GOVERNMENT ORDERS

CANADIAN WHEAT BOARD ACT

December 3, 1996-The Minister of Agriculture and Agri-Food-Second reading and reference to the Standing Committee on Agriculture and Agri-Food of Bill C-72, an act to amend the Canadian Wheat Board Act and to make consequential amendments to other acts.

That Bill C-72, an act to amend the Canadian Wheat Board Act and to make consequential amendments to other acts, be referred forthwith to the Standing Committee on Agriculture and Agri-Food.

Once again we have decided on this route in order that members who serve on the committee and interested groups may, if they wish, make submissions and the opportunity to speak in advance of the proposals that will improve the bill. Today I would like to outline in general the thrust of the legislation before this House which will modernize the operations of the Canadian Wheat Board.

While no set of proposals could possibly satisfy all the sides in that it is all too often a sharply polarized debate among farmers with respect to grain marketing, the government's approach is aimed at meeting the responsible expectations of the majority of western grain producers. Our policy objective is to build upon the improved strengths of our existing marketing system while modernizing the governance structure of the Canadian Wheat Board, enhancing its accountability, improving its responsiveness to changing producer needs and opportunities, providing more flexibility and faster cashflows and minimizing future complications in international trade.

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Many of the changes we are proposing will empower farmers with a bigger and more direct say in how their marketing system works, consistent with the majority of recommendations put forward by the western grain marketing panel. Overall, the changes fall into three broad categories, governance and accountability being the first.

The first relates to the governance and accountability of the Canadian Wheat Board. The overall governance of the wheat board will be placed in the hands of a board of directors consisting of between 11 and 15 members, the majority of whom will be farmers. To help make the transition to that new corporate structure a full set of interim directors will be appointed by the Government of Canada in 1997. Again the majority will be farmers. Then beginning in 1998 the producer majority among the directors will be replaced by directors elected by the farmers themselves.

Bill C-72 is written in such a way as to enable all this to happen. This is consistent with the advice of the western grain marketing panel, that is, to structure our amendments in the form of enabling legislation.

A number of farm groups appear to want the new law to be more precise in this area: specifying the date by which directors will be elected; confirming that the number of directors so elected will constitute a majority; and making this governance change irreversible, except of course by future amendments to the act.

The minister of agriculture has no difficulty with these ideas. They are completely consistent with the policy principles announced last October. The existing draft of Bill C-72 will enable them to be implemented. If the arguments presented to the standing committee are clearly to the effect that farmers would be more comfortable with the new law being more precise and less flexible with respect to the election of producer directors, then the minister would be happy to entertain the appropriate amendments to bring that about.

On the matter of accountability, Bill C-72 provides for a big change. For nearly 62 years the Canadian Wheat Board has been a crown corporation accountable only and solely to the Parliament of Canada. Under Bill C-72 it would evolve into a mixed enterprise. For the first time in history it would also become accountable to producers directly.

The essence of the Canadian Wheat Board's accountability to farmers will lie in demonstrating its marketing success and effectiveness. If the Canadian Wheat Board's performance is not satisfactory, then its board of directors including a majority of elected farmers can implement operational changes or ultimately trigger a process to change its marketing jurisdiction.

The essence of the Canadian Wheat Board's accountability to Parliament will lie in demonstrating its financial competence. This flows from the unique guarantee which Bill C-72 provides in relation to all of the Canadian Wheat Board's borrowing, not just initial payments, not just credit grain sales, but also all of its day to day financial transactions on the world's money markets. This amounts to billions of dollars annually backstopped by Canadian taxpayers if and when necessary.

As an agent of Her Majesty accountable only to Parliament, the Canadian Wheat Board automatically had this type of broad guarantee. For this mixed enterprise it is not automatic. It has to be written into law as Bill C-72.

The track record of the existing Canadian Wheat Board in relationship to its global financial transactions as a crown corporation is superlative. It enjoys a strong international credit rating. It has managed its day to day finances in a profitable manner gaining the benefit of the best possible interest rates and thus augmenting its pool returns to producers.

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Will these exceptionally high standards be maintained as it becomes a mixed enterprise under a different governance system and will the different accountability expectations be reached? We

fully expect so, but since Bill C-72 will provide the new Canadian Wheat Board with a unique legislated guarantee backed by taxpayers, it is not unreasonable for the new law also to include some safeguards to protect the taxpayers' position.

That is what Bill C-72 seeks to accomplish: getting the balance right between accountability to producers and accountability to Parliament. It will be important to weigh the pros and cons of having fewer safeguards for the taxpayer against having a less comprehensive guarantee.

It should also be noted that the Canadian Wheat Board has now and will continue to have decision making authority over matters which affect producers elsewhere in Canada outside its designated area, the authority to issue export permits for example. This is another reason why accountability to Parliament will continue to be important.

The second group of changes relates to more flexible operations and improved cashflow. Under these changes the wheat board will be able to make cash purchases of wheat and barley; manage adjustment payments during any crop year on an expedited basis; terminate pool accounts at any time and pay out farmers' returns as rapidly as possible thereafter; issue negotiable producer certificates; fully utilize modern risk management tools in dealing both with farmers and with consumers; defray farmers' grain storage and/or carrying costs; allow open farm deliveries to condo grain storage facilities; and procure grain using new technology, such as on farm mobile elevators.

These new flexibilities will help put more money from wheat board operations into the hands of farmers more quickly. To backstop cash purchases and to help the Canadian Wheat Board manage adjustment payments more quickly, the board will be allowed to establish contingency funds as a financial cushion.

The third category of changes relates to the Canadian Wheat Board's mandate. The legislation does not alter the Canadian Wheat Board's existing mandate but we are putting more decision making authority into the hands of the farmers themselves. In future the wheat board's mandate may be adjusted conditionally upon three things: first, a clear recommendation to that effect by directors of the Canadian Wheat Board; second, if the quality control issue is improved, the concurrence of the Canadian Grain Commission that a change can be made safely without damaging Canada's reputation or quality and consistency; and third, if the proposed change is significant or fundamental, then an affirmative vote among farmers would need to be a prerequisite.

The Canadian Wheat Board is a very effective marketer of Canadian grain. It has the support of the majority of western grain farmers. They want realistic and sensible Canadian Wheat Board changes but they do not want a scenario that would lead inevitably to the board's destruction.

Now just how valuable in the overall scenario and scheme of things is the Canadian Wheat Board? It sells some $5 billion worth of grain per year at a marketing cost of a few pennies per bushel. It retains no profit margin; all the rest goes to the farmers.

The board is one of Canada's most significant business enterprises. Doing business in more than 70 countries around the world, it is the fifth largest exporter and our biggest net earner of foreign exchange. It has earned for itself and for Canada a positive reputation in the eyes of the global customers, not so much on pricing issues-the board targets to extract price premiums-but on intrinsic quality, cleanliness, consistency, technological support, long term dependability, customer service and contract execution. The Canadian Wheat Board has been rated by its customers as number one in the world.

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These characteristics coupled with the size of the board, its global reach and its marketing clout result in Canada having roughly a 20 per cent share of the world market and realizing the best possible returns from those markets. The Government of Canada believes that it is worth preserving.

The Minister of Agriculture and Agri-Food is much committed to the principles that have been announced and which are embodied in the legislation presented before the House. Nevertheless there are a number of mechanical ways by which these principles to which I have referred can be accomplished. The minister is open to input from members of the Standing Committee on Agriculture and Agri-Food as to how the legislation could be improved.

[Translation]

Mr. Jean-Guy Chrétien (Frontenac, BQ): Mr. Speaker, I am pleased to rise to speak today at second reading of Bill C-72, an act to amend the Canadian Wheat Board Act and to make consequential amendments to other Acts.

Bill C-72, which is under debate this morning, is of little concern to the agricultural community in Quebec. While there are some wheat and barley growers there, their numbers are far fewer than in western Canada. However, because of the mission and role that have been given the Bloc Quebecois, it is our duty to express our opinion on the matter and more importantly to try to ground the current government's aspirations to control just about every field of activity in this immense country.

Our intervention in the issue is all the more important because it permits an objective analysis of the situation that will lead to a better understanding between the government and the 130,000 wheat producers and because, first and foremost, it allows us to fulfill the role we were given of protecting Quebec's interests.

So long as Quebec continues to pay billions of dollars in taxes to the federal government, we will continue to demand equal services and, more importantly, equitable financial benefits for Quebec.

This morning, the headlines in most of the francophone dailies read: ``The Minister of Finance in Ottawa again denies Quebec's claim for justice in the collection of the federal GST within Quebec''. Quebec will have a shortfall of nearly $2 billion. The Minister of Finance, a man of intelligence, said yesterday that Quebec is not losing any money in harmonizing the GST with its sales tax, whereas the maritimes would lose five tax percentage points.

However, he must be aware nothing is created and nothing is lost in nature. The maritime provinces preferred to have a higher sales tax rather than personal income tax, which was not the case in Quebec, Ontario and Alberta, for example.

However, this five per cent means we are paying the equivalent of $250 million to enable three maritime provinces to harmonize. A fine example of inequity. So, as long as Quebec continues to pay its $30 billion in income tax to the federal government, we will be around to demand justice.

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You know as well as I do how difficult it is for the Liberal government to grasp this rather simple concept of equality. This prompts me to add that the government should devote as much energy to developing a long term dairy strategy promoting the growth of the dairy industry, particularly in Quebec, since more than 47 per cent of all industrial milk in Canada is produced in Quebec.

In this context, I must warn the government that we will not be satisfied with a policy statement based on little more than empty promises, as the Liberal government has a habit of doing. In our view, while representing a laudable effort to modernize the Canadian Wheat Board, the blueprint for changes to the commission is clearly insufficient in the present situation.

Several wheat and barley producers called for a more flexible operational framework for the board, especially at the higher management level, and mainly for increased input from the producers themselves in the development of long term marketing strategies.

Whether the hon. parliamentary secretary agrees or not, Bill C-72 addresses to some extent these long-standing demands of the producers, while at the same time not giving them the freedom and flexibility they want and need to achieve their production objectives.

I was listening a moment ago to the parliamentary secretary who said over and over that a majority of western grain producers were happy with this bill. It is not normal for groups of western farm producers to hold referendum after referendum calling for changes to the Canadian Wheat Board. Granted, the Canadian Wheat Board has played and continue to play a major role in the sale and marketing of wheat and barley in western Canada. I am speaking honestly when I say that no one in this House can tell what would have happened to the economy and the farming industry in the three western provinces had it not been for the Canadian Wheat Board.

However, after 62 years, time has come to update this institution which, unfortunately, has strayed slightly from its goal. And when the government keeps making partisan appointments without-and that is a shame-looking at the primary qualifications of the commissioners, this goal is lost.

I am saying it and I will say it again. The secretary of state might get annoyed and say: ``Sure, but the member for Frontenac sits in the opposition and knows full well he will never have to appoint a director to the Canadian Wheat Board''. This is true. However, in my riding, for example, one can see that, over the last three years, a number of appointments were made strictly because of services rendered to that party, because of the funding provided to that party, with little consideration being given to qualifications.

This pattern is becoming the trademark of the Liberal Party and therefore of this Liberal government.

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It is well known that the Liberals give with one hand and take away with the other. Instead of acceding to the producers' requests, the government is trying, through devious and illusory means, to maintain control over the CWB. The bill provides that the board's social structure and the directors' status will be changed by electing a board of directors that will include a number of people from the industry.

However, given that this body will no longer be an agent of Her Majesty in right of Canada, producers should have priority as members of the board. Unfortunately, the government refuses to make a greater commitment to this issue. It refuses or at least fails to specify the number of farmers who will sit on a rather flexible new board of directors that will have anywhere from 11 to 15 members.

I am concerned about the Liberal Party's attitude, a party which has managed to appoint a fair number of its supporters to various government bodies since it came to office. Given its new structure, the Canadian Wheat Board will continue to leave the door wide open to this kind of partisan appointments, rather than give producers the place that is rightfully theirs in managing their interests.

I will conclude by pointing out that the Canadian Wheat Board accounts for close to 23 per cent of world exports of wheat and barley, which reflects the importance of its role. This is very

significant. These exports are estimated at close to $5 billion, in current dollars.

Since we will support the bill at second reading, we will make a few suggestions to improve Bill C-72 and if you accept them-

The Deputy Speaker: I am sorry, but the hon. member's time is up. The hon. member for Kindersley-Lloydminster has the floor.

[English]

Mr. Elwin Hermanson (Kindersley-Lloydminster, Ref.): Mr. Speaker, we are addressing the motion to refer Bill C-72 to committee. This is something that we have pressed the government to do, not because the legislation is good but simply because the public, particularly the farm community, needs to be exposed to this legislation so they realize how bad it really is.

The minister has made absolutely no progress on reforming grain marketing under the Canadian Wheat Board, just like he has made no permanent progress to reduce transportation inefficiencies in the movement of prairie grain, and just like he has made no progress in correcting the wrong-headed approach to cost recovery.

This is not because the minister is unaware of the issue. He is a Saskatchewan boy. He wandered around in the political wilderness of Saskatchewan for what seemed like 40 years as the leader of the provincial Liberal Party, after he was elected for a very short period to the House of Commons. The people of Saskatchewan very seldom vote for the Liberals but when they do, they boot them out sooner rather than later.

There is a real possibility, if the Liberals call a spring election, that this bill will not receive final approval from Parliament. It is unforgivable that the government has delayed bringing forward reforms to the Canadian Wheat Board.

We are now in the second half of February and this bill is just being referred to committee. It needs to be dealt with by the committee, come back for third reading, go to the Senate and receive royal assent. On top of that, it is a very flawed bill and needs a lot of work.

The probability of this bill passing at this point seems rather remote unless the government has a change of heart and is prepared to make significant changes to the bill.

Bill C-72 is a clear message to the prairie grain industry that the minister wants to fail at market reform. If he does not want it to fail, then he thinks he can pull a fast one on the industry by trying to mask minimal changes to the board, particularly its governance, leaving himself securely as the commandant of the board.

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Bill C-72 is badly drafted legislation that needs a series of major changes, and I stress major changes, to make it acceptable to the prairie industry and, more importantly, to individual farmers who are going to find out that this board is not the more accountable, more flexible Canadian Wheat Board that they were promised by the Liberal government.

The purpose of the bill is to change the governance, to make the board of directors an elected one rather than appointed commissioners. It is supposed to make it a more responsive, more communicative and more open marketing institution but it does not accomplish this.

We believe the government's proposed amendments to the board are weak, ineffective and a slap in the face to prairie producers. The government is telling them that they cannot manage their own marketing affairs, that in some way they are inferior to the producers of Ontario, Quebec and other commodities within Canada where producers are able to very effectively and capably manage their marketing affairs.

It is a matter to be seen whether or not the Liberal government will allow the wholesale changes to Bill C-72 that are permitted under the rules where a bill is referred to committee prior to second reading. Based on our experience we have found that amendments have been few and far between, usually cosmetic in nature and not very substantive.

Many farmers are beginning to believe that the minister of agriculture has manipulated the wheat board reform process. This has resulted in uncertainty, division and fear among western farmers. I have never seen an issue develop into such a divisive issue with the encouragement of the minister. At every opportunity he has poured gas on the fire rather than try to bring some positive, constructive and conciliatory measures forward to bring an end to some of the division and hard feelings that are mounting in the prairies over this issue.

Mr. Hill (Prince George-Peace River): No leadership.

Mr. Hermanson: The member from Peace River says that the minister has failed to show leadership and I certainly concur in that observation.

