1985 Legislative Session: 3rd Session, 33rd Parliament

HANSARD

The following electronic version is for informational purposes only.

The printed version remains the official version.

Official Report of

DEBATES OF THE LEGISLATIVE ASSEMBLY

(Hansard)

TUESDAY, MAY 28, 1985

Afternoon Sitting

[ Page

6299 ]

CONTENTS

Oral Questions

UBC dental hygienist program. Mr. Skelly –– 6299

Victoria Mortgage Corporation. Mr. Lauk –– 6300

Respect for the law. Mr. Reynolds –– 6301

Sales tax on benefit recording. Hon. Mr. Curtis replies –– 6301

Tabling Documents –– 6301

Provincial- Municipal Partnership (Taxation Measures) Act (Bill 21). Second reading

Hon. Mr. Curtis –– 6301

Mr. Blencoe –– 6301

Hon. Mr. Curtis –– 6302

British Columbia Railway Amendment Act, 1985 (Bill 15). Second reading

Hon. Mr. Curtis –– 6302

Mr. Stupich –– 6302

Hon. Mr. Curtis –– 6303

Compensation Stabilization Amendment Act, 1985 (Bill 32). Committee stage –– 6303

Mr. Gabelmann

Third reading

Revenue Sharing Amendment Act, 1985 (Bill 22). Second reading

Hon. Mr. Ritchie –– 6304

Mr. Blencoe –– 6304

Hon. Mr. Ritchie –– 6305

Committee of Supply: Ministry of Agriculture and Food estimates, (Hon. Mr.

Schroeder)

On vote 6: minister's office –– 6305

Hon. Mr. Schroeder, Ms. Sanford, Mr. Williams

TUESDAY, MAY 28, 1985

The House met at 2:04 p.m.

Prayers.

MR. VEITCH: Mr. Speaker, seated in your gallery this

afternoon are a very old and trusted friend of mine, Mr. Laird

McCallum, and his friend Phyllis Johncox. I would ask this House to bid

them welcome.

MS. SANFORD: I'd like to introduce to the House today a

long-time friend. I'm not going to call her an old friend, though.

She's a long-time friend: Joan Jellie, formerly of Courtenay, now

residing here in Victoria.

HON. MR. GARDOM: Mr. Speaker, we're honoured today in having

in the precincts Mr. E. Noel Park and his wife. Mr. Park is the member

for Tarnsworth in New South Wales. We'd like to pay a very cordial

welcome to him this afternoon.

MR. MITCHELL: In my riding there is going to be a large

family gathering of the Danyleykos from all across Canada. I would like

the House to join with me in welcoming Annie, Irene, Eugenia, Vera,

Olga, Carol, Mike, Bohdan, Delores and Joe. They are all brothers and

sisters of Sgt. Andy Danyleyko, who is the caretaker of the golden gate

for the buildings. Together they have 129 years of military service in

the Canadian forces.

HON. MR. RITCHIE: Mr. Speaker, visiting with us today we have

a class of 53 adults from Fraser Valley College, accompanied by their

instructor, Mrs. Moran. Would the House please welcome Mrs. Moran and

her class.

MR. NICOLSON: Also in the gallery are Bob and Audrey Huestis.

Bob was vice-principal at L.V. Rogers High School in all my years

there. They are now residing on the Island. I wish the House would bid

them welcome.

MR. REID: Mr. Speaker, it gives me pleasure to welcome on

your behalf Mr. Bill Sullivan, a businessman from Delta who is in your

gallery today.

Oral Questions

UBC DENTAL HYGIENIST PROGRAM

MR. SKELLY: A question to the Minister of Universities,

Science and Communications. The UBC senate has recommended the

elimination of its dental hygienist program, even though elimination

will only save $10,000 and the program will cost about a million

dollars to establish in the college system. Has the minister expressed

his concern to the board of governors about this move and asked the

board to reconsider this suggestion?

HON. MR. McGEER: Mr. Speaker, a proposal has been considered by senate.

It will then be reviewed by the board of governors, and the board of governors

will ultimately submit an academic plan to the Universities Council. In asking

for the academic plan earlier this year, I provided guidelines by which the

universities should do their planning. I would take it that one-of-a-kind programs,

if they were to be eliminated, particularly where there is a demand on the part

of the province for student graduates, would not meet the criteria that we had

established for the universities in drawing up their academic plan. But I think

it's too early to judge.

MR. SKELLY: Is the minister saying, Mr. Speaker, that he has

expressed his concern to the board of governors about the elimination

of this program and conveyed in the strongest terms possible his

concern that this program should be retained?

HON. MR. McGEER: Mr. Speaker, what I am saying is that we

believe in the principle of university autonomy. I suppose it would be

possible to try to second-guess every move made by every university.

Rather than that, what we have done is set down some general guidelines

for our institutions in drawing up the academic plan. We have turned

over to the Universities Council the responsibility for vetting the

plans, first of all to make sure that one-of-a-kind programs are

preserved and secondly to make sure that redundancies are eliminated.

If that process fails, Mr. Speaker, I suppose there is always the

availability of appeal at the provincial government level. But

certainly not at that stage. The universities will each submit their

plans to the Universities Council, and those plans will be reviewed,

with the criteria the government has established to be kept in mind.

MR. SKELLY: Supplementary to the same minister. Given the

fact that this is a one-of-a-kind program, that there are two times as

many job positions in the province as there are people graduating from

this program and that it's an extremely cost-effective program, will

the minister indicate to the University of British Columbia today that

elimination of this program, because it is so cost-effective and

because it does fit with the government's criteria, should not be

considered by the University of British Columbia?

HON. MR. McGEER: No, Mr. Speaker. I would take it that the

NDP policy is to interfere with the internal affairs of the University

of British Columbia. I want to make right now a clear distinction

between New Democratic Party policy and Social Credit policy. Our

policy is not to interfere with the internal affairs at the university.

The New Democratic Party's policy obviously is to interfere.

MR. SKELLY: Another supplementary, Mr. Speaker. Is the

minister saying that if the university does something that is contrary

to the public interest in this province, something which is not

cost-effective and actually diminishes the quality and availability of

dental services in British Columbia, that this is consistent with

Social Credit Party policy?

HON. MR. McGEER: No, Mr. Speaker, but Social Credit Party

policy, unlike the New Democratic Party policy, isn't to leap up and

interfere when the slightest objections are raised by any group.

There's a process that should be followed, but the New Democratic

Party, and particularly the leader of the New Democratic Party, has no

concept at all of university autonomy. Were he the government — God

forbid — there would be daily interference with the affairs of our

universities.

[ Page 6300 ]

MR. SKELLY: Supplementary, Mr. Speaker, to the Minister of

Health. If the Minister of Universities, Science and Communications

allows the university to proceed with the discontinuation of this

program, is the minister willing to put up the $10,000 that elimination

of this program will save in the Universities budget? The program does

provide dental service to people in this province who desperately

require it, especially students and low-income people. The program

virtually pays for itself, except for a small difference between the

cost of the program, tuition fees and paid services to lowincome

citizens and students. Is the minister willing to put up the difference

between the cost of this program and the money that the program earns

on its own?

[2:15]

HON. MR. NIELSEN: Mr. Speaker, it's obviously a hypothetical

question. The member was speaking about if, if and if. The $10,000 he

speaks of is really of very little magnitude in that the College of

Dental Surgeons have said that they would put the $10,000 in. I've

spoken with representatives from the college, and they agree that the

program could probably be best utilized at the college level.

They have pointed out, however, that they believe that there are

certain efficiencies available at the university. They have advised me

that they think it's a course that does not require a university

setting. They have also advanced.... In fact, the Leader of the

Opposition was well briefed. He obviously listened carefully to the

prepared text that was read to all members over the phone. It is not

the $10,000. That is not the question before either the universities or

the college at this time. That money, apparently, would be readily

available from a number of sources.

MR. SKELLY: Mr. Speaker, to the same minister, given the fact

that the program is conducted in the school of dentistry at UBC, that

the equipment is available both to dental students and to dental

hygienist students, that there is some cost efficiency in doing that,

and that those cost efficiencies would not be available if this program

were moved to the college setting.... With all of the uncertainties

that would surround that move and the chaos that would be caused for

students, is the minister willing to finance, however it is done, the

program at the University of British Columbia in order to avoid the

increased costs — estimated at $1 million startup costs for first-year

startup and operations — that this program would bring to the people of

British Columbia? I'm asking if he is willing to put up $10,000 to save

a million.

HON. MR. NIELSEN: Mr. Speaker, even that member would realize

that money must be appropriated in an orderly way, and it is not for a

minister to simply suggest that there is $10,000 available for any

suggestion that may come across in question period. The minister

responsible for universities has outlined the process whereby these

people at the universities make decisions. I would hope that sometime

in the future some of those people who are responsible for making those

decisions would come up with some other cost-efficient ideas —

cost-saving measures. It is not a matter of $10,000, as I said, because

it isn't, I believe, a question of the funding; it is the decision of

those who are responsible at the universities determining what courses

should be properly offered by their institution.

The cost efficiencies of the program with respect to the university

setting at UBC, as opposed to starting up a new program at a college,

are being debated now by those representatives who are lobbying MLAs,

but it is not a simple matter of a $10,000 difference. That, to me, has

not yet been any part of the argument, although apparently it is the

calculation those people have reached.

I'm sure they'll resolve the problem. The minister responsible has

outlined the process which is to be followed. We'll see what that

resolution may be.

I wouldn't suggest they're playing games.

VICTORIA MORTGAGE CORP.

MR. LAUK: To the Attorney-General, Mr. Speaker. There is a

company called Victoria Mortgage Corp. which has been ordered to cease

trading — whatever that means for a mortgage corporation — by Mr.

Bullock, superintendent of brokers. My instructions are that this

company is not licensed as such — as a mortgage company — and that any

losses are not insured. Could the Attorney-General advise the House

whether his department, together with Consumer and Corporate Affairs,

is investigating this company and its principal officers? That's number

one.

Number two: why, in British Columbia, do we allow companies to call

themselves mortgage corporations — unlicensed and uninsured?

HON. MR. SMITH: In answer to the first question, I cannot tell and I do not know. I'll have to make investigations.

In answer to the second question, the government does not license or

insure or insist that there be insured every corporation that may deal

in land or may provide securities in relation to land, and to do so of

course would be to set up a fairly large regulatory and insurance

scheme which, while it might be socially desirable from the point of

view of some, doctrinally, would require a somewhat major intrusion

into the area of insurance and business and the way in which people do

business. Suggestions like this, of course, always come to light any

time there's a failure. They never come to light when there are

successes.

MR. LAUK: That's quite astute and perceptive of the

Attorney-General. I would ask the Attorney-General this. There are

many, many people who are about to lose their life savings because they

thought they were dealing with a company that had some modicum of

responsibility. And it now appears that initially, even after the order

to cease trading — again I say, whatever that means — by Mr. Bullock,

the company's principal officers are suggesting that debenture holders

wait for many years for repayment.

In any other financial scheme and in any other program such as this,

it seems to me the government should move with great alacrity — and, I

say, from the Attorney-General's department — to see what has gone on.

These are ordinary investors; they're not institutional investors.

HON. MR. SMITH: Well, Mr. Speaker, from the standpoint of

whether or not the Criminal Code or the Securities Act or any other

regulatory provision we have has been violated, I most certainly will

look into it. But, again, I say that to undertake an exercise of

examining whether the government should move with alacrity every time

there is a failure of a corporation, or every time that some stock that

my friend the second member might invest in doesn't realize its

[ Page

6301 ]

potential.... I suppose also there should be alacrity on government intrusion

to find out why that stock has dropped. If that were the case, then governments

would be doing nothing but examining the performance of people in the private

sector.

