AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Tuesday, April 4, 2000

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[English]

The Chair (Mr. John Harvard (Charleswood St. James—Assiniboia, Lib.)): Colleagues, I'll call this meeting to order. We have the ministers for one hour, so we shouldn't waste any time.

First of all, I want to say welcome to Minister Vanclief. Mr. Vanclief was to be with us last week, but he couldn't be with us because of illness. I'm glad to see he's feeling better and looking better. It's nice to have a healthy minister.

Along with Mr. Vanclief today is Andy Mitchell, of course, and he is the Secretary of State for Federal Economic Development Initiative for Northern Ontario.

My understanding, members, is that Mr. Vanclief will begin. His remarks will be followed by a short statement by Mr. Mitchell, and then we'll get to questions.

Welcome again, Mr. Vanclief.

Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food, Lib.): Thank you very much, Mr. Chairman.

First of all, I want to apologize for not feeling well enough to join you last week, but we'll make up for it. We'll spend some time together today and again tomorrow, and I look forward to our times together.

I do want to make some opening comments, but as the chairman has said, I certainly want to hear your comments. With all of the team that I have with me, hopefully we'll be able to address concerns and comments that you have, either directly today or by following up on them if we're not able to do so with you today.

I'm here today to discuss with you the plans and priorities of Agriculture and Agri-Food Canada and the Canadian Food Inspection Agency for the year ahead. Before I do that, I do want to make a few introductions. The chairman has already introduced the Honourable Andy Mitchell. I'm certainly pleased to have him here, and certainly pleased that the appointment as Secretary of State for Rural Development was made. It was a recognition last August of the importance of rural Canada by the Prime Minister and our government.

Also with me is Frank Claydon, Deputy Minister of Agriculture and Agri-Food Canada; and Madam Diane Vincent, Associate Deputy Minister for Agriculture and Agri-Food Canada. The vice-president for programming for the Canadian Food Inspection Agency, Ron Doering, is unfortunately not able to be with us here today due to health reasons, but there are a number of other deputy ministers, assistant deputy ministers, directors, and staff available in the room to comment, if necessary, on any questions that you may ask.

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I want to spend a few minutes talking about where we have been, what we are currently doing, and where we are headed with the department and across the larger portfolio.

As you know—and I'm sure you have had a chance to review the plans and priorities document—Agriculture and Agri-Food Canada operates across four key priorities: one is expanding markets; the second one—this is not necessarily in any order—is innovating for a sustainable future; number three is a strong foundation for the sector in rural communities; and number four is sound departmental management.

Overall, I would say the agriculture and agrifood industry in Canada is performing quite well. I know we will be discussing the farm income issue in more detail tomorrow, but when we are dealing with any resource industry, unfortunately there are times when there are some grave difficulties. Overall, however, the industry is performing quite well, as I said.

The industry accounted for about 8.4% of the gross domestic product in 1998 and 1999, and from the gate to the plate it employs close to 2 million Canadians. Food and beverage sales to Canadian consumers were worth nearly $95 billion a year in 1998, and in that year agriculture and agrifood exports accounted for nearly $22.6 billion, which was a new record. Canada's share of overall world agriculture and agrifood trade moved to 3.3%, edging closer to the ambitious goal that has been set by the Canadian Agri-food Marketing Council, and that is to capture 4% of world trade by 2005. That success is being fuelled by our processed agrifood products, which are the fastest-growing and most profitable part of our agrifood trade.

As we know, Mr. Chairman, Canada is a trading nation. About one-half of the average farm gate income of Canadian farmers is as a result of trade. That's why the Government of Canada is continuing in our fight to bring order and stability to the world marketplace in a number of different ways, two of which are better access to world markets and—and this is certainly a very important one—the elimination of trade-distorting subsidies.

Last August, as you are all aware, we announced our initial negotiating position to the World Trade Organization for the WTO talks, and that position was arrived at after more than two years of consultations and the provinces. The WTO negotiations on agriculture began in special sessions in Geneva just two weeks ago, on March 23 and 24. That meeting led to an agreement on a work plan for the coming year, and that plan will allow Canada to voice its negotiating position. While the negotiating process won't move as fast as we would like, I can assure you that we will work diligently toward a successful outcome.

As I mentioned, trade is important to the sector. That is why the federal government, in partnership with the provinces and industry, has identified eight priority markets for Canadian agriculture and agrifood products. Last year we gained further access to those markets, and we saw an overall gain of more than $565 million for our exports to these markets. Meanwhile, we continue to develop new export markets through the agricultural industry marketing strategies—or the AIMS process, as it is referred to—and we continue to promote the sector as a reliable supplier of high-quality, competitive products to the world.

As Canada moves into the 21st century, the food system—and that is the complete system from field to fork—is more complex than ever before. To address these new challenges, the Government of Canada committed in the last throne speech to further improving Canada's food safety system. The Canadian Food Inspection Agency is dedicated to ensuring that food is safe and that consumers are protected by effective and efficient federal inspection and related services for food, animals, and plants.

We must communicate to Canadians how Canada's food safety regulatory system is sound, and that we will apply the most stringent scientific expertise in dealing with, for example, such advancing technologies as biotechnology.

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Biotechnology has the potential to play an important role in the future of this industry, but we must also listen to the consumers—consumers around the world and here at home—some of whom are telling us that they have concerns about that technology. The government is strongly committed to ongoing discussions with Canadians about issues concerning biotechnology. To that end, we established the Canadian Biotechnology Advisory Committee, with a mandate to hold a dialogue with Canadians on issues of concern.

Throughout the portfolio, we continue to provide improved services to Canadians. We are well connected to the sector as we increase clients' ability to be in touch and on-line. Our target is to make all appropriate departmental information available on-line by the end of this year, and to work toward getting all of our services on-line over the next four years.

While the overall sector remains healthy, we all know there have been some challenges to address—and I referred to them earlier, Mr. Chairman. Some producers in areas throughout the country, but particularly on the Prairies, have faced a difficult period over the past two years. The federal government has responded with a number of measures. As I said, we will be addressing some of those issues with you tomorrow, and mainly the issue on farm income. I don't want to go into any more detail on that today, other than to point out that the federal government recently did reach an agreement with the provinces for a farm income safety net plan for the next three years. Once ratified, this agreement will bring the total federal commitment to safety net funding to more than $3.3 billion for those three years.

While the negotiating was tough, I believe we came up with a plan that will serve the producers well. The agreement is an excellent example of cooperation among provinces and the federal government. We have laid the basic foundation for the sector, and we are now in a position to refocus our energies on building upon our vision for the future.

Providing greater income support during the bad times, however, is only one area of the overall effort being made by the federal government to help improve the viability of the sector for the long run. On an ongoing basis, the federal government provides the sector with the tools to adapt, with the tools to compete, and with the tools to grow in the global economy.

We will continue to work with industry partners to deliver programs to ensure that the sector keeps pace with change—programs such as our matching investment initiative, which is very much involved in research, the Canadian Adaptation and Rural Development Fund. Both the MII and the CARD Fund that I just referred to have been extremely well received by the industry.

