March 30, 1982 ALBERTA HANSARD 393 LEGISLATIVE ASSEMBLY OF ALBERTA Title: Tuesday, March 30, 1982 2:30 p.m. [The House met at 2:30 p.m.] PRAYERS [Mr. Speaker in the Chair] head: TABLING RETURNS AND REPORTS MR. HYNDMAN: Mr. Speaker, I have four filings: first­ ly, the 1980-81 financial

summary and budgetary review of the province; secondly, the financial

summary of the General Revenue Fund for the six months ended Sep­ tember 30, 1981; thirdly, supplementary information to the public accounts, being details of expenditure by payee, 1980-81; and lastly, for the interest of members, a list of the qualifications and experience of all senior investment Heritage Savings Trust Fund staff positions. MR. SHABEN: Mr. Speaker, I wish to file with the Legislature Library the Remote Area Heating Allowance Appeal Committee 1981 annual report. head: INTRODUCTION OF SPECIAL GUESTS MR. LITTLE: Mr.

Speaker, it is my pleasure today to introduce to you, and through you to the members of the Legislature, 43 grade 6 students from St. Wilfrid junior high school in the constituency of Calgary McCall. They are accompanied by teachers Pat Morris and Jerry McDonald, and bus driver George Cameron. They are seated in the members gallery, and I request that they stand and receive the traditional welcome of the House. MRS. LeMESSURIER: Mr. Speaker, I am pleased to introduce to you, and through you to members of the Assembly, 50 students from the Alberta Vocational Cen­ tre in the constituency of Edmonton Centre.

Accom­ panied by their leaders Mrs. Fay and Mr. Burghardt, they are seated in the public gallery. I ask that they rise and receive the very warm welcome of the Assembly. MR. NOTLEY: Mr. Speaker, this afternoon it's my pleasure to introduce three officials of the United Nurses of Alberta: Irene Gouin, the vice-president of the Edmon­ ton General hospital local; Heather Smith, chairperson, professional responsibility committee, Edmonton General hospital; and Diane Huisman, staff nurse at the General. I'm not quite sure which gallery they're in, but I ask them to stand and be recognized by the members of the House.

MR. KING: Mr. Speaker, it gives me great pleasure to introduce to you, and through you to Members of the Legislative Assembly — and, I might add, to the students who are in the gallery — Dr. Earl Hawkesworth, who is retiring tomorrow after serving most recently in a distin­ guished career as Deputy Minister of Education since 1971. Dr. Hawkesworth came to Alberta in 1958, after an educational career in Nova Scotia and Saskatchewan.

Important policy decisions have been made by the gov­ ernment during the past 11 years, and the deputy has been responsible for their implementation, including new ventures in the provincial funding of education, early childhood services, and extensive new services for handi­ capped students. New student evaluation programs are under way, private school funding has been greatly in­ creased, and elementary education has been revamped.

The Alberta heritage learning resources project, which was an outstanding development of western Canadian historical, geographical, and cultural materials, was pro­ vided to Alberta schools during the term of his deputyship. Dr. Hawkesworth's services have not been confined to Alberta. He has been president of the Canadian Educa­ tion Association, vice-president of the Agency for In­ structional Television, and a valued member of the advi­ sory committee on the Council of Ministers of Education.

He is a member of many educational and social organiza­ tions, including the Canadian Council of Teachers of English, Phi Delta Kappa, the commonwealth society, and Rotary International. He is a churchman of note, having served as a leader in ecumenical youth programs and as a baptist minister. Two previous Ministers of Education, the Hon. Lou Hyndman, and the Hon. Julian Koziak, join me in thank­ ing Dr. Hawkesworth for his loyal service, his wise counsel, and his good humor. I'd like to welcome Dr. Hawkesworth, and ask him to stand to receive the warm welcome of the Assembly.

MINISTERIAL STATEMENTS Department of Municipal Affairs MR. MOORE: Mr. Speaker, I am pleased to announce today that the government of Alberta will continue with a program of interest subsidies for municipal and school borrowings from the Alberta Municipal Financing Corporation. In 1974 the government introduced a program which provided interest subsidies from Alberta Municipal Af­ fairs, and in 1976 from Alberta Education, on loans from the Alberta Municipal Financing Corporation for general municipal and school purposes.

The interest subsidy pro­ vided an effective interest rate of 8 per cent in 1974, which was raised to 9 per cent in 1980 and 11 per cent in 1981. Since the inception of the program, most municipalities and school jurisdictions, as well as thousands of property owners, have benefited from its provisions. The interest subsidy for much of the past year has exceeded 6 per cent. Over $100 million of assistance has been provided to Alberta municipalities alone under this program in past years, with the 1982-83 budget being in excess of $86 million.

On average, Albertans will benefit by a reduction in property taxes of more than $40 per person in 1982, as a result of this program. This program, with some alterations as outlined here, will continue for the next fiscal year, with the new program being effective on March 31, 1982. 1. The government of Alberta will provide interest sub­ sidies on eligible funds borrowed from the Alberta Municipal Financing Corporation when the interest rate on Alberta Municipal Financing Corporation borrowings rises above 11 per cent, the same as at present.

394 ALBERTA HANSARD March 30, 1982 2. Interest subsidies will equal the difference between 11 per cent and the prevailing rate of interest charges by the Alberta Municipal Financing Corporation, to a maximum of 6 per cent. 3. On all loans approved and issued by the AMFC after March 31, 1982, interest subsidies will be paid by Municipal Affairs for five years from the date of a debenture being issued by the Alberta Municipal Financing Corporation, with the regular rate being paid after five years. 4.

Interest subsidies will continue, as at present, to be available for all normal municipal capital purposes except electric power, natural gas, and telephone systems. 5. Effective March 31, 1982, the interest subsidy to be paid by Municipal Affairs will reduce the effective rate of interest — that is, the AMFC rate minus the subsidy — to a level equal to that which existed when the first funds for a project were drawn from the AMFC, provided the total funds required for a project have been approved by the Local Authorities Board and the funds for the project are drawn within three years of its approval. 6.

Subject to the Alberta Municipal Financing Co­ rporation's authority and ability to raise sufficient funds, there will be no restrictions on amounts bor­ rowed from the AMFC during the 1982-83 fiscal year, except as determined by the Local Authorities Board in considering repayment ability and the re­ strictions regarding borrowing for electric power, natural gas, and telephone systems. Mr. Speaker, it should be noted that in no other province in Canada is a subsidy provided to interest rate on moneys borrowed by a municipality.

Thus, Alberta municipalities and their property tax payers will continue to enjoy the lowest borrowing costs of any other munici­ pality in the nation. head: ORAL QUESTION PERIOD Oil Sands Development MR. R. SPEAKER: Quite naturally, Mr. Speaker, today my question is to the Minister of Energy and Natural Resources. It's with regard to the $7 million to $8 million grant provided to the Alsands consortium, for operating costs. Could the minister indicate to us the justification for carrying on the one-month operation of the present consortium?

Is there a possibility of more partners for the consortium, a change in royalties, or the selling price going up, or is the government considering a larger equity position at this time? Are all those four criteria possibili­ ties? If so, are some of them possibilities or none of them possibilities at the present time? MR. LEITCH: Mr. Speaker, I'd first like to state accur­ ately the facts upon which the answer can be based.

The facts are this simple: the government of Alberta has agreed to pay up to $4 million, being one-half of the anticipated costs the Alsands participants will incur dur­ ing the month of April. That is somewhat different from the way the facts were stated in the question by the hon. Leader of the Opposition. Coming to the why, I think I can answer it this simply: our objective is to do everything possible to see this project proceed, and to see it proceed with the maximum possible private-sector involvement. Mr. Speaker, it is my view that until the end of March, we were not able to do those things.

Of course, we will also be pressing the federal government to make some changes, to enhance the prospects of the project proceeding. In my judgment, it was a very worth-while risk, for the people of Alberta to make that commitment to explore, during the month of April, all remaining avenues of having the project proceed. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion. I'd appreciate the minister being more specific. What changes or goals are possible in the month of April that won't be reached by March 31, to justify this $3 million to $4 million expenditure?

Does the minister fore­ see adequate changes, to justify it? Are new partners waiting in the wings to join the consortium? That's one specific question. Can the minister indicate whether there are partners who are examining the matter but need time? MR. LEITCH: Mr. Speaker, the hon. Leader of the Opposition is really saying: could you outline the possibil­ ities for the next month? I certainly can't do that in any detail. We're in discussions with the federal government, the present participants of Alsands, and others. During the month of April, we are going to explore all possible alternatives.

Obviously, that exploration of possible al­ ternatives means exploring changes in the earlier position. Whether they are in fact going to lead to additional partners joining the consortium is something we're simply going to have to wait for, and let events provide the answer. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion. Could the minister outline whether the government is considering its equity position as well, in terms of investment of moneys, resource dollars, from the Alberta government? MR. LEITCH: Mr.

Speaker, the government's position on an equity participation remains as has been described on a number of occasions in this Assembly. It is a possi­ bility, but our preference would be to have the project proceed with private-sector participants. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion. Albertans want some type of assurance that there is some new possibility and that something real could hap­ pen.

In the last two weeks, have some new types of negotiations come forward, some new factors, that are adequate evidence for saying that $3 million to $4 million must be invested in the ongoing operation of Alsands that could possibly bring about the implementation of the Alsands program? MR. LEITCH: Obviously, Mr. Speaker, it's our view that during the course of the month of April, there are possi­ bilities. We want to explore them fully, because if this project doesn't proceed, we want to be in a position where we can conscientiously and properly say that we explored all the possible ways it might have proceeded.

MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion. This is a message that the private sector of this province . . . MR. SPEAKER: Order please. Let's come directly to the question, without the

preambles. I think the hon. leader will have to agree that there has been a very, very

March 30, 1982 ALBERTA HANSARD 395 considerable degree of latitude in these questions which, with the degree of speculation involved in them, are really not strictly the kind of questions intended to be dealt with in the question period rather than in debate. MR. R. SPEAKER: Mr. Speaker, on the point of order. I just want to point out that my remark certainly wasn't to be a matter of raising debate in the Legislature; I was just stating a fact. Many industries are on hold at the present time, in terms of contracts, construction, and many support services.

In light of the government's deci­ sion to support Alsands during the month of April, could the minister indicate that those industries as well should sit in a hold position during the month of April, with some assurance that something might happen? MR. LEITCH: Mr. Speaker, I can't give any additional assurances over what I already said during this question period. What the businesses that have an interest in Alsands proceeding may do is, of course, up to the individual business.

I said in the Assembly — and I can't be any more specific — that we've made this proposal and arrangement for the month of April because we want to explore all possible alternatives. We think that in the exploration of those alternatives, we may find one that enables the project to proceed. Beyond that, I couldn't be more definitive. MR. KESLER: Mr. Speaker, a supplementary question. Could the minister indicate to the Assembly how long this government is prepared to prop up the Alsands project? MR. LEITCH: Mr. Speaker, one can never be absolutely certain about these matters.

But I don't look for the project proceeding beyond April 30 this year unless, by that date, the decision has been made to proceed with the project. MR. KESLER: Mr. Speaker, a supplementary question. Has the minister's department done any recent studies that would indicate that the Alsands project is economi­ cally viable, so Albertans can be assured that in keeping this project alive the government is not simply throwing good money after bad? MR. LEITCH: Mr. Speaker, we certainly have been doing an ongoing review of the economics of the Alsands project. In our view, it is an economically viable project.

