Madam Speaker: Private Members' Business, Second Readings–Public Bills, Bill 200.

An Honourable Member: Stand.

Mr. Peter Dyck (Pembina): I move, seconded by the honourable member for Charleswood (Mrs. Driedger), that

"WHEREAS the agricultural sector plays a vital role in the overall health of the Manitoba economy; and

"WHEREAS many of Manitoba's agricultural producers rely on ready access to markets in the United States in which to sell their products and services; and

"WHEREAS the Canadian and United States governments have recently been involved in a series of disputes regarding the restrictive trade actions undertaken by individual American states, which included the obstruction of access of Canadian cattle, hogs and grain to the United States; and

"WHEREAS a strong two-way trading relationship between Canada and the United States is beneficial to both countries' economies; and

"WHEREAS Canada's farmers will benefit from a strong and unified approach to bilateral trade discussions with the United States.

"THEREFORE BE IT RESOLVED that the Legislative Assembly of Manitoba encourage the Federal Government to continue engaging in discussions with the United States Government which will facilitate the unimpeded export of Canadian agricultural products to American markets."

Mr. Dyck: Madam Speaker, it is a pleasure to have the opportunity to discuss the importance of agriculture in Manitoba and the trade relationship between Canada and the United States. By the applause that I have just heard here, there are a number of agriculture producers who are colleagues of mine and who are very supportive of what is taking place.

Agriculture has a significant role in the overall health of Manitoba's economy. Agriculture and related industries contributed in the average of 11.2 percent to Manitoba's gross domestic product for 1993 to 1997. In fact, in 1997, agriculture accounted for more than one dollar in nine of Manitoba's economy. For every dollar of gross farm income produced in Manitoba, almost $2 is generated in the overall provincial economy. In Manitoba, one job in nine depends on agriculture.

The U.S. market is very important to Manitoba's agriculture producers. Total Manitoba agri-food exports to the U.S. increased by 17 percent in 1997 to reach a record $1,176,200. Almost half of all of Manitoba's agri-food exports by value go to the United States.

The U.S. is concerned with Canadian agricultural exports. The U.S. has maintained a number of long-term issues such as the Canadian Wheat Board, live cattle, live swine exports, as well as investigations into other exports such as potatoes. However, in the last year the level of harassment of Canadian exports by individual states has increased dramatically.

On September 16, 1998, the governor of South Dakota William Janklow began refusing to allow trucks carrying Canadian grain, cattle or swine to travel in South Dakota. Canadian truck traffic for the most part rerouted travel through neighbouring states bypassing South Dakota. A number of other U.S. states: Minnesota, Idaho, Iowa, North Dakota, Montana and Nebraska supported South Dakota by conducting truck inspections for documentation, although they did not issue travel restrictions.

My own experience as a producer has been one where we have had good access to the U.S. markets, and it has certainly helped us in our export business. Canada requested consultations with the U.S. under both the World Trade Organization which I will refer to as the WTO and the North American Free Trade Agreement or NAFTA. The blockade was resolved in October of 1998 after Canada and the U.S. agreed to meet to discuss bilateral agricultural issues. These discussions led to a December 2, 1998, signing of a record of understanding, later on referred to as ROU, which included a 17-point action plan addressing a number of trade issues.

The majority of the action plan items have been under discussion between Canada and the United States for some time. For these items the action plan formalizes the final details of the agreement. The ROU, or again the Record of Understanding, includes a general statement reinforcing the mutual benefits of both countries of open two-way trade, reaffirms both countries' commitment to NAFTA and to the WTO, sanitary and phytosanitary or SPS agreements and establishes a meeting schedule for officials and an early warning and consultation process.

The greatest potential benefit of the ROU could provide is to improve communication and understanding between Canada and the United States. There is nothing new in the agreement, but it may provide greater transparency and awareness of the Canada-United States trade issues. If the agreement leads to greater awareness of the importance of two-way trade in agricultural products, the relative levels of subsidization in both countries and an understanding of the SPS regulations in both countries, it may reduce the level of Canada-bashing and trade harassment.

