Proceedings of the Standing Senate Committee on
Agriculture and Forestry
Issue 3 - Evidence - Meeting of February 5, 2008
OTTAWA, Tuesday, February 5, 2008
The Standing Senate Committee on Agriculture and Forestry met this day at 7:01 p.m. to examine and report on rural poverty in Canada.
Senator Joyce Fairbairn (Chair) in the chair.
[English]
The Chair: Good evening, honourable senators, and good evening to all of those who have tuned in to watch the Standing Senate Committee on Agriculture and Forestry hearing on rural poverty and rural decline.
We are very pleased to have with us this evening the Minister of Agriculture and Agri-Food, the Honourable Gerry Ritz; and the Honourable Christian Paradis, Secretary of State for Agriculture.
In May 2006, this committee was authorized to examine and report on rural poverty in Canada. Since that time, the committee has released an interim report, travelled to every province in Canada, visited 17 rural communities and talked to over 250 individuals and organizations, but the committee's work is not done. Later this month, several members of the committee will travel to the Northern territories to listen to the rural concerns of citizens and organizations in those regions.
In our travels within the provinces, we were truly touched by the wonderful and diverse group of Canadians who shared their passion, knowledge and concern of rural Canada with us. We are humbled by their generosity and how they have welcomed us with open arms into their communities and sometimes even into their homes.
The committee is in the final stages of its study, and it is therefore very important to hear from the Minister of Agriculture and Agri-Food, who is also the minister responsible for the Rural Secretariat, the group that spearheads the federal government's rural strategy and is charged with raising public and policy awareness about the concerns of rural Canada.
We have an hour this evening, and I think the Minister of Agriculture has added 15 minutes onto that, for which we are grateful. I invite my colleagues to keep their questions as brief as possible to allow our guests to respond fully.
Hon. Gerry Ritz, P.C., M.P., Minister of Agriculture and Agri-Food and Minister for the Canadian Wheat Board: It is indeed a pleasure for me to be here today. I did say I could add 15 minutes to my intervention. It was on the front end, not the back end.
I appreciate the opportunity to meet with this illustrious committee. Your good work precedes you.
As I said in the first speech that I gave some months ago, I am basically, in agricultural terms, harrowing the ground that Chuck Strahl ploughed. He did a great job in getting agricultural issues in the front and centre of the minds of Canadians.
I appreciate the work of this committee. You have a tremendous history of digging below the surface on a number of important issues, rural poverty being a good example of that. I commend you for that. It is a timely intervention and goes to the heart of the issue.
As you well know — as you have said, you have been to some 17 rural communities across Canada — the pioneering spirit is still alive and well across Canada. We are a country settled by people with the desire to move on and break new ground when it comes to the agricultural sector.
I had the great opportunity to get to know my grandparents. They were pioneers. They were homesteaders. They went out, broke the ground and did the job that everyone looks at now so fondly and lovingly. They did the hard work and lived in the sod shanties, which dripped when it rained, were cold in the winter and hot in the summer.
I had the great opportunity to read my grandfather's journals. When he started farming in 1917-18, he kept a journal and every day he made an entry. It is so interesting to read what he talked about, the trials and tribulations, many of which were exactly the same issues then as they are today: access to markets, transportation costs, the price of seed and getting good genetics in the animal herds.
I had the great opportunity to present an introductory speech at the BioNorth Biotechnology and Life Sciences Conference here in Ottawa last fall. There have been tremendous gains in biotechnology from an agricultural standpoint across the industrialized area of Canada. I jokingly said that in my grandfather's era, the hands were on the plough handles; now they are on the microscopes and everyone is wearing lab coats. Those are today's pioneers in science, innovation and technology, which will change the face of rural Canada.
I will welcome the intervention of my secretary of state on the rural side. Christian Paradis is carrying the workload on the cooperative and rural side. He has had some great ideas that we have been able to forward through, and we will see how those bear fruit.
I have spent my whole life in rural Canada, and I thoroughly enjoy it. I cannot think of any better place. I have had the great opportunity to travel this world, and I cannot think of any better place to live, raise a family, build a foundation and branch out from that. I see a lot of heads nodding around the table. Many of you feel the same way.
Without the profitability at the farm gate, none of the rest of the industry, either on the input side or the processing side, will matter. It all starts with a robust and vibrant farm gate. Since I took over on August 14, my mandate has always been to put farmers first in anything I see coming before the government or anything with respect to farm programs and so on. It has to better the farm gate or I will not promote it.
One of the great potentials out there for the farm gate is diversity. The biofuels initiatives we have announced are very much anchored in producers being involved so they get another step up the food chain ladder, as it were. In this case, it is the energy ladder.
I think the actions of this government over the past two years, with Minister Strahl and now myself, have supported farm income. We have announced many programs that have gone to the heart and soul of what will keep agriculture alive. We are here also to support science and innovation, as I know you are as well.
We are trying to deliver and are delivering at this point, in conjunction with the provinces and territories, bankable and predictable farm programs. I have always had a problem, first as a producer and then as a politician, watching ad hoc programs that seek to address a situation but always miss the bull's eye. They are just off a little bit and never quite get to the farm gate in a constructive way.
Biofuels are part of the answer in moving ahead in a rural economy. We are starting to see hubs develop in Western Canada. I will speak to that. Hubs are developing, and they will become the centres that people will pivot from.
I am seeing a huge invigoration of the rural area in my part of the country. With the oil and gas sector coming onside, we see every farm site that was abandoned over the last number of years reinvigorated. There is either a new house going up or a trailer moved in as they expand. We are seeing that redevelopment of rural Saskatchewan and the west central side. Oil and gas is kicking it off, and agriculture from the grains and oilseeds sector is having a good year as well.
That bodes well for the schools in the area, for the post offices and for the anchors that people tend to gravitate to. There is also the trading sector and so forth.
Those types of initiatives, with biofuels and the oil and gas sector that is alive and well, work well coupled with good infrastructure. Infrastructure crosses the gamut. Everyone thinks of roads, water and sewer, but it is also infrastructure that people want to see in their towns and communities: the social side, such as museums, libraries, recreation centres where everyone brings their children to play hockey or dance ballet. We are starting to see those redevelop across the rural part of Canada, and it is great to be a part of that.
Cash flow is always an interesting thing to try to advance on the farm gate. Farms are changing, as you well know if you have been out in the rural areas. Farms are getting larger.
I had the great opportunity to travel Northern Canada, and I understand the committee is heading up there soon. I certainly commend that; it is fantastic. In my travels up to the Yukon and across the Northern territories last June, the people in the Yukon were telling me how they were so excited now they had 7,000 acres under cultivation in the Yukon. I said, ``That is fantastic. That is just about what my brother and I used to farm.'' It is fantastic to see that type of thing happening. People are agrarian by nature and starting to break ground up there as well.
