Assemblée législative de l'Ontario

MINISTRY OF AGRICULTURE, FOOD AND RURAL AFFAIRS

CONTENTS

Wednesday 16 November 1994

Ministry of Agriculture, Food and Rural Affairs

Hon Elmer Buchanan, minister

Rita Burak, deputy minister

Bob Seguin, assistant deputy minister, policy and programs

STANDING COMMITTEE ON ESTIMATES

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

*Vice-Chair / Vice-Président: Arnott, Ted (Wellington PC)

Abel, Donald (Wentworth North/-Nord ND)

Bradley, James J. (St Catharines L)

Carr, Gary (Oakville South/-Sud PC)

*Duignan, Noel (Halton North/-Nord ND)

*Fletcher, Derek (Guelph ND)

Hayes, Pat (Essex-Kent ND)

*Lessard, Wayne (Windsor-Walkerville ND)

Mahoney, Steven W. (Mississauga West/-Ouest L)

Ramsay, David (Timiskaming L)

Wiseman, Jim (Durham West/-Ouest ND)

*In attendance / présents

Substitutions present/ Membres remplaçants présents:

Cleary John C. (Cornwall L) for Mr Mahoney

Fawcett, Joan M. (Northumberland L) for Mr Bradley

Klopp, Paul (Huron ND) for Mr Hayes

Rizzo, Tony (Oakwood ND) for Mr Wiseman

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

Also taking part / Autres participants et participantes:

Murdoch, Bill (Grey-Owen Sound PC)

Clerk / Greffière: Grannum, Tonia

Staff / Personnel: McLellan, Ray, research officer, Legislative Research Service

The committee met at 1547 in committee room 2.

MINISTRY OF AGRICULTURE, FOOD AND RURAL AFFAIRS

The Vice-Chair (Mr Ted Arnott): Today we are dealing with the Ministry of Agriculture, Food and Rural Affairs. I want to welcome the minister, the Honourable Elmer Buchanan, Deputy Minister Rita Burak and ministry staff here today. Just to indicate, these will be votes 101 to 105. As we're initiating estimates today, we have allocated six hours of time to deal with these spending estimates.

Minister, welcome. I'd like to recognize you at this time for your opening statement.

Mrs Joan M. Fawcett (Northumberland): We get six hours --

The Vice-Chair: We'll talk about that. Go ahead, Minister.

Hon Elmer Buchanan (Minister of Agriculture, Food and Rural Affairs): You mean I've got to talk for six hours?

The Vice-Chair: No, you don't have to.

Hon Mr Buchanan: Mr Chairman, members of the committee, I'm pleased to be here again this year to present our 1994-95 estimates for the Ontario Ministry of Agriculture, Food and Rural Affairs.

During our preparation for today's meeting, I spent quite a bit of time reflecting back on the past four years. That day when I took over the ministerial reins seems like a long way off now, but I can recall thinking at the time that the job ahead for me was going to be especially challenging. Discontent was widespread in the farm and rural areas of the province, and our agriculture and food industry was struggling to cope with intense economic pressures, including a rapidly changing international business environment.

As someone who grew up in rural Ontario, I knew that the rural communities were an integral part of our province's social and economic fabric and that they needed help. It was clear that immediate support was needed, as was a long-term program of revitalization.

Well, that was four years ago, and I'm pleased to say that much has changed. I'm also very proud of our many accomplishments. Today, we are seeing a new spirit of cooperation. Farm groups, industry players and rural residents are working together to face the future, and they are coming up with solutions for dealing with common challenges. I believe that the actions of my ministry and our approach to doing business played a big hand in fostering this cooperative spirit.

One of the things we did was to throw out the old top-down way of doing things. We took on the role of facilitator and started working with people in rural communities and the agrifood industry.

As a facilitator, we have been focusing on bringing out the natural abilities and strengths of all the players in the food chain: the farmers, the processors, the distributors, the retailers and even the bankers. I found really encouraging the fact that these players have come to support the idea that change is necessary and are accepting the new scheme of things.

Since we've come up against adversaries like the recession and the changing global economic order, we've been acting more and more like a team, working together to strengthen the entire agrifood sector. As members know, an important component of this endeavour has been the Vision 2020 process. It has been two years since Vision 2020 first began when my ministry, in partnership with Ontario's agriculture and food industry, set out to help this sector rethink its traditional approach to doing business.

Vision 2020 has helped foster change and is helping the industry discover what it does best, and decide how it can build on these strengths for the future. Alliances among the agrifood industry players are resulting in fresh ideas and innovation. At the last Vision 2020 conference, a vision statement was developed which I think speaks volumes, and I quote: "Ontario will be a world leader in agriculture and food markets in which farmers and food processors will operate in a sustainable, profitable and dynamic environment, and in which all players can compete, foster and grow to serve the needs of their consumers." It essentially says that all players within the chain will work together, will be sustainable and profitable.

As members know, Ontario's agrifood industry is an important contributor to the province's economic wellbeing. It injects about $18 billion a year into our overall economy and is our second-largest industry. For this reason, it was critical for the industry to set new directions for itself and become better positioned to take advantage of new opportunities. Vision 2020 has allowed this to happen and I'm pleased that our government played such an integral role in the process.

In addition to bringing industry players together to discuss and plan, we have been helping the agrifood industry in other ways as well.

For example, my ministry is working with the industry to identify, develop and respond to both domestic and international market opportunities. This doesn't just mean focusing on new opportunities, but it means strengthening and building upon existing relationships as well. Trade missions and export trade shows are involved here, as is playing host to foreign delegations that come to visit Ontario agrifood operations first hand.

This type of support is paying off. Ontario has moved into the lead among Canada's agrifood exporting provinces with an unprecedented $3.7-billion total for 1993, a figure that represents well over one quarter of Canada's agrifood exports.

Investor confidence in our food processing sector is also running very high. For the three-year period ending in 1992, which is the last reported year, Ontario received the second-highest amount of food industry investment out of all the jurisdictions in North America; only California was ahead of us in terms of investments in the agrifood industry.

Earlier this fall, I attended two major food industry openings, both of which represent the confidence that investors have in Ontario's agrifood potential. One opening was in London at a $3-million research and development facility constructed by Ault Foods, and the other opening was at Nestlé Canada's new corporate headquarters in North York. Such investment is reassuring and it is doing much to enhance Ontario's strong economic foundation. As well, it is contributing to the livelihood of thousands of Ontarians who are employed in the agrifood sector.

Numbers alone, however, fail to capture the tremendous importance of farming and food processing to communities, families and individuals across Ontario. Rural communities have been the backbone of this province since its early days and they still are, but as we also know, they have been dealing with tremendous challenges and pressures.

Our government recognized the importance of these communities and took steps to revitalize them and help them deal with change. We've been providing communities with the tools they need to help themselves, based on the idea that it's the people who live in a community who often have the best ideas about what's right for them.

One of the tools we created is the Farm Registration and Farm Organizations Funding Act, commonly known as stable funding. Stable funding gives a louder voice to farm organizations, such as the Ontario Federation of Agriculture, that speak for rural Ontarians, for their concerns and their vision of the future.

Even though stable funding hasn't been around for very long, its benefits are already being realized. For example, in 1994-95, the OFA will have $5.4 million to service its 38,000 members. This is up dramatically from 1993-94, with $3.2 million, when membership stood at 19,800.

These extra funds will help farm organizations become stronger, which means that they can provide their members with a better degree of support, especially at the grass-roots level. I am pleased that stable funding is overwhelmingly supported by Ontario farmers, who clearly believe in the benefits of well-funded organizations to represent them and their interests.

I have also been working very hard to obtain a national consensus on a whole-farm income safety net program to protect farmers against the fickleness of weather and markets. Recently, we took further steps towards implementing a whole-farm program by extending the net income stabilization account, or NISA. For the 1994 tax year, NISA will include livestock and all remaining non-supply-management commodities. The enhanced program for edible horticulture is also being extended.

I believe that NISA, or a NISA-like mechanism, can be used as the basis for developing a whole-farm income safety net. The NISA program contributes to long-term income stability for producers, which results in greater stability for rural communities.

I share the view held by many Canadian farm leaders and agricultural organizations that a comprehensive national income protection program is needed for all Canadian farmers.

The members know that I've been a strong supporter of a well-planned and well-administered whole-farm income protection program. At the same time, I believe we must retain our crop insurance and market revenue programs.

I remain optimistic that a consensus on this important issue will be reached at next month's federal-provincial ministers' meeting, which I will be co-chairing. I'm looking forward to finalizing the terms of the program, including a more equitable federal-provincial cost-sharing mechanism.

Perhaps the foremost example of the government's commitment to revitalizing rural Ontario came about last March, with the expansion of my ministry's mandate to include rural affairs. This additional focus ensures rural communities receive the kind of attention they need and deserve.

Our extended mandate has led to a new rural division and a rural development secretariat, both of which support rural business and community development. They also ensure that all provincial ministries approach rural development issues in a coordinated way. I would point out that this is very important for me personally and I think that it's been well received by everyone in rural communities. There's a lot of work to be done, but it is an excellent start.

