AGRI Committee Meeting

STANDING COMMITTEE ON AGRICULTURE AND AGRI-FOOD

COMITÉ PERMANENT DE L'AGRICULTURE ET DE L'AGROALIMENTAIRE

EVIDENCE

[Recorded by Electronic Apparatus]

Wednesday, April 5, 2000

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[English]

The Chair (Mr. John Harvard (Charleswood St. James—Assiniboia)): Members, we're going to start the meeting on time, and with a little luck we'll be able to keep the ministers here until 1.30, which is gratifying.

We welcome back of course the Minister of Agriculture, Mr. Vanclief, along with his sidekick, Andy Mitchell, who is Secretary of State for Rural Development. And of course the two ministers have been joined again by Frank Claydon and Diane Vincent, and they have also been joined today by Judith Moses and Doug Hedley.

Mr. Vanclief, I gather you have an opening statement. and of course the meeting today is about the farm income situation and safety nets. Are both of you, Mr. Vanclief and Mr. Mitchell, going to have opening statements as yesterday? Just Lyle, right?

We'll start with Mr. Vanclief and then as usual we'll go to questions.

Hon. Lyle Vanclief (Minister of Agriculture and Agri-Food, Lib.): Thank you very much, Mr. Chairman. It's a pleasure to be here with the committee again today.

Thank you for introducing those at the table. However, Judith Moses was not able to join us today, but the senior executive director of policy branch, Doug Hedley, is here along with the deputy and associate deputy ministers. And I'm certainly pleased to have Minister Mitchell with me.

So I do want to thank the committee for the opportunity to share some time with you today talking about the particular and certainly important issue of farm incomes, which has been a priority for all of us for many months. We've been working, and I've been working closely with my cabinet colleagues, with my counterparts in the provincial governments, and with farmers themselves to come up with solutions that will provide some greater income stability for our producers.

I know you people have been following that very closely, and I appreciate the input that as individuals and as a committee you people have provided in that.

I do as well want to thank the committee for all of the hard work. You had a number of hearings both here in Ottawa and in western Canada. I appreciated receiving the report and would note that we have already acted on some of the recommendations. I look forward to responding in greater detail to that report.

Since I last appeared before the committee on this subject, our government has made $2.3 billion in assistance available to Canadian farmers. That includes a federal commitment of $1.07 billion for disaster assistance in 1998 and 1999, and then in January we announced a further $1 billion in income disaster support for the years 2000 and 2001, which includes interest-free cash advances to producers to help provide them with some cash to put their crop in the ground this spring.

We've also made a number of changes to the AIDA program for 1998, but in particular for 1999, that makes it more responsive to the producer needs, and in response to some advice that was given to us by individuals, by provinces, and by the National Safety Nets Advisory Committee.

To address the extreme and extenuating circumstances facing Saskatchewan and Manitoba grain producers, an agreement, as you know, was reached with those two provinces to provide a one-time additional federal injection of $240 million.

As you know, all of this is new short-term assistance in addition to the annual federal funding of our core farm safety nets. In that regard I've been working with the provincial counterparts in the industry, through the National Safety Nets Advisory Committee, to come up with a longer-term framework for this package of safety net programs. They've been ongoing for several years; and as you know—and I commented on it yesterday—Mr. Chairman and committee members, that hard work on everybody's behalf paid off two weeks ago when we reached a tentative agreement with all ten provinces on a long-term safety net plan.

It was a good day for producers, and probably the person who summed it up the best was Minister Lingenfelter from Saskatchewan, when he pointed out that it provides all farmers with the stability they need to thrive in the future. The Canadian Federation of Agriculture also echoed that statement when Bob Friesen, the chairman, noted that the agreement creates further stability for farmers.

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I look forward to receiving continued input from farmers through the National Safety Nets Advisory Committee, which will be meeting again this week to hear the views of individuals and groups as we continue to iron out the details of this agreement, including the disaster assistance program, the successor program to the program previously called AIDA.

Mr. Chairman, the tentative agreement certainly will benefit all provinces right across the country. For example, my colleague Rémy Trudel, the minister of agriculture in Quebec, commented at the press conference that the results of that tentative agreement fulfil the desire of some provinces after 15 years of efforts that have been going on. I hope the plan will be ratified by each province as soon as possible in order to provide our producers with greater security so that they can get on with their business.

The tentative agreement, as I said yesterday, provides annual funding in the total of $1.1 billion. I will be going to cabinet asking for a bit of a re-profile on that, so that $665 million will be in the basic safety net programs and the successor program package will have $435 million in income disaster.

This federal funding, as you know, is cost-shared with the provinces. Provincial allocations under the basic safety net package in the tentative agreement will be based on the size of the industry in each province. I will be also seeking approval from cabinet for additional funding to ensure that no province receives less under this reallocation than its current allocation in the basic safety net envelope.

As well, we must continue to realize that the disaster component of the safety net package now will ensure that where risks exceed basic safety net capacity in any province, the part II, that safety net disaster program, will be there for producers in that province, wherever they are, and they will be eligible to receive disaster support through that part of the envelope.

I will also be seeking cabinet approval for the third year of disaster assistance funding, which will bring the federal commitment to safety net funding to more than $3.3 billion for the next three years. There was certainly concern going into that federal-provincial ministers meeting a couple of weeks ago, Mr. Chairman, that we were not going to be able to reach an agreement on a long enough term so that there would be some security there, so the producers, and provinces, and the federal government would know what we had to work with in the years ahead, and I was very pleased with the hard work of everyone around the table. We were able to get a three-year agreement.

We also agreed that a new disaster assistance program and the net income stabilization account will be better integrated in order to provide a greater degree of stability to farm incomes. This will mean that the NISA will be a main vehicle to moderate normal fluctuations in farm income, and the disaster program will be used in the case of severe decline in income. Naturally if someone's NISA account has been collapsed, that's why there's the benefit of the disaster program, which is there to fill in after that.

As we move forward on ratification of the agreement by the provinces, I will be sitting down with my provincial counterparts again in the next few weeks to discuss details of the new disaster program, the successor program to AIDA, for the years 2000 and 2001.

As we know, in this file and in this issue our work is far from done. It took an extraordinary effort on the part of the federal government, the provinces, and the industry, with their very important input into this, to come to this agreement, and I'm confident that we will continue to work cooperatively in the best interests of Canadian farmers.

For our part, the federal government will continue those efforts on a number of fronts. We will continue to work to provide the tools to help the sector adapt and compete in the global economy. We will continue to work to reform our grain transportation system, and we will continue to work to level the playing field in the international arena and also to ensure that our producers can compete on an equal footing with counterparts around the world.

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Through all of these efforts, we are contributing to the strength and vitality of the agriculture and agrifood industry. We understand the risks that producers have to take. We understand the vulnerability of producers, because we are dealing, as I said yesterday, with a resource-based industry over which individual producers do not have as much control at any time as they would like to have. But collectively we will seek to find all the resources and all the energy that we possibly can in order to assist to the greatest extent possible.

So with those comments, Mr. Chairman, I turn it back over to you.

The Chair: Thank you, Mr. Vanclief.

