COMMITTEE OF SUPPLY

(Concurrent Sections)

AGRICULTURE

Mr. Deputy Chairperson (Ben Sveinson): Order, please. Will the Committee of Supply please come to order. This afternoon this section of the Committee of Supply meeting in Room 254 will resume consideration of the Estimates of the Department of Agriculture. When the committee last sat, it had been considering 2.(a) on page 15 of the Estimates book and on page 30 of the yellow supplement book. Shall the item pass?

When the committee last sat, it had been considering item 2. Manitoba Crop Insurance Corporation (a) Administration $4,738,900--pass.

2.(b) Premiums $14,800--pass; (c) Gross Revenue Insurance Plan $32,000,000--pass; (d) Big Game Damage Compensation $200,000--pass; (e) Canada-Manitoba Waterfowl Damage Compensation Agreement $150,000--pass.

Resolution 3.2.: RESOLVED that there be granted to Her Majesty a sum not exceeding $51,888,900 for Agriculture, Manitoba Crop Insurance Corporation, for the fiscal year ending the 31st day of March, 1996--pass.

Is it the will of the committee to go on to item 3. Manitoba Agricultural Credit Corporation? Is that what the minister would like? Is it the will of the committee? [agreed]

Hon. Harry Enns (Minister of Agriculture): Mr. Chairperson, if I may, a very brief introduction. I am pleased to have the programs of the Manitoba Agricultural Credit Corporation reviewed by the committee. Allow me to introduce senior management people who are with me on behalf of the corporation: Mr. Gill Shaw, of course, our General Manager; Ms. Davetta Sheppard, Assistant Director of Finance, seated to my left; and Charlene Kibbins, our Special Loans Officer.

Mr. Chairman, I view the ongoing operations of this corporation as extremely critical to the future challenges that agriculture faces, and it will become repetitive, but I do have to keep on reminding ourselves and members of the committee that we are now trying to position ourselves in what I refer to as the post-WGTA era. The fact that there will be some very significant changes on the agricultural landscape, I do not think, is lost on anybody, least of all my opposition critic in the Legislature.

I view, therefore, the particular challenges that the credit corporation faces as being of utmost importance to try to develop the kind of financial support programs at a time when additional dollars are not all that available. We have to work extremely hard to develop the kind of support programs with those resources that we have, that we can provide kind of attractive loan guarantees, support programs that will, to ever-increasing amounts, trigger the private lending institutions, banks, credit unions, to co-share with us the kind of capital requirements that in many instances farmers face in the coming years.

When you look at some of the opportunities that are available in special crops, it is not lost on any of us that often significant dollars are involved. We have ongoing, exciting opportunities in potato production in this province, but getting into potato production, particularly the demands that are currently there by the processors that they be irrigated potatoes, means significant outlay. I think estimates run from in the order of $2,000 an acre in terms of the capital requirements for a new start-up potato operator to get into it. We have to tailor our credit programs to try to help and try to assist new entries into that kind of farming.

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Livestock is, of course, a big component that we anticipate will figure largely and loom largely in the post-WGTA era in agriculture. The same report, the much-read report, Donaghy. Moore and Gilson report, that reviewed our hog industry last winter and summer, among other things, pointed out targets that were deemed to be doable in terms of increasing our hog productions in the province of Manitoba, and also pointed out that, with just on-farm requirements, there would be some $350 million required to bring about this increased hog production in the form of new barns, new facilities, stock, machinery, equipment, and, again, a very significant challenge for producers who are perhaps prepared to alter their farming methods and try to gear up for the new reality in this post-WGTA era, but, again, they face very significant credit challenges.

I am pleased to say that the corporation has, in my judgment, responded to these challenges. We are in the midst of developing significant programs that I believe will go a long way towards helping Manitoba producers make this transition period.

Honourable members will recall that during the course of the election the First Minister (Mr. Filmon) did indicate a diversification fund of some $10 million. I want to be very candid with members of the committee, I consider that merely a start. When I look at what neighbouring provinces like Saskatchewan are doing, they are talking about using and utilizing their entire GRIP premium, for instance, which is in the order of $85 million or $90 million for agricultural development programs, diversification programs. They are named differently in different jurisdictions, but it is the same kind of thing, as they try to prepare their agriculture for the kind of changes that are imminent.

It is my hope that my government will, certainly, it is my hope that some of the new members that are sitting on the government side of the House will assist and will provide the kind of support that I will require from time to time in my caucus and my cabinet to ensure that Agriculture receives its fair share of the resources. To that extent, I invite the honourable members from Her Majesty's loyal and most obedient opposition to make common cause with us. I make and continue to make this statement all too often publicly, but I do not apologize for it.

Agriculture, which is, in my opinion, the most important function of our society, has become such a minority group and such a minority status within this Legislature that we can spend countless hours debating the future of a professional hockey team, we can spend countless hours on all the other important issues of facing a complex modern society that trouble us, whether it is in Family Services or in Health or Education, but all is for naught if our relatively small numbers of farmers, 5 percent that are actively engaged in the production of food cannot produce a surplus of food so that the rest of us can go on doing our things, whether it is being MLAs, doctors, lawyers or teachers, none of that would occur.

Production of surplus food is the most paramount, most important primary function of what we call civilized society. So to that extent I welcome your constructive advice and suggestions for the coming future, particularly in this case, the credit corporation.

Mr. Deputy Chairperson: Item 3. Manitoba Agricultural Credit Corporation--Administration $3,040,300.

Ms. Rosann Wowchuk (Swan River): Mr. Chairman, I just want to follow up on a couple of comments that the minister made, and in particular the final comments were the importance of agriculture to the economy of our province and to all of Canada. I have to say that I do agree with the minister that it is strange that we can devote so much time to the survival of a hockey team and the support of millionaires whereas we do not have that same devotion to the rural community.

That came to mind when we had the whole change to the Crow benefit. I really anticipated when the Crow benefit was eliminated that farmers and rural people were just going to rally and get on a train and get on to Ottawa and protest this change. I was quite surprised when the change came about with as little protest as it did. When I saw the rallying on the corner of Portage and Main for the hockey team, I reminisced, thinking back to my hopes when the Crow benefit was changing and hoping that we could have had that same kind of support for farmers, but, unfortunately, too many people have distanced themselves from the farm. They are second and third generations away from the farm, and we have lost the real meaning of the value of the farm and what it really contributes to the society and to the economy of this province.

Aside from that, the minister talked about the need for funding and his plans and in particular the diversification fund with the $10 million, the announcement that was made in the election. I want to ask the minister, I have asked him once in the House and he said we would have to wait for estimates, so perhaps the minister could give us a little bit of detail as to where that fund is at this stage, how much of it has been developed and whether there are any criteria of how people will qualify and whether that money will come under this body for administration.

Mr. Enns: Mr. Chairman, yes, to answer the last question first, it is very much the intention to have the Manitoba Agriculture Credit Corporation administer the programs. We are at the current stage developing the criteria for the actual program. We expect it to be fairly wide ranging.

The challenge has been for diversification and value added, and that includes a very large spectrum of potential agricultural activities. I can give some indication of what the corporation is currently considering in this area. Projects that are currently under investigation by the corporation are in the cattle industry, the financing of livestock requirements including large feed lots. I might indicate to the honourable member the cattle feeding industry, which was virtually lost to Manitoba in the past decade for different reasons. Some of the reasons were that higher levels of subsidization that neighbouring provinces of Saskatchewan and Alberta were offering drew a lot of our feeder calves out of the marketplace.

Certainly, there is every indication that Manitoba cattle producers are prepared to feed and manage more cattle, and we will be looking at our already very successful stocker program. We will continue to look at expansion of our successful stocker co-operative program. We have about 13 or 14 stocker programs involving a number of producers that come together and avail themselves with a loan guarantee provided by MACC to be able to access a considerable line of credit with a private lending institution, upwards to about $5 million. I am sorry, that program is called the feeder association program. I should not confuse that with the stocker program.

We see new life throughout the province. Some of the old feedlots that have stood empty for many years are filling up again. The cattle feeding business is always an intensive management issue. Feeders will make that decision every year, whether or not they wish to engage in this business. It has its risks, and if prices are not there to encourage that to take place, there will be periodic setbacks to the program.

We certainly look at the hog industry as a major, major opportunity for diversified agricultural activity. As I indicated earlier, the report that reviewed the hog industry calls for considerable capital requirements. MACC really has not been a major player in the provision of credit or assisting in the credit financing needs of hog producers, partly because of the caps that they have within their program. These are the kinds of challenges that MACC is today responding to, and with the help of that $10- million-program that the Premier announced, and hopefully some additional dollars that we will be able to, in a more realistic way, realistic to today's needs--200, 300, 350 sows are medium-sized operations, but certainly very worthwhile to have our farmers engage in.

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Potatoes, as I mentioned earlier in my opening remarks--there are some very exciting expansion opportunities in the potato industry. Again, we need to find a way that we can assist new entries into potato production. Our extension work in the field tells us that most of the potato producers currently in the business are not that anxious to do much more expansion. They are in many instances producing at their optimum levels. We are therefore facing the reality that if we are to meet the obligations or the requirements of the potato industry in the province, we will be looking for new producers, considerable new producers. We are estimating that upwards to 20,000, 23,000, 25,000 additional acres of potatoes will be required within a very short period of time, a year or two, by our major processing firms in the province. Again, these are programs that would be considered for inclusion under the diversification program.

I am not excluding nontraditional forms of agricultural activity like the raising of bison. We have a growing, enthusiastic group of bison producers in the province. They have formed an association. There are some 48 to 50 of them, and the credit corporation is looking at a role for MACC to play in helping this fledgling livestock venture move along, particularly as it is moving into a fairly stable, not just a breeding program, but a reasonably well-developed, you know, meat-for-human-consumption program as well.

So, Mr. Chair, I have tried to provide the member some indication of the kinds of new programming that MACC will be trying to respond to. I want to, you know, point out very quickly, it is obvious that MACC nor this government is pretending for a moment to provide the wherewithal, the resources to be the principal source of the lines of credit requirement, but we can in many instances, if we tailor and so design our support programs, that with the appropriate guarantee program, which means minimal risk to the public purse, we can spur on the kind of credit granting that we are absolutely convinced the private sector, the credit unions and the banks are prepared to make.

Ms. Wowchuk: I am not sure that I quite understood the minister. Is the minister saying then that this is not going to be a direct loan program from MACC? It is going to be a guarantee program guaranteeing the loans so that some money will be borrowed from other institutions?

Mr. Enns: Mr. Chairman, senior staff advises me that it will be a combination. As I recall, and I was present in Dauphin with the First Minister (Mr. Filmon) when the announcement was made, the implications were clearly that the program would be principally of a guarantee role, not direct loans, but the corporation will undoubtedly have, as it currently has in its catalogue of programs, a number of programs that are in fact direct loans as well. So it will be a combination of the two.

The challenges, you know, I just want to put on the record, are so significant that we should not be fooling ourselves in thinking that the public purse would be the sole guarantor or sole provider of these funds. We are satisfied that under the right circumstances, and the right circumstances, I might hasten to add, also include very much, you know, the economic viability of the project. If the future of hog production does not look good, then neither the private sector, banks and credit unions, nor the government should be lending out money on those ventures.

If the cattle industry--we have no intention of artificially stimulating or artificially luring producers into certain agricultural production pursuits, only to find the market crash, only to find that we are, in fact, building in distortions to the market forces at play.

Ms. Wowchuk: I look forward to hearing more about the program and wait for that. I am glad that the minister is saying that it is going to cover a broad range of things because people in the cattle industry in particular and some people in the hog industry as well have said, it is just going to be diversification to add more cattle into the system, more hogs. They feel, and I feel as well, that diversification has to come over a broad range of things and not just moving towards expansion.

The minister talked about large operations, and I think that is fine, but we also have to look for a balance, where we have loans available to very small operations, because there are many people who have no desire to get into a very large-sized operation, but there are still people who want to have small operations. Sometimes it is the people who are on a smaller operation that have difficulty getting funds.

I want to ask the minister as well whether this program would allow for investments into processing, for example. As our industry grows, there is need for a processing of livestock here in the province, but also a processing of different products, such as any product that can be grown here in Manitoba that we could then get the value-added jobs from it as well.

Mr. Enns: Mr. Chairman, while I believe that there need to be and efforts should be made to co-ordinate better the activities of the corporation with other agencies and departments of government so that we act in a more co-ordinated fashion, nonetheless the fact remains that the corporation more or less deals at the farm gate with the individual producers.