A good example of our support for forward-looking, initiatives comes in the form of Jobs Ontario Community Action, which most of us call JOCA, which my ministry has been heavily involved in. As the members know, JOCA provides funding for projects that support local economic development. Most important, though, is the fact that these projects are community-inspired, created by people in the community for the community.

1600

I'd briefly like to tell the members about a couple of rural projects that are receiving JOCA funding. The first was developed by Women and Rural Economic Development, a group founded in 1993 to increase women's participation in Ontario's rural economy. Their idea was to set up five rural business networks across the province to provide business support and self-employment training for women interested in setting up their own businesses. As well, these networks would foster connections between women entrepreneurs.

Initial funding of $126,000 was given to Women and Rural Economic Development to establish the networks. Then, when they were up and running and proving to be useful, an additional $270,000 in funding was given to expand the program to 10 networks.

The funding was also used to develop a community-based marketing strategy for craft-based businesses. Already, 65 businesses have been created, and I understand that more are expected to be developed in the near future, thanks to the ingenuity of the women involved and the support they receive from the Rural Women in Business Networks.

The second project I'd like to mention was created by Agricultural Marketing for Eastern Ontario, or AMEO, a non-profit organization made up of farmers and food processors from a 17-county area that stretches from Victoria county to the Quebec border. AMEO was given almost $36,000 to conduct a two-phase survey to identify and evaluate agricultural marketing opportunities in the region.

Results from the first phase of the survey show that locally grown products could generate an incredible $25 million in sales for eastern Ontario. The survey's second phase is now looking at developing new market opportunities to take advantage of those potential sales. These two projects, as well as all the other JOCA-funded projects across the province, have a common denominator. They have all been conceived by local groups that desire the best for their communities, by people who want to have a hand in charting their common future.

Interministry cooperation has played a big part in the success of the Jobs Ontario Community Action program. This cooperation is leading to other unique initiatives as well. One of these is the community food adviser program. The food adviser program is a joint venture between my ministry and the Ministry of Health and is now up and going in 10 locations across Ontario. It supports volunteers who raise community awareness about food selection, preparation, safety, storage and even food budgeting.

The community food advisory program is important because it promotes good health in our communities. People learn about how their eating habits impact their overall wellbeing and they acquire a sense of control over their long-term health. Such heightened awareness about food issues will also translate into savings for our health system, especially when you consider that each year, 1.5 million Ontarians suffer from food-related illnesses.

I am pleased that we are making significant progress in addressing rural development issues through a coordinated community-oriented approach. As members are aware, the financial stability of farmers is vital to maintaining healthy rural communities. A couple of years back, our government went out in search of fresh ideas on how to deal with this important issue. We met with rural people who told us what they wanted and needed and we have acted. We came up with what is called the agricultural investment strategy.

A key component of the investment strategy is a program called FarmPlus, which has been a huge success. FarmPlus has seen my ministry working with credit unions and caisses populaires to channel money from guaranteed investment certificates into a special pool for farm-related businesses, loans and mortgages. Right from day one, FarmPlus was a winner. In the first two months of the plan, sales of GICs tripled the expectations. The most recent figures show that more than $21 million have been invested in these GICs; that is, $21 million available across the province, funds that stay in rural communities, funds that are designated for farmers in the agrifood business.

The agricultural investment strategy covers education and training to help farmers deal with the complexities of farm finance. Last year, under the education on farm finance and law program, we conducted 49 workshops on credit management across the province. About 830 farmers took part in the courses, which were delivered by teams of professionals, including lawyers, bankers, farm leaders and ministry staff.

Support for farmers has come in other forms as well. Take the highly successful Ontario feeder cattle loan guarantee program, which provides an alternative source of credit for cattle farmers at reasonable rates. It is also an excellent example of cooperative strategy for agricultural finance. This past spring, we added $10 million to the feeder cattle loan program, raising it from $25 million to $35 million. This increase reflected the fact that the 1993-94 value of loans was double that of the 1992-93 season.

The ethanol issue is yet another indicator of our commitment to fostering rural economic development. The ethanol industry makes sense in at least two significant ways: It deals head-on with the economic change both for farmers and rural communities, and it provides an environmentally friendly alternative fuel.

As members know, I have been pushing hard for Ottawa to take the necessary steps to encourage the growth of the ethanol industry. But like many others, I have been frustrated by the federal government's lack of response to this issue that is of such importance to rural development. One important step Ottawa must take is to secure an 8.5-cent-per-litre excise tax exemption for ethanol. The key word there is "secure."

Our government has already provided concrete support for Ontario's ethanol industry. Back in March, we provided a $5-million grant for the construction of an ethanol manufacturing facility in Chatham, and funding has also been given to the Seaway Valley Farmers' Energy Co-Operative to develop marketing and investor support for a plant in eastern Ontario.

I believe it is the responsibility of government to support innovative ideas such as ethanol, initiatives that are grounded in the present yet have an eye on the future. But to show such support, government first has to listen to what people have to say. Indeed, listening is something that our government thinks, and I think, is very important. By meeting with constituents and hearing their ideas, we come up with the solutions that work.

I've already talked about our consultations that led to the successful agricultural investment strategy. The members may also know about the advisory committee on rural development formed earlier this year to review existing rural development issues and initiatives and make recommendations. The committee is made up of a diversified and experienced group of people from across the province. They are familiar with all aspects of community development and are serving as a link between communities and the ministry.

We have also been meeting with rural residents to discuss specific issues affecting their communities. Last January, for example, my ministry and the Ministry of Community and Social Services held Ontario's first ever rural child care conference. Participants were able to acquire skills, share resources and experiences, and discuss and develop child care appropriate to their needs.

Just in September, I was involved in a youth conference called A Voice and a Choice, which was organized by the Ontario Coalition for Children and Youth. On the Saturday evening of the two-day conference, I hosted a session focusing on rural youth issues, which gave me an opportunity to meet with young people from across the province, listen to their concerns and find out about what's important to them.

The issues that we explored were far-reaching. They were interested in everything from the education system to such societal issues as racism, teen pregnancy and suicide, problems that were once thought to exist only in our urban areas.

The youth conference was a very successful exercise both for the young people and for me. They came away with the knowledge that their voices can be heard and that they can make a difference in their communities, and they got a taste of what it's like to work cooperatively.

In many ways, the youth conference stands as a symbol of what our government has been doing these past four years for Ontario's agrifood industry and for our rural communities. We have been bringing people together. We have been getting them to talk about their concerns and about their ideas for new directions, and all the while we have been listening so that we can bring forward initiatives that support the different visions that Ontarians have of the future.

As I've described, our way of doing business is working. Cooperation is becoming the norm. Through processes such as Vision 2020, players in the agrifood industry now realize the importance of working together towards shared goals.

This spirit of cooperation has also taken root in our rural communities. People are listening to the concerns and needs of one another, ideas are being exchanged, and common solutions to common problems are being found. My ministry is supporting these communities in their efforts.

I'm proud of what our government has accomplished. Not only have our efforts led to a stronger agrifood industry in Ontario and a process of revitalization for our rural communities, but they have created a sense of optimism about the future, a feeling that challenges can be overcome and opportunities taken advantage of.

I'm sure that members of the committee will have comments and questions and I look forward to addressing these. Representatives from my ministry will help in responses and together we will certainly attempt to provide whatever is needed so that the committee can make a constructive discussion of our estimates.

1610

The Vice-Chair: At this time, I'd like to inform the committee members of a situation that we face today. The standing orders of the Legislature indicate that the report by the estimates committee has to be made to the full House by the third Thursday of November, which is tomorrow, so we have only today for dealing with Agriculture, Food and Rural Affairs estimates. We have about 90 minutes to go.

There's been agreement from the three caucuses that we'll have the votes at 20 to 6 so that we can, in turn, go and vote in the Legislature on the resolution that's being debated today. So we have 90 minutes to go, approximately, at this point in time.

I'm open to suggestions from the committee as to how they'd like to do it, but what I would suggest perhaps is that I recognize the Liberal caucus now for 20 minutes. If you wish to use your time to have a response from the minister or if you would prefer to immediately engage in questions to the minister and ministry staff, that would be fine as well. I'm in the hands of the committee.

Mr John C. Cleary (Cornwall): A 10-minute windup at the end?

The Vice-Chair: We have 90 minutes. We can use it as we prefer. If you wish to respond to the minister, as you may have planned, that's fine, but we just have a limited amount of time, and if you want to use the time for questions, that's all I'm suggesting.

Mr Paul Klopp (Huron): That's all right with our caucus, 20 minutes each, if that's what you wish, and then a 10-minute wrapup. It seems like a good idea and then we'll go in rotation. Sounds fine with us.

The Vice-Chair: I now recognize the Liberal caucus.

