Mr. Chairperson (Marcel Laurendeau): Good afternoon. Will the Committee of Supply please come to order. This section of the Committee of Supply will be considering the Estimates of the Department of Agriculture. Does the honourable Minister of Agriculture have an opening statement?
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Hon. Harry Enns (Minister of Agriculture): Mr. Chairman, colleagues, I am pleased to introduce the 1997-98 Estimates for the Manitoba Department of Agriculture. It is an honour for my department and myself to serve our agricultural and food sector, an industry vital to Manitoba's overall economy as well as to our rural communities. It is, of course, the most important activity that we engage in, that is the provision of a safe and abundant supply of food.
I am sure that members of our Legislative Assembly are aware of the important contribution of our agrifood industry to Manitoba's economy. However, I believe that it is incumbent upon us to remind all Manitobans, especially those who are not directly involved in this industry, of our agrifood sector's important contribution. In doing so, I believe we should revisit some statistics about this industry's vital role in Manitoba's economy. One in nine jobs in the province was the result of agriculture production with approximately 60,000 persons directly and indirectly being employed in agriculture. Agriculture, directly or indirectly, accounted for about one-fifth of the total added value for the goods producing sector in the province. The food and beverage industry alone produced close to $2-billion worth of goods and services, accounting for almost one-quarter of Manitoba's total manufacturing output.
In recent years agriculture, direct and indirect, contribution of Manitoba's GDP ranged from 10 percent to 12 percent. Almost 25,000 farm family units form the backbone of our province's agriculture and food industry. In many respects the preservation and strengthening of family farms in Manitoba is critical to the viability and prosperity of this important sector to our province's economy. Although farmers make up less than 3 percent of Manitoba's population, they have a major economic impact on the province far beyond the proportion of their numbers. In effect, viable and prosperous family farms are essential not only for Manitoba's agrifood sector but also for our province's overall economy. Consequently, we must build on the strength of our province's agrifood industry and family farms for the long-term benefit of all Manitobans.
As in the past, I would like to briefly comment on the farm income situation in our province. In 1996, farm cash receipts in Manitoba were estimated at $2.79 billion, the highest on record in current dollars. Receipts from crop productions rose by some 15.7 percent to a record of $1.63 billion, mainly because of increased prices for almost all crops, more than offsetting the decreased marketings of flax seed, sunflower seed, lentils and dried peas in 1996. There was a 17.1 percent increase in livestock receipts to a new record of $1.6 billion. Lower program payments such as GRIP and crop insurance resulted in a 54.8 percent decrease in direct payments to Manitoba producers, which dropped from $104 million in 1995 to some $47 million in 1996.
To a major extent, the future of our province's agrifood industry is dependent on world trends. The shift towards a more liberalized global trading environment represents a major opportunity for Manitoba's agrifood industry to expand its exports. Our Manitoba agrifood sector and our farmers can compete within a level playing field, global marketplace, free of significant trade distortions imposed by foreign governments.
Our industry processors and producers will be able to significantly seize opportunities within a new and expanded world market based on our competitive advantages. Some of these advantages involve our high-quality agricultural products, our relatively low costs of production, the reliability of our supply, our high level of farm technology, our competitive tax regime, a strong and modern infrastructure, reasonable land costs and our strict, high standards involving both the quality and the safety of our food.
According to World Bank estimates, Asia will account for one-half of the growth in world trade between now and the end of the century. The real income per capita are set to double in the Asian tiger nations. There is every indication that several millions of Asians with increased spending power will spend a part of their growing wealth on purchasing imported goods, including food and food products. Many of the economically booming Asian countries have limited agricultural resources and will be unable to increase output significantly to satisfy their domestic demand. Some of these nations will simply be forced to increase imports of livestock products and feed grains, as well as processed food products.
Recently I participated in a trade mission to officially launch the Manitoba Pork Advantage in Asia. We used this opportunity to promote the forthcoming Canada-Taiwan Business Association convention scheduled to be held here in Manitoba in the latter part of this year. I am happy to report that this trade mission increased awareness of major Asian players about Manitoba's Pork Advantage. Of note, the Asian pork industry is increasingly finding it difficult to expand its operations, in large part due to the local environmental concerns, limited feed supplies and rising production costs.
The mission was structured around seminars at several locations. These seminars attracted the attention of major Pacific Rim players who are actively investigating the benefits of the Manitoba pork industry. During the trade mission, I found the possibilities for increasing our agrifood exports to be very encouraging. I gained a deeper awareness of the critical importance of listening to our overseas customers. By doing so, I especially became increasingly attentive to the fact that different nations with different cultures have different preferences. We must tailor-fit our agriculture products to satisfy their preferences; otherwise, they simply will buy their agrifood products from elsewhere.
The long-term future of Manitoba's agrifood industry will be greatly impacted by the new economic realities of grain transportation reforms. The combined impact of the WGTA and the Canadian Wheat Board pooling reforms will be far greater on Manitoba producers than for other western Canadian farmers. New economic realities imposed by the WGTA and the Canadian Wheat Board pooling reforms will require Manitoba's agrifood industry to accelerate in making major adjustments towards greater diversification, value-added activity, as well as finding and developing new markets.
Grain transportation reforms will drive our province's agrifood industry towards a long-term change--change with emphasis on high-value, low-volume crops, forage production particularly on more marginal crop production land, and less on low-value, high-volume crops for export, towards greater emphasis on livestock production and value-added production.
The provincial government and Manitoba Agriculture are committed towards working with the agrifood industry in making these adjustments.
On January 17, 1996, the Manitoba government announced the creation of the Working for Value rural task force to find ways of increasing the value of Manitoba's exports. This major task force was asked to hear from rural Manitobans about how to increase Manitoba's exports by $1 billion within the decade. The Working for Value task force held some 26 public forum meetings across rural Manitoba. These meetings involved public input from community members including producers, commodity groups, businesses and local leaders.
Our government task force of MLAs chaired by my colleague Jack Penner and co-chaired by Mervin Tweed and Frank Pitura asked the local community participants for their thoughts and suggestions on how to add value to their community resources and primary products. The task force interim report was released in Brandon on April 19 at Rural Forum 96. In the not too distant future the task force will be submitting its final report to our government.
The Province of Manitoba is committed to using the task force report as a major foundation in formulating its future policy decisions affecting agriculture in rural Manitoba and all its communities.
In recent months we have heard optimistic news about greater diversification and expanded value-added activity in our province. During November of 1996, Isobord Enterprises incorporated confirmed its plans to proceed with the construction of a plant that will generate several hundred new jobs. This plant will be the first large-scale operation in the world to transform cereal straw into a strong moisture resistant composite board using a patented process.
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The particle board will be environmentally friendly, formaldehyde free and from a highly renewable resource. The plant will produce composite board mostly for export markets. More recently, Prairie Flour Mills started construction of a facility to grind Manitoba wheat. This occasion marks the first time in 40 years that a new flour mill will open in our province.
The Isobord and flour mill projects are just a few examples of encouraging initiatives involving new or expanded processing plants in Manitoba. Other initiatives involved the expansion of the McCain food potato processing plant in Portage la Prairie, the new hog processing plant by J.M. Schneider Inc. for Winnipeg, the food processing complex, including a canola crushing facility by Canadian Agra Corporation at Ste. Agathe and the expansion of the Carberry potato processing plant by Midwest Food Products.
These projects involving new and expanded processing plants have been launched by the agrifood private sector. However, staff from the Manitoba Agriculture, Industry, Trade and Tourism, the Rural Development and Economic Development Board have worked very hard on a number of these new undertakings.
For example, our respective departments assisted a number of agrifood manufacturers in laying the groundwork for making some of these new expanded plants possible. Manitoba Agriculture staff were involved in such activities as conducting feasibility studies, reviewing infrastructure requirements and assessing supply needs of manufacturers. Many of the new expanded processing plants will certainly help our agrifood sector in making necessary adjustments to accommodate to the post-WGTA and Canadian Wheat Board pooling era
It should also be emphasized that there are many smaller but no less important projects involving fruit, vegetable, baking and other industries. Many of these new and expanded processing facilities are particularly welcome given our province's agrifood industries need to adjust towards greater diversification and value-added activity.
I want to share with members some encouraging news concerning the increase of livestock numbers in Manitoba and the associated opportunities for a greater diversification and adding value within our province. With hogs, Stats Canada estimated that there were 1.94 million hogs on Manitoba farms as of January 1997, an all-time record high. In 1996, Manitoba produced over three million slaughter hogs. With our province's expanding hog processing capacity we expect our hog production to reach over four million head by the year 2000.
With respect to beef cattle, Manitoba was one of two major cattle-producing provinces to increase its beef cow herd in 1996, a surprising result when you consider the difficulties the cattle industry has undergone for the last several years. Cattle numbers as of January 1997 reached 1.3 million head, a record high for this time of the year. There is a considerable capacity for our cattle production to undergo further expansion especially for increased backgrounding of beef cattle here in Manitoba.
In the long term, grain transportation reforms will give our producers relatively lower feed costs combined with abundant feed supplies contributing to our province's competitive advantage in cattle production.