We acknowledge that that view depends on one's percep­ tion of the world price of oil in the year 1990 and for the 25 or 30 years following that, because that will be the period during which the project will be producing oil. But there is no question in our minds that the project is economically viable, Mr. Speaker. MR. NOTLEY: Mr. Speaker, a supplementary question. The minister indicated that he didn't foresee any funding beyond April 30.

However, in the agreement between Ottawa and Alberta that was alluded to, for sharing up to $4 million of the operating costs with the federal govern­ ment, is there any contingency plan to carry it beyond April 30? MR. LEITCH: No, Mr. Speaker. MR. KESLER: Mr. Speaker, a supplementary question. Is the minister prepared to assure this Assembly today that this government will not take an equity position in Alsands? MR. LEITCH: Mr. Speaker, I thought we dealt with that at least a dozen times during these sittings of the Assem­ bly.

On each occasion, I said that the government was considering taking an equity position in the project, al­ though our preference would be to have the maximum private-sector involvement. The answer I have to give to the hon. member's question is the same as I have given on the previous half-dozen or dozen occasions. MR. KESLER: You didn't give the answer. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion, with regard to the federal government's involvement in the discussions.

Could the hon. minister indicate whether the federal government is prepared to co-operate with regard to royalty changes or an equity position? MR. LEITCH: Mr. Speaker, what the federal govern­ ment is going to do will depend on the passage of time and the federal government announcing its decisions. In this Assembly today, I certainly can't say, this is what I expect the federal government will or will not do. As has already been commented on, we've been referring to the need for changes on the part of the federal government. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion.

Could the hon. minister indicate the sequence of events during the month of April, in terms of meetings with the federal government and with the consortium? What is the plan of the provincial government and the minister, or is it just to let things float during the month of April? MR. LEITCH: Obviously, Mr. Speaker, we're not going to let things float, and we haven't been letting them float. During April, we will undoubtedly be having a number of meetings with the federal government, with the partici­ pants, and probably with other companies. Today I'm not able to set out a particular

schedule as to time and place of meetings, but undoubtedly they are going to occur. MR. NOTLEY: Mr. Speaker, a supplementary question. MR. SPEAKER: Might this be the last supplementary on this topic. MR. NOTLEY: The minister has indicated the govern­ ment is convinced that the project is viable. He's indicat­ ed before that an assessment was done on the substantial increase in the cost of construction. When can this Assembly expect either a tabling of that construction-cost review, or at least a tabling of the

summary, so Albertans and Canadians can also appraise whether the project is viable? MR. LEITCH: Mr. Speaker, I didn't catch all the words in the hon. member's

preamble. So if there's something that needs a response or correction, not having caught it, I'm afraid I can't do it. On earlier occasions, I indicated that at an appropriate time we would file one of the reports we've referred to in the Assembly regarding the cost of the project, or at least an executive

summary of it. I don't think an appropriate time is while negotiations and discussions are going on. I think they have to be concluded before that can be filed.

396 ALBERTA HANSARD March 30, 1982 The other reservation I had about filing the report arose from the fact that the detailed report may well impede the consortium's capacity to call for tenders in the ordinary way, since it might give an indication of the cost range of items being tendered. But I said I would give consideration to filing an executive

summary that per­ haps avoided that problem. Again, I don't think that should be done during the course of negotiations. DR. BUCK: Mr. Speaker, one very short supplementary. MR. SPEAKER: Perhaps we can come back to the topic, depending on how much time we have in question period. We have had 11 supplementaries on that question. Municipal Financing MR. R. SPEAKER: Mr. Speaker, in light of that, my second question is to the hon. Minister of Municipal Affairs. My questions were in more detail, with regard to the announcement; however, the announcement has an­ swered some. Mr.

Speaker, one of the questions I would like to ask is with regard to the terms of loans to municipalities. I understand that the AMFC board of directors considered shortening the length of loans to municipalities. The minister indicated there will now be five-year loans at one rate, then loans at a different rate. Could the hon. minis­ ter clarify whether that is a significant change in the term of loans to municipalities? MR. MOORE: Mr. Speaker, my comments in the minis­ terial statement dealt with interest subsidy.

The responsi- bilty for the Alberta Municipal Financing Corporation rests with the Provincial Treasurer, so I refer that ques­ tion to him. MR. HYNDMAN: Mr. Speaker, in previous years, mu­ nicipalities have usually borrowed for beyond five years. In this case, looking at the entire situation, we felt that having the five-year provision would not only result in significantly more moneys always flowing, by way of shielding from and through the Department of Municipal Affairs, but would also have a reasonable parameter for the very quickly increasing loans going out to municipa- lites on a shielded basis. MR. R.

SPEAKER: Mr. Speaker, a supplementary ques­ tion to the Provincial Treasurer. Under this new policy, is it the intention of the government to tighten the flow of loans to municipalities? MR. HYNDMAN: Mr. Speaker, in terms of the budget, I think it is very clear that this year — and I would probably predict next year — the amount of money provided by the government to shield property tax payers will again increase, as it has this year. It almost doubled, to $86 million. There will be a continued increasing of that shielding, and this program will simply facilitate that.

As well, I believe mention has been made of the fact that in the Bill before the House, the Legislature will be asked to approve a much higher figure: more than $1 billion new dollars being made available to municipalities to borrow at this shielded rate, the only program of its kind in Canada. MR. R. SPEAKER: Mr. Speaker, a supplementary ques­ tion. In changing the loan format to five years, could the hon. Provincial Treasurer indicate whether information is available as to the impact that will have on municipali­ ties, in terms of repayment? MR. HYNDMAN: Mr.

Speaker, that would vary throughout the province, depending on the financial situ­ ation and the extent to which there was borrowing, if any, as amongst and between the metropolitan centres, municipal districts, counties, villages, et cetera. Water Quality — Bow River MR. MANDEVILLE: Mr. Speaker, my question is to the hon. Minister of the Environment. Could the minister indicate whether his department is still monitoring the pollution level in the Bow River below Calgary? MR. COOKSON: Mr. Speaker, I don't know whether we're monitoring pollution as such, as the member sug­ gested; we do monitor the water system.

That informa­ tion is available, if the member would like it. We work jointly with Social Services and Community Health, through the health units. MR. MANDEVILLE: Apparently $3 million is going to be added for phosphorus control. Could the minister indicate what portion of that will be used downstream from Calgary to control the phosphorus in the Bow River? MR. COOKSON: The main source of phosphorus emis­ sion is in Calgary. The expenditure will be made to remove phosphorus at one or both of the plants in Calgary. MR. MANDEVILLE: A supplementary question, Mr. Speaker.

Could the minister indicate if they will be start­ ing this phosphorus removal in the Calgary plants this spring? MR. COOKSON: I'd have to check the timing, but they are well along toward completing the work. Our shared funding has gone to the city. I could perhaps report to the member as to the timing. Blackfoot Grazing Reserve DR. BUCK: Mr. Speaker, my question is to the hon. Associate Minister of Public Lands and Wildlife. Can the minister indicate how widely the Blackfoot operational development draft was circulated in the affected area of the Blackfoot grazing reserve? MR. MILLER: Mr.

Speaker, to the best of my knowl­ edge, this plan was circulated quite broadly when it was put out in April last year. Since that time, the department has had its planning people out meeting with the various user groups, as well as individuals. They're now develop­ ing a more comprehensive detailed plan, which is being reviewed. DR. BUCK: Mr. Speaker, a supplementary question.

Can the minister assure this Assembly and the people in that area that before the government makes a final deci­ sion to proceed with the project, the people in the af­ fected area will be given an ample opportunity to express their views once again?

March 30, 1982 ALBERTA HANSARD 397 MR. MILLER: Yes, I can give that assurance, Mr. Speaker. The fact of the matter is that they are now meeting with various user groups and interested individu­ als, and getting their concerns as to how best to utilize the Blackfoot grazing reserve. DR. BUCK: Mr. Speaker, a supplementary question. Can the minister indicate if any consideration has been given to moving the main staging area, or the entrance area, away from the Islet Lake area, where it's been proposed at this time? MR. MILLER: Mr. Speaker, I would have to take that question as notice.

I'm not sure about that one aspect of the plan. Constitution MR. KESLER: Mr. Speaker, my question is to the hon. Premier. Could the hon. Premier assure the House that he and his government are satisfied that democracy in Canada is well protected under the new constitution, in view of the fact that the federal government has invoked closure 10 times this session of Parliament, passed the emergency planning order, and brought a major piece of destructive omnibus legislation before the Commons, that legislation being Bill C94? MR. SPEAKER: The question is obviously a matter of debate.

The hon. member is asking for the government's opinion. Expressions of opinion are of the very essence of debate. In view of the nature of the question, if the hon. Premier thinks it can be dealt with within the time in the question period, perhaps we should deal with it. MR. LOUGHEED: Mr. Speaker, I'd like to deal with it at some length. The constitution of Canada basically establishes the relationships, in a federal system, between the provincial and federal governments. Over these many years, we've operated under the British North America Act, which has served the country well. The matters raised by the hon.

Member for Olds- Didsbury are issues within federal jurisdiction and in­ volve Members of Parliament and the House of Com­ mons. The importance of the constitution of Canada and the new Canada Act, from the standpoint of this Legisla­ ture and the people of the province of Alberta, is the importance of the relationship between the provincial governments and the federal government. Since 1976, this Legislature has had numerous debates with regard to proposals made by the Prime Minister of Canada with regard to constitutional change.

These have particularly involved the question of how the constitution could be amended in the future, that may weaken the resources of this province. The most important part of this has been the proposal made by the Prime Minister, in which it would be possible to change the constitution without the concurrence of an individual province, with regard to the matters of provincial jurisdiction, including provincial resources. On a number of occasions, it was the position of this Legislative Assembly that that should be resisted in the strongest possible way.

When we initially became in­ volved in this issue in '76, we were alone in that position; the so-called Victoria formula was one which was accept­ ed by all the other provinces but Alberta. Over the course of time, we worked on that position, together with a number of other positions which were involved, but came down to two fundamental questions on the Canadian constitution: the first fundamental question involved how the constitution could be amended; and the second one is assuring that the Alberta Individual's Rights Protection Act and the Alberta Bill of Rights could be adequately protected.

We were extremely pleased and gratified to hear the Prime Minister make a statement not too long ago that he had decided that instead of asking the British to hold their noses, he was going to hold his, because he was going to be supporting the Alberta constitutional proposals. MR. KESLER: A supplementary question to the hon. Premier, Mr. Speaker. We've heard much about the abandoning of the spirit of the agreement of the national energy program.

Would the Premier have any contin­ gency plans for the province of Alberta in cases where the federal government contravenes the spirit of the constitu­ tion, while respecting its letter? MR. LOUGHEED: Mr. Speaker, we received great sup­ port and encouragement with regard to the concern, which I frankly believe is overstated by the Member for Olds-Didsbury, with regard to that matter. On October 2, 1980, the Prime Minister of Canada intended to basically — through his majority in the House of Commons — change the constitution of Canada without the concur­ rence of the provinces.

This government led the way in appealing to the Supreme Court of Canada to have the issue of whether or not the federal government could in fact change the constitution without the concurrence or the consensus of the provinces. We led that battle. The result was the decision of September 1981, which was a decision for all those who feel so strongly about the rights of the provinces, and encouraged us a great deal. I'm sure it had a great deal to do with the extreme reversal the Prime Minister took on November 5, 1981, with regard to constitutional proposals.

