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Proceedings of the Standing Senate Committee on
Agriculture and Forestry

Issue 6 - Evidence, May 1, 2001

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OTTAWA, Tuesday, May 1, 2001

The Standing Senate Committee on Agriculture and Forestry met this day at 6:16 p.m. to examine international trade in agricultural and agri-food products, and short-term and long-term measures for the health of the agricultural and the agri-food industry in all regions of Canada.

Senator Jack Wiebe (Deputy Chairman) in the Chair.

[English]

The Deputy Chairman: I have been informed that we may now begin. The Senate has approved the necessary motion.

The committee today is fortunate to have before it the Secretary of State (Rural Development) (Federal Economic Development Initiative for Northern Ontario), the Honourable Andrew Mitchell.

We are looking at, among many other things, the short-term and long-term measures for the health of agricultural and agri-food industry in all regions of Canada. Rural development is certainly one of the areas that we think will play an important role in determining short-term and long-term measures.

Mr. Minister, I am pleased to welcome you and your officials before the committee today. Would you begin by introducing some of the officials that are with you tonight?

Hon. Andy Mitchell, P.C., MP, Secretary of State (Rural Development) (Federal Economic Development Initiative for Northern Ontario): Thank you very much, Mr. Chairman and members of the committee, for the invitation to be here tonight. I appreciate the opportunity to talk about the rural portfolio, to make some opening comments and to answer some questions.

This is Diane Vincent, the Associate Deputy Minister for the Department of Agriculture, and Lynden Johnson, who is the head of the Rural Secretariat within the Department of Agriculture.

Just to clarify the titles a bit, I have two different secretary of stateships. One is rural development and the other is that long title which is in Northern Ontario. Known as FedNor, it is, in essence, the regional development agency that governs Northern Ontario.

By your leave, Mr. Chairman, I will begin an opening presentation.

The Deputy Chairman: Yes, please.

Mr. Mitchell: Thank you for the invitation. It gives me an opportunity to talk about rural Canada and the approach that the government is taking to the issues that impact rural Canada.

Obviously, as members of this committee know, rural Canada is an important part of this country. It represents 95 per cent of our geography. It has 30 per cent of the Canadian population. Fifteen per cent of our gross domestic product is generated in the rural parts of this country. Fourteen per cent of our employment is found there.

I think that it is important to note, Mr. Chairman, that 40 per cent of our exports as a nation are generated from rural Canada, primarily through our natural resources industries, including agriculture, fishing, forestry and mining.

More important, Mr. Chairman, rural Canada is an important part of the social fabric that makes up this nation. It is the historical source of the wealth upon which Canada has been built.

Rural Canada has a set of unique traditions. We believe in rural Canada and we live by a credo of importance of community, importance of neighbours and importance of family. As you mentioned in your opening comments, Mr. Chairman, we need to work hard to ensure the long-term sustainability of our rural communities and of rural Canada.

The current federal government has been preoccupied with its response to the needs of rural Canada for some time. That was first enunciated directly in the Speech from the Throne in 1996, where the government made a very direct and very firm commitment to taking action to ensure the long-term sustainabil ity of rural Canada.

In 1997, stemming from that Speech from the Throne commitment, I had the opportunity then, as Chair of the natural resource committee of the House of Commons, to conduct a study called "Think Rural!" It was an all-party committee. We had an opportunity to travel to all parts of the country. We developed a number of recommendations and suggestions on how government should go about ensuring the sustainability of rural Canada and the industries that support it.

In 1998, the government announced the Canadian Rural Partnership, which is the programming under which I, as the Secretary of State for Rural Development and the Rural Secretariat, operate.

In 1999, the Prime Minister created, for the first time in the federal government, a position in the ministry specifically responsible for rural Canada and for rural development when I was appointed as the Secretary of State for Rural Development on August 4, 1999.

That position was created as a somewhat different position than we normally have in government. Most of the time, when we organize within the federal government, we tend to do so on a vertical basis. That is, we organize things that deal with industry; Then all things examined will fall under industry. Under health, all the items are health-related, et cetera.

The rural portfolio, however, is not a vertical portfolio but is, rather, a horizontal portfolio. I work across departmental lines. In other words, we try to identify a particular issue, challenge or policy initiative, and then we try to broker the solutions or the responses across departmental lines, regardless of whether an issue fits a specific definition of a particular department.

That government commitment to rural Canada could be seen as well in the February 2000 Budget, in which there were a number of important initiatives involving rural Canada. Community Futures, an entity which operates solely in rural Canada, received a $90 million increase in its budget at that time. We also had the establishment of the federal-provincial infrastructure program, a portion of which has in fact been designated for the needs of rural Canada. In the Speech from the Throne in 2001, the government again made a commitment to rural Canada and rural Canadians to work with communities to find solutions to the challenges that they face.

A major cornerstone of the government's response to rural Canada is the recognition that the challenges faced by rural Canada and by rural Canadians are indeed different in their nature from the challenges faced by urban Canadians. That difference mandates that we take a different public policy response, one that reflects those particular challenges.

When I speak of those challenges, I speak of such things as geography. Obviously, if you live and work in rural Canada, one of the things you have in great abundance is geography. That is one of the reasons many of us choose to live in rural Canada. That geography means that we have to respond to certain things, such as the delivery of government services, in a very different way from how we may respond in an urban centre which has a very small amount of geography.