We do have a new suite of agricultural programs, and I am sure you will have questions on that. There are four pillars within that suite of programming available to agricultural producers. We have broadened out the perspective so that livestock also qualifies for crop insurance, now called production insurance. That is good news with the problems they are having right now. We have added a top tier to the AgriStability, a margin-based program called AgriInvest which gives you the old NISA, Net Income Stabilization Account, type of program for the top 15 per cent, and of course a separate, stand-alone pillar for disaster programming.
There is a variance on that depending on the size and scope of the disaster as to the 60-40 formula with the provinces. It starts to become more federal in scope up to 80 per cent or 90 per cent, whatever the percentage will be, as it becomes a larger disaster rather than a small, regional component, which would stay at the 60-40 formula.
We have announced a number of different packages of money. We are moving forward with the provinces and territories to deliver them more quickly. International circumstances, of course, have a huge impact on rural Canada as well. There are people who agree with the North American Free Trade Agreement and the World Trade Organization, and there are people who do not. Having said that, statistics are proving that NAFTA has been a tremendous boon for agriculture and, of course, aquaculture, and Senator Baker would know that from Newfoundland. There are new markets available to the aquacultural sector because of agreements like NAFTA and hopefully WTO as well. At the WTO we are seeking an ambitious outcome hoping to benefit all sectors of agriculture. We will not pit one sector against the other: The export-based sectors and the supply-managed sectors, which are domestically based, have operated in harmony and can continue to do so. We are seeking those outcomes at the WTO.
We are also in the process of expanding our markets. We are so dependent on the American market. Many people say that when the Americans catch a cold we sneeze, and that is unfortunate because, as we see them teetering on the precipice of a recession, we are dragged that way as well. We have seen our dollar climb very quickly to surpass the American dollar at one point. We are back down now a little bit, but that has a tremendous effect on rural Canada and the livestock sector, which does a tremendous amount of trading with the Americans.
We are seeking to mitigate that by carving new deals with countries like Russia and the European Union. I was in Mexico a short time ago. We are looking at the Pacific Rim, knowing there is a tremendous, hungry group of people there looking for the quality of food stuffs we build and manufacture here in Canada. We are looking at those trips as well.
The secretary of state is just back from a trip through France and Spain where he had a tremendous opportunity to promote what the fabric of Canada is all about, and he can tell you more about that.
I will not bore you any longer. I look forward to your questions. I am quite excited to be here tonight. It is always a pleasure to appear before a committee and have a chance to brag about what is going right.
The Chair: Thank you. We certainly are not bored. Already you have given a good positive punch to this, and it is something we need to hear.
Mr. Paradis, would you like to say a few words before we go to questions? It would be useful.
[Translation]
Hon. Christian Paradis, P.C., M.P., Secretary of State (Agriculture): Madam Chair, it is a pleasure for me to be here with you this evening, and I thank you for your invitation. I will listen with great pleasure to your perspectives on the issue of rural poverty and your ideas about how we can deal with some of the major challenges facing us. I congratulate Senator Segal on bringing this question forward. I certainly agree with him that rural Canada is a matter of concern to all levels of government.
On May 27, 2007, I was assigned responsibility for rural and cooperative development initiatives for the Government of Canada. When Minister Ritz assumed his duties in August, he renewed my mandate. I myself was born in a rural region and I am very proud of it. More importantly, I chose to reside in this environment to earn my living and raise my family.
As the former president of my region's Chamber of Commerce, I can tell you that is possible to overcome some major obstacles and achieve some fine things in the regions, but it is never easy.
I am happy to have the chance to work with all levels of government and those involved in the area in order to improve the quality of life of the people in our regions. I am also pleased to have the opportunity to work closely with the co-operative sector — since I am also responsible for the Co-operative Secretariat, which is within the purview of the Department of Agriculture and Agri-Food.
A lot of work has already been completed on the question of rural poverty. The interim report that you prepared on this subject is a good example. As you mentioned in this report, rural poverty is the result of a much larger issue, that is, the economic and demographic decline in rural Canada. Our challenges are major. The population is getting smaller and older, as I can see for myself in my constituency. The primary sector of the economy needs less and less labour. Access to services is decreasing. Our young people are leaving to study and, too often, they do not come back. Efforts to attract more immigrants do not always produce the desired results, and so on.
Finding solutions for all these challenges is no mean feat. Above all, and I will come back to this, I am convinced that the solutions cannot come from the top down, with sectoral national policies that apply to everyone in the same way; that is impossible.
I have always been proud of my region and proud to regard myself as a regional guy. These issues have always interested me. Like many, I have already felt daunted by the huge challenges facing my region. There are times when we do not know which door to knock on, who to talk to, since the resources are sometimes too far removed from our regions.
Now, as Secretary of State, I have the honour and pride to assume responsibility for rural development within my department. This is a responsibility that I take very seriously.
When we mention rural development, we immediately think about agriculture. But rural development is a lot more than that. In my region, for instance, this also means mines, forestry, tourism, the manufacturing sector and much more, and that is just in my riding. Elsewhere it is different.
When I took the job last May, the President of Solidarité rurale, Jacques Proulx, the former president of the UPA, did not take long to remind me of this reality. To deal with the challenges in rural Canada, a sectoral approach cannot work. We need a broad vision, we have to look at the region as a whole, with all its strengths and weaknesses. The challenge is to work together, in a joint effort. This is where the Rural Secretariat, for which I am responsible, has a significant role to play.
The Secretariat's job is to create partnerships in order to act. Its action targets all the federal departments that have an impact on the issues affecting rural life.
As you mentioned in your interim report, there is no single solution that can solve the problem of rural poverty. No one department or agency has the ability or the responsibility to solve this problem alone. However, the Rural Secretariat's ability to bring together around the same table both internal and external partners is certainly a key element of the solution.
Another file that requires the collaboration of all levels of government is that of infrastructures. It is crucial for Canada to have safe and effective infrastructures. This is precisely the objective of the Building Canada policy developed by my colleague, Minister Cannon. His plan to spend $33 billion over seven years will stimulate economic growth, improve the quality of the environment and strengthen communities throughout the country.
We cannot talk about the rural development efforts of the Government of Canada without talking about Building Canada. In rural regions, in particular, I am persuaded that these investments will have a major positive impact, and this is so, I can tell you. In everyday life, when I go to my riding, people often talk to me about shortcomings of water and other infrastructures; you are all aware of these problems and we often hear about them in the rural regions.
Another key element is the new national Community Development Trust recently announced by the Prime Minister.
This morning we tabled the bill, which was passed unanimously and will come into effect once it has received royal assent. Under this initiative, the Government of Canada will provide $1 billion in new funding. Thus we will enable the provinces and the territories to help the communities and the workers affected by economic difficulties caused by the current volatility of the world financial markets and commodities.
