Manitoba Committee Hansard — 27 January 1975 (LO Committee, Sitting 2, 30th Legislature, 2nd Session)

30-2-lo2

Manitoba — Debates (Hansard)

Legislative Assembly of Manitoba HEARINGS OF THE SPECIAL COMMITTEE ON LAND OWNERSHIP Chairman Mr. Harry Shafransky, M.L.A. Constituency of Radisson Dauphin - Monday, January 27, 1975 Printed by R. S. Evans- Queen's Printer for Province of Manitoba

THE LE GISLATIVE ASSE MBLY OF MANITOBA SECOND MEETING OF SPECIAL COMMITTEE ON LAND OWNERSHI P - DAUPHIN JANUARY 27, 19 75 Chairman: Mr. H. Shafransky . 63 MR . G. JOHNSTON: By unanimous consent, Mr . Adam, would you take the CJ:"air until a permanent Chairman arrives. (Agreed) Take the Chair, Pete. MR . ADAM: Mr . Johnston has suggested that, in the meantime, that ... wsli we have just been informed that the Chairman is here . I1m not sure whsther th13y left Winnipeg this morning or whether they came in last night, but the Chairman �::; here now so MR . CHAIRMAN: Good morning.- -(!::.terjection)--Yes, Mr .

Spivak,' I se� �;u' re starting out very early in the gam_e. Thank you very much . The purpose of the meeting is to hear repres entations from people, interested members of the public, to matters relating to property rights in lands within the province . We had one meeting in Winn�peg last Monday, this is the second in a series of meetings. Before I proceed, I think I should introduce the members of the Committee .

On my left, Warner Jorgenson, the Member for Morris; Dave Blake, the Member for Minnedosa; Jim Ferguson, the Member for Gladstone; George Henderson, the Member for Pembina; Harry Graham, the Member for Birtle-Russell; Harvey Bostrom, the Member for Rupertsland. On my right, Wally Johannson, the Member for St. Matthews; Jim Walding, Member for St. Vital; Tom Barrow, the Member for Flin Flon; Gordon Johnston, the Member for Portage la Prairie; Pete Adam, the Member for Ste. Rose; the Minister, Sam Uskiw, Member for Lac du Bonnet; and I1m Harry Shafransky, Member for Radisson.

Pardon me! - Sid Green, Member for Inkster, the Minister of Mines and Resource s. Then we have those people, observers, Mr . Jim Bilton, Member for Swan River; the Leader of the Opposition, Sidney Spivak, Member for River Heights. I believe that is everybody. I have a number of people who have indicated that they would be presenting briefs . Are there any more people who would like to step forward and indicate, so that I can put them on the list.

We have now, Art Shaw, farmer from Pine River; John Potoski, Reeve, Rural Municipality of Dauphin; Bill Forbes, farmer, Dauphin; Arvin Bos, farmer, Dauphin, Local 502, National Farmers ' Union. Is there anyone else.- -(Interjection)--Yes, would you come forward and give your name so we can add it to the list. MR . CLIFFORD: I1m Larry Clifford, I' m a farmer from Dauphin . MR . CHAIRMAN: Larry Clifford. Any more ? Okay . The meetings will be transcribed as was agreed upon in Winnipeg. The transcript will be made available as- soon as they are printed.

Those people who ue interested would have to write into the Reeve . The members of the Committee will be rece iving them. Mr . Jorgenson. MR . JORGENSON: Yes, I think it should be poin!:(Jd_ out, Mr . Chairman, that since the proceedings are going to be recorded and transcribed, that anybody who has any statement to make will have to use the microphone, if we-are to get that statement on the record. So that it will be necessary for anybody whowi shes to speak, or to even pose questions, to use the microphone rather than speaking from where they are seated. MR . CHAIRMAN: Thank you. That is the procedure . Okay.

I shall call upon the first one, Mr . Art Shaw. Mr . Shaw. Proceed Mr . Shaw. MR . ART SHAW: Art Shaw, farmer, Pine River. This brief of mine is fairly brief. I1ve put down ownership of farmland in three classes; Canadian ownership, foreign ownership and government ownership . Canadian Ownership. Why whouldn1t any Canadian be free to own farm land anywhere in Canada. There may be a problem though - origins of Corporations may be a problem. Foreign Ownership . This I don't agree with unless the newcomer is actually going to be farming the land himself and can become a Canadian citizen.

When I was with NATO in Germany no Canadian or other foreigner was allowed to buy any real estate there . They had learned their lesson in 1922-23 when Germany had runaway inflation. A G erman mark was worth very little and outsiders bought up all the land they could get their hands on. Land is a good long-term investment usually. Here in Township 32- 21 the Hudsons Bay Company had land from when- 1670 or 1869 ? -u ntil the 1950s when the Manitoba Government got it. This parcel was for sale or lease. The price was too high and they were only speculating so

64 January 27, 1975 (MR . SHA W contrd) • • . • . the half

section was never sold or leased. Farmers grazed their cattle on it, free. The land was over-grazed, timber was stolen and fires took over from there. But, speculators pay taxes and can lose the land in a tax sale. Government Ownership. Mr. Spivak mentioned how much farmland has been bought lately by the Manitoba Government. What about all the farmland the Conservative Government took? They added farmland to forest preserves, parks , etc. Farms were expropriated and community pastures were established to subsidize grain farmers in the South.

They abolished tax sales in the Local Government Districts and any farmland in tax arrears automatically became Crown land. This system is still being continued. Government ownership of forests may be okay, Lut not if agricultural land has to be used for forests. Problems with Government Ownership . Waste. They don•t have to make a profit. Look at all the prime timber the Federal Governnwn t lets rot in Riding Mountain National Park. Don•t necessarily have to pay property taxes.

In this Town!?hip , 32-2 1, roughly one-third of the township is privately owned, one-third is leased Crown land, and one-third is vacant Crown land. There is a Government grant to the district equal to the taxes collected. If there was no private property there would be no taxes or grants. If the district of Mountain had enough ratepayers to be self-supporting it could be a municipality and wouldn't get the grant. Which extreme is the best for the province ? History shows land acquired by government from individuals rarely ever goes back to the individual . A good example is New Forest.

William the Conqueror kicked the peasants off their land and created New Forest. Nine hundred years later New Forest is still Crown land. There is no bargaining with the government where a lessee is concerned; the farmer has to take it or leave it. So one-third of this township is left. What is privately owned, produces several times what the leased land produces. In some cases, Crown land is literally mined. Leases get dropped when there is no money in cattle and buckwheat rye , or something else is grown in place of hay on privately owned land.

To sum up , if anything is done about foreign ownership of farm lands I don' t see more government ownership as the answer . If you want any suggestions, from my point of view higher property taxes would probably be one of the answers where outside ownership is con cerned or speculators is concerned, because in the area where I am there is practically no property taxes being paid. For instance, this year , in my case, my total property taxes on one

section come to about $260. 00, and then there •s a $250. 00 rebate , so that only leaves $1 0.00 of property taxes. Well if the taxes were doubled in proportion to the speculative value __ of the l_and and the rebates to resident ratepayers were there, it would knock some of the wind out-of the sp�ulation.

Some people may not know too much about what it's like in the local government distrtcts but I have a map here , a land map of Manitoba and it just goes up to 1967 , and you can see by the coloured portion of the map how from the local government districts south the Crown land is moving down, or government-owned land is moving down; and there are areas like community pastures, for instance , that are white on the map and don•t show up. Besides that, the Indians want larger-reserves and they're white on the map, that would mean more non- taxpayers. Anybody has any questions or comments. MR .

CHAIRMAN: Thank you, Mr . Shaw . We will opgn it up. Mr . Graham . MR . GRAHAM: Mr . Shaw, you made a statement ilia:t in your opinion Crown land wasn•t being utilized to its maximum value, only private initiative and private ownership was maximizing the use of the land. Do you think tllat same situation prevails over the entire pro vince or is it just peculiar to your locality ? MR . SHAW: Well it may be peculiar to that locality because there's no competition for land like there is in other parts.

People may be forced to improve and hang on and keep tlleir Crown land to make a viable unit, but there if the price of cattle go down you go into something else--well it's the hay. Normally the privately-owned land is used for growing hay to feed the cattle that are grazed on the Crown land, but if there is no money in cattle and you have to make a living well you tear up all your alfalfa hay land and seed it to grain when there's no money in cattle - that•s in the locality where I am. MR .

GRAHAM: The Crown land then that you are referring to is mainly for grazing purposes only, or could it produce a fairly good hay crop as well ? MR . SHAW: Oh, yes, but there's no incentive. If you improve it--well they got a sys tem now where they'll pay you for part of the improvements on that, but you don't know what the system is going to be in the next few years, whether you•re still going to have it or not.

January 27 , 1975 65 (MR. SHAW cont1d) .••.• You increase the cost of the lease, the lease is raised to another category if you clear and break it up and improve it and then you have to part with a share of the crop besides paying the lease and the lease could be doubled or tripled if it's in another category or another two categories higher . MR . GRAHAM: In your own operations as a farmer , have you leased Crown land in the past? MR . SHAW: Yes, I have Crown land now. MR . GRAHAM: Did you find the increase in the cost of leasing last year, did it serious ly affect your farming operation ? MR .

SHAW: Well what happened a year ago August the price of cattle went sky high so I shipped out two-thirds of the herd, I culled out everything, went through fences, old cows and everything else. Then last year the leases were doubled. I dropped eight quarters and still retained three quarters of Crown land for grazing, but those eight quarters I dropped they1re part of the vacant land now in the township, MR . GRAHAM: You found then that the price of the leasing almost dictated that you surrender a considerable portion of the Crown land that you had previously rented. MR . SHAW: Yes. MR . GRAHAM: Thank you. MR .

CHAIRMAN: Mr. Green. MR . GREEN : Mr . Shaw, I was very interested to hear your remarks about foreign ownership and Canadian ownership . This is a subject which has troubled me for a long time, and I would just like to get your ideas on it. You say that a foreigner should not be able to buy Crown lands in Manitoba similar to restrictions that you are aware of in Germany. Or did I m is-hear you ? Do I understand you correctly ? MR . SHAW: Yes . MR . GREEN: Because Mr . Henderson seems to think that you didn1t say that. MR . HENDERSON: ... in the way of tax ... MR . CHAIRMAN: Well, Mr.

Henderson, I thank you very much , I believe Mr . Shaw will be able to answer the question. MR . GREEN: If I 1m wrong, Mr. Shaw, I want to be told that I •m wrong . As I under stood you ... MR . SHAW: Well I•ll read it out as I wrote it down here . In Germany, for instance, no foreigner was allowed to buy any real estate there . Well when they had their inflation in •22 and •23 appare ntly other countries, their currency was good and solid, and they were able to buy up everything they could get their hands on in Germany , and maybe that•s what' s happening here .

Because of our inflation people are taking advantage of it from outside. MR . GREEN: What I understood you to say is that we should not permit this, but if I •m wrong then I want to be corrected. MR . SHAW: No, it's not many countries in the world where anybody can just go and buy land, is it ? MR . GREEN: And am I correct in understanding that you don't want foreigners to be able to buy land in Canada ? MR . SHAW: No, I don't agree with it either . MR . GREEN: Pardon me . MR . SHAW: I don•t agree with foreign ownership. MR . GREEN: That's what I understood you to say. MR .

SHA W: But I don •t see why any Canadian shouldn •t be able to buy because it's a free country in that respect. MR . GREEN: That •s exactly what I understood you to say. So then I have it right, that you say that a foreigner should not be able to buy land in Manitoba but any Canadian should be able to buy land in Manitoba . Is that correct? MR . SHAW: Yes. MR . GREEN : There are, by the way, many people who feel the same as you so I think that that is an opinion that•s sort of very current.

And I want to tell you right now so that you •11 know that I don •t happen to have that opinion1doesn •t mean that you •re not right and I•m not wrong. MR . SHAW: No , I•m just giving my opinion, you can take it for whatever it's worth or whatever you want to take it for .

66 January 27 , 1975 MR . GREEN: Right. Exactly. Right. Exactly. I agree with that, Mr . Shaw. Now my question is, what is the difference in your mind as to what happens if a person from Newfound land, who has no intention of coming to Manitoba, buys up ten sections of land in Manitoba, doesn't farm it, rents it out, and a person from Vermont, let•s say a hundred miles away, does the same thing, what is the difference vis-a-vis what happens to the land and its product ivity and everything else ? It's a question that troubles me and I wonder if you can give me some help . MR .

