Assemblée législative de l'Ontario

MINISTRY OF AGRICULTURE AND FOOD

CONTENTS

Wednesday 27 May 1992

Ministry of Agriculture and Food

Hon Elmer Buchanan, minister

Len Roozen, director, policy analysis branch

Grahame Richards, assistant deputy minister, food industry division

Bob Seguin, executive director, policy and programs

Ken Knox, assistant deputy minister, agriculture and rural services

Norris Hoag, executive director, education and research division

Rita Burak, deputy minister

Richard Kirsh, manager, financial planning unit

George Collin, executive director, laboratories and inspection services

Henry Ediger, executive director, crop insurance and stabilization

STANDING COMMITTEE ON ESTIMATES

Chair / Président: Jackson, Cameron (Burlington South/-Sud PC)

*Acting Chair / Président suppléant: Carr, Gary (Oakville South/-Sud PC)

*Vice-Chair / Vice-Présidente: Marland, Margaret (Mississauga South/-Sud PC)

*Bisson, Gilles (Cochrane South/-Sud ND)

*Eddy, Ron (Brant-Haldimand L)

*Ferguson, Will, (Kitchener ND)

*Frankford, Robert (Scarborough East/-Est ND)

Lessard, Wayne (Windsor-Walkerville ND)

*O'Connor, Larry (Durham-York ND)

*Perruzza, Anthony (Downsview ND)

Ramsay, David (Timiskaming L)

Sorbara, Gregory S. (York Centre L)

Substitutions / Membres remplaçants:

*Cleary, John C. (Cornwall L) for Mr Ramsay

*Hayes, Pat (Essex-Kent ND) for Mr Lessard

*Villeneuve, Noble (S-D-G & East Grenville/S-D-G & Grenville-Est PC) for Mr Jackson

*In attendance / présents

Also taking part / Autres participants et participantes:

Arnott, Ted (Wellington PC)

Jordan, Leo (Lanark-Renfrew PC)

Clerk: Greffier: Carrozza, Franco

The committee met at 1541 in committee room 2.

MINISTRY OF AGRICULTURE AND FOOD

The Acting Chair (Mr Gary Carr): It's my understanding that we have two hours and 40 minutes left, and we're looking at some of the votes on 101. The minister yesterday, I guess, received some written requests for answers, and I believe the minister is going to start off with some of those replies.

Hon Elmer Buchanan (Minister of Agriculture and Food): I believe, Mr Chairman, that both opposition parties had questions around the issue of ethanol and its status. There was a specific question from Mr Cleary, and I've asked Len Roozen, director of the policy analysis branch, if he would give us an update on the ethanol industry and if possible, if he could touch on the specific project that Mr Cleary was asking about.

The Acting Chair: If you could just state your name for the record right now.

Mr Len Roozen: Thank you, Mr Chair. My name is Len Roozen. I'm director of policy analysis branch for the Ministry of Agriculture and Food.

As the minister indicated, there were a couple of specific questions related to the issue of ethanol and I'd like to address both of them as well as provide a general update on what the ministry has been undertaking in terms of developing appropriate support for ethanol.

First of all, with respect to the specific questions, one question on vote 101. Question 9 concerned the status of fuel ethanol strategy. Is this part of the ministry's rural development plans? Is there any funding from the Ministry of Energy, Ministry of the Environment or Ministry of Industry, Trade and Technology under their development in support of green industries mentioned in the budget?

With respect to the three strategies, they are on separate tracks. The ethanol strategy is being coordinated by myself in my role as chair of an interministerial committee on ethanol. That committee -- I'll refer to it in a couple of seconds -- comprises a number of ministries which have an active interest in the topic, so it is actively trying to develop some strategies. At the same time, the community development initiatives are being developed by the Minister of Municipal Affairs, and in that process the Minister of Municipal Affairs has not targeted ethanol as an explicit initiative for community development.

Nevertheless, it is quite likely that suitable ethanol initiatives might come forward and be able to be fitted within the various initiatives that are under development as part of that package. Specifically, there are a couple of initiatives which the Minister of Municipal Affairs has referred to -- the community bonds and the community loans initiatives -- which may well be suitable for tying together with some initiatives in the area of ethanol. But those initiatives would first and foremost be driven by identified clients, not by the ministry itself.

With respect to the green industry strategy, the Ministry of Energy and its other coordinating ministries are pulling that strategy together and it too is in the development phase. It is not yet at the stage where there are specific projects identified. Nevertheless, again ethanol as a potentially green product has the potential to see some development initiatives take place within the green industry strategy.

In regard to some of the activities that are currently happening with respect to the Ministry of Energy's involvement with ethanol, it is currently actively involved in a number of projects. Those would include some research into whether ethanol from waste paperboard has potential. Second, they're actively participating with this ministry in a study of the technologies that relate to the Seaway Valley Farmers initiative, the PARTEQ technologies, to establish whether or not those technologies might suitably be employed in a cost-effective way in the production of ethanol. Third, the Ministry of Energy already has some work under way in the area of willow tree research.

The other specific question that was raised was under vote 104-1, education and research. Farmers in eastern Ontario are looking for government assistance for the development of a pilot plant for ethanol production. The question was, "Can the ministry indicate that the government will provide the necessary funding to help start the pilot plant?" By way of background, the project in question is the one sponsored by the Seaway Valley Farmers Energy Cooperative and that group, of course, represents a number of farmers in eastern Ontario.

It has two specific components to its proposal. The first of those is a demonstration project which uses the unique technologies developed by the Partners in Technology at Queen's or PARTEQ technology centre. That project is aimed at putting into place a five-million-litre facility which would demonstrate that their unique technology is capable of general application in the production of ethanol.

The second component to that project is the 15-million-litre, full-scale ethanol facility. The way in which the review of that project and the requests that go with it are being handled is that this group as well as many others was invited to participate in a consultation held by the interministerial committee which I chair. That interministerial committee was attended on April 29 and 30 by something in the order of 25 to 30 presentations from bodies interested potentially in the ethanol industry, and Seaway Valley and the various participants that the group represents were all invited to participate.

They gave us a full synopsis of the kinds of activities that those projects would entail. There was an indication at that presentation that there might be a role for government to play in providing some support for feasibility studies related to that project. Those requests, along with all the other requests, because the consultation did yield a number of proposals and a number of different opportunities for ethanol production in Ontario, are all being assembled and are going to form the basis for a full consultation which the ministry will hold after they have been properly coordinated.

The individual requests that relate to the Seaway Valley project itself have not been made explicit in the sense that there's no specific request for assistance; rather there was a suggestion that there might be a role for government to play in financial participation in the feasibility study. We're getting together with the group to identify the specifics of that request and then to form an appropriate response to it. Again, that will form a subcomponent of the full report, based upon our consultations, which will then be turned into a discussion paper and taken for public review.

The other thing I would point to with respect to that particular project is that last year our ministry, as well as the Ministry of Energy, jointly funded a project sponsored by the Canadian Renewable Fuels Association examining the cost-effectiveness of various-sized facilities in ethanol production, and some conclusions were reached about the effective sizes of plants that might be put into place.

In order to properly assess the PARTEQ technology, as I said earlier, there will be an extension of that study to ensure that its implications for the findings of the original study will be fully taken into account, with the expectation that the results will be that it produces a more cost-effective level of production for any given size of plant.

In a general sense then, as I mentioned, I chaired the interministerial committee. It's comprised of all the major players -- the ministries of Industry, Trade and Technology, Environment, Energy, Transportation, Revenue, Labour, Consumer and Commercial Relations and Treasury and Economics -- to ensure that any body with an interest in the topic has an opportunity to bring its views forward.

The purpose of the committee is to bring some proposals together with the perspective of looking at ethanol as a means of facilitating community development, for securing farm incomes, for conventional fuel replacement purposes and for identifying new crop technologies. The committee does not look at this from the point of view that corn is the only vehicle for the production of ethanol, and in fact the industry, in our consultations, gave us that same perspective. The expectation is that corn will form the basis of an ethanol industry if it is to occur in the short term, but in the longer term it's likely to be some alternative commodity such as waste paper, other celluloses, willow trees, among others.

Some recent developments in this industry have led to renewed interest in it. Probably the most significant is the recent announcement of the 8.5-cent federal excise tax exemption, and that, coupled with the existing provincial exemptions for the fuel, results in a fairly substantial tax preference of 23-cents-plus a litre. That has clearly changed the economics, to the point where very large scale facilities are now deemed to be marginally economically feasible. Smaller-scale facilities, according to our Chemcorp study, are somewhat less likely to be economically feasible.

Another recent development, or pending development, is that tomorrow UCO Petroleum, in conjunction with Sunoco, will begin to pump ethanol-blended gasoline for consumption in Ontario at 21 gas stations. That will again heighten consumer awareness and interest and probably lead to some renewed and broadened interest in the development of an ethanol industry.

One other recent development that is less helpful in the development of the industry was Hydro's January announcement that it's unwilling at this point, or unable at this point, to accept substantial amounts of cogenerated electricity. Cogenerated electricity from an ethanol plant is critical to making the economics of the plant work effectively in many of the other proposals that were put before us. The Ministry of Energy, in conjunction with Ontario Hydro, is examining that question to review with us whether there are circumstances that might change the earlier thinking on this.

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As I said before, the Chemcorp study has suggested that large-scale plants are marginally economical; smaller-scale plants are less so. They've pointed out that we'd need to have a fairly substantial industry. There's a critical mass that has to be achieved in order for ethanol to be a success in Ontario, and that's about 350 million litres out of 12 billion litres of fuel conventionally used in cars in Ontario, just to put it in perspective.

Our consultation really gave us three streams of information. It gave us a really good inventory of the kinds of projects that are in the pipeline, and there are a number of them. I won't go through them in detail, but they range from 50 million litres to 350 million litres, as well as the smaller demonstration-type plants related to the PARTEQ technologies.

The other major things it revealed were that the issues that face the industry at the current time are primarily issues related to the ability of Hydro to accept cogenerated electricity, the development of markets and the need for consumer education on the product, as well as a need for further research into feedstock costs. Corn is viewed as a relatively expensive feedstock even though it's viewed as the feedstock that will kick off the industry, because all the technologies are in place to use it.

There was also a clear recognition that the other major issue is the oil industry's unwillingness to accept ethanol. It would prefer to use other products for blending in order to reach the kinds of standards for fuel that it sees in Ontario or nationally in the future. They have a vested interest in the use of chemicals they produce themselves as opposed to using ethanol as the means of boosting octane in consumer fuels.

