No, no.

Mr. Roxburgh:

I am surprised that the farmer from Ontario-

Mr. Starr:

The greatest farming area in Canada.

Mr. Hees:

On a point of order, Mr. Chairman, may I say that I heard an opposition member say that the Minister of Agriculture has done absolutely nothing for the farmers of Ontario.

Mr. Roxburgh:

All right, have your fun. First of all, I wish to support the stand taken on Friday by a number of speakers who dealt with the importation of fruit, especially

March 4, 1968

Supply-Agriculture

peaches, from Australia. The hon. member for Okanagan Boundary and others referred to this matter. I should like to mention the hon. member for Okanagan Boundary particularly because he went into great detail with regard to the problem. He gave factual information. I do not intend to continue along that line other than to say that I sincerely hope the minister will give this matter his full attention.

Without going into detail perhaps I might refer to the tax concessions that provide a considerable natural incentive to Australian exporters. First of all there are the income tax concessions and, second, the payroll tax. A rebate on the payroll tax has been authorized by the government in order to encourage greater exportation. A special income tax deduction is allowed by the government for expenditures in the field of market development.

I have yet to hear of any Canadian farmer who has complained about fair competition. However, when an imported product is subsidized by the exporting country it certainly is time that our government took a real look at the situation. As an hon. member pointed out on Friday, the Australian pays more for his homegrown peaches than we pay for our homegrown peaches. I certainly think the officials of the Department of Agriculture should look into this problem.

I should like to deal now with a subject which in many ways is very dear to my heart. It involves a problem which has bothered me for a long time. I have reference to the wine industry. One of our important industries in Ontario is the wine industry. The wine industry, of course, is directly connected with the grape growing industry. Any action that influences the wine industry is passed on to the grape growers.

I do not know whether this fact is generally known but in Ontario alone approximately

15,000 acres are under cultivation for the growing of grapes. If an acre produces a full crop the Ontario and federal governments collect $1,300 per acre before the farmer receives what little benefit there is to him from that production. In the years 1964 and 1965 the federal government collected over $4 million, in the form of an excise tax on wine. In that same period the growers received about $1 million less, a little over $3 million. The provincial government received approximately $13 million.

I should like the gentlemen in the press gallery to take special notice of what I am

about to say. When we attend their functions and order wine, what are we served? We are served imported wines-oh, yes. I have been there and they serve only imported wines.

[DOT] (4:00 p.m.)

Shame.

Mr. Roxburgh:

What is the government's policy in this regard? On practically every state occasion the wine served is imported. What do the great wine producing provinces of Ontario and Quebec serve at state functions? They serve imported wines. What about our embassies abroad? What do they serve? They also serve other than Canadian wines. There was a Canadian special function at an embassy-I will not mention which one-and they did serve Canadian wine. After the function was over there were a number of cases of wine left. Did the embassy keep this wine to serve to other guests? No. The embassy sold it at giveaway prices to the embassy staff.

Mr. Alkenbrack:

That is an old Liberal custom.

Mr. Roxburgh:

Let us not have any interruptions from my friends over there. President Johnson has decreed that only United States wines are to be served at their embassies. I think hon. members will agree, and not just because we are Canadians, that Canadian wines have a much better reputation than United States wines.

I have been privileged to attend functions in a number of embassies of European countries here in Canada. What do they serve in the way of wine? They are proud to serve the wines of the country they represent. Portugal is known to be one of the worlds' best producers of sherry and port; yet that country imports some Canadian sherry. Canada is a trading nation and let us not forget that. One sure way of expanding our wine exports is by acquainting the people of other countries with our wine products by serving them in our embassies in those countries.

I know what will immediately be said, by some people who should know differently, about Canadian wines compared with imported wines. They will say our wines cannot be compared with the imported products. I have some facts here that indicate this is a lot of hooey. They show that Canada is producing some of the finest wines in the world, some of which have won gold medals.

March 4, 1968

I will not mention the name of the company but one company held a wine tasting test using Canadian wines and similar types of imported wines. These wines were decanted in the identical bottles prior to the test and were marked "x" and "y" in each classification. The test was carried out in many areas of Canada including Toronto, Kitchener, Ottawa, London, St. Catharines, Fort William Windsor and Hamilton. More than 500 people made this test and the over-all result as 267 in favour of local wines and 247 in favour of imported wines. I am sure if I asked the general public for an opinion regarding imported wines compared with local wines they would probably favour imported wines on the basis of 75 per cent to 25 per cent. Note how wrong they would be.

