[ 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.

On 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. Peck — the right to fix the terms and conditions in any respect when they affect 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.

On 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, long English cucumbers, raspberries, apples — the food industry in this 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 to have something to sell. However, I think that it would be just as ludicrous to say let's concentrate on production without making sure that what we're producing will either be consumed in the domestic market or that at least there will be the export market for it.

[5:15]

The member suggests that we should have more promotion. Good suggestion, and I thank her for it. It's the reason why the market development program is in the budget this year. There's about $3.3 million in the market development sector, and it may be insufficient; I don't know. But at least it is a start, and we have identified programs for that development.

The auditor-general report. Given the fact that it was a comprehensive audit, I thought that the ministry did very well in the report. The member suggested that there was an awareness of new direction for the ministry for the future. Actually, what was said was that the awareness of the new direction had not yet reached the level of the people out in the field. Well, sometimes direction is new and sometimes new direction is not communicated immediately. If we have failed in that regard, we will try to do a little better. They didn't say there was no new direction. What they said was that the awareness of the new direction had not reached the field.

She said she was afraid of the word "reviewing," because she was afraid of what it might mean to existing programs. For me, reviewing means that you take a look, you identify problems if there are any, and you target whatever resources or levels of support you have. You target that support to the area of highest yield so that you'll have as healthy an industry as possible.

You're right: Colony Farm is in the hands of the B.C. Buildings Corporation, only because they are the people who hold most of our property. I think we have 135 pieces of property that are held by the Land Commission itself. The Colony Farm property is in the land reserve. I wish it to remain in the land reserve, and it will be sold for agricultural purposes. It is under the control of the Agricultural Land Commission; although they are not owners as far as title is concerned, it's in the agricultural land reserve and under careful scrutiny of the commission.

Would it be a good place for an expanded greenhouse industry? It's close enough to the market. It might be an excellent place to have the kind of greenhouse or glass-house development that they have, for instance, in Holland, where they have acres and acres of land under glass. I think that not only would it be ideal, it's close to most strong sources of energy, but better than that, it's close to the market. Freighting would not be a major problem.

Erosion of land. The member makes a good suggestion. It's a valid concern. Erosion is a factor. I cannot validate the 50 percent number that you use for the land that has been lost in the prairie provinces. If it's eroded through wind and weather, then it may leave one place but it must land someplace else. My experience in Regina was that many times in a dust storm, much of that soil that was being eroded I found in my own living room on the furniture. That was my experience. In any case, it's surely blown away from one place but it needs to be deposited some other place. It's a valid concern, and I commend the member for it. It's a concern of mine as well, and we will be addressing it hopefully in future years to an even greater degree than we are now.

[ Page 6317 ]

Foreign ownership of land. There is an up side to foreign ownership, and that up side is this. We have land that we are preserving for future use. It's land that we have, much of it in the agricultural land reserve. It's more than we require at the moment; therefore, there is land that needs to be held for future production. For increased population, we'll need more land to produce, at least if technology remains the same as it is now. However, if you can t use it for production now, then it must be held. It needs to be held by someone. The up side is that if someone wishes to invest their foreign dollars — or their dollars, foreign to us — in this land and hold it in an unproductive state, you've got to admit one thing: at least it is held. As long as it is in the ALR, then we don't have this same fear. So, that's foreign ownership.

Aquaculture was your last point. At its outset in this firs year in which it's under the jurisdiction of Agriculture and Food, we will be targeting first of all toward fish-farming, not to exclude the rest. That will give you an idea of where the dollars identified in that program will be targeted.

MR. WILLIAMS: The minister says that the land will be held, and aren't we fortunate indeed. The land won't go anywhere, in terms of foreign land ownership. He's telling us: "Aren't we fortunate? The land will be held. Maybe we don't need it in production now, but it's okay, it will be held." Held for what? Ransom? Higher prices when our young people want to go into farming? Some service that is to the community; some service that is to future farmers of British Columbia.

The minister might just look at the models that are around elsewhere of successful administrations. Why not look at Sweden? Since 1916 Sweden has not allowed foreign ownership of its land, its farms, its forests, its major industrial plant. You can barely find an economy, especially a small country, that has done so well. Can't there be a lesson there for us? Wouldn't the minister be better off, rather than checking the price of tomatoes in Hong Kong and walking the Chinese Wall, in looking at better models, successful models, in other parts of the world if he can't stand it in British Columbia? It just doesn't wash.

Beyond that, there's a basic question of maintenance of these lands. I think the Minister of Agriculture and Food has some obligation to look at what other provinces and other jurisdictions do there as well. It isn't good enough to let agricultural land go to weed, and that's what happens frequently with foreign absentee owners just sitting on it waiting for future prices or sending some future generation of theirs here decades hence. The province of Prince Edward Island has looked at the question of minimum maintenance. When one owns agricultural land, there is an obligation, in terms of holding that land, in my view, to maintain it — maintaining its productivity, and avoiding its creating problems for other active farmers in the immediate neighbourhood or region. That's a reasonable idea. There's just more to it than this. We get this kind of superficial hopping over these things, and the question of foreign ownership continues to be a growing problem in British Columbia.