First he delayed making any changes to reform the board for more than two years. That allowed the uncertainty and mistrust to fester. Next he created a political charade in the form of the western grain marketing panel. After it came out with a half decent report, he ignored it, particularly the most important compromises it suggested. Based on the results of secret polls the minister decided the only way he would win a vote on barley marketing was by basing it on an all or nothing type question: no flexibility, no middle ground.

Now the minister thinks that by appointing a partially elected, part time board with minimal power that farmers demanding significant change will be satisfied. Then he will be able to wash his hands of the issue. The minister is certainly mistaken.

Some of the more substantial problems with the bill include the fact that it strengthens the government's control over the board rather than passing that control and responsibility on to the producers who actually pay for the services of the Canadian Wheat Board. The board will only be partially elected. The bill states that one or more directors may be elected. We know that the minister will agree to changes to that clause in the bill simply to mask some of the other controls that he does not want to let go, such as the government will appoint the chairman and president or chief executive officer instead of those people being selected by the directors who are elected by the farmers.

The government can dismiss a director at any time without cause. This is extremely unacceptable. This is the way tin pot dictators operate. I am ashamed that the minister of agriculture would bring in such an inferior piece of legislation. It shows no confidence in farmers to elect capable and competent directors to run the board.

The new board of directors must follow any directions it receives from the federal government, even if the directors believe such orders are not in the best interests of farmers.

The legislation allows the board to restore its authority over the feed grain market. This has been fairly controversial. Lorne Hehn, the chief commissioner of the board said it was a mistake, an error, and that it should be changed. However, the minister said no, it was not an error and that people misunderstood the bill. It certainly has the minister of agriculture for Alberta rather concerned. It is absolutely necessary to change this in the bill to make sure that we do not revert to 1973 marketing of prairie feed grains where barley could not even be moved across a provincial boundary without breaking the law. It is bad enough that our farmers cannot move their grain across international boundaries without breaking the law. If this bill is not corrected we may be breaking the law by moving our grain from Alberta to Saskatchewan or vice versa. This has to be changed.

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This bill reduces the possibility of future changes to the board's mandate. In order to make a significant change to the board's mandate farmers must go through an excessive approval process. First the board must recommend change. Then the Canadian Grain Commission must approve the change. Then there must be a producer vote held with a question determined by the minister. It sounds pretty rigged to me and it is certainly not showing any confidence of farmers to manage their own Canadian Wheat Board. Even after the vote, however, the minister would not be compelled to act on the results. Talk about arrogance and a lack of confidence. I find this measure in the bill absolutely disgusting.

No other political party has stated its position more clearly and more openly than Reform on matters related to the Canadian Wheat Board and the current barley plebiscite. Reform has repeatedly stated that we support and will work toward a reformed Canadian Wheat Board that is more accountable, more flexible and a board in which participation is voluntary. That is the debate that is out there among prairie producers and we know that is where support is growing. No matter what the minister does, eventually farmers will persist and will accomplish what they want.

We believe that only constructive changes to the board today will ensure its survival and effectiveness into the future and we do not advocate destruction of the board; only our political opponents are making those claims on our behalf.

In closing, the minister of agriculture has done more to damage the board, more to bring its usefulness into doubt in farmer's minds and more to hurt us internationally than anyone, all of us who have suggested that the board should be changed constructively to prepare producers to market in the 21st century.

The minister is moving us backwards; we want to move forward. This is bill is unacceptable in its present form and must changed substantially. I call on members of the committee to do that.

Mr. Glen McKinnon (Brandon-Souris, Lib.): Mr. Speaker, my colleague in our party who spoke earlier very clearly indicated that the wheat board is one of the institutions in the agricultural enterprise that is working solely for farmers. It is sharing with the farm community all the benefits of single desk selling at a fraction of the cost of revenues that are earned by that institution.

The Minister of Agriculture and Agri-Food Canada has explained the main objectives of Bill C-72 and I would like to discuss how we arrived at this legislation.

The Canadian Wheat Board has been serving Canadian farmers efficiently and effectively for over 60 years. During that time it has helped our grain sector build an international reputation for quality and reliability and has realized the best possible returns from the market for Canadian farmers. And as my colleague indicated earlier, shipload and boatload after boatload, the consistency is there and it is well received by those who are doing business with us.

The business environment is changing. We are doing business in an increasingly liberalized and competitive international marketplace. At the same time changing customer demands, reducing subsidization, new applications of biotechnology, booming markets for value added food products and a host of other changes mean that today's grain sector must be more innovative, more

self-reliant and market responsive than it was historically in the past.

In that context, the future of the Canadian Wheat Board has for several years been the subject of a sometimes very intense debate among farmers and other stakeholders in the grain sector, particularly in western Canada. As an aside I might indicate that in my riding of Brandon-Souris there have been court cases for those individuals who feel that they need to challenge the very authority of the Canadian Wheat Board Act and, for that matter, the whole method of marketing grain throughout the world.

The purpose of these amendments to the Canadian Wheat Board Act is to respond to some of the chief concerns that have been raised during that debate and to ensure that the Canadian Wheat Board is well positioned to continue as a reliable, responsive, single desk seller of Canadian wheat in the years ahead.

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In preparing this legislation our goal has been to ensure that everyone on all sides of this tough issue has had a full and fair opportunity to have their say.

In 1995 the minister established the Canadian Western Grain Marketing Panel to develop recommendations in consultation with all stakeholders in the grain industry. That panel did an excellent job in fulfilling its mandate and in providing a forum for producers and other stakeholders to discuss the future of the Canadian Wheat Board rationally, openly and transparently on the facts rather than on rhetoric.

It was the most extensive consultation regarding western grain in modern history, one which involved a series of town hall meetings in Manitoba, Saskatchewan and Alberta. It was in this forum that farmers and others gave their perspective on the current marketing system for western Canadian grain. Alternative arrangements were also brought forward.

The panel also held 12 days of hearings in Winnipeg, Regina and Edmonton, during which it heard 69 briefs and an additional 78 submissions from individuals and organizations who did not appear before the panel but made submissions for its information.

Following the publication of the panel's report last July, the minister invited interested parties to forward written responses to those recommendations. After the panel submitted its report last summer the minister further distributed a summary of its recommendations to every farmer in western Canada and invited their feedback.

All in all, from that process, 12,000 individuals and organizations responded. I am confident that the legislative changes we are putting forward today represent the views of the vast majority of western farmers and will address many of the key recommendations of the Western Grain Marketing Panel report.

One way or another we are taking action on all points raised by the panel with regard to wheat board governance. One of the major recommendations of the panel in this area was that the Canadian Wheat Board Act be amended to provide for a change in governance of the Canadian Wheat Board and to provide for greater flexibility in its operations and in the services which it provides to farmers. In fact, of all the recommendations contained in the panel's report, this one received the strongest consensus of support among farmers.

Under this legislation the overall governance of the board will be placed in the hands of a board of directors, most of whom will be farmers. To help ease the transition of the new corporate structure, an interim board of directors will be appointed by the government next year and the intention is that by the beginning of 1998 a majority of the directors will be elected by farmers.

The election of directors will have some fundamental impacts on the operations of the board, mainly because the board will be no longer a crown corporation. As much as possible, however, we have tried to minimize those impacts.

For example, as an agent of Her Majesty, the wheat board's borrowings are automatically guaranteed by the Government of Canada. To minimize changes, the Government of Canada will continue to guarantee the board's borrowings. In addition, the government will continue to guarantee initial payments and the Canadian Wheat Board's credit grain sales.

Nevertheless, there are still implications of moving to an elected board of directors that need to be fully examined. That is why the legislation is permissive in this area. Farmers need to be aware of what they have now and compare it to what they will have with an elected rather than an appointed board so they can make an informed decision regarding their ultimate preference in this particular area.

Another major group of amendments relates to more flexible board operations and improved cash flow. Under these amendments the board will be able to, first, make cash purchases of wheat and barley. Second, it will be able to manage adjustment payments during any crop year on an expedited basis. Third, it will be able to terminate pool accounts at any time and pay out farmers returns as soon as possible. Fourth, it will be able to issue negotiable producers certificates. Fifth, it will be able to defray farmers grain storage and/or carrying costs. Finally, it will be able to fully utilize modern risk management tools in dealing with both farmers and customers. In addition, to allow cash purchases and to help the board manage adjustment payments quickly, the wheat board will be allowed to establish a contingency fund.

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It is important to note that these amendments do not constitute the Government of Canada's full response to the concerns of Canadian grain producers and the recommendations of the Western Grain Marketing Panel. We are also pursuing many other avenues to address other issues related to grain marketing and transportation. Last November our government introduced legislation to modernize the Canada Labour Code.

Among other things, these amendments stipulate that while grain handlers and their employees will retain the right to strike and lock-out, in the vent of a work stoppage involving other parties in port related activities, services affecting grain shipments must be maintained.

With the amendments to the Canadian Wheat Board Act and many other changes we are making with regard to grain transportation and marketing, the Government of Canada is demonstrating that it is listening to the concerns of grain producers. It is taking actions to address those concerns and to lay the foundation for continuing growth and prosperity in the grain sector and Canada's rural communities into the next century.

I call on all members of the House to lend their support to this important legislation.

[Translation]

Mr. Jean Landry (Lotbinière, BQ): Mr. Speaker, I am pleased to be able to rise today and speak to Bill C-72, an act to amend the Canadian Wheat Board Act and to make consequential amendments to other acts. As you know, I represent an agricultural riding in Quebec, but it has no wheat or barley producers.

To be frank, the area governed by the Canadian Wheat Board covers the provinces of Manitoba, Saskatchewan, Alberta and British Columbia. However, as a member of the official opposition, to the great displeasure of our colleagues in the Reform Party and, naturally, of the member for Calgary Southwest, I must take part in the debate, as will my colleagues in the Bloc Quebecois later on, concerning this bill of such importance for many producers.

I know that we are here in this House to defend the interests of Quebecers. We are in this august place for the purpose of promoting sovereignty, but we must also use this forum to which we have access through our functions as members of the official opposition to speak to other nations. This also includes the nation of Canada. There is a lot of talk, with the Bloc Quebecois leadership race, about partnership between equals.

It is very simple: with 52 members, we are the representatives of the nation of Quebec, whether the members for Saint-Maurice and Sherbrooke like it or not. In addition, I must add that, for as long as Quebec is paying taxes to the federal government, it will be our duty and our right to find out how this money is spent. I would add that we must claim our fair share.

The bill before us was tabled following a clear and urgent recommendation for change by the panel of experts. The Liberal government stepped in in order to serve its own interests. Of course, it wants to see a democratic approach. It wants to give general responsibility for managing the Canadian Wheat Board to a board of directors.

At first blush, the Bloc Quebecois can only be pleased with the government's proposal by which this board of directors would henceforth be composed of a majority of producers, instead of three to five commissioners appointed by the minister. This shows a wonderful spirit of democracy. Perhaps we will influence the Liberal members with our fine example of democracy. I refer to my party's leadership race, and if that is the case, fine.

I am, however, still sceptical about the attitude and the real motives of the Liberal government, and here is why. According to the bill, future members of the board of directors will be elected by their peers or by the grain producers. The Liberal government, however, is taking care not to specify how many of these producer-elected members will be on the board.

In the documentation on this bill, care is taken not to set out a number of elected farmer members. It is stipulated that the majority of the new board will be composed of elected farmers, but there is no indication of when this will happen. What is more certain is that we are proposing an interim board for 1997.

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Obviously, never a day goes by on this Hill without talk of the possibility of a 1997 election. It is certain that we will be having byelections at least, in Jonquière and Calgary West. That I can announce, if we go by the established rules, but as for a general election, I will leave it up to the hon. member for Saint-Maurice to tell us when that will be held.

I am making reference to a possible election so as to clearly situate ourselves in a pre-election context. You will understand that, when the Liberal government speaks, through its minister, of appointing an interim board in 1997, it would be a real temptation for them to make political appointments, what we call patronage appointments. This would not be the first time, and it is a pretty sure bet that it will not be the last, either.

I always find it scary to see one or another minister making appointments. It is not very reassuring at all, frankly. It was not reassuring with the Canadian food inspection agency, so why things be any different a few weeks later? Now the minister confirms that a majority of members of the CWB board of directors will eventually be elected producers, which assumes that there could be some members selected by the minister. The minister would always be tempted to appoint friends, partisans of the

regime, or financial backers. There is nothing new under the sun-a well-known, and unfortunately very true, saying.

My party, the Bloc Quebecois, can only support the federal government's principle of finally giving grain producers a voice on the Canadian Wheat Board. One cannot help but be pleased to see such a change taking place. We know that the government is not doing this willingly. It is prepared to make changes, not as an unselfish gesture or out of a sudden desire for a more democratic approach but because it has been pressed to do so. By whom? By farmers who keep telling the government that the system is obsolete and does not meet their needs. Why do you think the panel recommended changes in the executive? Why would they want to switch from a board of three to five commissioners to a board of directors consisting of duly elected farmers? Because the latter will be in a better position to respond satisfactorily to their needs.

It does not take a genius to realize this. It is plain common sense. Now, western farmers have some very specific complaints. Transborder farmers are demanding a double grain marketing system, in other words, to be able to choose between a free system or working through the Canadian Wheat Board.

It was high time the government decided to look into this. You will recall that not long ago, the hon. member for Wild Rose presented a motion demanding a two-year opting out right. This did not come out of the blue.

I commented on this motion as follows: ``Producers could be granted more control over the board's operations, or the board could be given more room to manoeuvre''. It is true that a number of producers know there are some good business opportunities out there. I know why they want to market their grain without going through the Canadian Wheat Board. In the present situation, the board, through its sales on the American market, is taking advantage of rising prices.

In any case, the board has been around for more than 60 years. Its job is to sell a quality product, to offer customers outstanding service and to maximize returns for western farmers. Here again, the system is not perfect. There is always room for improvement. Does this mean government will have to forego these opportunities for patronage in order to adopt a bill that provides for more flexible operations and improved cash flow? No, hon. members. I see the benefits, but I also see the opportunities for patronage.

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They will have to get people from the agricultural sector, people who know this area, and who better than farmers, grain farmers, as members of the board of directors of this Canadian Wheat Board?

And then they will have to be elected. I think this is an excellent decision, but wait, let us see how this works. The government wants to make the rules. I do not think it will call on an outside firm as they do for the 6/49 draws or ask Mr. Kingsley, the chief electoral officer.

That being said, in spite an apparent willingness to make changes, the federal government wants to maintain its control over the Canadian Wheat Board with this bill. How? You will not believe this. Did you notice that in subsection 3.6(2), our government reserves the right to remove all elected members of the board of directors, including the farmers?

Earlier I mentioned how they could be elected, but I forgot to point out that the chairperson of the board is still appointed by none other than the minister. He is appointed by the Governor in Council on the minister's recommendation, so we might as well say he is appointed by the minister.

[English]

Mr. John Williams (St. Albert, Ref.): Mr. Speaker, I am glad to join in the debate on Bill C-72 which is amendments to the Canadian Wheat Board Act and consequential amendments to other acts.

I was reading through the bill and was rather surprised when I read sections 3.93 and 3.94. Section 3.93 starts off with an innocuous statement:

(1) The directors, officers and employees-shall

(a) act honestly and in good faith with a view to the best interests of the Corporation; and

(b) exercise the care, diligence and skill that a reasonably prudent person would exercise in comparable circumstances.

