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Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 9 - Evidence

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OTTAWA, Thursday, May 31, 2001

The Standing Senate Committee on Agriculture and Forestry met this day at 8:30 a.m. to examine international trade in agricultural and agri-food products, and short-term and long-term measures for the health of the agricultural and the agri-food industry in all regions of Canada.

Senator Leonard J. Gustafson (Chairman) in the Chair.

[English]

The Chairman: Senators, we have before us this morning from the Association of Manitoba Municipalities, Wayne Motheral, President, and Joe Masi, Director of Policy and Research, and from the Saskatchewan Association of Rural Municipalities, Sinclair Harrison and Arita Paul, Manager of Services.

Please proceed, Mr. Motheral.

Mr. Wayne Motheral, President, Association of Manitoba Municipalities: Mr. Chairman, it is a pleasure to be here. This is a first for me. I have a presentation of about 10 or 15 minutes duration, following which I look forward to our dialogue.

On behalf of the Association of Manitoba Municipalities, I am pleased to have the opportunity to appear before the Standing Senate Committee on Agriculture and Forestry and to offer our association's perspective on the impact that the crisis in agriculture is having on rural communities in Manitoba. On January 1, 1999, the Association of Manitoba Municipalities was formed following an amalgamation between the former Union of Manitoba Municipalities and the Manitoba Association of Urban Municipalities. The AMM now represents all 201 municipalities in Manitoba and provides a strong and united voice on their behalf to government.

We believe that agriculture and rural community crisis is serious enough to warrant drastic action being taken immediately by the federal government, to stem the tide of bankruptcy and despair that is plaguing our communities. This may be our last chance to salvage our rural communities and a rural way of life that helped build this great country.

We are aware that your committee is mindful of the impact that the agriculture and rural community crisis is having in Manitoba and across Canada. Our association has been doing its part to raise the issue with the federal government, with the recent letter we sent to the Prime Minister and the meetings we have held with Members of Parliament from all parties in Manitoba. In addition, we recently made a presentation to the Standing Committee on Agriculture of the Manitoba Legislature on an all-party resolution designed to heighten awareness of the impact of the current agricultural crisis on rural communities.

I should like to begin by affirming that rural Canada is the foundation on which a large part of Canada's economic wealth is founded. It is a place of great energy and ingenuity. Our task as community and political leaders is to channel this energy and ingenuity into rebuilding our rural economy and communities so that they can take their rightful place as strong and equal partners in the life of the Canadian nation once again. However, we are going to need a little help along the way. We hope our presentation this morning contributes in a positive manner to finding constructive solutions to the serious agriculture and rural community crisis facing our province and our nation.

I should now like to turn to the larger agriculture and rural community crisis that is referred to in the all-party resolution that was recently passed by the Manitoba Legislature. As you are aware, the financial crisis in agriculture is having a very real impact on producers and rural communities. In Manitoba and across Canada, farmers are struggling to deal with continued low commodity prices, while at the same time farm input costs such as fertilizer, fuel and chemicals continue to rise. Many farmers cannot afford to put in a crop this spring. This will have a profound impact not only on the producers and their families but also on their communities and the rural economy.

While our association is not a farm lobby group, our member municipalities are feeling the impact of the depressed state of the farm economy. In March of this year, we conducted at two-week tour of rural and urban communities across the province. Community leaders were unanimous in emphasizing the severity of the current situation. They told us that this is not just an agricultural crisis anymore; they told us that this is a community crisis that threatens the social fabric of rural Canada.

Farmers are being forced off the land, grain elevators are closing, local businesses are suffering, schools are closing and municipalities are losing their tax base. Our association has consistently delivered this message to elected officials in the federal and provincial governments over the course of the last year. In our role as an advocate for all 201 municipalities in Manitoba, the AMM recently delivered this message by way of a letter to the Prime Minister and also suggested some of the steps we believe need to be taken by the federal government to address the problems facing Canadian farmers and rural communities.

As the Federation of Canadian Municipalities indicated in a presentation earlier this month to this committee, there are many linkages between agriculture and rural communities. These include links to the rural economy, the social fabric of rural communities and environmental health. In our presentation, we hope to convey the importance of agriculture to rural communities in these areas and offer some suggestions that we trust this committee will find helpful in its deliberations.

With respect to the economic links between agriculture and rural communities, in 1999, agriculture accounted for 9.3 per cent of Manitoba's gross domestic product, or $1 in $11 of production in Manitoba's economy. Over 37,400 people were directly employed in Manitoba's agriculture industry, and another 20,400 Manitobans were employed in other areas of the provincial economy as a direct result of the agriculture industry. Altogether, one in ten Manitobans is employed as a result of the agriculture industry.

In rural communities, the numbers are even greater. In the western Manitoba region, which includes Brandon, Manitoba's second largest city, agriculture and related services employed 18 per cent of the workforce in 1996. Again in 1996, in the central plains region of the province, almost 27 per cent of the workforce was employed in agriculture and related services.

Many of the small communities across the Prairies were developed as service centres for the surrounding farms, and many continue to perform this role today. Businesses and services in these communities were established to support the needs of farmers, and they are still dependent on farmers as their largest customers. These include farm machinery dealerships, banks, vehicle dealerships, grocery and hardware stores, and all the other businesses that make up small communities and employ their residents. Clearly, the fate of these communities is tied closely to the future of agriculture.

Not only is agriculture an important component of Manitoba's economy; the agri-food business is one of Canada's top five industries, contributing 8.5 per cent of Canada's GDP. This industry provides work for approximately 1.9 million Canadians, making it Canada's third largest employer. The sale of grain, oilseeds and related products is worth approximately $12 billion a year to the Canadian economy.

The Canadian agriculture industry also makes a significant contribution to Canada's balance of trade with the rest of the world. Canada is a net exporter of agricultural products, especially grain and oilseed products. In 1998, on exports of almost $23 billion, agriculture and agri-food products made up fully one third of Canada's total trade balance with the rest of the world. This provides a huge trade advantage to the country as a whole and, in the global economy, one that Canada cannot afford to lose.

In the last few years, the grains and oilseeds sector of the farm economy has been particularly hard hit by a combination of factors: the continuing subsidization of exports by the United States and the European Community has contributed to keeping the prices of these commodities at historically low levels; the loss of the Crow rate subsidy has obliged western farmers to pay the full cost of transporting grain to port; and at the same time input costs such as fertilizer, seed and fuel have continued to rise.

In 1999, for every $1 that Canadian wheat farmers received only 11 cents came from the federal government, compared to the 46 cents that American farmers received and 58 cents that European farmers received. Canadian grain and oilseed producers are among the most competitive in the world and on a level playing field could compete successfully against the farmers of any other nation; however, Canadian farmers cannot compete against the treasuries of the United States and the European Community without a greater contribution by our federal government.

I should like to raise one specific issue that is related to the agriculture and rural community crisis. I am referring to the efforts by many people in Manitoba to obtain disaster assistance for those areas of the province that were affected by the wet conditions in 1999. The issue of disaster assistance has been a very frustrating and disappointing experience for those of us in Manitoba who truly believed the federal government would respond to this disaster. In fact, many Manitobans feel the federal government abandoned Manitoba during the wet conditions of 1999. The wet conditions in Manitoba in 1999 were a natural disaster - an act of God. It was therefore both the role and the responsibility of the federal government to commit the needed resources to ensure that our producers and communities could survive until the effects of the disaster were overcome.

By not responding to the disaster in Manitoba in 1999, the federal government accelerated the agriculture and rural community crisis we are talking about today. The rural fabric in the areas affected by the wet conditions looks much different today than it did in 1999. We urge you to recommend to the federal government that some form of compensation for those individuals and communities that were affected by the wet conditions be granted immediately.

For generations, young people from the farms have been drawn to the educational and professional opportunities of large towns and cities. In recent years, this trend has accelerated. For example, in 1971, the farm population made up 13.8 per cent of Manitoba's total population. In 1996, the farm population was down to just 7.9 per cent of Manitoba's total population. This is a reduction of 39 per cent. In real numbers, this translates to a level of 131,200 people in 1971 to 79,800 in 1996, a loss of 51,400 rural Manitobans. At the same time, the total rural population in Manitoba, except for the five cities, has decreased from 36.1 per cent of Manitoba's total population in 1971 to 34.4 per cent in 1996.

Farmers in rural communities overall are getting older and the percentage of younger people who will sustain these communities in the future is decreasing. In the western region of Manitoba where the dependence on the grain and oilseed sector of the economy is greatest, the number of young people aged 25 to 34 decreased by almost 13 per cent between 1991 and 1996. Western Manitoba has 14 per cent fewer people in this age group than the provincial average. At the same time, 8.8 per cent of western Manitoba's population is age 75 and over, compared to 6.3 per cent for the provinces as a whole. The AMM has grave concerns about the future of many of our rural communities, from where many of our best and brightest young people have been drawn to larger centres due to a lack of opportunities on the farm and in their hometowns.

With the declining incomes experienced by many farmers, a growing number of farm families have had to seek off-farm employment in order to make ends meet. It is now common for at least one member of a farm family to work full-time at another source of employment, and in many cases the other spouse works part-time off the farm when work can be found. While this has brought in enough income to allow many farms to remain viable, despite the low commodity prices, it forces farmers to spend valuable time away from the farm during prime seeding and harvesting seasons. It is also exhausting for farmers who are trying to maintain two full-time jobs at the same time - one on the farm and the other in town.

As I have indicated, the effect upon rural communities from a variety of factors has been great. I would like to offer an example from the community of Melita, Manitoba, which exemplifies the damage that has been done.

Melita is located in the southwest corner of Manitoba and is typical in many ways of a farm service community. It was established as a service centre for agriculture nearly a century ago, and its fortunes continue to be tied to the fortunes of the farm economy. The last few years have been devastating to this community, particularly with the 1999 wet conditions disaster compounding the agriculture and rural community crisis. They have lost a grain elevator and several local businesses, including a farm machinery dealership, a car dealership and several small businesses. Altogether, these businesses employed 40 to 50 people. In a community of 1,150, 40 or 50 jobs represents 10 per cent of the total workforce. It will be difficult for all of these people to find new jobs in the community, and many of them will be forced to leave Melita to find employment elsewhere. This further contributes to the phenomenon of depopulation that is wreaking havoc on our rural communities.