It's not an advantage to the people of British Columbia to have absentee landlords that don't maintain the land or look after it or contribute to its productivity. That's no advantage to British Columbia, and bringing in their dollars is of no particular advantage either, in terms of holding that resource. So the minister nods and agrees that it isn't a great advantage.

Well, if it isn't a great advantage, why don't we change it? Why don't we bring in legislation?

The member for Comox has been arguing for legislation and began the process in terms of requiring the reporting of citizenship with respect to registering of title some years ago. But clearly the next step is to end the process of alienating land in terms of foreigners who are not productive, not producing and not working the land themselves.

MS. SANFORD: Mr. Chairman, the minister said that he wanted to investigate the costs of production in British Columbia, because he felt that the costs of production were probably too high. He talks about the return, and I've got the figures here for apples. Eight cents is the net market return, whereas the cost of production is 14 cents, so he says we've got to investigate the cost of production. I wonder, when he's doing that, if he'd also look at why it costs 49 cents a pound if you get the apples on sale in British Columbia.

MR. GABELMANN: That's the key problem.

MS. SANFORD: That is one of the key problems, certainly, but there are a number of other things that I could tell the minister about with relation to the cost of production as compared to Washington.

The irrigation water which is made available to the farmers in the United States is made available at a cheaper rate than it is in British Columbia because of the Columbia River Treaty that you people introduced all those years ago. It's cheaper for them to purchase energy; it's cheaper for them to purchase fertilizer; it's cheaper for them in terms of property tax. The property tax that you people are applying doesn't help those farmers one iota either. You don't have to look very far to find out what the costs of production are all about. But it's that huge increase that makes British Columbia food difficult for British Columbians to buy if they are on UIC or on welfare.

The ARDSA program. He said that the ARDSA program is going to provide some moneys to solve the problems of erosion, etc., etc. The ARDSA money is the same as it's always been. There's no more money in ARDSA this year than there ever has been. So what does he mean in terms of solving the problems there?

He talked about soil eroding, blowing from one place to another. Well, at least it settles on another place, he says. But I hauled out my book here to give him some additional figures, which I hadn't intended to do. This is on the international scene: the Yellow River in China carries out to sea 1.6 billion tonnes of soil a year; the Ganges River in India deposits 1.5 billion tonnes of soil a year in the Bay of Bengal; the Amazon — 363 million tonnes; the Mississippi — 300 million tonnes; the Nile — 111 million tonnes. Now this is what's happening around the globe, so you might talk about it blowing from one place to another. But here we have a lot of erosion because of the rivers and the rainfall, and that really does not solve any of the problems with respect to erosion here in British Columbia. I don't think that the government is very serious yet about this problem, but I shall keep raising it because I am concerned about it.

Interjection.

MS. SANFORD: Yes, I suppose — make more room for them to put down pavement. Is that it? More housing?

[ Page 6318 ]

I have been concerned for a number of years about the use of pesticides in this province. I recognize that under the present conditions the farmers have to rely on the use of pesticides in order to have a productive crop. I was listening just this morning to the concern that was expressed by the Vancouver residents about the application of 2,4-D in the parks in Vancouver. People are up in arms. They're outraged that the parks board over in Vancouver would be applying 2,4-D to their parks. Apparently some children have taken ill as a result of this, according to the parents involved.

[5:30]

[Mr. Witch in the chair.]

There is not nearly enough work being done through the present government — either federally or provincially — with respect to alternatives to the use of these massive applications of pesticides that we use year after year. I do want to draw to the attention of the minister one particular evaluation that was done through the auspices of Agriculture Canada. It is an evaluation of the commercial cost of a sterile insect release control program for the coddling moth in British Columbia. I don't know if you've seen this. This is relatively new. It's been out this year. The findings of this particular survey, I think, are quite unique and are something that the minister and his ministry should follow up on.

They talk about the cost-benefit analysis of the commercial feasibility of sterile insect controls. It says:

"When all costs are included, the sterile insect control costs during the 1977 pilot study were $569 per hectare treated. The cost to growers of SIR controls, expressed on the basis of average costs over a six-year time period (assuming three years of SIR release and three years of monitoring) during the pilot study in 1977 would have averaged $301 per hectare over six years. The equivalent cost today for commercial SIR would be $382 per hectare over six years."