(3) Directors, officers and employees are not liable for a breach of duty-if they rely in good faith on

(a) financial statements of the Corporation represented to them by an officer of the Corporation or in a written report of the auditor of the Corporation as fairly reflecting the financial condition of the Corporation;

I read on in section 3.94:

The Corporation shall indemnify a present or former director, officer or employee of the Corporation-against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment, that are reasonably incurred by them in respect of any civil, criminal or administrative action-

The Corporation shall indemnify a present or former director, officer or employee-against all costs, charges and expenses-incurred by them in respect of any civil, criminal or administrative action-

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Bear in mind also that the wheat board alone is protected in that it is excluded from the Access to Information Act. We cannot obtain information on the Canadian Wheat Board because by law it is protected. No one can use the Access to Information Act to get information from the board. To make matters worse, as far as I am aware the auditor general is denied the right to take a look at the Canadian Wheat Board and pass comment on it.

Let us add all these things up. The auditor general cannot take a look at the wheat board. No Canadian can take a look at the wheat board because they are denied access through the Access to Information Act. And now its officers are being indemnified against criminal activity and there is some shadow of doubt being cast on its financial statements.

When we add all that up what do we get? There seems to be some kind of conspiracy to cover up around here. There seems to be some doubt being cast on the integrity of this government and on the management of the Canadian Wheat Board.

I would like the minister of agriculture to stand up in this House and tell us what is going on. I do not see any reason why we should pass legislation that creates a monopoly that is protected by legislation and is given the greatest secrecy imaginable and its officers are indemnified against criminal activity. Surely we, as all Canadians do, deserve real answers. Why are these two sections in this bill?

I have not heard one word out of the minister of agriculture explaining why he feels he has to indemnify the employees of the wheat board who rely on financial statements that have been audited by an independent auditor. I do not know why he has to indemnify the employees of the wheat board if they are sued in a criminal action. Mr. Speaker, can you give me any reason? Can anyone else give me a reason? I do not know.

This is indicative of the way this government has been managing its affairs. We have seen it in the Somalia inquiry; it gets embarrassing and the government shuts it down. We have seen it in the Krever inquiry seeking information and it is stonewalled. We talk about the Pearson airport and now we go to court. There is the Airbus fiasco which the government has bungled from day one. It has cost the taxpayers millions of dollars and we found out the other day that the Minister of Justice spent $160,000 of taxpayers' money so he could sell us a bill of goods. It has got to stop.

Criminal activity cannot be condoned under any circumstances whatsoever. To indemnify through legislation has to be the worst thing I have seen since coming here three and a half years ago. To put that in a bill on the wheat board which is protected against inquiry by the auditor general and against inquiry by any Canadian through access to information, is something even communist Russia would be proud of. That is what we are getting from this government today.

We have had it before and we will have it again. Whitewash. Pull the wool over Canadians' eyes. Do not tell them what we are doing with their money. Do not tell them that perhaps, and I say perhaps, somebody is cooking the books in the financial statement and now when it may come out, the government wants people indemnified.

The point is that questions are being raised. I do not have the answers but I am quite sure the minister of agriculture has the answers. It is his responsibility to stand up in the House and tell us what he is trying to cover up by these two sections. If he is covering up illegal activity and fraudulent statements we need to know about it. We need to know whose head is going to roll.

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Maybe it is the minister's head that should roll because this type of activity in a democratic country cannot be tolerated. I hope the minister comes in, stands up in the House and tells us what his intentions are.

Mr. Leon E. Benoit (Vegreville, Ref.): Mr. Speaker, today we are debating a motion to refer Bill C-72 to committee before second reading. I support that move because so much of this legislation needs to be debated and discussed before the bill is allowed to be passed.

People have three main concerns regarding the Canadian Wheat Board. The first is the lack of accountability of the board. It has a security level equal to that of CSIS. The second is that farmers do not have control of the board yet it is their money entirely that funds the operations of the board.

The third issue is that the Wheat Board has a monopoly that was only given to it under the War Measures Act but which has not been removed. Farmers want a choice. They want to make it extremely clear so that no one can possibly say otherwise.

Most western farmers and certainly most Reformers support keeping the Canadian Wheat Board as a marketing agency. That is not the issue here. We support that. We support giving farmers a choice. In a democratic country, it is almost unimaginable that they have not had that choice.

I want to deal with these three issues. I know I will not have time to cover them adequately but I will give it a try. I will relate them to this legislation. By the time I finish it will be abundantly clear that scrutiny of the bill is necessary before second reading.

First, the Canadian Wheat Board has a level of secrecy the same as CSIS, almost unimaginable. Yet it is not accountable. People have to ask themselves why that level of secrecy is in place.

The auditor general, for example, does not have access to wheat board documents and to information from inside the board. Therefore, we cannot rely on an auditor general's report to deal with the operations of the board and to determine whether things are being done as they should be done. That is the level of secrecy.

For example, the only way we found out that a commissioner who quits or is fired is entitled to a severance package of somewhere around $290,000 was through a leaked document. Yet as a grain farmer, as someone who pays for the board's operation, I was not entitled to know that. We do not know the salaries of commissioners. We do not know, certainly, the benefits package of commissioners.

Farmers believe generally that the benefits package is totally beyond anything that is reasonable. As the people who are paying for these benefits, paying these salaries and paying this severance package, we have a right to know exactly the dollar amounts that are involved.

Accountability is the first issue. Has this bill changed accountability?

An hon. member: No, it is worse.

Mr. Benoit: Has it dealt with accountability? Yes, but it has made it worse as my colleague says.

I refer to section 3.93(1) and read from the bill:

The directors, officers and employees of the Corporation in exercising their powers and performing their duties shall:

(a) act honestly and in good faith-

Directors, officers and employees are not liable for a breach of duty under subsection (1) or (2) if they rely in good faith on

(a) financial statements of the Corporation represented to them by an officer of the Corporation or in a written report of the auditor of the Corporation as fairly reflecting the financial condition of the Corporation; or

(b) a report of a lawyer, notary, accountant, engineer, appraiser or other person whose position or profession lends credibility to a statement made by that person.

The bill says they should act honestly. Section 3.94 goes on to state:

The Corporation shall indemnify a present or former director, officer or employee of the Corporation or a person who acts or acted at the request of the Corporation-

Because of time restraints I will go on to my second area of concern. Farmers do not have control over the board. They pay for the operations of the board but they have no control. Has this been changed? The answer is not necessarily. The legislation may not give farmers one bit more control over the board than they have now.

I refer to section 3.6(1) which states:

On the recommendation of the Minister, the Governor in Council may, by order, designate one or more positions on the board to be filled through election by producers in accordance with this section and the regulations.

The minister will probably change that because it certainly will not be tolerated. If that is slapped into place, the backlash from the farm community will be unimaginable. I think the minister can see that and the clause will be removed. However, that does not excuse him for this being in the legislation.

It is one of two things. Either he has intentionally deceived farmers and the public when he said that there would be elected directors, or he is showing incompetence. This is sloppily drafted legislation and that is intolerable. Either one of those two possibilities are completely unacceptable and the minister has to answer to that. Are farmers given more control? Not necessarily.

The third concern is the monopoly, the whole issue of giving farmers a choice. Farmers generally want the wheat board. But they also want to have the choice of marketing through a grain company or on their own. It is a choice that is given to anybody else in the country.

Will the bill give them that choice? Absolutely not. The monopoly power is maintained absolutely and that is unacceptable, especially when we look at how the monopoly was given to the wheat board in the first place.

In the memoirs of Mitchell Sharp, a former Liberal member of Parliament and cabinet minister under the Trudeau government and a close colleague of the Prime Minister, he spoke about when he was a high level civil servant in the finance department during the war in 1943, when under the War Measures Act the Canadian Wheat Board was given its monopoly powers. What did Mitchell Sharp say about that? Every Liberal in the House should read what Mitchell Sharp said. He said that because we were in a situation of war it was reasonable to give the wheat board a monopoly to control the supply for wheat. He acknowledges that it drove prices down. That was the purpose, to drive prices down so the government could afford to help Canada and Britain in the war effort.

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What Mr. Sharp said was that he believed at the time, and he still believes, that it was absolutely wrong that this monopoly was kept in place after the war. He believes that it has cost farmers a pile of money.

In particular, he acknowledged that the five year contract that was put in place after the war cost farmers hundreds of millions of dollars. That was only allowed because of the monopoly that was given to the board. The farmers have never been compensated for that.

The books are closed. Secrecy is there. The board is unaccountable. The monopoly remains. It makes no sense. It has to be changed and it has to be changed soon. Farmers are absolutely sick and tired of this issue not being dealt with and we have to deal with it.

Mr. Len Taylor (The Battlefords-Meadow Lake, NDP): Mr. Speaker, I am pleased to speak to Bill C-72, the amendments to the Canadian Wheat Board Act. This is an important bill. It is an important issue which I have been following for a long time.

I have discussed this matter with many producers throughout Canada and, in particular, throughout Saskatchewan and the prairies. I attended meetings of the Western Grain Marketing Panel when they were held in the province. I attended the meetings in Kindersley and North Battleford. Little of what was talked about is reflected in Bill C-72.

Bill C-72 is not being given the usual second reading in the House. Instead it is being introduced here for a short three hour debate and then sent directly to the agriculture committee for study. I definitely support the committee study but I oppose the process of fast tracking debate in the House in principle.

This process of sending a bill to committee before second reading is a recent innovation in the legislative process. In some cases it works very well, but in other cases it does not work well at all and I believe that is the case with Bill C-72. Bill C-72 is important to all Canadian farmers. Therefore, it is important to Canada.

Second reading is traditionally a time when members of Parliament address the principle of recently drafted legislation. It is a time to examine in public debate the concepts on which the bill, as written, are based. It is a time when MPs who have discussed the legislation with their constituents can put those comments on the record and share them with other MPs in the hopes of influencing the clause by clause discussion which follows when the committee studies the bill.

Not all MPs can speak during this shortened three hour debate. Not all MPs are members of the agriculture committee. Therefore not all MPs and, most importantly, not all of their constituents will have their voices heard on the principles contained in this legislation before third and final reading, when it is too late to make substantial changes to the bill. This process is simply fast tracking the legislation, despite the fact that perhaps there will be a shortened committee stage.

The process of shortening debate at second reading was designed for highly technical bills and not for ones like the Canadian Wheat Board legislation which also has political and subjective economic content. I object to this process being used for Bill C-72. I believe the minister of agriculture is simply using it to avoid lengthy public debate on a bill which he knows is flawed and which he does not want to fix.

I use as an example the fact that the day this legislation was introduced the minister said he was prepared to accept amendments. The next day the agriculture committee chairperson said: ``This bill will in fact be amended''. Today the parliamentary secretary, when introducing the debate, said that the minister would look at amendments to the bill. If the minister knew the bill was flawed and needed amendment he should have written it as such to begin with and not have introduced it the way it is today. He should have simply said: ``I am prepared to listen, talk to me''. If he knew it needed amending he should have done it originally.

I also object to the timing of the debate. It falls in the middle of the voting process on the future of barley within the jurisdiction of the Canadian Wheat Board. I and others had asked that the bill be delayed until voting had concluded on the barley motion to ensure that both these matters got the full attention of the public which they deserve. I am sorry that the minister has chosen not to listen to this advice.

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On the other hand, so as not to seem entirely negative, I am pleased that the agriculture committee to which this legislation is being sent is talking about travelling outside of Ottawa to make itself accessible to farmers, farm groups and communities on this bill. I would argue that the success of the Canadian Wheat Board

certainly depends on the legislation changing, as the views of the farmers and the farm communities are important.

The committee, if it chooses to travel and if this House gives the approval of the committee to travel, would be doing the right thing in this regard. I can only hope that it has given everyone enough time to prepare adequately to respond to the challenge that is in front of all of us.

This is an important bill and therefore I want to once again express my concern and disappointment that the minister chose not to seek the face to face advice of the farmer elected Canadian Wheat Board Advisory Committee in drafting the bill. The advisory committee, which is being replaced in this legislation, is made up of the farmers most knowledgeable about the operations of the Canadian Wheat Board and the affect those operations have at the farm gate.

The minister should have involved the advisory committee immediately right from the beginning but he did not. Obviously the flaws in this bill are there because he chose not to consult and therefore it is obvious that we could be avoiding unnecessary debate, saving lots of time and money had the minister done this differently. The advisory committee's advice in designing and drafting this legislation should have been sought as a matter of course.

Many in the House today are not farmers and certainly not farmers of grains under the jurisdiction of the Canadian Wheat Board. Therefore they may not realize that the economies of grain farming during the last 10 years have been stressful. Last year's crop and price were probably the best in that 10 year period which generally was characterized by low prices, low yields, low grades and lower and lower morale. Bankruptcies and quit claims were high, as were farm debts, suicides and on farm accidents.

At the same, time huge changes in the international marketplace have been taking place, not the least of which have been the subsidy talks of the Uruguay round of GATT and the subsequent establishment of the World Trade Organization.

Canada agreed with the United States and Europe to do away with a number of programs identified, I think incorrectly, as subsidies, and as a result Canadian farmers have lost their ad hoc emergency programs, the Crow benefit and certain supply management guarantees. I might add that Canadian governments under Mulroney and the present Prime Minister have done this without seeking similar moves by Europe and the United States, both of which are maintaining their GATT identified farm support programs.

Into this volatile mix is thrown the Canadian Wheat Board, the agency that sells Canadian wheat and barley to the international marketplace. This agency which maintained sales and prices during the turbulent times of the last 10 years has been targeted by the United States as an unfair trading practice with support from a number of Canadians, many of whom are seeking ways to escape huge debts they have built trying to survive through the very tough times.

This is a most vulnerable time in the history of the Canadian Wheat Board and this government should be doing everything in its power to support and sustain it from those outside attacks. This legislation and, I might add, the barley vote as well are only fueling the debate which has the possibility to weaken the board and therefore jeopardizes its future and therefore the future of farm income.

If nothing else, the minister of agriculture should resist all pressures to make substantial systematic changes to the board. He should give the board his unconditional and unqualified support and ensure that on the operational side the board has the flexibility it needs to address the internal and domestic challenges it faces.

Therefore in looking at Bill C-72 we have to look at the bill in that larger context. Perhaps the best thing the minister could do right now is to withdraw the bill because it weakens the position of the board and jeopardizes the future income of Canadian farmers across the prairies at a time prior to an election when we should discuss this during the election campaign.

An hon. member: He should resign.

Mr. Taylor: I hear comments from my colleagues that the minister should resign. I want to put it on record that I support that move. It sounds like a good move. The minister should resign but withdraw the bill before he does that.

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We certainly need a stronger, not a weaker, Canadian Wheat Board working for us. Anything less is an abdication of farmers interests to the corporate controls of the artificial international marketplace.

In committee I hope we will look at the legislation in a lot more detail, so I will not be too specific today. However, there are a few matters I want to put on the record while there is still time. I note that in this shortened three hour debate members are allowed 10 minutes whereas there would be longer speeches provided for in a debate at second reading. Many of us would have much more of an opportunity to express our detailed concerns about the bill.

First and foremost is the question of governance. It seems very clear that farmers want more say in how the board is run. There are numerous ways to achieve this goal but the minister and the government have chosen in this legislation to create an elected board of directors with a government appointed chair and a government appointed chief executive officer.

Although the minister says that the vast majority of the board will be elected by producers, the legislation does not say how many members of that board will be elected. So we have some serious problems in dealing with a matter on which there appears to be a general consensus, more farmer control of the board's operation. Not only is there no guarantee that more than a couple of farmers will be elected to the board, but there is no guarantee that their influence will have any value. As long as the government appoints some members to that board and controls the appointments of the Chair and the CEO, the board will not be accountable to producers.

As a representative of Saskatchewan, of New Democrats and of a lot of producers in Saskatchewan, I feel there has to be some assurance of the long term guarantee represented in the legislation. Most of us in Saskatchewan support amendments that make the board more flexible and more responsive to producers, but at the same time we want a better balance between responsibility to producers and fiscal responsibility to the federal government. That needs to be struck.