SHAW: That's why I say property taxes could be increased. MR . GREEN: Oh, I know that you're saying that one should be discouraged and the other should be permitted, but I•d like to see whether you can tell me, if there is a reason, what is the difference with regard to the use of that land.

In other words, how is it better used and have more productivity, like you spoke about with regard to private land, if it•s a person from well let's make it even more a problem - a person from Nova Scotia and a person from Maine who may be living two miles apart from each other, who have no intention of ever coming to Manitoba, who have the intention of buying the land, renting it out, hoping it goes up in value; is there any difference in your mind ? MR . SHAW: Yes, sure . Going back to that case in Germany, there's the currency dif ference .

The land may be real valuable in Maine but it •s not valuable compared with--well the only farm that I know of that was sold in the area where I am, an American bought it. He thought he got a real bargain but it was several times more than the normal price of land around there. MR . GREEN: So is it your complaint that when you permit that to happen that it increases the sale price of the land ? MR . SHAW: Yes, but there 's the problem of currency difference or a difference in values, we•re dealing with two different values. MR . GREEN: But for the farmer who--again I ask you this question.

If you were wanting to sell your land, if you were wanting to sell your land, let's say that you had retired and you wanted to have a little nest egg, as not only farmers but everybody else would like, and the fellow in Maine was willing to pay you $50 , 000 for your

section - I don •t know whether that •s a good price, let•s say that is a hypothetical price - and the fellow from Nova Scotia was only willing to pay you $40 ,0 00 for your section, do you believe that the government should prevent that fellow from Maine paying you the $50 , 000, so that you only had this $40 , 000 buyer . MR . SHAW: Even the guy from Nova Scotia would be ge tting robbed at $40,0 00.00. MR . GREEN: I knew that was coming that's why I said let•s make the prices completely hypothetical. Let•s say that there was a

section of land which, not you, but a farmer had for sale, the fellow from Main wanted to pay $50 , 000, the fellow from Nova Scotia who maybe was two miles away from the fellow from Maine (I hope Main borders on Nova Scotia) - Vermont ? --(Interjection)--New Brunswick ? Okay. MR . SHAW: But even so at Canadian ownership you're narrowing it down. MR .

GREEN: Yes, I' m just asking from the point of view of the man who wants to sell, should the government prevent this farmer from getting the price that the man in Maine wants to pay and require him to sell, or limit him to the kind of prices that the man in New Brunswick was offering ? MR . SHAW: Yes, I see what you're getting at. It's the idea of what the guy has a chance of getting ... MR . GREEN: Right. Would the farmers accept the fact that the government says, you can •t sell this land to that buyer even though he •s willing to pay you more money ? MR .

SHAW: Yes, but what I•m looking at is if Canadians aren 't farming it, there's going to be no land left to farm . If government has it tied up as Crown land, it isn •t used or just land tha t•s held for speculation - an example is the Hudson •s Bay land, a lot of it was never sold, it was just held hoping the price would go up. Well where ' s everybody going to be farming in the future . Sure there are guys that will say when you get into an argument with them, especially conservationists, that the Red River Valley can supply all of the province 's agricultural needs, that sort of thing, but there •s the future .

MR . GREEN: Mr . Shaw, I would like to know what you would think about what would be the difference if the land was purcha sed--let's say if 50 sections of land were purcha sed by a New Brunswick company or individual who had no intention of coming to the Province of Manitoba, no intention of farming the land, but had the intention of renting it out to you, what

January 27 , 1975 67 (MR . GRE EN cont'd) ..•.. would be the difference between him doing that and the public of Manitoba doing that, in terms of the use of the land ? And when I say the public of Mani toba I mean as represented by the government. MR . SHAW: Well according to statist ics, I don 't think there is much to worry about large corporations or large owners who actually farm because - this is a page from the Farm Business

Summary - 1973 I think. Well it goes - The most profitable farms were up to $90 , 000 to $1 19 , 999, and that was the highest return to labour . Over that it gradually kept going down ; the largest size is 180 , 000 and over and they were on the minus sid e in return to labour . So in the past corporate farms haven't survived and especially--well it was mentioned yesterday on Country Canada about in Al berta corporate farms usually failed. I think that the indiv idual operator, or as it shows in the Farm Business

Summary here, smaller farms or farms up to, well 120, OOOgross is about the limi t. Other than that, there's no competition from corporate farms; other than if they get so powerful they could manipulate the markets or labour or something lik e that. MR .

GREEN: Let•s forget corporate farming for a moment and see whether you can help me with this other question: Whether and why it would be better if, let us say a Canadian in New Brunswi ck bought 50 sections of Manitoba land and leased it out to Manitoba farmers- that's one poss ibilit y which you say you find nothing wrong wit h because it' s a Canadian buying 50 sections of Mani toba land and renting it out to Manit oba farmers--or the people of Mani toba, through the Department of Agri culture, buying the same 50 sections of land and renting it out to Manitoba farmers .

In your mind what would be the difference, why would one be better than the other, if one is better than the other ? MR . SHA W: I think it could go the way the ownership of land has gone in the area where I am, where you•ve got more and more government ownership over the years and it's got to a point that the people who are leasing land don 't have the incentive or there's no future in it, that they'll only lease while they can make money. If they can •t make money, then they drop the lease. Over a period of time a private owner will stick it out sort of thing , the next year may be better sort of thing .

He can always mortgage in bad years and pay it off in good years - that sort of thing , but if he's renting he only has value of his equipment or livestock or that to fall back on. So I don 't think there's much future in leasing land unless you get a sit uation where you have a captive labour force, like in South American countries where they have the giant estates and they're still under sort of a feudal syst em. That way you can more or less force people to lease the land whether they're making a living or not. So I don •t see any future for anybody to go buying up 50 sections or so and then leasing it out.

Why bother leasing it if you won 't have any future other than from year to year; if you have a few bad years in a row, you're out. You might as well go out to Albert a then . MR . GRE EN: I• m really not trying to argue with you, Mr. Shaw, I• m asking , you see, I asked you whether a person from New Brunswi ck buying 50 sections of land and leasing it out to farmers . . MR . SHAW: Well that's my answer. I don 't think there's any future for him anyway if he did. MR .

GREEN: So you would say that a person shouldn 't lease the land - I mean that it makes no difference whether the government does it or another Canadian does it, it doesn •t make sense to lease the land ? MR . SHAW: Yes , but there's a difference between government and a private individual or even a corporation owning and leasing the land, too , be cause ... MR. GRE EN: What's the difference? MR. SHAW: The tax, taxes for a start. MR. GRE EN: I understand that when the government leases out land to farmers that there is taxes on all the leaseholds . MR .

SHAW: Yes, but the government can let the land lie vacant, eh ? MR . GRE EN: Yes. MR . SHAW: And they don 't have to pay taxes on it, but if a corporation is speculating and leaving the land vacant well they're still paying property taxes . MR . GRE EN: Yes, I recognize that difference and that's why I asked you, if they each leased out the land which on the present program the government only buys the land to convert it into a lease to have a farmer on the land so that doesn •t arise . Whether it makes more sense to lease from a private individ ual or to lease from the publi c, whether there is any difference ?

68 January 27 , 1975 MR. SHAW: Yes, well property taxes , for instance . And if you want to control the number of foreign or other Canadian outfits or speculators, for instan ce, why not just increase the taxes and pay it back as rebates to resident farmers, that sort of thing . MR . GR EEN: Thank you, Mr. Shaw. MR . CHAIRMAN: Thank you. Mr . Uskiw. MR. USKIW: Yes , do I get from your remarks , Mr. Shaw, that you would wish the government to consider the possibility of imposing a special tax rate on those owners of pro perty who are not owner operators ? MR . SHAW: Well it is in effect at the moment.

The only thing is the taxes are extremely low. I'm talking about the area where I am but not necessarily other parts of the province. MR . USKIW: You •re misunderstanding my question . My point, sir , is do you think there should be a differential in taxation as between one that owns and operates his land, and one that is sim ply holding it for speculative reasons ? MR. SHAW: Yes , that•s in effect now, but it1s not effective because the taxes are so low . MR .

USKIW: Now if I bought your farm, on which I would want to speculate into the next five years as to its ultimate value, that• s one reason for buying your farm. MR. SHAW: Yes. MR . USKIW: Now your neighbour would buy your farm but he wants to buy it for the pur pose of making a livelihood from that farm. My question to you is would you want me to pay more money per acre in taxes than your neighbour since I am only buying it on the basis of speculati on ,

whereas he is buying it to cont inue on a farming operation? MR. SHAW: Yes, that•s my suggestion ... MR . USKIW: That•s what I thought you said . MR . SHA W: . . . if you want to control speculators sort of thing . MR . USKIW: So then you are suggesting that if someone lives in the Cit y of Winnipeg that wants to buy those 50 sections that Mr. Green thought was being bought by the person in New Brunswick just for speculative purposes, that you would prefer then that unless that per son was an owner-operator that there be a difference in the property tax rate, discouraging absentee ownership. MR .

SHAW: Yes, well the tax base would be the same for everybody, the only thing is these rebates you have would only go to the operator or the resident operator . MR . USKIW: All right. You're suggesting then that the tax rate be equal but there be a rebate to the owner-operators . So in essence you 're suggesting a discrimin atory tax policy ? MR. SHAW: Well if it is , it is now. --(Interjection)-- MR . USKIW: No, but the tax rebate now--yes, I see what you're getting at. But the tax rebate now doesn •t disco urage the one that wants to speculate in land.

Are you saying that it should be substantive enough to disco urage ? MR . SHAW: Yes , but the property taxes in the area where I am, property taxes haven't increased with value of the land or with the rate of inflation. MR. USKIW: Okay . Now my next .. . MR. SHAW: So there's why speculators can make a profi t. MR. USKIW: My next question has to do with whether in your opinion there is any reason to think in terms of determining, even within your own community, whether or not the market place alone should be the way in which people could acquire access to property.

What I'm saying here is that some people have money, have access to money and can buy it, other people are less fortunate because of ci rcumstance, and are unable to but have the same desire to engage themselves in agricult ure; I1m talking about young farmers who do n't have financial means and whose parents are not prepared to donate them a handsome sum or a handsome piece of property if you like . How do those people get into agriculture if the marketplace is the only way--if the only way to do is to borrow money and to pay it back to get ownership ? MR .

SHAW: Well up until a couple of years ago that wasn• t too much problem in the area where I am, because of all the Crown land that was available privately-owned land was not worth too much, because why bother buying privately-owned land for too big a price when you could ge t Crown land . • • but since things have really went up I say that there needs to be something done. MR. USKIW: Let•s take a hypothetical situation then, and this would have to be .

Assuming that the Leader of the Oppos ition and myself wanted to form a company to buy up half of the land in Manitoba , you kno W; we wanted to acquire half of the cultivated land in the province •..

January 27 , 1975 69 A MEMBER: You and Spivak ? MR . USKIW: Yes, for our own purpose, and of course we had the dollars wi th which to do just that, and of course you were then in competition with us to buy a farm for your own well-being, for your own endeavours. Would you see that as a problem if--what I am trying to say is if the marketplace is the only way in which we can acquire property, then the highest bidder gets all the land eventually, and is that a reasonable way of transferring lands from one person to another ? Is that the only way in which land should be transferred is my question ?

Maybe I should point out to you that that basic problem is the reason why we •re in the land lease program, for young fellows that haven't been able to raise the money to buy land, haven •t been able to compete in the marketplace - that's the context in which I am putting it to you. So my point is if the marketplace is the only vehicle, then what do you say to those people that can •t raise the money but who have the expertise and who want to continue in agriculture? MR .

SHAW: Well go work in the mines and let the price of land go up and then you'll have a crash probably like there was in the •30s or in the •50s . MR . USKIW: Okay . MR . CHAIRM AN: Mr. Jorgenson. MR . JORGENS ON: Mr.

Shaw, I don •t want to belabour this point too much further but, you mention that one of the ways that the so-called problem of foreign ownership could be handled is by providing some sort of a disin centive for foreigners to come in here and buy land, in other words you mention specifically an increase in the tax or a transfer tax in the event that they purchase land in this province, rather than prohibiting them completely from buying land.

I might say that there are two statut es, one provincial and one federal, which give foreigners equal rights to purchasing, ownership and disposing of land to natural born Canadian citizens - the Law Property Act in the Province of Manit oba and the Canadian Citize nship Act in Ott awa . Those laws will have to be changed if we are to prohibit foreigners from buying land in this province. But you mention disincent ives . What would you think of the idea of rather than a disin centive from foreigners purchasing land, an incentive for Canadians to transfer their land to resident Canadia ns.

