Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 19 - Evidence - Meeting of March 5, 2007 - Morning meeting


The Standing Senate Committee on Agriculture and Forestry met this day at 9:05 a.m. to examine and report on rural poverty in Canada.

Senator Joyce Fairbairn (Chairman) in the chair.


The Chairman: Good morning. It is a pleasure to be here in Prince George, which, as we have heard, is the transportation and economic hub of Northern and Central British Columbia. We have wanted very much to come and hear what you have to say.

Prince George is admittedly a long way from being what many of us would call a truly rural community, but it is a place where a lot of rural people come to live, for economic or health reasons or to pursue post-secondary education at the rural College of New Caledonia or at the University of Northern British Columbia, UNBC, which I do not think any of us around this table have been to before. It is absolutely amazing.

As you know, many of the rural residents who come to centres such as Prince George never return home. This is especially the case with rural youth. This out-migration has serious consequences for the communities left behind as we have been learning in our trips across this country.

Our first witness this morning is Greg Halseth, the acting institute director of the Community Development Institute at UNBC. His work is dedicated to studying how small town and rural places are coping with these and other changes. We welcome you here, Mr. Halseth.

Everyone in the room knows one of the members of our committee, but I would like you to know who the others are and where they come from. I will start with Senator Frank Mahovlich. I think you have heard of him. He grew up in Schumacher, in Northern Ontario. That is where those feet first went into hockey boots. Senator Len Gustafson is from Macoun, Saskatchewan. He is the deputy chair of our committee. Senator Peterson is from Regina, Saskatchewan. Senator Mercer is from Mount Uniacke, near Halifax, in Nova Scotia. I was born and raised in Southwestern Alberta in the city of Lethbridge. Thank you very much for coming out.

Mr. Halseth, the floor is yours.

Greg Halseth, Professor, Geography Program, and Canada Research Chair in Rural and Small Town Studies, University of Northern British Columbia: Thank you for this opportunity to address the Standing Senate Committee on Agriculture and Forestry.

From reviewing the committee's mandate, my sense is that your first and second tasks are likely well in hand. I will focus my comments today, therefore, on your third and fourth tasks, the issues of key drivers and of measures for mitigating change.

My message is fairly simple and threefold: First, the changes that are identified in your interim reports are not transitory, but instead they are the new steady state conditions. Second, instead of propping up the old economy, we need to focus upon transforming that old economy and we need to re-imagine and retool for new options within our rural economy and communities. Third, to do this retooling, policy change must be cross-government and this committee is ideally positioned to champion that cause.

To build the foundations then for an effective response to the collective impacts of social, economic and demographic change, we need first to understand the conditions of change and how to position policy in response. Baseline conditions describing rural and small town change include increased competition from low-cost producing regions, long-term relative declines in commodity prices, long-term relative increases in costs of inputs, uneven patterns of population change, and a host of others.

However, in the contemporary global economy, these are not adjustments or aberrations; rather, they describe the new steady state in place. This steady state recognizes that the pace of change is accelerating, that economic booms in commodities will not only come faster, and go higher, but they will bust sooner. When new cycles of upswing come, the fundamentals of employment and benefit will have changed to the detriment of local communities.

Our responsibility can no longer be focused upon adjusting policy or developing short-term assistance programs; rather, we need to address future conditions with foresight.

We can intervene through policy. Rural Canada's very creation and evolution has been driven by purposeful public policy intervention. However, as the conditions of change intensified after 1980, our efforts have been largely reactive. In forestry, for example, we have reduced regulation and tax burdens on the industry to assist in maintaining its profitability and therefore local employment, but there are fewer of those local jobs.

Instead, we need to move from reactive to proactive policy interventions. We need to get ahead of the game to recreate and reinvent the conditions for rural success.

At the federal level, it means that champions must be found across government and they must push for policy change across government. These champions need to assert that rural and small town Canada generates the basic sector revenues that power our urban centres and that they are rich in the place-based assets increasingly valued in the global economy.

To start with the fundamentals, attention to rural and small town human capital means policy investments in education. The global economy as a knowledge economy means using our human capital to respond to opportunities to take competitive advantage of local assets and fit with local aspirations.

The figure circulated with my package today illustrates an understanding that we have put together through work with communities across Northern B.C. A broad and robust community development foundation creates the stage for any number of a range of economic development options.

To attract new forms of economic activity, policy must also address our infrastructure needs. Infrastructure from the old economy needs to be revitalized, including our road, rail and airport networks, but such investments need to be appropriate to the rural and small town context. Attention must also be given to the new infrastructure required within the new economy. Specifically, this concerns communications and mobility infrastructure to support the exchange of ideas and goods over significant distances in real time.

Rural and small town Canada's fundamental contribution to our nation's well-being has been drawing down for the last 30 years the infrastructure investments of the 1960s and the 1970s. The infrastructure crises in resource boom regions today underscore this need to reinvest.

Next, access to basic services is a fundamental need in any community. To address rural poverty via recreating stable foundations for economic opportunities, we need to ensure that basic health and social services are available. Federal transfers in health, welfare and education need to target those funds to innovative rural and small town uses. In addition, support can be directly demonstrated by the smart delivery of federal services.

In both forestry and agriculture, one key federal contribution to the re-invention of rural and small town economies is directly through its research capacity. Research capacity within B.C.'s forest industry has virtually disappeared, and within universities it is limited. Much needs to be done; and our network of Canadian forest service centres and agricultural research stations need to move into the 21st century and be funded to drive the research for the next generations of products and economies.

In the forest industry, for example, we need research to assist diversification across product types, to identify full cost accounting for current and future economic alternatives, to explore viability options in non-timber forest products, and to find ways to measure and value other significant health, environmental and well-being contributions from our forested landscapes.

Our failure to meet the emerging mountain pine beetle epidemic a decade ago with already conducted and digested research expertise highlights a gap we cannot allow to continue.

Moving forward, in considering, for example, the new farm bill, we need to shift from propping up to creating new flexibility.

Using the example of market pressures, environmental debate suggests that markets will ask for better product labelling; push ``buy local'' and ``buy Canadian'' to reduce greenhouse gas emissions through transportation; become increasingly aggressive in demanding safety regulation, food-chain tracking and reduction in agri-chemical and agri- pharmaceutical inputs; and support supply management as a foundation for environmental protection against short- term overproduction and ecosystem exploitation.

Bridge funding, where applied, must be used wisely to assist with change.

We know these trends, and we must make policy proactive.

In closing, to address questions of rural poverty means creating policy conditions that support the reinvention of economic foundations through community development, community infrastructure, community quality of life, and the research base to apply knowledge through smart policy in rural and small town Canada.

The Chairman: Thank you very much. That was an inspiring presentation. You echo the same concerns we found at the other end of the country.

We have been holding hearings for the last year in Ottawa with people coming in and the more we heard, the more we knew we had to get out of Ottawa. Our first trip was two weeks ago when we went to Atlantic Canada and we barely got out with our lives. We went through every blizzard. The people in each of those provinces have concerns that are very different from ours, but fundamentally they are in the same direction.

Senator Gustafson: Good morning. I want to look into your thoughts regarding a new farm bill, a Canadian farm bill. You make several recommendations. It is my thinking that we have to understand what is happening in the global economy before we can ever deal with it properly. What would you suggest?

Mr. Halseth: Thank you for the question. I agree with you, and my presentation was geared to the sense that we need to understand the fundamentals of the global economy. In agriculture, as in any commodity, a key issue, as low- cost producing regions come on line, will be not only where we might still hold comparative advantage, but where we also might go with competitive advantage. We need to know therefore what those regions are moving into.

In the B.C. forestry — and I know it is the same on the Prairies — we have talked about diversification and broadening the foundations of our producers since my father was a little boy. If we compete head-to-head with a bushel of wheat produced in Canada against a bushel of wheat produced in a low-cost region where there are fewer environmental regulations, wages are lower and ecosystem inputs are not under the same controls, it will be a losing game in the end. We need to figure out what the global economy is going into. We need to identify where our opportunities are and then grow those up the value-added chain.

Once that is in place, we need to recognize what it is we fundamentally want to support here. If our farm families are the backbone of agricultural regions, then we have to have them benefiting from the economic flows. I cut out of my talk a commentary on Canada's low cost food policy. Many people I know across the Prairies who argue vigorously for the farm producer say that we put in place a wide variety of policy constraints that limit them in moving from one sector to another sector in agriculture, but when we intervene in the industry, it is more often to prop up the large players. Where the large players remain profitable in a low-cost food production setting, someone has to bear the burden of that low-cost production, and it is increasingly the farm family. Thus, even once we figure out where we are going to go, we have to figure out how the structure of the industry will work to get those benefits to the households that produce the food we live on.

Senator Gustafson: It appears to me that in the bureaucracy of agriculture there is a reluctance to recognize a reality, which is that we have been told by the Europeans and the Americans, or our bureaucracy has told us, that we are going to get them on a subsidy. I have waited for 27 years and it has not happened and I do not believe it will ever happen. We bought that lie and that lie is killing us, because I believe that if we were to meet that to some extent, the economic return would be much higher than we understand.

We have talked about diversifying. You know we went to canola and to mustard. We went through all that. Then we talked about processing and so on. We tried that, and a number of plants developed in Saskatchewan and then they found that with the freight they could not compete with the large players, so they build to a point and then decrease. We have been through all that, but we have failed to recognize that we have a global problem, and either we will have an industry or we will not have one.

I was talking on the phone to Senator Sparrow, who just retired. He used to say to Agriculture and Agri-Food Canada, ``Tell us what you are going to do. Either tell us to quit farming or tell us that we will move in a positive direction to get some kind of a farm bill.''

Mr. Halseth: While your characterization is very good and clear, to put a little bit of a positive spin on that, the Japanese are extremely fearful of the loss of tariff protection for their indigenous agriculture, particularly rice production. Some of the research teams that I am on have hosted quite a number of Japanese agricultural economists to come to Canada to see how we do agriculture, because, while we struggle, they recognize that in the global economy the Canadian agricultural producer is the most exposed producer, and therefore, it is one of the most competitive, aggressive and innovative producing communities because it has to go against things like the European Union, the U.S., and the Japanese markets, which are highly protective. Therefore, there must be strength in that system to take advantage of the flexibility, should the bureaucratic intransigency you describe ever open opportunity.

Senator Gustafson: In that area the marketing boards can compete, but they are not really competing. They are protected from the international marketplace. The grain producers have to export 75 per cent to 80 per cent of our product and it just does not add up.

Mr. Halseth: It does not pay.

Senator Gustafson: Until we get that to add up we have got an industry that is going down. At the top level, people are losing their investments and their savings, while the farmers and those at the bottom end who still have land payments and so on are simply dropping off. They have no hope. This is a difficult situation and we have got to meet it somehow.

Mr. Halseth: Right.

Senator Peterson: One problem we face is that our industrial strategy seems to be focused on exporting raw goods. Our people are asked to produce more, sell for less and go into debt quicker. So we come to this value-added, what we are trying to do, and every other nation in the world seems to do that. You talked about Japan, which does it quite effectively, as do China, Korea, all those nations. As an exporting country, we have to get into that game. We have to get money back to our producers. How do we do that? Do we start imposing tariffs?

Mr. Halseth: That is a very good question and one that policy has struggled with. I will use an example from forestry. Around here a spruce or pine tree takes about 100 years to grow to a size where the industry is interested in it for lumber production. We wait 100 years for a tree to grow and then we cut it into two-by-fours. The industry has to work under a regulated environmental regime. The jobs are high wage. The businesses have benefits for employees and all those kinds of costs.

In Indonesia a tree takes about 12 to 14 years to grow to a comparable size. It can be cut and turned into two-by- fours in a much shorter time, and the environmental and public policy costs, including taxation, imposed on the firms producing that wood are far less. Therefore, it does not make any sense to go head to head with two-by-fours from Indonesia and have the same structural strength for balloon frame construction as we use in Canada. We have got to look at our products. What is it that our slow-growing, 100-year trees have that fast growing trees do not have? There are many structural and fibre differences between those trees. Using innovative, engineered, structural construction products, MacMillan Bloedel Limited was looking to create value added that could not be replicated by low-cost producers and then to move into the marketplace replacing some of the current inputs, such as in steel and other components, with these activities.