MR. LAUK: With respect to me and my own personal investments

in the stock exchange, if I held the view suggested by the

Attorney-General I'd be on my feet every day.

RESPECT FOR THE LAW

MR. REYNOLDS: I have a question for the Attorney-General. In the Saturday, May 18 Times-Colonist

the Leader of the Opposition is quoted as saying: "Tell me one major

democracy in the world today that didn't begin with defiance of the

law. Because the principle of democracy is not simply respect for the

law. It is based on respect for the law but not blind obedience to bad

laws." Mr. Speaker, in view of this statement by the Leader of the

Opposition that it is okay to disobey a bad law, can the

Attorney-General advise this House if it is a new defence to a charge

in this province to say the law is a bad law that shouldn't be blindly

obeyed?

HON. MR. SMITH: The short answer to the question would be, of

course, no. But I'm sure that the Leader of the Opposition didn't make

those remarks, or if he made them, he made them in some entirely

different context.

SALES TAX ON BENEFIT RECORDING

HON. MR. CURTIS: Mr. Speaker, in the dying moments of

question period last week, the hon. member for Comox (Ms. Sanford)

inquired as to how much money has been collected "for" — to use her

word — sales tax on the recording "Tears Are Not Enough." I did not

have the information readily available. The answer I'm about to give is

an estimate only. I think the member will appreciate that, because the

statistical information is not right up to date. It will be, and I'll

report in due course. I'm informed that the 7-inch recording has sold

some 47,000 in British Columbia at $2.49 each. Of the 12-inch recording

— I don't know what that is in metric; I'll turn to some other learned

member –– 10,000 have been sold at $5.98 each. That would give the

member the sales tax revenues. But I emphasize that these are estimates

and subject to revision.

I was happy also to learn that some other provinces have followed

British Columbia's lead with respect to sales tax collected on this

recording.

Hon. Mr. Curtis tabled the third report of the compensation stabilization commissioner, for the year ending December 31, 1984.

Orders of the Day

HON. MR. GARDOM: Second reading of Bill 21, Mr. Speaker.

PROVINCIAL-MUNICIPAL PARTNERSHIP

(TAXATION MEASURES) ACT

HON. MR. CURTIS: Mr. Speaker, I wish to take my place in second reading

of Bill 21 and move second reading of the Provincial-Municipal Partnership

(Taxation Measures) Act. As the House will know, this is a companion piece of

legislation to that which was taken through the House earlier this session by

my colleague the Minister of Municipal Affairs (Hon. Mr. Ritchie). This bill,

together with the earlier one, deals with one of the key elements in the provincial

government's program for economic renewal. A central feature of these partnerships

for economic renewal is the reduction of property taxes on new industrial improvements.

Under the Provincial-Municipal Partnership Act introduced by my colleague, municipalities

are in a position to introduce a range of incentives for industrial development,

including a tax exemption of 50 percent or more on new industrial improvements.

Under this bill the provincial government will provide a 50 percent

exemption for non-residential school taxes in nonmunicipal areas, and

in those municipalities in which the local council has signed an

agreement to participate in the government's economic development

program and implemented its own program of municipal tax reductions.

These actions are complemented by other changes being made to the

property tax system, which have been dealt with elsewhere in

legislation, so I will not reflect on them, inasmuch as they have been

passed by the House and given royal assent.

[Mr. Strachan in the chair.]

The provincial-municipal partnership agreements are also closely

linked to new federal-provincial economic development initiatives. In

combination with each other, these intergovernmental thrusts will

direct the coordinated efforts of all three levels of government toward

the goal of economic renewal. This will maximize the impact of the

initiatives that are being undertaken.

This bill enables the province to fulfil a major component of its

part of the provincial-municipal partnership bargain. To restate it,

there will be a 50 percent reduction in non-residential school taxes on

new industrial improvements in participating municipalities. The debate

on the earlier bill, to which I have referred, canvassed a variety of

opinions on that measure.

As I said earlier, this is a companion piece of legislation which is

very important for the non-municipal aspect and for the school

component aspect of the entire partnership program. I move second

reading of Bill 21.

MR. BLENCOE: I don't intend to speak very long on Bill 21. I

have already made a number of comments on the concept of partnership

legislation and on our approach to partnership. I have travelled the

province in the last few months, meeting and consulting with local

governments on how we view real municipal partnership — something we

have been talking about for a very long time. I don't intend to go

through in detail the concerns we have with this piece of legislation,

or the others that have been before us.

[2:30]

Sufficient to say, Mr. Speaker, that in our view there are a number

of components missing from the current partnership program that has

been put before local government. It is not a global approach to the

concerns of local government, and tax relief is only a minor component

in the revitalization of our municipalities and our province.

Industrialists, captains of industry, will tell you over and over again

that on a scale of 1

[ Page 6302 ]

to 10 tax relief or tax giveaways rate 10. There

are other essential ingredients of communities that must be in good

shape to attract new industry. I refer to good community systems, good

recreational systems and good educational systems — universities must

be in good shape. In a global sense the health of a community is

measured by many aspects. In British Columbia many of those components

or aspects are in serious trouble.

We believe that you must approach partnership in a global way. For

instance, in the north of British Columbia I have discussed

transportation costs with northern councils. Transportation costs

should be part and parcel of partnership deals. It's no good producing

a product if you can't ship it to the lower mainland in a way that's

cost effective. There should have been a major aspect....

Transportation for northern communities should have been a part of

partnership. We have, indeed, serious reservations about tax giveaways.

All other jurisdictions, particularly in the United States, that have

got into tax giveaways have come to grief. What you have to be, I

think, is positive and up front in terms of the support you give to

local government.

I have stated categorically that we need in the province of British

Columbia a provincial-federal agreement, or partnership agreement with

the senior government in Ottawa, to rebuild municipalities. Many of

them are in serious financial trouble, and their infrastructure is in

serious trouble.

I don't think back-door giveaways are positive, because the money

for infrastructure must come from somewhere. And if you're giving away

money and at the same time trying to maintain your operation, those two

do not equate. They do not meet; the equation is not balanced.

However, we have stated that, because at the moment this is the only

deal or the only option being provided by this government for

municipalities, and it may indeed provide some new jobs, we have

supported the legislation. Anything that might look like it might

support or create new jobs. Mr. Speaker, we are not going to be

negative towards. We feel that the program has, in many respects, been

put together rather hastily. It wasn't done in true consultation and

true partnership with local government. I have said many times that the

actual development of concepts must be done in partnership. It's no

good devising programs within the confines of Victoria, or in the

bureaucracy, and then telling local government: "This is it. This is

what we offer you. This is how our view of partnership...." I think you

need to go back and consult with local government; and I think that

could have been done, to develop a package that met the real needs of

local government today. The real needs of local government today, Mr.

Speaker, are to do with their financial structures and their long-term

financial obligations and their infrastructural problems.

This particular legislation, and the partnership legislation, does

not tackle the deep problems. However, again, we are supporting it. We

hope it might do something, but we also hope that this government is

prepared to go back to the UBCM, back to the local councils and back to

the regions, to take a look at all the other aspects that are necessary

in partnership with local government. I have detailed many of those on

my travels, Mr. Speaker. Indeed, the response has been, I think, very

supportive.

To conclude, we will support the legislation on the grounds that it

does something; but it will have a minor impact on local government.

DEPUTY SPEAKER: Pursuant to standing orders, the House is advised that the minister closes debate.

HON. MR. CURTIS: Mr. Speaker, I note the comments made by the

second member for Victoria. I would not want to offend the rules of

this House by straying into another activity, which I undertook in

another portfolio some time ago; it was called revenue-sharing with

local government. I think that will answer in large measure some of the

concerns which the member states from the opposition side.

Mr. Speaker, I indicated this is the companion legislation to that

which was introduced by my colleague the Minister of Municipal Affairs

(Hon. Mr. Ritchie). Early indication is that it is being very well

received, that it is satisfactory to many municipalities. But, again,

the bulk of the activity undertaken under Bill 21 deals with areas

which are beyond the boundaries of the municipality.

I move second reading of Bill 21.

[Mr. Speaker in the chair.]

Motion approved unanimously on a division.

Bill 21, Provincial-Municipal Partnership (Taxation Measures) Act,

read a second time and referred to a Committee of the Whole House for

consideration at the next sitting of the House after today.

[2:45]

HON. MR. GARDOM: Second reading of Bill 15, Mr. Speaker.

BRITISH COLUMBIA RAILWAY

AMENDMENT ACT, 1985

HON. MR. CURTIS: Mr. Speaker, I move second reading of Bill

15, the British Columbia Railway Amendment Act. This bill introduced

amendments which make the British Columbia Railway and its two

subsidiaries — B.C. Rail Ltd. and BCR Properties Ltd. — liable for

fuel, hotel room and social service tax, from April 1 of 1985. This

exemption from taxation was originally provided in 1912. As a result of

last year's financial restructuring of this important Crown

corporation, it is now able to pay these taxes, as does any other

efficient business.

I should point out by way of explanation, Mr. Speaker, for the

members, that current exemptions from property taxation will remain in

effect for British Columbia Railway Company and the two subsidiaries.

B.C. Rail Ltd. is liable for income tax. The parent and the other

subsidiary are not liable for income tax.

The bill represents a move in terms of fairness, in terms of

ensuring that Crown corporations pay their fair share of taxes, and,

Mr. Speaker, I trust that it will have the support of members of the

assembly.

I move second reading of Bill 15.

MR. STUPICH: Mr. Speaker, the Finance minister trusts that

he'll have the support of the members of the opposition. But I bet

he'll call a division in any case.

The opposition will support this legislation. It runs along the

lines of the arguments that I used in discussing two other bills in

this session — the ALRT borrowing, or the rapid transit borrowing, and

the Expo borrowing — I'm sorry: the

[ Page

6303 ]

taxation relief from municipal taxation. I argued that we should know what it's costing for each of these services, if you like.

I must say I do appreciate the euphemism of the minister in saying:

"last year's restructuring of BCR." Anytime anybody wants to

restructure my finances and make a $430 million gift, I'd like to hear

from them promptly.

As a matter of fact, if the minister could find some $13 billion

from other sources, he could restructure the finances of every Crown

corporation and put every one of them on a paying basis. I think it's a

great idea. I'm not sure where he'd find another $13 billion. That's a

separate problem.

As I say, we do support it. We think the approach is correct. We

think it's the approach that should be used with respect to every

government authority, every government Crown corporation, every entity

operating outside of public accounts itself. So we support this.

HON. MR. CURTIS: Mr. Speaker, the restructuring last year

included, of course, the very successful preferred share issue, in

which a number of British Columbians participated. I say: "included." I

do not identify that as the sole part of the restructuring. I concur

with the member for Nanaimo's observations. I think that governments

over time in this province have moved toward having their respective

Crowns paying either full taxation or grants in lieu. That is

essentially or mainly found in property taxation, but I think on this

issue the two sides of the House will not find themselves far apart.

I move second reading of Bill 15.

Motion approved unanimously on a division.

Bill 15, British Columbia Railway Amendment Act, 1985, read a second

time and referred to a Committee of the Whole House for consideration

at the next sitting after today.

HON. MR. GARDOM: Committee on Bill 32.

COMPENSATION STABILIZATION

AMENDMENT ACT, 1985

The House in committee on Bill 32; Mr. Ree in the chair.

Sections 1 and 2 approved.

section 3.