In other words , I am speaking of, for example, a father to son transfer. One of the problems that I find today in talking to a good many farmers in transferring land from a father to the son is that if the father sells the land to his son he is going to be hit with a Capital Gains Tax; if he gives it to his son, he is going to be hit with a Gift Tax; he doesn •t dare die because he is going to be then hit with an Inheritance Tax. Suppose that those taxes and those barriers are removed and an incentive was provided for a Canadian farmer to trans fer his land to his son by removing some of those tax barriers .

Do you think that would also take care of the problem of foreigners coming in here buying land ? MR . SHAW: Yes, it might but I guess it could help to keep the price up too, maybe? MR . JORGE NSON: Well you know the price of land is not a constant thing . I recall in the early part of this century there was quite a bit of land that was bought in the Morris district, it' s in the Red River Valley, by a group of America ns .

They paid what they thought was a good price but it turned out to be a much higher price than the land was really worth and they lost their shirts , so you know when we talk of speculators we can talk both ways . They can make money and they can also lose a lot of money . In 1967 we had a similar sit uation when land prices went up pretty high; two years later you couldn •t even give a farm away because of the market sit uation in wheat. They•ve gone up again. Can you think of any reason why land prices will continue to rise and that there may be a possibilit y at one time that land prices will drop again ? MR .

SHAW: Yes, the price of land is way above productive value of the land, so it's liable to drop because the productive value isn 't there. MR . JORGE NSON : Yes . Land prices will fluctuate. You have no reason to believe that they are going to escalate upwards all the time . . . MR . SHAW: No. MR . JORGE NSON: •.. that they will go down and up . So those who are buying land as was said for speculative purposes could lose their shirts too. MR . SHAW: Yes. MR . JORGE NSON: Then you would say that there are alternatives to a strict prohibitio n of people purchasing land ?

Incidentally, you mention that there are very few countries in Europe that allow foreigners to come in and buy land. England is one of them that allows it

70 January 27, 1975 (MR . JORGE NSON cont •

d) but they have very strict land-use legislation. Their legis - lation makes sure that whoever buys farmland is going to use it for farmland.

Would you suggest that in this country - you mentioned earlier that one day we •re going to be needing a lot of land for the purpose of purchasing food and the example that we have had in the Niagara Penin sula where now the Ontario government are wringing their hands because they allowed so much of that good farmland to be used for purposes other than farming - do you suppose that land-use legislation may be necessary at an early date in order to prevent that from happening here ? MR . SHAW: Yes, I think things have gone a bit too far. MR. JOR GENSON: Do you think it' s gone too far already? MR. SHAW: Yes. MR .

JORGE NSON: And you think there should be action taken to ensure that our best farmland, our good farmland, is going to be continued to be used for farmland? MR . SHAW: Yes. The definition of farmland can cover a lot of area too. What some people may call agricultural land may not be agricultural land to somebody down at Morden growing corn, while in Northern Europe agricultural land is land like around Churchill where the Lapps graze their reindeer back and forth. MR. JORGE NSON: Yes, we can continue to find different uses for land.

For example, even on sand hills if you 1ve got enough water, that can become agricultural land as well - we have seen examples of that taking place. But in essence, I wanted to get your views on the question of land US§ and whether or not we should be taking steps now to ensure that we're not going to have to be sorry about the fact that we •ve allowed the encroachment of urban development to eat up most of our best farmland. MR . SHAW: Yes, and not put land into forest preserves that is poss ible agricultural land.

By agricultural land I mean grazing land for ins tance or--see when they take a quarter section, well some parts - New Brunswick I think it is, when the land was first settled, where it was arable that was where the farm was, eh? And where it was non-arable that was just left as timber. But when Mani toba was settled here a homestead consisted, well where I am, of arable and non-arable land . So a guy may have 100 acres of arable land and 60 acres he couldn •t do anything with except cut firewood off.

So when land is transferred now to forest preserves there •s a big chunk of arable land gets put into the forest preserve, but if you want to look at it on the basis of what farmland can do compared with forest, well if you take that arable land and you have spruce trees on it, well 50 years you may have pulpwood, eh? But in five crops of flax off of that land you •d have the same amount of paper that that pulp would have produced out of 50 years and it would be the type of paper that dollar bills are made out of. MR .

JORGENSON : What you are saying, if an indi vidual owned that land he would seek the best use for it, he would make sure that because he owned it and because he was paying taxes on it, that he would find a way to make that land pay? MR. SHAW: Yes. That's why I figure that land use is coming too late and not enough thought put into it. MR .

JORGE NSON: You make an interesting observation about pockets of good farm land in areas that have been set asid e as forest reserves; and I know for a fact that what you're speaking about is correct because I1ve run across that situation many times, where you have perhaps three or four sections of land right in the heart of a forest reserve that ess enti ally is marginal land, or sub-marginal land , and yet you •ll have four or five

section s of land inside that area that is the best farmland you can find; and yet farmers are prevented from farming it because it' s in the middle of a forest area or a forest preserve. MR . SHAW: An example of that is Sherwood Forest in Britain. There is no such thing as Sherwood Forest, it's just patches of trees now in a non-arable park , but what is arable is us ed. MR. JORGE NSON : That's all, Mr . Chairman. Oh , one other point.

That map that you have in your hand, that land that you speak of there that has been taken over by a succession of governments , that•s all in unorganized areas you're speaking of is it not? Local Government Di stricts? MR . SHAW: Yes, I guess so. MR . JORGE NSON : Fine . Thank you. MR . CHAIRM AN: Thank you, Mr. Shaw. Mr. Adam.

January 27 , 1975 71 MR . PETE AD AM: Thank you, Mr . Chairman . Mr. Shaw, you made a comment in your remarks about the government allowing the trees to rot in Riding Mountain Park, I think you said. Am I correct that you made that statement ? MR . SHAW: Yes. MR . ADA M: Do you want to elaborate on that a litt le. MR. SHAW: Yes . There is no timber permits allowed, you can•t cut any timber so the trees are maturing and falling down and rotting.

The government doesn't have to make money . • • also probably could support several sawmills or that sort of thing around here if the timber was being even thinned out so it would grow better or harvested properly. But it's a Park so nobody is allowed in there, not even allowed to put a television tower up or some thing like that. MR .

AD AM: What you're saying then is that in your opinion the management of the Park leaves much to be desired inso far as conserving that resource - the management that is now being done by the Federal Parks Board, is not one that will preserve that Park in the long run if the trees keep dying off and not sprouting . Is that what you •re saying ? MR. SHAW: Yes , well they don 't have to make a profit like an indiv idual would that had to pay taxes and make a living, so ... well, there is a lot of resource there in the timber that goes to waste . MR.

ADA M: I happen to agree with you so we're on the same wave length as far as that's concerned. I• ve been through Riding Mountain Park in 19 71, pretty well a consid erable part of the park, and I did see and witness over-age trees that should have been harvested, that only had a few years to live and then fall and end up as a windfall and I thought it was a real waste myself. I strongly believe that there should be some management. This is not the case as far as provincial parks are concerned? MR . SHAW: No . MR . ADAM: There's one more question then.

You mention that you thought that foreign owners should pay higher property tax. MR . SHAW: No , non -resident ... MR . ADA M: Yes , non-resident . Well non-resident would be a person living in Winnipeg or New Brunsw ick, as Mr . Green suggested, those are the people you 're referring to, people who are not living on the farm and not operating as farmers, they're speculators ? MR . SHAW: Yes . MR .

ADAM: If there was such a policy, and we're only speculating of course, would that not - because of the shortage of land, there is a shortage of arable land, there is com petition for land , there is a shortage of Crown lands available for leasing, maybe not in your area but I mean generally speaking , there is a shortage--there's a great deal of competition between farmers for Crown land and we hear about it every day. We get letters, you know, how come I can't get this, you know , my neighbour got it, and so on.

But would this not tend to, say the non-resident owner, would it not tend that he'd have to try and get a higher rent for his land if his costs are higher, and some farmers would be taking it ? MR. SHAW: You mention shortage of Crown land. Well all they need to do is open up some of that land that•s been taken back by the province - open it up for homesteading and that would put more of the Crown land into circulation . MR.

ADAM: Maybe in your areas there may be some - there might be more in other areas, but, you know , I know that in our area there's a great deal of competition --(Interjection) --Yes , I• ve seen it. There's a great deal of competition for those Crown lands; some of course are zoned , eh? Some are zoned for other uses other than agricultural, because the Lands Branch, Mines and Resources do the zoning as far as land is concerned.

Anot her question: So far as foreign ownership - and I think you were quite concerned on that point - do you think that there should be an excess profit tax on land speculators in order to discourage land speculation ? MR . SHAW: Well they get taxed in their income tax, they get taxed in income tax on capital gains, what they bought the land for and what they sold it for later on, so that wouldn •t necessarily work there. MR . ADA M: I• m speaking of an excess profit tax in addition to a capital gains tax MR .

SHAW: .... but taxes from year to year by property taxes would probably solve that problem in my opinion, but . MR . ADAM: Okay, thanks , Mr . Chairman.

72 January 27 , 1975 MR . CHAIRMAN : Thank you. Mr. Henderson. Pardon me , Mr. Shaw, we have one more and Harvey wants to • . • MR. HENDERSON: Yes, Mr. Shaw. You were talking about non-resident ownership. Do you consider a non-resident one who woo.ld live in a town and still would come out and farm his land, in the same category? He •s non-resident actually, but he still farms his land. MR . SHA W: Resident ? That's a problem in a way.

In some respects if so many far mers are going to live in town and go back and forth it creates a lot of expense for a dist rict just keeping the roads open for the one or two farmers that are still out on their farm. And then the guys that are staying in town , because they're cutting down on the expense of keeping roads open in the winter -w ell the school buses don' t have to go out and that •.. but then there's farm diversification . You can •t go setting up a feedlot in town to feed cattle the hay you •re producing out on the farm. So where do you go from there? MR . HENDER SON : Mr.

Shaw, don •t you think that this non-resident farmer is already paying taxes because if he's resident in a town his buildings are taxed and he is paying all local improvement taxes and all taxes in the town already. He's already penalized, shall we say, for his residence, which aren't on the farm. MR . SHAW: No, you don't pay tax on your residence on the farm. MR . HENDERSON: No , that's right but if this gentleman's living in town he's paying town taxes as well as his land taxes. MR . SHAW: Well why not live on the farm and then it won•t cost you any tax. MR .

HENDERS ON: Well this is true, but we realize like that there is a lot of people who do live in a town and who do farm their land. I'm serious; do you really think that he should also, lik e he's paying his farm taxes and he•s paying his town taxes, do you think there should be any further tax on it? MR . SHAW: Well, the businessman pays tax on his residence and place of business too ; so if you want to live separate· from your farm I guess that would be one of the problems . MR .

HENDERSON: Well I think the people that do that accept that but you don• t believe there should be any additional tax above those surely? MR . SHAW: Pardon ? MR. HENDERSON: You don •t believe there should be any additional tax above those. MR . SHAW: Yeah, well you're a resident farmer if you live there part of the time. There are people that live in Winnip eg, eh, and they spend all summer out at the farm because they're only growing grain. I'm talking about mostly the area where I am , so that's the sit uation as I see it there, not necessarily the grain farmers that are only in grain •.. MR .

HENDERS ON : I'm not disagreeing wit h you that he shouldn •t pay his resident tax and his land taxes, I• m just trying to get the point that you don 't believe he should be subject to any additional tax. MR . CHAIRM AN: Thank you. Mr. Bostr om. MR . HARVEY BOSTROM : Thank you, Mr. Chairman. 11d just like to say, Mr. Shaw, that I think you've given an excellent presentation. From the number of questions you've elicit ed I believe that you •ve given a great deal of thought to the matter bef ore you came and certainly provoked a lot of thought-provoking questions here.

I'm in agreement with you basical ly on the foreign-ownership aspect of your presentation . I• m a bit confused on the part of your presentation dealing with large private leaseholders as opposed to Crown land and its affect on the farmer. You mention that in South America there are large estates where the farmers are basi cally sort of captive-labour , and this I would expect are large private owners of property. Judging from your presentation here at the committee, and the fact that you•ve showed up to make a presentation, I would believe that you have a basic faith in the democratic pro cess.

You•re here to make a presentation to a group of legislators from all parties, to a committee set up to hear the views of farmers. Why then would you not believe that you would have more say as an individ ual farmer over land that is held by the public , Crown land, and leased to farmers, than if it were held by large non-resident non-farm owners, who are leasing it to you ? MR .