The Manitoba Pork Advantage is an initiative recently undertaken by our department in partnership with industry. This undertaking was launched to support the growth in production, processing and export market development of our provincial pork industry. This innovative initiative with industry partnership focuses on increasing provincial pig production beyond 4 million by the year 2000.
The Manitoba Pork Advantage highlights Manitoba's strengths, its large land base capable of supporting an expanded pork industry, skilled producers, a marketing system that is responsive to market signals, one of the lowest feed costs in North America, a quality product that meets market demand and a collaborative and close working relationship between the pork industry and government.
The inaugural launch of the Manitoba Pork Advantage in our province took place in Winnipeg on November 19, 1996. Over 500 Manitoba pork industry partners and potential investors from a broad spectrum of Manitoba's business community supported this major event.
Earlier, the government of Manitoba was pleased to announce a $3.4-million provincial funding commitment to an agrifood research and development initiative or ARDI in this year's budget. This new initiative will help to facilitate growth and adaptation in Manitoba's agricultural sector. The agrifood research and development initiative will enhance the agrifood industry's ability to adapt within the changing global marketing environment. ARDI will focus on diversification, value-added production, processing and exporting higher value products from Manitoba. This new initiative will assist Manitoba's agricultural sector to maintain its comparative advantage relative to other provinces which have already established research and development support programs.
ARDI is made possible through the use of safety net dollars available for a companion program for industry development purposes. It is expected that federal dollars will be added to Manitoba's planned financial commitment. In addition, ARDI funds will be highly levered by matching financial support available outside of government, including agribusiness associations, institutions, local organizations and commodity groups. In particular, commodity associations using checkoffs under the revised Agricultural Producers' Organization Funding Act will be able to partner with the province to ensure cost-effective development and applied research which meets their identified needs.
In January of this year, I was pleased to launch Manitoba Agriculture's new home page on the Internet. This new website is now available to all computer users with Internet access. Our new Manitoba Agriculture website provides marketing and technical information on a wide range of our province's agrifood products. Much of our Internet site information was designed to be of value to exporters and investors outside our province, both domestic and international as well as to our province's producers. Computer users can now find on our home page such information as an overview on the importance of Manitoba's agriculture and food sector, opportunities for buying Manitoba's various excellent agrifood products, technical information on diverse commodities and diversification in added-value investment opportunities.
Our new Internet site was developed and is now maintained by Manitoba Agriculture with funding assistance through the Manitoba Farm Business Management Council. We have tried to make our home page user friendly, practical, accurate, timely and relevant. In the months ahead, we will be expanding our Internet site with more and updated information in response to the constantly changing needs of our agrifood clients, who are our customers. The home page familiarizes users with the organizations of Manitoba Agriculture, the Manitoba Agricultural Credit Corporation, the Manitoba Crop Insurance Corporation.
Our new website was also designed to be useful to Manitobans who want to explore the broad range of our department's programs and services. By doing so, many people in our agrifood industry will be able to systematically review what programs are out there, what benefits are available to them and who in our department they can contact for more information about a particular program or service. Our new home page will be kept current and will focus on meeting the information needs of people within the agrifood industry.
At this time I would like to comment briefly on some other recent initiatives involving our department. Manitoba Agriculture is pleased to be a supporting partner in the growing Manitoba campaign recently launched in Winnipeg and in Brandon. Through newspaper advertisements, radio and billboards, urban Manitobans will be more aware of our agriculture food industry's impact on our overall economy, our quality of life and its environment.
Growing in Manitoba is an industry-driven communication program managed by the Agri-Food Network, a nonprofit agency. Partners in Growing in Manitoba include the Canada-Manitoba Agreement on Agricultural Sustainability, a joint federal-provincial government initiative, Manitoba producers and consumers, environmental and private industry organizations. Growing in Manitoba is just one example of Manitoba Agriculture's work with our many partners to promote and educate the public about our important agrifood industry.
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Other significant endeavours include the Manitoba Food Processors Association with their Manitoba-made thrust and Agriculture in the Classroom, Manitoba, which focuses on the school system. Our role is to facilitate and to assist in the co-ordination amongst partnership groups such as these to support them through our staff activities and where feasible with financial support from programs such as CMAAS, the Canada-Manitoba Agreement on Agricultural Sustainability.
I think you will agree that Manitoba's agrifood sector has a good-news story to tell about its diversity and potential for the future economic growth of our province.
For 1997, Manitoba's producers will be eligible to receive improved crop insurance coverage. More specifically, for the year of crop insurance coverage, dollar value for all crops has been set at 100 percent of the projected market price. Previously, the values were set at 85 percent of the market price. The 100 percent market price projections will result in an increase in dollar coverage for most crops.
Members opposite will be well aware that we have moved to bring the elk farming opportunities to Manitoba. We are doing so in a controlled and a highly regulated manner that will allow this province to take advantage of the diversification opportunities that already exist for elk farmers in Alberta and Saskatchewan. This is not the first time this activity has been tried in Manitoba and the unlevel playing field, the left, from the early attempts in the mid-'80s has created some challenges.
Speculation about what was or was not happening has raised unfounded concerns that the industry has had to deal with over the past couple of months. I am pleased to confirm, as I have previously stated, that there was no wholesale capture of up to 900 wild elk leading up to the start of our industry. Elk declared as of February 14, 1997, were raised under a permit from Natural Resources, were held under rights established for the First Nations or were purchased at fair market value. We now look forward to moving ahead with this exciting new industry opportunity.
The Canada-Manitoba Agreement on Agricultural Sustainability or CMAAS, signed on June 4, 1993, will deliver some $19.2 millions of equally shared provincial and federal programming over the period from 1994 to 1997, this being then the last year of that agreement.
The intent of the program is to enhance productivity and diversification of agriculture in a manner that is consistent with protection of the soil, water and air resources. Approximately $15.6 millions have been expended to date under this program. Manitoba Agriculture proposes to allocate a further $1.3 million to programming in '97-98 with the emphasis on activities in high-priority areas, including crop diversification, manure management, integrated pest management, precision farming, and water quality.
Provincial co-ordinated program area work teams are focusing activities into these priority areas. On-farm activities are being delivered by some 80 local delivery groups and producer and commodity associations. CMASS funding has developed, demonstrated and fostered the adoption of a wide range of improved and sustainable agricultural management practices, including the following examples: zero tillage production practices, including equipment, pest control and crop diversification; manure management practices, including lagoon covering, application based on soil and manure analysis, improved application equipment and techniques; forage production, including improved forage, legume and grass varieties; pest control and market opportunities in the United States; effective pest control through integrated pest management practices, pest incidence forecasting, and biocontrol of weeds; preparing area restoration and management practices on more than 60 sites along various water courses within the province.
A number of local delivery groups were nominated for awards at the recent Sustainable Development Awards of Excellence Program banquet. These groups were involved in a wide range of activities funded by CMASS and in support of sustainable agricultural practices.
Manitoba Agriculture's '97-98 budgeted expenditure represents a balance in serving the needs of Manitoba's farmers and the agrifood industry with the scope of fiscal restraint. The total budget expenditures for Manitoba Agriculture in '97-98 is approximately $97.7 million. This figure represents a total increase of approximately $1.2 million or approximately 1.3 percent more than the '96-97 voted Estimates of $96.5 million. Although our department budget represents a slight increase, nevertheless during our budget preparation process we made every effort to eliminate overhead and duplication as well as to review alternative delivery and management approaches. Our department's 1997-98 requested budget includes some estimated spending shifts. For example, our new proposed budget now includes $3.4 million for the new Agri-food Research and Development Initiative. Our allocation for the Net Income Stabilization Account or NISA has been increased by approximately $3.2 million, mostly to address an increase in eligible net sales under this program.
This concludes my introduction of Manitoba Agriculture's 1997-98 Estimates. I now look forward to reviewing them comprehensively with members of this committee.
Mr. Chairperson: We thank the minister for those comments. Does the official opposition critic, the honourable member for Swan River (Ms. Wowchuk), have any opening comments?
Ms. Rosann Wowchuk (Swan River): Mr. Chairman, I would like to take this opportunity to also put a few words on the record about the agriculture industry in Manitoba, and I want to thank the minister for his detailed outline of the importance of this industry to this province which is very important. Although only a small number of the total population of this province participates in the agriculture industry or the actual production of food, the spin-off industry with respect to processing food, and the production of equipment and various other aspects make us realize that the agriculture industry does have a tremendous effect.
Although only about 3 percent of the population participates in the agriculture industry, a much larger proportion of the provincial economy, close to some 10 percent to 15 percent, impacts on the actual economy of the province.
I have to say that, as the minister indicates, agriculture income is at a record high this year. I think we have to look at what is actually happening down on the farm. When we look at increased costs that farmers are paying, the bottom line, in many cases, has not increased as much as the actual income. When we look at higher fertilizer costs, higher chemical costs, all input costs seeing a great increase, the bottom line for farmers is not as great as we would like to see it.
These are the people who work at the grassroots, who do the majority of the work, but in actual fact their return is not as great as it should be over the last couple of years. Over the last year we did see, we were very fortunate to see grain prices up somewhat. We had some income for farmers from the payout from the federal government with the end of the Crow money, and that had an impact on the economy of the farming community, but as that money dries up, there will be no more money coming out of the Crow money.