Therefore, I be­ lieve that the Supreme Court of Canada is there and has shown, with its judgment of September 1981, that it accepts the federal system of this country, accepts the rights of provinces, and accepts the fact that there is a convention in Canada to assure that these constitutions cannot be changed unilaterally by the federal government. MR. KESLER: A supplementary question, Mr. Speaker.

In light of investigations that have taken place recently, concerning individuals who have had concerns about the constitution, and in light of investigations of an individu­ al in Vancouver, has the Premier had any reports of security checks or questioning by the RCMP on Alber­ tans who have taken public stands against the new constitution? MR. LOUGHEED: Mr. Speaker, I haven't had anything done involving security checks with regard to that matter.

Over the years, I certainly have had significant experience with the federal government in attempting to ascertain whether or not, on the issue of protecting the rights of the people of this province, they believe the citizens are behind the people of this province. On that security check, they've come up in a very affirmative way. Day Care and After-school Care Funding MR. NOTLEY: Mr. Speaker, I'd like to direct this ques­

398 ALBERTA HANSARD March 30, 1982 tion to the hon. Minister of Social Services and Commu­ nity Health. It concerns the question of day care and after-school care funding, especially as it relates to the city of Edmonton and the question of cost sharing with the federal government. Has a claim been made to the federal government for cost sharing of day care and after- school care programs for non-profit centres? MR. BOGLE: Mr. Speaker, under the auspices of the Canada Assistance Plan, the province of Alberta is able to claim, as are other provinces, for community-based, non-profit day care operations.

We have been doing that for some time. Keeping in mind that in Alberta approxi­ mately two out of every three day care centres are free enterprise, we are therefore unable to cost-share on those. However, we are able to receive some federal cost sharing for our total day care operations. As long as after-school care was blended with the day care operation, those portions of after-school care oper­ ated by non-profit agencies were also cost-shareable. Once their funding was separated from day care, there was some question of their eligibility.

Therefore, there were a series of meetings between officials of the Depart­ ment of Social Services and Community Health and fed­ eral officials as to the availability of federal funds. I am advised that we are now in a position where we have received payment for cost sharing, retroactive to 1979. I believe the intent of the earlier discussions we were having with the federal government was for the retroactivity. MR. NOTLEY: Mr. Speaker; a supplementary question.

I understand the arrangement is a fifty-fifty sharing of 100 per cent of the costs of operating these approved non-profit day care and after-school centres. Because of the concern expressed by at least one of the Edmonton aldermen, is the minister in a position to assure the House that the government of Alberta would not be profiting at the expense of the city of Edmonton, as a consequence of this cost sharing? MR. BOGLE: Mr. Speaker, to clarify for the hon. member, the province is able to cost-share approved costs the province puts into such programs.

In the case of after-school care, until the end of June 1981 the amount of support the province was putting into the program equaled approximately $100 per child per month. There­ fore, that portion of the program was cost-shareable, again only in those centres deemed to be non-profit, community-based centres. Mr. Speaker, the real question is the cost of day care in the municipalities.

Shortly I'll be very pleased to table in this Assembly a comparison of the costs of after-school care in the 10 provinces of Canada, which will clearly show how the costs in the city of Edmonton relate to other municipalities in this province and, more directly, to other provinces in Canada. MR. NOTLEY: Mr. Speaker, a supplementary question to the hon. minister.

The question is not the comparison with other provinces but whether there is in fact no profit-making, if you like, on cost sharing with the federal government on those aspects of the agreement dealing with non-profit day care centres, including after-school care, and that the province shares its load in total with municipalities and is not short-changing municipalities in any way. Can the minister give that categorical assurance? MR. BOGLE: Mr. Speaker, obviously I did not explain myself clearly enough in my previous response for the hon. member to understand.

The question is very clearly the areas the province is able to cost-share with the federal government, which fall under the Canada Assist­ ance Plan. Those areas are very clearly enunciated. Some areas we can cost-share fifty-fifty; other areas we cannot. We develop programs in Alberta to meet the needs in Alberta. We will cost-share wherever possible and practi­ cal to do so, because we believe it is certainly the right of Canadians who happen to reside in this province, where there is a cost-sharing program available, to receive the proper support. Mr.

Speaker, I do want to assure the hon. member that the support this province provides to the city of Edmon­ ton in terms of day care and after-school care is un- equaled by any other province in Canada to a municipal­ ity of equal size. MR. NOTLEY: Mr. Speaker, a supplementary question.

As a consequence of the money he has just told us the government has received from Ottawa, pursuant to the claim being submitted — and some of it's cost-shareable; some of it isn't — is the minister in a position to assure the House that the provincial share of the after-school care program in Edmonton cannot go beyond the amount already allotted, which is $700,000? Or could it, and — since we talked about the letter and spirit of other agreements — still meet the letter and spirit of the agreement on cost sharing? MR. BOGLE: Mr.

Speaker, the question is difficult to answer, for this reason: we no longer have a separate agreement with the city on after-school care. An agree­ ment was signed, which effectively transferred the respon­ sibility for after-school care from the provincial govern­ ment to the city of Edmonton on September 1, 1981. With that agreement, after-school care became an integral part of the family and community support service program. In the program this year, we have provided additional funds to the city of Edmonton.

For the first time ever $10 per capita will flow, through the programming, to the city of Edmonton and all other cities in Alberta for family and community support service related activities. Mr. Speaker, that compares with approximately $4.50 two short years ago. MR. NOTLEY: Mr. Speaker, a supplementary question. The issue is not the comparison with other years or other provinces.

The question is whether the funding made available by this Department of Social Services and Community Health, through the program the minister alluded to, meets both the letter and the spirit of the cost-sharing agreement with the federal government. MR.

BOGLE: It certainly complies with the Act this Assembly passed approximately a year and a half ago, bringing into force the Family and Community Support Services Act, which sees a substantial amount of provin­ cial funding transferred to the municipalities, so pro­ grams may be cost-shared on an 80:20 basis — 80 per cent of the costs picked up by the province, 20 per cent by the municipalities — to provide much-needed preventive social programs in the municipalities. MR. NOTLEY: Mr. Speaker, a supplementary question. I'm very delighted to hear that the actions of the depart­

March 30, 1982 ALBERTA HANSARD 399 ment meet the spirit of the legislation passed in this House. I would presume that to be the case. The question, however, is whether it meets the letter and the spirit of the cost-sharing agreement with the federal government? I've put that directly to the minister on three separate occasions, and he's answered another question. I now put that question to him. MR. SPEAKER: That's right, on three separate occasions. MR. NOTLEY: Perhaps I need a fourth occasion to get an answer. MR. BOGLE: Clearly, Mr. Speaker, programs are estab­ lished.

After-school care is one of a number of programs approved by the Edmonton city council. The city decides where its priorities are. Very clearly, after-school care is one of those priorities. We're able to cost-share certain portions of it, but only certain portions. MR. NOTLEY: Mr. Speaker, a supplementary question. Can the minister assure us, pursuant to both the spirit and the letter of the cost-sharing agreement from Mme. Begin that one of the Edmonton aldermen has just recent­ ly released, that the province is in no way profiting under the spirit and terms of that agreement? MR. BOGLE: Mr.

Speaker, we're certainly not profiting when we invest in a program and are able to cost-share a certain portion of that program. There is no way the province of Alberta profits in that kind of way. MR. NOTLEY: A supplementary question to the minis­ ter. Are we in fact cost-sharing in total with the city that portion we can collect from Ottawa? MR. BOGLE: Would the hon. member like to phrase his question again? MR. NOTLEY: Mr. Speaker, perhaps I can phrase the question by putting the figures on the after-school care costs. In the city of Edmonton, it's $2 million. As I understand, the provincial share is $700,000.

However, the province is able to collect a portion of that from the federal government. Will there be any increase in that $700,000 as a result of the information the minister just released in this House, that a portion of it is collectable from the federal government? MR. BOGLE: Mr. Speaker, the amount provided to the city of Edmonton has increased substantially. Last June, the figure was less than $400,000. As of today, as part of the family and community support services program, it's in excess of $770,000. Motor Vehicle Registrations MR. APPLEBY: Mr.

Speaker, I'd like to ask the Solici­ tor General a question. Will the practice of extending the time for registration of motor vehicles, in effect in pre­ vious years, be in effect again this year? MR. HARLE: Mr. Speaker, there hasn't been a practice, as I recall. The legislation provides that the registration of a motor vehicle extends for one month after March 31. MR. SPEAKER: The hon. ministers of Economic Devel­ opment, Environment, and Agriculture would like to deal further with previous question period topics. Petrochemical Development MR. PLANCHE: Thank you, Mr. Speaker. Yesterday the hon.

Leader of the Opposition asked if there were 15 petrochemical plants in active status. The answer is that 13 petrochemical plants have received industrial devel­ opment permits. All are either under construction or expected to be under construction soon. Two major ferti­ lizer projects are approved, one under construction. Seven other petrochemical projects and one other fertiliz­ er project have been publicly announced. Water Wells MR. COOKSON: Mr. Speaker, the Member for Clover Bar inquired with regard to concerns about the water table in the Scotford area.

In checking with the depart­ ment, Shell/Nova is presently driving piles in that area. They have to drive approximately 6,000 to a depth of 35 to 80 feet. I guess there was concern with regard to drainage in the area, in order to achieve this massive undertaking. Essentially I can tell the Member for Clover Bar that under the environmental impact assessment, water levels and quality in the general area will be monitored. If action is necessary, it will be taken. DR. BUCK: Mr. Speaker, a supplementary question to the Minister of the Environment.

Will he undertake to do a random sampling in the farm area to find out if many, or any, problems are occurring with surface wells in the farming community in that area? MR. COOKSON: I think probably that point would be covered. I'll check to see. Likely the company will be responsible, as part of its undertaking, if there is any possibility of damage to surrounding wells. I think we would require that as a responsibility of the company. DR. BUCK: Mr. Speaker, the hon. minister thinks.

Will the minister assure this Assembly that the minister's department will make sure that the farmers' interests are well looked after. Never mind the company's interests. Will the minister assure this Assembly that he will ask his department to survey the farmers in the area? MR. COOKSON: Mr. Speaker, we work for everybody, so I can assure the member. Beef Imports MR. SCHMIDT: Mr. Speaker, at the close of last week, the Member for Olds-Didsbury asked a question with regard to the amount of beef, both bone and boneless, imported into Canada. I would like to provide the infor­ mation.

For this quarter in 1982, total imports are down some 16 per cent. For that particular portion of boneless offshore imports, it's the lowest it's been in the last four years. ORDERS OF THE DAY MR. HORSMAN: Mr. Speaker, I move that questions

400 ALBERTA HANSARD March 30, 1982 122 to 128 inclusive, and motions for returns 120 and 121, stand and retain their places on the Order Paper. [Motion carried] head: MOTIONS OTHER THAN GOVERNMENT MOTIONS 204. Moved by Mr. Fjordbotten:

Be it resolved that the Assembly urge the government of Alberta to give consideration to the establishment of a system which will ensure income stability for the livestock industry. MR. FJORDBOTTEN: Mr. Speaker, it's a pleasure for me to introduce Motion 204 today. I introduced it be­ cause of the deep concern I feel about the livestock industry. Those concerns are shared by the Premier, in his remarks that I will mention later on, and by the Minister of Agriculture, the Hon. Dallas Schmidt. In­ deed, all members of the government are concerned.

There is recognition that a critical situation exists in the livestock industry today. In the absence of any federal policy, other provinces have stepped in and established programs of their own. Because of those factors, Alberta producers saw their natural advantage, their competitive advantage, slipping away. That all happened at the same time as the natural cycle of the beef industry was down. In addition, there was a reduced demand by consumers, because of high inflation and high interest rates. When you have high inflation and high interest rates, the end result is lower discretionary income.