Mr. Garry Breitkreuz (Yorkton-Melville, Ref.): Mr. Speaker, there are probably a lot of people across Canada listening to the debate today via the parliamentary channel. They will be wondering what we are talking about. Why are the MPs from the west concerned? I am from Saskatchewan, some of my colleagues are from Alberta and Manitoba. We are concerned about agriculture and a very specific matter with the Canadian Wheat Board. That is what we are discussing today.

Mrs. Cowling: Mr. Speaker, I rise on a point of order. I rose to speak in the House. Is there not a rotation with respect to speakers?

The Deputy Speaker: The hon. parliamentary secretary was not seen by the Chair. I am sorry for that. If I had seen her I certainly would have recognized her. She is quite right that it is a rotational system. Is the hon. member, being a perfect gentleman from the west, prepared to give his place up?

Mr. Breitkreuz (Yorkton-Melville): Mr. Speaker, would I still be able to speak? There has been a real absence of members from the government side to address this issue. We have had no response. This has not been a debate. It has simply been a raising of issues by the Reform Party and one NDP member with regard to this issue. If government members would have something to say we would be happy to hear it. We have not even heard the minister address this issue.

The Deputy Speaker: I think the hon. member is also indicating he would be happy to hear from the member and I take it the hon. member is in agreement that the parliamentary secretary speak before him?

Mr. Breitkreuz (Yorkton-Melville): That is fine as long as I get to speak.

The Deputy Speaker: The hon. Parliamentary Secretary to Minister of Natural Resources, with thanks to the hon. member for Yorkton-Melville.

Mrs. Marlene Cowling (Parliamentary Secretary to Minister of Natural Resources, Lib.): Mr. Speaker, as a member of Parliament who represents the rural constituency of Dauphin-Swan River, as a grain farmer and as a strong supporter of the Canadian Wheat Board, I am more than pleased to speak on behalf of Bill C-72, the amendments to the Canadian Wheat Board Act.

This legislation is the result of recommendations made last summer by the Western Grain Marketing Panel. The Minister of Agriculture and Agri-Food Canada commissioned the Western Grain Marketing Panel to hold extensive hearings and to come up with a set of recommendations to reform western grain marketing so the system can function more effectively.

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After an exhaustive consultation process involving countless letters, phone calls, faxes, E-mails, petitions, public and private meetings, demonstrations, parliamentary debates, surveys and the hard work of the panel, it is clear that most farmers do not hold extreme irreconcilable viewpoints.

This was evident in the recommendations of the panel that, along with views of members of Parliament and provincial governments, helped the Government of Canada to decide on the contents of the bill we are debating today.

I know there are differences of opinions among farmers and parties and that in the end one cannot make decisions that will please everyone.

Indeed, given the historic fractiousness of the western grains industry and the deep divisions that exist between those farmers who hold the most extreme views on grain marketing, it is not possible to satisfy all sides.

I believe most farmers want the board retained but with some degree of change. They want the board to be more contemporary in its structure. They want more accountability. They want a bigger say in how things are done. They want more responsiveness to changing producer needs and changing producer opportunities. They want more flexibility in board operations. They want a greater cash flow from their grain as quickly as possible. And, of course, they want to minimize their vulnerability to trade attacks or trade limitations imposed by other countries.

On the other side of the equation, most farmers also value the proven strengths of the Canadian Wheat Board, its global reach, its market clout, the sheer size and skill to go head to head with the world's largest and most powerful grain traders and win, the ability

to minimize the effects of the European and American trade distorting export subsidies, the board's world leading market intelligence and weather surveillance systems, and its sophisticated and comprehensive before market and after market customer services.

The Canadian Wheat Board currently serves more than 100,000 prairie farmers as a single desk marketer for wheat and barley for export and domestic human consumption. Its annual sales revenues are close to $5 billion, making the board one of Canada's most significant business enterprises. It is the country's fifth largest exporter and Canada's biggest net earner of foreign exchange. It carries on business in more than 70 countries and has earned for itself and Canada a very positive reputation in the eyes of its global customers.

However, we cannot rest easy about these achievements. There is a new world out there that requires regular change in business methods to cope with changes which this legislation addresses.

The changes contained in this legislation fall into three broad categories. The first category includes changes related to the Canadian Wheat Board's structure, governance and accountability. The second includes changes related to more flexible wheat board operations and improvements in cash flow. The final category includes changes related to the Canadian Wheat Board's marketing mandate and the empowerment of farmers.

I would like to discuss the second group of changes in greater detail. To backstop cash purchases and to help the wheat board manage adjustment payments quickly, the board will be allowed to establish contingency funds as a financial cushion. The Canadian Wheat Board is currently limited to purchasing grain from farmers in elevators or in rail cars at the initial payment and subsequently issuing those individual adjustments, interim and final payments.

Under the amendments, the Canadian Wheat Board will be allowed to buy grain on a cash basis. This authority will provide the board with more flexibility in acquiring grain by allowing it to buy grain at prices that represent one time settlements with producers. When used to complement pooling operations, cash trading will tend to reduce delivery uncertainty and increase pool returns, for example by reducing demurrage costs, facilitating additional sales at attractive prices and by improving the overall efficiency of the Canadian Wheat Board's sales program. With this authority the Canadian Wheat Board will be able to bid on varying prices for grain, thereby securing supplies more effectively and improving the efficiency of its sales program and returns to farmers.

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The board will be able to manage adjustment payments during any crop year on an expedited basis by removing the need to first obtain cabinet approval.

The federal government currently guarantees Canadian Wheat Board initial payments and adjustments to initial payments made during the crop year. The current requirement that all such payments be approved by cabinet hinders the speed with which the Canadian Wheat Board can adjust prices during the crop year.

Providing for the board to operate in a more businesslike manner by adjusting payments to producers more quickly, the current system of government guarantees and approvals eventually will be amended to apply only to initial payment established at the start of each pool period. After a sufficient Canadian Wheat Board contingency fund has been established, the Canadian Wheat Board will be authorized to make all subsequent adjustments and issue related payments to farmers at its discretion.

I should point out that in its 61-year history the board has never incurred a deficit on an adjusted initial payment on any of the farm pools. The few deficits that have occurred in the Canadian Wheat Board's history have all been relative to the initial price established prior to the start of the crop year.

The Canadian Wheat Board will thus be authorized to establish the appropriate contingency funds to guarantee adjustment payments to farmers and to back cash trading operations. Options for building up such funds include the board's profits on lending operations which totalled about $80 million last year and a check off on producer sales.

These new flexibilities will help put more money from the Canadian Wheat Board operations into the hands of farmers more quickly. There are some additional changes designed to increase flexibility, most of them recommended by the western grain marketing panel.

These amendments will enable the board to offer storage payments, interest payments or other delivery related payments on farm stored grain. This change is intended to encourage producers to sign delivery contracts early in the crop year and will also authorize the Canadian Wheat Board to pay bonuses for good delivery performance by farmers.

Payment of carrying costs will reduce the need for the Canadian Wheat Board to draw grain evenly from across the prairies during the crop year and thus help in logistical planning. Greater logistical efficiency results in higher net returns for farmers.

Under the proposed amendments, the board will be allowed to issue final payments well before January 1 which is not possible under the current act. The Canadian Wheat Board will be authorized by the legislation to close pools on short notice during the crop year and establish a second pool for the balance of the crop year.

Transferable producer certificates will offer greater flexibility by allowing farmers to negotiate how and when to receive payment for grain delivered to the board. Specifically the board will be allowed to establish a program that would provide farmers with a mecha-

nism to trade their producer certificates at mutually agreeable terms.

The development of condo storage facilities and the removal of delivery quotas on non-board grain crops have put out of date a provision that said deliveries of grain to an elevator facility must not exceed established quotas. Because it is necessary for the board to be involved in authorizing the flow of grain to condo facilities, this change will formalize open access by farmers to condo facilities.

With the changes proposed in Bill C-72, the Canadian Wheat Board will be able to become an even more effective marketing agent for western Canadian grain farmers.

Mr. Garry Breitkreuz (Yorkton-Melville, Ref.): Mr. Speaker, I am disappointed once again. I thought that by allowing the member to go ahead we might get the answers to some of the questions we have been raising but we never got any such thing. We just heard another one of those speeches written by the bureaucrats in the backrooms. The member never got down to discussing some of the concerns being raised by farmers in my constituency and as the member knows, by farmers in her constituency as well.

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I will outline what this debate is all about for the hundreds of thousands of people across the country who are wondering what we are talking about today. Most of the western MPs who are concerned about agriculture are debating the issue. The issue deals with the Canadian Wheat Board.

In agriculture the government has singled out the Canadian Wheat Board as a special area of concern. The government has been maintaining a lot more tighter control especially over the marketing of wheat and barley. It maintains this tight control through the Canadian Wheat Board. That is the essence of the debate we are having today.

Most people in Canada may not realize why the debate is important to the people of Alberta, Saskatchewan and Manitoba. It is because they do not have the freedom to sell their grain, wheat and barley that the people in Ontario and Quebec have. They are being treated very differently. People need to understand the context of the debate.

Who am I representing? Why am I standing up to speak about the issue? It is because many, many people in my riding have come to me. I am their representative. It is my duty to analyse legislation the government puts forth in a certain area and to critique what the government has done and to suggest changes.

The biggest concern people have is the delay which is occurring in making some of the changes that will give farmers the tools they need to market effectively in today's world. Why is the delay a concern? The delay has been horrific. We are three and a half years into this government's mandate and it still has not made any changes. The people in my riding are very concerned about the weakness of a minister that would allow this kind of situation to develop.

The hon. member for Dauphin-Swan River mentioned that the government must be sure it is making the right changes and that there are huge divisions developing within the farming community. Why have those divisions developed? It is because of inaction and the frustration farmers have experienced. The minister has created those divisions and he is continuing to widen them by the ineffective legislation he is introducing in the House.

I do not know why the minister has not bothered to speak to this but farmers want an answer. They want to know why he continues to review the situation. In 1993-94, during the first year of this Parliament, we asked the minister to begin to make some of the changes. He gave us the standard answer: ``I am reviewing the situation''. He has been saying that for almost two years. Then he put a panel into place. Now he is going to study it even further.

Every delay tactic possible has been used not to make changes that would give farmers more control over the marketing of their products. Farmers on both sides of the debate no matter what their perspective is are asking for the same thing. They are asking for more control over the Canadian Wheat Board. I did a survey in my riding and the vast majority, 90 per cent of the people who replied, want the board to be controlled by farmers. Not by the bureaucrats and not by the politicians in Ottawa; they are much too slow to respond.

One of the biggest problems with the bill is that it reduces the possibility of future changes to the Canadian Wheat Board. It is entrenching and putting more power into the hands of the minister of agriculture rather than giving farmers more control over their own affairs. To the people across Canada who are listening, if you do not think this is an injustice, then what is? We need to have that and farmers are asking for it, no matter which side of the debate they are on with regard to the Canadian Wheat Board issue.

Some of my colleagues have pointed out some sections which are of a huge concern. An example is section 3.94 where the corporation will pay the bill for any one of its directors or officers who may make a mistake. The farmers will still be liable to pay the bills.

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The wording of course is lawyer talk: ``The corporation shall indemnify a present or former director, officer, employee of the corporation or a person who acts or acted at the request of the corporation'' and it goes on to describe it. In other words, it removes accountability on the part of the people who are transact-

ing business on behalf of the farmer. It removes their responsibility. Why is that a concern?

We are all aware of what is happening on the west coast. Demurrage charges by the ships that are waiting in the harbours are being charged to farmers who have absolutely no control over the situation yet the farmers have to pay the bill. Now we have legislation which puts that into law with respect to the Canadian Wheat Board. It is absolutely wrong that farmers should have to pay the bills for things they have no control over. Why is the responsibility not put on those people who are causing the problem?

Farmers are coming to me every day saying that their transportation costs have gone up astronomically, especially since the government removed the Crow rate without any warning. They have appealed to me asking if there is something I can do.

The problem is that the people who are causing the problem are not accountable. They do not have to pay. It is entrenched in this legislation. It is a huge concern.

The government says it is implementing the recommendations of the panel. Again it is simply cherry picking. It is only picking those minute things which it feels it can do without lessening its power.

The essence of the problem farmers have is that they are battling big government. They are being held down. Their freedom is being limited by the minister and the bureaucrats in Ottawa. They are not being given more control over their own affairs. That is of real concern to them.

I noted some of the words the government used in the introductory speech that would sound good to farmers. For example, it said that the Canadian Wheat Board will be evaluated on its marketing success and performance or on its financial competence. Is there anything in the bill that allows an arm's length third party such as the auditor general to evaluate the performance of the board? Farmers do not even know what is happening. They have a very difficult time deciding whether the board is doing a good job.

The minister knows what is going on. No one can tell me that the minister does not know what farmers want. They want control over the Canadian Wheat Board. Why does it have to be controlled by the bureaucrats here in Ottawa? That question has not been answered.

If the minister set out to destroy the Canadian Wheat Board, he could not have done a better job of destroying it than he is doing right now with this delay and the way he is handling the situation. People on both sides of the debate are telling me that the minister of agriculture is destroying the Canadian Wheat Board. Farmers are frustrated. They are very concerned about what is happening.

If we are to have an effective marketing tool, we must begin to make some of the changes which Reformers have been asking for. This process does not facilitate that. Sending the bill to committee now is simply another delay tactic as far as I can see. I do not think the debate this morning will facilitate the changes which need to be made to the Canadian Wheat Board.

Mr. Julian Reed (Halton-Peel, Lib.): Mr. Speaker, the hon. member for The Battlefords-Meadow Lake made a statement about committees being inaccessible to members and therefore many members will not be able to debate the bill when it is before the agriculture committee.

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I would like to correct the record and point out that every member in the House has entitlement to speak at any standing committee. There is absolutely no restriction. For the hon. member to make such a suggestion is fallacious to say the least. To my hon. friends across the way, when this bill goes to committee, these concerns can very definitely be aired.

The bill makes changes to the Canadian Wheat Board. It gives farmers more power on the wheat board. The suggestion of my hon. friend from Yorkton-Melville about the demurrage charges when wheat is not getting through to load the ships right now is rather interesting. I wonder where he would like to lay those charges.

Mr. Breitkreuz (Yorkton-Melville, Ref.): On the railroads.

Mr. Reed: On the railroads. I notice his leader made that statement in the press. I suspect the next move his leader will make is to call for the railroads to be taken over again by the government so those charges can be absorbed out of the public treasury. Is that what the hon. member wants?

One of the wonderful things about the wheat board and the service that it provides to grain growers is that it allows them in times of difficulty to level out those costs. Right now when grain prices are relatively higher than they have been in a number of years-

Mr. Breitkreuz (Yorkton-Melville, Ref.): No, they are not.

Mr. Reed: Yes, they are and the hon. member knows it if he watches the grain prices. The temptation and the desire is always there to want to escape from the wheat board and deal independently. When prices are low then that opinion shifts and some of those grain growers then want the protection of the wheat board again.

They want a dual system where grain can be marketed independently or not. How in the world is the wheat board going to survive in that situation? In a year of higher prices there will be a shift

away from the wheat board and all of those employees and all of that wonderful infrastructure that is set up to market wheat sits idle. Then in a year when prices go down there will be a run back to the wheat board again and all of sudden it has to get back in gear.

It is totally unacceptable to operate in that way in international markets. Either we go all the way in marketing grain outside of the wheat board or we keep the wheat board. Let me tell the hon. member that as long as there is a majority of farmers in Canada who want the wheat board maintained then the wheat board will be maintained. If there was a great movement away from the wheat board, if the majority of farmers did not want the wheat board, the government would not be forcing it down their throats.