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With the price of grain going down, I worry about what will happen to the bottom line of the farm income. Of course we are seeing farmers are very diverse people, and if they cannot make money from growing grain, they are going diversify into other products. We have seen a great diversification and moving towards more livestock production, more hog production, and farmers will always meet the challenge of what the market demands. As they have in the past, they will continue to do that.
The minister talked about the increase in the number of hogs in this province, and that of course again is related to demands and the markets that are now opening up in the Asian countries. I look forward to the continued success of those markets and a good return for the producers in this province, but the bottom line is the minister talked an awful lot about value-added, and we do have to move in that direction. We have to look at ways, whatever way that we can get our product to market, to get it there, but we have to also remember that not all countries want to buy processed food. There are those countries who are going to want to buy our grain, whether it be wheat or oats or barley, in its natural state because they want the value-added jobs as well. The challenge is ours, will be Canada's challenge and this province's challenge, as to how we can continue to get that grain to those markets.
As we see the railways, the federal government having deregulated the transportation system and changed the transportation act, that becomes a bigger and bigger challenge, and we saw yesterday what was the Canadian Wheat Board taking a stand on an issue that has been on all of our minds and that is our ability as producers to get our grain to market. It is unfortunate now that the railways have reneged on that responsibility and chosen to move other products more quickly than they have been moving grain, and the farmers being the ones who are bearing the brunt of the cost of all of the demurrage that we see piling up because these ships are having to wait at port because the grain does not get there quickly enough.
So those are the kinds of challenges that are facing people in the farming community, that are facing the Manitoba government and us as representatives of rural communities as to how we can ensure that those people who are the grassroots producers of a product are the ones that gain the greatest amount of benefit from the market, and that they get a fair return for the product that they are producing.
As the minister indicated, it is a very important industry to this province, and the agriculture industry is very important to the rural communities. If the farming community does not do well, the rural communities do not do well, and soon you see people leaving the farm, and every time a family leaves the farm there is a negative impact on the community, whether it be to the schools, to the hospital or to the businesses of the community.
It is important that we remember who this Department of Agriculture is working for, really the people who are at the grassroots. It is those people that build the foundation for all of the markets that the minister talks about. We have to be sure that we have a healthy agriculture community at the grassroots. From there we will grow to meet the markets that are out there. But certainly those markets that are being developed right now are very, very important and play an important role in the changing agriculture society and the changing rural community that we have right now.
The minister talked about funding for agriculture research. We were very pleased to see the announcement that was made that there would be additional funds made through the announcement in the budget for agriculture research. I believe that we have to do much, much more of that. I think Manitoba has fallen behind in research in comparison to other provinces. It is very worthwhile to put that money into research. We will look forward to having further discussion with the minister as to how that money will be allocated, and what type of research the minister is proposing or how it will be distributed.
Certainly we were interested in the announcement of Isobord, and looking for an additional use for straw product rather than having it just burnt and causing a problem to urban members as we saw over the last year. We will look forward to having discussions as to what the return will be for producers on that and what the time line is to see the board into production and what kind of return we will see on that.
The minister also talked about the--[interjection]
An Honourable Member: How about this growing hemp here? Where is that at?
Ms. Wowchuk: The Minister of Justice just indicated that he is interested in where the hemp industry is. That is another issue that I will be raising with the Minister of Agriculture. We both had the opportunity to attend a conference in Vancouver earlier this year. Certainly there is a tremendous amount of interest in hemp production. When we talk about other fibres, we talk about ways that we can use straw for producing--Isobord. There is also a tremendous interest in additional fibre that can be produced from hemp. We look forward to discussing with the minister where the testing is on that product in this market.
The move by this government to move towards elk ranching has certainly been a challenging initiative on the part of the government and one that has not be positively received by all members of the community. Certainly we have even heard the Elk Growers' Association be critical of the way the minister introduced the regulations for elk ranching. There are other hunting association groups who have been critical as well. Of course, there have been people throughout the province who feel that the government could have handled it differently. If the government wanted to have elk ranching, they could have done it without actually capturing elk from the wild. The minister himself indicated that there are many elk in captivity right now and elk available in other provinces.
I think that is one of the issues that we have to look at, whether or not it was actually necessary to capture elk from the wild or whether it could have been, if the minister was so insistent on starting the industry, how else it could have been done and whether or not government should have looked at ways of dealing with the problem of large numbers of elk in other ways such as has been recommended by people in the community and by aboriginal people.
I know this falls more into the Department of Natural Resources as to how we should have addressed that particular problem, but certainly we look forward to seeing the corrections to the regulations that the minister may have made and also to seeing how the elk will be dispersed, who will qualify to get them, what the minister's intentions are there.
We look at the revenue side of the budget, and this government certainly anticipates that they will have high revenues from the result of the sale of these animals, but along with starting an industry we have to also ensure that we sustain our natural resources, and we do not put too much pressure on the resources as we build this industry.
We have had discussions with the minister on the Wheat Board, and members on the government side of the House have stated in the past their views, that we should be moving to an open-market system or a dual-market system. I was very pleased with the results of the barley vote to see that when the producers were asked for their views, they spoke very clearly, and the majority of them said that they wanted the single-desk selling and barley to stay under the Wheat Board. Now, those who are anti-Wheat Board, we hear them saying, oh, but it is not all of us. There are still 36 percent, I believe it was, who voted against the Wheat Board.
So you have to wonder where people are coming from on one side when you have a government that gets 46 percent of the vote or somewhere around 40 percent of the vote. They are still considered the majority and are allowed to govern the province as a majority, which they should be, but then when people do not get their way on things like the barley vote, then they can say, oh, but 36 percent of the people voted against it, so that is not a clear majority. My feeling is you cannot have it both ways. If the public and democracy says that the majority, whatever it is, can govern, then the majority should be a majority when it comes to a vote such as this.
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I think that the Wheat Board plays a very important role. There are challenges that are still facing the Wheat Board with Bill C-72, I believe that is the bill number, changes that will be put forward under that bill that caused some concern. I know the minister's comments have been that the recommendations do not go far enough. In our view, some of those recommendations, if implemented, will weaken the Wheat Board, and I believe that that will not be in the best interest of the producers of this province.
The minister talked about growing Manitoba, and certainly we have to do much more to promote our product. Other provinces do that. We have to be proud of what we produce in this province and encourage local people in the province to understand what we are producing and encourage local use. That would be one of the keys in having the agriculture industry grow.
The minister talks about agriculture in the classroom, and I think that is a very good program, but I think that we have to do much more work, and the Department of Agriculture has to do more to work with the Department of Education to ensure that children in the classroom are learning about the agriculture industry in this province.
I want to say that I think we have made positive steps with farm safety. We have much more to do there. Agriculture is considered to be one of the most high-risk industries in the country, lots of accidents, and you can understand why that is happening. When couples are working together, many times children are put into a situation where they should not be close to equipment, and that is something that has to be addressed, but I think that the government made a very good step when they brought in the legislation that would improve the lighting on farm equipment and improve the safety of all people who are travelling, farmers when they are moving equipment at a very busy time of the year and sometimes not nearly as careful as they should be and the general public. An accident that took place in southern Manitoba a few years ago certainly spells out what can happen when equipment is not properly lit.
So with those few comments, I want to say that I am prepared to debate the Estimates and raise issues with the minister. I want to say that, again, this is a very important industry. We have to look at expanding our horizons to world trade, but we also have to look at how we can offer better services for people who are at the grassroots and the ones who are actually doing the production.
We have to look at ways to ensure that this is a sustainable industry, that the resources that we are using--the soil, the water, the communities that we live in--are there for our children and our grandchildren, for those who choose to continue to play this very important role, and that is the production of food for not only Manitobans but for many people in the world.
Mr. Chairperson: We thank the critic from the official opposition for those remarks. I would remind honourable members that the committee that debates on the Minister's Salary, item 1.(a) is deferred until all other items in the Estimates of this department are passed. At this time we invite the minister's staff to take their place in the Chamber.
Is the minister prepared to introduce his staff present at the time?
Mr. Enns: Yes, I certainly am. At my immediate left my deputy minister, Mr. Don Zasada; assistant deputy minister, Les Baseraba, with the Regional Agricultural Services Division; Mr. Craig Lee, who is the assistant deputy minister with respect to Policy and Economics Division; and Mr. Marvin Richter who manages the financial matters within the Department of Agriculture.
Mr. Chairman, allow me to put on the record that I consider it an extreme privilege to be working with the men and women that make up the Department of Agriculture. We are, and certainly I am, cognizant of the fact that because of the financial restraint program that my government has imposed on the public services, the service generally, that they, like all other public servants in Manitoba, have not been provided with incremental pay increases during this period of restraint. I have the greatest of respect for the dedication for the work that they have undertaken during this past year, the enthusiasm with which they continue to serve our clients, our farmers, at a time when agriculture is facing a tremendous number of changes and challenges. I attribute a great deal to the success that Manitoba producers and the Manitoba agrifood industry generally have had in this past year to the dedication and services of the staff of the Department of Agriculture.
Mr. Chairperson: The item before the committee is item 1. Administration and Finance (b) Executive Support (1) Salaries and Employee Benefits $422,100--pass; (2) Other Expenditures $68,300--pass.