The third main stream of information was the kinds of roles government can play. That information suggests that there is not a widespread request for financial support but that there is a widespread view that government can play a leadership role in demonstrating that ethanol is a meaningful and useful fuel for Ontario consumers, and if this kind of environment is created, that the economics, to a great extent, will fall into place.

There were suggestions that came from the vast array of projects we heard from that range from direct grant support and loan support on the financial side, to issues such as ensuring that there was a continuation of the provincial and federal exemptions for ethanol, to demonstration projects using ethanol in government vehicles, issues such as education and promotion through programs instituted either by the Ministry of Agriculture and Food or through the Ministry of Education in conjunction with the Ministry of Agriculture and Food, or that the Ministry of the Environment could deem ethanol as an environmentally friendly product, as has been done by the federal government.

There were suggestions related to the facilitation of industry development, working with Hydro on the cogeneration issue, working on new technologies and alternative crop production technologies and clarifying trade issues to ensure there is no dumping of the fuel in Ontario if an industry develops.

The Acting Chair: I presume there are a couple of supplementaries. I wonder if you'd be prepared to go to that now, because there are a couple of signals for specifics. Mr Cleary, if you'd like to go ahead.

Mr John C. Cleary (Cornwall): Mr Roozen, you had mentioned your interministerial committee. I was wondering when decisions are going to be made.

My second question is similar. You had talked about new technology. Are you familiar with this new molecular sieve dehydration program, the new standard for a quality ethanol product which would cut the cost by several cents a litre?

Mr Roozen: I'll take the second question first. Yes, that technology was brought to the attention of the committee in its consultations. It does appear to have some potential for reducing the cost and will be assessed as part of the exercise we're undertaking.

In terms of the time frames involved for reaching recommendations out of the committee, as the committee completed its consultations last month there was agreement that the results from them would be circulated to everyone who was involved and that the interministerial committee would then meet, build some recommendations from them and frame the discussion paper that will be necessary for the full consultation. The discussion paper is expected to be completed in the latter half of June, with a consultation following that, and following the consultation, recommendations to come forward within the ministry.

Mr Cleary: How long will the consultation take?

Mr Roozen: The consultation is expected to be relatively brief over a one-month to six-week period.

Mr Noble Villeneuve (S-D-G & East Grenville): Seaway Valley farmers have to know by the end of July. Will you be able to give them guidance prior to that?

Mr Roozen: We will be able to answer as many questions as they can put to us, yes. We will be meeting with them in the very near future to discuss the specific details of their request to see exactly what it is that we can do to facilitate their project. They have to this point not done that identification of their specific requests of the ministries. They have only indicated that there may be a role for government to play in that project.

Mr Villeneuve: I had occasion to meet with the head of the non-utility generation with Hydro back in November, December, and at that point in time Hydro had not even considered the installation of ethanol production units in cogeneration plants. You've talked about the cogeneration surplus steam. How many cogeneration projects will be producing ethanol?

Mr Roozen: I can't speak for the entire list the Ontario Hydro facility has seen, but in our discussions with the cogeneration people at Ontario Hydro very recently, two weeks ago, there was an indication that they have a number of proposals. They didn't quantify how many there were, but they were prepared to give them renewed attention, given the fact that there was a desire to identify appropriate policies in support of ethanol.

I can't tell you definitively what will come of that process, but they have agreed to participate in our committee now, which they had not previously been involved with, and they are very interested in becoming more aware of the benefits that flow beyond the otherwise identified benefits to Hydro itself. They want to take a broader range of issues into consideration in making their decisions.

Mr Villeneuve: I'd like to specify one particular cogeneration plant, the one anticipated for Kraft foods at Ingleside. I don't know if you were involved with that one, but they've cut that by two thirds. They've gone from 150 megawatts to 50, and I understand there are some tentative agreements there at 50. There is a difference of opinion from those who will be generating the hydro and those within the Ministry of Energy, within Hydro, who say there is another plant for a medium-sized ethanol production unit. The cogenerators say there is not.

I'm not expert at this, but when I met with Hydro, I was rather dumfounded that cogeneration was not even considering at that point in time the production of ethanol, and it would be a natural, a rather cheap source of steam, and in most instances a surplus of steam to the secondary source of energy, which is the steam.

I think it's a natural. It's great to be studying biomass; it's great to be studying willows and all the rest of it. The Americans put 1.5 million bushels of corn into ethanol every day. I have not seen them go to biomass. They may yet go to biomass. But it's a natural. There's a 28% protein distiller's grain byproduct. We import protein for livestock feed here in Ontario. It's a natural for Ontario.

I would hope that the research which incorporates biomass and wood chips and all the rest of it would not be holding back the use of corn in the production of ethanol, because, as you mentioned, tomorrow -- and I will be in Chatham -- some 20 or 21 retail service stations will be introduced as octane-enhanced-with-ethanol.

A lot of that ethanol will be coming from somewhere else but Ontario and somewhere else but Canada at this present time. I think the expansion of that industry is limited to the accessibility of ethanol here. We have a situation where we have to move and we have to move quickly to create a new market for grain, to create some economic developments in rural Ontario in the production of ethanol.

I think your ministry has to be actively involved with the cogeneration projects to encourage that in more ways than just saying it's a good idea, because the petroleum industry is there using carcinogenic octane enhancers, known cancer-causing ingredients that have been banned in the States; and yes, for its own very selfish reasons, the industry is going to resist.

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We have to put that in perspective. It's not only new markets for grain and new economic development for Ontario; it's also a very positive reduction in pollution and the greenhouse effect. The air pollution that we have over some of our cities in the summertime we could reduce by a third if the gas being burned in our cars was enhanced with ethanol.

I don't see it as a dilemma at all. There are no negatives to it; it's all positive, except for the petroleum industry. Surely this government cannot be, as was mentioned in question period, in the hip pockets of the petroleum industry, I hope.

Mr Pat Hayes (Essex-Kent): Be assured of that.

Mr Villeneuve: I'm not sure after question period today.

Mr Roozen: I take it as a very positive sign that Hydro has agreed to participate in the committee and is expressing a stronger willingness to be aware of the issues related to the other benefits from that cogeneration, specifically, ethanol. They obviously caution us that they have cogeneration facilities on their request list that go far beyond ethanol, but they are at least expressing a willingness to look at the ethanol-related ones because there are other issues involved than just cogeneration.

Mr Villeneuve: Anyway, I'm sure pleased I brought it to their attention at the end of 1991 when indeed it was not part of the Hydro scenario at all.

Mr Gilles Bisson (Cochrane South): Just a very quick question on the whole question of methanol cogeneration. I don't know of any cogeneration plants now in Ontario running under methanol. There aren't any. But you did say that Ontario Hydro is working with the Ministry of Agriculture and Food and looking at that. Where are they with that right now? How far ahead is that?

Mr Roozen: On methanol?

Mr Bisson: Yes.

Mr Villeneuve: Is it methanol or ethanol?

Mr Bisson: Methanol, I thought you had said.

Mr Roozen: No, no, ethanol, not methanol.

Mr Bisson: Ethanol?

Mr Roozen: We're not working on methanol.

Mr Bisson: Then on ethanol.

Mr Roozen: On ethanol? That the Ministry of Energy is working with us on -- I'm sorry, I seem to have lost my train of thought.

Mr Bisson: I understood you to say in your presentation that the Ministry of Agriculture and Food was working with the Ministry of Energy through Ontario Hydro to look at the possibility of setting up a cogeneration plant for ethanol.

Mr Roozen: No. What I said was that the Ministry of Energy and the Ministry of Agriculture and Food were working together with Ontario Hydro so that there was a greater recognition of the benefits of cogeneration, and so that when they make their decisions, they will make them on a basis that goes beyond just the cogeneration issues in and of themselves, that there will be a recognition that there are benefits from the ethanol that should be considered when making that decision.

Mr Bisson: But no decision has been made to actually even contemplate the establishment of a cogeneration plant anywhere.

Mr Roozen: There are a number of requests on their list for consideration. They have not decided on any of them. They have not said yes to any of them; I guess that is the way to put it.

Mr Bisson: The reason I ask is because, as you know, the demand-supply plan of Ontario Hydro at this point is showing no need for the amount of generation that it thought it was going to be in. Are you aware of any kind of a special policy or anything dealing with that whole question of ethanol plants, cogeneration plants?

Mr Roozen: No, only a recent willingness to be aware of the issue and that the issue goes beyond the cogeneration issue in and of itself. But I take that willingness as a positive step.

Mr Bisson: So they're looking at the technicalities. Is it worth it, is it feasible, is it economical -- all those questions.

Mr Roozen: And are there alternative benefits, external benefits that don't relate directly to cogeneration?

Mr Cleary: Just one thing I'd like to correct on the record. The new technology from Queen's University is available only until July 1 to the Seaway Valley Farmers Energy Cooperative. So I guess they have to know where they're going too.

Mr Roozen: That's correct.

The Acting Chair: Thank you very much. Mr Minister, we had some other questions. Can you tell us?

Hon Mr Buchanan: Okay, if I could just tie up one comment on ethanol. I've been supportive as a minister of moving on this issue. We're moving it along and going through a process that is considerate and makes sure that we're moving in a direction that is economical and feasible for agriculture, as well as the energy side, and trying to keep the thing moving as quickly as we can. I know that both oppositions, as well as my own party, are concerned that we move this thing along as best we can. So we continue to be supportive. I know that both Mr Cleary and Mr Villeneuve have raised many questions and are concerned that we keep this moving. We will do as much as we can, but we have to move in an orderly fashion, which is what Mr Roozen has been saying.

You'd like me to move on to --

The Acting Chair: Yes, we have time.

Hon Mr Buchanan: Okay, I have a very large package of questions. I'll try and move through them as quickly as I can and highlight some things you want additional information on or you want to ask a supplementary on. Perhaps then we can get staff involved in this.

Dealing with Mr Cleary's package: first of all, a question about the forecast change in farm income for Ontario farmers for this year. We have some projections that the net cash income is forecast to increase by 24% over 1991. This is a direct result of an 8.5% increase anticipated from farm cash receipts, coupled with an expected increase of 3.1% in farm operating expenses.