It goes on for a number of pages here. Mr. Chairman, what this study ends up concluding is that it is a viable alternative at this stage to get involved in programs other than the use of the herbicides and the pesticides that we have been relying on so heavily over the years. It is high time. I think the population of British Columbia is most concerned about the continued use of these particular products, not only in the agricultural industry but in forestry and other areas as well. I would commend this particular study to that minister and recommend that he go through it. I'm not going to take any more time to go through the figures. But it does indicate that it is quite feasible at this stage to go to some of these alternatives. As far as I'm concerned, it's high time.

I will take my place at this moment, Mr. Chairman, and see whether or not the minister has some further responses that he would like to give, particularly as far as that ARDSA program is concerned and the program in terms of preserving agricultural land from erosion and soil degradation.

HON. MR. SCHROEDER: The question of the member on the control of codling moth is one example of an area in which the ministry is not just active.... The ministry believes they are, and they have been recognized to be, leaders certainly in Canada in integrated pest management. Codling moth is one example, but there is another example: the biological control of knapweed, which is exactly the opposite. One is the control of the pest itself, and the other is using pests to control a weed; in which case you almost would not feel at liberty to call it a pest, would you? Nonetheless, the ministry is not just active but is recognized as being in the forefront. I don't believe for one moment that they've gone as far as they could go, or even as far as they should go; nonetheless, they are active and are leaders at the moment.

As for the question on soil conservation, I did respond to that in one of my earlier interventions. I think that soil conservation is an area we as a ministry could address and put forward even more efforts. That's not to excuse the activity or inactivity of the past, but simply to say that it's an area that, after all, deserves more attention, and I intend to give it more attention.

MS. SANFORD: Mr. Chairman, there are a number of other issues. One of them relates to the fact that this minister is responsible for agricultural aid to developing countries and that no effort has been made at all on the part of the provincial government to assist in Ethiopian famine relief. We had the Minister of Finance (Hon. Mr. Curtis), in response to a question I posed to him the other day, indicate to me how much money has now been committed on behalf of the provincial government. Although it's in estimated figures, what I've worked out is that the total amount to feed the starving millions in Ethiopia and on the African continent is at this stage $12,411. That's the commitment on the part of this government. That's disgraceful. I notice that Saskatchewan, a province that is smaller than ours and has far less in terms of resources and ability to raise money, has committed $8 million to the Ethiopian famine relief fund. When you put that up against $12,000....

I have to bring to the minister's attention that he is responsible for that program of agricultural aid to developing countries. It too is a program that has not received much attention from this government. In fact, the funds that were established a number of years ago were "recaptured." I would like to know what sort of effort the minister is making with his cabinet colleagues in terms of getting a meaningful contribution to Ethiopian relief. How about just half of what the little province of Saskatchewan is doing? That's not very much. Half of what the little province of Saskatchewan has been able to come up with would, I think, be meaningful; $12,000 is not, Mr. Chairman. I would like the minister to make a comment on his efforts on behalf of Ethiopian famine relief. He is responsible for that program of agricultural aid for developing countries.

Mention has been made a couple of times about the problems that B.C. and Canadian farmers are having with imports. We have now been informed that there will be an import duty imposed upon raspberries shipped into the United States. We know about the attempt by the federal government of the United States to impose additional charges on the import of pork, and that's only the tip of the iceberg, I suspect, in terms of the problems that will develop over import duties and sending goods back and forth across the border.

People like the orchardists rely heavily on being able to sell their products in the United States. I have some concerns because all in all, if the Premier of the province has his way and we have free trade established between Canada and the United States, as the Premier has called for on many occasions, then we won't have to worry about saving the soil or an agricultural land reserve or anything else, because none of the farmers will survive, or very few will.

[ Page 6319 ]

I would like to know from this minister what his position is vis-à-vis the Premier's position on free trade. He says he disagrees with his colleague the House Leader, the member for Vancouver–Point Grey (Hon. Mr. Gardom), about marketing boards.

MR. WILLIAMS: And the Premier.

MS. SANFORD: I assume he disagrees with the Premier on marketing boards too. But I would like to know where this minister stands with respect to the Premier's position on free trade and the way he promotes free trade at every opportunity. I wonder if the minister would comment on that.

HON. MR. SCHROEDER: Mr. Chairman, first of all on agricultural aid to developing countries, the budget provision in this year includes 18 different projects in various parts of the world, through various agencies like CUSO, the Canadian Hunger Foundation, the Canadian Lutheran World Relief, the Canadian Organization for Development Through Education, the Red Cross, Food for the Hungry, the Frontiers Foundation, Inter-Action, International Association for the Transformation of Man, Operation Eyesight Universal, Oxfam, UNICEF, the Unitarian Service Committee, World Concern, YMCA, etc. The total provision in this year's budget for the programs under my ministry is $190,000. Again, when you think in terms of a world that's hungry, it is not a lot of money. When you think in terms of stacking dollars that you need for this kind of program on top of a deficit that already exists, and if essentially the bottom line would be to borrow more money so as to make a contribution to this program, you'd have to look long and hard at it.