As a result of the elevator closure and the loss of assessment and tax revenue, the town of Melita has been forced to reduce expenditures by $22,000, or 2.2 per cent of their municipal budget, to make up for the loss in revenue. This has an impact on the level of services the Town of Melita is able to provide to its residents. These are the choices that municipal leaders are forced to make during tough economic times.

A continued source of aggravation for producers is the 10-cent per litre federal excise tax on gasoline and the 4-cent per litre excise tax on diesel fuel for off-road farm machinery such as tractors and combines. The Keystone Agricultural Producers have calculated that this costs farmers $175 million per year. The $175 million is not the solution to the farm crisis in and of itself. Farmers find it discouraging to be paying this tax while they are struggling to survive.

Farmers have always tried to practise responsible stewardship of our land and our natural resources. Recently, however, in an effort to cut costs and increase production, farmers feel that they are being forced into making decisions that are not in the long-term interest of the environment. For example, in an effort to maximize production, marginal land in riparian and other ecologically sensitive areas is being cultivated and normal crop rotations are being abandoned in order to grow higher-value crops more frequently than the land can sustain. Both of these practices have potentially long-term and damaging environmental consequences, but farmers believe the present economic climate provides no alternatives.

The AMM believes that our farmers want to be responsible stewards of the land. If it is a priority for Canadians to ensure that our rural areas are managed in an environmentally responsible manner, we believe that a moral and financial commitment needs to be made by the federal government on behalf of all Canadians to make sure that a sustainable model is developed and put in place. The AMM would welcome the opportunity to work with the federal government to build on such initiatives as the environment tax credit developed by the Prairie Farm Rehabilitation Administration, the PFRA, to promote responsible stewardship of our agricultural resources.

The European Community and Japan are committed to a subsidy program that recognizes the "multi-functionality" of agriculture. These countries are prepared to provide support to their producers in order to accomplish several goals at the same time. As a primary goal, multi-functionality results in a secure domestic food supply, while at the same time also helps to protect the environment, preserve wildlife habitat, provide open green spaces and preserve the rural way of life. While the trade-distorting subsidies that have accompanied multi- functionality in Europe are regrettable and have taken their toll on the grain and oilseed sector of our industry, the AMM believes that multi-functionality is a good model for Canada to adopt.

A discussion about the future of agriculture on the Prairies would not be complete without indicating the importance of establishing a value-added manufacturing industry that would take advantage of the abundance of agricultural commodities produced in this area. In its second report, the Estey commission noted, in part, the following:

It is becoming apparent that only by developing value-added processes and enterprises to the highest economically feasible level will there be the ability to retain the farm population in Western Canada. Should we abdicate the value-added business, we leave the benefits to the countries to which we export the raw materials.

For too long, we have been content to export our raw materials to the world. While this has provided a good living for farmers for many years and has helped to generate a healthy trade surplus, we have failed to develop a manufacturing base that would provide a market for what we produce and at the same time provide for jobs in our communities. The AMM encourages the federal government to develop a comprehensive strategy that would encompass tax incentives as well as direct federal government funding and expertise to enhance the development of value-added industry in rural areas of Western Canada. A number of opportunities exist such as the production of ethanol, the production of canola-based industrial oil and fuels, pasta and flour milling, and opportunities in the livestock industry.

To ensure that a value-added manufacturing industry has a chance, we must ensure that the necessary infrastructure is in place. This means roads, bridges, sewer and water service as well as natural gas service. The AMM appreciates the funding made available through the National Infrastructure Program and the Prairie Grain Roads Program to help with these expenses, but the amount of money available through this programs hardly even scratches the surface of the need in rural areas of Manitoba. The AMM is currently working with our provincial government to develop an initiative to bring natural gas to more areas of rural Manitoba. Much more work needs to be done if our communities are going to establish themselves as viable locations for processing plants and the other industries that offer a sustainable future for our communities. We believe the federal government has an important role to play in the development of infrastructure in rural communities.

For a number of years, the federal and provincial governments have been encouraging producers to diversify their operations by planting different crops and taking on new types of livestock. The AMM agrees that it is not realistic for producers to expect to earn a reasonable return in the long term by growing only a couple of different crops. Producers need to actively seek outcrops and livestock that will add value to their operations.

At the same time, however, diversification is not a one-stop answer to farmers' financial problems. I would like to relate the story a producer gave to the recent hearings of the Manitoba government's Standing Committee on Agriculture. The farmer decided several years ago to get into growing caraway seed, a spice that is especially popular in Europe. When he planted the crop, it was worth a $1, $1.25 per pound. By the time he harvested his crop two years later - caraway seed, by the way, is a biannual - the price was 25 cents per pound.

To deal with the cumulative effects of low grain prices, high transportation costs and other factors, n immediate infusion of financial assistance to farmers was clearly needed in the short term. The AMM is appreciative of the $500 million announced earlier this year by the federal government to address the short-term problem. However, it is not enough to fix the problem, even in the short term. Between the years 1991-92 and 1998-99, the federal government has taken away approximately $2 billion annually in support payments from the agricultural sector in Western Canada through the removal of the Crow rate subsidy, reducing safety net programs and reducing the amount spent on research and development. Even with the aid package recently announced by the federal government, this reduction funding has not been recovered. At current prices, some producers have estimated that they will lose at least $40 per acre on every acre of grain and oilseeds they seed this spring. That is on top of the same amount they lost on every acre they seeded last year.

In addition to dealing with the farm crisis in the short term, an effective long-term strategy needs to be developed to ensure healthy farms and, more important, to ensure the long-term sustainability for future generations. Our members have told us that the Agriculture Income Disaster Assistance Program, or AIDA, has not been successful in either targeting those producers who are most in need or getting money to them in a timely manner. We are encouraged by the recent response we received from the Minister of Agriculture that indicates that the federal government is working to address these concerns through the agricultural safety net agreement and the multilateral negotiations on agriculture at the WTO.

The AMM does not believe it has a role in making specific recommendations with respect to the farm sector. Groups such as the Keystone Agriculture Producers in Manitoba, the Canadian Federation of Agriculture and other agricultural organizations are in a far better position to make these types of recommendations to your committee. However, as a municipal organization, we do want to impress upon you the damage that the agriculture crisis is having on our rural communities.

A crisis in agriculture in rural communities is surely upon us. If decisive action is not taken soon, rural areas of Canada will never be the same. Only the federal government has the resources to make an impact on the financial crisis that is devastating the rural economy.

We believe that the agriculture and rural community crisis in Canada is one of the most important public policy issues facing our country in the last 50 years. It is vital that the federal government renews its commitment to Canada's producers and rural communities by taking steps in support of a long-term plan for the future sustainability of agriculture and rural communities.

It is time that all governments, federal, provincial and municipal, engage Canadians in a comprehensive discussion on the importance of the agricultural sector and our rural communities, and work to design meaningful and effective measures to ensure the continued viability of these critical elements of our economy and society.

Our association pledges to work with both the federal and provincial governments to find solutions to the crisis. It is a challenge we must all accept in order to restore some hope for the future of our producers and our communities.

Thank you for giving our association the opportunity to make a presentation to your committee.

Mr. J. Sinclair Harrison, President, Saskatchewan Association of Rural Municipalities: Mr. Chairman, I wish to open by wishing Senator Wiebe a happy birthday. I do not know how many of you are aware that today is his birthday. The only reason I know that is that we have the same birthday.

The Chairman: Happy birthday, to you both.

Mr. Harrison: Let me begin by thanking honourable senators for inviting us here this morning.

Farming is no stranger to Senator Gustafson and Senator Wiebe. When he was Lieutenant Governor of Saskatchewan, Senator Wiebe helped us open our association's annual convention every year. He also started the Lieutenant Governor's Award for Outstanding Service to Rural Saskatchewan, an award that has been well received by rural Saskatchewans.

We are here primarily to talk about Saskatchewan, but certainly rural Canada fits in very well with our presentation. There are several indicators we can use vis-à-vis the health of any economy, and certainly agriculture has been good to Saskatchewan. At the present time, agriculture makes up about 10 per cent of the gross domestic product.

Realized net income is another measure that governments use for determining how an economy is doing. In that regard, I would ask you to look at page 9 of our written presentation.

In the period 1994 to 1998, you will see a figure of $740 million. If you follow those numbers through to 2001, you will see a projected figure of $224 million. Those figures speak for themselves. They indicate that the line is going in the wrong direction. We, along with yourselves and the federal government, have to do something to address those numbers.

The first page of our presentation outlines several indicators that paint a bleak picture for Saskatchewan. These indicators refer to smallest increase in assets per farm, decreased investment, net worth, decline in grains and oilseeds, and decrease in average operating income. We do not like to talk about negatives, but those are the facts. In the coming months and years, we have to turn that around.

Last week, we attended the convention of the Federation of Canadian Municipalities in Banff, and we were encouraged by the acknowledgement and recognition at that convention that rural Canada is in a crisis. I think you will see the Federation of Canadian Municipalities spend a lot more time and effort on this issue.

SARM was involved in a focus group with the Minister of Finance, Paul Martin, in Saskatoon last week and we were encouraged by his words about the federal government's thoughts about rural Canada and what is need to turn things around.

At page 10, we present a table on Saskatchewan agricultural diversification. We always talk about what we can do to diversity. How fast we do that depends on the farmers and the markets. A comparison of what we were producing in Saskatchewan in 1990 with what we are producing today will show a dramatic difference. Could we have done things more quickly? Perhaps. However, there has to be a market for what we are producing. We would suggest that, if there is a market for something, the farmers of Saskatchewan, indeed, the farmers across Canada, will grow it. I think producers have responded to those markets. We must continue to develop markets, to diversify and to value add in Saskatchewan as quickly as we can.