The other point I would highlight is that gross payments enhancing receipts are forecast at $650 million for Ontario producers, compared to $300 million in 1991 and $191 million in 1990. Generally speaking, the projections are for increase in gross farm income for 1992. I should note that Statistics Canada is going to come out with new projections on May 28, which is probably tomorrow. We have some material we can hand out here. There was a question on farm bankruptcies. In 1991 there were 15 farm bankruptcies in Ontario; in 1990, 32. Even though 1991 was a very tough year, I think primarily government, both provincial and federal, and safety net programs helped to keep bankruptcies down. In 1989 there were 18, back in 1988 there were 35 and in 1987 there were 52. In 1991 there were actually 15. I note that's not the general trend in Canada. In Canada, the trend in 1987 was 354 and went up to 441 in 1991. So actually the number of farm bankruptcies is on the increase, although it decreased in Ontario last year, almost cut in half.

There's a question about accumulated farm debt. The figure for 1991 is a preliminary estimate, $4.85 billion, which would be down slightly from 1990 at $5.03 billion. In 1989 it was $4.81 billion. So the preliminary estimate would suggest that the accumulated farm debt is down slightly from what it was in 1991. But again I stress that was a projection.

There was a question about off-farm income. The average off-farm income has been on the increase. Some of that would be reflected in wage increases, but it's certainly reasonable to expect that more people are working and getting more of their income off-farm. In 1990, the last figures we have, average off-farm income was $29,595; in 1989, $29,160. If you go back to 1985, there tends to be a $400- or $500-increase each year in the $29,000-plus range.

A question on land value changes over the past few years: Again, it's gone up. The last figures we have are for 1990 at $1,823 per acre. It's up from 1989 at $1,688; 1988 was $1,372. Again there's a gradual increase.

In terms of farm income trends in Ontario compared to Canada, if we go back to 1990 -- and I'll just deal with total net income -- in Ontario, total net income was down 21.9%. In Canada it was down 7.1%. In 1991 total net income per cent change was up 11% but it was down 23.6% in the country, I would suggest primarily because of grain prices in the west. The total net income projections as of May 7 were for an 11.6% increase in total net income in Ontario and a 23% increase in Canada.

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There was also a question on the ministry's move to Guelph; an update. The lab services centre continues on schedule. It should be completed in mid-1992 and we are expecting occupancy somewhere in the fall of 1992. The office complex architectural design should be completed some time in 1992 and we are expecting a joint proposal with the Ministry of Government Services going to management treasury board and being able to proceed with construction. We're expecting that to be completed and the move completed by the fall of 1995.

There was a question from Mr Cleary regarding the Agenda for People, about the $100 million in credit assistance. What we've been doing in terms of our financial assistance program is trying to use the money we have as wisely as possible to leverage money from the financial institutions. In fact, we're expecting in the programs we've announced that we're going to have significantly more than $100 million available to the farming community at rates that are going to be very reasonable, down near the prime or perhaps less. Those programs will be coming forward, so I'm going to be very pleased with what the results will be of our farm investment strategy. I think it will more than meet what we talked about in the Agenda for People.

There was a question about the emergency assistance package, which is known as the $35.5-million program, a question about the detail and the components that were underspent. I think it would be better to table it; there are some details here on that. There was some money that was not included and it was taken up at the end of the year when the Treasurer does his annual scoop to make sure that any money left around is taken back in.

Again from Mr Cleary, there was a question on the rural development initiatives. We are working with other ministries and we've been talking about things we can do in cooperation with the Ministry of Municipal Affairs and other ministries. As I mentioned yesterday in my statement, we have community leadership programs: The Ten Steps to Community Action, which is being very well received in rural Ontario; we have four community planning pilot projects and local advisory committees out there in the communities that are looking at how we can work towards revitalizing rural communities, and we are very much involved in Rural Routes `92, which is going to be in Woodstock in June. It's a showcase for resource planning, a two-day forum, which will allow all stakeholders to discuss resource use and integrated community planning. Community development is one of the five themes that will be explored there. As I said, we continue to work with other ministries to get on with rural economic renewal.

The question about how agricultural land use policies fit into the Sewell commission, the planning acts and the process the provincial government is going to pursue: What we are doing is undertaking a review of agricultural land use. The discussion paper that is now being circulated in public meetings was developed cooperatively with various groups and stakeholders. We're doing this consultation across the province. The deadline -- and we are willing to take submissions not only at the consultations but written responses -- is July 31. There are 16 planned public meetings at the moment. We are going to analyse the ideas and comments we get from this public consultation and the written submissions and see what the best way to pursue agricultural land preservation is.

The recommendations that come out of that should go to the Sewell commission, because it's looking at the planning process; we're looking at how we preserve agricultural land. We intend to make those recommendations available to the Sewell commission and it's our intention we will move in some fashion next year on how we can preserve agricultural land with something that has some teeth and allows farmers to be secure in terms of preserving farm land and at the same time allows for development in those areas where development is important.

Here's a good question: How much did the ministry spend in fighting the Ottawa Senators? I know everybody's dying to hear the answer to this one. Is the minister happy with OMB's final position? Will the minister be taking a position on this proposal at cabinet? I think I'll read this.

"The total cost of the hearing was $981,180.68, which included the consultant, the legal fees and their travel expenses, OMAF staff salaries and their travel expenses. Originally the hearing was scheduled to last six weeks but it was extended to 10 weeks; thus the increased cost.

"The OMB supported most of OMAF's evidence, and although the arena was approved, there were safeguards put in place to protect the area surrounding the arena for agriculture. The size of the arena was reduced and one of the office towers was deleted from the plan. Overall, this case indicated the commitment of this government to protecting farm land and to good planning principles.

"The matter will not come before cabinet. The Planning Act makes provision for the decision of the OMB to come before cabinet only if the matter is declared a matter of provincial interest 30 days prior to the hearing. This was not done. The OMB was the final decision," and I had said that as we went into it.

A few comments, if I might, on that issue. That was one of the determining factors that suggested to me that we needed to put something in place in terms of preserving agricultural land that was clear so we didn't get into these kind of hearings at OMB when the rules were not clear. We're dealing with guidelines. We were trying to preserve farm land, but the only way we could do it was through the OMB. In recognizing that this was very expensive, I was looking as a minister at: What can we do to prevent this from happening somewhere else and over and over again? That's one of the reasons for our land use consultations. That's enough reason to do it right there.

Conservation easements in the Niagara region, a question on the status of the review of the implementation: There's a series of questions that go with that. I have made a commitment that we will study the conservation easements to see what the opportunities and the implications for such a program in Ontario are; that's part of the land use consultations we're doing. There's a subcommittee that's been set up to see how it would work, because there's a lot of interest in the Niagara region. We are going into this with an open mind, seeing it as a possibility, but we have to look at the funding of such a proposal as well and make some decisions about whether it would be Niagara-specific or whether it would be provincial in nature.

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There was a question about the London boundary reforms. I was asked to indicate whether or not I support the recommendations, particularly the issue of the creation of agricultural buffer zones, and was I aware of the concern by the farm groups, including the Ontario Federation of Agriculture and the farm women's network.

The Minister of Municipal Affairs, Mr Cooke, has released the report. I'm aware of the report and I've certainly had some presentations made to me of concerns about the preservation of agricultural land. Traditionally OMAF does not get involved in this type of exercise until they are looking at changing the zoning and then we get to comment under the Food Land Guidelines; that's traditionally when staff and OMAF get involved. That's the way it usually works.

We are in the process, as I've said earlier, of doing a study about how we preserve agricultural land. I certainly would expect that whatever we come up with for a way of preserving agricultural land would be used in this London area.

The second part of that is that the minister has not yet tabled legislation as to what it will look like. I believe he's doing some further consultation, and we will get a chance to work on that privately.

There is a question about our participation in the net income stabilization account for the 1990 tax year; we didn't have the numbers. I've got the numbers here. By not participating in NISA, producers would have the benefit from the federal programs. If the province had participated financially, an additional 0.5% of net sales, or $6 million, would have been received by Ontario farmers from the federal government and it would have cost us an additional $10 million. So we total up and there'd be roughly $16 million that the farmers would have gotten if we had put in our $10 million. They would have gotten half of whatever it was we had put in.

There is a question the about the gross revenue insurance plan and NISA for this year. The 1991-92 payouts for GRIP are expected to total $230 million. Grain and oilseeds and horticulture producers will be receiving $80 million in NISA through the federal assistance and emergency assistance package.

There is a question about why there were delays in land stewardship payments. I think I'll just table that because it's quite lengthy.

The Ontario pork industry improvement program: There is a question about it not being renewed. That program was terminated in March 1990, so it wasn't something that we were going to be involved with. It had already been done in before I came to office.

There is a question on seasonal housing. This is a shared-cost program with the federal government. It has been in a decline over the last number of years and it's also been money that's been set aside that has not been totally used. In 1990-91, 7% of the budget was not used, and in 1991-92, 13% of the budget was not used. A decision on whether to continue the program is going to be based on consultation with the Ontario Fruit and Vegetable Growers' Association to see if it thinks it's still something it wants or if it would prefer to look at another program. So that is being reviewed.

There was a question on the statistical analysis of our Foodland support programs, and we were asked whether we were tracking to see if it had any impact or not.

My voice needs a rest. Maybe Grahame Richards can tell us about promoting --

The Acting Chair: If you can just make sure you put your name into the record to start off, please.

Mr Grahame Richards: Yes. Grahame Richards, assistant deputy minister, food industry division.

The question, as I understand it, was does the ministry have any statistical analysis on the success of its advertising campaign in convincing consumers to financially support Ontario farmers? The ministry conducts an annual advertising tracking study on two occasions, in November and March. The objective of this research is to survey Ontario consumer awareness of the program and its communication activities, including the symbol recognition, media advertising, in-store merchandising and consumer promotions, as well as their attitudes and preferences towards Ontario-grown produce. This type of research has been ongoing since the inception of the program and is conducted at the same time each year.

The research involves in-home interviews with a random sample of principal grocery shoppers across Ontario. Some of the results from the annual tracking study are: 84% of the consumers recognize the Foodland symbol; nine in 10 Ontario shoppers associate the symbol to some degree with the promotion and/or identification of Ontario foods; 83% of shoppers believe it's a worthwhile government program, and this number rises with the people who have seen the advertising recently.

The new campaign I think you're referring to is perceived as credible among consumers. The degree of credibility has increased from a mean rating of 8 on a 10-point scale in 1990 to 8.5 in 1991. This is especially evident in the following dimensions, which represent the core of the program's communications objectives: Buying Ontario produce helps preserve our food supply for the future, buying Ontario produce helps preserve Ontario's agriculture and our produce reaches the store in better condition than imports.