Let me give you the results of the test held at St. Catharines. Among the people who tasted the wines were some of our friends from the press. I am sure they should know something about wine if anyone does. They should be good tasters from what I know about them. In the classification of dry red table wines our Canadian claret outpointed imported claret on the basis of 19 preference votes to 5. In the classification of burgundies the reverse was true. I am trying to give a true picture. The imported burgundies received 15 preference votes against 9 for Canadian burgundies. There were still 9 votes in favour of the Canadian wines. In the Rhine wine classification the imported product was favoured by 16 votes to 8. In the sauterne classification, and we all know that sauterne has the highest wine consumption record, the Canadian wine scored 17 preference votes to 7 for imported sauternes. Canadian sherry was preferred by a vote of 16 to 7 over the imported wine. Portugal is recognized as one of the great producers of port wine but the Canadian product was preferred over the imported by a vote of 15 to 7.

These results confirm the claim by Mr. W. D. Hatch, president of the Canadian Wine Institute, that fine Canadian wines are equal to or even better than the great majority of imported wines. In spite of this a great many people serve imported wines. I suppose it is because it has been bred into us over the years that imported wines are better. I sincerely hope that these facts I have presented will encourage not only the members of this house but other people in Canada to use Canadian wines.

Since France brought about the run on the dollar a great deal of the imported wines in

Supply-Agriculture

wine cellars in the United States, in New York particularly, has been dumped down the drain. That is an indication of what these people think of imported wine. Perhaps in the long run they figure their own is better or at least as good. People acquire a taste for a product, be it wine, good whisky, certain types of food, cigarettes, cigars or many other products, only by the use of that product. It is like a child trying his first olive. Boy, what a face. Yet in later years he will eat olives with many meals and enjoy them.

[DOT] (4:10 p.m.)

In conclusion, Mr. Chairman, I say to the government of Canada and the governments of our wine producing provinces that they can do a great deal to promote the future of the wine industry and keep the grape growing industry in good shape without laying out one cent. In so doing they will be helping to solve our foreign exchange problems, and God only knows we need some help along this line.

Mr. Clancy:

Mr. Chairman, would the hon. member permit a question?

Mr. Roxburgh:

Certainly.

Mr. Clancy:

Port and sherry are fortified wines. They are not real wines; they are fortified. In other words, 20 per cent alcohol is added to them.

Mr. Roxburgh:

It depends on what wine you are buying.

Mr. Clancy:

I said port and sherry.

Mr. Roxburgh:

That is possible, but nevertheless our wines are considered to be among the best in the world. We produce good wine.

Mr. Schreyer:

Mr. Chairman, it has been pleasant in the last few minutes to listen to hon. members discussing the merits of Canadian wine. I do not think it is as pleasant, however, to discuss the merits of the policy of the Minister of Agriculture. A long time has elapsed since we last had an opportunity in this house to debate and consider the agricultural policy of the government. Since the last time the subject was under discussion in the house there have been developments and changes in regard to agricultural policy which have been very serious in their effect, and we have not really had a chance to focus on them here on the floor of parliament.

March 4, 1968

Supply-Agriculture

In the other place last week or the week before a senator introduced a bill having to do with dairy policy. I refer to Bill No. S-34. I presume the reason it was introduced was that it is being realized by more and more people in western Canada, in the prarie provinces in particular, that the changes in Canadian dairy policy are militating against large numbers of western dairy producers. Therefore a bill was introduced in the Senate which would have the effect, if passed, of taking away from the control of the Canadian Dairy Commission the power to exclude milk and cream producers from the subsidy benefits under the present dairy program if the amount of production is less than 50,000 pounds of milk or 1,750 pounds of butterfat per year.