As I said earlier, I am convinced that this is the right approach. The solutions for the rural regions will not come from Ottawa; they will come from the ground, from the base.
In recent months, I have given a lot of thought to these questions. I went to Europe to study the Leader program, which has a lot in common with the Prime Minister's approach. I also toured Canada to see what was happening on the ground, at home. Each province and each region has its own challenges. The industries are different, the demographic groups are different, the economies are different and, often, the ways of doing things and the philosophies are different too. To my mind, the role of the central government is not to develop one or more solutions for everybody. The role of the Government of Canada is to be a partner.
We have to acknowledge that the best players for dealing with the challenges in the regions are the people who live in them. The new national Community Development Trust is the perfect tool. No one is in a better position than local players to identify their needs and evaluate their determination to act in a given region. The national Community Development Trust will make certain investments possible, including training and skills development in sectors suffering from a shortage of local or regional labour, measures to help workers who have to make adjustments, funds to develop community transition plans, the development of infrastructure projects to stimulate economic diversification and other economic development and diversification initiatives that will help the communities to put transition measures in place.
In conclusion, I will continue to work with all my ministerial colleagues and their departments to develop the solutions and tools necessary to support our fellow citizens in the regions. We must all collaborate and build on the concrete measures already put in place by our government to offer better housing conditions, better services and more money in the pockets of all Canadians. We must continue to recognize that the Government of Canada has to provide support for the regions and not impose its policies on them.
Once again, I wish to thank all the members of the committee for their efforts and their attention to this often too invisible, but now very important, issue.
[English]
The Chair: Thank you for your vigorous presentations. They have very much reflected the issues we have found as we have worked ahead in the last year.
Senators, make your questions as short as you can because this will be a very vigorous discussion, and we want each of you to have a part in it.
Senator Segal: Welcome, minister and Mr. Paradis. I am delighted, if I may say, as an urban guy, born on pavement, that the level of enthusiasm and engagement from the minister and the secretary of state is as focused as it is. Whatever partisan issues may exist, certainly in this chamber both sides have been working hard on the issue of rural poverty and making sure there is fairness for the farm community as a general principle. I will deal with two questions.
The minister referenced how programs must be changed and evaluated. Some fall out of keeping and are not as valuable as they used to be, and others are redeveloped and focused. That has to be an ongoing process. I want to ask about the Canadian Farm Families Options Program, which preceded you. That program had a significant take-up. As you know, it had a basic income floor for the farmers and said that if your income fell beneath a certain amount, you would be topped up to a minimum for a farm family of about $25,000 per annum and for an individual, $15,000. When it was first announced by your predecessor, the program operated at a gross figure of $500 million, and then it was marked down and about $142 million was spent. I expect some other numbers were reallocated because circumstances changed. How well do you think that program worked, and why was it discontinued? Perhaps there was a need for other priorities to take its place.
In your judgment, because you both have personal experience of rural living, was income stabilization for the farm family a better approach than commodity-based income programs that deal with particular ups and downs in this commodity or that commodity or via crop insurance or the rest? The farm movements are divided on the issue. Some do not want to see any income support for farmers because they want the business itself to be profitable and they want that to generate the income and yield to keep it viable. They do not want struts and things put in underneath so that the viability of the enterprise is less important. On the other hand, many people in rural Canada are not farmers, but the poverty levels in rural Canada are compelling. They are worse than in the cities. I am looking for your perspective on the best way to go forward to meet the needs.
A second question relates to infrastructure. The infrastructure was the big pipe. Kids in urban Canada can download quickly on computers and become computer literate. The minister made reference to how important technology is in farming. In many parts of rural Canada, there is no big pipe. You are downloading on the telephone very slowly, which is a huge disadvantage for kids and learning. The digital facility is important to their future. I wonder whether, through the Rural Secretariat or through other work you are able to do on behalf of rural Canada, you can make the case that when large transitions take place in the telecommunications industry, some benefits to rural Canada might emerge. I would be interested in your comments.
Mr. Ritz: I will start with the last point first, which was high speed Internet availability in rural Canada. I can speak about my own area in Saskatchewan. SaskTel, a Crown corporation, has the lion's share of the market due to the way it was established in the province. That has been a detriment. Their idea of high speed was going to a push button phone instead of a dial phone. We have moved beyond that and do have a number of smaller operators who are offering the Internet over a satellite dish. That is what I have in my location in rural Saskatchewan. My kids have never suffered for lack of availability. When I need my VCR set, I get my grandson to do it. They are so far ahead of me on these matters. Programs have been discussed, and a lot of pressure has been put on having high speed Internet available everywhere, and basically it is. There are certainly holes in the system, no doubt, but it is based on population and sign-up subscription rates and so forth. My colleagues at Industry Canada, where I spent the first six months of my cabinet training — at that time it was Minister Bernier, now it is Minister Prentice — are very much involved in these types of things. We are proposing an auction for another set of streams of Internet capability, and there is a rural component that will be attached to some of that where they have to offer product to outlying areas, and that is a good thing. Knowledge is power in today's economy.
Shifting to the other part of your question, agriculture is business. Agriculture is big business. The idea that somehow we can maintain or revert to Old MacDonald's farm is not going to happen. I was born and raised on Old MacDonald's farm. It is not there any more. I do not miss the chores at five o'clock in the morning before school or at five o'clock at night at minus 30 degrees before I went to hockey. Having said that, it was a good life. The problem is that it has to be a sound business case scenario that we move forward with. The idea that you could somehow have income stabilization in a business does not fit. You are missing the market signals, for one thing. Management matters. Style of management and quality of management are seeing some farms succeed while others do not. The idea is that a government is levelling the playing field. I would stop at levelling the playing field so that the opportunities are there for everyone. It is what they do with them that makes the difference. Everyone farms differently. I had a neighbour all the years I was farming — I will not mention his name but he will know who he is — who always out-yielded me, and yet his crop insurance payments were higher. It is tremendous management. You will always have those kinds of stories.
The big failures always hit the news. The size of farms has changed. Economies of scale are driving it. Hardware and grocery stores, even mom and pop convenience stores offer more now than they did years ago. Agriculture has changed, and the government program was not changing with it. We were being restrictive and not allowing those market signals to come through or the management decisions to be made that allowed one farmer to get ahead. The worst thing you can do is hold everyone back in mediocrity. The lowest common denominator will not work for agriculture any more than it would for a hardware store. The difference is that with a hardware store, if I am not making if in East Overshoe, Saskatchewan, I can pack up, sell the building and move. The same cannot be said for agriculture.
Having said that, there has been a great deal of movement as farms have shifted and changed. We have seen the livestock sector in certain areas boom. We have seen it bust in other areas because they are taking top-quality land out of production. However, we must make programming that allows those decisions to be made at the farm gate by the farm families.