However, the forest industry moved away from research. One of MacMillan Bloedel's last tasks before it was sold to Weyerhaeuser was to close all of its research facilities, including the facilities that turned out innovative cardboard packaging made from waste products and structural glue laminated beams. If you get a tour of the university you will see those, and in one of our buildings there is an illustration where they have used essentially garbage from other processing to create a valuable product.

We need to consider what it is about our products that is unique and then capitalize on those features. Currently in B.C. there is an exercise underway to add value to timber frames and timber frame construction whereby the wood is certified with the names of the horses that hauled the wood out of the forest and the family that constructed the timber frame outline. These are marketable, value-added commodities, much like Arnold Palmer signature golf courses. It is one of the ways that that industry scaled up. We need to use those kinds of innovative activities as well.

On the policy side, we need to make sure that we do not truncate opportunities before they come up. For example, B.C., particularly the Cariboo region, is in the cattle industry, and questions arise about new regulations around slaughterhouses and food processing plants. No one is going to argue against the regulation for more safety in food processing and in the slaughtering of animals and so on, but as many in that region move towards niche, organic, specialty cattle production targeted to particular markets, we have to ensure that the policy allows for the creation of safe but also cost effective and accessible slaughtering facilities so that they can do their activities and market a whole chain of commodities that come certified organic and done in different ways.

That is my take on it. We need to look at our products, see what is special and build on that as a first stage, and then make sure that policy allows opportunities rather than truncates them.

Senator Peterson: You talked about infrastructure, too. We need hospitals, schools, railroads and that sort of thing in rural Canada, but rural Canada is depopulating and the population is aging. Somebody has to pay the taxes for that infrastructure. Do you see this as a way of reversing that trend? How far can we go down in terms of population? Do we have to stop at some level of population and say that we just cannot go any lower?

Mr. Halseth: That is right. I have a couple of observations. First of all, when this powerful economic engine of rural Canada, in my case, rural British Columbia, was created, they did not wait until a pulp mill was built in Prince George to put in a railway line. They did not wait until a pulp mill was built to put in a gas line down from the Peace River region. In fact, they had to set in place all of those infrastructure pieces before the forest industry would even think of investing a dollar in a pulp mill. To me, the line of putting in services after the population is up or down is nonsensical.

Policy leads where we want to go, and by default we have been de-servicing rural and small town Canada and thus exacerbating out-migration.

To give you a simple illustration, the BC Progress Board commissioned a report on airports. In the extreme northwest of British Columbia, there are fly-in ski resorts. It looks like you are in the middle of Switzerland. The mountains are spectacular. The log homes and chalets are spectacular. It will be quiet, a small plane will land on a dirt strip, and out will jump 35 doctors, professionals and other highly paid people from Europe coming to spend a great deal of money in the B.C. economy. When the Progress Board's report assessed airports outside of metropolitan Vancouver, their model was that every airport had to look like YVR, Vancouver International Airport, and thus their recommendation was to close down airports across Northern B.C. at a time when every small place was exporting every small little bit of activity, such as a family harvesting berries, canning them and marketing them over the Internet. They have to ship their goods now and air transport is the way to do it. Infrastructure needs to be appropriate to rural and small town places.

Senator Mercer: Professor, thank you very much for being here. I want to acknowledge that you are a Canada Research Chair. Having a research chair at a university of this size and in a community of this size is a testament to the success of that program, and I am happy you stayed here.

Mr. Halseth: I am very pleased to represent Canada Research Chairs Program.

Senator Mercer: It is a great thing.

You talked a good deal about research and you are the first person I recall to get into some detail about that. Is anyone in the world doing the type of research you recommended?

Mr. Halseth: Australia and Norway are very strong. In fact, most of the European Union countries are quite strong in research on rural and small town revitalization and diversity within economies that have a lot of similarities to Canada.

Senator Mercer: What would you estimate the cost of that research to be if we were to do it, starting tomorrow? Obviously, some of it would be restarting, because, as you say, MacMillan Bloedel closed down their research.

Mr. Halseth: I do not have any cost estimations. My sense though is that it would be far better to get ahead of these curves than to try to recover them in hindsight. The mountain pine beetle continues to be our best illustration.

Senator Mercer: That leads to my next question, which is whether the cost of not doing it is more important.

Mr. Halseth: The cost of not doing it is now estimated in multiples of billions of dollars.

Senator Mercer: That is good. I come from a province with a lot of small forestry operations and some large operations. Where do you see the small forestry operation versus the large forestry operation in British Columbia? Is there still a future for the small operator?

Mr. Halseth: I think that while we might approach the question differently, my response would be the same response that Minister Emerson gave a number of years ago when he was speaking about Canfor closing large operations under his watch, and the argument was that large operations have to compete in two-by-fours against low-cost production regions. They need to drive their costs down at any expense. That opens the door for small operators to be the flexible, innovative arm of our industry. I think that if we can create a supportive policy environment, that is where they will be. Many of these small operators continue to exist, like the Cariboo horse loggers, because they have an intimate knowledge of what they are doing and they are experts. Let us create the circumstance that allows them to grow that. This is where we need to go back to the economic argument; they also plow all of their profits locally.

Senator Mercer: I like the idea. Two things come to mind right away though: the capital costs and the risk factors for small operations to bear in being the innovators. It costs money to be innovative.

Mr. Halseth: Yes. There is a parallel argument that our Community Development Institute makes, which is that while rural and small town Canada is fiercely independent, we need to recognize and take advantage of opportunities to scale up. If you are a small-scale forestry producer in B.C., while you might be great on your woodlot and produce an excellent product for a market, you probably cannot spend all of your day marketing, staying on top of transportation costs, wrestling with CN for access to the rail lines and so on, so scaling up in that case in terms of having a marketing arm for the community forests in B.C. or the small producers in Nova Scotia may be a sensible thing to do. A number of small woodlot owners have scaled up like that in the Cariboo. They got together and formed a cooperative where they buy a wood drying shed and then they all use it through the year as a way to share capitalization costs.

Rural Canada has done this before, scaling up from the small.

Senator Mercer: You said that infrastructure has to be in place before. Would Prince Rupert be the exception to that rule, because they are now building the railroad to accommodate the port that we are building in Prince Rupert?

Mr. Halseth: No. The port was there. The physical setting of the port was there. The rail line was there. Many of the bulk exporting platforms were there, and space was there for shunting activities. In many respects, the basics of that infrastructure were set in place in 1914. The agreement that the province hashed out with CN and the private contractor from New Jersey was really to reinvest and scale up to a new economy level what essentially was the old economy infrastructure. It was that reinvestment in the infrastructure.

Senator Mercer: It probably could not have happened if the old infrastructure had not been there as a place to start to reinvent the whole thing.

Mr. Halseth: It had been there. Also, there are no containers going out of Rupert today, so there is still investing in the infrastructure before that activity truly gets underway.

Senator Mahovlich: Is the province responsible for reforestry? You mentioned a small company like Cariboo. When they forest their lands, do they reforest them? Are they responsible, or is it the province that is responsible?

Mr. Halseth: Provincial forest policy basically sets up a circumstance where the lease rights go to the cutting company. They harvest. They are also responsible for remediating the landscape, replanting and growing back the forest to what is called free growth stage, at which point if it is judged to be acceptable, the province then takes over control of that land base again. Silviculture reinvestment — reinvestment in forestry — works that way.

Senator Mahovlich: I see. I remember that many students from Ontario would come out to B.C. to work for the summer.

Mr. Halseth: They will be here in about a month.

Senator Mahovlich: Has that been successful?

Mr. Halseth: It has had pluses and minuses. It has been terribly successful in reforesting and trying to get a handle on the lands that we had not successfully reforested in the past. It has been a bit challenged because some of our planting techniques do not actually assist the seedlings to grow the best that they can. It has been a bit challenged because we have been planting a monoculture rather than a diversified forest, looking for the quickest growing tree. It made some sense 20 years ago, but now that we know about large-scale epidemics, it is a challenge. Also, the silviculture industry tends to be small contractors working on lowest bid arrangements with the major forest production companies, and so while some of those operators are exceptional, there is unevenness in that industry.

Senator Mahovlich: You mentioned the fast-growing trees. They are not of the quality of the slow-growing tree. The quality in the wood is not there. I spent some time in Alabama, and they do not like the wood for building material because it grows too fast and it is not as hard. They prefer Canadian timber down there.

Mr. Halseth: That is right. Again, we have to think about what we are producing and what they are producing, and how we can go after the higher return product out of that — not head to head.

Senator Mahovlich: Is the lumber that we export finished lumber? Is it treated, or do we just send the wood to China, for example, and they finish it when it arrives in their country?

Mr. Halseth: We do all three things. First of all, B.C. continues to play a big part in the international market for raw log exports. When the sawmills in the northwest region of the province closed as the Skeena Cellulose company collapsed, in order to keep some people working, they had the logging crews and the timber cruising crews still in the forest, and they were exporting raw logs to the United States, China and other places where they would then be turned into two-by-fours or other products.

Most of the lumber that we export is finished lumber in a variety of guises. The interior wood goes almost exclusively to the United States. It is one of the economic challenges. I ask my Economics 100 students, ``You have one product and one market. If you were a bank, would you invest in it?''

We also have a number of value-added products. Northern and Central B.C. are very high in pulp, paper, parcel boards, oriented strand boards, plywoods and those sorts of things. We do considerable work, particularly in a lot of cases where the materials are waste that had previously been burned. The medium density fibre board is a beautiful illustration. It is essentially sawdust ground even finer and formed into moldings. There is a high return on investment there, since the input was garbage.

Senator Gustafson: When we were in the East, the fishermen told us that they were shipping their fish to China, processing it there and shipping it back. That will be a great challenge for Canada.

Mr. Halseth: Yes.

Senator Gustafson: The problem we face with fisheries, agriculture, timber, pulp and paper, oil, gas, mining, potash, uranium and agriculture is that it all comes out of rural Canada and nothing is going back in. I use the word ``nothing'' lightly, but I want to express the problem we are facing. We have no political clout any more in rural Canada. We are too few. How do we overcome that? To make the point, in 1972 a barrel of oil was $2 and a bushel of wheat was $2. You know what oil is today — $60 or $70 a barrel — and a bushel of wheat is still just a little over $2. Now how in heaven's name are we in the agricultural community going to compete against this when we cannot seem to sell the message? That is one of the reasons for this committee, to make Canadian people and governments aware that we have a major problem in rural Canada.

Mr. Halseth: We are probably late because I am too wordy. I think that Andy Mitchell four or five years ago was on the right track in pushing a federal rural urban dialogue in order to sensitize urban Canada to the fact that their fundamentals depend on rural input. Urban think tanks like Urban Futures in Vancouver demonstrate clearly that the dollars start in rural Canada and urban places are where they recirculate those, and the messaging in your reports is that the future economic well-being of the country rests in rural. Our messaging should not be ``us versus them'' and this is sadly one of the circumstances we find in B.C. We are together in this exercise. Canada's roughly 31 million people are not much more than a good-size city in some of our competing countries. This is not a rural versus urban situation. This is Canada competing in the world, and we have to look at that together. That, I think, is the only way we will get sufficient investments back to re-equip rural.

Senator Gustafson: If I may, I think that our universities have a great challenge and a great opportunity because of your position to put that forward. They will probably listen to you better than they will us as a farmer.

The Chairman: On that note, thank you very much, Mr. Halseth. That was a great way to start and we thank you for coming.

We will now hear from Ms. Healy.

Theresa Healy, Facilitator, Northern Region, BC Healthy Communities, and Adjunct Professor, Dept. of Gender Studies and the School of Environmental Planning, University of Northern British Columbia: I would like to begin by thanking honourable senators for the invitation today. What I am about to present is drawn from my experiences of living in Northern B.C. since 1994, when I arrived here on a one-year contract and, like many other people, fell in love with the North and stayed. I have made a commitment to making my life and my career here in the North.