I am very encouraged with the development of a number of other programs in sister departments like Rural Development, the REDI program, the Grow Bond program. We have had a number of instances where they have been actively involved in precisely what the member is requesting, in aiding expansion for setting up of processing agricultural products. I am trying to think of some that particularly come to mind--the sausage, the meat plants in your area, speaking to the honourable member for Pembina (Mr. Dyck)--[interjection]--Winkler.

I am aware that those kinds of examples will be vigorously pursued by the managers of those programs; and, as these programs get better understood within the community, and as the need arises, I am certain that you are going to see considerable value being added to our base agriculture production through further processing. It is my hope that perhaps, by the end of the year, we will see our first pasta plant in Manitoba, and I think those kinds of developments can only help us make the adjustment period that we are now facing with the loss of the Crow and also in our future trading relations with our major partner, the Americans. The Americans do not seem to mind the product going in if it is in a processed form, but they get antsy when they see our trucks lining and clogging up their elevators with our grain every fall. So let us be smart. Let us do more of the processing here in our province, adding value to the product, creating jobs in our communities and, all in all, demonstrating that we can. I happen to be an optimist that we can react to the loss of the Crow in a positive way.

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Ms. Wowchuk: Can the minister indicate just in general terms whether there has been any impact on the lending or whether there has been an increase in the request for loans, whether there has been a change in environment since the announcement of the change to the Crow, whether you have seen a change of land people selling land, more requests for loans, whether there has been a decrease in land value, appraisals, or has there been any of that implication yet?

Mr. Enns: Mr. Chairman, I am advised that while the corporation hears, just as we all do, a lot of discussion about potential impact of the loss of the Crow, whether it is on actual land prices and or that decisions will be made--but senior staff informed me that loans portfolio is up considerably at the corporation. It is very much business as usual. They detect no appreciable drop in land prices at this particular time, and just hazarding a guess, I quite frankly do not anticipate that you will see any significant shift in land prices. It depends, I think, to what extent we successfully manage to grow those crops that provide for an economic return. As long as that is the case, neither the current holder of the land or institutions like MACC that are called from time to time to borrow money on would-be purchases of land will change their attitudes toward land prices.

Ms. Wowchuk: Well, it is nice to hear that the minister is so optimistic. I, unfortunately, am less optimistic, and that is just coming from people that I speak to in the community who are very concerned about the change and the loss of transportation services, and they worry. I hope the minister is right. I hope that we do not see a drop in price and that farmers will be able to continue to make a good living because it is their livelihood.

The minister said there was an increase, I believe, in the number of loans that were being applied for. Can he give us any indication whether these loans that are coming are from new farmers who are starting up or are they loans from existing farmers who are buying up farmers who are retiring? I guess I am looking whether it is for an amalgamation of lands or whether we see new farmers starting up.

Mr. Enns: Mr. Chairman, the Manitoba Agricultural Credit Corporation, because of its own limitations and cap, is not really involved in what is still going on, the larger accumulation, amalgamation of larger farm units. Our principal clients are the young, beginning, small farmer and as the members would know, we still offer a subsidized support to that beginning farmer, 2 percent relief of the interest rate. It was 4 percent some years ago, but, nonetheless even at 2 percent a young farmer, a young family that is taking out a $100,000, $200,000, $300,000 loan, it is significant support. The emphasis, and I think it is appropriately placed, is on the young and beginning farmer that is entering agriculture.

I do not foresee any change in that focus on the part of the corporation. Where the change will be is where some of the added responsibilities that I foresee or my government foresees the corporation undertaking in helping us specifically make this transition to different special crops to livestock to, quite frankly, respond and take advantage of the opportunities that we see are there in the post-WGTA era.

That brings me back to the point of optimism that I and the member had discussed just briefly. I cannot help it, and I say it very kindly to the honourable member without any malice at all. It is genetic. I am a Conservative and she is a New Democrat. So on Thursday, I am optimistic about what will happen in that great province of Ontario, just as I was on April 25 in the province of Manitoba. I do not hold that against her; it is a purely genetic thing.

Ms. Wowchuk: I hope the minister looks at the results of Saskatchewan with as much enthusiasm in a couple of weeks' time.

What I was looking for on the loans is--I recognize it is young farmers, but is it young farmers who are in place who are coming back to expand their operations or do you see new young farmers coming into the system and starting to farm? Do you have any breakdown on that kind of information?

Mr. Enns: Mr. Chair, I am advised that a lot of it is intergenerational transfer that is occurring now, young sons and daughters taking over the farming ventures from their parents. But we anticipate that there will be a change in a sense that providing that we can provide the right kind of information or extension services provides the right kind of information, there are, I do not want to exaggerate, a number of different kinds of things happening on the landscape at this time.

For instance, our young, small but nonetheless significant horticultural industry is really quite encouraging in different parts of the province, and very often you find young start-up farmers involved in these instances that involve not large acreage but intensive management and care, young producers that are growing saskatoons to raspberries to the more traditional strawberries and the likes of that. That, along with other what I would describe as less traditional forms of nonetheless agricultural activity on the landscape, I think will provide for steady clients of a diversified kind for MACC.

My job, I think, is to challenge the corporation to see that we are not too hidebound or traditional in what we perceive should qualify for being a farmer. One of the amendments that I am pleased to say the corporation made just a little over a year ago that I think will be very helpful in this respect was a regulation that I am sure the members will recall that restricted the corporation from making loans available to a farming operation only if you were more or less full-time farming or if 50 percent or greater of your income was derived from the farming venture.

Well, the truth of the matter is, in today's agriculture, for many start-up farmers that is simply not possible. We have many who would like to start but they are not prepared maybe to give up their teaching job or give up their job working in a local industry or part-time work, but these operators or potential farm operators were hindered from getting the necessary credit. MACC did not support, and they often could not get it from the private sector for that reason as well.

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Well, we amended that restriction, largely because I quite frankly want to see, just as I can see the inevitable expansion of larger and commercial operations, whether it is grain or livestock, but from a social point of view it is extremely important to the well-being of rural Manitoba. It is important to the maintenance of our social structures, our schools, our hospitals, our community clubs to make as flexible as possible our agricultural programming so that if somebody who we may have looked at as a hobby farmer a few years ago nonetheless is encouraged to become more aggressive and provide him with the kind of wherewithal that he can take a small hobby farm into an encouraging venture into agriculture.

Ms. Wowchuk: The minister indicates that this is a lot of people, lands transferring intergenerational, and that leads me into another question. The federal government, through Farm Credit Corporation, has introduced a program to help with the transfer of land between generations, and I wonder how that program compares to what is offered through MACC and whether MACC should be looking at programs similar to that to help our young farmers with transition between father and son, father-daughter operations, intergenerational transfers.

Mr. Enns: The general manager informs me that the two programs work really quite well. It is not our intention, nor should it be, to be in competition with another federal agency essentially in the same business. But again, we tend to work with the smaller units. Our caps are considerably below those of FCC so very often we are dealing with those clients who fit into that overall bracket, and if they are of a larger scale then we are only too happy to refer them to FCC where they get the service that they require.

Ms. Wowchuk: So the benefits of the FCC program and the MACC program are similar except for the scale of them? More money is available for larger operations through FCC?

Mr. Enns: Programs have their differences. One of the features of our program is that the situation in a generational transfer is the parent gets paid out immediately, and that is seen by some as an advantage. It is viewed as a full and complete sale although the guarantee is still there. I am satisfied that the intergenerational transfers are taking place, and it would appear that both at the federal and the provincial level, those resources of our two sister corporations are there to aid in this process. I have not received, to my direct attention as minister, specific problem areas in this regard.

Ms. Wowchuk: Did the minister say he has or has not received any? Has not, okay.

It is my understanding that with the federal program, there is a training program that people have to go through as they make preparation to take over the farm. I am wondering whether there are any similar programs that are offered through MACC.

Mr. Enns: I cannot respond specifically to the federal program. I am just advised that in our program we utilize very much the farm management services provided by the Department of Agriculture throughout the different parts of the province, through the ag reps' offices. We have found that to be quite satisfactory without the requirements of any kind of a formal training course.

Ms. Wowchuk: Just for clarification then, there is no sort of a transition training that is required when these kind of loans are being taken out.

I know that there was a course like that being offered in Dauphin where the older people who were selling the land and the younger people who were taking over the operation, they went through some sessions where there were adjustments. Counselling, just a whole discussion on the responsibility of taking out loans, a good explanation and some supports were put in place for the people who were making the transition off the farm and the younger couple or younger people who were taking over. I understand that the course that was being offered in Dauphin, and I do not know where else it was offered, was quite successful. I wonder whether the corporation has evaluated that program. It might be something that you might consider to offer to your clients.

Mr. Enns: Mr. Chairman, the program that the honourable member refers to is in fact a program combining the talents of the Federal Business Development Bank, which is a federal agency, although it was very much initiated by the economic section specialists of our department. We worked very closely together.

(Mr. Peter Dyck, Acting Chairperson, in the Chair)

We had, for instance, in this past year, 38 family units participate in the program at communities like Morden, Russell and Steinbach. We had another 42 family units participating in year two of this program at Ste. Rose, Deloraine and Stonewall. We call it under different titles, "Handing Over the Legacy," you know, "One Family's Journey." It is a video discussing strategy for family farm transfers. We have this video available. Fifteen hundred copies of the video have been distributed to Manitoba farmers and professionals working with young farmers. All of it is on the subject matter that the honourable member is asking questions about, to provide the kind of information for both sides of the transfer requirement, the retiring parents and incoming new generation of farmers.

It is a program that we continue to offer to communities. I suspect that it is driven by our extension people. If we can find the interest in certain communities, we will host these kinds of special-event days where we actually bring the families together to work in a kind of a seminar setting. We also do, I am advised, a considerable amount of individual consulting, individual delivery of material written and printed and video that is requested.

Ms. Wowchuk: I take it then, Mr. Minister, this is not a compulsory course that is a requirement if someone is applying for a loan. It is something that is provided and if people feel the need they can take it. Or how do you get your enrollment?

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Mr. Enns: No, it is not a compulsory matter, but I would think that a loans manager working under the direction of Miss Charlene Kibbins here, and if the party thought that there was some difficulty in how a transfer was going to take place, they may well want to, in fact would refer it to this kind of material that is available that could then better facilitate making the transfer, but it is not compulsory.

Ms. Wowchuk: Just back on loans. We talked about federal and provincial loans being at different levels, federal dealing with larger operations and provincial more to the smaller operation. Can you tell me what the cap on loans is? Is there a specific amount that an individual can borrow? How do you set the level?

Mr. Enns: Well, for some specific information, our loaning activity operates under, you know, specific regulations and limits. We have a maximum amount of $250,000 being available on long- and intermediate-term loans. We have a guaranteed operating loan of $150,000. Other loans like the stocker in the livestock area, stocker agreement loans can total up to a maximum of $100,000. In other words, under these three programs, it is possible for an individual to have up to a half a million dollars, $500,000, in loans. Compare that to, for instance, the FCC program. I am advised that, in many cases there are no ceilings, for instance, the average FCC loan has risen from--1992-93, the average loan was $493,000; that is very close to half a million dollars. Remember, our cap is $250,000. In 1993-94, that rose to $541,000. In the year just past, 1994-95--I am talking about the new worth of the farms, which figures into it. The average loan size, net worth eligible, rose to over $626,000. We are automatically excluded in these categories.

On specific programs, for instance, our maximum loan under the provincial program is $250,000. FCC has no cap. We allow off-farm income of $60,000. We still have a qualifier in there. FCC has no limit, no ceiling. We look very closely at the net worth of our client. We will not loan money to anybody who is worth $400,000. The federal government will loan money to Mr. Rockefeller. They have no ceiling. I do not know if Mr. Rockefeller is interested in resuming farming these days.

Our average loans, surprisingly, are not that much different. Our average loan size is $57,000 compared to the FCC average loan size of $77,000. We do very much the same business. In the year 1994-95, we anticipate we have to date some 419 direct loan approvals compared to 461 for FCC. Our outstanding loans at this point, 1993, is $219 million compared to $392 million for FCC.

Ms. Wowchuk: The minister indicated that there were 419 loans that were approved. How many applications would there have been for funds?

Mr. Enns: I cannot find the figures, but I am advised that our approval rating is really quite high, in excess of 90 percent. In 1994 we declined four applications. In 1993-94 it was somewhat higher, 8. In 1992-93 it was 30. This is beginning to worry me. They are approving more and more. Is that because I am Mr. Nice Guy or just too soft or, I mean, in '92-93 you guys rejected 30 applications.

Ms. Wowchuk: Well, I am pleased to see that farmers are able to get money, but I would just like a bit of information. Is MACC considered as taking more risky loans, or are loans up, I would imagine, because of the Young Farmer Rebate?