I always hear about huge corporate farms. I was incorporated but not huge by any means. The average farm in my riding is probably in the 6,000 to 8,000-acre range in the grain sector. In the livestock sector, it is probably bigger because of the pasture and hay land required. It is big business.
Senator Callbeck, I love your province of Prince Edward Island. If I could not live in Saskatchewan, I would live there, so no offence meant by the following, senator. It is economies of scale. As a former farmer, I am able to work only about 100 acres of hay land. I kept my tractor, bailer and some other equipment. I talk about the 100 acres of hay land in P.E.I. and they think I am a big operator. It is economies of scale. I can put almost six Prince Edward Islands in my riding. It is that huge and diverse.
Farmers, whether in Prince Edward Island on 100 acres or my area on 10,000 acres, need to have the ability to make the decisions and to expand and contract as markets direct. I have never liked the idea of income stabilization because it lowers us all to farm for the program. I like commodity-based, market-driven scenarios so that I can look at the signals and make those decisions as to what will pay and what will not.
The Chair: Colleagues, we have six very keen people who want to be able to ask their questions and get their answers. I would like to keep moving. Then we will come back for another round, if possible. Please keep your questions quick. So far, you are doing really well on your answers.
Senator Mitchell: I will be brisk. Very often, those who are opposed to taking climate change initiative argue that investing in climate change initiatives will hurt economies. I argue that that is wrong, that if we invest effectively, properly and creatively, we can actually stimulate an economy by pursuing the Kyoto terms and climate change initiatives. Nowhere is this more the case than with the agricultural industry. It is a fact that there are seven certified ways of enhanced soil management and 14 ways of enhanced livestock management that can actually lead to the development of real, marketable carbon credits.
Minister Ritz, I do not know whether you are aware of the Emission Credits Corporation in Alberta, but it would be worth your while to talk to them. This is a group of five farmers who have set up a business whereby they are amassing real carbon credits from about 1,200 farmers. These are after-the-fact credits, meaning that the farmer has to prove it has been done. You get a certificate, you can go to GPSit or see on Google where your credit would be related to. They have bona fide third-party bodies that sanction these. They track them. They have real market value. Right now, it is strictly a voluntary market.
Have you given any thought to the potential for this kind of initiative, for this kind of new industry, as it were, to take advantage of addressing climate change properly that could bring real money to Canadian farmers from real, industrialized companies that need credits all around the world? It would be investing in Canadian business; it would not be a cost but an investment.
Mr. Ritz: I do not disagree that there is a huge potential for agriculture to be a big winner with anything we do in the carbon trading area. I certainly agree with you. We are a proven carbon sink to the world because of the way we re- crop and reforest. It is that new, green growth that takes carbon out of the air and creates the sink.
There is a huge potential in Saskatchewan. There are 47 million arable acres. Another group in Regina, C-Green, is doing something similar. A few farmers that I know have received cheques this year and they welcome that extra cash flow. I do not disagree with that all. There is huge potential there.
As a federal government, we must be a regulator more than anything to ensure that no one gets stung. My concern is that the back-end work has not been done. If and when a farmer starts to change his farming operation, is he liable for the carbon that was sequestered and the tons he was paid for? Is he now liable because he is no longer in that crop rotation? There is work for governments to do internationally in that regard.
Agriculture can also be a huge loser if we do climate change wrong. My biggest argument against Kyoto was that it targeted fossil fuels. It targeted any particular industry that used fossil fuels to the extent that agriculture does, both as a fuel and as a source in fertilizer. Fertilizer is predominantly natural gas. Kyoto was structured in a way that was going to be very detrimental to the agricultural sector. We could have a huge debate about that. However, from my read of it, I agree with you 100 per cent that carbon credit and sequestration is a huge part of the puzzle for us to make it work, but we must be careful of how we do it so that in the end farmers gain and are not just tools of the trades.
Senator Mitchell: I am encouraged by your comments. There is lots of experience with creating markets. We do stocks and bonds, and have for 200 years. Carbon credits are not complicated compared to a stock. All the structure that has been brought into doing stocks is actually precedent for doing carbon markets. I think Canada can be a leader in this.
Given your interest in this and your very insightful comments that carbon sink is such an important feature for the agriculture industry, can you tell me why your government cancelled its funding to BIOCAP Canada Foundation? BIOCAP is a national network of research organizations headed out of Queen's University with roughly 220 researchers who look directly at enhancing the carbon sink potential of agricultural products and forestry products. I am sure they lobbied your predecessors. They are credible, powerful, and they were on the right track, but you cut the legs out from under them. Are you aware of that situation?
Mr. Ritz: No, I am not. I will take note of the name and track that down. I can send a written submission back. I have no knowledge of that particular operation or what the reasoning was.
Senator Mitchell: That would be great.
Mr. Ritz: The problem in setting up a carbon market is that you have to have international agreement as to its parameters. You cannot take credit for it and have the rest of the world sign off on it if they do not agree with the way you are doing it. Work is being done at different levels to get an international agreement on the value per tonne, on different soils, and so on, because crops will take in carbon differently; it is not a one-size-fits all situation. Like you, I am anxious to see what is happening.
Senator Mitchell: In the Throne Speech, it was mentioned that your government would be creating a carbon market. I have asked the Minister of the Environment and others about it. It does not seem to be happening. Do you have an idea when that might happen?
Mr. Ritz: It will not be today. It is a little late. I do not mean to be flip, senator. I am as anxious as you to see many of these things come together. You must understand how difficult it is in a minority situation when doing a rear-guard action on a number of different issues. That is not an excuse but a reality.
Senator Mitchell: You would not have trouble doing a carbon market in this minority situation. Everyone would vote for that.
Senator Gustafson: Welcome, minister. On the carbon issue, I have one comment: keep the paperwork down. There is so much paper with it. It is in experimental form; there is no question about that. It may even be that you will have to move something to give the farmers some protection. I have nothing against lawyers, but there are groups of lawyers that are putting together programs and so on, which will have to be monitored.
I have cried enough about the hardships of farmers so I will try to be positive here today. I see my colleague clapping his hands.
The price of grain and the global market for grain is phenomenal. I went across the line, where durum wheat was selling for $16.25 a bushel. I said to the elevator man: ``But that is before the farmers take out.'' ``No,'' he said, ``that is in the farmers' pockets.''
In Canada, they tell us we may end up with $12 for durum wheat out of the Saskatchewan Wheat Pool. Why the big difference between the U.S. and Canada? You have heard that question many times, I am sure.