My hon. friends will have all sorts of time to debate this at the agriculture committee. They will be able to go there whether they are members of not and sit down and express their concerns. They will be listened to. I happen to sit on that committee and I will make sure that they are listened to.

Mr. Charlie Penson (Peace River, Ref.): Mr. Speaker, I am happy to take part in the debate today to discuss Bill C-72 which makes amendments to the Canadian Wheat Board Act and to move those discussions to committee.

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My son and I and our families operate a 1,500 acre grain farm in Alberta in part of the area designated to be under the Canadian Wheat Board. I have a lot of colleagues on this side of the House who are farmers as well and who have experienced firsthand the Canadian Wheat Board's operation. It always amuses me to hear speakers, like the hon. member from Ontario who spoke just before me, express their views on how great it is under the Canadian Wheat Board when they have not had any actual experience under the board. Ontario is exempt from being under the Canadian Wheat Board operations, and I know there is another member from Ontario ready to speak here.

Between the members who are not under the board's operation and the lawyers from the other side who extol its great virtues, it seems they are being a little hypocritical. If it is so good, why does the Canadian Wheat Board not operate in Ontario and Quebec as well?

Bill C-72 has been very badly drafted. It will enhance the control and the power of the minister of agriculture. That is exactly the opposite of what is wanted in the agricultural community currently under the Canadian Wheat Board. It is so bad that I think the minister should resign. It is not just for this reason. The minister has established a clear record in the past three and a half years since he has come to this Parliament and become the minister of agriculture. I will go through items and I suggest that he has failed on every account. He has made those on all sides of this issue angry at him for the way he has handled the amendments to the Canadian Wheat Board and the whole marketing debate throughout the prairies.

Some historical background is necessary in order to talk about the Canadian Wheat Board with some knowledge. The Canadian Wheat Board was established in 1917 during the first world war as a war measures act. I can understand quite fully why that would be. In a war you want control over food supply. We had some commitments to Britain at the time and we wanted to have stable prices during wartime.

After the first world war the Canadian Wheat Board was disbanded as it should have been. The grain trade operated in a free market economy until 1935 when the Canadian Wheat Board was re-established. It was brought back as a dual market with private grain trade. It operated in that way for eight years until the beginning of the second world war. At the height of the second world war, in 1943, the Liberal government decided that the Canadian Wheat Board should be brought back in a monopoly capacity. There again was the factor of war conditions.

I support the move that was made at that time. We were supplying grain to Britain again. We were supplying grain to our allies. We wanted the price to be kept down in order to support the war effort.

However, after the war other factors became involved. There were some five-year contracts. As one of my colleagues said earlier, Mitchell Sharp, who has been a minister in government, has been quite critical of the fact that the board continued as a single desk agency when it was not required after the war.

That sets the context for the debate that has taken place in western Canada for the past several years. The debate is all about marketing choice. Some farmers want to pool their products, have the Canadian Wheat Board do their marketing for them and accept an average price. Farmers on the other side of the issue want to market their own grain. They think they can do better than the board is doing. They have their own special needs. It may be that they have a big farm payment to make at a certain time of the year and need cash flow when some of their neighbours may not need it.

That is the debate that is taking place. It is a matter of whether we should have complete restrictive measures and marketing through the Canadian Wheat Board or whether there should be choice. I understand fully both sides of the issue. We live in a free democratic country and my belief is that farmers should be given the choice to either haul to the Canadian Wheat Board and accept an average price or to go on their own. I suggest that farmers will decide with their produce which system they like best. I think it should be left that way.

This is the background to that issue. In the last three years, the Liberal government has taken away the subsidized Crow freight rate even though our competitors have not removed subsidies to the same extent that this government has. We have moved faster than all our international obligations suggest we need to. These days

farmers are paying the full cost of freight. As such, they have had to scramble to try to find the best possible market prices in order to survive. Many of them are doing just that.

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However, I suggest that the minister of agriculture is tying one hand behind the back of those farmers who want to survive. He is suggesting that the farmers simply could not market their wheat and barley internationally. He is saying that it is not possible. I think he is actually suggesting that farmers are not smart enough to do that.

Let us look at the facts. I farm myself. We market a number of products and my neighbours market a number of products already and there are companies out there that facilitate that. Canola is right up there in terms of dollar value with wheat as to which is the biggest export outside the country in dollar value per year. Canola is not marketed through the Canadian Wheat Board. Peas are not marketed through the Canadian Wheat Board. Farmers are marketing these products: fescue, clover, flax, rye, lentils. The list goes on. They are marketing beef. There has been a 40 per cent increase in the export of beef since the free trade agreement. The wheat board does not have to do that. There is no monopoly situation. It is a market economy.

For those who want to market through the Canadian Wheat Board and accept a pooled average and not have to do their own research and marketing, I suggest they keep that method in place. However, for those who do not want to market through the wheat board but want to look for other alternatives, that should be a matter of choice.

This brings us to the current round, 1993. Let us go through the list. Besides losing the Crow rate, the minister decided to increase pressure on the grain marketing debate and set up a grain marketing panel about a year and a half ago. This was a hand-picked Liberal panel. The chairman of the panel is a Liberal buddy of the minister of agriculture. I am sure the minister thought this guy would do what he wanted and come up with a favourable report. In fact, I think maybe that was the original plan.

However, once farmers and farm groups started making presentations to the panel, the members of the panel had their eyes opened up. In fact, there was so much demand for the panel to travel to different parts of the country that it had to finally agree to go to Edmonton and Regina. It was just going to hold hearings in Winnipeg.

In my riding, a group in the Grand Prairie-Peace River area said it did not make sense travelling to Winnipeg to make a presentation to the committee. Surely the committee should be out listening to the farmers in their communities. Some kind of compromise was reached and the panel ended up going to Edmonton. The panel was not even anticipating that in the beginning. However, there was so much pressure from producers that is what happened.

Members of the panel had their eyes opened up and, to their credit, they wrote a credible report suggesting that compromises be reached in certain areas and a consensus be reached in certain areas. They then made a series of recommendations. However, the minister of agriculture did not comply with those recommendations. In fact, he even refused to meet with the panel to discuss its recommendations. That is how contemptuous he was because the panel did not write the kind of report he wanted.

Further to that, the panel had recommended that barley should be outside the Canadian Wheat Board. However, the minister could not accept that and decided to hold his own vote. He knew from an Angus Reid poll he had taken earlier that farmers wanted a choice in how they marketed their barley.

He knew he could not ask the farmers whether they wanted a choice in how they marketed their barley because he would lose and that was not what he wanted. Therefore, he designed a question that was all or nothing: Do you want to deal with the Canadian Wheat Board on all sales of barley, malt or feed grain, or do you want to have the board not involved in any of that and deal with the entire free market?

That is not the debate that is taking place out there and this ballot, when it is finally tallied and the minister gets the result he wants, simply will not end the debate because it has not addressed the real issue.

Mr. Hermanson: A dishonest question.

Mr. Penson: Absolutely. That brings us to the amendments to the Canadian Wheat Board Act that the minister has decided to bring in. What are the amendments? They give more control to the minister and the government, more control at a time when they are asking farmers to accept more risk. That is not tenable. If members look at this legislation they will see countless times that different matters ``have to have approval by the minister of agriculture and the Minister of Finance''.

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Specifically, section 18(1) has been added to the act, requiring the directors of the new board to follow any directions given to them by the governor in council. It is apparent that the board has become merely a puppet board to be controlled by the minister of agriculture.

In conclusion, it is absolutely essential that the agriculture committee travel to western Canada. It will fill its members' ears as should be because this is a badly drafted piece of legislation and does not reflect what farmers want. I encourage the committee to

take as much time as possible and travel where people live to discuss this as a very important issue to farmers.

Mr. Murray Calder (Wellington-Grey-Dufferin-Simcoe, Lib.): Mr. Speaker, I would like to address two issues that have not been fully discussed in this debate on Bill C-72.

First I would like to put to rest, once and for all, an issue some have raised which really is a non-issue. I am referring to the notion that this proposed legislation either rescinds or intends to rescind the existing free interprovincial movement in the domestic feed grain market.

Grain farmers in western Canada have been able to sell feed barley and feed wheat domestically in designated areas on a private basis outside the Canadian Wheat Board since the government passed an order in council way back in 1974. It is not being changed.

This point has been made a number of times: in the policy announcement the minister of agriculture issued October 1996, in printed material circulated to all farmers in December, in comments the minister made in this House, in remarks he delivered at a meeting last month of Alberta's Wild Rose agricultural producers, and in a statement he made in Regina on January 21. Officials of Agriculture and Agri-Food Canada also reiterated the point that the existing domestic feed grain market is not being changed.

The minister said in a statement on January 21: ``Those who persist in raising this red herring are mistaken''.

Mr. Hermanson: Do you even know what you are talking about?

Mr. Calder: Yes, I do. If you want to listen, you will understand. The argument appears to be based on the idea that by repealing paragraph 46(b) of the existing Canadian Wheat Board Act that we are repealing the legislative authority for the order in council which authorizes free interprovincial trade in feed grains in the designated areas. Consequently that order in council would be null and void. This is not true and I will try to explain now why.

The order in council has nothing to do with that paragraph of the Canadian Wheat Board Act. It is not even mentioned. Several other provisions in the act are cited. It is as necessary, legislative authority, but not paragraph 46(b); therefore there is no substance to the suggestion that repealing this paragraph somehow undercuts the order in council.

If members do not want to take my word for it they can look it up in the SOR/93-486 on pages 3872 and 3873 of the Canada Gazette Part II, Volume 127, Number 20.

Even if the order in council did rely on paragraph 46, it would still be valid unless it were inconsistent with the new act as amended. Since this is not the case, the order in council is not in jeopardy.

Again I quote the minister's own words: ``It is not now and has never been the intention of the Government of Canada to restrict trade in the domestic feed grain market which was liberalized in 1974''.

This simple point is adamantly clear from the very wording of the questions that are being asked in this winter producer vote about barley marketing. The continuing existence of the domestic feed market is written right into the words on the ballot.

I hope this ends this discussion, but if it does not and if a reasonable doubt about this issue surfaces during the standing committee's detailed study on Bill C-72, the minister has already assured the sector that he would be happy to receive the committee's advice as to what its members believe should be done to make the point even clearer.

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The other matter I would like to raise is the legislation introduced last November to amend the Canada Labour Code. Grain exports are very important to Canada in earning foreign exchange. These sales are of course dependent on our ability to deliver high quality grain consistently on time.

Most of the time we have been able to do this but there have been several occasions when work stoppages at western ports have significantly curtailed grain exports. Since 1972, for instance, there have been 12 work stoppages that have adversely affected grain exports, although only on 3 of these occasions has the handling of grain been the cause of the stoppages. The other 9 involved longshore operations.

The Minister of Labour last November introduced into this House legislation to modernize the Canadian Labour Code, including amendments to the industrial relations section to clarify the rights and the obligations of the parties during a work stoppage. The amendments benefit the agriculture and agri-food sector by promoting the continued movement of grain to market and reducing the cost of work stoppages to farmers.

In all, Canadian ports engaged in longshoring and other ports activities as tugboats and mooring for instance would be required to continue providing services to grain vessels if they become involved in a work stoppage. Grain handlers and their employers retain the right to strike and lock-out. I am pleased that this legislation will help ensure that farmers can get their grain to the market in the event of work stoppages at Canadian ports.

The agriculture and agri-food sector is one of the most significant sectors of the Canadian economy. If we continue to work co-operatively with this sector to improve the way that we operate, I am confident that this sector will generate more growth, more

wealth, more trade, more jobs and more innovation for all Canadians. There can be no doubt that we are living in an era of unprecedented change, change that is occurring at a faster rate than we have ever experienced before. That change is driven in part by a shrinking world brought about by new world trade regulations and new world trading opportunities.

For 61 years the Canadian Wheat Board has been one of the cornerstones of our successes in the agricultural industry. With the changes that we have introduced to build on that success, providing the board with more modern governances and in its accountability to farmers and more flexibility and being responsive to that, farmers will be empowered with more to say in their marketing system, more power to take on the very real challenges and opportunities that lie before us.

The amendments to the Canadian Wheat Board Act that we are currently debating and the changes to the Canadian Labour Code to improving grain handling in the western coast ports will help keep Canada on course into the next millennium.

Mr. Dick Harris (Prince George-Bulkley Valley, Ref.): Mr. Speaker, I am pleased to speak on this bill today.

Unlike my very informed colleagues from Vegreville, from Kindersley-Lloydminster, from Yorkton-Melville, from Peace River and from Lisgar-Marquette, I admit I do not have the expertise that they have when it comes to the operation of the wheat board and the history of the wheat board. But in reading over this bill there is one thing I can do: I can smell a rat. There is something that stinks in this bill and I want to talk about those two clauses.

There is something that this minister is trying to cover up before it happens and that is section 3.93(3) where it talks about the directors, the officers and employees of the wheat board not liable for a breach of duty under subsection (1) or (2) with regard to the financial statements, with regard to the operation of the wheat board and with regard to lawyers reports, accountants reports, engineer appraisers reports, all sources that could show the wheat board up for what it is.

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What is the minister of agriculture afraid will come out? What does the Liberal minister of agriculture fear so much that he would take the time to put in a clause like this to protect the employees of the wheat board? What is coming down the pike? What does the minister of agriculture know that Canadians and Canadian farmers do not know? Is there something going on there? Is there mismanagement? Is there corruption? Is there criminal activity? One can only assume that could be a possibility when looking at the clauses that have been put in here. What is the minister anticipating?

Section 3.94 stinks like a barn as well: ``The Corporation shall indemnify a present or former director, officer or employee of the Corporation or person who acts or acted at the request of the Corporation, and their heirs''-they cover them all-``and legal representatives, against all costs, charges and expenses, including an amount paid to settle an action or satisfy a judgment''-sounds a little strange-``that are reasonably incurred by them in respect of any civil, criminal or administrative action or proceeding to which they are a party by reason of being or having been a director, officer, employee or person'' employed by the wheat board.

What is the minister expecting to come down the tube that would justify putting in a clause like this which gives such blanket protection to any director, officer or former employee of the wheat board? It mentions criminal or civil charges.

One has to suspect that the people who are out there taking a good look at the Canadian Wheat Board operation may be getting close to something. Is that the case?

We just heard the Liberal member talk about how good the wheat board is. If the wheat board is so good, if it is doing such a wonderful job for Canadian farmers I would like to ask a question of the member, but I cannot of course. Maybe I will get a reply some time. If the board is so good, why is the board not doing things like putting Ontario corn under the wheat board operation? Corn can be used for food or for feed, much the same as barley can. So why has the Canadian Wheat Board not brought corn into the operations of the wheat board? One wonders exactly what direction the board is taking.

I want to stay on this blanket protection that the minister of agriculture in this bill is giving to all the directors, officers and employees who were ever associated with the wheat board. One only has to say that something stinks in this bill. Is it because the minister of agriculture fears that something will stink in the Canadian Wheat Board? Is that why he has tried to give it such immunity and protection in the bill?

Mr. Hermanson: There is certainly an incentive to be dishonest.

Mr. Harris: As the hon. member for Kindersley-Lloydminster just said, what a wonderful insurance policy for someone if there was an intention to commit some sort of criminal or other fraudulent act or gross mismanagement in an area of trust. It is great insurance to know that these things can be done and one would not be touched. I am surprised, given some of the things the Minister of Justice has put out in this House that the Minister of Justice has not come out with something like this for every crook in Canada. For goodness sake, what an insurance policy to have. If I work for the Canadian Wheat Board I can do anything I want with complete immunity from any kind of prosecution, financial compensation or costs. Maybe we should tell the Minister of Justice about this. He could put it in the Criminal Code. He has put a lot of other dumb legislation in the Criminal Code.

