island in southern Ontario. If we truly want to buy a Canadian bottle of wine from the Niagara Peninsula, with grapes grown in the Niagara Peninsula, to support those producers, those owners of those vineyards, then we need to buy VQA, Vintners Quality Alliance, which means 100% of that grape in that bottle is from Canada, not from somewhere else.
We need to ensure those things change. Canadian consumers want to find a way to protect the producer, to buy from the producer. They just do not have the ability sometimes because they do not have the knowledge. We cloud over labelling so consumers think they may have bought a bottle of wine that has been produced in Ontario, by a vineyard that they can see as they go through the Niagara Peninsula. When we tell them it is not Canadian, they are indignant. They do not believe it has come from somewhere else. They drove to that winery in the Niagara Peninsula and bought the wine directly from it. That might be so, but the juice came from somewhere else.
I talked to the president of the Ontario Grape Growers Marketing Board, Debbie Zimmerman. She brought out a bottle of cellared wine, put it on the desk and then asked me a question about it. Fortunately, I knew the difference between the two. I have a few friends who work in the industry.
The label on the one bottle had the 2010 Olympics on it. We have a cellared bottle of wine with the Canadian Olympic logo on it. That suggests to everybody that not only is it a Canadian wine, but it is also in support of the Canadian Olympics. However, it turns out, it was not.
That is a sad epitaph to what really is happening to farms across this nation. We have to find ways to support them, which we are not doing.
We talk about the credit programs, and there have been many of them over the years. My colleagues on the other side, who have been here longer than I and who have worked on the agriculture committee, have seen them come and go. In fact, some from the other side used to complain about it. Some who are now on this side used to come out with those programs and say that they were not any good. Now we have vice versa. It is funny how shoes change feet sometimes.
Ultimately it is about all of us wanting to help the farm community and those farmers. I do not think any members in the House would say that they do not want to help farmers. In fact, I do not think people on the street would say that they did not want to help farmers. The difficulty is, how do we do it?
Without a comprehensive policy, we will simply come out with band-aids. This becomes one of them. Band-aids can be good, as they help stem the flow of blood for the moment. However, ultimately they get saturated and they start to seep again, and we see other problems.
We need a comprehensive agricultural policy that addresses the needs of farmers in the broader sense, not just in the one-off sense of getting them some additional available credit, albeit needed. We need to ensure farms are not only viable right from the time they are taken over, but attractive to young people who go into farming as well.
Unfortunately, I think the average age of farmers is somewhere in the mid-50s. That is not really where we want to see farmers. We want to see that age decline by 10, 15, 20 years, so young folks coming out of agricultural colleges will get into the farm business. Ultimately we are looking to see that happen.
We are pleased the government has brought this forward. It is an enhancement of a previous program, but it needs work. The New Democrats on the agriculture committee are willing to help make that work. We are willing to ensure that our farmers will get the support they need.
Make no mistake, we are also looking at a comprehensive policy that deals with the needs of farmers, not just the immediate but the long-term needs as well. It is in our interest to ensure that happens. Ultimately, if we do not, I will end up trying to find that old rusty hoe I have somewhere in the garage and will have to start digging and competing with the rabbits to try to grow carrots.
If that does not work, I will be looking for somebody else to do it for me. In that case, I will be working for that person on a farm field somewhere. Ultimately, without farmers doing the things they do, we are in real peril. If we allow ourselves to be hostage to those who import the food to us or those exporting nations, if we rely on staple products because we are no longer doing it, then we are going to be in trouble. We do trade. We do not necessarily grow oranges here, so we import them.
At some point in time someone is going to tell us that there is not enough for us. We have seen that already. Some exporting nations have said that they have had a drought or a bad crop year so they have had to keep their products internally.
If we do not grow our own because we have not supported our farmers and have allowed them to disappear, shame on us. It is incumbent upon all of us to ensure that we protect farmers, that we listen to them and bring forward programs that look at farming in a comprehensive way. We need to ensure that agriculture is sustainable throughout the country. We need to ensure that farmers can sustain themselves into the next century.