I'd like a word of clarification from you before I go to Mr. Hilstrom. The $1.5 billion proposed to be allocated by the federal government in disaster assistance over the next three years, is that the federal government's share of a 60-40 split and all the other provinces—

Mr. Lyle Vanclief: That's right, Chair. The numbers I gave total, if I get ratification for the third year of that program, $1.1 billion a year for each of the next three years, and that is 60%. So divide that by six and multiply it by ten and you'll get what's available.

The Chair: Good, that's all I need to know. Thank you.

Mr. Hilstrom, seven minutes.

Mr. Howard Hilstrom (Selkirk—Interlake, Canadian Alliance): Thank you, Mr. Chairman.

We don't have much time, so we have to get down to brass tacks here. On page 7 of 28 in the minutes that I got from the previous day's meeting, you referred to $600 million for the 1998 business year as a figure that's about what the federal government had put out. Page 140 in the 1999 budget plan gave the federal government commitment as $600 million for 1998-99 of federal funds. In fact, to date, there's only been $503 million put out from both the federal and provincial governments. So is that statement inaccurate on your part on yesterday's testimony?

Mr. Lyle Vanclief: I'll ask Dr. Hedley to do it. It's the way the books are kept on that.

What I did assure people yesterday is that as a result of the 1998 business year, Mr. Hilstrom, and the changes we made to the criteria that were requested by producers and others, the $600 million for 1998 will be so closely all paid out that I don't know how we could get any more accurate. But I'll ask Dr. Hedley to comment on how the numbers are kept in the plans and priorities.

Mr. Howard Hilstrom: The federal portion is what we're talking about, Mr. Minister.

Mr. Lyle Vanclief: Yes.

Mr. Douglas D. Hedley (Senior Executive Director, Policy Branch, Department of Agriculture and Agri-Food): The number the minister used yesterday was that approximately $600 million would be paid for the AIDA program in 1998 year. Of that, about $505 million has already gone out the door. We anticipate finishing up that year with about $600 million or $610 million for the overall year. We still have some claims outstanding that we're trying to clean up right now. We're down to about 2% to 3% of the claims to finish.

Mr. Howard Hilstrom: Thank you.

The thing that's been coming out ever since the fall of 1998 is that there have been an awful lot of announcements, but lots of times the money never flowed as a result of that. In fact, even today, Mr. Minister, you mentioned “good days for producers”. It's only a good day for a producer when in fact the money flows, and announcements don't quite cut the bill. AIDA in fact only really supported and helped potato farmers and hog farmers because they were the ones who had the drastic drop of income.

In regard to the safety nets, what have you done in regard to the three-year margin that is so low on grain export farmers that they in fact don't qualify for your programs? I'd like you to comment on that specifically. What about that three-year margin, which was a big problem that was identified to you by the Canadian Federation of Agriculture?

The second thing you mentioned is this part II envelope. Where a disaster exceeds the amount of money that a given province has for safety net programs, you're saying that your government would in fact provide all the money necessary to deal with that crisis. You also mentioned when you were talking about the envelope that if the money available in a given province was not sufficient for the disaster that came up, there would be more money to take care of the issue. And I think in here we could talk about southwest Manitoba and southeast Saskatchewan. Is this what you're referring to, that where there's a disaster you've already got a guarantee from cabinet that in fact you have that money?

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Mr. Lyle Vanclief: Mr. Hilstrom, I want to explain it again. I said again this morning that the basic safety net package, which is for crop insurance, NISA and companion programs, allows provinces, along with the federal government, to have that support and safety net there. Until December 1998, and from then on, we didn't have anything to provide to Canadian producers if that was not sufficient. The AIDA money came forward, and now the money for a successor program follows that.

If and when that support to producers is not sufficient, the disaster money package is there for producers in Canada, whether they be hog producers, grain producers, or whatever. That disaster money naturally chases disaster.

Correct me if I'm wrong, but I think you were referring to the reference period. We have changed that as well. That announcement was made for 1999. Producers can use the olympic average, which is three out of the previous five years. We made that change a number of weeks ago. They can use three out of the previous five years, taking out the high and the low years, in recognition of the concerns producers had.

Mr. Howard Hilstrom: I'm aware of that, Mr. Minister, but in many cases even taking three out of those five years—and they choose them—still won't give a lot of farmers enough of a three-year margin and a decent payout on these agriculture disaster programs.

Before we go into more detail on that, the farm sector is a very viable economic sector in Canada and very important. What's your position as Minister of Agriculture on the Kroeger-Estey report? Where do you stand on that precisely? Are you for the commercial contract-based system, or should the Canadian Wheat Board still be the major player?

Mr. Lyle Vanclief: I won't get into the specifics of it, but I've made my views very clear. I feel very strongly that there need to be some major changes made on behalf of everyone involved in the grain transportation system in western Canada. I believe everybody has to come to the table to make some changes there.

The Wheat Board—

Mr. Howard Hilstrom: What are those changes that you want to see?

Mr. Lyle Vanclief: The Wheat Board needs to be involved in a tendering process. The railway needs to have some stipulations put on it, as far as a revenue cap goes and that type of thing. A lot of work has been done, and I look forward to the legislation, the changes the transportation minister....

I also realize the need for this to be done in time, so it can be effective this year. There is too much money on the table and available to producers out there to let this go on. We've had over three years of debate on this. It is one of those issues where, like every other, we will not make everyone happy.

There are those who want to move all the way one way, and there are those who don't want to move in some areas at all. My view is there are good opportunities and it's necessary for everyone to make some moves here in order to improve the system that, quite frankly, is not doing as much and is not as flexible as it could be or should be in transporting not only grains in western Canada—Wheat Board crops—but the other crops western farmers are diversifying into, in trying to support and help themselves.

The Chair: Thank you, Mr. Minister.

Madam Alarie. Seven minutes.

[Translation]

Ms. Hélène Alarie (Louis-Hébert, BQ): Good day. I'd like to comment briefly on four points, although I'm tempted to go on a little longer than that.

First of all, there's this brochure which was included in the kit. Since we did get a copy of it, I'd like to say a few words about it. The Canadian Food Inspection Agency spent $302,000 putting out this eye-catching brochure. Members of the public are told to wash their hands, to watch out for germs and to eat healthy foods. No doubt it will get people's attention, but I have to say that the section on genetically modified foods isn't all that accurate. In fact, the information provided is tendentious at best and I was very disturbed to find it printed in this brochure.

For starters, the brochure boldly states that genetically modified crops may reduce the need for chemicals in agriculture. When we review the data for the past few years - and we will have time to do that in committee - we will see that practically speaking, this hasn't happened. The Agency says that genetically modified foods go though rigorous testing and inspections much like those done on traditional food products. In any event, the brochure discusses this subject at considerable length. I have to say that I was deeply distressed to read some of what is printed here.

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My second comment concerns the AIDA program. I sense that there is general unease about this program in all regions, including Quebec. I've heard all kinds of complaints and I plan to investigate them more closely. I think it would be a good idea for the committee to call in departmental officials to discuss this program with us. One thing that bothers me considerably is the method used to calculate the value of a farmer's inventory. Consider the problems that potato farmers and greenhouse growers are experiencing. Consider the dilemma of sheep farmers in 1997. They received only 46 per cent of the profits they might have earned had they been able to benefit from the changes at the agency in 1998. I just wanted you to know that I'm hearing some rumblings of discontent over the AIDA program and I intend to follow up and get some answers.