Canada's competitive edge is directly related to our excellence in research and development. While our research and development benefits the sector and the environment in ways that go well beyond dollars-and-cents figures, the department performs extensive return-on-investment studies that reveal a net gain for our sector. For instance, the annual net benefit from work done on just three—potatoes, wheat, and the hog industry—was more than $1.1 billion, a return that is four times the cost of all research and development activities in the last fiscal year. We are at the forefront of research and innovation, and we remain committed to carrying out leading-edge work that will give the sector a leading-edge advantage in the marketplace.

Sustainable practices are also a high priority for the department, and together with industry we have made a lot of progress in protecting and preserving our resources. But much more still needs to be done. We will continue to invest in the development of environmentally sound agricultural practices, such as those that will contribute to Canada's commitment to reduce greenhouse gas emissions.

We are working as hard as we can for the sector while protecting our environment and natural resources. The same goes for our corporate structure, where we are operating in a stable fiscal environment, with consistent and predictable program spending over the long term. In keeping with sound management practices, an internal review, audit, and evaluation process assesses our various grants and contribution programs, while program management uses outside consultants to audit programs and services.

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In closing, Mr. Chairman, the Report on Plans and Priorities for Agriculture and Agri-Food Canada lays out clear targets for the department. It also provides performance measures that will help Canadians track our progress toward our shared goals. We continue to build on our firm foundation for our industry here at home and to carve out new markets around the world. We are doing more and involving Canadians as we have never done before in charting that course. This is particularly true of the efforts we are making to work closely with Canadians in rural and remote areas. We have designed policies, programs, and services that are more accessible and better targeted to rural Canadians.

Mr. Chairman, I will ask my colleague, the Honourable Andy Mitchell, to provide the committee with some more details on our specific focus in rural Canada.

The Chair: Thanks, Mr. Vanclief. Just before we get to Mr. Mitchell, I want to remind members that the ministers are here on the main estimates, so you should prepare your questions accordingly. Reserve your questions for the farm crisis, income crisis, and safety nets for tomorrow; they will be here tomorrow on that subject.

Mr. Mitchell.

Hon. Andy Mitchell (Secretary of State (Rural Development) (Federal Economic Development Initiative for Northern Ontario)): Thank you very much, Mr. Chairman, and thank you very much, Lyle.

I'm going to be back to this committee to discuss particularly the rural file a little later on, I think in May, so I'll keep my comments relatively brief.

As you are aware, the position of the Secretary of State for Rural Development is a new position created by the Prime Minister last August. Essentially, it is designed to operate on a horizontal basis, with its primary objective to work towards improving the quality of life for rural Canadians. What I mean by horizontal basis is that rather than finding a particular issue or a particular problem and trying to pigeonhole it into a particular department, the idea is to take that problem or that issue and work it across departmental lines. Much of what I do in many of the initiatives I undertake is to work with my colleagues, both in cabinet and in the House, across departmental lines to try to achieve solutions to some of the challenges we face.

In essence, my portfolio has three primary areas that I deal with. The first one is something that we call the rural lens. Essentially that is to try to ensure that at the point of policy development, or regulation development, we take into account those issues in rural Canada that may distinguish it or differentiate it from those in an urban setting or in an urban context. If you think about that, some of the different challenges we face are in terms of our geography, our distance from markets on many occasions, the population densities we deal with, and obviously the fact that rural economies for the most part are resource-based economies, are cyclical in nature, and very often are very different from what you may find in a diversified, manufacturing-based economy in an urban context. So much of what I do in respect of the rural lens is to ensure that as we develop policy and as we develop regulations to give force to those policies, those specific challenges that face us as rural Canadians are taken into account in that process.

The second part of my portfolio deals with communications. By that I don't mean simply myself as a secretary of state communicating to rural Canadians, but, more importantly, rural Canadians communicating to me and to the government. To that end, something that Lyle began before my appointment, the rural dialogue, is an opportunity for rural Canadians to present to government those issues that they believe the federal government ought to be working on in terms of dealing with the challenges in rural Canada.

During that process, in 1998, we had an opportunity to talk to some 7,000 rural Canadians throughout all of Canada. Through that process they were able to identify 11 specific priority areas that they believed we needed to be working on as a federal government. That process continued in 1999 as many of those rural Canadians were brought together in Belleville, Ontario, to carry on that discussion. That process will continue later this month in Magog, Quebec, where there will be a second rural national conference, where rural Canadians will come together again. We'll have an opportunity to look at government success in dealing with some of those issues, deciding or directing if there are different areas we ought to be concentrating on or different ways we ought to go about doing that.

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As I oftentimes say, the whole issue of rural development is one that is bottom-up and not top-down driven. It's rural Canadians themselves who have to set the priorities. I don't set the priorities for the rural development portfolio; those are set by rural Canadians themselves.

In the effort to continue that communication, as well as the transparency, Lyle and I will table in Parliament in May a report on rural Canada that will give not only this committee but all of our colleagues in Parliament the opportunity to evaluate the types of activities we're taking as a federal government and to hopefully engage a debate that will have the interest of all Canadians.

The final area I work on in my role as the Secretary of State for Rural Development is the whole issue of deliverables; that is, providing programming that makes sense for rural Canadians. Obviously agriculture is an important part of that, but the issues of rural Canada go beyond simply agriculture and into a number of other areas.

I was pleased, in the budget Minister Martin tabled a few weeks ago, that there were a number of initiatives in there that are going to have a direct and positive impact on rural Canadians, such as the commitment of an additional $54 million to the Community Futures program. Most of you who come from rural Canada are familiar with that program. It is a rural-Canadian-focused program. There is additional money for that. I'm sure all of you have noticed the commitment on the infrastructure program, to develop it in a way that has specific criteria for rural Canadians and rural Canada. I was pleased to see that and, I might also mention, $160 million for ensuring that we have alternative and 21st century ways of providing government services to rural Canadians.

There are a number of other initiatives, but I'll take the time when I appear in front of the committee in May to go through those. Thank you very much.

The Chair: Thank you very much, Mr. Mitchell. Again, thank you to Mr. Vanclief.

Given the shortness of time, I will be very strict in enforcing our time limits. First to Mr. Bailey, and it's seven minutes.

Mr. Roy Bailey (Souris—Moose Mountain, Canadian Alliance): Thank you very much, Mr. Chairman. Because of the large number at the table here, I'm going to be briefer than the seven minutes in order to let everybody get in a question.

Mr. Minister, I'm glad you're feeling better. Honourable Andy Mitchell, we're glad to have you here as well. I'm going to ask each of you one question and then we can move more quickly, if that's all right.

First of all, Mr. Chairman, I want to ask a question about some financing in AIDA. It's not directly to the program itself, but I want to get a clear-cut answer. The farmers now have in their possession the forms for 1999 AIDA. There was a lot of money left in the 1998.... My question is very simple. Is that money that has not been spent or claimed going to be carried over into the new budget? If so, are you going to go back and redo the 1998 forms, or is it going to come over and that money will be available to the applicants with the new forms that are out now?

Mr. Lyle Vanclief: First of all, to clarify, Mr. Bailey, there wasn't any money left from 1998. When we announced the program we said it would be about $600 million for the 1998 business year and about $1 billion for the 1999 business year. When the payments are made to cover negative margins for 1998, for example, the payments for 1998 will be so close to $600 million that I would challenge anyone, in a process like that, to have it come out any closer.

I have said all along that all of the money would be spent over the two years, and I can assure you that all of the $1.6 billion will be spent.