Mrs Fawcett: I welcome the chance to put forward some remarks. I was interested in the minister's opening remarks, but I am a bit bewildered in that when you listen and when you read what all he says the Ministry of Agriculture has been doing and then you take a look at what's in the estimates book, it just doesn't seem to jibe, it doesn't seem to match, because in the estimates book there's that one column that seems to jump out at you everywhere, on every page almost, and that's the changes from the 1993-94 estimates to what we're projecting into 1994-95. It just seems that column after column there are brackets, and brackets to me mean cuts. I just get awfully worried about how the minister is going to walk the talk here. He says quite a bit there, but I just don't know.

I believe totally that agriculture is Ontario's second-largest business after the auto industry. It is a very important business. Really, I think we must recognize the significant contribution that agriculture plays in Ontario's economy, and if we don't, then we are missing the opportunity for many, many jobs.

As the minister pointed out, more than 220,000 of Ontario's jobs depend on the $6 billion worth of farm-gate production and the $20 billion in value added processing. Ontario is still Canada's largest agricultural province and I noticed in the minister's remarks that he said that Ontario has moved into the lead among Canada's agrifood-exporting provinces. Well, I guess so. It should. We are the largest agricultural province and we should be up there leading and in the forefront. Sometimes I really question that; I wonder if we are doing nearly as much as we should be.

I dwell on these facts because any plan for Ontario's future must ensure that agriculture takes its well-earned and deserved fair place in a real economic recovery, and I think that unfortunately Ontario's family farms and rural communities have been all but ignored by the NDP government. The minister, I know, would differ with me, but I really fail to see the support that his government has given him.

While the public has been calling on the government to place a priority on economic initiatives and protect and increase jobs, the $26-billion agricultural industry has been targeted for debilitating program cuts while overall government spending has increased by more than 15% over the last four years. Spending on agriculture has been cut by 14%, and its share of the provincial budget continues to shrink.

Once again in this year's estimates, the same as last year, we witnessed the NDP's commitment to agriculture dwindling. In the Tories' last budget, we recall, and I keep reminding the minister and the Tories as well, that at that time the Ontario Federation of Agriculture called for the resignation of the minister, Dennis Timbrell, and the Treasurer. I just want to say that we in our party really have made a commitment to agriculture and we mean it.

In the spring of 1992, Minister, you announced the agriculture investment strategy, and you did make a brief reference to it in your speech. As I recall, you pledged $120 million to the five-part program over five years. At the time I remember you saying, "Unlike the ad hoc government funding of the past" -- and I really assume he meant the Tories -- "these programs will be stable, long-term and based on cooperative partnerships among Ontario government, farm groups and the financial community."

When introducing the FarmPlus component in January of this year, you said that it was "the kind of catalyst Ontario's farm and rural communities need to enhance local job and business opportunities." Given the importance you have placed on the agriculture investment strategy, I wonder if you could explain how this document from your farm assistance program branch indicates that by the end of the 1994-95 fiscal year you'll have spent less than $6 million. Out of a $120-million program, that is less than 5% that will be actually spent.

I don't really want to hear how much money this $5.5 million of the $120-million program has leveraged, but I do want to know, and the agricultural community wants to know, when do you intend to spend the promised $120 million? What's happened to your commitment to the agriculture investment strategy? I get worried when I see, in the estimates book on page 99, that once again there's a bracket around a fair amount.

How much time of my 10 minutes have I taken? Have I taken it all?

The Vice-Chair: No. Were you just going to speak for 10 minutes?

Mrs Fawcett: Yes, because I don't want to cut my partner off.

The Vice-Chair: You started at 4:10, so you have about two and a half minutes left.

Mr Noble Villeneuve (S-D-G & East Grenville): Is this a tag team?

Mrs Fawcett: Yes. Oh, it's a good tag team, sir. Look out.

Further on the subject of your ministry's commitment to agriculture programs, I was astounded to hear that the minister refused to recognize his commitment to fund GRIP at 85%, a commitment he did give at one point. Farmers are not only hit once by your failure to live up to your 85% commitment, but are further hurt because for every dollar the province commits the federal government contributes money. So Ontario's lower contribution also means lower matching federal assistance.

This lack of support for GRIP means that Ontario farmers don't receive their fair share. In Canada's largest agricultural province, this should be unheard of, and yet I see no evidence in the estimates that the minister is about to correct these inequities. Perhaps the minister will be able to expand on this in his reply.

I better turn over to my partner so that he can get some -- I do have a lot more, Mr Minister, to put forward, but maybe we'll have to have a private meeting.

1620

Mr Cleary: I'm really pleased to be here today with my colleague because we have a number of issues that we would like to touch on, and some of our own commitments to support the safety net stabilization, reform the crop insurance, protect the farm tax rebate, enhance marketing of quality Ontario products, support land and water stewardship programs, ensure access to newer and safer crop protection technology, ensure access to technology and research tools, establish a rural investment fund, support the budding ethanol fuel industry and eliminate unnecessary regulations.

What I would like to say here is that we are very concerned about the third party's commitment to agriculture, because the Tories have $6 billion worth of program cuts. For me, one of the most telling things in this document is what's not in it. I almost feel that they've ignored the second-largest employer in this province.

The other thing that I would like to mention -- the minister touched on it -- is rural development. Last year he announced it was going to be the Ontario Ministry of Agriculture, Food and Rural Affairs. I would like to know exactly how the minister has reprioritized, reorganized and otherwise shuffled the ministry's budget to include these additional responsibilities. I guess what I say is, the budget has not increased; in fact it has decreased. What new initiative from the ministry falls under Rural Affairs? I know he touched on it briefly in his comments. Exactly what do farmers have now that they didn't have before?

The other thing that I would like to just touch on is the stable funding, which seems to be working well in most instances. Through this legislation every farmer in the province is required to submit $150 to the ministry. I would like to know from the minister, in total, how many farmers have submitted a $150 cheque to the ministry; how many farmers have requested a full refund of their cheque; and is the minister aware of how much money each of the GFOs has now received in Bill 42?

The second part of that question that concerns me is that on October 12, 1994, the National Farmers Union filed a constitutional challenge to the bill. It is reported that a number of farmers have already contributed to a trust fund to cover expenses for legal proceedings against the ministry. I would like to know, can the minister indicate how much the ministry or the government of Ontario has spent on this court challenge, and if there is no dollar figure available --

Hon Mr Buchanan: Zero.

Mr Cleary: Okay, if there's no dollar figure, I've got another one for you. Can the minister indicate how many hours he or the ministry and assembly lawyers have spent on this issue? Can the minister estimate how much such legal proceedings may cost? Surely you have faced similar challenges to other decisions you have made. Finally, can the minister indicate under what portion of the ministry or the Ontario government budget this cost will appear?

The other thing that I would like to touch on here is, as you know, things are changing in this province and we have a new way of handling hay for cattle feed in most instances. Some call them mushrooms, some call them many things, but the way they store hay outside -- many farmers prefer to leave their hay in the open air. However, in the township of Clarence a municipal government challenged this by putting in place a bylaw prohibiting the storage of hay within 100 metres of the neighbour's property or 50 metres from a roadway. This bylaw was passed in August 1994. More recently, there was an attempt by the deputy reeve of that township to abolish the bylaw. However, the abolition resolution was defeated. I have heard many farmers say that this is an example of where the government must reinforce and amend the Farm Practices Protection Act.

The other thing that I would like to touch on briefly was the groundwater concerns in many areas of the province. I know that our caucus is very concerned about that and is really going to study that further and work with the municipalities to develop better controls and clearer policy. I know the minister is familiar with some of these instances, because it has happened in many areas of the province, and I would like the minister to comment on that.

Mr Cleary: The other thing that's concerned our party and some in the agricultural community was the supposedly $18,000 that was spent on the one-day meat inspection conference for 120 ministry staff persons. Apparently, each of the 120 staffers was able to bring a spouse, and it's reported that the travel expenses would be paid and possibly time and a half because the session was held on a Saturday. From what I've read, the total cost was probably $30,000. Apparently, that happened over a month ago in Hamilton. I was just wondering if the minister would have the final figures on that cost.

I've got so many things here I don't know which to prioritize.

The other thing is GRIP and NISA. I'm sure the minister is well aware that many commodity groups, including the Ontario corn producers and the Ontario wheat producers, have called on him to honour an original national agreement on market revenue insurance programs. In 1991, the agreement gave Ontario the right to extend coverage at 85%. However, Ontario farm groups accepted the province's offer of 80% coverage, providing 85% coverage would be provided later. Through the past four years, however, the minister and the Premier have steadfastly refused to honour the original agreement.

Two weeks ago in the Legislature, our leader encouraged the minister to make this move and cited commodity group calculations that 85% can be provided at less cost than 80% coverage. I know there was a question in the House to the minister at that time, and the minister told the leader that her suggestion was not possible and he didn't know where she was securing the figures. These figures happened to come from these commodity groups.

On September 19, 1994, the Ontario corn producers provided him with a letter which fully explained the declining rates of moving average coverage because the minister cannot make his own calculations. Based on these figures, the ministry could actually save substantial amounts of money.