The proportion of shoppers who now say, "As a general rule I try to buy Ontario-grown products as much as possible in preference to those from outside Ontario," has increased significantly over the past year from 39% to 49%. A similar gain is evident in the proportion who indicate they will try to buy Ontario-grown products in the future.

The Acting Chair: I think now we could turn to some new questions, and we will go to Mr Cleary.

Mr Cleary: I don't know whether I have any at the moment. Maybe I could jump in later.

Mr Villeneuve: Mr Roozen is still here. It goes back to ethanol, Mr Minister. Do you have a discussion paper on the uses of ethanol and the size of plants? I know your ministry was scheduled to have something available last fall, but it wasn't available. Is it now complete, and is it available?

Hon Mr Buchanan: I'll ask Len to answer that.

Mr Roozen: The discussion paper we had hoped to do last fall has not been completed, no. That's the discussion paper I referred to earlier on. We'll have that paper written next month and in consultation in July. But what is available is the study that was funded jointly by the two ministries, Energy and Environment, which was done by Chemcorp Ltd on the economic efficiency of various sizes of plants.

Mr Villeneuve: Is that discussion paper available to critics and to the public?

Mr Roozen: Yes, we can provide you with copies. It is actually under the ownership of the Canadian Renewable Fuels Association, but we can provide you with copies ourselves.

Mr Villeneuve: On the bankruptcies, Mr Minister, maybe those figures should be put in proper perspective, that we have many people who were farmers and are now effectively bankrupt but haven't filed. I think we would be misleading to some degree if we said those are the only bankruptcies we've had, based on the figures you have just given us. Could you expand on those figures a bit?

Hon Mr Buchanan: If you're suggesting that other farmers are in difficulty and you can't measure the level of economic difficulty strictly by the numbers, I would agree. However, if you look at the total year-over-year increase in net income, there was an increase last year. But I know the farmers are still in difficulty, and there are some who have sold out. Perhaps, as Bob Seguin is here, he could talk a little more about bankruptcies than I could in terms of numbers.

Mr Bob Seguin: In answer to Mr Villeneuve's question, quite right, farmers historically have not been the first to apply for bankruptcy or the other avenues of leaving the business when they are in financial concern. The Department of Agriculture does provide a series of statistics, which we can provide to all members of the committee, about a number of ways of identifying financial difficulty for farmers: non-performing loans, farm borrowers in arrears, farm land held by major lenders. That information is available, and I can have it made available to all members of the committee, if that's the decision of the committee.

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Mr Villeneuve: I can appreciate that. It's just that if we look at the figures on the surface and not in more depth than that, the figures really don't give the entire story. For example, with regard to the net farm income summary in Ontario and Canada, Ontario's had an 11% increase in farm income whereas there has been a 23.6% reduction in Canadian income. Does that include both on- and off-farm income?

Mr Seguin: It does not include off-farm income but does include government payments. The programs the minister indicated yesterday and today, GRIP, NISA, crop insurance payments, the farm tax rebate, all form part of the total package that goes to farmers, one of the reasons net farm income is up in 1992, as estimated.

Mr Villeneuve: While Mr Seguin is still here, I'll go back to the support -- I believe the Bank of Montreal was the accepted bank.

Mr Seguin: Yes.

Mr Villeneuve: How many banks were interested in doing that business for the Ministry of Agriculture and Food? How many actually submitted?

Mr Seguin: Ten 10 banks participated in the discussion and consultation process with us and the commodity corporation. Three banks submitted formal bids, going to the effort of actually bidding, figuring out the rates they would charge, all the other terms and conditions. Several indicated that they would have, but the amount of money the corporation was initially looking for, between a $50-million and $100-million loan, was a little too excessive given that this was a whole new program area. A number indicated that they would be willing to be part of a syndicate of banks taking a share of that pool and a couple of more indicated that they would like to see the program up and running for a couple of years. One or two banks thought that if there were a 100% guarantee they'd be there with no problems, but those were not the terms of our conditions.

Mr Villeneuve: That's interesting. Because it's involved with agriculture, which has traditionally been a pretty solid industry but we have noticed a number of failures, do you feel that would have a bearing? As opposed to strictly a business approach, would the fact that it was agriculture specifically have turned off some banking institutions?

Mr Seguin: No. All the institutions, both banks and trust companies and the credit unions and caisses populaires, indicated that because it was agriculture they were interested. But how much flexibility they would have given the size of financial liability we were asking from them made it more of a business decision for them. They had to relook at the hard numbers, and because it was a new program, only a few were risk-taking enough to take the extra steps.

The Bank of Montreal had worked with members of the commodity corporation in other avenues -- the corn producers, the soybean board -- and with Agriculture Canada on a program under the Advance Payments for Crops Act, which is something similar to what the commodity loan program is. They felt most comfortable with the concept and were the most aggressive in pursuing it and the most aggressive in the bid.

Mr Villeneuve: Again pursuing the commodity support program, when do you feel that the applications at the farm level will be available and when indeed will we have the system up and going with money to lend to the producers, which is the whole aim of the exercise?

Mr Seguin: I agree it's the aim of the exercise, and it's our intent to have it as soon as possible. However, there are still a few details to be ironed out between ourselves, the bank and the commodity corporation. They're no longer substantive problems, they're just things we have to work out to reassure everybody that we all understand what's at stake; if something goes wrong, the steps and processes. It's just a matter of clarifying these details.

I should point out that the commodity loan program can operate if a farmer has gone to a supplier and gotten prime plus 3% or 4% for a short-term operating loan. He can come to the commodity corporation, and as long as the supplier gets paid off and will waive all security against the crop, which he or she should if he or she has been paid off, the commodity corporation will make that financing. So there's going to be opportunity to pick up those farmers who have already made financing arrangements at high rates. Those farmers who were very fortunate and had very good rates might not find the commodity corporation that attractive.

Mr Villeneuve: That's right, and certainly 1992 is not going to be very beneficial under the commodity corporation because, in my experience, if I pay my supplier cash or within 10 days I will get a discount. If I don't pay within 30 days, it's a 2% or 2.5%-per-month charge, which is very expensive. At this stage of the game, with the cropping input having now been spent, in many instances for almost 30 days, the benefit for 1992 I believe is pretty negative.

Mr Seguin: The leaders of the commodity corporation and the members trying to help drive it from the farm side still see a number of benefits. They recognize that they would've preferred to have it up and running a little sooner than it is now, but they also see as they work through it a number of problem areas they would have hit if they had rushed through the process. They also know that as they work through this year they get that extra start time for next year. As you know, with the interest rates this year, there isn't as much pressure on a number of farmers as there would have been a couple of years ago, but this program is also there for the longer term, to be there in the years when credit is far more restrictive and the price of credit is much higher than it is this year.

Mr Villeneuve: Mr Chair, can I pursue the financial arrangements or is someone else waiting?

The Acting Chair: Mr O'Connor is, but I think his is new, so you can keep going on this one for a couple more minutes.

Mr Villeneuve: Mr Minister, when you made the commodity loans announcement, a vehicle to leave capital in agriculture -- capital that was already in agriculture and to leave capital in agriculture -- do you have any more information on this? Can Mr Seguin tell us what you're planning on doing in the long-term loan type of deal in agriculture? I saw an issue where you are attempting to retain capital in agriculture; in other words, from a retiring farmer to a new farmer.

Hon Mr Buchanan: I understand the question now, and I think Bob can probably answer it.

Mr Villeneuve: While we've got him on the hot seat; I hate to lose him.

Mr Seguin: We have actually two major programs we are considering. One is on private mortgage guarantees, which will allow a retiring farmer or person with interest in agriculture to loan money to a beginning farmer, but with some guarantee behind it that that stake is not completely at risk with the new farmer.

As the minister indicated earlier, by using your moneys in a different way to help leverage that financing, most of the transactions will be solid but will help cover the few that will go under; it will also try to improve the terms between the borrower and lender at the private level, improve that flow.

The other one we're thinking of which is a little more innovative, at least as we see it, is the rural loans pool: opportunities to pool capital that already exists in rural Ontario. We have done a study -- and it will be available publicly when we finally get all the typos cleared up; it was done for us by Ernst and Young -- on just how much capital is available in rural Ontario. There is over $60 billion in financial assets available in rural Ontario, the best estimate.

Even a small portion of that, if we could somehow leverage some of that into lending back, farmers and farm communities lending back to themselves, with some protection from the government on guarantees and protection in case of default, that will give farmers an added source of credit for long-term lending. What we have to do is compete against GICs and other instruments out there, but something can be done on that. We have to make it very attractive.

Mr Villeneuve: You have to realize that you are also competing with the Farm Credit Corp, a federal crown agency which has had that in place now for some 15 years, on a bond-type issue with guarantees by the federal government beyond the normal $60,000, which is the investment protection you have under a normal investment program. Would your system be somewhat similar to that or in competition to that?

Mr Seguin: It would be different. There would be some competition. But one of the concerns we've had, and it was raised in Mr Hayes's report in the agricultural finance review committee, was the concern that the Farm Credit Corp was no longer being seen as the prime long-term lender in rural Canada. Indeed, it's only recently that the Farm Credit Corp has gone back to the capital markets to get moneys back in to reloan for future loans. As you know, the Farm Credit Corp has had several difficult years as it was restructured.

This is another avenue for farmers to source long-term credit. As such, it gives farmers an extra competitive advantage. They're saying: "Here's a pooling source we can get from our own communities. We can try FCC, we can try our bank, we can try private lenders or our own equity." It improves the opportunities for farmers to source capital at a more reasonable rate.

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Mr Villeneuve: Supported by the Ministry of Ag and Food and administered by OMAF, or administered by someone else? Have you worked out those details?

Mr Seguin: We're working on the details, but the thought was it would be something similar to the Agricultural Commodity Corp, the commodity loan program, to try to encourage smaller groups to undertake the responsibility for administering within certain guidelines. But that's what we're trying to work out: how feasible that is and what the guidelines would be to ensure proper control of public moneys.

Mr Larry O'Connor (Durham-York): One thing we do when we get into the committee, sometimes you don't know whether you want to interrupt the line of questioning because when you're a member from a rural riding and we share a lot of the same interests, you wonder whether your questions are pertinent.

I noticed, looking at the information you gave us, the declining numbers of bankruptcies. I don't know whether that's as a result of the declining number of farmers; it certainly makes me wonder. I was just wondering if there's something that's happening within the ministry that would ensure the farmers, whether they're chicken producers or turkey producers or other forms of livestock, getting a fair price at market.