Mr. Roy Bailey: Thank you, Mr. Minister. I get more questions on that than you can believe.

I want to turn now to the Honourable Andy Mitchell. There was one statement you made that I believe is a quality statement and a necessary statement. You referred to the quality of life as it refers to rural Canada. When the honourable minister mentioned that less than 4% of Canadians are striving to produce about 4% of the agrifood in the world, that's a remarkable goal.

Would the member not agree that in order for rural Canada to have a quality of life, you have to take a good portion of the guesswork out of the farming operation as an industry? In other words, quality of life in rural Saskatchewan is going to rest almost solely upon the sound policies of income stabilization. I don't think anyone would argue with that point.

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The question I want to ask the member is this. Do you think it's possible, in a country with such diverse agriculture as we have, to develop a stabilization income for all of rural Canada so that they can live without fear of what I've gone through in my constituency, of going from here to here within two years?

Mr. Andy Mitchell: Mr. Bailey, I would answer that from two perspectives. First of all, on a broad perspective, one of the objectives, I believe, of government at all levels has to be to create an environment in rural Canada within which individual communities, individuals, individual businesses can be successful. Our role as a government is to create that environment within which individuals and their communities can be successful, and many of the things I undertake are to assist in the creation of that environment. I think in many respects we do quite well.

One of the things that Lyle deals with directly.... From time to time we find in our rural context situations that require additional activity by government, and you've identified one of those, and that is the whole issue of income support in the agricultural sector. That's getting more specific in the rural file, and I think and believe truly—and Lyle will have an opportunity tomorrow in the discussions on farm income—that the government has responded very well, working with our provincial counterparts, in dealing with the issue of income support.

Mr. Roy Bailey: I have a final question to either one.

What good news can I provide to farmers in my constituency on this day that will give them some hope for the rest of the crop year?

Mr. Lyle Vanclief: Not only hope for the rest of this crop year...but two weeks ago tomorrow or the next day we reached a tentative agreement with the provinces on the safety net—a federal-provincial agreement with the provinces. That takes away the uncertainty of those risk management tools that are there.

Following up on what Minister Mitchell has said, there are many ways in which a community, an individual, can have strength and security in their individual or collective financial social aspect. One of the roles of the government there is, to the best of our ability, to equip those people to deal with the realizations and the realities of today, whether that be the global marketplace, competitiveness, or whatever.

There is no one answer to any of these things. There's a combination. Some of the things the individuals have to look at themselves, and they are looking at themselves, be that diversity of their own business or diversity within their family and how they can work. That's why I was so pleased with the agreements we have with all ten provinces. The federal government and the provincial governments therefore can work with the individual producers and the industry to go in that direction.

The Chair: We're finished for this round. There are 35 seconds left in this round, so I'll add that to the official opposition, if we can get back to you for a second round.

Madame Alarie.

[Translation]

Ms. Hélène Alarie (Louis-Hébert, BQ): Thank you for coming to meet with us today. We have had a number of delays.

I would like some clarification on the department's budgetary envelope, more specifically as regards expenditures in the area of innovating for a sustainable future. Eighty-five per cent of the budget envelope is earmarked for operating expenditures, whereas 14% is earmarked for capital and investment expenditures. Although I read pages 14 and 15 of your brief, I did not find the answer to my question. Why is the bulk of the budget for innovating for a sustainable future, which is $333 million, earmarked for operating expenditures?

[English]

Mr. Lyle Vanclief: Most of it is an operational cost, because we spend close to $300 million a year on research, and that falls within that sustainable future category. There's $270 million a year, I believe. The deputy might have some further comments. There's also a budget figure in there on top of that for the matching investment initiative, I believe, Deputy.

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So that $333.6 million, if that's the one you're referring to on page 11 of the English version, by far...well over 90% of that is for research and development.

I'll ask Deputy Minister Claydon if he wishes to comment as well.

Mr. Frank Claydon (Deputy Minister, Department of Agriculture and Agri-Food): Just one or two other comments. Basically, the moneys that are there are for the most part the salaries of the research staff. It's basically the brains we pay for, and therefore it comes as an operating expense in terms of salaries.

We also have the Prairie Farm Rehabilitation Administration as part of our innovating for a sustainable future business line. Of course, PFRA is more on the practical, applied side in terms of helping farmers find innovative solutions, in terms of dealing with environmental problems, water control, and water supply for rural municipalities as well.

Mr. Lyle Vanclief: I don't think you're thinking, for example, that the cost of a scientist and the work they do is administration. The costs of scientists and research people are the costs of doing research. So the administration of that whole research branch, the strict administration, if you can put it that way, the coordination of all of that, is a very, very small portion of that $333.6 million.

[Translation]

Ms. Hélène Alarie: Last year, I made a comment that I would like to repeat this year. I do not particularly like to see columns of figures or text that provide a host of information in budget analysis. I understand the philosophy, but I do not like text that does not enable us to target on a point by point basis the questions we have when analyzing estimates. I find that form particularly difficult to follow.

My second question is obviously for my favourite agency, the Canadian Food Inspection Agency. I have examined the operating budget on page 8 of the Agency's estimates for this year and the coming years. Given all of the additional requirements under international trade, I have trouble understanding how the forecasts for the fiscal years 2000-2001 and 2002-2003 have decreased slightly. It seems to me that the problems are not on the decline, but on the contrary, are evolving. If the Agency remains as it is, if our requests to it remain the same and if its objectives are maintained, I think the Agency will require additional resources, not fewer resources, since the issue of GMOs, which I always mention, and international trade will continue to increase. I have trouble understanding why its budget would be reduced. In my opinion, this is one of the budgets that should be increasing. What I am saying, Mr. Gravel, is not that bad.

[English]

Mr. Lyle Vanclief: I'd like to have the budget increase too, very much, and I know André Gravel and Ron Doering would as well.

As important as an increase in the budget is—and I'm not diminishing that; everybody can always use more money—using the money wisely and targeting resources that are there is also important. And the agency has done an excellent job of that. Certainly we have been able to demonstrate by the results of the food safety system in Canada, not only domestically but internationally, that we are renowned for the results of that, and that best test is in the very few problems we have. There's no such thing as zero risk.

For example, 5,200 shipments of food come into Canada every 24 hours, every day of the week, Monday through Sunday, and the safety of all of that product has to be ensured, as well as the production of food in Canada, not only for domestic use but for export use as well.

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But as for the budget aspect of it, maybe Dr. Gravel could make some comments.

André.

The Chair: We have one minute left in this round.

[Translation]

Mr. André Gravel (Vice-President, Programs, Canadian Food Inspection Agency): Thank you, Mr. Minister.

Mr. Chairman, I am pleased to see that Ms. Alarie supports additional funds for the Agency. The issue of food safety is something that is of concern not only to the Agency, but also to all Canadian consumers.

With respect to the budgetary adjustments, I do not know if the Chairman and Ms. Alarie remember the budget.

Ms. Hélène Alarie: [Editor's note: Inaudible]... over three years.

Mr. André Gravel: Precisely. The Agency will receive $30 million over three years for biotechnology. The Agency will take the necessary steps to invest in areas that it considers key sectors. Product assessment and post-product assessment testing, etc., are undoubtedly areas where investments will be made. I think that the investments planned in the area of biotechnology will be truly beneficial for the Agency and Canadian consumers.