Ms. Wowchuk: I have not got the same book here that you have. The section I want to stop on, if you would, is Technological Services.
Mr. Chairperson: All right, that is (d).
Ms. Wowchuk: Thank you.
Mr. Chairperson: (3) Policy Studies $71,200--pass.
1.(c) Financial and Administrative Services $773,100--pass; (2) Other Expenditures $489,400--pass.
1.(d) Information Technology Services (1) Salaries and Employees and Benefits.
Ms. Wowchuk: When the minister made his opening comments he indicated that the government had done a lot of work on improving technological services with computers. Can the minister indicate if there has been additional monies spent on computer services to hook up all the offices, the Ag offices, to a central, or whether that it had been necessary to spend funds there or what kind of improvements to technology services have been made over this year in the Department of Agriculture.
Mr. Enns: Mr. Chairman, we certainly can not say that we have fully completed the integration of computer services throughout out various scattered offices, agricultural offices throughout the province. What we are under, as you can imagine, in the process of bringing about greater computer capacity throughout the department--the additional dollars that are represented in different parts of these estimates reflect that. We have some particular challenges, particularly in our two major corporations like the Crop Insurance Corporation and the Manitoba Agricultural Credit Corporation. A very specific demand needs some urgency to bring our computer capacity and technology fully up to speed in these areas and probably would be the priority areas within the department prior to having them expended throughout the general service of our extension staff.
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Ms. Wowchuk: Can the minister indicate--he talked about on-line services that are available. Are those on-line services available, that is, available to everybody? I am looking at how this service is available to the different Ag offices, whether that has resulted in additional expenses that have had to be expended to ensure that the various Ag offices and Crop Insurance and Agriculture Credit Corporation profits.
Mr. Enns: It was a very pleasant day in Brandon at Manitoba Ag days that we were able to announce Manitoba Agriculture as coming into the information age with our own website and our hookup to the Internet system. We were able to demonstrate the hookup to a group of interested farmers and producers who were in attendance at Ag days in the bull ring arena, the sales ring arena of the Keystone Centre. We hope this will grow.
This provides for those producers, and there are growing numbers of them who are equipped with the kind of computer capacity and technology on their farms that they can access everything that is being put on that website by the Department of Agriculture and that is, in essence, all the services available from the Department of Agriculture and our corporations, our Crop Insurance Corporation, Manitoba Agricultural Credit Corporation.
As well, it is specifically geared, of course, to those who wish to tap into this kind of information from all parts of the world, and the FBM net has been operational since August of 1993. We are tying into a greater circuit that has been developed since 1993. Currently, there are some 640 users registered. Four to 500 use it regularly.
Across Canada, there are over 7,100 users of the farm--what would that FBM stand for? Farm Business Management. Manitoba net users have made over 29,000 calls. Users across Canada have made over 332,000 calls since this project was started in August of 1993. It is driven largely by our farm management group that has hooked this in with the Canada-wide farm management programs, and many of our producers who have been involved in sourcing our farm management specialist services are finding it obviously advantageous to make use of it.
I suspect this is just our new entry into this program, that in the coming years this will become a major source of information, a major resource tool for our producers. It will be of interest to people who wish to know something about Manitoba Agriculture and the agrifood industry. It will be of interest to people who are trying to source food products from Manitoba. It will be of interest to potential investors who wish to invest in value-added primary food products grown here in our province for various food-exporting opportunities in Canada, the United States, or in other parts of the world.
Ms. Wowchuk: I can indicate to the minister that I am not very computer literate because I was having a hard time remembering the words of "website" and "Internet." Is the minister saying that there are about 640 Manitobans that are hooked up to this management service and are using the service here in Manitoba? I guess what I am looking for, is this going to be a way where, when the technology is available, that Manitoba producers will be able to turn on their computer and find out about press releases that the Department of Agriculture has put out, or different forecasts and information? Is that the intent of this, and is it available? Is the minister saying that now approximately 640 farmers in Manitoba are accessing this information?
Mr. Enns: Staff advised me that it is 640 Manitobans who are using the system. It need not necessarily be farmers. It could be feedmill operators that are using it to source information on grain prices and feed. It could be others related, one would assume, to the overall agrifood sector that are sourcing it.
Mr. Chairman, I will suggest to my colleague that I, like her, am of that generation; that I will never fully comprehend the magic and the miracle of computers. I will not try to pretend that I am expert in these matters. I am constantly astounded as I visit in different parts of the province just how often when you walk into the office area--it could be part of a kitchen or a separate room--more and more farm families that have sophisticated computer equipment available to them. There are other services that have been on-line for some time throughout Canada, and of course in the private sector. More and more people are sourcing all kinds of agriculture related information through this new modem of communications.
Ms. Wowchuk: Some of the people who are most literate in the community and the province are our students. I wonder whether the Department of Agriculture is working with the Department of Education to provide information through the Internet and other services that makes it available to schools such as for, we talked about an education in the classroom program, and whether any steps are being taken by the Department of Agriculture to offer distance education service agriculture courses.
I would like to ask the minister if perhaps this is the section to be asking these questions under, or else is there another section that we should be talking about these kinds of things?
Mr. Enns: I am advised that there is another section under Farm Management, a section that we could further expand on this, but allow me to say that I appreciate the support from my opposition colleague with respect to this particular program. I just feel that it is extremely important that, as I indicated in my opening comments and I often indicate on any occasion that I have to speak publicly for and on behalf of the Department of Agriculture, we have become such a highly urbanized society that it is not just a question of providing information about Manitoba agriculture to our urban cousins, but it is important that they understand the legitimate concerns and requirements of today's agriculture. That gets reflected in society's attitude towards agriculture, and very often, through misinformation or just simply not understanding, agriculture gets pushed into positions that are sometimes difficult or that make it unnecessarily difficult for agriculture to fully develop in the manner and way in which we believe it can. So I will certainly look forward to a greater discussion on this issue at the appropriate section in the Estimates.
Ms. Wowchuk: Is the minister indicating then--what I am looking for is, I am wanting to know about some costs about the Internet and this service. Would that be also in the section further down?
Mr. Enns: Yes, I can provide her with some cost information. The home page was developed and is currently managed and maintained by Manitoba Agriculture with primary funding assistance through the Canada and Manitoba Farm Business Management Council. This new initiative is part of the national Farm Business Management Program. It is one of the few shared programs that we have with Ag Canada in the Department of Agriculture and is represented there.
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Costs for developing and enhancing and maintaining the Internet home page is approximately $120,000 over a three-year period. This amount covers the salary for a contract employee as well as site development costs. Manitoba Agriculture provided about $15,000, as well as administrative costs and support, with the remainder to come from monies provided by the Canada and Manitoba Farm Business Management Council, which is funded by Agriculture and Agri-Food Canada.
So it would appear that this initiative will cost us half of the $120,000. No? It is $15,000. That is a modest investment. I like that balance. Mr. Chairman, $15,000 from Manitoba and $120,000 from Ottawa. You will note the astuteness with which the Department of Agriculture negotiates with our Ottawa colleagues. Would that some other departments negotiate in the same manner.
Ms. Wowchuk: Can the minister indicate if that is $15,000 annually that Manitoba Agriculture would be paying? He indicated that it was a contract. Could the minister indicate who provides those services for us?
Mr. Enns: That was a one-time cost, a one-time $15,000 contract price, to get the expertise to set it up. We provided, in addition to that, some office space and auxiliary services, but it is only a one-time cost and is now being operated and run within our Farm Management division or group.
Mr. Chairperson: Shall the item pass? The item is accordingly passed. (2) Other Expenditures $43,800--pass.
(e) Human Resource Management Services (1) Salaries and Employee Benefits $220,400--pass; (2) Other Expenditures $41,900--pass.
2. Risk Management and Income Support Programs (a) Manitoba Crop Insurance Corporation (1) Administration $4,458,300.
Ms. Wowchuk: Mr. Chairman, I have several questions that I would like to ask with respect to the Manitoba Crop Insurance Corporation. We, last year, had a new program brought in, and it was an Enhanced Crop Insurance. The minister indicated that there has been much better participation in this program versus what we had under the previous programs, and that is partly due to the fact, I believe, that there is 50 percent coverage which has no premiums to it. I wonder if the minister can indicate to this House the number of people who are participating in Crop Insurance, and if we could break down from that what percentage of them are at 50 percent, what are at 70 percent, and what are at 80 percent coverage.
Mr. Enns: I am expecting momentarily senior management people from Manitoba Crop Insurance. They will come and join us. That will enable me to provide the honourable member with these figures. I can certainly indicate to her that her preamble was correct, that we are pleased with the increased participation in Crop Insurance generally. I think as my officials settle down, Mr. Neil Hamilton, assistant general manager of Manitoba Crop Insurance and Henry Dribnenky--a good Irish name--that works with senior management of the Crop Insurance Corporation as well. The question was how that broke down, and I will have that information momentarily.