MR. GABELMANN: The debate on the principle involved in

section 3 occurred

in some detail when the original legislation was introduced, and briefly the

other day. I just want to say in passing that this amendment fully finishes

the job of ending collective bargaining in any real sense in the public sector

in this province, because it gives the commissioner — that job now held by Mr.

compensation. I just think it's important once again not to make a long

speech about it but to state simply and clearly that this is contrary to international

conventions that we as a country have signed and to which this province, I believe,

should be an adherent. We now no longer have free and collective bargaining

in the public sector in respect of this legislation. It makes it more clear

and more specific with this amendment in which Mr. Peck can now fix the terms

and conditions of a collective agreement.

We object to this kind of legislation, and we've said it before, so

I won't say anything more about it than that at this point, Mr.

Chairman.

Section 3 approved.

section 4.

MR. GABELMANN: Mr. Chairman, much the same principle applies

in a different way in

section 4. During the second reading discussion

the other day, I made some comments about the impact on the interest

arbitration system in this province as a result of this kind of

legislation. The minister, in closing second reading debate, did not

respond directly to my concerns about the impact on interest

arbitration and the fact that respected arbitrators either will refuse,

or have already in some cases refused, to participate in interest

arbitration in the public sector. I wonder if the minister is of the

belief that the policy objective met by

section 4 of this legislation

is worth the damage to interest arbitration, which is an increasingly

important dispute-resolution mechanism in this province.

HON. MR. CURTIS: Insofar as I have been informed, and from my

continuing conversations with Mr. Peck with respect to the

administration of the program, we've not had any great difficulty with

interest arbitrators. The member may see the problem or the situation

from a different point of view, but I think the actual experience would

suggest that that is not the case.

MR. GABELMANN: I wonder if the minister has read some of the

interest arbitrators' judgments in recent arbitrations. Bruce McColl

comes to mind immediately — what can only be characterized politely as

a savage attack on the system, decrying the process that now exists,

suggesting that he and others who do that kind of work.... I think the

Minister of Education's (Hon. Mr. Heinrich'

s) former law partner has

expressed the same kind of concerns, and I know other arbitrators have

as well. We're going to get to the point where the good arbitrators are

not going to be taking interest arbitration in the public sector, and

that should be of significant concern to the government from a policy

point of view. I'm surprised that no attention appears to have been

paid to that point.

HON. MR. CURTIS: I can see that there have been some critical

comments offered by arbitrators — not unexpectedly, perhaps, in some

instances, but that's fair enough; that's how the system functions.

However, I also understand that there's been no difficulty in having

arbitrators associate themselves with the program, undertake the

activity which they previously undertook and receive their fees — do

their work. If the thesis which the member advanced were the case —

that arbitrators would not come within a barge-pole of the program and

the legislation — then I think we would have cause for concern, but

that's not borne out by the facts.

MR. GABELMANN: I agree that it's not yet the case. I'm

suggesting that it will soon become the case, and all the indications

from the people involved in that particular field of activity tell us

that it might soon become the case. While this may not be strictly

relevant to

section 4, I don't know how else to work it in.

[ Page 6304 ]

I just wonder whether the minister has given any further

consideration to the problem that occurs for arbitrators — or for Mr.

Peck — who are faced with what in effect are catch-up settlements,

where you have the normal situation, where 90 percent of an industry or

field of activity may be paid at a certain rate and 10 percent at a

lower rate, and when that comes up — newly organized or whatever — for

a decision, bringing that 10 percent or whatever percent you might

happen to be up to the regular level in that field of activity....

Heretofore at least it has not been allowed as being beyond the

guidelines, but it is patently unfair — Zion Park Manor is one that

comes to mind from memory — that people who make a certain number of

dollars in that industry can't have either collective bargaining, an

arbitration process or the compensation stabilization program bring

them up to that level — not to give them an exorbitant or

beyond-the-guidelines increase but just to bring them up to the

prevailing rate.

HON. MR. CURTIS: To the hon. member for North Island, the

catch-up question is something which I have discussed with Mr. Peck,

not specifically in terms of the workers to which the member has

referred but rather as a typical aspect of the program at this

particular point in time. He refers to Zion Park; yes, I am aware of

that circumstance. I try to maintain close contact with Mr. Peck at his

wish, at his call, rather than at my call; not to inject myself into

his deliberations or his rulings but rather to identify areas of

concern, difficulty or opportunity, in fact, as and when they are

identified and occur.

[3:00]

I can tell the member that the commissioner and his small staff are

looking at this particular problem of catchup. The member may also be

right that it's perhaps not specifically relevant to this section, but

the Chair has been lenient thus far.

Section 4 approved.

Title approved.

HON. MR. CURTIS: Mr. Chairman, I move the committee rise and report the bill complete without amendment.

Motion approved.

The House resumed; Mr. Speaker in the chair.

Bill 32, Compensation Stabilization Amendment Act, 1985, reported complete without amendment, read a third time and passed.

HON. MR. NIELSEN: Second reading of Bill 22, Mr. Speaker.

REVENUE SHARING AMENDMENT ACT, 1985

HON. MR. RITCHIE: I move second reading of Bill 22. Before

proceeding, I would like to make a few brief comments in anticipation

of some questions that may arise from the other side of the House.

Actually the basic reason for this Revenue Sharing Amendment Act is to

remove the downs that take place whenever the economy of the province

is down. Over the past year or two we have had to deal with some very

difficult situations because in some cases municipalities were spending

to the full extent of their income, forgetting the true concept of

revenue-sharing: that is, truly sharing in the revenue of the province.

It was as a result of this that we began to realize the need for a

stabilization fund within the revenue-sharing. With the support of the

UBCM at that time, it was agreed that indeed we would do so.

I might add, Mr. Speaker, that I and my staff are working at this

moment with the UBCM executive in developing a formula to arrive at

what should be considered to be a level of funding within the

stabilization portion and at what level we would trigger any move in

that portion of the program.

So it's a very simple piece of legislation, Mr. Speaker, requested

by UBCM on behalf of municipalities and regional districts, although it

doesn't affect regional districts. Also it is legislation that is being

fully discussed with them, and the formula that will be used will be

after full consultation with the UBCM.

MR. BLENCOE: We're proceeding here rather fast.

Generally I have to indicate we are in support of this piece of

legislation. However, we do have some questions and queries and

concerns. First I may say that we have for some time called for a

stabilization factor in revenue-sharing. There has been a concern over

the years about the fluctuations, the up-and-down, of revenue-sharing,

and of course it creates great consternation and concern for local

government when they're trying to do their budgets and their allocation

of spending when they don't know to the last minute exactly what is

going to happen with revenue-sharing. For many municipalities, towns

and villages, revenue-sharing and what they get from the province is a

major factor in budget deliberations.

Therefore we are pleased. We have called for, and I am pleased to

see the government is finally carrying out, a procedure whereby there

is a factor of stabilization in the system. I think all municipalities

will welcome that, and I'm certainly pleased that the government has

taken our words and our advice on this particular piece of legislation

and has introduced basically a very sound piece of legislation.

However, I will put forth a couple of concerns, and maybe the

minister could consider them. There appears to be no statutory control

over the precise disposition of accumulated savings in the account. I

believe there is too much discretionary control in the hands of the

minister. It would be preferable, for example, to specify in the

legislation that the account shall be used to stabilize unconditional

grants only. We believe there is indeed a high degree of flexibility

there, and I think this legislation could be tightened up in that

particular area. There is concern that there may indeed be far too much

discretion and the legislation may not carry out what it purports to do

because of the flexibility. I think municipalities would like to see

that kind of flexibility removed from the legislation so they can be

assured that there is stabilization in the unconditional grant portion.

Another concern is that there is no indication as to the actual

integrity of the account. Presumably an accumulated account of money

could, in the future, be spent on a new program or a previously

provincial responsibility which may be added to the revenue-sharing

program simply to take advantage of the money in the account. We have

concern that again this is discretionary and flexible, and that it

could be at

[ Page

6305 ]

the whim of the minister; the money that is in this

stabilization program could be spent on a new program or a new area at

the expense of traditional essential kinds of programs that are in

place at the local level.

That, Mr. Speaker, is an issue that I know has always been one

that.... Local government feels that this particular area must be tied

down more. We need to have security for local government that the

government won't shift its policy in terms of where it's putting its

revenue-sharing money.

Also, Mr. Speaker — we assume this will come down — the information

on regulations is absent, and we would like to know exactly what the

intentions are there. I presume we will get that in the near future. Of

course, a general question is what will become of the interest on this

savings. Will the interest on the savings be utilized by local

government or will it be utilized by the provincial government? I would

hope that the interest on the savings of the stabilization program

would be applied to local government.

There are some general questions, Mr. Speaker, which probably we can

answer in committee stage, but, overall, we support the legislation. It

is something we have called for, and I know local government will

welcome it. It adds to our direction, when we were in government. We

were very supportive and brought forward revenue-sharing programs, and

this is something we have called for for a long time.

HON. MR. RITCHIE: I'd like to assure that member that there

are two important ingredients in any successful program, in my opinion.

One, of course, is flexibility, and the other is common sense. I can

assure the member that there will be a great deal of that applied in

this program, as there has been in others. I think our record speaks

for itself too. We have gone out of our way in protecting the

unconditional portion of revenue sharing, and municipalities were given

my assurance last year, as they were the year before, that we would not

allow it to drop below a certain figure, and that has been maintained.

It is my hope and certainly my desire — and I feel quite confident, Mr.

Speaker, in saying — that as a result of the initiatives of this

government we are seeing some good signs, and we can look forward to

the unconditional portion of revenue sharing being strengthened.

With that, Mr. Speaker, I move second reading of the bill.

[3:15]

Motion approved unanimously on a division.

Bill 22, Revenue Sharing Amendment Act, 1985, read a second time and

referred to a Committee of the Whole House for consideration at the

next sitting of the House after today.

The House in Committee of Supply; Mr. Strachan in the chair.

ESTIMATES: MINISTRY OF

AGRICULTURE AND FOOD

HON. MR. GARDOM: I call vote 6, Mr. Chairman, resolved the

sum not exceeding $188,723 be granted to Her Majesty to defray the

expenses of the Ministry of Agriculture and Food, the hon. the

minister's office. And I shall get out of here before I hear anything

about marketing boards, I trow.

On vote 6: minister's office, $188,723.

HON. MR. SCHROEDER: As you have guessed, Mr. Chairman, the

discussions on orderly marketing and supply management programs is an

interesting debate between the House Leader and myself. His position

has always been clear; and my position is becoming, as time progresses,

more and more abundantly clear.

It's a delight to stand in the House again just briefly to review

the state of the industry in the province. I think I would be short of

honest if I said the industry is without its stresses and without its

pressures and without its agonizing, but I would also be misleading the

House if I suggested for one moment that agriculture was not a very

stabilizing influence in the economy of British Columbia. It's one of

the few areas of economic activity where they don't experience the

severe dips and the sudden rushes of economic activity. I have

represented it as that each time I've stood, and this year is no

exception.

The economic growth in the industry, although present and

recognizable, is not overwhelming. The farm cash receipts for 1983 were

$898 million in 1984 those increased to $956 million; and the

projection for this coming year, all things remaining constant, would

be $990 million. You see that there isn't a great growth but

nonetheless, significant enough, so that we can say with some

confidence that stability is present and stability seems to continue.