[English]

The Chair: Thank you.

Madame Alarie, you've now discovered that the way to a minister's heart is not through his stomach, but through an increased budget.

Mr. Steckle, you have seven minutes.

Mr. Paul Steckle (Huron—Bruce, Lib.): I'm going to be very brief, but I have a lot of questions perhaps for tomorrow's meeting.

Given that, as I understand, we have a freeze in terms of cost recovery for a period of time, and that there has been a further extension of 30 days to the gazetting of the matter of medicated feeds and how we regulate that on farm feed production; given that we're going to have to inspect these operations; and given that there will have to be a lot of bodies to do that and certainly a lot of on-farm cooperation for that to happen, I would like to ask the ministers what the cost of that is going to be, and how have we triggered that into the whole operations of cost recovery? And how do we intend to take care of that expenditure, given that it has not yet occurred but is a phase-in over the next three years?

Mr. Lyle Vanclief: Thank you very much, Mr. Steckle. I just have a comment on that.

The process to ensure to the consumer and to the industry that feeds that are medicated in Canada, whether they be medicated on-farm or in feed processing facilities.... We can give full assurance to the consumer that it is a good one and that we can ensure the food safety that's there. It has been in a consultation process now for eight years. Everyone has been involved in that: the producers—whether they be pork producers, beef producers or poultry producers—small feed manufacturers, large manufacturers, etc.

Some regulations to do that were gazetted back on February 5. That will now be for a 90-day comment period. The purpose of that process in government, of course, is to give everyone a chance to comment on that if there are concerns and changes that can be made.

I want to make it very clear that it is not the intent, for example, to drive the manufacturer of medicated feed on-farm to feed manufacturers. That is not the intent at all. But I have to tell you that at the present time we do not have the type of system where we can ensure to the consumer that if and when there is feed medicated on-farm, we have a process by which we can demonstrate to the Canadian consumer or our foreign consumers out there that this is watched. We do not intend to have cost recovery fees in this. The pork industry, for example, is working out its quality assurance program, as is the poultry industry, if I could use those two. But there are some concerns on the type of equipment that is there. Quite frankly, I think at this stage some of it is a misunderstanding. If we can clear that up, we will.

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But what I have said is that I will not back off from having a system, whatever it be, by which we can give assurance to the consumer and help the industry—because they want to do this as well—to be able to give the assurance that wherever feed is medicated, some records are kept so that if there needs to be a follow-up, there can be a follow-up.

Mr. Paul Steckle: Further to that, part of the question was, what consideration has been given to the kind of costing that would go into doing on-farm inspections? I believe that's part of the process.

Mr. Lyle Vanclief: The on-farm inspection process is one that, in talking to the different industry sectors—for example, with the pork industry with their quality assurance—I see as fitting in very well with that. That's self-regulated.

Yes, there may very well be a very small requirement. But we are not looking at a system, nor do I feel that there needs to be a system where there has to be, can I say, a police force going around, any more than there is right now with feed manufacturers.

I was a pork producer myself, and quite frankly, I got some bad feed from a feed manufacturer a number of years ago, but, boy, I was quick when I.... It took me a number of weeks to realize it, before the effect really showed. I wanted a system, and there was a system, where I could go back to that feed manufacturer and say, hey, show me what you did when you mixed that feed. Unfortunately there was a mistake made, but there was a system in place whereby, had there not been a mistake, that manufacturer would have been able to show it.

We need to have that system. It doesn't have to be an elaborate system, but there needs to be some system there, and the industry itself is driving this and cooperating.

As I say, it has been a consultation process for eight years. The reason we have gazetting is to make sure that when regulations are put in place, there's a chance to comment on them, or clear up any misunderstanding, or make them clearer, and so on. That's the process we're going through now, and they have until May 5 to put in their comments.

The Chair: Thank you, Mr. Steckle.

As a follow-up on that, Mr. Minister, with respect to the regulations affecting medicated feeds, it's my understanding that there will be a phase-in period.

Mr. Lyle Vanclief: Definitely.

The Chair: I met with representatives of some of the large commercial operations yesterday, and I think their concern is a complete follow-through on the part of the government. They apparently will be affected by the new regulations first, but they're concerned that everybody be included when the process is over. They don't want the government to stop just at the large commercial operators and leave those smaller operators back at the farm gate, out of the regulations.

Mr. Lyle Vanclief: That's why it's a phase-in, because quite frankly, the large commercial operators are further along in having this system there at the present time, so we feel that we can move more quickly there and then bring everyone else on side.

That's why I say clearly that I will not back off having a system in place for everyone. It has to be one that doesn't cause undue expenditures but can give, and we must give, and I'm confident it will give, the assurance to the consumer that if and when feed is medicated, there is a process in place to check that it is done properly, and that it is fed properly as well, with withdrawal times and so on.

The Chair: That seems pretty clear to me.

Mr. Proctor, you have five minutes.

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

Welcome, all.

As a quick point of clarification, on page 20 of the Report on Plans and Priorities, there's a reference to the AIDA program in 1998 and 1999 that says “$1 billion in federal support”. Then, in the next item, it says, “In 2000-2001, AAFC will inject up to an additional $500 million....”

It's not really additional money, is it? The AIDA program died at the end of 1999, so it's not like it's $1 billion and then another $500 million. It's $500 million for this year and $500 million for next year. Is that not correct?

Mr. Lyle Vanclief: Yes, if that's the way you want to word it.

Mr. Dick Proctor: I didn't word it.

Mr. Lyle Vanclief: No, read it, I mean.

It's the safety net. If you look at the title above that, it's the safety net framework, and what we're talking about there is in reference to the basic safety net package being about $600 million a year. The AIDA was in addition to that.

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You're right, the AIDA itself died on December 31, 1999. The new program is additional money following. It's not on top of AIDA; AIDA's gone.

Mr. Dick Proctor: Right. And in actual fact, the money that's identified here is actually a little bit less than in the two years previous—in terms of the AIDA money. It was more than a billion dollars, and this one is $500 million for each year. Is that correct?

Mr. Frank Claydon: That's right. We can talk about it more tomorrow, but don't forget about some of the other things that have been done, particularly in the province you come from.

Mr. Dick Proctor: Yes. But, Mr. Minister, as the agriculture minister, you've been here since 1988 as a member of Parliament, and you were the chair of this committee for four years. You will know that the budget for agriculture was a heck of a lot bigger in the early nineties and it's been going downhill steadily. By the information from your department, it was about $5.9 billion in 1991-92, and it dropped by about $3.7 billion last year or the year before. That's without even factoring in inflation.

What I'm getting at is if we had that extra money, or that money we used to have, we'd go a heck of a long way to solving a lot of the problems we have at the moment.

Mr. Lyle Vanclief: Well, if we had the level of funding that we had in this country in 1993, we'd still have a $42-billion-a-year deficit. At that time, as a government, we were taking in $120 billion a year and spending $162 billion. That doesn't work in any organization.

Yes, we'd like to have more money. There's more money there now. When I became minister in 1993, the safety net funding for agriculture was fast going down to $600 million a year. As it is at the present time, the safety net envelope alone is now over $1.1 billion a year. In 1993, the industry and the provinces said to me that they needed $850 million in the safety net envelope. It's now at over $1.1 billion. And we are trying to, with the resources we have, target it the best we can. It's impossible to be all things to all people.