One thing I've always encouraged my local farmers to do, because we have a lot of fall fairs and what not, is to put out displays and show the consumers who come up to our fall fairs exactly what they're getting as farmers for the product. I was just wondering if there's anything the ministry is doing to make sure there's a little bit of fairness put in that as well.

Hon Mr Buchanan: I think you've identified the number one issue for all agriculture, whether it has to do with preserving agricultural land or whether it's taxes or the environment or whatever it happens to be: If farmers got a fair price or a reasonable price for their product, all these other problems would disappear.

It's a difficult issue because it would mean in order to do that the government would have to intervene in the marketplace and set some prices. The supply management system we have in place, which controls the amount of imports we have in dairy and chicken, turkey and eggs, works reasonably well. We've talked about that before.

In some of the other commodities, though, farmers are suffering from low farm-gate prices, and we recognize that as the number one problem. But, as I said, it's difficult to respond to. However, we've set up an internal group which is looking at prices that are received for different commodities and trying to get a grasp on income the farmers are getting from different commodities based on the size of the operation.

We are starting to address that situation by talking to suppliers and processors etc, to come up with better information and better data on how we respond and what governments can do to assist in fair prices for farm-gate products.

Mr O'Connor: In looking through this, we see the average off-farm income has been changing and it's been going up quite dramatically. Obviously, the farmers are having difficulty just earning an income on the farm alone. I was just wondering if the ministry has been looking at trying to establish some way it can increase the competitiveness of the food processing sector.

Mr Villeneuve: Unionize them.

Mr O'Connor: Yes. When I go grocery shopping, I walk down the aisles and I take a look at the canning sector, for example, and it's harder and harder to find things on the shelf that are grown and processed in Ontario. I wonder if the ministry's been looking at trying to improve the competitiveness in that area.

Hon Mr Buchanan: Yes, that is one of the links in the food chain. I've spoken a lot about the need to work cooperatively with everyone in the food chain, from the farmers through to the consumers.

Certainly the food processing sector is one area we in the ministry are trying to respond to and trying to look at its competitiveness. Rather than simply telling the farmers they have to produce at a cheaper price, we are looking at and working with the food processing sector. We've got a market development branch. We've worked with over 300 different companies in terms of helping them with market development. We've sponsored seminars in this province and worked with companies in going to other countries to try to develop export markets. We have a research fund, which is going to have about $5 million over the next five years, to assist the food processing industry to be competitive by having the latest technology and the latest research that's available to get new products into the marketplace.

It's an important link in the food chain, and if we don't work with them, we lose the food processing side because of imports that are cheaper. If we can't compete, then the farmers ultimately suffer as well, so we are trying to respond in a balanced way to the food processing industry.

Mr O'Connor: What is the role of your food processing advisory council?

Is it an educational food processing advisory council?

Hon Mr Buchanan: Yes. It's represented from the whole sector, labour and federal and provincial ministries, and it's working in education and training, working with colleges and universities as to what kinds of programs and what kinds of training are necessary to assist the industry.

Mr Ron Eddy (Brant-Haldimand): The minister mentioned rural development initiatives and I believe announced that there were four community planning pilot projects. Could I ask where they are, and is there the opportunity for any additional ones?

Hon Mr Buchanan: Sure. This is Ken Knox, the ADM. I can tell you there's one in Huron county. I know that and I'll let Ken tell you about the others.

Mr Ken Knox: I missed the second part of the question; I'm sorry.

Mr Eddy: I wondered if there was the opportunity for any additional. I know at least one municipality that's very anxious to become one and I didn't know whether there was that opportunity.

Mr Knox: There are four pilot projects and they were set up with a non-stat grant from the ministry of $25,000 each to help the community organize and develop what its strategy would be as a community. We selected four from various regions of the province. There is one in Huron, there's one in Perth county, there's one in Lanark and there's one on St Joseph Island, near the Sault.

At this point we have an evaluation program that's going on and we would like to see it completed before we take on any new projects. In other words, there are four pilots; evaluate them and then determine if this is something we ought to broaden out and make available to communities right across the province.

Our feeling is that the concept is right and that the communities have done a good job strategically of coming together and determining what their needs are. The one in Perth county, as an example, was started by a community which was a one-industry town and that industry folded. They started within that community of Milverton to decide what they as a community should do, realized that it was broader than that, because they as a rural community depended a lot on the interaction with agriculture, so they included the township around them to determine what the strategy should be for diversification and growth, and our ministry staff have worked closely with them. That's one example of the four that are going on.

I suspect it will be a successful evaluation and then they would be available.

Mr Eddy: May I ask if the one in Huron county includes the entire county?

Mr Knox: No. Actually there are four different rural community development projects going on in Huron. The one we are involved in is west Huron. I can think in field crop terms where you have a test to compare things with, so we are involved in the one in west Huron. The other three the Huron county council is involved in support for, and now we're comparing the various models within Huron county to determine which of those is preferred and whether or not it's reasonable and preferred to have some government funding as seed money in there. That's part of the evaluation process: to determine whether the $25,000 from the province is essential or is worthwhile in order to see these kinds of things develop.

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Hon Mr Buchanan: There was a part of the question about the possibility of another one. If I could just give a little bit of response: This isn't a committee that's giving out money here today, obviously, but we do look favourably on community groups that come together with proposals. That's basically what we've done at this point. We're not actively encouraging everybody across the country, but we certainly try to look favourably when groups do come together in that way. If you have another committee that's interested and has a proposal, we'd be more than pleased to look at it, knowing of course that money is tight. We're still interested in looking at it, even if it's for future reference, as something we could do to help at a later time.

Mr Eddy: There is one that's very anxious.

Hon Mr Buchanan: That's something we can definitely talk about.

Mr Cleary: On another subject, I guess everyone knows about the problems our students are having this summer in finding employment. Two areas of employment come to mind: the agricultural museum and the junior agricultural program. I guess the minister's been getting off pretty easy up to now. I'd just like to ask him why these reductions are occurring and if the minister feels these are appropriate.

Hon Mr Buchanan: Obviously, the more students that are hired the better it is for the students and for the economy. Part of the difficulty in terms of the number of students is the increase in minimum wage, because there's been an allotment of X dollars. I don't think that's necessarily the total reason for the decrease. If I look at the numbers we're hiring, they are down significantly and we'd obviously like to hire more. We're trying to live within a budget and do the best we can. Summer employment for students is vital and we're trying to manage with what dollars we have the best way we can.

Mr Cleary: What would the figures be this year compared to last year? Do you have that there?

Hon Mr Buchanan: The summer experience program: I've got 1991 at 264 and in 1992 we're looking at 141. The environmental youth corps is 103 in 1991 and 85 in 1992. It says here that the corporate funding utilized in 1991 was $200,000.

Mr Cleary: Which of these would be employed at the Ag? Which program would that be under? Would that be the environment?

Mr Norris Hoag: Norris Hoag, executive director of the education and research division of the ministry. Mr Cleary, your question was on which of the programs apply to the students we hire at the agricultural museum, and that is the summer experience program. Although I don't have the exact number of people, the number of dollars from the summer experience program this year is the same as last year. So it's my anticipation that about the same number of people would be hired at the agricultural museum. The overall allocation of funds in the ministry for summer experience is down, because last year we had an opportunity to add corporate funds to that, which was not available this year. That has already been mentioned.

Mr Cleary: One thing that wasn't addressed today and was on my list of questions was an update on Ben Berendsen.

Hon Mr Buchanan: The Chairman didn't let me get that far. I have answers here. I'm sure you're aware that I have met with Mr Berendsen personally twice and have had a fair bit of communication with him. We have been involved in testing the water as well, and I'm sure you know that we joined with the Ministry of the Environment to participate in paying for water to be trucked in until the end of June. Unfortunately, this case has now gone off to the Ombudsman and it's become somewhat a legal matter. I don't think I'm at liberty to comment a whole lot more on it at this time.

Mr Ted Arnott (Wellington): Just to follow up on that, Minister, as you know, Mr Berendsen resides in Wellington county. We have discussed this at length at various times. If Mr Berendsen were able to bring you new information in terms of lab analysis of the groundwater on his property, would you be willing to meet him again and discuss this matter once more to achieve some sort of final resolution to the problem?

Hon Mr Buchanan: Yes, that is my position, and although I shouldn't be speaking for the Ministry of the Environment, I believe it was their position as well. Give us some data which show from tests that there's a cause and effect here from the asphalt that's buried under the barn, I believe it is; then we will continue to discuss the matter and continue to have negotiations and so on. The problem is that at this point in time we don't have any new information, and my involvement sort of came to an end.

Mr Arnott: Turning to the issue of the GATT negotiations, I see you touched upon that issue yesterday in your statement. Recently, I guess in the last week, the European Community farm ministers apparently have come to some sort of consensus on reduction of export subsidies, and there appears to be some movement there. I'd like to know what your assessment is of that development and what the government of Ontario's next move is in response to what may be some considerable developments on that issue.

Hon Mr Buchanan: I have a couple of points on that issue. One is that the Americans have not really responded, at least yet, to the Europeans' movement. There certainly is time for that. I guess we believe in Ontario that the American negotiators are more concerned about a North American free trade deal at this particular point in time than they are with GATT. They've more or less given up on GATT, and that's perhaps why the Europeans have moved in with some cap reform. The Americans seem to have lost interest.

What are we doing? We continue to support the federal position. We have also been exploring the possibility of making some contact with our counterparts in the US at the state level and perhaps even the federal level to make sure the American people in agriculture understand supply management and our position on article XI, as well as, of course, the export subsidy reductions we've called for. So we continue to support the federal position but we are taking some initiatives to talk to our US counterparts, because I think they are the key to having successful negotiations from our perspective. We are doing both of those things.

Mr Arnott: The third question deals with the move of the ministry head office to Guelph. You indicated earlier this afternoon that the time line is to move the head office by fall 1995. How does that compare with the initial time line when the announcement was made to move the head office to Guelph?

Hon Mr Buchanan: I'll bet it's a couple of years behind schedule, but I don't know the actual numbers. Do we have an answer? Okay, Rita.

The Acting Chair: Nobody volunteers, so Rita gets it.

Ms Rita Burak: As I recall, the original announcement was in either the 1986 or the 1987 throne speech. The decision was taken then to proceed with the food quality lab first, to make sure that was up and running to serve the industry, and then to proceed with the office building. So there may at the outset have been some very preliminary dates set -- I think the staff perhaps could remind us of that -- but in terms of what we anticipated once we started doing the preliminary planning, as the minister says, we're only maybe a couple of years off what might have been expected back then.