My presentation is a hybrid, distilled from my experiences teaching many Northern students who come to our university as well as running my own business. I have had a research and consulting business since 1992. Also, for the last 10 months I have been working for BC Healthy Communities. I have been fortunate to do a lot of research in the North on Northern issues, and much of that has been community-based research or participatory action research which actually means I get to work with people, not on them.

It is from those perspectives and that privilege that I speak to you today. I hope I have something different or unique to bring to the committee in terms of looking at a big picture. I want to urge you to take an appreciative approach to understanding the issues of rural poverty and farm families and those who live with those conditions and circumstances.

It seems to me that there is quite a stereotyping and some discrimination against rural folks. Rural poverty is not a problem of personal failure or individual difficulties. Rather, Northern and rural residents are actually very strong minded, capable and courageous people who have chosen and adopted a way of life that has been their heritage; they have held fast to the principles and practices of their ancestors in loving the land and making a living from that close connection.

With the Great Depression we had to come to terms with notions embedded in Elizabethan poor laws that if you were poor or if you were out of work, it was your own fault. We had to come to an understanding that government had a role to play when economic circumstances were such that it was beyond the role or the capacity of an individual to cope.

Canada's great tradition of a welfare state was embedded in this notion of government acting collectively in the best interests of its citizens, not caring for the weak and disabled and servicing the poor, but working for its citizenry as a whole, including those less fortunate, in difficult times of economic transitions caused by global forces. The dissertation I completed at Simon Fraser was on this very topic, the evolution of social policy by various levels of government. That transition in the role of government was fuelled not by Mackenzie King as is popularly believed, but by the growing awareness of the Canadian population.

Today, I believe, it is again global forces that have shifted the playing field for farm families. The move to mechanization and industrialization of farm operations has made them horrendously expensive to operate and beyond the notion of the family-run farm. Unless you are a corporate conglomerate or you are involved in the scientific creation of food-like products in the marketplace, there is decreasing opportunity to make a living from the family farm.

However, the Chinese character for crisis is made up of two separate characters, one for danger, one for opportunity. I believe there is a real opportunity for a far-sighted government to address this issue in a way that will be vitally important for the future of the country.

The population in Canada has begun to speak up and wants leadership from government. In this high tech information age, the reality is that people want substantive and meaningful change. I think the voice of Canadian people on the environment, for example, is only the tip of the iceberg. People are beginning to fear the food they eat, when in our country we had taken for granted that the food we eat is safe for infants and for our elderly. I believe that there is an opportunity for the government to support local food production that would actually increase access to an improved economy in local regions. I think the skills and commitment are certainly in place in the hearts and homes of farm families, ranches and Aboriginal communities who want to preserve the capacity of local land to feed local people.

I want to stress what I think will not work as a mechanism for addressing issues surrounding agriculture and rural poverty. There has been a strong move to develop and support policies designed to encourage rural residents to move into larger centres as a means to rationalize services and reduce costs. That is not enough for those residents. In many ways I see it as almost a forced relocation. It is not good for the country as a whole. While encouraging greater centralization may make sense for the mechanics of governing, it does not encourage healthy communities.

I want to urge you to consider what will work. I do not want to underestimate the hardship and suffering. I have read some of the testimony presented to this committee and I sincerely believe that it is tough out there. I was at a conference in Saskatoon two years ago and a farm woman stood up in the closing panel and confronted the panel of experts presenting on agricultural issues with the phrase ``we are being researched to death literally.'' She went on to explain the physical ill health and mental strain endured by those who are struggling to farm and to make a living and to sustain a livelihood that has supported their families for generations and the country for centuries. With all due respect, in her mind the workings of hearings and research reports were like Nero fiddling while Rome burned. I have heard that same ``researched to death'' phrase from many elders in different Aboriginal communities and many residents in smaller communities as well.

The harsh reality of rural conditions is hidden from view and allows for short-sighted policy, which I believe reinforces the circumstances that worsen the conditions of rural lives. Thus, I do want you to adopt this appreciative approach. It is important to recognize that there will always be a percentage of the population that loves the land and prefers not to live in large urban centres, and I suggest to you that the problems associated with urban living are causing more and more people to leave the city centres and move to smaller cities and towns.

Statistics Canada has reported that in certain key groups the traditional shift of rural to urban, which has been a steady trend in Canadian history since the turn of the last century, is in fact reversed. There are more people moving to rural communities than rural people moving to cities in two key age groups, mature career professionals looking to slow down their profession and take life a bit easier and young professionals with young children. They are looking for the lifestyle and the safety that they perceive in rural communities. Statistics for the U.S. show similar trends.

I believe there has been a fundamental lack of respect for rural people. People who live in rural areas choose to do so for love of the land, as I mentioned before, and for a preference for a lifestyle that does not involve a two-hour daily commute, house prices beyond the reach of most people and survival mechanisms that mean you do not look other human beings in the eye during the course of an average day. It is not because of a failure to make it in highly competitive urban settings. I have heard complaints from many people who have moved from communities like Williams Lake to Vancouver because the visit to the supermarket in Vancouver takes only 20 minutes, whereas if you go with your husband to the supermarket in Williams Lake and you leave him in the car because you are just running in to get a head of broccoli, he waits for 45 minutes because of all the people you stop to talk to.

Second, what we eat and where it comes from and what it does to us when we eat it are reinforcing the need for revitalization of local agriculture. Most of what is sold in our local supermarkets has travelled miles to sit on those shelves. If you read the labels on those products, we are no longer eating food but highly processed, highly adulterated products that, if truth in labelling laws applied, would not be called food but food-like product that may contain traces of food. The risks associated with eating products from industrialized food processing have been heightened in recent months: spinach from one processing plant poisoned people in seven states and in Canada; hormones, antibiotics, inhumane treatment and unnatural practices have resulted in mad cow disease; there are problems with avian influenza.

Milk and beef from the Robson Valley are shipped to Vancouver and then returned to store shelves in Mackenzie via Edmonton, packaged and too expensive to buy for the local people who actually produced it.

The healthier choice, buying organic, is often a more expensive option, increasing dependency and reliance on the cheaper options which are often expensive in other ways. Fast food outlets and processed junk foods are fuelling an epidemic of obesity among our children, while media images stress a particular, usually slim, body image.

Aboriginal people have always lived on local food. Their traditional healthy diets have been undermined on two sides. First, they have been assailed by media and advertising that have introduced fast food and junk food and have brought on an epidemic of diabetes, for example, to a people who did not know the disease before European influences. The Aboriginal diet, actually the traditional foods, had provided a natural protection against diabetes. That research was carried out here at UNBC.

I cannot stress how wonderful it is to have a university in the North that actually gets some of these issues on the table and some of the knowledge that is coming forward, because Northern issues have a Northern lens.

Second, environmental contamination has reduced if not extinguished access to that traditional way of life, to plants, berries, salmon and wildlife. The pine beetle has driven wildlife away and industrial resource extraction operations have poisoned land and water while encroaching on sacred sites and diminishing prime resources of livelihood and food.

Last August I was in a small Aboriginal community where one of the agencies was hosting a focus group. They were asked what is the most important health issue facing their community and they talked about food, about the fact that when they put the fish to dry it slides off the skin, and that the elders are advising them not to eat the moose because the livers look so diseased.

What are the opportunities? In B.C. a young couple instigated the 100-mile diet from a challenge they had set themselves as a married couple to eat for one year only what could be obtained and produced locally within 100 miles. It is a modern-day version of the traditional Aboriginal relationship with the land. The 100-mile challenge is now being taken up by many people, from one-off efforts such as office potlucks to long-term family commitments. Buying more locally generated food would increase economic stability and security for food producers and increase opportunity for improving the health and safety of local citizens.

One of my colleagues, Dr. David Connell, did research on the impact of the farmers' market. He originally did the research in Prince George, and the amount of economic activity generated by the farmers' market there was so impressive that other communities across the province have undertaken similar research.

There is also, I believe, a greater opportunity for safety. The accountability that can be expected when you look in the eyes of the person who is buying your mushrooms or tomatoes is a far greater guarantee to public health and safety than any degree of food inspection. I believe the increasing education and awareness of Canadians regarding the environment and their insistence that elected leadership actually show some leadership on the issue will spill over into related issues, such as food production, as Canadians become more knowledgeable about the costs and risks associated with the loss of agriculture and the undermining of sustainable rural community.

Last week I hosted a forum on Healthy Terrace, with a spotlight on hunger and poverty. Then I was in Smithers for the BC Rural Network conference. There had been a landslide on the road between Smithers and Terrace. Both communities had a heightened sensitivity to how cut off they felt and how many days of food supply they had in their communities. They were still clearing the road and it was down to one lane of traffic.

While we argue about definitions of rural or levels of income that define poverty, we continue to ignore the erosion of the family, of heritage and of skill, and we delay the support crucial to the well-being of decent, hard-working and law-abiding Canadians who have earned and require sustenance from their nation as part of the fabric of the land.

I urge you to anticipate this growing groundswell and actually put in place increased support for local farming and rural community through far-sighted and thoughtful policies embedded in an enhanced respect and support for rural livelihoods as a necessary commitment to the future of a healthy and diverse Canada.

I realize that we cannot overturn international food systems, but I do believe that we should be supporting and encouraging a reasonable alternative in increased local food production. I urge you to be part of the solution and to provide the solid leadership that is so needed on these crucial issues.

The Chairman: Thank you very much. That is exactly what we hope we will be able to do as part of the solution, thanks to people like yourself.

Senator Mahovlich: You mentioned change. It is very difficult to make a change with the government, but last year I was staying at a medium-priced hotel in the middle of Rome, and a huge ruckus started up at two o'clock in the morning. It was the middle of the week and they were putting up tents for the market. Two or three times a week the farmers come into the city and display their goods.

In Toronto, we have a market once a week, the St. Lawrence market. Some people go there every Saturday morning. I know my friend Eddy Shack goes Saturday morning for the market, but it is the only market. To make a change for the city of Toronto is I would say very difficult because you are dealing with big players like Loblaws and all the huge stores they have. Those huge stores purchase from South America. Much of their lettuce and salad is not Canadian. In order to make a change, would you say the government has to come in and force these people to buy Canadian?

Ms. Healy: No. As I said, I think it will be very difficult to overturn international and national food systems that do have a very strong hold on the market.

I see a different approach, which is let us fund and support the alternative. It is that old saying, ``Build a better mouse trap and the people will come,'' or something like that. Dr. Connell found in the research locally that when people come to the farmers' market they begin to build it into their routines. It becomes a weekly ritual on Saturdays mornings. We have ours only once a week and only in the summer, but a significant percentage of the population now comes. It is the place to go and it is much more than just the food. There are all kinds of social relationships and then there is further economic benefit.

I do not think we can tackle companies like Loblaws, but I do think we could invest time and energy in this positive alternative and more people would turn to it. I was born in Ireland and grew up in England and in both countries what you described, senator, is quite common. A significant percentage of the population prefer to buy their fruit and vegetables from the markets. They have a relationship with the farmer or his wife who comes in.

Senator Mahovlich: Right. Would England have the same rural problem that we have now?

Ms. Healy: Well, no. Actually, you could drop England in Northern B.C. and lose it, I think, so they do not. They have managed to sustain an agricultural economy even in the face of joining the EU, where the government encourages certain producers not to produce because of European Union agreements.

Senator Peterson: When we were in Eastern Canada we heard from a few witnesses who are living in poverty. When it is near the end of the month and they have $40 or $50 left, they have to decide whether to buy food, pay the rent, buy medicine for the children or pay the Hydro bill. As a result, they are probably not getting nutritional foods and their medical costs will rise. This raises the possibility of looking at a guaranteed annual income for individuals. What are your thoughts on that?

Ms. Healy: I have listened to many of my colleagues discuss this and I must say that their arguments have convinced me. I am not an expert on the issue. I will say that I grew up very poor myself. My dad got paid on Friday night and Friday night we would have fish and chips because there was cash in the house. We would have a wonderful Sunday dinner but then by Wednesday or Thursday we were down to beans on toast and sometimes nothing. I grew up hungry. When I did my research I was looking at working people in Canada during the Depression. I believe that what I found during that research holds true today, that when you have that choice to make, you will starve. If you have only a limited amount of cash, the one thing you can cut back on is food.