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Let us be fair to Canadians. If we can give immunity to employees, directors and officers of the Canadian Wheat Board and give them that kind of protection should they wish to be involved in any kind of questionable opportunities, why not be fair, treat all Canadians equally and give it to everyone, including the crooks?

As I said when I started my speech, something stinks in this bill. These two clauses are nothing more than an insurance policy to protect someone who may have some questionable activities in mind. On these two clauses alone the government should take this bill and stick it where the sun does not shine.

The Acting Speaker (Mr. Milliken): Is the House ready for the question?

Some hon. members: Question.

The Acting Speaker (Mr. Milliken): Is it the pleasure of the House to adopt the motion?

Some hon. members: Agreed.

Some hon. members: No.

The Acting Speaker (Mr. Milliken): All those in favour of the motion will please say yea.

Some hon. members: Yea.

The Acting Speaker (Mr. Milliken): All those opposed will please say nay.

Some hon. members: Nay.

The Acting Speaker (Mr. Milliken): In my opinion the yeas have it.

And more than five members having risen:

The Acting Speaker (Mr. Milliken): Call in the members.

And the bells having rung:

The Acting Speaker (Mr. Milliken): At the request of the deputy government whip, the vote on this motion will be deferred until the conclusion of Government Orders tomorrow.

* * *

INDIAN ACT OPTIONAL MODIFICATION ACT

December 12, 1996-The Minister of Indian Affairs and Northern Development-Second reading and reference to the Standing Committee on Aboriginal Affairs and Northern Development of Bill C-79, an act to permit certain modifications in the application of the Indian Act to bands that desire them.

That Bill C-79, an act to permit certain modifications in the application of the Indian Act to bands that desire them, be referred forthwith to the Standing Committee on Aboriginal Affairs and Northern Development.

From the outset this government has sought to form a new relationship with First Nations, a relationship founded on the cornerstone of self-government. We have made significant progress toward that goal and look forward to the day when the inherent right of aboriginal peoples to self-government is fully implemented throughout this country.

While we are working to reach that goal we must also remove existing impediments to the social, economic and political development of First Nations. Some of the provisions of the Indian Act are such impediments.

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As self-government negotiations are completed and ratified, and we are currently involved in about 80 different self-government negotiations across the country, the Indian Act will have less and less application to First Nations and no application to First Nations which have concluded their self-government agreements. But self-government will not come overnight and until these negotiations are completed and all First Nations are again self-governing, the Indian Act will continue to be the governing legislation.

For many years the Indian Act has occupied a unique place in the minds and lives of First Nations. It has been seen as both unwanted and necessary, as both offensive and protective, as both a prison and a shield.

In its chapter on the Indian Act, the Royal Commission on Aboriginal Peoples quotes Harold Cardinal, a Cree leader who eloquently sums up the ambivalent feelings that many First Nations have toward this act. Cardinal says: ``No society with even pretensions to being just can long tolerate such a piece of legislation, but we would rather continue to live in bondage under the inequitable Indian Act than surrender our sacred rights''.

This has been a dilemma. Until now, to move away from the oppression of the act could also have meant moving out from under its protection and from its recognition that First Nations have a unique legal position in Canada which includes a special relationship with the federal government. Not surprisingly, there has been great reluctance to change the status quo, yet the status quo cannot and should not be sustained.

This situation had to change. The approach had to be different. That is why we have introduced the Indian Act optional modification act. The bill takes a step away from the Indian Act but it does not distance First Nations from their rights under the act, nor does it distance the federal government from its responsibility to First Nations. But just so there will still be no room for confusion or misunderstanding, we have included a non-derogation clause in the bill to emphasize that the bill should not be interpreted to reduce protection of aboriginal and treaty rights given by section 35 of the Constitution, including the inherent right of self-government.

We also recognize that not all First Nations will want to adopt the provisions of this new act. First Nations will want to study this legislation and understand its implications. That is why the entire bill is optional. Those who choose to opt in will be able to apply the provisions of this legislation to local governance and their day to day business. The current Indian Act will continue to apply to First Nations who choose not to opt in. It will also apply to all First Nations in areas where the proposed act is silent.

Why are we providing this alternative to the Indian Act? Why are we proposing the first major initiative with respect to the Indian Act in 45 years? The answer is simple: fairness requires it; justice requires it; circumstances require it. We have no other choice.

The Indian Act reflects an earlier time, a time when First Nations were treated as wards of the state. It was a time when non-aboriginal governments did not trust First Nations to manage their own affairs and to run their own lives. It was a time when big brother in Ottawa was given the authority to intrude and regulate the most minute aspects of the lives of First Nations. It comes from a time when aboriginal religious and cultural beliefs were suppressed and aboriginal demands for justice and land claim settlements were opposed.

But today is a very different time. Does it make any sense in this day and age that I as minister should have the authority to operate farms on First Nation lands, purchase and distribute seeds and decide how to spend the profits? The Indian Act says that I can without the consent of First Nations and without any notice. The Indian Act also gives me the power to dispose of wild rice and dead or fallen timber on First Nations land without their permission. On the prairies, First Nations farmers cannot even legally sell their wheat or other agricultural produce without my consent.

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This is absolutely ridiculous and should not be tolerated. This is not the way to engender self-sufficiency. This is not the way to foster a spirit of economic independence. This is not the way to conduct relations with First Nations in this country.

The simple fact is that an option is necessary. It is necessary to get the government out of the areas that should be within the exclusive domain of First Nations. It is necessary to remove barriers so First Nations can create their own opportunities and build their own futures. It is long overdue.

No government should make these sorts of changes to a specific group in society without consulting them and without offering them every opportunity for input. That is why we have consulted widely and why we propose to consult even more broadly through the committee study. That is why we are making this legislation optional.

There is nothing radical in what we propose. The optional modifications are minor but taken collectively they would increase the power of First Nations while reducing the powers of both the minister and the Department of Indian Affairs and Northern Development.

The approach is incremental, to act where there is a base of support and consult where there is not. That is the best way to proceed and that is the way we are going. First Nations and governments agree that discussion and dialogue must continue for that very reason.

It is appropriate that this bill should be referred to the Standing Committee on Aboriginal Affairs and Northern Development before second reading. This referral to committee is important because it allows us to remain open to further changes to Bill C-79. If we were to go the normal parliamentary route and refer the bill to committee after second reading, there would be a perception of greater limits on the extent of amendments that could be made at committee. It is important not to leave that impression.

We believe there is a need for open public discussion. We want the committee to have the freedom to conduct the broadest possible consultation and to have maximum flexibility in its handling of these proposals. By sending this bill to committee now, there will be an opportunity to hold in depth hearings and to consider further additions to and deletions from the bill.

It is time for this House to consider the establishment of a more formal mechanism, an annual review of the Indian Act by the standing committee through which First Nations may bring forward their concerns about particular aspects of the act. In the meantime the government will continue to focus its energies on implementing the inherent right of aboriginal self-government, settling land claims and improving socioeconomic conditions.

The Indian Act optional modification act will give more power to First Nations which will make it easier to get things done. It represents not a destination but a means to take us there.

I have had this job for three years. I thought that the trail of tears aboriginal people have travelled down for hundreds of years was just that, a trail. It is not a trail. On the way back they thought it was a trail but it is a wall. I see aboriginal leaders across this country

almost taking spikes in their hands and driving into that wall to get over it. We have to destroy that wall. I do not care if the UN has said for three years in a row that Canada is the best country to live in. Until we have destroyed that wall, until we can bring aboriginal people back to where they were at the time of the first encounter, we do not deserve that title. This is one way to a better and more equitable future that we can all be proud of as Canadians.

[Translation]

Mr. Claude Bachand (Saint-Jean, BQ): Mr. Speaker, I would say right off that the minister's plan of action is somewhat incoherent. I will elaborate a little later.

To announce today that this bill is going to amend the Indian Act, which the government has been saying it wants to get rid of for the past three years now, and to say that consultations were very broad, when 550 of 600 native communities in Canada are opposed, is a bit misleading.

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I would say first off that the Bloc Quebecois will oppose this bill and the fast track approach. Things are not being speeded up to give the committee a better opportunity to introduce amendments, but to have the bill passed quickly.

I also find it odd that the bill is before the House on the very day the budget is being presented. There is a whole circus underway outside the House, and everyone is focussing on the budget and not on this bill. I think the minister has created a smoke screen. There is a historical context. Before we know where we are going, we have to establish where we are. We have to set out the background.

Before the Europeans came to North America, as the great capitals of the 14th and 15th centuries, like London and Paris, gained international stature, they had no idea that there was another continent with a native population spread across its entirety. There was no problem, because the two continents perhaps had no knowledge of each other.

The problems began at the moment of contact. I am talking about the period that goes from the 16th century to the 19th century. Curiosity and mutual mistrust are normal when two civilizations first meet. Neither knows what the other wants and what the others are up to. There is a period of adjustment. Gifts are exchanges, items are traded-a bit like today's diplomacy. That is the way it was at the time.

These relations evolved. Eventually, relations were established between the First Nations and the Europeans in a wide range of areas, including not only trade but also military co-operation and coalitions. This marked the beginning of the whole treaty era.

Of course, on one side there were the Europeans, vested with the authority of their king and equipped with their seals to stamp on the treaties they signed, while the aboriginal peoples, on the other side, had a totally different philosophy.

In fact, I have a few lines to read you because references are often made to the wampum and I think it is important to explain what it is. The aboriginal peoples' philosophy is clearly explained. Their equivalent to the royal seal was a wampum exchange.

A white wampum background symbolizes the purity of the agreement. Two rows of purple beads represent the spirits of our respective ancestors.

Between these two rows are three wampum beads symbolizing peace, friendship and respect. The two rows represent parallel paths, two boats moving side by side on the same river. One is a birch bark canoe, representing the aboriginal people, with their laws, customs and traditions, and the other is a ship, representing the white people, with their laws, customs and traditions. We travel together, but in our own boats. Neither shall try to steer the other's boat.

Then there was the royal proclamation, and, again, the paternalistic tone the minister uses was very prevalent at the time.

Let me read you an excerpt of the royal proclamation: ``And since it is fair, reasonable and essential to our interests-the crown's interests-and to the safety of our colonies-the crown's colonies-that the various nations of savages-as they were called back then-with whom we have some contact and who live under our protection, be neither disturbed nor bothered regarding the ownership of such parts of our domains or territories that were neither bequeathed to us, nor bought by us, these areas are reserved for their use as hunting grounds-'' and so on.

This gives an idea of the tone. What is important however, is that, at the time, native people felt this was from nation to nation. They considered that the king was dealing on those terms, even though the tone was definitely paternalistic.

It is in regard to the issue of protection that the federal government resorted to subtleties and developed its scheme to assimilate native people.

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In the 19th century, the quasi-equality began to erode. The famous immigration policy was in effect, and boats full of people kept arriving on the continent. By 1812, there were ten times more new immigrants than natives, because the latter had been decimated by various diseases.

The fur trade was also suffering badly. So, the colonies, the Dominion, no longer needed the manpower provided by native people for the fur trade. Things began to change. The economy's new sectors were the forest, wood, agriculture and mining industries.

Then the natives started to be perceived as people who should be removed. With the new economy, native people became an obstacle to the federal government, and I dare say that, given the measures that are being taken and the paternalistic attitudes of this government-they are almost hereditary in government-things have not changed much. The idea that Europeans were superior continued to develop.

The minister is telling us that he will ram through these amendments to the Indian Act. Why is he doing that, if not because he has some authority and is making full use of it in deciding the future of Canada's native people? There are some 500,000 native people in Canada. The minister is saying: ``I have the authority. I know you are against this measure, but I will do what is good for you''. Things have not changed much since the early days of the colonies.

At the time, the subtlety was in using the famous protection of the royal proclamation, which, for the government, for the Dominion, became a domination-assimilation process. And then the machinery of assimilation kicked in.

In 1849, government, democratic institutions, did something terrible: they created residential schools. The government began taking children from native bands and putting them in residential schools in order to stamp out their culture and their language, so that they could be assimilated with immigrants, who were ten times more numerous. White people outnumbered native people ten to one at the time.

In 1867, a date we keep hearing in all the praise coming from the Liberal party and from all the federalist parties, the Constitution of Canada was signed by the Fathers of Confederation, but no natives were present. In fact, the then newly elected Prime Minister said he wanted to do away with the band system and completely assimilate Indians into the Dominion.

So now we can see a little better why the government at the time felt it had to stamp out the native system of government. It was at this point that the Indian Act, which is completely consistent with Confederation, was introduced in order to regulate all aspects of native people's lives. Not only were children placed in residential schools but, as well, native peoples were told: ``Your governments will no longer operate like that. You will elect them in the manner we tell you. We will drive you from your lands sometimes and, if there is no game in one location, we will send you somewhere else. We will decide''. In addition, if there were important minerals in a particular location, the government said: ``There is no longer any game in this location, so we are going to send you elsewhere'', using that excuse to move them so they could make money.

Things went on this way. These displacements were considered to be ``in the national interest'' at the time.

In 1969, the present Prime Minister, then Minister of Indian Affairs, presented his white paper. It was the same thing all over again: the machinery of assimilation continued forward. He said the Indian Act would have to be abolished. We are hearing the same thing from the minister today. This was the equality they were talking about. Once again, native peoples rose up.

Finally, the native peoples took charge of their destiny. There was an international movement and, relying on the legal aspect, natives began to say: ``There are people elsewhere on the planet who are victims just like us''. Finally, the Supreme Court and the superior courts in each of the provinces kept handing down decisions in favour of native peoples, with the result that, in 1982, the government had to add to the Canadian Constitution section 35, which protects their ancestral rights.

This is the tradition in which the minister follows. He has not kept the promises in the red book. Furthermore, David Nahwegahbow and Russell Diabo, who wrote the book themselves, said: ``They broke their promises, so we are withdrawing''.

There were phoney consultations, as I have said. In addition, 550 aboriginal communities want nothing to do with this bill, but the minister is forging ahead anyway, confronting the opposition parties, the official opposition and the Reform Party, and flying in the face of the philosophy contained in the Erasmus-Dussault report.

History will judge the minister. It is not too late for him to do something. If he withdraws his bill, perhaps history will remember him as someone progressive, but if he goes ahead, he will be seen as part of the machinery of assimilation like all the others.

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[English]

Mr. Garry Breitkreuz (Yorkton-Melville, Ref.): Mr. Speaker, I am pleased again to speak to Bill C-79.

I attended the news conference when the minister introduced this legislation. I was not impressed then and I now have had the chance to study the bill and I am still not impressed.

I listened with interest to the minister's concluding remarks. He talked about the need to destroy the wall. Yes, there probably is a

wall there called the Indian Act. The only way it will be destroyed is to repeal the Indian Act.

However, I do not think that is a good analogy. I think this is a pit. It is a pit that we have put the aboriginal people into and they cannot get out. Now we are providing another pit, we are giving them a choice between two pits by introducing Bill C-79.

After the minister spoke at the news conference, Assembly of First Nations Chief Ovid Mercredi spoke on behalf of 500 Indian bands which oppose this legislation. He said ``we do not like Indian act No. 1, why should we like Indian act No. 2?''. He was referring to this. He referred to the Indian Act as a cage. He said ``why should we be happy because the government says `look at the new cage we made for you?'''