Flax was selling last week for $16.25 a bushel. The big problem today in agriculture is pork and cattle. Looking at the global market — and you may have better figures than I on this, and I would like to hear them — China, India and even Russia have stopped movement of grain out of their countries. There is a very positive forward look in grain prices. However, the problem is input costs. Fertilizer has gone from $300 a tonne to $600 a tonne. Fuel costs have doubled. You know what machine costs are.
I do not recommend regulating these companies. I think the free market is the best way to go, but come spring, the input costs and borrowing power for farmers will be major, because they have to grow it before they can sell it.
I would like to hear your comments.
Mr. Ritz: I will start with the simplified forms. We have moved forward with Canada Revenue Agency. We now have a very simplified form. It just asks, ``How much did you make last year?'' Send it in. It is about as simplified as you can get. We are cognizant that the forms have to be simplified so that farmers can make use of them. We have done that with the new requirements on the final year of CAIS, the Canadian Agricultural Income Stabilization Program, as we move forward on Growing Forward in the new farm programs to make them simplified, easy to handle and quick to do.
On inputs, senator, I do not have an easy answer. There has always been that disconnect between what farmers get and what inputs are. As a former producer, I would start by looking inward. How do I buy and why do I buy what I do when I do? When I was seeding, it was very easy for me to drive my truck in, pull up under the spout, have the fertilizer dumped in and take it out to the air seeder, and away I go. To buy it in the fall, pre-purchase it, dicker on price with 10 of my neighbours so that we get the price down, take advantage of that pre-ordered pricing, does not happen any more. Farming is no different from manufacturing where it is just-in-time delivery, and of course that costs more money. The biggest difference is that in any other industry, just-in-time costs can be passed on as part of the cost of production. In contrast, agricultural producers are price takers on the selling end and they pay whatever the price is on the input end without the thought that they can dicker. We have a little thing called NAFTA that has made the border disappear. If fertilizer is $300 a tonne in North Dakota, you can drive your truck down and buy it. You do not have to buy it in Estevan, where it is $600 a tonne. Farmers keep saying they should not have to do that. Guys, it is your business; you manage it as you see fit. Everyone has had to go further and make deals and ensure that they buy right so that they can sell right.
I have a bit of a bugbear, and I have told farmers that they are their own worst enemy. The beginning of the formulation of the co-ops, pools and credit unions during the 1930s and 1940s was because there was no buying power. People got together and created those buying capacities. Those same operations now have become big business. It is time to reinvent that, to work with your farmers. There are groups out there, farm and ranch supply, that have done tremendous work. Farmers of North America have done tremendous work on generic glyphosates, and we were happy to make those changes at the Pest Management Regulatory Agency, PMRA, in Ottawa to allow them to bring that generic product in.
From my department's standpoint, we are working very hard to ensure that those generic chemicals and pesticides are available to our producers, because we are bringing them in on the other guy's product anyway. It makes no sense to disallow a certain fumigant for the apple crop in Ontario when we are bringing in apples from Washington that have it on them. It makes no sense to punish our producers and yet bring the product in from the United States. It is better, more efficient and more environmentally friendly; there are many reasons to do it. For some reason, our regulatory process is more concerned about the regulatory process than about the product. We are working on those situations.
It is always a balancing or juggling act. Especially in Western Canada, where we have one crop, suppliers know when we will seed and when we will harvest, and they know within a week or two, barring rain, when we will spray. The prices tend to follow that line.
I do not think there is a job for governments to regulate that. We have to create the atmosphere that farmers can make those decisions and form those cooperatives if they need to in order to get that buying power.
Senator Gustafson: The credit unions saved our country. I did not think I would ever say that.
Mr. Ritz: I do not disagree with you at all, senator. I paid for my farming habit as a general contractor. We got reasonably large; we had about 36 employees and we had quite a bit of equipment. However, when the banks started to pull back in the mid-1980s, I had $1 million worth of work on the go, I had a $100,000 line of credit, and the bank arbitrarily one day made a decision in Toronto that I no longer qualified for that $100,000. You try to keep $1 million worth of work flowing with no cash flow. I did it. I was able to keep it going, not lay anyone off and keep my machinery running. I went down the street to the credit union and have been there ever since. I do not disagree with you, senator, about the credit unions.
Now when I renegotiate my mortgage, though, I have to check with the chartered bank to ensure that the credit union is not hooking me a little. You have to be nimble as a businessman.
Senator Gustafson: That was Alvin Hamilton's quote, not mine.
Senator Callbeck: As you know, I come from a province that grows a lot of potatoes and puts a lot of dollars into the economy. I understand that recently you met with the Secretary of Agriculture from Mexico and that one of the topics was seed potatoes. As a country, we used to export a lot of seed potatoes to Mexico, but lately there have been very severe restrictions and it has become costly and time-consuming, so the exporters are hesitant even to think about it. For example, in my province, the exporters have to bring in Mexican inspectors and pay for them. They have to send samples to the labs in Mexico, and it goes on and on. As I said, it is very time-consuming and costly.
Did you come away from your meeting with the minister hopeful that some of these restrictions might change and that it might be easier to export our seed potatoes?
Mr. Ritz: I had a very good discussion with Secretary Cárdenas in Mexico. I came away feeling good about the trip and that we had made inroads. We worked with their version of the Canadian Food Inspection Agency. They are very interested in the science side of what we do here.
We have two Canadian icons that that are well-known in the world: one is the Royal Canadian Mounted Police; the other is the Canadian Food Inspection Agency. They are both well-respected for work they have done. I was very critical of CFIA in my former life and I have griped about the odd speeding ticket with the RCMP as well, but those organizations have a tremendous status on the globe for doing a very good job. They are in the middle of budget talks with me, so that is probably not a good thing to have to the record, but they do an excellent job. There is much credibility with groups like the Mexican groups and the United States Department of Agriculture as well.
Every once in a while, my producers and yours in Prince Edward Island question whose side they are on, whether it is on the exporter or the importer side, but it has opened and reopened markets for us. We had a couple of glitches, for example, with the potato wart in Prince Edward Island and the cyst nematode in Quebec and Alberta. That tends to close doors quicker than not, but the problem that I identify when I read between the lines — and Secretary Cárdenas alluded to this — is that we both sleep beside the elephant and we are both very much attached to the U.S. economy. The Mexicans are very cognizant of the fact that if they did something that distressed the Americans, it would reflect badly on them and there would be repercussions. I am not slamming either government. I do not intend to create a diplomatic incident, but that is a fact of life and we face the same things.
The Mexicans were quite excited by the fact that we, as a country, had put together a WTO panel on the American subsidization of their crops for the years 2002, 2004, 2005, and so on. For some reason, 2003 did not fit. The Brazilians have signed on with us and the Mexicans are close to doing that as well. It is time to push back a bit. A lot of what is said and done in Mexico is because of what the Americans are saying and doing with us as well.