SHAW: Well as I said , you can bargain with individuals who you may be leasing land from, such as if the outfit is leasing land to you, you can go to them and say you want your land kept up and improved, will you pay for half the fertilizer and half the herbicide , and things like that, but with the government it is just a straight lease, and if you grown grain

January 27 , 1975 73 (MR . SHAW cont •d) .••.• well you have to pay a higher lease for improvements you•ve made in the land, and they also get a share of the crop besid es, and there's no flexibility, just take it or leave it. But with another farmer who is renting out his land or that, well you can get some sharing or it• s more personal, and that•s why I think that if you have a deal with anybody leasing land it's preferable to deal with even a company than the government.

Another reason you can bargain with another indiv idual or the government is because if the land isn •t leased they still have to pay taxes on it, and if the land grows up with weeds well they're going to be the los ers, but if it' s government land well you're the loser, too , because you're paying the taxes that•s keeping the government going , that's letting this land go to waste sort of thing. MR . BOSTR OM: Don't you believe that you would have a say in your government ? You're here today to make a presentation; you obviousl y have some faith in the democratic process. MR.

SHAW: Yeah, but look at all the land in the township , for inst ance, that I speak of, thatrs justlying idle. A fire sweeps through every few years, and it's mostly all scrub growing and not being leased or anything. MR . GRAHAM : He 1s being very polite , Harvey, in saying that farmers don1t trust politicia ns . MR . BOSTRO M: That's a good comment coming from a politician. MR . SHA W: And a farmer. MR . CH AIRMAN: Mr. Graham, I thank you very much but I wish that you would put yourself on the li st and then I can have your comments recorded for posterity. Proceed. MR . BOSTR OM: That's all, Mr. Chairman . MR .

CH AIRM AN: Thank you. Mr. Uskiw. MR . USKIW: Mr. Chairman , I1m kind of regretting that we don't believe in the demo cratic process, and that government is really not the people. I've always been led to believe that government and people were the same thing . But I should like to follow up Mr. Bostrom 1s question and ask you, Sir, then, since land in South America , as you allege, is owned by large private land companies, why it is then that the people that farm that land you refer to as peasants or slaves ? MR . SHAW: I didn•t refer to them as peasants or slaves ... MR .

USKIW: You said in your remarks that they were captive labourers MR . SHAW: Well , no ... MR . USKIW: You alluded to a feudal approach, yeah. MR . SHAW: Well no . You mentioned about large corporations; well I mentioned there may be a problem if they get to be so large that maybe they can manipulate the market or manipulat e the labour . . . MR . USKIW: I• m talking about Sid Spivak and I owning all the land, as an example. MR . SHAW: Well then you have a problem, eh ? Then it's time to move out to Alberta while you can get out there. MR .

USKIW: So your distinction, Si r, really is that you would prefer to enter int o a lease arrangement with your neighbour with whom you can bargain ... MR . SHAW: Yes. MR . USKIW: ..• as opposed to a large corporation, whether it's private or public ? Would that be a correct analysis of your posi tion ? MR . SHAW: Preferably private. MR . USKIW: No, no, but - you don't follow me. What I'm getting from you is that where you can bargain wit h an individ ual you feel you•re much safer; but where you are bargainin g with a large company or government, you feel you•re not as safe? MR .

SHAW: Well they're less impersonal , or they're more impersonal, sort of thing . MR . USKIW: Okay . MR . SHAW: They're more dist ant. MR . CHAIRMA N: Thank you, Mr. Shaw. Mr. Green. MR . GRE EN: I• d just lik e to pursue this a li ttle bit because remarks were made here, maybe they were facetious , or maybe they were not facetious, but I want to examine them because they go to the heart of my thinking , and I want to see whether there is really that much difference of opinion.

Would you find that getting a mortgage from the Crown Trust Company, or your Great West Life Ass urance Company, puts you in a safer position than getting a mortgage from the Manitoba Agric ultural Credit Corporation. Do you really think that that is so ?

74 January 27, 1975 MR . SHAW: I don't know; I never had anything to do wit h them, MR . GRE EN: Then you are really not saying what Mr. Graham said, that you trust Crown Trust or Beneficial Finan ce, or Household Finance , •• MR . SHAW: No, MR . GRE EN: .•. or the Royal Bank, better than you would trust the Mani toba Agric ultural Credit Corporation, which you are a part owner of. MR . SHAW: Well, that's a subject I would have to look into . MR . GRE EN: Well as long as you didn •t make - I thought that Mr. Graham attributed to you a definite conclusion on that and I just wanted to see whether that was correct.

MR . CH AIRMAN: Thank you, Mr . Shaw. Mr. Potoski, That is all, Mr. Shaw ? MR. SHAW: Yes, MR . JOHN POTOSKI: Mr. Chairman, honourable members and members of the Special Committee on Land Use Policy, Leader of the Op position, his aides, ladies and gentlemen. As you have already mentioned, my name is John Potoski ; I am a farmer, a registered seed grower, and the views which I express are personal.

In a matter of formulating a land policy for Manitoba I am of the opinion that the following broad principles should be incorporated int o the land policy of the province: First, public int erest must at all times take precedence over private interest, or the interest of various groups and organi za tions .

Second, recent economic developments indicate that agriculture must be recognized as one of the most important major indust ries ; governments , both Federal and Provincial, should and must inject int o agriculture the same degree of incentives in the form of financial support as they extend to. manufacturing, mining and the entire spectrum of business enter pris es; Thirdly, studies recently completed in several provinc es, and also in the United States, indicate that because the family farm is the most efficient and socially desirable agricultural unit, governments must create a climate conducive to the establishment of a fami ly farm, and to an increase of the viability of those units now in operation .

Fourthly, immediate inception of an agressive policy to check the depopulation of rural Manito ba ; such policy to be granted top priority. The following are some of the more desirable possibilities: (

a) Generation of increased income in rural Manitoba: 1. By virtue of integration of our agricultural industry by way of establishing related secondary industri es. 2. Increase in the availabilit y of investment capital in the form of subsidies and loans at low interest rates available only to the Canadian citizen, preferably the younger generation of prospective farmers. 3. Control of sui table methods of taxation or direct legislation, foreign or non resident ownership of prime agricultural lands . 4.

Exercise controlled by provincial regulations , supplemented by municipal by laws , urban expansion over prime agricultural land . 5. Regulate transfer of ownership of prime agricultural lands by restricting or regulating - (

a) The sale of agricultural lands to first ly corporations , secondly, foreigners ; (

b) Transfer of ownership of agricultural lands for the purpose of speculation. Only bona fide farmers should be permitted to acquire such lands ; (

c) Adequate acreage of land suita ble for recreational purposes should be set aside for public use ; (

d) Transfer of privately-owned recreation lands should be restricted to Canadian citizens only; (

e) Non-resident owners of recreational land should be subj ect to a surcharge on property tax, Non-residents should be permitted to acquire privately-owned land only up to a certain assessed value. Recreation lands in the hands of non-Canadians should be repa triated, Non-Canadian owners of recreational lands should be required to dispose of privately acquired lands within five years if that acquisit ion was contrary to the present regu lation, Respectfully submi tted,

January 27 , 1975 75 MR . CH AIRMAN: Thank you, Mr. Potoski . Mr. Henderson . MR . HENDE RSON : Yes , one of my questions refers to Page 25 (

a) where you•re talking about the ownership of land and you said it shouldn 't be allowed to corporatio ns. You must have a definition of a corporation that you •re thinking of because you must realize that many farms now because of the federal tax laws and succession dues, and so forth, are set up as corporations that are really farmers . MR . POTOSKI : Yes, I• m not referring to co-operative farms or farms which are actually set up for the purpose of farming . MR . HENDER SON : Family corporations ? MR. POTOSKI: Right.

Family corporations or co-operatives what you may wish, but not corporations say, finance corporations acquiring land. MR . HENDERSON: Yes , I see what you mean, then. And the other thing - you were talking about no speculators in land, and you are particularly talking about land . Now if you •re going to restrict speculators in land, are you going to restrict them in speculating in, shall we say, stores, oil companies , hotels and other things , or are you just going to say you can't speculate in land ? MR . POTOSKI : Yes, I• ll just say, just in land. I think that we must separate the two enti rely.

After all land is our greatest heritage and land should not be subject to speculation; it was created and God-given to man to use and to live on and it should not be subject to specu lation, and that is what is driving a lot of our farmers off the land today, is speculation . How can a private person compete in buying land against a large corporation say from United States , Germany or wherever at, it's impossible. MR .

HENDERSON: Yes , I go along partly with what you're saying but we realize the speculators can lose, and as was mentioned earlier, we •ve seen speculators come in from the United States before, they bought at a high price and lost, and they lost their own money, it wasn't government' s money, it was their own . And this could happen again. I just wondered why you were so interes ted in cutting down speculators on just farmland and still would allow them to do it in everything else. MR .

POTOS KI: Well, it' s entirely an issue and it's entirely a commodity, I think land - as long as you •re going to have speculation and as long as you •re going to have high interests coming in and buying your land, our young people or our people cannot compete against them - no way - and our land will certainly drift into those hands; and you •re all aware that trend is becoming more and more increas ingly at the present time. If that trend contin ues we will have nothing but tenants. MR.

HENDE RSON : Yes , I realize what you're talking about, speculators , but many foreigners could be in here - we•re all speculators as farmers, you know, in another sense, we're all speculators, you know, hoping that it goes up and that we make, we're all speculators - and many foreigners might be coming in. You aren•t talking about restricting any foreigners of that type, are you ? MR . POTOSKI: Well if foreigners want to come in , let them do the same as my dad did. Let them buy the land, go out there and work it. MR . HENDERS ON: That's right. Yes , but many of these farmers are doing this.

We heard at the hearing the other day from one of the men that was selling to these foreigners, that they were applying for ci tizens hip papers and that they were preparing to come in . Now you don •t believe we should restrict any of these, do you ? MR . POTOSKI: No, those that wish to come and acquire land and settle on them, sure, by all means let them come in. MR . HENDE RSON : Do you think you're talking about a very large percentage when you're talking about people that are just speculators only wit hout thinking of coming over and farming ? MR .

POTOS KI: Well, of course, I wouldn 't be able to just say what ... but there is that trend and there is that interest at the present time that land is being bought , money's being put into land at the present time by high money interests which they feel is most secure in Canada . MR . HENDE RSON: Well you aren't against anybody that's going to come over here anyway, you're going MR . POTOS KI : No, if he comes over and buys land and acquires cit iz enship, sure give it to him • MR . HENDERSON: If he can get by the immigration authorities as far as your con cerned .•.

76 MR . POTOSKI : That's right, MR . HENDERS ON : That•s all then, MR . CHAIRM AN: Mr. Green. MR . GREEN: Mr. Reeve ••• MR . CHAIRMAN: Potoski . January 27 , 1975 MR . GREEN: He•s the Reeve, yes, You see I have no distrust of him because he hap pens to have been elected by his residents to occupy a position in the public , therefore I don •t mind calling him Reeve. Mr. Reeve, would you be concerned if you had a report that by 1980 there should only be 20, 000 people on the land as against 40, 000 people which there were seven years ago. Would that bother you? MR. POTOSKI: Very much so . May I add, Mr.

Minist er, that in the Rural Municipality of Dauphin - since you•ve called me a Reeve - in 1926 the population was 6, 400; in 1971 the population was 3, 166 - dropped 50 percent. And our greatest asset, and I think the Mani toba Chamber of Commerce pointed out very very well when they said our greatest problem is the loss of population, and that is our greatest problem. We must keep our land in such a pers pective that we can keep our population wit hin a province and even induce population to come in. MR .

GREEN: So if your elected representatives at the provincial level had before it a report prepared under the Conservative administration, the TED Report, which said that the farm population would be reduced to 20, 000 people by 1980, you would expect your elected representatives to try to do something about that? MR . POTOS KI: Right. MR . GRE EN: And you have suggested various things, one of control on foreign owner ship, and when you say that you're talking about a foreigner in Germany owning land in Manitoba not intending to go there and farm it ? MR . POTOSKI: Right, MR . GREEN: Because I gather, Mr.

Potoski , although I don 't know you, other than our meetings that we•ve had from time to time , I don 't know your background, but I gather your background may be somewhat like my own, that either you or your parents came here from eastern Europe. MR . POTOSKI: Right. MR . GREEN: And you don 't see anything wrong wi th that ? MR . POTOSKI: No, very defini tely not, And I can say again also , that as far as I know, as far as our family hist ory goes back, they were landowners all the way through; and I'm very happy and proud to be one of them, to continu e holding land, being a tenure and living on the land.