My third comment has to do with general policy. I get the impression that, to use a well-known expression, someone is putting the cart before the horse. There are genuine inequities in so far as subsidies are concerned. I quite agree that we should make a valiant effort to wean ourselves from export and direct farm subsidies. However, in the real world, farmers survive from day to day and must compete with other markets. Whether they farm in the West or in the East, farmers all operate close to the US border. We hear the figures quoted all the time: our farmers receive subsidies of $140, while American farmers receives $240 and European farmers are subsidized to the tune of $300. We still do not have a policy in place respecting family farms and producers. How can we devise a policy, when these inequities persist? In my view, all of the efforts made, including those of the Cairns group, came during phase I, while we should have seen a bigger effort during phase II. The first thing we need to do is address the problem of the inequity faced by our producers who are in a crisis situation. Grain farmers from the West and other kinds of farmers in the East are facing the same problems. I'm deeply concerned about this situation.

The fourth point I wanted to make concerns a subject that we are likely to talk about more in future than we now do. I'm referring to grain transportation. I addressed the Kroeger Commission and reminded it not to forget the St. Lawrence and the Great Lakes. While there may be problems moving grain by land in Western Canada, once the grain reaches our part of the country, it must still be transported and we also have problems on this front. Therefore, let me just issue this word of caution to you. We will not put up with a grain transportation policy that is unfair to some. That's all I had to say.

[English]

The Chair: I just want to remind members this appearance today is really about farm safety nets. You touched on a number of topics, Madam Alarie. That used up just about five minutes, so you have about two and a half minutes to answer whatever you want to answer, Mr. Minister.

Mr. Lyle Vanclief: I'll try to touch base on all of them. I won't make any further comments on grain transportation. I think I made my views clear on that in my answer to Mr. Hilstrom.

On fairness, regarding support to agriculture—I think that's the word Madam Alarie used—we certainly have, without question, a very strong negotiating position at the WTO. That is a very important area where we work to try to level that playing field. Negotiations started there last week. We have an excellent opportunity, and we'll avail ourselves of every opportunity to explain to other countries around the world what their actions are doing, not only in the short term but in the longer term, to their producers.

On the issue we're discussing today of farm income, AIDA is available to every farmer, whether they raise sheep or pork, or grow potatoes, corn, soybeans, wheat, canola, or whatever. It's based on the gross margin of that individual operation. It is not an income guarantee program. It was not said to be in the beginning. It is not a price guarantee program on each individual bushel or animal in that farmer's production. There are trade concerns with some of those directions, but that was the design of the program.

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On food safety, I think we would have been very lax if we had not made comments in the Food Safety and You, brochure. Canadians told us clearly they did not understand how the safety of the food they ate was ensured. If we had put out a brochure and not commented on how the safety of food was maintained, based on science, we would not have been as forthright with the Canadian consumer as we could have been and should have been. That explains it briefly.

If you want more details, I know your committee is looking at having some hearings. I don't know where it has ended up. I don't know if it's just this committee, this committee and the health committee, or whatever. But there will be hearings here on the Hill on the whole issue of genetic modification. So I'm sure more information will come forward then.

The Chair: We're going to have a study on labelling, with regard to GMOs.

Thank you, Madam Alarie.

Mrs. Ur, seven minutes.

Mrs. Rose-Marie Ur (Lambton—Kent—Middlesex, Lib.): Thank you, Mr. Chair.

One of my first questions, Mr. Minister, is on market revenue. At all my Federation of Agriculture meetings held this spring, a topic of discussion was the status of the present payout. There was information in one of our local magazines we receive that there were no details announced for 2000-01 in the program, as Ontario continues to reject any Canada-Ontario agreement that would reduce payouts to 80%.

Economists in my area are saying that no formal announcement is possible while Ottawa continues to insist on unreasonable terms.

Could you expand on those concerns?

Mr. Lyle Vanclief: I think everyone around the table is probably aware that the market revenue program is a companion program that the industry in Ontario put in place for grains and oilseeds only, in Ontario. Ontario is actually the only province that has anything resembling a GRIP program left. Provinces chose to make some changes for different reasons in different areas.

That program was put in place. We are aware—as are you and a number of others around the table—the industry in Ontario wanted the federal government to extend the arrangement we had with the Province of Ontario on that program for two years. It was to end as of March 30, 2000.

We sent a proposed agreement to the Province of Ontario recently. We have not heard back from them. We have offered to extend that program for two years. That's exactly what the producers asked us to do. I believe the proposal offers 85% coverage for the two years. It's an extension they asked us to do, but we have not heard back from the province as of today. But I will say that proposed agreement went to them just recently.

Mrs. Rose-Marie Ur: Yesterday, when you were before the committee, you said how important it was for expanding markets, and profitable expanding markets. I certainly agree with you. In one respect, looking at the vision in agriculture—I heard this at every meeting—what do we have as a vision for agriculture?

But we're here on safety net programs. So how can we, as a government or a committee, work to some kind of direction where we can ensure that the primary producer is part of that profitable cycle we see in expanding markets? All too often we hear that we're making great dollars over here, but the little guy who is producing the product is going in the opposite direction.

Mr. Lyle Vanclief: As I've said many times, the safety net system, the crop insurance, NISA, disaster programs, and companion programs are a very integral part of that. But just as important is the work that's done on research and market development, whether that be domestic or otherwise. On average, 50% of the farm gate dollar in Canada comes to the producer because of export. In some provinces, in some commodities, it's far higher than that.

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We will continue to work with the provinces and with the individual organizations through research, through market development, in order to provide to them all the resources we can muster, the tools they need to adapt to that very competitive globe that's out there now. It is a global market, as we all know.

There are a number of fronts in rural development, whether that be through a program such as Mr. Mitchell commented about yesterday, the expansion of community futures.... For example, the Canadian Grain Commission, which is very important to the grains industry, through some changes in volumes and other reasons had fallen into a very serious financial situation. The government put in $20 million in order to make up for a deficit they had. Over the next number of years we'll be putting in $63 million, for a total of $83 million, so that we can maintain the excellent work of the Canadian Grain Commission without their having to consider raising any of their fees. These are the types of things we do in many different ways.

Mrs. Rose-Marie Ur: You were saying you're just looking at the criteria of the new disaster fund you're putting together. One complaint I've heard time and time again is that the goalposts were constantly changing with the first AIDA disaster program. Are we going to ensure that this new program we put together is put together in such a way that we come down with one set of rules and then we can live by those rules until the program is exhausted?

Mr. Lyle Vanclief: We said in the first program that as the program evolved, if we saw that we needed to change the criteria to make it better so it could reach as many people as we could possibly reach with it, we would maintain that flexibility. I'm not one to say that when we set a new set of criteria for a program, that's it.

We made some changes, for example, to cover negative margins for 1998. We made some changes regarding enlarging farms, regarding family labour, regarding allowing producers to file on the accrual or the cash system, and two or three other things. Those were very positive changes for the criteria for 1999.

When new criteria are made up for another program, I don't think we should freeze totally the criteria for that as well. We need to maintain that flexibility in case we have the opportunity to improve it.

Mrs. Rose-Marie Ur: I have one last statement. You don't need to reply.

One of the things our farmers are really encouraging us to move forward with is an enhanced NISA. They support NISA totally but they feel there can be some improvements made within the NISA program as well, especially making it easier to access your dollars when the problem actually is happening, not down the road.