In the spring of 1999, the North Dakota Legislature introduced several pieces of legislation that could restrict exports of Manitoba products. The most significant of these proposed that it would be a Class B misdemeanour for any person to transport any agricultural product or livestock into North Dakota from another country or to pass through North Dakota with an agricultural product from another country unless the product or livestock had a phytosanitary certificate stating that, first of all, you state that the agricultural product or livestock does not contain any chemical levels in excess of established maximum residue limits. Another criteria: the agricultural product or livestock shows no trace of any chemical for which no maximum residue limit has been established; and lastly, the agricultural product or livestock shows no trace of any chemical not approved for use on such agricultural product or livestock in the U.S.

On April 1 of 1999, Canada requested NAFTA consultations on this bill. If this bill had become law, the U.S. would have been in violation of its international trade obligations under both NAFTA and the WTO. Canada would have been able to pursue panels arguing that the legislation is being applied inconsistently with U.S. obligations under national treatment and that the standards of enforcement are not based on science. This bill was approved in both the North Dakota House and the Senate.

We are pleased that on April 12 of 1999, Governor Schafer vetoed this bill, and that on April 13 of 1999, the House and Senate ratified the governor's veto. We are confident that the good working relationship between Mr. Filmon and Mr. Schafer contributed to Mr. Schafer's veto of this bill. We will continue to promote a positive relationship between our two governments. Nevertheless, we remain very concerned with the progress that this bill made in the North Dakota Legislature and the potential threat that it had to our export interests.

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I am going to be referring to several acronyms as I move on, the first one being the Ranchers-Cattlemen Action Legal Foundation, which I will refer to as the R-CALF and the antidumping and countervail duties which I will refer to as AD/CVD on beef. On October 1 of 1998, R-CALF or again the Ranchers-Cattlemen Action Legal Foundation filed an AD/CVD, which is the Antidumping and Countervailing Duties, on beef petitioned with the U.S. government on live cattle from Canada. Now R-CALF is a nonprofit foundation formed to act on behalf of U.S. ranchers and cattlemen. It is based largely in Montana, but has received support for the petition against Canada from the National Cattlemen's Beef Association. After several delays, the U.S. Department of Commerce indicated there was sufficient industry support for the petition and initiated the AD/CVD investigation on December 22, 1998. On January 19, 1999, the U.S. International Trade Commission determined that there is a reasonable indication that the U.S. industry is materially injured or threatened with material injury by imports of live cattle from Canada.

Now, moving on to the countervail investigation, the largest portion of the subsidy alleged by the petitioners, R-CALF, comes from the Canadian Wheat Board's monopoly on barley exports. Now here is the interesting part. R-CALF claims that the Canadian Wheat Board's exclusive control over feed barley exports allows the Canadian Wheat Board to maintain artificially high export prices and artificially low domestic prices for our feed barley, which provides a benefit or a subsidy to livestock producers.

Now, the Net Income Stabilization Account, known as NISA, is also identified in the petition. The U.S. has previously found NISA noncountervailable in live swine investigations, but it is not specific to an agricultural industry. A preliminary determination of subsidy levels is expected in early May. A preliminary duty can then be assessed at the border if significant subsidies are found. Canadian exporters would be required to post a bond or cash deposit to cover an estimated amount for the duties which may be collected in the event that the CVD order is issued upon completion of the investigation.

Antidumping or the AD investigation. Dumping occurs when a producer sells a product in an export market at a price that is below the price received in the whole market or at a price that is lower than the cost of production. Now R-CALF is alleging that during the 1997-98 fiscal year, Canadian cattle producers sold cattle to U.S. purchasers at below the Canadian cost of production. A preliminary determination of dumping is expected in early May. If dumping is found, a preliminary duty can be assessed at the border. As with CVD, Canadian exporters would be required to post a bond deposit to cover an estimated amount for the duties which may be collected in the event that the AD order is issued upon completion of the investigation.