The deputy might want to make some comments. We don't need to get hung up on numbers—where it was or where it is at the present time. It is now more than it was a year or two ago. The important thing is how we work with the resources, the individuals, and the realities of the industry to prepare all of us together to meet the challenges and the opportunities of the industry today.

Mr. Dick Proctor: What is the percentage of the total budget for all of agriculture? Would you know what it would be?

Mr. Lyle Vanclief: I have the figures here someplace. I don't have them memorized, but....

Mr. Dick Proctor: Is it a little over 1%?

Mr. Lyle Vanclief: I think it's 1 point—

Mr. Dick Proctor: Zero three?

Mr. Lyle Vanclief: I think it's 1.3%. But don't hold me to it. Somebody can look it up, but—

Mr. Dick Proctor: That's okay. It's less than 2%. I think we'd agree on that.

Mr. Lyle Vanclief: Yes, it is.

Mr. Dick Proctor: Would you happen to know what the budget is for the common agriculture policy that the EU has in Europe?

Mr. Lyle Vanclief: There's no question it's much higher.

Mr. Dick Proctor: Between 40% and 50%?

Mr. Lyle Vanclief: Of the EU?

Mr. Dick Proctor: Yes.

Mr. Lyle Vanclief: Yes.

Mr. Dick Proctor: So that really tells the tale in terms of some of the realities the farmers have, some of whom are sitting behind you this afternoon. When it comes time to compete, it's pretty near impossible for them, and it has been for some years now.

Mr. Lyle Vanclief: There's no question it's difficult. We have come forward with a lot of support in a number of different ways, and we continue to seek ways we can do even more.

The Chair: Thank you.

Mr. Borotsik, five minutes.

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

If you could, please keep the answer short. I only have five minutes. I know the Minister of Agriculture will comply with that request.

First, I would like to congratulate the deputy minister for leaving the Department of Agriculture. I suspect it's a good move, not having to deal with these kinds of issues on an ongoing basis, Mr. Claydon. But I do, in all honesty and sincerity, congratulate you in your new position.

I have a couple of questions. The minister said let's not dwell on the numbers, but I guess I have to since this is estimates, and we'll deal with safety nets tomorrow.

There doesn't seem to be a lot of wiggle room, a lot of movement in the budget. As I understand it, the total estimates right now are $2.301 billion that will go forward for agriculture in the year 2000-01. That is an increase over last year, no question about it.

• 1320

There are a couple of areas I don't know whether the minister would like to deal with. There's been some talk about a reduction of the excise gas tax with respect to agriculture. It's been talked about not by you, Mr. Minister, but by others of your cabinet. Do you have enough room in this budget to be able to accommodate a program of that nature?

Another question is this. You talk about $500 million in this program going forward with the disaster program, but as I recall, $65 million of that has been taken out of that disaster program and placed into your ongoing safety net costs. Is that not correct? Where are you going to find the additional $65 million to put the $500 million into the safety nets program?

Mr. Lyle Vanclief: That was the desire of by far the majority of the ministers at the interprovincial ministers meeting last week.

Mr. Rick Borotsik: I'm sorry, but this document says there's $500 million coming forward to the year 2000-01 for the safety nets. It's not. It's $435 million. Are you going to find $65 million to put back in there?

Mr. Lyle Vanclief: This document predates that agreement.

Mr. Rick Borotsik: I appreciate that.

Mr. Lyle Vanclief: It's all there. The money is still all there. The provinces wanted the opportunity based on a different allocation. They wanted the—

Mr. Rick Borotsik: All right. So what you're saying, Mr. Minister, is the $500 million—

Mr. Lyle Vanclief: Mr. Chairman, he says he wants me to have short answers, but he wants all the questions.

Mr. Rick Borotsik: Exactly. The $500 million then is not $500 million going forward for the new safety net program.

Mr. Lyle Vanclief: Mr. Chairman, if Mr. Borotsik listened to my opening comments, I explained that in those comments.

The Chair: It's the Borotsik factor. We're quite familiar with it.

Mr. Rick Borotsik: I thank you. Mr. Proctor did compare—and we're talking numbers here—other years when there was substantially more support to agriculture. In fact, in the 1992-93 estimates the federal contribution was $4.3 billion. This year it's $2.3 billion. It's $2 billion less than what it was in 1993. Your answer to that was that we would have a terrible deficit, we can't do that, we can't support it.

So are you saying two things, Mr. Minister? Number one, even though there's a surplus, some of those surplus dollars cannot be put back into agriculture. You're also saying that agriculture is not the priority of that surplus. It has to go someplace else and can't come into some of the areas of agriculture that have been funded previously in other years.

Mr. Lyle Vanclief: Is it my turn, Mr. Chairman?

The Chair: Yes. It is.

Mr. Rick Borotsik: I don't know. How much time do I have left?

Mr. Lyle Vanclief: Well, I think you've strung your time out. I don't have to answer.

Mr. Rick Borotsik: No. You have lots of time.

Mr. Lyle Vanclief: Oh, you want me to answer.

Mr. Rick Borotsik: There's lots of time. Trust me.

Mr. Lyle Vanclief: All right. As I said, and you just admitted yourself, Mr. Borotsik, there is more in the Agriculture and Agri-Food budget this year than there has been in the recent past. That shows very clearly that as we get resources, we are putting resources back in. I don't have to remind you of this again. I think you're fairly close to the political party that was in charge when we had a $42 billion deficit a year. As we have gotten ourselves, with the help of all Canadians, into the black ink finally, we have had a lot of priorities.

If you listened to the premiers who met in January, they had three priorities to go forward to the Minister of Finance. The first was health care. The next was tax cuts. And at that time specifically they said more help to prairie farmers. There are a lot of priorities, whether it be transportation, assistance to families and children, or research and development. As we get small amounts of black ink, we are trying to allocate those in many different ways, and we will continue to do so. I think our track record has shown that we have done it.

The Chair: Make it short.

Mr. Rick Borotsik: I appreciate this political answer; however, $240 million was allocated to Saskatchewan and Manitoba. Is that reflected in the 2000-01 estimates?

Mr. Lyle Vanclief: No, it was not reflected in here.

Mr. Rick Borotsik: That was not reflected in the 2000-01?

Mr. Lyle Vanclief: So you can add that to it as well.

Mr. Rick Borotsik: Was it reflected in the 1999-2000? Will it be paid out of that?

Mr. Lyle Vanclief: No. That was not part of the safety net envelope.

Andrew, do you wish to comment? It will be in 2000-01.

Mr. Rick Borotsik: So it will be 2000-01.

Mr. Lyle Vanclief: In 2000-01.

Mr. Rick Borotsik: So the $240 million is reflected in this $1.273 billion, then?

The Chair: Is that your final question?

Mr. Rick Borotsik: Is that my final answer?

A voice: I think you got your final answer.

Mr. Rick Borotsik: Mr. Chairman, is that my final answer?

Mr. Lyle Vanclief: No, that has to be added on to the 2000-01. It is not part of the plans and priorities that are here before you.

The Chair: Okay. Are we clear?

Mr. Lyle Vanclief: You can now take, Mr. Borotsik, the $2.335 million and add it on. So look at how fast we're putting money into agriculture.