It certainly showed up in a reduced demand for beef. There is no doubt that those mortgage payments certainly have that impact, as all consumers look for ways of cutting costs. That re­ duced demand was bad enough. However, in addition to political action in other provinces and that reduced demand, a lot of other things were happening all over the world. The world economy was down, also there were problems elsewhere. As has been the historic policy of our government, first of all we listened closely.

In consultation with individual producers and producer groups in this province, we in­ troduced the beef cattle and sheep support program. When we introduced it, we recognized that this one-time help for producers would help them through a critical period, but we agreed that it had to be done now. Action had to be taken, and action was. Today I checked the applications from beef cattle and sheep producers that have been logged at the office here.

There are 44,057 applications; 6,000 further applications that have been received but really haven't been logged in; approximately 10,000 applications in the district agricul­ turalists' offices or still in the mail. So there's an estimat­ ed total of 60,057 applications. The response from the producers of Alberta in this critical time in our industry has been excellent; in fact, overwhelming. Mr. Speaker, livestock producers have always prided themselves on being free enterprise people. They believe in the free market, and they've ridden the ups and downs in the natural production cycle.

When prices were low, they trimmed down their herds. When prices started to rise, they built them up again. Sometimes it hurt, but they rode with the market cycle and absorbed all those fluc­ tuating prices.

However, with beef consumption down from 113 pounds per capita in 1976 to 78 pounds last year, and the support programs in other provinces de­ stroying our natural advantages, and having free enter­ prise in Alberta basic to our life style, we acted, not by setting up a bureaucracy but by a one-time support program at a critical time in the industry, to give assist­ ance quickly and thereby have some breathing room to look at longer term solutions. It would be great if the market would turn around. No further action would then be necessary. However, that really doesn't seem as if it's going to happen.

If the present trend continues, not only will our young farmers and ranchers not be able to get into livestock production but many of the established cow-calf, feeder, or lamb producers will disappear. No one can stay in a business if he continues to lose money day after day and year after year. Inflation and high input costs have hit the livestock man hard. The producer has had to borrow significantly more money to operate, at a time when the market prices for everything he produces are down. We know he's borrowing more money, because the Canadian bank business loans increased. In 1979, they were up 30 per cent.

In 1980, they were up 24 percent. And in 1981, they were up a whopping 37 per cent. So we know that producers are having to borrow more and more money at higher and higher interest rates. But when he went to borrow that money, he found that inflationary expecta­ tions had adversely affected the fixed rate of long-term debt. Mr. Speaker, producers have had some difficulty bor­ rowing long-term funds. Lenders really don't want to lend money at long-term rates, because higher inflation and the instability in the economy make them feel they could always get more.

I know how those producers feel when they go to the bank. I remember back in 1969, I had wheat and barley piled everywhere, in all the buildings and outside. You could hardly give it away. It was 25 to 40 cents a bushel. The banks weren't interested in lending me money on that wheat, because we didn't know when we'd sell it. But if you had a cow — it could have a broken leg — they'd lend you money. A little later on they weren't interested in lending on that cow. But if you had a granary — it didn't even have to have hardly any wheat in it — they'd lend you all you wanted.

So those cycles have been there in the past. But right now the problem with borrowing money is different than it ever has been, because the input costs for the producer have gone up so high and the fixed long-term rates just aren't there. There is so much instability that the produc­ er just doesn't know where he stands. While all this is happening, the producers recognize that eastern producers, through government subsidies, can buy western grain as cheaply as we can. Live cattle can be shipped to the east cheaper than frozen beef. Hence you know where the packing industry went — to the east.

Yesterday I heard that 40 employees of a Leth- bridge packing plant were laid off because their freezers are full. The markets just aren't there, and they're not killing. You can guess the rest. We all recognize that the overall primary position of Alberta in the livestock industry has to be preserved. We in government are committed to assist wherever possible in developing a strategy to restore stability to our live­ stock industry. In the [state of the province address] on October 14, the Premier stated a number of things.

I think people may have some difficulty remembering October 14, 1981, because things are moving so rapidly nowadays. On that occasion the Premier stated:

March 30, 1982 ALBERTA HANSARD 401 We have had discussion with a number of people in this industry. They've discussed some of their views with us, and asked us to concentrate not just on the short-term area but try to assist them more significantly in a number of other constructive parts of the beef cattle industry. All producers recognize the fact that some action has to be taken somewhere.

In that speech, the Premier also stated some concerns: The proposals before the House of Commons with regard to meat import legislation — it's a useful piece of legislation, but it's been significantly limited by the last GATT negotiations. Something that's always concerned everyone in the indus­ try is that with the amount of exports we have, we don't even get observer status at the GATT negotiations. The Premier has shown great concern about the GATT nego­ tiations and the way import quotas were operated. I think all producers recognize that fact and share those concerns.

You might ask how important the livestock industry is to the province of Alberta. Did you know that livestock represents 44 per cent of our cash receipts in the prov­ ince? In Saskatchewan, it's only 19 per cent; in Manitoba, 30 per cent. Alberta farmers market four times as many cattle as Saskatchewan, and five times as many as Mani­ toba farmers. Now those are pretty significant figures when you look at the amount of livestock we produce and what our receipts are.

The cash income sale from livestock in Alberta is two and a half times as large as the income derived from the sale of livestock on Saskatchewan farms. The three prai­ rie provinces all have a large stake, but Alberta has one of the largest. We have the largest livestock population in western Canada. We have 50 per cent of the cattle and calves. We have 40 per cent of the hogs, and we have 55 per cent of the sheep and lambs. So we have a significant interest in the viability of our livestock industry. In 1979, the combined cattle and calf slaughter was 757 million pounds of beef and veal.

In 1979, pork produc­ tion was 192 million pounds. In the same year, mutton and lamb were 1.5 million pounds. Poultry production stood at 110 million pounds. While that production was going on, Albertans consumed 220 pounds per capita of meat and fish. With all that we consume here, the largest share of our production is export. So you can see that the livestock industry makes a very significant contribution to Alberta, because it provides jobs. We need to have more processing of the products within Alberta, from the production level up. The live­ stock industry has the potential to provide many more jobs.

The livestock industry provides a market for our barley, because we are one of the largest producers of barley. Most of that barley is fed. So if the cattle industry is doing well, it helps our grain producers. It provides export, but it provides the best food for all of us. We tend to take that for granted. We drive by a lot of cattle in the feedlots and in the field, and we don't pay any attention. But we go into the restaurant and expect to get the best steak. We do get the best steaks here, and the price is reasonable. If you were in Korea, steaks are $9 a pound.

In some of the re­ staurants in West Germany, a steak can cost $40. In many foreign markets, beef is available only one day a week. We can go into the supermarket any day we like. We can drop into the different fast food outlets and always get beef. But in some places, that just isn't available. So what do we do for the livestock industry? First of all, as always with our government in Alberta, we listen. It comes from the bottom up, and we respond and assist an industry. We have to work with the producers and producer organizations so we can work out a long-term strategy with them.

I've been in the livestock business for a long time, and I'm opposed to any government inter­ vention in my industry. I know that is a view shared by a majority of producers. However, there is an acknowl­ edged problem, and we in this government must be prepared to assist the industry. We can't sit back and say that we can't do anything. We've got to be up front and do what we can to help them.

I'm convinced that one-time payments from govern­ ment, important as they are — and how important it was to the critical state the livestock industry was in — is not a long-term strategy to strengthen the industry that makes such a contribution to the economy of Alberta. That one-time payment is important, but the strategy for the future and how we handle that is important. I believe totally in free enterprise and free markets. However, too many external factors are affecting the free market, and it's having trouble functioning.

The importation of beef and the cattle support programs in other provinces have had an impact on us. I'm totally opposed to supply management production controls. I think the ultimate answer in the beef industry is a national program, but with no elements of produc­ tion controls. I think it should be voluntary. I think we have to come up with a solution that's operated by the industry and the governments involved, but has govern­ ment involvement and support only until it becomes es­ tablished and self-sustaining. With a little help, I think the industry is really quite capable of solving those problems.

I think all hon. members in this Assembly should be aware that today the industry is working hard to come up with answers and to address the issues. All cattle organi­ zations are interested in the long-term stability of their industry, and they're looking at all the options. They know that more meats can be processed here. There's a great market in the Pacific Rim, in China. To get those markets and process the products here is important to the economy of Alberta and to the long-term benefit of Alberta producers. Alberta can increase its livestock pro­ duction fourfold from the present level.

We have a great job to do, and we have an industry out there that can provide a lot of things for us if we're willing to look at it. Mr. Speaker, I put the motion on the Order Paper because I think a number of issues should be brought up in debate. I'm just going to touch on a couple of them and hope that hon. members who speak after me will step into some of those issues, because I think they're issues that have to be brought out. Number one: what's happening in other provinces? What's happening in other provincial jurisdictions? What are they doing?

Number two: the Crow rate, which really encourages processing of beef in eastern markets. How are we going to address that issue? Number three: the GATT agreement. What impact does that have on our producers and what steps can we take? What representa­ tions should we be making? Interest rates: I heard the other day that the total long-term, short-term, medium- term agricultural debt in Alberta runs between $3.1 bil­ lion and $3.4 billion. When you have the agricultural industry with that debt, how can we step in on interest rates just in agriculture?

How about small business and all the other ones that come along with it? I think we

402 ALBERTA HANSARD March 30, 1982 have to address the interest rate issue, because it's impor­ tant to the livestock industry. The industry is out there working now, trying to look at that issue and what they can do. I hope one hon. member will step in with point number four, and that's marketing boards, which seem to be an Ottawa preoccupation at the moment. What does that mean to our livestock industry in Alberta? Will high interest rates, escalating inflation, high production costs, and low market returns be solved by a marketing board? What are the advantages and disadvantages?

Number five: I hope some hon. members will address some of the ways this government has responded, on an emergency basis and an ongoing basis, by doing a number of things to stabilize the incomes of producers in this province. I really believe and am firmly convinced that solutions must be offered for debate now so we can end up with a policy direction which is best for the industry. Today I'm really pleased that we're going to have nearly the full two hours for debate on this motion. I take my seat now and look forward to the remarks of other hon. members. Thank you. MR. THOMPSON: Mr.

Speaker, I'd like to say a few words on this motion. Southern Alberta basically started in agriculture in the ranching and livestock industry. People moved in and started bigger ranches. Later on, of course, a lot of the land was broken up and went back into grain. When you look at it, we still have some of the biggest ranches in Alberta down there. We have ranches like the Maclntyre ranch in my constituency, the Bar K 2, Knight ranch, and Palmer ranch. So it is still a big part of our income in the Cardston constituency.

In fact, as far as sheep were concerned, at one time there were people running from 5,000 to 10,000 head of sheep in one herd. We had 40 per cent of Canada's sheep population in southern Alberta. So it is important to our area. I think the Member for Macleod said it well when he said that we're all concerned. There are two figures we just can't get past. One is the fact that our consumption has gone down from 112 pounds to 87 pounds, and the other is the rapid increase in our cattle numbers in this province.

I'd just like to give you a couple of them: in 1950, we had 400,000 head of beef cows in Alberta; in 1960, we had 827,000 head of cows; in 1970, we had 1,105,000 head of cattle; and in 1980, we have 1,380,000 head of cattle. In the last few years, our cattle numbers have kept increasing and, for some reason or other, our beef consumption has dropped. I don't particularly agree with the Member for Macleod when he says the cost of meat is too high. When you compare a pound of beef steak to a pound of lettuce, I really think you're paying way more for the lettuce; be that as it may.