(Mr. Deputy Chairperson in the Chair)

What are the criteria that a farmer comes to MACC for a loan versus going to a local bank? Is it only the interest that makes a difference or is MACC prepared to take higher risks?

Mr. Enns: In general, I am advised that MACC is a lender of higher risk. We take on, and that should not be surprising, because our mandate is to help the beginning farmer, the young farmer, and there is potentially more risk involved with that. We like to think that we manage the loan in terms of being satisfied that there is sufficient cash flow to service the loan. That is very often the determining condition that will meet with loan approval. FCC, I think it is fair to say, has a greater attraction and a greater role to play in the larger and the commercial farm ventures that are in the countryside.

Ms. Wowchuk: I am sure that, and I know that over time there have been loans that have been made that have not been able to be repaid and MACC has come into possession of a fair amount of land, and I would like to know the policy, the leaseback policy to farmers who have gone into debt and then they had to lease back their land. I think there has been a change in policy as far as long-term leases go. You cannot lease land as long as you used to, and it is a shorter time that a farmer has to make a decision whether or not they want to continue leasing and have to buy back. So I am looking for what the changes in policy might be with land that has gone into receivership, and then the farmer is leasing it back.

Mr. Enns: The one change that I am advised has been made is we switched the five-year lease back to a four-year lease-back, and then with the equity provision being written into it, that can then enable the party to begin the purchase of his land.

Generally speaking, this is an area that from time to time draws attention to the corporation and to ourselves as government. The guiding mandate or objective in all of this is to do everything possible to help the family farm, the farmer who is in trouble to continue farming, if he so desires.

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Regrettably, for different reasons, farmers get themselves into difficulty from time to time. I am pleased to report that further down in my Estimates, when you look at the operations of the Farm Mediation Board, that the farm failure rate has decreased dramatically, possibly to a point where it now is simply a question of life, where you will have, as in all walks of life, people who have failed to manage their affairs in an appropriate manner and find themselves in difficulty, though I would not want to make that generalization.

The corporation works hand in hand with the Farm Mediation Board. The legislation that set up the Farm Mediation Board directs the corporation to do so, and often the arrangements are jointly arrived at with the family in difficulty that enables the family to continue operating on the farm. Then, if in four, five years, the position has been improved to the point where that party can repurchase the land, we accommodate that.

That part of the program attracts some criticism from time to time, but I am advised that when that is done, it is always done on the basis that the land in question is properly appraised. Very often, the land in question is tendered out for sale, and only if unsuccessful in that tendering process do we, on a quick-claim basis, offer that land back for the assessed price to the original landowner.

Now, often, in the course of time, there is some loss. Interest keeps ticking on, and the loss on the original loan that perhaps got the farmer into trouble in the first instance, that has to be written off at that particular point in time.

These are all individually looked at, individually dealt with, and there are, no doubt, some arbitrary decisions made as to when it is appropriate to offer that land in that way and when it is not.

Ms. Wowchuk: There used to be a long-term lease program which, I believe, was a 25-year lease that a farmer could get. The minister says they have gone from a five-year down to a four-year. Is there no longer a 25-year lease program?

If we are looking to get young farmers, to help them out, you say they had five years to get themselves set up, and now we are going down to four years before they have to make a decision to buy back that land. Unless I am not understanding the program, I do not see how this helps young farmers or the farmer who is in trouble, why you would reduce the amount of lease time, why they could not continue to lease under that program, instead of saying that they have to buy it after a certain length of time or else it is going to go up for somebody else to buy.

I would like an explanation of how this is supposed to be benefiting farmers.

Mr. Enns: Well, Mr. Chair, first of all, just a small correction, the actual time period amounts to seven years. The lessee in year four has the opportunity, if he indicates his desire to purchase, that then is extended by three years, so you are now leasing the land in question over a seven-year period.

But, Mr. Chairman, there is a very distinct and deliberate and fundamental difference of philosophy involved here.

My government does not view the Manitoba Agricultural Credit Corporation as being desirable to being the largest landowner in the province. My government views and I, as Minister of Agriculture, view that the most productive way of using farm lands is in private ownership.

The department is under instructions from my government to, in a prudent and expeditious manner, divest itself from the 105,000, 120,000 or 130,000 acres it once had, and I believe their land holdings now are probably in the 95,000 or 90,000. I am advised that the current number of acres that MACC has title to is some 90,560, for a total value of $17 million.

I appreciate that another administration took a different attitude towards it. They viewed it as a desirable way to have more farmers being tenants, more farmers being lessees. Being first-generation Canadian, my grandfather having farmed under Czar Nicholas II, I chose the latter.

Ms. Wowchuk: Can the minister indicate then--he did indicate but I missed the amount of land that was under the corporation's administration before he became minister.

I guess I want to say that I have to disagree here with the minister. If farmers want to rent land--and there are a lot of people who rent land. Whether they rent it from the Crown, from the corporation, whether they rent it from other farmers, they still rent land, and they choose to make a living that way. By making a living that way, they sometimes get themselves away from a heavy debt to banks. When you look at having to borrow the money to purchase the land, in the end it is the banks that make the money. It has nothing to do with a czar or anything of that kind of thing. It is a way, I believe, that we can help farmers from carrying a big debt load.

I regret that the department and this government has taken that direction, so if the minister could tell us how much land they have sold off from the corporation, and, also, I asked earlier on the question whether there are still any long-term leases that people are holding with the corporation, and when those long-term leases expire, do they have a chance to renew them or is that the end of them?

Mr. Enns: Well, Mr. Chair, I think we perhaps could have avoided this by providing some information earlier. We do have long-term leases that will go to the age of 65, for instance. We have 44 of such leases in effect, can be renewed by the spouse or relative. Most of our leases are under short term. We have, in total, some 265 leases, 44 long term, 221 short term, total properties.

Ms. Wowchuk: I am again looking for clarification on long-term leases. The people that do have long-term leases, they can renew them and continue to use that land.

Mr. Enns: Well, it is as I have explained to the committee before. These long-term leases are a residue of former programs. We are not, as senior management makes it very clear to me, kicking anybody off the land. Anybody with a lease until age 65 and has those conditions and provisions can transfer to a spouse or to a relative and continue leasing that land for an undetermined period of years.

What we are not doing is writing up new leases of that kind today. Those long-term leases are not available today.

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Ms. Wowchuk: Mr. Chairperson, then, can the minister clarify on short-term leases? He talks about leases that end up being up to seven years, four years and then a three-year extension, people who are leasing that land. When those seven years expire, does that person have the opportunity to extend that lease or does the land go onto the market, and even though that individual may have been farming it, he has to go into competition with somebody to buy that land.

Mr. Enns: I am advised that the land under these circumstances, generally speaking, will, if there is no capacity to purchase, go on the open market. However, there are instances where the party involved will seek the services of the mediation board and will attempt to resolve some of their problems. Allow me to read you the terms of the five-year, seven-year--[interjection] We do not have the program for the current, so excuse me, that is fine.

Ms. Wowchuk: The minister mentioned the mediation board. In looking at the record here, the mediation dealt with 11 cases last year as of March 1994. Are these people who would have had leases but could not fulfill their leases and had to make refinancing. I look at the numbers, and there is indication that the number of people who went before the mediation board has increased over the last couple of years.

Mr. Enns: I am advised, Mr. Chair, that these were case situations where we had to guarantee the loans for 11 applications that were run through the mediation board. The mediation board sets up an operating regime that enables the family to stay on the farm. That includes talking to the private bankers, talking to the machinery dealer, to the fuel dealer, and also talking to MACC, and if we all co-operate, in our case it meant providing the guarantee for the continued financing of the farm operation. We dealt with 11 such cases in the year '94.

Ms. Wowchuk: Mr. Chair, you were talking about diversification and other areas of farming. The one line I asked about last year and I ask about again this year is fish farming. The minister talks about the various ways of diversifying the economy in rural Manitoba, and there is a line set up here. Is there no interest, or is there no promotion being done to encourage people to diversify into the fishing industry or developing fish farming? I realize it is not on the lakes.

Mr. Enns: Staff advised me that we have one fish farm. There does not appear to be any interest that is reflected in actual applications to the corporation, but just in a small aside and in a general way, these are some of the things that the corporation has to look at. Generally speaking, when the corporation had its initial beginning roots, we essentially used, as collateral, land, a loan up to 80 percent of land. Some of the things that are taking place in agriculture are not that land insensitive anymore. You can have, as the member knows, a very sizeable hog operation, for instance, on relatively small acreage. So some of the criteria that MACC uses to initiate, even just the thought of borrowing or supporting a venture, have to be rethought in my opinion.

Ms. Wowchuk: I guess I have to agree with the minister. We have to relook at this. I would wonder, you talk about it being based on land, so I would assume then that people in Metis communities, who might have access to a lake in their area that would serve as a fish pond but have very little collateral, am I to assume then that somebody in that category would not qualify for a loan under this program, or what are the qualifications required?

Mr. Enns: Mr. Chair, the member is correct that more than likely that kind of individual should avail themselves to the opportunities under the Communities Economic Development Fund, which operates under somewhat different guidelines and rules and is, I think, more specifically geared to work with resource-based and northern clients. The member would be aware that the regular commercial fishermen's loans used to be part of the credit corporation's operation, but that, some years ago, was transferred to the Communities Economic Development Fund people. It would appear to me that there would probably be a better reception at that agency for loan applications of that nature, but I appreciate what the member is saying. It is not necessary that a venture like this need be associated north or adjacent lake; it could be somebody in southern agri-Manitoba that decides to develop some form of agriculture or fish farming.

Again, I do not think we are currently set up to respond to that, but I think over the next period of time there will be a number of different kinds of things that I would encourage the corporation to look at, the interest being that we want people to make their livelihood in rural Manitoba. We want people in our rural communities and rural towns for reasons that I stated earlier, and they cannot all be, nor should they all be, large 3,000 acre farmers or larger. We cannot all operate out of a million, multimillion dollar hog barns. So there is going to be a diverse mix of activities and of people, and they are all welcome in the scheme of things.

The Department of Agriculture, I think, has to take a cautious but a very inclusive kind of attitude towards all of these activities. We are the department that has the primary responsibility of ensuring a stable food production in the province, and that means, of course, working with the very best of our food producers in the province. As the member herself indicated some while ago, there are individuals who choose to remain small or operate moderately, to look to rural Manitoba to offer a particular kind of lifestyle, not necessarily ones that you measure in large bank accounts or not willing to take the kind of high risks associated with that kind of a level of farming.

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It is a challenge, I think, to the managers within the Department of Agriculture. It is a challenge to me as minister, and I think it is a challenge in this instance to the corporation that we can provide a blend of programs that makes it as meaningful as possible to those people who, from time to time, seek financial advice, seek credit advice, and sometimes it is only advice. Sometimes it is guarantees. Sometimes it is actual dollars.

Ms. Wowchuk: Well, I would like to see the corporation pursue this a little bit. I have read some interesting articles on aquaculture, and there have been some very successful operations. I guess, looking at it, I am assuming then that to qualify for a loan here it would have to be someone who has a land base, but somebody who would also have to work in--this would be working in conjunction, I would imagine, with Natural Resources to qualify to have access to any kind of water. I am looking at, and I do not expect you to find it, but I would not mind if you could provide me with some of the criteria that are required to get a loan like this and what is available because I think that there are some opportunities. When I mentioned in the Metis communities, I would hope that we would not be segregating, and that if they are interested in starting a fish farming operation, they would not be directed to CEDF after that. If there was a way that we could work through this corporation to help them get started, I think that would be very useful. I would like if you could provide me with some information on what the qualifications are and how a person applies for that loan.

Mr. Enns: Mr. Chairman, I note that staff is taking notes of the honourable member's request. I am sure that in due course they will provide her with whatever information they can provide in this instance. Thank you.

Mr. Deputy Chairperson: Item 3. Administration $3,040,300--pass.

Net Interest Cost and Loan Guarantees $4,355,000.

Ms. Wowchuk: I just wanted to ask the member for St. Boniface (Mr. Gaudry) if he might have neglected to mention earlier that he might want to ask questions on this area.

Mr. Neil Gaudry (St. Boniface): That is okay.

Mr. Enns: I just want to raise that item, just draw the attention, that is the support, really, the support program, a very fundamental support program to young farmers. That is the Young Farmer Rebate program, the $4,355,000 on this item that we are just now passing. It is worth drawing the committee's attention to it. It is a significant program. This is a direct cash rebate to Young Farmer loans.

Mr. Deputy Chairperson: 3. Net Interest Cost and Loan Guarantees $4,355,000--pass; Allowance for Doubtful Accounts $2,000,000--pass.