The Chair: It's getting better all the time.

Mr. Calder, five minutes.

• 1325

Mr. Murray Calder (Dufferin—Peel—Wellington—Grey, Lib.): Thank you very much, Mr. Chairman.

Actually, I have to ask Rick how his government's proposal on a super department, which we went against in 1997—

Mr. Rick Borotsik: Wasn't this supposed to be about estimates, Mr. Chairman?

Mr. Murray Calder: Yes, that's right. You just hate the truth.

The thing that I'm interested in, Mr. Minister...and this is a sort of preamble for a series of questions tomorrow. We've watched our farmers right now.... Yes, they're exporting more, and in the process of exporting more, they're losing more money on the farm gate. This has been my observation.

I know there's money set aside in the estimates right now for basically a short-term solution to these problems. What do you perceive in these estimates and in future estimates that is going to look at long-term solutions to the farm income crisis?

One thing we heard when we were out west in December of last year was the fact that the grassroots farmers are looking at the reincorporation of a GRIP-style program.

Mr. Lyle Vanclief: One of the very valuable tools we have available to us is the Safety Nets Advisory Committee. As we look at the design of the successor program, for example, Mr. Calder, to the AIDA program, I asked the Safety Nets Advisory Committee to listen to presentations and comments that a number of individuals and groups have for that aspect of our safety nets.

The agreement that we reached two weeks ago on primarily the allocation of the basic safety net envelope—crop insurance, net income, stabilization and companion programs—is a critical one as well.

As I said earlier, we have to approach this in many different ways—that is, the effectiveness of our research, the effectiveness of market development, both market development here at home...that primary market, that big market, our domestic market. The reality is that it is not growing very rapidly, and if our industry is going to continue to grow as it has in the past.... I'm not saying exports for the sake of export. I don't mean that. Profitable exports, yes. But if we are going to make use of the resources we have, not only the land base, but also the people resources, the results of research, etc., then we're going to have to continue on that aspect as well.

So I see an awful lot of things as safety net, not just specific programs of income assistance. The best safety net in any business is planning your business and being able to have the tools and to take advantage of the opportunities out there in a marketplace, for example.

Mr. Murray Calder: Mr. Chairman, I'm going to split my time with Mrs. Ur.

The Chair: Okay.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): I'm going to go back to the topic of medicated food. That may not be exactly on topic with the estimates.

I'm getting a lot of comments from my pork producers that they want it extended and they weren't aware of it. I explained to them when I spoke to Mr. Gravel that a person has been there since day one. The filtering of information, not just dollars, down to the grassroots does not appear to be there with that program. It was indicated too regarding the cattlemen who were wanting us to move ahead with this. That's not the indication I had back at the grassroots. Has something changed on this?

Mr. Lyle Vanclief: This is always a challenge, if I can put it this way. I'm not criticizing farm organizations, but I can tell you very clearly that the cattlemen and the pork producers have been involved in this consultation, I was going to say from day one, but I think almost from day one. They've been involved in this for five, six, seven years out of the seven or eight years that it has been involved.

I met with the executive of the Canadian Pork Council, for example, a week ago last night. One of the individuals there has been personally involved. They asked for more time to extend the comment period so that they could get to all of their annual meetings. I suggested to them that this is their role. They and their counterparts were there discussing this on behalf of their industry. I can only assume, if someone comes forward from a national executive and a national body speaking on behalf of their industry, that they have carried out their communications with their own individual membership, and that is their role.

• 1330

Also, that is why we have comment periods on regulations once they're gazetted.

The Chair: We'll have to leave it at that, Rose-Marie. Thank you.

I understand you have to limit your appearance to one hour.

So the last five minutes, including the 35 seconds I owe you, Mr. Breitkreuz, go to you.

Mr. Garry Breitkreuz (Yorkton—Melville, Canadian Alliance): Thank you, Mr. Minister, for coming before the committee. I hope you're back to full strength after your illness last week.

The cream-puff questions are now over. I want to ask you about the AIDA program, which has delivered only $500 million to farmers, according to the information we had this morning. You promised $1.7 billion, and that's almost a year and a half ago. The amount given out to farmers so far hasn't even paid the interest on the loans they've had to incur in order to wait for the money to come.

The question I have for you is simply this: when can you guarantee that the $1.25 billion that's left in AIDA will be delivered to farmers?

Mr. Lyle Vanclief: Mr. Chairman, I guess the member wasn't listening when I answered his colleague's question.

When we announced that program, even though the Canadian Federation of Agriculture said we only needed $500 million to assist farmers over two years, we put $900 million on the table. We also added another $170 million a few months after that. We have changed the criteria a number of times to address a number of the concerns that the industry and the producers have had, and we changed them for 1998 and for 1999.

I can assure the honourable member that with the changes to covering negative margins, for example...and we said at the time as well that $600 million of that would be used for the results of the 1998 business year and the remaining $1 billion for the results of the 1999 business year.

You cannot file an application on a business year until the business year is over and until your book work is done and the applications go in. The negative margin adjustments are being made based on those applications already in. Producers have had the opportunity to apply for that as well.

I'm repeating what I said for the first question, Mr. Chairman. Very, very close to $600 million will be paid out as a result of the 1998 business year; the remaining $1 billion plus will be paid out as a result of the 1999 business year. Those applications are now being filed by producers and they will be dealt with as promptly as possible.

Mr. Garry Breitkreuz: Thank you. I think the minister is admitting that the program is a disaster because the criteria continually have to be changed.

We've also discovered one other thing, that is, the costs to administer the program are $33 million out of the total that's been so far disbursed. That means that $1 out of every $14 is being sucked up to manage the program. That's many times more than it costs to administer other agricultural programs.

Why is the minister so inefficient in getting the money out of Ottawa? Why, Mr. Minister, do you not cut back on the red tape so that more money can be delivered to farmers?

Mr. Lyle Vanclief: Mr. Chairman, the last comment I find interesting, coming from a party that has criticized the government for not having enough red tape in some support that we have given to Canadians.

An hon. member: Hear, hear!

Mr. Lyle Vanclief: I also find it interesting that while we were having this debate on the farm income crisis some people outside the House of Commons made statements that we should send the farmers the money and then ask them to do the paperwork later. That's a difficult one.

I do want to point out that the reality is that the program was put in place in a hurry, in response to the need. When you put a program in place of that size, dealing with the thousands of farmers who are out there, you do not, if I could put it this way, get all of the kinks out of the program in the first few months. I have publicly stated that we had some administration problems.

• 1335

It's also a reality that over 50% of the producers, for obvious and justifiable reasons, in their own mind, did not apply for the program until we extended the deadline past the end of July into the first three weeks of August. Over 50% of the applications didn't come in until the month of August.

If we look at the costs, there are some initial costs in setting this up. Several million dollars' worth of computers were some of the initial costs. They will be there. That's a one-time cost as we go forward with successor programs, etc. We usually allocate 3% of the cost of the program to administration. In the first year it was higher than that, even when you take out the cost of the computers.

We know that will be streamlined considerably in future years. And if we look at the cost where the provinces delivered the program, Mr. Chairman, which is in a number of provinces, it cost the provinces $581 for each application. Where the federal government administered the program, it cost $471 per application, and we pay a portion of the provincial.... So the federal government will be more efficient in the future, but the federal government initially is more efficient than the provinces.