Now, what are Manitoba's actions? Manitoba supports the strong action that the Canadian Cattlemen's Association, the Manitoba Cattle Producers Association and the federal government have undertaken on each of these trade actions by the U.S. Maintaining access to the U.S. market is very important for Manitoba's cattle industry. The U.S. must be reminded that it must live up to its international trade obligations as outlined in NAFTA and the WTO. However, strong actions that are based on enforcing international trade agreements are only part of the solution. Long-term solutions must be based on a greater awareness of the importance of two-way trade in agricultural products: the relative levels of subsidization in both countries, and understanding of the SPS regulations in both countries. This can be achieved by a dialogue between producers, industry and governments. If we can achieve an improved level of understanding between our two countries, it will reduce the level of Canada bashing or trade harassment which emanates from the United States.

I would like to refer to an article which I just picked up in the last Agriweek, but it also talks about the U.S. and the decisions that they have made. It is entitled Second Thoughts. A state law that would have barred Canadian export dies. I quote here: "North Dakota Governor Ed Schaffer last week vetoed a bill that would have drastically interfered with grain and livestock shipments from Canada through this state. The bill would have banned entry into the state of both grain and livestock from Canada, but not other states, unless certified to be free of residues of chemicals and drugs not approved for use in the United States. The bill has easily passed both houses of the state legislature, and the governor himself has supported it.

"However, it appears that pressure from Washington and Ottawa changed the governor's mind. The bill was to take effect in the year 2001. Canada would have taken the matter to the NAFTA dispute settlement panel where it probably would have been struck down.

"Another bill which would have prevented sellers of farm chemicals in the state from charging higher prices than in Canada for products also registered in Canada was watered down by the amendments. This removes a flash point but by no means heralds a new age of trade harmony."

Madam Speaker, in conclusion, that is my concern, that certainly at this point we have been able to prevent some of the restrictions that we thought may become evident in the next number of months. We have been able to prevent that but, on the other hand, in the long term we have not resolved the problems that we need to resolve.

So I would urge all members to support this bill with the encouragement that we give to both our own Agriculture minister and the federal government to continue to work with the U.S. to make sure that the movement of product can go unrestricted north and south. Thank you very much, Madam Speaker.

Mr. Clif Evans (Interlake): I welcome the opportunity to speak to this resolution presented by the honourable member. Certainly, on this side of the House, Madam Speaker, if there is anything, one of the few things that we must agree on is co-operation amongst not only Manitoba farmers but Canadian farmers, between us and the United States and across Canada. So we do intend on making some comments and certainly supporting Mr. Dyck's resolution today and hopefully hearing something from the Minister of Agriculture (Mr. Enns) so that we get a better understanding, a more educated understanding as to what is really happening.

But, of course, we all know, Madam Speaker, and I am sure the member for Pembina (Mr. Dyck) has indicated, that there are challenges. We certainly agree with that, that there are some challenges, as the member mentioned, the pesticides and the U.S. regulations that certain producers and production and export of certain commodities across to the United States could be greatly affected by the way that the U.S. is making these regulations preventing us, from the pesticides that we use, to be able to export that product. Putting a stop to this–as Keystone Agricultural Producers president and agricultural producers across Manitoba and Canada said, putting in regulations is going to cost our producers millions upon millions of dollars.

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Madam Speaker, there are quotes from the Keystone Agricultural Producers saying that certain regulations, a certain act that I understand is being looked at and is being held back with support of our federal government and support of our provincial government, that we are holding the U.S. back and making certain regulations law so that we can in fact look down the road and see whether we cannot negotiate something to be able to bring some sort of sobriety amongst the two countries into having these exports allowed under certain conditions with the pesticides that we use here on this side.

There are other issues that have affected producers, perhaps not the larger producer. One of the issues is the single-desk marketing for hogs, Madam Speaker. We know that the Minister of Agriculture (Mr. Enns)–I will want to hear how he defends that–has created perhaps a boom for these large, large corporations, some that he is quite tight with and in with. We want to hear what he has to say about the small or medium producer and how the single-desk marketing board is going to support those producers. [interjection] The Minister of Justice (Mr. Toews) talks about crony capitalism, and if the shoe fits, wear it, I guess.