It may be of interest to the honourable member that a total of 8.2 million acres were insured under the program last year. This figure was comprised of some 7.7 million acres in all-risk crops or 80 percent of Manitoba's acreage. That is an all-time high for the corporation. A question I have asked of the corporation from time to time, and I have not received an answer and because perhaps there is none available, it is questionable whether or not we are not just about insuring all real acres or very close to it. There are, obviously, small acreages scattered throughout the province what you could just about describe, you know, under management of hobby farming, and some crops, although there are only very few that are not covered by Crop Insurance that account for that 20 percent that is uninsured. In other words, I believe that we are very close to providing coverage for all of the significant agricultural acreages that are available for this kind of insurance.
In 1996, this participation level represented a 38 percent increase in all-risk crop acreage, and a 1,400 percent increase in tame hay acreage relative to the 1995 crop year. So there was a very significant acceptance of the program that was developed by Manitoba Crop Insurance, which we refer to as the Enhanced Crop Insurance Program that was offered to our producers in the year '96.
Starting in '97, all western provinces have adopted some version of the Enhanced Crop Insurance and, Mr. Chairman, you know me for the modesty that I normally exhibit and I will continue exhibiting in this Chamber, but the Crop Insurance Program that has been offered to Canadian producers now for some--well, I suppose it had its genesis in the late '50s--'58, '59, '60, when it was started. So it is a program of some 35, 36 years. It is a high-risk business. These gentlemen have to make their best guesstimate as to weather, prices, pests, floods, drought. Unlike some other jurisdictions, and I will not go out of my way to name them, the Manitoba Crop Insurance, the Manitoba producers have been extremely well served by the people that operate our Crop Insurance Corporation.
Perhaps--I say perhaps--I know that perhaps one of the most complimentary things that can be said about the Manitoba Crop Insurance Program is when other jurisdictions take note of what we do and within a very short time, within a year or two incorporate the kinds of changes that we make to our Crop Insurance Program into their crop insurance programs. That is what the note here says, that virtually all western provinces have adopted some version of our Enhanced Crop Insurance Program.
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Ms. Wowchuk: Mr. Chairman, I thank the minister for that information and, unless I was not listening accurately, I do not know whether the minister broke it down for us, but he said that there was $8.2 million insured. I was wondering, what percentage of the people insured their crop at the 50 percent coverage and what percentage of them take the higher coverage, either at 70 or 80 percent?
Mr. Enns: Mr. Chairman, yes, I do have some further information in that regard, and it is broken down in three categories of crop types. Cereals and oilseeds, 27 percent of the registered producers have just opted for the 50 percent coverage level; 33 percent for the 70 percent level; and 40 percent for the 80 percent level. In the special crops area, 22 percent have opted for the 50 percent coverage; 26 percent for the 70 percent coverage; and 52 percent for the 80 percent coverage. It is obvious to me that many of the producers who wish to cover their higher input costs in these crop areas are choosing the maximum coverage available to them under this program.
Tame hay is just the reverse; 85 percent have opted for relatively the premium free, you know, 50 percent coverage, although I remind members of the committee that we have introduced a registration charge to get into the program. I believe it is in the order--it is 20 cents an acre, so that is not totally correct to say it is premium free. We consider it premium free. There are obviously administration costs involved in the registering of these acres. What it really is is a cost recovery of these administration costs that we are charging. But in tame hay, 85 percent are in the 50 percent program; 11 percent in the 70 percent program; and only 4 percent in the 80 percent program.
So for an averaging of all the crops, the figures would come out to 27 percent of the policy holders are in the 50 percent category; 32 percent in the 70 percent category; and 41 percent in the 80 percent category.
Ms. Wowchuk: Mr. Chairman, I wonder if the minister could indicate whether there is any breakdown across the province, whether there are areas of perhaps in the southern or the northern part of the province who tend to take the 50 percent coverage.
The reason I raise this issue is that I was talking to some people in my constituency. What they were telling me is that the 80 percent coverage is just too expensive for them. They very seldom would end up getting a payout out of it. The yield for their area just does not work out right, and that is another whole issue that perhaps we can discuss. What I am looking for is if the department can see any trends as to which part of the province we are seeing people opt for the 50 percent, and in which part of the province we are seeing the higher coverages.
Mr. Enns: Mr. Chairman, I am advised that we do not have a breakdown of the type that the member for Swan River requests. I am reminded that even those who are purchasing the 80 percent coverage are, in effect, getting the first 50 percent premium free. When you net it out, you are looking at paying about 40 percent of that 80 percent coverage. But it is a refinement of data that may be available in the future, but we do not have it available on this occasion.
Ms. Wowchuk: I appreciate that it is a new program and there probably have not been any trends set yet. I would request then, if you were looking at trends in the future that we could have some information as to what the payouts are. I guess the higher payouts would be for those that have the higher coverage, but if there could also be some breakdown when you are looking, have more time to look at this information in more detail. That would be something that I would appreciate getting.
I want to go to another area. The minister talked about change. There was a press release, and the minister referred to it in his statement, that we were now moving to 100 percent of coverage of the projected price and that we were at 85 percent of the projected price. Can the minister explain what that really means? Is it just a shell game with numbers that there is going to be more money? Does it actually mean there is a higher number, and what is this based on?
Mr. Enns: Mr. Chairman, the member for Swan River (Ms. Wowchuk) knows how easily I am wounded. To suggest that I engage in shell games, you know, but I will defer from reacting too vociferously to that otherwise serious charge and not to destroy the decorum of this pleasant afternoon as we proceed with these Estimates.
Let me first of all say that the 85 percent or the 100 percent do reflect real dollars, real figures. What happens is that we accept, not just we, but across Canada, the federal government sets at the beginning of the insurance year their best estimate of prices on the various crops and it is on those. Because we are talking about hopefully an actuarially sound insurance program, we have to have fixed costs on which to adjust premium rates to. When those figures come to us from the federal government from Ag Canada as to the appropriate price for wheat, for barley, for oats, whatever is being insured, then that is the payout figure that the program is designed for. The reason that last year the decision was made to pay only 85 percent of that established figure was because a new element has been introduced in the last go-arounds with our federal partners in the insurance.
They have put an absolute cap on the available dollars on our Crop Insurance Program and so it was, with some concern or nervousness if you like, that we wanted to make sure that we stayed within our projected costs, our projected estimates, of that crop year knowing that we could not go beyond a certain figure, could accept additional monies beyond that cap from our senior partner, the federal government, that decision was made to tailor down, quite frankly, our payouts, our benefits to 85 percent of those values. We have, working with the same set of circumstances that cap is still there, but with fine tuning of our numbers, the experience of last year, and some capacity within this range feel confident that we can push that payout to 100 percent of those published figures again.
I want to be careful that I am looking at--my people, these figures do not necessarily reflect the actual price at any given time. This is the figure on which the farmers get paid out, not just in Manitoba but in Saskatchewan and on these commodities throughout Canada. They are established by Ottawa but it is a real difference. Last year, we were paying 85 percent of those figures; this year we will be paying 100 percent. I might say, Mr. Chairman, understandably, that was one of the few areas that the corporation and certainly the department and the government that received some criticism or complaints about that took away from some of the otherwise generally endorsed accepted acceptance of the Enhanced Crop Insurance Program. I am very pleased that I have been able to, first of all, to convince my own treasury to move this figure back up to the 100 percent. I am confident that we will be able to work within the overall costing restraints that this program operates under with our partners in Ottawa.
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(Mr. Mervin Tweed, Acting Chairperson, in the Chair)
Ms. Wowchuk: Mr. Chairman, I am just trying to get a little bit of clarification on this, if the minister would be patient. Are we saying then that Manitoba, is this a national program right across the country? It is now at 100 percent, or is Manitoba doing something different than other provinces are and if the minister could compare? Let us take one commodity, for example, let us take wheat and what the payout price was last year compared to what the payout price will be this year, so that I can get a better understanding of what it is we are changing here.
Mr. Enns: Mr. Chairman, there is, as we have in Canada always, a factor in transportation costs which makes it not necessarily exactly the same in different parts of the Prairies where these grains are grown and that always has to be factored in but, for instance, to answer a specific question, last year the value that was being paid out on red spring wheat was $3.62. This year the value is $4.08. So that is a difference.
I will guess that whether or not--the federal government is not involved in determining whether or not the Manitoba Crop Insurance Corporation will pay out 85 percent of these values or 90 percent of these values. That is a decision made provincially, and I would suspect in different jurisdictions of Alberta, Saskatchewan and other provinces those respective organizations make similar decisions from time to time. We felt that we needed to be sure that we did not overexpend in the '96 crop year to tab our figure at 85 percent of these values. This year we are doing it at 100 percent.
Ms. Wowchuk: So is the minister saying that in 1986, if a person had a claim on wheat, they would have got paid 85 percent of $3.62, and in 1997, if they have a claim, because it is 100 percent, they will be getting paid $4.08? Because that would be quite a significant difference if it is 85 percent of $3.62 versus 100 percent of $4.08.
Mr. Enns: I am advised that these figures that I am quoting, these are our Manitoba Crop Insurance figures, which already include the 15 percent reduction, so these are the actual payout figures that were in effect last year and will be in effect this year.
Ms. Wowchuk: And $4.08 would be the price that Crop Insurance has come up would be anticipated as what Manitoba Crop Insurance thinks that the price of wheat will be for the upcoming year, or where do you get the figure of $4.08?