I did come away with the feeling that we are very close to getting seed potatoes into Mexico for this growing season. They said they were looking at the final stages of reregulating. We will follow up within the next week or 10 days.
Prince Edward Island used to have a market in Argentina that no longer exists because of the political unrest there. We had some international problems where an unscrupulous person changed the CFIA's permits on a load of potatoes that were a mix of some from Quebec and some from Prince Edward Island and they were shipped into Algeria. That has been a good market for us at times. The Algerians are now saying that it was nothing that either the government or the CFIA did. They are now willing to start looking at our potatoes again. It is all out there and in flux. I am happy to raise those issues when I travel internationally.
Senator Mercer: Minister, and secretary of state, I appreciate your both being here. We are involved in this study of rural poverty and we have not spent much time talking about it. We have talked about other problems but not specifically about that. I will, unfortunately, perpetuate the problem.
I was interested, minister, in your comments about reading your grandfather's journals. Your grandfather had the same problems that we are facing today. I guess they will be the same problems that your grandchildren will read about in your journals or in your testimony before this committee.
I am concerned about the distractions that have been created in agriculture. All kinds of things are going on. We have a distraction in Western Canada with the Canadian Wheat Board. Instead of focusing on doing good work on behalf of both the producers and the consumers, we are distracted by the firing of the president of the Canadian Wheat Board and now the firing of the vice-president of the Canadian Wheat Board, Deanna Allen. I am concerned that we are caught up in political ideology. Your government wants to go one way; previous governments wanted to go another way. We continue to distract both ourselves and the Canadian Wheat Board from the main objective of serving the agricultural community, particularly in Western Canada, and making sure that we are doing as good a job as possible in marketing our wheat internationally. That is my opinion.
I am concerned that someone — I do not know who; maybe you can help me — directed the Canadian Wheat Board to remove Ms. Allen from her position as vice-president. This has caused added distraction of enormous proportions so that we are not focused on the game, but on ideology and on personalities. This government introduced a number of pieces of legislation that, on the surface, are commendable, for example the whistle-blower act and the liability act. They are commendable; however, as soon as someone is critical of the government, he or she is fired. I am concerned about that.
Minister, can you tell me how we will stabilize the Canadian Wheat Board and let it get back to the business it is to do, if we continue to have interference from above? I am not suggesting it was you, minister. I have no idea who it was, but I would love to know. If you have the answer, I would be happy to hear it. How will we get the Canadian Wheat Board back to work and to focus on the job it was intended to do?
Mr. Ritz: I do have the answer as to who fired Deanna Allen. It may shock you. It was a fellow called Greg Arason, Acting President and CEO of the Canadian Wheat Board. That was a decision taken by the board of directors. They were meeting that day and Greg Arason told Ms. Allen that her services were no longer required. There was absolutely no intervention or interference by the federal government in that action whatsoever. Deanna Allen was the vice- president of communications. Somehow, the media is stating that she was the vice-president of the Canadian Wheat Board. That is not true. She was the vice-president of communications.
Senator Mercer: The other question is this: How will we let the Canadian Wheat Board get back to business? There have been votes by farmers who have said that they support the efforts the Canadian Wheat Board and people want to save the Canadian Wheat Board. It seems to me that we are spending so much time politicking over the Canadian Wheat Board in all parts of Western Canada that we are not focused on the job of selling wheat and barley. Let us get on with that.
Mr. Ritz: I would categorically deny that and argue with you to the nth degree. As a producer in the Wheat Board area, I have understood the history of the wheat boards. Farming has changed drastically over the years, but the Canadian Wheat Board is still locked down in philosophy that is 40 years out of date. There is nothing stopping it from moving farmers' grain.
Senator Segal started this off by talking about the Internet. Farmers are on the Internet. They know exactly what grain is selling for in Australia and in the United States. They know what Japan is paying for grain, too. We seem to be missing a number of dollars per bushel. The argument is about giving farmers the tools to make the marketing decisions that they need to make for the best interests of their farm gate. The Canadian Wheat Board, as the monopoly buyer of export barley, durum and hard red spring wheats, does not seem to be returning the dollars to farmers, and farmers are making those decisions.
We had a plebiscite on barley that showed 62 per cent of farmers want some sort of change. They want to have access to the marketplace. In doing my town halls and interviews, and as the regional minister for Saskatchewan, I am bombarded by calls on the Canadian Wheat Board, on both sides of the issue. The side of the issue that maintained the board — that is, the status quo as it has been for 50 years — is shrinking fast. If we had that vote today, we would be well over 80 per cent in favour of some sort of change.
We are not stopping the board from doing their job. They have some 450 employees. The board of directors is 15 members strong — 10 farm-elected, five appointees, plus the president and CEO. We have just announced the new, dynamic CEO that the board of directors picked. I did not pick that person; I did not know the name that was coming forward. I knew who was on the short list, but I did not know who they picked until they came to me and said, ``Run the government process. Here is our guy.'' It is Ian White who has worked in Canada before putting together the Manitoba and Alberta pools and making them viable operations.
I think there is a tremendous future for the board. Any farmer who wants to use it will have access to the board next week, next year or 10 years down the road. It will still be there.
Senator Mercer: Minister, I am concerned that in five years' time, you and I may not be doing what we are doing now but the Wheat Board also may not be doing what it is supposed to do; and farmers will find themselves in need of something like the Wheat Board.
Mr. Ritz: That would be the farmers' decision, not mine.
Senator Mercer: You represent the farmers. All members of Parliament and the Senate also represent the people in their region. It is our duty to protect them; and I am concerned that in the final analysis, we may be throwing the baby out with the bathwater.
Mr. Ritz: Nothing is being discarded. We have never had any intention of seeing the board collapse. If it is the powerful entity in the world that it says it is — it has offices and salesmen around the world, a client list second to none and access to product that is the best in the world — why would it disappear?
Senator Oliver: I will not ask a partisan question, but rather a question about the subject matter of our study, which is rural poverty. I would like to refer to comments made by each of you and then ask you one question only. That is, what do you recommend to this committee in view of what you have told us?
Minister, you said that there is a huge invigoration in the rural area where you come from, on the west central side. You went on to say that it was because of gas and oil and so on. In other words, your rural communities have been reinvigorated, and I want to know how.
Mr. Paradis, you said that when we think of rural Canada, we traditionally think of agriculture; however, it is more than agriculture, forestry or tourism. All the regions are different so there is not one response that you can give that would fit all.
Given both your responses to the subject matter of this committee's study, do you have recommendations and messages for us on what steps we can take to try to reinvigorate rural communities across Canada so that they can become viable?
Mr. Ritz: The first thing for me would be labour mobility, being able to move to that good job. We have seen many roadblocks tossed up between provinces. We have a little thing called interprovincial trade barriers that stop a lot of forward momentum.