For instance, if a government is trying to consolidate bricks and mortar to hold less office space in an urban centre like Vancouver or Toronto, its clients may have to take mass transit, such as the subway, to access the closest departmental outlet. If it does the same thing in a rural context a client may then be 150 or 200 kilometres away from the point of service. Therefore, the approach must be different in a rural context.

There is an issue of population density. We do not have large population densities in rural Canada. That makes a big difference when you are trying to attract investment. For instance, on the issue of telecommunications infrastructure, in a large urban centre with a very large marketplace, the private sector may very well, on its own, be willing to make an investment in telecommunica tions infrastructure because the market size will dictate that it can get a return on that investment quite easily.

That infrastructure is just as important and just as critical in a rural area but, because of the lack of population density and market size, the private sector may not be willing to make the same investment that it was willing to make in an urban centre. Public policy response in that case may require forming a public-private partnership to ensure that infrastructure is devel oped in our rural areas.

Another unique challenge, an obvious one, is the whole issue of distance from market. Whether it be our natural-resource-based industries, the value-added industries that arise or the industries that service our natural resource industries, small businesses in the rural parts of the country must address the potentially long distances from markets. That distance requires a different type of response than it may in an urban context.

Most of all, when we talk about the unique challenges faced by rural Canadians, we face the fact that most of our economy is based on natural resources. As such, our economy is cyclical in nature. As parliamentarians, we sometimes wish we could repeal the cyclical nature of commodity prices, but the reality is, commodity prices do fluctuate.

That means the economies of our rural areas will fluctuate. That is a different reality from that of a manufacturing-based, technologically-diversified, urban economy, which means that we require a different public policy response to meet that cyclical nature.

Mr. Chairman, in trying to develop approaches to the different types of challenges that we face in rural Canada, there are four specific types of approaches that I believe we must, and do, employ in order to be successful.

The first is something that we call the rural lens. The rural lens is a big part of the mandate that I have as the Secretary of State for Rural Development. Put very simply, it means that, as we try to deal with legislation, as we try to respond to the issues of the day or as we try to formulate regulations, I am responsible in part for ensuring that we act in ways that not only make sense for urban Canada, but that we act in ways that make sense for rural Canada as well.

Just because a solution or an approach works well in Toronto,Vancouver, Calgary or Halifax, that does not necessarily mean it will make sense in our small, rural communities. We say we are applying the rural lens to an issue. We are trying to ensure that, as we bring forward the legislation or the response to the issues of the day, we do so in a way that makes sense for rural Canadians as well.

The second approach to our response to rural Canada and the needs of rural Canada is that it is absolutely essential that we take a bottom-up and not a top-down approach. By that I mean it needs to be left to communities themselves to be able to develop strategies and the type of approach that they want to take towards sustaining their rural communities.

Part of that is recognition and realization that rural Canada, although it faces many of the same challenges regardless of where you are in rural Canada, is, in itself, not monolithic. The challenges faced by an outport community in Newfoundland are very different from those faced by a mining community in Northern Ontario. They are different again from an agricultural community on the prairies, and different again from a forestry community in British Columbia.

Therefore, as we try to develop strategies for sustainability, we have to recognize that one shoe does not fit all. It is difficult for a politician in Ottawa or in a provincial capital, or a bureaucrat in either of those locations, to be able to design a solution that will work right across the board. That is why we are firm believers in the Rural Secretariat and portfolio for a bottom-up type of process, where communities themselves establish the types of priorities and strategies that they want to take forward.

For that to happen, a third approach must take place, which is that of community capacity-building. It is one thing to tell a community that it should develop the solutions to the challenges that it meets. However, if the community does not have the capacity to develop those solutions, then a bottom-up process does not do much good.

I had a conversation with an individual from an outport in Newfoundland, who said: "You know, Andy, that is all fine and good, but the trouble is, our community does not have the capacity any longer. We had a bank branch and besides the financial services it offered us, the bank manager was involved in all of our economic development initiatives. Several of the employees were involved as well. When our local school closed, not only did we lose education in our community, we lost the human resource capacity that those teachers were providing to the community."

It is important that a community, if it is to take a bottom-up approach, be allowed to approach it that way. To ensure that the community has the capacity to carry that out it is necessary to ensure that the human resources be in place, that the leadership skills are there and that the community is capable of building a consensus about its direction.

Many of us here today have been involved with communities and we know that building community consensus can sometimes be a difficult process. We must ensure that communities can identify their assets and, where they can, make the best use of what exists within the community. We must also ensure that the young people of our communities have the opportunity to develop and view their communities as places where their long-term futures can be made.

That is what community capacity-building is all about.

Beyond that, there is a fourth component. We need to have a bottom-up process that allows communities to chart their own courses and we need to give them the capacity to do that. We need to give the communities the tools with which to carry out their strategies.

That is where senior levels of government, whether they be provincial or federal, have to come in to provide the tools that will allow the communities to pursue their particular objectives.