1 am sure the minister is aware that when the new policy was first introduced it took a little time for its full implications to sink in, but when they did a storm of protest began to arise. Even the Winnipeg Free Press was moved to editorialize last spring that the proposed dairy subsidy program would discriminate against western dairy producers, particularly shippers of farm separated cream and even of manufactured milk. I should like to read a paragraph or two from the editorial in the Winnipeg Free Press last May:

The implications of the new policy for the western farmer thus become clear. The quota system will mean a decrease in Manitoba's dairy production; it will mean that many small producers will be forced out of business; it will make it virtually impossible for a new producer (since he has no quota) to enter the business; and it will mean that farmers who were planning on increasing their herds will have second thoughts on the matter. It will work directly against the attempts of the provincial government to make Manitoba self-sufficient in dairy production; it will be-

This should be marked, Mr. Chairman.

-a blow to small rural creameries; and it will stand in the way of a number of new milk processing plants that are either coming into being or are being planned, in some cases with the provincial government as sponsor.

The editorial goes on to specify the regions or areas of the province-and this applies equally to Saskatchewan and Alberta-where creameries have existed for a long time and plans were being made to construct processing plants for manufacturing milk, and it became clear that the dairy policy of this government would militate very directly and gravely against the continuation of these creameries and processing plants. The minister will argue, of course, that subsequent to these complaints being made the government

and the commission adjusted the policy somewhat so that instead of eliminating all those producing under 50,000 pounds of milk they eliminate only those whose production is under 12,000 pounds. Between the levels of

12,000 pounds and 50,000 pounds it is left to the discretion of the commission whether these producers will be eligible to receive the dairy subsidy.

I admit that this is an improvement, but it is not good enough. The fact that it is a matter of discretion for the commission implies that some applicants producing between 12,000 pounds and 50,000 pounds will be deemed eligible to receive the subsidy but many will not. That is the point. The minister must realize that what I am saying applies to Saskatchewan as much as Manitoba, and perhaps even more so. Eighty-three per cent of the Manitoba producers of milk for cream and manufacturing milk have a production of under 50,000 pounds. So the policy is, in effect, playing with the future prospects of 83 per cent of the cream and manufacturing milk producers of that province, and a higher proportion in Saskatchewan. The number of producers affected in Alberta is almost as high.

In the past 20 years there has been a rapid process of adjustment in the agricultural industry. It has been so rapid that it has resulted in social dislocation. It really does not behoove this government, nor is it necessary for it to come forward with a policy or acquiesce in a policy or trend that will have the effect of aggravating this problem. Yet this is precisely what will happen.

[DOT] (4:20 p.m.)

At the same time the government is smart enough to realize the deteriorating economic conditions in most rural regions of the country, and so it has spoken of the need for coming forward with ARDA programs, retraining allowances, and so on. There is a basic inconsistency in the fact that on the one hand the government is denying price support to large numbers of small agricultural operations while on the other hand it becomes necessary to provide financial assistance in other ways. The cost to the public is just as great, if not higher. Since ARDA was first established, and as those engaged in those programs realize by now, it has become evident how excruciatingly difficult it is to come forward with plans which can be applied practically and have immediate results in many agricultural districts in the country.

March 4, 1968

Before any of these long-range readjustment programs under ARDA can take effect, some reconsideration must be given by the government to its dairy program so that the small dairy operators, shippers of farm separated cream, or those who ship under 50,000 pounds of manufacturing milk who constitute 83 per cent of the producers, can receive a guarantee that they will be eligible to receive price support in proportion to their production as well as those who produce in excess of

50,000 pounds. I agree with the former member for Assiniboia, who is now a senator in the other place, that the government should not hide behind the skirts of the dairy commission. As I said, the intent of the bill before the Senate is to remove from the discretionary powers of the dairy commission the power to determine whether or not those producing less than 50,000 pounds will eligible for continued price support. If the government does not give consideration to this problem it will mean that the number of farmers on the prairies engaged, at least in part, in a dairy operation will decline.

I have some figures here which indicate that whereas only four years ago 25 million pounds of creamery butter were produced on the prairies, last year only 17J million pounds were produced, a decline of almost 8 million pounds. If we translate that into financial terms as it affects farmers engaged in part at least in dairy production and look at the loss in financial returns and the loss in hours of work for the creameries, one can see what an immediate adverse effect all this is having. So the government will respond by pumping in more money through ARDA. Of course the situation would be worse if the government just ignored these developments and did not attempt to provide any compensation in dealing with these problems. In any case, it will have to spend as much money. If the government intends to cut down on dairy price support it will have to do something more through ARDA and, as I said, this is difficult.