In Western Canada, we have seen the export of our raw resources stateside because of the processing sector there, which is second to none. I will give them credit for that. They are drawing our pork and beef down there in record numbers to be processed, and it is hurting our ability to process here. We have seen increases in pork of 80-some per cent and increases in beef of 30-some per cent coming back into Eastern Canada. That is western product that has gone into the U.S., been processed and come back up here because I cannot ship a pork chop from Saskatchewan to Ontario. Those interprovincial trade barriers have to change.
We had a good discussion at the last federal-provincial ministers meeting at the agricultural level. We know it is a big problem. Alberta and British Columbia have just signed an agreement called TILMA, the Trade, Investment and Labour Mobility Agreement, which is a transfer of industry, labour mobility and so on, so that the border will cease to exist between the provinces. If you are an accredited electrician in Alberta, you can hook up a panel in British Columbia. Electricity flows down the wires and it is basically the same thing.
However, Saskatchewan is not signing on at this point because of its Crown corporations and union activity. That is fine; but there are provisions in offerings like TILMA to make allowances for that. I think we have to start looking beyond our own noses and realize that people are mobile.
The largest payroll in Newfoundland is from the oil sands at Fort McMurray, Alberta. That is fantastic. They are a tremendous group of folks and I have met them all. I have gotten to like pickled moose and screech in the process. We have a Newfoundland club in Lloydminster. They bring in their cod tongue and that type of thing and are converting people to their culture all the time because of their tremendous work ethic and the joy of life they bring to the area. It is great to see that happening.
As a country, we have gotten slack at retraining. Everybody got entrenched in a job and forgot to take those extra skills that let you move up the ladder. We have a lot more work to do in that line.
There is a tremendous amount of work to be done between the federal and provincial governments. We need to stop being territorial and work hand in hand for the betterment of the people that we all represent.
Labour mobility and education are the keys to rural poverty, to getting over that hurdle and allowing people to move and take on that better job. Instead of being scared that they are living in a new place, they need to be given support while they are there.
[Translation]
Mr. Paradis: As I said to you earlier, I come from an environment in which there are a lot of resources, including mining, forestry and agricultural resources. The Rural Secretariat has been asked to form a work group, because it wishes to have a rural lens. There are large departments, like Natural Resources Canada and Fisheries and Oceans Canada, that are major players in communities based on resource development. At present, three departments are working together — Agriculture, Fisheries and Oceans, and Natural Resources — to find an interdepartmental approach in some sectors. The other problem that we often encounter is that, when our sectoral policy comes from Ottawa, it does not fit the region well. It is frustrating. I have been through it myself as president of the Chamber of Commerce, we had projects that were endorsed by the community. . .
[English]
I will not say community buy-in project, but when we were looking for federal instances, there was no one. We had to travel to Quebec City and Montreal and we had to struggle with that.
[Translation]
Now, we want to try and offer some flexibility, provide the local players with tools, tell them they will be informed, there will be a partnership, the federal government will show flexibility.
That is why I gave the example of what was announced with the billion-dollar trust, that is the direction, in order to cover broader points. Minister Ritz was talking about training and skills development in sectors faced with labour shortages. There may be labour mobility, but there are also jobs available in rural areas like mine, but the problem is that there is a shortage of qualified labour. This is unacceptable because if, at a given time, there are jobs available but no one to take them, there is a problem. I was looking at the vicious circle you discussed in your interim report and that is a good illustration of the problem: there is a shortage of people, so not only is the creation of businesses hindered, but worse yet, business growth is also hindered. Some companies where I am from could grow but they cannot and they are even thinking about having to shut down eventually because of the lack of labour. But, to attract labour, you have to offer services.
All this means that we have to ask ourselves who is in the best position in the region to identify the problem and make sure that public funds are invested intelligently. And the answer is definitely the local players. So, if we arrive with a concerted approach, with either municipal or provincial players, and there is a federal partnership, this is the key to success, encouraging community buy-in projects.
I would like to take the opportunity to answer Senator Segal's question. When we talk about the $33 billion infrastructure plan announced, this is what we mean. Minister Cannon is looking for flexibility. What we are told is that high-speed Internet might be eligible under Building Canada, but always subject to agreement with the provinces. The provinces, on the territorial level, could say whether that interests them or not. One thing is for sure, in communities like mine, we see that there really is a problem at that level. There are rural areas that do not have Internet; there are even some semi-rural places that do not have Internet. Sometimes we see that the people who make public policy are not sufficiently well acquainted with the places concerned.
This is why, when we talk about flexibility of partnerships, maybe in the context of a community buy-in public funds will be invested efficiently and meaningfully.
I saw in your report that what is required is indeed an approach that is not dictated by the various levels of government. I think personally that this is the key to success and this is the direction the secretariat wants to go in.
We want it so that our players work together in an interdepartmental approach based on the territory and not the other way around.
Senator Chaput: My question is short, because Mr. Paradis has already answered it in part. It concerns the Rural Secretariat and, in particular, the lens you apply to policy. Is there some flexibility in the lens you apply to policy when you are developing new ones? For example, when we talk about rural environments and specific problems, is there some flexibility so that, when you come to the aid of these communities, if the community is more vulnerable and has more pressing needs, it receives services to meet its immediate, pressing needs, rather than according to the population?
Mr. Paradis: First of all, the Rural Secretariat does not have a program management portfolio. There have been pilot programs with model programs. The Secretariat will provide, as you say, a rural lens to ensure that federal government action is consistent with all the departments involved in the files. At present, that is the direction in which we are going when I talk about the work group.
For example, Fisheries and Oceans Canada, Agriculture Canada and Natural Resources Canada are three departments that cover nearly all the rural regions in Canada. The Rural Secretariat is working on seeing which types of policy might be effective, which way we should go, what are the innovations, what might make our communities competitive with respect to the resources they have in their territory. Then the secretariat will make a report, and this is what will help the responsible department to choose the direction of its policies. So it means taking concerted action towards this.
Senator Chaput: Is there flexibility according to particular needs?
Mr. Paradis: There is a lot of talk about tending towards bioeconomics and bioenergy in these areas, there may be plenty of flexibility. Many procedures may arise from the fields of agriculture and biomass.
Let us take the example of the forestry sector. If viable projects are put forward in connection with biomass based on forest residues, we can target our approach by territory. We realized, however, that sometimes dialogue was non- existent between departments. We have often had to manage with silo policies. Unfortunately, a territory that comes up with a concrete and simple project, though not necessarily a large-scale one, will have trouble dealing with the federal government. We wish to be able to offer information about the realities specific to each region. Every department will then be informed, when some innovative proposal is put forward, and will be able to respond to it.