The federal government has a large number of tools available to assist rural Canadian communities. The Community Futures Program, which I spoke about earlier, is a significant tool. The program is designed to assist communities in developing economic development strategies and community sustainability strategies and it provides access to capital for the communities, which would not be available from the private sector in rural areas. The program has allowed a significant number of small businesses to be established and to survive in communities where good ideas existed but threatened to die "on the vine, for lack of nourishment".

One of the differences between the infrastructure program that has been put forward this time and the previous program is that there is a stipulation in all of the agreements with the provinces that a minimum percentage had to be set aside for the rural parts of those provinces. That stipulation can be read in the agreements that were signed between the federal government and the provinces.

The regional development agencies have, within their mandates and within the scope of their programming, particular initiatives that help rural areas. When ACOA announced its initiative about one year ago, part of that was a $50 million community fund to allow rural communities to have the types of assistance they need. The Community Access Program, which allows for public access to the Internet, will be an integral part of the sustainability strategies in many rural communities. In other communities, it may not be.

In our Ministry we have a series of pilot projects to assist communities to develop innovative solutions to sustainability. Not only are we assisting the communities themselves in undertaking those pilot projects, but the lessons we learn from that we are able to apply in different communities.

Even though the health file is primarily a provincial responsi bility, we have created an Office of Rural Health within the Department of Health. There was a contribution of $50 million to the Office of Rural Health, so that it could test innovative solutions for the delivery of health care in a rural context. As an example, a little over $1 million of that funding in Ontario was used to train nurse practitioners to provide services in a rural context. It was an innovative solution for the delivery of health care in a rural context.

We work with many validation processes to ensure that our solutions and our methods are being carried out in the way that rural Canadians want. We established, at the beginning of this process, the rural dialogue. I use the word "dialogue" as opposed to the word "consultation" because it conveys two things: That it is an ongoing process, not something that just happens and comes to a stop and that it is a two-way conversation whereby rural Canadians are able to tell us what their priorities are and we are able to tell rural Canadians about what we are doing and the progress that we are making.

Last year, in late August, we had a national world conference. We brought together 500 rural Canadians from across Canada to have these discussions. They in turn had regional or local consultations where some 7,000 rural Canadians were involved. Beyond having the conversations and the meeting in Magog, we brought forward an action plan. The federal government has committed to 54 specific actions that rural Canadians, at that conference, asked us to undertake in terms of moving forward on their agenda.

This year, rather than a national conference, we will have four regional conferences. One conference took place last week in Vernon, British Columbia, one will be in Northern Canada this summer and one will be in Eastern Canada in the fall. That will be followed by another annual national conference in 2002.

Rural Canada is a special place. It is where many of us around this table have had an opportunity to live, to bring up our families and we intrinsically understand how important and special a place that is. We have an obligation, as a federal government, to work with our rural citizens and organizations and other levels of government to ensure the long-term sustainability of our rural communities, and to ensure that the young people of rural Canada consider it a place where they can have a future for themselves and their families.

The Deputy Chairman: Thank you, Minister Mitchell.

Our committee will examine the short term and long-term measures for the health of agriculture in this country. Your department has a difficult task in the months and years ahead. I compliment you. It is rather refreshing to hear about the long-term planning, which is so vital if the rural part of our country is to survive.

Senator Fairbairn: Thank you, Mr. Mitchell. As you are aware, this is the beginning of our study on rural communities and rural life in Canada.

This committee has been working hard in the last few years with trade issues, with the income crisis and with the subsidy wars. Those things get such a lot of publicity and priority that it seemed to many of us that people almost forget that it is not just farms, ranches and the land that is at risk, it is the towns, villages and small communities. The challenge is to bring that into the equation and into the public mind of those outside the geography you mentioned at the beginning.

Having heard you tonight, I think you are certainly on the right track. In terms of connecting with rural Canada, before the ministry of state for this position was set up, there was emphasis being put by your colleague, Mr. Goodale, on the notion of using technology in innovative ways, not only to try to connect rural communities but to give the people in them the same kind of opportunity to do business through technology as people would have in downtown Calgary. That goes beyond what we have done in the past.

Effort has been put into this. To what degree has that taken hold? Is it measurable yet in rural Canada? Is it to a degree that we can determine, within towns and communities, that business connections are being set up and that industries may be developing now because of that technological outreach? Some times it is hard to find the legs or even the aircraft, as individuals, to get around those areas.

Mr. Mitchell: That is a good point, Senator Fairbairn.

To answer the question about the progress we are making, in some areas of rural Canada there has been fairly substantial progress, particularly in those parts of rural Canada which are adjacent to our large urban centres. We have done a good job in providing some of the technological infrastructure that will allow those rural communities to have access to markets that, ten years ago, before the advent of the Internet, one could have only dreamed about.

That is not the case in large parts of rural Canada. I was in Nunavut last week. That is not only rural Canada, it is also remote Canada. Significant work needs to be done there, as in many places.

One of the commitments that we made, as a government, is that we would have broadband access to all communities in this country by 2004. As a rural secretariat, we have made submissions to the broadband task force that has been developed under the leadership of the Minister of Industry. We have been able to provide our input about the types of steps that must be taken.

We are trying to grapple with that public policy issue of ensuring that we have connectedness to all of Canada. The issues are, in fact, different in rural Canada. As we try to develop the approaches we want to take to achieve that government objective, we may well develop them it in a different way in our rural areas than in our urban areas. That is a good example of an item that is a priority.