I also wish to say to the minister that as his policy succeeds in forcing more farmers in western Canada out of dairy production there will be a proportionately greater onus on the government to do something about its western grain pricing policy. There are some very disturbing developments in this area. We know now that at the half way point in the present crop year exports of Canadian wheat amount to only 40 per cent of last year's level. I know that the minister opposite will

Supply-Agriculture

say that the reason for this is the developments in international markets, and we all know they are very good at offering justifications for what is failure on their part. The fact is that United States wheat exports are virtually the same as last year. If one country can do it, so can another if it has the will to make the extra effort.

The Department of Trade and Commerce has been relatively successful in promoting export trade in Canadian goods. The budget of the department has been increased to provide for greater effort in sales promotion, the promotion of trade fairs, trade missions, and the like. An equal increase in effort should be made with respect to the promotion of sales of Canadian wheat and feed grain.

In addition to the rather disturbing developments on the export sales front in regard to western grain there is the problem of price. Over the years hon. members on this side have given the Liberal party an education with respect to the cost-price squeeze, particularly in western Canadian agriculture. So the Minister of Agriculture and his colleagues are well aware of the fact that there has been no improvement. Not even one small step has been made toward finding a partial remedy for the problem.

From time to time the president of the Saskatchewan wheat pool makes public statements which are very informative indeed. He is not one who is given to overstatement, and precisely for that reason I wish to read the following few sentences which tend to go to the heart of the problem of prices and costs in western agriculture. Mr. Gibbings of the Saskatchewan wheat pool said:

-the recent large wheat sales-

He was referring to last year.

-had given rise in eastern Canada to the erroneous idea that the prairie farmer's problems had been solved.

But the sales had only obscured the adverse cost-price relationship, which would rise further if farmers got a short crop or if Canada couldn't sell and had to store a large amount of surplus grain.

The central point of the argument which I am trying to develop is contained in the following statement made by Mr. Gibbings:

Farmers had received the same prices for grains as they did 17 years ago, yet their costs of production had increased 54 per cent in that period. Farmers had absorbed that increase in costs by improved efficiency. None of the increased cost had been passed on to the consumer.

March 4, 1968

Supply-Agriculture

Owing to the government's performance in combating the crisis of inflation in our economy, the cost of production in agriculture has increased tremendously in the last three years. It has increased steadily through the 1950's and 1960's, but in the past two and three years it has greatly surged upward. In the light of these developments, how can one sit back with equanimity and view a static level of prices for farm products? Prices of farm products have remained static and there has been an upward surge in the cost of agricultural production because of the haphazard and inadequate performance by this government in dealing with inflation as it burns its way into all sectors of our economy. In the light of all this, Mr. Chairman, it is not difficult to understand why the Liberals of western Canada have become increasingly disgruntled in the past couple of years and from time to time have been calling for regional conferences. They have been trying desperately to come to some meeting of minds amongst themselves as to what should be done, but even when they have a regional conference they seem unable to agree on policies for western agriculture.

[DOT] (4:30 p.m.)

To be fair, I think it must be said that at their last meeting a few weeks ago they did manage to agree. They reversed a decision of a committee session at a plenary session the following day and agreed to endorse a resolution which would be forwarded to the government, presumably, asking for an improved pricing policy for western grain. I am sure the resolution was submitted to the Minister of Agriculture and to the cabinet. No doubt the minister was present. He knows what western Liberals have asked for in the way of pricing policies for western grain.

In so far as wheat is concerned they have asked for the two price system so that there would be a floor of $2.12 per bushel and an additional $1 per bushel for the amount consumed domestically. As I say, probably the Minister of Agriculture was there. No doubt he made a very good speech, because he can make a good speech on occasion. I am certain he assured his Liberal friends in the west that this resolution would be given serious and sympathetic consideration and that the government would try to do something. The problem with the minister, and I am not being offensive when I say this, is that he makes very good statements when he is speaking to groups outside of the house. He

spoke at Vancouver and he has spoken to farm union gatherings on the prairies. However, his performance in that respect is not equalled by his performance in cabinet. Obviously he has been unable to persuade his cabinet colleagues to do something about the problem now. Nobody has come up with a pricing policy.