And I hope that privil ege will be extended to many other people. MR . GREEN: What you are concerned wit h is that land in Manitoba be populated by people who are working on that land and producing and are residents of the province ? MR . POTOSKI: Right. MR . GREEN: And you would expect your public representatives to do something about that. MR . POTOSKI : Right. MR . GRE EN: You•ve suggested various means that could be taken .

Would you object if it resulted in the objective that you're looking for, that if your public representati ves saw land being purchased in large parcels by individ uals , even if they were people in Winnipeg or people in Alberta or people in New Brunswi ck, that it would be preferable to the public buying that land and making it available "on good terms" to young people who would farm the land in our province . Would you say that that was a good thing for the government to do ? MR . POTOSKI: Yes, I would say it would be a good thing for the government to do . MR .

GRE EN: Welf would I be correct in saying that if the government didn•t do that, your elected representative, that one of the dangers is that maybe Sid Green who accumulated some money and Sid Spivak and Warner Jorgenson--(lnterj ection)--if that 's the case, Mr. Jorgenson, I feel sorry for you, I'm not going to congratulate you for it. But the fact is that - we •ll leave Mr. Jorgenson out of this - E. P. Taylor and Sid Spivak and Izzy Asper and Sid Green - you know, my only problem, Mr.

Potoski , is that I don 't have more money than I •ve got, not that I would want to have less money - but if some people with a lot of money bought up huge tracts of land in Mani toba and rented it out to farmers, that that wouldn 't be better in your eyes than the public doing the same thing, at least as I understood you. Am I correct ?

January 27 , 1975 MR . POTO SKI: In my opinion it wouldn 't be better. I still feel, as I mentioned at the beginning of my in troduction, that public interest must be placed first over private interest. MR . GRE EN: And you1re a farmer, Mr. Potosk i? MR . POTOSKI: Right. MR . GRE EN: And you're also an elected representative? MR . POTOS KI: Right. 77 MR . GRE EN: And I gather that it is not your opinion that farmers stop trusting a person after they1ve elected him to office? A ME MBER: You don1t have to answ er, John, if you don •t want to . MR . GREEN: Well let's put it this way, Mr . Potoski .

Do you feel that you have lost the trust of the people of Dauphin Rural Municipality because they elected you to office. Do you think that that's a reason that they no longer trust you? MR , POTOSKI : No, I don•t. MR . GRE EN: So you don't say that farmers don't trust their elected representatives? MR . POTOSKI: No . No , I wouldn 't. MR . GREEN: That •s all, Mr. Potoski - Reeve Potoski . MR . CHAIRMAN: Mr. Walding . MR . WALDING: Mr. Potosk i , just for clarificati on . You use the two terms "foreign" and "non-resident" in your brief. Do you use those interchangeably or do you see a difference between them? MR .

POTOS KI: Well of course there is a difference there. MR . WALDING: Would you explain to us how you see that difference as applying to the ownership of land in Manitoba? MR . POTOS KI: Well I feel the ownership of land in Manitoba should be such that it would stay within a range where people could buy it, especially our young people. Now, if we have foreign owners coming in and living in foreign countries , they are purely speculating . No way can our people compete with speculators , not from now on.

It has been mentioned here that say in '60s and so on , speculators bought land and lost but I don 1t think you •ll ever see that recurrence. Our land today is getting scarcer and scarcer and scarcer and unless we do something to protect this land and protect it in the interests of our people, we're going to lose it. And I think the last thing we •d ever want to see, the same as was mentioned in South Am erica, that large land owners should control the biggest part of our land and that our citi zens should just become tenants. MR .

WALDING: Suppose that those non-resident owners were Canad ians , would you still have the same objection? MR . CHAIRMAN: Pardon me , the music is obviously that the bar opened up downstairs and they had this social last . . . MR . WALDING: Shall I repeat the question? If those non-resident owners that you object to holding land in Manitoba, if they were Canadians would you have the same objection? MR . POTOSKI: Well if they were acquiring land purposely for speculation in large amounts , yes. I think there should be a limit set to the amount a person could own land . MR .

WALDING: Whether they were resident or non-resident and whether they were a corporation or a non-corporation? MR . POTOSKI: Right .... corporation depends on the size of the corporation, depends on the size of course, you would limit them that is perhaps to the amount of partici pants in that case. MR . WA LDING: So what you are saying is that an individ ual could not own more than . MR. POTOSKI: Say two sections or three sections . MR . WA LDING: Say two sections.

But if he incorporated himself int o a corporation with his wife and brother-in-law and a couple of other signers then he could own a hundred sections? MR . POTOSKI : Right. If they're all farming, sure. MR . WALDING : Would you allow that then by the same token if he leased that land out to other farmers? MR . POTOSKI: So long as he was a resident in the area and so long as he had a personal int erest. MR . WALDING: Well he would have a personal interest in that he•s getting rent from the land that he •s leasi ng out.

78 January 27, 1975 MR . POTOSKI: Well, he•s getting rent - after all if he developed that farm and lived on that farm for a large number of years and if he retired and rented it to his neighbour there•s nothing wrong with that. MR . WALDING : No , but supposing he had very large resources and could buy out several farms and rent them to other farmers ? MR . POTOSKI: That's a hypothetical question there. You•re going into, you know , into ... MR . WALDING: No, let•s say that General Motors wanted to diversify and wanted to buy out a dozen farms. MR .

POTOSKI : No , of course , I don 't believe in extreme acquisit ion of lands . MR. WALDING : I wanted to know where you drew the line. I mean is there a certain number of farms that a man can own and rent out to other people? MR . POTOS KI: Well if he1s a farmer. MR . WALDING: But if he•s renting out all the land that he owns to other farmers, does it make a difference whether he1s a farmer or not? MR . POTO SKI: If he•s living in the area and if he•s developed that farm, if he•s developed that land or that farm, it doesn•t make it a great problem. MR . WALDING: It doesn't make any difference? MR . POTOSKI : No.

MR . WALDING: Okay. One other point. Right at the end of your brief you say that non Canadian owners of recreational land should be reqmred to dispose of previously acquired land. Would you require the same to be true if that non-Can adian owner was resident on that land ? MR . POTOSKI: Well it depends on to what extent the circums tances would . You take, for instance, in Ontario foreigners just sim ply bought up the very best of shorelines in all the most beautiful lakes and they're holding it in large quantities and the local people have no access to it. I think that should be repatriated.

And if the same sit uation should arise in Manito ba , the same, very definitely, regardless of whether it' s foreign or local. If he acquires a large shore front which is in the public interest, or should be used by the public, I think that should be acquired for the public . MR . WA LDING: I agree with you. But what is the difference of the nationality of the owner of that land, whether he1s a Canadian or American or German or anything else; if he is restricting the access of the public to the lake, what difference does his nationalit y make ? MR .

POTOSKI : Well of course in that case you apply principles in the amount of land you hold or the amount of properties involved. MR . WALDING : But do you see a difference that the nationalit y would make or not ? MR . POTOSKI: Well it doesn 't make too much difference ... in that case. MR. WALDING : I would be inclined to agree. But if that non-Ca nadian owner was resident on that land, would that make any difference to you ? MR . POTOSKI: Resid ent on that land ? MR . WALDING: On that recreational land ? MR . POTOSKI: Well providing he hasn't got large tracts .

If he has sufficient for his own use and - well for his friends or something like it, fine and dandy, sure. MR . WALDING : You would see no problem there? MR . POTOSKI: No, absolutely not. MR . WALDING : Thank you very much. MR . JORGE NSON: Mr. Chairman .•. MR . CH AIRM AN : Yes , Mr. Jorgens on ? MR . JORGENSON : Oh, do you have somebody else ? MR. CHAIRMAN : Yes , I do . Mr. Spivak. MR . SPIVA K: Reeve Potoski , I• m in the same position as Mr.

Green and yourself and probably most people in this audience, that my parents came from eastern Europe, or my grandparents came from eastern Europe, same case I ass ume that some of their parents did. There are two things that I1d lik e to question you on. One, the reference in your actual written presentation and then some reference that you made in answer to Mr . Green's question. One, dealing with the writt en submission was the fact that you accept that there has to be a federal and provincial effort into agricultural in providing some degree of incentive of financial support for farming and for farmers .

MR . POT OSKI : Right.

January 27 , 1975 79 MR . SPIVA K: Secondly, you indicated that your grandparents have been landowners both in eastern Europe and in Canada . Therefore having said that, do you believe that a policy designed by the government, by Provincial Government, which would only allow a farmer in attempting to deal with the loaning agency of the Provincial Government, the ability only to lease land in the initial period, that that is a suffi cient incentive for ownership and consistent wit h the princi ples that you 1ve talked about? MR . POTOSKI: Yes. MR .

SPIVA K: You believe that leasing the land is ownership from your point of view? MR . POTOSKI: Well you mean by the government? MR . SPIVA K: No , no , I want to follow through this. That a farmer in comin g to the loaning agency of government and being told by the government that we will not loan you money by way of a mortgage, but rather we will buy the land and lease it back to you wit h certain options, that that will provide the incentive from the Provincial Government consist ent with the principles that you 1ve talked about? MR .

POTOSKI: Well of course that must be qualified because as far as I understand the government will provide mortgages, both federal and provincial governments will ... MR. SPIVAK: No, I'm talking about a provincial ... MR . POTOSKI: But then, again, in certain cases the government perhaps to those who have not farmed or not been establi shed or not acquainted with farming may be a farming risk, perhaps they'll rent it out to them and he has a chance of proving himself and acquiring that land through a lease, which is even better for himself. MR .

SPIVAK: But if the only incentive that the Provincial Government through its loaning agency will provide is -that the only way in which a farmer can deal wi th the loaning agency is by having the government buy the land and leasing it to him because the loaning agency will not provide the farmer wit h a mortgage, do you believe that that incentive is sufficiently consistent wit h what you talked about? MR. POTOSKI : No, I think if a person applies for a loan and he's not a risk, he should get it. MR . SPIVAK: He should get a loan by way of being able to buy the land and have a mortgage from the loaning agency?

MR . POTOSKI: That's right. MR . CHAIRM AN : Mr. Graham. MR . GRAHAM: Thank you, Mr. Chairman, and through you to Reeve Potoski . I believe that you stated earlier, Mr. Potoski , that you have some concern about the size of land hold ings that some farmers have and you would probably like to see some restric tions placed on the size of a farming unit. Is that right? MR . POTOS KI: Yes, that's right, I would. MR . GRA HA M: Would you attempt to give any indication on what size you would like to see a farm unit maintained at? MR .

POTOSKI: No, it's pretty difficult, but I think from our statistics and observations say a farm uni t which would make a good family farm, a good sized family farm, and I think from what reports we have at the present time it runs anywhere from two to three sections, is something like it. MR . GRAHAM: Two to three sections . MR . POTOS KI: Somewhere in that ... Some places even two sections is recommended in many cases. MR . GRAHAM : You 1re talking mainly about the area that you •re most familiar with in the Municipality of Dauphin are you, or are you referring to the general Province of Manitoba? MR .

POTOSKI : Well ... particularly referring to the area of Manitoba, of course the situation in Dauphin here too, MR . GRAHAM : You're a farmer and I• m a farm er, and we know that in some areas a two-section farm would be quite adequate to operate, depending on the classi fication of the land and the use that it 's put to,

whereas in another area wit h maybe a different soil class ifi cation it might take two and three times as much land to make a good farming operation viable. MR. POTOSKI: Quit e right, quit e right. MR . GRAH AM: So that it would be rather difficult, would it, to establish a size by an arbitrary figure of say 1, 500 acres or 1, 000 acres -I 'm just using those figures ...

80 January 27 , 1975 MR . POTOSKI: Yes . Well I think in such cases it should be recogni zed, or at least the question of viabilit y of the operation of the farm - as you say, in some cases it could be two sections, others four may be required, and true enough the viabil ity of the operation should be consid ered in such cases . MR . GRAH AM: In that respect would you think pos sibl y it might be--l'm just more or less grasping at straws here - then would you think that it maybe should be related to the income of the operation rather than the acreage of the operation ? MR .

POT OSKI : Well of course that would have to be studied and looked into. It•s pretty difficult to set a set of guidelines offhand at this stage, but that could be a factor. That could be a factor, true enough. MR . GRA HAM: I believe that one way that politicians can become credible with farmers is to list en to them and try and get their views. A MEMB ER: That's why we're here. MR . POTOSKI : Thanks for coming too , we're glad to see you come and have this dialogue with you, I appreciate the opportunit y. All people here do. MR .