Mr. Lyle Vanclief: We've already made some changes to NISA this summer and there are some proposed changes before the national NISA advisory committee almost as we speak in order to do exactly those types of things.

The Chair: Mr. Proctor, you have five minutes.

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

This is a document, Minister, that was made available to the agriculture committee a couple of weeks ago in Brussels. As you can see, it's a producer support estimate by commodity and it has three categories: wheat, milk, and beef and veal. Of course, Canada is in the study together with the U.S. and the EU. I think the clerk is passing out other copies of it.

I draw your attention to the milk category. The producer support estimate for Canada is at the OECD level and actually one cent higher than Europe. On beef and veal we trail the EU by the proverbial country mile, but we're very competitive with the United States, with whom we have most of that trade.

It's when we come to wheat, however, that we see the problem. Our support for wheat—and you've heard these a number of times—is 9¢, 38¢, and 56¢. I heard yesterday, and I don't disagree entirely with the comment, about what you inherited in 1993 and the deficit situation. But why has that lack of support for grain and oilseed farmers been allowed to occur? Why have those farmers been asked to bear a disproportionate share of the burden of fiscal responsibility?

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Mr. Lyle Vanclief: There are a number of ways, Mr. Proctor, that government supports the industry. One is through programs such as the basic safety net program and now the disaster program, and the other is through legislation. When you take the way the OECD does it, I know you're fully aware that they take into account and they put a value, for example, as far as legislation is concerned.

I want to talk just for a minute about the support to the dairy industry. The government, other than having legislation there to allow the continuation of the supply management system.... We will keep it there; I'll make that very clear. Other than a small amount that is still there for an industrial milk subsidy, which is being ratcheted out over the next couple of years, there is no direct support to the dairy industry other than the legislation. That support is by the consumer.

Just as a sideline, I was talking to a constituent this morning who just got back from five weeks in Florida. They commented to me that a pound of butter in the town of Picton is $2.99 this week. Dick, you know where the town of Picton is. A pound of butter in the United States is $2.99 U.S.

On the others, the beef, there is no direct support other than the other type. It's the same on the grain. I realize that is the situation.

The other consequence to that would be—and I don't know whether you're suggesting this or not—that we have a guaranteed return to a producer on a bushel of grain or a bushel of canola or whatever the case might happen to be. That does not go without its challenges and without its problems as far as internationally is concerned.

Mr. Dick Proctor: Thanks very much.

With the little bit of time I undoubtedly have left, I want to zero in quickly on the grain. I'd like you to look at Canada from 1986 through 1998. You'll see that in the 1986 to 1988 period we're quite competitive with the European Union, the U.S., and the OECD. We're starting to slip a little bit by 1991 to 1993, but it's still not that bad. It's 1996 to 1998 where we really drop down so dramatically. Of course, that comes with the end of the Crow benefit.

Obviously some of us were arguing about the fact that there was a disaster going on in the Prairies and the need for some help. Clearly you folks had access to all of that data. I'm just wondering why it took so long to address that situation when it's as plain as the nose on all of our faces that we were headed in this direction from the early 1990s, 1993-94.

Mr. Lyle Vanclief: You don't want me to repeat what I've said. Mr. Borotsik is coming next to speak and I'm sure he doesn't want me to remind him again either. You just said as well that we inherited a very serious situation and we had to make some changes.

Mr. Dick Proctor: But the pain has been suffered disproportionately, Mr. Minister.

Mr. Lyle Vanclief: The pain has been suffered. We have put a lot of money back into your province. In Manitoba, just within the last number of weeks, the federal government has put in an additional $240 million above and beyond the safety net envelope that we have been increasing as well.

The Chair: You have 30 seconds.

Mr. Dick Proctor: When I get to another round, if we get to another round, can we add it in?

The Chair: Yes.

Mr. Borotsik, five minutes.

Mr. Rick Borotsik (Brandon—Souris, PC): I know Dick would be more than happy to give me his 30 seconds.

Yesterday, Mr. Vanclief, you indicated in this session:

I do want to point out that the reality is that a program was put into place in a hurry, in response to the need. When you put a program in place of that size...

In 1997, when you became the minister, your staff held a briefing with you. In that briefing they indicated that for the year 1998-99 and up to 2000, there were going to be some serious concerns with oilseeds and grain, as identified by Mr. Proctor in his graph. Why did it take basically 18 months to get the cheques rolling to the farmers? Is that not enough lead time for you and your department to be able to put in a program?

I recall, Mr. Vanclief, many times you saying you would not put in ad hoc programs. Do you consider the AIDA program to be an ad hoc program?

Mr. Lyle Vanclief: No, I don't consider it to be an ad hoc program, because it's available to all farmers across the country. That is a fact. It's not available just to grains and oilseed producers. It's available to farmers, no matter what their source of income, across the country.

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As for the information you're referring to regarding the projection of where the markets were going to be in 1996-97, etc., there were some predictions that markets were going to drop, but I challenge anyone—and I've done this publicly to some of the best economists in the world—to give me an honest answer saying they anticipated they would drop to anywhere near the level they did drop to. If we go back to early 1998, for example, the industry itself, the Canadian Federation of Agriculture, was saying we would need $500 million over two years to address that. We put in $1.07 million to attempt to alleviate that. It did not alleviate it for every producer. It is not all things to all people.

Mr. Rick Borotsik: [Inaudible—Editor].

Mr. Lyle Vanclief: You asked for a five-word answer yesterday—

Mr. Rick Borotsik: I did, I did.

Mr. Lyle Vanclief: I told you the five words I'd use, but I won't use them here.

Mr. Rick Borotsik: Today, Mr. Vanclief, in your testimony, you ruled out price guarantees or income guarantees. You basically said that. The MR program in Ontario has a tendency to have that GRIP price guarantee component in it. Are you then saying other provinces could well put in, as companion programs, a program similar to the MR program, the market revenue program?

Mr. Lyle Vanclief: I don't think there's anything prohibiting them from doing it. Other provinces have done that. Ontario has done that as a companion program.

I must remind you that does not come without some dangers as far as trade is concerned.

Mr. Rick Borotsik: I'm just asking, would you support it with other provinces then?

Mr. Lyle Vanclief: I would want to see what their program was—

Mr. Rick Borotsik: Okay, so if they have the same model as the MR, then there shouldn't be any problem?

Mr. Lyle Vanclief: We have said that Ontario, as much as, yes, I support the program and understand it, is pushing the envelope very closely.

Mr. Rick Borotsik: I ask my question again, Mr. Vanclief. You've just sent to the Province of Ontario your agreement, which hasn't been sent back. You are prepared to extend it for another two years. If other provinces approached you with a similar model of an MR program, am I to believe then the government would support that in other provinces?

Mr. Lyle Vanclief: What I have said very clearly is we would point out to them the dangers in doing that type of thing and we would have to take a look at that. We have not told Ontario they cannot do it, but we do have concerns about it continuing.

Mr. Rick Borotsik: Okay.

Mr. Vanclief, the $240 million that was given to Manitoba and Saskatchewan—and certainly Dick and I thank you publicly for that, and I do it simply because we had a natural disaster in our area, as you're aware, and so did Dick, so I consider that we have extenuating circumstances in agriculture beyond the commodity crisis; we also had a natural disaster crisis.... So in saying that, would you consider the $240 million, albeit it's a one-time affair, an ad hoc program?