Some people believe that the survival of rural communities is contingent on integrating with large, more urban centres. Certainly, that is a worldwide phenomenon. For some reason, people want to live in cities. Those of us who live in rural Saskatchewan cannot understand that phenomenon. We like rural living, but in order to do that there must be an education and health infrastructure in place. Otherwise, there is no reason to live in rural Saskatchewan. SARM would like to put forward an alternative view, where rural residents are able to enjoy an improved, quality way of life in which they enjoy autonomy, security, prosperity and health.

We have no control over some things. As Mr. Motheral mentioned, the increase in fuel prices has certainly had a significant impact on agriculture. We are very dependent on fuel. It is not possible to run a farming operation without using large quantities of fuel. We have felt the most recent increases directly in the cost of fuelling of our machinery. Fuel price increases also increase the cost to us of purchasing fertilizers and indirectly affect transportation costs across the board. Hence, as a nation, we have to address the fuel price issue.

Yesterday, we visited Iogen, a company that is looking at making ethanol out of straw and forest products, which are looked upon primarily as waste products across the Prairies. We are encouraged by what we have seen there. We are two or three years away from Iogen building a plant of this stature in Western Canada. It is industries such as like that will help us into the future.

Increasing the number of value-added businesses in rural communities will create jobs, including better paying jobs for educated people, keep people in rural areas and attract some new people, reduce the significance of freight costs by decreasing their relative importance to the overall value of the finished product, and add stability to rural and farm incomes.

We need a modern transportation system, which includes road, rail and accessibility to containers and container depots, modern, affordable communications systems, and a human resource strategy that includes a skilled workforce and educational opportunities.

With respect to transportation, our members, the rural municipalities of Saskatchewan, spend a lot of their time and attention on trying to keep an acceptable transportation network in place. Rural Saskatchewan would benefit from industries that have the ability to move goods in and out of rural areas, better access to communities and the potential to increase tourist visits and create better first impressions of the destination communities. Although there are many examples of industries throughout rural Saskatchewan, a good infrastructure is needed.

An example of a value-added industry is FarmGro Organic Foods, just outside Regina. Their plant was strategically located between the CP and CN lines. Having located there, FarmGro is having difficulty getting a spur line built into its plant. That is an example of the kind of hardship we have to overcome to ensure that value-added industries can survive.

I am sure you are all aware that branch line abandonment has been a problem for rural Canada, for the Prairies, especially Saskatchewan. We have more branch lines than any other province. As those branch lines disappear, more load is put on our road system. We do not have the resources to build up our roads. Although there has been limited funding by the provincial and federal governments, it is our position that we should maintain every mile of branch line possible, to keep loads off the road and on the rail. Rail transportation is much more efficient. Environmentally speaking, it uses a lot less fuel. Hence, as branch lines close it becomes very difficult to maintain value-added industry in rural Saskatchewan.

I would ask you to go to the page entitled "Saskatchewan Rail Network." On that page, we have indicated the branch line system, and the black squares indicate value-added industries. I think that map paints the picture of why we need a branch line system.

We refer later in our written submission to containers, but I will take this opportunity, while we are looking at the map, to talk about them. A container is not a divisible load. Once a container of lentils or peas is processed and has been sealed, that load cannot be divided. The container has to be trucked to a container port. Containers can only be loaded on rail in Regina and Saskatoon, two places. Therefore, the plants across Saskatchewan that have the ability to process to export standard and to load containers have to send the containers by truck to either Saskatoon or Regina to access rail. We need more container ports and access to the branch line system that is in place today.

We would also suggest that containers are the way of the future. Certainly, it is cheaper to transport commodities in bulk. We recently toured a container port in Vancouver. Given the increase in the number of containers, one realizes that that is the way the world is going.

Consumers want a safe food supply, not to mention safe water. They want to know where their food comes from. The large elevators that are being built on the prairies, albeit efficient - they save money for the grain companies and they save money for the railroad system - do not allow for the determination of the origin of the food contained within. In the future, consumers will demand the ability to trace back the origin of their food. It is for that reason that the meat industry has gone to tagged animals; in that way, the industry is able to determine the source of a diseased animal. Currently, if a commodity that ends up in an importing country in a bulk commodity is contaminated, there is no way of tracing it back to the problem. Hence, in the future there will be much greater use of containers. As such, more container ports will be necessary. As well, the branch line system is necessary in order to maintain our road system as it is today.

We have had some success in getting provincial and federal dollars into our road system, but certainly not a sufficient amount. In 1993, the federal government announced an infrastructure program, and a second program has just recently been announced by the federal government. The second infrastructure program is of a green nature - we certainly need money for sewer and water, and water quality - but this program will not help our transportation system like the first one did. Since more than half the projects have to be of a green nature, very limited funds are coming out of the infrastructure program for roads.

Last June, the Prairie Grain Roads Program, the PGRP, was announced. The Prairies received $175 million, $106 million of which was to come to Saskatchewan. We were very excited about this announcement. We negotiated with the federal and provincial governments. And as it turned out, in Saskatchewan, 70 per cent of the $106 million is being directed at the highway system and 30 per cent to the rural road system, which we feel is grossly unfair. In Manitoba, the funds were split 50-50 between provincial highways and the rural municipal structure; in Alberta, 100 per cent of the PGRP funds went to the rural municipal structure. Saskatchewan has more roads to maintain in the rural municipal structure than either Manitoba or Alberta. We met with Senators Wiebe and Gustafson and Mr. Goodale, anybody we thought would listen on this issue. I do not know whether we can change it, it is a five-year program, but it is our opinion that we were short-changed on this particular program for rural municipalities.

In the future, communications is going to be very important for Saskatchewan, for rural Canada. We need a level playing field. As long as we are tied to wire, and we do not know for how long that will be, the playing field will not be level for us. When the telecoms were regulated, there were subsidies, so everybody paid the same amount, regardless of where you were. As we move into deregulation, we will no longer benefit from subsidization, and the implications of that could be very serious for us and for the rest of Canada.

Also, with respect to postal rates, the idea was floated that regardless of where one is in a deregulated system everybody would pay into a pot and those rural areas would be subsidized. The federal government, in its wisdom, has not adopted that yet. As long as we are tied to a wire system, that is going to be a detriment for rural Canada. Naturally, once we move to wireless - and we are probably almost there - this will not be an issue. Everyone will be served equally. Hence, in the absence of subsidization, in order for rural Saskatchewan to be on a level playing field with respect to telecommunications we will push to wireless just as quick as we can.

I am sure I do not have to talk to you about environment and water. We all remember what happened in Ontario and what happened in our own province of Saskatchewan. It would appear that there are boil-water orders almost daily in Saskatchewan, in Canada. It is obvious that water quality is a problem, and it is something that is drawing a lot of attention. It will take many dollars to upgrade water treatment plants. It will be difficult to guarantee Canadians and visitors to this country that regardless of where they are in the country the drinking water is safe, but it is something we have to do.

We must remember that it is people - our ratepayers - who suffer as a result of the farm income crisis. The impact of the crisis has been dramatic on the people of Saskatchewan. People are working two jobs to try to raise a family. Marriages are breaking down consequently. Things are not good. We have a responsibility as people of Canada to try to do something about that.

I would ask you to turn to table 4 - "Saskatchewan farm population" - on page 11. I am sure you are all aware of the numbers. I am sure that when the numbers come in from the latest census they will indicate a dramatic decline in farm population, something we do not want to see. However, urbanization seems to be a worldwide trend. It is tough to stop worldwide trends, but we have to try. A recent article in the Western Producer indicates that in one year alone, from 1999 to 2000, there was a decrease of 6,400 people in rural Saskatchewan employed on farms.

I will now turn to page 8, "Summary of Recommendations and Conclusions". The first recommendation relates to a trade equalization payment. The European Economic Community and the Americans are subsidized to a higher level than we are. Our federal government took the position at one time that it would get the other countries to reduce those subsidies. It is clear that the government is not going to do that, that it does not intend to do that. For us to be major players in the world, there must be a level playing field; therefore, a trade equalization program has to be put in place.

I talked about fuels, and certainly one way of addressing that is to eliminate the federal tax on farm diesel and gasoline.

Our third recommendation is to ensure effective, competitive transportation. In that way, the new players, such as regional railroads, will be able to provide service on economical branch lines and other lines they need to make their operations feasible. In the last couple of months, two applications by short line companies, regional railroad companies, went before the CTA. We have been fighting for competition on the rails for years, and this was our first ray of hope for competition. The CTA, in its wisdom, however, denied those two companies access to the rails. We thought it was wrong then, we still think it is wrong, and we are encouraging those two companies and others to go back to the CTA with other applications. In this era of profits by the railroads, we are being denied the opportunity to have cheaper freight rates.

The fourth recommendation is to increase the amount of funding dedicated to municipal road construction. We talked about this earlier. We need a rural road network, and we need assistance from all levels of government to make that a reality.

Recommendation number five is for the federal government to accelerate efforts to bring high-speed Internet to the rural and remote areas. We hope that that means wireless and that it would be economical.

I touched on the subject of drinking water. We need national standards. At the FCM convention last week, a resolution was passed that the federal government has to get involved and that national standards must be put in place and monitored.

We recommend that the federal government work with the Prairies to provide better educational opportunities for rural residents, to implement training programs that address identified labour shortages and to increase participation by First Nations in the workforce. There are labour shortages in rural Saskatchewan. There is legislation in other provinces to bring in migrant workers, but in Saskatchewan we have chosen not to do that. Our association has worked closely with the FSIN. I have been involved with SARM since 1986, and unfortunately I have to admit that we have not done a good job. There are probably as many First Nations people in the jails and hospitals as there were in 1986. The workforce is not increasing. First Nations people make up the fastest-growing segment of our population in Saskatchewan. That is the workforce of the future, yet we are not doing a good job of bringing them into the general workforce.