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Mr Arnott: Do you foresee any additional obstacles that might be looming that would throw this timetable off even further?

Ms Burak: No, we don't.

Mr Arnott: Budget cuts wouldn't impact on it?

Ms Burak: No.

Hon Mr Buchanan: One of the things in our favour is that in Guelph there's obviously a capital works project -- building and construction involves work and labour -- and I don't foresee any problems in its being shaved. In fact, it was one of the ones announced by many different ministers, OMAF, MGS and everybody else. In terms of moving operations and decentralizing that have been announced I think it's right at the top of the list, so I don't see it being delayed.

Mr Arnott: What class of farm land is going to be used for the construction of that head office?

Hon Mr Buchanan: Rita's got a good answer to that question.

Ms Burak: It's ministry-owned property which abuts the university. It's not farm land.

Mr Arnott: I see. It's not farmed now?

Ms Burak: No. In fact, it's right next to our milk quality lab, which has been there for a number of years, so we're not taking land out of production.

Mr Arnott: There's no Ontario Food Land Guidelines associated with that.

Ms Burak: It's not zoned agriculture, no. It abuts the university and it's not zoned agriculture.

Hon Mr Buchanan: It's not wetlands either.

Mr Arnott: Okay. The next question I have concerns tile drainage. In the past the provincial government has made available for farmers, through the municipalities, significant funding to assist farmers in tile drainage plans. I'm told that it is quite late this year and that there has not been a decision announced. In the past years, many municipalities in my riding have benefited, and farmers as well, in Arthur township, Maryborough township, Minto township and so on. I ask the minister what his plans are with respect to tile drainage announcements and if he could indicate, if there has been a delay, why there has been a delay and what is forthcoming in the near future.

Hon Mr Buchanan: I don't think there has been a delay -- perhaps a few days or a week -- but if we go with the same program, the announcement is almost imminent: very soon, hopefully next week.

Mr Arnott: Has the decision been made to go with the same program as previously?

Hon Mr Buchanan: We haven't modified or changed the program in terms of its structure. As to the actual dollar allocation, if that's your question, I don't have the answer at my fingertips. Richard?

Mr Richard Kirsh: Richard Kirsh, manager of financial planning. The budget for the tile drainage program is $10.8 million, the same as last year.

Mr Arnott: Was every dollar allocated?

Mr Kirsh: Last year we used $10.6 million of the $10.8.

Mr Arnott: One more question, and it's on the issue of rural development which you mentioned earlier. In our document New Directions our party leader and our caucus have called upon the government to establish industrial development bonds, community development bonds as well, as a concept which would bring capital together for community development. I see this as being something very beneficial to rural Ontario and something certainly within the mandate of the ministry. As you have indicated, the ministry does have a mandate in terms of rural development. Have those specific proposals been given consideration by your ministry, and if so, where are they at and what do you have to say about it?

Hon Mr Buchanan: The idea certainly has merit. We talk about rural loan pools; it kind of goes along that direction. When you talk about community development bonds, whether it's a pool or a bond it's going in the same direction. I guess I support the concept in terms of the idea and how it would evolve and that it would provide funds.

One of the things I've been talking about for many months now is the concept of recycling rural dollars. We soon discovered that there is a lot of savings in rural Ontario; Bob Seguin referred to that earlier in terms of the billions of dollars that we know are deposited in rural banking institutions which are subsequently invested in urban centres or offshore centres. We need to find a way of encouraging people who have a few dollars in savings to direct some of that money back into their own community, so we're looking at ways of doing it.

We still have details to work out in terms of the loan pool, obviously, but the concept of a community bond is certainly not something we oppose. How it works would need to be fleshed out. We will be moving towards looking at all kinds of instruments, I hope, as the government in fact looks at how we get involved in rural economic renewal over the year and over the years to come.

Mr Bisson: One of the issues that's come up repeatedly from farmers in my community is the whole question of what's happening with the GATT negotiations. I guess a couple of months ago there was a bit of a scare through the farming community, probably all across the country, let alone Ontario. Where are we at right now? I'm a bit unclear as to what the latest developments are with regard to the effect on milk farmers.

Hon Mr Buchanan: The large demonstration in Ottawa by 30,000 farmers was I think primarily led by the dairy farmers of Ontario and Canada who were concerned about supply management article XI, which allows us to produce milk and to also produce eggs, chicken and turkey in a market where we have import controls allowed under GATT. Farmers are still very concerned about that; there are things happening right now in the dairy industry in terms of quotas, sales and so on that we don't need to get into here.

The negotiations have been stalled. Most people had written them off and I believe the US government had written them off as well. They seem to be channelling more of their resources into a North American free trade deal at the moment. However, a week ago the Europeans announced some new cuts in their common agricultural policy; they're actually going to cut supports for grain and for beef to European farmers. I believe that, in the Europeans' mind, is going to restart the negotiations, because they basically have been stalled and not going anywhere.

Mr Bisson: But if you talk to people within the industry in my area, the whole question seems to be around the marketing boards, what could happen there in the long run. The sense they have is that if people outside Canada had their way, we would do away with the marketing boards, which would really put a kibosh -- I'm not very clear on the issue, which is why I'm asking where the hell we're at.

Hon Mr Buchanan: It's true there's not a lot of support in other countries for the system we have. We continue to support the federal government and hope it will be firm in its resolve to defend supply management and the marketing board system we have. In terms of the dairy farmers in your area, there's a fear of the unknown. When you're under attack and you're hearing people saying no other countries seem to support our system, then obviously there's a great deal of fear and anxiety. If we could get this resolved in some way, it would be much better for dairy farmers and others who really fear the unknown, because they don't know whether there is going to be a deal. If there is, what's it going to do to them? Are they going to be protected -- which is what our position is -- or not? So we continue to work with the feds and encourage them to be firm in their resolve and do the best we can.

Mr Bisson: As you're aware, there was a move in regard to some of the dairies in northern Ontario, a loose consolidation of dairies, I guess, if you want to put it that way. Again, the question is that we've seen some losses in places like Sudbury and Sault Ste Marie. I know there's some work on the part of the ministry of agriculture. I haven't been informed lately of where things are at, but apparently there was some sort of policy change being looked at, or have I just misunderstood that?

Hon Mr Buchanan: I'm looking for a volunteer to tell us about the northern dairy policy. He's shaking his head.

Mr Bisson: You're it on The Price Is Right: Come on down.

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Mr George Collin: I'm George Collin, executive director of laboratories and inspection services. I can't give you very much direct help, Minister, on this, but the issue has been under review, discussion and hearings in front of our director of the dairy inspection branch. Much of the issue depends on, as you say, the closing and consolidation of several dairies. The other issue is the distribution licence system. This is an issue under very intense discussion right now. I can't help you with the details beyond that point.

Mr Bisson: In regard to the licensing issue, where is that at? My understanding is that there was supposedly some kind of decision forthcoming from the ministry on how it was going to deal with that. I know in Kapuskasing, for example, there were some fears of the dairy closing over there and the licence reverting to somebody in North Bay, I think it was.

Mr Collin: That's right.

Mr Bisson: Apparently there were supposed to be some discussions on how that would be dealt with.

Mr Collin: Yes, there are discussions under way, but I can't give you any detail on that.

Hon Mr Buchanan: There's no major change in policy. What exists in the north now, as you know, is to make sure that the milk that's consumed there is produced there. Distribution costs are higher and have led to a number of people calling for more competition. We are trying to protect the producers as well. If we were to open it up wide, it would be under a lot of pressure to bring other milk in from other areas, which would hurt our producers up there as well.

There's no immediate change. We have licensed one or two new distributors in the north. The Kapuskasing situation is almost a special case. We have also explored the possibility of allowing other distributors to bring milk into Kapuskasing, which would presumably lower the cost of milk, but it's a delicate issue. We're trying to work it through to make sure that if one grocery chain is taking milk in, then it will give milk to its other people who are selling milk in that area and not just the milk distributor. It's an issue that we're aware of and trying to work through.

Mr O'Connor: Maybe to raise some eyebrows here in the room, in meeting with local farmers in my riding and two federations that come to see me as representatives on occasion -- I do sit down and talk with them fairly regularly -- one area of concern they raised with me, and I think it's probably as a result of some of the hype they read in the newspapers, is about the proposed changes to the Labour Relations Act. I was just wondering if you have done any studies on how this could affect the farmers. Has the federation been involved in some of the discussions? It was a little controversial, and I saw some eyebrows go up, but I think it's still something that we as rural members have been asked on occasion.

Hon Mr Buchanan: I'd like to thank my friend Larry for the question. A task force that has been put together is going to make recommendations to the Ministry of Labour as to how the amendments would affect agriculture and how they might be incorporated. There is a lot of concern in the agricultural community. As I referred to earlier in terms of the GATT negotiations, I think part of it is a fear of the unknown. They've heard a lot of things from different people who have varying ideas about labour legislation. However, I think that in those cases the family farm, a normal-sized operation, has nothing to fear at all. They probably will not be impacted in any way.

The minister has discussed lifting the exemption for agriculture. I believe that is probably going to come into existence, although I'm waiting to see what the task force that's currently looking at this matter will bring forward. There's no question there's going to be some impact. We are aware, though, that if agriculture's included, we'll have to look at a dispute settlement mechanism other than simply a stoppage in work. If we're dealing with perishable food or we're dealing with livestock, we have to look at the humaneness of looking after chickens or animals and so on. You can't just withdraw your labour, so there would have to be some means of settling any disputes other than simply a withdrawal of labour.

I think that's being addressed by the task force, hopefully, and I know the Minister of Labour is quite willing to accept that it will be somewhat different than the sort of traditional industrial model that might apply at GM or at an auto plant.

Mr O'Connor: Thank you, Mr Minister. I didn't mean to put you on the hot spot.

Hon Mr Buchanan: That's okay. I like good questions.

Mr O'Connor: I felt the question has been raised in my riding and I thought it appropriate that I ask you.

Hon Mr Buchanan: It's all right. I'll still speak to you, Larry.

The Acting Chair: Mr Frankford just wanted to see if you had some of the replies to a couple of the questions from yesterday.

Hon Mr Buchanan: Yes. I've lost track of my paper here, Mr Chairman, but I think it was here.

One of the questions I think was looking at surplus food products and urban food banks. In fact I was discussing this issue with the Ministry of Community and Social Services today. We need to have some legislation brought in, which is called indemnity, so people who provide food -- there's another word for it that I'll think of in a minute.