Mr. Enns: That, you see, is the value that Agriculture Canada, the federal government, that is their best guess, but it is on those figures that we base our premium structure on and on which we will make the payout.
Ms. Wowchuk: There are other new programs that have come under Manitoba Crop Insurance, one of them being a program that was announced for an improved program for big-game damage. We have heard briefly about the program and that there would be better compensation for damage from deer and elk to hay and other crops. Can the minister give us detail about these new programs and whether they are in place right now, whether the coverage, for example, big-game damage to hay is at the 100 percent coverage as has been announced, or is it still being paid at the lower rate? I had a call from a constituent not very long ago saying that although he had heard about the new program, they were not being compensated at the new rate. So can the minister indicate where that new Crop Insurance Program is?
Mr. Enns: I am particularly pleased to respond to this question because it affords me the opportunity to once again indicate the leadership role that Manitoba and the Manitoba Crop Insurance Corporation play.
The honourable member for Swan River (Ms. Wowchuk) will be particularly sensitive to the fact that she hears complaints as I hear complaints from farmers in Saskatchewan that do not have similar compensation programs in place that have existed in Manitoba even prior to these changes. It is my understanding that Manitoba is the first jurisdiction in Canada to recognize an important simple fact, that if society as a whole deems it advisable that we have abundant wildlife in our province, and I think all of us concur and share that hope for different reasons. Whether it is abundant waterfowl, ducks and geese, we rejoice when, particularly this time of year, the famous birds make their comeback from wintering in the south, and they do that in big numbers. Fortunately when they do it this time of year they cause no damage. When they come back in the fall on their way south and if there is considerable crop land out--I know there is a considerable amount of crop land out in the Swan River Valley that the honourable member represents--a considerable amount of damage can be done.
In addition, we all enjoy the white-tail deer, the elk, the moose, the bear that we can with some justifiable pride say that we have managed to maintain in our society, that they cohabit with today's agriculture and with today's development.
I personally take some considerable pride and joy in the fact that, having had the privilege of being responsible for Natural Resources, Mr. Chairperson, on a number of occasions in this province, that we have so ordered our affairs, we have provided the necessary habitat, that we have probably more deer and more of our major wildlife resources available to us in our province than existed in this province when a certain gentleman by the name of Cristoforo Colombo first set sail to look at the New World.
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I know that we have a great deal more white-tail deer here. They were only very occasional visitors before the first European agricultural settlement took place on the Prairies. They have actually come and joined us, because they have found out that farmers are pretty good providers in their alfalfa fields and their grain fields. In fact farmers will, from time to time, stack the hay in the round bails all in nice rows so that the elk and the deer can easily access them and not have too much difficulty in finding them.
For us to be able to move and for me to be able to convince my colleagues in my caucus, my cabinet to accept the 100 percent compensation program, it gives me a great deal of pleasure for two different reasons. Unlike those meanspirited socialist friends of mine in Saskatchewan who, when faced with the same challenge, decided to place the burden on another minority group of their citizens, the hunters, they imposed a $12 I think per licence surcharge as a means to gather the necessary dollars to improve their compensation program.
Now, I do not know what is going to happen if after the federal government really fully comes down with the heavy hand of gun registration whether or not there will be anybody else hunting anyway, and then that program will be underfunded. But in the province of Manitoba I am very pleased to have the opportunity of making this announcement, this policy change, that will provide 100 percent coverage of commercial value of lost and damaged product. That compares to the 70 percent that is provided in Saskatchewan and the lesser of 80 percent of commercial value in Alberta.
So without question, we are leading the nation in providing this kind of support to our agriculture producers who, at different times, are called upon to host some of our wildlife friends, particularly through a difficult winter.
It does have one other great advantage, and many of the persons that I have had the privilege of working with and in contact with in the Department of Natural Resources and the community that they serve, wildlife interests, view this as a great plus in bringing together more harmonious agricultural and wildlife relationships in the field. The farmer looks a little differently at that duck or that goose or that elk or that deer, if he knows that he is going to get 100 percent compensation for his loss as he did when he was getting no compensation or very little compensation. Then very often the farmer's attitude toward duck or goose was that the only good one was a dead one, and put pressure on governments to control and reduce wildlife populations because of the losses that he and he alone was being asked to suffer.
So this kind of sharing of the costs associated with healthy wildlife populations in our province, I believe, is a real win-win situation for obviously the wildlife, the deer, the elk that are involved, but also for the farmers who, in my opinion, unfairly have been asked to carry some of the burden that is associated with these healthy wildlife populations. So I am delighted that I was able to be the minister involved to make this kind of fundamental step forward in further improvement and further service to the farming community in this regard.
Ms. Wowchuk: I am also pleased that there is now a program, as the minister indicated, in my constituency and in other constituencies that border along the Duck and Riding mountains. My colleague, the member for Dauphin (Mr. Struthers), I am sure has the same problems in his constituency. It was a very serious problem and one that came to head last winter when we had the number of elk that were damaging crops in the area, and the minister knows that the people in the Swan River Valley put a tremendous amount of pressure on his government, that if they were going to capture elk, they also had to address this issue. I believe that it was as a result of a lot of pressure that was put on by people in the Swan River Valley that this program finally came about. I am very pleased about that, that there is a proper compensation for big-game damage because I also do not believe that farmers should bear the brunt of having to feed the animals that are there for the pleasure of many other people.
(Mr. Chairperson in the Chair)
It is also a big issue because in the Swan River constituency there is a lot of grain that is left out in the field this winter and a lot of grain that was in the field in September and October that is not on the ground anymore because it has been served to keep a deer and elk population very healthy this winter. So I am sure there will be a lot of claims as a result of that.
Can the minister indicate whether or not, since the federal government plays a role in a share in the cost of the waterfowl damage--I believe the federal government has a share of that. Does the federal government put any money towards this big-game damage program?
Mr. Enns: Yes, the federal government is a partner in this program. They have been sharing the costs with respect to the waterfowl and bird depredation program for a number of years, but they were not participants in the big-game damage. That has always been up until now a full provincial responsibility. I am pleased that the federal government has joined us. We are using some of the available safety net dollars as a relatively minor companion program adjustment to our overall program so that now that the federal government will be sharing at the 50 percent level of the first 80 percent cost of the big-game program as well as the waterfowl program. The federal government would not proceed to the 100 percent, so the decision to go to the 100 percent is entirely one made by the province and the costs of topping up the 80 percent to the 20 percent in both programs, the waterfowl program and the big-game program, is the sole responsibility of the province.
Ms. Wowchuk: Can the minister indicate what the application process is and whether or not it is a requirement that a person who makes a claim for big-game damage also be enrolled in Crop Insurance?
Mr. Enns: No, you do not have to be enrolled in the Crop Insurance Program to avail yourself to the coverage and the support of either of these programs.
Ms. Wowchuk: For those people who are enrolled in crop insurance, can the minister indicate whether consideration has been given that their losses that they face because of wildlife damage or waterfowl damage not be taken into consideration into their crop averages, or does the damage that is sustained from waterfowl or big-game damage end up driving down their production average?
Mr. Enns: My staff advises that yes we do take into account against the individual's productivity figures, these losses when they occur by wildlife. It is, I think, justifiable on the basis that if it is a recurring situation that these are, just like different soil zones play a role in coverage and in premium setting, there is a factor of farming in that particular area under those circumstances that makes it an action that for purely sound, actuarial reasons the Crop Insurance Corporation feels they must undertake.
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Ms. Wowchuk: Can the minister perhaps explain, because that would seem unfair, because the person who is not carrying crop insurance would get compensation because he or she has had losses, but the person who has had crop insurance and suffers the same losses will have their averages driven down. So can the minister explain whether there is a different level of coverage for somebody who does not have crop insurance versus somebody who has crop insurance?
Mr. Enns: Mr. Chairman, let me undertake to provide the honourable member with a more detailed explanation for the rationale that the corporation employs. I appreciate that if one views it a certain way, a sense that there is a difference--I am being given an explanation that I do not fully comprehend right now. I will ask Mr. Hamilton to take pen to hand and provide the honourable member with a full answer. I know that is an issue particularly in an area like the Swan River Valley.
The question of fairness between a party that receives compensation, although he is not a Crop Insurance customer, and the Crop Insurance customer who also suffers wildlife damage, I am going to challenge staff to give us a one-pager on that one, that perhaps before the course of these Estimates move too much ahead, we will be able to provide you with. Thank you.
Ms. Wowchuk: Thank you very much. I appreciate the minister making that effort to provide that information. Another issue of compensation is one that has been raised by Manitoba Cattle Producers, that is, the loss of livestock to wildlife. I understand that there has been consideration after many requests from cattle producers across the province to have this issue addressed. I wonder if the minister could fill us in on the details of what that program will be and when it will be available, whether or not it is going to be an insurance program that cattle producers are going to have to buy, or whether it is going to be a compensation program for losses.
Mr. Enns: It was certainly the intention of the department and myself that when we challenged ourselves to provide this expanded coverage for wildlife loss, we meant to be as inclusive as possible. We are even looking at, again, not a big ticket item, but occasionally bears cause damage. Leafcutter bee operations, we have had a modest program, I believe, out of Natural Resources when bears do damage to our beekeepers--or is that also carried here with a corporation? For some reason, they can and have caused destructive damage to leafcutter bee operators who have their little buildings and facilities out there. Sometimes they are laced with sugar as they have to feed the bees, and that attracts our friendly bears from time to time to disrupt those operations.