When we look at gender issues, it is often the female who then lives with chronic conditions because of poor nutrition, because she will make sure the children are fed. If the husband is working then he gets a good meal because they are dependent on his work. Literally, you see people putting their bodies into that gap between money and the things that they need; they use their bodies to bridge that gap.

Senator Peterson: Is it quite possible that medical requirements could cost more than the income?

Ms. Healy: Yes. Absolutely.

Senator Peterson: The second thing we heard is that in rural Canada, literacy is a big issue. What are your thoughts on that? As a nation, how are we dealing with this? Are we doing well or poorly?

Ms. Healy: Locally, a big problem we have with literacy is that it is often men who cannot read because they had the opportunity to work in the forestry industry. For example, the high school in a community I did research with has the lowest graduation rate in the province because the young boys are so attracted to these jobs which actually pay very well, so 10 or 15 years later they have a truck, a boat, a nice house. They have all of these things, but when problems hit the industry, they cannot find work because they actually cannot read. To make matters worse, there is a huge degree of pride involved for a man to admit he cannot read. Early in my research career here in the North I was encouraging an older gentleman to write down his thoughts, and it suddenly dawned on me that he could not read or write. Then I said, ``Perhaps I can do that for you if your arthritis is bothering you,'' which was something to solve his pride. It is very shameful, particularly for men I think, to admit this.

The economy in the North goes with boom and bust, and I believe that violence in the family, depression, mental health issues and so on all arise because of a man's lack of capacity to find another job when all he has ever done is work in the woods and that has been undermined.

Senator Peterson: Is that still occurring?

Ms. Healy: Yes, definitely.

Senator Peterson: It is ongoing. Something has to be done in the early stages rather than later.

Ms. Healy: Absolutely. I would also like to stress that local rural communities are not competing on an even playing field when it comes to funding for programs. I talked about rural people being courageous and strong. For example, in one Aboriginal community where the unemployment rate for the young men under age 30 is something like 98 per cent, they are running programs that are designed and carried out locally. Frequently they are compelled to find project- based funding to run these programs. That is a very debilitating, demoralizing occupation. You need money to run these strong programs, but when the call for proposals comes, you are actually competing against organizations whose annual budget is more than your community's entire municipal budget. The rural and smaller communities are on an unequal playing field when it comes to seeking funding, unless the funder specifically designates a geographical component or actually sets the stream so that they can participate. Our smaller communities are like the little hamster on the wheel, going faster and faster and not getting anywhere, and the early preventative programs and the strongly grounded interventions are suffering.

Senator Gustafson: I wanted to touch on the area of retiring farmers or retiring people in rural areas. Today, if a farmer were to sell his farm and try to buy a house in Vancouver, Toronto or Edmonton, it would be impossible.

I was just sitting on the plane with a man from Edmonton. He said his sister bought a house 10 years ago for $150,000 and now it is worth $450,000. Farmers do not have that. You could sell 10 quarter sections of the land in different areas and you would not get enough money to buy a very modest house in a rural area.

The other problem farmers have is pensions. Basically they have no pension. They might get $800 a month. You know where that goes today. I guess the question is what do we do.

Ms. Healy: Actually, senator, in the North it was very much the practice that you came here, raised a family, made a good living and then moved to Victoria on retirement. Well, seniors cannot do that any more.

Senator Gustafson: You could do it 20 years ago.

Ms. Healy: Not today. On the other side of that coin, though, is that I enjoy research with seniors. With the Prince George Council of Seniors I designed and carried out a survey. We called it North of 65. We heard very strongly from the seniors that for many of them, retiring to Victoria is no longer an option financially, but for many it is also not something they want to do. Instead, they would like to age in place. We did research in one of the local nursing homes with a gentleman who always lived rurally, and he found the noise and the air quality in Prince George absolutely depressing. That was not how he wanted to live his sunset years.

We have seen a shift in the North. Economics is part of it, because many seniors cannot afford to buy a house in Vancouver or Victoria anymore, but many have sold their houses because the spread of Prince George got too close. They build and move further and further out. People genuinely love this kind of life. When I say forced relocation, it is not hyperbole. Many seniors feel that they are being forced to relocate because of the worry about health and access to health services because of being so cut off.

In my opinion, we need to support the choices that rural people want to make and the ways that they want to live. We have absolutely sold farmers and farm families short in this country. They have been the backbone of the country. In 1900, I think two-thirds of Canada's population lived in rural areas and was dependent on that for a lifestyle and livelihood. We have gone so far away from that with all of the encouragements. Schools have been closed down. In the small community of Wells, for example, the people fought to keep their grade school open, but for secondary school the children have to commute more than hour each way through very rocky terrain and mountain passes and, particularly in the winter, the travelling is dangerous. We have to support rural communities so that they can be a vibrant source of livelihood and lifestyle.

One of your previous witnesses testified strongly to the sense of cohesion and the longing that exists in rural communities. Certainly that is true, but it seems that as a nation we have set out to disentangle that social fabric.

I will tell you a short story to illustrate what I mean. Women learn not to look anybody in the eyes in the big city because they might come on to you. They might be crazy. We tend to have a real Teflon coating. People in the big city do not even know who their neighbours are. When I first came to Prince George as a new professor I was teaching the evening class, which I love because you get a mix of ages. I was so nervous my first times teaching I could not eat before class, and the only place I knew to go afterwards was the Wendy's, where I would have a baked potato with chili. The third time I was there the guy in front of me turned around and started talking to me very friendly. I was looking at everybody in the restaurant thinking I hope they remember what he looks like for when they find my dead body. It took me about five minutes to realize that he was just a nice guy. That is the joy of living in Prince George. People are friendly and they talk to you. Now I get into trouble when I go to Vancouver because I look people in the eye and I talk to them.

That says something about life in rural communities. One of your earlier witnesses talked about how if a house burns down everybody rallies around, and that is very true. It seems to me that the North has an unfair reputation of being full of red necks. I think it was a British prime minister who said that you can do what you want as long as you do not do it in the streets and frighten the horses. I think rural people have that same attitude. If you can help build the barn, there is respect for you as a human being.

The Chairman: Thank you very much. We appreciate your coming.

Honourable senators, we have now before us our second panel of this visit to Prince George. We are happy to welcome Catherine Nolin, Paz Milburn and Baljit Sethi.

Catherine Nolin, Assistant Professor, Geography Program, University of Northern British Columbia: Thank you for the opportunity to discuss the issue of rural poverty among immigrants and refugees in British Columbia. Since I arrived here more than five years ago, I have been impressed with the historical and contemporary reality of rural and small town British Columbia as viable places for immigrant settlement. We know that for any place in Canada — rural or urban — economic opportunity is a prerequisite for viable settlement; there is a need for jobs, advanced education and services. I am sure that Mr. Halseth highlighted for you the broader issue of economic viability in Northern British Columbia.

Unfortunately, we know from your interim report that rural poverty is a critical and outrageous reality given Canada's prosperity. Parallel to this emerging portrait of rural poverty is the reality of poverty among recent immigrants and refugees in Canada. Geographic concentration and/or dispersal in urban, rural, small town, downtown, suburban and remote spaces makes a difference to the settlement and integration experience.

My task this morning is to emphasize the diversity of rural residents in British Columbia and to sketch out the particular situation of immigrants in rural and small town British Columbia. It is not a straightforward portrait that I will paint, not only because of the paucity of data on immigrants beyond the big three of Vancouver, Toronto and Montreal, but also because the circumstances of settlement beyond the Lower Mainland actually offer some interesting avenues out of poverty for immigrants in British Columbia.

First I want to stress that I think we need to take seriously the recent work by researchers at Statistics Canada and others who highlight for us four key points related to immigrants, refugees and the issue of poverty, and then we will talk about the rural issues.

The four key points are the persistent and growing income gap between immigrants, in particular refugees, and Canadian-born residents; the above average levels of poverty among recent immigrants, which again are growing; the above average levels of unemployment; and the under-representation of immigrants in well-paid jobs in conjunction with their overrepresentation in the low-income sector.

Where is this happening? Living in urban Canada is the reality for the vast majority of immigrants coming to Canada. Approximately 62 per cent of Canada's immigrants live in Toronto, Vancouver or Montreal. If we include Edmonton and Calgary in the mix, we are talking about 90 per cent of recent immigrants settling in one of only five mega cities in Canada. The vast majority of immigrants are heading to urban areas.

The policies that have been put in place with the point system under which immigrants are selected for entry into Canada based on their skills, education levels, language ability and so on certainly influence the urban nature of immigrant settlement. For our discussion today I think it is quite important to realize that it is almost impossible for someone from a rural background with skills that would be entirely suitable to rural or small town life to be accepted. Rather, our immigration policy facilitates moving temporary workers to rural spaces. These include mainly semi- skilled or lower-skilled rural residents from places like Mexico, the Caribbean and the Philippines. This is a new phenomenon for British Columbia, which in 2004 launched the Seasonal Agricultural Workers Program, a labour mobility program that has been used extensively in Ontario. I will come back to that in my concluding comments.

I have stressed that there is a rising and high level of poverty among immigrants in Canada as a whole. There are approximately 580,000 immigrants residing in predominantly rural regions in Canada. That number is almost unchanged since 1996. The key point I want to stress is that among immigrants presently living in predominantly rural regions, those who arrived before 1981 integrated well economically into their Canadian communities, sometimes outperforming the Canadian-born residents of those predominantly rural spaces. However, new and recent immigrant groups have not integrated economically as well in the predominantly rural regions.

Let us look at British Columbia in particular. Skilled workers have made up the bulk of immigrants to B.C. About seven in 10 immigrants residing in the province were admitted to the country in this category. Fully two-thirds of immigrants aged 25 to 44 years in British Columbia had a university level education. They are highly skilled and highly educated and yet they are underemployed with higher levels of poverty than we have seen in the past.

I will conclude with a few points so that we have time for discussion.

I would say that the successful inclusion of recent immigrants into the rural Canadian labour market and Canadian society will not be achieved simply by leaving matters to market forces. Rather, a wide range of policies are needed to speed up the process of integration, reduce the likelihood of poverty, and address sources of disadvantage. Such policy initiatives might include, first, the better coordination of settlement services in British Columbia, and funding to accompany this coordination, so that new immigrants know the opportunities in smaller centres and rural areas. I am sure Ms. Sethi will highlight that.

Second, policies are needed that address the lack of status and offer protection for immigrant women who leave abusive partners in rural and isolated communities. That is an issue we are seeing more and more in Northern British Columbia.

Third, policies must recognize and promote the so-called hidden skills of new immigrants to perspective employers as a way to counteract the under-employment or lack of employment in rural places.

Fourth, the provision of language skills and training to new immigrants, which is the work of the Immigrant and Multicultural Services Society, which you will hear more about, is critical and needed beyond Prince George and the communities that we serve here.

Fifth, we need expedited recognition of foreign credentials, which is an issue for all immigrants in Canada.

Sixth, temporary permit holders should be able to apply for permanent residency after so many years of successful employment. In 2003, approximately 87,000 temporary workers were admitted into Canada, the bulk of them being mainly farm workers, nannies, child care providers and so on. The reality for temporary workers in rural Canadian spaces is that they come for 5, 10, 15 or 20 years sometimes without the ability ever to apply for citizenship and contribute positively to the rural spaces they are working in.

Finally, we have to improve funding on the issue of rural, small town and remote settlement of immigrants; more specifically, we need funding on rural poverty among immigrants and refugees. The vast majority of research that we can draw on today is based on the issues of immigrants and poverty in urban spaces. There is minimal information on rural spaces and immigrant poverty, and we need to know more about that area.

Settlement resources in regions of low immigration must come first if we expect newcomers to settle and stay in those areas. Funding based solely on the number of immigrants who are already in a particular province is not appropriate and we have recommended that there be a minimum threshold of core financial support for settlement agencies to carry out their work.

The Chairman: Thank you very much. That applies at the national level as well as at the provincial and rural levels.

Paz M. Milburn, Manager, Prince George Council of Seniors: I have distributed brochures to give you an overview of the services that we provide for seniors in the Prince George area.

Even though I am the manager, I am still the front-line worker who deals directly with the seniors needing financial assistance or information on the different benefits that they can apply for once they reach the age of 65.