The federal government has to change its immigration policies. At the focus group meeting with Paul Martin last week, the suggestion was made that Saskatchewan needs 2 million people, or certainly a dramatic increase in its population. For many years, Saskatchewan's population has sat at about 1 million. We have a big infrastructure to maintain. Without taxpayers and corporations, companies, we cannot afford to maintain the infrastructure system we have there. One way of turning that around is increasing the population. I am getting past that stage in life where I can do much about it, so we are going to have to call on the younger generation to do that.

That concludes my recommendations. Certainly, other areas must be addressed, but I will stop here. I wish to thank honourable senators for hearing those comments.

The Chairman: Before I go to questioners, I would like your observation on the fallout you expect this summer and into the fall if something is not done to help farmers. I was out seeding for a couple of weeks, and in the area where I live at least 12 farmers had to quit. None of them declared bankruptcy. They just quietly sold out their farm and moved off. It affected other people around them, as they left their farms.

My observation is that if something is not done to help them many more farmers will be leaving the farm this next fall. I would like to hear your comments.

Also, input costs have risen, for instance, on fertilizer from $225 a tonne to $425 a tonne. Who benefits from that?

Senator Stratton: The gas companies.

The Chairman: The gas companies and the oil companies. We just calmly sit by. Who did Conoco buy out?

Mr. Motheral: They bought out Gulf.

The Chairman: Conoco bought out Gulf Canada, and they are making money hand over fist. They have never had the kind of incomes that they have today. Even if we got increased grain prices, as my son has said, we will be no better off. Can the government do something about that? I do not hear much about how we can control input costs. The fertilizer companies say that they need natural gas to produce fertilizer, and so the costs increase.

Mr. Harrison: We would suggest, Mr. Chairman, that only the federal government can do something about it. Individual farmers cannot take on the major oil companies. To suggest that farmers who are leaving theirs farms are inefficient farmers is a fallacy. There may have been some poor operators at one time, but certainly the people who are still there on the land are excellent operators. The economies of scale are gone. It is a fallacy that you have to get bigger to save more money - big farmers, medium-sized farmers, small farmers are all losing money.

I would agree with you, farmers are leaving as we speak. Action must be taken immediately. To suggest that the provinces have the wherewithal to turn it around, they do not, at least in Saskatchewan. In terms of the municipalities, we are on the front lines, where people cannot pay their local taxes, which is turn has a direct effect on infrastructure. We believe, and that is why we have come to Ottawa today, that there is a federal crisis and that the responsibility is that of the federal government. It is now upon us and it is time to take action.

The Chairman: Mr. Motheral, would you like to respond to that?

Mr. Motheral: Our concern is a similar to the one Mr. Harrison has outlined. We have taken this issue to our local Members of Parliament in Manitoba, we have taken it to several opposition parties. We are not telling a new story. Everybody seems to know about the problem.

How can we get some action on this? We need the political will to do something to save our rural communities. With respect to the WTO rules, Canada is only spending 20 per cent of the cap. United States is at 100 per cent. What we need is political will. We have the resources to save our communities. How can we get to those few people who are holding the strings? Where are they getting their information?

The reason we have been here in Ottawa this past two days is to see whomever we can about the problem. We are very pleased to have been able to make this presentation to your committee. We are trying to stir up political will.

The alternative is to do nothing, to let our resources go to the multinationals, whose priority will not be sustainability of our land. We have producers on our land right now who are doing a wonderful job of keeping our resources sustainable. We need political will, to ensure that this continues.

Senator Fairbairn: There are an awful lot of questions that can and should be asked, and I know some of my colleagues will do that, so I will not take too much of your time. However, I have one observation to make. There is much interest about this issue in this room. The major non-legislative assignment of this committee for this year and probably next is a study of rural Canada and its problems. My home is Lethbridge, which is surrounded by rural towns and villages. Everything you have said today rings true with me. The concerns you have highlighted are indeed grave ones. The possibility of our farms, towns and villages reaching a point where they may not be sustainable is alarming. Should that happen, it would profoundly change the face of Canada - and not only as we see ourselves. I do not think urban Canada understands the rural issues and the makeup of our country. That is why I think this issue is so important. I commented on this at the meeting in Banff last week.

Who should you talk to? Well, certainly, we are glad you are here talking to us. Our committee will have recommendations and make reports. We will talk to ministers, and we will continue to do that.

I am wondering the degree to which you and your organizations have plugged in with Mr. Andy Mitchell, who was given a ministerial responsibility for rural interests following the last election. That is another channel into the federal cabinet and the decision-making process.

With respect to the transportation issue, which is a big one, I understand that the Canada Transportation Act is currently being reviewed and that a report is expected by July 1, 2001. The House of Commons Standing Committee on Transport and Government Operations will presumably review that report. Legislation may follow. It would be timely and helpful for your organizations to think about the legislative changes that you would like to see. You have outlined some thoughts with respect to this today.

Another area that concerns me in terms of our rural communities is the situation with respect to families. Do your organizations keep any statistics on the impact of rural changes on the family, not only in terms of leaving the farm but also with respect to family breakdown, divorce, health, violence, those kinds of things?

You talked about farm families needing someone to work full-time off-farm and about producers having to knock themselves out doing two jobs at the same time. Are there any developments in your rural communities that would see people using access to the new technologies? I take your point about going to wireless as soon as possible. However, is there any indication that these innovations are helping people who work and live in rural Canada? Are these technologies enabling rural people to work from their homes, to access markets and business through technology, in much the same manner that, say, a self-employed person in Calgary could?

Those are my concerns, Mr. Chairman.

Mr. Motheral: I can certainly comment on the concerns you have raised.

In terms of transportation, certainly the municipalities are appreciative of the PGRP initiative by the federal government - however, as you know, there never seems to be enough money. Nevertheless, we were fortunate to convince our government to direct 50 per cent of the funds toward municipal roads. That is certainly a help. It is all part of the basket approach of trying to deal with the rural crisis. To look at it another way, if we cannot help our farmers stay on the land, then roads are not going to be very important. So, it is part of the basket, that is for sure.

With respect to stress and family relationships, the government has reinstated the "stress line." Families can telephone the Manitoba Farm and Rural Stress Line for help, if they find themselves in stressful situations. That is certainly a positive initiative.

I will be returning to Ottawa with the Manitoba Minister of Agriculture -Mr. Harrison is returning with the Saskatchewan minister - to make a presentation to the House of Commons Standing Committee on Agriculture and Agri-Food. I believe the Women's Institute will present to that committee as well and, as such, will have those figures. As Mr. Harrison said, those problems are certainly happening out there. Farm families are experiencing stress.

I have a close relationship to stress myself. I am a fourth-generation farmer. Our family broke the land. My son and I are farming together. I am sacrificing my retirement to try to save everything, and I am not the only one. There are several like me out there doing that, and it is very stressful. We are forced to make decisions on a monthly basis, regardless of our debt. We go into debt every year to plant a crop, and hope to recover that debt. We experience stressful situations almost on a monthly basis at home, so I am very close to that, even though I have an off-farm job.

We have had conversations with Mr. Mitchell. He is very personable and open, as far as rural issues are concerned. We will try to meet with him again in an effort to bring these issues forward.

Senator Fairbairn: That is good, because it works two ways. For him to make the kind of impact he would wish to make on his colleagues, it helps to get this push from the people about whom he is most concerned. That is very helpful.

Mr. Motheral: We do not want to leave this committee with the impression that this is only a Western Canadian problem. This problem is countrywide; it is a rural problem. Mr. Mitchell, being from Ontario, knows the situation. He knows the problems we are experiencing in the rural areas. We have to approach this on a Canadian basis.

Senator Fairbairn: Do either of you have a comment with respect to technology?

Mr. Motheral: Yes. You are talking about the business portion of the Internet, high-speed Internet. There has been an initiative by Manitoba Telecom Services Inc. to put high-speed Internet into rural areas, but they can only guarantee that 85 per cent of Manitoba will have access to it. That pretty well covers the capital region, which is Winnipeg and the surrounding municipalities. In other words, there are several areas that will not have access to the high-speed Internet.

As we all know, the high-speed Internet is essential to doing business from home. It is the way of the future. We will certainly be pushing our government and the federal government for that. The Prime Minister set as one of his goals two or three years ago to make sure that we were all connected in Canada, and that is certainly something that will have to be done.

Mr. Harrison: Mr. Mitchell has spoken at our convention. We are meeting with his department tomorrow, to see how we can work more closely and to determine what we can do in the future.

We have made presentations to the CTA review panel. They appear to be an understanding group but, again, they are bringing forward a report. We saw Estey, we saw Krever. Somebody will probably have to study the report of the CTA review panel. It is time to start doing things. We hope that this is the last study on transportation.

Rural Canada is the glue that holds Canada together. We have strong cities, strong towns, we even have strong villages. If we think of them as a concrete mixture, a mixture of strong stones, medium-sized ones and small ones, we still need something to hold the concrete together. If not, the concrete will crumble. It is in that sense that we suggest that rural Canada is the glue holding us together. It has made this country great, but it is starting to crumble, and we all know what happens to concrete when it goes bad. It is time, therefore, to rejuvenate the glue and start sticking us back together again.

Senator Fairbairn: I could not agree more.

Mr. Harrison: We all know about the large call centres that are being built in large cities, where people congregate like ants everyday and have a telephone stuck on their ear for eight hours. I have never worked at one, but I have had a daughter who has worked at a call centre. I can think of a million jobs I would sooner work at.

If those same people could work out of their houses, rather than congregating at these large call centres, the situation would be much better. If rural Canada had access to telecommunications, then people who live on farms could work out of their homes and do the work that is being done from these call centres. It would improve the situation greatly. It would be better for the family, it would be better for the home, it would be better for everybody. It would be a win-win situation.

It is not always necessary to group employees into one place. We are seeing a lot of offices institute a policy of flexible-hours, for example. What is important is to get the job done, and not necessarily within regular working hours. That is what we should be concentrating on.

Senator Stratton: Welcome, gentlemen.