When he put those figures out about how much of the cash receipts come from cattle, I think he did a very good job of explaining the impact of the livestock industry in Alberta. But I'd like to speak a minute on the importance of the cattle industry to the grain growers. I keep calling them cattle, but I really should be saying livestock. In Alberta we raise 55 per cent of Canada's feed grain, and we feed 65 per cent of that 55 per cent right here at home.

Basically, over the years, we have built up a really inte­ grated agricultural system, where we produce the live­ stock, feed the livestock, and export the meat. It's been traditional — and the Member for Macleod mentioned this — that when grain sales are slow or crops are large, or a combination of both, we've always used the livestock industry as a safety valve to eliminate our grain problems. So there's no doubt in my mind that the grain growers and the livestock people are tied together, whether they like it or not. Lots of times they don't like it, but it's a fact of life.

Another thing I'd like to talk about in southern Alberta is the importance of the feedlots. Over the last 30 years, we have built up a large feeding industry in this province. In my constituency we have feedlots that run all the way from 1,000 head to 1,500 head, due to several factors. One, of course, is the climate. It's a little milder down there than it is farther north. Another is the availability of feed. We have a lot of grain, and we have a lot of irrigation. A lot of hay is raised there. So there's a big supply of feed handy. Of course, another thing is that a lot of cattle are available.

With those three factors, it's been natural for the feeding industry to take a real hold down there. The importance of that industry to our province, what businesses are involved: to start with, there are the auc­ tion marts. They employ quite a few people. There are the custom truckers. That not only takes in the grain truckers but also the livestock truckers. Quite an industry is in­ volved there. Then, of course, you have the feed mills and the packing plants. Basically a lot of people outside of the ranchers and farmers are involved in this thing.

Many, many people in southern Alberta are employed in the custom feeding of cattle. I think that's another reason we need a viable livestock industry. So my recommendation is that if we come up with a program, I think it should be national in scope. I'll be very interested in hearing what some of the other people say on this subject. I think too many provincial programs are already floating around, and it's pretty hard for good old free enterprise Alberta to compete with provincial treasuries of other provinces. So if there is one, it should be national in scope. Secondly, I believe it should be optional.

I don't think any livestock operator should be forced to go into the program. I think it should be his own decision. It should be based on something like the hog program and the hail and crop insurance program. You pay a premium; it gives you a certain amount of insurance as far as price is concerned. You decide how much you want to pay into it and how much you want to gamble. The last point, and probably the most important, is that it should not endanger our exports to the U.S.

We always have to keep in mind that in 1980, we had a $200 million trade balance in our favor as far as livestock crossing the border, back and forth. So it has been a real market. If we are going to make this a viable industry and increase it, I think our most natural market is to the south. We ought to protect that and see that it's still there. I'm not going to say much about the Crow rate, because I don't think we can at this time. It's in a state of flux. We really don't know where it's at. Until there's a little more detail to look at, it's pretty hard to make any decision on it.

I'd just like to make this one recommenda­ tion, though. If a Crow benefit is paid, I feel it should be paid directly to the producer. This not only helps the livestock operator, but I think it is basically in the interest of the individual grain grower. Thank you for your attention, Mr. Speaker. MR. PENGELLY: Mr. Speaker, it's a pleasure for me to rise and take

part in this debate on the motion put forth by the hon. Member for Macleod. I would like to stress

March 30, 1982 ALBERTA HANSARD 403 four things. I'd like to mention a little about the impor­ tance of the industry; the reason for its decline; some of the direct ways the government is helping the industry; and some of the suggested ways, directions, and policies that might further assist this industry. It has been said before, and it bears saying again, that the livestock industry is most important to the province. Well it should be, for we have all the natural advantages. We have the advantage of an abundance of high-quality grass and feed grains, and a surplus of good water.

In some parts of the province, there's the weather advantage of extended winter grazing. Alberta also has high-quality, hardy breeding stock. Perhaps one of the most important, Alberta also has a very select group of ranchers and feeders who are unequalled anywhere in this nation. Mr. Speaker, livestock sales represent about 44 per cent of Alberta's farming cash receipts. But, unfortunate­ ly, the cattle sector continues to sustain significant losses. A number of factors contribute to this critical situation, and I'd like to list those.

The natural cycle of the cattle industry coincided with the federal policy of high interest rates. This boosted the feedlot operating cost, weakened the consumer's purchasing power, and caused Canadian beef consumption to plummet from 113 pounds per capi­ ta in 1976 to about 78 pounds per capita last year. It is also said that vegetarianism and meat substitutes in diets also contributed somewhat to the decreasing demand for beef.

The import of cheap beef into Canada from the United States under the terms of the GATT agreement, when these high import levels were set during the top of the cattle cycle, was another factor. The inequities produced by the Crow rate allow only raw grain to move at pre­ ferred rates. Everything else costs much more, three or four times as much. Obviously this is to the disadvantage of the livestock farmers. Alberta feeders enjoy no advan­ tage from their location. Through government subsidies, eastern farmers can buy grain as cheaply as the livestock men here.

Freight rates allow easterners to buy Alberta calves for much the same price, f.o.b. Ontario, as those close to our own producers. Live cattle can be shipped cheaper than frozen beef. That's another reason for the eastern trend in the packing industry. The absence of a national program saw other provinces establish support programs, and Alberta saw its competi­ tive edge slip away. To combat this competitiveness the government, in consultation with the producer organiza­ tions, introduced the beef cattle and sheep support pro­ gram last fall. That has been well explained here.

In doing so, the government recognized that a one-time payment would help producers through a critical period but would not solve other long-term problems which brought about the crisis. We forget that the government has helped in many direct ways. There's a water pumping program, with rent­ al pumping equipment and trailers, for filling dugouts. There's a feed freight assistance program to meet prob­ lems with winter feed. There's also compensation to re­ duce losses of producers whose animals die of anthrax, rabies, or tuberculosis.

There's also assistance to defray costs and encourage the exhibiting of livestock in some of the major shows in other provinces. There's also compen­ sation for livestock loss due to natural disasters and predation. Over a three-year period, our government has allotted $3 million to promote beef consumption. The cattlemen who have made representation to me have made one thing abundantly clear; that is, they are not interested in any central marketing agency which has a supply man­ agement authority.

They say it is no answer to the problems caused by high interest rates, rising inflation, high-cost production, and low market returns. Many are opposed to any government intervention in their industry. They also know and recognize that a one-time payment from the government does not contribute to development of a long-term strategy to strengthen the industry. They recognize that poor demand is the biggest problem. They have suggested directions the government might follow and policies which could provide assistance with­ out interference. Mr. Speaker, I'd like to list some of those mentioned.

They suggested that the federal gov­ ernment, provincial government, and producers work together for a national program. It was also suggested that they could provide taxation changes to allow live­ stock producers to defer income by putting it into trust accounts during years when prices are at the top of the cycle. As already mentioned, they ask assistance in beef promotion. We're already doing that. They would like to see the food processing industry expanded, especially that of boxed beef. They suggested that producers pay into a fund in much the same way as with the hog stabilization program.

These voluntary insurance premiums would entitle a pro­ ducer to draw on the fund in years when the livestock market was on a down cycle. Of course, we could suitably fund such an approach. But in the absence of any nation­ al solution, or any hopes of one, I urge the government to plan, in co-operation with producers, a stabilization pro­ gram in the very near future. I urge all members to support this motion. Thank you. MR. STEWART: Mr. Speaker, as another rural member I welcome this opportunity to discuss something that pertains to agriculture.

Certainly our livestock industry is one of our major ones in that regard. During this particu­ lar time in our economy, the livestock industry has been highlighted as one that has possibly suffered more than some of the others. Mr. Speaker, I think we recognize that we produce export products in our livestock industry — beef, sheep, and pork — to ship to other markets in the world. Recognizing the fact that there's a downturn in the North American economy and, to a degree, a world recession, certainly this product has found it more and more diffi­ cult to be competitive and saleable in other markets in the world.

If we look at livestock production in this province over the last 20 years, we will recognize that it has almost become two industries. Certainly the cow-calf producer — since time began, the historical rancher in this prov­ ince — is one of our primary industries. The cattle- finishing industry — and I will call it that in preference to calling it a cattle-feeding industry — has matured over the last 10 or 15 years, to where it has become a very important second industry from the point of view of agriculture.

Geographically it has benefited many areas in this province and has brought together the raw products and produced a quality beef we can be proud of in any export market. I think the butchering and finishing of the boxed beef industry, and many of the processes that take place, are making this product saleable to markets that were not traditional. I'd like to believe that, as a finished product, it can be air-freighted to almost anywhere in the world. Because of its consistency in quality, it can find a ready market that was not traditional in the past. I believe people in the industry have the fortitude and

404 ALBERTA HANSARD March 30, 1982 initiative to develop and market this product, given a reasonable opportunity in what production and transpor­ tation costs are. Historically we've been plagued with the fact that freight costs for sending our product to eastern Canada have put us at a disadvantage. More expertise, and looking to the Pacific Rim countries with some of our products in a more developed manner, will create another opportunity for those new industries we've seen develop. If we look at stabilization, we have to be very realistic about what that can ultimately mean.

In its philosophy, the federal Department of Agriculture has felt that some type of national plan would not be successful without some type of production controls. As a province that depends so heavily on exports, we could only suffer the greatest from this type of program. I don't believe people in this province are prepared to accept a federal program that would have that type of stipulation. Industry should certainly have control of its own desti­ ny. I believe a lot of people have explored almost every avenue that would help the industry.

I don't think that we as a government should look at the cattle industry in isolation from the rest of agriculture. In my estimation, any program that would favor the cattle industry today would be part and parcel of a government program that people who are not in the livestock industry would feel they should enjoy to an equal degree. I guess if we as a province are really determined to see agriculture survive, we have to think about production costs and any manner that we can control those costs. Certainly people involved in agriculture have no control over their input costs.

I believe it's one avenue that people not only in the beef or sheep industry but all people in agriculture can benefit from. Any program that will cut those production costs — and I'm thinking about the input costs in agriculture, such as our fuel and fertilizer costs, our cost of doing business in this province, and certainly the cost of transportation — and give our people in agriculture an opportunity to get their product to market in a more competitive manner because of the freight costs, will certainly have a long-term effect.

I think it will ultimately be the deciding factor in how well agriculture does in Alberta. We're competing with an oil industry that, as well as agriculture, is having a downturn at this point in time. Certainly we're at a disadvantage from a manpower point of view. Agriculture cannot compete in the market place for the numbers of people that may be required to ulti­ mately give agriculture its proper place in the sun. But we've survived that for the last 30 or 15 years, ever since Leduc became the main focal point of the oil industry in this province.

People in agriculture have recognized the fact that they couldn't compete with the oil industry when it came to dollars and cents for manpower. But agricul­ tural production in this province has not suffered as a result. The technology we have employed has certainly made agriculture still our number one industry. If we're prepared to give it every opportunity to keep our produc­ tion costs in line, I believe it will continue to be so. As far as the free enterprise system is concerned, I think people in the industry recognize you're going to have ups and downs in beef prices.

There has to be a curtailment of production at certain times, simply be­ cause there isn't a market for it. But with a good, aggres­ sive marketing system and new markets being found, possibly we can even expand on what we are already doing. I hope people addressing this issue this afternoon will consider all aspects of agriculture and not recognize beef production in isolation from the fact that the rest of agriculture is also suffering from the same problems as the beef industry.