But, Madam Speaker, as I say, there are other issues, and if this particular government is in support of assisting our producers and our farmers in exporting to the United States–and with the situation that we have now, we do know that the producers in Manitoba, Saskatchewan and western Canada unfortunately have had a bad year and are looking for some assistance from the federal and provincial governments, and one of the issues that has been brought to light is that with the conditions that some of our farmers, our smaller producers, are having, this government has cut the rural and farm stress line at a time when many, many of the smaller producers are having the most difficult times of their agricultural careers.

Madam Speaker, other issues that affect our producers are subsidies. The United States subsidies have basically stayed the same. Where Canadian crops received 9 percent in 1997, a 9 percent subsidy for its crops, the Americans received an 18 percent subsidy. Our producers cannot export in situations and conditions such as those. We have to try and work collectively between this Minister of Agriculture, the federal Minister of Agriculture, the federal U.S., and, of course, the individual states. As the member indicated, there are some situations and preventions that are in place in some of the states. North Dakota, Minnesota and others are making it difficult for our producers to be able to expand their export into the United States where the market is, of course, very lucrative with our dollar.

But, on the other hand, Madam Speaker, we hear American farmers saying that we are further ahead than some of them because of the low Canadian dollar and the opportunity to provide more of that product to the United States at a lower cost. Well, that may be, but they are receiving the subsidies, and we have to be able to convince those American states and those producers and those politicians in the United States to rethink the legislation that they want to put in and force upon our producers.

Speaking earlier of the problems that our producers have had, the federal farm aid package that calls for a 60-40 provincial-federal contribution, it seems that the Minister of Agriculture (Mr. Enns) told our Agriculture critic that this minister and this government had almost nothing to do with the negotiation of this very important package. I find that rather ludicrous for it to be such an important part, 60-40. We are putting in 40 percent of the farm aid package for our provincial producers, and the Minister of Agriculture says: I did not really know much about it; I was just told. So we will want to hear–[interjection] Madam Speaker, that reminds me, and I will make comments about that.

But I want to comment, first of all, on the minister's lack–is it lack of or his government's lack of interest in being able to negotiate a good deal for our producers in this province? I ask: Is this provincial government, are they taking the interests of Manitoba farmers to Ottawa? If he does not know what the negotiation was, how do we know whether he has done what he is supposed to be doing and sending the message across?

I agree, and we agree on this side, that farm and agriculture produces one in nine jobs across this province, but we know how important the agricultural scene is and how important agriculture is to this province, to Canada, and our exporting not only to United States but to the Asian countries is extremely important.

One of the questions I want to ask the Minister of Agriculture (Mr. Enns) whether he will respond to is what is this government and what stand has he taken on the Estey report? Does this minister agree that the Canadian Wheat Board should no longer have a role in the handling and the transportation of grain? I want to hear from the minister what his role is on this. I want to be able to hear the right answers from this minister, so that as we have indicated we can pass this resolution brought forward by the member. This minister–we are going to hear him respond to some of the questions.

A question that we have, does this government think that the cap on freight rates should be removed? Should publicly owned hopper cars be sold to the highest bidder? What is the minister and his government's stand on that? Is this government showing some life towards our producers? I do not know. The question was how much? The minister says, I do not know; I was not involved. Why were you not involved? Well, I was told. I believed the feds would do this, and I believed the feds would do that.

That is why, Madam Speaker, I am hoping that this present provincial Agriculture minister, for the time being, does what is necessary in negotiating and working in good faith with our federal counterparts and the U.S. in making sure that our Manitoba producers are able to export as much product and commodity that we can through proper negotiations, so what is fair is fair. I want to hear what the Minister of Agriculture has to say on this, and we will continue to dialogue with him. Thank you.

Hon. Harry Enns (Minister of Agriculture): Madam Speaker, I want to first of all put on the record and thank my friend and honourable colleague from Pembina (Mr. Dyck) for putting this issue before the Manitoba Legislature. This is a very important issue. The issue that he refers to in the resolution, all of us have seen some form of it, even our urban friends, about the harassment that our farmers have faced throughout the year from our biggest trading partner, the Americans, despite the fact that we have formal trade agreements with them, initially the Canada-US Free Trade Agreement, then expanded to include Mexico under the NAFTA agreement. So we continue to have these difficulties and only dialogue, only consultation, only bringing out the information will help doing that.