Mr. Lyle Vanclief: It's getting very close to an ad hoc program, yes.

Mr. Rick Borotsik: Well, it's not available to everybody, so I'd say you're absolutely correct.

How much time do I have?

The Chair: One minute.

Mr. Lyle Vanclief: But if you're opposed—

Mr. Rick Borotsik: Oh no, I said I'm not.

My last question is this. We now have $435 million in the disaster programs moving forward, because $65 million has been turned back into the companion programs in the NISA and the crop insurance. Do you think only $435 million is necessary for the year 2000 and the year 2001 out? Because again, looking at grains and oilseeds, all of the economists I talk to and read about now say there doesn't seem to be a major change. In saying that, are you also opposed to having some sort of cost recovery or income recovery program out of the $435 million?

The Chair: You have 30 seconds, Minister.

Mr. Lyle Vanclief: What do you mean by cost recovery?

Mr. Rick Borotsik: Well, an income recovery or a cost recovery program for grains and oilseeds, for cost of production, similar to—

Mr. Lyle Vanclief: Oh, cost of production.

Well, as to the amount, it's anybody's estimate what that's going to be and what the requirements are going to be. If I go back, again, I don't think anybody predicted in 1997 that the prices would be where they were in 1998 and 1999. It's not that I want a disaster to happen someplace else in the world, but it can turn around, and let's hope it does. But we have that much money there. Remember that's 60%. The provinces will come forward.

Concerning the money that moved, can I say, from box 2 up to box 1, the provinces said very clearly they wanted to use the money in box 1, some of the NISA money. They want NISA tied.

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Remember we have $3.1 billion in NISA accounts in Canada. I know some of that money is in the hands of producers who may not need it, but I also remind everyone that because of the 1998 business year, way over $0.5 billion was triggered that farmers could have pulled out of their accounts. They chose not to do so. I know some have drained their accounts. Yes, I do. But if they have drained their accounts, then that means it's that much more meaningful for them that the disaster program is there.

So we need to tie these together so that NISA can be used more along the line it was primarily intended to be used for.

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

The Chair: Mr. McCormick, five minutes.

Mr. Larry McCormick (Hastings—Frontenac—Lennox and Addington, Lib.): Thank you very much, Mr. Chair.

Thank you, Ministers, for being here.

When the clerk accused me of not dropping in on the committee yesterday, I said I was just across the hall. It's hard to be at all these places at once.

I want to thank and recognize Minister Mitchell for being here. A year ago we did not have this additional minister here. Yes, Lyle, Minister Vanclief, was doing a great job of doing everything, but this additional support will make a great difference in rural Canada.

I'm looking at the minutes from yesterday. This $214 million Minister Mitchell talks about that he has to invest in rural Canada will make a great difference when we give it to the people at the grassroots and let them decide how to apply it in their communities.

Mr. Chair, to the Minister of Agriculture, I thank you for and applaud the emergency funding that we, the federal government, gave to Manitoba and Saskatchewan. It was very much needed. Of course there never is enough. Yet today, as chair of the government rural caucus, I have the people from the Peace area in B.C., from Alberta, and from Ontario saying “Well, that's not fair. We didn't get our share.” I defended it, but will this long-term safety net extension that you brought the provinces and the federal government together with—and I thank you for and congratulate you on that, and I'm sure we'll all get on board—will that help ease their concerns in Ontario, Alberta, and B.C.?

Mr. Lyle Vanclief: Certainly with the reallocation of the basic safety net dollars, it will mean the three provinces you heard from will have considerably more money than they have had in the past to use to support their industry, and we are certainly going to encourage them, if not more than encourage them, to make sure that money is used in a way that does help in income situations for producers in their provinces.

Sometimes some of that money, and rightfully so, is used for research and market development, but I said to the ministers very clearly that we will be watching very closely. Because the federal government has to approve their programs, because we're a partner in them—that's our money—we want to make sure that increase in income they have is by and large used for income support. So that will be very meaningful and can be very helpful for situations like we've had in the past.

Mr. Larry McCormick: Mr. Minister, quite a political statement was made here by one of my colleagues across on the other side of the table. He said AIDA was designed...or resulted in the dollars going to potato farmers and hog producers.

Whether you have this information available now or whether we can get it later, I would ask that we get the information available and table it, and I would like any rough estimates mentioned now of where the money went from the AIDA program. I have not defended and I didn't speak well about AIDA and many other things when I was in the west, but when someone comes out and says it was designed so that the money mainly got to potato producers and hog producers, I just can't accept that, Mr. Minister.

Mr. Lyle Vanclief: I suppose the numbers could be attained on a commodity issue, but it was not put in place for a commodity issue. It was put in place for a farm issue.

I guess we might raise the question of the over 11,000 producers in Saskatchewan who got support; the over 2,600 in Manitoba; the 5,500 in Ontario; and the close to 25,000 producers in Canada. I don't think they were all hog and potato producers. I know producers who were in the horticulture industry and the grains and oilseeds industry.

The program was not without its flaws, and I've said that publicly.

Mr. Larry McCormick: Thank you, Minister.

Mr. Lyle Vanclief: And we will continue to work on that to improve it.

The Chair: Thank you.

Mr. Ritz, followed by Mr. Steckle.

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Mr. Gerry Ritz (Battlefords—Lloydminster, Canadian Alliance): Thank you, gentlemen, for appearing here today. It's always very interesting when you are here.

I have a couple of questions. With regard to your third bullet on the elements of the safety net plan, you're going back to cabinet with your hand out and saying that you need more and so on. How much money are you asking for? Is there a timeline? It's over a three-year period. Is there a timeline for that? What happens if cabinet says no or cuts your request in half? It says that the basic safety net envelope will never be less than the 1999 level and so on. In my province of Saskatchewan we were already short in 1999, so you're setting us at a low benchmark. I'm just wondering how that's all going to evolve.

Mr. Lyle Vanclief: Of the $600 million in the basic safety net envelope in the past, the province of Saskatchewan has gotten about $195 million of it. When one province gets one-third of the total safety net envelope for Canada, I don't think that anybody from that province can say that they are short.

That third bullet, Mr. Ritz, is that we said—I challenged my provincial colleagues, and they rose to the challenge in the tentative agreement—that no province would have less. It's our estimate that it will take about $40 million a year on top of the $665 million to make sure that no province in Canada has less than they had before. This is a three-year agreement, so that would be whatever number would be required for three years. I can tell you that I have full confidence that my cabinet colleagues will support me.

Mr. Gerry Ritz: Okay. Great.

I'd like to go back to the 1998 year, which we're still working on according to your statistics and so on that you set out here today. Again, I go back to Saskatchewan, and you did institute retroactively negative margins for 1998. How many applications have you received from Saskatchewan? Of course that would help us. How many of those—

Mr. Lyle Vanclief: Do you mean negative margins?

Mr. Gerry Ritz: Yes.

Mr. Lyle Vanclief: I don't know if we have those numbers here today, but if we don't, we'll get them.

Mr. Gerry Ritz: I'd like to get those. I would like to know how many applied, how many qualified, and for how much.