The minister of Indian affairs promised to amend the Indian Act. Bill C-79 is not an amendment to the Indian Act. It is an act that allows Indian bands to opt out of the current Indian Act and into a new one.

Specifically, Bill C-79 removes the need for ministerial approval for the sale of agricultural products and certain artefacts. It is not clear whether they can also bypass the Canadian Wheat Board, which we were debating earlier this morning. The question should be answered as to whether they would have to comply with the regulations of the Canadian Wheat Board.

Additional bylaw making powers are conferred on band councils. Fines levied for violation of the Indian Act, the regulations or band bylaws are increased to $5,000 and are payable directly to band councils. None of this revenue needs to be accounted for nor does it have any effect on the amount of tax dollars flowing into the community. Again, we need an answer. We need to know why this is so.

Bill C-79 allows bands to create a voluntary ticketing scheme in order to expedite law enforcement.

Also by virtue of Bill C-79 the minister, rather than the governor in council, is given the opportunity to set aside elections. The term of office for a chief and council is extended from two to three years. This will not make many of the native people I know who are living under anti-democratic band councils very happy.

The minister is authorized to enter into agreements with band councils for educational purposes. It seems this is already happening. Is the minister simply putting into legislation what is already happening today, legitimizing it?

The minister's authority for road construction and repair is removed in Bill C-79. However, the bill does not say who will be responsible and liable for public safety on these roads and bridges under band control. There are a lot of unanswered questions.

Bands are now given the authority to manage natural resources on band held land. However, the revenue flowing from these resources is once again unaccounted for. Nor will this revenue reduce the amount of grants and contributions flowing from the federal government. The fundamental relationship between crown and aboriginal peoples is not changed.

Bill C-79 includes a non-derogation clause. Aboriginal treaty rights remain protected under section 35 of the Constitution. Nothing in Bill C-79 affects taxation, Indian registration, band membership or the protection of reserve lands. Bill C-79 is like its cousin, Bill C-75.

First Nations land management which was introduced December 10, 1996 creates two categories of bands with special status for those who opt into Bill C-79.

Bill C-79 does not meet our party's litmus test for equality, financial accountability or democratic accountability at the band level. Those are the three tests we measure legislation with.

Bill C-79 is the first bill introduced by the minister that is not an initiative of the previous Tory administration. Bill C-79 does not fulfil the minister's promise to amend the Indian Act. Bill C-79 stands on its own. It is not an amendment to the present Indian Act.

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Bill C-79 was rushed to fulfil a promise and respond to the royal commission on aboriginal peoples. Review by justice officials is suspect because changes were being made until the evening before it was tabled.

The Assembly of First Nations claims that only 100 of the 600 First Nations support Bill C-79. Bill C-79 does not bring democratic equality, and raises serious concerns with powers granted to chiefs and councillors.

Bill C-79 does not bring financial accountability and reduces the minister's scrutiny. The auditor general is still excluded from auditing band books, just like he is excluded from scrutinizing the Canadian Wheat Board.

Bill C-79 will probably be constitutionally challenged as a consequence of this opting in provision. It will create a bureaucratic nightmare and a field day for lawyers and consultants. That is a major concern of ours.

Like Bill C-75, it lets the minister off the hook and allows him to wash his hands rather than take on those elements of the Indian Act that warrant amendments and/or repeal.

Canadians, both native and non-native, were looking for leadership and vision. They got neither. Why is the minister afraid of giving equality a try? Here are some of the crucial steps we need to take toward equality. When I talk about equality, it does not mean assimilation.

The Indian Act must be repealed and replaced with legislation that will move us closer to true equality. Maybe we should call it

the equality for Indians act. We need to agree on a definition of self-government, something that has not happened.

The majority of Canadians, including grassroots Indian people, will support aboriginal self-government as long as the federal government's relationship with Indian reserves is similar to the relationship between provinces and municipalities. Most of Canada's aboriginal people-there are about 500,000 of them-already live in municipalities under provincial jurisdiction. The federal government retains responsibility for about 350,000 treaty Indians currently living on reserves or crown land across Canada.

Treaty Indians deserve the same rights and freedoms and should share the same duties and responsibilities enjoyed by the tens of millions of municipal residents across the entire country.

For self-government to work, Canadian law, including the charter of rights and freedoms, must apply equally to aboriginal people and Indian governments. We cannot have two systems.

Local Indian governments will never be truly democratic nor financially accountable until and unless a normal local government to taxpayer relationship is established. The federal government must make treaty entitlements payable in part directly to individual treaty Indians living on reserves. The local band administration could then establish a local tax system to pay for local services. Government payments for welfare and housing could easily be transferred in this manner. All treaty entitlements and benefits should be considered a taxable benefit in accordance with the Income Tax Act.

Every treaty Indian should pay income taxes, excise taxes and the GST, just like every other Canadian. Every treaty Indian entitled to compensation benefits or services promised by a treaty should have the choice of receiving those entitlements directly from the federal government or through local Indian governments and should be able to exercise this option at any time.

Both the federal government and the Indians should fully honour the commitments they made to each other in the treaties. Land claim settlements should be negotiated publicly. They should outline specific terms. They should be final. They should conclude within a specific timeframe and they should be affordable to Canada and the provinces. All reserve or settlement lands should remain part of a sovereign Canada.

There should be public discourse on the value and extent of all land claims. That should be the first step in addressing Indian land claims. For the equality alternative to work, every treaty Indian entitled to land under the formula articulated in each treaty should have the choice of taking personal possession of the property or having the land held in common and administered by the local Indian government.

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Any treaty Indian who wishes to permanently move off the reserve should have the option to negotiate with the government a personal compensation package to help with the transition to a new job and a new life living off the reserve. The compensation should constitute a fair exchange for treaty entitlements.

Bill C-79 creates two classes of natives. It will make the equality and accountability issues worse, not better. Like Bill C-75, it will become a bureaucratic and constitutional nightmare, further dividing natives and non-natives, creating a money pit for lawyers and consultants. The best thing we could do is to let Bill C-79 die on the Order Paper.

Mr. Julian Reed (Halton-Peel, Lib.): Mr. Speaker, there is an ancient Oriental proverb that most of us know by heart: the journey of a thousand miles begins with the first step.

Three and a half years ago the Minister of Indian Affairs and Northern Development took the first step, the second step and the third step and moved into an area that had not been tackled with a view to making great progress, as he has in the last three and a half years. The minister must be commended for his vision, determination, hard work and the level of consultation that he has had over these years with every Indian band in Canada.

It is a privilege for me to speak to the motion on Bill C-79, which is designed to refer the bill to committee for further input, consultation and possibly for further amendment. The bill addresses concerns too long ignored and inefficiencies too long endured. It presents First Nations with an option. If they want they can remove themselves from certain parts of the Indian Act or they can choose to continue under its provisions.

The design of the bill is to reduce the powers of the Minister of Indian Affairs and Northern Development and put more authority for the day to day management of their affairs into the hands of the First Nations.

Some have suggested that the government has not adequately consulted before introducing this legislation. Those people would like to see more delay, more paper shuffling, more hand wringing, with a view to living with the status quo. That may be good enough for some members, but it is not good enough for the First Nations. It is not good enough for the minister. It is not good enough for the government.

The truth is that the Government of Canada has been trying to improve the Indian Act not just for one year, two years or three years. It has been trying to fix it for 50 years. Minor tinkering began almost immediately after the Indian Act was passed in 1876. Since then there have been a number of attempts to make the act more relevant, more just and more responsive.

The first major series of amendments came in 1951, following a report by a joint committee of the House and the Senate. These amendments were far reaching, but they still did not change the fundamentally paternalistic nature of the original act. While the minister's powers were reduced, they still remained extensive and intrusive.

Efforts were made again in 1960 with a commentary on the Indian Act prepared for a joint committee. This report was not taken up and the act remained unchanged.

In 1969 extensive consultations took place examining the whole relationship between the government and the First Nations. In their submission the United Interior Tribes of British Columbia said something which everyone then and everyone now knows to be true. ``The Indian Act is definitely not the answer to the problems of the Indians of today''. That was in 1969. Just as the Indian Act was failing First Nations then, it continues to do so today.

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The Indian Act was revisited in 1970 when the Alberta chiefs released their citizens plus report. That report recommended amending but not abolishing the Indian Act. No amendments were made and the status quo continued.

In 1982 the House established a parliamentary task force on Indian self-government. This task force included, as ex officio or liaison members, representatives from the National Aboriginal Association as well as the Native Women's Association. It tabled its report, commonly known as the Penner report, in November 1983.

If implemented, that report would have fundamentally altered the relationship between First Nations and the federal government. The Indian Act would have become largely irrelevant, but again there were few results to show for the effort and the Indian Act remained in place.

Further consultations were held with chiefs across the country and the government did produce legislation in 1984. Unfortunately First Nations opposed that bill and the legislation died after second reading.

The government of the day introduced another bill, C-31, the very next year. That legislation dealt with several specific provisions of the Indian Act which discriminated on the basis of gender and made the application of the act much more equitable. That legislation passed but the underlying problems of the act remained unchanged.

In 1986, the auditor general conducted the first comprehensive audit of the Department of Indian Affairs and Northern Development. That report focused on lands, revenues and trusts, areas governed by the Indian Act. As a result of the auditor general's report, the department undertook an extensive review of these areas, culminating in the government's introduction of Bill C-115. The amendments proposed by that bill grew out of recommendations by the Kamloops band in British Columbia.

These recommendations had been studied by the government and band councils and were then referred to all chiefs, provinces and MPs for comment. From April to December 1986, further consultations were held with bands, organizations, provinces and federal officials. These amendments, known as the Kamloops amendments, were finally passed into law in 1988.

It was also in 1988 that Bill C-122 was introduced. This legislation was aimed at a very narrow issue with respect to the Indian Act emerging from a report of the standing joint committee on regulations. That bill did not proceed beyond first reading.

Further modifications were made to the Indian Act in 1988 through Bill C-123, which dealt with the provision of support for minors and Bill C-150 which cleared up a technical error which was discovered in 1985 Indian Act.

We come to the present time. I have gone into some detail with respect to the past efforts to alter the Indian Act because it is important to put the Indian Act optional modification into perspective. The legislation before the House has its genesis in many years of frustration, many years of study. Government after government has revisited this issue. Government after government has consulted, debated, reviewed and considered. The Indian Act has become one of the most studied pieces of legislation in our history. However, all of that study has produced few results.

We find ourselves in 1997 with an act that has remained largely unchanged since 1951. We find ourselves with an act that First Nations understandably find demeaning. We find ourselves with an act that treats First Nations as wards of the state and which gives the minister authority to intervene and intrude in the lives of First Nations' communities.

The time has come to provide an alternative, to begin to step away from the paternalism of the Indian Act. Before introducing this legislation we conducted our own consultations with First Nations and I will briefly review that process.

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The minister first raised the idea at the Alberta chiefs summit in March 1995. The next month he wrote to every chief, councillor and leader of First Nations organizations asking for their views and suggestions about changing the act, the one step at a time along that journey as described in the Chinese proverb.

Based on numerous discussions with First Nations and the input he received, in September 1995 a package of proposed-

The Acting Speaker (Mr. Lincoln): Excuse me, would the hon. member conclude as your time is up.

Mr. Reed: Mr. Speaker, I do not want to hold up the progress of the House.

In conclusion, the minister has carried this vision along this journey and these amendments which are very important will go to committee, will be discussed and if necessary will be amended. We hope that the minister's dream will be realized.

[Translation]

Mrs. Francine Lalonde (Mercier, BQ): Mr. Speaker, I was wondering about the timing of this bill, but I hear my colleague for Halton-Peel referring in his conclusion to the fact that the minister has finished his journey.

Yet this bill, Bill C-79, merely amends the act of which we all are ashamed, the Indian Act. This act infantilizes aboriginal people, makes them into incapable minors. It imposes upon them a government system which, to all intents and purposes, has been such that some of them have lost their own system of government, or are unable to make use of it. With this bill, the native peoples have been more or less forced, in a roundabout way, to accept that.

What I find the most shocking in this bill is the nastiness of its nature. It holds out a few little goodies and forces band councils who want them to accept the principle of this hated act, an act which is, in their eyes, a symbol of subserviency.

This bill is shocking for other reasons as well. It is also shocking because no one among those who addressed the aboriginal question, as a commission or otherwise, has thought that not only the solution, but the beginning of the path toward a solution, lay with amendments to the Indian Act.

Yet the red book, with its generosity, its understanding, its compassion, with all the illusions that it held out, never made any reference to even minor amendments to the Indian Act. Now we find the minister wanting to be able, on the eve of an election, to say: ``Mission accomplished''. There is one thing you can be certain of: he will not be able to count on us to help him be able to say that.

The native people of Canada-if I may use that term-have a lot of grievances. I have long had an interest in these matters. I was a minister in the Lévesque government when René Lévesque gave official recognition in the National Assembly to the ten Indian and Inuit nations. This arose out of a process begun in 1983 when representatives of the aboriginal groups were brought together and certain proposals were advanced. Not all were judged to be enough, but this did mark the beginning of a process of change.

Obviously, as on the one hand the Indian Act was supreme, and on the other a process of transformation was initiated, beginning on the federal level with the Penner commission and later with the Erasmus-Dussault commission, the native people of Quebec chose to respond: ``Very nice of you to offer, but we will continue to call for recognition on the federal level of the rights we feel we are entitled to''. In Quebec it was felt this was a valid option.

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But what has happened since then? Not long ago we had the Erasmus-Dussault report which is far removed, I would say light years removed, from Bill C-79. We hear nothing about this report. We do not know where it has been shelved, and what we see now is this pitiful excuse for a bill which hardly deserves to be called even an attempt to deal with aboriginal issues.

Meanwhile, in Quebec, the Parti Quebecois, which later formed the government, worked hard on preparing proposals for aboriginal people, proposals that were made to the various groups, to the leaders of aboriginal communities. What we have managed to do is create an opportunity for change that would get rid of the Indian Act once and for all and let each community, moving at its own pace, take over the management of its resources, develop its economy and become aware of the need to protect the environment beyond the limits of its territory, and I am sure aboriginal people in Quebec are starting to understand.

They are starting to realize that it will be in their best interests to negotiate with the government of a Quebec that is sovereign, because if they wait for Canada to deliver on its futuristic promises, they will never get anywhere.

Even today, and this is not something to brag about because much remains to be done about improving the circumstances of aboriginal people, but anyone who is aware of these issues knows perfectly well that aboriginal people are much better off in Quebec than anywhere else, whether we are talking about knowledge and retention of mother tongue, demo../graphics, education or the poverty rate.

We also had the James Bay agreement signed by Robert Bourassa which remains a model of its kind. In spite of the unhappy events in Oka, which I will not discuss here, there is no comparison between the relationship between Quebecers and aboriginal people, although coloured by a past which both sides have to live with, and what we see elsewhere.

It is unfortunate that this government, instead of making real progress on aboriginal issues, and we can draw a parallel here with the national question, preferred to take the easy way out, an easy way I would call pernicious because it will force aboriginal communities to go along with the fundamental principles of the Indian Act if they want to take advantage of certain changes.

I may add that it is rather unusual that this bill is optional. It will be up to the band and the band council to decide, and once they decide to go along with the new legislation, they cannot go back.

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Now this can cause major divisions, and here again, the settlement process will remain in the hands of those who administer the Indian Act. Instead of improving, the situation has become even more complex and the future does not look very promising.

[English]

Mrs. Marlene Cowling (Parliamentary Secretary to Minister of Natural Resources, Lib.): Mr. Speaker, I am pleased to participate in the debate on sending the Indian Act optional modification act to committee before second reading. The minister has already outlined the contents of this legislation. He has referred to the government's overall objective to reduce federal control over the lives of First Nations people.