I appreciate that the member for Pembina put this resolution on the Order Paper. It would be my wish, my hope, honourable colleagues, that we deal with it and pass this resolution. It does send a statement to the Americans and to our trading partners, and it is important that we choose and look for every opportunity to do that.

I am going to desist from making any lengthy response to this resolution at this time, Madam Speaker, because although appearing to be my usual modest self, I am not in any way wishing to look into the future in a somewhat braggartly manner. But I have every intention of returning to this Chamber shortly, after interregnum of some 35 days, where we carry on with the Estimates of the Department of Agriculture and where I, as minister, will have ample opportunity to explain in broader detail the kind of agriculture concerns as raised by my friend the honourable member for Interlake (Mr. Clif Evans). But I recommend speedy passage of this resolution by all members of this Chamber. Thank you.

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Mr. Stan Struthers (Dauphin): Madam Speaker, it is with pleasure that I rise to compliment the member for Pembina (Mr. Dyck) for bringing forth a worthwhile resolution, a resolution that I certainly have no trouble in supporting here in the Legislature. I also believe that when we have the opportunity as legislators to stand up for a segment of our population that contributes so much to our provincial economy, we should take that opportunity. That is what I believe we will be doing in a few minutes here today in the Legislature.

I want to, Madam Speaker, set the context for why I believe this is an important resolution to move forward on. We have seen a lot of changes in agriculture over the last number of years. I do not think there is a single Manitoban who ever believes we can go back to having a homestead on every quarter section and have it like it was 50 years ago. I do not think there are many Manitobans who think that that is a reality. I also think, though, that Manitobans are a little bit nervous about the trend in which we see fewer and fewer farms populating our rural areas. Along with fewer farms, there are fewer communities. Communities that had been thriving and vital at one time are now less of an entity in rural Manitoba, and each of us in this Legislature can think of a little community that at one time was a hustling, bustling centre for districts in rural Manitoba.

My hope is that we as a Legislature will attempt to reverse the trend towards fewer farms, towards fewer resources for rural people. We need to look no further than the statistic that indeed the honourable Minister of Agriculture (Mr. Enns) has drilled us on over and over in this Legislature, that people involved directly in putting food on our table only represent 3 percent of the population. That tells us that we have to be doing some things to help out.

One of the other changes that has taken place, something that I think was working in farmers' favour which is lost to farmers now is the two-price system for wheat. I think that was a real benefit for farmers. Now that is no longer available to farmers, it has meant $250 million out of farmers' hands. That, in my opinion, was a move taken to prepare us for free trade. It was a move that was taken to prepare us for negotiations on the Canada-U.S. trade agreement which eventually led to the North American Free Trade Agreement. Also gone is the Crow rate which was a real benefit to farmers. That was $720 million taken out of our industry, taken out of our communities, taken out of the hands of western Canadian farmers.

Now, what was supposed to happen was a greater diversification and a growth in the value-added industry, value-added operations in Manitoba, but do you know what? If you went back to 1974 and if you want to check with the Keystone Agricultural Producers or the National Farmers Union, they will show you graphs that they have got showing that we were beginning the value-added and the diversification in the early to mid-1970s, and it was growing since then. The graphs that you will see will not indicate a big bump when we lost the Crow rate. It will not indicate that all of a sudden we started running out and becoming more diversified and more value-added. Manitobans have been doing that because it makes sense. Manitobans did it years ago. When we opened up the prairies, we did that, and I think we should continue to do that.

Madam Speaker, maybe the biggest advantage that prairie farmers have right now is the single-desk selling advantage of the Canadian Wheat Board, something that this government is a little bit leery of coming out and embracing. They will say they are in favour of the Canadian Wheat Board, that is easy to do, but are you in favour of single-desk selling? That is the advantage that farmers have. That is what will provide stability for producers, stability for people who use the products that are produced on our fields.