GRA HAM: I was just wondering if you had any suggestions to put forward on how you would control the size of a farming operation ? If you •re concerned about the size, how would you attempt to control it? MR. POTOSKI: Well I think they are doing it in other countries. You take, for instance, in Denmark there •s nobody extremely rich and nobody extremely poor. They all have a certain amount of land and when they put in a crop or raise so many hogs or anything, they have a price set before they even undertake the operation and they are very success ful.

Now it will require a good deal of study and probably accept some of their principles or their ways . They must have a way because they're extremely succes sful - in the small amount of land and the amount of population they have there and they're very successful. MR . GRAHAM: The climate and the fertility of the soil could be substanti ally different than ours here in the centre of the prairies . MR . POTOSKI: True enough, they couldn •t begin to give two sections of land to anybody in Denmark or anywhere else in Europe as far as that goes, so that's true enough. That•s why we have large ... MR .

GRA HAM: I was just wondering if you had any suggestions to put forward to us on how you would attempt to control the size of a farm and if you believe that it should be controll ed? MR . POTOSKI: Well as I say that should be studied and an analysis made and a figure arrived at. MR . GRAHAM: You don't think any hasty decision should be made then, it should be studied in depth. MR. POT OSKI : Oh , I think so. Well I think it should be studied, oh definitely. MR . GRA HAM: Would you like to see municipal corporations closely involved in these studi es ? MR .

POTOS KI: Well I think it would be rather difficult for them to--well we could be perhaps a part of a central study. MR. GRAH AM: No, but you would like to see involvement of people as well as just the administration of government involved in any studies of that nature, would you ? MR . POTOSKI: Yes, I would. MR . GRAHAM: Thank you. MR . CHA IRMAN: Mr. Jorgenson. MR . JORGE NSON: Mr.

Pot oski , you •ve been farming for a number of years and I pre sume that you keep records of your farming operations and have some idea of what your pro fits of margin has been over the years, and I don't want to pry into your personal affairs, but I wonder if you could give some idea of the percentage of your capital investment that you realize in income. Would it be three percent, five percent, six, seven, eight - roughly? MR . POTOSKI: That varies so much on the valuation. You take, three years, two years from today that would have been an entirely different figure of what it is today. MR .

JORGENS ON: Yes , I realize that, but ... MR . POTOS KI: We just can•t come up with a figure that would give you an answer to that question . MR . JORGENSON: I realize that, that it does vary, but over the years would you suggest

January 27 , 1975 81 (MR . JORGE NSON cont•d ) ....• that your return on inves tment is as high as you could get in any other enterprise , for example, if you inves ted--well could you, for example, today make as much money as you can if you invested in government bonds? MR . POTOSK I : That's questionable , MR . JORGENSON : It's questionable that you could? Then why would anybody want to invest in land if the return on that land is going to be so much lower than he could invest else where, MR .

POTOSKI: Well as I• ve mentioned, that those investors , they're just inves ting money for the protection and safeguarding their interest and their money, They're not interes ted in just what their returns will be, if they were interested in their returns they wouldn •t be putting it into . • . MR . JORGENSON: We had evidence before the committee on Monday to the effect that 75 percent of the West Germans that are buying land in this country are in the process of taking our visas to come here and live. Do you see any great danger in those people?

I under stand that the German farmer, as most west European farmers are, are excellent farmers. MR. POT OSKI : Yes . True. MR. JORGE NSON: So you have no objection to that? MR . POTOSKI: No , if it1 s their intention to come and farm this land . MR . JORGENSON : This is the evidence we had before the commi ttee, how much it can be relied upon I don't know but that was the evidence that was given. MR . POTOSKI: There may be just a percentage of them ... MR . CHAIRMAN : Mr . Potosk i , would you use the mike, I believe you're moving away. Thank you. MR .

JORGE NSON: I want to deal wi th this question of corporate farming. I have never, and I state a personal opinion here, I have never been that concerned about farm size getting too large, because I operate a farm myself and I know that once it gets beyond the capacity of the owner-operator to manage that farm, he starts losing money on it. That opinion has been borne out by a recent study that was done in the Province of Alberta , and I have a clipping of a newspaper here that was released on the 7th of January, and I1ll just read you a portion of it.

The clipping goes on to say: "Wit h many huge corporations unloading the farm operations they got into in the United States the prospect of the family farm in Alberta being taken over by a corporation has been dramatically reduced. The Alberta Agric ulture Department in a release said the largest Unit ed States corporations have learned their financially oriented brass simply don •t understand farming. Corporations try to grow too fast and have no chance to make little mistakes before making the big ones that bankrupt them." And I• ve always believed this. We have so many examples .

Nation al Grain went into a huge hog operation at Abbotsford a few years ago, they went ban krupt. All these big corporations eventually do . There 1s always some factor that enters into the picture that levels things up, and we have one coming in right now . The question of labour . I know of farmers in my part of the country who are not purchasing more land, they •re reducing their holdings because they cannot get labour . They are trying to adjust their farms to the size that they and their families alone can manage so they can operate that farm by themselves; instead of having a

section or two sections or three sections of land, they're reducing it down to about 900 acres which is what they feel they can manage - one operator. And I think there is going to be a great deal more of that than there is going to be of the increase in size . I want to agree wi th you about the concern about the loss of the farming population. MR . POTOSKI: That's right. MR . JORGE NSON: I don •t think there •s anybody here that has not shared some concern over this subject.

But at the same time, you •re a farmer and, you know, when you started farming you could not poss ibly farm as much land as you can farm today wit h a great deal of ease, with air-conditioned tractors and power steering, you can work longer hours, and you •ve got lights. You know there are many things , you can put in so much more land today in acreage, you can look after so many more animals because of modern techniques , there's so many things you can do alone as a farmer that you couldn 't do 20 years ago . How would you militate against that?

How would you draw up some regulation or whatever in preventing farmers from exercising their most capable efforts in their farms and farming as efficiently as pos sible? MR . POTOSKI: That's true enough, but as you•ve mentioned and I still am concerned

82 January 27 , 1975 (MR . POTOS KI cont 'd) ..•.. over population, and the larger your units get the population is depleted, your communities become almost extinct. I agree with you in your question and so on , but I still don 1t think it should go to the limits where one man should say, farm 10 , 20 sections for one operation. Where has your community gone then? MR . JORGE NSON: Yes , but my point is that outs ide of the Hutterite colonies which are increasing - you 1re not suggesting that we take away the Hutteri te colonies ? MR . POTOSKI : No, no we're no t. MR.

JORGE NSON: My point is that this sit uation is going to take care of itself, primari ly because of the labour problem, You cannot get labour. So a farmer now has to depend on his own labour resources. That means he's going to have to reduce the size of his farm in order to operate it. MR . POTOSKI: Well it's a sit uation that may perhaps be ... firms in Alberta but it' s certainly not relating itself here in Manitoba, MR . JORGE NSON: Oh, yes it is, in southern Mani toba it is happening, MR .

PO TO SKI: If the farmers hadn't stepped in and bought a good deal of land and kept these people there and so forth, I think we'd have been in a plight . MR . JORGENSON: Farm sizes are actually getting smaller, not larger. But there's one other factor that could enter into the pict ure now and perhaps we should be giving some consideration to it, And that's the question of energy. You know , we could within a few years on the farm have to supply our own energy, And that can be done - methane gas - and it's being done in a good many farms right now.

There's a good possi bility that in order to farm today you 're going to have to provide nof only your own financial resources, your own manage ment resources and your own labour resources but you might have to provide your own fuel as well . Do you not see that as a possibility, if the energy situation con tinues to take the trend in the direction that it has been taken in the last two years. Now if you are going to have to start paying the kind of prices for fuel that some of the oil producing countries are ask ing for, it may not be possible for us to farm. MR .

POTOSKI: Are you trying to tell me that the only way our farming operations will be geared, in large size and providing our own fuel and so forth, that's our only way out? MR . JORGE NSON: I suggest, sir, that that will result in a decrease in farm size, not an increase . MR . POTOSKI : No, but you mention that you must have large units to provide your own energy fuel and everything else to be self-sufficient. MR . JORGENSON : No, I did not say that. MR . POTOSKI: That's the way I took it, MR .

JORGE NSON: No, I did not say that, sir, What I suggested, that we may have to readjust farm sizes again in order to accommodate the energy problem that we might be facing, and that does not mean an increase in farm size, in my opinion that means a reduction in farm size and a switch to a more diversified type of farming operation - livestock -b ecause live stock is where you get the energy from. MR . POTOSKI: If that process should take place by a free and a natural will it' s one of the best things that could happen. But will it? At the present time ..• MR . JORGE NSON : I'm posing it as a question .

I have no answers myself, I1m just sim ply posing it to you and wondering what your observations would be, MR . POTOSKI : No, neither have I, but I think you1re a better farmer than I am, MR . JORGE NSON : No, I sold my farm. MR . POTOSKI : You sold you farm, MR . JORGENSON : Couldn 't find anybody to work it, That's all, Mr. Chairman. MR . CHAIRMA N: Thank you, Mr. Usk iw, MR . USKIW: Yes . Mr. Potoski, I want to follow up on the line of questioning that was put to you by Mr. Spi vak.

He tried to determine from you whether you thought it was desir able to have two options - a lease option and a mortgage option - and your answer to him was that, yes, you would hope that there would be a choice, that the one that could raise mortgage financing should be able to do so , and the one that couldn 1t should be given an opportunity through the lease program and eventually to exercis e his option to purchase if he so wish es. I want to suggest to you here, sir, that we have in Canada 10 provinces , most of which do not provide mortgage financing, Manit oba is one that had for a period of years and

January 27 , 1975 83 (MR . USKIW cont •d) ..•.. discontinued in 1968 and then went back into it for a period during the tight money situation but has again di scontinued the practise . Do you not agree that where there is a service provided in the mortgage field, namely through the Farm Credit Corporation which is through the Federal Government, that there is no need for the province to duplicate or to try to compete with that service , or for the same business in other words .

There is no ad vantage to the province , to the taxpayers or anyone for having two agencies facilitate the mort gage needs of Manitoba farmers. So in essence in Manitoba's sit uation, we have wherever there is a customer who wants to borrow the money to buy his farm, he is referred to the Farm Credit Corporation which is a federal agency and where the federal agency then turns him down and says, but you don •t have enough equity, we don •t feel that you can handle a loan of this size , he is then referred to the MACC under the land lease program. That is the way we are functioning now .

Do you see anything wrong wit h that relationship as bet ween the provin cial program and the federal program, each serving a need. MR . POTOSKI: No, I think it's a very good program. Yes, I think it's a very good pro gram. MR . USKIW: You don't think that we have to duplicate the general credit corporation in mortgage lending ? MR . POTOSKI: No, absolutely not. MR . CHAIRMAN : I just wondered, it1s 12 o'clock, what is the will of the committee. That we proceed till 12 :30 ? MR . JORGENSON : Let's conclude with this witne ss and then adjourn . MR . CHAIRM AN: Okay . Proceed. Mr. Johnston . MR . G.

JOHNSTON: Mr . Reeve, the first witness that appeared before our committee, Mr. Shaw, stated that he gave up some Crown land because the Department of Agric ulture had increased the money amount of his leases. In your experience as a reeve, has this happened in your municipality in an unusual amount. In other words , did the government so increase their lease price that it caused farmers in a significant number to give up Crown land ? MR . POTOSKI: We 1re in such a fortunate positio n here in the Rural Municipalit y of Dauphin that our residents lease very little , if any, Crown lands . MR . G.

JOHNSTON : So then you don't have any knowledge to back up further Mr. Shaw•s statement ? MR. POTOSKI: That•s right . That isn•t a problem wit h us. MR. G. JOHNST ON: Then I turn to another activit y of government, namely the Manitoba Agr icultural Credit Corporation. Have they been active in your municipalit y in the last few years purchasing land ? MR. POTOS KI: They have been acti ve, I• m not aware of just the amount of land that was purchased here, but they are active in this area, yes . I believe they have an office here and so forth.

But 11m not aware of the amount of lands been purchased; it's never been drawn to our attention as a matter of fact. MR . G. JOHNSTON: Are you familiar with any of the transactions or a transaction between MACC and the farmer? MR . POTOS KI: No, I'm not. MR. G. JOHNSTON: Then the other questions that I would ask you perhaps I'll hold for someone who has had some experience in that regard.