Statistics Canada information reveals that 10.3 per cent of seniors in B.C. live on a low income. That is a much higher percentage than in all the other provinces. Alberta has only 3.5 per cent of seniors living on low income, and Saskatchewan has 1.7 per cent. Quebec and B.C. have the same rate of 10.3 per cent.

When speaking of poverty, we are talking about seniors who have an income below $15,000 a year before taxes are deducted. There is a perception or myth that once people retire they are well off and able to live comfortably. Though I am not a senior yet, I will be in a future time. I was told by Revenue Canada that if I keep working at this rate, with the amount of money I earn, by the time I retire I will receive $26.98 a month from CPP. How can you live with that?

Most of the problems we encounter every day are seniors asking for financial assistance. The rent in Prince George is $500 for a bare minimum basement suite, and most of those do not include utilities or heat. We receive phone calls from seniors asking for help paying the rent because they are short $250, or else the landlord will ask them to vacate the place. We try to help them by tapping into the community. Whom can we ask for help with that? It is appalling to see that the seniors are the forgotten population, because when we speak about poverty we think about the general population, about disabled people, not about all the seniors who are isolated and not able to tap into the resources available in the community.

One of our services is delivering Meals on Wheels to low-income seniors. We have 43 clients at the moment and 50 per cent of them have an income of $12,000 a year. Some of them are not very healthy because they cannot afford to buy their medication since they have a very small amount of money to go around. Most of the time they call us to see if we can help them pay their heating bills, or else they will be cut off by Terasen Gas, or their telephone bills or their Hydro bills.

Many of the seniors we provide services for also need financial assistance for hearing aids and dentures. We have a denture program and we are funded by a local non-profit organization in Prince George, but we can help only six seniors a year and we are allowed to provide them only $1,000 per denture and a denture costs at least $3,000. Where will seniors get the extra money? Not having dentures affects their health and the way they live. Therefore, there is no other way for them but to keep crying for help, but we can help them only so much.

This is only the Prince George area we are speaking about, not the whole province. With the colder weather conditions we have here, we have to put more money towards our heating and Hydro bills. We do not money left for individuals to pay the rent or the grocery bills. That is where poverty lies for most of the seniors in this town.

I will not elaborate on that more, but I will be happy to answer questions, because this is the reality we deal with. They are real people we deal with every day. Those are my facts and my issues.

The Chairman: Thank you very much.

Baljit Sethi, Executive Director, Immigrant and Multicultural Services Society of Prince George: I have been working with immigrants for the last 30 years, and I am also an immigrant and have gone through all the hassles and struggles that the majority of educated immigrants face.

Immigrant and Multicultural Services Society is stationed in Prince George, but we provide services to a greater area. We travel around and we have clients from Prince Rupert to Valemount and Fort St. John to Williams Lake, but our funding is very limited. Most of the things we do we do from other programs and then we contact the immigrants over there.

Prince George was considered number three in receiving government-sponsored refugees in the 1980s to 1995, and there is still a heavy flow of East Asian, Polish, Iranian, Middle Eastern and African refugees and immigrants coming here. We used to get four or five families in a week. We had very limited resources, but the community is wonderful. They supported us voluntarily, financially, and in every respect.

My experience is little different. I do not rely figures. I go on the experiences of the people. I feel that the immigrants who stay here a little longer are in the long run better off in smaller communities than in cosmopolitan cities.

In the past, when many of our immigrants came here we did not have many opportunities for upgrading skills or language classes and all those other facilities that professionals can have if they live in the bigger cities like Toronto, Montreal, Vancouver and Edmonton. We had very limited resources in Prince George at that time, so people would move away from here. Many of them would keep in touch with us, though, and they said that they had made a big mistake leaving Prince George because here they had more community support and living was much cheaper and more convenient.

Now things have changed. We have more resources in the community. The house prices are affordable so that people can buy a basic house in the $120,000 range, which you cannot even dream of in a bigger city. The quality of life is much better. In my experience, the immigrants who come to this northern region buy a home within two years and then they feel settled. That cannot even be considered in bigger cities.

At present, the majority of the immigrants are underpaid, but still they are much better off. The majority of them are working, but there are two special groups of immigrants who have more difficulty getting decent jobs.

One is immigrants who come after the age of 40 or 45 years. Sometimes I consider them as semi-retired seniors because they live that life. They are not able to get into any training course or language classes and they have no opportunity to work in many fields.

The second group is women. Women mostly are the ones raising the family and supporting their husbands and they have very limited opportunity. They are the majority of the senior immigrants who come as sponsored.

The men are not able to get more than $8 to $10 an hour. That establishes their social status, and many people with that social status suffer mental health problems including depression, especially because the winters are so long. They need to have some kind of support so that they can contribute something to this society. They are willing to do that.

We have been getting many skilled immigrants, especially people coming from Europe. They were highly educated, technical people. Although their English was not good, there is not much difference between English and their language so it is easy for the Europeans to pick up English and then they are able to go back into their professions. However, once they start other professions, the majority of immigrants stick to the new line because, I have realized, immigrants are hesitant to change many jobs the way Canadians do. They do not want to lose whatever they have in hand unless they are promised something better.

We never realized that after 20 years we would have a shortage of those skills. We should look into the skills immigrants have and train them and then we could prepare for the future. Canada never prepared for the future. The biggest waste in this country I say is the human resources that are wasted. We have wasted so many educated people. Doctors are washing dishes. I have a client who was a Ph.D. in the field of horticulture now working as a janitor. He is simply waiting, and when he gets citizenship he will go back or go to another country. That is the fate of many immigrants.

It is not fair to Canada and it is not fair to the people who choose to become Canadian. We want Canadians to stay here and to contribute to the economic situation of this country, not to wait to have Canadian citizenship and then move to another country.

Canada is now not the only country wanting more immigrants. Many European countries, Australia and New Zealand all want more immigrants, and the immigrants now have a choice. Many Canadian, American and European companies go to third world countries and give contracts to those people to work there and they pay them according to their own country's standards. Still, they are saving money and the immigrants are working in their own country and earning the same money.

If we want to bring immigrants to Canada, we need to look at our policies. We need to look at how we can address our shortage of skills and how we can retain immigrants here. Bringing immigrants is not a problem. Many people would like to come to Canada for social, economic or political reasons, but after they come, how many people really stay?

At the last national settlement conference we had three years ago in Calgary, the minister said that we need more people. He said that many people have already been given a visa, but they do not want to come to Canada. That is the reality. We know that many people who do come end up frustrated because they do not get into their own field. Once a person is a professional, whether they are from a poor country or a rich country, when they come to Canada life is very expensive and their social status goes down. That has an effect on immigrants' mental health, which is a big issue.

Many people's qualifications are recognized but their language skills are not up to the standards needed to function in professions in Canadian society. In B.C. we offer courses only up to level 3, which is just basic communicative language. It does not prepare immigrants for training courses or any other high level English course. The acceptance level for any training post is level 7. To move from level 3 to level 7 is not a question of two months or four months. It is a question of maybe a year or two years. There is no way that they can pick up language that is totally different from their mother tongue within two months or four months.

Some institutions offer English-language courses, but they are mainly for foreign students. They are not targeted to the needs of immigrants.

One problem is that Canada is one country but each province acts as a separate country. The evaluation and assessment in one province are not accepted in the other provinces. There is no immediate help available to immigrants to upgrade their skills to work in their own field. Every province works on their own and there is no national system. I have gone through the system province to province myself and for my clients.

There is no national database. How many people have skills that we do not know about? How many people's skills have we wasted? We have no information about that. Even big companies depend only on local resources. They do not know what is available in the other parts of Canada.

There is no vocational training combined with ESL programs. Many immigrants who want to upgrade their skills also want to improve their English. Instead of spending a year or two first to improve their English and then going to training courses, why can we not combine language classes and skills training so that it will be a shorter period altogether? That would be less expensive for Canada and less expensive for the immigrants also.

Immigration research indicates that the government-sponsored refugees settle better into the Canadian labour force and economy. They contribute more than the immigrants. The reason is that the government-sponsored refugees get assistance from the government. Even the other immigrant refugees, once they apply for refugee status and are interviewed by the senior immigration officer, are entitled to assistance and then their medical costs are paid by the government until they become landed immigrants. That is not the case for immigrants; they have to look after their families' needs and obligations right away and there is no immediate help available to them. They take whatever comes their way and then they are stuck with that. It is not a loss for them. It is a loss for the government because those immigrants do not pay taxes, which they could contribute. They could have the ability to pay.

My recommendation is a skills-connect program, which we recently introduced. I do not agree with that because there are too many conditions, like not having been in Canada for more than five years; five years pass very easily and quickly moving from province to province or place to place. Also, having three years pre-experience in their own country is not possible for most of the immigrants. I already mentioned the issues with English skills upgrading. The CP program is only for EI people, but you could modify it a bit or recreate it for immigrants, so that companies could hire the immigrants and the immigrants could gain experience on the job and they could be paid a living allowance or something so that they could work.

Senator Mercer: All three of you have told us similar stories about the recognition of foreign credentials being a problem. We have heard that before, and we see it every day, especially those of us who spend some of our life in big cities. In Ottawa, when we get in a taxi, we know that the taxi driver is probably much better educated than we are and is a professional. Many of them are professionals in the countries they come from.

I continue to have a problem identifying who the bad guy is here. Everybody says there is a problem, but who is the bad guy? Is it the medical association or the engineering society? If so, then maybe we need the government to legislate. Those associations and societies want to self-regulate, to self-govern, but if they do not it well enough, then maybe government needs to step in and start governing the process for them. Then the government can fix it or screw it up, as sometimes government can.

Do you have an opinion on that, Ms. Nolin?

Ms. Nolin: I think the answer is twofold. On the one hand, I think we have to look to the professional bodies because they are the ones doing the recognition of credentials. We are not. There have been successes. For instance, the nursing association has been quite successful and at the forefront. We can see that it is possible.

On the other hand, I think it is important that there is a role for the government to put pressure and to highlight the fact that this is opportunity lost, as Ms. Sethi mentioned. It is not a secret anymore. We all know that this is a critical issue and that there has to be some pressure brought to bear at the federal level.

Senator Mercer: You also mentioned in your comments that there are above-average levels of poverty for recent immigrants. I think we can all accept that as a fact. Have you studied what happens to the next generation of that same family?

Ms. Nolin: The findings I have seen recently have shown a different trend than in the past. For immigrants who arrived before 1981, their life was what was called the transition period where everyone recognized that it takes a while for people to get on their feet, but over time there was a merging with immigrants and Canadian-born workers so that eventually after five, six or seven years, there was a merging of those incomes and then the children did better over the next generation.

However, with recent immigrants in the last 10 or 15 years we have seen a widening of the gap between immigrants and Canadian-born residents. That coming together we saw in the past is not happening. Over time, there is a persistent transition penalty, and the children are experiencing the same thing.

Senator Mercer: Is there some systemic or inherent racism in that? It was about that time that our immigration policy shifted, rightfully so, to encourage people from other than European countries to come to Canada and people come from everywhere around the world now. Do you think that is part of the issue?

Ms. Nolin: I think that is part of it. In that time period, we shifted to the point system and recognition based on skills, education, language abilities and so on. We are seeing a more highly educated population arriving. At the moment, the immigrants in the highest levels of poverty in British Columbia are those who have come in under the skilled workers program. We are not seeing an unskilled or lower-skilled group. Therefore, part of the problem is the way in which people have been chosen. There is a mismatch with the jobs that need to be filled.

Senator Mercer: I would like to go back to our previous discussion about unemployment in the second generation of immigrants. What you described was the great Canadian dream: We come; we work hard; we do not necessarily succeed, but our children do. We have seen it in every city. Every major city has a neighbourhood that has been at one time Italian, another time Polish, another time Somalian and so on. The immigrants come and work together and then eventually all leave together to go to what we would consider better neighbourhoods.

Ms. Milburn, you talked about 10.3 per cent of seniors living with very low income. You did not mention, nor does your brochure mention, a food bank. Is there a food bank?