If members across the way can scoff at that when I say it, then surely they have the courage to go and campaign on that in the next election. I do not think they will, because they know that single-desk selling and the Canadian Wheat Board is something that is very popular with farmers because it works for farmers. We can make it a little more transparent, and we can make it more accountable. I do not mind that. I do not think you will find many farmers that would disagree with that, but I would challenge the people across this room right now to go out and campaign and say that they would get rid of single-desk selling, which I think is their ultimate goal. I think that is your ultimate goal. Go and tell that to farmers. Do not say: oh, we are in favour of the Wheat Board, and then take actions that actually denigrate the single-desk selling advantage of the Canadian Wheat Board.

Madam Speaker, the minister just mentioned the word "harassment" and I agree with him. When the Americans make rules that end up nothing else other than harassing farmers as we try to trade across that border then I think we have to take action. That is why I think that we need to move forward with this resolution today. I want to point out that this harassment is taking place in spite of the trade agreements that this government supported in the hope that we would actually free up trade with our farmers to Americans south of our border.

Along these lines, I am nervous, like others, about the future talks of the World Trade Organization, negotiations which our leaders are entering on the world trade scene. I am very nervous, since we are sending the same people over to negotiate who I think let us down in the first round. I think we have to, as a Legislature, be there for the greater interest and the greater benefit of farmers to make sure that the people negotiating on our behalf understand that they should be there for the betterment of the farmer and to understand that we do not want to be putting up with the kind of harassment we see at the border today.

So with those few words, I commend again the member for Pembina (Mr. Dyck) for putting forth this resolution, and I suggest that we pass it with all due swiftness. Thank you very much.

Mr. Jack Penner (Emerson): Madam Speaker, just a few brief connotations on the private member's resolution that is before us. I was listening with interest to some of the things that the honourable member for Dauphin was saying during the debate and I think we should all pay heed to some of the things that he said, because I think what we need to do is understand the agricultural community and the agricultural issues on both sides of the border. We should also understand the concerns expressed by producers on both sides of the border. I think we need to first of all before we put all sorts of innuendoes or incorrect information on the record sit down and discuss, implement forums, invite American producers to the Canadian side of the border to talk to their Canadian counterparts

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Similarly I think it would be very useful if we would do the same thing on the U. S. side. I think there are opportunities from time to time to attend conferences, whether they are wheat growers conferences or oilseed growers conferences, soybean growers meetings and those kinds of things. I think we should apprise ourselves of the ability to attend those functions and from time to time invite ourselves to be speakers at these functions to demonstrate to them how willing we are to sit down and dialogue with them the issues of the day.

There has been much said about the Free Trade Agreement that was drafted about five or six years ago between Canada and the United States, and, then, of course, later, just a year or two ago, the World Trade Agreement. I think it is badly misunderstood because one of the key elements of the Free Trade Agreement that Canada and the United States agreed to was a dispute-settling mechanism. I say to all of the members in this Legislature, indeed to Manitobans, would it not be for the dispute-settling mechanism that Mike Gifford and company negotiated on behalf of Canadians and would it not be for the Trade Agreement, we would have faced much, much stiffer competition and much, much stiffer opposition for our products crossing the border.

We should not think for a minute that the American lobby in the United States, whether it is the tobacco lobby or whether it is the soybean lobby or whether it is the wheat lobby or indeed the oil lobby, as an industry, is a weak organization. These are not weak organizations, and they have a tremendous impact, and they spend large amounts of money to ensure that their legislators, their senators, are well informed about the impact on them regardless of the kinds of actions that Europeans have taken in respect of the world pricing mechanism.

We say a lot, Madam Speaker, about the effect the Canadian Wheat Board has on the marketing of our grain in this country. Well, that might well be true, but I think we should look very closely at what happened during the '30s, when wheat dropped to roughly about 50 cents to 60 cents a bushel in western Canada during the 1930s. Some would say that it would at times not even pay the freight, but similarly we are today in that similar kind of situation. Even though we are under the control of the Wheat Board and/or the marketing agency be the Canadian Wheat Board, there have been instances cited lately, this last year, that the freight could not be paid by the products shipped in a carload of barley.