[English]
Senator Brown: I want to tell you how much I agree with you on the Wheat Board issue. I have not been in the business for nine years now, but as an Alberta farmer I was one of the lucky ones affected by the Calgary real estate values that just go out in concentric circles from that big city, so when I decided to retire, I could afford to retire. I thought I would return, but I guess I will not now.
You said that the farmers need to reinvent the co-ops and that what farmers want from the Wheat Board is choice. They want to be able to sell products wherever they choose. I was at a rally in Southern Alberta where we witnessed the arrest and imprisonment of a number of Alberta farmers who had dared to sell their wheat across the border into the United States. I never forgot that. I never thought my country could have such a dictatorial attitude on one side of the country where you have a wheat board.
In Ontario, you can sell your product wherever you want, whereas in Western Canada we are still trying to prop up the British Empire somehow by supplying food stocks for the war, which I believe is where the original wheat board came from.
With respect to carbon capturing and sequestering, I know there is a project in the south of Saskatchewan where they are piping it into Weyburn, I believe, which is where my father was born. It is sounds good. If we need to capture and get rid of carbon, then we need a place to store it.
I have been watching, hearing and reading about carbon credits, and I saw what happened in Europe where they started at a certain price and quickly went up 500 per cent and 600 per cent. My concern for the farming industry is that if they start buying carbon credits that are not tied to carbon reduction, sooner or later it could turn into a disastrous shell game. If the federal government does something with that, it should be regulating how the credits are sold and how secure they are, and there should be regulations to protect those who invest in the carbon credits.
Back when we had the high prices for energy and high prices for fertilizer in the 1980s, I was part of a group in Alberta that worked with Premier Getty and came up with a farm income stability fund, but it was not a gift. It was long-term, low-interest, fixed-interest money, 20 years in duration. It was administered through the five major banks, and the banks were responsible for allowing applicants to come up with a plan for how they could pay back the money they borrowed. Whether you farmed cattle, hogs, grain or whatever did not matter. You could be any kind of farmer, but you had to come up with a plan to pay off the loans at a certain rate, and it was a fixed rate. We had just come out of 22 7/8 per cent interest at that time, so 9 per cent looked good to farmers. Of course, years later it was still 9 per cent, but the interest rate had dropped below that. If you could come up with a rate that was floating close to the prime rate, plus or minus, whatever you could afford or whatever you were planning to do, it would fluctuate if we got back into that high-interest cost again. That would help farmers across the board, and there would be no distinction between a chicken farmer, a hog farmer or a grain farmer.
My question then is for you to think about the possibility of revisiting that. I believe somewhere between 14,000 and 17,000 Alberta farmers enrolled in that plan.
Mr. Ritz: Senator Brown, I am as concerned as you are that carbon traded just on paper could turn into an Enron and farmers could bear the brunt of that, depending on who is policing it. Any new facilities that are now being built, whether they are in the oil patch or electrical systems, are adaptable to carbon capture and sequestration. They are putting those facilities together. You mentioned the facility in Weyburn, and they are pumping carbon back down into the soil. The underlying geophysical makeup of Western Canada is such that components down there — it is a salt- bearing layer — will attach themselves to the carbon, and the carbon does not come back out again.
We have the potential in Western Canada to do the deep-well sequestration. The oil patch workers are now using abandoned wells and pumping back down. They are also recapturing a lot of the methane and carbon and using that to pump down to force oil back up, so there is a trade-off there. Those are some of the major innovative things that are being done in the oil patch to come to grips with the targets we are setting for pulling carbon out of the ground. I do not disagree with you at all.
As to the one farm program you spoke about, I was farming in Saskatchewan at that time and I looked with envy at what Alberta was able to do out of their heritage monies and so on, and of course we were not able to do that. However, we have made significant changes on the world stage by signing on to programs, like GATT, the General Agreement on Tariffs and Trade, which do not allow us to do those types of ad hoc programs to the same extent that we once did. The way you describe that program, it would probably be GATT amber at best, and we are running out of room in that amber box as we move towards some sort of signatory in Geneva.
We have, however, made advances on the cash advance system in Canada. There is now $400,000 available to each and every producer, and available to the livestock sector, that was not previously available. Regardless of whether you take the full $400,000 or only $160,000, the first $100,000 is interest-free for 12 months.
We have tried to address the high cost of inputs with those types of cash advances so that you have access to the products you need without the costs being that high at the bank. It also allows you to have a line of credit at the bank against your inventory or potential inventory and still access the cash advances there, so it gives you more freedom.
We have tried to disconnect some of those cash advances. You could take a cash advance through the Canadian Wheat Board on your grain and through the Canola Council of Canada on your canola, and so forth. They are tied to your product and you are committed to whoever gave you the cash advance in order to sell it back to them, and you may decide you do not want to do that. These other cash advances are a little more disconnected to give you freedom regarding how you will handle that.
The Chair: I am noticing by the clock, minister, that we have taken you over time. Senator Gustafson would like a word, and I want you to leave from here with also a word from me that you will remember.
Senator Gustafson: Is the $250,000 additional capital gains tax in place?
Mr. Ritz: Yes. It was in Budget 2007. It went from $500,000 to $750,000. If you are thinking of selling out, now is a good time.
Senator Gustafson: What about last year?
Mr. Ritz: No. It was in Budget 2007, which did pass, but effective now.
The Chair: The word I would like to leave with you is ``sugar beet.'' I am from Southwestern Alberta and we, in Taber, are the sugar beet capital of Canada. We are now facing, from the Americans, the possibility of a closed border for a very important part of that industry. If this should happen, the industry is finished, and you would understand what that would mean to the farm community in that area.
We will help. We have done it before with the cattle problem. This committee wrote to the government people in the United States. If there is anything we can do, we will do it. This may not be the biggest operation in Canada, but it is a very important one, and I hope that you, as minister, will do everything you can to keep that border open for us.
Mr. Ritz: Every operation is important. There are no different degrees; they are all important. I have had the initial discussions with the powers that be. I have had my first conversation with the new Secretary of Agriculture, Ed Schafer, who used to be Governor of North Dakota. He actually knows where Taber is. There is a lot of work to be done on that file.
There was a misdirection out there that the Mexicans were somehow cranking a deal with the Americans that would be detrimental to the sugar beet juice in Canada. That has proven to be a non-starter. It was the industry shopping that around. It was not the government of Mexico looking to shortchange us on a deal. I had those initial discussions with Secretary Cárdenas in Mexico, and I will be having those discussions with Secretary Schafer. We are hoping to meet within another 10 days or two weeks.
The Chair: We, as a committee, are here to help in any way we can.
Thank you very much. This has been a pleasure for each and every one of us. Both of you are right on top of your job and we hope that we can have you back here on other occasions so that we also can be right on top, where you are. On behalf of everyone, good luck, and thank you so much for coming and giving us the time.
The committee adjourned.