Farm cash receipts, as compared with operating costs, still leave a

deficit margin. Although the 1980-84 receipts were up by 28.8 percent,

the operating costs for the same period of time were up 30.4 percent,

which means that operating costs gained on receipts by 2 percent. This

is tolerable over a short period, but it's not tolerable over a long

period of time. As a result, it has become the responsibility of the

ministry, and the minister himself, to try to develop in the industry a

value-added complex, a value-added mentality, so that the value of

product that leaves agriculture and food is enhanced, as compared with

previous years, and as a result offsets the operating costs.

We try, each time we meet with the various commodity groups in the

industry, to whet their appetite and whet their imagination to see

whether we can together come up with new, innovative, productive ideas

to help enhance not just the quality but also the value of what we do

in Agriculture and Food.

By the time you put the value-added into the food and beverage

industry, the dollar-value growth is more significant. In 1980 it was

just over $2 billion; 1981, $2.48 billion; 1982, $2.5 billion; 1983,

$2.55 billion; and in 1984, $2.67 billion. But as we increase the

number of products and the variation in products, and the value-added

product, there is every hope that in the next five-year period we can

increase the value of agriculture to the province by 25 percent. If we

do, it will have unbelievable spinoff effects as far as employment is

concerned — and, again, dependability of supplying our own foodstuffs.

In which area do we see the greatest potential for development? It's

in the area of extending the harvest year for those commodities in

which we are not self-sufficient. A concept that has come to fruition

in the ministry now is that we should be looking at greater development

of the greenhouse industry. Yes, we provide all the apples we can eat

and all the milk we can drink. In the feather industries we provide all

the products we can consume, yes. But there are products for which we

are highly dependent on import markets. These are fresh vegetables —

the greens. We do not provide sufficient in the

[ Page 6306 ]

province to look after our own needs. For a period

of time we do, yes, for that short harvest period from midsummer to

early fall. But if we could extend the harvest period both before

nature's harvest period and after, if we could extend our production

period into the shoulder areas of the year, we could increase

production by as much as 200 percent. In other words, if we could

simply extend the harvest period one-third on each shoulder, rather

than it all being over that two-month period in midsummer, it could be

two further months in spring and two further months in fall. As a

result, we have motivated the industry to think in terms of putting

more production under glass and bringing it to maturity that much

earlier — and then have the natural harvest period and then have an

extended period in the fall. Hence you will have noticed in the budget

this year not a huge amount of money, but some money which we could

use, coupled with private industry money, to see whether or not we can

accomplish those goals.

The other area that we have been encouraging the farm community to

be thinking in is the development of commodity.... I'll say it in the

same phraseology that I use when I'm out on the road: to develop the

commodity in the shape and size that the consumer has demonstrated he

would prefer it. In years gone by, when I was in the processing

industry with Canada Packers, we had a set way that we preserved food

so that it would be available in the off-season. We put it in cans. A

little later we started freezing it. We froze corn in five-pound bags.

We froze peas and corn, peas and carrots — various combinations, but

always in a commodity size that was convenient for the processor.

The actual fact was that over the years the structure of society

changed. We no longer have homes where there is both a mother and a

father and children. We now have many homes in which there is only a

mother and children; many homes where there is only a father and

children; and many homes where there are two breadwinners and no one

home to do the things which would have to be done in order to convert a

five-pound bag of frozen corn into meal-sized quantities. As a result,

if you go to some of the high-density areas and watch what the buying

trends are, people on an increasing basis want to have steaks in

ready-to-prepare size — if possible, already with the herbs and spices

nearby. They like to have it already trimmed and ready to go, and it

would be very nice if it had near at hand some of the other things that

are necessary in order to prepare it — briquets, etc. You notice, if

you go to watch the shopping trends, that

whereas it used to be that

the greatest percentage of counter space was dedicated to the kind of

commodity size that I first described to you — five-pound, two-pound,

one-pound frozen portions — on an increasing basis that kind of

commodity is relegated to a very small area of the shelf space in the

store. And on an increasing basis food is there not as a TV-dinner but

as food ready to be prepared, whether that be chicken and noodles or

whether that be.... You name any commodity; it's there, it's packaged,

it's in bite size and it's ready to prepare so that it's easy to do.

This is what we need. I've been encouraging everyone right from the

producer, who, by the way, up until recently has not been concerned too

much more than to get his commodity out of the farm gate. Nonetheless,

all of the time that he has been producing, working his fields and

driving his tractor and harvesting, he could be utilizing his

imagination to think of new and innovative ways in which to prepare

food.

All kinds of examples exist. For instance, one of them, while eating

a hot dog, said: "What do you mean, hot dog?" I was telling the

cattlemen this the other day. "What do you mean, hot dog? It's not

really hot at all, but what if it were?" He simply created a device in

which he inserted a tube-like thing into the the middle of the wiener,

extracted some meat and in its place put chili sauce — and now, lo and

behold, a new commodity, born out of a very obvious idea. This kind of

thing, if allowed and encouraged to occur, will occur.

One of the areas in which I've been encouraging producers is in

comparing their product with the competition from around the world to

see just how well we are doing. It's very easy for us as producers to

compare ourselves with ourselves and to measure our progress in quality

year by year, and really to believe — be thoroughly convinced — that we

are number one in the world, when in actual fact if you have an

opportunity to compare you can see whether we are number one. In some

instances we are. But in some instances we are not, and where we are

not I believe it is incumbent upon me to encourage the producers in

those commodities to upgrade until they are number one.

[3:30]

In trying to help them accomplish this, the budget this year

provides for a new food exhibition. We're going to call it Food

Pacific. It's not an exhibition as in the Pacific National

Exhibition-type exhibition where you encourage people to come and see

how big your cabbage has grown. This is the kind of food show that

would.... It wouldn't be unique in the world; the European Common

Market has a trade market similar to the one that I envision, and it's

called Anuga. It's the kind of a food show where something in excess of

160,000 buyers flow through the Anuga food show during its time.

We are going to put the first of these shows underway for the year

1986. It's going to happen the last three days of August and the first

two days of September, for a total of five days. The response on the

Pacific Rim is.... It's not just encouraging, it's almost frightening,

because when you're doing something for the first time you want to be

sure that everything is done right and it's done to your best, but

having not done it before you wonder whether you have your best foot

forward.

Nonetheless we are going to, through this show, give an opportunity

for our producers in the province of British Columbia not to have to go

to the expense of taking their commodity to other parts of the world to

make its comparisons, but rather to have the rest of the world bring

their commodity here to our turf and to actually make the comparison.

There is nothing more convincing than to take a look at two samples and

to see which is better and which is best. Having seen it with their own

eyes, it will not be nearly so difficult to convince our producers as

to which of the commodity groups do require some quality attention.

Those are just some examples of areas in which I envision us

becoming competitive, not just in our own markets, not just on our own

continent, but around the Pacific Rim.

There is an area that has been present with us for years and yet has

been undeveloped. It's the area called aquaculture. Norway has

demonstrated the vast potential in aquaculture, particularly

fish-farming, which is just one part of aquaculture. Ten years ago we

in British Columbia were likely on a par with Norway in fish

production. In the last ten years Norway has outstripped us

embarrassingly. The opportunity for development in aquaculture has

caught our vision

[ Page

6307 ]

in the last two years, and this year, for the first

time, you will see it in the budget. There is room for development in

this area. Once again, we have to enlist those who are already in the

industry in the private sector, to motivate them and to assist them in

technology and assist them particularly in brood stock, which is going

to be required if they are going to have their industry developed.

Those are areas that are new. The areas that are continuing, that

have been with us for many years, I'm sure we can discuss during the

process of my estimates.

But those are the areas: market development, in which I'm keenly

interested, and product development, an area that we have always been

interested in, but in which I would like to see heightening interest in

this fiscal year.

Those are some of the words that I would like to speak in opening,

Mr. Chairman, and I'd be very happy not just to answer questions but to

take any suggestions from the floor of the chamber that could help us

not only in making agriculture ever increasingly stable but to make it

ever more profitable. If those kinds of ideas are coming forward, I

would be the first to acknowledge them and to utilize them if at all

possible.

MS. SANFORD: We've heard from the minister a speech that, I

recall, he gave last year, about the things that have to happen in the

agricultural industry, the improvements that have to be made in

marketing and product development and so on. He glossed over the really

difficult time that the farmers of this province are having at this

time. I was surprised that he didn't pay any more attention to what is

happening in the agricultural community, because I know he's aware of

it.

A very cursory look, a very cursory reference to the fact: "Well,

the operating costs gained by 2 percent over the amount of money that

the farmers were collecting, and this is okay in the short term, but

we've got to be careful in the long term." Let's have a look at what's

really happening in the agricultural community, Mr. Chairman. In

British Columbia we have the highest rate of bankruptcies amongst farms

of anywhere in Canada. That's number one — the highest rate, right here

in British Columbia. Twenty percent of all of the farmers are in very

serious economic difficulty. "Severe financial stress" is how the Farm

Credit Corporation refers to it.

This government is not giving the kind of leadership that's going to

ensure the survival of the farms in this province. It's fine to talk

about marketing and improving the product and value-added and all these

things, but let's ensure, first and foremost, that at least the farmers

of the province are able to survive. The information that I have coming

this week out of the Peace River is that the bankruptcies in that area

are unprecedented. The cattlemen, at their convention this last

weekend, said they wouldn't survive, any of them, unless they had some

off-farm income: some timber on their property that they're able to

sell or some other means of ensuring that they survive economically.

The tree-fruit industry is in desperate straits. According to some

of the marketing people that I've been talking to in the Okanagan,

we're going to see unprecedented numbers of bankruptcies up there this

year. But oh, we've got to improve the product; we've got to have value

added. What about survival? It's fine for the minister to go off to

China and Japan. As a matter of fact, Mr. Chairman, he wasn't even able

to attend the last B.C. Federation of Agriculture convention because he

was in China and Japan at the time.

AN HON. MEMBER: And he's going again?

MS. SANFORD: He's going again. We had to have these estimates

today because the minister is off to China again for more market

development, I guess.

MR. REID: That's what it's all about.

MS. SANFORD: If you don't have any farmers producing anything, you're not going to have much to sell.

MR. REID: What are you going to do with the stuff when it is produced if you haven't got a market for it?

MS. SANFORD: Well, that's another issue, Mr. Chairman. This

government has said that as a goal it would produce here in British

Columbia 65 percent of the food that we consume. They haven't reached

that goal; they're not near it.

This government is failing the agricultural sector. There is no

doubt about that. Farmers are paying 27 percent of their operating

costs in interest charges. The federal government has reneged on its

promises as well. I know a lot of farmers were really hoping that the

federal government, based on the promises they were making during their

election campaign, would be able to come up with the kinds of programs

that would assist farmers, particularly here in British Columbia, where

they have the highest rate of bankruptcies anywhere in Canada. This is

a little clipping from the Conservative platform in the last election,

not too long ago: "We will establish an agribond program to provide

loans at reduced rates to producers. A tax exemption for earned income

on these bonds will be provided to encourage people to invest in this

program." There's no money available to farmers. As a matter of fact,

the only thing we've discovered in the federal budget is that they have

cut significantly the amount of money made available to Agriculture

Canada.

The Farm Credit Corporation says that 20 percent — or 533 — of its

2,500 credit accounts in B.C. owe $9.5 million. A year ago 491 accounts

were in arrears for $6.9 million. So in a year under this minister and

this government, under the kind of financial mismanagement they have

given to this province, we have these kinds of figures. It could be,

and should be, a stable industry. It does provide more stability than

most other industries, so how can the government sit back and allow

this kind of thing to happen in a community which the minister started

out by saying provides some stability in this province? They've cut

back on program after program that might have ensured we weren't the

province that had the highest rate of bankruptcies.