I have been sitting around this table for a number of years. This committee has travelled to various parts of the country, and the story never changes. In the past seven or eight years, the story has always been the same and it never changes. It is almost as though we sit here and listen to what you say but nothing happens. And it is consistent, nothing happens.

One begins to wonder why we are doing this. Why are we consistently sitting around this table and listening to the problems in the agriculture sector when nothing really happens? One begins to wonder about the federal government's commitments to do something. Things have not changed in the last seven or eight years; in fact, the situation is worsening.

To my dismay, I feel we are doing a disservice to the agricultural committee to sit around a table like this and listen to you knowing that regardless of what we do nothing will happen. That is the stage I am at, the frustration level I am experiencing, because I cannot count the number of meetings I have attended where I have listened to presentations essentially the same as yours, talking about the same problems you are have highlighted, and essentially nothing ever happens. We always think that if we can nudge it along, nudge it along, we will get a bit here, a bit there, but really, in its entirety, the problem is just getting worse. We just seem to go our merry way and ignore the fundamental issues.

I apologize for ranting; I will move to questions. It is just my frustration coming out.

Part of the problem, as you say, is that we have only utilized 20 per cent of the room we have under the WTO, whereas the U.S. has gone up to 100 per cent. Europe uses every trick in the book it can. We consistently hear of different programs for equalization. Do you have a program that can be put forward to the federal government that will not conflict with WTO trade obligations and that realistically can be of help to you? Has that been done by either of your groups?

Mr. Motheral: I will make the first comment, and it will be very short. Our association concerns itself only with bring the rural community. We are not a farm lobby group. We work on behalf of communities.

With respect to your comments about the WTO and any formulas or solutions, we would leave that in the hands of, say, Keystone Agricultural Producers or SARM, who lobby on behalf of farms.

I will turn it over to Mr. Harrison, in that case. By the way, senator, I do agree with your rants.

Mr. Harrison: Certainly, I would agree with your first comments. I have been coming to Ottawa since 1986, and sometimes I look in the mirror - and I did that again this morning - and ask myself, "Is this doing any good?" Often, before I come to Ottawa, I get telephone calls from people who say to me, "Why are you going back? Nothing has happened in the past." We take the approach that something has to happen, that something will happen. We have not given up hope. Collectively, we have to make a better impact.

As we speak, there are people working on safety nets, and that is part of it. There is not one cure-all; rather, a host of things would be a significant help in the situation. What is needed is a better environment in rural Canada. Attention must be paid to issues such as short line rail and transportation. Institutions for health and education are very important, but we if cannot access them they are not much use to us. There has been consolidation of the health care system and the school system. Some parts of this great country are undergoing municipal consolidation. We do not agree with that. We have fought it. We have won it in Saskatchewan.

Senator Tunney: And we lost.

Mr. Harrison: There were people at the microphones in Quebec pleading with the FMC to take a position on forced amalgamation. We would suggest that amalgamation is not good for Saskatchewan and not good for Canada. Local representation is important, and for that reason amalgamation has not been beneficial to the rural municipalities of Ontario, Nova Scotia and Quebec. It was forced upon them. The cities will be the big winners, and they will dominate. They do not understand rural Canada.

That is an example of something that has been done in the past two or three years that has been bad for rural Canada, something that is a disincentive, and we have got to change that.

We need a basket-full of things to make the environment better in rural Canada, senator.

Senator Stratton: When you talk about the transportation infrastructure, roads and railroads, in terms of an intermodal transportation network have you examined the potential of private-sector partnerships? Has anyone talked to you about how that could work? I know that in parts of Manitoba the private sector has taken over lines and is operating them profitably, and I am sure the same thing takes place in Saskatchewan.

Is there any formula that you know of that could work?

Mr. Motheral: You are right vis-à-vis Manitoba and OmniTRAX. It has worked very well with the private corporation coming into the Churchill catchment basin, and it is also good for Saskatchewan.

Our association made a presentation to the Canadian Transportation Agency wherein we said that there needs to be an atmosphere of sharing, of running rights, et cetera - and of course CP is opposing that. Nevertheless, we must foster competition, which is the only way we will get lower freight rates. Private companies like OmniTRAX will certainly be welcome in many areas, especially with the branch lines that are being abandoned.

Mr. Harrison: In my remarks, I referred to two applications that went before the CTA. One was by a company called Ferroequus - and for those of you who know Latin it translates to "iron horse" - owned by Tom Payne. His application sought to run a line from North Battleford to Prince Rupert, where there is an under-utilized terminal. The proposal made sense to everybody in Western Canada except Transport Canada and the CTA. The application was denied.

OmniTRAX is a company owned by Mr. Broe out of Denver. Some people hate American investment in Canada, but in my opinion we need money from wherever we can get it. OmniTRAX is the other company that applied for running rights on several of the main lines and branch lines in Saskatchewan. They were denied.

The point here is that there are people with private money who are prepared to come into Saskatchewan, come into Canada to invest, and they are being denied.

Senator Fairbairn: Why were they denied?

Mr. Harrison: They indicated that wanted to solicit business along the line, which only makes sense. A company that is going to run a railroad has to solicit business. However, the federal government, in its wisdom, did not agree, told them that they could not solicit business, that the company could run a train up and down the line but that it could solicit business. Draw your own conclusions from that.

We plan to meet with the CTA and talk with them about their decision. The decision simply does not make sense.

I would ask you to turn to the last page of our written submission. You will find a railroad network map there.

Senator Wiebe is very familiar with this area, the area south of Swift Current. There is a Z-shaped line there. There are the Vanguard, the Shaunavon, the Notukeu and the Altawan subs. That particular Z-shaped branch line was purchased recently and is run under the name of Great West Rail.

That is the kind of thing that has to happen. If that line disappears, the road network is going to have to pick up all that heavy traffic. We cannot let that happen. In the northwest, you will see some green lines. They are owned by OmniTRAX, the outfit out of Denver. That company also bought the Churchill port and the line from Le Pas - the line that CN said would never make money and could not take steel hopper cars. The line has been marginally upgraded, and now grain is being hauled to Churchill in steel hopper cars.

Mr. Robert Ritchie, the president of CP rail, was at FCM on Monday. I spent a half an hour talking to him about running rights. He said that if that is allowed it will break his company. We are in a world of deregulation, and with deregulation comes competition. For some reason, in the West, the idea is that we can deregulate but still have a monopoly. When you get that, you get gouging.

Those of you who have CN shares are getting a good return on your dollar. Why? Because you are taking it out of our pockets. They are not sharing efficiencies with the people who are paying the bill. That has to stop.

Senator Stratton: I am interested in the electronic infrastructure. I live outside the city of Winnipeg. Being that close to the city, I though I would be able to get the high-speed Internet, but I cannot. Has anyone talked to you about how they see this evolving and over what period, where private-sector investment would go into the rural areas for this kind of communication?

Has anybody talked to you about this, any company, any government, to give you a vision of what is happening or likely to happen down the road? In order to be competitive, you need that electronic infrastructure.

Mr. Harrison: Private business goes where money can be made. Running a line 10 or 15 miles to serve one customer unfortunately is not a moneymaking proposition. That is what we are faced with. We have talked to them, but the economics are not there.

I am not up on technology, but that is why we say we have to go through the air. Once you go to the air, everybody is equal. The necessity to run a line will not be there. No one knows what the future holds, but given how technology has unfolded over the last two or three years, if we let our imaginations run wild it will come. The sooner we can get there, the better. It will not be possible to force people to put wire in the ground to service rural Canada; even to put wire in the ground in other parts of this great country is difficult. Air is equal to all. Anything you can do to promote that with private industry would be helpful. That is where our future is.

Senator Stratton: What should government do to help that to happen?

Mr. Harrison: We have to remember how much wire is already in the ground, and how much is going in as we speak. I think what is holding us back are the billions of dollars of infrastructure we have in the ground. It is a similar situation to that of gas, why we are still burning gas when there is technology out there to use hydrogen. There is resistance to advance.

Mr. Motheral: Mr. Harrison hit the nail on the head: private companies go where they can make a profit.

You are asking what individual people can do, what municipalities can do. There are dollars available if a municipality wanted to expand or to contribute. I am not saying that that will ever happen, but there is money there. The government has an infrastructure-funding program in place right now. Their second priorities are transportation and high-speed Internet and telecommunications.

The Chairman: By way of example, it would appear that there are no communications on the Prairies and in rural Canada. Only if someone reads the National Post or The Globe and Mail will he or she know what is going on. On Tuesday, here in Ottawa, I read in either The Globe and Mail or the National Post "farm income up." Before coming to Ottawa, I read in the Regina Leader "farm income, $7,000 a farmer, including off-farm income." If we are going to change this thing, Canada has to know what is going on.

Are you monitoring the message to the urban population? That message is affecting us adversely right now. I spoke out about this yesterday in the Senate, but, well, no one listens because I am just another politician speaking out. However, when the RMs speak, they listen in a different way. Do you communicate in any way what is happening out there?

Mr. Motheral: We communicate to our members but not to the national press. Perhaps we should look at trying to improve that. According to the Manitoba Department of Agriculture and Agri-Food, farm cash receipts for crops in Manitoba in 2000 were 22 per cent below the 1995-1999 average. This information has to get to federal government, the cabinet. Some of their information is wrong, and I have been told that by our own Member of Parliament for Winnipeg. The Member of Parliament said that the information the Prime Minister is receiving is being interpreted differently.

So maybe one of our jobs, as rural municipalities, should be to get the message out, to communicate a little better.

The Chairman: I would suggest that that is one of the areas the municipalities should look at. There may have to be someone in Ottawa who monitors it. I do not know exactly what the answer is, but I hear it again and again that rural Canada is getting a different message than the urban centres.

Mr. Harrison: We do not monitor the press, and certainly it is a good idea, but it is a costly process. On the front page of this morning's Globe and Mail is a picture of President Bush's two daughters, who ordered a beer while underage. I cannot imagine why this is an important story to the people of Canada.

Senator Wiebe: Mr. Chairman, I should like to give a warm welcome to Mr. Motheral on his first appearance before our committee. I hope this is the first of many appearances.