Mr. Lyle Vanclief: Okay.

Mr. Gerry Ritz: I see the statistics on this sheet you handed out, the AIDA delivery statistics. The number of claims that are still out and the average payment and so on haven't changed significantly. This negative margin program was supposed to be in place in the first part of the year, and you only have 95 claims left to go. I'm just wondering what happened to those negative margins.

Mr. Lyle Vanclief: If a person already had an application in, their application will be automatically reassessed to see if a negative margin applied, and then there would be the payment out. If someone didn't apply and they think the negative margin would apply, I think there was a deadline for them to do that.

But I'll ask Dr. Hedley if he has a couple of brief comments to help clarify that. Then we can get those other numbers for you as quickly as possible.

Mr. Gerry Ritz: There was talk at a committee meeting way back in October that there would be an appeals process set up by October-November. We still haven't seen anything on that.

Mr. Lyle Vanclief: Yes, they're all set up. They weren't set up in October-November, but they have all been set up for some time now. I read the numbers in the last day or two. There are, I think, 300-some in Saskatchewan, and 60-some have already been settled. There's a breakdown available to me of the different types of complaints. But there is an appeals board—I forget the proper title of it—in every province in order to deal with those.

Mr. Gerry Ritz: I'd love to see the numbers.

Mr. Lyle Vanclief: Do you mean the numbers on appeals?

Mr. Gerry Ritz: Yes, and what their concerns are, in order to see if it ratifies what I'm seeing in my office.

Mr. Lyle Vanclief: I think it's 360-some or 460-some in the province of Saskatchewan.

Mr. Gerry Ritz: It hasn't been publicized that well, because I'm still getting a tremendous number of farmers coming into my office and saying there is no appeals process they can use. They don't have the contacts and so on. So it would be great.

Mr. Lyle Vanclief: We have difficulty—and I want to put this exactly right. When we put out information, we're accused of using taxpayers' dollars to promote something, and your party is not exempt from making that type of accusation.

Some hon. members: Oh, oh!

Mr. Lyle Vanclief: Then when people come to us and say they don't have information, you say to us, how do we get it out there?

Mr. Gerry Ritz: It's the quality of the information.

Mr. Lyle Vanclief: The press is very good. I'm not here to flatter the press, but the press is a very important vehicle in putting that out there. In the eyes of some people, we have spent too much money to explain to people how they apply, where they apply, etc., for the AIDA program.

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All I am saying is that collectively we had better make up our mind on how much money we need to spend. It's a new program, and people need to get used to it. We'll get it out there. But the process is there. If there's anything we can do to help get that information out there, we'd be more than pleased to take some advice on doing it.

The Chair: Thank you, Mr. Minister.

Next is Mr. Steckle, followed by Mr. Proctor.

Mr. Paul Steckle (Huron—Bruce, Lib.): I'd like to thank the ministers for meeting with us again today. It's not often that we have ministers appearing on back-to-back days on this particular subject.

My first question has to do with processes. When I go back to 1998 and think about our beginnings, when we started talking about the difficulties in the rural sector, of course a lot of things were unknown, such as the magnitude of a problem, how we were going to deliver the service, and how long this need would have to be looked at.

We've gone on now into a second edition of what we believed to be only a two-year program. We're now into a four-year program.

The biggest problem I had in dealing with this issue was the process. In Ontario the province is delivering the money to the farmers. I'm excluding other provinces where that doesn't apply. In the case of Ontario there was a lot of politics played, and I've always tried to avoid that. Believe it or not, I really did try to avoid politics, or at least the perception that politics is playing a part in how we delivered the money to the farmers. Time after time after time, after making certain commitments based on what I was led to believe were the delivery times of the money, something happened, and it often broke down at the provincial level. How do we overcome that?

We have to work with the provinces because we have the provinces there to work with, but if we can't find the mechanism to quickly get the money to where it's needed, how do we as politicians, all of us here, find a delivery process that is efficient, effective, and expeditious? We have to find a better way. It's the same thing with the MRI right now in Ontario. We have a problem there. This is going on and on and on, and farmers are getting to the point where they're wondering whether we're ever going to deliver.

Mr. Lyle Vanclief: I make no excuses for it, but the reality is that the program is a new program, and when you design a program that is as far-reaching as this one is, to be available to every farmer in Canada, as diverse as our farms are and our country is, it's very difficult. I don't think that all of us sitting around this table are so naive as to think there won't be politics played by everybody involved. That's unfortunate, because when politics are played on it, it is the producer who ends up paying the price.

I'm not taking anything away from my cabinet colleagues, but there aren't a lot of ministries that have to have as many federal-provincial agreements with dollars involved as there are in the Ministry of Agriculture and Agri-Food, because agriculture is a shared jurisdiction. Quite frankly, at one time a couple of weeks ago during our discussions—and Mr. Mitchell will verify this—I threatened to do it federally only. The provinces didn't really want that. If that's the case, you don't have to go back and forth. What happens in reality is—and this is a simple reality—that province A is looking over their shoulder to make sure there isn't something in province B where the t isn't crossed by the same slant it was when you made an agreement with province A. It goes back and forth, and all of that goes on.

We learned a lot with the AIDA program. If we think back to when NISA started out, the forms were long, etc. Now your application is off your income tax form. Dr. Hedley will tell you that within a year's time—and he might want to comment—we may see that the disaster program can be done in a very similar way so that it's automatic. If you trigger it, it's there. But with a new program you just don't get there overnight.

I said time and time again that if it wasn't going to pay out the full amount of money I said it would, we would change the criteria so that it would. I said it yesterday, and I'll say it again: all of the money that was allocated for 1998 and 1999 will be paid out. As we design the new program and the administration of it, we'll probably find that the administration of a new program will not be as costly.

The Chair: We'll have to leave it there. Thank you.

Next is Mr. Proctor, followed by Mr. Calder.

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Mr. Dick Proctor: Thanks again, Mr. Chair.

On the design of the AIDA program, Mr. Minister, it was certainly, I think, accepted by everybody in the fall of 1998 when this was coming together that you were going to introduce—or the federal government was going to develop—a plan that was based on the Alberta FIDP plan. I think that was pretty widely accepted by one and all.

Mr. Lyle Vanclief: One model—

Mr. Dick Proctor: I was most interested to hear the chair of the Alberta soft wheat growers tell the standing committee when we were in Airdrie last December that, in the words of Mr. Eckert, he had begged you a full year earlier not to tie into the Alberta plan because, as he told us, it was designed for cattle.

I know that the cattle rancher down the way here has said that potatoes and hogs were the big winners, but let me quote from Mr. Eckert. He said:

...it was designed for the red meat sector. They have an excellent benchmark for two, three, or four years, and then they fall, because of the cyclical nature of that business, and it brings them up to 70% of those previous three high years. It's a fantastic program for the red meat sector.

My question is this: do you recall any dire warnings from the soft wheat producers about the AIDA model and tying it to FIDP when your officials were busy developing this in 1998 and early 1999?

Mr. Lyle Vanclief: The FIDP program in Alberta was one model that we looked at. I'm not saying that the soft wheat producers did not write me a letter or contact officials with their concerns. There were a number of people who had input—hundreds of people had input—and input is still coming in on the design of a new one. The safety nets advisory committee is meeting in Winnipeg tomorrow to listen to the views of individuals—some of whom are in this room right now as we speak—on proposals on the design of a new program.