Special Farm Assistance $255,000.

Ms. Wowchuk: I want to revert to one line, if that is possible, if it would be acceptable to go to Doubtful Accounts. I just want to ask you, budget for $2 million a year, is that what you budget for, or did you spend $2 million last year on doubtful accounts?

Mr. Deputy Chairperson: Is there leave to revert to Allowance for Doubtful Accounts? [agreed]

Mr. Enns: I am advised, Mr. Chair, that last year the actual Doubtful Accounts amounted to some $880,000.

Ms. Wowchuk: Can the minister indicate if that is an improvement, compared to other years? Was the farming situation better than in the previous year as far as Doubtful Accounts went?

Mr. Enns: Mr. Chairman, it is actually quite a significant improvement. I want to say at the outset, though, before I even give these figures, let us not be misled. By and large, the many millions of dollars that the corporation has loaned out to Manitoba farmers over the course of its 30-year history, the amount of delinquent accounts is extremely low, less than 1 percent. I want to state that very emphatically because it needs to be said. The attention is drawn to Crown corporations when we have losses or when we have difficulties. So in giving you these figures I would ask that they be kept in mind.

There were some difficulties, quite frankly some questionable loans that the corporation wrestled with and, of course, very serious problems that agriculture faced when the international price of grain collapsed, the full brunt of the subsidy war that was being fought without support programs in place, like the NISA program or the GRIP program. After all, that is why we established such agencies as the Farm Mediation Board to deal with the crises on the farm.

That is why the federal board has a debt review board. In 1992-93 the corporation actually wrote off some $4,300,000. In 1993-94 that figure was reduced to $1,300,000. This year, as I already indicated, is further reduced to $880,000. That is a reflection I think, too, of the growing health of the industry, quite frankly. I suppose another way of saying it, too, is possibly that the difficult cases have left agriculture in those earlier years.

Ms. Wowchuk: Just for clarification, when there are doubtful accounts, accounts that are written off, the corporation repossesses, is that correct? So, if you repossess the land, is that showing up in this figure? Where does the land that you repossess show up in the figures?

Mr. Enns: The figures that I just quoted are fairly straightforward. If the corporation loaned farmer X $300,000 and five years later foreclosed on him and took back the land value at $200,000, that $100,000 is the amount that is written off. That is the accumulation of this kind.

Ms. Wowchuk: I wanted to say that I am very pleased to see that the number of doubtful accounts has decreased as it has, and I hope it is an indication of better things to come, not only that we have those people who got themselves into very serious difficulty a few years back are out of the system, but also a sign that maybe agriculture is turning around and there is a better future, more stability in it.

The next line is on the Special Farm Assistance, which Mr. Chair had taken us to before I realized that I had not asked my questions on the Doubtful Accounts, and, again you see a decrease in there. Can the minister indicate to us what the change is, what the Special Farm Assistance is and why that has decreased?

Mr. Enns: Mr. Chairman, I am advised that this, again, is part of the function that MACC gets involved with in our attempt to continue to help farmers maintain their presence on farms that are in difficulty. This is initiated by the Farm Mediation Board that under their arrangement enables them to carry on farming. The corporation picks up the guarantee.

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Again, these figures are going in the right direction dramatically. For instance, in the years '91-92, this figure of actual money payments paid out by the corporation registered at some $580,000. It has then progressively, in '92 dropped to $467,000, in '93 to $206,000, '94, this year, anticipated to be at $110,000. That figure of 500 that was in the offers was based on those earlier years when the payout was in the order of 500, 400, 418. Now we believe with last year's, '94-95 payment actually being $110,000, that was our obligation as a result of the Farm Mediation Board's decision to show the figure of $250,000, is reality, is prudent. There will probably be a surplus amount in that account next year. It was no longer necessary to show the $500,000 that we showed in previous years.

Ms. Wowchuk: Mr. Chair, I may be asking a question on a line that has passed already, so if I am out of line you can correct me. I want to ask--I am probably out of line but I will ask it anyway. I want to know, on the staff who work for MACC and government staff, are people paid at the same level? It was a question I meant to ask under crop insurance as well. Are people who work for Crown corporations civil servants or are they under a separate contract?

Mr. Chairperson: I believe this might fall under Administration. Is it the will of the committee to revert back to the line of Administration? Agreed? Agreed.

Mr. Enns: Mr. Chairman, I am advised that while historically there was relative parity with the pay schedules at corporations like MACC and, I might add, for Manitoba Crop Insurance Corporation as well, there was a change that MACC and Manitoba Crop Insurance employees did not receive the benefit when there was a payment made on the pay equity circumstances which the general civil service, public service, received but not the employees of the Crown corporations.

Now I will take the liberty, Mr. Chairman, to express my surprise to the honourable member for Swan River. She will remember that on the question of gender balance, for instance, when the Crown corporation was here, I was surprised that we had become perfect--42 males, 42 females in that corporation. I look at the senior staff that surrounds the general manager here--very capable senior staff that are running the multihundred-million-dollar operation known as the Manitoba Agriculture Credit Corporation, and they did not get pay equity consideration which now brought them down to a somewhat lower level. I make those casual observations only for the record.

Ms. Wowchuk: Does the minister have any intention of addressing that issue to ensure that we have pay equity in all departments? Has there been any discussion in the department?

Mr. Enns: Well, Mr. Chairman, I will certainly want to continue to do what is appropriate for a group of employees that I regard very highly. Allow me simply to put on a few other records of a personnel nature with respect to the MACC staff. For instance, on the executive team we have a 60:40 percent ratio gender balance, favouring the male; credit management, it is somewhat higher, 75:25; administrative support, we have a higher component of the female gender, 68 percent compared to 32 percent. Overall, the corporation is 56 percent male and 44 percent female.

I would suspect that the issues with respect to redressing the pay equity matter would be really one that would have to be addressed at the negotiating table. The act that dealt with the pay equity issue when it affected the general civil service of the Province of Manitoba had a sunset clause in it, and it is no longer operable. It is dead, I am advised, but that certainly does not mean that it is a dead issue. I am sure that it is an issue that will continue to be on the negotiating table when the salary and working conditions are up for discussion by the appropriate individuals charged with that responsibility in the corporation.

Ms. Wowchuk: Can the minister indicate, and I ask this purely for clarification, the staff of the MACC corporation, is that a separate negotiation, or are there negotiations at the same time as all government employees, or do they use a separate bargaining unit?

Mr. Enns: They are a separate component. They are a Crown corporation operating under their own legislation. They are advised by a board of directors duly appointed by the government of the day, but because of the close relationship with so many of the functions of the Department of Agriculture, they are viewed and treated very much as part of the department in much the same manner that the Crop Insurance executive people are. The programs that are part and parcel of the overall Department of Agriculture's delivery to farmers of Manitoba are very often intertwined, and as such, they work very closely with the Department of Agriculture, but for purposes of administration, personnel, and pay, they are a separate entity.

Ms. Wowchuk: Can the minister indicate, on the average, what the discrepancy in pay would be versus a government employee and somebody that works at the Crown corporation? For somebody that would be doing an equivalent job, is there a big discrepancy in salary?

Mr. Enns: I am advised that it varies. In some classifications, it is virtually nonexistent, but there are specific classifications in the administrative and clerical where it can be considerable.

Ms. Wowchuk: Can the minister indicate if the people of this corporation have a contract now, or are they in the middle of negotiations?

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Mr. Enns: I am advised that the contract dates are coterminous with the rest of the civil service. They are now operating without a contract but are looking forward to contract discussions to resume shortly.

Ms. Wowchuk: I have just one more question on the administration side. Does the corporation contract out a lot of work, or do you have all the staff that you require within the corporation?

Mr. Enns: Management advises me that on very rare occasions, they contract out. They have on occasion, I think currently, done some contracting out of some legal work, but that the practice of the corporation is to use resources from within the corporation.

Ms. Wowchuk: Would the corporation contract out, for example, legal work when there was an overload of legal work, or is it because there is no legal counsel on staff?

Mr. Enns: Mr. Chair, I am advised that we are currently filling a legal position within the corporation, and that would enable the corporation to essentially continue doing its own legal work.

That is not to say that when--and regrettably, in the last little while, those occasions have developed where it is deemed advisable to seek out specific legal assistance that perhaps provides us with the kind of expertise we need in a court challenge, where the kind of corporate advice that an in-house lawyer provides day in and day out to the corporation we would feel would be placing the corporation at a disadvantage.

The practice and the intent, of course, is to fill the legal position from within the corporation. I understand that is being done currently, so that the ongoing practice of using in-house resources will continue.

Ms. Wowchuk: Those are all the questions I have on this. I would like to thank the Chair for recognizing me and the committee for allowing me to revert back to the issues that I had forgotten to touch on earlier.

Mr. Deputy Chairperson: Item 3. Special Farm Assistance $255,000--pass.

Resolution 3.3: RESOLVED that there be granted to Her Majesty a sum not exceeding $9,650,300 for Agriculture, Manitoba Agricultural Credit Corporation, for the fiscal year ending the 31st day of March, 1996.

We will revert back to 1.(b) Executive Support (1) Salaries and Employee Benefits $433,000.

Mr. Enns: Allow me again to introduce Assistant Deputy Minister of Regional and Management Services, Les Baseraba, and Dave Donaghy, Assistant Deputy Minister of Marketing. Craig Lee, Deputy Minister of Policy, I have already introduced, and Mr. Marvin Richter, who is director of Financial Administration.

Ms. Wowchuk: There are a few areas I would like to talk about as far as policy and the direction the department is going in and positions that the government has taken and initiatives that the government will be taking as we see a changing environment here in this province, and I would like to begin, if we can, with the minister talking a little bit about hog production in this province, about the policy paper that we saw come out from the department and the reaction from hog producers in this province with regard to that discussion paper, where there was discussion of increasing hog production, but the main point of concern in that whole discussion, I believe, was moving towards the dual marketing of hogs.

I would like to ask the minister what his intentions are regarding that document and on moving towards the recommendation on dual marketing and also the expansion of the hog industry.

I think we do have to look at expanding our industries in this province, and the production of hogs is one of the areas where we have to expand, but I do not necessarily feel that it has to be the very large operations. We have to look at the operations that are there.

We also have to be sure that we have markets for the product that we are going to produce, because there is no point in doubling the industry if there is not a market. The industry has doubled over the past few years--we have seen a big increase--but it grew as the markets grew.

So I would like the minister to indicate what he sees happening with this document, which parts of the document he sees implementing and whether or not he is prepared to move away from the single-desk selling of hogs or whether he is prepared to listen to farmers as they indicated very clearly last fall that they are happy with the single-desk selling and do not want to see any changes.

Mr. Enns: I want to take a few moments to put on the record some of the current thinking of the ministry and of my government with respect to the future pork industry in Manitoba. I use the word pork advisedly, because although pork and hogs are intertwined there is a difference. I could not agree more with the honourable member for Swan River that it would be less than suitable for this ministry or this government, the Department of Agriculture, to be actively promoting the expansion in hog production in the province of Manitoba unless there was really a fundamental appreciation that markets were in fact there.

It is the opinion of those who have viewed some of the markets that are currently being serviced by Canada, by Manitoba, it is the view of a number of other specialists and experts--I might say much more expert than myself--and it is a view that I share, having had just a very brief but nonetheless an exciting first-hand experience just in February this year to have visited with the largest importer of pork in the world, Japan, and some neighbouring countries like Korea and Taiwan while I was in that part of the world.

Understand that every additional hog that we produce in the province of Manitoba is for the export market, every one. We are exporting 70 percent of our current production. Let us understand that. We are not talking about flooding the domestic market or impacting even on the North American market in a big way. We are looking at the international export of pork. The question that the honourable member raises is, before we get excited about promoting hog production, are there in fact legitimate market opportunities for hogs? It is my belief they are there.

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Japan, the biggest importer of pork products, which I am proud to say Manitoba had established some initial contacts with, 25 years ago, 24 years ago--it was Manitoba hog producers that established some of the first Japanese imports of Canadian pork. Nonetheless it has been--when you compare it to other countries, we are--well, let me put it this way, we could do a lot better.

The little island country of Taiwan, about the size of Vancouver Island, which houses 21 million people on that little island, also produces darn near as many hogs as all of Canada and is the supplier of 37 percent of Japanese pork requirements. The little country of Denmark, in the middle of Europe, supplies another 34 percent of Japanese pork requirements. Our big neighbour, the United States, provides 16 percent of the Japanese import requirements. Canada, all of Canada, provides 6 percent. We have the best pork. We have better pork than the Taiwanese. We have better pork than the Danes. We have better pork than the Americans. And that is not just because Harry Enns or Manitoba Pork says so. We in fact do. We have world-quality pork.