Ms. Milburn: We do have a food bank in Prince George. We have the Salvation Army and St. Vincent de Paul. Last December I did a hamper drive for very low-income, isolated, lonely seniors, and when we compared our list to the lists of the regular clientele of the food bank, not a single senior's name was on their lists. St. Vincent has 800 people who actually go to the food bank and to whom they provide hampers every December and the Salvation Army has more than that, but those organizations were appalled when I showed them the list of the low-income seniors who needed the particulars.

Senator Mercer: Those people are not being served by the current food banks?

Ms. Milburn: That is right. They are being neglected. Also, there are a number of mentally disabled people or people with mental illness in that same category.

Senator Mercer: In spite of all the stuff we talked about regarding immigrants, Ms. Sethi, I believe you said that within two years of arrival, almost all new immigrants are buying their own homes. Did I understand you correctly?

Ms. Sethi: Yes. That is true, because the houses were affordable. The prices started increasing last year, but before that in Prince George you could buy a basic home for less than $100,000, so with a $5,000 down payment you could buy a house rather than pay rent. Even now with the higher prices you can still buy a basic three-bedroom, older home for $100,000 or $110,000 or $120,000, which is not possible any other place.

Senator Mercer: Right. Thank you. You had better not put that in the report or everybody will be moving to Prince George.

Ms. Sethi: That is true. The other day I met an Iranian man whose family came to Prince George. He works at Home Depot. He told me he is glad they moved to Prince George because he had been working at Home Depot over there and when they transferred him to Prince George his wife did not like the idea of moving to a village, but within six months they had bought a house and their quality of life had improved. That is the reality.

We should regionalize immigration. We went to Fort St. John, Terrace, Kitimat, Valemount, and all those places. The living is less expensive. If you earn the same amount of money you can live more comfortably.

Senator Mahovlich: At what age do you consider a person a senior in Prince George?

Ms. Milburn: In Prince George, a senior is 60 years old or more, but to receive a benefit you have to be 65 years old. In some cases, people at the age of 55 actually fall into that category because of physical or mental disability.

Senator Mahovlich: Are many farmers here seniors?

Ms. Milburn: There would be a few farmers maybe around Vanderhoof and further on, and the farms would be run by the children now, because the seniors are getting too old.

Senator Mahovlich: Usually, if my memory serves me, most farmers I knew stayed on the farm and the family looked after their seniors.

Ms. Milburn: Yes, but now most of the seniors do not have their families to help them because they are physically not capable of looking after the farm. Most of the seniors here recently are selling their homes since they cannot live independently anymore because of the physical challenge of looking after their homes.

Senator Mahovlich: I see you have Meals on Wheels and the meals are prepared by Smokehouse Kitchen. Is that a restaurant here?

Ms. Milburn: It is a restaurant run by the Prince George Native Friendship Centre. We have a contract with them because they were the only ones who accepted to prepare the meals for $5 a meal, which is the most we could afford to pay.

Senator Mahovlich: We have Meals on Wheels in Toronto and it is very successful. People really appreciate a hot meal once or twice a week. It is very popular.

Ms. Sethi, I am wondering about refugees. You were saying that quite a few refugees come to Prince George.

Ms. Sethi: Yes. The majority of them apply for refugee status in Montreal and then they come to Prince George for forestry because they can get temporary, seasonal work tree planting or spacing. Then they realize that living here is much cheaper, and they do not go back to Montreal. Their lawyers are still in Montreal if there is a hearing.

The problem is that immigration takes so long for these refugee cases — five or six years minimum. By that time they have seasonal work and then they get EI, but they cannot go to English classes and they cannot take any vocational courses. We say that even if they have to pay, they should be able to take vocational courses and all that so that they would be prepared for better jobs in the future. Also, when we select people from overseas as skilled workers, if we tell them that this is the standard of English for being in Canada, they would be happy to take courses to upgrade their English while they are waiting for immigration. I think it would be cheaper in their own country too.

Our government should work with the institutions, universities and colleges overseas and tell them what we require, and some of the students would like to be prepared for the international job market.

Senator Peterson: Ms. Nolin, on the immigration policy in B.C., who establishes the structure? Is it the provincial government? More importantly, would rural areas have any input as to the requirements or special skills they would have of an immigrant?

Ms. Nolin: Interestingly, the British Columbia government has recently got on board with this idea of the regionalization of immigration or the regional movement of immigrants. Immigration is federal, but like many other provinces British Columbia has signed an agreement to run their own show. There is an interest at the provincial level to figure out a way to have communities beyond the Lower Mainland benefit from the high number of immigrants arriving in British Columbia every year. There have been a few preliminary steps to try to get communities around the province to know about this issue, to learn about for example the provincial nominee program, where communities can say what requirements they have and what jobs are available and figure out a way to bring people to those communities. I think British Columbia is at the tail-end of this movement.

Manitoba seems to be light years ahead. Many rural communities in Manitoba are very successful with the provincial nominee program, and by far the vast majority of provincial nominees are going to small communities in Manitoba.

It is something small communities in British Columbia are learning about and potentially can benefit from.

Senator Peterson: Yes. I think it would work better. Once immigrants get into the larger urban centres, they tend to stay there. I guess the more you find out what it is like to live in Prince George, the more likely you are to stay.

Ms. Milburn, you had indicated that if you kept working at the rate you are now you would get a pension of $26.98. I presume that that was CPP, right?

Ms. Milburn: Yes.

Senator Peterson: What does the old age pension, the old age supplement, without anything else, come to a for couple?

Ms. Milburn: The Guaranteed Income Supplement for a couple would come to at least $700.

Senator Peterson: Is that per person?

Ms. Milburn: Yes. Combined, it would be $1,400 a month for the couple.

Senator Peterson: That is plus the $26 a month. We are getting up around $16,000 for a couple, which it is still well below the $25,000 that has been determined.

Ms. Milburn: Yes. That is correct.

Senator Peterson: That is a gap that has to be filled.

Ms. Milburn: There is a big gap there. We do an income tax clinic every year and right now we have 30 clients with an income below $20,000.

The Chairman: Thank you very much. We have learned a lot. We will probably have other questions when we reread your testimony and will likely be in touch with you to find out more.

Colleagues, we will now hear from our last panel. We are very pleased to have with us Sharron Hill, Executive Director of the New Focus Society, and Brian Hill, President of the B.C. Breeders & Feeders Association.

Sharron Hill, Executive Director, New Focus Society: I am honoured and humbled at being chosen to provide this committee with information regarding rural poverty in Canada.

As executive director of a non-profit society since 1992, I have witnessed many changes of government, both federal and provincial. I have endured the roller coaster ride that each change of government brings, through all the ups, downs and rounds and rounds. Why have I tenaciously fought to keep our society going? Because we own a ranch, and struggling with my own issues about living under the poverty line, especially when my children were growing up, kept me fighting for the underprivileged and the most vulnerable people in our community.

Let me share some facts that reflect life in Quesnel.

We will start with women's wages. As forestry is our prime industry, the majority of jobs go to the males. Opportunities for women are still compressed into teaching, nursing, social service, office workers and retail positions. Only the teachers and nurses are protected by union contracts, while social services have to compete for funding, which keeps wages suppressed, and office workers usually are employed by small businesses that are struggling to survive. The male dominance attitude still prevails, which is the assumption that women are working only to stave off boredom or to augment their husband's already large salary. These issues have historically kept wages for women far under the norm for both Canada and British Columbia.

Turning to women's issues, child care is a primary need, especially as marriages have failed and many single parents are left to earn the living plus raise the children. Quality child care is necessary to support working families and to provide positive influences and quality learning experiences to the children in care, which is proven to prevent social ills, youth crime and mental illness in the long run.

Child care was gaining credibility and more businesses were being open to serve the children ages zero to six until the federal government pulled out of the Early Learning Child Care Agreement set up under Paul Martin, effective March 31, 2007. The provincial government decided that without the transfer of funds they too would pull out of funding child care in B.C., which effectively puts the burden back onto all working parents. Since mid-February around the province we have all been on the streets protesting the provincial government cutbacks.

Quesnel has a higher than normal incidence of domestic violence due to the stressors brought on by seasonal employment, a fact of a forestry resource industry, and that impacts the children of these families who learn to solve their problems through violence, thus continuing the cycle.

Health care for women is also a concern as we do not even have a gynaecologist in Quesnel and women have to travel a minimum of 100 kilometres to see a specialist.

Women's services are constantly underfunded. The province removed core funding for the Women's Resource Centres in 2004, and now the federal department of Status of Women Canada is shifting policy, which removes advocacy and may reduce the final piece of core funding that keeps our Quesnel Women's Resource Centre open.

Several other social services have been downsized or ceased altogether because the political shifts, both federal and provincial, are away from supporting and advocating for women in rural communities. This is shameful.

Another loss that our community experiences is that qualified, educated and experienced women have had to move out of the rural areas to find better or more stable jobs and improved wages. The ongoing political shifts and swings over the years have had a destabilizing effect on the rural communities and especially upon Quesnel.

The next issue I want to address is homelessness. Homelessness in rural areas was unheard of in 2000, but with the change of provincial government and their constant attack on the poor and unemployed through the planned obsolescence of legal aid, basic skills training and income assistance, the most vulnerable people were pushed out of their meagre circumstances to find temporary shelter with others and in many cases pushed out of their home community.

In 2005 we saw 1,126 households move from Quesnel or pass away. A great number of these families were on income assistance.

New Focus Society was funded by the National Homelessness Initiative to report on the profile of the homeless or those at risk of being homeless in the Cariboo-Chilcotin during 2004 and 2005. In Quesnel, we completed 76 surveys, which encompassed 103 adults and 50 children who were either homeless or at risk of being homeless. Fifty-one of those surveyed lived on less than $800 per month and 18 of those reported living on less than $200 per month. The majority of these people noted that Quesnel has been their home for three or more years, so they were not transient as the myths sometimes lead us to believe. Thirty-seven per cent of those surveyed admitted to having a disability or mental health problems and they were not receiving any ongoing treatments. Many of them did not have a CareCard, so they could not even see a doctor on a temporary basis.

Following our study, the Women's Resource Centre was funded for six months to assist women and their children who were homeless or at risk of being homeless. They helped 69 women and their children in that six-month period. The gap between rich and poor is vast and growing bigger every day. It is a travesty that in such a rich country some people are surviving only through the generosity of the soup kitchens in rural communities.

Next are employment issues. From the late 1990s to 2003, Quesnel suffered a deep unemployment slump of 18 per cent, and Human Resources Development Canada funded the New Focus Society to research the problem and develop some strategies and solutions. As mentioned earlier, the newly-elected provincial government pushed the unemployed to find work or to find a new location to live.

In 2004, thousands of people were disqualified from provincial income assistance and our community diminished by 1,126 households as people moved to the cities, to the North, sometimes to Alberta or as they died, and some were even murdered in the small town of Quesnel due to the fallout. Therefore, with fewer people actively seeking work and the forest companies pressed to take out the bug-killed wood, we actually witnessed a mini-boom of employment in 2005 and ``help wanted'' signs popped up in the windows of smaller restaurants and service agencies. However, it was the shortest boom Quesnel has ever seen, as a major forest company announced a shift layoff and 36 jobs were lost in November 2006 because of the market shifts due to negative beliefs in the marketplace around the bug kill.

We are fast becoming a one-employer community as West Fraser has been buying out other companies and is gearing up to be the winner of the forest company survivor game. Hundreds of jobs may be lost.

The forest sector dominates Quesnel's employment opportunities. Due to the mountain pine beetle infestation, this sector is in jeopardy. The community is hoping to mitigate some of the problems through government funding, but will it be too little too late?

The first of the youth issues is education. Lack of a Grade 12 education is a barrier to finding any employment in Quesnel, even sweeping floors. However, as our youth have endured the boom and bust cycles exacerbated by a single resource-based industry, forestry, more are choosing to stay in school and go on to post-secondary education.

Prior to 2005, youth had to leave the community for further employment-related training or academic learning and many young people chose to stay in the cities for work as there were not many opportunities back in Quesnel, even if they did have a degree. Our demographics clearly show a gap in population between the ages of 21 to 39 years, and the few people who do return come for family support issues and because housing and the cost of living is lower here than elsewhere.