Mr. Harrison, let me take this opportunity to also wish you a happy birthday. I am quite happy to say that as of today I now qualify for the old age security pension. You are going to have to wait many years before you quality!

Mr. Harrison: Oh, many years.

Senator Wiebe: I must say that Senator Stratton and I agree with your opening comments. Ever since John Diefenbaker sent $200 to every farmer in Canada, every government since then, Liberal or Conservative, has tried to solve the agricultural crisis by just throwing money at it. Once they have thrown money at it, right across Canada there is a debate about whether it was enough money. At no time has any Liberal or Conservative government sat down and looked at the long-term solution in regards to agriculture. I feel very upbeat about this committee. I think we have an opportunity to provide that long-term solution. Whether the government accepts it or not should not embarrass us in any way. I know that I will feel quite comfortable at the completion of our report that we have presented a meaningful and a proper long-term solution to the agricultural situation in this country. So, I am not frustrated in any way, shape or form in that regard.

I have about six questions to ask our witnesses today. They are going to be quite detailed and quite long. Rather than begin now, Mr. Chairman, I would like to give every member of the committee a chance to ask questions first. Then, if time permits, I would like to put the witnesses on the spot in regards to some of the long-term solutions.

Senator LeBreton: Senator Fairbairn said something about urban Canada not understanding the rural crisis. I was raised in rural Canada, and we were swallowed up by urban Canada. We lived on a farm that was swallowed up by suburbia. However, I think the problem is much more profound than that.

I do not know whether the problem is one of urban Canada not understanding; I worry that they do not care. Senator Gustafson referred to newspaper articles about farm incomes being on the rise. Then there will be a story about the minister suggesting crop diversification. Senator Gustafson suggests that perhaps rural municipalities should speak out, that there should be media monitoring.

I think the approach - and I would like your comments on this - should be much more direct. For example, Health Canada is convincing Canadians of the dangers of smoking. Canadians across the country are familiar with the tar ponds problem in Cape Breton. Canadians are familiar with the problems in the softwood lumber industry.

I am wondering, when you are meeting with federal officials and Minister Mitchell, who has responsibility for rural Canada, whether Canadians should be made aware of the importance of Canada's bread basket and who it is that is feeding Canadians.

I was raised on a dairy farm. We had Jersey cattle. When I went to school in the city, the kids I went to school with believed that chocolate milk came from Jersey cattle.

You can communicate with your own people, but the problem is larger than that. I believe there is a role for the federal government. They spend all kinds of money making people aware of situations and getting people motivated and mobilized. I think it would be a good idea to approach communications from that vantage point.

Mr. Motheral: That was very near and dear to the municipal people at our mayors and reeves' meetings in Manitoba in March. We go and listen to them and then we bring them up to date on some of issues that we are talking about.

One of the things they said to us - and with no disrespect to the farm lobby - is that the farm lobby is not working. That is why we took it on as a community lobby, the agriculture crisis being part of the problem of the community crisis.

The Canadian Federation of Agriculture and the Keystone Agriculture Producers in Manitoba, the major farm lobby group in Manitoba, have been doing some excellent work. The message is not getting out though, and this is the problem. You are right, maybe we should combine forces vis-à-vis a media approach.

The Keystone Agricultural Producers recently sponsored a luncheon in the Manitoba legislative building to advertise what the meal cost. The meal cost about $12. The normal tip that would be left on a $12 meal amounts to more than the producer was actually making from that meal. Those are the kinds of messages that we need to get out to urban people. These kinds of stories have to appear in The Globe and Mail. I know that a couple of years ago the Saskatchewan association featured a one-pager in The Globe and Mail comparing the American and European subsidies with the Canadian subsidies. They featured a stack of coins to make the comparison a visual one, I believe.

I think it was your association that did that; correct?

Mr. Harrison: Part of it, yes.

Mr. Motheral: That is a very expensive approach, but at this time perhaps we should not worry about the expense, just getting the message out.

Senator LeBreton: What I am suggesting is that it should not be your responsibility. You talk about coming here to Ottawa and meeting people. What I am suggesting, rather than adopting band-aid approaches - as Senator Stratton said, we sit here and listen to the same problems over and over - is a public awareness campaign by the government to enlighten people about the situation. We must enlighten people, make them care. It is everyone's problem. One-page ads in The Globe and Mail are very expensive, and it is only a one-time effort.

Have you talked to Minister Mitchell and/or the Department of Agriculture about investing the funds that other government departments invest, to bring to the attention of the public this serious matter?

Mr. Motheral: That is certainly a good idea. A certain amount of that is done, but not enough. I now understand your point - and provincial governments could also participate in a public awareness campaign.

Senator LeBreton: That is right.

Mr. Motheral: That is something we should look at.

Mr. Harrison: Certainly, we would agree. We are always limited as to what we can do by our resources. There are other things, as well. Denis Mills undertook a tribute to the farm family. We were very encouraged by an urban MP - and I do not believe he has any agricultural taxpayers in his constituency - putting time and effort in that. The impact of his tribute would be equal to, if not more than, a Globe and Mail spread. It is not worthwhile doing something just once in a newspaper. An awareness campaign has to be ongoing. And now that we have two national papers, the cost of an awareness campaign would double.

Senator LeBreton: But the onus should not be on you, necessarily.

Mr. Harrison: No. However, if we can garner your support on that, we would be more than willing to corporate.

Senator Fairbairn: You would have to make sure that the federal government was putting out the right information, too. It would have to be a cooperative effort.

Senator LeBreton: I have a question about the recommendations. With respect to your recommendation to eliminate federal taxes on farm diesel and gasoline, is that recommendation high on your list of priorities? What impact would that have on the cost to you of farm diesel and gasoline?

Mr. Harrison: The list of recommendations is not in any particular order. The impact of eliminating federal taxes on farm diesel and gasoline will not be profound; it will turn rural Canada or rural Saskatchewan around. However, as everybody knows in this country, fuel prices have sharply increased. According to the predictions, they are not about to start dropping. Apparently, we will see $1 per litre, or more.

Senator LeBreton: So you pay all taxes on fuel now?

Mr. Harrison: No, there is some relief for farmers. We are looking for more.

Mr. Motheral: Our presentation referred to the $175 million per year that this tax costs farmers.

Senator LeBreton: So it is significant.

Mr. Motheral: It is significant.

The Chairman: Just to make that point, I paid $8 for a small can of gasoline for my lawnmower the other day. At the time, I shuddered to think of what it would cost me to fill my tractors. This is a serious problem.

Senator Chalifoux: Welcome, gentlemen. I was pleased to see, Mr. Harrison, your recommendation regarding the First Nations. I hope that includes the Métis, who make up the largest population in Saskatchewan. I received about a week ago a copy of a Senate report done in 1888. That report talked about ranching and farming in the Northwest Territories, which, at that time, included Manitoba, Saskatchewan and Alberta. Hence, our people have been involved in farming and ranching for many years. When First Nations people started to farm, Indian Affairs made sure that they could not sell or buy anything. That changed, but not until the 1950s. What we are facing here is a whole nation of people who could partner with you and your organizations, an opportunity unavailable to them until the last 30 to 40 years.

The Métis are a different kettle of fish. We have always had to fend for ourselves. We were not involved in reserves or anything like that.

You talk about the labour shortages and First Nations. Years ago, First Nations and Métis from the North went to southern Alberta to pick beets, but prices and education have changed. Have you considered working in partnership? There is the Kainai Agri Business Corporation in Alberta; Chief Chris Shade is the president of that. There are organizations within the Métis - for example, the Métis Nation of Saskatchewan, with Clem Chartier.

When you talk about First Nations participation in a workforce, are you thinking about training and keeping the people in the communities, over and above problems of money and profits? I ask that because what is happening now is that people are migrating to the cities with no social support services. The First Nations are congregating in large ghettos, when really they would be much happier back home.

Have you worked with First Nations and Métis communities in your provinces to address that situation, so that we can start looking at keeping the younger people back home? This problem is not exclusive to First Nations communities; the farming community as a whole is faced with this problem.

Olds Agriculture College is one of the best in the country for training our young people in areas of agriculture and diversification. I am researching this, because I want to get into hemp. As soon as I leave the Senate, I want to get into hemp. I have been in touch with the vice-president of an excellent hemp association in Manitoba. This is another good possibility for First Nations. However, here again, there has to be a processing plant.

Can you give me your comments on this, please.

Mr. Motheral: I will address the hemp situation. Manitoba certainly did start with a bang, but it failed.

Senator Chalifoux: I would like to know why.

Mr. Motheral: The processor went bankrupt.

The hemp plant grows well. However, in the Manitoba situation, there was a lack of knowledge, of resources, of machinery, et cetera. No one wanted to take the bull by the horns and develop it. An attempt was certainly made to get the industry going. Many people lost money in that initiative. I know some of them personally.

With respect to migration to cities, we are certainly not eliminating any ethnic group whatsoever; it is all-inclusive.

Senator Chalifoux: With respect to hemp, I hope they have not given up.

Mr. Motheral: I hope so, too, There are other initiatives out there that need to be looked into, but we need government assistance to get these value-added initiatives going.

Senator Chalifoux: Excellent.

Mr. Harrison: Our association has had a close relationship with the Federation of Saskatchewan Indian Nations, as far back as when Roland Crow was chief, and then Blaine Favell and now Chief Perry Bellegarde. Can we do more? Of course we can do more, and we have to do more.

As far as the Métis are concerned, I have to admit that we have not worked closely with them. It is certainly something that we should do. We have to do a better job there.

Senator Chalifoux: By excluding those organizations, you are missing a good opportunity for partnership and for lobbying. The Manitoba Métis Federation is, excellent, as you know. Their president is David Chartrand. They would be interested, I am sure, in partnership and in lobbying.

Mr. Harrison: I might also add that First Nations people, as I understand their history, are rural people. They were raised on the land. They understand the land; it is in their blood.

Senator Chalifoux: The Métis, too.