In some cases, we've got to recognize that the industry cannot be propped up in isolation from world conditions and cannot be artificially stimulated for any long period of time without having a detrimental result. [Mr. Purdy in the Chair] I look forward to the rest of the people who will participate this afternoon. I certainly feel that the oppor­ tunity of having agriculture discussed in this Legislature cannot happen too often for the industry. Any new ideas, and our show of concern, are certainly going to stimulate the people in the industry who are trying to resolve some of their own problems. Thank you. MR.

MANDEVILLE: Mr. Speaker, I want to make a few comments on this resolution. I'm going to endorse most of the comments made this afternoon; that is, that we don't get into supply management and we don't have any long-term subsidy programs for the livestock industry. One would certainly have to agree that the cattle indus­ try in this province contributes a lot to Alberta. But whether you're in grain farming, the cattle industry, or whatever, it's the same as anything else. You're going to have your ups and downs. I've been in the cattle business all my life. I've seen many ups and downs in it.

At present we do happen to be in a depression in the cattle industry. In the last two and a half years, we have taken severe losses. But it's not the first time we have experienced losses in the cattle industry. At the present time, I don't see any daylight as far as coming out of the depression we have in the cattle indus­ try. I can't charge it to the cattle numbers in the province. I have to charge it to the tough economy we have in Canada and on the North American continent. It's the economy itself. The last two years, the input cost in the cattle industry has been terrific.

It is what has been taking the profit or making the losses so severe as far as the cattle industry is concerned. Mr. Speaker, one of the biggest stumbling blocks we have in the cattle industry today is the high interest cost. In many cases, the interest cost is equal to the feed cost when you're feeding cattle in the feedlot. The interest costs are causing absolute havoc to the cattle industry.

I was certainly disappointed when I listened to the governor of the Bank of Canada, Bouey, the other day, standing up in public and indicating that farmers and ranchers were going to have to get better control of their management in order to exist. Certainly we have to have good control of our management. If I had anything to say about what was happening, I would make a leader out of a gentleman making this type of comment. He'd be lead­ ing a lot of other people, and it would be right out of office.

I think it's a disgrace to say that it's the farmers and cattle producers who have to control their manage­ ment, when it's nothing whatsoever to do with their management. It's the conditions. It's cycles we have been going through for many years. But the interest cost is something I don't think we should be going through, having something like this imposed not only on the cattle industry; it's the entire economy in Canada and the United States. In my constituency, the cattle industry is one of the

March 30, 1982 ALBERTA HANSARD 405 most important we have as far as agriculture is con­ cerned. I have three large feedlots in the area. One, Lakeside Feeders, was set up to feed 20,000 cattle. Now they're feeding up to 40,000 cattle. I can assure you that they're feeling the pinch, and feeling it hard. However, they still don't want a marketing board, and they don't want government interference in their operation. They're sure they'll be able to survive and come out themselves. They're not the only feedlot in my constituency that has had severe problems with the cattle industry.

Several of the large feedlots in my constituency have. Mr. Speaker, I'm against subsidies. I'm against market­ ing boards. As I said, I have to endorse the speakers who have spoken here today. I'm pleased to hear that we have the same feeling throughout our Legislature. I did agree with the subsidy put on the cattle industry. The reason is that we had a subsidy program in place for other red meats in the province. Other provinces throughout Cana­ da had subsidized programs in the cattle industry that we in Alberta had to compete against.

So I had to agree with the subsidy program, providing it was a one-shot deal, not a continuing program to carry on for a number of years or getting people into the cattle industry who shouldn't be in it. It was well supported throughout the province. I talked to many cattle organizations. They agreed with it, provid­ ing it was a one-shot, $133 million into the industry to cover approximately half the losses they had in 1980 as far as the cattle industry was concerned. The big concern most cattlemen had was that we would have a conflict with the United States.

We've certainly got to keep a free market as far as the United States is concerned. We can't come up with subsidized programs where they're going to cut us off from exporting Canadian beef to the United States. As I said, I still don't see any daylight as far as the cattle industry is concerned. If anyone has been following the cattle reports coming out of the United States — and they have 80 to 85 per cent of the cattle in North America. If you look at the last few reports, cattle-on- feed reports are coming up with 110 or 114 per cent over last year, over the last two or three months.

So our cattle population is down. I have to agree it's down. But with the high interest rate, high feed cost, and the demand on some of the lending agents to get some of the money back into the hands of the lending agents, a lot of our ranchers and feeders in the United States have been putting their cattle on feed. So I think we're still going to have a surplus of cattle. But when we get through with that surplus, I think we'll be able to stand on our own two feet as far as the cattle industry is concerned. We're going to have our cattle population cut considerably after, I would say, six to eight months.

I can see some cattle markets in the very near future that are going to be depressed. At the present time, both the United States and Canada have a lot of boxed meat and a lot of beef in storage. They're not able to sell it, but the packers are still bidding fair prices for our cattle. Mr. Speaker, I really think the only thing we can do with the cattle industry is let it come out on its own, let it work out a level where it's going to supply the demand of our consumers in this province. I certainly agree with the Cattle Commission in a lot of cases. They feel we should be putting all our emphasis on marketing.

As far the cattle supply is concerned, we're going to have to leave that in the hands of the producers themselves. They'll certainly control that. I'm hopeful that we will in western Canada. I can see marketing boards working for the industry in eastern Canada, where we have a lot of small producers. But I certainly hope we'll oppose any market­ ing boards in western Canada or any management sup­ ply. We don't need to get into any of these areas. With those few remarks, I would say that I think the resolution is good. We should keep on top of it.

But I don't think we should have government intervention in any way. MR. APPLEBY: Mr. Speaker, I'd like to say something about the resolution we have before us today. We've been hearing from the deep south and the mid-south in this province. Perhaps a voice from the mid-north would contribute to the debate. As we look at the resolution, I'm thankful that the Member for Macleod introduced this here today, so we could have a discussion on it.

It is somewhat vague: . . . urge the government of Alberta to give consider­ ation to the establishment of a system which will ensure income stability for the livestock industry. Of course, there are some misgivings among a great many people as to whether the government of Alberta can, on its own behalf, introduce some sort of stabilization pro­ gram in isolation from the rest of the nation. I was very impressed by the remarks of the Member for Bow Valley, because I have a great deal of respect for his background and knowledge about the cattle industry, and the success he has had at times.

He's mentioned this success, and he also mentioned the times he was not successful. He admits that the industry is in a state of fluctuation, and anybody who really wants to get in­ volved has to be prepared to accept that situation. All members who have spoken in the discussion of this resolution this afternoon have underlined something that is very apparent; that is, the deep concern this govern­ ment and, I'm sure, all members of this Legislature have for the situation that exists in our red meat industry in the province.

It was really something to hear the com­ ments from the Member for Cardston, when he outlined the number of cattle in Alberta in 1950, 1960, 1970, and 1980, and realize the fact that we have more in Alberta today than we had 30 years ago, yet our packing industry in many areas of the province has practically disappeared. The reasons for that were given. But it is a very cyclical type of industry, subject to conditions outside the realm of the province itself. As we travel around the province and meet with our constituents, the call and cry seem to be that the govern­ ment should do something.

When every hon. member of the Legislature hears that remark, I'm sure they say: what should we do? We get a variety of opinions and sugges­ tions as to what could and should be done. We know our farm organizations have varying views on what could be done to stabilize the industry. In Alberta, Unifarm expre­ sses support for a federal program, and the National Farmers Union is very strong on a national meat authori­ ty. The Hon. Eugene Whalen himself expresses the view that he would like to see a national policy.

From the information I've received, on more than one occasion he has taken that proposed policy to his cabinet colleagues. Each time it has been shot down; he hasn't been very successful. Personally, I would very much like to see a program proposed by the federal government put out for consideration and discussion across the nation, so we could have input from our various organizations in Al­ berta, and other province's could do the same. I've heard very definite statements from members here today that they are utterly and completely opposed to

406 ALBERTA HANSARD March 30, 1982 supply management. I'm not too well informed on that situation, because I hear varying opinions about it in my part of the country. One of the apprehensions is that it would involve a quota system. One of the concerns ex­ pressed about a quota system would be what type of provision could be made for entry of new people into the system. Another concern is what type of condition could be set up to allow for expansion within that system. Those are interesting things.

Then of course I have brought to me the fact that the dairy industry is working under that type of supply management system. The turkey industry is working under that sort of national system. The broiler producers and the egg marketing people are under that type of system. I'm not too familiar with egg marketing or the broilers, but I have people in my constituency of Atha­ basca who are highly involved in the dairy and turkey industries. These days I'm not hearing anything from these people. They seem to be doing all right, and they seem to be managing.

As far as the quota situation is concerned, I know that from time to time they have been able to increase their quotas, depending on the supply and demand across the nation, I suppose. They are not unhappy about the system they're working under. I have not heard any really convincing arguments proposed today as to why there should not be supply management. I'm not advocating there should be, but I'd like to hear some very good, sound reasons why there should not be. That's the situation I'm in. When I hear these remarks in the Legislature this afternoon, Mr. Speaker, I have to wonder.

It's not sufficient to me for somebody to say "just because". I would like to hear somebody very positively point out one, two, three, four reasons we should not have supply management. We have a different situation in the northern part of the province, because most of our producers number their cattle in the hundreds or maybe even less. A number of the people speaking here today represent producers, ei­ ther ranchers or feedlot people, who number their cattle in the thousands.

We have a different situation too, because a lot of those ranch cattle are being raised in an environment where they're on pasture for many more weeks of the year than in northern Alberta. Their feeding season when they have to supplement their pasture with the feeding of hay, silage, and whatnot, is considerably shorter than ours. As has been mentioned by some of the other people, that is probably a different type of attitude people have. In talking to some of my producers in recent weeks, Mr.

Speaker, a number that were utterly and completely opposed to any type of supply management are beginning to say, one or two years down the road, that it wouldn't be too bad if we could have provisions in it, work out the details, so our young farmers would have an opportunity to enter the industry, and an established farmer would have some means of expanding his operation if this became necessary in order to make it economical. These are the sorts of things I'm hearing from established producers today.

That's probably important and actually deserving of pretty careful consideration in comparison to what is happening in other industries in the agricultural field. If any program of stabilization comes about, it certainly has to be worked out in conjunction and con­ sensus with the people in the industry, the producers themselves. I definitely support the views expressed today that the marketing situation has to be emphasized as completely as possible and expanded to the greatest extent.

As a province, we can get involved in the marketing situation and do a great deal, as we are doing, by spending money in this type of effort. The million dollars we've allocated for the Alberta Cattle Commission this year for promo­ tion is a good step in that direction. Of course the money, some $20 million, being allocated for marketing promo­ tion overseas will help as far as the agricultural industry is concerned. But as was mentioned by the hon. Member for Wain- wright, for agriculture to survive we have to consider it not in isolation as far as the livestock industry is con­ cerned.

We have to consider all aspects, because our agricultural industry in Alberta is so interrelated. Grain and livestock producers are so interdependent that whatever programs we work out and whatever deci­ sions we make have to be something that will not be to the benefit of one segment of the industry and to the detriment of the other. Certainly we're going to have these kinds of cycles.

If we can do something perhaps not to eliminate them altogether but certainly to modify them so they won't be so extreme as in this case, where all of a sudden we're faced with high interest rates and inflation of input costs to the industry, then we will be in a better situation. In 1973 and 1974, when we had the problem with the livestock industry, we didn't have these other factors causing such difficulty; that is, the interest rates and the input costs at that time. I think the subsidization that we brought in in the cow-calf program was sufficient impetus at that time to put the industry back on its feet.