I know the Liberals will say that last fall they indicated the price of wheat would be supported at the floor level of the international wheat agreement, which in effect was $1.95. How can one reconcile this statement with the fact that a few years ago western Liberals were talking, not just during election campaigns but at regional conferences, of the imperative need for a $2 floor under wheat? Those statements were made in 1963. Since 1963 inflation has decreased the value of the dollar by approximately 12 or 13 per cent. Instead of offering a $2 guarantee, however, the government comes forward with $1.95. I suppose $2 in 1963 is worth about $1.90 now. I guess this is how the government is going to justify itself when it goes to the western provinces in the next election. The Liberals are going to say, yes, we promised $2 in 1963 but because we have not been able to do anything about inflation $2 in 1963 is only worth $1.90 now, and since we are giving you $1.95 we are actually giving you more than we promised. I am sure this will confuse everybody, including the minister and his colleagues. Perhaps this is the only way the government can get out of this shameful position with regard to its treatment of western agriculture. The fact is that $2 promised in 1963 to be equalled now would require $2.12 per bushel at least.

I have already indicated how this government's dairy policy is adversely affecting dairy production and dairy producers in western Canada. The very least the government could do to make up for this adverse effect would be to improve their policy with respect to grain producers on the praries. However, they are not doing that either, Mr. Chairman.

I should say to hon. members that the performance of the government and the minister is so difficult to follow that from time to time I have to pause and ponder just what to make of it. Hon. members on this side have asked repeatedly if the government would do anything about increasing the amount of money available for cash advances. I feel this is a point worthy of some deliberation. There

March 4, 1968

has been the failure to keep up with export levels set in past years and the movement of grain off the farm and from the country elevators has slowed down greatly. It appears it is going to slow down even more in the next few weeks and months. This is all the more reason for increasing the amount of money available to farmers through cash advances.

We have no indication of intent from the government. Its ministers act as though they were not really concerned. I have said before but I want to say again that the image the government projects so far as the agricultural industry is concerned is one of the complete indifference, indolence and nonchalance. This applies to their attitude to the trend away from the farm which has been going on since 1952 and has been accelerating. Rather than trying to come forward with policies to slow down this trend and avoid social and economic dislocation, this government is indifferent with respect to dairy policies, indifferent about setting agricultural price supports for western agriculture and actually seems to accelerate the trend. Those who have tried to peer into the future of the agricultural industry have said that the trend will continue. Where 40,000 farmers in a given region are involved in hog production today, by 1980 the actual number of farmers so engaged will be between 4,500 and 5,000. That is how drastic the transition is, and the loser in the end will be the Canadian consumer. For these reasons no government ought to hesitate in supporting the prices of agricultural commodities.

[DOT] (4:40 p.m.)

Some hon. members from Ontario on this side of the house have referred specifically to sugar beets, vegetables, and so on. I wish to speak briefly about potato production in Manitoba. Potato prices in the past year have fallen drastically in the United States and as a result potatoes have been moving into western Canada at prices which, if they do not constitute dumping, come very close to it. There has not been much overproduction of potatoes in western Canada. As a matter of fact, there was no overproduction last year. Despite that, potato prices to producers slumped disastrously. As a result a delegation called on the Minister of Agriculture and asked him to consider imposing on United States potatoes a value for duty. Today the minister indicated that he has made no decision. He clouded the issue by giving an indirect answer and so I take that he is not

Supply-Agriculture

inclined to make a decision on the request. He has not even given the delegation the satisfaction of any answer.

A few months ago the Prime Minister indicated that since some industries in this country will be adversely affected by the implementation of certain features of the Kennedy round agreement the government would consider extending grants to such concerns as are adversely affected. I submit that the government should extend this kind of thinking to the agricultural industry. Helping industry overcome the disruption of rapid changes in trade patterns is unfair unless agriculture is given similar treatment.

Order, please. I regret to inform the hon. member that his allotted time has expired.

Mr. Schreyer:

May I have a couple of minutes to conclude?

Does the committee agree?

Agreed.