Another large problem that the young people struggle with is the student loan system. Several rural kids have had to take out a student loan because their families, especially if they were farmers, did not have enough income to assist with education. Once they completed their courses, jobs were scarce, and if they became employed, it was rarely in their chosen occupation. Usually the jobs they got were minimum wage and minimum hours as baby boomers were holding onto their jobs until they could afford retirement. Therefore, the rural kids have been less able to pay on their student loans. When you cannot pay your student loan, you are hunted down, threatened, taken to court and humiliated, sometimes on a daily basis. How much of this can a person endure without feeling like a criminal in their own country? Is there any incentive for these young people to be contributing taxpayers?

The second youth issue is agriculture. Young people are not choosing to work the family farm. They have worked all their summers and spare time assisting their parents and learned at an early age that this is a back-breaking occupational choice that drains money away from family needs and there is no pot of gold at the end of the rainbow.

Viewing the agricultural corridor of Highway 97 from Prince George to Cache Creek, we see fewer people in the fields, fewer animals and a good many ``for sale'' signs on vacant land. It is difficult to find a farmer under the age of 50, and he is usually found struggling on his own while his wife and quite often himself have taken on work outside the farm to keep the household bills paid.

I hope this committee is seeking solutions.

The Chairman: Absolutely.

Ms. Hill: I offer some recommendations.

The first is if you really want to assist farmers, research their income tax losses back to 1997. Look back 10 years and make each farm family a one-time payment equal to their losses stated on the assessment that we got back from the Canada Revenue Agency. Most of those losses began with the high-interest policies, up to 25 per cent, beginning in 1981. Many of us are still carrying losses forward and still trying to pay off bank loans that grew on a compounded basis.

Second, do something for the generation who really were victims of farming losses in Canada, as those youth are your best hope for returning to and revitalizing the farms. Research the number of farm kids who had to take out student loans because their parents had below poverty incomes, and if the student loans are still in arrears, find a way to write them off. Quit chasing these student loan delinquents and assist them to clear their credit ratings. Assist these young people to become better citizens rather than treating them like criminals in their own country.

Assist young people who wish to take agricultural studies by offering grants, not loans, as they will need progressive knowledge to revitalize and reinvent farming that will have a future.

Develop a new farm policy that ensures that Canadian grocery stores offer Canadian-grown products first and imported products second. This policy should be complete with branding initiatives that will build incentive and build pride in Canada's agricultural industry.

Third, invest in rural communities through stabilized funding policies. It is time for politicians to realize that child care, education, health care and social programs are investments in the future and should be established as long-term funds, not held up as cost items that can be axed year by year depending on the ideology of the government of the day.

Fourth, it is time to reconsider hiring people to assist others in their own communities who need help dealing with government issues. The shift over the last several years of replacing real people with electronic voices and posting all government information and programs on e-technology may work for some, but it is a big disconnect for people in rural Canada. How can you expect those people who have struggled with poverty to own a computer and to know how to navigate the sea of information you provide? Not to mention the lack of literacy and numeracy skills of the average person or the elderly, which we know exists in the rural communities.

The Chairman: Thank you very much. That is a powerful presentation. I am glad that at the very end you dealt with the issues that you did because they are fundamental.

We will now hear from Mr. Hill.

Brian Hill, President, BC Breeders & Feeders Association: Well have a very broad background in the agriculture sector. We represent a lot of people through the BC Breeders & Feeders Association. There has been a tremendous amount of work done. I am sure you people have an idea of the statistics and so on, so I will not waste a lot of time with that sort of thing.

In the last little while, even before BSE or mad cow disease, our ranchers and farmers have been back to the 1980s level of prices. Ever since then there has been a steady incline in input costs, including fuel and fertilizer and all of the costs relating to growing a product. Therefore, asking farmers to become more and more efficient is just not working anymore.

I represent approximately 2,500 people in 16 associations throughout B.C. We have a three-way funding agreement between the B.C. government, the banks and the feeder associations that are set up. We loan out money up to a limit of around $39 million. In the last number of years we have been almost at our level. Our ranchers and farmers were using our programs. They are very good programs and they allowed many ranchers to provide a cash flow, which is something that the banks do not seem to want us to have.

Maybe I should give you a bit of background. Years ago, after I graduated from university with a bachelor of science degree in animal sciences, the best job I could find was working at Lakeside Feeders Ltd. as a cowboy in a feed lot. From there I went to work for Canada Packers. I have worked also for Excel Beef. We moved over here in the late 1970s, and I was also a livestock dealer. I have been a livestock dealer for probably the last 37 years, buying and selling cattle. We have run our own ranch and our own feed lot, and we run a buying station.

I have seen all aspects of this business. Believe me, in the last 10 years, particularly the last five years, there has been a complete erosion of the equity that people have in this business. You cannot continue to sell equity and remain viable, because basically that old cow that used to bring you a few dollars, you may as well shoot her now because of the rules for cattle over 30 months of age. It all has to do with free trade and various other things.

Somehow there has to be a recognition of the fact that you cannot compete with the rest of the world with one arm tied behind your back as far as input costs go. Canada seems to be the only country that wants to play by the rules, and the United States do whatever the hell they feel like and they do not even know that Canada exists as far as what we do.

In B.C., we represent about 7 per cent of the cattle population across Canada. It is still a viable business. It still produces a lot of dollars. It still produces a tremendous amount of income and the spinoff income is great.

I will give you an example from quite a few years ago when we were running a feed lot and a buying business, among other things. I had two people running three-ton or five-ton trucks hauling cattle in. We had a liner that was busy shipping cattle out to feeders supplying Alberta as an order buyer. I had the brand inspector pretty well full time. We also had another couple of people helping us farm.

Then the government changed one tax law, affecting basically the amount of money that a small farmer or a part- time farmer could make. They moved it from $2,500 up to $10,000 and took away the tax exemptions that the person could declare.

Out of that business I just described, I would take 100 head of cattle and sort them around and sell them to smaller guys. Those guys were working in a mill or driving a truck. They were doing something else, but their goal was not to work in that mill for the rest of their life. Their goal was maybe to have something else they could enjoy that would give them a little better lifestyle and give them a few extra dollars. After the government changed that tax law, we did not have anybody working for us anymore. The truck drivers were gone. The brand inspector was gone. The money that those people had generated and spent in town dried up. The machinery dealership folded because there were not enough people to support it. The same thing happened to our restaurant and everything else. The people did not have disposable income to spend in the small communities. That is what dries up small communities — not having disposable income. Granted there will always be people who will abuse the system, who will figure out how to get more money out of it than they are entitled to, but the government does not need to get everything out of the system. As soon as you change a few tax regulations and you take money away from an individual who might hire somebody else, you stop the money flowing. You are better off to leave the money in circulation.

A lot of things have been tried, and there have been so many programs. Over the years there has been income assurance. I do not need to tell you about all of the programs, but I do believe that, right now, to some degree, some of these farmers need a cash injection.

The other point is that you cannot continue to give cash injections because it breeds inefficiencies. You have to allow these people the wherewithal and input. I keep returning to input costs because if we are going to deal in 1980s values, then we should be back at 1980s input costs if we are to survive in this business. You cannot keep selling a cow, or, pardon me, a calf, for $1.20 or $1.30 on today's market. We sold cattle for that kind of money back in 1980 when the cost of fertilizer was $80 a ton. I bought my first tractor for about $9,000. Now they are about $90,000. Now a round bailer is $45,000 to $50,000. I paid $8,000 for mine. I am still selling hay for $80 a ton. How do you do that?

We have gotten to the point that in the last few years we have withdrawn a lot from the business. I do not make my income out of the cattle business anymore. I cannot afford to stay there and continue to lose money. I have not been able to invest a lot of time in our feeder association program because, frankly, I am sick of losing money. The trouble is that we are getting to an age now where we would like to retire. We would like to slow down. I would hate to see the equity that we have built up in our farms and ranches disappear in order for us to live for the rest of our lives.

This is what young people are looking at today. My sons do not want to go into my business. A few years back it was either get a little bit bigger or get a little smaller. Unfortunately, my boys did not want to invest in it because dad works too bloody hard. That is the problem today.

I wonder how many people in this facility here will go into agriculture. There is no incentive to stay on the land. Money is a great motivator, and people enter jobs and businesses based on the idea that there is certain light at the end of the tunnel and they expect to be able to provide their families and their communities with a decent living. Unfortunately, at the end of the day, most farmers figure out that by the time you take your expenses off your product, you are in the hole. This has not come about overnight. It has been happening for quite a number of years.

We definitely have to look at the different systems involved, especially the taxation laws, and also how we market cattle. We have to do things differently in that respect because the system we have in place today is not working. When the two major packing plants in Canada control where your products go, basically the farmer is hopeless or helpless as far as what price he will get. When everything changes, when BSE comes down, for example, and we want traceability and electronic identification, it all falls on the producer. The guy who is raising the calf is the one they expect to shoulder all the input costs. He has to put the tag in the calf's ear, and when it goes to Japan or the U.S., they come after him to say you raised a product that has a problem. In the meantime, every time fuel goes up and he has to haul that product to town, that is money taken away from the farmer. They do not add money on at the other end because there is no place to go.

In order for me as a feed lot operator to make money, I have to buy cattle cheap. Now, if I buy cattle cheap off the next guy, where is he going? In order to feed the cattle right, we have to buy cheap grain. How do we keep living out of each others' pockets when the rest of the world is moving ahead, when people are making an average of $100,000 or more in many places? They will pay only $25 or $30 for a steak dinner. We get paid probably 50 cents to a $1 for it on the raw product.

We have to do something about where we are going with our agriculture part. One big point is infrastructure, because nobody is putting any money back into it, not in B.C.

British Columbia is to some degree a very diversified part of the world. They probably grow more feed in Alberta in five miles than we do in 50 miles in this part of the country because we have only little pockets here and there, but it is still a very viable industry and it still contributes a lot of money to the economy. Thank you.

The Chairman: Thank you very much. I am listening to you very carefully and I certainly hear much of what you say in the area that I come from in Southwestern Alberta.

Senator Gustafson: First of all I want to thank the witnesses for being forthright with us. Being a farmer myself I know something about the situation.

There is something that bothers me about our agriculture system in Canada and our bureaucracy. The Americans have looked after their farmers very well. They have had the three best years in their history while we have had the three worst in ours, and we end up buying from the people who push it. We are blaming the Americans, but we cannot blame the Americans for looking after their farmers.

The agriculture bureau is the largest lobbying force in the United States. They work for their farmers, and if you are a senator in New York or in Seattle you support the hard line. We do not have that dedication in Canada. We blame the Europeans and the U.S. saying we will get off of subsidies. That will never happen. I have waited 25 years to see them get the Americans off of subsidies. They will support their farmers.

Canada has to make a decision and it will cost money. We are getting so far behind in the agriculture community that there is no way to come ahead unless we get some support.

I have fed cattle in my lifetime as well. My sons still have cattle. The cattle industry was always a proud industry that looked after itself very well. There was no comparison. Even the grain industry could not compare with the cattle industry. Twenty years ago we did pretty well.

What I am saying, and maybe saying poorly, is that it is going to take an injection of capital. If our agriculture department and we as a government cannot study the global impact on agriculture and come up with some solution and some kind of a farm bill that gives us some future, we are in big trouble.

Senator Mahovlich: It is not a handout. This is some kind of an equalization payment.

Mr. Hill: Yes, because you cannot keep losing money. Like I said, I quit being an order buyer for the simple reason that I do not know who has got money anymore. Feed lots keep amalgamating and you end up with larger and larger lots because of efficiencies. It makes more sense to feed 50,000 cattle than five because you need the same amount of equipment and everything else. From the same point of view, trying to get money out of some of these guys is difficult. I dealt with a lot of ranchers and farmers in Alberta because I was from there before I moved here. Those farmers are in their late 60s. After this last go around, one guy said, ``I am sick and tired of losing money. I have lost $12 million and I cannot lose another cent.'' You work all your life to build up your equity and you see it erode because of BSE and everything else. I think it is the biggest farce that ever came down the road, that five or six animals can totally ruin a whole business worth billions of dollars. I have never heard of any cases of anybody ever dying from it. We killed off more chickens in this province in the last year and people still eat chickens. It is the same thing.