It was able to survive until the 1979 period, when we really hit the downfall with interest rates and these other costs. I don't think we can completely discount any program that might have attached to it some sort of supply management. Producers say to me: we want to be assured that we can get back our costs of production and a fair profit; that's all we're asking. Mr. Speaker, we wouldn't have any problem if our producers were getting a fair price for their livestock sufficient to do that. We wouldn't even have to have this debate this afternoon. That's the tragedy of the whole situation.

Producers are working very, very diligently, very, very hard, and they'd be happy to continue if they knew that eventually they were going to have a type of industry which would produce and continue to produce that fair return. As I say, that's happening at present in the dairy industry and in other controlled industries. I think we have to give some serious thought to that. I'm not advocating it strictly as some­ thing we must do, but let's look at it very carefully and see if this does not fit in, in some manner, with a program which would bring some sort of stability to the livestock industry in this province.

Thank you. MRS. OSTERMAN: Mr. Speaker, it's been an interest­ ing debate so far this afternoon. I almost rose out of my chair a couple of times listening to the last hon. member speak. It's obvious that we represent very, very diverse constituencies. But I'll get back to the comments of the hon. Member for Athabasca shortly. I think we need to ask ourselves what has made our agricultural producers the most efficient anywhere; I'm sure we could say anywhere in the world.

Even on the credit side, for those of us who have to borrow, I understand that our record in agricultural borrowing in terms of payback is better than any other sector of the economy. So obviously we must be a fairly good risk. Although some people may consider them to be subsi­

March 30, 1982 ALBERTA HANSARD 407 dies of some sort or another, I think our myriad of programs have really had a lot to do with the efficiencies that existed in the past and, in particular, our present agricultural economy. I would submit that those pro­ grams have been a benefit to our producers and, in particular, a benefit to consumers. I don't think the average consumer really realizes that, because a number of members today have been speaking about the number of programs we have. For instance, I believe one member touched on some of our research programs.

All those different research pro­ grams have been taken up quickly and implemented, because our agricultural primary producers certainly have to be the most practical people on the North American continent. If they see that somebody has, so to speak, built a better mousetrap, they'll be using it next year. They'll be incorporating it into their business and doing a job that benefits all of us in the long run, especially consumers.

So in the long term, those programs that exist to better facilitate the production of whatever kind of agricultural product we're talking about, have not necessarily made wealthy people out of farmers but certainly have provided for consumers the very best quality and the lowest priced products for consumption on the North American con­ tinent, indeed anywhere in the world. It's interesting to look back a little at where we've been, in terms of the Canadian economy. I think that has been mentioned by a number of members. That has had a great deal of bearing on the eating habits of our consum­ ers.

Looking at some statistics, I note that in 1970 Canada had the third highest per capita income in the world. Only eight years later, we're seventh, behind Swit­ zerland, Sweden, Denmark, Norway, Iceland, and the United States. At that time there weren't any stats to show what the oil revenues did for those people living in the Middle East, though one may suspect they weren't uniformly distributed. To go back to my own and my husband's experience starting farming in 1956, we purchased our first 23 head of steers in the fall of 1956. MR. ISLEY: That was the wrong kind; they don't reproduce. MRS.

OSTERMAN: For the hon. Member for Bonny- ville: we got some heifers the next spring. We found out that steers didn't have babies, so we got to buying heifers. We had just started farming that spring, and in the fall, on borrowed money — it wasn't many dollars, though it seemed like a lot to us because it put us very deeply into debt. We fed those 23 steers some feed wheat. It was very badly frozen wheat that I think we were getting about 60 cents a bushel for that fall. The hon. Member for Macleod recalled when grain was piled up in the field. I can remember starting out farming in the Vulcan area.

I've never seen so many Cadillacs in my life. I couldn't figure it out. If farming was that bad, how could all these people be driving these big cars? I discovered there was a very enterprising car dealer in the High River area, who, incidentally, had some tax prob­ lems later on, I believe. But we won't speak to that. This enterprising fellow took wheat in trade and was able to sell it. Somehow he managed to have a very large quota, but we can't get into that. With all this grain piled up, a number of farmers decided that rather than see it rot in the field, they would trade it on Cadillacs.

I remember somebody saying to Joe and me: if your car breaks down, we'll just lend you one any day or, alternatively, you can put it in our trunk and travel with us; if our car breaks down, we'll get yours out and use it. That's just a little history. The following May and June, we sold those 23 steers for 18 cents a pound. We calculated that we had about broken even on that exercise. At about the same time, I remember we were selling 3 to 5 gallon cream cans for up to $3.50 for one canful. That was a lot of milking, especially when you were milking eight cows by hand.

You had no electricity, and it seemed as if you were always doing it in the dark, both morning: and night. It took me a long time. It was spring before I finally found out what color our cows were, though they always seemed to walk into the right stall. So we made out all right. That's a little history. You had to want to be involved in agriculture very badly, and I suppose the same thing applies today. That little production that started in the spring of 1956 — our friends from the city described it as embarking on a life­ long camp-out.

They said they'd seen a lot of people go camping for two weeks, but they really hadn't met anybody who was entertaining the idea of doing it permanently. That lifelong dream that Joe and I had about going farming — maybe we had more stars in our eyes and didn't really see what was happening around us — led us into probably the very best, most productive existence we could have hoped for. But today I suspect that the young farmers don't approach farming in the same way. There certainly aren't the same stars in their eyes. The realities around them come home much more quickly because of the very fast pace of life.

Our myriad of programs are going to have to continue. We're going to have to speak out very strongly that they're not subsidies. Indirectly they're helping each and every consumer in this country. High interest rates: a number of people have gone over the litany of reasons why we find ourselves in this posi­ tion today, given, as I stated before, that our producers are the most efficient in the world. A number of things have been put forward. I note some comments by econo­ mists that rate our problems and the kinds of things affecting our agricultural economy right now. They talk about: 1.

Inflated production costs leading to profit margins that cannot sustain the industry for long. 2. High interest rates, together with inflated credit requirements have a multiple effect on total interest charges. 3. Widely variable rates which render effective production planning difficult. 4. Declining beef consumption. That has been mentioned over and over again and has to do with our overall economy. 4. Farm Business management limitations. I submit that the number one problem is high interest rates.

High interest rates are causing the problem in every other sector of our economy, which eventually leads to the decline in beef consumption. I think that's a fairly simple proposition, but it's certainly not a simple proposi­ tion to start looking at a solution. A number of econo­ mists are saying that the high interest rates the Americans have endured for some time have helped immeasurably in reducing their inflation rate. Why hasn't that happened in Canada? I think the Premier put his finger on that partic­ ular bit of advice we're getting from the governor of the Bank of Canada. The hon.

Member for Bow Valley had

408 ALBERTA HANSARD March 30, 1982 some ideas on what he would like to do with that gentleman if he met him, but he really didn't go into detail. The Premier pointed out that the Canadian econ­ omy has a completely different mix. So the premise that high interest rates are going to cut or ameliorate our high inflation rate just hasn't held true, and indeed we need a made-in-Canada interest policy. As a number of people, especially economists, point out that a made-in-Canada interest policy would certainly have an effect on our Canadian dollar.

But I submit that the effect on the Canadian dollar would probably lead a lot of us to change our buying habits in terms of things we buy that are produced outside this country. In particu­ lar, those of us who depend on foreign markets for our goods would be well served by a lower Canadian dollar. I realize you can point to a number of individual costs that would go up as a result of this lower dollar, but overall I think we can show that that lower dollar would indeed help our exports. The cattlemen have been making suggestions about al­ ternative credit arrangements, for instance.

I believe the agricultural community should have control over their own credit institution. I think they've put forward a number of good ideas in that regard. It's interesting that the commercial lending institutions in the province ap­ parently account for something like 74 per cent of the dollars that are borrowed right now by our agricultural community. Our own lending institution, through gov­ ernments, accounts for about 26 per cent. Apparently that is mostly land purchases. But that 74 per cent obviously accounts for a great deal of the operating money being borrowed right now.

As we all know, for those of us who are using borrowed dollars — and I suspect most of us still involved in agriculture are — that operating money is far too high. I believe there are other ways of putting capital togeth­ er — as has been suggested by a number of the agricul­ tural community, particularly the Cattlemen's Associa­ tion — that could serve to reduce the rate at which we borrow and still offer a fair rate of return for those who put their dollars into a strictly agricultural type of bank. We look at what has been offered today by way of the resolution before us.

There's no doubt at all that a number of producers who are watching their enterprises almost go down the tube are saying, in what may be to some degree desperation: we'll settle for anything. If you throw a drowning man a rope or a life preserver, I think he or she is bound to grasp it. I suspect there are a number of producers across this province — and I'm sure some of those producers have been speaking to the hon. Member for Athabasca. I think they must be quite des­ perate to suggest that their interests would be well served by the kind of regulation the federal government would impose.

To some degree, the federal government is responsible for the situation we find ourselves in today. I don't know how many years we've been talking about some sort of Canadian policy for red meat across this country. But they haven't had the guts to offer anything. They keep throwing it back on the provincial governments. They don't consult the producers. So in their obviously well- placed desire to help their producers, the provincial gov­ ernments have been 'ad hocking' their way through a number of programs. It has created absolute chaos in the industry.

Given the cyclical nature of the industry, added to all these other sorts of artificial things that have been done, we find ourselves in the position we're in today. The hon. Member for Cardston said we should be looking to a federal program. It should be an across- Canada program. We all agree with that. But, my friends, I think we have waited as long as we can. I think there has to be a made-in-Alberta program for stabilization if the feds don't pick up something immediately. It has to be addressed to the whole red meat industry.

I think it's very dangerous for us to embark — as we have to this point, because we've been trying to assist our producers — on ad hoc programs that don't address the overall red meat industry. I think we have to do it in Alberta. Most of the production is here. Surely if we put forward a good sound proposal that consumers will realize is going to continue to encourage our producers to be the best in the world, they will support those kinds of proposals. But the proposals mustn't be made without the very realistic caveat that this world has changed. Our agricul­ tural resources are finite.

We can't continue to say, we've always had a red meat industry here, we've always had a certain percentage of the market, or we've always had X number of cows and therefore we should continue to. I don't think it's realistic. If I could just digress for a minute, I think it's realistic to look to a certain percent­ age of that market that Alberta should have consistently. But in terms of pumping up or building in this province an artificial level of production that takes land that would normally be far more productive, that right now cattle are grazing on — I look at the area we farm.

My husband is breaking a lot of land. In the last year and a half, he's probably broken about 150 acres. We were probably pasturing about 50 cows. In terms of world food produc­ tion, that was really wrong. It's morally wrong to pasture cattle on land that could be producing the pounds of protein, in grain, on that kind of land. We must look to the other very productive land we have in this province, but it's main carrying capacity in the gray-wooded area should be cattle. That's where the emphasis should be.

We mustn't prop up the industry and do something artifi­ cial that would continue to have an expectation that cattle can be produced anywhere and somehow we have a right to produce them anywhere. Basically I support the hon. member's motion. I have some caveats in terms of how we as a government actively facilitate the kind of program the agricultural industry needs to stabilize itself.

We must look at that very closely, bearing in mind that a cattle program in particular should especially be geared to the production costs of those parts of the province that are, historically and in the future, best suited for that kind of production. I congratulate the hon. member for bringing this mo­ tion forward. MR. ISLEY: Mr. Speaker, I would like to add a voice from northeastern Alberta to the debate on Motion 204. I don't purport to be an expert on the cattle industry, but after listening to the hon.