I don't know the numbers on the delivery of FIDP in Alberta. Whether it has been mostly to cattle producers, Mr. Proctor, I don't know. It was a model that we looked at. Interestingly enough, in regard to some of the tie-together between how we were connecting NISA and AIDA, Alberta was not in favour of it in the beginning and have changed their views on that now. As we all are, Alberta is being flexible so that we can make this work as best we can.

So yes, it was one of the models.

Mr. Dick Proctor: Thanks.

I want to look ahead, Mr. Chair. On the safety nets committee, which is reporting later this year, as you've said, you have been quoted a couple of times of late about the possibility or the suggestion of an exit strategy for farmers. We've had experts before the Standing Committee on Agriculture who have referred to how farmers are left twisting in the wind and that they really need to know so they can make decisions and get on with their lives. In fact, in talking with farmers themselves, they've indicated that they'd appreciate some frank candour on this topic.

My question is, can you please enlighten the committee regarding an exit strategy? Is it something the safety nets committee has been asked to consider? As minister, do you think such a strategy would be a good idea? We've done it in other primary resource sectors. Do we need to do it in agriculture?

Mr. Lyle Vanclief: Well, Mr. Proctor, I made a statement along these lines some 18 or so months ago, and at that time a number of people bit my head off when I said that everybody in every business, including farmers, every year needed to consider making some choices and decisions, whether it be on how they run their operation, on the diversity of their operation, or on whether they stay involved in the operation at all.

It was perceived at that time that I wasn't supporting family farms. Nothing could be further from the truth. But I am a realist. And I don't care what business you're in: in the realities of today—whether that be in downtown or rural Canada—there are times when some very serious decisions have to be made. It's no secret. I made one of those decisions myself, and it wasn't an easy one, but it was a reality that my wife and I faced.

I do think we need to be—and we are—giving it some thought. I haven't specifically tasked the safety nets advisory committee to this, but I do think we need to take a look at it, whether you want to call it transition support or whatever. I hate to say it. I really hate to say it, but it's a reality. And if there are people, through whatever the reason might happen to be—world prices, the inability of provincial and federal governments to give the support that would be necessary to help them stay in business.... There will always likely be some who need some support, whether that be support to help one of the individuals, if it's a husband or wife, if I could use that example, to gain some skills so they could help maintain the family income....

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I don't look at it as saying it's help to maintain the family farm; it's help to maintain the family income, because farmers.... I don't like seeing people have to work off the farm. Our own son is doing it; I admit that. But when we look around our society, in a lot of our households today two people are working in order to maintain a family income—

The Chair: We're going to have to leave it there—

Mr. Lyle Vanclief: —and we're not likely going to be exempt in agriculture. But if we can help in those ways, I think it's very important and fair to the industry in order to try to find some ways to help them to do that.

The Chair: I have to face reality too: time moves on.

Mr. Calder, followed by Mr. Hilstrom.

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

Minister, what I want to talk about a wee bit are the disaster programs, in particular in regard to the flood in southwest Manitoba and southeast Saskatchewan. When we were out there in December of last year, one of the things we heard was that the flaw in that program is that there was no land maintenance component of it.

The farmers weren't able to put the crop in. They basically lost the infrastructure that was in the land, that being the time and energy they put into preparing the land and the fertilizers that were sitting there. All that was lost because they couldn't put a crop in. On top of that, the ones who did put a crop in wished that they hadn't because their yields were that incredibly low—it hadn't matured.

So there should be a component in there, I believe, first for land maintenance, which would be.... Unfortunately, when you are able to get on the land, up come the weeds too, so you have to put sprays and everything back on and bring that land infrastructure back up. There should be a component for that. There should also be a recognition for the loss of income for that year.

I know there is a disaster relief program out of the Department of National Defence, but the wording of it is that if it's a flood it has to be “moving water” and it has to destroy infrastructure. If there's some way you could be talking around the cabinet table about that, we should be able to have it brought in, because in this situation with that flood there was infrastructure lost. I just told you what the infrastructure was. Plus, income for that year was lost too.

I'm just wondering what your comments are on that.

Mr. Lyle Vanclief: I and my department worked very diligently with the officials in government that deal with the disaster funding assistance agreement in trying to encourage them to find a way to use that program to cover loss of uninsurable assets. We worked very diligently to explain to them from an agriculturalist point of view, whether that be soil structure or whatever, that there were, in my view, some applications here that would fit.

Unfortunately, we were not successful. I haven't given up yet. As recently as yesterday afternoon I signed another letter to my cabinet colleagues and encouraged them to continue to take a look at this. I must say, however, that it has been reviewed and reviewed and reviewed.

And when we look at what we all thought was the right thing at the time.... You mentioned agreeing to extending the crop insurance deadline; that was with some desire from producers. Often, one of the biggest things you learn by doing something is, with hindsight, that you shouldn't have. At that time, naturally.... We're all farmers: we live in hope that even though the crop is late the rest of the summer will be good and the fall will be late. In hindsight, that probably was not doing anyone a favour, but I think Mr. Borotsik will agree that at the time we all thought it was the right thing to do.

The disaster funding assistance criteria is being reviewed. I think that with the comments we've had, these types of—if I can say it this way—applications will be considered. Whether they will be included in the future or not, I don't know, but we've certainly put our views forward.

The Chair: Murray, we're going to leave it at that, because we're running out of time.

Mr. Hilstrom, we'll give you three minutes, then there'll be one question for Mr. Borotsik. Then I think Mr. Bailey can have one question and that's it.

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You have three minutes.

Mr. Howard Hilstrom: In regard to management of your department, Mr. Minister, and the AIDA administrators there, I'm a farmer and I got an AIDA package the other day. I'd like to point out that I have never applied for AIDA due to the simple fact that I think that money should go to farmers who don't have an income the way I do. So I'll make that point clear.

Mr. Murray Calder: It's double-dipping.

Mr. Howard Hilstrom: Well, that's fine, but I'm not going to take money out of farmers' pockets.

I got a package from AIDA because I'm a farmer, and in that package there was information. Instead of spending money on advertising, as you're talking about and criticizing me for, why wouldn't you put updated information into that package that every farmer gets? Then they wouldn't be going into Gerry Ritz's office. Is it possible that you could do that?

Mr. Lyle Vanclief: What was short in the package?

Mr. Howard Hilstrom: This information on appeals and the kinds of questions that farmers want to ask about, such as what's going on with the program. Could that additional information go out?

Mr. Lyle Vanclief: Doug.

Mr. Douglas Hedley: The information regarding appeals is in the handbook you received in the mail. We also do a number of mail-outs during the year to keep updating all producers that we know about who have applied.

Mr. Howard Hilstrom: So that information on the program should all be in there, correct?

Mr. Lyle Vanclief: Yes. I thought it was there, Howard. It's in the package.

I'm not faulting the producers. They're busy. It's a catch-22. If you don't have the information there, there's a problem. If you have the information there in a book that looks too thick, they say “What do you do with all this?” Do you remember that criticism, gentlemen?

Mr. Howard Hilstrom: Do you agree that the safety net components are only where there's a problem, but the big picture for farmers is that they want the income to come not from safety nets, but from the marketplace and wherever?