I should stipulate that rural Canadians oftentimes tell us that the Internet and access to the Internet is important, but that we should always remember that it is not an end in itself. It is a tool that allows us to do other things.

We have made good progress. There are 5,000 sites now in rural areas of the country which allow for public access to the Internet. We are the first nation in the world to connect all of our schools to the Internet. We have done that in our rural areas. We have made good progress on that.

The digital divide does exist between urban and rural Canada and we have an obligation, as a government, to close that divide and to ensure that rural Canadians have access to the technology and telecommunications infrastructure every bit as much as urban Canadians.

Senator Fairbairn: I gather that the only way to make the kind of connections you want to make, as Minister, is to go on the road to physically meet people to try to gather information and spread ideas through physical presence. A year or so ago there was a great build-up of frustration among all parties in Parliament that somehow the message was not understood at all in urban Canada. Many parliamentarians got together and helped to set up a televised farm concert at the Air Canada Centre in Toronto. It was a terrific event and a great day, and it was on Newsworld. Then everything kind of subsided.

I wonder about the degree to which you have the opportunity to flip the coin and talk to urban people to get understanding and, maybe even more so, support for the problems that are on the farm. There is a romantic picture of the farm in many people's minds. It is not that way now. I often think that we take farms for granted in cities and that we do not give them the support that they need. The day that our rural communities and our farms go down is the day that our country is significantly diminished.

Mr. Mitchell: Senator Fairbairn, that is a very good point.

From a communications perspective, there is a substantial amount of work that needs to be done. I think we do a relatively good job within rural Canada itself, but that is almost like preaching to the converted. Most rural Canadians understand the challenges that we talked about. They have their own rural newspapers or newsletters.

I will table a report to Parliament, as I did last year, on the state of rural Canada, probably in September or October of this year, to provide an opportunity to have debate. That tends to engage the rural members of both Houses and rural Canadians.

We do need a better and more comprehensive communications strategy to allow myself and others to speak about rural Canada to urban Canada. As you mentioned, the realities of rural Canada go beyond the romantic vision that some people may have, whether that has to do with agriculture or any of our other natural resource industries. It is important, when I talk about the challenges faced by rural Canada, that urban Canadians understand them.

When we deal with legislation in the Senate or in the House of Commons, if we want to apply that legislation differently in rural areas, or if our response to the economies of our rural areas is different from that in an urban context, we do so because there are very strong public policy reasons. These have to do with different economy types, not with trying to do something that is untoward or not a good use of public dollars. Our response to rural Canada and the economies of rural Canada is simply based on the fact that the realities of those economies are different from the realities of urban Canada.

Oftentimes we see, in the media and elsewhere, criticism simply because we take a different approach. That criticism sometimes misses the reason for taking a different approach when the reality is different.

You said it quite well. You had that opportunity at the Air Canada Centre. We need to do that on an ongoing basis to get that message to all Canadians.

Senator Tkachuk: You talked about the commitment of the government to rural Canada. To clarify for the people who may be watching, is there a department of rural development?

Mr. Mitchell: No. Within the Department of Agriculture there is a Rural Secretariat. The mandate of the Rural Secretariat is to work, on a horizontal basis, across departmental lines. For instance, if you are trying to deal with the issue of delivering service, because of the wide geographic area, the solution to that does not rest within a single department. It rests across horizontal lines.

If I want to ensure that services will be delivered, I will ensure that HRDC services are delivered that way, as are those of Agriculture and Agri-food, NRCan and Fisheries and Oceans. I want to ensure that all of those departments are on side with an initiative that will see a more effective delivery of services.

Senator Tkachuk: Is the greatest crisis in rural Canada that you cannot visit a government office?

Mr. Mitchell: That is just an example. There are many different issues involved. I talked about trying to attract investment when there is a small market base or a lack of population density. I talked about the issue of the cyclical nature of our economies. When commodity prices fluctuate, they have an impact on the industry and an impact on the communities that depend on that industry.

Those are the types of issue that we face as rural Canadians. Solutions need to be dealt with across departmental lines.

Let us consider the issue of commodity prices. It is a big and important issue in agriculture. Fluctuating commodity prices are also a big issue for mining and forestry, and even for fisheries. When we develop strategic approaches to dealing with fluctuating commodity prices, we should not just deal with agriculture fluctuations, we must do it in general with natural resource-based industries, all of which are subject to fluctuation due to commodity prices.

Senator Tkachuk: The price of gold goes up and down. Are you not concerned about that? What do you do when it fluctuates?

Mr. Mitchell: There are a number of things that could be done. We want to work with communities to diversify their economic bases so that when there is a downturn in their primary industry, there are other industries that will support them through the bottom part of the cycle. We may want to work with them, for instance in a mining industry, to lengthen the amount of time that a mine will continue to be viable.

We both know that if you open a mine, it will eventually close. However, maximizing the ore body may be something that you want to do in that particular community. You may want to try to bring down the cost of extraction, the cost of mining it. I do not have the exact numbers in front of me, but the actual cost of developing the tar sands, of converting that into oil, has dropped substantially. That is an example where we helped to sustain the community.

There are a number of approaches. I am not suggesting that when prices go down, we should subsidize mining companies. However, there are many things that could be done by the approach that we take..