Mr. Garry Breitkreuz: I have a last question.

The Chair: You're already over a minute, Mr. Breitkreuz. Thank you.

I suspect these questions are a precursor of what will take place here tomorrow.

Members, I understand that the officials will stay if we have questions. Does anyone want to ask questions of the officials, or are you going to save your questions for tomorrow?

Mr. Jake E. Hoeppner (Portage—Lisgar, Ind. Ref.): I'd like a question.

The Chair: Mr. Claydon, you can stay? Mr. Gravel, Madam Vincent?

Thank you, Mr. Vanclief, and thank you, Mr. Mitchell. I understand both of you will be back tomorrow. We await your reappearance.

Yes, Mr. Claydon.

Mr. Frank Claydon: Mr. Chairman, perhaps I could just make two brief comments. One is I'd like to respond to Mr. Borotsik's congratulations to say that I am not at all leaving this job because I don't like the job or I don't like the industry that I'm working with. It's a great industry and I'm very proud to have worked in this industry for the last 14 years.

The other comment was also for Mr. Borotsik, about the allocation of the $240 million. I just want to clarify that the way the government books work, this $240 million will be allocated against our 1999-2000 budget, but the money will in fact be received by farmers in 2000 and 2001. So in terms of the estimates they will show up against 1999-2000, but the money will in fact be received by farmers in the period 2000-01.

The Chair: Mr. Murray, did you want a question?

Mr. Ian Murray (Lanark—Carleton, Lib.): I'll ask one when the minister is back tomorrow.

The Chair: Mr. Borotsik.

Mr. Rick Borotsik: I would like a clarification on that from Mr. Claydon. Therefore, you're saying the $1.7 billion that was identified as the main estimates 1999-2000 will in fact increase to $1.95 billion or whatever the number is. That will be reflected in the financial statements when they're received from the 2000 year-end, March 31, then.

Mr. Frank Claydon: Yes, Mr. Borotsik.

Mr. Rick Borotsik: Okay, so the estimates we have of $2.3 billion will be compared against the estimates now of $1.9 billion, so the increase for this year then won't be substantial.

Mr. Frank Claydon: Yes.

The Chair: Mr. McGuire.

Mr. Joe McGuire (Egmont, Lib.): Since Mr. Claydon has only three days left in the harness, I want to wish him the best of luck in the future in his new position. He's done a tremendous job for Canada in this department. Especially in this last year or year and a half, he's put a lot of long hours into developing a farm safety net response. I wanted to congratulate him and thank him for his efforts.

Because of your position in the department in the last number of years, I wonder if you can give us an overview of where you see the industry going in the new century, and especially in the next 10 years, as far as being an economically feasible industry is concerned, the trends, the demographics of farming. Are we going to have fewer and fewer, or can we have more with diversification? What are your general views on the industry and on where it's been and where it's going?

• 1340

Mr. Frank Claydon: Mr. Chairman, I'll try to do that without going over into the minister's territory.

My observation in terms of living with this sector for a number of years is that the potential is incredible. There's no stopping this industry in terms of what it will be able to accomplish. We're living in one of the food surplus areas of the world and we're looking at most of the rest of the globe being food deficit regions. So I think that in any kind of long-term view Canada is extremely well positioned to be a major player in terms of supplying food to the world.

I think as well that we've made some incredible progress in the last five or ten years in terms of trying to improve our record in terms of value-added types of food products. A couple of years ago, in fact, our value-added products in terms of exports were worth more than our exports of commodities. That was partly because the price of commodities is down, and we'd all like to see those prices higher, but certainly I think we have a great future in terms of food in general and I think we're going to be able to do more in terms of value-added and creating jobs for Canadians across the country. I can't see anything that stands in our way in terms of being great at that.

The Chair: Is that it?

Madame Alarie, did you want a question? I'm trying to sort things out.

[Translation]

Ms. Hélène Alarie: Yes, of course.

My questions are for Mr. Gravel. I looked at the estimates for 2000-2001. Page 20 covers objectives and planned results for the labelling of food products derived through biotechnology. It also mentions the development of an improved draft CODEX Committee on Food Labelling text by May 2000. Do you think you can meet that timeline?

Mr. André Gravel: Mr. Chairman, the CODEX Committee will meet here in Ottawa. Canada is chairing the CODEX Committee on Food Labelling. Canada is also responsible for setting up a group that will develop a position on the labelling of genetically modified foods. This working group met on two occasions in Brazil. As I was saying, Canada is chairing the group. The information that was collected at these two working group meetings has made it possible to suggest some options for labelling genetically modified products, which will be put on the table when the CODEX Committee on Food Labelling meets here in Ottawa in May. So we should be in a position to respect the deadline, Mr. Chairman.

Ms. Hélène Alarie: I have another short question. The following page refers to a Biosafety Protocol. CFIA will contribute to a government-wide analysis of the final Protocol text, and the interim analysis will be used to formulate a common consultation document for use with the provinces and non-governmental stakeholders in the spring of 2000. Has this been done? Is it well underway? Will there be enough time?

Mr. André Gravel: Mr. Chairman, it is still early on in the spring of 2000. Today is only April 4; spring started on March 21. Yes, the Agency has worked on the document, and we expect to meet the scheduled timeframe.

Mr. Hélène Alarie: I hope you have a good spring, and I will now leave some time for the others.

[English]

The Chair: I'm going to try to get all the questions in. Mr. Hoeppner, I'll try to include you, but I have to go to the full-time members first. So it's Mr. Casson and Mr. Borotsik, and if I don't hear from any others, then it'll be you, Mr. Hoeppner. Mr. Proctor has just indicated so....

Go ahead, Mr. Casson.

Mr. Rick Casson (Lethbridge, Canadian Alliance): Thank you, Mr. Chairman.

I'd like to address my question to Mr. Gravel.

There have been some changes requested in the Canadian Food Inspection Agency regulations in regard to the importation of beef cattle and cattle in general. This has been an ongoing discussion. It's being gazetted right now, I believe. I'd like to get some idea from you on the timeline that it'll take until these changes are implemented.

• 1345

Dr. André Gravel: Mr. Chairman, the proposed modifications to the health of animals regulations is a very complex process. That has to do with giving Canada the opportunity to establish zones within Canada or within foreign countries that are free of certain animal diseases. This is a follow-up to the negotiations that have taken place with the Office international des épizooties, which is the international body that deals with animal diseases.

Canada's objective in that is to be in a position to recognize certain states, as an example, of the United States as being free of certain animal diseases and limiting the obligation to provide substantial evidence of testing and specific certification. Canada has a vested interest in enacting these types of regulations in that by doing it ourselves, we are expecting others to do it for us as well. As an example, if there was an outbreak of, say, foot and mouth disease in Canada today, we would expect that given the controls we have in place we could limit the impact on our export market to a certain area of Canada. We want to give ourselves the regulatory tools to allow us to do it to others.

In terms of timeframe, we're still analysing some comments on that. I'm not too sure exactly what the overall date will be. As I said, we were receiving extensive comments from industry associations and from foreign countries as well, because they also are quite interested in that piece of regulation.

The Chair: Thank you.

You have a couple of minutes yet.