The Japanese market and the eastern market generally, the Pacific market can only grow for the one simple reason that I am going to put on the record, because what amazed me no end, as interesting as the trip to Japan was, was the fact that that country, smaller than the landscape of Manitoba, housing 115 million people, very little agricultural land, mostly rocks and mountains, a lot of that in earthquake zones, that they can produce 76 percent of their own domestic pork requirements. They do that on the strength of getting access to North American feed grain, notably American corn. It was interesting to me that many of the Japanese, while I was inquiring about trade opportunities with them, kept asking me, why is it that our costs for importing feed grains are going up.

Americans in '94 had the biggest corn crop on record. Normally, supply and management would say that corn prices should have gone down, but they went up 18 percent, and they will go up 18 percent next year and 20 percent the year after, because the Americans are doing exactly what we are doing. They are value-adding; they are feeding more of their grain to cattle, to hogs, to poultry.

We are doing it. The honourable member knows that, particularly with the elimination of the Crow, there is going to be precious little feed grain leaving Canada. At the value of 3 cents a pound and looking at freight increases of 200 to 300 percent, we are not going to be moving much feed grain into the world market. That was what the Crow benefit was all about, to enable to have your Swan River barley end up in Montreal or in Vancouver, to be in export position to compete with American corn.

So what all of this tells this little layperson--and then you read some Japanese figures themselves that say by the year 2003--that is only seven or eight years from now--they expect Japan's capacity to meet their own pork requirements to drop from current 76 percent to something like 53 percent. That is just about a 20 percent increase that that biggest importer of pork will require in pork, just to maintain, not increase pork consumption, just to maintain present levels.

Now, surely Canada, surely Manitobans can rise to that challenge of getting its fair market share, particularly at a time when the other major suppliers like Taiwan are, by government direction, being told to reduce their overall pork production. They have overdone it. On that little island they have created unacceptable environmental problems for themselves, and they are actually targeting about a 25 percent, 30 percent reduction in pork production in Taiwan.

That is why 25 of the most progressive Taiwanese farmers followed me back from Taiwan to come and visit us in Manitoba in the depth of winter, because they want to continue producing hogs, but they know they cannot do it in their country anymore. They may have to do it in Manitoba or Saskatchewan or Alberta or in the Midwestern states.

But in any event the bottom line is that the markets, in my judgment, are there. That is not to say there will not be glitches, that there will not be--you know, we have seen them, we had fairly poor prices last October, November. They have recovered a little bit now, but overall the long-term markets are there, I am convinced of that, so I feel confident in supporting the kind of projections, policies that were contained in that pork review, the Donaghey, Moore, Gilson Report, and I am supported in that projection by people much smarter than I am in that field.

The whole question is there is reason to produce the hogs in Manitoba, and the hogs will be produced in Manitoba because feed prices will remain attractive and become more attractive with the disappearance of Crow relative to other jurisdictions. But the issue is, will we process the hogs in Manitoba? Of that I am not sure while I speak.

You see, the two are separate. I am a modest cattle producer, and I have watched the virtual total disappearance of the beef processing industry from our province over the last two and a half decades. As a beef producer it really does not mean a damn to me. I have probably enjoyed better prices in beef production the last five or six years than in all my 30-odd years in beef farming. It does not really make a great deal of difference to have my animal processed in Manitoba. It does not really make that big a different to the hog producer to have his animals processed in Manitoba.

But, as a member of this government, as a Manitoban, it makes a great deal of difference, because I need, we need, this government needs those 12,000 jobs the pork industry generates. Quite frankly, I am not interested in increasing hog production in the province of Manitoba unless we provide the jobs at Schneider's, at Burns, at the Forgan's and at Springhill that go along with the raising of pork. That is the issue that is facing this government, that is facing this ministry.

Currently, some of our best hogs, 4,000 or 5,000 or 6,000 a week are leaving the province to be processed otherwise, mostly in Burlington, Ontario, and I am very concerned about that. While our hog production numbers steadily rise, we anticipate that there will be some 370,000 additional feeder pigs produced this year. That is about a 15 percent increase, but the numbers at Manitoba pork that we are processing are going down.

When do you want me to intervene? When do I make some change? When we do not have a processing industry anymore in the province?

It is not essential to the production of hogs to have them processed in the province, but it is absolutely essential to the well-being of this province, to the well-being of Manitoba that we do that, or else I do not have the money to support health care or education. It is Bernie Christophe's boys that are working for 16, 17, good union wages that we get our income tax from that support our health care systems, that support our education systems.

Well, the honourable member maybe wants me to throw in a little casual reference to my old friend the Czar, but I will do that privately with Becky. Becky and I are on good terms because Becky is one of the few members left in the House that Brian Mulroney still sends Christmas cards to, and I appreciate that.

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Anyway, the member for Swan River deliberately diverted me from this spirited dissertation on the hog industry in the province of Manitoba. I have no intention of doing anything other than to ensure that the hogs get processed in Manitoba.

Ms. Wowchuk: Well, that was a very interesting discussion, and I want to assure the minister that we would also like to see hogs processed in Manitoba. We want those extra jobs so that we can provide for many of the services that we are seeing reduced under this government's administration.

I have to admit that the minister loses me at some point where he says that, or he implies, I think that is what he is saying, he talks about the number of hogs leaving this province and that they should be processed here, but they are not being processed here because there are not the facilities to process them? I do not quite get what you mean, what the minister means, I should say, that there is a problem with the hogs leaving the province, and I think he is saying it must have something to do with the single-desk selling. I had asked him to tell us why he was looking towards moving to a dual marketing system of hogs.

If we have a single-desk selling system here, can the minister explain what he means? If we have single-desk selling, if we have plans to process them here, why are they not being processed here, or is it the fact that we do not have the ability to process all the hogs here in Manitoba? And I do not mean this facetiously, I am looking for the minister's interpretation of what the problem is here.

Mr. Enns: Mr. Chairman, I do not pretend to have the answers either. There have been different circumstances that prevailed at different times. The current situation is such that any processor must sell his hogs under the single selling desk through Manitoba Pork. There have been times when, for different reasons, Manitoba Pork has not received adequate numbers of hogs to provide the needs for our four major processing firms. We have had times when our processing firms have run at 75 percent 80 percent 78 percent capacity and/or less. My understanding is that at the moment we are running very close, not to full capacity, but certainly we are running at about 40,000.

I am advised by my assistant deputy minister that we are running at about 90 percent, 92 percent, 95 percent capacity of our current processing facilities as they are now working. I am also advised that if push came to shove and they felt inclined to further maximize their efforts to double shifts, that could be considerably enhanced. So it is not a question I would necessarily point to of processing capacity. It is a capacity, though, of attracting and ensuring that those hogs come to these plants.

We are not interested, quite frankly, in erecting further provincial trade barriers. My Premier will not stand for it. He has been in the forefront, particularly at forums like the Western Premiers' Conference in knocking down provincial trade barriers and I suppose, if we were to impose an embargo and not permit any Manitoba hogs from leaving the province of Manitoba, that we could ensure that all hogs produced in Manitoba were in fact processed in Manitoba. But that is not an option that this government and this minister is prepared to consider. It is not an option that Manitoba Pork is really interested in, because from time to time it has been extremely important to them to be able to move hogs to the United States or to Ontario as they try to do their best in terms of maximizing returns for the producers that they represent. It does not alter the matter, and I am not avoiding the question. The fact of the matter is that in those areas where we see the greatest growth in our hog production numbers, they are the hogs that are, by and large, leaving this province for processing elsewhere, and I find that unacceptable.

Ms. Wowchuk: The minister says he finds it unacceptable that these hogs are leaving the province. Can the minister indicate then, these hogs that are leaving the province, are they all sold through the Hog Marketing Board, or are there hogs leaving the province that are by-passing the marketing board?

Mr. Enns: My understanding is that the majority of them, upwards to 80, 82 percent of them are in fact not being sold through the board. They are paying the levy to the board, but they are being sold under contractual arrangements that do not involve the board.

Ms. Wowchuk: Can the minister indicate how this has come about, because if we have single-desk selling, how is it that we have hogs that are leaving the province without being sold through the board? I am not sure what he means by that.

Mr. Enns: Well, as I said, we do not have restrictions on the hogs leaving the province. This is an issue that has been debated right across Canada. You will recall, a few months ago the issue got to a fairly heated stage in Saskatchewan, when the Saskatchewan board attempted to close the border. Quite frankly, we receive a number of Saskatchewan hogs that come into Manitoba plants for processing.

I can also report that what particularly drives some of the export of hogs out of Manitoba is price. I am advised that the parties that are engaged in this are getting more money, shipping them over a thousand miles, paying the freight and ending up with $10, $12 a hog more than Manitoba processors are willing to pay. There are no easy answers to this dilemma, but I also know that the end result is not acceptable to me, that is, if next year this time that 5,000 or 6,000 is 12,000, and 18 months from now it is 17,000 or 18,000, that is what concerns me. I am concerned that a major facility may be planned or built within trucking range of Winnipeg, as Burlington now is, in North Dakota or in Alberta or in Saskatchewan of the nature that is prepared to bid, you know, actively and directly for Manitoba hogs. I cannot complain. I cannot blame a hog producer for shipping his hogs to Burlington, Ontario, or to Calgary, Alberta, if he is getting $8 or $9 or $10 more for his hog than he is getting in Manitoba. I seek some advice.

Ms. Wowchuk: The minister has indicated that there is a problem in that hogs are by-passing the board, but if I understand it correctly, those people who by-pass the board are still paying their levy to the board. The minister has identified a problem. Can he let us know what his department has been looking at and what he sees, what his department sees, as an answer to this problem.

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(Mr. Frank Pitura, Acting Chairperson, in the Chair)

Mr. Enns: It is not a departmental position, but it is certainly one that has been addressed by Mr. Donaghy, who sits with us as my assistant deputy minister, Mr. Moore, and Professor Clay Gilson, when after a lengthy review of the hog industry, they came up with, among other things, a conclusion that a more flexible marketing system ought to be looked at, one that allowed a processor to secure continuity of supply, one that could allow for specific, you know, types of hogs to be marketed, perhaps to a dedicated market.

I am not satisfied, Mr. Chair, that we as exporters of pork are doing everything we can to gain a better market share in the world market. If the Japanese or the Koreans, for that matter, want a particular hog, perhaps of greater weight or some other dimension, if we are the ones that are trying to sell it then we have to provide that product to the customer's requirements. Our system now does not really lend itself to that. Our system now blends all the hogs coming in from all 2,000 producers in the province of Manitoba into one central selling yard and then they are averaged out much like the Canadian Wheat Board operates. It is a problem that has to sort itself out.

Ms. Wowchuk: The minister indicates that, you know, there are particular kinds of markets and there is room for the hog industry to grow. I certainly agree with the minister. There is room to grow, and certainly there are markets in the Pacific Rim, but our industry did double over the past 10 years or whatever. We saw a doubling of the industry, and we were able to meet market needs with the single-desk selling system that we have in place.

I think if the market is there that we can meet the needs in the market, that we can grow and supply those markets, and I hope we do. I hope that we can grow and take advantage certainly of that large market out there, but I do not agree with the minister, nor do many producers agree with the minister in the direction that, in order to capture these markets, to be a part of them, we have to move away from the single-desk selling. I just want to put that on record, that I do not agree, but I do agree with the direction that the department is going in to look for new markets and develop those markets so that we have a way to get some of the value-added jobs here in this province.

With the loss of the Crow benefit, certainly we are going to have to look at different ways to use our grain, and one of them is through livestock, but certainly we have to look at the processing. I think we have to look at getting those extra jobs here and tap it in. But again I say that we were able to double our industry with the single-desk selling, and I do not think there is a need to move away from single-desk selling to a dual marketing to tap into those markets. I guess I would like to hear the minister's comments, whether he believes that we can grow to take a fair portion of that market under the system, or does he believe the system has to be changed in order to play a role in those growing markets?

Mr. Enns: Mr. Chairman, I do not disagree with the honourable member for Swan River. I certainly want to acknowledge the very, very significant role that our pork producers, Manitoba Pork have accomplished in effectively doubling our pork production. It was maybe 11 or 12 years, I think it was when another minister in 1977 challenged the industry to do just that. The truth of the matter is we were producing at that point in time some 900,000 hogs and today in '92 or '93 or '94 we are producing in excess of two million hogs, a doubling of the pork production. Providing the circumstances, markets, feeding arrangements, providing we can overcome some of the environmental issues that trouble us from time to time in the pork production, that continued growth will take place.