The net worth of B.C. farms in the past three years has fallen $763

million, and yet the budget for agriculture has slipped to less than 1

percent of the provincial budget. They're failing the farm community.

Agribonds have been set aside; they are not going to happen. We don't

have a partial interest reimbursement program that is of much help any

more to the farmers because of the cutbacks there. But the minister

himself, according to a press release in November 1984, pinned his

hopes on the federal government as well, because in this press release

the minister says that "the overall cost of credit to Canadian farmers

is a major and urgent concern." He says that "because the problem is so

large, it should be dealt with nationally."

Well, nationally they're doing nothing. So I would like the minister to explain this afternoon, now that the program

[ Page 6308 ]

has fallen through nationally and the farmers here

are facing bankruptcy one after another, and that this industry could

be such a stabilizing force in this province — it won't be much longer

— what the government intends to do. What are their plans, now that

this national program that the minister had banked on in order to

assist farmers...? It's a major and urgent concern, he says. Now that

nothing is happening federally, what does he intend to do?

[3:45]

[Mr. Ree in the chair.]

Now I suppose he's going to mention that he has come up with $2.8

million to help the Peace River farmers. That program is being

administered totally by the banks of the province. They have full

authority, under the program that was put in place to try to assist

those Peace River farmers, to decide who gets money and who doesn't.

They are asking the people up on the Peace River to put up more

collateral, and even when they put up more collateral they are

sometimes denied the loans.

The program may have been initiated with all the good intentions in

the world, but according to the most recent information that I was able

to get yesterday from the Peace River farmers, there's a lot of

dissatisfaction with it. The banks are playing their usual games,

giving out government guaranteed money to those people that they see

fit, without any kind of reporting back to the provincial government,

without any reins being placed on those banks by the provincial

government — nothing.

Unless the farmers today are getting some off-farm income — and the

percentage of the farmers that are surviving on off-farm income is very

high, again according to national statistics — they're not able to

survive. I mentioned the partial interest reimbursement program. This

is a program which assisted the farmers in paying some of those high

interest costs. Why is it that in Ontario the government there has come

up with an additional $13 million to try to offset the interest costs

that are paid by those farmers? Why is it that in the province of

Manitoba the government has reduced the interest rates to 8 percent in

order to ensure the financial success of those farmers? Why is it, at

the same time, that the provincial government has moved from a fixed

rate to 2 percent below prime to 1 percent below prime, and then has

finally set the partial interest reimbursement program at prime? You

can easily see that setting the program at prime is not going to be of

that much assistance to them when they're paying 27 percent of their

operating costs in interest charges.

The other thing is that because there isn't a viable form of

assistance to farmers here in British Columbia, we find that the

long-term debt which is financed by the chartered banks in B.C. is much

higher than it is anywhere else in the country. Here in British

Columbia, we find that it is 51.9 percent of the long-term outstanding

debt — and this is as of January 1984 — for a total of $861.8 million,

and that compares with only 27 percent financed through the chartered

banks nationally. Now the banks, in my view, are playing too large a

role in an industry as vital as the agricultural industry in British

Columbia. Chartered banks finance 82.4 percent of the short-term and

74.7 percent of the intermediate-term farm debt in the province,

compared with 73 percent and 60 percent nationally.

This whole circumstance suggests that B.C. farmers in arrears of

debt repayment may be more vulnerable to foreclosure than would be the

case if the major portion of such debt was financed through a public

agency in British Columbia, such as the Farm Credit Corporation. I

think it's interesting to compare two headlines that appeared in the Globe and Mail

in November last year. One headline says: "Financial Woes Assail

Farmers." The other headline, in the same edition of the same paper,

says: "Bank Profits in Canada World's Best." So what do we have? All of

these farmers facing this kind of financial difficulty have to rely on

off-farm income and are at the mercy of the banks in terms of the

programs that are being administered, such as that $2.8 million up in

Peace River.

At the same time the Minister of Agriculture and the government are

cutting back on programs essential for the survival of the farmer in

British Columbia. I am really surprised that the minister glossed over

the very serious situation that exists with so many of the farmers in

B.C. After all, it's now our second industry. It produces the very food

we eat, and, as the minister says, it's a stabilizing influence — if it

survives. But many sectors of that farming community, I'm afraid, are

facing a difficult time, and a whole lot of them are not going to

survive.

Even the farm income insurance program, an excellent program

introduced by the member for Nanaimo (Mr. Stupich) when he was Minister

of Agriculture, has been cut back $1 million in this year's budget.

When you look at the figures — with the reductions in farm income

insurance and in the partial interest reimbursement program, and the

cuts in extension services to farms throughout British Columbia — then

I think you recognize that this government is not providing the kind of

service and the kind of leadership that should be provided to the farms

of British Columbia. In 1979 the partial interest reimbursement

program, which I referred to earlier, paid out $23 million. In 1983 it

paid out $11 million. I don't know what it will pay out at the end of

1984, with the interest rate set at prime. But obviously, based on the

financial difficulties that these farmers are having, it's not going to

be enough to ensure the survival of so many of our people who rely on

agriculture as their means of livelihood.

The minister talked about the greenhouse industry and how it should

be expanded; how the horticulturists of the province can expect better

returns if, in fact, longer periods of growth can be promoted in

British Columbia. Let me tell you about the horticulturists right now,

Mr. Chairman. In my constituency there is a farmer — a horticulturist

who, I think, is growing some 42 different crops this year — who cannot

understand why the government does not take more interest in providing

services to people like him. He knows what he's doing. He's an

excellent farmer and he works very hard at it. He decided that in some

of the expanded properties that he's working on this year he would have

some of the soil tested. So he sent the soil sample up to Kelowna for

testing, put a rush order on it because he was about to plant within a

month, and did not get any kind of response for two and a half months.

That kind of service is a non-service.

That's the kind of thing this minister should be paying attention

to. He should spend more time in British Columbia doing that kind of

thing, rather than flying out to various other countries. Sure you can

develop markets, but let's ensure the survival of the farmer at home.

That's exactly what the farmers are saying themselves. That's exactly

what John Savage, president of the B.C. Federation of Agriculture, said

last November when the minister was unavailable. Their priorities as

farmers are to ensure the economic survival of farmers, and they stated

in a press release from that B.C.

[ Page 6309 ]

Federation of Agriculture convention last year that

they would much prefer that the minister stayed here and took care of

the very serious problems that exist in that farming community, rather

than to spend as much time and energy as he does traveling the world on

market promotion. I'm not saying market promotion shouldn't be done.

I'm saying that his priorities are wrong.

This same horticulturist from Courtenay tried to have lab facilities

established at North Island College. He's done as much as he can in

order to have tissue sampling and soil analysis done. A number of

people now teaching at North Island College are fully capable of

conducting those tests and of putting on courses in horticulture, soil

analysis and prevention of soil erosion. All of those things are there,

Mr. Chairman, but because of $30,000, I think it is, that's needed to

put in the kind of minimum lab facilities that would be required, they

have not been able to respond to that request. As a result, this

particular horticulturist feels a great sense of frustration. He has no

spare time. He can't spend his time chasing after soil samples sent up

to Kelowna, waiting two and a half months for them to come back. He

can't wait for tissue samples to be sent here, there and everywhere in

order to analyze some particular problem that's developing on his

particular farm. He can't get the information that he needs. According

to him, he goes to the United States for the information that he needs

with respect to sprays and the changes that are taking place, the

testing that's been done, because it's just not adequate here in

British Columbia. Here we have the second most important industry: less

than 1 percent of the total budget, cutbacks in extension services.

It's not good enough.

[4:00]

I would like to spend a bit more time talking about the farm income

insurance program. The program, according to the minister, is one that

he would like to see phased out. But it's pretty clear that that

program has to remain in place at this time. When you look at the net

market returns for the various commodities produced in this province,

and at the cost of production of those various commodities, you can see

that farm income insurance not only needs to remain in place, but needs

to be improved.

The cost-of-production figures are too low. The farmers are having a

difficult time in terms of negotiating with government under the farm

income insurance program for cost-of-production figures that more

accurately reflect the actual cost of production on those farms. For

instance, I'll just give you the 1984 figures. Beef production — this

is the cow-calf operation: $1.06 was the cost of production, and the

net market return was $0.78. Blueberries: cost of production, $0.61;

net market return, $0.46.

Interjection.

MS. SANFORD: Nineteen eighty-four.

HON. MR. SCHROEDER: Give the previous year's.

MS. SANFORD: That was $0.60 and $0.60.

HON. MR. SCHROEDER: Now go back to '82 — $0.60 and $0.90. Come on!

MS. SANFORD: Are you talking about blueberries? Do you want the beef figures as well? I can give you all of those.

The cost of production of beef in 1980 was $1.12; the net market

return was $0.82. In 1981 the cost of production was $1.24: the net

return was $0.62. In 1982 the cost of production was $1.14; the net

market return was $0.71. In 1983 the cost of production was $1.15; the

net market return was $0.77. So I've given you all the figures I have

for that period of time. It doesn't matter where you look — tomatoes,

province is in desperate straits. In 1983 the cost of production was 14

cents a pound, and the net market return was 8 cents a pound....

The farm income insurance program solves part of their problem, but

it certainly is not ensuring the survival of that industry at this

time. No doubt there are other problems. One of them is a cut in the

ALDA program.

HON. MR. SCHROEDER: Cost of production.

MS. SANFORD: The minister says one of them is the cost of

production. You're right, it is. Transportation costs, fertilizer

costs, sales tax — all of those are reflected in the cost of production.

But the ALDA program.... I asked the minister a question about this

in the Legislature some time ago, and the minister at that time said:

"Well, the ALDA program remains in place." Unfortunately the bell rang

that day, because the minister was only partially correct. In 1981, for

instance, the ALDA program eliminated from possible assistance to

fruit-growers the ability to purchase and plant new stock. That was

eliminated from the ALDA program, and that's the most expensive part of

the program.

Mr. Chairman, I'm going to take my seat now, but I think I'11 give

the minister some figures about the ALDA program and what has happened

as a result of that cutback — because it is a cutback.

HON. MR. SCHROEDER: I noticed my worthy critic saying it was

too bad that the minister glossed over.... I'm afraid that she's got

the wrong minister. The minister doesn't make a practice of glossing

over. It's a matter of time, and I'm willing to debate until the House

is satisfied about any of the pressures that face the agriculture

community at this time. However, we need to know that if you select

certain figures from certain columns, you can make an industry look

good or make it look bad. Whether you're talking farm cash receipts,

bankruptcies, inventories, farm expenses, depreciation, net farm income

or net commodity income, it doesn't make any difference which column

you go to: you can make an industry look good or bad depending on which

numbers you select.

I'll give you an example, Mr. Chairman. If you want to talk about

farm cash receipts — this is for British Columbia; this is not Canada

now; we're interested in the province — the wheat return in 1983 was

$19,303,000. In 1984 it was $18,690,000, which is a decrease of 3.2

percent. That's if you're talking about wheat as a commodity. However,

if you're talking rapeseed — now called canola — that which was $14

million in 1983 is $25 million in 1984, an increase of 71 percent. So

it depends on which commodity you want to look at. If you go to the

bottom line on total crops, you still have to look at 1983 compared

with 1984, when it comes to farm cash receipts, in this way. In 1983

there were $307 million of farm cash receipts on crops, and in 1984

there were $331 million of cash receipts on crops, an increase of 7.8

percent.

[ Page 6310 ]

It is with the agriculture community in total that I have to deal,

and then pay particular attention to those individual commodities that

are under inordinate stress. I think that's my obligation.