Mr. Rick Casson: I'd like to ask about user fees as they apply to the department. I'm not sure who would be best to answer that. There was an announcement I believe a week or so ago that user fees would be frozen at their present levels, but when we talk to producers—and I've been talking to them—one of the things they keep bringing back to us is let's concentrate on doing something about the things that we have control over. Certainly user fees, taxes, transportation reforms.... It's been estimated that $300 million could be left on the Prairies through a proper transportation reform of the grain-handling system.

For user fees, is there anything you have considered or are looking at? Are you going to implement a reduction of the amount of fees that are charged to farmers, and is one of the ways of saving some costs going to be a fuel tax reduction?

Mr. Frank Claydon: Mr. Chairman, in response to the question concerning user fees, in fact a fair amount of our time this last year has been devoted to finding ways that we can avoid having to make increases to user fees. A good example of that is the work that has been done with the Canadian Grain Commission. They were in a situation where there was a fair amount of funding required. One of the options on the table was to look at possibly increasing user fees. I'm pleased to say that the minister was able to secure additional funding through the budget, and that it wasn't necessary to look at any user fee increases.

We're certainly not averse to looking at ways by which we can further reduce costs for producers. It's difficult in a lot of instances to see what can be done in terms of reducing user fees unless there's some alternative source of funds. There may be other ways to try to do this. In some areas, particularly in the Canadian Food Inspection Agency, there have been a number of initiatives to try to work with the industry to look at more streamlined ways of doing inspections so that we can take costs out of the system and therefore not have to have the same level of fees.

Those are the kinds of things we would be prepared to look at in the future as well. Certainly, if there are areas for improvement, we'd be willing to devote the time and effort to see if we could do something about that.

• 1350

The Chair: Thank you.

Messrs. Borotsik and Proctor, and if we have time, Mr. Hoeppner.

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

I have a couple of quick questions. First, I hope you didn't get the wrong impression. We will miss you, Frank, we really will. I've found you very accessible and certainly a very capable individual in the deputy minister's position. The minister? We'll leave that up to the electorate. Frank, we do wish you the best.

However, now that we have you in the last five days or so.... You've been there I think for four years now. You've dealt with safety nets, probably ad nauseam. I can fully understand your frustrations in dealing with the number of organizations that come together and try to put a safety net program on the table.

I don't mean this to be political and I don't want you to get political; however, in your opinion, has there ever been any discussion from government forward, or from stakeholders to government, with respect to a longer-term safety net program, perhaps tied into the cost of production? We know what we have to compete with with the Europeans. We know what we have to compete with with the Americans.

We have people out there right now who, through crop insurance, can't get cost of production. We are losing...70% of something is still a loss. There are negative margins right now. The minister might say that everything is rosy in agriculture. It's not. Grains and oilseeds are hurting very badly right now.

Cost of production—is it ever part of the philosophy that this government has embraced? I say that because obviously the GRIP program was a part of that and we got rid of the GRIP. Have you ever seen that come forward, or do you believe in the next number of years that may come forward as a philosophy for agriculture?

Mr. Frank Claydon: You mention the word “frustrating”. I don't find what we have to do to develop these programs to be frustrating. It's time-consuming, but I think everyone is trying to work to find some common solutions. And it's not easy; it's really tough. You also want to avoid getting into a situation where you're going to encourage trade action from the Americans or others, which is simply going to take those benefits and flush them down the drain in terms of what producers will be able to benefit from.

The minister has a Safety Nets Advisory Committee that is extremely active in terms of trying to look at various proposals that are being suggested by farm groups and others across the country, as well as ideas that are coming out of the bureaucracy. We're not leaving any stone unturned.

I think that in fact there's a meeting of the Safety Nets Advisory Committee this week and they will be looking at some GRIP-like kinds of proposals in terms of whether there are ideas there that we need to resurrect and—

Mr. Rick Borotsik: Does the $435 million carry forward into the year 2000-01, or is it beyond that?

Mr. Frank Claydon: No, we're looking at program design for 2000-01 as well as beyond. We have to look at what's feasible in terms of mounting different programs. We don't want to move too quickly in terms of something that's completely a change simply because it takes time to get it right.

But there's nothing that says we're fixed into some particular design constraints. We've asked the safety net committee to look at all possibilities.

The Chair: Thank you.

We'll go to Mr. Proctor and then we'll try a question from Mr. Hoeppner.

Mr. Dick Proctor: I have a follow-up for Mr. Claydon.

I wish you well in your new endeavours.

But in terms of the programs, what we've seen, as I think Mr. Borotsik was suggesting and certainly I would, is a number of ad hoc programs, programs that have a lifespan of a couple of years and then are replaced by another program. Would it be your wish, or your desire, that we should be developing some longer-term programs that we can fine-tune as we go along and get the kinks out of, which the minister alluded to in his remarks, so that we're not reinventing a different wheel every couple of years? This could be either a cost of production or some other manoeuvre whereby people can build on something, knowing that there might be some money there in years when it's not needed that can be drawn down in crisis years.

Mr. Frank Claydon: Mr. Chairman, we do have the NISA program and the crop insurance program, which have been relatively long-term programs. We've had the crop insurance since the late 1950s. I think, as well, the provinces and the federal government were working together on a disaster approach before we ended up in the difficulties that we had in 1998 and 1999.

I think everyone would like to see something that gives as much predictability and stability to the farm community as well. I think we're going to be learning from what we've done over the last couple of years. I hope we'll end up with something that is more stable. I think, though, we have to keep an element of flexibility to deal with circumstances that will not always be the same in the future.

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The Chair: Thank you. I'm going to try to get Mr. Hoeppner in for a question.

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

I also wish you well, Mr. Claydon.

I want to go to an article in Agriweek, which says:

Ontario grain and soybean growers, who still have a GRIP-like support program for the main crops, known as Market Revenue Insurance, will soon be getting advance payments in time for spring; a total estimated at $60 million....

So is this a fact, that there still is a GRIP program in Ontario?

Mr. Frank Claydon: Yes, Ontario is the one province that didn't want to cancel its GRIP program.

Mr. Jake Hoeppner: So why is it then a problem to reinstate that in western Canada?

Mr. Frank Claydon: It's something that has to be looked at, and we are looking at some GRIP. We have a situation in Ontario where there isn't the kind of export orientation that we have in the west. You know the situation with shipments from western Canada down into the northern tier states and how volatile that can be in terms of the American political agenda.

Mr. Jake Hoeppner: I have another set of figures I want to throw out, and maybe you can verify them. I read an article that says with the cutbacks over the last number of years in 1998 and 1999 Canadian agriculture will still be short $1.89 billion as compared to earlier years and 88% of that will be borne by western farmers. Is that an accurate analysis?

Mr. Frank Claydon: Mr. Hoeppner, I'm not sure of the figures you're quoting, but certainly there was, with the cancellation of the Crow benefit in western Canada, a significant reduction in program benefits there. But I don't know exactly—

Mr. Jake Hoeppner: Would you be able to give us some kind of ballpark figure on those figures, whether it's accurate or not? It would sure help us in dealing with the problem.

Mr. Frank Claydon: Certainly. If you could provide us with those figures, we'd be glad to do that.

The Chair: Thank you, Mr. Claydon.

It was an easy go for you, Madame Vincent.

Thanks to all of you, and we'll see all of you again tomorrow.

This meeting is over.