This legislation does not replace or amend the Indian Act. Rather, it provides an option to parts of it. First Nations can decide for themselves whether to opt for its provisions or to remain under the terms of the Indian Act.

Eventually the Indian Act will no longer be needed. It is outdated. It is paternalistic. It is cumbersome and costly. It gives the minister powers that he does not need. I anticipate that by the time the last nail is driven into the coffin of the Indian Act, very few First Nations will still be affected by it. That is because this government has set in progress a pattern of building self-government from the ground up. So this legislation must be seen within a larger context of the government's efforts to promote the inherent right of self-government of aboriginal peoples.

Over the long history of the relationship between governments and aboriginal peoples we have seen an ebb and flow of self-government. It is not a happy history. It demonstrates a fundamental lack of understanding on the part of past governments. They did not appreciate the sophistication of aboriginal cultures and forms of government. The history of legislation concerning First Nations demonstrates a degree of arrogance and paternalism that causes us today to shake our heads and wonder how governments could have been so narrow minded, insensitive and unfair.

There are five statutes that provide the framework for First Nations policy during the past 200 years. The first was the royal proclamation in 1763 which separated Indian lands from those that formed the colonies. It initiated a process by which Indian land could be purchased. Second was the Gradual Civilization of the Indian Tribes in Canada Act of 1857. Third was the the Gradual Enfranchisement Act of 1869. Theses acts endeavoured to remove all distinctions between Indians and non-Indians.

Fourth was the Indian Act of 1876, the first to bear that title. It consolidated previous legislation and introduced new provisions. Fifth was the Indian Act of 1951 which followed the recommendation of a joint committee of this House and the other place. It introduced major reforms, including the reduction of powers exercised by the government. Those are the principal statutes but in between these key dates many amendments have been introduced that have had a profound impact on the day to day lives of First Nations peoples.

I will look at some recurring themes within those statutes and regulations. When we look at the way in which the rules have been changed at the whim of successive administrations, this House will get a better idea of why we now want to give First Nations the option to get government off their backs. One of the most important themes is the basic question who is an Indian. By 1876 the definition was someone of Indian blood, or in the case of mixed marriages the definition was a non-Indian woman married to an Indian man.

The 1951 act replaced the notion of Indian blood with the notion of registration. Registered Indians had the right to band membership and could live on reserve. Indian women who married non-Indian men were not recognized as Indians. This was not changed until the Indian Act was amended in 1985.

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But the issue of who is an Indian also includes whether the government has a right to decide, whether the government has a right to take away the rights and privileges of an individual Indian. This was the objective of the Gradual Civilization Act passed in 1857. It introduced the notion of enfranchisement. An Indian adult male could obtain the franchise but he would lose his Indian status.

Over the years the government sought to encourage Indians to give up their status by promising them land which they would hold as individuals, not as members of a band. In 1857 the government promised up to 50 acres. How many Indians fell for this? How many were willing to lose their Indian status in return for enfranchisement and private ownership on reserve land? Between 1857 and the passage of the Indian Act 19 years later, only one.

This method of encouraging Indians to give up their traditional ways was not working, so in 1876 the law was changed. In a breathtaking piece of paternalism, enfranchisement was imposed automatically on any Indian who earned a university degree or who became a doctor, a lawyer or a clergyman. Compulsory enfranchisement for all Indians over 21 was taken in and out of legislation frequently over the next 43 years. In 1933 it was again reintroduced and it stayed in effect until the act was revised in 1951.

What we have here is a record of arbitrary decisions on the part of former governments to try to destroy the fabric of First Nations by removing Indian status from some of the most prominent members of the First Nations communities. This is part of the legacy of the Indian Act. This arbitrary power extends to other spheres.

In fact, much of the concern about the enfranchisement issue arose out of another broad area of concern: land. The history of government relations with First Nations with respect to land shows an alarming degree of high-handed imposition of government will. Individual land holdings on reserves were instituted in 1876. Residents received a location ticket from the superintendent general; otherwise reserve residents would not be considered to be lawfully holding their individual plots of land. The superintendent general could order that a reserve be surveyed and divided into lots and then require that band members obtain location tickets.

By 1884 a male Indian holding a location ticket could bequeath property to family members, including his wife, but the wife had to be living with him at the time of his death and she had to be of good moral character. Who decided whether she was of good character? Government authorities.

It was the government, not the band council that would decide how moneys from the surrender and sale of reserve lands and other resources would be spent. It was the superintendent general, not the band council who decided whether non-Indians could reside on or use reserve lands.

The governor in council could allow leases to be issued for surface rights on Indian reserves. There was no need to get approval from a band council. According to the changes established in 1919 the owners of the land would have to be compensated, but by 1938 even this provision was dropped.

In 1941 Indians were prohibited from selling agricultural produce, furs and wild animals. To this day the Indian Act contains a provision prohibiting the sale of agricultural products by western Indians without official permission.

Changes to the act in 1951 removed many of the most glaring inequities surrounding land. Expropriation powers were significantly reduced. Administration of Indian estates was brought more into line with provincial laws. But many of the old rules remain.

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Today we shake our heads and wonder how governments of the day could be so imperious and paternalistic. But the day will come when Canadians will wonder why they continued to keep so many restrictions in the Indian Act in the latter half of the 20th century. That is why the government has introduced the legislation before us as an option to get out from under some of the old rules, to start a new era without paternalism.

I urge all members to join me in voting to send this legislation to committee for further study.

Mr. Len Taylor (The Battlefords-Meadow Lake, NDP): Mr. Speaker, I am pleased to speak on Bill C-79, the bill that makes what they call optional modifications to the Indian Act. I was very pleased to hear the words of the minister in introducing the bill to Parliament and as well to hear a number of the Liberal members commenting on why they think the act needs to be changed and eventually eliminated.

I applaud the minister of Indian affairs for his work over the past three years in visiting with aboriginal people from coast to coast to coast. He has travelled more extensively than probably any other minister of Indian affairs that I am aware of.

It seems that while he was travelling he learned some of the language Indian people want to hear, but the actions he has taken are not the ones the majority of Indian people would like him to take. The Indian people in Canada would like the language being used by the minister and by government members to be more adequately reflected in the legislation proposed and in the actions the government takes in terms of removing some obstacles that are in their way, along with providing them with the resources necessary to assist them in getting themselves out of the difficulties past legislation and government practices have put them in.

In looking at Bill C-79 I recognize there are a number of positive aspects to it. However, they are almost insignificant in terms of what it is that needs to be done for aboriginal people in Canada today. The legislation allows the government to remove itself from certain aspects of Indian community life. It allows different First Nations to buy into the proposal or to leave things as they are. Let us look at some of the specifics.

For example, departmental officials will no longer have to approve the sale of farm produce. This is admirable but that has not been going on for years. This part of the Indian Act has basically been ignored by all the officials, the department and the minister for years.

The act allows for a First Nation not to require the instruction from the minister on road repair. I am sure most First Nations are glad they no longer have to ask the minister for permission to fix their roads, but they have no money to fix their roads. Their roads are in horrible disrepair and it is because the resources are not available to fix them. They do not have to ask the minister because they cannot fix them in any case. If the government were truly interested in assisting in this regard, it would ensure that the necessary moneys were there, not just for road repairs, but for the

establishment of new roads to connect with provincial highway systems which ignore a lot of the First Nations communities.

The bill also states that the terms of office for chief and council could be extended from two to three years. Obviously many of the Indian governments would applaud the move from two to three years, but most of them have been asking for an extension to four years. Because other governments around them have terms of office of four years, many of them see that the work they start is interrupted at the end of the second or the third year. Most of them have been thinking that four-year terms would be appropriate. Having the opportunity to set their own terms of office in conjunction with people in their own communities is very important.

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I notice in the briefing papers that the government indicates it would ``not fundamentally affect the crown's fiduciary relationship and treaty obligations''. The word fundamentally is very important to aboriginal people in Canada. Fiduciary responsibility of the federal government is paramount. The fiduciary responsibility exists and cannot be changed, yet the government acknowledges that it will not be fundamentally affected. That means there may be an effect on the fiduciary responsibility. We must ensure that does not happen at all.

All of this follows the release of the report by the Royal Commission on Aboriginal Peoples. There has been a great deal of comment around the country about the expense and the expanse of the royal commission. Fifty-eight million dollars was spent on the royal commission, money that the minister even said he would rather have spent on housing than on the royal commission.

Regardless of what we think about the process and the financing of the royal commission, the fact is the documents released by the royal commission exist. This is the most extensive study of the relationship between aboriginal people and the rest of us that has ever taken place in this country.

I do not claim to have read the entire royal commission report. I am only almost finished the first volume of the several volumes of the report, but I am overwhelmed at the value of the information contained in the document. In skimming the other documents that I intend to read over the next few months, I can tell that the royal commission has done a tremendous job of identifying the problems that aboriginal people have faced and suggesting some solutions as to how to overcome those problems.

Certainly getting rid of the Indian Act is a part of that, but it is not negotiating the Indian Act away one Indian band at a time or one section of the act at a time. What this country needs is a thorough parliamentary First Nations provincial government review of the Indian Act and the overhaul of it in one fell swoop with the idea of ensuring that the resources are available to all levels of government to ensure that the replacement is a success.

It makes no sense to replace the Indian Act one nation at a time, one clause at a time. This does not seem to me to be the most efficient way of doing it. Certainly the words, the study, the thought, the work that has gone into the report of the Royal Commission on Aboriginal Peoples make it very clear that substantial changes are necessary both in attitude and in programming in order to fix a number of the problems that exist. Some of them cannot be fixed by this type of negotiation; they will simply be fixed within the Indian communities on their own.

When we ask First Nations communities what is at the top of their list for correction, they are not saying they want to get the minister off their backs from selling farm products. They talk about the need for more housing. They talk about the need to improve their health and justice systems. They talk about the need to fix their education system to ensure that their young people are well educated and skilled both in traditional knowledge and in the ways of the neighbouring communities, to ensure that their young people will be successful as they get older. They also talk about culture and language, economic development and self-government, land and resources which ensure their economic development packages are successful.

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These are all matters which require a great deal of attention from all members of this House, from all members of provincial legislatures and from all municipal governments across this country. We as communities, as people living together, must understand the history of this country, how all of our people have worked together to get us in the position we are in today. Tinkering with the Indian Act, one clause at a time, one band at a time, certainly will not achieve the goals which we wish to achieve.

I wish the minister well as we go into the election period. I know there are major challenges in front of us. I challenge the minister to address those serious, important issues before we face the people.

[Translation]

Mr. Osvaldo Nunez (Bourassa, BQ): Mr. Speaker, I am pleased to speak today to Bill C-79, which amends the Indian Act.

This bill allows bands so wishing to amend certain provisions of the Indian Act. We are looking at the reform of a bill passed over a century ago. That was a long time ago. The amendments concern 45 of the 120 sections of the Indian Act.

The main areas affected by the changes are estates, new powers to band councils, electoral procedures, infractions and the application of criminal law on reserves. For example, the chief and the band council have a three year mandate; we do not know why. The

minister has the power to annul an election; we do not know the reason for that either.

Because the new powers this bill confers are optional, only the nations so requesting will be covered by this new legislation. The others will remain under the old one.

This is a bad bill. The report of the Erasmus-Dussault royal commission of inquiry noted the bill was outdated and backward and said that amending it was not the way to establish a new relationship between natives and non natives.

With Bill C-79, Canada returns to its colonial past with respect to its aboriginal peoples. At the time, the only aim of the Indian Act was to assimilate the native peoples. This bill does not even have the approval of those primarily affected by it-the native peoples. In December 1996, of 610 aboriginal communities, 542 came out against this bill. In other words, more than 85 per cent of the First Nations categorically reject the process set in motion by the federal government in this respect.

How can the government go ahead when the vast majority of those affected oppose its proposal? Many of the commitments the Liberal Party of Canada had made to the aboriginal people before the election were not fulfilled. Even the aboriginal people involved in developing the election platform set out in the red book made sure to publicly dissociate themselves from the Liberal Party of Canada when they saw this government's attitude and behaviour toward the First Nations.

There is no mention anywhere in the seven pages of promises relating to the aboriginal people in the red book of any amendment to the Indian Act. Where does this initiative come from? The red book states at page 98: ``A Liberal government will develop a more comprehensive process for consultation between federal ministers and aboriginal representatives with respect to decision making that directly affect First Nations, Inuit and Métis peoples''.

This is another example of a serious consultation problem on a bill that concerns specifically and directly aboriginal peoples. This approach is contrary to the red book, which goes on to say: ``It does not make sense for the federal government to be unilaterally making policy or budgetary decisions that affect the lives of aboriginal people, without their consent''.

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The fact of the matter is that it is the core of the commitments made to the aboriginal people that this government failed to honour. Where is the ``new partnership'', the ``mutual respect'', and the ``participation of aboriginal people in the decision making process'' this government had promised before the 1993 election?

On November 21, the report of the Royal Commission on Aboriginal Peoples was released. This is a comprehensive, important and interesting study prepared by the Erasmus-Dussault commission. I agree with the objectives stated in this report concerning self-government, the recognition of aboriginal nations and territorial claims.

Canada's aboriginal nations are distinct. As such, they must have increased self-government, so as to be able, among other things, to generate revenues and to protect their languages and cultures. Aboriginal nations have a right to be sovereign in strategic sectors such as health, education, language and economic development. It is the only way they can ensure the preservation and development of their own identity.

However, aboriginal people must first be recognized, so that they can negotiate directly with the federal and provincial governments. We must repair the harm done over the years to aboriginal people by the various Canadian governments. After more than a century of Canadian policies designed to assimilate, if not eliminate aboriginal people, it is time the federal government recognized its mistakes, assumed its responsibilities and made the necessary changes.

Aboriginal nations must achieve self-government status to stop being financially dependent on Ottawa. I am pleased that the Government of Quebec negotiated and signed a modern day treaty with the Crees. The James Bay Agreement made it possible to improve the Crees' economic situation and to let them take charge of their development. I should point out that the fair sharing of the land was instrumental in the success of this initiative.

It is well known that I come from Latin America, where Indians make up a large part, sometimes the majority, of the population in certain countries. From the beginning of colonization in 1492, the aboriginal peoples were exploited and exterminated. Today, more than 500 years later, they are still living in inhumane conditions, in unacceptable poverty and misery.

The Erasmus-Dussault report is critical, and rightly so, of the living conditions of native people in Canada, ``the best country in the world'' as the Prime Minister so often tells us. In Latin America, these conditions are much worse.

I take this opportunity to urge the federal government to put the issue of Amerindians on the agenda when meeting with various countries, whether bilaterally or multilaterally through the OAS, or in other international forums.

International co-operation must be developed in this regard with respect to the Americas. The Erasmus-Dussault report describes and deplores the immense problems confronting Canada's native peoples with respect to health, education, unemployment, housing and crime. Native peoples are a minority representing 3 percent of the population. They are often the victims of racism and discrimi-

nation. In addition, this study points out that over 10,000 households on reserves are without indoor plumbing.

The Liberals have done nothing to resolve these serious problems. Nor will they with Bill C-79. For all these reasons, I will therefore be voting against Bill C-79.

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The Speaker: The hon. member for Lévis has the floor. Dear colleague, I wonder whether you would prefer to wait until after oral question period to begin your speech? Did you hear the question?

Mr. Dubé: I am in agreement.

The Speaker: We will take these five minutes to begin statements by members. You will lead off when we resume debate. Thank you.

[English]

It being almost two o'clock, we will go to Statements by Members.

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