But what she is not addressing, and what I have particularly tried to make the central point, is whether or not those hogs are processed in Manitoba, is the issue of concern to me and the only reason why I would consider re-examining the current system of marketing. I want to cite one example. Even from this distance I recognize the handsome visage of my animal director, Dr. John Taylor, sitting over there, who right now is working with the federal government and others to try to bring about a safe methodology of ensuring that any processed meat leaving our country, leaving this province, leaving Canada meets the kind of increasingly higher standards of our customers, notably the Japanese.

I know, for instance, what the Japanese customer wants in many instances. He wants what they call and advertise, clean meat. By that they do not mean a little bit of manure droppings on it. They want it residue clean. They do not want certain drugs to be used, no sulfa drugs in it. They will pay a premium for that.

Now, my director of Animal Industry Branch and a lot of other good folks in Canada are going to try and make this whole nation reluctantly come to some kind of a new standard, and I am saying that is maybe not necessary at all. Why should we not be spearheading and, in fact, producing it, or if we can dedicate a plant? If the Hutterian brothers who run the Springhill plant in Neepawa want to produce a certain type of pork that is absolutely residue free, that we can guarantee contains no antibiotics, no sulfa drugs, and they make a commercial success, why should not we do that? We cannot do that today because of the marketing structure. We cannot trace back to the farm gate where the hog comes from that goes to any one of our packing plants because of the single selling desk. So we cannot offer that guarantee to a customer. Those are some of the challenges that are facing the industry right now.

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Ms. Wowchuk: I am sure that there are ways to overcome those challenges, and those are challenges that will have to be met. One of the problems that is a subject of a lot of discussion with the growth of the hog industry is one that the minister just touched on briefly, and that is the whole environmental issue. As you increase the hog production, you have to find a way to deal with wastes.

Now the minister indicated that in Taiwan, which is a very small country, they produce 37 percent of the pork requirement for Japan. Did the minister or has his department looked at what other countries, particularly countries like Taiwan, are doing in the matter of processing waste? Those of us that come from the farm recognize the value of waste as a means of fertilizer, but I am sure that in those countries they must have some way of processing it. I wonder whether there has been any analysis done of this and whether the department has looked at the possibility of addressing the problem that is created by the amount of waste that is produced at hog barns and whether there have been any studies on the possibility of implementing processing, particularly when you have some of the larger hog operations.

Mr. Enns: Well, Mr. Chairman, there is absolutely no doubt that the department and the entire industry will have to redouble their efforts to overcome the difficulties that in some instances stem from very legitimate concerns, other instances, not so legitimate, but are in fact simply anti-hog production. There is no other way of putting that. We are extremely fortunate, a country like ours, that has a number of options available to us.

We certainly have made the first step in the rather lengthy effort that the department was involved in with most of the stake players in drawing up for the first time for the province very specific regulations and guidelines, that the member is familiar with, that spells out the whole matter of animal care but as well touches very specifically on the issue of waste disposal.

(Mr. Deputy Chairperson in the Chair)

There is a growing data bank that is being developed that indicates to us with confidence that we can apply certain levels of direct application of hog waste onto land which, by the way, is a luxury that a country like Taiwan does not have. In Taiwan not a single drop of hog manure can be applied to the land. It all has to be processed because of the nature of their congested area.

But we have other options available to us. The department is involved in looking at appropriate, sustainable levels of organic fertilizer, as I prefer to call it, on such things as native pasture lands and some of our community pastures, on regular farm land, different soil types.

We have drawn up specific regulations prohibiting the application of animal fertilizer near rivers and streams or on land types, geography or otherwise, that would place at risk a possible runoff or leaching effect of the results of this kind of application. We are also co-operating with different experimental efforts, through the Sustainable Development Fund and others, for Canada and for Manitoba, on all new kinds of innovative ways of processing and handling hog manure, animal waste.

There are certainly some very interesting ones and exciting ones going on. In Korea I visited a number of sites where they, in the process of processing hog manure they also gather sufficient methane gas to essentially provide the energy sources for the farm and end up with a very acceptable fertilizer that is in high demand both for the urban dweller and for the small gardener. We are looking at specific projects like the Clivus composting project which calls for the composting of the manure, odour controls with respect to straw covers on lagoons, injecting systems, injecting liquid hog manure into the ground, not allowing for on-surface application. There are a number of initiatives that are currently underway, both by the Department of Agriculture and through such organizations as the Sustainable Development Innovations Fund that are currently funding different programs that are seeking out new and innovative ways of handling hog manure waste.

Ms. Wowchuk: Mr. Chair, I am pleased to hear that those things are going on. A lot of the problems that we face with the environment, a lot of them are perception and a lot of them are a lack of information. The minister indicated that there were people who were anti-livestock production, and I think that those people are in the minority. I think we have to do more to make people aware of the value of the industry. We have to do more to ensure that we can live in harmony, both the people who choose to make a living in the farming community with the raising of livestock and those people who choose to live in the rural community because they just like to live out there and they choose to make it their home. We have to make an effort to live in harmony.

I am pleased that there are efforts being made to deal with things such as smell that cause a problem, and looking at other ways of developing fertilizer from the waste product is certainly a valuable commodity. The minister indicated the various things that were going on, but it is my understanding that there are farms--and I do not know whether it is in Taiwan--but where there are very large operations, all wastes are processed. The end product is an odourless product, very much like topping soil, a product we could spread on the soil and cause less of an image problem, so to speak.

That was what I was looking for, whether there might be on a small scale perhaps attempts being made to research the possibility of seeing whether it is economically feasible to set this up. Because in the end, if it is too expensive, the person who is raising the hogs is not going to be able to process this waste if it is not economically feasible. So that was what I was looking for, whether the department has done any research in that area to see whether there are ways that we could process waste that would be more environmentally friendly.

Mr. Enns: Mr. Chairman, the honourable member will appreciate that her comments are quite correct. They have to be within the realms of economic viability, and part of that tends to be dictated if there are sufficiently high volumes of manure to be processed and a market for the product.

I can relate to the honourable member that, yes, I have visited one of these fairly large-sized farms in Korea where they were processing all their hog manure onsite. I stuck my hands into the product that I was told was two-week-old hog manure, not quite 12 days. If it was not for the fact that my mother raised me to always wash my hands before I had lunch or dinner, I would not have felt compelled to wash my hands because there was absolutely no odour.

It was the kind of product that my dear old aunts would have fought over for their African violet plants that they grow on their shelves in cities. But they had high volumes of the product, 21 million people in a small, little country, no trouble to find ready markets for the product, small market gardeners, urbanites and rural people. We will have to determine whether or not those same circumstances come together at some juncture here in a province like Manitoba. I suspect they will be of a different nature.

Our first attempts here would really have to be more of containment of the odour problem. Our producers, and I think the industry, will move ahead in some of the directions that they are now pointing at that will resolve those issues and I think altogether to a greater understanding and a greater empathy for the fact that this is an issue that, whether it is perception or not, has to be dealt with.

* (1700)

We have, as a government, moved in certain legislative areas like proclaiming the Farm Practices Protection Act, and they are beginning to hear on a regular basis complaints from citizens about this or any other kind of farming practice. We have, as I said earlier, put into place very specific regulations with respect to livestock waste. We have firm guidelines in place for the hog producers of Manitoba that deal with not just such items as manure, but also the disposal of mortalities which occur in any livestock operation. It simply is not acceptable, Mr. Chairman, in this day and age to have producers dispose of their dead hogs in a snow bank near a creek somewhere and have them defile the environment in that manner. That practice has to stop and will stop.

But I think there was a reason, by the way, when the New Democratic Party government of Ed Schreyer passed the first environmental legislation back in 1972 or '73 when they exempted agriculture from the environmental regulations that were beginning to be imposed upon our other industries in the province. I supported the legislation at that time because we did not want to, at that point in time, impose on the farmer the growing list of environmental regulations that a manufacturer or other person has to live with in doing business in the province.

Now in 1995, in 1994, we are not doing agriculture a favour anymore by exempting them from environmental regulations. We have to bring them under the rationale of environmental regulations. We have to do it in a way that we can work with the different farm organizations, with the industry itself, the producers themselves, so we can introduce sensible, reasonable regulations that can be lived with by the farm community and those that they impact on, but at the same time protect the environment that in the final analysis we are all interested in protecting.

Ms. Wowchuk: On that particular subject, I hope that the department will continue to look at, on some small scale, and evaluate the various ways that we can improve the situation. As our animal industries grow in this province we know that we are going to end up facing, as farmers, criticism, and if not criticism people will be raising concern about the impacts on the environment by the increased livestock production, particularly when we start having waste and we are concerned with water supplies. We have to look at the best possible ways to deal with this, to create an environment that allows for the growth of the industry without being criticized by some people so that we can get the growth that we want to see.

I just want to ask about a couple of other areas as far as policy and direction that this government is moving in. One of the issues over the last year, along with the Hog Marketing Board discussion, last fall we went through a big discussion on the Canadian Wheat Board. People again spoke out on the Canadian Wheat Board when we had the vote on the Wheat Board Advisory Committee. We have a very pro Wheat Board Advisory Committee right now, but we have heard comments, if not from this minister, from the previous minister who was critical of the Wheat Board and the way they are handling the sales and the way we are dealing with our markets to the south. I want to ask this minister what his views are on the Canadian Wheat Board and what he sees Manitoba grain producers facing as challenges over the next year.

I want to ask the minister whether he supports the concept of the Canadian Wheat Board, that is, the policy of this government or whether, as he indicates, there is need to look at dual marketing of hogs. Has his department been assessing the marketing of grain, and has the minister directed his staff to review the merits of the Wheat Board as it exists now, or has anyone in the department been reviewing the dual marketing of wheat as well?

Mr. Enns: The honourable member is fully aware that the operations of the Canadian Wheat Board are very much a federal jurisdiction, and I have sufficient matters on my plate to contend with without looking for additional responsibilities that I do not have. But I have no difficulty--I appreciate that, having said that, the Canadian Wheat Board and its operation is of major importance to Manitoba farmers. Certainly, I have had occasions to be offered a great deal of advice, probably somewhat different advice than she received while she was campaigning in this last election, but that is also partly the nature of where I campaigned and where she campaigned. I have every respect for the operation of the Canadian Wheat Board. I will give you my personal feelings, that they continue to do and will continue to do for Canada and for the cereal growers a credible job, particularly in our off-shore markets, international markets.

There are untraditional kinds of stresses being put on the Wheat Board because of the fact that within the last few years the Americans have become a major market for us. That never was the case before. We have always traded some grains with the Americans, but not to the extent that we have seen develop in the last few years. That is putting some, you know, entirely different stresses on the operations of the Canadian Wheat Board. I can only say, Mr. Chair, we in agriculture ought not to feel so secure or confident that our world will never change. We live in a changing world. Look what is changing in virtually every other disciplines of our life from health to education to family services. So what was drafted into regulations some 35 years ago that currently still operates the Canadian Wheat Board is not necessarily the regulations that are applicable for 1995.

I do not mind telling the honourable member and to this extent publicizing what to some extent I will be speaking to the federal Minister Ralph Goodale on Thursday morning when I have an opportunity of meeting with him prior to appearing before the parliamentary committee on agriculture dealing with the legislative changes to the WGTA. I make the position, and I have made it directly to Lorne Hehn and several of his Wheat Board commissioners, that with the disappearance of the WGTA the fact that Manitoba grain producers and eastern Saskatchewan--I always want to include eastern Saskatchewan--but eastern Saskatchewan and Manitoba grain producers, because we are facing the maximum hurt as a result of the loss of the Crow.

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Then in fairness, particularly if we have a cap imposed on us, by the way, by the present federal government, on the amount of grain that we can send into the United States, then I want to see Manitoba farmers and eastern Saskatchewan farmers have some priority in our grain moving to fill those market quotas to the Americans first. Because our alternative is a 300 percent freight increase in trying to get it to Montreal or Vancouver. So I am not being unfair to my Alberta farmer friend or my western Saskatchewan farmer friend for asking for that kind of consideration, but I do not know whether the Canadian Wheat Board as it is presently structured can respond to that kind of, what I consider, legitimate and fair request. How will they anger the Alberta wheat farmer or the western Saskatchewan wheat farmer if they show that kind of preference that I am calling for? I will be calling Minister Goodale's office on Thursday morning at nine o'clock for Manitoba and eastern Saskatchewan farmers. I think it makes sense.

If it were left to market force to decide, it would operate that way. You would move your grain to meet the lowest costs. So instead of facing a $25, $30, $38, $40, $42 increase for moving feed barley into position through the Canadian routes, our farmers could be looking at much more modest and acceptable if they are allowed free and open access to the American markets.