So I look at a commodity like the cow and calf operation, which by

the way had an increase in those two comparative years of 8.2 percent.

I look at sheep and lambs, a small segment in our province: an increase

of 10 percent. I look at hogs, which were dead even. I look at dairy

products at an increase of 5.5 percent. I look at poultry: an increase

of 11. 8 percent. I look at eggs; they're up 2.8 percent. Honey is up

3. Other livestock is up 3.4 percent. There is not a negative figure in

that column of livestock, and they had an increase, not bottom-line,

for livestock in total: $545 million increased to 579 million; granted,

not a huge increase, but a 6.2 percent increase.

Now if I want to choose individual items out of that column, I can

make farm cash receipts look good or bad for British Columbia. I can go

to the bankruptcy page and make some comparisons on bankruptcies. I

think the member said we have the highest rate of bankruptcy — in

Canada, I think she said; you'd have to compare it with something,

wouldn't you? In 1979 we had 19,780 census farms. Nine of them were

served bankruptcy in 1979. In 1980 — now we're talking in the best of

times — there were 19,896 census farms, and ten of them were in

bankruptcy. In 1981 there were eight; in 1982 there were five; in 1983,

which is when the economic squeeze took place and interest rates shot

out of the sky, we had 20,000 farmers — higher than before — and 26

were in bankruptcy. That's less than 0.13 percent of farms in

bankruptcies.

If you want to make that comparison with other industries, all of a

sudden the farm industry shows plenty of evidence as to why it can be

called stable. It is stable, and it's stable not only because the

industry itself provides for its stability but because governments, not

just this government.... This government, federal governments.... And

if you look at the industry in other countries, those countries,

perhaps to an even greater extent than we, provide subsidy programs

which allow the farm industry to be stable.

In 1984, the last year of record, we have 19,972 census farms, of

which 39, fewer than 40, are in bankruptcy. That's less than one-fifth

of 1 percent. Now if you took this into manufacturing or any of the

other base industries, I'm afraid agriculture would rank very high. To

say that we are the worst and we have the highest rate of bankruptcy,

and to leave it there, is simply to mislead the public.

I have to say that we do not have flawless financial strength. We do

have some bankruptcies. But I also say that regardless of whether it's

in manufacturing or in farming, we do have some instances of

inefficiency in operation, and in the best sense of the word, we must

have in the industry an inbuilt capacity to root out those who are

inefficient. We do not have an obligation as a society to guarantee

that those who are inefficient remain in business. We do not have that

obligation. Therefore when I see nine bankruptcies out of 19,780 census

farms, I say the measure of purifying is very small. We have a very

stable industry.

I wish there were none. I wish I could stand up and say on behalf of

the farmers, who, by the way, know me as a minister who is accessible,

as a minister whom they can approach, a minister who dialogues with

them, a minister who comes to see them on their turf, and a minister

who meets with them on a wide-open basis as often as is possible.... On

the basis of that open-door policy, it just so happens that at

sometimes somebody else is inside the door if the door is always open.

That's the problem with the open-door policy. But the member was there

as we met with the cattlemen the other day. I think my worthy opponent

was there to hear the introduction: no glowing terms for a minister,

but just a simple down-to-earth former farmer who listens to them and

is honest with them, and who seeks and tries to help them. That's all.

I don't think that I need to listen to the kind of criticism that says:

"Here's a minister who doesn't make himself available; he's travelling

the world."

I'm afraid I don't travel the world nearly as much as maybe I might

in order to help the farmers realize what they really want. If you talk

to them, you know what they want. They want to realize their real

worth, their real value; they want to realize the return for their

product from the market. There isn't a farmer alive who is content with

an income insurance program, although most of them will say: "Thank

heaven that we have that kind of a program in place until we can

realize from the marketplace sufficient income to offset our costs."

They say: "Thank heaven we have it in place." I say: "Thank heaven we

have it in place." I've said it before; I've said it in this House

before.

[4:15]

[Mr. Strachan in the chair.]

However, if we want to help farmers achieve their goal, we're going

to have to do two things. We're going to have to curtail costs of

production by management, and we're going to have to enhance markets.

Those are the two things that we need to do, and I think that I have an

obligation to do both, and I have some criticism that says I don't

spend enough time on market development. Well, I try to ride it as

close as I possibly can. But there we are: they have numbers on

bankruptcies.

What were some of the other things that my hon. opponent mentioned?

They talked about federal cooperation on agribonds. My wish for

agribonds hasn't been diminished by virtue of the fact that the first

federal budget didn't make mention of them. The place where we debate

farm credit policies and the place where we debate the availability of

loans is when we as Ministers of Agriculture from across the country

get together, sit down for three days at a time, hash through a

strenuous agenda on each occasion.... Do I say that correctly? On each

occasion since I've been minister, the issue of farm credit and the

issue of agribonds has been debated, and in the first instance the

subject was placed on the agenda by the province of British Columbia.

This was the year just before I took the office of Minister of

Agriculture.

My wish for the availability of a constant and predictable rate of

credit for farmers hasn't waned one little bit. It has to take place.

I've said it, and I think that I'll say it again just so that the new

member will hear me say it: we cannot, in the production of food,

afford the humps and dips that occur in many areas in the industrial

sector. We can't afford it. We can't afford to shut down just because

we've had a slow year, because in order to tool up again it takes,

depending on the commodity, four years, five years, six years, seven

years, depending on whether you're talking cow-calf, grapes, treefruits

or fish-farming. With very few of the commodities can we simply put the

seed in the ground in the spring and reap that fall. You can't afford

to shut down. Therefore you have to have a predictable rate of

insurance on farm credit so that a

[ Page 6311 ]

farmer can plan in the long term — four years, five years, six years, seven years.

We need a program other than a program where the general society

simply picks up the interest charges for a farmer. No, I think a better

plan is to reduce the interest that's earned in the first place. That

means that we, out of taxation, don't simply pay the farmer's interest

bill but actually reduce the amount of interest earned. Isn't that

better? It seems better to me. If we could find through deposits money

that's available from the general public.... My mother, who has a few

thousand dollars on deposit somewhere, could earn what she would earn

now on just as secure a basis and still have that money available for

her when she required it. She would earn 71/2 or 8 percent or whatever

it cams for her in a regular deposit now, but it could earn that from

the agricultural sector.

It makes good sense to me. It would make money available to the

agricultural sector at whatever that rate would be. I would even argue

in front of my colleagues that we, as a ministry, would be able to pick

up the administrative costs in that kind of a plan. That's the wish

that I have for farm credit. I'd like to have the federal government go

along with that kind of a plan, of course. Then we would have a

constant plan right across the nation. But if the federal government

chooses not to go that kind of a plan, I would even in that event

recommend to my colleagues that we find ways and means of moving in

that direction ourselves. Why not? It makes good sense to me.

The member talked about the assistance for Peace River farmers.

Nobody felt worse about the Peace River farmers than I did, having

listened to the two representatives from that area plead long and hard

for the Peace River farmers; not only they, but the National Farmers

Union, who, by the way, each year make a pilgrimage to Victoria, at

which time we sit down with them to discuss their plight. This year we

discussed it again.

The red light's on; I'll have to discuss it with you a little later.

MS. SANFORD: The minister, I think, is still glossing over

the problem. He needs more time. The Farm Credit Corporation, which has

knowledge of the farmers right across Canada, is saying that 20 percent

of the farmers in this province are suffering severe financial stress.

Yet the programs that might assist those farmers through a very

difficult period are constantly being cut back.

The bankruptcy figures that the minister was quoting are really the

tip of the iceberg. I've already indicated the information that's

coming back to me from the various commodity groups about the kinds of

bankruptcies that they are expecting over the next little while. The

Peace River is certainly one of them, and, unfortunately, the B.C.

tree-fruit industry is likely to face a large number of bankruptcies.

I'm not suggesting for a minute that we subsidize inefficient

farmers. The minister indicated that that may be what I was suggesting.

Not for a minute. I think that the orchardists and the Peace River

farmers would not take kindly to that kind of statement. They are

working as hard as they possibly can. They've done everything that they

can in order to make sure that they have a viable operation, and

they're still faced with these financial problems.

Mr. Chairman, I mentioned the cutback in the farm income insurance

program; I mentioned the cutback in the partial interest reimbursement

program; and I started to mention the cutback in the ALDA program. This

applies particularly to those orchardists up there who are now in such

severe difficulty. The tree-fruit loan program has been chopped. The

most expensive part of renovating the orchards up there is purchasing

the new trees and putting them in the ground. There's still some

assistance available through the ALDA program for clearing and doing

some site preparation, but they're not able to get money through ALDA

to purchase the new varieties that are absolutely essential for them to

purchase in order to be competitive. They can't afford to do the

necessary work that they have to undertake if they're going to survive.

They have to replace orchards that are old, and they have to get into

new varieties in order to meet the competition that's coming from other

countries.

Let me give you an example. In 1983 the ALDA program was no longer

available to help replace the orchards that are so necessary to be

replaced at this time to be competitive. In 1979 ALDA disbursed

$1,200,000 in that tree-fruit sector; in 1980, $1,386,000; in 1981,

$1,654,000; in 1982, $1,739,000. Then the program was cut. It dropped

to $593,000 in 1983; and in 1984 it dropped to $281,000. That alone is

an indication that the orchardists are going to face a much more

difficult time over the next few years. They're not even replacing the

stocks that they would otherwise replace, because of cuts in programs

like this.

Interjection.

MS. SANFORD: It is a cut. It's no longer available to them. I

wonder if you'd explain why it has dropped from $1,386,000 in 1980 down

to $281,000. That's a significant drop — less than a quarter of what

was being done before. It's just one program after another that has

been cut.

There used to be a program in this province.... Maybe it's not all

that significant, but it just adds more burden on to the farmers. This

is a program of liming subsidies that used to be in place in British

Columbia, way back. It was removed. As a result, farmers cannot carry

out that necessary liming which will ensure that they have a productive

and viable farm, to say nothing of the soil degradation that takes

place if it's not done. The minister said they're going to try to give

Peace River farmers some assistance with liming on a pilot project. I

would like to know how much money is involved, what kind of assistance

is available to those Peace River farmers, and how many are going to be

able to benefit from this so-called pilot project. There's no doubt

about it, soil acidity in Peace River is a major problem. The costs up

there are very high. In the lower mainland it costs about $40 a tonne

to have the lime applied, and farmers cannot afford it. It's a very

necessary part of the operation if we're going to ensure the success of

farmers in British Columbia. Vancouver Island also has an acidity

problem. It seems to me that Island producers should also have

available to them the subsidy necessary to ensure that the acidity

problem is taken care of. It's also a problem in the Okanagan, no doubt

about that.

But I would like to spend a bit more time on the minister's emphasis

on travelling the globe and marketing. I have to point out again that

I'm not opposed to marketing. I just think his priority is in the wrong

place at this time, and I think that the farmers of the province — the

B.C. Federation of Agriculture — would agree with that. On November 27,

1984, during the B.C. Federation of Agriculture convention, John

Savage, the president, issued a press release which says the

[ Page 6312 ]

following: "Before farmers can spend a lot of time

and effort on more sophisticated marketing and developing of export

trade opportunities, at least five tough realities must be addressed."

I have tried today to address those realities. I don't think the

government is addressing them. What they're doing is cutting back on

the necessary programs that would assist farmers.