What I was going to ask, and perhaps there may be others in the audience who might like to answer at a later time, if - well I must preface this by saying that at the last meeting of the committee a farmer stated that one of his neighbours had approached the MACC to get a loan so he could buy a neighbour's land, it was ranching or grazing land; I think the figure of $80.0 0 an acre was ... MR . CHAIRMAN : Mr. J ohnston , if I may bri ng you to order.

I have ask ed that that parti cular statement be investigated to see the facts on the case and I don't think it is relevant to this particular presentation, but I have asked the Mani toba Agric ultural Credit Corporation to bring in the report, because those statements were made about the MACC supposedly coming in and buying out in the face of somebody else attempting to buy . MR. G. JOHNSTON: Then, Mr . Chairman, I'll ask the general question: if anyone here has any knowledge that

whereas MACC has competed to buy farm land, in other words , outbid what was going to be a private transaction, Mr . Reeve, would you know of anything like that happening in your municipality ? MR . POTOSKI: No, not to my knowledge. It may have happened but not to my knowledge.

84 January 27, 1975 MR. CH AIRMAN: Mr . Uskiw , MR . USKIW: Yes, just for the benefit of the committ ee. We did not let the statement of Mr . Friesen go wi thout checking into it. The Chairman of the corporation has written to him directly ask ing him to verify in some way the statement that he made to the committee in the Legislature. So soon as we have his reply we'll make that available for the committee. MR. CH AIRMAN: Mr. Adam. MR. ADAM: Thank you, Mr. Chairman.

Reeve Potosk i , I just wanted to refer to Page 2 of your written brief, and your remarking on the transfer of privately-owned recreational lands should be restricted to Canadian ci tizens only. I want that clarifi cation. This paragraph, I take it is that you would not allow a Canadian or a Manitoban to sell recreational land to a non resident of this country. Is that correct ? MR. POTOSKI: Right. MR. ADA M: But that I could sell to a Canadian . MR. POTOSKI: Right. Unless a non-res ident has the intention of taking cit izens hip here and occupying the parcel of land in question ? MR.

ADA M: You 1re talking about agricultural land, or just recreational land ? MR . POTOSKI: Both, agri cultural and recreation. I• m referring to recreation as well. MR. ADAM: Now I would lik e your opinion on , say, if I sold my hunters 1 paradise , for instance , which maybe I have, to a non-resident and he comes in and he pos ts, "No Hunting" don 't buy it, what is the difference if I sell it to you and you posted - "No Hunting". You know , this is recreational land , I just wanted a litt le more clarifi cation on that. MR. POTOS KI: Well put relationship of that to ownership. You 1re getting off . MR .

ADAM: No , no . MR . PO TOSKI: We1re dealing with ownership. You're dealing with policies. MR . ADAM: No , I'm saying, John, that you would not allow me to sell my land to an American because it's recreational land, but I could sell it to anyone else . Is that the state ment you •re making ? MR . POTOSKI: That's right. MR . ADAM: That's correct ? MR. POTOSKI: That's correct. MR. ADAM: Okay. Also you mentioned that non-resident owners should be subj ect to a surcharge on property tax.

That would be, say, an American for ins tance owning recreational land here, doesn•t live here, you say that we should add on a litt le tax. That would be something lik e what Mr. Shaw was suggesting. Is that correct ? MR . POTOS KI: Right. Correct. MR. ADAM: Have you got anything in mind as far as what he should be charged . MR . POTOSKI: I have no figure in mind. MR . ADAM: Would you also suggest that we do that for a land speculator on agricultural land ? MR. POTOSKI: Yes, very definitely. MR . ADAM: A surcharge. MR. POTOSKI: Well whatever, whatever MR. ADAM: For a non-own er? MR .

POTOSKI: That's right, for a non •.. MR. ADAM: For a non -resident ? MR. POTOS KI: Well it depends what you consider a non- resident. If he•s purely a speculator then ways and means of controlling must be initiated, and that's just a suggestion, the surcharge. You may have other ways and means. That's just a suggestion. All these are just in principle . We1re not laying any guidelines, you know, in detail. Just all speaking ••• MR. ADAM: Mr. Potoski , on No. 4, under the same, on recreation lands , say , should be repatriated.

Repatriated by the, lower paragraph, non-Canadian owners of recreational lands should be required to dispose of previously acquired land within five years; or do you mean expropriated ? MR. POTOSKI: Well they should be repatriated in time , a period of say five years. MR . ADAM: Over the five years . MR. POTOSKI: That's rig ht. MR. ADAM: I see. Mr. Walding mentioned in his questions - I don 't know whether I got

January 27 , 1975 85 (MR. ADAM cont'd) ..•.. a clear answer on what your answer was. On leasing of land you felt that it was preferable for a local farmer to lease land from another farmer, whether he was actively farming or not, as opposed to one who was a non-r esident. Is that . MR . POTOSKI: I never made that statement. MR . AD AM: I understood that, you know, Mr . Walding asked you MR. . . . . . . : It's not in your brief. MR. AD AM: No, that's not in the brief, that was in a verbal ... MR. POTOSKI : I never mentioned ... MR . CHAIRM AN: I believe that that was a question that Mr . Shaw was answering. MR .

POTOS KI: Right, right. MR . ADAM: Well, Mr. Walding asked a question with regard to leasing of land by pri- vate owners as opposed - as to a formal . . . MR . POTOSKI: That question was never posed to me . MR . ADAM: Okay. I accept that then. MR. CHAIRM AN: Mr. Green. MR . GRE EN : Mr. Potoski , there were two things that I want to come back to specific ally because Mr .

Jorgenson raised several questions . 11m reading a statement from a docu ment called "Targets for Economic Development" which was prepared by the Government of Mani toba in 1969 under the auspices of a commission set up , headed by the Chairman of the Manitoba Development Fund, Secretary of the Department of Industry and Commerce, both under the auspices of Mr .

Spivak at the time , and the statement with regard to a number of farmers is as follows: "Because of the uncertainty about how many non-commercial farms there will be by 1980, the target for 20, 000 commercial farms should be set, but should not be a matter of concern if farm numbers as defined by the census are higher." And then further, Page 59 : "The targets of 20, 000 farms by 19 80, and an agricultural labour force of 30, 000, mean that fewer people will be living on farms and depending directly upon farming for their incomes than at present.

The decline should be faster than the natural attrition rate, and therefore people will have to seek new employment. " Now this target of reducing the commercial farms to 20, 000 from - well I think that it would have been somewhat over 35 , 000 at that time , although I may not be correct - that's not something that you would be in agreement wit h ? MR . POTOS KI: No. Very definitely not. MR . GREEN: And Mr.

Jorgenson doesn't agree with it eit her, but he says that if you let the thing take care of itself - and I hope I1m not being unfair - that it'll go away, that it won•t go down to this number, that if you just let things go on as they are, that your elected representatives do not have to intervene because it will take care of itself. Do you agree with that? MR . POTO SKI: No, I don't. Very definitely don •t. MR . GREEN: So you gather that there is something that we as your representatives should do in order that this target . . . MR. POTOSKI: That1s right. MR .

GRE EN: ... not be reached, and you1ve suggested various things in your brief. Now Mr . Jorgenson also raised a problem which I have always understood to exist, and I want to know if the farmers have correctly communicated this to me . He said that the rate of return on the capital invested has been - he didn 1t actually say this but I 1m just trying to find out whether that is correct - that the rate of return on the capital invested would mean that a farmer is not getting a fair return on his money. Now let us take that a li ttle further.

He has $1 00, 000 invested in land and capital equipment, let's say that's the present val ue, for getting what he paid for it, that the present value would be $1 00, 000 on land and capital equipment, that if he put that into government bonds today, he would get over $9, 000 without doing a sti tch of work; and what is happening, as I understand it from many farmers, is not only are they not getting the normal interest return but they're getting less than that, or have in certain years got less than that, and get paid nothing for their labour.

Now would I be correct in saying that that was a legitimate problem of many farmers, that they were not getting even the amount that they would get if the money was put into government bonds ? MR . POTOSKI : Yes, very definitely. That has been a problem. MR . GRE EN: That was defini tely a problem, and therefore the huge amount of capital

86 (MR. GREEN cont1d) January 27, 1975 that a farmer had invested in his land was making it very diffi- cult to continue in farming . MR . POTOS KI: Rig ht, MR . GRE EN: And yet the farmer is not like the stockbrok er, he can•t say I• m earning five percent on this security and the other security pays te n, so I• m going to transfer from the five percent security to the ten percent security, because his farm is more than an invest ment, it's his home and it's his way of life. MR . POTOS KI: That•s his way of life, right, very definitely . MR .

GREEN: So he can't take this $1 00, 000, on which he may be making seven or eight, put it into something that gives him nine percent interest, and then sell his labour for another $10, 000 a year. Alth ough it looks like that on paper, he just can•t do that because he would be destroying his way of life. The farmer lik e anybody else has certain living patterns; there are certain things that he loves to do , and there are certain things that he just cannot do .

What the farmer would like to do is live on his land, yet not be penalized by having a big capital investment on which he gets no return and get nothing for his labour . Is that correct ? MR . POTOSKI: That's right. MR . GRE EN: Well in that respect the farmer is no different than anybody else. He wants to get a fair return for his labour, and he doesn •t want to have capital invested which doesn •t pay him anything . MR . POTOSKI: That's what we maintain, that the farmer should be in the same econo mic sit uation as all other segments of our country . And why shouldn 't they? MR .

GRE EN: One of the things that Mr . Uskiw•s Farm-Lease Program does, is to remove, part anyway, of that capital investment that he •s been getting no return on by saying that the farm will be capitalized on $1, 000 but the lease will be only at a five percent return, so that he is not losing five percent of the interest that he would get if he had put it into government bonds . Isn •t that correct ? MR . PO TO SKI: I •m not that sure. MR .

GREEN: Well isn•t one of the things that a farmer can do under the lease program is that if he did have $1 00, 000 in land he could get that $1 00, 000 out and he could lease at a percentage lease that would be based on five percent of $1 00, 000, rather than losing 10 per cent in int erest. Isn •t that one of the things that his program is doing ? MR . POTO SKI: I think the program is primarily meant to re-establish farmers. I don 't think it's meant as a money-making scheme. MR . GR EEN: I agree wi th you, Mr. Potoski , but what it does mean is that instead of this man putting $1 00, 000 into a farm • . • MR .

POTOSKI : You're getting into high figures and I don't think - is there ever an ins tance where such has happened? MR . GRE EN : Let's take $50, 000.00 .•• MR . POTOSKI : Well has any farmer or anybody ever - could you trace a loan that was made or people that came on to this program that have done that ? MR . GRE EN: Well, I• m not sure that I can do it for $1 00, 000, although it may be.

Let•s take the $50 , 000; that it is poss ible now for a young farmer instead of taking a mortgage on a $50 , 000 farm and having to pay interest on it at the current market rate, that the government will let him lease it and he will pay interest on the farm as if it was capitalized at 5 percent. That would relieve the farmer of having this huge capital investment on the farm, would it not ? MR . POTOSKI: Well I presume that any such cases would certainly be invest igated by the Commission, by the agency. So I don •t think ... MR . GRE EN: Is it in any event, Mr .

Potoski , correct that one of the big problems that people in rural Manit oba - this is what I •ve been told, and I think Mr .

Jorgenson more or less confirmed it - that one of the big problems in rural Manitoba is that a man has capital investment of land and equipment of - let•s use the figure of $1 00, 000 - that he is not even earning $10, 000 a year, or many years didn1t, or $7, 000 when the interest rate was 7, and it would be more businesslik e if he was the ordinary businessman who clipped coupons for him to sell the farm, put the $1 00, 000 into bonds and securities and get the 7 or 8 percent that they were paying at that time . MR. POTOSKI: I think you mentioned that farming is a way of life.

Anybody who believes in a way of life of farming would never sell his farm and go and borrow money to carry on.

January 27 , 1975 87 MR . GRE EN: Mr. Potoski: I agree wit h you 100 percent; I• m not disagreeing with you. I• m merely indicating that that was one of the farmer's big problems , that in order to live his way of life he was not getting the kind of fair return that another person would get with the amount of capital moneys invested and a return for his labour as well . That was a problem in the farm . MR . POTOSKI: Oh yes, very definitely, yes. MR . CHAIRM AN: Thank you. Mr. Blake . MR . DAVID BLAKE : Thank you, Mr. Chairman.