1630

On September 23, 1994, the Ontario wheat producers also sent a letter to the minister with very similar calculations. Is the minister willing to say that the commodity groups' calculations that increasing the market revenue level from 80% to 85%, using moving price average, is incorrect? Will the minister provide the cost of GRIP and NISA for the past year and the coming year, using both the 80% and 85% coverage levels and taking into consideration the moving price average component?

The Vice-Chair: Mr Cleary, thank you very much.

Mr Cleary: That's it?

The Vice-Chair: It's expired for the Liberal caucus. I'm now turning to the Conservative caucus.

Mr Villeneuve: Minister, staff, it's always interesting to do the estimates on Agriculture and Food, particularly in a situation where the budgets of Agriculture, Food and Rural Affairs have been cut to the point where, if every other ministry within the government of Ontario had been reduced by about the same amount, we really wouldn't have a deficit.

Strange as it may seem, my Liberal colleagues talk about the farm tax rebate, and they went way back to almost 10 years ago, when the Progressive Conservative Party was the government of Ontario, and of course that was the party that initiated the farm tax rebate. I recall well the Treasurer of the day back in the Liberal era did something that apparently the Liberals have decided was not good. They reduced the farm tax rebate quite extensively. At that point in time, farmers of Ontario did not forget that, and indeed many of the rural ridings that were held by the Liberals at the time were lost. I believe the one main area of concern was the farm tax rebate and the way the Treasurer at the time, Mr Robert Nixon, reduced very extensively the farm tax rebate. It was corrected in a subsequent budget, however. It came back to what the Conservatives had initially done with it. At that point the damage had been done, however.

However, in vote 101, the ministry administration program is the only program activity which seems to be going up in costs. It's gone up by almost 3% compared to cuts of almost 12% to agricultural services and rural affairs, 3.8% to food industry development and a further cut of 3.1% to education, research and laboratory services; 11% has been cut to policy and farm finance.

At the same time, salaries, wages and benefits to operate the Ministry of Agriculture, Food and Rural Affairs have risen to 21% of the entire expenditures, as compared to approximately 18% of the total budget, which was the cost of operating the ministry some four years ago. Transfer payments have dropped to 58%, based on page 25 of the estimates briefing book, from approximately 62% of the entire budget just two years ago and down considerably from the 67%, which was transfer payments to farmers some 11 years ago.

This certainly leaves the ministry open to charges from the agricultural and farming community that it is beginning to get top-heavy in the operating of head office and staff within the Ministry of Agriculture, Food and Rural Affairs. Ministry administration programs have actually been shrinking after rising steadily from the 1991-92 fiscal year.

The minister has failed to stop the disproportionate cuts to the ministry's budget. Agriculture, Food and Rural Affairs continues to be harder hit than all other ministries within the government of Ontario, even though the government claims to have expanded the mandate of the ministry by including rural affairs.

We're still examining the effects of the GATT agreement. Has the ministry identified any provincial legislation which will have to be amended to conform with GATT? I think that's very important because, as was outlined in the minister's presentation earlier today, our exports are now over $3 billion and rising. Unlike my Liberal colleagues, I maintain that agriculture is the number one industry within the province of Ontario, bar none, when we consider the entire ripple effect of agriculture, food production, food distribution, processing etc.

There have been stories reported in the press that in some cases migrant workers have been seriously abused, and this has come out recently: the fact that the charges have been made by union officials who have refused to give examples, name names. This has justifiably angered the farming community, particularly those who use migrant workers.

If these accusations are true, why have there been no charges laid, and if indeed they're false, why has the government not condemned those people who have brought that to the fore, basically the unions in question? Bill 91, I believe, is the vehicle that is being used by these unions. They're at the door, preparing to look at agriculture, the accommodation of migrant workers and the whole gamut that follows.

The minister and the ministry in recent months have become more familiar with deer farming, elk farming. Diversification is something that we must look at from many aspects, including import replacements. Where do we stand on a new agricultural diversification act which would give the ministry the jurisdiction to go out and seriously promote diversification of agriculture in Ontario? We're behind other provinces right now, certainly western Canada and the province of Quebec, in diversification, and they have much more limiting climates than we do here in Ontario.

Has the government considered bringing aquaculture under the jurisdiction of Agriculture, Food and Rural Affairs? I understand, in the minister's presentation, that with the extension of the name to include Rural Affairs, it hopes to become the lead ministry. However, this still remains to be seen because the ministries of Environment and Energy, Municipal Affairs, Natural Resources etc appear to be meddling in the affairs that I feel should be under the entire jurisdiction of Agriculture, Food and Rural Affairs.

Ontario's wine and grape industry has improved tremendously but continues to face very high taxes. Given the expanded mandate of the ministry, what is Ag, Food and Rural Affairs doing to lessen the tax problem to the grape and wine industry?

In terms of new markets and new product development, has the ministry undertaken any studies with the apple commission and/or the wine industry to look at the sale of alcoholic cider and its production? British Columbia, which is another major apple-producing province, has a cider industry, but for some strange reason we don't. Is the problem one of no identifiable demand or is it regulation, red tape and taxes? Has anyone studied this? I think we have a very viable potential market.

Ministry legislation: What is the status and the urgency of the following bills: Bill 63, AgriCorp; Bill 64, crop insurance; Bill 65, farm stabilization; Bill 78, livestock compensation? Amendments to the Ontario Food Terminal Act recommended after the board was reviewed in the committee: Are these coming forth? Has any work been done to draft amendments strengthening the Farm Practices Protection Act; in other words, right to farm?

Issues related to the Rural Affairs part of the portfolio: We need to know more about this. Has it just been an extension of the name? What has really happened? Has the ministry been transferred any specific functions from other ministries or any leads to incorporating items of what has been Natural Resources, Environment and Energy or Municipal Affairs into having Ag, Food and Rural Affairs be the lead ministry?

1640

If Ag, Food and Rural Affairs is now supposed to comment on government actions which affect rural Ontario, what comments has your ministry made, where have you been commenting, and can we get copies of your comments on such very important issues as the entire wetlands policy, the loss of the managed forest tax rebate, firearms registration and Bill 162? Is this a dead issue or is it going to reappear?

The minister was right to criticize the federal Liberal refusal to act on ethanol. The provincial Liberals, when in power in Ontario, acted in very much the same way to prevent the use of ethanol. Has there been any recent progress with the federal government or other developments in promoting the use of ethanol?

I just happen to have correspondence here dated April 11, 1990, from the Minister of Energy, and it's in reply to a query that I had passed on to the ministry:

"We have received your recent letter which advocates the use of fuel ethanol to reduce carbon dioxide emissions from transportation.

"We agree that the use of any biomass-derived fuel, including ethanol, can result in a net reduction of carbon dioxide emissions." And this is the caveat: "However, there are concerns that fuel ethanol is not a cost-effective way to do this compared with energy efficiency improvements."

This letter goes on:

"In the United States, a proposal to permit the use of MMT in unleaded gas is now under review. The proponents argue that the new evidence shows that using MMT does not harm the performance of exhaust catalysts." The ministry doesn't, however, tell us that MMT is a cancer-causing agent.

The minister continues:

"In summary, we share your interest in ethanol as a means to reduce carbon dioxide emissions. We hope that current research will eventually make it possible to produce less costly fuel ethanol from wood or waste cellulose. At present, it does not appear that ethanol from grain can be produced at a sufficiently low cost to become an important component in Ontario's gasoline without significantly larger subsidies. We continue to welcome ethanol-related proposals to our EnerSearch program if it can be shown that an Ontario production plant could result from a successful project."

This letter is signed by someone called "Lyn McLeod, Minister," and it's somewhat interesting to see the agricultural paper now out from the Liberal Party suggesting how great ethanol would be. This is quite a turnaround in what Lyn McLeod, Minister of Energy under a Liberal government, was saying not long ago.

Review of regulations: During the brief to cabinet last February, the president of the Ontario Federation of Agriculture, Roger George, made reference to regulations which make no sense but which resulted in lost time and money for the farmer, not to mention the tax dollars lost in administering much of this kind of futz, known in rural Ontario as nonsense.

At the time, the Premier seemed to give a fairly strong commitment to reviewing and scrapping frivolous and unnecessary regulations, particularly from the Ministry of the Environment. I recall well that part of the problem was onions which had gone bad and could not be returned to the land where they'd been grown. I think this has been addressed and I appreciate that, but these are some of the nonsense things that cost money and that create havoc in rural Ontario. Has the Ministry of Agriculture, Food and Rural Affairs established a working group with agricultural organizations to identify problem areas and red tape? That's a major problem, red tape.

The $50 registration fee: Farmers who happen to recognize their farm as something other than their own name have to be registered, not incorporated. Anything other than the name that this individual is known by has to be registered, and a $50 fee is being charged. We don't think that's quite fair. We fully realize that agriculture is very much a business, the most important business in the province of Ontario; however, this is needless red tape.

What is the reason for Guelph relocation expenditures to be up to almost $1 million? Could we have some confirmation as to what the cost is of relocating 801 Bay, or the folks who are going from 801 Bay to Guelph? That's on page 37.