I agree with you that there has to be something, a new farm policy, because we have been forced and every time we have gone to different meetings and things and different programs that have come out. Well, this is red flag. This is not agreeing to the free trade agreement with the U.S.

This is a very complicated process. It is not just a little farmer sitting on a farm raising a few cattle. It becomes complex when you take everybody into account. Canada is a big country that you have to take into account because there is not just our sector. A lot of other sectors are involved. When we are being forced by our government to play by the rules for the sake of trade-offs in other agreements and a devastating business, where are you going to be if you have to be reliant on imports for your food? You are going to be in a horrible position.

Senator Gustafson: You make a good point. I have been to Europe twice. We met with their agriculture representative and minister and so on in the European Union and they say that we Americans, as they call us, have no appreciation for food. They say that they know what starvation is and they will never let it happen again. They will stand with their farmers, and so they are not going to change. If we are operating under the idea that the Americans are will change and the Europeans will change, we have got to study this global economy and come up with something that is definitely an injection of cash until we get back on our feet.

Mr. Hill: In what time frame? It is almost too late for me.

Senator Gustafson: Tell me about it.

Mr. Hill: Our generation has gone down the road, and my sons. Will it be the grandkids? Are we going to skip a whole generation because of this? If something is not done soon, even my grandson, who likes to come out and have grandpa take him for a ride, will disappear.

Senator Gustafson: I believe that our farmers are facing the toughest spring to plant a crop that they have ever faced. I believe that.

Mr. Hill: I agree.

The Chairman: Thank you. I too well know what you are talking about, because that is where I am from. I think that in the preliminary report we put forward before we got on to these outside hearings — we had been having hearings in Ottawa for the better part of a year and we put out a small interim report just before Christmas — struck a note somewhere. That report received more responses in some respects than great big reports that we have written in the past. A key thing is that we are on an edge now and we talked about that. We had only two recommendations, as I recall, but one of them was to have a farm bill for protection of Canadian farmers. That is something we can work on, but that is longer term. One of our thoughts of in having these hearings was to hear what you all have to say and see how we can use whatever clout we have in Ottawa from our various provinces to make some changes, because I think everyone at this table agrees that, certainly in the cattle industry, we are just on the edge.

Mr. Hill: There certainly has to be cooperation between the federal and provincial governments.

The Chairman: That is right.

Mr. Hill: When BSE hit, Alberta was doing something for their farmers. Saskatchewan was doing something. We went to just about every meeting, but the Minister of Agriculture's advice was join the Canadian Agricultural Income Stabilization Program, CAIS. Unfortunately, B.C. was the last province to cough up any money at all for programs. We had people who came up with sound ideas as to payments and different structures through our own feeder association. They came up with many ideas that they presented, but they were all rejected because B.C. did not ante up anything significant, as far as I am concerned.

Senator Mercer: I like being on this committee but some days it pisses me off and this is one of them, and you guys are depressing me. I do not like being depressed, but it is not your problem. You came here and told us what you thought. That is good, and I thank you.

Mr. Hill, you are right on it. The BSE crisis drives me crazy. We play by the rules and we report sick animals and we know damn well the Americans do not, even though they have reported a couple since it started.

You mentioned that there was a tax change. I am a little unclear. I want to get it clarified so that we all have the right reference in our notes so that we can follow up. Was that a federal or provincial change and what was it?

Mr. Hill: I believe it was a provincial change, probably to the amount of allowable tax deduction that they would allow a small farmer to take. When I say a small farmer, I am talking about a little backyard guy with a few cows and that sort of thing and the job where basically he could not write off some of his expenses on his farm, his haying expenses and that sort of thing. The change came about in the early 1980s and I believe it was provincial.

Ms. Hill: I believe federally they could have only up to $30,000 on their T4. Anything over $30,000 was taxable.

Senator Gustafson: It was off-farm income too. Yes. You were able to work off the farm on a job and they would not tax you on that.

Senator Mercer: In our hearing so far this is the first time anybody has mentioned that change. I think we want to pursue that a little further and perhaps with other witnesses as well. I appreciate your bringing it up.

Ms. Hill, you came with some solutions and I like that. I want to talk to you about two in particular.

You talked about developing a new farm policy to ensure that Canadian grocery stores offer Canadian-grown products first and imported products second. That does not scare me because a number of years ago we forced radio stations in this country to play a certain amount of Canadian music and now we have a vibrant Canadian music industry. Maybe if we force grocery stores to sell Canadian products, we might have a vibrant farming industry. However, it sounds to me like you are talking about country-of-origin labelling. During the BSE crisis, as several senators around the table remember, we were told that country-of-origin labelling is not really where we want to go internationally because if in our major market, which is the U.S., beef is labelled Canadian or American, we will probably get the short end of the stick. They will buy U.S. brand beef as opposed to Canadian. Is that what you are suggesting, that we go to country-of-origin labelling?

Ms. Hill: I offered this solution after talking to my son. I asked him what it would take for him to even consider coming back to the farm. He told me that there has to be recognition that Canadians grow good quality products and that those products are on our shelves first and foremost and that our best stuff is not exported. Look at our apple crops, for example. We have fabulous apples in Canada, but all the best are exported and we eat the worst at home. He said that we have to protect our Canadian agriculture system and promote our own goods and let us eat the best and share the rest, and then maybe there would be some hope. I think hope is the key for young people looking at what there is to come back to the farms for. If there is no incentive, if there is no pride in being a farmer in Canada, there are too many other choices.

Senator Mercer: The apple example is an excellent one. I lived in the Annapolis Valley in Nova Scotia. We would argue with British Columbia that we grow the finest apples in the country, but between us we grow the finest apples in the world. I go to the grocery store and buy apples from Chile. The guy down the road who grows great apples must be getting frustrated.

Ms. Hill: I could remind you too that in British Columbia there was an agriculture minister who in his wisdom removed the apple industry from the Okanagan Valley. Do you remember what year that was?

Mr. Hill: He was tied up with the feeder association and he was a supervisor in the provincial government who said that the sooner we kill the apple industry in B.C. the better off we will all be because they are just a bunch of guys looking for handouts.

Ms. Hill: We have seen the apple orchards leave the Okanagan. They have a fine wine industry now, but is that the type of policy our government should be making for farmers? I do not know. I think that is part of the problems we have seen in the past.

Mr. Hill: I am not sure that your country-of-origin labelling is what you would expect to see. I do not agree that that is the way to go. I do believe that local grocery stores can make a difference, though. When BSE came into effect and nothing was going across the border, for example, in this province Overwaitea Food Group promoted B.C. beef, but unfortunately B.C. beef gets mixed in with Alberta beef because we have no packing plants in B.C. anymore.

The U.S. does not want country-of-origin labelling either because they do not want to spend the money. Also, if they can buy feeder cattle from Canada and take them down to the U.S. to feed them, what cattle are they? Are they Canadian, or are they American? They were born here but raised there. If they do that, the cost will come right back down to the primary producer.

Senator Mercer: The cost never goes to the consumer. It goes to the producer. That is the problem.

Mr. Hill: Absolutely. The way agriculture and some of these things work, you start off with a very wide base and as you go up the production line it narrows and narrows. In the beef business it narrows right down to about two or three major packing plants that are controlled by the U.S. Then it diversifies back out again to the general population. They used to take a different margin, a different mark-up structure on how they promoted beef. Now they expect the breeder associations, the feeder associations, and the farmers through the beef information council and the other programs we have to supply, research, and do everything else to promote your product, when in essence the packing plant, the last guy handling your product, should be the one promoting it.

Senator Mercer: My last question is on your recommendation, Ms. Hill, that a one-time payment be made to each farm family equal to their losses as stated on the assessment by the Canada Revenue Agency. I am not quite clear on what that means, and I would also want to do some research on how much that would cost. I am not speaking against it. I am just trying to understand more what you mean.

Ms. Hill: I went back to that year and used that timing because that was the point at which Brian had to go find work to start paying off some of our bills because we were going under and we were due to lose the last part of what we had left of our farm. In those years we had a $97,000 loss carried forward on our income tax return. That goes to show the depth of the personal debt that we were carrying through the banks, through machinery loans, through the losses in the cattle business that we were in. That was the catalyst. If you looked through those years, 1996 maybe to 1998, at the losses that all the farmers were carrying across Canada, how big would that be? We are still paying on loans. We will not be finished paying on our loans until we sell the farm and pay them off. I try to get creative and say what would really help the farmers, and I look especially at us. We are old. We are worn out. We are 60 years old. We are tired of the hard work and the hours that we have put in with no payback. So if you are looking to help farmers first, maybe this is one point to start at. Look at where farmers were.

Senator Peterson: Thank you both for your presentation. It certainly enlightens us. Something that really troubles me, and I am sure others too, is that the automobile, the aerospace and the agriculture industries are about the same dollar value, but to support the auto or aerospace industries, we call it an industrial strategy, but to support agriculture, we call it handouts and welfare.

The tragedy in all this is that we are going to wake up someday, and that day could be coming pretty soon, when we are a nation that cannot feed itself and that relies totally on foreigners. That is a scary thought and it should scare all of us. This committee's challenge is to make that point emphatically. The time for action is now, not next year or the year after, or we will face this dilemma.

You talked about selling your cows at a $1.30 a pound. I would presume that that price is set by the packing companies.

Mr. Hill: No. For your $1.30, I am talking about a 600-pound calf for instance going through the auction market either in Alberta or over here. I sold cattle in 1980 for $1.35 and $1.40 a pound and shipped them all the way to Ontario to a feed lot operator back there when the rate was still in effect. They made money on them back there. That was 30 years ago. Where have we come forward? We have actually gone backwards. When I worked for Canada Packers back in the 1970s when the market went to hell, we bought cows for 10 cents and 12 cents a pound. Two and three years ago there were cows selling for 10 cents and 12 cents a pound because you could not ship them anywhere because of BSE and the policy about cattle over 30 months of age.

Senator Gustafson: One guy got a cheque for $7.

Mr. Hill: Yes. I am not telling you anything that you have not already heard, but it is devastating when the price of everything else in world has gone up and the price of what you are doing has not or has gone backwards. I started off working for $1.25 an hour. Now there are people working for $30 an hour, but in the agriculture business we are still working for $1.25 an hour. Actually, I think it has gone down.

Senator Peterson: We will put the spotlight on it and we will try to do that. Thank you.

Senator Mahovlich: Ms. Hill, you gave a great presentation. You mentioned electronic voices. We have to be very careful of this. They did it to me in the airport the other day. They said here, phone this number to reschedule your flight and phone this number to book your hotel. I pick up the phone all I get is a voice saying call back in an hour. You know, too busy, call back in two hours. I did not have a hotel. I could not book my flight. It was a scary situation. I had to get up at four in the morning to run over to the airport to try to book myself another flight. This is a bureaucratic thing that we have to keep our eye on.

The Chairman: Thank you both very much for coming.

Mr. Hill: Thank you for allowing us to put forward our views.

The Chairman: That is why we are here. The main thing we are trying to do all across the country is to hear it straight, and you were straight. Everyone here today was straight and we thank you for it.

Ms. Hill: In one of your reports, you were talking quite a lot about the CAIS Program and how maybe that should be extended to oilseed and different grain growers. Brian knows more about it than I do, but we do not believe that that is a good vehicle to get money out to farmers, and anything that I have heard about this through our community is that people are having a terrible time getting any money and if they do get some money, now there is a claw back. I tend to feel that those programs have to be reworked, because this one is not working very well.

The Chairman: I think, Senator Gustafson, that that one goes back a bit.

Senator Gustafson: They have revamped that program two or three times and it should have crashed.

The Chairman: We are still looking at it.

Mr. Hill: Can we not come up with a simple program, with yes or no, rather than 35 pages? The accountants did not even know how to interpret CAIS in most cases. Some of the secretaries in our feeder associations have had to spend months and months trying to figure out how to interpret the program and how it would work for your farm in order to get something. If programs are to be of benefit, they have to be simple, otherwise you spend more time being an accountant than you do looking after your business.

The Chairman: On that note, thank you very much, and all our best.

The committee adjourned.