I would like to think that the Canadian Wheat Board understands these issues. They certainly appeared to understand them when we raised them with them when they appeared before our cabinet and caucus prior to--oh, this was back some time ago in January.

I do think that the future acceptability and survival of the Wheat Board--I should not say survival, but I think the future acceptance of the Wheat Board will hinge on how well the Wheat Board can adapt to some of these changes.

The member may want to refer to that as calling for flexibility in the marketing system, some diminution of the single selling desk of the Wheat Board. That may well be the case. I would like to think that the grain industry ought to be able to work that out for themselves, just as I hope we can work out some of the problems in the hog industry without too much government intervention or decree.

Ms. Wowchuk: Mr. Chair, the minister indicated that the Canadian Wheat Board does come under federal jurisdiction as do many other issues that are affecting farmers at the present time, but because they do affect the Manitoba producers, I believe it is only fair that we discuss them at this time.

I look forward to seeing a copy of the minister's presentation that he will be making to the parliamentary committee on Agriculture as far as the WGTA goes.

The minister talked about, he has a concern with the cap of grain going into the U.S. He is hoping that the Wheat Board can respond to that issue because we can ship our grain more cheaply through the U.S. and into that market. I think that, if we ship grain into that market, we are going to see retaliations from the American grain producers.

The other market that is open to us--access to market that is a reasonable price as well--is through the Port of Churchill. The minister did not indicate anything on that. He says he would like to see our grain being shipped, I guess, to fill the void in the U.S. market that has been created by the Export Enhancement Program with them shipping their grain out. But the other issue, through the Wheat Board plan, is to see our grain going down through the Mississippi through the export market. I would prefer if we could to ship our grain through the Port of Churchill.

I would ask the minister if his department has done any work on the analysis of the Port of Churchill and shipping grain through that area, and whether they have looked at the economic value in saving costs for farmers and also the economic benefit of that line.

Now, I realize there is other economic benefit. It would not all come through the Department of Agriculture, but I wonder if the minister and his department are as supportive of shipping grain through the Port of Churchill as he is to shipping grain via the U.S. I do not know whether I misunderstood whether the minister was looking at only shipping grain into the U.S. into the market that is available there or exporting via the U.S. down the Mississippi.

Mr. Enns: Mr. Chairman, not so long ago, I was privileged to sit in on a meeting that was conducted by the Canadian Wheat Board, and they had one of their experts explain to a group of Manitoba producers the ramifications of the changed circumstances.

They very clearly point out that while there is a catchment area, as they describe it, that favours the movement of the grain south--and that is not surprising to any of us--there is also though another catchment area of The Pas, Swan River, even a significant portion of northeastern Saskatchewan that makes the shipment through the Port of Churchill considerably more attractive as a result of these changed circumstances.

The honourable member is well aware that there are a host of other issues involving the Port of Churchill. Regrettably, the Port of Churchill has always felt the impact of powerful politics. I do not mean my kind of politics or her kind of politics. I mean the politics within the grain trade that mitigated against the full utilization of that port on top of the other problems that it had, including the physical ones of a difficult terrain to maintain a rail line on and so forth.

But I am optimistic. I explained to her a little while ago why I am an optimist and why she is not an optimist, did I not, Mr. Chairman? She can just refer back to the record if she needs a reminder of that.

I am an optimist about the potential that may develop, you know, when we are really faced with a reality, and that will come about starting this August 1, when all of a sudden a tradition of many, many years comes to a full and immediate stop. Now, there will still be some softening of that action, and part of the other reason that I am visiting Minister Goodale is to try to finally get some details as to what kind of compensation we can get, particularly for moving forward the St. Lawrence Seaway pooling formula by a full year out of the $300-million adjustment fund but, nonetheless, the reality of the new freight regime will truly dawn upon us.

I am not about to predict what may happen to an operation like Churchill, not be able to predict what may happen to routes established to the south. We are the home of major, major trucking firms. Access to the south via truck would not be a problem. Our problem is whether or not we have the border situation that allows us to take advantage of movement of grains in both directions.

The directions of moving and utilizing Churchill, I fear, will continue to be significantly in the hands of the federal administration.

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We want to be extremely careful that we do not accommodate the federal government in a way that we do not expect. We are aware that the federal government wants to privatize the CNR. The Churchill line is part of that line. We may just end up owning that line far sooner than we want, and I do not want to own it in its present condition unless under some acceptable terms. I do not want to own it period, but there is some reason to be concerned that under the current frame of mind the federal government will be all too willing to offload the entire Churchill operation, port included, to anybody who is willing to hold up their hand.

Well, you and I know that there are some significant dollars involved in bringing the facilities up to speed. We also are aware that when similar withdrawals were made in other parts of the country, notably the train service from Newfoundland, that that was accompanied by a very substantial cash offer of some $400 million to allow the province to develop other infrastructure requirements, namely highways, to offset the train service that province enjoyed.

So those are some of the issues, but I apologize if I in my earlier remarks did not include Churchill. Certainly, Churchill, in my opinion, becomes a much more viable outlet for some of our grains. I think the combinations of the two will interact. The southern movement entirely will depend to a great extent as to access to the border. If we do not have access, then we have problems.

Ms. Wowchuk: Mr. Chair, the minister has confirmed what I am saying, that we could face some real problems if we hope to ship too much grain through the United States, because there could be problems with farmers objecting to the amount of grain coming in and facing additional tariffs, and we cannot just look in one direction. We have to look at other accesses for our grain. In particular, I believe the Port of Churchill could end up playing a very important role in the economy of this province.

The minister talked about politics. I believe that the Port of Churchill has been the subject of a lot of politics. It would just take some political will on the part of the federal government. They have made some promises towards that port, and we would hope that they would fulfill those promises.

I do have concern, particularly with the plans to privatize CN and what the impacts are going to be and who is going to end up owning that line and the responsibility of it. Now we hear that the federal government is also looking at privatizing ports. Certainly if they decide to privatize the Port of Churchill, without any support, there is not very much hope for it. I hope that when the minister has the opportunity, he will address those issues and emphasize to the federal government that they did make some very big commitments to that port.

We also look at the implications if that--and, again, this is not particularly an Agriculture issue, but the whole Churchill line, the bayline, ties into other areas. If we are looking at the economy of the province and we do not have the rail line up there, there is a tremendous road system that has to be built. The minister talks about his government having money for health and education. We also have to have money to provide transportation to those northern communities that depend on the bayline for their access.

So it is a big problem and one that is going to have to be addressed. I hope when the minister is addressing the issues to the parliamentary committee, he will consider the merits of the Port of Churchill in his presentation.

I would like to ask the minister just on his presentation--[interjection] I am sorry I did not hear that.

The minister said he is going to be making a presentation on the changes to the WGTA. Although they are going to come into effect on August 1, the minister knows--and the minister did not agree with the way that the change was made. We had always said that the WGTA should be in place, and the minister favoured, his party favoured, paying the producer, but we have this sudden-death situation where we now have all options taken away.

I guess the question I want to ask the minister is, at any time, did his government consider lobbying the federal government and asking them, instead of ending the WGTA and having a payout to the producer, did the government consider the merits of having the WGTA phased out over a three-year period, because that is the amount of money that is in the package, is a three-year payout.

Did the government, anyone, analyze the implications of having that phased out over three years and giving the farmers an adjustment period, rather than this sudden death? Did the minister at any point take that to an Agriculture--I do not recall whether there has been an Agriculture ministers' meeting since the change was announced, whether that possibility was discussed or whether he has given that any consideration or taken that proposal. Does the minister feel that that would have been less of a burden for farmers if they could have had the Crow benefit phased out over three years, instead of it ending immediately August 1, 1995?

Mr. Enns: Mr. Chairman, I am trying to recall just how long it has been that we had serious and ongoing kinds of discussions. They would be sometimes involving just the ministers of Saskatchewan and Alberta and myself as being the principal ministers involved. British Columbia to a lesser extent would come and join us occasionally.

We have had at least three or four. I cannot fault the federal minister in this regard, that he has made every effort to at least provide us with opportunities to discuss the issues with him, as they kept moving to kind of deadline dates. As well, there were a number of teleconferences where senior officials and ministers would be together discussing the issues.

I have to tell her that particularly Saskatchewan tended to be the jurisdiction that perhaps more closely allied itself to the position that the honourable member for Swan River takes in simply being opposed to any change, period, and that is an acceptable position to take. Alberta and Manitoba argued strenuously and hard for a considerable softening or further or longer phase-out period of the loss of the benefit of the Crow. Seven years was talked about. Five years was talked about. These are figures that the honourable member is familiar with. When the farm leaders met in Regina and called for that $2 billion or $3 billion payout, they were reflecting that five-year or seven-year option.

I have to acknowledge, though, that at no time did we suggest that this be phased out in any way other than to the producers; that is, by containing the phase-out to the current receivers of the benefit, the railways, because that, in our opinion, would have delayed the necessary reforms and efficiencies that have to come to our rail system.

The belief was very strong that they, quite frankly, needed a shock to go through this system, and by reducing those monies over three years or five years to the rail system would have only meant them carrying on their inefficiencies as the services grew poorer and poorer to the farmers.

So, to that extent, the answer is no. My government, the Manitoba government, did not consider an alternative other than the payout going to the producer. We have considered that the payout should have been extended over a longer period of years, five to seven years.

I say that with some fairness when you consider the treatment that the dairy farmers received across Canada. You have to remember that 70 percent of them are in eastern Canada, Ontario and Quebec. Their very substantial support program of over $200 million, $215-odd-million called for a 30 percent reduction of that subsidy fazed out over two years at 15 percent. That is a considerably milder treatment on the part of that group of primary producers, of which we have some too in our province but the bulk of them reside in eastern Canada, than the considerably harsher conclusion of the Crow benefit which happens to be a benefit to western producers.

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I am also reminded by my staff that the international trade regime that we are operating under, the subsidy reductions made it very difficult, if not impossible, to try to phase out the payment to the railways, to the system. The Crow, after all, was highlighted, premiered as one of the major trade irritants between us and our major trading partner, the Americans, as well as with GATT.

It is really under GATT that we obligated ourselves by signing, which by and large received all-party support that made it mandatory for us to end the benefit in the manner that the federal government has chosen.

Ms. Wowchuk: I question the minister on what he is saying about GATT. I thought that transportation subsidies or other subsidies had to be reduced by 60 percent, and if the transportation subsidy was reduced 15 percent one year and 15 percent the next year by the federal government, is it not accurate that we could have continued to reduce that for two more years, and we would have met the requirements of GATT and we would not have had to eliminate the subsidy completely? This was a move by the federal government to reduce spending, but there was no need for them to reduce it as drastically or as quickly as they did. They could have reduced 15 percent over the next couple of years and achieved the requirements of GATT. Is that not accurate?

Mr. Enns: While my experts are going to find me the correct answer, I will offer an opinion that will get me in trouble. Part of the problem is that I find Canada all too often to be eager to live up to the full measure of the law under international trading agreements that we sign, i.e., GATT, when it takes the French farmer in France or the Belgian farmer in Belgium or the German farmer in Germany a lot longer and a lot slower to move or pressure their governments to live up to these same agreements that they have also signed. Canada tends to, whether rightly or wrongly, play by the rules in a more forthright manner.

It gets more complicated than that. I am advised that we could have, in terms of the--at the dollar rate, reduced our subsidies in the manner that the member prescribed and lived within the regulations of GATT, but we could not meet the volume requirements. There was also volume attached to that, and that would have meant that the volume that we moved, particularly in canola and some of our wheats, then we could have shipped two-thirds with the program on. Then we would have hit the volume cap because there are volume caps in the agreement, as well, where you could not apply the subsidy. Then there would have begun a very difficult marketing situation for the wheat board, or for anybody else, to apply that situation to the producers. Under those circumstances, we support the action taken.

Ms. Wowchuk: I have to agree with the minister that Canada is often very happy to give away our supports, and I believe that this was a move by the federal government to reduce their budget at any price. They were going to eliminate the supports to farmers, no matter what, and they did not consider what other countries were doing, and when you look at what is happening in the United States, they are not abiding by the requirements. We are seeing that they are not reducing their Export Enhancement Program, which is what is causing room for a market in the U.S. for our grain.

I feel very strongly that this was a political move on the part of the federal government. They wanted to reduce their spending, but they did not reduce their supports for farmers nearly as much in eastern Canada as they did in western Canada. I strongly believe that there should have been a stronger fight put up by provincial governments to the federal government in this case. I wish that that would have happened. I do not know what kind of an effect it would have had, but I think that there should have been more protests from provincial governments to the federal government for the changes that they have made to the economy of western Canada.