On page 38, what is the definition difference between census farms, 68,000, and farm operators, 100,900? How many farms are registered under Bill 42? I believe the minister gave us that information in his opening statement.

Why is there an anticipated increase in the number of days to process a freedom of information request, from 24 to 25 days?

Successor rights, particularly as it applies to railways, and I know the Chairman will be interested in this one because it affects his community very directly: A number of commodity groups, most notably the Ontario Corn Producers' Association and the Ontario Soybean Growers Marketing Board, have expressed serious concerns over branch-line abandonment and the provision for successor rights granted under Bill 40. Thousands of jobs are at stake in various communities, not only jobs but the price of commodities that are grown out in rural Ontario.

Given the far-reaching potential negative effects if the lines are abandoned and torn out, what role is the Ministry of Agriculture, Food and Rural Affairs -- and that touches them all, the agriculture, the food and the rural affairs section -- going to play and what positions has it represented to the Ministry of Labour, as well as to the Ministry of Economic Development and Trade? These are very, very important aspects in rural Ontario.

Has the ministry made any representations to the Ministry of Labour concerning minimum wage rates, including the use of already existing powers which could be used to set different minimum wage rates for the trade-sensitive horticultural and tender-fruit sector?

Agricultural and rural services: I'm getting a number of very serious complaints that the extension people, particularly as it involves 4-H, leave a great deal to be desired. I understand that basically 4-H is being operated on a voluntary basis with volunteers out in rural Ontario and with an ever-diminishing involvement with the ministry. Possibly we could touch on that, because I think it's most important that our rural youth, and these are not only farm kids, in the 4-H movement be promoted and supported.

The demise of numerous programs, including the land stewardship and the red meat assistance: The agriculture and rural services program has seen major cuts in recent years. If not for Jobs Ontario spending, this area could be described as having been seriously done away with or gutted. What are the government's future priorities in this very important area?

Has the ministry monitored the degree to which farmers have been spending money on conservation equipment or measures since the stewardship program was terminated? Is tillage equipment to promote the reduction of erosion etc still being purchased at the same rate as it was while the program of stewardship was on? Has there been any tracking to determine what sort of need there may be to continue a land stewardship program?

Last year, Ontario became Canada's largest food exporting province, as was touched on by my colleagues earlier. How have exports held up this year? Are we still basically on the same increase of exports or has it flattened out? Is it still the case that while exports to the US are strong, we've been increasing our food trade deficit with the rest of the world? Have we been able to make progress in exploring Mexican markets under NAFTA, for example? Are producers in the food industry making progress towards closer cooperation with one another along with the consumers? Because we are all consumers; producers are also consumers.

What is the current status of discussions with regard to the distribution of revenue from the stockyard lands liquidation? Has the ministry evaluated the effects of its abattoir assistance grants? We have many small abattoirs out in rural Ontario and we understand that in many instances the grants that appeared to be available to them were not, for some bureaucratic reason.

1650

The Vice-Chair: Your time is up. The clerk informs me that the minister now has the right to respond to the statements that have been made by the two opposition caucuses, and he has up to 30 minutes to respond. We have about 40 minutes left today, Minister, in our proceedings. If you could leave some extra time for the opposition caucuses, I'm sure they'd appreciate it so they can ask you questions.

Hon Mr Buchanan: I can call on a couple of experts here as well, I'm assuming. I'll try and be fairly brief so that you get a chance, as opposition parties, to raise a few issues. I'll touch on what I think are the highlights of some of the things that have been mentioned.

In terms of our reductions, yes, we have been through expenditure controls and various other things in terms of our budget being reduced, but if you look at the last three years and what's been spent on Agriculture, if you look at the average, it's more than any three years that you can look at at any other time. If you take the last three years, average out what's been going to Agriculture and look at any previous three-year period, you'll find that there's been more going to Agriculture and Food in terms of our expenditures than has been the case in the past.

The other point I would raise, if we look at the --

Mrs Fawcett: What kind of math is that?

Hon Mr Buchanan: That's math to my advantage, not to yours. The other thing I would draw your attention to is that if you look at 1987-88, there was a $57-million drop in the budget of the ministry right in the heyday of 1987 to 1988. I hasten to explain that, because in the past there have been a number of ad hoc programs that were put in place, sort of interest assistance, that were in for one or two years and then they ran out and other ad hoc programs were put in place. That's the way that Agriculture has operated as a ministry.

We have tried, in cooperation with the federal government and other provinces, to put safety nets in place that are long-term programs. The farmers will know what programs are there and they can get on with farming and not have to lobby governments for programs. That's why we look at the ag investment strategy, the ag commodity corporation, FarmPlus. These are intended to be programs that will be there.

You mentioned the fact that there's perhaps not as much money going into them as you thought or was announced. But what's important to realize here is that rather than us writing cheques to farmers, we've been leveraging, which you mentioned, and putting some money into the contingency fund, in order to pay any loans that we had to cover in terms of the guarantee, which we think is a better use of taxpayers' money than simply writing the cheques directly to farmers. We have leveraged significant millions of dollars and we've actually brought interest rates down.

Mrs Fawcett: How much?

Hon Mr Buchanan: I'll have to get Bob Seguin, the ADM, to comment on the $120 million and where we're at in terms of expenditures, in terms of actual dollars. But the key is that I've had farmers come to me -- the ag commodity corporation is up to about $85 million worth of business over the last three years -- and say, "We didn't use the ag commodity corporation to borrow, but I want you to know that the banks are offering me the same deal as the ag commodity corporation," so please don't think about it not being a success because it hasn't got -- we would have liked to have seen it up to about $50 million a year, and I think we're at $38 million or more. It's gone up almost double since year one.

It has been a success. Even though it's not being used by farmers, it's a competitive vehicle that's in the marketplace, so the banks are offering the farmers the same rates, which helps the farmers in the long run; it doesn't require money from government.

On the GRIP, the 85%, just very quickly, we all understand the numbers of that. I have been driving for a whole-farm program of safety nets which would have some enhanced NISA, more money going into a NISA program, and yes, there's some money in that safety net pot. I very much would like to see a whole-farm program in place that would include, obviously, the grains and oilseeds and people who are now on GRIP. If we do not get an agreement on a whole-farm program in December, when the ministers are meeting here in Toronto, then obviously that's something I will take a serious look at. But whatever money we have in there I'd like to see go into a whole-farm program. If we take all the money that might be in the pot and give it out, then I won't have anything to necessarily fund the safety net program we're talking about.

I'll perhaps call on Mr Seguin to talk about the $120 million, but I want to move on quickly.

In terms of the stable funding, about 53,000 farmers have registered with us. We believe that's about 90% of what's out there. That's an estimate, because if they don't register, how do you know what to calculate it on? From the information we have from the organizations, about 25% of the farmers have asked for refunds and received them, about 300 farmers have been granted exemptions through the tribunal process and 96% of the decisions have been approved by the accreditation tribunal for exemptions, which are mainly Amish and Old Order Mennonites in most cases.

There have been a few who were rejected, but basically they have been approved. So there's been about a 75% success rate, if you want to call it that, who have sent their money in and left their money in with the farm organizations, and obviously the challenge is now up to the farm organizations to prove that they merit that confidence of the $150. The proof is up to the local organizations and the provincial to show that.

You mentioned the legal challenge. Nothing has happened yet. Nothing has been filed, other than what we see in the newspapers, that a law firm has been retained. I don't think anything official has been done yet and we obviously would need to wait until such time as something formally is done before we worry about what it's going to cost, and we would deal with that at the time. I don't have any idea if it's actually going to go forward. It's been announced. We'll have to wait and see.

In terms of the storage of hay etc, the bylaws, the land use people we have in the field work with local municipalities to try to get something reasonable done.

The meat inspection meeting you referred to, I think the deputy is anxious to respond to that part of your question.

Ms Rita Burak: Mr Cleary, you asked us to get you the final cost of that, really, one evening and a Saturday conference that the meat inspectors attended. You may recall that we announced a couple of years ago that we wanted to upgrade the technical abilities of our meat inspectors to meet the increasingly high standards that we're placing on provincially licensed plants.

Since the nature of the work of the inspectors is that they've got to be onsite whenever there's a kill, there isn't a lot of flexibility in terms of when you get them together. So yes, they were brought together for a Friday evening and a Saturday. I can get you the final cost of that one-day session, but I can tell you it was substantially lower than the press report which I recall seeing in the Sun, substantially lower than what was reported to have been planned. I can assure you that before they booked that hotel in Hamilton, the branch went to great lengths to make sure they got the absolutely lowest-cost accommodation and meals and to bring them into an area where the bulk of the inspectors reside to make sure that the travel costs were very low.

Staff were instructed to double up and triple up in cars and we did everything we could to keep it to a low cost, but I feel very strongly that for a business as sensitive to maintaining health standards in our food chain, it is important to ensure they get a consistent level of training and consistent messages about new regulations. But we'll get you that final data.