[4:30]

These are the five tough realities according to the president of the

B.C. Federation of Agriculture. First, the cost of money. I've

mentioned the partial interest reimbursement program and the fact that

the government has decided to cut it right back to prime. Farm

operating costs are another concern that they have. There again, such

things as liming subsidies and ALDA programs for orchard-planting are

also factors in farm operating costs. Of course, the cost of money is

one of the big ones. Competition from U.S. products — I hope to spend a

bit more time discussing that shortly. Lack of consumer demand

information. Fifth, concentration in the processing, distribution and

retail links of the agriculture and food chain.

One of the concerns of the agricultural community is that

increasingly processing plants have been closing down here. Federal

government assistance in establishing processing plants has been going

to other provinces, like Alberta. Our plants here in B.C. have become

very old, not been upgraded, and as a result are being closed down. The

minister mentioned again this year in his speech that we should be

doing more processing here. That remains to be seen, although I think

this year he has some money set aside for that specific purpose.

The whole focus of the Ministry of Agriculture now is more on

marketing and distribution than it has been before. I think that it's a

mistake at this time to do that kind of promotion at the expense of the

other programs. You can't do both, Mr. Minister. You can't fly all over

the world, you can't market all of these products — or try to market

these products, and that's a whole other issue, because I don't think

all of the globe-trotting by the minister is resulting in the marketing

of very much produce. It's resulting more in the marketing of

technology — greenhouse technology, technology in terms of the

treatment given to various products to ensure that they will be free

from fungus and other problems. They don't want to buy our seed

potatoes, they just want to know how they can keep them virus-free.

Cutbacks in field operations, extension services — when all of those

should be expanded, because we have the opportunity with an industry

like agriculture to expand and to become better here in British

Columbia. It's the one industry that is so viable — far more viable

than the other resource industries appear to be at this.... Agriculture

is certainly a resource industry.

But I'm worried, Mr. Chairman, that this new mission and this new

direction that the minister is forever talking about is going to result

in even more cutbacks in existing programs, because all the signals

point in that direction. For instance, the minister has said: "Many

farmers do not require the traditional ministry extension services

because they've become more knowledgeable and have professional

qualifications themselves." The horticulturist from Courtenay whom I

referred to earlier has all of those qualifications, but he still needs

the assistance and it's not forthcoming. The minister says that the

agricultural industry has matured and that the private sector now

undertakes activities similar to those which farmers traditionally

relied upon the ministry to offer. But the private sector, at this

stage, because of the economics, are looking to the ministry and to the

government, because it's the only way they're going to be able to

survive, and that assistance is not forthcoming.

The emphasis and the direction, Mr. Chairman, is going overseas

instead. I think that's the wrong emphasis and the wrong direction,

when we have these problems, as the president of the association

himself outlines.

The minister talks about value-added and about ensuring that we buy

B.C. produce. I'm wanting to raise an issue with him at this point

which relates to some of the things that I think the ministry could be

far more involved in. I know that the industry itself does a lot in

terms of promoting consumption of B.C. products. The dairy branch, for

instance, does a lot of advertising, and the cattle people do, and so

on. But I think that the provincial government should do far more in

terms of promoting consumption of B.C. produce. There are some problems

with that, Mr. Chairman, in that very often the produce that comes in

from the United States is sold at a lower price at the supermarket, and

when you have 250,000 people....

Oh, I'm sorry, I've run out of time again. I don't know that I like

this new rule, Mr. Chairman. It keeps interrupting my train of thought.

HON. MR. SCHROEDER: Mr. Chairman, I was in the middle of

talking about the Peace River farmers. I think I was saying that nobody

felt any worse about the situation than I did, having listened to the

two representatives from the area. We had to find a way, without

distorting the structure of the entire production marketing model — not

just for British Columbia but for across Canada — to help the farmers

get their seed in the ground, to take — as farmers have done ever since

there were farmers — the risk on another growing year. We had to be

awfully careful, because the kind of loss which some of them had

experienced without insurance was insurable. To simply pick up their

losses was to throw mud into the face of those who had carefully looked

at their management skills and said: "Okay, we will insure." I'm just

saying we had to look carefully at what kind of assistance. Then we had

to look just across the border. The Peace River block, after all, has

an imaginary line called the British Columbia-Alberta border, and there

are economic dynamics that play in that entire area, and you cannot

simply distort one part against the other. So we had to take a look at

what Alberta was doing. Alberta was not picking up, through a special

program, losses that had been incurred by their farmers with crop under

snow. The reason why they weren't picking up any of these losses was

that a greater number of the farmers had insured.

The answer for us, then, was to find a way in which our producers

would follow suit and insure. They had had three bad years in a row.

There wasn't a lot of money around to insure. Certainly they couldn't

stand a fourth year of losses such as the ones they had in the three

years that just occurred. What became clear — and by the way, I don't

think that it was likely a perfect answer — out of all these dynamics

after you put them into the mix was this: the best thing for us to do

would be to find some way we could provide assistance, as Alberta does,

to help these people insure for the next year and still help them out

of their dilemma for the present year. So we found what it would cost

per acre to put the seed in the ground, with all of the attendant

costs, including fertilizer as I

[ Page 6313 ]

recall, which was about $30 an acre. If we provided

access to funds at $30 an acre and made as a prerequisite that in the

coming year they would insure the crop that was in the ground, which

they were anticipating, then certainly the kinds of losses that they'd

experienced would not happen again, at least not in this year. So we

made as a condition of the guarantee of these funds that they should

properly buy the insurance and the options available to them.

The total program is $3.2 million, $2.8 million of which will come

from this fiscal year. Where most of the money will come from is that

the government decided on your behalf to pay the interest on those

loans — not only that, but also to give them a rebate of 10 percent of

the loan if it was paid in the first year and 5 percent if it was paid

in two years.

That was the plan for the Peace River farmers. I heard some say it

was too little and too late. I heard some say that it's always too

little and too late. I heard some say thank you. I heard some say it

was a good idea. Today there was a letter on my desk from the chamber

of commerce of the area that said: "Thank you very much for the efforts

which you expended on behalf of our farm community." Those are various

things that are said. I think that somewhere perhaps down the middle is

the real answer. I wish it had been a little more. I think that's the

real answer: I wish it had been a little more.

Interjections.

HON. MR. SCHROEDER: They are 13 people who always say the same thing. You want their names?

So much for the Peace River farmers.

There are other provinces who tried to do different things with

agriculture's dilemma as far as farm credit was concerned. Some decided

that maybe they would experiment with a moratorium on debt. The end

result of a moratorium on debt simply meant that funding through

traditional lending institutions dried up. Would you as a banker lend

money to an agricultural producer...

AN HON. MEMBER: If I were a wealthy banker.

HON. MR. SCHROEDER: You would, would you?

...and run the risk of having a moratorium put on those funds to

distort entirely your lending portfolio? No, you wouldn't do it, so we

can't hold blame to the lending institutions for not wishing to do the

same thing. A moratorium on debt does not work. Predictable debt is

what will work. That's the kind of program that I am desperately trying

to implement; first of all to identify it, and then to implement it.

I'm waiting to hear from the hon. critic some suggestions as to what

source of funds there might be for exactly this kind of program.

Farm income insurance. If you took at the blue book for any given

year for farm income insurance, you do not get — and the former

Minister of Agriculture who now sits over there can tell you — an

accurate picture of what farm income insurance payments might be. The

insurance program is looked at in advance. You can't tell what the

demand will be on those accounts in any given year, so you put down

numbers which you believe will be adequate for that year. It is, after

all — I hate these words — demand-driven. Therefore if the experience

in any given year is somewhat more disappointing than what you've

provided, it simply means that you do have to come back to your

colleagues with a special warrant to provide funds which were not

anticipated in the budget.

The fact that there is $1 million less designated for farm income

insurance in this given year has nothing to do with the amount of funds

which will need to be expended under that program if the demand is

there. The FII program, after all, in these recent years has become

actuarially sound. It is an insurance program. It's a program for which

a premium is paid. The producer pays one-half of the premium and the

government pays the other half of the premium, and if the cost of

production exceeds the market return, then a draw on that account is

made to cover the difference.

[4:45]

The only criticism that I have heard of the farm income insurance

program in the farm industry is that they wish it wasn't necessary.

They would sooner have their returns from the market. I'd like to help

them realize their goals in that regard. But it's an actuarially sound

insurance program, demand-driven. The budgetary provision is simply a

forecast which might be bang on, might be over and might be short. Who

knows at this point?

She mentioned that the negotiations are tough, Mr. Chairman. I think

that you would not hold in high regard any management program which did

not constantly review the provisions of that program to see that it was

efficient. On the farm income insurance program, that's precisely the

mandate that has been given to those managers, and they are given the

instructions to root out any abuses, if there are any. I'm not saying

there are, but in the partial interest reimbursement program there were

abuses. We had to bring in special auditors to be sure that the

interest reimbursement was really targeted to agricultural endeavours

and not to someone's motor home that they used in Florida. We had to be

careful, and we had to hire extra auditors to be sure that every dollar

reached the place for which it was targeted.

But there is another down side on the FII program, and I would like

the member for Nanaimo (Mr. Stupich) to listen real carefully now. The

down side is one for which we may well have to find some alternatives.

We may have to find some alternatives in the program to do away with

the down side. Our farm income insurance program has been identified by

our foreign competitors as top-loading, to the extent where our

product, which flows into their markets, is injuring their markets and,

as a result, is subject to countervailing. That's the area in which we

are working right now.

Interjection.

HON. MR. SCHROEDER: We've told them it was actuarially sound.

They look at it as a highly identifiable toploading program, and

although their courts have not given their final decision, the fact

that it would attract scrutiny is a down side. Now that's with our

foreign competitors, but those are not the ones that create the most

difficulty for us. The ones that create the most difficulty for us are

the other provinces who have identified the FII program as a toploading

program and, hence, not just subject to scrutiny but, because of

scrutiny and following scrutiny, subject to having us eliminated from

other programs which may be established at a federal level, such as

tripartite stabilization for red meats.

As a result we have to take a look at the farm income insurance

program and see whether or not there is a better way of accomplishing

what it has accomplished. I've said it before and I'll say it again: it

has served a purpose. It has not

[ Page 6314 ]

served it perfectly, and I don't suppose anyone

ever pretended that it might. But it has contributed to stability.

However, in the year 1985 not all the dynamics are the same as they

were in the year 1975, and as a result we may have to look at new ways

of doing similar things.

The member has a specific criticism on the service to

horticulturists. There's no way I would try to defend that kind of

service; I just have to say that's not our goal. Our goal is not to

give that kind of service, and therefore we're going to need to do a

little better. I think the smartest thing I could say is that I'm

sorry; we need to do better. However, we do have an emphasis on

extension in the ministry. That emphasis is continuing, and in spite of

the downsizing which took place in 1983, we believe that we are doing

an adequate job of extension. However, whenever we don't, please draw

it to our attention, as you have done; I thank you for that. We want to

do a good job in that area.

The ALDA program has not been withdrawn. The ALDA program does

exist. I think the member knows that the ALDA program is a revolving

fund. It's like a sinking fund from which loans are made and to which

repayment is made with interest, and hopefully that that fund will grow

and become a greater influence as time progresses. It's about $3

million there now. I think I answered in question period the other day

in this manner: the funds are there, they're available on a first-come

first-served basis, and the applications for this year already exceed

the money that's there. It's predictable. Three million dollars, in my

humble opinion, is not enough in that fund, and if we had had a year in

which revenues were a little better than they are right now, it may

well have been that my colleagues would have listened to a proposal

that I'd put forward to double the amount of money in that fund.

However, not this year. We'll try again in the next year.