It is not the mining company per se that our public policy is directed toward; it is ensuring the communities that industry supports are sustainable. That means, ensuring that the commun ity has its economy as diversified as possible and that things are designed in a way that maximizes the particular resource that a community may have.

In one case in which I was personally involved, a mining community's life as a mining community came to an end because the ore body was no longer sufficient - in Elliot Lake in Northern Ontario. We worked, as governments, with that community to transform it. It changed from being a uranium mining community, to being a retirement community in Northern Ontario. The community is now a different community, but it continues to have roughly the same population.

I remember well, because I lived there at the time, that a lot of people said that the end of the mine would be the end of Elliot Lake. That is, in fact, not what happened. That community was sustained into the future through a unique solution that probably would not work in many other places. It worked there because the community asked itself what asset it had. People wondered, when the mine closed, what asset they had.

It was easy to consider. There was row after row of empty houses. It was easy to go down to Southern Ontario and convince people to sell their $300,000 houses, put $270,000 in the bank and collect the interest from that, plus their pensions. Most of the people who moved up to that community had more disposable income than they had had in their lives before that.

Senator Tkachuk: This is all very good. There are hundreds of communities all over Canada that are slowly dying, that are trying to save themselves. There is no question about that.

Let us talk about what your commitment was in this book. Is the Department of Agriculture and Agri-food's budget less today than it was several years ago? The Minister of Finance bragged that it was.

Mr. Mitchell: Is it less than several years ago? Probably not. If you go back far enough to program review, all of the departments experienced a rationalization. The previous government had left us with a $42 billion deficit. It was important to deal with that.

Senator Tkachuk: Were health care and education costs cut by the federal government in its transfer payments to the provincial governments? Let us talk about real things in rural Saskatchewan, rural Alberta, or rural Manitoba. Are there not hospitals, schools, and an infrastructure, so that communities can survive?

Surely the government is not taking credit for the initiative of a town that gets itself together after a mine or the Department of Rural Development closes. What has that to do with it?

Mr. Mitchell: The Department of Rural Development did not exist when Elliot Lake sustained itself. I was in government at the time. I was part of that process as a member of that community. Many of my beliefs in the importance of a bottom-up driven process and the importance of working on rural development, from the perspective of sustaining communities, were not learned here in Ottawa. They were not learned through interactions with departments of government. They were learned by understanding what happens on the ground, and what happens when real people confront real problems and come up with real solutions.

You are right, we can bury our heads in the sand and say, "Woe are we. There is no possibility, the problems are too many, and we cannot possibly deal with this." One could take that approach, but I do not. I believe that there is a future for rural Canada and rural Canadians.

That requires a multidisciplined approach. It requires money. When I talk about having tools, that is money. However, it goes far beyond that. If you do not have communities that have the capacity to undertake initiatives so that they can survive, all the money in the world will not help. If you do not understand that the problems which rural Canadians face are unique, that they are different from the challenges faced by urban communities, then all the money in the world will not help you.

The Rural Secretariat, through our horizontal process of working across governmental lines and with all departments, in my mind, is a positive and useful way to address the problems that rural Canada and rural Canadian communities face.

Senator Tkachuk: I grew up in a rural area, so I can speak as forcefully as anybody about the problems of a particular province, for example, Saskatchewan. I am sure that there are problems wherever there is declining income. In Saskatchewan, there is declining income due to declining grain prices.

However, I take issue with the fact that, when I look through this book, I see government departments that are only doing their job. They are not doing anything extra. We are supposed to be providing service to rural Canada and rural Saskatchewan just as we would to the cities of Saskatoon or Toronto. Surely that is part of government responsibility. These areas contribute to a tax base and in return, should get something back.

I was hoping that when we came here today we would have a little more serious thought about how we are going to solve some of the problems in rural Canada. How do we fix the problem of not having doctors in small town Saskatchewan? How do we fix not having medical professionals there and not having hospitals accessible?

One must drive all the way to Saskatoon. That is 300 miles from Hudson Bay. It is issues like that that are important, not whether a government office operates in Hudson Bay. No one cares about that. People will drive that distance.

Mr. Mitchell: Let me give you some examples, if you want to deal with the health care file very directly. We have the CHIP program which provides assistance for patients in rural, remote communities. A patient could have an ultrasound done without having to travel. The image is transmitted to a doctor who is hundreds or thousands of miles away. A diagnosis can be made on that patient, who otherwise would have had to travel hundreds of kilometres.

Earlier I gave you a very specific example of how that is done. Nurse practitioners could be provided with specific training in rural health and the needs of rural Canadians. We could ensure that they have the opportunity to provide some of the primary care that otherwise might have had to be done by a general practitioner.

I will give you a good recent example. I may not be known for giving a lot of credit to the provincial government in Ontario, but I will in this case. The federal government helped to fund a plan to put together a medical school in Northern Ontario with the mandate of teaching rural and remote medicine. That is a very concrete example of how to deal with doctor shortages in our rural areas.

You ask whether there are specific things being done. Yes, there are. From my perspective, as the federal government makes commitments to work with the provinces, because health care is a joint responsibility, I would ensure that we do not forget that we must deal with issues in a way that makes sense for rural Canadians.