1700

Hon Mr Buchanan: Mr Seguin, ADM, policy, will talk about the $120 million and where we're at in terms of those numbers.

Mr Bob Seguin: As requested, the $120-million program was cut during the expenditure control plan that was announced by the government, and in discussions after the decision, we met with the farm groups and indicated where the cuts would be made.

The program will now spend a little less than $50 million over the life of the program, and we deferred the new farm apprentice program indefinitely. That was the one substantive cut taken on the five-part program. Other parts of the program were shaved a bit to get the savings required by the government. But this was discussed, at the time of the expenditure control plan announcement, with the farm community.

Hon Mr Buchanan: Thank you, Bob. Perhaps we could we move on to responding to Mr Villeneuve.

In terms of the administration and being top-heavy in terms of increases, we've got some numbers that I think we should share with you.

Ms Burak: I think, Mr Villeneuve, your first question related to the administration vote, vote 101.

The increases there relate to the Guelph relocation project. Treasury board has a fund of money which it will provide to ministries that are relocating in order to do the necessary planning, the necessary training of staff, planning for who is going to move to Guelph, who is not and therefore has to be redeployed. We received an increase of $926,000 for that. That was the largest increase.

That vote received a number of decreases, including over half a million for social contract payroll savings, about a quarter of a million dollars in expenditure carryover, or planned expenditure reductions, from the previous year. In addition, we reallocated money within the ministry to cover off some systems work that we do in the systems branch to support the line branches in carrying out program delivery. I don't recall at my fingertips which programs they were, but they would be in aid of program delivery. So the numbers are not that disproportionate.

I think your other question was, following on, has this vote been cut less than some of the other divisions? Maybe I can give you these figures: Our administration vote is about 17% of the ministry's total operating. In terms of how we hit administration in the expenditure control plan versus how we hit the line programs, we hit administration 24%. So we tried to give an equal or greater hit to administration and the streamlining and central operations in Guelph and Toronto than to the field.

Mr Villeneuve: Can I ask a supplementary on that? Does that cost include the likes of whenever you've thought -- the Palladium in Ottawa, for example: A lot of money was spent there on legal and staff being there and other appeals of decisions, ie, land division. Is that all part of that admin or is that separate?

Ms Burak: No. The land use staff, whose budget external resources, external lawyers or consultants might have been used for, and that was about two years ago, are currently in the rural development division. Previously they were in the ag division.

Mr Villeneuve: So that's additional cost to admin that's not included?

Ms Burak: You're using an interesting definition of admin. The program of land use planning required that they take certain actions in that particular case, and that would be a cost of running that program.

Hon Mr Buchanan: There were a few other questions raised by Mr Villeneuve. You mentioned the trade agreements. The one that comes quickly to mind is our Oleomargarine Act, which has been around for many years. Certainly the vegetable oil producers and others have been calling for its repeal.

We are now looking at that in cooperation with the federal government and other provincial governments. It's seen also as an interprovincial trade barrier. Because of the agreements we've signed with the other provinces, it's something we need to look at, but we are doing it constructively with milk producers, soybean growers and others to look at a planned way of dealing with this somewhere in the future. But we're still in the planning stage. We know we're going to have to do something at some point because it's not GATT-consistent in terms that it is truly a trade barrier. That's one of the ones that quickly comes to mind, but I'm not aware of any other immediate changes we'll need to make.

Some of our regs we'll need to look at perhaps in terms of some of the things that we have in place, but there are no major legislation initiatives planned.

You mentioned livestock diversification, something that I personally and the ministry have been very supportive of. We have asked the farm groups that are associated with the so-called livestock diversification, which takes us into game farming and other operations, to work with the other groups that are out in the communities, whether it's the hunters and anglers or Ontario naturalists, certainly the environmental groups, that they work together to work through some of their differences so that bringing forward such a bill, which we have been working on, could flow through in relative ease and people would be comfortable with it, as opposed to having confrontation.

Some of the farm groups, including the OFA and other groups, actually are working with some of the groups out there to try and come to some compromises on this issue. It is associated with Bill 162. We've also asked the farm leaders to work with other people, whether it's the anglers and hunters or other groups, about 162, so they could work out their differences on that one as well.

We believe it's better to get them cooperating and working together than to bring in a bill that would be seen as controversial, which quite frankly I would admit that 162 is with certain groups. We would like to move forward, but we want the groups to cooperate and work out their differences so we can put something together that will have the support of a broad range of people.

In terms of hard cider, I know that Mrs Fawcett from Northumberland was anxious to tell us about the company that's down near her residence, which actually is in the production now of hard cider.

Mrs Fawcett: I think the name in there is Scrumpy.

Hon Mr Buchanan: Scrumpy is the name of it, and obviously depending on how the market grows, there are some opportunities for the apple industry which are badly needed.

In terms of rural affairs and our role up to this point, many of the accomplishments we've had are behind-the-scenes things which we aren't out beating our chest about. But as Municipal Affairs is looking at implementing the changes to the Planning Act, they have come to us and worked with our ministry and our client groups in terms of setting up committees for the implementation to try and explain how some of these changes would affect farmers, whether it's the wetlands or other issues. So they've come to us in order to set up these committees.

I would, I think, be correct in saying that two or three years ago that would not necessarily have been the case. It was an MMA bill, a Municipal Affairs bill, with the House, and they would have set up their own committee without necessarily involving our ministry.

1710

We have been brought into the process at the MNR level as well in terms of working with MNR. The deputy at MNR and Deputy Burak are now meeting regularly, meeting with some of the stakeholders of MNR and trying to do things together as opposed to them doing their thing and us just focusing on farmers.

There are some things happening. I think this is a process that needs to evolve over time so that the concept of rural affairs will grow. I think it will grow over the next number of years. There may at some point be extra money attached to it, but I quite frankly believe strongly that rural Ontario doesn't need a whole lot more money; it needs the support of government as a facilitator to assist them in terms of developing their own ideas. In some cases it's a matter of getting out of the way and letting them develop.

Mr Villeneuve: Exactly.

Hon Mr Buchanan: We work with other ministries to assist us in doing that. That's what I certainly see as the mandate. It's our job, as I see it, and the staff working with other ministries. One of the concrete things we've done is have a rural development secretariat who are out there in our field offices actively looking for community economic development initiatives. We've been proactive in trying to encourage things.

The JOCA funding: We are actually out there encouraging people to look at it. Well over 60% of the approvals of JOCA funding have been in rural Ontario. We've got a good percentage of the money that's going out as well. We are being proactive, and those people who are in the field offices with that title -- which is new for them and it's a change for some of them -- we tried to basically keep the same staff with some retraining. I think this mandate will grow over time and we're going to see some of the benefits down the road.

On the Ontario Stock Yards Board funds, we're still having debates with treasury and treasury board about the split. We have made decisions about how the amount of money that goes to the industry would be divided up between beef and dairy, sheep and hogs and others. That has more or less been agreed by the industry. I guess the ball is in our court now in terms of going to treasury and seeing what kind of a deal -- I do want to be clear on the record, though, that certainly the government expects that there will be some share which will go to consolidated revenue once the bills are paid. But I hope that we can get that wrapped up.

Mrs Fawcett: Why is that necessary?

Hon Mr Buchanan: The question was, why was that necessary? We have continued to try to work with the industry. I mean, there's an argument about who owns the stock yards board and all that kind of stuff. We are trying to work with them and agree on what kind of a consideration and get some money out to them. I don't want to get into all the legal wrangling about who owns the land and that. We are basically not selling the land, so we --

Mrs Fawcett: Tell the Treasurer it would be a good way for him to be kind to agriculture, to give it to agriculture.

Hon Mr Buchanan: I wish the Treasurer had a whole lot more money so he could give us a lot more, but I want you to know that I don't happen to believe that a whole lot more money necessarily thrown into agriculture is the answer. I think we need to focus on marketing initiatives, on research, which we've tried to maintain. If you look at our estimates and look at what we've tried to do in terms of research, we've tried to maintain those projects, we've maintained what we can in terms of marketing, and to provide some field services and some support. I'm not a big fan, even though obviously when your budget is reduced through expenditure control or other matters it's a concern.

But I do think we have to be more creative in the kinds of solutions we look for because farmers' getting a cheque one year and not getting it the next is pretty dramatic for farming and farmers. We have to look at creative ways of doing things.

I guess I better shut up, Mr Chair; I promised to be brief.

The Vice-Chair: All right. We have about 25 minutes remaining. I'd like to now go into rotation for questions and we'll start with the Liberal caucus.

Mrs Fawcett: I'd just like to further ask Mr Seguin, because I didn't realize I could have questioned him when he was forward, is there now $114 million left in that fund? You didn't give me any numbers. You kind of floated around and I really didn't understand totally what exactly the state of that whole investment strategy fund, where it's at. There was $120 million promised and, to me, only $6 million has been spent, so there should be still $114 million left.