Mr. Enns: Well, Mr. Chairman, I want to be careful about what I put on the record. There is no question that many grain producers in Manitoba are going to face some very difficult readjustment, and the fairness of the way in which the federal government has dealt with it is certainly open to question when compared to other producers of other commodities in other parts of the country.

Having said that, and I know that I will betray my own limited agricultural experience as a cattle producer, I happen to believe that there are many more pluses. Many more positive things will come as a result of the loss of the Crow. A simple fact of the matter is, we are not doing our primary producers any favour by encouraging them the belief that governments, the taxpayers will be a major source of their income. We simply have to derive our major source of our income from the marketplace, and we will have to grow those kinds of things that the marketplace develops.

Now, what we want to do in the Department of Agriculture with the resources available to us is provide the best possible kind of safety net support programs for that crash year that comes in agriculture. We had a good discussion about that when we dealt with the Crop Insurance Corporation here when last the committee met, but the idea that a grain producer or a livestock producer can kind of automatically depend that up to 30, 35, 40 percent of his income can be derived from a government, tax-supported program is simply not being realistic anymore, faced with the other demands that taxpayers have on government services.

It would certainly make life easier if other agriculture-producing countries that we trade with and that we compete with were walking lock step with us out of this regime of government support, direct support in agriculture. There are indications that some movement is taking place, although I acknowledge again Canada is all too often far in the lead. There is indication that that compassionate, sensitive new group of American congressmen led by that--well, how would you describe him, Becky? It is your former countryman, Newt Gingrich, that philosophical caregiver--that maybe that Congress will reduce the American subsidies to agriculture and help out my Canadian, my American farmers.

Point of Order

Ms. Becky Barrett (Wellington): Mr. Chair, I am wondering if the minister would allow me to answer the question he just posed to me.

Mr. Deputy Chairperson: The honourable member for Wellington does not have a point of order, but she can place some comments on the record to the minister.

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Ms. Barrett: Mr. Chair, the minister well knows that I spent the first 33 years of my life in the United States and have now 20 years been a Canadian citizen. However, I do maintain familial ties in the United States and as a matter of fact my parents live in the state of North Carolina.

I will just briefly say that my analysis, which is based on discussions with my family about the question that the minister asked about how I would characterize the current Speaker of the House of Representatives, Newt Gingrich, is that I would prefer to have Strom Thurmond or Jessie Helms in that position than Newt Gingrich.

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Mr. Enns: I will take that under advisement when next I meet either of these venerable gentlemen.

Ms. Wowchuk: Now that was an interesting diversion.

The minister talked about subsidies from other countries. I think the farmers cannot expect 30 percent of their income from governments, and I can agree with him wholeheartedly. Farmers want to make their money from the marketplace, but until such time as other countries begin to recognize the impacts of their subsidies, it is going to be very difficult for Canadian farmers to make a good income from the marketplace and compete fairly with people from other countries if they are being subsidized and our supports are being taken away. There is no doubt that things are changing, and we have to look at farmers getting a fair return from the marketplace, but somehow we have to be careful that we in Canada do not start complying with all the rules of GATT at a faster rate than other countries are doing, because our farmers are going to be hurt by it.

Another issue that has come about more quickly than we had anticipated was the changing to the pooling policy which was to take effect in August 1996. That date has been moved up to August 1995, and now a proposal has been put forward on behalf of the government by the farm representatives indicating that the Manitoba government would accept the changes to the pooling providing that Manitoba got a fair share out of the $300 million pool. Now there may be varying views as to what would be a fair share or how we should be compensated, and I know that there are lots of people who are asking for a portion of that $300 million.

Can the minister indicate what response he has had as to this request and whether we know what Manitoba's share of the $300 million is going to be, and can the minister also indicate, if his department finds that the compensation that is being offered to Manitoba producers is not adequate by his standards, does it mean that then the support for the change to the pooling will be withdrawn?

Mr. Enns: Mr. Chairman, certainly if the federal government does not respond in what we deem to be an adequate manner, I will withdraw, my government will withdraw our stated willingness. We never expressed a great deal of support for the withdrawal or the moving back of the date, but again we were approached by Minister Goodale, along with Minister Darrel Cunningham from Saskatchewan, and Minister Paszkowski from Alberta, would we under certain circumstances be prepared to move the date forward? We were being advised individually by our grains people, the people that are in the business.

It gets to be a complicated issue. With forward contracting of grains of five, six, eight months ahead future selling of grains, and with the freight factor being such a significant component on it, there needed to be certainty as to what and when it was going to happen. For that reason, we were persuaded--I am sure with a great deal of reluctance, certainly on the part of Manitoba Pool representing the grain farmers of Manitoba--but for the sake of having certainty about what was going to happen on a certain date, to support this forward moving, providing that in this first year, '95-96, we will receive full compensation. It was the full amount that the pooling formula paid out will be paid to our Manitoba farmers. That is the position that I am taking with Minister Goodale on Thursday and before the committee.

Then we further say that in the years '96 to '99 that we believe we have cause to call for about $120 million of the $300-million adjustment fund coming to Manitoba to compensate Manitoba for its loss under the pooling arrangement.

Now, the member is quite correct, the line-up is getting longer every day as to claims against that $300-million adjustment fund. The Alberta alfalfa dehyd industry looks to it as its saviour from some of the impact that they face with the loss of the Crow. Saskatchewan is looking forward to some infrastructure road money, short rail line money and so forth. There have been suggestions emanating from this province that $30 million, or something like that, should go to upgrading Churchill, the bayline.

You know, I get very nervous as all these claims come in on this one fund. I think that in the interests of grain producers--these were benefits accruing to grain producers, not anybody else, so I am trying not to lose focus that the principle concern has to be to the grain producer. There are issues quite frankly that I would like to, if allowed, if I left that focus, I may well want to have and may still succeed in getting some of those monies to come into general agricultural diversification monies.

We talked earlier, when we had the Manitoba Agricultural Credit Corporation with us, about the $10-million diversification program that was announced. I acknowledged that was very modest. That fund, in my judgment, should be a $100-million fund, if we are to do what agriculture needs to do in the next five or six years. The main concern is that we continue this focus on the people for whom the benefit was provided in the past, for the past many years, and the people who will be most impacted by it, the grain producers, they should be the major beneficiary of it. This is the kind of support that is generally supported in the western provinces by the Canadian Wheat Board, as well.

Ms. Wowchuk: I want to say that I agree with the minister that if any compensation is made available, it should be made available to those people who have to make the adjustment, just as with the WGTA funding. It is our feeling that that money should go also to the grain producers rather than the landowners because it is the grain producers who are going to have to make the adjustment to pick up the extra cost of shipping.

Can the minister indicate then what--he has indicated that there are requests for full compensation for the first year for 1995 and then partial compensation for the following years. Has a proposal been developed or submitted, as well, as to how these funds would be disbursed. Will it be the responsibility of the provincial government? Will it be the responsibility of the federal government? Have any plans been put in place along with asking for compensation? Has the department put together a proposal of how those funds should be disbursed?

Mr. Enns: Mr. Chairperson, I am advised that details are being worked on as we speak. We certainly see this as a federal jurisdiction, a federal responsibility. We will do our best to ensure that those details are made available and known to farmers as soon as possible. That again is part of the rationale for my visit with the committee and with Mr. Goodale on Thursday.

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Ms. Wowchuk: Can the minister indicate if he has any information when this will be settled. We know that the pooling is going to be changed. It is going to be moved up to August 5. There is no agreement yet as to what compensation will be, but what would be the objectives of the department to time line when we would see these funds disbursed?

Mr. Enns: I would think that the federal minister made it very plain to all of us what his time constraints really are. The act currently before the House of Commons has to pass prior to the June 30 recess date that is set for the federal House. The current changes and amendments to the WGTA legislation, and I do not know what impact it has on the pooling formula, will all have to be through Parliament by June 30. I suppose if it does not pass--I do not know what happens if we do not pass--you are in a situation where a budget has been struck, come down, been voted on, based on, but that requires certain legislative procedures, in this case, amendments, modifications to the WGTA legislation. I think it would present the federal government with quite a difficulty if they did not pass it.

Ms. Wowchuk: Well, I imagine it would present them with quite a difficulty, but I am quite sure that it will pass. I guess I may have misunderstood then. I thought that everything that was required for the change to the WGTA was already passed and it was only the matter of the pooling that had to be dealt with, but the minister is indicating otherwise, and the whole package has to be passed before any decision can be made on the changes. I would imagine then with the pass of the legislation that is when all the final details would be spelled out about how the funds would be disbursed, both from the WGTA and from the pooling. Is that correct?

Mr. Enns: Well, it is certainly my hope, because there are just too many open-ended questions that are floating around out there. But again, you are talking about several pieces of legislation involved in the pooling, Canadian Wheat Board Act, WGTA legislation, all tying in together with the Budget Act. You know, the budget is an act. There would be, no doubt, some Order-in-Council that would be passed that would subscribe to certain things, but I am hopeful that those kinds of details will be available on or about that time, which is another four weeks hence.

Ms. Wowchuk: We will wait to hear the results of the discussion, and I hope the minister has a good presentation in Ottawa and can speak well for the Manitoba farmers.

I want to move on to another area, and I do not know whether we want to stop right now or whether we should--

Mr. Deputy Chairperson: Are we going to pass these?

Ms. Wowchuk: No, I am not going to pass it right now.

I want to ask the minister, perhaps his staff, whether this is an appropriate place to ask questions on the legislation that the minister--the minister introduced some legislation today on the checkoff--and whether it is appropriate to ask on policy on this question or whether I should be asking those in another area, if I could be directed in that, please.

Mr. Enns: Perhaps I could ask her--you know, we have a section dealing specifically with policy and economics and more specifically dealing with boards, commissions, support services, if that would be all right, on Appropriation 3.6 on page 18.

Mr. Deputy Chairperson: 1.(b)(1) Salaries and Employee Benefits $433,000--(pass); (2) Other Expenditures $68,700--pass; (3) Policy Studies $71,200--(pass).

1.(c) Financial Expenditures and Administrative Services (1) Salaries and Employee Benefits $901,700.

Ms. Wowchuk: I want to ask, this is the section on the Canada-Manitoba agreement on agriculture subsidies. Is this the area where we would be talking about the--sorry, I will pass it to another line.

Mr. Chairperson: 1. Administration and Finance (c) Financial and Administrative Services (1) Salary and Employee Benefits $901,700--pass; (2) Other Expenditures $458,200--pass.

1.(d) Information Technology Services (1) Salaries and Employee Benefits $298,900--pass; (2) Other Expenditures $43,900--pass.

1.(e) Human Resource Management Services (1) Salaries and Employee Benefits $228,700--pass; (2) Other Expenditures $34,100.

Ms. Wowchuk: Earlier we talked about affirmative action and plans and the minister had indicated the balance, and I was quite impressed with the number, but the balance of people that are working, men and women in the departments.

We have a very high aboriginal population in this province and as I read many ads recently in the newspaper, I saw one ad where the Canadian Wheat Board had a specific ad where they were looking to hire aboriginal people in their staff.

Does this department have any policy and are any efforts being made to improve the level of aboriginal people working within the Department of Agriculture?

Mr. Enns: I think I indicated to the committee before, we do have, first of all, specific targets that we try to achieve within the department. While we are successful in some areas, obviously, the question of recruiting persons of aboriginal background to the service within the department has been not successful. I regret that all too often our aboriginal brothers and sisters find themselves, even when they are pursuing the kind of necessary qualifications through education, not choosing the field of agriculture. Even when I was the Minister of Natural Resources, it was always one of my concerns, particularly in that department that administers so much of northern and rural parts of Manitoba where many of our aboriginal communities are located, that we do not have more aboriginal people within the service of that department.

We do have quite a few and they have, of course, excelled in some particular aspect, such as firefighting service and like that, but I mean in the main line, in the administrative and the executive of the Department of Natural Resources dealing with forests, with fish, with wildlife and all of that. The problem is that as you--and I have addressed it sometimes directly, when you even look at some of the great work that some of our community colleges, Keewatin, is doing up there. I have proudly attended some graduations of 18 or 20 aboriginal youngsters, but when you ask what their future plans are, without exception they are moving into the social services area.

So I say that is a failing on our part of our community that we do not excite or interest more of our aboriginal youngsters to look at departments like Agriculture, like Highways, like Natural Resources as a future for them to be interested in.

Mr. Deputy Chairperson: Order, please. The hour being 6 p.m., I am interrupting the proceedings. The Committee of Supply will resume sitting at 8 p.m. this evening.