What does that mean? It means, the nurse practitioner's program. It means, a medical school that will deal with rural issues. It means, using technology so that patients do not have to travel 300 kilometres, that a technician can deal with a patient several kilometres from home and that the diagnosis can be made thousands of miles away.

There are real, concrete solutions, senator, that are on the ground and are being developed to deal with the challenges that rural Canadian communities face.

[Translation]

Senator Gill: For about 40 years now, I have seen towns popping up in the North, where most of the rural and remote regions are. The towns come up like mushrooms, depending on what people in the South, entrepreneurs and industrialists need. But when the mines close, the people in those towns are left with nothing, because they have no other resources. If they were marginalized before the mines closed, they are even more marginalized after. I have seen that going on for many years now.

I like the expression you use: the rural lens. It demonstrates the spirit in which you want to approach this, taking into consider ation the residents' perception on the development of their rural or remote region. Those are the people who are truly aware of their area's potential, environment and resources, since they have been living there for generations. That is how we can achieve common-sense and sound development.

I support the government in its efforts to work with the towns' people in order to help them create programs designed by them, for them.

Will the government also make an effort to bring together the people of rural and remote regions with the people who create jobs? For example, by closing down the mine, the president of Iron Ore killed the town of Schefferville, and left Schefferville residents high and dry.

Is the government planning any measures to help business people and industries understand these problems?

[English]

Mr. Mitchell: I think that you make a good point, Senator.

For rural development to be most successful and for it to have a positive impact, partnerships are required. It requires bringing a number of different components to the table. The federal government is one of those partners. The provincial or the territorial government, depending on the jurisdiction, is one of those partners. The private sector is a critical partner in many of the initiatives that will be undertaken.

For instance, the development of the telecommunications infrastructure will involve the private sector, in one form or another, to provide that kind of infrastructure. When we consider the Canada-Ontario or the Canada-whatever provincial infrastruc ture program, it allows for that fourth partner, the private sector, to come on board.

Most natural resource communities, particularly mining communities, work toward developing the strategies I talked about in terms of maximizing the ore body, lowering the cost of production and ensuring that a mine's sustainability can be lengthened. That, by its very nature, requires a partnership with the industry itself. In some cases the industry will be the primary partner.

[Translation]

Senator Gill: A little earlier, you said that 95% of Canada's territory consisted of rural and remote regions. This means that our resources, which represent 40% of our exports, come primarily from those rural regions.

Is there some kind of information program to help people from major cities understand this? We have to promote and protect those regions.

[English]

Mr. Mitchell: To answer your question, we have applied to do just that, to make the point publicly through a variety of vehicles. We have supported organizations that try to do that as well.

However, I will be honest with you, Senator. I think that we need to do a better job in communicating that to all Canadians, so they have a better understanding of some of those things that we have been talking about here tonight.

Senator LeBreton: Thank you, Minister.

For clarification, how many people are in your Secretariat within the government?

Mr. Mitchell: We have a staff of 74.

Senator LeBreton: What is the annual budget of the Secretariat?

Mr. Mitchell: The budget is about $10 million.

Senator LeBreton: You talk about rural Canada. We have spent a lot of time tonight talking about resources and mining. Do you operate primarily from the Department of Agriculture?

Mr. Mitchell: That is where the Rural Secretariat is housed, yes.

Senator LeBreton: Because you are housed in the Department of Agriculture, is it fair to say that a certain percentage of your time, therefore, is devoted more to agricultural issues? If that is the case, what percentage of your time, in terms of your day-to-day work activity, is spent on agricultural issues versus forestry and mining?

Mr. Mitchell: Senator, the question does not lend itself to the type of role that I play because I do not spend time particularly on agriculture or particularly on mining or forestry. I spend time on the sustainability of rural Canada. That may involve me in an agricultural issue or a natural resource issue but, for the most part, that involves me in much broader issues.

I want to put the issue of the Rural Secretariat into context. We are not a line department with a whole budget of program spending. That is not what we are about. That is not our approach. The money that directly supports our work is money that allows us to do our job as a catalyst to marshal government initiatives across departmental lines.

Let me give you a specific example. The Community Futures program is a significant delivery program in rural Canada. I suspect most members here understand that program. That program is not delivered by a particular ministry. It is delivered by four different ministries. When it came time to enhance the funding to do the job better, that initiative came from the Rural Secretariat. Spending was increased by $90 million there, but that amount does not show up in the Estimates under the Rural Secretariat. It will appear in the Estimates of those departments that, in fact, administer the program.

The same thing happens with the infrastructure program. The portion of the infrastructure program dedicated to rural commu nities will not show up under the Rural Secretariat. It will appear under the line ministers who deliver the programs.

Let us be clear in our minds concerning the budget. The money that goes to the Rural Secretariat is not for the program spending. It is the money that we utilize to be the catalyst to cut across departmental initiatives, such as finding enhanced resources for the Community Futures program.

Senator LeBreton: You obviously have a base somewhere. This glossy brochure, "Working Together in Rural Canada," has a minister's message and a message from the Secretary of State - that is you. Does that mean that, for every department that you work across horizontally for, as you say, you will have a message, though not necessarily about resources?