Mr Seguin: As I indicated in the earlier response, as we noted in the expenditure control plan and announced at that time, we were cutting the program back. We deferred indefinitely the new farmer apprentice program and, with a combination of other cuts, we've now planned to spend approximately $48 million.

Mrs Fawcett: That's $48 million out of the original $114 million?

Mr Seguin: Over the term of the program.

Mrs Fawcett: Over five years?

Mr Seguin: Over the five years. That's our plan.

Mrs Fawcett: So from $120 million it's down to only $48 million now?

Mr Seguin: Yes.

Mrs Fawcett: Where did that money go?

Mr Seguin: As part of the expenditure control plan commitments.

Mrs Fawcett: Holy smokes.

Hon Mr Buchanan: If I could just jump in here as well, I think it's important. In the original plan, we were looking at a pot that would be set aside that would be a contingency, which we believed was the best way to do it. It would build up a fund, which was like an insurance envelope. When we got down to the short strokes of expenditure control, the Treasurer basically gave us a guarantee, a promise -- well, I shouldn't say a promise -- that if there were any losses, they would cover them on a year-to-year basis. As opposed to putting money actually in a pot, they would cover as needed, so that was one of the reasons we were willing. We gave up some of our pot of money that was going to be set aside on the promise from the treasury that if there were problems with loans, we would be covered as needed. So we didn't get to set that money aside.

Mrs Fawcett: All right.

Hon Mr Buchanan: So that's where the money went. It didn't disappear necessarily out of the program. There just isn't a bank account sitting there to be drawn on as needed.

Mr Seguin: The amount of money I had described is the amount of money we plan to spend in the remaining contingency funds and in the operations of the programs of the remaining four components.

Mrs Fawcett: Okay.

Mr Cleary: I'd like to talk a little bit about bovine viral diarrhoea, BVD. There seems to be a program in place in the province of Quebec where there is a $2-million compensation fund for losses that exceed $5,000 or 15% of the herd.

It's my understanding that earlier this year Oxford county and the OFA adopted a resolution to develop a vaccine and compensation package to take to you, Minister. I would like to know, is it the minister's intention to allot any part of the ministry's budget to assist farmers who have suffered losses to BVD and, if so, how much?

Hon Mr Buchanan: I'm going to ask Deputy Burak to respond, please.

Ms Burak: First, with regard to the province of Quebec, we understand that it does have a modest compensation program which is limited to veal producers, and we are aware of that.

After the resolution that you mentioned from the federation of agriculture, the federation and our ministry met with the livestock groups that might be affected. I believe the milk board, the cattlemen, the veal association and others were in attendance.

At the end of that meeting, and after having a review of the work that we've been trying to do all along as the disease became apparent, the federation and the commodity groups determined that a compensation program would not be appropriate. Rather, the better solution would be to expand the educational programs for producers and to do some special work with the veal producers, who felt most vulnerable.

As a part of that package, everybody in the room -- the federation, the ministry, the commodity groups -- came away with an agreement on what everyone would do, and our part in it was to provide some support for a video, to provide the technical expertise using our extension staff and specialists to develop the components of additional seminars that could be held.

I was in contact just a couple of weeks ago with the federation executive member who was charged with following through on this, Mr Morris, and it does appear that the plan that we all put in place is working its way through the system. That was the outcome of that resolution, to the best of my knowledge.

1720

Mr Cleary: Another question I have, could the minister or the deputy comment on the current budget of Alfred college, as well as the ministry's future plans?

Hon Mr Buchanan: Do you want a breakdown of their budget?

Mr Cleary: They questioned me on the future plans and what the ministry's plans are, and I don't know.

Hon Mr Buchanan: We can certainly dig out what their budget is, if you wish, and give it to you. I don't have it right here.

Mr Cleary: So there are no future plans, then, beyond what their budget is? They have been speaking about an educational package, and I thought that was through the Ministry of Agriculture, Food and Rural Affairs.

Hon Mr Buchanan: There could be; I'm not exactly sure where we're going here, but I know that they have done some work in terms of some exchange programs, particularly with francophone communities in Europe. Those kinds of exchange programs have been happening, and there have been actually some agreements signed between ourselves and French-speaking communities in Europe. I'm not exactly sure how long that agreement is going to last in terms of exchange students, but we certainly don't have any plans to reduce it or change it in any way.

The college has been left to look at those kinds of options, as Kemptville has, quite honestly, in terms of attracting students from other countries in terms of dairy education etc in agreement with the federal government. So there are some opportunities for the colleges to look at opportunities for them to actually generate some money internally.

Mrs Fawcett: There was an article in the paper today on Jobs Ontario and the millions of dollars that had been wasted and so on. Is there any indication that the Ministry of Agriculture was part of that? You spoke about the Jobs Ontario part of the agricultural budget and how good it was, and I just hope, then, that the agricultural money was spent well and we didn't get --

Interjection.

Mrs Fawcett: No, it wasn't.

Hon Mr Buchanan: One of the things that I think we need to be clear on is that there are about four different parts to Jobs Ontario. There's Jobs Ontario Capital, which is the capital budgets that are spent from some of the ministries that have heavy capital expenditures. There's Jobs Ontario Homes, which is the housing, basically. There's Jobs Ontario Training, which is intended to get people from welfare or whose unemployment has run out a permanent job, and we've provided funds to help with the training, whatever that is deemed to be. In some cases, it's literacy and numeracy skills; in other cases, it's upgrading whatever skills they have.

Mrs Fawcett: Did you waste any of that money at all?

Hon Mr Buchanan: No, we didn't waste any money. But the Jobs Ontario Community Action is the one that we are most involved with, and we have been the lead in several hundred different projects out across rural Ontario, and we haven't wasted any money. One of the things that I like about that is it allows us to use money which comes from other sources and encourage rural economic development, so that we're getting money from the government pot spent in rural Ontario which doesn't come directly out of our budget.

One of the things that I continue to pursue is the opportunity to spend money from other ministries in rural Ontario, and we wouldn't waste it. We would not waste one nickel.

Mrs Fawcett: Maybe I could just put a question on the record.

The Vice-Chair: About one minute. Sure, Mrs Fawcett, if you wish.

Mrs Fawcett: In your speech, Minister, on page 3, you talk about crop insurance. You just said, "I believe we must retain our crop insurance and market revenue programs." In the estimates book I see a bracket of $300,000 around "crop insurance re-engineering," and I just wonder, is that part of the budget being cut dramatically or are you increasing it? What does "retain our crop insurance program" mean?

The Vice-Chair: Briefly, Mr Minister.

Hon Mr Buchanan: Real quickly, we want to retain the program, and I believe that crop insurance as a standalone program is very important.

Mrs Fawcett: Yes.

Hon Mr Buchanan: There are some in other places, not in Ontario but federally and in some of the other provinces, where they'd like to put crop insurance into some other vehicle, and I'm defending it as a standalone. The $300,000 saving in re-engineering is where we moved away from having a slew of agents selling insurance around the province and we re-engineered down to about 22, I believe, permanent people who deal with crop insurance, GRIP, NISA etc who are sort of experts on an ongoing basis. By doing that, we actually were able to save -- this is out of administration costs, not out of the farmers' pockets in terms of payments. It's the administration we've actually reduced by $300,000.

The Vice-Chair: Thank you, Minister. The time for the Liberal caucus has expired and I now turn to the Conservative caucus, Mr Villeneuve.

Mr Villeneuve: Thank you very much. It's too bad that the time is so limited.

I would like to know your ongoing annual cost on land preservation. You're appealing in many instances local decisions. I would like to know what your cost to those appeals is on an ongoing basis. Should it actually be coming out of your ministry? I don't believe it should.

Second, on Bill 163 and all the related chain reaction, including -- and it's not in 163, but the removal of the tax exemption on managed woodlots, did you really give your blessing to that?

Hon Mr Buchanan: Every ministry and minister was faced with expenditure control plans that we're under. The Ministry of Natural Resources looked internally at what programs it had and this is one of the programs it deemed it could terminate. Obviously I've heard about it in rural Ontario, especially in my own riding. I know that the Minister and the Ministry of Natural Resources are taking a look at what they can do, now that it has sort of been terminated. They are taking a look at that issue.

Was I happy about it? Not particularly, but I wasn't particularly happy with some of the decisions that I had to make either, with the impact that they had. When you're in a period of restraint, you sometimes have to do things that you don't normally wish to do. So I wasn't particularly happy.

On the land use, we see that once Bill 163 is in place, our role will be more focused and more defined. We hope that we're going to get out of a lot of appeals and so on, that once the policy is clear we will not end up at OMB and will not need to spend money on the resources to go through that process.

In terms of what we actually spend, I don't see anyone nodding their head with that number in their head, but we certainly can get that. It would come out of the land use group's budget as well.

Mr Villeneuve: The developers spent several million dollars. Would it be close to what you've spent?

Ms Burak: I wonder if I could just ask staff. Have you got a breakdown of the vote for the branch's base expenditures? We can get that for you, but I know, Mr Villeneuve --

Mr Villeneuve: There's no hurry.