Mr. Harrison: Right. We are forcing them into an urban setting, which is not in their blood.

Senator Chalifoux: Exactly.

Mr. Harrison: So they are natural people to be in rural Canada.

Senator Oliver: Mr. Chairman, I would like to associate myself with some of the remarks of Senator Stratton. Senator Stratton has a lot of common sense. He seems to put his finger on the pulse of the problem, and he has done it again.

I would like to try to elaborate a bit on the issue raised by Senator Stratton and ask you to give us some help. It seems to me that part of the issue is that rather than just coming here and making presentations to a committee you should be saying asking yourself, "What is it that the committee can do to really help resolve this problem?" It seems to me that there is not just one agricultural problem all across Canada. Nonetheless, it really can be broken up and segregated. For instance, some of the issues in your brief relate to what I would call lifestyle or cultural problems, in terms of education in rural areas and so on; others relate to how to get more money at the farm gate for the products that the farmers have produced with their labour and their machinery.

The real agricultural question is this: How do you get more money at the farm gate? In looking at some of your recommendations - accelerate efforts to bring high-speed Internet, eliminate farm taxes, develop national drinking water standards, and so on - it seems to me that many of them do not go to the essence of the agricultural problem, that is, how farmers can get a fairer share of the money generated by their product.

You can help this committee by priorizing the recommendations you would like us to make. As a committee, we can make recommendations to cabinet, to government. We can say to the government, "We have studied this issue. We have had serious recommendations made to us, and there is one that we want to put before you now requiring immediate action to help overcome this problem." If we said to cabinet, "We want you to develop national drinking water standards and provide funding to rural communities to enhance drinking water safety," that will not keep the 12 farmers who just left in Saskatchewan where the chairman lives on the farm. Hence, what are the priorities that will put more money at the farm gate?

If you can help us do that, we might be able to help you and as such overcome some of the scepticism and concern that Senator Stratton and others have expressed around this table.

Can you help with us some serious priorization on what should be done for the essential agricultural problem?

Mr. Motheral: I will probably yield to Mr. Harrison because, as I said, we are a community-based organization with agriculture being one of the problems.

In short, however, one word - cash. There is no use skirting around it. You are perfectly right - we use other systems. We use water, we tap into the social structure, we use the education and health systems, we use them all. This is all terminology to try to get attention. The immediate problem is getting cash into the farmers' pockets, which, in turn, will help community businesses prosper. There is no use beating around the bush - and I can see a lot of smiles - the essence of the problem is cash.

Senator Oliver: You are not asking the federal government for more cash, though. Let's assume that farmers grow wheat in your community and that they are receiving x-cents per bushel for their wheat. When that wheat becomes bread and other value-added products, it is worth, let's say, $4. How do you get a larger portion of that $4 at the farm gate? That is the issue, as I see it.

The Chairman: That is in the control of the multinationals.

Mr. Motheral: I have just one comment - and then I will turn it over to the farm lobby group. It is very difficult to compete with heavily subsidized nations. We need to be on a level playing field with other nations. We are the most efficient wheat producers in the world, but we cannot compete with the treasuries of the United States and the treasuries of European Communities.

There is a surplus of wheat being produced in the world today. We need the political will to help us in the short term, until something is done about the world situation. We are trying to convince the federal government that, in the short term, we need a subsidy package or some form of trade equalization.

Senator Wiebe: How many years would the short term be? Is it 20, 30, 40 years?

Mr. Motheral: It could be.

Senator Wiebe: Are you prepared to sell that message to the taxpayers of Toronto, Montreal and St. John's, Newfoundland?

Mr. Motheral: That is our mission - otherwise, we will lose our communities. It is one or the other.

Mr. Harrison: Just so that I understand your request, we will come back with a set of priorized recommendations. How quickly do you need that?

The Chairman: Tomorrow.

Mr. Harrison: That is the way I like to operate, too. We will get back to you as soon as we can. We have a board meeting in June. We will put that on the agenda.

I think we have to convince the people of Canada that an investment in agriculture or rural Canada is an investment in Canada's future. Until we convince them of that, they are going to be reluctant to share some of the federal surpluses that are out there.

The Chairman: If the oil companies and the processors and the fertilizer companies continue to increase their prices, there will be no end to the problem. Input costs are high. I will be very pleased if I just get the input costs that myself and my boys put into our crop, and not make a nickel. But that is not going to happen. I am not going to get my money back. Last year, we had a shortfall of $65,000 on our farm, a shortfall. That has nothing to do with depreciation and other expenses. That was just on operating costs.

As long as the oil companies continue to push prices up and fertilizer prices double - I am now wondering whether we should have fertilized at all. We also have to worry about the environment and the whole rural establishment.

Mr. Harrison: There are alternate fuel sources out there. I am sure you are all aware of Ballard, a Canadian company out of B.C. They have been around for 10 years. They have $800 million in the bank. They have been doing R&D. They have strategic alliances with all the fuel companies, with all the car companies. There could be a transition from traditional energy sources to something that is more affordable.

We talk about the hog industry. There are natural sources of fertilizer. People say that everyone is moving away from rural Saskatchewan, but if someone decides to build a hog barn it is too close to someone else's house inevitably. It does not add up.

So there are some things that we have to do for ourselves in Saskatchewan. As I said earlier, I do not think there is any one thing in particular. There is a host of things that we have to do in rural Canada to improve the environment for rural businesses.

When you see our recommendations, you will see that it is not one thing specifically that will help us. As Mr. Motheral said, money is important. However, if there are problems with the environment - in the end, agriculture and rural Canada have to stand on their own feet.

The Chairman: Nonetheless, as long as we are only getting 8 or 10 cents out of a box of cereal, say, and the hockey player, for example, who is promoting it is getting 10 cents it will not work. We cannot live on the 10 cents we get out of that box of cereal, say.

Senator LeBreton: The trick is to change places with the hockey player.

Senator Fairbairn: Better contracts.

The Chairman: I guess so.

Mr. Motheral: I have to stress the point about political will. The United States has said that they want people on the land, as has Europe. They want to keep their land sustainable and environmentally friendly. We need the same thing, and that will involve a package, cash.

Senator Tunney: Welcome, gentlemen. I echo Senator Stratton's concerns and his level of frustration. One feels depressed trying to see something positive here. This is a meeting I will not soon forget.

Senator Chalifoux mentioned the hemp industry. I dealt with that issue in my maiden speech just two weeks ago. It is my intention before I leave the Senate to see that industry up and running. Someone asked: Why did it fail? It failed because there was no government support for the industry. The hemp market is a specialist one. It needs a marketing board operating under legislation. Otherwise, we will see repeat scenarios of the situation in Manitoba where a group of people tried to get a hemp enterprise up and running. I know a fair bit about it, but not as much I would like to.

The dairy industry, which is where I come from here in Ontario, would be in the same situation if we did not have a marketing board and supply management. In all other agricultural sectors, excepting dairy and poultry, farmers are price takers. All the other players, transporters, processors, distributors, retailers, set their margins. The producer takes what is left over. The producer seems happy, as our chairman has just said, to just break even. A farmer cannot live by just breaking even, never mind those who are living off their equity and would be delighted to just break even.

I was looking at Figure 1, "Pulse processors in Saskatchewan," in your written material. Are the plants that you have indicated here crushing plants, or cleaning, drying and crushing plants?

Mr. Harrison: They could be any of those. Generally, with pulse, it is cleaned to export standards, and then they either bag it so that it can be put it in a boxcar or seal it and put it in a container.

Senator Tunney: Going back for a moment to the dairy and poultry industry, you may know that Quebec produces almost 50 per cent of the milk in this country. We would not have a dairy industry had it not been for the aggressive lobbying of the Quebec producers. They are the most professional people I know.

In the early days of free trade, back in 1988, you may remember a protest on Parliament Hill by 40,000 people on one of the coldest days ever. Without that protest, we would not have had supply management, because the Americans were dead set against it, and still are.

Producers have to unify and send a message to governments, federal and provincial, that they will not take it any longer.

Generally, if there is a little complaint in one sector, the Minister of Agriculture will find a bit of money to throw at the problem, to, shut them up, and then go to say that farmers should find something else to do, should diversify. That enrages me. The government should be helping farmers to find markets for their products, through research and programs. There is a need for our products.

I live east of Toronto, on the lake shore, and I see about eight freight trains, each with six engines pulling about 180 grain cars, going to Montreal during the daylight hours, and there are probably that many more in the dark hours. I can see the profits the railways are making - and I see the losses the grain producers are encountering in growing that product. This has to change.

If you do not stand up for yourself, who will? You have to show determination. I am probably taking too much time here, but if our governments do not get tough on these trade issues we are lost - issues of potatoes, pulp and now water. This morning's paper has a story about selling our water.

Senator Stratton: Why not?

Senator Tunney: We do not even try to get a fair deal from the Americans. If I were in a position of some authority, I would tell the Americans that we are sick and tired of their trade harassment. We have some aces up our sleeve, of course. If we stopped supplying them with our pulp, their newspaper racks would be empty in two months. If we did not supply them with natural gas, the lights would go out in California this week. We have aces up our sleeves but we are too lily-livered to show them.

You have to get tough if you are going to support yourselves.

The Chairman: I will ask the witness to reply to Senator Tunney, and then I will go to Senator Wiebe, who still has his first set of questions.

Mr. Harrison: Certainly, I agree with a lot of what you said. However, for us to take the railroads on, we have been doing that for the last 100 years. Unfortunately, the railroads control the Department of Transport, and that has to change. The application for running rights is a good example.

We demonstrated on Parliament Hill this fall. Did it do us any good? No. If taking up a placard and demonstrating is what it takes to do business in a country - we are not used to that; we have to be smarter than that.

So I would disagree with you, senator. Surely, we have the wisdom within this committee, within the Parliament, to do things smarter.

Things also have to be done differently in the province. Five or six years ago, the province called for proposals for co-generation, to use waste heat in Saskatchewan to generate power. Several good proposals came forward. TransCanada pipeline submitted a proposal. Heat goes up their stacks at 111 degrees. Did the province accept any of them? Not one. Had we done that, we would have power to sell.