We are in the stage of negotiations reviewing the issue that the honourable member raises with respect to the cattlemen's concern about the loss of animals to wolves, to bears. It is a more complicated issue in the sense that all too often, and I know that the honourable member has a background with cattle, as I do, the situation where the cattle person comes upon an animal that he has lost, some time after the loss has occurred very often in the fall when cattle are being rounded up and he is missing a cow or missing a few yearlings and comes upon, you know, comes upon skeletal remains, pretty good evidence maybe that the particular wildlife prevalent in the area, that it could have been caused by wildlife, but it is a little difficult to determine with some reasonable accuracy.
I have challenged this. I met with the executive of the Manitoba Cattle Producers, and I asked them to assist us in working out a protocol that would be acceptable under which terms these kinds of losses would be compensable, you know, whether or not the involvement of veterinarians would be called for to determine cause of death, or whether we can tackle those that are simply not, upon which no judgment can be made.
There is also a little issue, I think there is a willingness on the part of Ottawa to look at the program. We are putting it forward as a shareable program, would like to have Ottawa share the program with us. If we had, it would likely be only up to the 80 percent figure. Understandably, with the figures that I showed you before of compensation that was being paid in other jurisdictions which range anywhere from 65, 70, 80 percent, Ottawa is not willing to be paying a jurisdiction more than they share in any other jurisdictions. I can understand their reasons for their limitation, but we are pursuing discussions with Ottawa officials to hopefully be able to present a program that will offer similar coverage of loss from wildlife to cattle producers in the province of Manitoba.
Ms. Wowchuk: Mr. Chairman, so the minister is saying then that the program is still in design stages. No program has been announced, and we probably do not anticipate one this year. Can the minister indicate whether that again would be an insurance, if they are looking at an insurance program that the people could buy insurance, or would it be similar to the program that we have now for wildlife damage to hay and waterfowl damage? A clarification there, please.
Mr. Enns: This is viewed as a straight wildlife compensation program. We utilize the services of the Manitoba Crop Insurance Corporation who are in the business of compensating, and even that decision--it is understandable that when we are dealing with crops or with material that the Manitoba Crop Insurance Corporation is familiar with, wheat, grains, hay, products that they supervise, and their people are often called out to assess the scale of damage--30 percent, 50 percent--it is natural to the Crop Insurance to be administrators of that program. The program that we are now talking about may well be administered through the Wildlife branch of the Department of Natural Resources. But to answer your question directly, it is not considered in the form of an insurance program or cattle producers would be asked to provide some kind of a, you know, insurance program before they would be eligible, again, the rationale being that the same as we are paying out, as I just answered a little while ago, crop losses to an uninsured farmer, the same rationale applies to a cattle producer who has the misfortune of losing animals as a result of wildlife depredation.
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Ms. Wowchuk: Mr. Chairman, I just want to revert to this 100 percent coverage that we were talking about a few minutes ago. The minister said it used to be 85 percent of the projected price of 1996, and now it is up to 100 percent coverage. Can the minister go back and give a little bit of history on that? In the past, has it been 100 percent? Did it go to 85 percent only last year because of the cap on the federal funding, or has it traditionally been 100 percent in the past?
Mr. Enns: Mr. Chairman, the member asks an interesting question, and I will, in preparing that other question that I kind of took as notice. I think it would be of interest to me and to her to go back a few years to see what has, in fact, been the practice. I am advised that the year prior to that we were at 100 percent.
Now, there are different methodologies that come into play also, as well. We are now paying on a firmer price than we are today. We went to the 85 percent because of the federal government's unilateral capping their contribution. My authorization from my Treasury Board is to participate in a program with the federal government providing that we maintain a spending proportion, 60-40 I believe it is, of the total program. With Ottawa putting a fixed cap on it, I did not have authority to spend beyond that. So to ensure that we stayed within that program, we self-imposed, if you like, that restriction on us by making the payout 85.
I am advised that in the early '80 years, when grain prices were high, this was not a precedent-setting move, that percentage of payout whether it is 100 percent or 80 or 75, has been evoked on different occasions for different reasons. It might be interesting to ask the Crop Insurance to simply go back 10, 15 years and see what in fact the practice was.
Ms. Wowchuk: Mr. Chairman, I may have asked this before, and I am not quite understanding the minister. Has it raised to the 100 percent because the federal government has raised their cap and there will be more money coming from the federal government, or because the provincial government has decided to put more money into it?
Mr. Enns: Neither of those two is really the case. The federal government has put an absolute cap on their overall contribution to safety net programs. I believe it is set at $600 million across the country. That is what is available from Ottawa for all provinces. That is a sizeable reduction. Previous to that, I think, it was in the order of $680 million--it was as high as 850--$850 million was Ottawa's contribution to the various safety net programs, of which Crop Insurance and NISA are the major programs. In addition to that, they did not have a cap. You have to understand these are client-driven programs. If the take-up is higher, then provincial share rises, but as well, Ottawa's share rises.
We were in agreement that we would share these costs on a 60-40 basis. That was the case up until the last, or the next to last Paul Martin budget of the Liberal government. My Agriculture critic from the Liberal Party here in Manitoba has not been diligently doing his share on behalf of Manitoba farmers and allowed the then federal finance minister to put an absolute cap on the federal government's contribution, and not just at the cap at which the program dollars were being spent but at a very sizeable reduction.
As my associate deputy minister indicates, it was up to at some point $815-million federal contribution. This cap was imposed at $600 million. From that $600 million, Manitoba's share is roughly speaking about $85 million, and out of that we have to get our share for the federal government's participation in the Crop Insurance Program. Our share for the federal government's participation in the NISA program, out of that came our share when we had the program, although it is no longer is with us, the sugar beet tripartite support programs. What we have experienced though, we took a major portion of dollars available to us to enhance the Crop Insurance Program last year, I believe some $18 million in that order, matched by Ottawa. That still left us with some additional dollars, and those dollars are the ones that give us a comfort level that we can now go to the 100 percent.
The federal government did not change, did not add any additional dollars in it. It is not quite fair to say that neither did the province. We are both saying that we are confident that we can live within the cap, and we are both maintaining the same level percentage-wise of our contribution.
Ms. Wowchuk: I am well aware of the impacts on agriculture because of cutbacks by the federal Liberal government. Certainly the farmers are well aware that there has been a tremendous reduction both in agriculture support and agriculture research. We will take every opportunity to remind them about that.
Mr. Chairman, what I am wanting again to ask about people who talked about crop insurance saying that they are only taking the 50 percent coverage, because they are not happy with the numbers. They do not want to pay the higher amount of money, because they do not think it will be a return for them. Is it possible for a person who is at 50 percent coverage to build up his average? Are the individual numbers taken into consideration so that the person can build up where their return will be more favourable, for then they would be more interested in taking the better insurance? What they are telling me now is that with the numbers where they are, it does not pay to get the coverage. Does the individual average still come into play even when they are at the 50 percent coverage? Is there an opportunity for them to build up their average?
Mr. Enns: Mr. Chairman, I wonder if you want to take note of that great event that took place in the capital city of our country, namely, Toronto. They recently rescinded the ban on smoking in that fair city. Would you consider asking the House to consider lifting the ban on smoking in this Chamber for the duration of the Agriculture Estimates so that you and I could conduct this in a civil fashion?
An Honourable Member: Five-minute break.
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Mr. Enns: Well, I will let the Chair ponder that while I answer the honourable member's question. The answer is yes; you can increase your productivity even at the 50 percent level.
Mr. Chairperson: Is there a willingness of the committee to allow the minister to have a five- minute break? [agreed]
The committee recessed at 4:31 p.m.
The committee resumed at 4:37 p.m.
Mr. Chairperson: Will the committee come to order.
Ms. Wowchuk: Oh, was I asking? I thought the minister was going to answer.
Mr. Enns: The specific question before I offered the diversion was whether or not it was possible for somebody in the 50 percent program to improve his individual productivity figures. Yes, staff indicates that is quite possible.
Ms. Wowchuk: Mr. Chairman, one of the areas that used to come under Crop Insurance was the GRIP program, which is no longer in existence; however, there are very substantial surpluses both on the federal side and the provincial side of GRIP. I understand that there is some money that has to be retained to be held in trust until outstanding issues have been addressed.
Can the minister indicate how soon he expects those to be resolved, whether there are court cases that are being--that there are funds being held for? The other question is, we have raised several times with the minister that we think that the surplus money from GRIP should be channelled into farm programs rather than into general revenue, and I have stated many times that I believe that the surplus from GRIP should be put into agriculture research, an area where we are desperately lagging behind other provinces. So I would ask the minister if he could indicate to us whether any consideration has been to put the surpluses from GRIP into agriculture research and whether he has, in any way, lobbied the federal government to try to keep the surplus of Manitoba's funds that the federal government has, in Manitoba for agriculture purposes.