Ms Burak: -- that the bulk of the legal work would be done, certainly over the last couple of years, in-house by our legal services branch and the staff being witnesses. But we'll get you the data.

Mr Villeneuve: The dairy inspection branch: Milk quality is very important. Are you monitoring this closely? We have effectively done away with the dairy inspection branch. Can you shed some light on what's happening and then, secondly, on the sale of raw milk by people who apparently own cows in certain dairy barns and pay to have them looked after. This is of great concern to our consumers and to our producers.

1730

Hon Mr Buchanan: In terms of the quality control of the milk that's coming to market, we have in fact been able to monitor and show that milk still is very safe in terms of the testing that's being done. I think the deputy wanted to talk about the downsizing efforts perhaps.

Ms Burak: Just to pick up where the minister left off, we've been monitoring on a number of different bases through our laboratory and just recently, I believe it was about two or three weeks ago, had a meeting with representatives of the milk board to go over the data and hear any issues or concerns that they had.

I think it would be true to say that at the end of the meeting everybody would agree that the statistics would show that there hasn't been any change or damage as a result of the reduction in the number of on-farm inspectors. I would say we haven't eliminated on-farm inspection; we've reduced the numbers. We are trying to watch very carefully the geography that people have to cover and are monitoring their workloads to make sure that there aren't any gaps in areas where we have a lot of dairy farmers, but we are monitoring it very closely.

Mr Villeneuve: The sale of raw milk?

Hon Mr Buchanan: The Ministry of Health, I think, has been taking the lead on the sale of raw milk. Although there have been some calls for us to look at regulations and we should change the way we've done things, and I know that one veteran of the Liberal caucus has called for a task force to be set up to look at the sale of raw milk, to this point in time we have decided that we're very proud of the quality we have. We have no plans to make any moves in one direction or the other at this point in time when it comes to the sale of raw milk.

Mr Villeneuve: Production of hemp? Is this an alternative crop that will be looked at in a positive light?

Hon Mr Buchanan: I've always been very careful commenting on this subject. Since it's late in the day, I guess my inhibitions are down. My understanding is that the two farmers who have come together to get a licence to grow a crop this year, obviously it needs to be evaluated. If it turns out to be economically feasible, I think it's worth pursuing in terms of the tobacco belt. If there are some products that we could make from hemp, then I think we should pursue it and should support it. But we need to do an evaluation on what's happening this year before we go full speed into this.

Mr Villeneuve: My colleague from Grey-Owen Sound.

Interjection: He wants to know where to buy hemp.

Mr Bill Murdoch (Grey-Owen Sound): Maybe in Grey county; we have a hard time growing any kind of crops up there, so I don't know whether it would grow too well at all. You know, we don't have the heat units that we need for that.

I know it's been asked, but I want to just get it on the record. We know how badly Bill 163 is devastating rural Ontario. I just want to know --

Interjection: Get real, Bill.

Mr Murdoch: I guess your friends on your own side seem to think it's a good bill, but I understand you fought quite hard for us on it. Do you think there's anything we can do about it now at all? It's coming in for third reading. I understand it's going to have one hour. As minister, is there anything you can do to help us out in rural Ontario, because you are minister for Rural Affairs too?

Hon Mr Buchanan: Some of the things that I've actually heard people say out in rural Ontario have shocked me, and I've had to come back and say, "Is this really what this bill means?" It's unfortunate that there is probably more misinformation than there is accurate information out there, and that's unfortunate.

In my own area there was one community person who stood up in a public meeting and said that the community would not be able to build a community centre if this went through because it was in --

Mr Murdoch: It's on the floodplain.

Hon Mr Buchanan: No, no. It was because there was going to be no more building of anything in rural Ontario basically.

Mr Murdoch: Well, they're almost right.

Hon Mr Buchanan: The wetlands policies have actually been in place for a while. Some people are just sort of now catching up to them, but they have been in place, and those people who have been in the development business I think have been aware of them.

What's important to get on the record is that in areas where existing farming is taking place adjacent to wetlands, that can continue. It's not going to stop people from doing what they've been doing. They're not going to have to take out their tile drains or any of that sort of thing. But it is going to prevent probably the building and construction near wetlands in certain areas, which most farm organizations don't have a serious problem with. So existing practices can continue.

It's going to be a new regime, but before we all jump over the cliff, we should take a look at what's happening in Europe. We need to take a look at what's happening in Holland, what's happening in Belgium, what's happening in Denmark, where they're losing some of their agricultural industry because they didn't pay any attention to the wetlands, they didn't pay any attention to the environment, and now industries in fact are leave Denmark and moving to Australia because they've destroyed the land base.

I think it's important that we put this in some perspective of what the intent is and not get too caught up in the rights of the property owner, which we all respect, coming from rural Ontario. I think it's important, and we had a dialogue. In fact we went back to the ministry and asked them to put back in, for example -- I know the member for Grey-Owen Sound appreciates this -- retirement lots for farmers. We got that back into the bill. It was on behalf of my colleagues, yourself and others, that we got that back in. So we did have an impact and we did make some changes.

I think it's important as we talk to rural people to make sure they get accurate information and not sort of tell them that this is going to shut down rural Ontario.

Mr Murdoch: I understand that, but the escarpment's still there. There is that clause that says you can't use things in some of the designated areas, and that's a dangerous one. I just hope the minister will go to cabinet when the regulations are set and that he'll fight -- I know he will fight -- for rural Ontario.

The Vice-Chair: Thank you, Mr Murdoch. The time of the Conservative caucus has expired. I now turn to the government caucus. Mr Klopp, do you have a question?

Mr Klopp: Yes, I guess a statement or a question. I found it very interesting today. I just want to say that some farmers have told me, Elmer, that you're doing a fantastic job, and I want to assure my colleagues that isn't me talking; that's other farmers. I think it says a lot about this government and I just wanted to get that on the record.

One of the things, I think, that we've talked about here that maybe isn't quite understood from a rural investment fund area is with regard to the $120 million or what it is. I think that needs to be explained a little more for our colleagues, Elmer. We looked at that as an investment fund that farmers like -- well, I'll use an example and you can expand on it if you wish. But so often we had rebate programs in which all we did was we'd just run around and subsidize a bank, and I really could have used that money saved up front.

That, I think, was what the investment fund was, and if you could just maybe make sure that's explained to our colleagues, what the $120 million really meant, because we hope that the farmers never use that money, that they just know that it's there and they can use up to that, borrow against that, and we just hope of course that no loans go bad. But could you just explain it a little better to them?

Hon Mr Buchanan: I think the answer is the fact that the fund is an ag investment fund. It's not a --

Mr Klopp: Like you write cheques on it like the old program.

Hon Mr Buchanan: Some people like to use the word "subsidy." Many farmers resent that word, so it's not a cheque-writing mechanism. It's intended as an ag investment to allow farmers to borrow money from existing institutions. In one case we set up the Agricultural Commodity Corp, which is run by farmers for farmers, and we actually used banks' money. I mean, it isn't taxpayers' money that's being used here. We offer some guarantees.

We are able to leverage money and put programs in place that last for a long time, and there's no sort of time line on these programs. So it's the leveraging feature of this, which actually came from farmers. This is not sort of a New Democrat ideology. The concept came from farmers. They put it together when the Hayes task force travelled around, and we basically acted on what farmers were asking for. I think it has the support of basically all parties and all farmers.

Mr Klopp: Thank you. That's it.

The Vice-Chair: The time that we have for estimates today unfortunately has expired. I'd like to ask the minister a question. There are a number of verbal questions which were asked by the opposition critics. If the minister could, if possible, instruct his staff to review Hansard and give the opposition critics written responses within a reasonable period of time, I'm sure that would be appreciated.

Mrs Fawcett: I would really like some further information. I know Mr Villeneuve mentioned 4-H, and I'd like to know really if 4-H is going to be something that will continue to be helped along, and also subsidies to fall fairs, because that's a good educational vehicle.

Hon Mr Buchanan: You can count on us.

Mrs Fawcett: Right. I want to make sure those funds are never cut --

Hon Mr Buchanan: You can talk to your federal counterparts about --

Mrs Fawcett: -- from 4-H and fall fairs.

Hon Mr Buchanan: We will provide that, Mr Chairman, to the people within a reasonable time.

The Vice-Chair: Through the clerk, Minister. That would be fine. Thank you very much.

We now have the opportunity to vote on the 1994-95 estimates of the Ministry of Agriculture.

Shall vote 101 carry? Carried.

Shall vote 102 carry? Carried.

Shall vote 103 carry? Carried.

Shall vote 104 carry? Carried.

Shall vote 105 carry? Carried.

Shall the 1994-95 estimates of the Ministry of Agriculture, Food and Rural Affairs carry? Carried.

Shall I report the 1994-95 estimates of the Ministry of Agriculture, Food and Rural Affairs to the House? Carried.

Thank you very much, Minister and Deputy Minister and staff, for attending this meeting today. The committee now stands adjourned. We reconvene at the call of the Chair.

The committee adjourned at 1742.