So I ask honourable members to be very careful when we make those kinds of analyses because we need to know the whole marketplace, and we need to know the effect. I would suggest to you, Madam Speaker, that if you did the analysis, that the price that was received by farmers during the '30s for wheat was probably no less in comparable dollars than the price received just three years ago for wheat by western Canadian farmers. That was even at the level of the Crow, even with the $720 million included in the Crow benefit, because we were facing prices at less than $3 a bushel. I think if you would do the dollar-for-dollar value based on the 1934 dollar versus the 1997 dollar, you would have seen that the price equality was very similar. Yes, the Canadian Wheat Board marketed all the grain.

Now, I ask, as farmers, where was the net return increase that some members have talked about here? I think we need to be very careful when we do those kinds of analogies. I have, without question, been one of the staunchest supporters of the board's structure and the board's system. I truly believe that we need a national marketing agency to export, but I question, Madam Speaker, whether we need the kind of involvement and control that is currently being put in place in the domestic process. I think that is what we should be looking at. I think those are the kinds of things that we need to discuss with our American friends and our American counterparts in the agriculture community.

I think we need to be very careful, and I know that some of the farm organizations have dramatically changed their position, maybe not so much the policy position but the rhetoric that I have heard come out of their organizations during the last two years. It was a well-known fact that the previous Conservative government, call it the Mulroney government in Ottawa, was very hesitant to make the changes of the Crow because they knew the dramatic impact that would have and the dramatic changes that would cause in western Canada.

An Honourable Member: Did not stop the Liberals.

Mr. Penner: The Liberals paid no attention to that and just moved en masse to make the dramatic changes. I think we are now starting to experience the true ramifications of those kinds of decision making.

Madam Speaker, I stand here as I have done before, and I say to all of you in this Chamber that agriculture will not be the same in the next decade as it has been in the previous 10 decades. It cannot be because all the fundamentals have changed now. Your freight costs are no longer equalized across this great western nation. They are now differentiated, and therefore the costing will be different. That will lead, in my view, to a much greater degree of diversification in this province. It will have to, because otherwise the grain farmers in this province will be hard pressed to be able to exist. Therefore you are going to see a much greater degree of that diversification in such products as experimenting with hemp. I understand that the hemp industry has this year contracted some 20,000 acres of hemp production in this province. They are looking for more seed. They are limited to the acreage that is going to be planted because there is not enough seed around to be able to plant more. I think that in itself is again a demonstration that people are truly searching for other alternatives to increase their return per acre. Those of us who are involved in the agricultural industry know full well how the nets have shrunk, even though we export a major portion of our production to our American friends.

However, let us not be led to believe that the change in percentages crossing the border from the Americans to the Canadian side or the Canadian to the American side have changed much. It is still around 61-62 percent on both sides. We import roughly about 61 percent of our agricultural requirements, be it in vegetables, be it grains, be it in corn, be it in soy bean meal and all those kinds of products that we import. We still import about 61-62 percent of our needs from the United States; similarly, we export roughly about 61-62 percent to the Americans. That is not well known by the American farmers living in the southern United States; or, I would dare say even 300 or 400 miles south of the Canadian border into the United States, it is not well known at all.

We import most of our agricultural equipment, tractors, combines. All those kinds of productive needs we import from the United States. Many of our chemicals that we use on our farms, be they fertilizers or other chemicals, are manufactured in the United States, licensed in a different process in Canada. I concur with that, and that is where we need some uniformity because if we are going to change all the other rules of trade and marketing and pricing, then those must be changed as well.

There must be a confirmation of those kinds of processes. It makes no sense at all today to import vegetables that have been sprayed with one kind of chemical in the United States and not allow that chemical to be used in Canada, because the consumer is the net benefactor of both sides of it. So it makes no sense to me that we impose those kinds of restrictions. If you are going to export products out of Canada to the United States that have chemicals applied to them that are not licensed in the States, it makes no sense to me to have that differentiation. I think we need to clearly understand as producers on both sides of the border that they exist and that they need to be changed, and that there needs to be a harmonization process put in place.