Ms Burak: Good Samaritan.

Hon Mr Buchanan: Good Samaritan law, which would allow farmers to basically donate foodstuffs and not fear any kind of liability, if you will, for donating that food. In talking to the minister today, we're looking at how we can move that concept through. Apparently we also need to have some discussions with the federal minister. I'm not sure of the legality or why that is true. But we have met with members of the Toronto food policy council, we've talked to a few people from the co-op side of things, and I think there are some opportunities for us to allow farmers to contribute some of the surpluses we have and get involved in some of the food banks.

I also think, if I could expand on the concept, that there are some opportunities for our ministry to become more involved in urban areas like Metro Toronto. I'm really concerned that some urban people are so far removed from agriculture that they've lost their roots, if you will, in terms of supporting farmers and they're always looking for the cheapest food supply. If we go back a couple of generations where almost everybody had a grandparent who lived on a farm, we've lost that over the years and I think we need to do more as a ministry to link up and educate urban people about the importance of agriculture.

One of the reasons is to have farmers involved through farmers' markets, and I think that was another one of the questions you've raised. We need to look at other opportunities probably to see how we get farmers' markets perhaps spread around Metro Toronto a little bit more than just in one or two locations. Farmers' markets are working well in some other cities. Why not have more of them in Metro Toronto? So yes, there are some real opportunities here for us as a ministry. Although we're seen as rural, I think we can't lose our market. A sizeable part of that market comes from Metro Toronto.

Mr Jordan: This question has probably been covered, but at the constituency offices in my riding I'm getting considerable pressure regarding this Article XI, which I understand you and the federal government are still sticking with, but the word is out to some of these people that in fact you do have an alternative plan. The feds and people like yourself, Mr Minister, are aware of some negotiation or something by which over a five-year period you would phase in something different that would still give a type of protection, but not what we have today. Are they grasping at straws on that?

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Hon Mr Buchanan: I don't have any alternative plan or any hidden agenda. In fact, I've been asked that by the farm community. I really don't want to contemplate that, because as soon as you start to contemplate your funeral, usually you come to that end. I think we've looked at some of the data in terms of tariffication, which is what the Dunkel proposal was suggesting out of GATT, that we put tariffs on milk -- in this case what you're hearing from your constituents in eastern Ontario in the dairy industry -- that would flow into this country and then reduce them over time.

There was some work done in terms of how high the tariffs would have to be. That work has been done at the federal level. We looked at some numbers as well, but the numbers for supply management were not tabled, as I understand. I should probably get somebody up here who knows. The government of Canada, as I understand, did not table the tariffication numbers for supply management commodities; it did for some other areas. Is that correct, Bob?

Mr Jordan: I understand what you're saying, but what's making it appear more than gossip in the district, if you will, is that some of the larger farmers are in fact buying up quota and the smaller farmers, out of fear, are of course selling it. So they see something there, that if you're a big enough operation, that's going to leave you viable, regardless of what comes out of article XI. But there's a feeling there that the smaller, the 30-herd, for instance, unit will not be viable. They feel, "Do I go today or do I wait for my funeral?"

Hon Mr Buchanan: That's happening across the province.

Mr Jordan: It is?

Hon Mr Buchanan: Yes. It's not just happening in your area. Again, it comes back to what I said. To repeat myself a little bit, it's fear of the unknown. Dairy farmers are concerned about supply management, article XI, what's going to happen.

What I find interesting is that if we were to go the tariffication route, certainly supply management and marketing boards we know would be very much under attack and threatened. I can't for the life of me figure out why people will at this point pay more money for quota. In fact, the price of quota is going up. You're probably correct that it's being bought up by some of the larger producers. I don't understand the reason for that. It's not because they have any inside information. I think it's not wise to be doing that.

If some of the people are offering their quota up because they're getting out, some people are buying quota and paying more for it because they have a cash flow problem. Quotas have been cut over the last year and they will be cut again this coming summer -- 3%, 5%, in those kinds of ranges, so those cuts are coming. They want to keep the cash flow up, so they go and borrow more money and buy more quota in order to keep their cash flow up. Again, I'm not sure that's good financial management, but that is happening. I don't know that it's just the big guys who are buying the quota, though. I think some of the other people are buying it up as well.

Mr Jordan: Mr Minister, the question they really put to you, and you probably get it in your constituency office, is, "Are you going to advise me to sell now and get out or are you going to advise me to stay on?" "I can't advise you either way" is my reply, which doesn't give them very much satisfaction leaving the office. They feel I should be able to come to Queen's Park and get information to help them make a decision. They're not going to go over a 30-herd operation, but they would like to maintain it for their son 10 years down the road. So that's the picture that's there. I don't have answers.

Hon Mr Buchanan: And I don't necessarily either. I don't think we should be advising. As a provincial government and as members of this Legislature, we should be trying to support the federal negotiators to get the best deal to preserve the system. I happen to believe it's one of the best systems. In talking to people from other countries, even the American producers now think our system would be a good one for them because they have huge surpluses, thousands of tons of surplus butter. I think we have to stay the course and support the current system. I don't think it's up to us to recommend that they sell or stay in or whatever. We're defending a position the best we can because we think that will work.

The business of the size of farms is a debate that's been around for a long time, and people who talk a lot about competitiveness as a focus will say that if you have a larger unit of production you're more competitive because you lower your unit costs. That's true for dairy farms the same as it's true for chocolate companies and anything else -- cars, auto plants.

Mr Jordan: Ontario Hydro.

Hon Mr Buchanan: Ontario Hydro? No, I didn't say that. I don't know anything about Ontario Hydro.

Yes, that is there. People think that, and not just because of GATT. Some people think a larger farm is more efficient, and that probably is true to a certain extent.

Mr Jordan: So what is the position, to advise them either way?

Hon Mr Buchanan: No, and I think it would be unwise to do that.

Mr Cleary: I'm just wondering if we're going to carry on with those questions we presented yesterday.

Mr O'Connor: I think there was a good question asked here about the north American free trade agreement as well yesterday that we never did finish up.

Mr Cleary: There are quite a few that haven't been answered yet.

Mr O'Connor: I've got about 20 of them here.

Hon Mr Buchanan: I've got the answers, Mr Chair.

The Acting Chair: What I was going to do, since there are some written answers, if there are more, if you'd rather have those answered now, I want to make sure we got as many as we could.

Mr Cleary: Very flexible.

The Acting Chair: We're very flexible. Mr Villeneuve had a question. I don't know if you'd rather carry on. I'm at the wish of the committee.

Mr Villeneuve: We're getting very close to the last half-hour and I still have a number of questions that have been partly answered by the minister. I know he has those questions and may well have some answers. I would certainly like to --

The Acting Chair: I guess what we can do too is that any of the questions can be put in written form for the minister to attempt to answer. The minister's got quite a few here. If the minister has them, if there are any specific ones you'd like to hear about now and then get a further answer on, you can do that, if the minister can find the paperwork. Is there a particular one, Mr Cleary?

Mr Cleary: He was doing pretty well.

The Acting Chair: He was doing pretty well. He had all yours right in the front there. Okay, if you just want to continue, if you can find the ones that Mr Cleary had asked before.

Hon Mr Buchanan: With regard to trends in enrolment in colleges and in agricultural programs at the University of Guelph -- I guess that was one of Mr Cleary's -- numbers in 1991 were actually up. We were hovering around 933 in 1990 and in 1991 we were up to 1,049. The follow-up to that was a concern about declining enrolment and were we going to reverse the trend. I think the trend has been reversed. In terms of the community colleges, I've talked to that sector and its numbers are up. Requests for entrance are up as well. I assume the same thing is true of the agriculture colleges, that enrolment is in fact on the incline. Part of it's due to the economy and to the fact that young people are staying in school more and looking for other programs. There's not a problem with a decline in terms of attendance at the ag colleges.

The details on the anti-recession money that we got, $7.9 million last year, are in print form. There is a whole page of numbers; in fact, there are two pages of numbers. We'll just simply table that for you, but it was spread around the province, the different colleges and some at the University of Guelph.

There was a question on the anti-recession dollars. Why was it directed at the buildings instead of farmers to make needed capital purchases? This was an emergency kind of thing done very quickly. Most of these projects were ones that had been around for many years, requests in from -- there were school boards. In our case, it was dealing with our colleges. There were things that had been asked for over many years and there wasn't the money to do. The Treasurer looked at ways of getting some jobs created very quickly with existing projects and decided to go this way in terms of capital projects using government facilities to give them a chance to be upgraded.

That isn't to say that farmers couldn't have spent the money on capital purchases and upgrades, but it would have taken a while to design a program and then make sure it was going to create jobs, and local jobs. If you purchase a new combine, I'm not sure how many jobs that would create in Ontario. It might create a number and it might not create any. So you'd have to design a program that was going to be targeted to create jobs. There was a question about the floating price option on crop insurance and what changes have been made to the floating price option for 1992. Henry? And I'll give you the supplementary: How does the commission treat a zero yield when average farm yields are determined?

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The Acting Chair: Could you just introduce yourself.

Mr Henry Ediger: Henry Ediger, executive director, crop insurance and stabilization.

Last year there was some complaint about the floating price option in 1991. A lot of farmers said that the float was too low. It was relatively low compared to what it has been in the past when the price was fixed. This has been moved up for 1992. The amount it's been moved up is about 35 cents a bushel for corn. We've talked to all the commodity groups and they're relatively happy with the change in the float.

The other question was, what happens if a farmer gets a zero yield? Under our crop insurance program, farmers are insured on an individual average yield and, of course, whether it's zero, 10, 100 or 150 bushels, that's the amount that has to be put in in order to maintain the integrity of the program.

What the commission has introduced in the past couple of years is a buffering system. Any yield below 70% of normal is buffered up and any yield above 130% of normal is buffered down. So it's a symmetric buffering, and that helps in many instances. I've looked at a lot of 10-year yields where farmers have had three or four of their yields buffered, and it certainly goes a long way towards evening out some of these flows.

Hon Mr Buchanan: Again, for Mr Cleary's question on the tripartite premium funding of crop insurance, I can try to answer that one. We're dealing with the federal Crop Insurance Act, 1990, which sort of sets out the way things are done in the country as well, of course, as in Ontario. Under that, producers are paying 50%. We certainly support the concept of changes and modifications there, but we do have to go along with what is in the federal act at this point in time. We don't have the option of making our own rules unless we get the provinces on side.