Mr. Enns: Mr. Chairman, allow me once again--I know that I have done this on other occasions--to acknowledge the very substantive support program that the GRIP program represented to our grain producers at a time when they sorely needed it. As I recall, that program paid out in excess of $800 million to grain producers. Well, my ever-alert senior staff, always wanting to make sure that their minister stays within the confines of "just the facts, ma'am, just the facts, ma'am," and not exaggerate, says the actual figure is $778 million, a very, very significant sum of money of support that obviously maintained a number of our producers through a difficult period of time. I appreciate the fact that that same period of time saw too many farm foreclosures; nonetheless, one can only imagine how many more there would have been if my colleague the now Minister of Highways and Transportation had not introduced that program in 1990, I believe it was.
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It took a lot of negotiations to bring the federal government and the other provinces together on that program, and that program was announced initially as a five-year program. It had a sunset clause to it which we ourselves imposed on the program, but it did provide these very significant benefits to the farm economy in Manitoba and, indeed, in other provinces. Again, let me say that the program was designed in Manitoba. Now that Saskatchewan is out and Alberta is out and we are out and we can sit back and do kind of a posthumous review of the program, we find, and I think it is not false modesty, that we can again acknowledge that we probably offered the best of this program to our Manitoba farmers in terms of benefits paid out, in terms of the program living up to its expectations. Mr. Chairman, I can attest to that. I still have producers reminding me that some of them would like to see that program ongoing and carrying on.
Also, you know, the program probably made its biggest contribution to the Manitoba scene in the very difficult cropping year of '93, where we had weather, disease. It was a year that we really had our first serious experience with fusarium, the tombstone disease, as it was quickly dubbed in the popular term, where the program went into a very serious deficit, upwards to 160 millions of dollars, 170 millions of dollars in deficit position at the end of the year.
Remembering that the conditions of the program were that when the program concluded, the senior partners would have to pick up any deficit in the proportionate share of contributions. Quite frankly, it looked to me as a pretty sure bet that I would have to be going to my Treasury, as the federal government minister would have to go to his Treasury, to find some additional millions of dollars before we exited that program. All these things were starkly imbued in my memory, because that was the year that I came back to Agriculture, in '93, to that kind of a welcoming scene on the landscape.
Fortunately, as it happens in prairie agriculture, the years that followed we were able to recover through better crop production, better prices, the deficit situation of that program. We ended the program with--as the member is well aware, she refers to them--very substantial surpluses that were in place as we exited the program.
Our conditions of the program called for returning the producers' share to the producers. I am advised that in the month of February, just a month or two ago or a month and a half ago, some $15.8 million were returned to Manitoba producers as their share of the GRIP surplus. That represented 75 percent of the producers' share of the surpluses.
The honourable member is correct when she indicates that we have retained 25 percent of the producers' share of the surplus to have in reserve for possible use should there be some liabilities that will be attached to the program. I can advise the honourable member that we have two principal concerns. One is an outstanding issue of perhaps owing some interest to lentil producers who, the honourable member will recall, successfully pursued the corporation or the program with respect to payments in that crop area. We are in court at present with respect to a significant sum of possible interest that is in dispute, and should the courts decide against the corporation, then these monies would be applied to cover those costs.
The other outstanding issue that is--it is not fair to say before the courts, but it is in process; there is a possibility. I think it is prudent on the part of the corporation that they also make contingency plans for what may develop in that case, as a fairly major challenge from one risk area, Risk Area 12, the Red River corridor group that continues to feel that they have a case to be made that should improve their payout, and I have no observations to make about the case. It would be imprudent for me to do so because they, that is the group representing that area, have retained legal counsel as has the corporation, and it is an issue that is continuing to be under review, and I cannot offer any further information about that.
With respect to the federal government's sizable share of the surplus--you know I appreciate that there is--I think we confuse different pools of money. When we hear of Saskatchewan, for instance, getting significant pools of money for research and development or diversification and development programs, I am led to understand that money is really coming from what used to be the federal government's share of the GRIP premium; just as we, for instance, took up some of our slack in our overall safety net dollars available to us to use a significant portion to enhance our basic crop insurance. We are advised in no uncertain terms that the federal share of the surplus automatically returns to the federal Treasury, and my Treasury is imposing the same conditions with respect to the provincial share of the surplus.
I do not mind putting on the record that I would, of course, have liked to have had use or retention of some of those dollars or all of those dollars or a portion of those dollars for additional and expanded agricultural programs. Certainly, the Research and Development program is one that rapidly comes to mind. I am pleased, nonetheless, that along with my capable deputy minister and I, we were able to garner for Research and Development the $3.4 million that are in the Estimates currently before us. It is my hope that we can build on those with a matching federal contribution and perhaps from other sources so that the Research and Development Fund can grow significantly.
Ms. Wowchuk: Mr. Chairman, in light of the fact that Manitoba has some of the greatest adjustments to make because of the changes to the Crow and the pooling, Manitoba farmers bear the biggest brunt of that, did the minister make any attempt to try to convince Ottawa that their share of the federal money, which is the surplus of GRIP, should remain in Manitoba for ongoing adaptation?
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Mr. Enns: Mr. Chairman, Manitoba made every effort, and I want to acknowledge the support that I received from virtually all farm organizations. We pooled together a coalition of farm interests which included Manitoba Pool and various commodity organizations to press as hard as possible for a more generous sharing of those compensation or those dollars that were made available at the time the Crow was withdrawn. We argued vehemently that, for the very reason that the honourable member mentions, because the hurt, the impact, is greatest on Manitoba and to a similar extent to eastern Saskatchewan that we deserve, you know, significantly higher proportion of that billion, six-hundred-million dollar payout, if you like, that the federal government offered as they exited the Crow program.
We offered the same arguments with respect to the St. Lawrence pooling formula which also is a pool of money that is coming back to producers to offset some of the changes in these programs, but we were unsuccessful. The federal government was adamant. The claim was that historically there were many years that Manitoba was the recipient, on the receiving end in terms of benefits from the Crow, although that was not true in the latter years. We argued that was not relevant. The issue was, who was going to be hurt most as a result of the removal of the Crow? It clearly was Manitoba, but the arguments fell on deaf ears. I have not been able to use that same argument with respect to the surpluses before us. The position of the federal government is that they are treating us no differently than they have treated other jurisdictions, and they are pretty adamant with respect to that position.
Ms. Wowchuk: Another program that is run under this part of the department is the NISA program, and it has long been argued that as a safety net NISA helps only those do not need it. In fact, the majority of funds in NISA accounts tend to be held by a very small number of people, and there are many people in Manitoba who actually do not participate or have accounts of less than $2,000. Can the minister indicate whether he has any concern about this program, which is supposed to be a safety net program for all producers but tends to be helping those who need the help the least and farmers who are struggling are not able to take advantage of the NISA program?
Mr. Enns: This program has features to it that have to be understood by the producers that it is in their interests to enroll. It is true that it is scaled to the size of the operation, that the larger operators are proportionately able to put more money into this stabilization program than the small producers, but it is just equally important for the small producer to get into the program, stay in the program and contribute to the program. Within a relatively few short years, it is, for the scale of that operation, a very worthwhile stabilization program.
I am pleased to report that over the years there has been a different participation level. It hovers around the 18,000 to 17,000 number of people that are enrolled in the program; and, as is pointed out to me by staff, in the last year or two we have had relatively good years and you would expect, and there should be, minimum withdrawal from the program.
In the last year, in '95, of the $21 million that were put into the program, some $10 million were withdrawn, leaving a net base of somewhat in excess of $10 million. I have a lot of belief in this program. It is a program that exerts a fair degree of self-discipline on the part of the individual producer, and it is a program that could stand the individual farms in good stead during a year or two of rough sledding. I share that particularly with the knowledge that those years of the very substantial billion-dollar, ad-hoc payout programs in times of stress, times of drought and times like that, are likely not going to be seen again. I do not foresee the mood and willingness on the part of the federal government. I do not see the capacity on the part of provincial governments to provide these kinds of ad hoc but very expensive programs that the farm communities experienced in the past. So it is just good management on the part of our producers to avail themselves of this program.
Ms. Wowchuk: Can the minister tell us of the number of producers who are participating, and I am not sure if he indicated the number of producers--[interjection]--Pardon me, 18,000? What percentage of those producers would have $2,000 or less in their accounts? Does the minister have that information available? I guess what we are looking at is, is this program really helping the people that really need it? The minister indicates it is a good program, and it is a good program, if you have the money to put in it, but if you have not got the money or your banker is waiting for the money, it is pretty difficult to put the money into the program, even though there is government money to match it. So I am looking for some information as to who is actually benefiting from it and what percentage of the participants have a very low account of, say, $2,000 or less.
Mr. Enns: Mr. Chair, one thing should be evident to all of us. It does not matter whether it is this program or other programs like GRIP basic crop insurance. Small producers get small benefits; bigger producers get bigger benefits. It is not an acreage proportionate basis; it is simply a question of scale. We have a graph here that shows that about 4 percent, 645 producers, would fall in that category of $2,000 and less. I am advised that, within the category of $2 to $2,000, about 21 percent of the producers fall into that category. I must say, and the honourable member will recall, in my opening statements, we kind of referred to having 25,000--
Mr. Chairperson: Order, please. The hour being 5 p.m., time for private members' hour. Committee rise.
Call in the Speaker.