You are obviously based in the Department of Agriculture and Agri-food. I think it is fair to ask whether agriculture is, in fact, the primary focus of your work. It seems obvious that that would be so because agriculture is a very large component of our rural life.

Mr. Mitchell: There is no question that agriculture is a big part of our rural life. That is one of many issues that I deal with.

You talk about the report to Parliament. That report has contributions from a large number of departments. My officials and I do not simply decide to write a government document about rural Canada. In fact, we consult a large number of departments and ask for their input.

The Auditor General, in looking at horizontal initiatives within the federal government, identified the rural initiative as a good example of a horizontal initiative.

In fact, the interdepartmental working group, which goes beyond the rural secretariat, includes 28 different departments and agencies. They work with us in developing horizontal, cross departmental initiatives on rural issues.

I do not think that we would want to get into a situation where a rural Canadian would come to me, asking for help with an issue, to whom I would have to respond hat the issue was not in my area and not part of my department.

Senator LeBreton: I am not saying that at all. I am trying to determine, first of all, the size of your budget. You obviously are attached to the Department of Agriculture and Agri-food. You physically work somewhere. I am sure you do not have a little desk in every department.

What I was trying to determine, frankly, without the long lecture, was whether more of your time is actually spent dealing with the Department of Agriculture and Agri-food as opposed to, say, the Department of Natural Resources or other departments of government.

Mr. Mitchell: I will be honest with you, Senator; I do not keep a time sheet where I tick how much time I spend talking to various officials.

Senator LeBreton: Why is your office located in the Department of Agriculture and Agri-food?

Mr. Mitchell: Historically, that is the way it was created. We have to be somewhere.

Senator LeBreton: I have a specific question, since that was not very enlightening.

In the report of the Standing Committee on Natural Resources, of which you were the Chair in March 1997, there was a recommendation, at page 20, on infrastructure. The committee recommended that, in order to correct the historical deficiency of infrastructure in rural regions, a minimum of 50 per cent of expenditures associated with any future federal infrastructure program should be injected into rural Canada.

In that rural action plan, under date of April 2001, which is the month just finished, there is a report of a conference held in Magog, in April 2000. In Priority Area 5, you talk specifically about infrastructure. You cite examples such as $2.6 billion being spent on infrastructure in collaboration with Canadian municipal ities, a strategic highway, and so on down the line.

Can you tell me whether those figures come anywhere close to the recommendation of your committee, that 50 per cent of infrastructure funds go into rural Canada?

Mr. Mitchell: We have not achieved the 50 per cent figure. We have gone from an agreement in 1993 that did not designate anything specifically as rural, to agreements with a minimum of 15 per cent, from a federal perspective.

Some of our agreements state a higher percentage, depending on the province. We have, in fact, made progress. We have gone from having no designated amount for rural infrastructure to having an amount designated. We have established that precedent very clearly. If there are future programs, then we will try to move that yardstick even further.

Senator LeBreton: How would you answer a direct question about this recommendation by the committee of which you were the chair? You make a very strong recommendation that 50 per cent of infrastructure expenditures go into rural Canada. I suppose you cannot hazard a guess as to what that figure actually is as of now?

Mr. Mitchell: For the most part, the current infrastructure program in most of the provinces - and I can get you the exact information - is primarily at the application stage.

We are in the first year of the program. As each year ends, we will evaluate exactly how those expenditures break out between rural and urban areas. I am confident that in the actual delivery of programs, a good portion will be dispensed in rural areas.

We also must consider other programs, which deal with different types of infrastructure, that add to the total being spent in rural areas. The government's initiative in grain transportation will result in additional infrastructure dollars being spent that way. At the same time that the government announced the $2.6 billion program, it announced the $1 billion program for its own physical infrastructure. Much of that exists in rural areas.

We established a specific infrastructure program with the Federation of Canadian Municipalities, a $100 million fund and a $25 million fund for studies. Much of that money will find its way to rural areas. The Community Access Program, which is very much designated for rural areas, provides telecommunica tions infrastructure in our rural areas.

When you add all of those up, which I have not done - and you make a good point that it may be a good analysis to do - then you will see that there are substantial amounts of dollars being spent on infrastructure through these various programs in rural areas.

I am not trying to lecture, Senator, but I am trying to make it clear that those programs, of which I just spoke, do not just find themselves resident in a specific department. They are resident in a number of departments. My role is to try to ensure, across departmental natural lines on a horizontal basis, that our focus includes rural Canada.

Senator Tkachuk: When you referred to the 15 per cent on the infrastructure program, is that the new one that the Minister of Finance announced recently?

Mr. Mitchell: The infrastructure program that we are talking about now was in the budget of 2000, so that was 14 months ago. After the announcement, because it is a joint program with the provinces and territories, there were negotiations through the summer and the fall. Agreements were signed. I think all but one agreement is signed now and delivery has begun.

Senator Tkachuk: Could you tell me if you got the 15 per cent designation for this fund? There also an infrastructure fund that was announced by Minister Martin previous to this one? Did they fall short of the 15 per cent on that one?

Mr. Mitchell: I would have to get you that information. The difference between the two, though, is that in the 1993 program there was no designation requirement. Provincial jurisdictions, on their own, may or may not have designated substantial amounts to go to rural areas; most did. One of the key things that I wanted to ensure in this infrastructure program was that it was not an option and that there had to be a minimum amount designated for rural Canada. It is 22 per cent, not 15 per cent, by the way.