My heart is soft on that kind of stuff. You know my background. As a result, I would be prone, perhaps, to overdo the aid — not just agricultural aid to foreign and developing countries, but aid to those who cannot in any way provide for themselves. But I have to work with the guidelines that are established for us, and I have to work with policies that are ours and to which I subscribe. I have in regard to this a wish that is almost constant: I wish I had more dollars to do this kind of thing than I do have.

When you come to the overall budget provision for agriculture, in a year of declining revenues we have managed to do not too badly. The overall agricultural budget is still only a little short of I percent of the overall budget, and certainly if you look at that in terms of the fact that our industry during the down time was the number two industry, as you've referred to on several occasions, it would suggest, by straight comparison, that it should have the second-highest support out of government. The fact is, it's made up of entrepreneurs, private industry, who over the years have resisted the kind of subsidy that is common even in other countries. They wish to remain private, to remain independent. Although I believe it is a legitimate and expected service of government to help them in their extension, nonetheless they wish to be quite independent. I can't go to sleep entirely comfortable with what I've been able to accomplish for the farmers; nonetheless, the amount of support for them has been constant.

[Mr. Kempf in the chair.]

The question on import duties, on agreements for import and export, the question of are we tough enough at the GATT table; I don't think we are. When we reach agreement between nations as to exchange of product, I'd like to see us be a little tougher. When you're talking in terms of the policy — or an emerging policy, if necessary — on free trade, I'll allow the Premier of this province to make those statements at his liberty. I'll simply reserve statement until such time as policy is clarified for government.

Those are the questions that I think the member left for me, Mr. Chairman.

[5:45]

MS. SANFORD: The minister is going to wait for the Premier to make his policy clear with respect to free trade. I think it's very clear. It's been clear for a couple of years. Every chance he gets, he calls for free trade.

The minister obviously is not prepared to state his position on the issue of free trade, so we're just going to have to wait, I guess. I only hope he doesn't follow along with the Premier on this, because of the adverse impact it will have on the agricultural community of this province. I don't expect the minister to say anything in opposition to the Premier, though. I think he will go along, as he has with the other programs that have been introduced. The other emphasis in terms of expenditures in this province: I expect the minister will go along with the Premier on that, as he has on every other issue. I haven't heard the minister come out strongly against any of the statements made by his government, even those that are in direct conflict with the interests of the agricultural community.

But, Mr. Chairman, we have to have a government and a minister that will ensure the economic survival of those farmers. I can't emphasize that often enough. I really think that that is essential. We have to have a government — and this is almost as important, in my view, and almost as urgent — that is committed to ensuring that we have a soil capable of producing food. In other words, the issues of soil degradation and soil erosion are two issues that the government has got to address immediately. The ARDSA program as it is currently set up is not going to do the job, and the minister knows that. He mentioned ARDSA, but the ARDSA program is what it has been all along.

We have to ensure that farmers have access to moneys. Farmers have to borrow a lot of money. They have to be assured that they can plan based on the kind of interest that they're going to be paying over the next few years, so that they can plan their future production and their expansion based on that interest rate. When over 27 percent of the operating costs of farms goes to interest, then I think you can recognize that we have a problem. The partial interest reimbursement program should be, at the start and as a minimum, set back to 2 percent below prime, and that $10,000 limitation should be lifted, in my view. The farmers are requesting it, and I certainly agree with them, particularly in view of the economic circumstances that so many of them find themselves in.

I would encourage the minister to work on the problems that exist at home before he spends any more time traveling. I think that the amount of time and effort and direction that the minister is taking at this time in traveling the world is not warranted in view of the serious problems that exist here at home with the farmers. Extension services have been cut back and they must be expanded. I went through that earlier.

When the minister looks at costs of production, he must took more at the marketplace costs and the differential that

[ Page 6320 ]

exists between what that farmer gets and what is charged the people at the supermarket. It's very difficult for people on low incomes today to be able to provide themselves with a nutritious diet by buying B.C. produce. That too relates to issues like the income that Human Resources recipients receive, and the large numbers of people who must survive on UIC payments.

I think the minister must take a very strong position with respect to free trade. He must oppose his Premier on that, in the interests of the agricultural community. The minister should be drawing up legislation that would put an end to absentee foreign ownership of land that is capable of producing food. It's high time, overdue, and I don't know why the minister has not acted before now.

These are just a few of the issues. I did not really pursue with the minister the moneys that have been set aside for the aquaculture program. We didn't get any figures out of the minister, as I recall. Perhaps he'll have an opportunity to give those later.

The House resumed; Mr. Strachan in the chair.

The committee, having reported progress, was granted leave to sit again.

Hon. Mr. Gardom moved adjournment of the House.

Motion approved.

The House adjourned at 5:53 p.m.