We have a north country full of uranium. Do we have a nuclear reactor in Saskatchewan, proving that it is safe technology? No. We are prepared to ship uranium all over the world and let somebody else use it, but we are not prepared to do it in our own backyard. We have to be prepared to do things ourselves, to demonstrate that they are safe practices. So, we, in Saskatchewan, have to do things differently; we, in Canada, have to do things differently. Surely, we do not have to demonstrate on Parliament Hill to make our point.

Senator Wiebe: First of all, Mr. Motheral, you mentioned in your comments that you had sent a letter to the Prime Minister outlining some of your solutions to some of the problems. Would you mind making that letter available to members of the committee?

Mr. Motheral: I will certainly do that.

Senator Wiebe: My first question deals with the comment that we are going to have to continue subsidies for at least 20 years. I think subsidies are going to have to be continued for the transition. Every farmer I know, and I know a lot of them, dislikes subsidies. They do not like handouts. If I told farmers around the province that they could look forward to a subsidy, in a handout, for the next 20 years, the majority of them would pack up and say, "That's it."

We all look forward to the day we can drive a Cadillac. A young farmer whose future holds only the promise of a model-T is going to want to get into something else. Hence, the answer is not long-term subsidies. We have to find answers that deal with the problems.

And one of the problems - and this is the input I want from you people - is that we seem to say that a lot of our problems are related to subsidies. "If we could only get rid of the subsidies, we would have heaven on earth. Our prices would go up." At one of the first meetings of this committee, I asked the representatives from the Department of Agriculture this question: If subsidies were removed completely, would the price of grain go up? No, was the answer. I asked them whether, even with subsidies, the world price would remain the same, and they said yes.

Therefore, the problem is not subsidies. Subsidies are there because the governments of Europe, the United States and Canada are trying desperately to keep their farmers on the land. That is what our government is doing with those subsidies - they are trying to keep their farmers on the land.

The problem is that we are overproducing; we are producing far too much grain. I think the debate about whether one country is producing more than another is meaningless. As an example, the price of wheat dropped a few dollars on Monday. The projections of the Texas winter wheat crop were too low. In fact, there are going to be more bushels than expected. So the price of wheat has dropped.

On the other hand, the price of Durham has began gone up dramatically. Why? The U.S. weather conditions for growing Durham were such that they will not get as many bushels as expected.

This tells me that the problem is not subsidies. The problem is over-production. We are producing far too much. How do we address that? As a farmer, I want to get the best yield possible out of my land. I am proud of the fact that I can produce something with what God has given us.

As a government, we have to look at developing new ways to market the product that we produce. Ethanol is one example. Maybe we should find another use for wheat besides bread. Let's start eating up that surplus. Unless we say to farmers that we are going to take their land out of production - and that is something that I definitely do not want to see nor would I recommend - we are not going to address this long-term problem.

Governments, and perhaps this committee, should recommend a dramatic increase in research and development budgets. Maybe we should stop looking at European markets for exports. Perhaps we should start looking at developing north-south markets for exports. Maybe we should look at South America and the United States, concentrate on that, and develop trade relations with them that would be far more secure than what we have now with Europe.

So my question to you is this: Can you come up with any ideas as to what we can do with the crops that we are presently producing?

Just before I finish, I am going to add to that question. We hear a lot about diversification. Yes, diversifying is necessary, but diversification is not the answer. My sons-in-law have been growing chickpeas for the last 10 years. They have done very well with those chickpeas. However, I think the price of chickpeas will be very low this fall. Do you know why? Because too many farmers have diversified into chickpeas. There is an oversupply.

It is the same old problem. We are always oversupplying. We have to concentrate our efforts on what we do and how we market the products.

We do some processing of the products that we produce, but we have to do a lot more of that. It will help to save our rural communities because the processing plants will create many jobs.

The day before yesterday I visited an ethanol plant here in Ottawa. That plant provides 92 jobs. We could have 20 of those ethanol plants in each one of our western provinces, and that would create 2,000 jobs.

In terms of political will, and the provincial governments will have to do this, in the U.S. every gallon of gasoline that is purchased in a particular state must contain 10 per cent ethanol. Those are areas that we, as a committee, should be looking at, to ensure that the long term for farmers does not mean 20 years of subsidies.

There will have to be subsidies during the transition period, but we have to give farmers longer hope than that. Your comments, please.

The Chairman: I just wish to make a comment. On the subject of there being a surplus of grain, 2 billion of the 6 billion people in the world do not have adequate food. Therefore, in the global sense, there is not too much food in the world, nor is too much food produced. The problem is that we have no way of distributing it and those who are living in poverty have no way of buying it.

I think we need to be cautious when we talk about production. Yes, there is overproduction, but is like the exotic cattle business: everybody rushes in, and when there is seed and enough livestock to move around the bottom dropped out. However, to say in general that we are overproducing wheat when people are starving raises many questions in my mind.

Mr. Harrison: Senator Wiebe, I agree with your comments about diversification. It is better for a farmer to specialize and do one thing well, rather than doing ten things and not doing a good job of any of them.

Further to what Senator Gustafson said, as long as there are people starving in the world we should aim to produce enough to feed the nations. We send money to starving nations and allow them to buy food any place in the world, and that makes absolutely no sense. We should not send one red nickel out of this country; we should send food.

The Chairman: The Canadian Food Grain Bank!

Mr. Harrison: Some food is sent, but there should be more of it.

With respect to jobs, for every 1 million hogs there are 6,000 jobs. That is an area where we in Saskatchewan can certainly expand.

With respect to subsidies, I agree wholeheartedly that there is no future in paying subsidies. We need a transition payment perhaps, but there are some things that we can do to help ourselves.

There is a wheat-burning furnace on the market. When fuel prices were much lower than they are today, it would not have made sense to burn wheat. However, in today's market, these things have to be explored.

Senator Wiebe: We are almost out of time. Mr. Harrison, I know you well enough that I can pick up the telephone and call you to get answers to my remaining questions.

Mr. Harrison: And the same thing with Mr. Motheral.

Senator Wiebe: Before we close, however, I wish to make a comment. Unfortunately, my research budget did not allow me to do all the studies I wanted to do. We talked earlier about economies of scale, about everything going over to large farms.

According to the two studies that I have had done - these are two independent studies on the cost of farming, one related to the southeast part of the province and one to the southwest part of the province. I now have the French translation and will make copies of these studies available to committee members.

One study looked at a 25-acre farm; the other farm was 4,000 acres. Those two independent studies show that even those farms will not survive unless we address the long term.

Thank you, again, for your interest.

Senator Stratton: We are going through a 20-year transition. Yes, you need money, but as Senator Wiebe said we have to become creative. You are as the stewards of the land, this multi-functionality that Europe loves to talk about.

We had an interesting presentation by Ducks Unlimited a couple of weeks ago. In that presentation, they suggested taking marginal lands out of production, putting them back to their original state.

Couple that suggestion with the problems with water. We have a growing national crisis with water.

We have the issue of water, taking marginal lands out, and you being the stewards of the land. Can you not come up with something creative as a selling point to the government that takes those three aspects into consideration?

You are the keepers of the land - the issue of multi- functionality. Add to that the Ducks Unlimited concept, which I think is a good one, and the water crisis.

Finally, 125,000 farmers are going to retire in the next decade. There are currently about 280,000 farmers in Canada. We have a problem.

Mr. Motheral: I can certainly make a quick comment on the multi-functionality aspect. We consider that to be just part of the basket approach. It is certainly one of the things that can be looked into, that is for sure.

On the issue of marginal lands, I farm right next to the United States; my farm is right on the U.S. border. In fact, I have a custom's office right next to my farm. Although initially I had concerns and problems with some of their programs, they are looking awful good now. There are set-asides, there is a conservation program, they have a program with respect to marginal lands, and it is very fruitful to the landowner. There are dollars available that can actually sustain that land. It is $40 to $50 an acre.

We work with Ducks Unlimited on many initiatives. Some municipals like them, some do not. However, some of their programs offer a mere pittance. That is just not a solution. The solution is some combination of government assistance and some conservation group assistance.

So, I agree with it. I think there is a place for that, for sustainability.

Mr. Harrison: Just a quick comment. As rural residents, as farmers, we have provided the habitat for wildlife for nothing, forever. The reason that a lot of this stuff is broken up is that we were not being compensated. Ducks Unlimited and others are suggesting that that should change, we suggest it should change, and I think it is a great idea. We are working with Ducks Unlimited, Manitoba, on a tax incentive, a trial project, and they are going to do one in Saskatchewan. I think that is certainly something that we will be recommending.

Senator Fairbairn: I agree with the suggestion or the reality that the difficulties and opportunities in rural Canada, and the fundamental importance of rural Canada are not understood in urban centres. This is critical. It is important for your organizations to be connected to the urban municipalities because that in itself has to be a centre of communication of the concerns of rural Canada.

There is no question in my mind that government should be involved in this as well. The solution, however, is not to simply just pawn it off to government. There has to be cooperation.

You commented on getting the message out to urban communities. I am worried about getting the right message to the federal government. The right information has to get to the government. If the planning is based on misinformation or information that is not up to date or relevant, the implications will be serious. It will all fall to the ground.

There simply has to be a better understanding of this country so that we will not have Senator LeBreton and others saying the rest of Canada does not care. I suspect if the rest of Canada understood better, it would care more.

Just before closing and thanking you, let me tell you that if you stick around for the next committee, our Social Affairs Committee, which is doing an in-depth study on the Canadian health care system, you will get an ear full. A sense of gloom and doom came over me as I was going over my papers for that meeting. We are looking at rural health at that meeting today - and rural health is a major component of your difficulties.

The Chairman: I want to thank our witnesses for their attendance here today and tell them not to lose hope.

Senator Fairbairn: Never give up.

Mr. Motheral: With all the doom and gloom, there are many positive things going on also, and that is what keeps us going.

The committee adjourned.

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