Senator Tkachuk: Is 22 per cent the designation or is that 22 per cent of what was in the last one?

Mr. Mitchell: No, that is the designation. Again, I point out, it is a minimum.

Senator Tkachuk: I am confused.

Mr. Mitchell: On average, projections are that it will work out to 22 per cent.

Senator Tkachuk: Just so I have this straight - and you may want to correct me because I am not sure exactly how it was phrased - at the beginning you gave a certain percentage of the country's economy and a certain percentage of business. You talked about the land mass and geography. My view would be that about a third of the country's population would be considered rural. That would be my guess, and I think that is about right.

Mr. Mitchell: Roughly.

Senator Tkachuk: It seems to me to be an accident of nature, that it would fall one-third, two-thirds. I know the Liberals did not have a lot of seats in large rural areas. My question is whether less than 22 per cent was spent in the first infrastructure program in rural areas or in rural Canada.

Mr. Mitchell: What I said, Senator, was that I did not have the figures for the 1993 program, and that I would provide them to you.

Senator Tkachuk: In this case, you are saying that a minimum of 22 per cent must be spent in each province. Is that the way it will work?

Mr. Mitchell: That is on average, in rural Canada.

I will go back to this point because either I am having a hard time describing it, or it is not being heard correctly. The issue, in the context of the rural lens, is in the difference between the program this time and the program last time that the needs of rural Canada, rather than happening as a matter of course, are explicitly stated, up front, in the agreements. That is the difference between the first infrastructure program and the second one. That is the key point that I was making.

Senator Tkachuk: One-third would not have been a good number. considering that it is probably more expensive in rural areas than it is in urban one. Rural areas do not have the economies of scale you talked about earlier.

Mr. Mitchell: Some infrastructure is - but you may be in a situation, that is easy to imagine, where one infrastructure program in one centre could gobble up the whole program. That could be feasible. You are trying to ensure that a minimum amount will be designated for the rural areas, and that, in fact, is the difference. The needs of rural Canada, rather than happening simply because of the process, were explicitly stated in the agreements. That is the change that took place between the first infrastructure program and the second infrastructure program. I use that as an example of the rural lens which we spoke about.

Senator Tkachuk: Would the fountain in the Prime Minister's riding be classified as a rural expenditure or an urban one?

Mr. Mitchell: One of the things I try to do in my job is to put the needs of rural Canadians front and centre, as opposed to the political shenanigans that tend to go on.

Senator LeBreton: When you do the report card on the infrastructure, could you break it down by region and what percentage went to Nova Scotia, New Brunswick and all of the different regions?

Mr. Mitchell: Sure, Senator, I will table that.

Senator Tkachuk: We want to watch for political shenanigans as well.

The Deputy Chairman: Mr. Minister, I thank you for your willingness to address some of the questions that do not necessarily apply to your department. It was very kind of you and very educational for all of us on the committee.

One of the questions that concerns me is what is happening in agriculture. Some of the farmers and individuals living in small, rural communities in Saskatchewan are coming up with wonder ful ideas. I think your concept of the bottom-up approach will bear great rewards in the future.

A community not very far from where I live has just purchased a grain elevator. As you know, there are many of them for sale on the prairies. They have decided to turn it into a cleaning and packaging plant for some of the pulse crops grown in that area and that will provide jobs for up to 50 people. This kind of development came from the local area. Would your department be involved in directing people like that towards any grants or assistance or loans that may be available to get something like that up and running?

Mr. Mitchell: Senator, we can certainly offer advice on that. Several programs come to mind. Western Economic Diversifica tion may be able to assist in that particular program. In addition to that, although their financial needs may go beyond the capacity, the Community Futures Program could be a source of capital - either debt or equity, as they are able to do both - to allow the community to undertake that type of project.

One of the things we would do, if the inquiry came in again, along our role of working across departmental lines, would be to determine the need and to direct the prospective client to the particular program or department that could be of benefit to him.

Senator Fairbairn: You talked of working with different departments across lines. Do you work with the Department of Indian and Northern Affairs as well, in terms of some of its special development programs? It did factor, in a separate way, into the infrastructure program, certainly in the first one, and I think the second one too, as well as in other kinds of programs. Is the secretariat hooked into that particular department?

Mr. Mitchell: Yes, senator, it is. It is one of the departments that is part of the IWG, the Interdepartmental Working Group. It works with us as we try to develop some of the programming to deal with rural Canada. It obviously has significant responsibility, both in terms of the Indian Affairs portion as well as the Northern Development portion of its mandate. Many of our remote communities fall under its direct programming jurisdiction and we work very closely with them in the Interdepartmental Working Group. It has had a role to play in some of the initiatives that we have brought forward.

The Deputy Chairman: Mr. Mitchell, I thank you and the members of your department for appearing before us today. It has been a tremendous hour and a half. I have certainly learned a lot, as I am sure the other senators have. We thank you very much for taking the time to be with us this afternoon.

Mr. Mitchell: Thank you, Mr. Chairman and senators. I appreciate the opportunity of being here to provide testimony for your important work.

Senator Fairbairn: We will have to have you back as we proceed along our path.

The committee adjourned.

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