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But, if you talk truly about harmonization, then you are opening a whole Pandora's box that was driven in large part by the change that the Liberal government in Ottawa forced upon us by changing the Crow and the Crow benefit. That is simply the competitive price structure. If we are going to have a competitive price structure in Canada and the United States, then you need to do away with many of the restrictions that are currently there that have a major impact on products that are now produced in Canada under supply management.

But I can make that same argument about the supply-management sector and how we apply the quota system on the supply-management system, and that also needs major reconsideration, not so much from a Canada-U.S. kind of trade situation, but internally, Quebec to Manitoba, Ontario to Manitoba, Ontario to Saskatchewan, Alberta, B.C. Why do we as a country apply quotas based on population? Should we not apply quotas based on your capacity to produce on a competitive basis? Does that not make sense to Madam Consumer out there? Why should Manitoba not be allowed to produce as much as Manitoba can produce within that requirement of domestic consumption, if you want to allow, if it can produce it cheaper than any other province can? Now, based on the elimination of the Crow benefit and the freight rate differentiations, we can; we can produce almost anything that is grown cheaper than other provinces can simply because we cannot get it to the marketplace in its raw form at the same cost that other provinces can because we are right in the centre of the continent. So I make those arguments; therefore, it gives me a great deal of pleasure to put those remarks on the record today and ask members for support to pass this resolution before we adjourn here today. Thank you, Madam Speaker.

Hon. Frank Pitura (Minister of Government Services): Madam Speaker, I will be very brief. I notice that there is a willingness, I think, on both sides of the House to pass this resolution. [interjection] Well, I just wanted to mention a couple of things here, and then we can vote on and pass this resolution.

Madam Speaker, I think that one of the things that I would like to share with the House here today is the fact that earlier this month my colleague from Emerson (Mr. Penner) and my colleague from Steinbach (Mr. Driedger) and myself met with the Keystone Agricultural Producers from District No. 3. They placed before us a very major concern about this Bill No. 1335 that the North Dakota State Legislature has passed, and rightly so, because it really does provide North Dakota the chance to put up a trade barrier with respect to products moving into North Dakota from Manitoba. You know that with the trade agreements between the two countries, although you can couch a trade agreement in terms of language and make it say what is supposed to be said within a trade agreement, but the spirit of the agreement has to be upheld by those that are participating in it and they will honour that trade agreement.

One of the things that I noticed when I was involved in the agricultural area earlier on, and it really drove me to the point where we worked to have some resolve was the fact that when the U.S. farmers wanted to plant canola and get into the canola industry, the seed that they obtained from Canada, they could not use it to plant in their fields because the chemical that was used to treat the seed was not registered in the United States. So I think, as my colleague for Emerson (Mr. Penner) indicated, that the harmonization of the registrations of pesticides between the two countries is a very important step and one that we should take and pursue very quickly.

As a result of seeing some of these trade inequities, I think that is one of the things that prompted us as people involved in the agricultural field about a decade ago, in fact it is about 12 years now, to resurrect and put on an international farm symposium. This farm symposium, we have altered it from North Dakota, Minnesota and Manitoba on a revolving basis, and what we have attempted to do was to attract producers from both sides of the border to sit down and discuss the issues that affect them in their agricultural industry and their industry at home and to share these issues back and forth.

By sharing these issues between producers on both sides of the international border, we were able to appreciate each other's industry much more and we were able to work together and attempt to come to a resolve in terms of, yes, we have differences, but as producers if we work together we can work these things out, and there is no sense putting up road blocks in our way because, in essence, we are all in the same industry. We all want to make a living in the agricultural industry, so why prevent each other from getting ahead in their industry?

So, Madam Speaker, with those few comments, I urge the speedy passage of this resolution.

Madam Speaker: Is the House ready for the question? The question before the House is private members' Resolution No. 4, Canada–U.S. Agricultural Trade.

Is it the will of the House to adopt the resolution?

Some Honourable Members: Agreed.

Madam Speaker: Agreed? Agreed and so ordered.