Reeve Potoski , most of my questions have been answered by other members of the committee , but I have a piece of farmland that I acquired about 30 years ago, I guess , when I got out of the service. I• ve never lived on it and I• ve never farmed it and I• m sure that you wouldn 't want to class someone like me as a non-res ident, or a speculator . MR . POTOSKI: I sure wouldn •t. I sure wouldn 't. MR . BLAKE : I• ve never consid ered selling it in all that time . But I left the farm as a young man for one reason; because I couldn 't make enough money on the farm, I could make more money elsewhere.

I share the concern with many people in the rural areas, the depopulation of the rural areas is a concern to us all, but how do you feel that you 1ll get young men to come back and farm unless you can show them that they can make more money on the farm, or as much money as they can make elsewhere. Even if you gave a young man a farm today, if he can•t make 10 or 12, or 15 thousand dollars a year, as much as he can make in most jobs now, in the mines of elsewhere, what incen tive do you feel that he needs to come back.

I lik e the way of life; I think farming's a great way of life but I could make more money elsewhere so I left the farm. How do you think you can get them back ? MR . POTOSKI : I think our biggest problem is the viability of our farming operations and we should, and we must, place our farming operations viable; and if we don't do that agriculture is going to go down; our population will go down in rural areas� I think agricul- ture is one of the cornerstones of our country, of our civilization, and that should be preserved.

And whatever ways and means , I• ve suggested a few, there are others, there are many ways and means , but we must make agriculture a stable operation the same as other industries . MR . BLAKE : There •s no question about that, but as I say, I just wanted to get your views on what ideas you might think would attract good young farmers back to the farm. MR . POTOSKI : Well of course there are many, I think. You have the farm loans and so on; you must be able to get money at a low interest rate and probably some forgivable loans and many many , you know, many programs .

I think some of the programs that are in operation at the present time are good but I think they must go further. MR . BLAKE : Preferable to leasing, do you feel it might be more of an incentive to a young farmer if he could buy the farm on a long term with probably some preferred interest rate but with lower payments in the initial years when he is struggling to get started. Possi bly a scheme such as the Veterans Land Act used after the war where you provided them with so many bushels of grain as payment.

If you had a good crop you made a larger payment, if you had a poor crop, you gave them a very small payment. Do you think that might be an incentive, where the young man has ownership of the farm immediately even though he has a longer term to pay it off. MR . POTOS KI: Oh , very definitely. Ownership is a great pride. MR . BLA KE: He would think that•s preferable to renting ? MR . PO TOSKI : And he•ll struggle through difficulties .

You may have your ups and downs and so on, but as long as he can hang on to that land and make a living there and have a future for his family, he will struggle and work hard and stay there. MR . BLAKE : Thank you, Mr. Chairma n . MR . CHAIRM AN: Mr. Graham. MR . GRAHAM : Thank you, Mr . Chairman. Reeve Potoski , so far we•ve dealt mainly with ownership of land . I maybe am a litt le unduly concerned but so far we have dealt very li ttle with land use .

Now you have made two references in your brief to use of land and you refer to one where you •re concerned about urban expansion into the prime agricultural land; and the other one was setting· aside sufficient land for recreation for the public use . Are you very concerned about the abuses of the utilization of land in the province . . MR . POTOSKI : Yes , I am, yes, I• m very definitely •••

88 January 27, 1975 MR . GRAHAM: I think myself that land utilization is probably the subj ect that we should be concerning ourselves with. MR. POTOSKI: Right, very definitely . MR . GRAHAM: Under the Canada Land Inventory which was taken some time ago, we have now been able to classify our lands into eight general classificat ions and the utilization of that land quite often we find is not being--t he land is not being used for its best purposes.

For instance , qui te often we 1ll find that classes 1, 2, 3 and 4, which is mainly for growing crops and forage crops, could be used for pasture purposes if an incentive for a livestock program took precedence. Does this concern you at all ? MR . POTOSKI: Yes, very much so, very definitely. MR .

GRAHAM: The reason I asked was that we also have some intention of government policy before us when the government produced their "Guidelines for the Seventies" and in their policies for the seventies I noticed that they said, the primary focus of their program is to encourage the expansion of livestock enterpris es, particularly beef. Does this concern you, that if there is an over emphasis on beef production that it could very well curtail grain pro duction; land could be used probably not for its most beneficial purposes because of govern ment incentives in a particular line of agri cultural policy ? MR .

POTOS KI: I think that's the problem that they're running into at the present time; but however they are coming out with suggestions or wit h programs where less grain would be fed to beef and still produce a good quali ty of beef say on pastures and other feeds. MR. GRAHAM: It doesn't really concern you too much though that good grain producing land could be taken out of production and put into beef production . That wouldn •t bother you ? MR . POT OSKI: Not at the moment, no . MR . GRA HAM: Well we•re looking into the future, you know, and policies that will be put forward for the future. MR.

POTOSKI: That should be kept in mind, it's true. That is ... MR . GRAHAM: You are a litt le concerned in that respect then, that land should be used for the purposes for which it is best suit ed? MR . POTOSKI: That's right because there are areas which are most sui table say for grain production and there are areas which are most sui table for livestock production, there fore these areas should be so designated or used that way. MR . GRAHAM: Do you think that government then should be able to dictate to a farmer that he can only grow grain on this certain farm and he can only produce beef on the other farm? MR .

POTOSKI: Well, of course, once you get into the internal operations of a farm, it is, you know, extremely difficult to make such predictions at the present time , but I think that the returns will se ttle that part; if it1 s more feasible or more profitable to grow grains, they will grow grains and if it' s necessary even livestock lends itself well with grain production as a rotati on . MR . GRAHAM: Then you believe that probably the marketplace will best dictate how the land is used .

That if grain becomes a particularly attractive crop it could be possi ble that farmers would take land out of hay production and sow grain on it and they should be allowed to do th at? MR . POTOSKI: Well of course that ... MR . GRAHAM: I• m as king questions because we need the assi stance of people if we're going to establish policies for the future. MR . POTOSKI: That question may well be so , it may be so that certain lands should be designated for livestock production and certain lands for grain prod uction. It may be so . If it would be feasible, that is, if one wouldn 't ..• MR .

GRAH AM: Well if that is done , it would probably be done through a planning com mission, I would imagi ne . MR . POT OSKI: That1s right. MR . GRAHAM: You , as a municipal person, I imagine , would want to have some input into any planning of that nature, would you not ? MR . POTOSKI: We would. We•d be glad to . MR . GRAHAM: Thank you very much. MR. CH AIRMAN: Mr. Johannson. MR . JOHANNSON: Reeve Pot oski , I• d like to congratulate you upon your brief. It•s a

January 27 , 1975 89 (MR. JOHAN NSON cont 'd) .•..• very well done brief and you•ve discussed it very thoroughly. I• d like to ask a question which relates to a sort of a divided opinion that I think we perceived at the last meeting; particularly the Farm Bureau seemed to be concerned for getting maximum value out of property, that is maximum property prices for farmers who are already in the busine ss, and yet they were also concerned about keeping prices down for the young guy who wants to get into the busine ss .

That is , the establi shed farmers are con cerned wit h getting maximum price for their property because this will be their nest egg when they retire. The young fellow who•s trying to get into the business wants to invest as li ttle capital as possible. Now which group do you think should get top priorit y. MR. POTOSKI: I think I answered that question in my opening remarks. The public interest must come first, Give a fellow a chance to acquire land if he•s at all int erested and capable of •.. MR . JOHANNSON: You •re talking about the young farmer? MR. POTOS KI: Right, MR. CHAIRMAN: Mr . Spivak. MR.

SPIVA K: Mr. Potoski , could I ask something , I want to follow along the line of questioning. Do you have any children who are farming with you ? MR . POTO SKI: Right now. MR . SPIVAK: Yes . MR . POTOSKI: They1re not farming with me, they went professional. MR. SPIVA K: You own the land ? MR . POTOSKI: That's right. MR . SPIVAK: In the event of death, in the event of your death would you ass ume that your wife would have the option of staying on the farm, possi bly one of your sons coming back, possi bly leasing it, possi bly selling it.

In other words, in the event of death because you own the farm you would have various options open to her. Is that correct? MR . PO TO SKI: That •s right, MR . SPIVA K: What do you believe the policy should be if the government is to go into land leasing business with respect to the abilit y of the widow to deal with the land in the event of the death of the farmer? MR . POTOS KI: I think she should have her privil eges or whatever she should opt to accept. MR .

SPIVAK: Are you aware that the Manitoba Agric ultural Credit Corporation pro gram provides that the lease is terminated within 30 days in the months of January, February and December if there is a lease wit h the government, or after that period within a maximum of eight months; and do you think that that•s consistent with what you think should happen in an agricultural land policy ? MR . POTOSKI: You mean if there 1s . . . MR . SPIVA K: If there's a death of the lessee. MR . PO TO SKI: And the family has no • . . ? MR . SPIVAK: No, You don't think thatrs fair ? MR . POT OSKI: No , I don't. MR .

SPIVAK: And that's not consistent with the kind of program wit h respect to land use that you •ve talked about? MR . POTO SKI: No. I do believe that family continuity should be followed up . MR . SPIVAK: Family continuity should be followed up ? MR . POTOS KI: Right. MR . SPIVAK: Thank you. MR . CH AIRMAN: Thank you, Mr . Pot oski . We come back at what ? 2:30 ? 2:00 o'clock ? 2:30 . Co mmittee rise , we'll come back at 2:30. 2:30 p. m. January 27 , 1975 . MR . CHAIRMAN: Order please.

Is there anyone else who is present who would lik e to make a presentation to the committee, Would you please step forward and give us your name, There is none ? We have seven more briefs to be presented. I1ve had some indication of the desire of one person hoping to present the brief as early as possible, he has to leave, and I wonder if it is the will of the committee that we would hear this brief. (Agr eed) Mr. Cooper .

90 January 27, 1975 (MR. CH AIRMAN cont'

d) Pos sibly before I start, for the benefit of those people who were not here this morning, the whole purpose of the committee meetings is to inquire into matters relating to property rights in lands within the province . This is a special committee that was established at the last session of the Legislature on May 30, 1974 . Mr. Cooper. I believe you have a brief and it' s being distributed now. MR . COOPER: Yes, Mr. Chairman . MR . CHAIRMAN : You may proceed. MR. COOPER: I appreciate this opportunit y of appearing at this time on behalf of the Parkland Regional Development Corporati on .

Wit hout further adieu, I'd just like to go into reading the brief. The conception of land as property is deeply entrenched in our society. On the other hand, the use and enjoyment of land by its owners is profoundly modified by the demands of society. This has always been so , but the interaction of private rights and social responsi bilities becomes even more complex with the increasing pressure of demand for space and an increasin gly complex technology . Every societ y must establi sh its own equilibrium between private rights and social responsib ilit ies .

Perhaps equilibrium is not quite the cor rect term. There is a broad zone of interaction between private and public interests . Even within the general framework of western democracy the line of demarcation within this broad zone varies enormously as between Sweden and Texas . In other lands , for example, it is normal and acceptable for the public authorities to intervene in the use and disposition of land to an extent that would be considered unthink able in the United States, yet both are democratic countries in the generally accepted sense of that term.

The point is, of course , that the mental climate in each country is the product of hist ory and condition s. This was taken from the book "Land, Pri vate Property, Public Control" by Professor R. W. G. Bryant from Montreal . The above remarks introduced Professor Bryant's wide-ranging and comprehensive study of land ownership in many countries with particular emphasis on public ownership .

Hi s book published with the help of a grant from the Social Sciences Research Council of Canada in 19 72, discusses land ownership , theory and practi se, among other things discussing the subj ect under the following headings : ownership and the growth of citie s; real estate and new towns; munic ipal land ownership ; public ownership of land; leasehold tenure; pooled ownership ; expropriation; site value taxation; the manner and purposes of land taxation, etc.

Through his own extensive studies and by use of many references to other economi st s, his torians and public authoriti es, he presents a most convincing case for public ownership of land. Referring to the resist ance to change on the attit ude of private ownership to public ownership of land, Professor Bryant states, and I quo te: "In a societ y based on independent farmers and entrepreneurs and in which wage earners could hope to save enough to start a business of their own , the property idea was naturally part and parcel of the notion of individ uality.

It followed, also , that in American democracy the idea that every man can do as he wishes wit h his own property is very deeply embedded. It has been modified only very slowly and grudgingly in response to the obvious need to relate it to social needs.

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Collection	Manitoba — Debates (Hansard)
Citation	30-2-lo2
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Volume / chapter	30th 2nd hansardpdf lo2.pdf
Language	en
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