Member for Three Hills de­ scribe her and her husband's experience starting farming, I take pleasure in saying that I've known since I was a young lad that to start a basic herd you had to have 23 heifers and one bull, not 23 steers. [interjections] I would like to congratulate the hon. Member for Macleod in putting forward Motion 204:

Be it resolved that the Assembly urge the govern­ ment of Alberta to give consideration to the estab­ lishment of a system which will ensure income stabi­ lity for the livestock industry. Probably we have to narrow the motion, to speak of the beef and sheep industry, because I believe we've adequate­ ly addressed the pork industry. Like many of the mem­

March 30, 1982 ALBERTA HANSARD 409 bers before me, I will be speaking mainly on the beef industry, as there is very little sheep industry in my part of the province. I view the beef industry as very important to the province. I think a review of history will show that it's the industry which opened the province, particularly the movement into southern Alberta. A more recent review of history will show that it's an industry that is flowing northward. I believe I would be correct in saying that at this time, well over half the beef breeding cows in this province are north of Highway 16. For those who have read Dr.

Horner's report on the meat industry, and his recommendations to government to bring an additional 10 million acres of land into production in this province, I don't think you have any difficulty deciding where that land is going to come from. It's going to come from northern Alberta. So I predict that continued shift of the beef industry to the north, at least the basic cow-calf industry but probably not the feedlot industry. There are various good reasons for that. As the industry moves north, it faces two problems that people from the south do not experience. One is the type of grazing land available.

There aren't public lease lands which have native grasses good for cattle production. All our public lands and grazing leases in the north tend to be covered with trees, and it's a rather expensive process to remove them. I think the second added cost the indus­ try faces as it creeps north is longer feeding seasons. Many producers in my part of the province are very thankful to the Associate Minister of Public Lands and Wildlife for his rangeland improvement program, which is definitely improving grazing in the north, northeast, and northwest parts of this province.

The grazing reserve program under the Alberta Heritage Savings Trust Fund is providing a secondary pasturing area for many farmers, both young and old, to expand their cattle herds. This year in particular, and last year to a lesser degree, the ranchers in my country were very thankful to the Minister of Agriculture for the feed freight assistance program. Normally we're an area that produces a feed surplus. But as a result of two dry springs, there was a terrible shortage of feed this year. Through that program, we've retained our basic herd numbers.

The representations I've received from my constituents at this point are, number one, they are thankful the program was extended until June 1, 1982; secondly, they would like to see the minister raise the limits of $5,000 per individual to something in the neighborhood of $7,000 to $7,500, because of the amount of feed they've had to move into the area. I think I've touched on one thing I view as a dramatic change in the future in the industry; that is, a shift to the north.

Before I come to my closing comments, I'd like to go back and review the growth of the industry over the years, where it's located in Canada, and a number of things. I believe the hon. Member for Cardston men­ tioned some of these numbers.

The cattle on Alberta farms in 1950, 400,000 head, underwent a very dramatic increase of 106 per cent, to 827,000 head by 1960; in the decade of the '60s an increase of 34 per cent, to 1,105,000 in 1970; in the time period from '70 to '75 a very dramatic increase of 47 per cent, to a total of 1,620,000; then in the five-year span from 1975 to 1980 a decline of 38 per cent, to end up in 1980 with 1,380,000 beef cows on Alberta farms.

If you look at total cattle marketings over the last 30-year period, including cows and calves, you again see an increase of about 43 per cent from 1950 through 1961, hitting a total of 677,000 head in 1961; a dramatic in­ crease of 44 per cent from 1961 to 1970, hitting 977,000 head; again that dramatic jump of 47 per cent in the first five years of the '70s, to 1,430,000 total cattle marketings; peaking in 1977 with [1,653,000] cattle and calves going to market, and declining in 1980 to 1,242,700. It's also inter­ esting to note that — and I believe the hon.

Member for Macleod expanded on this a bit — from 1961 through 1979, the amount of beef contributing to farm income increased significantly, from 29 per cent of total farm income in 1961 to 42 per cent of total farm income in 1979. Mr. Speaker, it's also interesting to look at the statis­ tics on breeding beef cows and heifers on farm by prov­ ince as a percentage of the Canadian herd and see what has happened to our herds over the last five years or so.

If you look at the time period from 1975 to 1980, we actually enjoyed an increase in the proportionate amount of the Canadian herd, from 36 per cent to 37.7 per cent. In actual numbers that's a decrease from 2.242 million to 1.75 million. The point I'm making here is that relative to the rest of Canada, the industry has held its own in breeding beef, cows, and heifers. In 1979, we peaked at 38 per cent of the Canadian herd, declining slightly in 1980 to 37.7 per cent.

During the time span 1979-80, it's inter­ esting to note that the only province that increased as a percentage of total Canadian herd was Ontario, which went from 11 to 11.5 per cent. But if you look back to the time period 1976, 1977, and 1978, you'll notice that they declined from when they were making up 15-plus per cent of the Canadian herd. You see a similar pattern develop if you look at the proportion of cattle slaughtered in federally inspected plants. In 1975, Alberta slaughtered 40.51 per cent of Canada's herd in federally inspected plants. In 1980, we were still slaughtering 40.9 per cent.

Again you see very few significant jumps in any of the provinces. If I'm attempting to make a point here, Mr. Speaker, I suppose it's this: so far we've held our own as to our position in the Canadian cattle industry. Like many members before me, I agree that we are facing a critical time and, unless we make some moves, we could start to lose. I look at the price received for steer calves in October 1973: an average of 58.38 cents. I look at it in October 1981, averaging about 74 cents. I apply an inflation factor of 11 per cent to the 1973 price.

I'm not suggesting it was an ideal price, but just to run a quick comparison: if the price of the steer calves had gone up by 11 per cent over that time period, which is probably what our inflation factor was, last October they should have been selling for $1.34 a pound. At that rate, I think our farmers and ranchers would be very, very happy that they were getting a fair return. I look at fat steers going through Calgary in October 1973: 46.19 cents. I apply the inflation factor of 11 per cent to that base, and this past fall they should have been receiving $1.06 for a fat animal.

In reality, they were receiving in the neighborhood of 70 cents; a little higher, a little lower. Again, if the inflation factor that applies to the rest of our economy and society were applied to beef, those feedlot operators would have been satisfied with their returns. Mr. Speaker, I think what we're seeing is a cost/price squeeze being put on the livestock producer. His input cost for fuel, machinery, fertilizer, and labor is going up at inflationary rates or better, yet his price at the gate for his products is not keeping pace.

Add the dramatic in­ creases in land costs, and your cost/price squeeze gets even tighter.

410 ALBERTA HANSARD March 30, 1982 Mr. Speaker, this brings me to the need for some form of stabilization. While I agree with the hon. Member for Cardston, that that stabilization should be national in scope, I also agree with the hon. Member for Three Hills, in saying I have no confidence they're going to bring one forward. Hence, I think the responsibility to take some action is going to rest on the members of this House.

Many members before me have expressed concerns with provincial programs that are growing, with the artificial subsidies in our freight system that tend to work against the natural competitive advantages of our western prairie beef industry. I have those same concerns. We went through the hog situation where the other provinces came in. The federal government didn't address the situation or accept its responsibilities. We finally had to come for­ ward, and I submit we're going to have to do the same again. I look at the programs of our neighboring provinces.

Since 1979, B.C. has had a participating contributory program that applies to calves, yearlings, and finished beef, the province paying 50 per cent of the cost of that program. By all reports, it appears to be working very well. It's also significant to note that in the last five years, B.C.'s proportion of the Canadian average of slaughtered cattle has doubled, from approximately 1.05 per cent to 2.02 per cent, still not making them a significant producer but I wonder if their stabilization program has something to do with their nudging upward in position.

In the past five years, their breeding cows have increased from 4.9 per cent to 6.3 per cent of Canada's total. I look next door at Saskatchewan, which last fall announced it's beef stabilization program, effective January 1, 1982. I would say that program has the basic components of a good program. Don't get me wrong. I'm not supporting this program in its entirety, but it does have some good components'. I believe I said this before in this House. It has a six-year lock-in period. It's volun­ tary, but once the producer makes the decision, he's locked-in for six years.

It's participatory in the sense that he must contribute 4 per cent of the gross price he receives on his cattle. I think those components should be in any stabilization program. It should be voluntary and participatory, and there has to be a lock-in period. Otherwise, you will have people jumping in and out. Mr. Speaker, many details in this program will not fit the Alberta industry. If you read the program, it's defi­ nitely designed to develop an on-the-farm cattle industry in Saskatchewan. It's aimed at the basic producer, and he must retain ownership of those cattle until they're sold.

It has limitations in terms of numbers that would be totally unrealistic in the Alberta cattle industry. I think we must recognize, as this government recog­ nized in its beef and sheep support program, that there are three basic components to the Alberta beef industry, which obviously don't exist in the Saskatchewan beef industry. We have the gentleman running the basic herd, the cow-calf operator whose goal is . . . AN HON. MEMBER: Or a woman. MR. ISLEY: Or a woman? Some women run herds. I'm sorry. My wife has done it a number of times, because I wasn't there.

We have the cow-calf operator, where the goal of the male or female in charge of the herd is to produce the calves, probably wean them, and sell them in the fall. We have people in the backgrounder business buying those calves and taking them through until they're 700, 800 pounds, or more. Then we have the feedlot operators. I think any program we develop is going to have to recog­ nize that, as opposed to trying to impose a new structure on the new industry, which I suspect our brothers to the east are doing. What should we do, or what should we not do? I suggest to the hon.

Member for Athabasca that we should not go into supply management. To me, supply management brings to mind quotas, a limit on what you can produce. You probably have to buy the quota to move into the industry. It brings in fixed prices. So we have things which I find rather amusing. The Public Utili­ ties Board sets the price of milk. I have a little difficulty with that. I look at what supply management has done to the dairy industry in this province, and I think back to when I grew up on a farm south of Vermilion. Basically we survived on a cream cheque.

Any animal on the place that ate grass, gave milk — whether it had one to four teats — was run into the barn and milked. Mom, dad, and all eight of us kids were out there morning and night, and that's how we were raised. When we went to town Saturday afternoon, Mom shopping for groceries. The cream cheque terminated at exactly the same time, be­ cause that's all the money there was in the family. A lot of neighbors grew up the same way. Right across the pasture fence, the hon. Member for Vermilion-Viking was doing the same thing with his family.

The versatility of going back to that way of supplementing a farm income doesn't exist today. I'm told that 15 years ago in the Bonnyville area, enough cream was produced and went to the local creamery to supply the entire area and the Canadian Forces Base, Cold Lake, and they shipped the surplus out. Today they ship everything in. The farmer who is running into a rough time with beef production can't diversify and say, I'm going to add 20 dairy cows to my herd, and use the old-fashioned way of supplementing his income. They're tied up with quotas and modern equipment. [interjections] Yes, the old- fashioned way.

So I suggest that one thing we do not do is support supply management. I suggest that we do three things; that is, work toward rationalizing the freight system in this country, so you remove some the anomalies which make it as cheap to feed our barley in eastern feedlots as in western feedlots. We have to address the Crow issue and resolve it in a way that will benefit the total agricultural industry. So the first thing we must do is resolve our inequities through the freight system.

The second thing — and we should move with it rather quickly — is a voluntary, participatory income assurance program similar to the o