Why then, can't you, as a minister responsible for farm income to a certain extent, be more forceful, or at least not put hindrances in the way? Why are you not coming out more strongly in calling for a wheat board that is not a single-desk seller, so those farmers who could improve their income by having a voluntary marketing system could do that?

Do you not believe it's your responsibility to provide those farmers with that opportunity, albeit you can argue about whether it's a minority or not? What's your position on the Wheat Board then?

Mr. Vanclief: Mr. Hilstrom, for a number of years the Wheat Board was criticized because the commissioners were appointed by the government. Ten of the 15 directors of the Wheat Board now are appointed by farmers. If the farmers are not electing directors who carry their views, they have the same opportunity as they have with all of us around this table when it comes to the next election. They have the democratic opportunity to send their people to the Wheat Board to represent them, and when they're there—

Mr. Howard Hilstrom: But you're still forcing those who don't want to be part of it to be part of it, and that's the point. You're forcing people to be part of a marketing system they don't want to be in.

The Chair: We're running out of time.

Mr. Lyle Vanclief: Wheat Board directors have the opportunity to make those types of changes if they so wish.

The Chair: Jake Hoeppner lives.

Mr. Borotsik, one question.

Mr. Rick Borotsik: Mr. Minister, it's a simple matter of sharing information. Mr. Ritz talked about keeping us informed as to the appeal process, how many people are appealing, how many people are successful in the appeal.

I wrote a letter to Mr. Claydon on February 17 asking for some internal audit documents, some information on the AIDA program. I received a response on March 14 saying that they're coming soon, and I have yet to see them. So I guess it's a matter of—

Mr. Lyle Vanclief: They were sent last week.

Mr. Frank Claydon (Deputy Minister, Department of Agriculture and Agri-Food): It's in the mail.

Mr. Rick Borotsik: Well, it's in the mail. Thank you very much.

I guess what I'm trying to say, Mr. Minister.... I also asked for administration costs on the AIDA. They sat on a bureaucrat's desk for a long period of time before I got access to them. Let's work together, and I promise that this isn't a matter of embarrassing government or policy, it's a matter of making it work better. I would really appreciate it if that information could be shared on a more ongoing basis, rather than our having to ask you and your bureaucrats to do that.

That's more of a statement, but I'd like to have a commitment.

Mr. Lyle Vanclief: You have our commitment to provide that information as quickly and as thoroughly as we possibly can.

The Chair: The final question.

Mr. Roy Bailey (Souris—Moose Mountain, Canadian Alliance): Mr. Minister, in the past you've been opposed to block funding because of trade concerns. My question is, what has changed now, and can you guarantee that if it's continued, the block funding formula will not cause countervail action by the U.S.?

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Mr. Lyle Vanclief: There's no block funding formula; there is no block funding. I'm opposed to block funding because when you send cheques to a province and say do what you want with them, there's no national continuity to the program. We were there a number of years ago and we had a lot of competition between provinces.

If you're referring to the reallocation to the provinces, it will be based on a formula of the breakdown of the $665 million in the basic safety net envelope, based on a combination of the value of market receipts and farm cash receipts.

Market receipts are exactly what they say. Farm cash receipts include market receipts and any other government income that comes to the producer as a result of the farming operation. It probably will be made—I don't know whether it's fully determined yet—on a 50-50 basis: a weighting of 50% to market receipts and 50% to farm cash receipts. That's not block funding at all because it's based on a formula.

Block funding says we just send you the money. Still, crop insurance is a national program; NISA is a national program; and companion programs will have to have the approval of the federal government because we're a partner in them.

The Chair: Thank you.

Mr. Lyle Vanclief: Mr. Chairman, if I could go back to Mr. Ritz, I knew it was someplace in the briefing book. As of March 20, 457 had submitted for a review in Saskatchewan. Eighty have been resolved and closed to date. Some of the issues they raised forward were structural change or production cycle rules—that's a concern—clarification of payment calculations; and some missed deadlines. In Manitoba as of March 20, there were 138 review requests, and 46 of those have been resolved. Basically, the breakdown is the same on those requests.

Mr. Rick Borotsik: [Inaudible—Editor]...resolved, whether it was for the appellant or for the program?

Mr. Lyle Vanclief: I don't know that.

Mr. Rick Borotsik: That's information. I mean, if you had 48 resolved and only one was for the appellant and 47 for the program, we'd like to know that.

The Chair: Mr. Minister, I'd like to close by saying that when this committee went across the Prairies just before Christmas, a number of witnesses noted the need to take what you might call a comprehensive approach to agriculture, perhaps not unlike what, say, the European Union does—comprehensive meaning going well beyond income support programs. I suppose it could be said then that you're thinking along those lines, and not only thinking but acting. That's why you have your sidekick Mr. Mitchell with you today, and he'll be coming back to tell us more about what he's doing on May 9.

Am I on the right track, Mr. Minister?

Mr. Lyle Vanclief: There's no question. One of the questions, Mr. Chairman, often asked is for a government vision for agriculture, a government vision.... Andy is, as well, for rural Canada. One of the terms they use in the European Union now is the multi-functionality of agriculture, the multi-functionality of the rural part of the country. That's an important discussion we need to have.

The difficulty with that—I'm not making excuses, and I'm back to what I said—is that it's a tough one in that we don't know what Mother Nature's going to bring us this year. If we look back to the past in 1995, 1996, and 1997, fortunately a lot of the concerns we have right now were not there. Then Asia fell apart. The world markets were into the fifth bumper crop in the world. The only thing that can change that for this year would be a crop failure in North America. If there is one, let's hope it's not us—and I don't want to wish bad luck on our neighbours.

But we've never had five bumper crops in the world before. That's hard to explain to the 775 million people around the world who go to bed hungry every night. It's a reality we're dealing with. There are surpluses. There are transportation difficulties and challenges, not only in Canada but around the world.

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It's not an easy one, but I'm more than open to any thoughts that your committee has or that you have as individuals on that. I think you've demonstrated here today one of the things I've always said about the committee, and I thank you for it. I've only been on the agriculture committee in my over eleven years here, but from what I hear of other committees, there's less partisan politics around this table than there is around some committee tables on the Hill.

Mr. Rick Borotsik: [Inaudible—Editor]

Mr. Lyle Vanclief: There are still some.

Mr. Rick Borotsik: We are pretty partisan guys, Mr. Minister.

Some hon. members: Oh, oh!

An hon. member: There's no question about that.

Mr. Lyle Vanclief: Mr. Borotsik is still here. When Mr. Borotsik's memory kicks in, he gets haunted by it.

But sincerely and seriously, Mr. Chairman, I appreciate the support, the help, and the ideas from around this table for the good of the agriculture industry from gate to plate. That's important in the agricultural aspect and in the agrifood aspect, because neither one of them is any good without the other partner.

Mr. Rick Borotsik: Mr. Minister, I don't want to scare you, but it's really wet in southwestern Manitoba again this year, so you're on notice again.

The Chair: Mr. Minister, I want to thank you, and I would say that the members behave themselves very well unless somebody comes along and threatens to modify us genetically. Other than that, we're doing fine.

Anyway, thanks to you and your colleagues for your second appearance in as many days.

Mr. Lyle Vanclief: I think some of us have already been affected.

The Chair: This meeting is over.