There was a question on the legislation to implement Agricorp. The question was, "Why has it been delayed and when is it scheduled to be introduced and completed?" I can say that the legislation is ready to bring in. I'm kind of looking for an opening to do that, and I'm hoping we can have all-party support. If we can get that, the chances of my getting it in quickly and getting it through are improved. If there is anything controversial about it, it will be hard to get into the House, but it is ready to go as soon as we can get on the legislative agenda.

I think that, in conjunction with what I said yesterday, has more or less covered off your questions, Mr Cleary.

Mr Villeneuve also had a list. The first one I have is on the horse industry, and talked about the racetrack taxes and what could happen as a result of the possible introduction of casino gambling. The question also asked: Has OMAF studied this?

We recognize the horse racing and breeding industry and all the jobs. There are about 50,000-plus jobs associated with that industry. The Ministry of Consumer and Commercial Relations is very much aware of that and the importance of it. We talked to the commission. We know the horse racing industry is important to rural communities because it's spread across the province.

We are reviewing everything we have in the way of information. Any kind of impact the expansion of casino gambling would have will be taken into consideration, or any new gaming initiatives that we bring in. We're obviously going to have to consult with the horse racing industry and try and minimize any impact. Some of it would be by additional support through possible taxation or support programs, but we certainly are very aware of the impact any kind of gambling in other areas would have.

A question again on the Chatham Agricorp move and what operations would go to Chatham. Agricorp, I think, has been announced as going there, at least a couple of times. That would proceed. The head office facilities to accommodate the crop insurance and stabilization division would also be part of that and it says it will be completed by 1994. The crop insurance, market revenue program, tripartite stabilization and the farm income stabilization programs would then run out of Chatham.

The next question deals with upcoming environmental legislation: How much will fall under OMAF's jurisdiction on matters affecting farmers? It's a five-part question. What role has OMAF played in discussions? Did OMAF comment on the report of the agricultural task force, the Ontario Round Table on Environment and Economy?

We certainly have ongoing discussions with the Ministry of the Environment on the environmental bill of rights. In fact that was one of the reasons that one of the early things I did was to get a group of farm leaders around the table as an advisory group. We met, I guess, monthly last year to get ready to respond to the possible introduction of an environmental bill of rights. The first time that group met they were very fearful and as the year went on they got more positive and started talking about it. We have had discussions and, of course, feedback providing information to the Ministry of the Environment.

How much of that jurisdiction we would have in OMAF remains to be decided. I can say that the Minister of the Environment was very pleased with the farm leaders and how their farm environmental plan came out. She was very positive. In fact she took it to meetings and held it up as an example of how groups come together. Here's a group that was very fearful of her and her new bill of rights they had heard about. They actually took initiative on their own and what they've done will be recognized in new legislation.

Our role in the round table: We didn't formally comment on that. I'm aware that there was some criticism of some of the things in the early draft and how it was treated, but that was fed into the round table. It was part of the several task force reports. There was a lot of comment on some of the other task forces as well, but that was all then put into the round table and that group will make some kind of final report within a month.

We didn't get actively involved in the task force. Normally, you don't ask a task force to go out, do something for you, give it back to you and then sort of criticize them. It was accepted and then the recommendations came out of the round table, which is primarily 50% ministers and 50% business people.

The question on the status of fuel ethanol I think we've dealt with.

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The question on GRIP in Saskatchewan says: "Saskatchewan recently announced a number of negative changes to its participation in GRIP. Does Ontario plan any changes?"

We don't plan any changes along the same line I think the question would suggest as Saskatchewan, which looked at the structure. It's interesting, because as we understand it and as I understand it, they changed theirs to be a little more like ours here in Ontario and got into some difficulty because of it.

What we are contemplating changing in terms of the support price is that the farm groups had asked us to not drop off the 15th year, which was a very good year, I understand, in terms of price support, because they average 15 years in order to get the support price, and that came across the whole country and some of the other provinces supported that and we are supporting that. Basically that is a better price, a better support price, but no other changes in the way GRIP works.

There was a question on, "Has the cabinet or the ministry approved the white paper or any other discussion paper on food land preservation in addition to what we've already circulated?" No, there are no additional papers other than what we have out now as a discussion paper, and I hope that is going to be the basis for a decision document. I know I've been criticized, in the press at least, for having another paper, another discussion, but this is intended to be a decision document we can use to make some decisions.

Another question from Mr Villeneuve, "On the broader subject of rural development land use, how does the government hope to promote more rural jobs and development when the issue is very closely connected to that of rural sewage treatment and the restrictions that have been placed by government?"

We are working with the Ministry of the Environment ensuring that environmental regulations are not unduly restrictive with regard to agriculture and rural development, and again, I'm hoping our consultation and working with Sewell will reflect that and we can in fact speed up rather than slow down some of the restrictions that are in place now. The minister I think has responded to that in some ways to speed up some development hopefully and create more jobs and not have the sewage treatment and other things get in the way of development.

The other question was the London-Middlesex annexation and have we responded. I think I answered that to a certain extent earlier.

Now we're getting down to the one I'm sure everybody is interested in, the money question. The question says: "The food industry is showing a 6% increase in spending for the 1993 year. Does the ministry have any particular goals in terms of turning around the widening food trade deficit, either in terms of further increasing exports or import replacement?" Grahame?

The Acting Chair: Please just give your name for the record.

Mr Richards: Grahame Richards, assistant deputy minister, food industry division.

The question, just to restate it, was that the food industry development vote item is showing a 6% increase in spending in the 1992-93 year and does the ministry have any particular goals in terms of turning around the widening food trade deficit, either in terms of further increasing exports or in import replacement.

In more recent years, I guess we were expecting some problems after the implementation of the free trade agreement. Also, a factor that's impacted on imports has been the high value of the Canadian dollar, which negatively affected our exports.

A large portion of our imports are products we don't grow in Ontario, for example, fruits and vegetables in the winter, citrus and tropical foods, tea, coffee and nuts. In spite of that, the ministry does look for opportunities for import replacement and indeed has in Mr Knox's area an innovation agriculture unit that is working on projects in that area.

More specifically, the question related to our goals. Our goals are to strengthen the Ontario food sector in order to enable it to be competitive in North America and thus globally. A strong, competitive food processing sector will ensure a ready market for Ontario farm products and ensure that we're competitive with imports and in a position to expand exports.

More specifically, the actions we've taken in the past two years are the formation of a food industry competitiveness branch to work with the food industry on competitiveness issues, and we have enhanced our traditional export programs with a border states program for new exporters and a program referred to as the expanded development and growth for exports program, which is a grant program to assist organizations in long-term export development activities.

We continue with our trade missions. In the last year, in both outgoing and incoming missions there were 100 particular trade activities. As the minister mentioned in his opening remarks, the implementation of the food industry strategy to address technology transfer, research and development, skills training, joint ventures and strategic alliances with the food industry are all designed to strengthen their position.

The results to date: From 1989-90, exports grew, I believe, about 17% in spite of free trade, and in our exports during that year the growth exceeded the import growth. Also, our share of world agricultural trade, although small, actually grew from 1989-90 after declining each year from 1986-89.

Hon Mr Buchanan: Thanks, Grahame.

Another question: "The federal government recently conducted a study of food industry regulations which were making the Canadian industry less competitive with respect to imports. When was the last study undertaken in Ontario, or will one be undertaken?" Basically, what we've done is that staff have reviewed the federal study. We are not planning any study at this point in time, but we are monitoring the situation through the agrifood competitiveness council with the federal government.

Next question: Agriculture in the Classroom needs to be supported as the population becomes more removed from agriculture. I have an extensive answer here, but I would say I support that. We recognize the fact that we need to expand our role into urban areas and education is one of the keys to that.

The question on the beekeeping industry, three components to that: Anyone want to volunteer to --

Mr Collin: There have been some major discussions this past winter with the bee industry, and the Ontario Beekeepers' Association particularly, on three basic disease problems: foul brood, which has been a disease of long standing with the bee industry in Ontario; tracheal mite. You may recall that tracheal mite has been a problem that has drifted from the United States into two areas near Cornwall and in Niagara. Over the last three years the industry and ministry have undertaken a program to eradicate hives where they find the tracheal mite.

There's a major change in this program this coming year. The quarantine will continue in Niagara and Cornwall. The quarantine simply stops the movement of bees out of the area by hive and allows pollination bees to go into the Niagara and Cornwall areas. They will no longer be eradicated or destroyed; they'll be treated with menthol, and hopefully that program will control it. The ministry has agreed with the beekeepers' association that the association will monitor the spread of tracheal mite outside the Cornwall and Niagara areas. There's a proposal to the minister that a fund be provided to the beekeepers of Ontario to do this monitoring, and the beekeepers are very much on our side.

The third problem the bee industry has in Ontario is the verroa mite, and there is no control for this problem. It's a disease declared by the federal government, the Department of Agriculture, and it was detected in Niagara and Windsor in the fall of 1991 for the first time. Agriculture Canada continues its program of control -- it has the legal responsibility -- and our ministry assists in research and development. Those are the three changes on the bee program.

Hon Mr Buchanan: I think I'll be through, except for my own members. There are a couple of questions; we didn't talk about NAFTA.

Anyhow, "Mr Villeneuve: `How is the crop insurance commission to be changed?'" Basically, it will become the Agricorp board of directors once the legislation is through. One of the big questions is: How will vacancies on the board be filled? We anticipate that these will be selected by the Ministry of Agriculture and Food, based on advice from the general farm organizations and the commodity council. We're looking at the possibility of having a memorandum of understanding with the farm groups to set that out.

The last question deals with: How is the Ellen Lowry situation being handled? I remember this question well from the House. It has to do with separate crop insurance contracts. There's a policy in place which is universal across the country that says that two individuals have to have separate books and separate operations in order to have separate crop insurance contracts. We believe the case was dealt with in a fair manner, and there is every reason to believe that if she has applied and possibly was accepted for a contract for 1992, providing she meets the criteria that are applied to two individuals in the same household -- it's uniform, it has nothing to do with her being a spouse of another farmer.

That kind of concludes that particular list.

The Acting Chair: Then the minister can circulate the written answers to the members who didn't get covered. The time for estimates has now expired and I shall now call the votes.

Votes 101 to 106, inclusive, agreed to.

The Acting Chair: Shall the estimates of the Ministry of Agriculture and Food be reported to the House?

Agreed to.

The Acting Chair: The time having expired, this committee will adjourn until Tuesday, June 2, when we will take a look at the Ministry of Health.

The committee adjourned at 1754.