However, if the money was not there for tree replanting or for

orchard renovation or, for that matter, for vineyard replanting, it was

simply that the applications arrived at the office after the money was

already appointed for another purpose. That's what my ministry tells

me. Other than that, the $1.6 million which was available in 1982 —

which according to the numbers of the critic went down to $0.5 million

and now is down to $0.2 million.... The ministry simply says that the

applications for that purpose did not arrive in the office in time to

be eligible. The program is in place.

MS. SANFORD: Going back to that last point, I just wanted to

inform the minister that it was in 1983 that moneys were no longer made

available to farmers who wished to replace their orchards. That has

been discontinued. There are still moneys available for some site

preparation and so on, but not for the expensive part of the procedure,

and that's why they've had such a drop in the Okanagan. That's the

information that I have. I've checked it out with your ministry. I

have, so the minister is not as informed on that as he might be.

There are a number of other issues that I'd like to raise, and I

hope I can go through some of these rather quickly. The auditor-general

this year did a thorough accountability reporting of the Ministry of

Agriculture and Food, and has been quite critical about some of the

operations of the ministry. One of the things that she points out — and

I just wanted to mention this — is that the annual report fails to give

the reader a clear indication of what the ministry expects to happen in

the future, and what the ministry intends to do about it. I certainly

would concur in that. There really is not the necessary planning taking

place in the ministry to give the directions to ensure the survival of

farms in British Columbia. I think that's made clear simply by the way

in which they have been cutting back on programs. It's fine to have a

food show and it's fine to fly to China, but really I think that the

auditor-general is quite correct in her criticism of the accountability

and the lack of planning within that ministry.

The other thing that I'd like to draw to the minister's attention

and question him about relates to his response to the auditor-general,

which I'd like to quote because I think it's important enough:

"Some existing programs have developed over a period

of years. They respond to the particular problems of different historic

periods. Many of the financial programs and economic regulations, for

example, were implemented primarily in the mid-1970s in response to

depressed market conditions. Consequently these programs are aimed at

'presentation' or 'maintenance' of the agricultural sector, and that

must be reviewed in light of emerging economic opportunities."

I'd like to know what these emerging economic opportunities might

be, and I'd also like to know what the minister intends by reviewing

the maintenance of the agricultural sector at this time. To me, it

means only one thing, and it worries me. I think it means further cuts

in terms of partial interest reimbursement programs, farm income

insurance, extension services, whatever; that these are the emerging

economic realities the minister wants to look at to review all of the

existing programs, which, as I say, have already been cut.

There is an issue which has grabbed my attention, Mr. Chairman,

relating to an area that the government is not paying any attention to

at this time. I've raised it already in the Legislature during

statement time. It relates to the preservation of soil in this

province. Soil erosion and soil degradation is a very serious problem,

according to Senator Sparrow in the Senate report on soil erosion

across Canada, and one which merits the immediate attention of the

various ministries of agriculture and governments across Canada. I

don't think we can afford to ignore this problem, no matter what the

finances of the province at this time. If we allow the continued

erosion and degradation of soil in B.C., then we're not going to have

the stability that the minister referred to earlier. We're not going to

have the agricultural community providing us with any food to speak of.

It is a serious problem, and one that's going to require education on

the part of the farmers. It's certainly going to require government

money, because we cannot expect the farmers of the province to take

care of the erosion problem.

It's not just land being removed from the agricultural land reserve

that we have to be concerned about. It's not just losing 22 acres here

in Saanich in the middle of an agricultural area; even though that 22

acres may not be the best productive land in the world, it does put

additional pressures on the surrounding areas. It's not just issues

like the Colony Farm, which I understand the government is now intent

on selling. If they are selling it at the going price for land in that

area there's no way any farmer is going to make a living from it, which

will only put additional pressure on the Agricultural Land Commission

to remove that land from the agricultural land reserve.

[ Page 6315 ]

I hope the minister has been following this issue. I know that

Colony Farm is now under the jurisdiction of the BCBC, but it is such a

jewel of agricultural land in this province that I do not think we

should run the risk of selling it at the prices which are obviously

going to be asked. I think it will be about $5 million to buy those

parcels. I understand the Colony Farm is going to be sold in two

parcels. It's not just that, Mr. Chairman: because the farmer is

obviously not going to be able to make ends meet at those rates, no

matter what he tries to grow on that piece of land, I think pressure is

going to come to have that particular piece of property removed from

the agricultural land reserve. We made that suggestion when Colony Farm

was first disposed of to BCBC. We felt then that it should go under the

jurisdiction of the Agricultural Land Commission and not be left to

BCBC, which at this point is interested in selling the land to get some

more moneys into treasury, I guess, to try to save the financial hide

of the government as a result of all the economic mismanagement over

the last three years in particular.

[5:00]

Mr. Chairman, this issue of erosion of land is one that I have

raised with the minister before. I can only impress upon you again the

urgent need for you, Mr. Minister, to convince your government that no

matter what the finances, unless we begin some work in terms of

protecting the soil from the degradation that's taking place through

overfertilization, through lack of liming and all these other problems,

as well as the erosion that takes place because of the high levels of

rainfall in this province, we won't have any agricultural base at all.

In 70 years, one-half of the topsoil on the Prairies has disappeared.

That topsoil took over 10,000 years to form. That's the kind of thing

that's happening right across Canada, British Columbia included. There

is a lot of erosion up in the Peace River area. There's erosion

everywhere.

I would like to see this minister make this an issue that he speaks

about. I've not heard him speak on the issue. He responded the day that

I raised it in the Legislature under the members' statements, Mr.

Chairman, but I don't think he's made it an issue with the farming

community. I don't think any educational program has been established.

I don't think that anything more than what normally takes place under

the ARDSA program — ditching and irrigation that's normally available

under ARDSA — is taking place. It's a serious issue, and I can't

emphasize enough how strongly I feel about the need for action if we're

going to retain that very minimal amount of land that we have in

British Columbia capable of producing food. All we're looking at is 4

percent to 5 percent. I'll leave that, Mr. Chairman. I'd like to say a

whole lot more.

I'd like to raise the issue with the minister of foreign ownership

of land; that is absentee foreign ownership. I wonder how many years

I've spoken about this issue, Mr. Chairman. I've been here 13 years

now, or nearly 13, and I've raised it every year that I can remember. I

asked the minister not long ago whether or not the government had

decided to take any action on the foreign ownership of land. He

indicated that the government had not. I understand that up in the

Peace River alone about 30 percent of the agricultural land is now

owned by absentee owners, and that large tracts of land owned by

absentee foreigners are lying idle. It's not being put to any use

whatsoever, and, as a matter of fact, presents a problem for the

existing farmers because of the weed growth and that kind of thing.

After raising this issue for 13 years, I think it's high time I got

through. Farmland is too important a resource....

MR. WILLIAMS: All land is.

MS. SANFORD: When I initially raised this it was all land;

I've now given up to the extent that I'm only talking about

agricultural land at this point. Maybe we can get 4 percent at a time

on this issue.

The government refuses to move on it, and I don't know why the

minister refuses to take any action on this particular issue. What

justification is there for allowing absentee foreigners to invest in

our precious resource and then when they feel like it, leave it idle?

We have no control. The farmers up in the area who have been brought in

as managers for some of the existing farmland apparently have an almost

impossible time communicating with the absentee foreigners. Most of

them in the Peace River are from West Germany, by the way.

The next issue, Mr. Chairman, relates....

MR. WILLIAMS: Get him to answer.

MS. SANFORD: Well, I'm going to make a note as to whether or

not he responds to that. I don't see how they can possibly avoid that

issue any longer.

Mr. Chairman, I'd also like to raise the issue again of aquaculture.

There is a provision under this year's estimates for some moneys to be

expended through the Ministry of Agriculture in the area of

aquaculture. Since the best oyster growing area in the world is in the

Baynes Sound area, within my constituency, I'm interested in the kinds

of moneys that are going to be made available. There is no specific sum

listed in there, at least that I could determine. How much money will

be made available under the aquacultural program that's mentioned in

the estimates this year? Will it be directed mostly at fish-farming?

The minister mentioned fish-farming and the excellent work that has

been done in Norway on those projects. How much of that will be

directed towards improving the production of oysters and the processing

of oysters within the province of British Columbia?

[Mr. Ree in the chair.]

What we have now, I think, is a total of $5,000 allocated out of a

nine point something billion-dollar budget to the four or five areas

now under the public domain in terms of oyster production. That $5,000

is not even going to be enough money to have the people within the

Ministry of Environment travel around to have a look at it once, let

alone take care of the public oyster-growing areas.

How much longer do those oyster growers have to wait before they are

brought in under the Ministry of Agriculture and Food? They've made

this request for a number of years. It still hasn't happened, so I'd

appreciate the minister's comments on that.

HON. MR. SCHROEDER: Mr. Chairman, I got as far as the ALDA program. I'm going to....

Interjection.

HON. MR. SCHROEDER: I'll move a little more quickly.

The member expressed some concern about competition with a U.S.

product. The competition with the U.S. product is one which serves as a

very valid indicator as to whether or not we really have a handle on

our own costs of production.

[ Page 6316 ]

Whenever it's the case that, as the member has correctly said, the

cost of production for apples is 14 cents and the return from the

market is 8 cents, leaving a spread of 6 cents — and particularly if

Washington state is selling at 8 cents and turning a profit — then all

of a sudden....

Interjection.

HON. MR. SCHROEDER: Would you just be quiet until you get the floor?

If you have competition which has established the price at 8 cents,

then all of a sudden there's an indication that you have to take a long

look at your own costs of production. I think that I have an obligation

to assist in that regard and help the fellows look at the costs of

production. Therefore the competition of U.S. products is a subject

that's close not just to my heart but to every producer's. By the way,

this year the spread between the cost of production and the market

return might be even greater than 6 cents.

If you are in Hong Kong on the day the product arrives and you look

at a product which we believe to be the best and the greatest,

first-class, best quality.... We believe it to be that here, but when

you see it in the actual market and it doesn't compare favourably — not

to say it's the worst, but another product is picked up first — then

not only are we not competitive even at the same price, but we cannot

compete in the marketplace even at a reduced price. As a result the

returns to our producers are even less. I'm concerned about it, very

concerned.

The mention of soil conservation.... Here's an intraministry memorandum:

"Soil conservation has been identified as an important program

for which funds will be provided under the upcoming ARDSA agreement. The main

areas of concern are soil erosion, ponding, compaction due to excess water —

particularly in the Fraser Valley — soil erosion due to spring runoff and summer

storms in the Peace River region."

It has not escaped our attention entirely, and, although it's a year in

which we don't have all of the money to do exactly as we wish, you need

to know that the ministry is aware and is addressing it.

Now then, the member was talking about a number of processing plants

in the province of British Columbia that have shut down. It's

absolutely correct. If a processing plant cannot put a product on the

market in the size or shape that the market wants it or at the price

that it is willing to pay, then you can push all kinds of product

through that plant and it will eventually meet the same fate as Swan

Valley Foods, in which we have some ten and a half million dollars of

taxpayers' money invested, which plant has been inoperative for yea

these many years, and for which we have been trying to find someone who

would operate it. You've got to operate it where it is; you can't move

it. The best offer that we have is $520,000 — half a million dollars, a

little better — on a $10 million cost. It's the kind of plant that

shuts down. It shuts down only because.... Although dynamics can change

in the 10-year period from the time of its inception until now,

nonetheless it's the kind of plant that is shut down when there is not

even a hope that its product can win in the marketplace.

The member says she wishes we would pay more attention to the

producer and less attention to the consumer or the export market — less

attention to marketing, more attention to producing. I think that we

have to do them in tandem. It wouldn't be wise for me to say we should

abandon the producer in favour of marketing, because you have t